| Reichman v Reichman |
| 2011 NY Slip Op 07023 [88 AD3d 680] |
| October 4, 2011 |
| Appellate Division, Second Department |
| Michael Reichman, Appellant, v Paul Reichman,Respondent. |
—[*1] Jaspan Schlesinger, LLP, Garden City, N.Y. (Steven R. Schlesinger, Jared A. Kasschau, andSeth A. Presser of counsel), for respondent.
In an action, inter alia, for a judgment declaring that the plaintiff is the holder of the majorityof shares in Bedbathstore.com, LLC, for an accounting, and to impose a constructive trust on,among other things, the assets of Bedbathstore.com, LLC, the plaintiff appeals, as limited by hisbrief, from so much of an order of the Supreme Court, Nassau County (Driscoll, J.), enteredMarch 15, 2011, as, after a hearing, denied his motion to preliminarily enjoin the defendant, theother member of Bedbathstore.com, LLC, from, inter alia, having access to the assets and recordsof Bedbathstore.com, LLC, during the pendency of this action. By decision and order on motiondated April 14, 2011, this Court granted stated portions of the plaintiff's motion, inter alia, to staythe defendant from accessing the computers and servers of Bedbathstore.com, LLC, pendinghearing and determination of the appeal.
Ordered that the order is modified, on the facts and in the exercise of discretion, by deletingthe provisions thereof denying those branches of the plaintiff's motion which were topreliminarily enjoin the defendant, during the pendency of this action, from transferring anyYahoo accounts associated with Bedbathstore.com, LLC, transferring the domain nameassociated with Bedbathstore.com, LLC, accessing Bedbathstore.com, LLC, computers andservers and the online credit card transaction processing terminals related to the company'soperations except in the ordinary course of business, making any expenditure of funds ofBedbathstore.com, LLC, that are not in the ordinary course of business, altering the financialrecords of Bedbathstore.com, LLC, except in consultation with the accountant for the company inaccordance with generally accepted accounting practices, or drawing any funds from thecompany, other than a base salary in the ordinary course of business, and substituting therefor aprovision granting those branches of the [*2]plaintiff's motion; asso modified, the order is affirmed insofar as appealed from, with costs to the plaintiff, and thematter is remitted to the Supreme Court, Nassau County, for the fixing of an appropriateundertaking pursuant to CPLR 6312.
The plaintiff commenced this action, inter alia, for a judgment declaring that he is the holderof the majority of shares in Bedbathstore.com, LLC (hereinafter the LLC), for an accounting, andto impose a constructive trust. The plaintiff moved to preliminarily enjoin the defendant, theother member of the LLC, from, inter alia, having access to the assets and records of the LLC,during the pendency of this action.
"A party seeking the drastic remedy of a preliminary injunction has the burden ofdemonstrating, by clear and convincing evidence, (1) a likelihood of ultimate success on themerits, (2) the prospect of irreparable injury if the provisional relief is withheld, and (3) abalancing of the equities in the movant's favor" (Berkoski v Board of Trustees of Inc. Vil. of Southampton, 67 AD3d840, 844 [2009]; see Shasho vPruco Life Ins. Co. of N.J., 67 AD3d 663, 665 [2009]; Matter of Related Props., Inc. v Town Bd.of Town/Vil. of Harrison, 22 AD3d 587, 590 [2005]). "The purpose of a preliminaryinjunction is to maintain the status quo and prevent the dissipation of property that could render ajudgment ineffectual" (Ruiz vMeloney, 26 AD3d 485, 486 [2006]). "The decision to grant or deny a preliminaryinjunction lies within the sound discretion of the Supreme Court" (Arcamone-Makinano v Britton Prop.,Inc., 83 AD3d 623, 625 [2011]). "The mere existence of an issue of fact will not itselfbe grounds for the denial of the motion" (id.).
Here, the plaintiff demonstrated, inter alia, a likelihood of ultimate success on the merits onthe causes of action for an accounting and to impose a constructive trust by submitting evidencetending to show that he is a member of the LLC, including a copy of the LLC operatingagreement, which states that he owns a 40% share of the LLC (see Limited LiabilityCompany Law § 1102 [a]; seealso Man Choi Chiu v Chiu, 38 AD3d 619, 620-621 [2007]; Matter of Capizola v Vantage Intl., 2AD3d 843, 844-845 [2003]). Contrary to the defendant's contention, the record does notshow, at this point, that those causes of action are time-barred (see CPLR 213 [1]), anddoes not show that it was improper for the plaintiff to seek such relief in his individual capacity(see Craven v Rigas, 85 AD3d1524 [2011]). Further, the plaintiff demonstrated potential irreparable injury to the companyabsent the preliminary injunction, and the balance of the equities are in the plaintiff's favor (see S.J.J.K. Tennis, Inc. v Confer Bethpage,LLC, 81 AD3d 629, 630 [2011]; Hicksville Props. v Wollenhaupt, 268 AD2d407, 409 [2000]). Under these circumstances, the Supreme Court should have granted theplaintiff's motion to the extent indicated herein. Prudenti, P.J., Rivera, Austin and Roman, JJ.,concur.