JG Group Holdings LLC v. Kahlon

2025 NY Slip Op 30404(U)

• Court: New York Supreme Court, New York County
• Decided: January 31, 2025
• Docket: Index No. 652196/2020
• Status: Unpublished

Opinion

JG Group Holdings LLC v Kahlon 2025 NY Slip Op 30404(U) January 31, 2025 Supreme Court, New York County Docket Number: Index No. 652196/2020 Judge: Joel M. Cohen 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. INDEX NO. 652196/2020 NYSCEF DOC. NO. 186 RECEIVED NYSCEF: 01/31/2025

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 03M -----------------------------------------------------------------------------------X JG GROUP HOLDINGS LLC, JGFT LLC, PGFT LLC, AC INDEX NO. 652196/2020 GROUP HOLDINGS LLC, CHALUTS TRUST,

Plaintiffs, MOTION DATE 07/15/2024

-v- MOTION SEQ. NO. 008 JOSSEF KAHLON, DECISION + ORDER ON Defendant. MOTION

-----------------------------------------------------------------------------------X

HON. JOEL M. COHEN:

The following e-filed documents, listed by NYSCEF document number (Motion 008) 171, 172, 173, 174, 175, 176, 185 were read on this motion for LEAVE TO FILE THIRD AMENDED COUNTERCLAIM .

Defendant/Counter-Plaintiff Jossef Kahlon (“Kahlon”) moves for Leave to File a Third

Amended Counterclaim (“TAC”), pursuant to CPLR 3025(b). Plaintiffs/Counterclaim-

Defendants JG Group Holdings, LLC, JGFT LLC, PGFT LLC, AC Group Holdings LLC, and

Chaluts Trust (collectively, “Plaintiffs”), and previously dismissed third-parties Amir Chaluts

(“Chaluts”) and Jane Gol (collectively, “Counter-Defendants”) oppose this motion. For the

following reasons, Mr. Kahlon’s motion is granted in part.

CPLR 3025(b) provides that “[a] party may amend his or her pleading, or supplement it

by setting forth additional or subsequent transactions or occurrences, at any time by leave of

court . . . .” “Motions for leave to amend should be freely granted, absent prejudice or surprise . .

. unless the proposed amendment is palpably insufficient or patently devoid of merit” (MBIA Ins.

Corp. v Greystone & Co., Inc., 74 AD3d 499, 499 [1st Dept 2010

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Here, Mr. Kahlon submits that the proposed TAC only amplifies allegations derived

generally from the same set of facts and transactions that were referenced in earlier pleadings.

The TAC proposes to assert the following claims against Counter-Defendants: (i) a declaration

that the Guarantee is not enforceable against Mr. Kahlon, (ii) violations of the Fair Debt

Collection Practices Act, (iii) piercing the corporate veil; (iv) breach of fiduciary duty, (v) abuse

of process, (vi) malicious prosecution, (vii) civil conspiracy, (viii) conversion, (ix) promissory

estoppel; (x) injurious falsehood, (xi) defamation per se, (xii) accounting and (xiii) tortious

interference with a business relationship.

“A party opposing leave to amend must overcome a heavy presumption of validity in

favor of [permitting amendment]” (LDIR, LLC v DB Structured Products, Inc., 172 AD3d 1, 4

[1st Dept 2019]). That said, “[a] proposed amended complaint that would be subject to

dismissal as a matter of law is, by definition, ‘palpably insufficient or clearly devoid of merit’

and thus should not be permitted under CPLR 3025” (Olam Corp. v Thayer, 2021 NY Slip Op

30345[U], 3–4 [Sup Ct, NY County 2021]; see also Scott v Bell Atl. Corp., 282 AD2d 180, 185

[1st Dept 2001], affd as mod sub nom. Goshen v Mut. Life Ins. Co. of New York, 98 NY2d 314

[2002]).

Mr. Kalhon fails to meaningfully respond to the Counter-Defendant’s arguments that

certain proposed counterclaims are “palpably insufficient or clearly devoid of merit.” Upon

review of the proposed amended counterclaims, the Court finds that the following are palpably

insufficient on their face:

First, Defendant’s second proposed counterclaim for violations of the Fair Debt

Collection Practices Act relating to Plaintiffs seeking to enforce the Guaranty is insufficient as

“the Act does not apply to a creditor . . . that seeks to enforce a debt owed directly to it” (Winter

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v Lab. Corp. of Am., 225 AD3d 509, 509-10 [1st Dept 2024], quoting Pirrelli v OCWEN Loan

Servicing, LLC, 129 AD3d 689, 693 [2d Dept 2015]; 15 USCA § 1692a[6][B]).

Defendant’s seventh proposed counterclaim for civil conspiracy is barred under CPLR

3211(a)(5) based on this Court’s prior dismissal of Defendant’s conspiracy claim in the FAC

because there is no independent claim for civil conspiracy in New York (NYSCEF 100/NYSCEF

105, ¶¶118-122, NYSCEF 125, NYSCEF 126 [Tr.] at 48-49).

Similarly, the proposed third counterclaim to hold Chaluts and Gol personally liable by

piercing the corporate veil is insufficient as New York does not recognize an independent claim

to “pierce the corporate veil” (Matter of Morris v New York State Dept. of Taxation and Fin., 82

NY2d 135, 141 [1993]; Tap Holdings, LLC v Orix Fin. Corp., 109 AD3d 167, 174 [1st Dept

2013]).

The Court will permit Mr. Kahlon to file the remaining proposed counterclaims as the

Court does not find that they are “palpably insufficient or clearly devoid of merit” on their face.

As to the Counter-Defendants’ argument that the proposed fourth, eighth, and eleventh

counterclaims are barred by res judicata, that is a separate argument from whether those

counterclaims are insufficient on their face because it entails going beyond the scope of the

pleading. The res judicata argument can be tested on a motion to dismiss or for summary

judgment. In addition, if the Counter-Defendants believe Mr. Kahlon’s assertion of these claims

is frivolous in light of the parties’ prior Stipulation of Discontinuance (NYSCEF 118) or for

other reasons, they can seek relief under 22 NYCRR 130-1.1.

Accordingly, it is

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ORDERED that Mr. Kalhon’s Motion to Amend is GRANTED IN PART; and Mr.

Kalhon may file a revised proposed Third Amended Counterclaims consistent with the Court’s

ruling herein within seven (7) days of the date of this Order; and it is further

ORDERED that the Counter-Defendants have twenty (20) days thereafter to answer or

otherwise respond to the Third Amended Counterclaims.

This constitutes the decision and order of the Court.

1/31/2025 DATE JOEL M. COHEN, J.S.C. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION

□ GRANTED DENIED X GRANTED IN PART OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

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

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