throbber
FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`: NEW YORK
`FILED
`NYSCEF
`DOC.
`541
`NO.
`SUPREME
`
`COUNTY
`
`CLE
`
`08
`
`17
`
`/2017
`
`02332
`
`PM
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`1 2011
`
`OF THE
`COURT
`NEW YORK
`
`STATE
`COUNTY
`
`RECEIVED
`NYSCEF:
`OF NEWYORK
`
`08/17/2017
`
`PRESENT
`
`guA,
`
`-v•
`
`td Teak )
`
`Justice
`
`.
`
`The following
`Notice of Motion/Order
`
`papers,
`
`Affidavits
`
`Answering
`Replying Affidavits
`
`1 to _,
`numbered
`were read on this motion
`to Show Cause - Affidavits
`- Exhibits
`Exhibits
`
`-
`
`to/for
`
`Upon the foregoing
`
`papers,
`
`it
`
`is ordered
`
`that
`
`this motion
`
`is
`
`~ ~
`
`PART
`
`INDEX NO.
`
`MOTION DATE
`MOTION SEQ. NO. O l
`
`o(s).
`
`|
`|No(s).
`
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`
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`
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`x
`IX
`
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`0
`I-
`0
`
`1. CHECK ONE:.....................................................................
`...........................MOTION
`
`2. CHECK AS APPROPRIATE:
`APPROPRIATE'
`3. CHECK IF APPROPRIATE:
`
`................................................
`
`I
`
`CASE DISPOSED
`: O GRANTED
`O SETTLE ORDER
`DO NOT POST
`
`ON-FINAL
`
`DISP
`
`C.
`
`J.S.C.
`TION
`
`THER
`
`O DENIED
`
`IN PART
`¤-GRANTED
`O SUBMIT O DER
`FIDUCIARYAPPOINTIIENT
`
`EFERENCE
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`: NEW YORK
`F ILED
`NYSCEF
`NO.
`541
`DOC.
`
`COUNTY
`
`CLERK
`
`08
`
`/17
`
`/ 2017
`
`02
`
`: 3 2
`
`PM
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`652831/2011
`NO.
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`OF NEW YORK
`OF THE STATE
`COURT
`SUPREME
`OF NEW YORK
`PART
`COUNTY
`12
`:
`IAS
`--------____------------...----------------..---------------------------------X
`REDDY
`SREENIVASA
`JAISRIKAR
`GADE,
`and JAISRIKAR2,
`INC.,
`
`LLC,
`
`Plaintiffs,
`
`IndeX
`
`no.
`
`652831/11
`
`Mot.
`
`seq. No.
`
`012
`
`- against
`
`-
`
`DECISION
`
`AND ORDER
`
`MOHAMMED
`TRINGLE
`M.
`ISLAM,
`TWO FOOD CORP,
`TRINGLE
`
`FOOD
`
`CORP.,
`
`.
`
`Defendants.
`------------------.....-------------.........-----------------------------------X
`BARBARA
`J.:
`
`JAFFE,
`
`Plaintiffs
`
`Gade,
`
`Jaisrikar
`
`LLC (LLC),
`
`and
`
`Jaisrikar2,
`
`Inc.
`
`(Inc.)
`
`move
`
`for
`
`an order:
`
`(1) entering
`
`judgment
`
`against
`
`defendants
`
`Islam,
`
`Tringle
`
`Food
`
`Corp.
`
`(Tringle),
`
`and Tringle
`
`Two
`
`Food
`
`Corp.
`
`(Tringle
`
`Two)
`
`consistent
`
`with
`
`the jury's
`
`verdict
`
`and judgment
`
`presented
`
`pursuant
`
`to
`
`the notice
`
`of settlement
`
`filed
`
`on August
`
`8, 2016;
`
`and
`
`(2) permitting
`
`plaintiffs
`
`to amend
`
`the
`
`second
`
`amended
`
`complaint
`
`with
`
`amended
`
`complaint
`
`submitted
`
`I
`I
`
`consistent
`
`the proposed
`
`third
`
`to
`
`the court
`
`on July
`
`31,
`
`2016.
`
`(NYSCEF
`
`456).
`
`Defendants
`
`cross-move
`
`for
`
`orders:
`
`(1) pursuant
`
`to CPLR 4404(a),
`
`setting
`
`aside
`
`the
`
`verdict
`
`and
`
`dismiss
`
`the action;
`
`and
`
`(2) pursuant
`
`to General
`
`Business
`
`Law
`
`(GBL)
`
`§ 394-a
`
`(2)
`
`and
`
`IJniform
`
`Commercial
`
`Code
`
`§ 3-804,
`
`directing
`
`that
`
`plaintiffs
`
`provide
`
`defendants
`
`with
`
`a written
`
`undertaking.
`
`(NYSCEF
`
`518).
`
`. L BACKGROUND
`
`.
`
`A jury
`
`trial
`
`was
`
`held
`
`before me on July
`
`26,
`
`28,
`
`29,
`
`2016,
`
`and August
`
`1, 2016.
`
`At
`
`trial,
`
`plaintiffs
`
`testified
`
`about
`
`the
`
`events
`
`partners,
`
`owned
`
`as an investment
`
`underlying
`
`two Dunkin'
`
`the
`
`action
`
`as follows:
`
`Gade,
`
`together
`
`with
`
`three
`
`Donuts
`
`stores
`
`in Manhattan,
`
`one
`
`located
`
`on
`
`125th
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`: NEW YORK
`F ILED
`NYSCEF
`DOC.
`NO.
`541
`
`COUNTY
`
`CLERK
`
`08
`
`/ 17
`
`/ 2017
`
`0 2 : 3 2
`
`PM
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`652831/2011
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`I
`
`Street
`
`and
`
`the
`
`other
`
`I
`on Madison
`
`Avenue.
`
`In 2007,
`
`they
`
`sought
`
`to divest
`
`themselves
`
`of
`
`ownership
`
`of
`
`the
`
`stores;
`
`defendant
`
`Islam
`
`agreed
`
`to purchase
`
`both
`
`stores.
`
`The
`
`parties
`
`agreed
`
`on a
`
`total
`
`purchase
`
`price
`
`of $1.1 million,
`
`$780,000
`
`for
`
`the
`
`125'"
`125 thStreetlOCation,
`
`and
`
`$320,000
`
`for
`
`the
`
`Madison
`
`Avenue
`
`location.
`
`Subsequently,
`
`Islaiti
`
`agreed
`
`to pay
`
`a total
`
`of $1.3 million.
`
`.
`
`the proposed
`
`sale
`
`of
`
`the
`
`During
`
`the transitional
`
`period
`
`between
`
`contract
`
`and
`
`closing,
`
`franchise
`
`must
`
`be approved
`
`by'
`
`Dunkin',
`
`and the
`
`purchaser
`
`must
`
`be trained
`
`in running
`
`the
`
`franchise.
`
`Plaintiffs
`
`testified
`
`that
`
`the parties
`
`had
`
`understood
`
`that
`
`defendants
`
`were
`
`to manage
`
`the
`
`stores
`
`over
`
`the two-year
`
`period
`
`before
`
`closing,
`
`during
`
`which
`
`defendants
`
`would
`
`retain
`
`any
`
`profits,
`
`and
`
`be liable
`
`for
`
`any
`
`losses.
`
`At
`
`the
`
`closing,
`
`assets were
`
`transferred,
`
`documents
`
`were
`
`executed,
`
`$200,000
`
`of
`
`price
`
`was
`
`$100,000
`
`was
`
`put
`
`Islam
`
`but
`
`the purchase
`
`paid,
`
`and
`
`in escrow.
`
`promised,
`
`failed,
`
`to pay
`
`the
`
`balance
`
`after
`
`closing.
`
`Defendants
`
`gave
`
`plaintiffs
`
`several
`
`promissory
`
`notes,
`
`none
`
`of which
`
`was
`
`satisfied.
`
`Defendants
`
`denied
`
`having
`
`acquired
`
`the
`
`stores,
`
`and
`
`asserted
`
`that,
`
`thus,
`
`no closing
`
`occurred,
`
`and
`
`asserted
`
`that
`
`of
`
`the
`
`four
`
`partners
`
`who may
`
`have
`
`owned
`
`the
`
`stores,
`
`only
`
`one
`
`appeared
`
`at
`
`trial
`
`because
`
`the
`
`others
`
`were
`
`"probably
`
`on which
`
`contain
`
`forged
`
`paid."
`
`were
`
`They
`
`also
`
`alleged
`
`that
`
`the
`
`"contracts"
`
`plaintiffs
`
`rely
`
`signatures,
`
`not
`
`properly
`
`completed,
`
`and
`
`are thus
`
`unenforceable
`
`and
`
`incapable
`
`of performance.
`
`Defendants
`
`also
`
`claim
`
`ownership
`
`of
`
`the
`
`$100,000
`
`held
`
`in escrow,
`
`assert
`
`that
`
`it should
`
`be released,
`
`and
`
`deny
`
`that
`
`they
`
`are liable
`
`on the promissory
`
`notes.
`
`They maintain
`
`that
`
`a demand
`
`for
`
`payment
`
`was
`
`never made,
`
`and
`
`that
`
`the
`
`notes
`
`should
`
`not
`
`.!
`
`have
`
`been
`
`admitted
`
`in evidence
`
`at
`
`the trial.
`
`The jury
`
`rendered
`
`the following
`
`verdict:
`
`1.
`
`Tringle
`2007,
`
`Two
`causing
`
`breached
`damages
`
`a promissory
`of $600,000,
`
`note
`plus
`
`dated
`to LLC,
`issued
`applicable
`interest,
`
`November
`14,
`as per
`the note.
`
`2
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`
`NYSCEF
`
`DOC.
`
`NO.
`
`541
`
`2017
`
`02:32
`
`p
`
`I
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`652831/2011
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`Tringle
`
`2007,
`
`Two
`causing
`
`breached
`damages
`
`a promissory
`of $350,000,
`
`note
`plus
`
`dated
`issued
`to Inc.,
`applicable
`interest,
`
`November
`as per
`the
`
`14,
`note.
`
`Tringle
`
`2007,
`
`Two
`causing
`
`breached
`damages
`
`a promissory
`of $350,000,
`
`note
`plus
`
`to Inc.,
`issued
`applicable
`interest,
`
`dated
`
`November
`27,
`the note.
`as per
`
`into
`entered
`and Tringle
`Inc.
`Tringle
`November
`14, 2007;
`
`a management/partnership
`breach
`this
`not
`did
`
`agreement.
`
`agreement,
`
`dated
`
`and Tringle
`Inc.
`November
`14, 2007;
`
`into
`entered
`Tringle
`
`a management/partnership
`breach
`this
`did
`not
`
`agreement.
`
`agreement,
`
`dated
`
`LLC and Tringle
`November
`14, 2007;
`
`Two
`
`entered
`Tringle
`
`into
`Two
`
`a management/partnership
`breach
`this
`did
`not
`
`agreement.
`
`agreement,
`
`dated
`
`and Tringle
`Inc.
`breached
`this
`
`entered
`
`into
`
`agreement,
`
`causing
`
`of
`a contract
`damages
`
`dated
`sale,
`of $630,000.
`
`December
`
`2007;
`
`Tringle
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`8.
`
`LLC and Tringle
`this
`agreement,
`
`Two
`causing
`
`entered
`damages
`
`into
`
`contract
`an oral
`of $270,000.
`
`of sale;
`
`Tringle
`
`Two
`
`breached
`
`9.
`
`Islam
`
`did
`
`not
`
`represent
`
`fact
`
`to plaintiffs.
`
`falsely
`
`any
`
`(NYSCEF
`
`512).
`
`II. MOTION
`
`TO AMEND
`
`A.
`
`Contentions
`
`Plaintiffs
`
`prevailed
`
`-on five
`on
`
`of
`
`the nine
`
`questions
`
`on the
`
`verdict
`
`sheet,
`
`three
`
`as to the
`
`promissory
`
`notes,
`
`and
`
`two
`
`as to the contracts.
`
`of sale.
`
`The
`
`second
`
`amended
`
`complaint
`
`contains
`
`four
`
`causes
`
`of action
`
`that
`
`are relevant
`
`to these motions:
`
`(1) breach
`
`of contract
`
`by Tringle;
`
`(2) breach
`
`of contract
`
`by Tringle
`
`Two;
`
`(3) breach
`
`of contract
`
`by
`
`Islam;
`
`and
`
`(4)
`
`consumer
`
`fraud
`
`and common
`
`law fraud
`
`by
`
`Islam.
`
`It was
`
`filed
`
`on October
`
`15, 2013,
`
`and
`
`defendants
`
`answered
`
`on
`
`or about
`
`November
`
`24,
`
`2013.
`
`(NYSCEF
`
`114).
`
`Plaintiffs
`
`seek
`
`to amend
`
`the
`
`second
`
`amended
`
`complaint
`
`to add,
`
`inter
`
`alia,
`
`the
`
`following
`
`allegations:
`
`3
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`: NEW YORK
`F ILED
`NYSCEF
`541
`DOC.
`NO.
`
`COUNTY
`
`CLERK
`
`08
`
`/ 17
`
`/ 2017
`
`0 2 : 3 2
`
`PM)
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`652831Ï2011
`INDEX
`NO.
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`Before
`which
`would
`
`14, 2007
`the November
`closing,
`promised
`to pay
`Jaisrikar,
`and properly
`manage,
`
`they
`pay
`
`for,
`
`Two
`Tringle
`$600,000,
`LLC,
`stores
`(note
`the
`
`Islam
`and
`as part
`
`a note
`signed
`of assurances
`
`by
`that
`
`it
`
`1);
`
`Tringle
`
`Two
`
`failed
`
`to pay
`
`the
`
`$600,000
`
`owed
`
`under
`
`note
`
`1;
`
`Before
`which
`would
`
`14, 2007
`the November
`closing,
`Jaisrikar
`to pay
`promised
`they
`and properly
`manage,
`for,
`pay
`
`Two
`Tringle
`Inc.
`$350,000,
`stores
`(note
`
`2,
`the
`
`Islam
`and
`as part
`2);
`
`a note
`signed
`of assurances
`
`by
`that
`
`it
`
`'
`
`Islam
`
`signed
`
`note
`
`2, personally
`
`as well
`
`as on behalf
`
`of his
`
`company;
`
`Tringle
`
`Two
`
`failed
`
`to pay
`
`the
`
`$300,000
`
`owed
`
`under
`
`note
`
`2;
`
`Before
`which
`would
`
`14, 2007
`the November
`closing,
`to pay
`promised
`Jaisrikar2,
`and properly
`manage,
`
`they
`pay
`
`for,
`
`Two
`Tringle
`Inc.
`$350,000,
`stores
`(note
`the
`
`Islam
`and
`as part
`3); and
`
`a note
`signed
`of assurances
`
`by
`that
`
`it
`
`Tringle
`
`Two
`
`failed
`
`to pay
`
`the $350,000
`
`owed
`
`under
`
`note
`
`3.
`
`Defendants
`
`argue
`
`that
`
`they would
`
`be prejudiced
`
`by the proposed
`
`amendment
`
`as to the
`
`causes
`
`of
`
`.
`
`promissory
`
`notes,
`
`and
`
`object
`
`to what
`
`they
`
`characterize
`
`as "new,
`
`but
`
`time-barred,
`
`action."
`
`They
`
`claim
`
`there
`
`is no mention
`
`of promissory
`
`notes
`
`in the
`
`second
`
`amended
`
`complaint,
`
`and that
`
`permitting
`
`(NYSCEF
`
`520).
`
`a post-trial
`
`amendment
`
`triggers
`
`their
`
`right
`
`to answer
`
`and
`
`interpose
`
`defenses.
`
`Plaintiffs
`
`contend
`
`that
`
`in opposing
`
`the motion
`
`I
`to amend,
`
`defendants
`
`ignore
`
`pleading
`
`requirements,
`
`and
`
`that
`
`they
`
`properly
`
`seek
`
`to conform
`
`the pleadings
`
`to the
`
`facts
`
`adduced
`
`at
`
`trial.
`
`(NYSCEF
`
`531).
`
`B. Discussion
`
`Pursuant
`
`to CPI R 3025,
`
`a party may
`
`amend
`
`a pleading
`
`"at
`
`any
`
`time
`
`by
`
`leave
`
`of court
`
`before
`
`or after
`
`judgment
`
`to conform
`
`[the
`
`pleading]
`
`to the
`
`evidence."
`
`(CPLR
`
`3025[b],
`
`[c]
`
`; Kimso.
`
`Apts.,
`
`LLC v Gandhi,
`
`24 NY3d
`
`403,
`
`411
`
`[2014]).
`
`Leave
`
`"shall
`
`be freely
`
`given
`
`upon
`
`such
`
`terms
`
`,4
`
`

`

`RK
`
`7
`
`2017
`
`02:32
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`652831/2011
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`P
`
`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`ggggy
`NYSCEF
`
`DOC.
`
`NO.
`
`541
`
`as may
`
`be
`
`just,"
`
`"even
`
`if
`
`the
`
`amendment
`
`substantially
`
`alters
`
`the theory
`
`of
`
`recovery."
`
`(Id.
`
`.
`
`[internal
`
`quotation
`
`marks
`
`and
`
`citation
`
`omitted]).
`
`The
`
`sole
`
`factor
`
`for
`
`the
`
`court
`
`to consider
`
`whether
`
`the opposing
`
`party
`
`will·be
`
`prejudiced
`
`by
`
`the amendment,
`
`even where
`
`the motion
`
`amend
`
`is made
`
`during
`
`or after
`
`trial.
`
`(Murray
`
`v City
`
`of New York,
`
`43 NY2d
`
`400,
`
`405
`
`[1977];
`
`is
`
`to
`
`Gonflantini
`
`184 AD2d
`
`369
`
`[1S' Dept
`
`1992]).
`
`v Zino,
`
`368,
`
`Evidence
`
`pertaining
`
`to the notes
`
`was
`
`admitted
`
`in evidence
`
`at
`
`trial
`
`(see
`
`tr. at 52:14
`
`-
`
`53:18;
`
`61:20
`
`- 65:23
`
`[Gade's
`
`testimony
`
`that
`
`note
`
`given
`
`as security
`
`to take
`
`over management
`
`of
`
`stores];
`
`77:15
`
`- 92:8
`
`[issues
`
`of authenticity
`
`and
`
`admissibility
`
`of notes
`
`and
`
`status
`
`as to
`
`repayment];
`
`150:12
`
`- 25 [Gade's
`
`testimony
`
`that
`
`notes
`
`given
`
`as security;
`
`due
`
`diligence
`
`regarding
`
`notes];
`
`165:23
`
`- 166:20
`
`[cross
`
`examination
`
`regarding
`
`notes];
`
`356:8
`
`- 357:7
`
`{Islam's
`
`testimony
`
`regarding
`
`lack
`
`of payment
`
`on note];
`
`401:b0
`
`- 25 {Islam's
`
`testimony
`
`regarding
`
`notes]),
`
`along
`
`with
`
`copies
`
`of
`
`the notes
`
`(NYSCEF
`
`462,
`
`463)..
`
`Thus,
`
`there
`
`is no prejudice
`
`in permitting
`
`the
`
`amendment.
`
`(See M Entertainment,
`
`Inc.
`
`v Leydier,
`
`71 AD3d
`
`517,
`
`520
`
`[15' Dept
`
`2010]
`
`["
`["The
`
`document
`
`was
`
`received
`
`into
`
`evidence
`
`by the trial
`
`court.
`
`It was
`
`considered
`
`by the
`
`court
`
`in
`
`rendering
`
`its decision
`
`and
`
`is part
`
`of
`
`the
`
`record
`
`on appeal.
`
`Therefore,
`
`there
`
`can
`
`be no prejudice
`
`to
`
`(defendant)
`
`in permitting
`
`the
`
`amendment"]).
`
`Moreover,
`
`defendants
`
`could
`
`not
`
`have
`
`been
`
`surprised
`
`by evidence
`
`of
`
`the
`
`notes.
`
`In motion
`
`sequence
`
`that
`
`defendants
`
`were
`
`on the notes.
`
`(See Parra
`
`v Ardmore
`
`009,
`
`plaintiffs
`
`argued
`
`liable
`
`Mgt.
`
`Co.,
`
`Inc.,
`
`258 AD2d
`
`267
`
`[1st Dept
`
`1999],
`
`ly denied
`
`93 NY2d
`
`805
`
`[trial
`
`court
`
`did
`
`not
`
`err
`
`in
`
`granting
`
`motion
`
`to amend
`
`third-party
`
`complaint
`
`after
`
`verdict,
`
`as third-party
`
`defendant
`
`had
`
`sufficient
`
`notice
`
`before
`
`trial
`
`that
`
`claim
`
`may
`
`be asserted]
`
`; Equitable
`
`Life
`
`Assur.
`
`Socy.
`
`of US v
`
`Nico
`
`Constr.
`
`Co.,
`
`Inc.,
`
`245 AD2d
`
`194,
`
`195 [1St Dept
`
`1997]
`
`[defendant
`
`cannot
`
`claim
`
`prejudice;
`
`evidence
`
`at
`
`trial made
`
`it aware
`
`that
`
`plaintiff
`
`intended
`
`to prove
`
`that
`
`contract
`
`for work
`
`existed];
`
`see
`
`5
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`: NEW YORK
`F ILED
`NYSCEF
`541
`DOC.
`NO.
`
`COUNTY
`.
`
`CLERK
`
`08
`
`/17
`
`/ 2017
`
`0 2 : 3 2
`~
`
`PM|
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`652831/2011
`INDEX
`NO.
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`also
`
`Paradiso
`
`&'
`& DiMenna
`
`v DiMenna,
`
`232 AD2d
`
`257,
`
`257
`
`[1S' Dept
`
`1996]
`
`["
`["Since
`
`defendant
`

`
`was
`
`on notice
`
`that
`
`this
`
`check
`
`writing
`
`practice
`
`was
`
`at
`
`the heart
`
`of
`
`this
`
`case,
`
`defendant
`
`was
`
`not
`
`prejudiced
`
`by the trial
`
`court's
`
`amendment
`
`of
`
`the pleadings
`
`to conform
`
`to proof
`
`adduced
`
`at
`
`trial
`
`pursuant
`
`to that
`
`practice"]).
`
`of a conversion
`
`of
`
`funds
`
`In Lanpont
`
`v Savvas
`
`Cab Corp.,
`
`the trial
`
`court
`
`denied
`
`a motion
`
`made
`
`on the
`
`eve
`
`of
`
`trial
`
`to
`
`amend
`
`an answer
`
`to assert
`
`the
`
`defense
`
`of
`
`the exclusivity
`
`workers'
`
`of
`
`compensation,
`
`thereby
`
`precluding
`
`that
`
`defense
`
`from
`
`being
`
`presented
`
`at
`
`the trial.
`
`(244 AD2d
`
`208
`
`[1S'
`
`Dept
`
`1997].).
`
`On
`
`appeal,
`
`the Court
`
`reversed
`
`and
`
`required
`
`a remand
`
`to the trial
`
`court
`
`to consider
`
`the
`
`new defense.
`
`As Lanpont
`
`neither
`
`pertains
`
`to a motion
`
`to amend
`
`a complaint,
`
`nor
`
`stands
`
`for
`
`the proposition
`
`that
`
`amending
`
`a complaint
`
`requires
`
`a new answer,
`
`it
`
`is inapposite,
`
`especially
`
`as the
`
`defense
`
`at
`
`issue
`
`was
`
`to be decided
`
`by
`
`the trial
`
`judge
`
`rather
`
`than
`
`the jury.
`
`III. MOTION
`
`TO SET
`
`ASIDE
`
`A.
`
`Contentions
`
`I I
`
`Defendants
`
`argue
`
`that:
`
`(1)
`
`the
`
`evidence
`
`at
`
`trial
`
`does
`
`not
`
`support
`
`the
`
`verdicts
`
`rendered
`
`in
`
`plaintiffs'
`
`favor,
`
`in that
`
`there
`
`was
`
`of valid
`
`and
`
`promissory
`
`notes
`
`are not
`
`contained
`
`in the pleadings,
`
`and
`
`should
`
`not
`
`have
`
`been
`
`included
`
`as part
`
`of
`
`no showing
`
`contracts;
`
`(2)
`
`the
`
`allegations
`
`as to the
`
`the verdict.
`
`(NYSCEF
`
`520).
`
`Plaintiffs
`
`argue
`
`that
`
`the jury
`
`properly
`
`found
`
`that
`
`there
`
`was
`
`a contract
`
`between
`
`(a)
`
`Inc.
`
`and Tringle,
`
`and
`
`(b) LLC and Tringle
`
`Two,
`
`and
`
`that
`
`plaintiffs
`
`fulfilled
`
`their
`
`obligations
`
`under
`
`the
`
`contracts.
`
`(NYSCEF
`
`531).
`
`.
`
`Pursuant
`
`to CPLR 4404(a):
`
`B. Discussion
`
`6
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`W
`
`CLERK
`
`08
`
`17
`
`2017
`
`NYSCEF
`
`DOC.
`
`NO.
`
`541
`
`.
`
`02:
`
`32
`
`P
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`831/2011
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`After
`aside.a
`favor
`cause
`
`evidence,
`
`a trial
`verdict
`of a party
`of action
`in the
`
`the motion
`. upon
`of action
`. .
`of a cause
`and
`thereon
`entered
`judgment
`or any
`as a matter
`of
`to judgment
`entitled
`verdict
`the
`issue where
`or separable
`. . .
`of
`justice
`interest
`
`court may
`. the
`. .
`of any party
`be entered
`judgment
`direct
`that
`a new trial
`order
`law or
`it may
`to the weight
`of
`is contrary
`
`the
`
`set
`in
`of a
`
`A party's
`
`entitlement
`
`to judgment
`
`as a matter
`
`of
`
`law depends
`
`on whether
`
`the
`
`evidence
`
`preponderates"
`
`"so
`
`in favor
`
`of
`
`the movant
`
`that
`
`the
`
`verdict
`
`"could
`
`not
`
`have
`
`been
`
`reached
`
`on any
`
`fair
`
`interpretation
`
`of
`
`the
`
`evidence."
`evidence."
`
`(Killon
`
`v Parrotta,
`
`28 NY3d
`
`101,
`
`108
`
`[2016]
`
`[internal
`
`34 AD3d
`
`374
`
`[1" Dept
`
`2006]).
`
`quotation
`
`marks
`
`and
`
`citation
`
`omitted]
`
`; Laham
`
`v Bin Chambi,
`
`374,
`
`\
`
`It must
`
`be found
`
`that
`
`"there
`
`is simply
`
`no valid
`
`line
`
`of
`
`reasoning
`
`and
`
`permissible
`
`inferences
`
`which
`
`could
`
`possibly
`
`lead
`
`rational
`
`[people]
`
`to the
`
`conclusion
`
`reached
`
`by the jury
`
`on the
`
`basis
`
`of
`
`the evidence
`
`presented
`
`at
`
`trial."
`
`(Cohen
`
`v Hallmark
`
`Cards,
`
`Inc.,
`
`45 NY2d
`
`493,
`
`499
`
`[1978];
`
`Vaccaro
`
`v County
`
`ofSuffolk,
`
`137 AD3d
`
`1011
`
`[2d Dept
`
`2016]).
`
`If
`
`the verdict
`
`is set aside
`
`as a
`
`matter
`
`is a judgment
`
`in the movant's
`
`favor.
`
`45 NY2d
`
`at 498).
`
`of
`
`law,
`
`the remedy
`
`(Cohen,
`
`"Whether
`
`a particular
`
`factual
`
`determination
`
`is against
`
`the weight
`
`of
`
`the
`
`evidence
`
`is itself
`
`a factual
`
`factors."
`
`question"
`
`that
`
`"involves
`
`what
`
`is in large
`
`part
`
`a discretionary
`
`balancing
`
`of many
`
`(Cohen,
`
`45 NY2d
`
`at 499).
`
`The
`
`court's
`
`discretion
`
`is informed
`
`by the deference
`
`given
`
`the jury's
`
`resolution
`
`of disputed
`
`factual
`
`issues
`
`and
`
`inconsistencies
`
`in
`
`witnesses'
`
`testimony
`
`(Bykowsky
`
`v Eskenazi,
`
`72 AD3d
`
`590
`
`[1" Dept
`
`2010],
`
`lv denied
`
`16 NY3d
`
`701
`
`[201
`
`l]; Desposito
`
`v
`
`55 AD3d
`
`659
`
`[2d Dept
`
`2008]),
`
`and
`
`the entitlement
`
`of
`
`the
`
`City
`
`of New
`
`York,
`
`by
`
`party
`
`opposing
`
`the motion
`
`to "every
`
`inference
`
`which
`
`may
`
`properly
`
`be drawn
`
`from the facts
`
`presented,"
`
`and
`
`"the
`
`.
`
`facts must
`
`be considered
`
`in a light more
`
`favorable
`
`to the
`
`nonmovant"
`
`(Szczerbiak
`
`v Pilat,
`
`90
`
`NY2d
`
`553,
`
`556
`
`[1997]
`
`; KBL,
`
`LLP
`
`v Community
`
`Counseling
`
`& Mediation
`
`Servs.,
`
`123 AD3d
`
`488,
`
`489
`
`[1" Dept
`
`2014]).
`
`Nonetheless,
`
`"[t]he
`
`critical
`
`inquiry
`
`is whether
`
`the verdict
`
`rested
`
`on a fair
`
`interpretation
`
`of
`
`the
`
`evidence."
`
`(KBL,
`
`LLP,
`
`123 AD3d
`
`at 489
`
`[internal
`
`quotes
`
`omitted]).
`
`Where
`
`7
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`NEW YORK
`FILED:
`NYSCEF
`DOC.
`NO.
`541
`
`COUNTY
`
`CLERK
`
`08
`
`17
`
`2017
`
`02:
`
`32
`
`P
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`652831/2011
`.
`RECEIVED
`
`08/17/2017
`
`NYSCEF:
`
`a verdict
`
`is against
`
`the weight
`
`of
`
`the evidence,
`
`the
`
`remedy
`
`is a new trial
`
`(Cohen,
`
`45 NY2d
`
`at
`
`498; Nicastro
`
`v Park,
`
`113 AD2d
`
`129
`
`[2d Dept
`
`1985]).
`
`Generally,
`
`"in
`
`the
`
`absence
`
`of
`
`indications
`
`that
`
`substantial
`
`justice
`
`has not
`
`been
`
`done,
`
`a
`
`successful
`
`litigant
`
`is entitled
`
`to the
`
`benefits
`
`of a favorable
`
`verdict,"
`verdict,"
`
`jury
`
`and "the
`
`court
`
`may
`
`not
`
`with
`
`as this would
`
`employ
`
`its discretion
`
`simply
`
`because
`
`it disagrees
`
`a verdict,
`
`unnecessarily
`
`interfere
`
`with
`
`the fact-finding
`
`function
`
`of
`
`the jury
`
`to a degree
`
`that
`
`amounts
`
`to an usurpation
`
`of
`
`the jury's
`
`duty."
`
`(McDermott
`
`v Coffee
`
`Beanery,
`
`Ltd.,
`
`9 AD3d
`
`195,
`
`206
`
`[1"" Dept
`
`2004)
`
`[internal
`
`quotation
`
`marks
`
`and
`
`citation
`
`omitted]).
`
`I
`
`In answer
`
`to question
`
`seven
`
`of
`
`the verdict
`
`sheet,
`
`the jury
`
`found
`
`that
`
`there
`
`was
`
`a contract
`
`'
`
`between
`
`Inc.
`
`dated
`
`December
`
`with
`
`damages
`
`sustained
`
`Inc.
`
`of sale
`
`and Tringle,
`
`2007,
`
`resulting
`
`by
`
`in the amount
`
`of $630,000.
`
`In its answer
`
`to question
`
`eight,
`
`the jury
`
`found
`
`the
`
`existence
`
`of an
`
`oral
`
`contract
`
`of sale
`
`between
`
`LLC and Tringle
`
`Two,
`
`with
`
`resulting
`
`damages
`
`sustained
`
`by LLC in
`
`the
`
`amount
`
`of $270,000.
`
`In support
`
`of
`
`the argument
`
`that
`
`these
`
`verdicts
`
`are not
`
`supported
`
`by
`
`the
`
`weight
`
`of
`
`the evidence,
`
`defendants
`
`assert
`
`that:
`
`1.
`
`only
`
`one
`
`contract,
`
`and
`
`did
`
`not
`
`fulfill
`
`the
`
`condition
`
`that
`
`they
`
`Plaintiffs
`deliver
`
`admitted
`a bill
`of
`
`sale.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`Contrary
`closing
`
`to the allegations
`transaction
`of either
`
`in the
`complaint,
`contract
`for
`
`there
`was
`the purchase
`
`no evidence
`store.
`of either
`
`at
`
`trial
`
`of any
`
`.
`
`There
`
`is no contract
`
`for
`
`the
`
`sale
`
`of
`
`the Madison
`
`Avenue
`
`store.
`
`Plaintiffs
`a letter
`signed
`tr. at 139:21-23;
`523;
`
`stating
`140:6-7).
`
`that
`
`defendants
`
`have
`
`"no
`
`balance
`
`due"
`
`(NYSCEF
`
`Gade
`denied
`the notes
`(tr.
`
`sent
`having
`at 145:18-25;
`
`a demand
`152).
`
`for
`
`payment
`
`for
`
`the
`
`sale
`
`of
`
`the businesses
`
`or
`
`Gade
`loan,"
`
`admitted
`neither
`
`he was
`in trouble
`that
`is defendants'
`of which
`
`his
`with
`obligation
`
`home
`mortgage
`(NYSCEF
`
`loan
`524);
`
`and
`
`the
`
`"GE
`
`8
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`NEW YORK
`FILED:
`NYSCEF
`DOC.
`NO.
`541
`
`08
`
`17
`
`2017
`
`02:32
`
`P
`
`COUNTY
`
`CLERK
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`652831/2011
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`7.
`
`8.
`
`Gade
`
`never
`
`demanded
`
`payment
`
`pursuant
`
`to the terms
`
`of
`
`the
`
`contracts
`
`of
`
`sale.
`
`!
`
`Plaintiffs
`them.
`
`failed
`
`to establish
`
`any breach
`
`by defendants
`
`of an obligation
`
`owed
`
`to
`
`These
`
`assertions,
`
`even
`
`taken
`
`collectively,
`
`do not
`
`demonstrate
`
`the
`
`absence
`
`of a basis
`
`for
`
`the jury
`
`verdict,
`
`as the evidence
`
`is at
`
`least
`
`equally
`
`supportive
`
`of
`
`the
`
`verdict.
`
`Plaintiffs
`
`rely
`
`on the
`
`following
`
`trial
`
`evidence:
`
`1.
`
`Islam
`
`admitted
`
`including
`Tringlet
`
`(a)
`(Horn
`Aff.,
`between
`agreement
`the transitional
`(c)
`and Tringle
`(Gade)
`transitional
`officer
`contract
`contract
`
`Two,
`
`contracts
`several
`signed
`to having
`December
`of sale,
`dated
`the
`contract
`the transitional
`Exh.
`1);
`(b)
`LLC and Tringle,
`dated
`management/partnership
`November
`dated
`(Islam),
`agreement
`management/partnership
`November
`dated
`of Tringle
`Food
`Corp.,
`June
`between
`Inc.
`and Tringle,
`dated
`LLC and Tringle
`between
`dated
`
`the
`to purchase
`between
`2007,
`management/partnership
`November
`14, 2007
`(id,
`agreement
`between
`officers
`14, 2007
`exh.
`(id,
`3);
`between
`Gade
`and
`exh.
`14, 2007
`(id,
`19, 2008
`exh.
`(id,
`June
`19, 2008
`
`two
`stores,
`LLC and
`
`exh.
`
`2);
`of LLC
`the
`
`as an
`the
`
`the
`
`(d)
`Islam,
`4);
`(e)
`and
`15);
`(f)
`exh.
`16).
`
`(id,
`
`Islam
`
`exh.
`
`.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`made
`each
`
`partial
`in the
`
`down
`amount
`
`for
`payments
`of $50,000]).
`
`checks,
`
`the stores.(id,
`
`12 [copies
`
`of
`
`four
`
`Islam
`price
`
`"Franchise
`signed
`was
`$1.1 million
`
`Request"
`
`(id,
`
`exh.
`
`forms,
`13 [request
`
`indicating
`Dunkin'
`to
`
`that
`
`that
`the total
`Donuts]).
`
`purchase
`
`Islam
`all pertaining
`transfer
`several
`signed
`documents,
`such
`"Notification
`of Sale,
`purchases
`as:
`Transfer
`(a)
`Agreement"
`exh.
`"Assignment
`and Assumption
`(b)
`Agreements"
`and
`"Franchise
`exhd.
`(id,
`
`20);
`(c)
`
`23-24).
`
`to the Dunkin'
`or Assignment
`exhs.
`(id,
`
`Donuts
`Bulk"
`
`in
`21 and
`
`22);
`
`(id,
`
`In his
`responses,
`discovery
`both
`to purchase
`agreement
`
`Islam
`stores"
`
`admitted
`(id,
`
`that
`exh.
`
`he had
`"enter[ed]
`item 4).
`
`27,
`
`into
`
`an
`
`Islam
`were
`
`admitted
`transferred
`
`during
`(id,
`
`his
`exh.
`
`deposition
`tr. 119;6
`38,
`
`there
`that
`- 25).
`
`was
`
`a closing
`
`at which
`
`the
`
`stores
`
`parties
`The
`stipulated
`related
`documents
`214:20-214:26).
`
`at
`
`trial
`that
`submitted
`
`were
`
`"the
`to
`
`Dunkin'
`Dunkin'
`
`Donuts'
`Donuts'"
`
`contract
`(NYSCEF
`
`of
`
`sale
`
`528,
`
`and
`exh. H,
`
`tr.
`
`2 This
`Corp."
`
`contract,
`
`and others
`
`cited
`
`by plaintiffs,
`
`erroneously
`
`refer
`
`to Tringle
`
`Food Corp.
`
`as "Triangle
`
`Food
`
`9
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`: NEW YORK
`FILED
`NYSCEF
`DOC.
`NO.
`541
`
`COUNTY
`
`CLERK
`
`08
`
`/17
`
`2017
`
`02
`
`: 3 2
`
`PM)
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`652831
`2011
`NO.
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`.
`
`Based
`
`on the foregoing,
`
`it cannot
`
`be said
`
`"that
`
`the verdict
`
`could
`
`not
`
`have
`
`been
`
`reached
`
`on
`
`any
`
`fair
`
`interpretation
`
`of
`
`the
`
`evidence."
`
`(Laham
`
`v Bin Chambi,
`
`34 AD3d
`
`at 374).
`
`Moreover,
`
`as
`
`much
`
`of
`
`the
`
`evidence
`
`at
`
`trial
`
`consisted
`
`of
`
`testimony,
`
`any
`
`credibility
`
`issues
`
`arising
`
`therefrom
`
`deference."
`
`(Laham
`
`v
`
`were
`
`resolved
`
`by the jury,
`
`and
`
`its resolution
`
`of such
`
`"1ssues
`
`is entitled
`
`to
`
`Bin Chambi,
`
`34 AD3d
`
`at 375).
`
`IV.
`
`INTEREST
`
`The
`
`notes
`
`provide
`
`for
`
`interest
`
`at
`
`the rate
`
`of seven
`
`percent.
`
`In their
`
`proposed
`
`judgment,
`
`plaintiffs
`
`seek
`
`interest
`
`at
`
`that
`
`rate
`
`from November
`
`14, 2007,
`
`until
`
`judgment,
`
`and
`
`the
`
`statutory
`
`rate
`
`of nine
`
`percent
`
`thereafter.
`
`Only
`
`two
`
`of
`
`the three
`
`notes
`
`are dated November
`
`14, 2007;
`
`the third
`
`is dated
`
`November
`
`interest
`
`upon
`
`27,
`
`2007,
`
`as per
`
`the jury
`
`verdict.
`
`Moreover,
`
`the
`
`notes
`
`do not
`
`provide
`
`for
`
`the
`
`rate
`
`of
`
`default.
`
`Pursuant
`
`to CPLR 5001(a),
`
`a creditor
`
`may
`
`recover
`
`prejudgment
`
`interest
`
`on unpaid
`
`interest
`
`and principal
`
`payments
`
`awarded
`
`"from
`
`the
`
`date
`
`each
`
`payment
`
`became
`
`due
`
`under
`
`the
`
`terms
`
`of
`
`the promissory
`
`note
`
`to the
`
`date
`
`liability
`
`is
`
`established."
`
`(Spodek
`
`v Park
`
`Prop.
`
`Dev.
`
`"When
`
`a claim
`
`is predicated
`
`on a breach
`
`of contract,
`
`the
`
`Assoc.,
`
`96 NY2d
`
`577,
`
`581
`
`[2001]).
`
`applicable
`
`rate
`
`of prejudgment
`
`interest
`
`varies
`
`depending
`
`on the nature
`
`and terms
`
`of
`
`the
`
`contract."
`
`(NML
`
`Capital
`
`v Republic
`
`of Argentina,
`
`17 NY3d
`
`250,
`
`258
`
`[2011]).
`
`"Most
`
`agreements
`
`associated
`
`with
`
`indebtedness
`
`provide
`
`a 'contract
`
`rate'
`
`of
`
`interest
`
`that
`
`determines
`
`the
`
`value
`
`of
`
`the
`
`loan
`
`and
`
`that
`
`rate
`
`is used
`
`to calculate
`
`interest
`
`on principal
`
`prior
`
`to loan maturity
`
`or a default
`
`in
`
`performance."
`
`(Id.).
`
`1'0
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`NEW YORK
`Pj:LED:
`NYSCEF
`DOC.
`541
`NO.
`
`COUNTY
`
`CLERK
`
`08
`
`17
`
`2017
`
`02'.
`
`32
`
`P
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`652831/2011
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`Here,
`
`the applicable
`
`rate
`
`is seven
`
`percent,
`
`and
`
`it applies
`
`to the period
`
`prior
`
`to default.
`
`And,
`
`as the parties
`
`did
`
`not
`
`provide
`
`for
`
`the
`
`interest
`
`rate
`
`that
`
`governs
`
`after
`
`default,
`
`York'
`New York's
`
`statutory
`
`rate
`
`applies
`
`as the default
`
`rate.
`
`(Id).
`
`Therefore,
`
`the
`
`statutory
`
`rate
`
`of nine
`
`percent
`
`applies,
`
`but
`I
`
`it accrues
`
`on the
`
`date
`
`of default
`
`under
`
`the notes,
`
`not
`
`the
`
`dates
`
`that
`
`the
`
`notes
`
`were
`
`executed.
`
`(See Chipetine
`
`v McEvoy,
`
`238 AD2d
`
`536,
`
`536
`
`[2d Dept
`
`1997]
`
`[trial
`
`court
`
`improperly
`
`computed
`
`amount
`
`of
`
`interest
`
`due
`
`on promissory
`
`note
`
`after
`
`default;
`
`as note
`
`did
`
`not
`
`provide
`
`that
`
`rate
`
`until
`
`principal
`
`court
`
`should
`
`have
`
`awarded
`
`interest
`
`be paid
`
`at specified
`
`fully
`
`paid,
`
`only
`
`!
`
`statutory
`
`interest
`
`rate
`
`of nine
`
`percent'after
`
`date
`
`of defendant's
`
`default]).
`
`As
`
`the parties
`
`do not
`
`address
`
`the
`
`date
`
`of default
`
`under
`
`the
`
`notes,
`
`nor
`
`did
`
`the jury
`
`decide
`
`this
`
`issue,
`
`the amount
`
`of
`
`interest
`
`owed,
`
`including,
`
`but
`
`not
`
`limited
`
`to,
`
`the date
`
`of default,
`
`is
`
`referred
`
`to a special
`
`referee.
`
`V. UNDERTAKING
`
`As
`
`an alternative
`
`to dismissing
`
`the complaint,
`
`defendants
`
`argue
`
`that
`
`plaintiffs
`
`should
`
`be
`
`directed
`
`to deliver
`
`an undertaking
`
`pursuant
`
`to Uniform
`
`Commercial
`
`Code
`
`§ 3-804
`
`and General
`
`Business
`
`Law
`
`§ 394-a
`
`(2).
`
`Uniform
`
`Commercial
`
`Code
`
`§ 3-804
`
`provides:
`
`an
`of
`which
`instrument
`an action
`may maintain
`otherwise,
`thereon
`due
`proof
`liable
`upon
`production
`of
`the
`instrument
`and
`amount
`the
`less
`court
`
`The
`
`owner
`
`fixed
`
`not
`by
`the
`indemnifying
`against
`and
`assigns
`claims
`on
`the
`instrument,
`is prosecuted
`or defended
`
`instrument,
`successors
`further
`action
`
`whether
`is
`lost,
`name
`own
`in his
`of
`his
`ownership,
`terms.
`The
`its
`than
`twice
`the
`his
`defendant,
`loss,
`including
`but
`this
`the state
`
`destruction,
`by
`recover
`from
`and
`facts
`which
`the
`court
`shall
`require
`amount
`heirs,
`costs
`provision
`or by a public
`
`allegedly
`personal
`and
`expenses,
`does
`not
`officer
`
`theft
`
`or
`
`party
`any
`his
`prevent
`in an
`security,
`on the
`unpaid
`representatives,
`reason
`by
`where
`apply
`in its behalf.
`
`of
`an
`
`by
`
`General
`
`Business
`
`Law
`
`§ 394-a
`
`similarly
`
`provides:
`
`ll
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`NEW YORK
`FILED:
`NYSCEF
`DOC.
`NO.
`541
`
`08
`
`17
`
`2017
`
`02:32
`
`P
`
`COUNTY
`
`CLERK
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`INDEX
`NO.
`652831/2011
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`upon
`the
`of
`three
`interposed
`amount
`the
`
`1. Where,
`within
`article
`counterclaim
`
`claiming
`party
`or
`other
`parol
`as if
`thereupon
`
`an
`ef
`trial
`that
`a negotiable
`it
`action,.
`upon
`commercial
`uniform
`the
`which
`code,
`lost while
`was
`in the
`is founded,
`action
`prove
`he may
`the
`due
`thereupon,
`and may
`or
`evidence
`recover
`set
`secondary
`produced.
`it was
`
`appears
`
`instrument
`action
`the
`or a
`it belonged
`to·the
`thereof
`contents
`off
`amount
`the
`
`by
`due
`
`that
`2. For
`sum fixed
`or
`with
`bill,
`effect
`that
`
`representatives,
`against
`and
`bill,
`
`he must
`purpose,
`or
`the judge
`by
`at
`least
`he
`will
`against
`all
`costs
`
`two
`
`adverse
`to the
`give
`not
`less
`referee,
`approved
`sureties,
`the
`adverse
`indemnify
`claim
`other
`any
`by any
`and
`by reason
`expenses,
`
`the
`
`party
`than
`the
`
`by
`
`a written
`undertaking,
`of
`twice
`amount
`the
`or
`the
`judge
`referee,
`and
`his
`heirs
`on
`account
`of
`a claim.
`
`the
`
`party,
`person,
`such
`of
`
`the
`
`in a
`note
`to
`the
`personal
`note
`
`or
`
`Notwithstanding
`
`the use ofthe
`
`word
`
`"shall"
`
`in Uniform
`
`Commercial
`
`Code
`
`§.3-804,
`
`opinion
`
`is divided
`
`as to whether
`
`the posting
`
`of an undertaking
`
`is mandatory.
`
`In the Official
`
`Comments
`
`to the
`
`statute,
`
`an undertaking
`
`is deemed
`
`discretionary:
`
`claimant
`testifies
`the
`If
`in due
`of a holder
`hands
`court
`is
`therefore
`The
`reason
`loss
`against
`by
`or
`has
`time
`elapsed,
`and
`instrument
`The
`requirement
`of
`discretion
`
`of
`there
`
`its
`
`ownership
`therefore
`is
`court.
`
`the
`
`(Uniform
`
`Conïmercial
`
`falsely,
`course,
`to
`authorized
`such
`possibilities.
`is
`so little
`that
`there
`not
`an
`
`if
`or
`the
`
`instrument
`the
`obligor
`require
`
`may
`security
`There
`may
`possible
`doubt
`is no
`good
`absolute
`one,
`
`subsequently
`be subjected
`
`turns
`to double
`the
`
`in the
`up
`liability.
`obligor
`so much
`of.the
`security.
`to
`the
`
`indemnifying
`be cases
`in which
`as to the
`destruction
`reason
`to require
`the
`left
`and
`the matter
`is
`
`Code
`.
`
`§ 3-804
`
`Official
`
`Comments).
`.
`
`Decisions
`
`in which
`
`courts
`
`found
`
`an undertaking
`
`to be discretionary
`
`include
`
`Newbury
`
`Place
`
`Reo
`
`IH, LLC v Sulton,
`
`48 Misc
`
`3d
`
`1206(A),
`
`2015 NY Slip Op 50985(U),
`
`*4
`
`(Sup
`
`Ct,
`
`Kings
`
`County
`
`2015)
`
`(requirement
`
`not
`
`absolute;
`
`matter
`
`left
`
`to court's
`
`discretion),
`
`487 Clinton
`
`Ave.
`
`Corp.
`
`v Chase Manhattan
`
`Bank,
`
`63 Misc
`
`2d 715,
`
`717-718
`
`(Sup
`
`Ct, Kings
`
`County
`
`1970)
`
`(court
`
`rejects
`
`mandatory
`
`interpretation.of
`
`statute,
`
`and
`
`grants
`
`plaintiffs'
`
`request
`
`to use
`
`interest
`
`bearing
`
`account
`
`as security),
`
`and Kwon
`
`v Yun,
`
`606
`
`F Supp
`
`2d 344,
`
`369-370
`
`(SD NY 2009)
`
`(requirement
`
`of undertaking
`
`discretionary).
`
`]2
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`NEW YORK
`FXLED:
`NYSCEF
`DOC.
`NO.
`541
`
`COUNTY
`
`CLERK
`
`08
`
`17
`
`2017
`
`02:32
`
`P
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`652831/2011
`INDEX
`NO.
`
`RECEIVED
`
`NYSCEF:
`
`08/17/2017
`
`Although
`
`the Appellate
`
`Division,
`
`First
`
`Department,
`
`in Sills
`
`v Waheed
`
`Enters.,
`
`held
`
`that
`
`the plaintiff
`
`"should
`
`have
`
`been
`
`required
`
`to post
`
`security
`
`to indemnify
`
`appellant
`
`front
`
`any
`
`future
`
`actions
`
`on these
`
`lost
`
`instruments
`
`(UCC
`
`3-804),"
`
`it did
`
`not
`
`discuss
`
`whether
`
`an undertaking
`
`is
`
`in all
`
`circumstances.
`
`(253 AD2d
`
`351,
`
`352
`
`[1" Dept
`
`1998],
`
`lv denied
`
`93 NY2d
`
`808
`
`mandatory
`
`[1999]).
`
`However,
`
`in Matter
`
`of Diaz
`
`v Manufacturers
`
`Hanover
`
`Trust
`
`Co.,
`
`the
`
`court
`
`concluded
`
`that
`
`it may
`
`not
`
`order
`
`payment
`
`on a lost
`
`negotiable
`
`instrument
`
`without
`
`requiring
`
`the
`
`payee
`
`to post
`
`an
`
`undertaking
`
`and
`
`that
`
`the undertaking
`
`is thus mandatory.
`
`(92 Misc
`
`2d 802,
`
`805-806
`
`[Sup
`
`Ct,
`
`And
`
`in Beswick
`
`General
`
`Business
`
`Law
`
`§ 394-a,
`
`the
`
`Queens
`
`County
`
`1977]).
`
`v Weiss,
`
`construing
`
`Court
`
`affirmed
`
`the
`
`lower
`
`court's
`
`order
`
`directing
`
`the defendant
`
`to pay
`
`on a note
`
`conditioned
`
`on
`
`the plaintiff
`
`obtaining
`
`an undertaking,
`
`observing
`
`that
`
`the undertaking
`
`"effectively
`
`protected
`
`.
`
`.
`
`defendant
`
`from the
`
`risk
`
`of double
`
`liability
`
`should
`
`the
`
`lost
`
`instrument
`
`reappear."
`
`(126
`
`AD2d
`
`854,
`
`855-856
`
`[3d Dept
`
`1987]).
`
`Here,
`
`the notes
`
`were
`
`issued
`
`in 2007,
`
`this
`
`action
`
`has been
`
`pending
`
`since
`
`2011,
`
`and
`
`there
`
`is
`
`little
`
`likelihood
`
`of a future
`
`claim.
`
`The
`
`facts
`
`here
`
`are similar
`
`to those
`
`addressed
`
`in Kwon
`
`v Yun,
`
`although
`
`there,
`
`the plaintiff
`
`did
`
`not
`
`dispute
`
`that
`
`he borrowed
`
`the money,
`
`received
`
`the
`
`funds,
`
`and
`
`failed
`
`to repay:
`
`the
`While
`reasonable
`than
`more
`- aside
`and
`Metedeconk
`transferred
`
`is a close
`question
`for
`ground
`security
`requiring
`No other
`years.
`four
`party
`that
`plaintiff's
`claim
`from
`— there
`evidence
`is
`other
`to àny
`
`one,
`
`no
`party.
`
`concludes
`the Court
`This
`here.
`asserted
`has
`the Notes
`that
`the
`
`any
`were
`Notes
`
`on balance,
`that,
`been
`has
`litigation
`based
`claim
`distributed
`have
`
`is no
`for
`pending
`the Notes,
`on
`to a member
`negotiated
`
`there
`
`of
`or
`
`been
`
`(606
`
`F Supp
`
`2d at 369).
`
`13
`
`

`

`FILED: NEW YORK COUNTY CLERK 03/28/2018 11:09 AM
`NYSCEF DOC. NO. 574
`: NEW YORK
`FILED
`NYSCEF
`541
`DOC.
`NO.
`
`COUNTY
`
`CLERK
`
`08 /17
`
`/ 2017
`
`O2
`
`: 3 2
`
`PM|
`
`INDEX NO. 652831/2011
`
`RECEIVED NYSCEF: 03/28/2018
`mm m.
`6201/
`2ulM
`08/17/2017
`RECEIVED
`NYSCEF:
`
`VI.
`
`CONCLUSION
`
`Accordingly,
`
`it
`
`is hereby
`
`I
`
`ORDERED,
`
`that
`
`the motion
`
`by plaintiffs
`
`Sreenivasa
`
`Reddy
`
`Gade,
`
`Jaisrikar
`
`LLC,
`
`and
`
`Jaisrikar2,
`
`Inc.
`
`is granted
`
`to the
`
`extent
`
`of
`
`(1) permitting
`
`plaintiffs
`
`to amend
`
`the
`
`second
`
`amended
`
`complaint
`
`consistent
`
`with
`
`the proposed
`
`third
`
`amended
`
`complaint
`
`submitted
`
`to the court
`
`on July
`
`31, 2016;
`
`and
`
`(2)
`
`granting
`
`them judgment,
`
`although
`
`entry
`
`of
`
`judgment
`
`is stayed
`
`pending
`
`a
`
`. .
`
`calculation
`
`of
`
`the
`
`interest
`
`due
`
`as set
`
`forth
`
`below;
`
`it
`
`is further
`
`ORDERED,
`
`that
`
`the issue
`
`of pre-judgment
`
`and post-judgment
`
`interest,
`
`including,
`
`but
`
`not
`
`limited
`
`to the
`
`

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