Arfa v. Zamir, 1350

• Decision Date: 13 July 2010
• Docket Number: 1350,603602/05
• Citation: 2010 NY Slip Op 06064
• Parties: Rachel L. Arfa, et al., Plaintiffs-Appellants-Respondents, v. Gadi Zamir, et al., Defendants. 546-552 West 146th Street LLC, et al., Intervenors-Defendants/Counterclaim Plaintiffs/Cross-Claim Plaintiffs- Respondents-Appellants, 2000 Davidson Ave. LLC, Intervenor-Defendant/Counterclaim- Plaintiff/Cross-Claim Plaintiff, v. Rachel L. Arfa, et al., Counterclaim-Defendants- Appellants-Respondents, Gadi Zamir, et al., Cross-Claim Defendants, [And Another Action]
• Court: New York Supreme Court — Appellate Division

2010 NY Slip Op 06064

Rachel L. Arfa, et al., Plaintiffs-Appellants-Respondents,

v. Gadi Zamir, et al., Defendants.

546-552 West 146th Street LLC, et al., Intervenors-Defendants/Counterclaim Plaintiffs/Cross-Claim Plaintiffs-Respondents-Appellants,

2000 Davidson Ave. LLC, Intervenor-Defendant/Counterclaim-Plaintiff/Cross-Claim Plaintiff,

v. Rachel L. Arfa, et al., Counterclaim-Defendants-Appellants-Respondents,

Gadi Zamir, et al., Cross-Claim Defendants, [And Another Action]

1350

603602/05

New York Appellate Division

First Department

Decided on July 13, 2010

Schlam Stone & Dolan LLP, New York (David J. Katz of counsel), and Michael C. Marcus, Long Beach, for appellants-respondents.

Balber Pickard Maldonado & Van Der Tuin, P.C., New York (John Van Der Tuin of counsel), for respondents-appellants.

Mazzarelli, J.P., Andrias, Friedman, Nardelli, Moskowitz, JJ.

Order, Supreme Court, New York County (Charles E. Ramos, J.), entered September 16, 2008, which, to the extent appealed from as limited by the briefs, denied plaintiffs' motion to dismiss intervenors-defendants' claims for an accounting and for waste and mismanagement as against plaintiff Rachel L. Arfa and granted plaintiffs' and cross-claim defendants' motions to dismiss the claim for statutory restitution, penalties and fees pursuant to Real Property Law § 440-a, unanimously affirmed, without costs.

Intervenors-defendants, which are New York limited liability companies, allege in support of their first and fifth claims (respectively, for an accounting and for waste andmismanagement) that they were managed by Harlem Holdings, LLC, a Delaware limited liability company; that the 60% owner of Harlem Holdings was Argelt LLC, an entity owned in part by plaintiff Arfa; that Arfa, in addition to being (through Argelt) a beneficial owner of Harlem Holdings, was one of Harlem Holdings' three managers; and that Arfa used her resulting control over intervenors-defendants' property to benefit herself at intervenors-defendants' expense. As it is alleged that Arfa was a beneficial owner and fiduciary of the entity that managed intervenor-defendants, intervenor-defendants have stated causes of action sounding in breach of fiduciary duty against her under both New York and Delaware law (see Bullmore v Ernst & Young Cayman Is., 45 AD3d 461 [2007]; In re Treco, 229 BR 280, 289 [1999], affd 239 BR 36 [SD NY 1999], vacated on other grounds 240 F3d 148 [2d Cir 2001]); Bay Center Apts. Owner, LLC v Emery Bay PKI, LLC, 2009...