| Brach v Harmony Servs., Inc. |
| 2012 NY Slip Op 02075 [93 AD3d 748] |
| March 20, 2012 |
| Appellate Division, Second Department |
| Nathan Brach, Respondent-Appellant, v Harmony Services,Inc., et al., Appellants-Respondents, et al., Defendants. |
—[*1] Andrew Citron, New York, N.Y., for respondent-appellant.
In an action, inter alia, for a permanent injunction, the defendants Harmony Services, Inc.,and Leah Hirth appeal from so much of an order of the Supreme Court, Orange County (Cohen,J.), dated December 7, 2010, as granted the plaintiff's motion for a preliminary injunction, deniedtheir cross motion pursuant to CPLR 3211 (a) to dismiss the complaint insofar as asserted againstthem, and denied their separate motion pursuant to CPLR 511 (b) to change the venue of theaction from Orange County to Kings County, and the plaintiff cross-appeals from so much of thesame order as denied his cross motion to compel arbitration and granted the motion of thedefendants Harmony Services, Inc., and Leah Hirth to stay arbitration.
Ordered that the order is modified, on the law, by deleting the provision thereof granting theplaintiff's motion for a preliminary injunction, and substituting therefor a provision denying theplaintiff's motion; as so modified, the order is affirmed insofar as appealed and cross-appealedfrom, without costs or disbursements.
In 2003, the defendant Harmony Services, Inc. (hereinafter Harmony), a not-for-profitcorporation, was created. The certificate of incorporation named the plaintiff, Nathan Brach, andthe defendants Leah Hirth, Jacob Freund, and Herman Friedman as its initial board of directors,and provided that the corporation was to be operated by at least three of its directors. In 2010, theplaintiff commenced this action alleging, inter alia, that Hirth had been acting on behalf ofHarmony, engaging in transactions worth millions of dollars, without the approval of any of theother three directors, and that Hirth incorrectly claimed that the other three directors had beenremoved from the board.
"In order 'to prevail on a motion for a preliminary injunction, the movant must demonstrateby clear and convincing evidence (1) a likelihood of ultimate success on the merits, (2)irreparable injury absent the granting of the preliminary injunction, and (3) that a balancing ofequities favors the movant's position' " (Gluck v Hoary, 55 AD3d 668, 668 [2008], quoting Apa Sec., Inc. v Apa, 37 AD3d502, 503 [2007]; see Doe v Axelrod, 73 NY2d 748, 750 [1988]). Here, since it isunclear as to [*2]who are the board members of Harmony, theplaintiff has not demonstrated a likelihood of ultimate success on the merits (see Brookhaven Baymen's Assn., Inc. vTown of Southampton, 85 AD3d 1074, 1078 [2011]; Omakaze Sushi Rest., Inc. v Ngan KamLee, 57 AD3d 497 [2008]; Matter of Advanced Digital Sec. Solutions, Inc. v Samsung Techwin Co.,Ltd., 53 AD3d 612 [2008]; cf. CPLR 6312 [c]; S.P.Q.R. Co., Inc. v United RocklandStairs, Inc., 57 AD3d 642 [2008]). In this regard, the Supreme Court should not have, ineffect, rejected the minutes from three board meetings submitted by Harmony and Hirth(hereinafter together the appellants) to show that the plaintiff, along with Freund and Friedman,were no longer members of the Harmony Board. The minutes were signed by an alleged secretaryof Harmony, and the appellants subsequently submitted affidavits from persons who attendedthose meetings attesting to the authenticity of the minutes (see generally People v Ely, 68NY2d 520, 527 [1986]; DFI Communications v Greenberg, 41 NY2d 602, 606-607[1977]). Although the plaintiff's submissions raised an issue of fact as to the authenticity of theminutes, they did not warrant rejecting them outright. Therefore, the Supreme Court should havedenied the plaintiff's motion for a preliminary injunction.
In light of the parties' conflicting submissions as to who sits on the Harmony Board, a factualdispute exists as to whether the plaintiff possesses standing to sue (see N-PCL 623 [a];720). Consequently, the Supreme Court properly denied that branch of the appellants' crossmotion which was pursuant to CPLR 3211 (a) (3) to dismiss the complaint for lack of standing tosue.
That branch of the appellants' cross motion which was pursuant to CPLR 3211 (a) (5) alsowas properly denied, as the appellants failed to establish their prima facie entitlement todismissal of the complaint on that basis (see Fleetwood Agency, Inc. v Verde Elec. Corp., 85 AD3d 850[2011]; Rakusin v Miano, 84 AD3d1051 [2011]).
The appellants' motion to change the venue of the action from Orange County to KingsCounty was properly denied. The plaintiff designated Orange County as the venue on the basisthat, at the time of the commencement of the action, Freund resided there (see CPLR 503[a]). The appellants failed to demonstrate that Freund did not reside in Orange County at the timethe action was commenced (see CPLR 510 [1]; cf. Herrera v R. Conley Inc., 52 AD3d 218 [2008]; Neu v St. John's Episcopal Hosp., 27AD3d 538 [2006]), and did not show that the plaintiff improperly engaged in forumshopping, as Freund is not a nominal party (see Yanez v Western Beef, Inc., 28 AD3d 751, 752 [2006]; see also Schwimmer v Welz, 56 AD3d541, 544 [2008]).
The Supreme Court properly denied the plaintiff's cross motion to compel arbitration, andproperly granted the appellants' motion to stay arbitration. Under the circumstances, the plaintiffwaived whatever right he had to arbitration (see Matter of Waldman v Mosdos Bobov, Inc., 72 AD3d 983[2010]; Hart v Tri-State Consumer,Inc., 18 AD3d 610, 612 [2005]; Matter of Hawthorne Dev. Assoc. v Gribin, 128AD2d 874 [1987]).
The appellants' remaining contention is not properly before this Court, as it was raised for thefirst time on appeal in their reply brief (see Gartner v Unified Windows, Doors & Siding, Inc., 68 AD3d815, 816 [2009]). Mastro, A.P.J., Balkin, Chambers and Lott, JJ., concur.