Opinion
Index 503139/2020
03-10-2022
YOUNG S. CHUNG, individually and on behalf of URBAN FRESH CORP. and 11 UM FOOD CORP., Plaintiffs, v. COLIN K. XIE, BARBARA JANUS, JUTCEBROTHERS, LLC, AND DOES; 1-100 Defendants,
Unpublished Opinion
DECISION AND ORDER
LEON RUCHELSMAN JUDGE
The plaintiff has moved seeking the appointment of a receiver. The defendant has gross-moved seeking a preliminary injunction ordering the plaintiff to cease from engaging in certain conduct. The motions have been opposed respectively. After reviewing all the arguments this court now makes the following determination.
As recorded in prior orders, the plaintiff Young Ghung and the defendant Colin Xie are equal owners of two grocery stores, one located in Queens County and: the other in Kings County. Each party has accused the other of essentially stealing money fro the corporations. On January 5, 2021 the parties entered into a stipulation wherein they each agreed not to. withdraw any funds from either store without the consent Of the other. The defendant has now accused the plaintiff of opening a secret account and stealing funds belonging to the stores amounting to approximately $300,000. The plaintiff accuses the defendant of poaching employees to another grocery store wherein the plaintiff does not maintain any ownership interest at all.
Conclusions of Law
Concerning the motion seeking a receiver, it is well settled that "a temporary receiver should only be appointed where there is a clear evidentiary showing of the necessity for the conservation of the property at issue and the need to protect a party's interests in that property"' (see, Quick v. Quick, 69 A.D.3d 828, 893 N.Y.S.2d 583 [2d Dept., 2010]). Thus, a temporary receiver is appropriate where the party has presented "clear and convincing evidence of irreparable loss or waste to the subject property and that a temporary receiver is needed to protect their interests" (Magee v. Magee. 120 A.D.3d 637, 990 N.Y.S.2d 894 [2d Dept., 2014]). Moreover, a receiver is charged with the responsibility to "preserve and protect the property for the benefit of all persons interested in the estate" and the receiver's allegiance is; only to the court (Bank of Tokyo Trust Company v. Urban Food Malls Ltd.. 229 A.D.2d 14, 650 N.Y.S.2d 654 [1stDept., 1996]).
The defendant has presented clear and convincing evidence the plaintiff opened a bank account without informing the defendant and of diverting and utilizing corporate funds for his own personal use. Thus, on February 9, 2021 the plaintiffs counsel sought to obtain PPP loans and requested defendant's participation in opening a bank account. However-, defendant asserts the plain-tiff opened another account and this ''secret' account contains corporate funds hidden from the defendant. Indeed, the defendant has not presented any evidence at all demonstrating the legitimate use of those funds. Consequently, the motion seeking the appointment of receiver is granted. The court hereby appoints Led Barnes Esq., of Barnes & Barnes -PC; 445 Broadhollow Road, suite 226, Melville, NY 11747-3610, 631-683-2408, LKB@BARNESPC.COM as receiver pursuant to CPLR §6401.
The plaintiff has filed a cross-motion seeking to enjoin the poaching of any employees by the defendant. A party seeking a preliminary injunction "must demonstrate a probability of success on the merits, danger of irreparable injury in the absence of the injunction and a balance of the equities in its favor" (Nobu Next Door, LLC v. Fine Arts Hosing, Inc., 4 N.Y.3d 839, 800 N.Y.S.2d 48 [2005]). Further, each of the above elements must be proven by the moving party with "clear and convincing evidence" (Liotta v. Mattone, 71 A.D.3d 741, 900 N.Y.S.2d 62 [2d Dept., 2010]).
Contrary to the arguments of the plaintiff there is no likelihood of success the stipulation entered between the parties prohibits any such poaching. The stipulation prohibits either party from removing "any funds or assets" of either grocery store (see. Stipulation, ¶1(a)). There is no likelihood of success that "assets'" include, employees. Further, affidavits submitted by employees who left 11 UM Food Corp., noted that the: defendant did not influence their decision at all (see. Affidavits of Confesor Kendysson, ¶2, Jose Delgado, ¶2, Luis Alfredo, ¶2; and Andy Diaz, ¶2). Thus, other than allegations of such poaching there is no evidence supporting them. Consequently, the motion seeking a preliminary judgement is denied.
So ordered.