3 East 54th St. New York, LLC v. Patriarch Partners, LLC

• Decision Date: 01 December 2011
• Citation: 90 A.D.3d 418,2011 N.Y. Slip Op. 08678,934 N.Y.S.2d 126
• Parties: 3 EAST 54TH STREET NEW YORK, LLC, etc., Plaintiff–Appellant–Respondent, v. PATRIARCH PARTNERS, LLC, Defendant–Respondent–Appellant,Patriarch Partners Agency Services, LLC, et al., Defendants–Respondents.
• Court: New York Supreme Court — Appellate Division

2011 N.Y. Slip Op. 08678

90 A.D.3d 418

934 N.Y.S.2d 126

3 EAST 54TH STREET NEW YORK, LLC, etc., Plaintiff–Appellant–Respondent,

v.PATRIARCH PARTNERS, LLC, Defendant–Respondent–Appellant,Patriarch Partners Agency Services, LLC, et al., Defendants–Respondents.

Supreme Court, Appellate Division, First Department, New York.

Dec. 1, 2011.

Itkowitz & Harwood, New York (Donald A. Harwood of counsel), for appellant-respondent.

Brune & Richard LLP, New York (Charles Michael of counsel), for respondent-appellant; and Patriarch Partners Agency Services, LLC, Lynn Tilton, Ark Investment Partners, II, LP, ArkCLO 2001–1, Limited, Zohar ICDO 2003–1, Limited, Zohar II 2005–1, Limited, respondents.

Fox Rothschild LLP, New York (Daniel A. Schnapp of counsel), for Petry Media Corp., Petry Television, Inc., Blair Television, Inc., Richard Intrator, Arnold Sheiffer, Timothy McAuliff, Val Napolitano and Leo MacCourtney, respondents.Akin Gump Strauss Hauer & Feld LLP, New York (Christopher L. Boyd of counsel), for Sandler Mezzanine T.E. Partners, L.P., Sandler Mezzanine Foreign Partners, L.P. and Moira Mitchell, respondents.TOM, J.P., ANDRIAS, CATTERSON, ABDUS–SALAAM, ROMÁN, JJ.

Order, Supreme Court, New York County (Paul G. Feinman, J.), entered January 11, 2010, which, to the extent appealed from, granted defendantPatriarch Partners, LLC's motion for summary judgment dismissing the complaint as against it, and denied plaintiff's cross motion for leave to amend to add causes of action against Patriarch Partners, LLC, unanimously affirmed, without costs.Order, same court and Justice, entered January 12, 2011, which granted defendantsLynn Tilton, Patriarch Partners Agency Services, LLC, ArkCLO 2001–1, Limited, Ark Investment Partners, II, LP, Zohar ICDO 2003–1, Limited, and Zohar II 2005–1, Limited's motion to dismiss the complaint as against them; defendantsSandler Mezzanine Partners, L.P., Sandler Mezzanine T.E. Partners, L.P., Sandler Mezzanine Foreign Partners, L.P. and Moira Mitchell's motion to dismiss the complaint as against them; and defendantsRichard Intrator, Arnold Sheiffer, Timothy McAuliff, Val Napolitano, Leo MacCourtney, Petry Media Corp., Petry Television, Inc. and Blair Television, Inc.'s motion to dismiss the second through sixteenth causes of actions as against them; granted plaintiff's motion for leave to renew and, upon renewal, denied Patriarch Partners, LLC's motion for summary judgment as to the second cause of action based on a theory of alter ego liability; and declined to deem the caption amended to include Petry Holding, Inc. as a defendant, unanimously modified, on the law, to deny plaintiff's motion for leave to renew, and to grant plaintiff's request to deem the caption amended to include Petry Holding, and otherwise affirmed, with costs against plaintiff.

Plaintiff owns a building in which it leased space to defendantsPetry Television, Inc., and Blair Television, Inc.(the Petry Tenants).The first cause of action in the complaint alleges breach of contract against the Petry Tenants based on unpaid rent.An additional 15 causes of action are asserted variously against the Petry Tenants and several other defendants, both corporate and individual.The gravamen of the complaint is that the other defendants, who are primarily the secured creditors of the Petry Tenants pursuant to a loan agreement initially entered into two years before the lease was signed, participated in a fraudulent scheme to loot the assets of the Petry Tenants, thereby rendering them judgment-proof shells unable to pay contract creditors such as plaintiff.

The complaint...