Jobar Holding Corp. v. Halio

2024 NY Slip Op 33526(U)

• Court: New York Supreme Court, New York County
• Decided: September 26, 2024
• Docket: Index No. 655689/2017
• Status: Unpublished

Opinion

Jobar Holding Corp. v Halio 2024 NY Slip Op 33526(U) September 26, 2024 Supreme Court, New York County Docket Number: Index No. 655689/2017 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. 655689/2017 NYSCEF DOC. NO. 306 RECEIVED NYSCEF: 09/26/2024

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 03M ----------------------------------------------------------------------------------- X

JOBAR HOLDING CORPORATION, ROBERT BUCK, INDEX NO. 655689/2017 INDIVIDUALLY, AND ROBERT BUCK, AS EXECUTOR OF THE ESTATE OF JOAN BUCK, DELIVATIVELY AS SHAREHOLDERS ON BEHALF OF JOBAR HOLDING MOTION DATE 07/31/2024 CORPORATION, MOTION SEQ. NO. 015 Plaintiffs,

- V - DECISION+ ORDER ON MOTION BARBARA HALIO,

Defendant.

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HON. JOEL M. COHEN:

The following e-filed documents, listed by NYSCEF document number (Motion 015) 299, 300, 301, 302, 303,304,305 were read on this motion to DISMISS

Defendant Barbara Halio's ("Defendant") motion to dismiss Plaintiffs' Second Amended

Complaint (NYSCEF 270) pursuant to CPLR 321 l(a)(5) and (7) is denied.

A. Background

This is family business dispute. Plaintiffs allege that Defendant improperly diverted

funds from Jo bar Holding Corporation ("Jobar") to herself and her family.

On October 7, 2020, the Court granted in substantial part Defendant's motion to dismiss

the Amended Complaint on the grounds that Plaintiffs mixed direct and derivative causes of

action (NYSCEF 185). Following oral argument, the Court stated, "I would not entirely

foreclose the possibility that if facts come up that would give rise to a possible individual claim,

based on funds being withheld only from this particular Plaintiff, then the Plaintiff can seek leave

to amend" (NYSCEF 235 [Tr. at 42]).

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Plaintiffs moved to amend to assert five direct claims and one derivative claim. By order

dated March 15, 2024, the Court granted Plaintiffs' motion to file their Second Amended

Complaint (NYSCEF 269). Of note, Defendant was unrepresented when the motion to amend

was granted.

Replacement counsel for Defendant filed a Notice of Appearance on April I 7, 2024

(NYSCEF 271) and subsequently moved to dismiss the Second Amended Complaint.

Defendant's motion is supported only by an affirmation of counsel (NYSCEF 300). Defendant

argues that the claims asserted in the Second Amended improperly seek to resurrect dismissed

claims and that collateral estoppel applies because Plaintiffs withdrew their appeal from the

Court's October 2020 order.

B. Legal Standard

CPLR 321 l(a)(5) provides for dismissal where "the cause of action may not be

maintained because of. .. collateral estoppel." "The doctrine of collateral estoppel, or issue

preclusion, bars relitigation of issues of ultimate fact where the issues have been conclusively

determined against one party in a proceeding where that party had a full and fair opportunity to

litigate the issue" (Vera v Low Income Mktg. Corp. , 145 AD3d 509,510 [1st Dept 2016] citing

Kaufman v. Eli Lilly & Co., 65 N.Y.2d 449,455 [1985] [other citations omitted]). The moving

party bears the burden of establishing that collateral estoppel applies (id. citing Parker v.

Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 349 [1999]).

CPLR 321 l(a)(7) provides for dismissal where "the pleading fails to state a cause of

action." When assessing a motion to dismiss for failure to state a cause of action, the court must

afford the pleadings a liberal construction, accept the allegations of the complaint as true and

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provide the plaintiffs with "the benefit of every possible favorable inference" (Leon v Martinez,

84 NY2d 83, 87 [1994]).

C. The Motion to Dismiss is Denied

Defendant argues that the Second Amended Complaint should be dismissed because it

includes causes of action that were dismissed by the Court in the October 7, 2020, order.

Defendant further argues that collateral estoppel applies because Plaintiffs withdrew their appeal

from the Court's 2020 order. The Court disagrees and denies the motion to dismiss.

First, the Second Amended Complaint - which is based on discovery in this action

(NYSCEF 303 - 305) - has been clarified to assert five direct claims and a single derivative

claim. The motion to amend was made, in part, in response to comments made by the Court

during oral argument on October 7, 2020. Accordingly, the claims are not subject to dismissal as

duplicative of the previously dismissed claims.

Second, Plaintiffs did not withdraw an appeal. The letter cited by Defendant provides

that Plaintiffs were withdrawing a pending motion to extend the time to perfect an appeal from

the October 7, 2020, order because the motion was moot (NYSCEF 302). Contrary to

Defendant's assertion, the appeal was perfected and not withdrawn. Moreover, the appeal does

not concern Plaintiffs' revised claims which are distinct from those that were dismissed.

Accordingly, Defendants' estoppel argument is without merit.

Third, Defendant does not make any new arguments in support of its motion to dismiss

for failure to state a claim. Instead, Defendant only cites to the Court's prior dismissal order and

other filings. Therefore, Defendant has not established that dismissal is warranted.

* * * *

Accordingly, it is

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ORDERED that Defendant's motion to dismiss is DENIED; it is further

ORDERED that Defendant's answer the Second Amended Complaint within twenty

days; it is further

ORDERED that the parties submit a status update letter, including whether any

discovery remains outstanding, within thirty (30) days.

This constitutes the decision and order of the Court.

9/26/2024 DATE JOEL M. COHEN, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED 0 DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

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

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