Opinion
Index No. 503538/13
11-18-2013
MASSEY KNAKAL REALTY OF BROOKLYN LLC, Plaintiff, v. W.J.R. ASSOCIATES, PATRICIA A. REINHARDT AS EXECUTRIX OF THE ESTATE OF WILLIAM J. REINHARDT, ALAN C. TRACHTMAN, JARED LEFKOWITZ, AND TIMOTHY D. KING, Defendants.
At an IAS Term, Part Comm-1 of the Supreme
Court of the State of New York, held in and for
the County of Kings, at the Courthouse, at Civic
Center, Brooklyn, New York, on the 18th day of
November, 2013.
PRESENT:
HON. CAROLYN E. DEMAREST,
Justice.
| The following papers numbered 2 to 58 read herein: | Papers Numbered |
| Notice of Motion/Order to Show Cause/ Petition/Cross Motion and , Affidavits (Affirmations) Annexed __ | 11, 2-7, 40-49, 52-53 |
| Opposing Affidavits (Affirmations) __ | 15, 58 |
| Reply Affidavits (Affirmations) __ | __ |
| __ Affidavit (Affirmation) __ | __ |
| Other Papers Memorandum of Law | 8, 54, 57 |
Plaintiff Massey Knakal Realty of Brooklyn LLC, (Massey KB) moves, by way of an order to show cause, for an order: (1) enjoining defendants from initiating any action or proceeding against plaintiff or any of its affiliated entities with regard to the payment of any monies that will be due or payable to defendant Timothy D. King under the Confidential Negotiated Settlement Agreement and General Release (Massey Agreement) until the court determines priority and preference among the defendants to any monies payable by plaintiff to King; (2) enjoining the transfer of any monies from plaintiff to any of the defendants pursuant to the Massey Agreement until the court determines priority and preference among the defendants to any monies payable by plaintiff to King; and (3) staying the enforcement or levy of any execution, lien, or other judgment held by any defendant against monies held by plaintiff that are or will be payable to King under the Massey Agreement until the court determines priority and preference among the defendants to an monies payable by plaintiff to King.
King cross moves for an order: (1) authorizing King to wind up the affairs of defendant W.J.R. Associates (WJR) partnership; (2) declaring that King has a 33 percent interest in the partnership assets; (3) granting "Cross Defendants Motion for a Preliminary Injunction, or limiting said injunction to the total amount of the judgment $160,000 (one hundred and sixty thousand dollars)."
The court assumes that King is referring to plaintiff's motion for a preliminary injunction and that the reference to the judgment relates to King's judgment by confession in the amount of $160,000 in favor of WJR.
WJR and defendant Patricia A. Reinhardt, as Executrix of the Estate of William J. Reinhardt, cross move for an order, pursuant to CPLR 3218, vacating the judgments entered against King upon his affidavits of confession of judgment in favor of defendants Alan C. Trachtman and Jared Lefkowitz.
Finally, Trachtman and Lefkowitz cross move for an order, pursuant to CPLR 5230, vacating the execution of judgment obtained by WJR and Reinhardt against King and Massey KB.
BACKGROUND
The underlying facts are essentially undisputed. On or around June 27, 2013, Massey KB commenced this interpleader action seeking to determine defendants' rights and priorities with respect to money Massey KB had agreed to pay to King, a former member of Massey KB, as part of a May 30, 2013 settlement of litigation between Massey KB and King (Massey Agreement). Under the Massey Agreement, Massey KB was required to make its first payment to King on July 1, 2013.
Massey KB determined that there were issues as to whether other persons or entities might be entitled to this money because, on or around April 22, 2013, Trachtman and Lefkowitz served separate restraining notices on Massey KB relating to a judgment by confession that Trachtman had obtained from King in the amount of $200,000 and a judgment of confession that Lefkowtiz had obtained from King in the amount of $35,000. Both of these judgments by confession had been entered with the Kings County Clerk's office on or around June 11, 2012. In addition, on or around June 21, 2013, the Marshal of the City of New York served a levy by way of an execution with notice to garnishee pursuant to CPLR 5232 (a) upon an entity identified as "Massey Knakal, Attn. Michael S. Wlody" at "275 Madison Avenue, 3rd Flr., New York, NY, 10016" relating to a judgment entered by WJR and Reinhardt against King on September 14, 2012 in the amount of $ 160,000. The City Marshal's levy attached to the execution required that the garnishee turnover the judgment of $160,000, interest of $11,026.08, statutory fees of $15, expenses of $.90 and poundages of $8,552.10 for a total of $179,594.08. It is undisputed that this $160,000 judgment against King is based on a Judgment by Confession that WJR and Reinhardt obtained against King in that amount that was filed with the court on or around September 14, 2012.
On the day that Massey KB commenced the action, it also obtained a temporary restraining order: (1) enjoining defendants from initiating any action or proceeding against Massey KB or its affiliated entities with respect to the money payable to King pursuant to the Massey Agreement until the court determines the defendants' priority and preference to the money; (2) enjoining any transfer of any monies from Massey KB pursuant to the Massey Agreement pending the court's determination; and (3) staying the enforcement of or levy of any execution, lien or other judgment held by any defendant against any monies pending the court's determination. On the return date of the order to show cause, the court continued the injunction and stay until the determination of Massey KB's motion for a preliminary injunction and stay.
VALIDITY OF WJR AND REINHARDT'S JUDGMENT AND EXECUTION
Initially, in addressing the validity of WJR and Reinhardt's judgment by confession and execution, King, Trachtman and Lefkowitz contend that Reinhardt does not have standing to represent WJR and obtain a judgment against King. Trachtman and King's argument is not without some facial appeal, in that the WJR partnership, pursuant to both the partnership agreement and Partnership Law § 62 (4), dissolved at the time of William Reinhardt's death in December 2005. As King has demonstrated that Reinhardt and King were the only remaining partners of WJR at the time of William Reinhardt's death, King, as the sole remaining partner, was the only person with authority under Partnership Law § 68 to wind up WJR's affairs (see Fogel v Neiman, 288 AD2d 429,430 [2d Dept 2001]; Matter of Birnbaum v Birnbaum, 157 AD2d 177, 186 [4th Dept 1990]).
Under WJR's partnership agreement (WJR Agreement), the partnership was deemed dissolved upon the death of a partner (WJR Agreement ¶ 17), although the surviving partner or partners could elect to continue the partnership business upon the payment of the deceased partner's share to the deceased partner's estate (WJR Agreement ¶ 18).
Nevertheless, under the circumstances here, Reinhardt's lack of authority to act for WJR is irrelevant to Reinhardt's right to recover on the judgment of confession and execution, as Reinhardt's proof conclusively demonstrates that her claim is for the benefit of the estate of William Reinhardt rather than an action on the behalf of the partnership. In this regard, WJR and Reinhardt have submitted a copy of a settlement agreement (Staples' Agreement) involving WJR, Reinhardt and King that settled their claims against each other in an action entitled Staples, Inc, et al. v W.J.R. Associates, et al., United States District Court for the Eastern District of New York, Index No. 04-cv-0904 (Staples' Action) and other associated papers. In the Staples' Agreement WJR and Reinhardt agreed to settle all claims they asserted against King in the Staples' Action based on King's agreeing to pay WJR and Reinhardt $ 160,000 (Staples' Agreement, ¶ 1). The Staples' Agreement provided that King's obligation to pay the $ 160,000 would be evidenced by a promissary note obliging King to pay Patricia Reinhardt, as Executrix, the $160,000, without interest, on or before June 9, 2012, and a judgment by confession in that amount (Staples' Agreement § 2). Copies of the executed promissary note and judgment by confession are attached to the Staples' Agreement. According to WJR and Reinhardt's counsel, WJR and Reinhardt's claims against King in the Staples' Action included claims for contractual indemnification, breach of fiduciary duty and tortious interference with contractual relations.
The Staples' Agreement was provided as an exhibit .to an affirmation in opposition submitted by Robert Connolly, who was WJR and Reinhardt's counsel during the course of the Staples' Action.
Given his participation in the Staples' Action, WJR and Reinhardt's counsel undoubtedly has personal knowledge of the claims at issue in that action (see Cole v Telesco Leasing Co., Ill AD2d 1038, 1038 [4th Dept 1991]; Caramanica v State Farm Fire & Cas. Co., 110 AD2d 869, 869-870 [2d Dept 1985]; Beberman v Halbrecht, 105 AD2d 876, 877 [3d Dept 1984]).
In considering these facts, the court notes that, although William Reinhardt died during the Staples' Action, his estate would have remained liable to Staples for WJR's partnership obligations/liabilities incurred prior to William Reinhardt's death to the extent that the partnership assets would have been insufficient to satisfy Staples' claims (Bon Temps Agency v Hickey, 5 AD3d 157, 158 n [1st Dept 2004]; Schuler v Birnbaum, 62 AD2d 461, 464 [4th Dept 1978]; 15A NY Jur 2d, Business Relationships § 1846). In addition, if Reinhardt, as executrix, paid more than the estates' pro rata share of any judgment or settlement of Staples' claims against WJR, the estate would have been entitled to indemnification from King (Schuler, 62 AD2d at 464; Partnership Law § 40 [1] and [2]). While no party has fully described what led to the Staples' Agreement, given the nature of the agreement and the law governing partnership obligations, it can be readily inferred that King agreed to pay the $ 160,000 to Reinhardt as indemnification or an adjustment of King's partnership obligations to Reinhardt resulting from Staples' claims against the partnership (see Goldsmith v Sternberg, 125 AD2d 365, 365-366 [2d Dept 1986]; Schuler, 62 AD2d at 464). Moreover, the promissory note - which names King as payor and Reinhardt as payee, but does not mention WJR - constitutes an acknowledgment of a debt separate from the partnership, even though the obligation may have originally arisen as the result of partnership business (see Katz v Powers, 92 Misc 2d 892, 894 [Suffolk Dist Ct 1978]; K.A. Drechsler, Annotation, Actions at Law Between Partners and Partnerships, 168 ALR 1088 § 5).
Perhaps more importantly, since Reinhardt, as noted above, had no authority to act on behalf of the partnership upon William Reinhardt's death and the dissolution of the partnership, Reinhardt could only have been acting on the behalf of the estate (see Partnership Law § 68; Fogel, 288 AD2d at 430; Matter of Birnbaum, 157 AD2d at 186). Reinhardt's inclusion of WJR in the Staples' Agreement, the judgment by confession and the execution was therefore without legal effect and has no bearing on the legitimacy of Reinhardt's claim or Reinhardt's authority to act for the estate. Further, King has waived any objection to the inclusion of WJR as a party by signing the Staples' Agreement (see Palmieri v Town of Babylon, 87 AD3d 625, 626 [2d Dept 2011]; Rufai v Providence, 28 Misc 3d 134 [A], 2010 NY Slip Op 51353 [U] * 2 [App Term, 2d Dept 2010]; see also Cervera v Bressler, 106 AD3d 683, 683 [2d Dept 2013]) and the affidavit for a judgment by confession (see 46 Am Jur 2d, Judgments § 204; 73 NY Jur 2d, Judgments §§ 117, 118; see also Cervera, 106 AD at 683). Absent any suggestion that WJR and Reinhardt obtained the judgment by confession from King by way of collusion or fraud, Trachtman and Lefkowitz may not rely on the erroneous inclusion of WJR as plaintiff on the judgment by confession and the execution as a ground warranting vacating the judgment or execution (73 NY Jur 2d, Judgments § 288; see also Halsey v Winant, 258 NY 512, 529-531 [1932]).
Despite the court's determination that the inclusion of WJR as a party in the judgment by confession and execution was erroneous, the court has continued to refer to WJR in the remainder of the decision for consistency of reference.
To the extent that King's papers may be deemed to raise an argument that execution and judgment by confession may not be enforced because of the general rule providing that partners may not sue each other at law until there has been an accounting (see Non-Linear Trading Co. v Braddis Assoc., 243 AD2d 107, 115 [1st Dept 1998]; Goldsmith, 125 AD2d at 365), this argument is without merit. Of note, there is an exception to the general rule for actions at law relating to single transactions that are fully closed but unadjusted (see Goldsmith, 125 AD2d at 365; Schuler, 62 AD2d at 463-464; see also Snyder v Puente De Brooklyn Realty Corp., 297 AD2d 432, 439 [3d Dept 2002], lv denied 99 NY2d 506 [2003]). Accordingly, to the extent that the general rule requiring an accounting has any bearing on the enforcement of a judgment by confession, the enforcement of WJR and Reinhardt's judgment by confession falls under the exception to the general rule (see Goldsmith, 125 AD2d at 365; Schuler, 62 AD2d at 463-464; see also Snyder, 297 AD2d at 439; Katz, 92 Misc2d at 894).
Trachtman and Lefkowitz also contend that the execution is invalid because WJR and Reindhardt incorrectly identified and served the garnishee based on the fact that the entity identified in the execution, "Massey Knakal" is not a legal entity. In support of this contention, Trachtman and Lefkowitz have submitted a printout from the New York Department of State's website showing that there are nine entities whose names begin with "Massey Knakal," including plaintiff Massey Knakal Realty of Brooklyn, LLC None of these entities is identified simply as "Massey Knakal." Further, in the interpleader complaint, Massey KB alleged that it and its affiliated entities operate under the "doing business as" name of "Massey Knakal Realty Services" (MKRS) and that the Marshall served WJR and Reinhardt's execution at the Manhattan offices of an affiliate of Massay KB. Massey KB further asserts that it is the only MKRS entity that possesses or anticipates possessing any property in which King has or will have an interest. In addressing this issue, counsel for WJR and Reinhardt stated, in an affirmation in support of their own cross-motion, and in opposition to the cross-motions of Trachtman and Lefkowits, that he spoke directly with Michael S. Wlody, the Chief Financial officer of Massey Knakal's various entities, and that Wlody told WJR and Reinhardt's counsel that he (Wlody) would be in possession of funds belonging to King, and that an execution could be served at the 275 Madison Avenue address.
Under these circumstances, the court finds that WJR and Reinhardt's identification of the garnishee in the execution as Massey Knakal is a non-jurisdictional technical defect which should be disregarded (see National Bank of N. Am. v State Tax Commn. of State of N.Y., 106 AD2d 377, 378 [2d Dept 1984]; see also Board of Mgrs. of Oyster Point Condominium vNyce, 79 AD3d 1034,1036-1037 [2d Dept 2010]; Holster v Ross, 45 AD3d 640, 642 [2d Dept 2007]; Public Serv. Mut. Ins. Co. v Joyce, 182 AD2d 535, 536 [1st Dept 1992]). Importantly, despite the allegations made by Massey KB in the complaint that the execution was served on an affiliate, Massey KB makes no assertion that the person who accepted service of the execution was without authority to accept service on the behalf of Massey KB, Massey KB does not object to the validity of the execution, Massey KB does not allege that the misnomer caused any confusion as to which MKRS entity held funds belonging or could belong to King, and Massey KB does not allege that the misnomer in any way hindered its ability to commence this interpleader action. Accordingly, WJR and Reinhardt sufficiently complied with the requirements of CPLR 5232 (a) and the defect may be ignored because Massey KB has not been prejudiced by the misnomer (see National Bank of N. Am., 106 AD2d at 378; see also Board of Mgrs. of Oyster Point Condominium, 79 AD3d at 1036-1037; Holster, 45 AD3d at 642; Public Serv. Mut. Ins. Co., 182 AD2d at 536).
Trachtman and Lefkowits rely on decision in which the Court of Appeals held that a judgment creditor's obtaining jurisdiction in New York over a parent corporation garnishee does not require that the parent corporation garnishee be compelled to deliver assets located in a foreign jurisdiction that are held by a subsidiary corporation that is not subject to this state's personal jurisdiction (see Commonwealth of the N. Mariana Is. v Canadian Imperial Bank of Commerce, 21 NY3d 55, 64 [2013]). The rational of this case simply has no bearing on the misnomer at issue here.
King's final objection to the execution is that it improperly demands interest in contravention of the judgment by confession. As relevant to this assertion, King in his affidavit for judgment by confession (King Affidavit), states that, "I hereby confess judgment in this Court in favor of [WJR] and [Reinhardt] ("plaintiffs") for the sum of One Hundred Sixty Thousand ($ 160,000.00) Dollars without interest thereon. Further, I hereby authorize the Plaintiffs . . . to enter judgment for that sum, without interest thereon, in the Supreme Court, Kings County" (King Affidavit ¶ 2). After describing the nature of the underlying promissory note, King further states that "[i]f the aforesaid sum of $160,000.00 is not timely paid on or before the Maturity Date [June 9, 2012], Plaintiffs are authorized to enter judgment against Defendant in the amount of $160,000.00, without interest thereon" (King Affidavit ¶ 3).
In examining the execution and the City Marshall's levy and final demand, it is evident that the interest demanded in the execution and the levy is statutory interest pursuant to CPLR 5003 from the entry of the judgment by confession on September 14, 2012 to the June 21, 2013 date of the levy and demand. A party entering a money judgment is entitled to such statutory interest upon the entry of any money judgment (see Colgate v Broadwall Mgt. Corp., 51 AD3d437,437-438 [1st Dept 2008]; Matter of MatraBldg. Corp. v Kucker, 19 AD3d 496, 496 [2d Dept 2005]). Here, the phrase "enter judgment . . . without interest" in King's affidavit, by its plain terms, only bars interest on the $160,000 at the time of entry of judgment. As such, nothing in the affidavit precludes the recovery of statutory interest accruing after the entry of judgment (cf. Russ & Russ v Schadoff, 303 AD2d 394, 394 [2d Dept 2003], lv dismissed 100 NY2d 577 [2003] and 100 NY2d 606 [2003]). In any event, even if the execution and levy improperly demand statutory interest, King would only be entitled to an order striking of the demand for such interest, and would not be entitled to the vacature of the judgment by confession or the execution (see Keller v Greenstone, 253 App Div 573, 574 [1st Dept 1938]; see also Russ & Russ, 303 AD2d at 394).
In this regard, the execution indicates that the judgment amount was $160,000 and the request for interest is based on interest accruing after the date judgment was entered. Indeed, pursuant to the Court's own rough calculations, the $11,026.08 in interest demanded in the levy corresponds to nine percent interest annual interest (the statutory rate under CPLR 5004) on $160,000 from September 14, 2012 to June 21, 2013.
Although the language of the confession by judgment at issue in Russ & Russ is not outlined in the Appellate Division, Second Department's decision, in the lower court decision, the lower court noted that the judgment by confession contained a statement that interest and costs were waived (see Russ & Russ v Schadoff, 2001 NY Slip Op 40448 * 1 [U], mod 303 AD2d 394 [2d Dept 2003], lv dismissed 100 NY2d 577 [2003] and 100 NY2d 606 [2003]).
PRIORITIES
As King, Trachtman and Lefkowitz have failed to identify any grounds that would warrant vacating the judgment by confession favoring WJR and Reinhardt and the execution WJR and Reinhardt delivered to the City Marshall, the court turns to the priority of the judgments. With respect to Trachtman and Lefkowitz, the only action they have taken on their judgments by confession is to serve restraining notices on Massey KB. A restraining notice, however, provides no priority to a judgment creditor, and "a judgment creditor serving a restraining notice ordinarily is required to take further steps in enforcing his [or her] judgment, such as an execution, in order to prevent the intervening rights of third parties from taking precedence over his [or her] claim against the judgment debtor" (Aspen Indus, v Marine Midland Bank, 52 NY2d 575, 580 [1981]; see Matter of Kitson & Kitson v City of Yonkers, 10 AD3d 21, 25 [2d Dept 2004]; Burstin Invs. v K.N. Invs., 255 AD2d 478, 480 [1998]; City of New York v Panzirer, 23 AD2d 158, 160-163 [1st Dept 1965]). Thus, although Trachtman and Lefkowitz entered their judgments before WJR and Reinhardt entered their judgment and served their restraining notices before WJR and Reinhardt delivered the execution to the City Marshall for enforcement, WJR and Reinhardt's execution and levy has priority over the earlier served restraining notices (see City of New York v Panzirer, 23 AD2d at 160-163; see also Burstin Invs., 255 AD2d at 480).
WJR and Reinhardt also assert that King's affidavits in support of Trachtman and Lefkowitz's judgments by confession fail to provide the detail required by CPLR 3218 (a) (2). CPLR 3218 (a) (2)'s requirements that the affidavit state concisely the facts out of which the debt arose and show that the sum confessed is justly due is intended to protect the interests of third parties who might be prejudiced in the event that a collusively confessed judgment is entered (see Regency Club at Wallkill, LLC v Bienish, 95 AD3d 879, 879 [2d Dept 2012]; Burtner v Burtner, 144 AD2d 417, 418 [2d Dept 1988]). "The statute and its gloss do not require a procrustean dovetailing of detail" (Princeton Bank & Trust Co. v Berley, 57 AD2d 348, 354 [2d Dept 1977]). Rather, the affidavit need only provide sufficient detail to allow other creditors to investigate the claim and ascertain its validity (id.). Nevertheless, in cases addressing affidavits for judgments of confession relating to the provision of professional services, courts have held that the affidavits must, at the very least, indicate the date when the services were rendered and for what purpose (see Baehre v Rochester Dental Prosthetics, 112 Misc 2d 270, 274 [Sup Ct, Erie County 1982]; see also Cooper, Selvin & Strassberg v Soda Dispensing Sys., 212 AD2d 498, 500 [2d Dept 1995]; Dougherty v Salty Dog, 131 AD2d 628, 629 [2d Dept 1987]).
Here, the affidavits for both Trachtman and Lefkovits merely state, in identical language, that "[t]his confession of judgment is for a debt justly due to the Plaintiff arising from unpaid legal services rendered to Timothy King by the Plaintiff without any statement as to when the services were rendered or any detail regarding the nature of the legal services. As such, the affidavits for Trachtman and King are insufficient to support the judgments by confession and they are void to the extent the judgments affect the interests of third parties (see Baehre, 112 Misc 2d at 274; Cole Hatchard v Nicholson, 73 AD3d 834, 835-836 [2d Dept 2010]; Cooper, Selvin & Strassberg, 212 AD2d at 500; Dougherty, 131 AD2d at 629).
On the other hand, King has not challenged the validity of Trachtman and Lefkowitz's judgments by confession, and the defects in the affidavits do not affect the validity of the judgments of confession as against King (see Shenson v I. Shainin & Co., 243 App Div 638, 638-639 [2d Dept 1935], aff'd 26S NY 537 [1935]; 73 NY Jur 2d, Judgments § 118; see also Regency Club at Wallkill, 95 AD3d at 879). Accordingly, assuming that Massey KB has any funds that are owed to King or will be owed to King after it has satisfied the levy and execution favoring WJR and Reindhardt, no issue currently before the court would prevent Trachtman and Lefkowitz from seeking enforcement of their judgments from the funds held by Massey KB.
KING'S CROSS-MOTION
King has cross moved for an order authorizing him to wind-up the affairs of WJR and declaring that he holds a 33 percent partnership interest in WJR. Initially, it would appear that King may not obtain such relief by way of a motion without first making a cross-claim in this action (see Di Mauro v Metropolitan Suburban Bus Auth., 105 AD2d 236, 239 [2d Dept 1984]; 84 NY Jur 2d, Pleadings § 186; cf. Yorkes v Ross, 142 AD2d 642,642 [2d Dept 1988] [partner may commence declaratory judgment action to wind up affairs of partnership]; Shandall v Katz, 95 AD2d 742, 743 [1st Dept 1983][only means to wind up a partnership is by an accounting]; Schuler, 62 AD2d at 463-464). In any event, King, who now seeks to wind-up WJR more than seven years after its dissolution, has simply failed to make any non-conclusory allegations that WJR currently has any assets that warrant the court granting King "authority" to wind up WJR, directing an accounting or granting the requested declaration (Schuler, 62 AD2d at 463-464; Ekbar v Tan Jay Intern. Ltd., 741 F Supp 448, 470-471 [SDNY 1990], affd 930 F2d 909 [2d Cir 1991], cert denied 502 US 853 [19.91]).
WJR and Reinhardt contend that King cannot obtain his requested relief in light of the broad arbitration provision contained in the partnership agreement (see Feffer v Goodkind, Wechsler, Labaton & Rudoff, 183 AD2d 678, 678 [1st Dept 1992]; Escava v Escava, 9 Misc 3d 1101 [A], 2005 NY Slip Op 51358 [U] * 11 [Sup Ct, Kings County 2005]; see also Garson v Powell, 267 AD2d 277, 277-278 [2d Dept 1999]). An agreement to arbitrate, however, is not a defense, and where a party has resorted to a judicial forum in contravention of an arbitration agreement, the opposing party's options are limited to seeking a stay of the judicial proceeding or to moving to compel arbitration (Allied Bldg. Inspectors Intl. Union of Operating Engrs., Local Union No. 211, AFL-CIO v Office of Labor Relations of City of N.Y., 45 NY2d 735, 738 [1978]).
It would appear that an action to wind-up WJR's affairs would be untimely, unless Reinhardt waives the untimeliness of the request or King demonstrates an estoppel (see Mashihi v 166-25 Hillside Partners, 51 AD3d 738, 739 [2d Dept 2008][statute of limitations for an accounting and winding up of partnership is six years from dissolution]).
The court notes that WJR and Reinhardt also argue that King's cross-motion is barred by the terms of the general release contained in the Staples' Agreement. The release and settlement, however, were limited to claims at issue in the Staples' Action and there are simply not enough facts in the record to support a finding that the affairs of WJR were wound up in the Staples' Action (see Blank v Blank, 222 AD2d 851, 853-854 [3d Dept 1995]).
PRELIMINARY IN JUNCTION AND STAY
Initially, contrary to WJR and Reinhardt's position in opposing Massey KB's motion for a preliminary injunction, the dispute amongst the defendants relating to their relative rights to the funds held by Massey KB is not "patently without substance" and is thus appropriately raised by way of an interpleader action (Lincoln Life & Annuity Co. of N.Y. v Casewell, 31 AD3d 1, 8 [1st Dept 2006]). Further, although this court's resolution of the issues raised by the parties' papers appears to determine the relative rights of the defendants to the funds held by Massey KB, the defendants have not joined issue and the parties' respective motions/cross-motions do not finally resolve the action. Given that the motions do not finally determined the action, the court finds it appropriate to grant the preliminary injunction and stay to maintain the status quo until the action is resolved (see Seaboard Nat. Bank v Reid, 172 App Div 135, 137-138 [1st Dept 1916]; see Orseck, P.A. v Serviccos Legales De Mesomerica S De R.L., 699 F Supp2d 1344, [SD Fla 2010]; In re Enron Corp. Securities Derivative & "ERISA" Litigation v Enron Corp., 2004 WL 2889891 [SD Tex 2004]; Mark E. Mitchell, Inc. v Charleston Library Soc'y, 114 F Supp2d 259, 262 [SDNY 2000]).
While the court, based on the absence of any real dispute relating to the material facts, could probably grant summary judgment finally determining the rights of the parties and . resolving the action, no party has moved for such relief and the court cannot grant such relief sua sponte (see Warren v Mikle, 40 AD3d 974, 975 [2d Dept 2007]; see also Carter v Johnson, __AD3d _, 2013 NY Slip Op 06333 * 2-3 [2d Dept 2013]; cf. Tirado v Miller, 75 AD3d 153, 157-160 [2d Dept 2010]).
The parties are directed to appear for a conference on December 11, 2013 to address the remaining issues in this case.
CONCLUSION
Accordingly, Massey KB's motion for a preliminary injunction and stay is granted and (1) the defendants are enjoined from initiating any action or proceeding against Massey KB or its affiliated entities with respect to the money payable to King pursuant to the Massey Agreement until the court determines the defendants' priority and preference to the money; (2) Massey KB is enjoined from transferring of any monies pursuant to the Massey Agreement pending the court's determination; and (3) the enforcement of or levy of any execution, lien or other judgment held by any defendant against any monies pending the court's determination is stayed pending the court's determination. King's cross-motion is denied. Trachtman and Lefkowitz's cross-motion is denied. WJR and Reinhardt's cross-motion is granted to the extent that the Trachtman and Lefkowitz's judgments by confession are deemed void to the extent that they affect WJR and Reinhardt's right to recover on their execution and levy against King's property held by Massey KB. Finally, the parties are directed to appear for a conference on December 11, 2013 to address the remaining issues in this action.
This constitutes the decision and order of the court.
ENTER,
___________________
J. S. C.