Preview
(FILED: NEW YORK COUNTY CLERK 1270372013) INDEX NO. 153511/2012
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 12/03/2013
NEW YORK STATE SUPREME COURT
COUNTY OF NEW YORK
anne nn nen enema nnn nena nn enema nnn nn nen enn,
SCOTT W. WRIGHT P.C. Index No. 153511/2012
Plaintiff, REPLY AFFIRMATION IN
SUPPORT OF PLAINTIFF'S
- against - MOTION TO ENFORCE THE
SETTLEMENT AGREEMENT
MS GLOBAL FINANCE LLC, MUSDEN
FINANCIAL SERVICES LLC, MS GLOBAL
HOUSING, LLC, GLOBAL FUNDING, LLC,
KEN MACKAY, and MICHAEL SHORE,
Defendants.
pneeee nee eeennn ene nnnen nce n ec ennmnnnenennXK
SCOTT W. WRIGHT, an attorney duly admitted to practice before the Courts of the
State of New York, affirms the truth of the following statements, under penalties of perjury:
1 I am an attorney, licensed to practice law in the State of New York. I am the sole
shareholder, officer and director of plaintiff Scott W. Wright, P.C. and I am fully familiar with
the facts set forth herein.
2. This reply affirmation is in further support of plaintiff's motion to enforce the
Settlement Agreement in this action and grant judgment to plaintiff against defendants Ken
Mackay and Michael Shore (“respondents”), jointly and severally, in the amount of $70,000."
3 Plaintiff filed its complaint on June 8, 2012 and amended the complaint by right
on June 29, 2012 (the “Complaint”).
4 Defendants, in lieu of answering the Complaint, moved to dismiss the Amended
Complaint or Compel Arbitration on July 30, 2012. Plaintiff opposed defendants’ motion and
cross-moved for leave to further amend the Amended Complaint.
' Plaintiff moved for judgment in the amount of $100,000, but subsequent to filing of the motion, defendants paid to
plaintiff the sum of $30,000.
5 The parties entered into a Settlement Agreement executed by all defendants dated
July 12, 2013. A copy of the Settlement Agreement is annexed to my affirmation filed in
support of the instant motion as Exhibit “A”.
6 Defendants’ counsel represented to the Court by letter dated July 15, 2013 that the
parties had settled the action and the Court denied as moot defendants’ motion to dismiss or
compel arbitration on July 16, 2013. A copy of the Court’s order is annexed my affirmation filed
in support of the instant motion as Exhibit “B”.
d All of the defendants in this action, including the individual defendants Ken
Mackay and Michael Shore (the “respondants”), executed the Settlement Agreement.
8 Each of the defendants breached the Settlement Agreement when defendants MS
Global Finance LLC and Musden Financial Services LLC (the “corporate defendants”) failed to
pay to plaintiff on or before August 31, 2013 the sum of $100,000.
9 Plaintiff filed the instant motion on September 16, 2013 to enter judgment against
the respondents for their breach of the Settlement Agreement. Following the filing of this
motion and consultations with defendants’ counsel, defendants paid to plaintiff the sum of
$30,000.
10. Respondants have opposed the instant motion claiming that this Court has no
jurisdiction over the motion and based upon their interpretation of the Settlement Agreement.
Respondants have also filed a frivolous counter-claim under 22 NYCRR 130-1.1 for costs and
fees and making the novel demands that I execute a Stipulation of Discontinuance depriving this
Court of the jurisdiction to enforce the Settlement Agreement and to prevent plaintiff from
executing upon the judgments entered against the corporate defendants. Plaintiff herein replies
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THIS COURT HAS JURISDICTION OVER THE INSTANT MOTION
11. This Court never entered an order or judgment dismissing this action. The Court
on July 16, 2013 merely dismissed defendants’ motion to dismiss or compel arbitration based
upon the representation by defendants’ counsel that the parties had entered into a settlement
agreement. See Plaintiff's Exhibit “B”.
12. Further, the action was active when I filed the instant motion and remains active
in the ECF’s database.
13. Defendants’ counsel never tendered to me a Stipulation of Discontinuance.
Neither did defendants’ counsel ever, during the two months between the date of the Settlement
Agreement request and the instant motion, request a Stipulation of Discontinuance. Counsel
apparantly believed, as I did, that his clients would fulfill their obligations under the Settlement
Agreement. It was, therefore, reasonable that Counsel would not tender a Stipulation of
Discontinuance during the relatively short time period of defendants’ required performance.
14. I would not have signed a Stipulation of Discontinuance that did not make an
exception for enforcement of the Settlement Agreement. I have been and remain willing to
execute a Stipulation of Dicontinuece excepting enforcement of the Settlement Agreement.
15. In some cases, the question of enforcement of the Settlement Agreement by
motion versus a plenary action would be merely an issue of additional expense to plaintiff. In
this case, however, it is of more significance.
16. Although the defendants were unwilling to fulfill their obligations during the two
months between execution of the Settlement Agreement and the filing of this motion, they
instead moved their businesses out of this jurisidiction into the State of Connecticutt. It is likely
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that a plenary action would have to be made in Connecticut, not only muddling the governing
law, requiring representation by Connecticut counsel and complicating enforcement, but
avoiding this Court and this Part, which was closely involved in settlement of this action.
17. It is settled law that a settlement agreement terminating a lawsuit may be enforced
by motion rather than a plenary action. See Teitelbaum Holdings v. Gold, 48 N.Y.2d 51 (1979).
18. Settlements are strongly favored by the courts as there are strong public policy
considerations favoring settlement. See Denburg v. Parker Chapin Flattau & Klimpl, 82 NY2d
375, 604 N.Y.S.2d 900 (1993); Matter of Galasso, 35 NY2d 319, 361 N.Y.S.2d 871 (1974).
Presumably, the enforcement of settlements is also strongly favored in accordance with public
policy considerations.
RESPONDENTS ARE LIABLE FOR
BREACHING THE SETTLEMENT AGREEMENT
19. Respondents contend that only the corporate defendants have any responsibility to
pay to plaintiff the damages defined by the Settlement Agreement. They are incorrect.
20. The Settlement Agreement provides that the corporate defendants, which are
owned and operated by the respondents, would execute and deliver Confessions of Judgment and
if they failed to pay $175,000 to plaintiff in two installments plaintiff could immediately have
judgment entered against them. A breach by respondents, on the other hand, would require
further litigation. There is no provision in the Settlement Agreement limiting respondent’s
liability. It was the obligation of all of the defendants to ensure the payment of damages to
plaintiff.
21. I was and remain concerned that respondents have diverted or will divert assets of
the corporate defendants. I, therefore, required that respondents to specifically agree to execute
4-
in activities
Confessions of Judgment on behalf of any third party or themselves if they engaged
competing with the corporate defendants. See Settlement Agreement Paragraph 5. Breach of
this provision did not grant to plaintiff the mere right to commence legal action against
respondents; it required that they execute Confessions of Judgment without further litigation.
This requirement did not limit respondent’s obligations, it supplemented them. Plaintiff could
obtain judgment against respondents for breaches of other provisions of the Settlement
Agreement only by engaging in further litigation such as the instant motion.
a2 Respondents contend that the execution by plaintiff of the Releases of
future
respondents from liability for prior acts somehow constitutes a release of liability for
breaches of the Settlement Agreement.
23. The releases executed by plaintiff unambiguously state that respondents were
released for liabilities “by reason of any matter, cause or thing whatsoever, whether known or
unknown, from the beginning of time to the date hereof” [emphasis added]. Respondents’
Exhibit “E”. The Releases did not pertain to any act by any defendant subsequent to the date of
execution, July 26, 2013.
24. The Releases were subject to the Settlement Agreement so as to avoid release of
liability for any prior diversion of assets from the corporate defendants. This reference to the
Settlement Agreement did not in any way provide to the respondents immunity from liability for
breaching the Settlement Agreement on August 31, 2013.
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25. Wherefor, counsel requests that this Court grant to plaintiff judgment against
defendants Ken Mackay and Michael Shore, jointly and severally, in the amount of $70,000.
Dated: New York, New York
December 3, 2013
/o /
Wright
-6-
Preview
(FILED: NEW YORK COUNTY CLERK 1270372013) INDEX NO. 153511/2012 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 12/03/2013 NEW YORK STATE SUPREME COURT COUNTY OF NEW YORK anne nn nen enema nnn nena nn enema nnn nn nen enn, SCOTT W. WRIGHT P.C. Index No. 153511/2012 Plaintiff, REPLY AFFIRMATION IN SUPPORT OF PLAINTIFF'S - against - MOTION TO ENFORCE THE SETTLEMENT AGREEMENT MS GLOBAL FINANCE LLC, MUSDEN FINANCIAL SERVICES LLC, MS GLOBAL HOUSING, LLC, GLOBAL FUNDING, LLC, KEN MACKAY, and MICHAEL SHORE, Defendants. pneeee nee eeennn ene nnnen nce n ec ennmnnnenennXK SCOTT W. WRIGHT, an attorney duly admitted to practice before the Courts of the State of New York, affirms the truth of the following statements, under penalties of perjury: 1 I am an attorney, licensed to practice law in the State of New York. I am the sole shareholder, officer and director of plaintiff Scott W. Wright, P.C. and I am fully familiar with the facts set forth herein. 2. This reply affirmation is in further support of plaintiff's motion to enforce the Settlement Agreement in this action and grant judgment to plaintiff against defendants Ken Mackay and Michael Shore (“respondents”), jointly and severally, in the amount of $70,000." 3 Plaintiff filed its complaint on June 8, 2012 and amended the complaint by right on June 29, 2012 (the “Complaint”). 4 Defendants, in lieu of answering the Complaint, moved to dismiss the Amended Complaint or Compel Arbitration on July 30, 2012. Plaintiff opposed defendants’ motion and cross-moved for leave to further amend the Amended Complaint. ' Plaintiff moved for judgment in the amount of $100,000, but subsequent to filing of the motion, defendants paid to plaintiff the sum of $30,000. 5 The parties entered into a Settlement Agreement executed by all defendants dated July 12, 2013. A copy of the Settlement Agreement is annexed to my affirmation filed in support of the instant motion as Exhibit “A”. 6 Defendants’ counsel represented to the Court by letter dated July 15, 2013 that the parties had settled the action and the Court denied as moot defendants’ motion to dismiss or compel arbitration on July 16, 2013. A copy of the Court’s order is annexed my affirmation filed in support of the instant motion as Exhibit “B”. d All of the defendants in this action, including the individual defendants Ken Mackay and Michael Shore (the “respondants”), executed the Settlement Agreement. 8 Each of the defendants breached the Settlement Agreement when defendants MS Global Finance LLC and Musden Financial Services LLC (the “corporate defendants”) failed to pay to plaintiff on or before August 31, 2013 the sum of $100,000. 9 Plaintiff filed the instant motion on September 16, 2013 to enter judgment against the respondents for their breach of the Settlement Agreement. Following the filing of this motion and consultations with defendants’ counsel, defendants paid to plaintiff the sum of $30,000. 10. Respondants have opposed the instant motion claiming that this Court has no jurisdiction over the motion and based upon their interpretation of the Settlement Agreement. Respondants have also filed a frivolous counter-claim under 22 NYCRR 130-1.1 for costs and fees and making the novel demands that I execute a Stipulation of Discontinuance depriving this Court of the jurisdiction to enforce the Settlement Agreement and to prevent plaintiff from executing upon the judgments entered against the corporate defendants. Plaintiff herein replies -2- THIS COURT HAS JURISDICTION OVER THE INSTANT MOTION 11. This Court never entered an order or judgment dismissing this action. The Court on July 16, 2013 merely dismissed defendants’ motion to dismiss or compel arbitration based upon the representation by defendants’ counsel that the parties had entered into a settlement agreement. See Plaintiff's Exhibit “B”. 12. Further, the action was active when I filed the instant motion and remains active in the ECF’s database. 13. Defendants’ counsel never tendered to me a Stipulation of Discontinuance. Neither did defendants’ counsel ever, during the two months between the date of the Settlement Agreement request and the instant motion, request a Stipulation of Discontinuance. Counsel apparantly believed, as I did, that his clients would fulfill their obligations under the Settlement Agreement. It was, therefore, reasonable that Counsel would not tender a Stipulation of Discontinuance during the relatively short time period of defendants’ required performance. 14. I would not have signed a Stipulation of Discontinuance that did not make an exception for enforcement of the Settlement Agreement. I have been and remain willing to execute a Stipulation of Dicontinuece excepting enforcement of the Settlement Agreement. 15. In some cases, the question of enforcement of the Settlement Agreement by motion versus a plenary action would be merely an issue of additional expense to plaintiff. In this case, however, it is of more significance. 16. Although the defendants were unwilling to fulfill their obligations during the two months between execution of the Settlement Agreement and the filing of this motion, they instead moved their businesses out of this jurisidiction into the State of Connecticutt. It is likely -3- that a plenary action would have to be made in Connecticut, not only muddling the governing law, requiring representation by Connecticut counsel and complicating enforcement, but avoiding this Court and this Part, which was closely involved in settlement of this action. 17. It is settled law that a settlement agreement terminating a lawsuit may be enforced by motion rather than a plenary action. See Teitelbaum Holdings v. Gold, 48 N.Y.2d 51 (1979). 18. Settlements are strongly favored by the courts as there are strong public policy considerations favoring settlement. See Denburg v. Parker Chapin Flattau & Klimpl, 82 NY2d 375, 604 N.Y.S.2d 900 (1993); Matter of Galasso, 35 NY2d 319, 361 N.Y.S.2d 871 (1974). Presumably, the enforcement of settlements is also strongly favored in accordance with public policy considerations. RESPONDENTS ARE LIABLE FOR BREACHING THE SETTLEMENT AGREEMENT 19. Respondents contend that only the corporate defendants have any responsibility to pay to plaintiff the damages defined by the Settlement Agreement. They are incorrect. 20. The Settlement Agreement provides that the corporate defendants, which are owned and operated by the respondents, would execute and deliver Confessions of Judgment and if they failed to pay $175,000 to plaintiff in two installments plaintiff could immediately have judgment entered against them. A breach by respondents, on the other hand, would require further litigation. There is no provision in the Settlement Agreement limiting respondent’s liability. It was the obligation of all of the defendants to ensure the payment of damages to plaintiff. 21. I was and remain concerned that respondents have diverted or will divert assets of the corporate defendants. I, therefore, required that respondents to specifically agree to execute 4- in activities Confessions of Judgment on behalf of any third party or themselves if they engaged competing with the corporate defendants. See Settlement Agreement Paragraph 5. Breach of this provision did not grant to plaintiff the mere right to commence legal action against respondents; it required that they execute Confessions of Judgment without further litigation. This requirement did not limit respondent’s obligations, it supplemented them. Plaintiff could obtain judgment against respondents for breaches of other provisions of the Settlement Agreement only by engaging in further litigation such as the instant motion. a2 Respondents contend that the execution by plaintiff of the Releases of future respondents from liability for prior acts somehow constitutes a release of liability for breaches of the Settlement Agreement. 23. The releases executed by plaintiff unambiguously state that respondents were released for liabilities “by reason of any matter, cause or thing whatsoever, whether known or unknown, from the beginning of time to the date hereof” [emphasis added]. Respondents’ Exhibit “E”. The Releases did not pertain to any act by any defendant subsequent to the date of execution, July 26, 2013. 24. The Releases were subject to the Settlement Agreement so as to avoid release of liability for any prior diversion of assets from the corporate defendants. This reference to the Settlement Agreement did not in any way provide to the respondents immunity from liability for breaching the Settlement Agreement on August 31, 2013. -5- 25. Wherefor, counsel requests that this Court grant to plaintiff judgment against defendants Ken Mackay and Michael Shore, jointly and severally, in the amount of $70,000. Dated: New York, New York December 3, 2013 /o / Wright -6-