Preview
FILED: NEW YORK COUNTY CLERK 07/01/2020 08:08 PM INDEX NO. 154031/2020
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 07/01/2020
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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CEDAR ADVANCE LLC, :
:
Plaintiff, : Index No. 154031/2020
:
-against- :
:
DPW HOLDINGS INC., DPW VENTURES INC., :
DIGITAL POWER INC., DIGITAL FARMS INC., :
POWER-PLUS TECHNICAL DISTRIBUTORS :
LLC, COOLISYS TECHNOLOGIES INC., I.AM :
INC., MICROPHASE CORPORATION, and :
MILTON C. AULT III, :
:
Defendants. :
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MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN LIEU OF COMPLAINT
PURSUANT TO CPLR 3211(a)(8)
WELTZ KAKOS GERBI WOLINETZ VOLYNSKY LLP
170 Old Country Road, Suite 310
Mineola, New York 11501
Tel: (516) 320-6945
Attorneys for Defendants DPW Holdings Inc., DPW Ventures Inc., Digital Farms Inc., Power-
Plus Technical Distributors LLC, Coolisys Technologies Inc., I.AM Inc., Microphase
Corporation, and Milton C. Ault, III
On the Brief:
Robert B. Volynsky
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PRELIMINARY STATEMENT
Defendants DPW Holdings Inc. (“DPW”), DPW Ventures Inc., Digital Farms Inc., Power-
Plus Technical Distributors LLC, Coolisys Technologies Inc., I.AM Inc., Microphase Corporation
(collectively, the “Entity Defendants”), and Milton C. Ault, III (“Ault” and with the “Entity
Defendants” collectively, “Defendants”), by and through their undersigned counsel, Weltz Kakos
Gerbi Wolinetz Volynsky, LLP, hereby submit their Memorandum of Law in Support of
Defendants’ Motion to Dismiss the Motion for Summary Judgment in Lieu of Complaint
(“Plaintiff’s Motion”), filed by Plaintiff Cedar Advance LLC, pursuant to CPLR 3211(a)(8). 1
FACTUAL AND PROCEDURAL BACKGROUND
The factual and procedural background of this matter are set forth in detail in the
accompanying Volynsky Aff., to which the Court is respectfully referred.
ARGUMENT
CPLR 3213 provides, in relevant part, that “[t]he minimum time [that a motion for
summary judgment in lieu of complaint] shall be noticed to be heard shall be as provided by
subdivision (a) of rule 320 for making an appearance, depending on the method of service.” CPLR
3213. In turn, CPLR 320(a) provides, in relevant part, that “[a]n appearance shall be made…within
thirty days after service is complete” if a Defendant was personally served outside the State of
New York pursuant to CPLR 313. CPLR 320(a).
1
As previously set forth in an Affidavit, sworn to by Ault, and filed in a prior action between these same parties (the
“Prior Action”), there is no entity named Digital Power Inc. “that has or had its office of principal place of business
at 201 Shipyard Way, Suite E, Newport Beach, CA 92663.” Affirmation of Robert B. Volynsky, dated July 1, 2020
(hereinafter “Volynsky Aff.”), at Ex. C, ¶ 3. Moreover, Defendant DPW “neither owns nor has any affiliation with
any entity named Digital Power Inc.” Id., at ¶ 4.
Further, and as previously disclosed in the Notice of Removal filed in the Prior Action, Defendant DPW Ventures,
Inc. is a d/b/a of Defendant DPW (Id., at Ex. D, at ¶ 7(c)), and on or about December 11, 2019, Defendant Power-Plus
Technical Distributors LLC was merged into another entity, non-party Digital Power Corporation. Id., at ¶ 7(e).
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Where, as here, a CPLR 3213 movant sets a return date or a due date for answering papers
prior to the time for making an appearance pursuant to CPLR 320(a), the Court lacks personal
jurisdiction over such Defendants because “the movant failed to provide the defendant timely
notice of the motion (and thus of the defendant’s obligation to file answering papers).” See Alpine
Capital Bank v. Estate of Eugenia S. Shiah, No. 656081/2019, 2020 N.Y. Misc. LEXIS 2137, at
*5 (Sup. Ct. N.Y. Cty. May 20, 2020); see also Bhanti v. Jha, 140 A.D.3d 685, 686 (2d Dep’t Jun.
1, 2016) (upholding lower court’s dismissal of plaintiff’s motion for summary judgment in lieu of
complaint for lack of jurisdiction where plaintiff “made the motion returnable on a date prior to
the expiration of the time within which the defendant had to appear in the action, which was a fatal
jurisdictional defect.”). Additionally, “because failing to provide sufficient advance notice of a
motion’s return date ‘create[s] a greater possibility of frustrating the core principles of notice to
the defendant[],’ this defect may not be corrected or disregarded under CPLR 2001.” See Alpine
Capital Bank, 2020 N.Y. Misc. LEXIS 2137, at *5-6.
Here, Plaintiff’s Motion set a return date of July 6, 2020. Volynsky Aff., at Ex. A.
However, and notwithstanding the fact that Plaintiff has yet to file an Affidavit of Service, upon
information and belief, on June 17, 2020, nine (9) identical sets of the Summons, the Notice of
Motion of Summary Judgment in Lieu of Complaint, the accompanying Memorandum of Law in
Support thereof, and the Affirmation of Ariel Bouskila, Esq. (with exhibit) (together, the “Initiating
Documents”) were personally delivered to an employee of Defendant DPW at DPW’s offices
located at 201 Shipyard Way, Suite E, Newport Beach, California 92663. Id., at ¶ 9 and Ex. B.
Notably, Plaintiff failed to include the Notice of Electronic Filing (Mandatory Case) with its
Initiating Documents, which, in and of itself, renders Plaintiff’s service ineffective and divests this
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Court of personal jurisdiction over Defendants. See generally, Alpine Capital Bank, 2020 N.Y.
Misc. LEXIS 2137, at *6.
Notwithstanding, assuming, arguendo, that the Court deems that this omission non-fatal,
the Motion is still jurisdictionally defective as Defendants’ time to serve answering papers (i.e.,
June 29, 2020) and the return date of the Motion (i.e., July 6, 2020) are set before Defendants’
time to make an appearance pursuant to CPLR 3213.
Particularly, as regards to the Entity Defendants, based on these facts, service would be
deemed complete on June 17, 2020 and as such, the return date and/or Defendants’ deadline to file
answering papers must be set at least thirty days from this date (i.e., July 17, 2020). It was not.
Further, as regards to Ault, service has not yet even been completed because Ault was not
personally served with the Initiating Documents, and as such, service on Ault cannot be deemed
complete until ten (10) days after the yet to be filed Affidavit of Service is filed. See N.Y. HIGHER
Educ. Servs. Corp. v. Hill, 1985 U.S. Dist. LEXIS 18224, at *6 (N.D.N.Y. Jul. 3, 1985) (analyzing
CPLR). Thus, Ault’s time to respond to the Motion has not even begun to run yet. As such, the
premature return date in the Motion is fatal to Plaintiff’s efforts to confer personal jurisdiction in
this Court over Defendants in this action.
More than that, Plaintiff’s failure to file an Affidavit of Service raises a separate,
interrelated issue concerning Ault. To the extent that Plaintiff failed to strictly comply with the
mailing requirements contained in CPLR 308(2) (which are equally applicable to personal service
of an individual outside of the State pursuant to CPLR 313), then it is axiomatic that the Court
lacks jurisdiction over Ault. See e.g., JP Morgan Chase Bank, N.A. v. Malik, No. 26278/2009,
2018 N.Y. Misc. LEXIS 1754, *6-7 (Suffolk Cty May 9, 2018); see also Lazarre v. Davis,
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109A.D.3d 968, 969 (2d Dep’t 2013) (The burden of proving that personal jurisdiction has been
acquired over a defendant in an action rests with the plaintiff).
Accordingly, the Court should deny Plaintiff’s motion for summary judgment in lieu of
complaint, in its entirety, and grant Defendants’ motion to dismiss for lack of personal jurisdiction,
in its entirety. 2
CONCLUSION
For all of the foregoing reasons, Defendants respectfully request that the Court issue an
Order denying Plaintiff’s motion for summary judgment in lieu of complaint, in entirety; granting
Defendants’ motion to dismiss for lack of personal jurisdiction, in it entirety; and for such other
and further relief as the Court deems just and proper.
Dated: Howard Beach, New York
July 1, 2020
Respectfully submitted,
WELTZ KAKOS GERBI WOLINETZ
VOLYNSKY LLP
By: /s/ Robert Volynsky
Robert B. Volynsky
170 Old Country Road, Suite 310
Mineola, New York 11501
Tel: (516) 320-6945
Attorneys for Defendants DPW Holdings Inc., DPW
Ventures Inc., Digital Farms Inc., Power-Plus
Technical Distributors LLC, Coolisys Technologies
Inc., I.AM Inc., Microphase Corporation, and
Milton C. Ault, III
2
Defendants should also be entitled to their costs and disbursements in connection with their motion to dismiss. See
Alpine Capital Bank, 2020 N.Y. Misc. LEXIS 2137, at *7 (May 20, 2020) (grating defendant’s motion to dismiss
plaintiff’s motion for summary judgment in lieu of complaint and awarding “costs and disbursements to be taxed by
the Clerk of the Court upon the submission of an appropriate bill of costs.”).
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Preview
FILED: NEW YORK COUNTY CLERK 07/01/2020 08:08 PM INDEX NO. 154031/2020 NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 07/01/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK --------------------------------------------------------------X CEDAR ADVANCE LLC, : : Plaintiff, : Index No. 154031/2020 : -against- : : DPW HOLDINGS INC., DPW VENTURES INC., : DIGITAL POWER INC., DIGITAL FARMS INC., : POWER-PLUS TECHNICAL DISTRIBUTORS : LLC, COOLISYS TECHNOLOGIES INC., I.AM : INC., MICROPHASE CORPORATION, and : MILTON C. AULT III, : : Defendants. : --------------------------------------------------------------X MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN LIEU OF COMPLAINT PURSUANT TO CPLR 3211(a)(8) WELTZ KAKOS GERBI WOLINETZ VOLYNSKY LLP 170 Old Country Road, Suite 310 Mineola, New York 11501 Tel: (516) 320-6945 Attorneys for Defendants DPW Holdings Inc., DPW Ventures Inc., Digital Farms Inc., Power- Plus Technical Distributors LLC, Coolisys Technologies Inc., I.AM Inc., Microphase Corporation, and Milton C. Ault, III On the Brief: Robert B. Volynsky 1 of 5 FILED: NEW YORK COUNTY CLERK 07/01/2020 08:08 PM INDEX NO. 154031/2020 NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 07/01/2020 PRELIMINARY STATEMENT Defendants DPW Holdings Inc. (“DPW”), DPW Ventures Inc., Digital Farms Inc., Power- Plus Technical Distributors LLC, Coolisys Technologies Inc., I.AM Inc., Microphase Corporation (collectively, the “Entity Defendants”), and Milton C. Ault, III (“Ault” and with the “Entity Defendants” collectively, “Defendants”), by and through their undersigned counsel, Weltz Kakos Gerbi Wolinetz Volynsky, LLP, hereby submit their Memorandum of Law in Support of Defendants’ Motion to Dismiss the Motion for Summary Judgment in Lieu of Complaint (“Plaintiff’s Motion”), filed by Plaintiff Cedar Advance LLC, pursuant to CPLR 3211(a)(8). 1 FACTUAL AND PROCEDURAL BACKGROUND The factual and procedural background of this matter are set forth in detail in the accompanying Volynsky Aff., to which the Court is respectfully referred. ARGUMENT CPLR 3213 provides, in relevant part, that “[t]he minimum time [that a motion for summary judgment in lieu of complaint] shall be noticed to be heard shall be as provided by subdivision (a) of rule 320 for making an appearance, depending on the method of service.” CPLR 3213. In turn, CPLR 320(a) provides, in relevant part, that “[a]n appearance shall be made…within thirty days after service is complete” if a Defendant was personally served outside the State of New York pursuant to CPLR 313. CPLR 320(a). 1 As previously set forth in an Affidavit, sworn to by Ault, and filed in a prior action between these same parties (the “Prior Action”), there is no entity named Digital Power Inc. “that has or had its office of principal place of business at 201 Shipyard Way, Suite E, Newport Beach, CA 92663.” Affirmation of Robert B. Volynsky, dated July 1, 2020 (hereinafter “Volynsky Aff.”), at Ex. C, ¶ 3. Moreover, Defendant DPW “neither owns nor has any affiliation with any entity named Digital Power Inc.” Id., at ¶ 4. Further, and as previously disclosed in the Notice of Removal filed in the Prior Action, Defendant DPW Ventures, Inc. is a d/b/a of Defendant DPW (Id., at Ex. D, at ¶ 7(c)), and on or about December 11, 2019, Defendant Power-Plus Technical Distributors LLC was merged into another entity, non-party Digital Power Corporation. Id., at ¶ 7(e). 1 2 of 5 FILED: NEW YORK COUNTY CLERK 07/01/2020 08:08 PM INDEX NO. 154031/2020 NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 07/01/2020 Where, as here, a CPLR 3213 movant sets a return date or a due date for answering papers prior to the time for making an appearance pursuant to CPLR 320(a), the Court lacks personal jurisdiction over such Defendants because “the movant failed to provide the defendant timely notice of the motion (and thus of the defendant’s obligation to file answering papers).” See Alpine Capital Bank v. Estate of Eugenia S. Shiah, No. 656081/2019, 2020 N.Y. Misc. LEXIS 2137, at *5 (Sup. Ct. N.Y. Cty. May 20, 2020); see also Bhanti v. Jha, 140 A.D.3d 685, 686 (2d Dep’t Jun. 1, 2016) (upholding lower court’s dismissal of plaintiff’s motion for summary judgment in lieu of complaint for lack of jurisdiction where plaintiff “made the motion returnable on a date prior to the expiration of the time within which the defendant had to appear in the action, which was a fatal jurisdictional defect.”). Additionally, “because failing to provide sufficient advance notice of a motion’s return date ‘create[s] a greater possibility of frustrating the core principles of notice to the defendant[],’ this defect may not be corrected or disregarded under CPLR 2001.” See Alpine Capital Bank, 2020 N.Y. Misc. LEXIS 2137, at *5-6. Here, Plaintiff’s Motion set a return date of July 6, 2020. Volynsky Aff., at Ex. A. However, and notwithstanding the fact that Plaintiff has yet to file an Affidavit of Service, upon information and belief, on June 17, 2020, nine (9) identical sets of the Summons, the Notice of Motion of Summary Judgment in Lieu of Complaint, the accompanying Memorandum of Law in Support thereof, and the Affirmation of Ariel Bouskila, Esq. (with exhibit) (together, the “Initiating Documents”) were personally delivered to an employee of Defendant DPW at DPW’s offices located at 201 Shipyard Way, Suite E, Newport Beach, California 92663. Id., at ¶ 9 and Ex. B. Notably, Plaintiff failed to include the Notice of Electronic Filing (Mandatory Case) with its Initiating Documents, which, in and of itself, renders Plaintiff’s service ineffective and divests this 2 3 of 5 FILED: NEW YORK COUNTY CLERK 07/01/2020 08:08 PM INDEX NO. 154031/2020 NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 07/01/2020 Court of personal jurisdiction over Defendants. See generally, Alpine Capital Bank, 2020 N.Y. Misc. LEXIS 2137, at *6. Notwithstanding, assuming, arguendo, that the Court deems that this omission non-fatal, the Motion is still jurisdictionally defective as Defendants’ time to serve answering papers (i.e., June 29, 2020) and the return date of the Motion (i.e., July 6, 2020) are set before Defendants’ time to make an appearance pursuant to CPLR 3213. Particularly, as regards to the Entity Defendants, based on these facts, service would be deemed complete on June 17, 2020 and as such, the return date and/or Defendants’ deadline to file answering papers must be set at least thirty days from this date (i.e., July 17, 2020). It was not. Further, as regards to Ault, service has not yet even been completed because Ault was not personally served with the Initiating Documents, and as such, service on Ault cannot be deemed complete until ten (10) days after the yet to be filed Affidavit of Service is filed. See N.Y. HIGHER Educ. Servs. Corp. v. Hill, 1985 U.S. Dist. LEXIS 18224, at *6 (N.D.N.Y. Jul. 3, 1985) (analyzing CPLR). Thus, Ault’s time to respond to the Motion has not even begun to run yet. As such, the premature return date in the Motion is fatal to Plaintiff’s efforts to confer personal jurisdiction in this Court over Defendants in this action. More than that, Plaintiff’s failure to file an Affidavit of Service raises a separate, interrelated issue concerning Ault. To the extent that Plaintiff failed to strictly comply with the mailing requirements contained in CPLR 308(2) (which are equally applicable to personal service of an individual outside of the State pursuant to CPLR 313), then it is axiomatic that the Court lacks jurisdiction over Ault. See e.g., JP Morgan Chase Bank, N.A. v. Malik, No. 26278/2009, 2018 N.Y. Misc. LEXIS 1754, *6-7 (Suffolk Cty May 9, 2018); see also Lazarre v. Davis, 3 4 of 5 FILED: NEW YORK COUNTY CLERK 07/01/2020 08:08 PM INDEX NO. 154031/2020 NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 07/01/2020 109A.D.3d 968, 969 (2d Dep’t 2013) (The burden of proving that personal jurisdiction has been acquired over a defendant in an action rests with the plaintiff). Accordingly, the Court should deny Plaintiff’s motion for summary judgment in lieu of complaint, in its entirety, and grant Defendants’ motion to dismiss for lack of personal jurisdiction, in its entirety. 2 CONCLUSION For all of the foregoing reasons, Defendants respectfully request that the Court issue an Order denying Plaintiff’s motion for summary judgment in lieu of complaint, in entirety; granting Defendants’ motion to dismiss for lack of personal jurisdiction, in it entirety; and for such other and further relief as the Court deems just and proper. Dated: Howard Beach, New York July 1, 2020 Respectfully submitted, WELTZ KAKOS GERBI WOLINETZ VOLYNSKY LLP By: /s/ Robert Volynsky Robert B. Volynsky 170 Old Country Road, Suite 310 Mineola, New York 11501 Tel: (516) 320-6945 Attorneys for Defendants DPW Holdings Inc., DPW Ventures Inc., Digital Farms Inc., Power-Plus Technical Distributors LLC, Coolisys Technologies Inc., I.AM Inc., Microphase Corporation, and Milton C. Ault, III 2 Defendants should also be entitled to their costs and disbursements in connection with their motion to dismiss. See Alpine Capital Bank, 2020 N.Y. Misc. LEXIS 2137, at *7 (May 20, 2020) (grating defendant’s motion to dismiss plaintiff’s motion for summary judgment in lieu of complaint and awarding “costs and disbursements to be taxed by the Clerk of the Court upon the submission of an appropriate bill of costs.”). 4 5 of 5