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Lambe v. Kahlon

United States District Court, E.D. New York

September 23, 2014

TROY LAMBE, SUNRAY SOLAR INC., and MAX DIVERSIFIED INC., Plaintiffs,
v.
YOSSEF KAHLON, a/k/a JOSSEF KAHLON, ATLAS SOLAR HOLDINGS LLC, ERICA T. YITZHAK, THE LAW OFFICES OF ERICA T. YITZHAK, and ERIKA T. YITZHAK, ESQ. P.C., Defendants.

Richard J. Reisch, Esq., Carle Place, NY, Attorney for Plaintiffs.

Roy A. Klein, Esq. Melville, NY, Attorney for Defendants Erica T. Yitzhak, The Law Offices of Erica T. Yitzhak and Erica T. Yitzhak Esq., P.C.

MEMORANDUM AND ORDER

LEONARD D. WEXLER, District Judge.

Plaintiffs Troy Lambe ("Lambe"), Sunray Solar Inc. ("Sunray"), and Max Diversified Inc. ("Max") (collectively "Plaintiffs"), bring this diversity action against defendants Yossef Kahlon, a/k/a Jossef Kahlon ("Kahlon"), Atlas Solar Holdings LLC ("Atlas"), Erica T. Yitzhak, the Law Offices of Erica T. Yitzhak, and Erika T. Yitzhak, Esq. P.C. (together "Yitzhak") (collectively "Defendants"). Defendant Yitzhak moves to dismiss Plaintiffs' complaint pursuant to Federal Rules of Civil Procedure ("Fed.R.Civ.P."), Rule 12(b)(6).

BACKGROUND

According to the allegations in Plaintiffs' amended complaint, Plaintiff Lambe is the sole shareholder and principal owner of Plaintiffs Sunray and Max. Amended Complaint ("Comp."), ¶ 16. From 2007 through 2013 Plaintiffs Sunray and Max were in the business of renewable solar energy systems, conducted in the state of New Jersey.[1] Cmplt., ¶ 19-20. Sunray located sites and customers, facilitated the projects and processed local approvals, and ordered and installed the systems through Max. Cmplt., ¶ 21-25. Once the system was approved and active, it would generate "Solar Renewable Energy Certificates ("SRECs"), which are a publically-traded market commodity, the value of which is subject to supply and demand. Cmplt., ¶ 27-28.

In and around 2011, Plaintiffs entered into various agreements with Defendants Kahlon and Atlas whereby Atlas and Kahlon would fund the systems facilitated by Plaintiffs for third-parties, and in return, Atlas and Kahlon would receive the SRECs, in addition to tax and other benefits. Cmplt., ¶ 29. Ultimately, Defendants invested in twenty-six (26) systems with Plaintiffs, and entered into various agreements, including a Contractor Installation and Completion Guarantee, whereby Defendants would fund the system and Plaintiffs would guarantee to complete the systems. All 26 systems were installed and successfully completed. Cmplt., ¶ 30-38. In addition, Sunray and Atlas entered into a Solar Energy Systems Maintenance Agreement, whereby Sunray would maintain the systems in return for payment by Atlas through the proceeds of the SRECs generated. Cmplt., ¶ 40.

Some time in August 2011 following policy changes in the state of New Jersey, the market value of SRECs dropped. Defendants Kahlon and Atlas cut off funding for the systems, and have not made any payments since that time. Cmplt., ¶ 44-46.

Plaintiffs sought other investment partners for other solar energy installation projects. It signed contracts with NJR Clean Energy Ventures Corporation ("NJR"), with whom it worked with on sixty-two (62) solar energy systems; Clean Power Finance ("Clean Power"); and NRG Energy ("NRG"), with whom it worked on eight (8) solar energy systems. Cmplt., ¶ 50-61.

In or about June 2012, Defendants Kahlon and Atlas hired Yitzhak, who filed at least two liens on Plaintiffs' assets with no notice to Plaintiffs. Cmplt., ¶ 47-49. On September 19, 2012, Defendant Yitzhak wrote to Plaintiffs informing them that liens had been placed on all of their assets, and falsely alleged that Plaintiff owed Defendant Atlas money, demanding payment under "various agreements" and threatening a lawsuit. Cmplt., ¶ 62-68.

On October 22, 2012, Plaintiffs were served with a Summons, [2] later made a Demand for the Complaint, and were served the complaint on February 5, 2013, with an affirmation of service by Yitzhak that the complaint had been served on December 18, 2012. Cmplt., ¶ 69-71.

On January 30, 2013, Defendant Yitzhak served a letter on Plaintiff's three other financial partners - NJR, Clean Power and NRG - stating that Defendants held liens against Plaintiffs, that legal action had been commenced, and that Defendants suffered as a result of Lambe's and Sunray's "fraudulent and deceitful actions." A copy of the complaint and the liens was included, and the financial partners were advised to "refrain from forwarding any payments" to Sunray and Lambe. Cmplt., ¶ 72-77.

Following receipt of the letter, NJR terminated their agreement with Plaintiffs, and Clean Power and NRG said they would not move forward with Plaintiffs until the litigation was resolved. Cmplt. ¶ 78-81. Plaintiffs were forced to take a reduced fee for services provided, and were unable to complete up to 300 additional properties they anticipated would be funded by NJR, Clean Power and NRG. Cmplt., ¶ 82-85.

Plaintiffs's complaint alleges twelve causes of action, including three claims for tortious interference, and claims for defamation/trade libel, malicious use/abuse of process, violation of New York Judiciary Law § 487, negligence, professional malpractice/negligence, two claims for breach ...


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