Appellate Division, Second Department: September 15, 2023

By Connolly, J.P.; Chambers, Dowling, Voutsinas, JJ.

NANCY SHUNKUEN NG, ETC., res, v. ASQUARED GROUP, INC., ET AL., app — (Index No. 714168/16) Graber Law Firm (Felicello Law P.C., New York, NY [Michael J. Maloney], of counsel), for appellants. White, Cirrito, Nally & Lynch, LLP, Hempstead, NY (Christopher M. Lynch and Allison M. Castel of counsel), for respondent. In an action, inter alia, to recover damages for breach of fiduciary duty, the defendants appeal from a judgment of the Supreme Court, Queens County (Salvatore J. Modica, J.), entered June 9, 2020. The judgment, insofar as appealed from, upon an order of the same court (Dennis J. Butler, J.) entered February 27, 2018, inter alia, granting that branch of the plaintiff’s motion which was for leave to enter a default judgment against the defendant Andy Lee, and after an inquest on the issue of damages, is in favor of the plaintiff and against the defendant Andy Lee in the principal sums of $135,208.98 for compensatory damages and $700,000 for punitive damages. ORDERED that the appeal by the defendants Asquared Group, Inc., and XYZ Corp. is dismissed, without costs or disbursements, as those defendants are not aggrieved by the judgment (see CPLR 5511); and it is further, ORDERED that the judgment is modified, on the facts, by deleting the provision thereof awarding punitive damages in the principal sum of $700,000, and substituting therefor a provision awarding punitive damages in the principal sum of $300,000; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements. The plaintiff and the defendant Andy Lee were shareholders of Kyoto Dining Group, Inc., and Kyoto Restaurant, Inc. (hereinafter together the Kyoto corporations), corporate entities formed for the purpose of operating a restaurant business. In April 2013, Lee transferred the assets of the Kyoto corporations to the defendant Asquared Group, Inc. (hereinafter Asquared), a corporation of which the plaintiff was not a shareholder, purportedly to freeze the plaintiff out of her 25% share in the Kyoto corporations. Thereafter, in October 2016, the assets of Asquared were transferred to another corporate entity, Stellar 153, Inc., which was owned by the girlfriend of Lee’s father. The plaintiff commenced this action, inter alia, to recover damages for breach of fiduciary duty. After the defendants failed to appear or answer the complaint, the plaintiff moved for leave to enter a default judgment against them. Lee opposed the plaintiff’s motion, contending, among other things, that he had a reasonable excuse for his default and a potentially meritorious defense. In an order entered February 27, 2018, the Supreme Court granted the plaintiff’s motion, holding the defendants in default and directing an inquest on the issue of damages. After the inquest on the issue of damages, a judgment was entered in favor of the plaintiff and against Lee in the total sum of $935,417.16, which included compensatory damages in the principal sum of $138,208.98 and punitive damages in the principal sum of $700,000.