Willoughby Rehab. & Health Care Ctr., LLC v. Webster

• Decision Date: 09 December 2015
• Citation: 22 N.Y.S.3d 81,134 A.D.3d 811
• Parties: WILLOUGHBY REHABILITATION and Health Care Center, LLC, et al., respondents, v. Helen WEBSTER, appellant.
• Court: New York Supreme Court — Appellate Division

134 A.D.3d 811

22 N.Y.S.3d 81

WILLOUGHBY REHABILITATION and Health Care Center, LLC, et al., respondents,

v.Helen WEBSTER, appellant.

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

Dec. 9, 2015.

Dollinger, Gonski & Grossman, Carle Place, N.Y. (Matthew Dollinger and Jessica M. Seidman of counsel), for appellant.

Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrera & Wolf, LLP, Lake Success, N.Y. (Howard Fensterman and Sarah C. Lichtenstein of counsel), for respondents.

REINALDO E. RIVERA, J.P., MARK C. DILLON, CHERYL E. CHAMBERS and HECTOR D. LaSALLE, JJ.

In an action, inter alia, to recover damages for breach of contract and breach of fiduciary duty, the defendant appeals (1), as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Schellace, Ct. Atty. Ref.), dated September 11, 2012, as (a) denied those branches of her motion which sought reimbursement of certain sums paid by her and other individuals identified as the buyers in the parties' stipulation of settlement to purchase an interest in the Split Rock Rehabilitation and Health Care Center, LLC, and reimbursement for the assessment imposed by Public Health Law § 2807–d on gross receipts collected by certain facilities after she and the other buyers purchased membership interests in entities that owned those facilities, (b) granted those branches of the plaintiffs' motion which were to direct the buyers to reimburse the parties identified as sellers in the stipulation the sum of $1,065,564, representing assets excluded from the sale of the membership interests in New Franklin Rehabilitation and Health Care Facility, LLC, and Fort Tryon Rehabilitation and Health Care Facility, LLC, and to direct the buyers to pay the sellers the sum due on certain promissory notes given to the sellers as part of the sale price of Franklin Day Care Realty, LLC, (c) granted that branch of the plaintiffs' motion which was to direct the buyers to pay the sellers the balance of the purchase price due on the sale of the membership interests in New Franklin Rehabilitation and Health Care Facility, LLC, and Fort Tryon Rehabilitation and Health Care Facility, LLC, to the extent of rejecting the opinion of the defendant's expert that certain swap agreements entered into by New Franklin Rehabilitation and Health Care Facility, LLC, and Fort Tryon Rehabilitation and Health Care Facility, LLC, were liabilities that should be subtracted from the balance due, and (d) sua sponte awarded the plaintiffs attorney's fees, and (2) from a judgment of the same court entered on October 31, 2013, which, upon the order, was in favor of the plaintiffs and against her in the principal sum of $2,415,564.

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the judgment is reversed, on the law, those branches of the defendant's motion which sought reimbursement of certain sums paid by her and other individuals identified as the buyers in the parties' stipulation of settlement to purchase an interest in the Split Rock Rehabilitation and Health Care Center, LLC, and reimbursement for the assessment imposed by Public Health Law § 2807–d on gross receipts collected by certain facilities after she and the other buyers purchased membership interests in entities that owned those facilities are granted, and those branches of the plaintiffs' motion which were to direct the buyers to reimburse the parties identified as sellers in the stipulation the sum of $1,065,564, representing assets excluded from the sale of the membership interests in New Franklin Rehabilitation and Health Care Facility, LLC, and Fort Tryon Rehabilitation and Health Care Facility, LLC, to direct the buyers to pay the sellers the sum due on certain promissory notes given to the sellers as part of the sale price of Franklin Day Care Realty, LLC, and to direct the buyers to pay the sellers the balance of the purchase price due on the sale of the membership interests in New Franklin Rehabilitation and Health Care Facility, LLC, and Fort Tryon Rehabilitation and Health Care Facility, LLC, are denied, so much of the order as sua sponte awarded attorney's fees to the plaintiffs is vacated, and the order is modified accordingly; and it is further,

ORDERED that the defendant is awarded one bill of costs.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment (see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ). In addition, the appeal from so much of the order as sua sponte awarded attorney's fees to the plaintiffs must be dismissed because no appeal lies as of right from an order that does not decide a motion made on notice, and we decline to grant leave to appeal from that portion of the order in view of the fact that a judgment has been entered in the action (see Hester v. Hester,

121 A.D.3d 645, 993 N.Y.S.2d 359 ). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1] ).

The plaintiffs include nine limited liability companies and one corporation that operate skilled nursing home facilities in the New York metropolitan area. In 2004, the plaintiffs commenced this action against the defendant to recover damages for her alleged breach of their operating agreements and her fiduciary duty in failing to execute certain financial documents and to contribute her proportionate share of additional capital (see Willoughby Rehabilitation and Health Care Ctr., LLC v. Webster, 46 A.D.3d 801, 849 N.Y.S.2d 887 ). In April 2008, the parties entered into a complex so-ordered stipulation settling this action. As part of the settlement, the defendant and other individuals (hereinafter collectively the buyers) were to purchase interests in certain plaintiff entities and other entities from the sellers identified in the stipulation (hereinafter collectively the sellers). The various parties entered into a number of other agreements and stipulations outlining the terms of those transactions. Before and after the transactions occurred, numerous disputes arose, resulting in extensive motion practice. On March 25, 2009, the parties agreed to empower a court attorney referee (hereinafter the referee) pursuant to CPLR 4317 to hear any and all disputes that arose out of the stipulation. Although the motions at issue here were first returnable in March and June 2009, the referee did not issue the order appealed from until September 11, 2012, because he apparently spent almost three years attempting to mediate disputes regarding the parties' agreements.

The referee erred in denying that branch of the defendant's motion which sought reimbursement of certain sums paid by her and the buyers to purchase, inter alia, an interest in the Split Rock Rehabilitation and Health Care...