Swartz v. Swartz
| Decision Date | 14 December 2016 |
| Parties | Starnette SWARTZ, appellant-respondent, v. Jerome SWARTZ, et al., defendants, Shanah Swartz–Gordon, et al., respondents-appellants, James P. King, et al., respondents. |
| Court | New York Supreme Court — Appellate Division |
145 A.D.3d 818
44 N.Y.S.3d 452
2016 N.Y. Slip Op. 08390
Starnette SWARTZ, appellant-respondent,
v.
Jerome SWARTZ, et al., defendants,
Shanah Swartz–Gordon, et al., respondents-appellants,
James P. King, et al., respondents.
Supreme Court, Appellate Division, Second Department, New York.
Dec. 14, 2016.
Robinson Brog Leinwand Greene Genovese & Gluck, P.C., New York, N.Y.
(Michael A. Leon and Peter Kane of counsel), for appellant-respondent.
Lamb & Barnosky, LLP, Melville, N.Y. (Scott M. Karson of counsel), for respondents-appellants and for respondents Swartz Family Limited Partnership # 4, Jerome Swartz Irrevocable Trust # 1, Jerome Swartz Irrevocable Trust # 2, Jerome Swartz Irrevocable Family Trust, Jerome Swartz Irrevocable Family Trust # 2, Jerome Swartz Irrevocable Family Trust # 3, Jerome Swartz Qualified Annuity Trust No. 1, Jerome Swartz Qualified Annuity Trust No. 2, Jerome Swartz Qualified Annuity Trust No. 3, Jerome Swartz Charitable Lead Annuity Trust, Swartz Family Holding Corp., Kopelman 2001 Family Trust, Swartz Foundation, Sound Point Investments I, LLC, Sound Point Investments II, LLC, Sound Point Investments III, LLC, SK Joint Ventures, LLC, SK Joint Ventures II, LLC, OTM Distributions, LLC, 3151 SW 141 PL, LLC, 3300 So Congress Ave, LLC, BBD Associates, FL, Swartz Organization, LLC, Pershing, LLC, Swartz Initiative for Computational Neuroscience, Inc., Swartz NYC, LLC, and Spring Café Realty, LLC (one brief filed).
Meyer, Suozzi, English & Klein, P.C., Garden City, N.Y. (Kevin Schlosser of counsel), for respondents James P. King and James P. King & Associates, LLC.
RUTH C. BALKIN, J.P., L. PRISCILLA HALL, SANDRA L. SGROI, and BETSY BARROS, JJ.
Appeal and cross appeal from an order of the Supreme Court, Suffolk County (Whelan, J.), dated May 14, 2014. The order, insofar as appealed from by the plaintiff, (1) denied her motion for a preliminary injunction; (2) granted those branches of the
motion of the defendants Shanah Swartz–Gordon, Nikola Swartz–Hennes, Joshua Swartz, and the first 27 defendant trust, partnership, and corporate entities named in the amended summons and complaint which were (a) to dismiss the amended complaint insofar as asserted against those 27 defendant entities, (b) pursuant to CPLR 3211 (a)(7) to dismiss certain causes of action insofar as asserted against the defendants Shanah Swartz–Gordon and Nikola Swartz–Hennes, and (c), in effect, to stay various causes of action insofar as asserted against the defendants Shanah Swartz–Gordon and Nikola Swartz–Hennes pending resolution of an action entitled Swartz v. Swartz (Supreme Court, Suffolk County, Index No. 10874/09); (3) granted those branches of the motion of the defendants James P. King and James P. King & Associates, LLC, which were (a) to dismiss certain causes of action insofar as asserted against them, and (b) to stay the cause of action to recover damages for accounting malpractice insofar as asserted against them; and (4) denied those branches of her cross motion which were pursuant to 22 NYCRR 130–1.1 for the imposition of sanctions. The order, insofar as cross-appealed from by the defendants Shanah Swartz–Gordon and Nikola Swartz–Hennes, denied those branches of their motion made with the defendant Joshua Swartz, and the first 27 defendant trust, partnership, and corporate entities named in the amended summons and complaint which were (a) pursuant to CPLR 3211(a)(4) and (7) to dismiss the causes of action under Debtor and Creditor Law §§ 273, 275, 276, and 278, to recover attorneys' fees, for a permanent injunction, and for a declaratory judgment insofar as asserted against the defendants Shanah Swartz–Gordon and Nikola Swartz–Hennes, and (b) pursuant to 22 NYCRR 130–1.1 for the imposition of sanctions against the plaintiff.
ORDERED that the order is modified, on the law, (1) by deleting the provision thereof denying those branches of the motion
of the defendants Shanah Swartz–Gordon, Nikola Swartz–Hennes, Joshua Swartz, and the first 27 defendant trust, partnership, and corporate entities named in the amended summons and complaint which were pursuant to CPLR 3211(a)(7) to dismiss the causes of action under Debtor and Creditor Law §§ 273, 275, and 278, and for a permanent injunction insofar as asserted against the defendants Shanah Swartz–Gordon and Nikola Swartz–Hennes, and substituting therefor a provision granting those branches of that motion, (2) by deleting the provision thereof granting that branch of the motion of the defendants Shanah Swartz–Gordon, Nikola Swartz–Hennes, Joshua Swartz, and the first 27 defendant trust, partnership,
and corporate entities named in the amended summons and complaint which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging conversion insofar as asserted against the defendants Shanah Swartz–Gordon and Nikola Swartz–Hennes, and substituting therefor a provision denying that branch of that motion and staying litigation of this cause of action pending resolution of an action entitled Swartz v. Swartz, pending in the Supreme Court, Suffolk County, under Index No. 10874/09, and (3) by deleting the provision thereof granting that branch of the motion of the defendants James P. King and James P. King & Associates, LLC, which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging unjust enrichment insofar as asserted against them and substituting therefor a provision denying that branch of their motion and staying litigation of this cause of action pending resolution of an action entitled Swartz v. Swartz, pending in the Supreme Court, Suffolk County, under Index No. 10874/09; as so modified, the order is affirmed insofar as appealed and cross-appealed from, with one bill of costs to the respondent trust, partnership, and corporate entities payable by the plaintiff.
In April 2009, the plaintiff, Starnette Swartz, commenced an action for a divorce and ancillary relief against her husband, Jerome Swartz (hereinafter the matrimonial action). In connection with the matrimonial action, Starnette Swartz and Jerome Swartz entered into a so-ordered stipulation, which, inter alia, restricted their ability to transfer or dispose of certain assets. The plaintiff then commenced this action against Jerome Swartz; James P. King and James P. King & Associates, LLC (hereinafter together the King defendants), who were the accountants for the plaintiff and Jerome Swartz during their marriage; Shanah Swartz–Gordon and Nikola Swartz–Hennes, who are Jerome Swartz's two daughters from a prior marriage (hereinafter together the Swartz daughters); Joshua Swartz, who is Jerome Swartz's son from the prior marriage; and 27 trust, partnership, and corporate entities that Jerome Swartz allegedly had an interest in or controlled (hereinafter collectively the corporate defendants). In an amended summons and complaint, 3 partnerships and 1 corporate entity were added as defendants (hereinafter collectively the added defendants). The plaintiff contended that Jerome Swartz, with the help of the King defendants, transferred assets to his children, the corporate defendants, and the added defendants in order to hide these assets and to deprive the plaintiff of her right to equitable distribution in connection with the matrimonial action.
The plaintiff moved for a preliminary injunction, inter alia, enjoining the corporate defendants, the Swartz daughters, and Joshua Swartz (hereinafter collectively the Swartz defendants), and the King defendants from transferring or disposing of assets or funds to the extent that they received such assets or funds from Jerome
Swartz beginning on January 1, 2009, until the present. The King defendants moved, inter alia, to dismiss the amended complaint insofar as asserted against them pursuant to CPLR 3211(a) (7), or to stay the action pending resolution of the matrimonial action. The Swartz defendants separately moved, inter alia, to dismiss the amended complaint insofar as asserted against them pursuant to CPLR 3211(a)(4) and (7), and for sanctions pursuant to 22 NYCRR 130–1.1 from the plaintiff. The plaintiff cross-moved for sanctions pursuant to 22 NYCRR 130–1.1 against all of the defendants.
The Supreme Court denied the plaintiff's motion for a preliminary injunction and the plaintiff's cross motion for sanctions. The court granted those branches of the motions of the King defendants and the Swartz defendants which were to dismiss the amended complaint insofar as asserted against the corporate defendants and all of the causes of action asserted against the King defendants pursuant to CPLR 3211(a)(7), with the exception of the accounting malpractice cause of action asserted against the King defendants, which the court stayed pending a determination regarding the plaintiff's equitable distribution rights in the matrimonial action. The court denied that branch of the...
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