| Coby Group, LLC v Hasenfeld |
| 2007 NY Slip Op 09716 [46 AD3d 593] |
| December 11, 2007 |
| Appellate Division, Second Department |
| Coby Group, LLC, et al., Appellants, v Steve Hasenfeld etal., Respondents. 544 Union Avenue, LLC, Nonparty Appellant. (Action No. 1.) Coby Group(Union Avenue), LLC, et al., Respondents, v Leslie Westreich et al., Appellants. 544 UnionAvenue, LLC, Nonparty Appellant. (Action No. 2.) |
—[*1] Marshall C. Berger, New York, N.Y., for respondents in both actions.
In two related actions, inter alia, for injunctive relief, which were, in effect, joined for trial,(1) the plaintiffs in action No. 1 appeal from so much of an order of the Supreme Court, KingsCounty (Saitta, J.), dated August 11, 2006, as granted that branch of the cross motion of thedefendants in action No. 1 which was for a preliminary injunction, prohibiting them fromtransferring a contract for the purchase of property located at 544 Union Avenue in Brooklyn, orin the event of closing on the property, prohibiting them from selling or transferring the property,and restraining them from using the "cobygroup.com" domain name for a web site or for ane-mail address, and (2) the plaintiffs in action No. 1 and Leslie Westreich and Morty Yashar,defendants in action No. 2, appeal, as limited by their notice of appeal and brief, from so much ofan order of [*2]the same court, dated November 20, 2006, as,upon reargument, adhered to its prior determination except to the extent of, among other things,permitting the plaintiffs in action No. 1 to transfer the property on the condition that a percentageof the proceeds be held in escrow, and (3) the plaintiffs in action No. 1, Leslie Westreich andMorty Yashar, defendants in action No. 2, and the nonparty 544 Union Avenue, LLC, appealfrom an order of the same court, entered December 19, 2006, which directed 544 Union Avenue,LLC, to comply with the terms of the order dated November 20, 2006.
Ordered that the appeals by Leslie Westreich and Morty Yashar, defendants in action No. 2,from the order dated November 20, 2006, and the order entered December 19, 2006, aredismissed as they are not aggrieved by the portion of the order dated November 20, 2006, and theorder entered December 19, 2006, appealed from (see CPLR 5511); and it is further,
Ordered that the appeal from the order dated August 11, 2006 is dismissed, as that order wassuperseded by the order dated November 20, 2006, made upon reargument; and it is further,
Ordered that the order dated November 20, 2006 is reversed insofar as reviewed, on the law,so much of the order dated August 11, 2006, as granted that branch of the cross motion of thedefendants in action No. 1 which was for a preliminary injunction prohibiting the plaintiffs fromtransferring a contract for the purchase of property located at 544 Union Avenue in Brooklyn, orin the event of closing on the property, prohibiting them from selling or transferring the property,and restraining them from using the "cobygroup.com" domain name for a web site or for ane-mail address is vacated, and upon reargument, that branch of the cross motion is denied, andthe order entered December 19, 2006 is vacated; and it is further,
Ordered that the appeals by the plaintiffs in action No. 1 and the nonparty 544 UnionAvenue, LLC, from the order entered December 19, 2006, are dismissed as academic in light ofthe determination of the appeal from the order dated November 20, 2006; and it is further,
Ordered that one bill of costs is awarded to the plaintiffs in action No. 1 and the defendantsin action No. 2.
In 2004 Coby Group, LLC (hereinafter the Coby Group) was created and organized by itstwo members Leslie Westreich and Morty Yashar to develop and market commercial andresidential real estate. McCarron Park Condominiums, LLC (hereinafter McCarron), is affiliatedwith the Coby Group and is controlled by Westreich and Yashar. Steve Hasenfeld becameassociated with the Coby Group in December 2004. During the parties' business relationship,Hasenfeld worked on various real estate transactions and developed a computer system and website under the name Coby Group. In February 2005 the Coby Group entered into a contract topurchase property located at 544 Union Avenue in Brooklyn. In June 2005 Hasenfeld'sassociation with the Coby Group ended.
In November 2005 the Coby Group and McCarron (hereinafter collectively the plaintiffs)commenced an action against Hasenfeld and business entities under his control (hereinaftercollectively the defendants) and Hasenfeld commenced a separate action against the Coby Group,McCarron, Westreich, and Yashar. According to the plaintiffs, Hasenfeld was only an unpaidintern who allegedly converted their trade name, web site, and contract to purchase the 544Union Avenue property for his own benefit. To the contrary, Hasenfeld contended that he entered[*3]into a joint venture, forming a limited liability company withWestreich and Yashar, to purchase and develop real estate and that the purchase of the 544 UnionAvenue property was part of their agreement. The two actions were joined for trial and both theplaintiffs and defendants moved, inter alia, for injunctive relief.
On August 11, 2006 the Supreme Court granted, inter alia, that branch of the defendants'cross motion which was for a preliminary injunction prohibiting the plaintiffs from transferringthe contract to purchase the 544 Union Avenue property, or in the event of closing on theproperty, prohibiting them from selling or transferring the property, and restraining them fromusing the cobygroup.com domain name for a web site or for an e-mail address. Upon grantingreargument, the Supreme Court modified the provision of the preliminary injunction. In the eventof a subsequent sale or transfer of the 544 Union Avenue property, the court directed theplaintiffs to hold 30% of the net proceeds in escrow pending further order of the court.Additionally, the court directed that the plaintiffs or any entity owned or controlled by eitherYashar or Westreich could close on the contract to purchase the 544 Union Avenue propertyprovided that party agreed and stipulated to be bound by the escrow provisions of the order. 544Union Avenue LLC, an entity controlled by Westreich, acquired title to the 544 Union Avenueproperty.
In order to be entitled to a preliminary injunction, the movant must establish (1) a probabilityof success on the merits, (2) a danger of irreparable injury in the absence of an injunction, and (3)a balance of the equities in the movant's favor (see CPLR 6301; Aetna Ins. Co. vCapasso, 75 NY2d 860, 862 [1990]; W.T. Grant Co. v Srogi, 52 NY2d 496, 517[1981]; Dav-El Servs., Inc. vCommonwealth Worldwide Chauffeured Transp. of NY, LLC, 21 AD3d 928 [2005]; Gagnon Bus Co., Inc. v Vallo Transp.,Ltd., 13 AD3d 334, 335 [2004]).
Here, the defendants failed to establish a likelihood of success on the merits because thesubmissions by the parties indicated that it is unclear whether Hasenfeld entered into a jointventure with the principals of Coby Group (see Tilden of N.J. v Regency Leasing Sys.,230 AD2d 784, 786 [1996]; Natuzzi v Rabady, 177 AD2d 620, 622 [1991]). Moreover,the defendants failed to establish that they would suffer an irreparable injury without injunctiverelief (see Matos v City of NewYork, 21 AD3d 936, 937 [2005]; Neos v Lacey, 291 AD2d 434, 435 [2002];White Bay Enters. v Newsday, Inc., 258 AD2d 520, 521 [1999]). The assets sought to berestrained by the defendants are not specific funds which can rightly be regarded as "the subjectof the action" (see CPLR 6301; Credit Agricole Indosuez v Rossiyskiy KreditBank, 94 NY2d 541, 548 [2000]; Leo v Levi, 304 AD2d 621, 623 [2003]; Fischerv Deitsch, 168 AD2d 599, 601 [1990]). Finally, the defendants failed to establish that abalancing of the equities was in their favor (see Laro Maintenance Corp. v Culkin, 255AD2d 560, 561 [1998]; Klein, Wagner & Morris v Lawrence A. Klein, P.C., 186AD2d 631, 633 [1992]). Santucci, J.P., Krausman, Lifson and Balkin, JJ., concur.