The following e-filed documents, listed by NYSCEF document number (Motion 009) 182, 183, 184, 185, 186, 187, 191, 192, 194, 195, 196, 197, 198, 199, 200, 201, 255, 259 were read on this motion to/for DismissalThe following e-filed documents, listed by NYSCEF document number (Motion 010) 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 248, 249, 250, 251, 252, 253, 254, 256, 260 were read on this motion to/for Vacate-Decision/Order/Judgment/AwardDECISION AND ORDER Reference is made to a certain Amended Complaint, dated December 12, 2017 (the Amended Complaint) (NYSCEF Doc. No. 198). Previously, per motion sequence 008, the case was dismissed against defendant Jason Ostro (Jason) (9/20/17 Order, Ramos J., NYSCEF Doc. No. 188), and per motion sequence 006 a default was entered against the company defendants, Brown Box Computer Solutions Israel, LLC, Brown Box Computer Solutions, Inc., Brown Box Computer Solutions International, Ltd. (collectively, the company defendants) (4/19/2017 Order, Ramos. J. NYSCEF Doc. Nos. 164, 172). For the reasons set forth on the record and per the below, Yaakov Schulman’s (Yanki) motion to dismiss is granted, without prejudice, the caption of the case is amended as provided below, and an assessment of damages by inquest against the company defendants is ordered as set forth below.In motion seq. no. 009, defendant Yanki moves to dismiss the complaint against him pursuant to CPLR 3211 (a)(7) arguing that the Amended Complaint lacks any specific allegations of actionable wrongdoing by him. The Amended Complaint alleges both direct and indirect claims as against Yanki. To wit, the breach of fiduciary duty (3rd cause of action), the diversion (4th cause of action), accounting (5th cause of action), and fraud causes of actions (12th cause of action) are all pled as direct claims, but the breach of fiduciary duty (6th cause of action), the accounting (7th cause of action), and conversion claims (8th cause of action) are all pled as derivative claims. However, the lion’s share of the allegations in the complaint concern Elliot Ostro’s (Elliot)’s son, Jason, only. To be clear, the only allegations against Yanki (other than that Yanki was an owner) are contained in paragraphs 129-133 of the Amended Complaint and allege that after Elliot had already “loaned” the company over $500,000 (which money was allegedly misappropriated by Jason by, among other things, sending purchased computer equipment to Poland and not Israel without authorization from Elliot), Jason and Yanki (i) agreed to provide Elliot with access to company books and records, (ii) promised that Elliot would be the CFO of the company, and (iii) promised to have a formal operating agreement drafted and executed, and failed to keep any such promises and never intended to do so when such promises were made. Distilling Yanki’s alleged role as forth in the complaint — “Yanki refused to act contrary to the wishes of Jason” (Amend. Compl., para. 131). This is simply insufficient to make out the claims asserted against Yanki because promises of future intent are not actionable as fraud, there could not have been reasonable reliance after over $500,000 of charges were incurred as to any additional funds advanced, and, in any event, such $500,000 charges predate the allegations against Yanki. Finally, any derivative claims against Yanki are not properly asserted in this action because these derivative claims are improper in this lawsuit alleging direct claims (Abrams v. Donatti, 66 NY2d 951, 953 [1985]).Accordingly, it isORDERED that the motion of defendant Yaakov Schulman to dismiss the complaint against him, mtn. seq. no. 010, is granted and the complaint is dismissed in its entirety as against said defendant, with costs and disbursements to said defendant as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly in favor of said defendant; and it is furtherORDERED that the action is severed and continued against the remaining defendants, as set forth below; and it is furtherORDERED that the caption be amended to reflect the dismissal and that all future papers filed with the court bear the amended caption; and it is furtherORDERED that counsel for the moving party shall serve a copy of this order with notice of entry upon the Clerk of the Court (60 Centre Street, Room 141B) and the Clerk of the General Clerk’s Office (60 Centre Street, Room 119), who are directed to mark the court’s records to reflect the change in the caption herein as follows:Elliot Ostro, Michael Ostro and Aurelia Ostro, Plaintiffs, v. Brown Box Computer Solutions Israel, LLC, Brown Box Computer Solutions, Inc., Brown Box Computer Solutions International, Ltd., Defendantsand it is furtherORDERED that such service upon the Clerk of the Court and the Clerk of the General Clerk’s Office shall be made in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the “E-Filing” page on the court’s website at the address www.nycourts.gov/supctmanh)]; and it is furtherORDERED that the corporate defendants’ motion to vacate their default, mtn. seq. no. 009, is denied as they have not provided any reasonable excuse for the default, nor a meritorious defense nor otherwise offered a basis upon which vacating the default would be proper; and it is furtherORDERED that an assessment of damages by inquest against defendants Brown Box Computer Solutions Israel, LLC, Brown Box Computer Solutions, Inc., Brown Box Computer Solutions International, Ltd. is directed, and it is furtherORDERED that a copy of this order, with notice of entry, be served by the movant upon the Clerk of the General Clerk’s Office (60 Centre Street, Room 119), who is directed, upon the filing of a note of issue and a certificate of readiness and the payment of proper fees, if any, to place this action on the appropriate trial calendar for the assessment hereinabove directed; and it is further;ORDERED that said note of issue shall be filed by the plaintiffs within 30 days of this order; and it is furtherORDERED that such service upon the Clerk of the General Clerk’s Office shall be made in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the “E-Filing” page on the court’s website at the address www.nycourts.gov/supctmanh)]; and it is furtherORDERED that the parties are directed to appear in Part 53 at 60 Centre Street, New York, New York, 10007, on March 7, 2019 at 11 A.M. for a status conference concerning their inquest. In the event that note of issue was filed in accordance with the above, the parties shall advise the Court, in which case, the matter will be referred for an inquest and no conference shall be required.Date: 1/18/2019CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION GRANTED DENIED GRANTED IN PART OTHERAPPLICATION: SETTLE ORDER SUBMIT ORDERCHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE
