Clarke Contr. LLC v. Promethean Bldrs. LLC

2026 NY Slip Op 30809(U)

• Court: New York Supreme Court, New York County
• Decided: March 6, 2026
• Docket: Index No. 656229/2023
• Status: Unpublished
• Author: Lyle E. Frank

Opinion

Clarke Contr. LLC v Promethean Bldrs. LLC 2026 NY Slip Op 30809(U) March 6, 2026 Supreme Court, New York County Docket Number: Index No. 656229/2023 Judge: Lyle E. Frank Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

file:///LRB-ALB-FS1/Vol1/ecourts/Process/covers/NYSUP.6562292023.NEW_YORK.002.LBLX000_TO.html[03/13/2026 3:46:00 PM] FILED: NEW YORK COUNTY CLERK 03/10/2026 11:07 AM INDEX NO. 656229/2023 NYSCEF DOC. NO. 262 RECEIVED NYSCEF: 03/06/2026

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LYLE E. FRANK PART 11M Justice ---------------------------------------------------------------------------------X INDEX NO. 656229/2023 CLARKE CONTRACTING LLC, MOTION DATE 11/10/2025 Plaintiff, MOTION SEQ. NO. 009 -v- PROMETHEAN BUILDERS LLC,ROBERT J. HUBNER, DECISION + ORDER ON MOTION Defendant. ---------------------------------------------------------------------------------X

PROMETHEAN BUILDERS LLC, ROBERT HUBNER Third-Party Index No. 595259/2024 Plaintiff,

-against-

MICHAEL CLARKE, JC ELITE CONSTRUCTION SERVICES, LLC

Defendant. --------------------------------------------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 009) 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 248, 249 were read on this motion to/for AMEND CAPTION/PLEADINGS .

Upon the foregoing documents, the motion is granted.

Relevant Background

This motion arises out of a bitter business divorce and dispute. Plaintiffs instituted this

proceeding in December of 2023, seeking to enforce promissory notes. Defendants

counterclaimed to dissolve defendant entity Promethean Builders, LLC, on the grounds that it

was not reasonably practicable to carry on business. In March of 2025, Plaintiffs made a demand

on defendant Hubner to commence an action on behalf of Promethean to resolve certain breaches

of the operating agreement alleged by Plaintiffs. Defendants denied the request in April of 2025.

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In May, Plaintiffs filed an amended complaint that asserted several direct and derivative claims.

Defendants moved to dismiss the derivative claims, which was granted by order of this Court on

October 3, 2025 (the “October Order”).

Discussion

Plaintiffs now seek leave to file a second amended complaint, asserting one direct and

two derivative new claims based on alleged breaches of the operating agreement. CPLR

§ 3025(b) permits a party to seek leave to amend their pleading and directs that such leave is to

be “freely given.” Leave to amend is properly denied, however, when the proposed claims are

“plainly without merit.” Montefiore v. Soja, 292 A.D.2d 241, 242 [1st Dept. 2002]. Defendants

oppose the motion as to the derivative claims and argue that it has already been decided that the

decision not to sue is protected by the business judgment rule and that the proposed amended

complaint therefore fails to adequately allege the derivative claims. For the reasons that follow,

the motion is granted.

The first issue is whether the proposed derivative claims are barred by the October Order.

There, Plaintiffs had alleged several derivative claims sounding in tort theory. The Court granted

the motion to dismiss these claims, stating in the relevant portion that “the Court finds that

plaintiff has failed to allege that defendants’ denial of plaintiff’s demand was for made in bad

faith and not a legitimate corporate purpose.” Other derivative claims were dismissed for failing

to meet a heightened pleading standard for breach of fiduciary duty and failure to allege

necessary elements of a claim for conversion.

Here, the proposed derivative claims are causes of action five and six. They allege that

Hubner violated the terms of the operating agreement for Promethean in allegedly a) transferring

certain business opportunities offered to Promethean to a company owned solely by Hubner; and

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b) taking “various forms of compensation” from Promethean coffers that were not permitted by

the operating agreement. Plaintiffs allege that the reason that their demand to bring suit based on

these claims was rejected is because defendant Hubner was self-interested and did not wish his

allegedly bad faith actions to be exposed.

The Court finds that the proposed claims are not patently without merit, nor are they

barred by the October Order. Turning first to the October Order, these claims sound in breach of

contract and therefore are not subject to a heightened pleading standard as the tort claims were.

And where the October Order based its decision largely on a failure to plead facts going to a bad-

faith denial of Plaintiffs’ demand, here the proposed amended complaint alleges sufficient facts

going to bad-faith. And finally, the proposed claims are not patently without merit. While the

decision to bring suit or not is generally covered by the business judgment rule, there is an

exception for when “the challenged transaction is affected by an inherent conflict of interest, in

which case the burden shifts to the defendant to prove the fairness of the challenged transaction.”

Pokoik v. Steinberg, 2026 N.Y. App. Div. LEXIS 1061, * 2 [1st Dept. 2026]. The proposed

amended complaint alleges that the decision not to bring suit against Hubner was made by

Hubner on behalf of Promethean because he did not wish to have alleged bad faith actions

exposed. On the lenient standard of a motion for leave to amend, and assuming these facts to be

true, the claims are sufficiently pled. In opposing the motion to amend, Defendants have not

made a showing of the fairness of the challenged transaction (either the underlying actions or the

decision not to bring suit). Therefore, Plaintiff has met their burden for leave to amend.

Accordingly, it is hereby

ORDERED and ADJUDGED that the plaintiffs’ motion for leave to amend the complaint

herein is granted, and the amended complaint in the proposed form annexed to the moving

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papers shall be deemed served upon service of a copy of this order with notice of entry thereof;

and it is further

ORDERED that the defendants shall serve an answer to the amended complaint or

otherwise respond thereto within 20 days from the date of said service.

3/6/2026 DATE LYLE E. FRANK, J.S.C. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION

□ □ X GRANTED DENIED GRANTED IN PART OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

□ CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

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