In a June 29, 2011 decision by Justice Bucaria, the court granted the plaintiff’s motion for summary judgment on the causes of action for violating NY LLC Law § 402, breach of fiduciary duty, breach of contract, fraud, unjust enrichment, and violation of the Debtor Credit Law . The court determined that the plaintiff established that he was a 50% member of the LLC, the sole assets of which were two real properties in Nevada, and that the defendants, one of whom was the LLC’s managing member, transferred those properties to a third party without the plaintiff’s knowledge or consent, without the statutorily required vote of the majority interest of the members, and without paying any consideration to the plaintiff. The court found that the managing member’s representations to the plaintiff that he would manage the LLC’s day-to-day operations to the benefit of the company and its members were false and that after transferring the properties, he continued to counsel the plaintiff on those investments without divulging the transfers.

The court cancelled a notice of pendency which the plaintiff filed on one of the defendant’s personal home on the grounds that the defendant transferred the proceeds of the real property sales to his wife who used those funds to purchase their home. The court dismissed the notice of pendency upon finding that the complaint failed to establish an action for a constructive trust, necessary to file a notice of pendency, because the action was for money damages that would not affect the title to or the possession of the defendant’s home.

For a more in depth discussion of this decision, please go to Peter A. Mahler’s blog at www.nybusinessdivorce.com.

Gitlin v Chirinkin, Sup Ct, Nassau County, June 29, 2011, Bucaria, J, Index No. 12131/07