Opinion
Index No. 531507/2023 Motion Seq. 1 2
07-25-2024
ADRIANE HARTILL, PAUL DISCALA, and GERARD Plaintiffs, v. JOHN NUNZIATA, Defendant, And 15.6 AINSLIE ST., LLC, Nominal Defendant,
Unpublished Opinion
DECISION AND ORDER INDEX
LEON RUCHELSMAN, J.
The plaintiffs have moved seeking to dismiss counterclaims' filed by the defendants. The defendants have cross-moved seeking to dismiss the complaint. The motions have been opposed respectively. Papers were submitted by the parties and arguments held. After reviewing all the arguments this court now makes the following determination.
According to the amended complaint, Andrew Nunziata the father of defendant John Nunziata and the grandfather of all three plaintiffs owned property located at 156 Ainslie Street in Kings County. Upon Andrew's passing the property was inherited by Andrew's children, defendant John Nunziata, Maria Discala, and Arthur Nunziata. Thus, on December 12, 2006 John created an entity called 156 Ainslie LLC which comprised of one asset, namely the property .located at that address which was equally owned by John and Arthur and Maria. Maria passed away on July 7, 2007. The children of Maria, the plaintiff's herein, have asserted ownership interests in the entity. They commenced this lawsuit seeking a declaratory judgement and an equitable accounting and claims against John for breaching his duty to the entity. The defendants counterclaimed asserting the plaintiff's are not members of the entity and thus cannot pursue any claims. There are further counterclaims asserted alleging fraud, money had and conversion and unjust enrichment. These motions seeking to dismiss have now been filed.
Conclusions of Law
It is well settled that upon a motion to dismiss the court must determine., accepting the allegations of the complaint as true, whether the party can succeed upon any reasonable view of those facts (Perez, v. Y &M Transportation Corporation, 219 A.D.3d 1449, 196 N.Y.S.3d 145 [2d Dept.., 2023],).. Further, all the allegations in the complaint are deemed true and all reasonable inferences may be drawn in favor of the plaintiff (Archival Inc., v. 177 Realty Corp., 220 A.D.3d 909, 198 N.Y.S.2d 567 [2d Dept., 2023]). Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a pre-discovery CPLR §3211 motion to dismiss (see, Lam v. Weiss, 219 A.D.3d 713, 195 N.Y.S.3d 488 [2d Dept., 2023]).
The operating agreement states that the: company is dissolved where there is "the bankruptcy, death, dissolution, expulsion, incapacity or withdrawal of any member or the occurrence of any other event that terminates the continued membership of any member, unless within six months after such event, this Company is continued either by vote or written consent of a majority in interest of-all the remaining members" (see, Operating Agreement, Article VI(1)(c) [NYSCEF Doc. No. 9]). There really is no dispute that upon Maria's death the remaining members, namely John and Arthur took a vote to continue the operations of the entity.
Turning to whether the plaintiff's maintain any ownership interests in the entity, Limited Liability Company Law §608 states that "if a member who is a natural person dies...the member's executor, administrator... or other legal representative may exercise all of the member's rights for the purpose of settling his or her estate or administering his or her property, including any power under the operating agreement of an assignee to become: a member"' (id)
Clearly, the representative of an individual who has died can act with all rights the member enjoyed for the certain defined purposes enumerated in the statute, .namely settling the estate (see, Andris v. 1736 Forest Realty LLC, 213 A.D.3d 923, 184 N.Y.S.3d 813 [2d Dept., 2023]) . However, a representative does not have the status of an assignee. This contrasts the treatment in other states. For example, in Louisiana when a member of a corporation dies "the member's executor, administrator...or other legal representative shall be treated as an assignee of such member's interest in the limited liability company" (see, Louisiana Revised Statutes 12:1333 'Powers of Estate of a Deceased or Incompetent Member').
Thus, the estate of Maria may exercise "all" of Maria's rights (see, Crabapple Corp., v. Elberg, 153 A.D.3d 434, 60 N.Y.S.3d 124 [1st Dept., 2017]). Therefore, the estate of Maria maintains an interest in the entity. This interest flows from Maria herself and thus the estate is not a new member and does need to be voted upon as a new member pursuant to Article III(2) of the operating agreement. Consequently, the motion seeking to dismiss the complaint is denied. Further, all the counterclaims are based upon the fact the plaintiff's have no standing to assert any interest in the entity. Since they maintain such an interest the motion seeking to dismiss the counterclaims is granted..
Lastly, the plaintiff's motion seeking discovery is granted. As members of the entity1 the plaintiff's are entitled to all the discovery sought.
So ordered.