Motion-Secondary: Diana Imports Inc. v. World Marketing Incorporated

On November 27, 2018 a Motion-Secondary was filed involving a dispute between Diana Imports Inc., and World Marketing Incorporated, for Commercial - UCC in the District Court of New York County.

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK____________________
DIANA IMPORTS INC. )
) Index No. 655885/2018
)
Plaintiff, )
-against- )
)
WORLD MARKETING INCORPORATED )
)
Defendant. )
___________________________________________)

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S ORDER TO SHOW
CAUSE TO STAY OR VACATE DEFAULT JUDGMENT, FOR PRELIMINARY
INJUNCTIVE RELIEF, AND TO ENFORCE SETTLEMENT

The Defendant, World Marketing Incorporated (“the Defendant”), submits this

Memorandum of Law in support of its Order to Show Cause to Stay Enforcement of and Vacate the

December 16, 2019, Decision and Order of this Court on Default; Preliminary Injunctive Relief

restraining the Plaintiff from taking or continuing with any actions to enforce the Judgment; and to

Enforce the Settlement between it and the Plaintiff, Diana Imports, Inc. (“the Plaintiff”). For the

reasons set forth below, the Defendant’s Application should be granted.

Preliminary Statement

Thus case arises out of a Judgment following an Inquest in which Plaintiff’s Counsel – a 68-

year-old lawyer with no previous non-appearances and an unblemished career – failed to appear

for medical reasons, and the Court penalized a small, family-owned garment business in the sum of

$258.780.85 and in favor of a company that had been paid over $300,000 and failed to deliver goods

paid for. The Judgment further provided that all goods could be moved, and permitted a private-

label/Steve Harvey shirts (subject to non-party licensing and royalty agreements) to also be sold.

While the Defendant previously moved for a Stay and Vacatur of the Judgment, since that

time new facts have emerged: The Parties reached a settlement that the Plaintiff proceeded to

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covertly breach by levying the Defendant’s bank account during a time when its lawyer was speaking

with the undersigned, and when both Parties were acting in accord with the Settlement. The

Defendant stipulated to adjourn the hearing date on the Motion to Vacate. Additionally, the

undersigned has obtained a transcript of the Inquest and, upon review by the Defendant, learned that

the Plaintiff presented false evidence.

Absent the within relief on an emergent basis, the Defendant stands to be irreparably harmed

by the drain of funds and reputational impact.

Statement of Relevant Facts

I. Proceedings Below

Robert Hantman (“Hantman”) submitted an Affirmation in support of the Defendant’s

Motion to Vacate the Court’s Order dated December 19, 2019, and resulting Judgment upon Default

rendered December 31, 2019, and/or to Enforce Settlement (Exhibit B) between the Defendant and

the Plaintiff (Hantman Aff., ¶2). The Order directed the Defendant to pay the Plaintiff $258,780.85,

based on Hantman’s non-appearance at Inquest Hearing on December 14, 2019, and permitted the

Plaintiff to release goods it was storing (Id. at ¶3).

The Order resulted from Hantman’s unintentional nonappearance at the Inquest Hearing

scheduled for December 14, 2019, in spite of a November 27, 2019, mediation in which a Settlement

was agreed to in principal and a written proposal sent on December 9, 2019 (Id. at ¶4).

The client was out of town during these four (4) days between the seemingly successful

Settlement and the Inquest Hearing (Id. at ¶5). Further two of these four days of fell on a weekend

(Id.).

Hantman planned on attending the Inquest Hearing and requesting an adjournment, as a

signed settlement agreement was imminent, which Plaintiff was aware of (Id. at ¶6).

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Hantman is 68 years old and suffers from sleep apnea for which he needs to use a CPAP on a

daily basis (Id. at ¶7). However, the machine has not been working (he is in the process of replacing

it), and has had and will have difficulty sleeping until a new one is delivered (Id.).

The absence of the prescribed CPAP machine was compounded by the fact that night before

the Inquest Hearing, Hantman was up until 2:30 AM working on a letter to Judge Troia on an

emergent matter (Id. at ¶8).

Unfortunately, due to the late-night work on the emergent matter and lack of the CPAP

machine, Hantman did not wake up in time (Id. at ¶9). This resulted in Hantman’s nonappearance

(Id.).

By Order to Show Cause dated December 18, 2019, the Defendant moved to Vacate the

Judgment or for a Stay thereof pending appeal (Id. at ¶10).

Simultaneously, the Defendant filed a Notice of Appeal with the Appellate Division (Id. at

¶11).

The Court did not want to hear Hantman’s argument at Hearing on the Order to Show Cause,

stating that the application have been filed first, and telling him to remain quiet (Id. at ¶12).

Therefore, he was unable to present the Defendant’s argument (Id.).

On December 18, 2019, the Court denied that branch of the Motion that was for a Stay (Id. at

¶13). The Motion to Vacate is still pending (Id.).

Though the Defendant’s request to Vacate is technically stillpending, this Motion is being

brought for that and enforcement relief based on the occurrence of new facts and information that

change the posture of proceedings (Id. at ¶14).

In the meantime, the Court encouraged the Parties to settle this matter (Id. at ¶15).

Following submission of the Defendant’s Order to Show Cause, and in accord with this

Court’s suggestion, Counsel for the Parties began settlement talks (Id. at ¶16).
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The talks were motivated by (i) the Plaintiff’s desire to avoid this Motion practice and

potentially motion practice with the Appellate Division; and (ii) the Defendant’s desire to avoid any

attempts to enforce the Judgment (Id. at ¶17).

These discussions culminated at a January 24, 2020, meeting, at which the Parties and their

respective Counsel were present (Id. at ¶18). The Plaintiff was represented by Evan Weinbraub, who

signed the resulting Memorandum of Agreement on its behalf (Id.).

The Plaintiff’s agreement not to move on the Judgment was essential because, among other

things, the goods that it had permission to discard under the Judgment were paid for by the

Defendant and licensed to Steve Harvey (Id. at ¶19). Therefore, their potential dissemination could

give rise to issues for and with a third party.

During that discussion, Libou informed Hartman that the former firm partner on the case

(Weintraub) was no longer working on the matter, and that it would be assigned to a new attorney

(Id. at ¶20).

Libou, Perle, and Hartman agreed by phone that the Plaintiff would take no steps to enforce

or act on the Order, and that the Defendant would not file any Motion papers (Id. at ¶21).

At the same time, Counsel agreed that the Parties and Counsel would meet to further

settlement (Id. at ¶22).

In accord with this, the Parties and Counsel all met at Plaintiff’s Counsel’s office to reach a

formal settlement (Id. at ¶23).

As described in the Perle Affirmation, the Memorandum was intended to be binding on the

Parties and served as a way to avoid the time and expense to both sides in further litigation (Id. at

¶24).

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The Defendant immediately began acting upon the Memorandum in the following days,

which the Plaintiff knew of and cooperated with (Id. at ¶25). The Plaintiff agreed to release samples

of the goods to the Defendant and, upon the Defendant’s approval, the same would be sold (Id.).

At the same time, the Defendant sought assurance – through Hantman – that the Plaintiff was

planning to adhere to the terms of the Memorandum and proceed in good faith (Id. at ¶26).

On January 27, 2020, Hantman emailed Weintraub and asked for status, and suggested that

they stipulate to an adjournment of the Order to Show Cause to avoid time and expense to both

Parties (Id. at ¶27).

Hantman received a response on the same date stating that the Plaintiff was working on

getting information needed from its warehouse, which he expected to have the following day (Id. at

¶28).

On January 29, 2020, Weintraub’s office emailed a Stipulation of Adjournment that Counsel

had discussed (Id. at ¶29).

The Stipulation was filed on even date and is not returnable until March 24, 2020 (Id. at ¶30).

Later that day, the undersigned learned that the Plaintiff discharged Weintraub and retained

new counsel (Id. at ¶31).

In the meantime, the Parties set to work on arranging to ship and receive samples (Id. at ¶32).

On January 30, 2020, the Plaintiff arranged to FedEx samples to the Defendant as per its

instructions (Id. at ¶33).

New Counsel appeared for the Plaintiff on January 31, 2020 (Id. at ¶34).

Hantman immediately took up communications with new counsel (Douglas Pick) to ensure

that the Plaintiff was acting in good faith pursuant to the Memorandum (Id. at ¶35).

In response to an email Hantman sent dated January 31, 2020, Pick denied that there was a

signed or verbal agreement that put a stay on collections (Id. at ¶36).
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Hantman responded that there was a tentative settlement and verbal agreement, which was

why the Defendant did not seek immediate relief with the Appellate Division (Id. at ¶37).

Pick responded that Hantman would need to either make a reasonable settlement offer or

otherwise take any steps deemed necessary (Id. at ¶38). The samples were sent, received, and

approved (Id.).

On February 10, 2020, Hantman learned that the Plaintiff had taken steps to levy the

Defendant’s bank account (Id. at ¶39). Indeed, the Notice received was signed February 3, 2020, by

Pick, indicating that the Plaintiff was well-aware – at least one week ago – that it was moving toward

enforcing the Judgment.

Michael Perle (“Perle”) has Affirmed that, on January 13, 2020, he entered an appearance as

co-counsel for the Defendant, but his personal involvement with the events in question began

somewhat in approximately the first week in January (Perle Aff., ¶2). He learned that the matter

involved a dispute relating to a sale of goods—garments held in storage for an extended period of

time during this dispute (Id.).

The January 24, 2020, Settlement Memorandum eventuated from a series of preliminary

contacts Hantman and Perle had with lawyers from Wachtel Missy, LLP, then-counsel for the

Plaintiff, which began in early January (Id. at ¶3). Prior to formally entering his appearance, Perle

had a series of calls on January 9-10, 2020, with Libou (Id.). At the time, the return date on the

Defendant’s OSC was set for January 16, 2020, but Libou expressed the Plaintiff’s interest in settling

the matter to avoid what he anticipated would be significant costs for both Parties relating to motion

practice and possibly further litigation (Id.).

Perle also believed that it was in the best interet of the Parties to attempt to reach a fair

settlement (Id. at ¶4). In this way, Libou agreed that the Plaintiff would not move to enforce the

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Judgment, and Perle agreed that the Defendant would not file for a stay with the Appellate Division,

so that the Parties might settle (Id.).

In these conversations, Libou and Perle acknowledged lacking knowledge and understanding

of the business involved such that they could reach a settlement, so the onoy realistic way to reach

one was through a face-to-face meeting between the Parties (Id. at ¶5). The two agreed to attempt to

set up such meeting, during which time the Defendant agreed to adjourn the OSC to February 11,

2020, and the Plaintiff would refrain from any enforcement activities (Id.).

A preliminary conference call amongst counsel occurred on January 17, 2020, during which

possible options and an agenda for the potential meeting were discussed (Id. at ¶5). Over the next

few days, Counsel communicated by phone and email to schedule a meeting, finally set for January

24, 2020, at Plaintiff’s then-counsel’s office (Id.).

The meeting occurred on that date, attended by Neil and Jerry Mossberg (the Defendant’s

principals), Hantman, Perle, Ajay Soni and another gentleman, and Libou and Weintaub (Id. at ¶6).

After Counsel on both sides made opening remarks about desiring settlement, the next nearly three

(3) hours were spent devoted almost exclusively to discussions between the Parties in which they

explored various settlement options (Id.).

A proposal generated entirely through the discussions and negotiations between the Parties

resulted (Id. at ¶7). It was tentative to the extent that, in order to be implemented, certain

assumptions regarding third-parties would have to be confirmed and the Defendant had to be given

opportunity to confirm that the goods were in saleable condition and that licensing agreements would

be complied with (Id.).

All material terms within the immediate control of the Parties were agreed upon at the

meeting and were embodied in a “Memorandum of Settlement,” executed by Counsel at the

conclusion of the meeting (Id. at ¶8). While the Memorandum indicated that it contemplated a
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formal agreement that would follow and that collateral documents between the Parties would be

required, it was not an ‘agreement to agree” (Id.). The Memorandum was instead a plainly spelled-

out understanding that, if the Parties proceeded in good faith and inspection confirmed that the

garments were in saleable condition, the generation of such documents would be pro forma and the

negotiation and execution of definitive agreements would be a formality (Id.).

Counsel also discussed the need to adjourn again the return date on the OSC beyond the

February 11, 2020, date, to allow sufficient time for the necessary drafting and confirmations and

third-party arrangements (Id. at ¶9).

The mutual intent that the terms set forth in the Memorandum would become, and did

become, a full settlement was confirmed over the following six (6) days (Id. at ¶10). On January 27,

2020, Hantman and Libou corresponded regarding implementing the settlement (Id.). In Hantman’s

email at 5:19 PM, he asked Plaintiff’s Counsel:

Any progress on tentative settlement? What are we waiting for? Perhaps we
should stipulate to an adjournment so that you don’t need to respond and, at the
same time, we don’t have to submit additional papers as we now have a transcript
of the inquest and would need to address what the Court relied upon. Please
respond as ASAP thanks.

(Id.).

Libou replied at 5:23 PM:

Hi Robert,

I actually spoke with Ajay a few minutes ago and he is working on getting the
additional info he needs from his warehouse. He expects to have an answer by
tomorrow. Let’s plan to revisit this tomorrow afternoon.

Thanks,
Jason.

(Id.).

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In an email at 5:42 PM on January 27, 2020, Libou wrote to Hantman that “I will plan to call

the court tomorrow and ask about possible dates for the adjournment” (Id. at ¶11).

On January 29, 2020, Hantman sent an email to Libou at 3:21 PM, asking, “Can you ask them

to ship the samples to the palazzo hotel under neil Mossberg[?]” At 4:31 PM, Jason Libou replied:

Hi Robert, If your client wants the samples shipped to Vegas, please ask
WMI to provide a FedEx or UPS account number. Thanks, Jason

(Id. at ¶12).
On January 29, Jason Libou prepared, and Hantman signed, a further stipulation adjourning

the return date on the Defendant’s OSC from February 11 to March 24, 2020 (Id. at ¶13).

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Per the correspondence, the Plaintiff shipped by January 30 the samples to the Defendant,

per the instructions transmitted to Libou (Id. at ¶14). Thus, by January 30, 2020, there clearly had

been both part performance by each party, and mutual acceptance of the performance of the other

party, demonstrating unequivocally mutual assent to be bound by the terms of the Memorandum of

Settlement (Id. at ¶15). This occurred simultaneously with the execution of the stipulation

adjourning the Defendant’s OSC from February 11 to March 24 (Id.). This accommodation

necessarily had to be predicated as before upon the understanding that in the interim not only would

the Defendant not seek a stay in the Appellate Division, but also the reciprocal understanding that,

as with the two prior stipulations adjourning the return dates of the OSC, the Plaintiff would hold its

enforcement efforts in abeyance, as well proceed in good faith to complete the implementation of

the settlement (Id.).

Accordingly, subsequent to the Memorandum’s execution, the Defendant’s counsel

discontinued all efforts to file for relief with the Appellate Division based upon the assurances of

the Wachtel firm that, during the period through the adjourned return dates, the Plaintiff would not

dispose of the goods, or attempt to execute on the judgment (Id. at ¶16).

Notably, in addition to the Plaintiff agreeing to send the samples and making other

arrangements contemplated by the Memorandum, at no point through January 30, 2020, or as long

as the Wachtel Missy firm was remained in the case, did the Plaintiff did not advise or signal to the

Defendant that it should discontinue performing in accordance with the Memorandum (Id. at ¶17.).

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However, on January 31, 2020, Defense Counsel were somewhat startled to

learn from an NYCEF email that the Plaintiff had apparently fired Wachtel Missy and

engaged new counsel (Id. at ¶18). Perle communicated by phone and email with Doug

Pick a few days later (Id.). He provided him with a copy of the memorandum and

recounted the related events, both prior to and after its execution (Id.). He advised that

his client had told him a totally different story and had denied that it had ever agreed to

any suspension of enforcement activities, notwithstanding the prior adjournments of the

OSC (Id.).

Within the last few days, with the Defendant’s OSC on hold until March 24,

the Plaintiff, through new counsel, moved to exploit the situation by aggressively

pursuing enforcement of the judgment (Id. at ¶18).

Perle submits that the Plaintiff’s firing of the Wachtel Missy firm, and its

engagement of new counsel, unacquainted with proceeding events and understandings,

can only be interpreted as act of blatant bad faith—to blow-up an understanding which

was well on the way to full consummation (Id. at ¶20).

II. Merits

Neil Mossberg (“Mossberg”), the Vice President of the Defendant, has explained

that the Defendant is a 30-year-old family business which designs, imports, and sells

apparel (Mossberg Aff., ¶1). He has been working in the garment production and

distribution industry for over 25 years (Id.).

The Defendant designs and then develops products, and contacts overseas

manufacturers to produce that apparel (Id. at ¶3). The Defendant’s customers include JC

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Penny, Costco, Tilly’s, US Army and Air Force Exchange Service, Macy’s, Amazon and

others (Id.).

The Defendant was introduced through a mutual friend to produce products on its

behalf (Id. at ¶4). It chose to do business with the Plaintiff because it was having

problems with other suppliers taking deposits paid for goods, but never delivering (Id. at

¶5). Because of these previous problems, the non-payment of deposits was a crucial

element to the Defendant’s agreement with the Plaintiff to prevent further losses due to

the fraud of business partners (Id.).

The Plaintiff knew that one of the main reasons the Defendant was doing business

with it was to avoid paying deposits, but then waited until after spending months

finalizing the details of the orders and, even accepting the orders to demand deposits (Id.

at ¶6). At that point, it was not too late for the Defendant to switch suppliers; it had to

oblige and pay the deposits, which amounted to $60,000 (Id.).

Throughout the business relationship, the Plaintiff continually cheated the

Defendant, then brought the action making false accusations that it was owed money

when the Plaintiff owes the Defendant money and products that were paid for, but the

Plaintiff still refuses to release them (Id. at ¶7).

The Plaintiff’s allegations and the false statements in Ajay Soni’s Affidavit, and

in the transcript of the Inquest Hearing, are glaring when viewed against the evidence of

the business dealings that are attached (Id. at ¶8).

The Judgment entered against the Defendant will be crippling for the company

and its employees especially given that the Defendant was the party actually harmed in

the underlying transactions (Id. at ¶9).

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The Plaintiff directly stole from the Defendant by refusing to release goods

already paid for and overcharging for fees that the Defendant was not obligated to pay in

the first place (Id. at ¶10). Further, their actions also caused huge losses from failed

arrangements with the Defendant’s customers due to the Plaintiff delivering goods late

and damaged in some cases, or never delivering them at all (Id.).

The massive Judgment against the Defendant will rub salt in those wounds, truly

cause irrevocable damage, and likely cause the total destruction of the Defendant (Id. at

¶11).

The force of the Plaintiff’s actions, and the Judgment will spread to more innocent

victims (Id. at ¶12). Today, the Defendant employs fifteen (15) people (Id.). This

Judgment will make it impossible to meet payroll and cause immediate layoffs (Id.).

The Judgment will also cause the Defendant to fail to make regular payments to

its other business partners, risk additional lawsuits, and put strain on the company’s

abilities to pay its lines of credit and pay employees (Id. at ¶13).

All of this is not based on the actual facts of the case, but to punish the Defendant

for something its lawyer did (Id. at ¶14). The Plaintiff lied to the Defendant and stole its

goods, and also to the court (Id. at ¶15).

In May 2018, after initial meetings, the Defendant placed several orders for

multiple groups of products with the Plaintiff (Id. at ¶16). The orders placed were

accepted with the dates of delivery, terms of payment, and packing instructions already

negotiated (Id.). The products were to be delivered in staggered deliveries to third-party

warehouses specified by the Defendant and with specific packaging to protect it from the

elements (Id.). The Defendant Cut Ticket Orders as well as the Plaintiff’s own invoices

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sent in response to the Defendant’s orders show that the place of delivery was to be

warehouses that were designated by the Defendant, not the Los Angeles Port, as the

Plaintiff has maintained throughout this action, namely through Ajay’s testimony (Id.).

This is confirmed in the Defendant’s and the Plaintiff’s initial orders; the t-shirts

that were delivered to the designated warehouse without any further negotiation on the

topic (Id. at ¶17). It directly contradicted the Soni Affidavit at the Inquest Hearing, as he

claimed that the goods were to be the Defendant’s responsibility once they arrived at Los

Angeles Port (Id. at ¶18). It also generally contradicts every one of the Plaintiff’s claims,

as it claims for each order that the “goods timely arrived in the U.S. at Los Angeles port

and to the Plaintiff’s public nominated warehouse in Los Angeles (Id. at ¶19).

In fact, the Defendant was not obligated to accept or pay for any goods until they

were delivered to the warehouse of the Defendant’s designation (Id. at ¶20). Any claims

of warehouse fees by the Plaintiff are therefore improper since it was supposed to deliver

the goods and was willing to accept it (Id. at ¶21).

Delivery dates were crucial, as many of the agreements with purchasers contained

cancellation clauses or mandatory discount fees that trigger upon certain dates (Id. at

¶22). Further delivery quantities were crucial, as they had to pay per piece for freight and

warehousing and, thus, receiving items in bulk causes supply chain costs and problems

(Id. at ¶22).

The Plaintiff claims that the t-shirts “timely arrived in the U.S. at Los Angeles

port and to its public-nominated warehouse in Los Angeles (Id. at ¶23). The agreed

destination was the Defendant’s designated warehouse, which goods were delivered to

(Id.). However, the goods were not timely delivered as they were to be delivered on

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September 15, 2018, but were not delivered until September 24, 2018, and were delivered

damaged and improper packaging (Id. at ¶23).

Because of this, the Defendant requested a discount on the orders of $9000 which

the Plaintiff approved an October 29, 2018, email from Vinny (Id. at ¶24). The Plaintiff

does not note this discount in its Complaint or evidence (Id. at ¶25).

For part of the t-shirts orders, the Defendant ran late and needed to fly in the

goods which costs more than shipping via boat (Id. at ¶26). The Defendant agreed to

help the Plaintiff even though it ran late and had the initial responsibility of delivering the

goods on time to the Defendant’s warehouse (Id.). The Defendant agreed to contribute

$0.6/PCS for 2383 PCS that the Plaintiff flew in (Id.). It took advantage of the

unrequired contribution to the air freight by overcharging by $0.15/PCS for the freight for

a total of $357.45 (Id.). This agreed-upon $.6/PCS is confirmed in a September 2008

email exchange between Vinny the Defendant (Id.).

After accepting the orders, in July 2018, months after the companies had begun

doing business, the Plaintiff came back to the Defendant to change the terms of the

agreement in regard to requiring down payments (Id. at ¶27). As explained, not needing

to place down payments were part of the reason why the Defendant chose to give the

Plaintiff the orders in the first place and the Plaintiff knew of the fact (Id.).

By the time the Plaintiff decided to demand deposits the Defendant did not have

time to place orders with another supplier and satisfy its obligations, so that it had no

choice but give deposits of $10,000 on September 6, 2018, $10,000 on September 11,

2018, and $40,000 on October 9, 2018 or run the risk of losing orders (Id. at ¶28).

These deposits are absent from the Plaintiff’s Complaint (Id. at ¶29).

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Regarding the flannels, the Plaintiff not only requested the $40,000 deposit that

was paid, but also demanded that the Defendant pay for the order in full before it would

release it to the third-party transport service, which it was required to organize and pay

for even though it was the Plaintiff’s responsibility to get the goods to the warehouse (Id.

at ¶30).

The first two times the Defendant paid the full payments, the Plaintiff released the

goods (Id. at ¶31). However, the deliveries arrived late, so the Plaintiff agreed to give the

Defendant a discount of $19,362 (Id.). The discount was confirmed in writing by an

email from the Plaintiff to the Defendant (Id.).

This discount is absent from the computations that the Plaintiff has used in their

claims and in Ajay’s Affidavit (Id. at ¶32). The third time the Plaintiff made the demand,

the Defendant made payment and the Plaintiff sent an October 31, 2018, email to the

agreed upon third-party trucking company regarding specifications of the delivery (Id. at

¶33). However, the Plaintiff refused to release the goods when the truck was en route

(Id.).

The Plaintiff retained the $60,000 deposit, the $59,543.05, full payment of the

goods, and the goods themselves while claiming that it was owed for full payment of the

flannels, which was paid in full as confirmed by the October 31, 2018, email sent by

Vinny (Id. at ¶34).

Regarding the sweaters that the Plaintiff claimed it was owed for, they were never

delivered (Id. at ¶35).

Additionally, the Plaintiff claims that the Defendant owes $32,235.82 for the air

freight for these orders (Id. at ¶36).

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While the Defendant agreed to split the costs of the air freight for the t-shirt

orders, it was not obligated to do so, and it never agreed to share costs of such shipping

for the sweaters (Id. at ¶37). This was the responsibility of the Plaintiff (Id.).

The Plaintiff took the deposits that the Defendant was coerced into making and

then ran late on multiple deliveries, bought large amounts of goods all at one time as

opposed to in agreed-upon scheduled deliveries, or took orders and failed to produce

goods altogether (Id. at ¶38).

The Defendant tried several times to negotiate with the Plaintiff (Id. at ¶39).

Nevertheless, the Plaintiff caused the Defendant to lose sales of approximately $400,000,

and stole $120,000 in the form of deposits and full payments for undelivered goods (Id. at

¶40).

The Defendant gave the Plaintiff over $300,000 to date for things they have not

fully done (Id. at ¶42), totaling $332,220.65 (Id. at ¶43).

Jerry Mossberg, President of the Defendant (Jerry Aff., ¶1), has affirmed that the

Judgment is causing damage from which it might not recover (Id. at ¶2). It cannot pay its

employees (Id. at ¶5). The Plaintiff stole over $100,000 from the Defendant, and then

sued (Id. at ¶7).

The Parties attempted to reach a resolution, but the Plaintiff failed to honor the

agreement (Id. at ¶8).

The Plaintiff took orders from the Defendant and then changed the terms of the

agreement (Id. at ¶12); it received full payment and then kept the merchandise (Id. at

¶14). It delivered damaged goods that were improperly shipped (Id. at ¶20), costing sales

losses in excess of $400,000 for the Defendant (Id. at ¶21).

17 of 32
FILED: NEW YORK COUNTY CLERK 02/11/2020 11:30 PM INDEX NO. 655885/2018
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 02/11/2020

Argument

I. The Court Should Stay Enforcement of the Order In Light of the
Likelihood of Success On the Merits and the Equities.

Law

CPLR 2201 provides that, “[e]xcept where otherwise prescribed by law, the court

in which an action is pending may grant a stay of proceedings in a proper case, upon such

terms as may be just.”

Article 22 permits a court to stay proceedings in a proper case upon such terms as

may be just. It is within the court’s discretion to stay execution of a judgment upon the

disclosure of “exceptional circumstances.” Coburn v. Coburn, 109 A.D.2d 984, 985, 486

N.Y.S.2d 467, 467 (3d Dept. 1985).

Application

Here, exceptional circumstances command that a stay be issued preventing the

Plaintiff from further attempting to enforce the Judgment. The Plaintiff has already

moved to levy the Defendant’s bank account. The Defendant is a small,

Case Info

Judge

Francis A Kahn Iii Track Judge’s New Case

Case No.

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Document Filed Date

February 11, 2020

Case Filing Date

November 27, 2018

County

Parties

DIANA IMPORTS INC. Plaintiff
HA, BRYAN Attorney for the Defendants
HANTMAN, ROBERT JAY Attorney for the Defendants
KLEINHENDLER, HOWARD Attorney for the Plaintiff
LIBOU, JASON LOUIS Attorney for the Plaintiff
PERLE, MICHAEL RICHARD Attorney for the Defendants
PICK, DOUGLAS J Attorney for the Plaintiff
WORLD MARKETING INCORPORATED Defendant
ZABICKI, ERIC C Attorney for the Plaintiff
EVAN WEINTRAUB Attorney
JASON LIU Attorney
NYALL COOK Attorney

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Motion-Secondary: Diana Imports Inc. v. World Marketing Incorporated

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Case Info

Parties