Crestview SPV, LLC v. Crestview Fin., L.L.C.

The following e-filed documents, listed by NYSCEF document number (Motion 006) 128, 129, 130, 132, 141, 142, 143, 144, 145, 146, 148, 151, 167 were read on this motion to/for JUDGMENT-SUMMARY. The following e-filed documents, listed by NYSCEF document number (Motion 007) 133, 134, 135, 136, 137, 138, 139, 140, 147, 149, 150, 152, 153, 154, 155, 160, 168, 169, 170, 171, 172 were read on this motion to/for CONTEMPT. DECISION+ ORDER ON MOTION Upon the foregoing documents, it is In motion 06, defendant Crestview Financial, LLC (CF LLC),¹ moves pursuant to CPLR 3212 for summary judgment on the sole cause of action for an accounting and pursuant to CPLR 2201 to stay production of documents pending resolution of the Order to Show Cause.² CF LLC argues that because an equitable accounting requires a fiduciary duty, but here there is no fiduciary duty under the LLC Agreement’s exculpation clause, the action must be dismissed. The motion is denied because plaintiff Crestview SPV, LLC (SPV) does not seek an equitable accounting, but a right to books and records and certain reports as provided by the agreements. Likewise, the court rejects CF LLC’s argument that SPV is not entitled to equitable relief because it had an adequate remedy at law; again, SPV does not seek an equitable accounting. While SPV did not address the merits of CF LLC’s summary judgment motion, since CF LLC failed to sustain its burden, the burden never shifted to SPV. (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980].) In motion 07, SPV moves by OSC for (i) “a finding of contempt against [CF LLC] and its principal, Shalom Auerbach,³ pursuant to Jud. Law [§§]756⁴ and 770⁵ and to punish defendants for their willful disobedience of court orders designed to defeat, impair, impede or prejudice [SPV]‘s rights and remedies,⁶” (ii) “ the imposition of sanctions for nondisclosure under CPLR 3126 including striking defendant’s answer and rendering a judgment by default against this recalcitrant defendant,” (iii) “the imposition of a fine as well as incarceration of [CF LLC]‘s principal,” (iv) “legal fees in the amount of $7,500 to compensate [SPV] for legal fees incurred in the making of this motion,” and (v) “an order that the issues involving Auerbach setting up at least one and possibly more companies as conduits in which to funnel money from Crestview Financial LLP⁷ to personally benefit himself be resolved against [CF LLC] and Auerbach.”⁸ (NYSCEF 133, SPV’s OSC.) In addition to attorney fees (NYSCEF 169, Kyu O. Kim, Esq. aff; NYSCEF 170, Kiyoung P. Choe, Esq. aff.), SPV seeks sanctions in the amount of $1,029,825.55. (NYSCEF 153, Russell A. Flaming, CPA aff.) This sanction calculation assumes a breach of contract claim, but there is no such claim in this action anymore (NYSCEF 82, Second Amended Complaint) and there has been no request to restore it. On March 20, 2017, SPV was formed by Inmost Partners LLC and CF LLC which established SPV to purchase merchant receivables from CF LLC. (NYSCEF 76, Unverified Second Amended Complaint