Mouhlas Realty, LLC v Koutelos, 2009 NY Slip Op 30893(U) (N.Y. Sup. Ct. 4/7/2009)

• Decision Date: 07 April 2009
• Docket Number: Motion Seq. No. 2,Motion Cal. No. 15,5799/08.
• Citation: 2009 NY Slip Op 30893
• Parties: MOUHLAS REALTY, LLC, Plaintiff, v. MARY KOUTELOS, Defendant.
• Court: New York Supreme Court

Page 1

2009 NY Slip Op 30893(U)

MOUHLAS REALTY, LLC, Plaintiff, v. MARY KOUTELOS, Defendant.

5799/08.

Motion Cal. No. 15

Motion Seq. No. 2

Supreme Court of the State of New York, Queens County.

April 7, 2009.

January 14, 2009.

PATRICIA P. SATTERFIELD, Judge.

Upon the foregoing papers, it is hereby ordered that the motion is disposed of as follows:

This is an action for, inter alia, breach of contract commenced by plaintiff Mouhlas Realty, LLC ("plaintiff"), a limited liability company which manages and rents commercial and residential realty that it owns, against defendant Mary Koutelos ("defendant"), a member of plaintiff who owns a 28.6 percent interest therein. On March 5, 2008, defendant, as the petitioner, commenced a dissolution proceeding under the instant index number for the dissolution of plaintiff, who was the respondent, to which counterclaims were asserted by plaintiff. By order of this Court dated August 4, 2008, the petition and plaintiff's counterclaim for an equitable buy-out were dismissed, and the remaining counterclaims were severed and continued as this converted action, pursuant to CPLR § 407. Plaintiff was directed to file and serve a complaint asserting the counterclaims as causes of action within 20 days of service of a copy of that order with notice of entry, which such filing occurred on September 22, 2008. The verified complaint asserts three causes of action for breach of contract, breach of fiduciary duty and imposition of a judicial lien on defendant's shares. In answering the complaint, defendant asserts two affirmative defenses upon the grounds that the complaint fails to state a cause of action and plaintiff lacks standing to assert claims against defendant. The answer also contains a counterclaim seeking a declaration that the resolutions adopted by plaintiff in its business meeting of October 11, 2007, are void. In reply to the counterclaims, plaintiff asserts the following three affirmative defenses: (1) the Doctrine of the Law of the Case; (2) Procedural Defect as a Basis to Strike the Defendant's First Affirmative Defense; and (3) Procedural Defect as a Basis to Strike the Defendant's Second Affirmative Defense. It is upon the foregoing that plaintiff seeks summary judgment on its three causes of action, and dismissal of defendant's affirmative defenses and counterclaim.

It is well established that summary judgment should be granted when there is no doubt as to the absence of triable issues. See, Rotuba Extruders, Inc. v. Ceppos, 46 N.Y.2d 223, 231 (1978); Andre v. Pomeroy, 35 N.Y.2d 361, 364 (1974); Taft v. New York City Tr. Auth., 193 A.D.2d 503, 505 (1^st Dept. 1993). As such, the function of the court on the instant motion is issue finding and not issue determination. See, D.B.D. Nominee, Inc., v. 814 10th Ave. Corp., 109 A.D.2d 668, 669 (2^nd Dept. 1985). The proponent of a summary judgment motion must tender evidentiary proof in admissible form eliminating any material issues of fact from the case. See, Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980). If the proponent succeeds, the burden shifts to the party opposing the motion, who then must show the existence of material issues of fact by producing evidentiary proof in admissible form, in support of his position. See, Zuckerman v. City of New York, supra. Moreover, a rear-end collision establishes a prima facie case of negligence on the part of the operator of the rearmost vehicle and imposes a duty of explanation to excuse the collision either through a mechanical failure, a sudden stop of the vehicle ahead, an unavoidable skidding on a wet pavement, or any other reasonable cause. See Milskiy v Solanky, 8 A.D.3d 353 (2^nd Dept.2004); Barile v. Lazzarini, 222 A.D.2d 635 (2^nd Dept. 1995); see also McGregor v Manzo, 295 A.D.2d 487 (2^nd Dept. 2002); Gambino v City of New York, 205 A.D.2d 583 (2^nd Dept.1994); Power v. Hupart, 260 A.D.2d 458 (2^nd Dept. 1999); see, also, Caputo v. Schaumeyer, 252 A.D.2d 512 (2^nd Dept. 1998); Danza v. Longieliere, 256 A.D.2d 434 (2^nd Dept. 1998).

In support of the motion, plaintiff contends that its first and second causes of action for breach of contract and fiduciary duty, respectively, "request a judgment of specific performance compelling defendant to make her required capital contributions in the sum of $71,500.00, together with costs, disbursements and reasonable attorneys [fees] with interest from October 11, 2007." Plaintiff further contends that the third cause of action for the imposition of a judicial lien upon defendant's shares request, inter alia, that the lien placed on such shares be equal to the amount of capital contributions owed by defendant. Plaintiff asserts that it is entitled to summary judgment based upon this Court's previous findings in the underlying order dated August 4, 2008, which stated, in relevant part, the following:

The articles of organization for LLC, not included in petitioner's papers but provided by respondent, contain no provision relating to the operation of the business other than the paragraph stating that the limited liability company is to be managed by 1 or more members. Contrary to petitioner's assertion, this management scheme is permissible under the governing statute. (Limited Liability Company Law § 401.) The members of respondent LLC did not enter into a written operating agreement. Certain sections in the Limited Liability Company Law set forth default provisions that are applicable in the event a company does not have an operating agreement. None of the assertions made by petitioner demonstrate that respondent LLC cannot be operated in conformity with those provisions. Pursuant to Limited Liability Company Law § 411, the managers have authority to fix the compensation of managers for services in any capacity, and under section 402(c)(2) a majority of the members may approve incurring indebtedness other than in the ordinary course of business. While there is no specific statutory basis to compel additional capital contributions from members, neither is there a statutory prohibition against the practice, and the payment of an additional capital contribution properly voted for by the members has been approved judicially. (See, e.g., Van Der Lande v Stout, 13 AD3d 261 [2004].)

Based upon the aforementioned language set forth in the underlying order, plaintiff asserts that this Court has made a judicial determination in this litigation "that the business resolutions which plaintiff's members adopted in their [business] meeting on October 11, 2007 are valid, and this Court further held that plaintiff is entitled to capital contributions in the sum of $71,500.00 from [defendant], as approved by the members in that business meeting[]." Thus, plaintiff asserts that it is entitled to judgment as a matter of law on the three causes of actions asserted in the complaint, as well as dismissal of the counterclaim seeking a declaratory judgment declaring void the resolutions adopted by plaintiff in the October 11, 2007 meeting, based upon the law of the case.

"The law of the case doctrine is part of a larger family of kindred concepts, which includes res judicata (claim preclusion) and collateral estoppel (issue preclusion). These doctrines, broadly speaking, are designed to limit relitigation of issues. Like claim preclusion and issue preclusion, preclusion under the law of the case contemplates that the parties had a "full and fair" opportunity to litigate the initial determination (citations omitted)." People v. Evans, 94 N.Y.2d 499, 503 (2000); see, Doscher v. Doscher, 54 A.D.3d 890 (2^nd Dept. 2008). The doctrine "'is a rule of practice, an articulation of sound policy that, when an issue is once judicially determined, that should be the end of the matter as far as Judges and courts of coordinate jurisdiction are concerned' (citations omitted)." Oyster Bay Associates Ltd. Partnership v. Town Bd. of Town of Oyster Bay, 21 A.D.3d 964, 966 (2^nd Dept. 2005); see, Mosher-Simons v. County of Allegany, 99 N.Y.2d 214 (2002); Hampton Valley Farms, Inc. v. Flower & Medalie, 40 A.D.3d 699 (2^nd Dept. 2007); Fellin v. Sahgal, 35 A.D.3d 800 (2^nd Dept. 2006); Meekins v. Town of Riverhead, 20 A.D.3d 399 (2^nd Dept. 2005). Indeed, it is fundamental that one Judge may not review or overrule an order of another Judge of coordinate jurisdiction, and the decision of the Judge who first rules in a case binds all courts of coordinate jurisdiction as the law of the case, regardless of whether a formal order was entered. See, Messinger v. Messinger, 16 A.D.3d 562 (2^nd Dept. 2005).

Here, although plaintiff essentially argues that it is entitled to summary judgment based upon the elimination of all factual issues from this case by virtue of this Court's purported finding in its August 4, 2008 order, that the business resolutions adopted in the October 11, 2007 are valid, and plaintiff is entitled to capital contributions in the sum of $71,500.00 from defendant, such argument is wholly misplaced. Indeed, despite the claims by plaintiff that this Court made the former determinations, the underlying order, which only made findings with regard to the appropriateness of a judicial dissolution, and the equitable buy-out of plaintiff, the only issues properly before the Court, stated, in relevant part, the following:

In this case, the allegations in the petition of overreaching and breach of fiduciary duty by two of the other three members of respondent LLC do not plead the requisite grounds for dissolution of a limited liability company. (Limited Liability Company Law § 702; see, Widewaters Herkimer Co., LLC v Aiello, 28 AD3d 1107 [2006]; Artigas v Renewal Arts Realty Corp., 22 AD3d 327 [2005]; Schindler v Niche Media Holdings, LLC, 1 Misc 3d 713, 716-717 [2003].) Petitioner has failed to state any facts showing that LLC is unable to function in accordance with its articles of organization or operating agreement, or that the business is failing...