September 13, 2013
George APRILE, Plaintiff
MEN OF INVENTION LLC, d/b/a Silver Lining, Joseph Schwartz, Terry Dieterle, Jr., and Sasha Petraske, Defendants. No. 652726/13.
This decision has been referenced in a table in the New York Supplement.
Dobrenko & Associates, P.C., by Walter Dobrenko, Esq., Astoria, Attorneys for Plaintiff.
David A. Kaminsky & Associates, P.C., by David A. Kaminsky, Esq., New York, Attorneys for Defendants.
MANUEL J. MENDEZ, J.
Upon a reading of the foregoing cited papers, it is ordered that this motion for an order enjoining the defendants from selling, destroying and/or removing any of the furniture fixtures and equipment from the bar restaurant located a lower level basement/cellar at 75 Murray Street, New York, NY, and compelling defendants to turn over the keys to the premises on or before September 15, 2013 and permit plaintiff to take possession is denied. Defendants cross motion to extend the time to remove their possessions is granted.
Plaintiff, along with defendants Schwartz, Dieterle Jr., and Petraske formed Men of Invention, LLC, for the purpose of operating a Bar Restaurant at premises located at 75 Murray Street, New York, N.Y. The LLC's operating agreement dated in June of 2010 provided that plaintiff would have a 33% membership interest, Defendant Schwartz 31%, Dieterle, Jr. 31% and Petraske 5%. It also allocated profits and losses in the same proportion. In accordance with the operating agreement at paragraph 17, " The company shall dissolve upon the earliest to occur of the following: (i) September 30, 2013(ii) the termination of the lease between Bogardus, LLC and the company (iii) the unanimous consent of the members or (iv) such date upon which dissolution occurs pursuant to Section 701 of the LLCL (see operating agreement Exhibit A).
In July of 2010 defendant Men of Invention, LLC (as tenant) entered into a lease with Bogardus, Inc., (as owner) for the premises located at 75 Murray Street New York, N.Y. commencing on September 15, 2010 and expiring September 14, 2013. Plaintiff is a member of Bogardus, Inc., but it is suing in his individual capacity as both a member of Bogardus, Inc., and as a member of defendant Men of Invention, LLC.
At paragraph 52 the lease states:
" Upon the expiration or other termination of the term of this lease tenant shall quit and surrender to owner the demised premises, broom clean, in good order and condition, ordinary wear and tear and damages which tenant is not required to repair as provided elsewhere in this lease excepted, and tenant shall remove all property from the demised premises. "
At paragraph 54 the lease states:
" .....all fixtures, paneling, partitions, railings, and like installations, installed in the premises, at any time by tenant or on its behalf, shall become the property of owner and shall remain upon and be surrendered with the demised premises unless owner, by notice to tenant prior to the date fixed as the termination of the lease, elects to relinquish owners' right thereto, in which event the same shall be removed by tenant at tenant's expense....."
At Paragraph 56 the lease states:
" The tenant may install trade fixtures in the demised premises without the consent of the owner."
(See Lease Exhibit B).
Plaintiff now seeks to enjoin defendants, including Men of Invention LLC, from selling, destroying and or removing any of the furniture fixtures and equipment from the premises. He further seeks to compel defendants to turn over to him the keys to the subject premises on or before September 15, 2013— which is a day after the lease expires— and permit him to take possession of the premises.
Defendants cross-move for an order denying plaintiff's request and extending for a reasonable time beyond the termination of the lease agreement, the time to remove their property and trade fixtures.
CPLR § 6301 grants this court the power to issue an order directing the defendant to perform an act for the benefit of plaintiff, or to refrain from performing an act which would be injurious to the plaintiff. A preliminary injunction may be granted under CPLR article 63 when the party seeking such relief demonstrates (1) a likelihood of success on the merits; (2) the prospect of irreparable injury and (3) a balance of equities tipping in the moving party's favor ( Doe v. Axelrod, 73 N.Y.2d 748, 532 N.E.2d 1272, 536 N.Y.S.2d 44  ).
Plaintiff has failed to establish the elements for the granting of the requested relief.
Plaintiff alleges on one hand that he is suing on behalf of the landlord and on the other as a member of the LLC, however it appears to this court that he is bringing this action in his individual capacity to collect on a presumed debt for failure of the defendants to distribute the profits obtained in the management of the LLC. Plaintiff is worried that if defendants remove the assets from the premises he would be unable to collect any judgment he obtains against them. However, " the mere danger of asset-stripping is not a sufficient basis to make an exception to the general rule that an unsecured creditor suing to collect a debt is not entitled to preliminary injunctive relief to prevent the debtor's dissipation of assets prior to judgment. ( Credit Agricole Indosuez, v. Rossiyiskiy Kredit Bank, 94 N.Y.2d 541, 729 N.E.2d 683, 708 N.Y.S.2d 26  ). An injunction is an equitable remedy, and it is well settled that where adequate relief can be obtained by a money judgment there is no need for equitable relief, the money judgment suffices ( Spitzer v. Fink America, Inc., 2 A.D.3d 1379, 770 N.Y.S.2d 225 [4th Dept.2003] ).
" The law of fixtures was evolved by the judiciary in order to ameliorate the harsh result to those who substantially improved property but who had less than a fee interest. The view in New York is broad. Trade fixtures which is a fixture or improvement that is annexed to real property by the tenant for the purpose of carrying on its business during a lease term, retains its classification as personal property to the extent that it can be removed without substantial injury to the freehold (see Tag 380 LLC, v. JP Morgan Chase Bank, 12 Misc.3d 1172(A), 820 N.Y.S.2d 846 [NY City Civ.Ct.2006] quoting J.K.S.P. Restaurant, Inc., v. Nassau County, 127 A.D.2d 121, 513 N.Y.S.2d 716] ).
" For reasons of public policy, a tenant may remove trade fixtures prior to the expiration of the lease or before the tenant quits possession, unless otherwise agreed to by the parties" ( Modica v. Capece, 189 A.D.2d 860, 592 N.Y.S.2d 775 [2nd. Dept.1993] ).
Men of Invention LLC, prior to and at the termination of the lease is allowed by Paragraph 52 to remove all of its property, except the fixtures which shall become property of the landlord. (See Lease Paragraph 54). However, tenant is also permitted to install " Trade Fixtures" . (See Lease Paragraph 56). The fact the lease allows for the installation of " fixtures" and " trade fixtures" is evidence that the parties intended to treat each category of fixtures separately and differently. Trade fixtures are those that can be removed without causing substantial injury to the freehold. These Trade Fixtures can be removed by the tenant prior to and at the termination of the lease.
A lessee on the termination of his lease will be given a reasonable time in which to remove trade fixtures which he has placed thereon ( Bernheimer v. Adams, 70 A.D. 114, 75 N.Y.S. 93 [1st. Dept.1902] ). Defendants request a reasonable time subsequent to the termination of the lease to remove its property and any " trade fixtures" . This could not be accomplished sooner due to the Temporary Restraining Order issued by this court preventing the property's removal. The lease expires on September 14, 2013 and defendants will not be able in such a short period of time to effectively remove its property. Defendants do not suggest how much time it needs to remove its property and the court finds two weeks to accomplish the removal of all furniture, equipment and trade fixtures to be reasonable.
Finally, it should be noted that plaintiff has no standing to obtain injunctive relief on behalf of 75 Bogardus, Inc., or to obtain possession of the premises on its behalf. " One choosing to use a corporation to operate a business cannot, absent special circumstances, disregard the corporate structure and obtain damages personally for harm to the corporation. Accordingly, an individual shareholder does not have standing to secure a personal recovery for an alleged wrong done to a corporation. Further the fact that an individual closely affiliated with a corporation, such as a principal shareholder or even a sole shareholder, is incidentally injured by an injury to the corporation does not confer standing on the individual to sue on the basis of either that indirect injury or the direct injury to the corporation" (14 N.Y. Jur.2d Business Relationships § 36; Suss v. American Soc. For Prevention of Cruelty to Animal, 823 F.Supp. 181 [S.D.NY 1993]; Gmerek v. Scrivener, Inc., 221 A.D.2d 991, 634 N.Y.S.2d 299 [4th Dept.1995]; New Castle Siding Co., Inc., v. Wolfson, 97 A.D.2d 501, 468 N.Y.S.2d 20 [2nd. Dept.1983] ).
Accordingly, it is ORDERED that the motion for an order restraining the defendants, its members, its agents, and or employees from selling, destroying and or removing any of the furniture fixtures and equipment from the bar restaurant located at lower level basement/cellar at 75 Murray Street, New York, N.Y. 10007 and compelling the defendants to turn over the keys to the subject premises on or before September 15, 2013 and permit plaintiff to take possession of the premises is denied, and it is further,
ORDERED, that any restrains on defendants, its members, agents and or employees ability to sell, and/or remove any of the furniture fixtures and equipment at 75 Murray Street New York, NY, is vacated, and it is further,
ORDERED, that defendants' cross motion is granted, and it is further,
ORDERED, that defendants, its members, agents and/ or employees shall be granted two (2) weeks following termination of the lease to remove all of its personal property, furniture, equipment and trade fixtures from the premises located at 75 Murray Street, New York, NY.