Daskal v. Tyrnauer
| Decision Date | 22 October 2012 |
| Docket Number | No. 500734/11.,500734/11. |
| Citation | 37 Misc.3d 1214,961 N.Y.S.2d 357,2012 N.Y. Slip Op. 52036 |
| Parties | Martin DASKAL, individually and on behalf of 333–345 Green LLC, 1775 East 17th St., LLC, and 1584 Fulton LLC, Plaintiff, v. Joseph TYRNAUER a/k/a Volvi Tyrnauer, WNT Construction Corp. WTC Development Corp., WTC Construction Co., Inc., WTC Management Inc., Home @ Greene N.Y. Inc., WT Development Corp., WT Construction corp., 101–115 Spring Garden St LLC, Elie Staub, 1230 57th St. LLC, Gregory Miedrzynski a/k/a Greg Miedrzynski, and Banco Popular North America, Defendants. |
| Court | New York Supreme Court |
OPINION TEXT STARTS HERE
Michael Korsinsky, Korsinsky & Klein, LLP, New York, for Plaintiff.
Steven Weg, Goldberg & Rimberg, PLLC, New York, for Defendants Tyrnauer & Tyrnauer Companies.
Steven Lucks, Fishkin Lucks, LLP, New York, for Defendants Banco Popular & Miedrzynski.
Roger Adler, New York, for Defendants Staub.
The following papers read herein:
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¦Papers Numbered ¦ ¦
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¦Notice of Motion/Order to Show Cause/ Petition/Cross Motion and ¦30, 32, ¦
¦Affidavits (Affirmations) Annexed ¦34–36, ¦
¦ ¦45–46 ¦
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¦Opposing Affidavits (Affirmations) Reply Affidavits ¦31, 59–61, ¦
¦(Affirmations) Affidavit (Affirmation) Other Papers Memoranda of ¦63, 65–66 ¦
¦Law ¦ ¦
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In this action by plaintiff Martin Daskal (Daskal), individually and on behalf of 333–345 Green LLC (Green LLC), 1775 East 17th St., LLC, and 1584 Fulton LLC (collectively, plaintiff), defendants Joseph Tyrnauer a/k/a Volvi Tyrnauer (Tyrnauer), WNT Construction Corp., WTC Development Corp., WTC Construction Co., Inc. (WTC Construction), WTC Management Inc., Home @ Greene N.Y. Inc. (Home @ Greene), WT Development Corp., WT Construction Corp., and 101–115 Spring Garden St LLC (the Tyrnauer defendants) move for an order dismissing plaintiff's first amended complaint: (1) pursuant to CPLR 3211(a)(7), for failure to state a cause of action upon which relief may be granted, (2) pursuant to CPLR 3013 and 3014, for failure to plead plain and concise statements, and (3) pursuant to CPLR 3016(b), for failure to allege fraud with particularity. Defendant Elie Staub (Staub) moves for an order dismissing plaintiff's first amended complaint as against him on these same grounds, and also for an order, pursuant to CPLR 603, severing the claims asserted as against him. Defendants Banco Popular North America (Banco Popular) and Gregory Miedrzynski (Miedrzynski) move for an order dismissing, with prejudice, plaintiff's first amended complaint, pursuant to CPLR 3211(a)(5) and (7), and pursuant to CPLR 3016(b).
The gravamen of the complaint is plaintiff Daskal's claim that he was defrauded by Tyrnauer through the various Tyrnauer defendants, with the assistance of Banco Popular's loan officer Miedrzynski, in the diversion of the assets of Green LLC. Although Daskal has alleged a derivative suit on behalf of 1775 East 17th Street and 1584 Fulton LLC, in addition to Green LLC, the complaint is devoid of allegations of actual loss to either of these entities. Moreover, the claims asserted by Daskal, sounding in breach of fiduciary duty, have been previously alleged, in substance, in other pending actions.
The facts, as alleged in plaintiff's amended complaint are as follows: 1 On or about March 7, 2000, Daskal, with a partner, purchased a foreclosed parcel of real property located at 333–345 Greene Avenue, in Brooklyn, New York (the Greene property) through an entity that he owned named 333–345 Greene Corp. The purpose of such purchase was to develop the Greene property with a residential and retail building. After Daskal's partner withdrew from the project for financial reasons, Tyrnauer, in mid–2001, approached Daskal and offered to participate in the development of the Greene property. Tyrnauer represented to Daskal that he had his own construction company, WTC Construction, and that in exchange for a 50% interest in the Greene property, he would contribute $550,000 (an amount which was allegedly well below the fair market value of a one-half interest in the Greene property) to what would be Green LLC, and he would have WTC Construction develop the Greene property at cost. Daskal accepted Tyrnauer's offer.
In order to effectuate Tyrnauer's obtaining a 50% interest in the development of the Greene property, Daskal, on June 17, 2001, formed Green LLC, with Daskal and Tyrnauer each obtaining a 50% interest in Greene LLC. On or about July 24, 2002, in furtherance of the agreement between Daskal and Tyrnauer, the Greene property was transferred from 333–345 Greene Corp. to Green LLC, and Green LLC thereby became the owner and developer of the Greene property. Also on July 24, 2002, Daskal and Tyrnauer signed a “Notice of Shareholder and Officer of 333–345 Green LLC,” which identified them as the sole members of Green LLC and provided that they were both required to execute documents relating to transactions involving the Greene property. On November 15, 2005, Tyrnauer and Daskal signed an Operating Agreement, which stated that the purpose of Green LLC was to acquire, own, develop and manage the Greene property. In May 2006, the Operating Agreement was amended and restated to provide, at paragraph 11, that all documents affecting the real property owned by Green LLC must be signed by both members. On December 14, 2007, Daskal and Tyrnauer signed a document acknowledging that there was an Operating Agreement requiring both of them to sign all documents relating to transactions pertaining to Green LLC.
On June 22, 2006, Green LLC entered into a construction contract (the Greene Project Construction Contract) with WTC Construction (of which Tyrnauer was the sole owner) for the construction of an apartment building at the Greene property (the Greene Project). The total cost of completing the job, as set forth under the Greene Project Construction Contract, was to be $15,357,340.20. According to Daskal, this amount was represented to be the actual cost that Tyrnauer anticipated it would take to complete the building pursuant to the contract specifications, and there was to be no profit to WTC Construction. A Supplemental Amendment executed on June 26, 2006 set a target date for the completion of the Greene Project as 26 months from the date of the closing.
In order to finance the development of the Greene property, in or about June 2006, Greene LLC obtained a loan from Banco Popular in the amount of $22,600,000, divided into a Land Acquisition Loan in the amount of $2,750,000, a Project Loan in the amount of $3,341,592, and a Building Loan in the amount of $16,508,408 (collectively, the Loans). The Loans were evidenced by loan documents dated June 28, 2006 and June 30, 2006, and were secured by mortgages on the Greene property, which were signed by Tyrnauer and Daskal, as members of Green LLC and personally as guarantors.
Under the terms of the Loans, Banco Popular did not provide Green LLC with the full $22,600,000 outright, but in accordance with common practice for building loans, the loan agreements provided that Banco Popular would advance Green LLC particular sums of money upon receiving evidence that specific stages of construction had been completed. In order to ensure that it did not release excessive funds or release funds before construction benchmarks had been met, Banco Popular employed Project Control Associates, Inc. (PCA). PCA reviewed WTC Construction's loan draw requests and lien waivers, along with the supporting documents, and monitored the Greene Project to determine that the construction had reached the proper benchmarks before Banco Popular would release funds to Green LLC. Plaintiff alleges that defendants submitted false documents to Banco Popular in order to prematurely draw down proceeds from the Loans.
On July 10, 2006, WTC Construction entered into a construction contract (the Nesher Contract) with Nesher Builders LLC (Nesher). In the Nesher Contract, Nesher agreed to be the general contractor for the Greene property at the completion price of $11,975,000, which was $3,382,340.20 less than was stated as the cost of completion in the Greene Project Construction Contract. Nesher allegedly terminated the Nesher Contract and ceased to work on the Greene Project due to WTC Construction's failure to make payments. Nesher was paid approximately $600,000 for the work it performed.
As a result of WTC Construction's failure to make adequate progress on the Greene Project, the Greene Project Construction Contract was amended on July 16, 2008 to extend the date by which the Greene Project was to be completed to March 30, 2009, and to add a time-of-the-essence provision. Plaintiff alleges that Tyrnauer agreed in the July 16, 2008 amendment that if the Greene Project was not completed by that date, he would pay Daskal $108,000 per month.
Green LLC maintained a bank account at Signature Bank. According to plaintiff, Tyrnauer also created a secondary bank account in January 2009 for Green LLC, but changed the name of the account name to Home @ Greene, transferring $1,803,121.07 from the primary Green LLC bank account into this secondary account. Plaintiff claims that Home @ Greene was created to avoid paying certain judgments and creditors which are not involved in this action. Specifically, plaintiff alleges that in January 2009, WTC Construction advised parties to whom it owed money or with which...
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