Rotenstreich v. Lesches

2024 NY Slip Op 31898(U)

• Court: New York Supreme Court, New York County
• Decided: May 31, 2024
• Status: Unpublished

Opinion

Rotenstreich v Lesches 2024 NY Slip Op 31898(U) May 31, 2024 Supreme Court, New York County Docket Number: Index No. 655503/2023 Judge: Melissa A. Crane 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. 655503/2023 NYSCEF DOC. NO. 117 RECEIVED NYSCEF: 05/31/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. MELISSA A. CRANE PART 60M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 655503/2023 NAFTALI ROTENSTREICH, CHABAD OF GRAMERCY PARK MOTION DATE N/A

Plaintiff, MOTION SEQ. NO. 004

- V - INTERIM SHAYA LESCHES, YJP FOUNDATION, INC., DECISION + ORDER ON MOTION Defendant. ------------------------------------------------------------------- --------------X

The following e-filed documents, listed by NYSCEF document number (Motion 004) 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96,101,102,103,108,113 were read on this motion to/for DISMISS

Per the reasoning on the record, the court grants that part of the motion to dismiss the

petition to the extent that it seeks to vacate the part of the arbitration award concerning the "YJP

Premises." As stated on the record, the award does not violate the rule against perpetuities

because the parties have not yet entered into a lease. Any lease the parties enter into must

necessarily comply with various aspects of New York law, including, e.g., safety regulations and

the rule against perpetuities. Nor does the award fail by virtue of the statute of frauds (see

Tauber v Gross, 216 AD3d 1066, 1067 [2d Dep't 2023] [in suit concerning agreement to sell real

property in Monsey, NY "appellant's arguments concerning the statute of frauds, and the proof,

or lack thereof, before the arbitration tribunal relate to the merits of the dispute and do not

constitute a basis for vacating the arbitration award"]).

Also as stated on the record, and as this court already determined in the decision and

order on motion 1, dated 11/15/2023 [EDOC 34], "petitioners cannot establish that the panel

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exceeded their authority" because the parties agreed to binding arbitration of "all controversies

[claims and counterclaims] between the undersigned parties" as well as "interests in ... properties

relating to YJP and CGP" [EDOC 29]. Moreover, petitioner participated in the entire arbitration,

including the part dealing with the mansion (the "YJP Premises"). Nor is the arbitration award

inconsistent with respect to awarding the YJP Premises to YJPF as the panel found that

Petitioner "agreed that the creation of a new YJPF was intended to serve as the successor to YJP

D/B/A CGP" (Award, EDOC 69 at pg 3, section 1).

Nor has petitioner established bias. The decision of the panel was unanimous, including

the decision of petitioner's chosen arbitrator. Petitioner has failed to show by clear and

convincing evidence that there was corruption, fraud or misconduct in procuring the arbitration

award (Tauber, 216 AD3d at 1068). The court finds the remainder of Petitioner's arguments to

vacate that part of the arbitral award concerning the "YJP Premises" to be unavailing.

Nevertheless, as explained on the record, that part of the award that punted "[a]ll disputed

issues regarding salaries, conflicts of interest( s), involving the employees and directors of YJPF"

to "the trustees and/or board of the newly created YJPF," defeated most of the reason for the

arbitration in the first place (see EDOC 68 [where the parties agreed that the above issues would

be put to the arbitrators]).

The award leaves open the possibility for subsequent decisions from the arbitral panel

(see EDOC 69 pg 4). Accordingly, the court remands to the arbitral panel all issues concerning

Lesches' alleged: (1) misappropriation of Chabad' s funds and resources to run a rival business,

while simultaneously taking a salary from Chabad; (2) misappropriation of Chabad' s funds to

purchase a townhouse for his family; and (3) solicitation of YJP personnel to work for his rival

business (EDOC 66). Moreover, the panel should consider Lesches' counterclaims, including

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that Petitioner created a new company to compete with YJP. These issues collectively are the

"non-YJP Premises disputes." The parties are free to agree to a new panel, or this court, to decide

these remaining issues. Lacking agreement, the present panel will decide the non-YJP Premises

disputes. The parties have 30 days to either return to the existing arbitration panel, appear before

a new arbitration panel, or stipulate to have the non-YJP Premises disputes resolved by this

court.

The court has considered the parties' remaining contentions and finds them unavailing.

Accordingly, it is

ORDERED THAT the motion to dismiss the amended petition (MS 04) is granted to the

extent that the amended petition seeks to vacate the part of arbitration award concerning the YJP

Premises; and it is further

ORDERED THAT that remainder ofrespondent's motion to dismiss the Amended

Petition and cross motion to confirm the arbitration award is held in abeyance pending the

further arbitration proceedings contemplated in this interim decision and order; and it is further

ORDERED THAT the non-YJP Premises disputes are remanded to the arbitral panel for

decision. The parties must appear before the arbitration panel within 30 days to resolve those

issues or, alternatively, the parties may appear before a new arbitration panel [by agreement] or

the court [by agreement] to resolve the non-YJP Premises issues within 30 days of the date of

this interim decision and order; and it is further

ORDERED that the parties must email the court, cc'ing all sides, at SFC-

Part60@nycourts.gov to advise whether they are appearing before the existing arbitral panel, a

new panel, or the court; and it is further

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ORDERED THAT the parties must appear for a status conference over Microsoft Teams

on 9/3/24 at 10:30 a.m.

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5/31/2024 DATE MELISSA A. CRANE, J.S.C. CHECK ONE: CASE DISPOSED ~ NON-FINAL DISPOSITION □ DENIED □ GRANTED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

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

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