Papers submitted:Defendant’s Order to Show Cause dated March 20, 2019,Affidavit and Affirmation in Support XAffirmation in Opposition XReply Affirmation XDecision & Order Defendant, J.D., moves by Order to Show Cause dated March 13, 2019, for an order granting the following relief: 1. Pursuant to CPLR §3211[a][8], dismissing Plaintiff’s Amended Verified Complaint as against the Defendant J.D., based upon lack of personal jurisdiction;2. Dismissing the Plaintiff’s Amended Verified Complaint as against Defendant J.D., based upon improper service of same;3. Pursuant to CPLR §3211[a][2], dismissing Plaintiff’s Amended Verified Complaint as against Defendant J.D., based upon lack of subject matter jurisdiction;4. Pursuant to CPLR §3211[a][7] and CPLR §3016[b], dismissing Plaintiff’s Amended Verified Complaint as against Defendant J.D., based upon the Amended Verified Com-plaint’s failure to state a cause of action as against said Defendant;5. Pursuant to CPLR §2201, staying the trial of this action pending further order of this Court; and6. For such other and further relief as the Court deems just and proper.Plaintiff/Wife, E.D., opposes the requested relief.Defendant/Husband, M.D., did not submit any papers.Background/HistoryPlaintiff E.D. and Defendant M.D. were married in 1993 and have four (4) children, M.D. (23 years old), M.D. (23 years old), P.D. (14 years old), and N.D. (8 years old).Plaintiff was granted leave to amend her complaint to add Defendant’s father, J.D. as a defendant in this divorce action by Order dated December 7, 2018 (Hon. Edmund M. Dane, J.S.C.), on the premise that J.D. is an alleged third party transferee of marital property. After unsuccessful attempts to personally serve J.D. (who lives in Israel and France), Plaintiff made an oral application to this Court on February 1, 2019, for a direction allowing an alternative method of service. As will be further discussed below, the Court directed that service be made by serving the attorneys that have previously appeared in this action on his behalf (to defend against a temporary restraining order placed on a bank account, in which J.D. has an interest), Tabat, Cohen, Blum and Yovino, P.C., and also by publication in Israel. The information regarding J.D.’s residence address in Israel was provided by Defendant/Husband. J.D. has again retained Tabat, Cohen, Blum and Yovino, P.C. for the limited basis of contesting jurisdiction in this action.Defendant J.D.’s MotionJ.D. moves for dismissal of the Amended Verified Complaint as against him on the grounds of improper service, lack of personal jurisdiction, lack of subject matter jurisdiction, and failure to state a cause of action. In the alternative, in the event that the Amended Verified Complaint is not dismissed as against him, J.D. request that the trial be stayed to allow him a sufficient amount of time to conduct discovery.J.D. alleges that he has never been properly served with the Amended Summons and Amended Verified Complaint in the present action. He asserts that the December 7, 2018 Order (Edmund M. Dane, J.S.C.) required that service be made upon him pursuant to CPLR §308[1]. He claims that no affidavit of fact or affidavit of due diligence was produced by Plaintiff to justify an alternative method of service and that, accordingly, that pursuant to CPLR §308[5], Plaintiff’s application for alternative service was defective, and should not have been granted.J.D. also asserts that Tabat, Cohen, Blum & Yovino, PC (hereinafter “the firm”) has been retained for the limited purposes of making an application pertaining to a temporary restraining order on a Signature Bank Account (account ending xxx5111) granted by the Court. J.D. submits a copy of his initial retainer with the firm, dated August 21, 2018, which outlines the firm’s responsibilities as “Terminating Restraining Orders.” He also provides a copy of a second retainer, dated December 28, 2018, and states it was for the exclusive purpose of prosecuting an appeal from the December 7, 2018 Order on J.D.’s behalf. He argues that the firm has not been retained to represent him on the merits of the matrimonial action, and that therefore, service cannot be made by serving the firm. J.D. states that a letter of rejection of service was sent from the firm to Plaintiff’s attorneys and provides a copy of same. In addition, J.D. avers that he never saw a publication of the pleadings in any newspaper in Israel.Regarding lack of personal jurisdiction, J.D. asserts that he is not a resident or domiciliary of this state, or of the United States, and has never lived in the United States. He states “I have lived in France and in Israel. I have an interest in a bank account held with Signature Bank.”J.D. asserts that CPLR §302[b] governs long-arm jurisdiction in matrimonial actions. He argues that, pursuant to CPLR. §302[b], the Court can exercise personal jurisdiction over a non-domiciliary defendant in a matrimonial action only if either (1) the state was the matrimonial domicile prior to the separation, (2) if the defendant abandoned the plaintiff in this state, or (3) if the plaintiff’s claim for a distributive award (equitable distribution) accrued under the laws of this state or under an agreement executed in this state.J.D. argues the he was never been married to Plaintiff in this state (or otherwise), he could never have “abandoned” Plaintiff in this state (since they were never married), and no claim for a distributive award could have accrued under the laws of the State of New York (since they were never married). Therefore, he argues, this Court does not have jurisdiction over him pursuant to CPLR. §302[b].Regarding subject matter jurisdiction, J.D. claims that the funds being held in the Signature Bank Account (account ending xxx5111) have not been declared marital property. He further states that the Court, in its December 7, 2018 Order, lifted part of the restraint on the Signature Bank Account (account ending xxx5111) after J.D. (at the time a non-party) moved to lift the restraining order by cross order to show cause dated August 30, 2018. J.D. argues that the Court’s lifting part of the restraint (the December 7, 2018 Order restrained the sum of $1,000,000.00, effectively releasing approximately $400.000.00) is indicative that the money in this account is not marital property. J.D. asserts that Plaintiff has never brought a declaratory judgment action seeking to have the funds in the Signature Bank Account (account ending xxx5111) declared to be marital property. Accordingly, he argues, these funds are not the subject matter of this litigation.In regard to the cause of action asserted against him in the Amended Verified Complaint, J.D. alleges that Plaintiff does not validly plead a fraudulent conveyance claim pursuant to CPLR §§3211[a][7] and CPLR 3016([b], and should be dismissed. He further asserts that Debtor and Creditor Law §276 requires that actual intent be plead for the claim of fraudulent conveyance.J.D. alleges that the assertions made in the Amended Verified Complaint constitute legal conclusions that are plead without the required specificity. He specifically points to paragraphs “12″, “13″ and “14″, pertaining to the interests in KDM Realty LLC, KDM Realty 1 LLC, and the sale proceeds from EDM Realty LLC “(“EDM”). Regarding the sale proceeds from EDM, he states that Plaintiff only alleges the transfer occurred but failed to plead anything regarding J.D.’s intent. Regarding KDM Realty LLC and KDM 1 Realty LLC, he claims that Plaintiff alleges Defendant/Husband transferred 41.5 percent of his 50 percent of his respective interests in KDM Realty LLC and KDM 1 Realty LLC to J.D. without pleading anything that J.D. had intent to defraud Plaintiff. Since actual intent was not plead or alleged, J.D. argues that the Amended Verified Complaint must be dismissed as against him, for failure to state a cause of action.Finally, J.D. argues that, in the event he is not dismissed from the case, the trial of this matter should be stayed, pursuant to CPLR. §2201, to allow him sufficient time in which to conduct discovery and prepare for trial.Plaintiff’s Affirmation in OppositionIn opposition, Plaintiff argues that J.D. has misapplied the law and incorrectly relied on CPLR §302(b) to claim that the Court does not have long-arm jurisdiction over him. Plaintiff asserts that CPLR §302(b) does not apply to third party transferees in a divorce action, and, accordingly, J.D.’s argument regarding lack of personal jurisdiction is incorrect.Plaintiff argues that, pursuant to CPLR §1001 and CPLR §1003, J.D. is a necessary party to the action for the purposes of equitable distribution. She asserts Defendant/Husband has admitted to transferring marital assets to J.D. worth approximately $4,000,000.00 just prior to the commencement of the first divorce action between the parties. These assets included membership interests in three (3) separate limited liability companies (LLC’s”), EMD Realty LLC, KDM Realty LLC, and KDM 1 LLC, which interests, according to Plaintiff, all originated during the marriage, and each of which LLC’s own (or owned) real property in Nassau County.Plaintiff states, with regard to EMD Realty LLC: Defendant/Husband was the sole owner of EMD Realty LLC, which owned a commercial property in Nassau County; Defendant/Husband transferred his entire interest in the LLC to his father, J.D.; during the pendency of this action (in or about March 2017), Defendant/Husband facilitated the sale of the commercial property (which was debt free) for close to $1,000,000.00.With regard to KDM Realty LLC and KDM 1 Realty LLC, Plaintiff states that the properties owned by these LLC’s have not been sold. However, she asserts that Defendant/Husband and J.D. (and a third partner) secretly withdrew over $1,000,000.00 of equity from the properties in March, 2018, mortgaging both properties without notice to Plaintiff and in violation of the automatic stays. Plaintiff submits bank statements showing a deposit in the amount of $529,568.55 into J.D.’s Signature Bank Account. Plaintiff alleges that amount deposited matches funds withdrawn from a KDM 1 Realty LLC bank account.Plaintiff argues that service was completed as per the Court’s directive, by publication, after personal service was impossible based upon the misrepresentations of J.D.’s whereabouts. Plaintiff states that the last publication occurred on March 14, 2019. She provides a copy of the transcript of the proceedings before the Court on February 1, 2019, during which the application for alternative service was made by Plaintiff. She also provides a copy of the affidavit of publication from the newspaper in Israel. Plaintiff also submits a copy of an “Affidavit of Attempted Service” apparently from a process server in Israel, outlining his attempt to serve J.D. at an address provided by Defendant/Husband in Israel. (The Court notes that it is not clear that this is an affidavit)Plaintiff argues the stay of trial should be lifted so she can proceed forward in this litigation. She requests that this Court direct J.D. to appear for deposition on a specific date, and a strict discovery schedule and trial date be set.Third-Party J.D.’s Reply AffirmationIn reply, J.D. (through his attorney’s affirmation), repeats his arguments. He further asserts that there has never been a determination that the funds in his Signature Bank Account (account ending xxx5111) are marital property.In response to Plaintiff’s allegation that Defendant/Husband admits to having transferred marital assets to his father J.D. just weeks before the parties’ first divorce action, J.D. points out that after the first divorce action, the parties reconciled. Accordingly, he contends that the operative date should be the date of commencement of the within divorce action. He further asserts that asserts that “[t]he asset [it is not clear which asset is referred to] was transferred in satisfaction of a legitimate debt and lawsuit, and provides copies of a summons and complaint in a 2014 action by J.D. against Defendant/Husband. Also provided are copies of a $600,000.00 note and mortgage dated February 20, 2012, payable to J.D. and made by EMD Realty LLC (signed by Defendant M.D. as Sole Member thereof) and a $350,000.00 note and mortgage dated February 20, 2012, payable to J.D. and made by Defendant M.D.Discussion/RulingPersonal JurisdictionPursuant to CPLR §3211[a][8], a party may move for judgment dismissing one or more causes of action asserted against him on the ground that “the court has not jurisdiction of the person of the defendant.”. Here, J.D. asserts that he is not a resident or domiciliary of this State or of the United States, that he is not a citizen and has never lived in this Country. He asserts that he has not committed any tort in this State, does not own any property in this State and has no connection with this state. Accordingly, he claims that there is no basis for the Court to assert jurisdiction over him.CPLR §302, the “long-arm” statute, provides that the Court has jurisdiction over the acts of non-domiciliaries in certain cases. J.D. argues that “CPLR §302 [b] governs the jurisdictional predicate in matrimonial actions” and that if the requirements of that statute are not satisfied, then this Court cannot exercise personal jurisdiction over him. CPLR 302 [b] provides:Personal jurisdiction over non-resident defendant in matrimonial actions or family court proceedings. A court in any matrimonial action or family court proceeding involving a demand for support, alimony, maintenance, distributive awards or special relief in matrimonial actions may exercise personal jurisdiction over the respondent or defendant notwithstanding the fact that he or she no longer is a resident or domiciliary of this state, or over his or her executor or administra-tor, if the party seeking support is a resident of or domiciled in this state at the time such demand is made, provided that this state was the matrimonial domicile of the parties before their separation, or the defendant abandoned the plaintiff in this state, or the claim for support, alimony, maintenance, distributive awards or special relief in matrimonial actions accrued under the laws of this state or under an agreement executed in this state. The family court may exercise personal juris-diction over a non-resident respondent to the extent provided in sections one hun-dred fifty-four and one thousand thirty-six and article five-B of the family court act and article five-A of the domestic relations law.This Court finds that CPLR 302 [b] is intended to provide a jurisdictional basis over a non-resident defendant in a matrimonial action, when that defendant is the spouse. This subsection does not preclude the assertion of another predicate for long arm jurisdiction simply because the non-spouse defendant (J.D.) happens to be included as a defendant in a matrimonial action.J.D. argues the he was never been married to Plaintiff in this State (or otherwise), he never “abandoned” Plaintiff in this state (since they were never married), and no claim for a distributive award could have accrued against him under the laws of this State (since he and Plaintiff were never married). Therefore, he argues, this Court does not have jurisdiction over him.While this is, of course, a matrimonial action, J.D. is not a matrimonial defendant, intended to be addressed by the statute.The Court finds that in the present case, there are other predicates on which to assert jurisdiction over J.D. CPLR §302[a] provides:[a] Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or* * * *4. owns, uses or possesses any real property situated within the state.In his Affidavit in Opposition, J.D. avers that he “does not use, own or possess real property in this state” and that he has “no connection to this State”. However, he nowhere refutes the alle-gations made by Plaintiff in the moving papers and in her Amended Verified Complaint with re-gard to J.D.’s ownership interests in KDM Realty LLC, KDM 1 Realty LLC and EMD Realty LLC. The allegations include, inter alia, that J.D. owns a 41.5 percent in each of KDM Realty LLC and KDM 1 Realty LLC, and that he owned 100 percent of EMD Realty LLC; that each of these LLC’s own separate parcels of commercial real property in Nassau County that were purchased during the marriage. J.D. does acknowledge his “interest in a bank account held with Signature Bank” (in New York).Since Plaintiff’s claims against J.D. are based upon her allegations that the limited liability companies, real properties, and the subject bank account (into which funds related to the subject properties are alleged to have been deposited), are intertwined as part a scheme by Defendant/Husband to deprive Plaintiff of her equitable share of marital assets, this Court finds that there is a sufficient basis for the exercise of personal jurisdiction over J.D., pursuant to CPLR §302(1) and (4).Accordingly, J.D.’s request to dismiss the Amended Verified Complaint for lack of per-sonal jurisdiction is DENIED.Improper ServiceJ.D. contends that he was not properly served in this action. He argues that the December 7, 2018 Order (Edmund M. Dane, J.S.C.) required that service be made upon him pursuant to CPLR §308[1], and that Plaintiff failed to make a sufficient showing to justify an alternative method of service. He argues that the oral application made by Plaintiff (through her attorneys) for alternative service pursuant to CPLR §308[5], was not substantiated by an Affidavit of Due Diligence or an Affidavit of Fact, and should not have been granted.CPLR 308[5] vests a Court with the discretion to direct an alternative method of service of process when it has determined that the methods set forth in CPLR 308[1], [2] and [4] are ‘impracticable’ (Home Fed. Sav. Bank v. Versace, 252 AD2d 480 (quoting CPLR 308[5])[2d Dept. 1998). "Although the impracticability standard 'is not capable of easy definition' (Markoff v. South Nassau Community Hosp., 91 AD2d 1064 [2d Dept. 1983], it does not require the applicant to satisfy the more stringent standard of ‘due diligence’ under CPLR 308(4), or to make a showing that ‘actual prior attempts to serve a party under each and every method provided in the statute have been undertaken’. (Astrologo v. Serra, 240 AD2d 606 [2d Dept. 1997]). Once the Court is satisfied that the impracticability standard is satisfied, the alternative method of service should be “reasonably calculated, under all the circumstances, to apprise” the defendant of the action (Mullane v. Central Hanover Bank & Trust Co., 339 US 306, 314 (1950).After attempting to effectuate service on J.D. in both Israel and France all to no avail, Plaintiff/Wife’s counsel made an oral application for an order directing an alternative method of service on February 1, 2019. Counsel averred that a process server tried to serve J.D. at his last known address in Israel, but the process server was told by a neighbor that J.D. no longer resides in Israel, but lives in France. Defendant M.D. was present in the Courtroom and stated that his father lives in Israel at the address he had provided to Plaintiff’s counsel. Plaintiff’s counsel also stated “informants in France gave us a few different addresses, none of which has availed J.D.”The Court, satisfied as to the impracticability of service pursuant to CPLR 308[(1], [2] and [4] granted Plaintiff’s application and directed service via publication in a newspaper in Jerusalem, Israel. The Court also directed that service be made upon Tabat, Cohen, Blum & Yovino, P.C., “firm”), the attorneys that have previously appeared in this action in J.D.’s behalf in 2018 to defend against a temporary restraining order placed on his Signature bank account. The firm has also been retained by J.D. to prosecute his appeal from the Court’s December 7, 2018 Order (which, inter alia, granted leave to file and serve the Amended Verified Complaint that is the subject of J.D.’s present application), and the firm is also representing him in connection with the present application.J.D. and the firm argue that the firm has appeared only on a limited basis, that the firm has not been retained to defend J.D. “on the merits” at any time and has never been authorized to accept service of process on his behalf.The Court directed that the firm be served as an additional method of service, as a means of ensuring that he is aware of the pendency of the action. (See Contimortgage Corp. v. Isler, 48 AD3d 732, 735 [2d Dept 2008])(where a junior lienholder in a mortgage foreclosure action was served by publication only, Court stated that lower court could have directed service by publication and an alternative method such as mailing to attorney that had represented the defendant in another action, as a method more reasonably calculated to apprise him of the pendency of the action).Here, J.D. was already aware of the pendency of the action against him, as he has taken an appeal from the Court’s December 7, 2018 Order which, as discussed above, granted Plaintiff leave to file her Amended Verified Complaint. J.D. was already aware that he has been added as a Defendant herein. Accordingly, the usual concern with granting alternative service by publication that, in all likelihood, a Defendant will not see the publication, and thus may never actually receive notice that an action is pending against him, is simply not present here.Moreover, it is worth noting that J.D. states in his Affidavit in Support, sworn to March 8, 2019, that “I have lived in France and Israel”, but he provides no further detail as to his present address or location. The Affidavit appears to have been signed in Paris, France (the jurisdictional information at the top of the affidavit is blank, but the notary’s certificate stamp imprint appears to be in French and states: “Me Bernard CARVAIS, Notaire, PARIS — Cour d’Appell”). J.D. does provide with his papers, however, a Signature Bank account application, signed by J.D. and dated June 1, 2017, which lists his address as “Kikar Magnes 3, Jerusalem, Israel” — the address listed on Plaintiff’s summons, and the address where service was attempted in Israel. J.D. also submits a power of attorney form in which he is shown as the principal (designating his son Defendant M.D. as his agent), is also signed by J.D. on June 1, 2017, and which lists the same address in Israel. The fact that J.D. does not indicate in his Affidavit in Support where he presently resides, stating only that he “has lived in France and in Israel” is further indicative to this Court of the impracticability of attempting to serve him pursuant to CPLR §308[1], [2] or [4].Plaintiff filed an Affidavit of Publication, sworn to March 14, 2019, showing that required publication was made in Hamodia, a weekly newspaper in Jerusalem, Israel, on February 28th, March 7th, and March 14th, 2019.Accordingly, Third-Party J.D.’s request to dismiss the Amended Verified Complaint is for improper service is DENIED.Failure to State a Cause of ActionJ.D. moves pursuant to CPLR §3211[a][7] and CPLR §3016[b] for dismissal of Plaintiff’s Amended Verified Complaint as against J.D., on the ground that the Amended Verified Complaint fails to state a cause of action as against him.On a motion pursuant to CPLR 3211[a][7] to dismiss for failure to state a cause of action, the court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Goshen v. Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]; Leon v. Martinez, 84 NY2d 83, 87-88 [1994]). “In opposition to such a motion, a plaintiff may submit affidavits to remedy defects in the complaint and preserve inartfully pleaded, but potentially meritorious claims” (Cron v. Hargro Fabrics, 91 NY2d 362, 366 [internal quotation marks omitted]).Here, the Court agrees with J.D.’s assertion that Plaintiff’s Amended Verified Complaint that separate causes of action could have been more clearly labeled or defined. However, the Court’s function on a motion to dismiss for failure to state a cause of action is to determine if the facts as alleged by Plaintiff fit within any cognizable legal theory and potentially meritorious claims.Plaintiff alleges that Defendant/Husband improperly transferred marital assets to his father J.D., so as to deprive Plaintiff of her equitable share of those assets. Those claimed assets consist of interests in specific limited liability companies, which own (or owned), respectively, specific parcels of commercial real property, as well as funds traceable, allegedly, to the sale of one of those properties. Plaintiff alleges that J.D. is the third-party transferee of those marital assets. She alleges that J.D. became the financial alter ego of Defendant/Husband, acting at the latter’s direction to deprive Plaintiff of her equitable share of those marital assets. With respect to the refinancing of one of the commercial properties, Plaintiff alleges that J.D. acted with Defendant/Husband to withdraw equity from a marital asset.A third-party transferee of marital property subject to a distribution dispute is a necessary party in a matrimonial action for the purposes of equitable distribution. (Solomon v. Solomon, 136 AD2d 697, 698 [2d Dept. 1988]); Schmidt v. Schmidt, 99 AD2d 775, 776 [2d Dept. 1984]. CPLR §1001 and CPLR §1003.The Court finds that Plaintiff states a viable cause of action as against J.D., as an alleged third-party transferee of marital property.Subject Matter JurisdictionJ.D. moves pursuant to CPLR. §3211[a][2] for dismissal of Plaintiff’s Amended Verified Complaint as against J.D., on the ground that the Court lacks subject matter jurisdiction. He argues that the funds that have been restrained in his Signature Bank Account (account ending xxx5111) have not been found to be marital property.Domestic Relations Law §236[B], defines marital property as “all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held, except as otherwise provided in agreement pursuant to subdivision three of this part.” (Domestic Relations Law §236 [B] [1] [c]).The Court finds that J.D.’s argument that the Court lacks subject matter jurisdiction is without merit. Plaintiff alleges that the funds in question are marital property, that they are comprised of proceeds from the sale of a parcel of commercial real property purchased during the marriage. Regardless of how the account is titled, the issue is whether Plaintiff has an interest in the funds, which is an issue for this Court to determine.Moreover, at issue are not only the funds in the subject bank account, but also the portion of Defendant/Husband’s ownership interests in the various limited liability companies that were transferred to J.D.Accordingly, Third-Party J.D.’s request to dismiss the Amended Verified Complaint for lack of subject matter jurisdiction is DENIED.Stay of the TrialJ.D.’s request for a stay is DENIED. The stay of the trial granted by the Court in the Order to Show Cause, dated March 20, 2019 by which the present application was made is hereby VACATED. The parties are hereby directed to appear for a conference on July 16, 2019, to set an expedited discovery schedule and a trial date.All other requested relief, not specifically addressed herein, is hereby DENIED.This constitutes the Decision and Order of this Court.Dated: July 1, 2019Mineola, New York
