R&R Capital v. Merritt

60 A.D.3d 528, 875 N.Y.S.2d 65

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: March 19, 2009
• Status: Published

Opinion

Order, Supreme Court, New York County (Charles E. Ramos, J.), entered August 12, 2008, which granted defendant’s motion for disbursement of proceeds of the sale of certain property located in Pennsylvania, unanimously reversed, on the law, with costs, and the motion denied.

The motion court did not have jurisdiction over plaintiff’s claim for a final accounting of the proceeds of the sale of the Pennsylvania property at issue, which was the sole asset of a limited liability corporation in which plaintiffs and defendant were equal members. Although plaintiffs initially commenced this action in New York relating to defendant’s alleged mismanagement of several limited liability corporations, the claims were heard and dismissed after a nonjury trial.

Defendant subsequently sold the property at issue and plaintiff commenced an action in Pennsylvania for, inter alia, a final accounting based on the sale of the property and defendant’s alleged mishandling of the proceeds. The Pennsylvania court placed the proceeds of the sale in escrow pending a determination by Supreme Court, New York County regarding how the funds should be disbursed and defendant moved the court for disbursement of the funds pursuant to a schedule submitted with the motion.

The motion court, in granting the motion and permitting the disbursements sought by defendant with limited exceptions, lacked jurisdiction over plaintiffs claims, since the relief sought did not relate to a cause of action raised in the initial complaint, nor was the issue involved previously litigated in this action (see P.A. Bldg. Co. v City of New York, 236 AD2d 275 [1997]; Ward-Carpenter Engrs. v Sassower, 193 AD2d 730 [1993]). Concur— Tom, J.P., Saxe, Sweeny, Acosta and Freedman, JJ.