Verderber v. Commander Enterprises Centereach Llc

• Decision Date: 07 June 2011
• Citation: Verderber v. Commander Enterprises Centereach Llc, 85 A.D.3d 771, 925 N.Y.S.2d 142, 2011 N.Y. Slip Op. 5050 (N.Y. App. Div. 2011)
• Parties: Joseph E. VERDERBER, et al., appellants,v.COMMANDER ENTERPRISES CENTEREACH, LLC, et al., respondents.
• Court: New York Supreme Court — Appellate Division

85 A.D.3d 771

925 N.Y.S.2d 142

2011 N.Y. Slip Op. 05050

Joseph E. VERDERBER, et al., appellants,

v.COMMANDER ENTERPRISES CENTEREACH, LLC, et al., respondents.

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

June 7, 2011.

Scher Law Firm, LLP, Carle Place, N.Y. (Austin Graff of counsel), for appellants.Ruskin Moscou Faltischek, P.C., Uniondale, N.Y. (Melvyn B. Ruskin, Douglas A. Cooper, and Matthew F. Didora of counsel), for respondent.JOSEPH COVELLO, J.P., RANDALL T. ENG, L. PRISCILLA HALL, and SHERI S. ROMAN, JJ.

In an action for declaratory relief and to recover damages for breach of fiduciary duty and fraud, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County(Washawsky, J.), entered July 2, 2010, as, upon granting the defendants' motion for leave to reargue their opposition to that branch of the plaintiffs' motion which was to strike, as against public policy, Article VII of an October 2000 operating agreement of the defendantCommander Enterprises Centereach, LLC, which had been determined in an order dated January 22, 2010, and upon vacating the determination in the order dated January 22, 2010, granting that branch of the plaintiffs' motion, denied that branch of the plaintiffs' motion and thereupon, in effect, searched the record and awarded summary judgment to the defendants declaring that the interest of the plaintiffsJoseph E. Verderber and Judith Verderber in Commander Enterprises Centereach, LLC, terminated in January 2009, and that the defendantBenco, LLC, is entitled to purchase their interest, to be valued in accordance with the formula set forth in Article VII of the subject operating agreement, and denied, as academic, their cross motion pursuant to Limited Liability Company Law § 509 for summary judgment against the defendantBenco, LLC, in the sum of $1,144,928.

ORDERED that the order is affirmed insofar as appealed from, with costs, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment, inter alia, declaring that the interest of the plaintiffsJoseph E. Verderber and Judith Verderber in Commander Enterprises Centereach, LLC, terminated in January 2009, and that the defendantBenco, LLC, is entitled to purchase their interest to be valued in accordance with the formula set forth in Article VII of the subject operating agreement.

The plaintiffsJoseph E. Verderber and Judith Verderber(hereinafter together the Verderbers) owned a 20% interest in Commander Enterprises Centereach, LLC(hereinafter the company), together with the defendantBenco, LLC, which owned the remaining 80% interest in the company.Pursuant to an October 2000 operating agreement, upon any event that terminated the continued membership of a member in the company, the interest of that member would be deemed to be offered for sale to Benco, LLC, and would be valued in accordance with a formula set forth in the operating agreement.Contrary to the plaintiffs' contention, the Supreme Court properly determined that the October 2000 agreement governed, and that pursuant to that agreement, the January 2009 assignment by the Verderbers of their interest in the company to the plaintiffVerbenco, LLC, terminated their...