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Meagher v. Doscher

Supreme Court of New York, Second Department

January 24, 2018

Michael Meagher, et al., respondents,
v.
Drew Doscher, appellant, et al., nominal defendant. (Action No. 1) Michael J. Meyer, etc., plaintiff-respondent, Michael Meagher, et al., nominal plaintiffs-respondents,
v.
148 South Emerson Associates, LLC, defendant, Drew Doscher, appellant; Charles C. Russo, nonparty-respondent. (Action No. 2) Index Nos. 60807/14, 68379/14

          Argued-November 3, 2017

         D54449 M/htr

          Kasowitz Benson Torres LLP, New York, NY (Michael J. Bowe of counsel), for appellant.

          Arnold & Porter Kaye Scholer LLP, New York, NY (James M. Catterson, Margaret A. Rogers, and Stephanna F. Szotkowski of counsel), for respondents in Action No. 1 and plaintiff-respondent and nominal plaintiffs-respondents in Action No. 2.

          Nixon Peabody LLP, Jericho, NY (Seth L. Berman of counsel), for nonparty-respondent in Action No. 2 (adopting the brief filed by the respondents in Action No. 1 and the plaintiff-respondent and the nominal plaintiffs-respondents in Action No.2).

          WILLIAM F. MASTRO, J.P. L. PRISCILLA HALL SANDRA L. SGROI COLLEEN D. DUFFY, JJ.

          DECISION & ORDER

         Appeals from an order and judgment (one paper) of the Supreme Court, Suffolk County (Jerry Garguilo, J.), dated February 19, 2015, an amended order of that court dated September 16, 2015, and two orders of that court, both dated October 1, 2015. The order and judgment, in effect, granted the motion of the plaintiffs in Action No. 1 for summary judgment on the complaint and, in effect, declared that the plaintiffs Michael Meagher and Stephen Smith each hold a 25% ownership interest in 148 South Emerson Partners, LLC, and granted the motion of the plaintiff and the nominal plaintiffs in Action No. 2 to appoint a temporary receiver for 148 South Emerson Associates, LLC. The amended order dated September 16, 2015, insofar as appealed from, denied the motion of Drew Doscher, the defendant in Action No. 1, to vacate so much of the order and judgment as pertained to Action No. 1 and for leave to renew and reargue his opposition to the motion for summary judgment on the complaint in that action. The orders dated October 1, 2015, granted the motions of nonparty Charles C. Russo, the court-appointed temporary receiver in Action No. 2, for interim compensation, and denied the cross motions of Drew Doscher, a defendant in Action No. 2, inter alia, to direct the plaintiffs and the nominal plaintiffs in Action No. 2 to pay the interim compensation sought by the court-appointed temporary receiver.

         ORDERED that the order and judgment is modified, on the law, by deleting the provisions thereof, in effect, granting the motion of the plaintiffs in Action No. 1 for summary judgment on the complaint and, in effect, declaring that the plaintiffs Michael Meagher and Stephen Smith each hold a 25% ownership interest in 148 South Emerson Partners, LLC, and substituting therefor a provision denying that motion; as so modified, the order and judgment is affirmed, without costs or disbursements; and it is further, ORDERED that the appeal from so much of the amended order dated September 16, 2015, as denied that branch of the motion of Drew Doscher, a defendant in Action No. 1, which was for leave to reargue is dismissed, without costs or disbursements, as no appeal lies from an order denying reargument; and it is further, ORDERED that the appeal from so much of the amended order dated September 16, 2015, as denied those branches of the motion of Drew Doscher, a defendant in Action No. 1, which were to vacate so much of the order and judgment as pertained to Action No. 1 and for leave to renew his opposition to the motion for summary judgment on the complaint in that action is dismissed as academic, without costs or disbursements, in light of our determination on the appeal from the order and judgment; and it is further, ORDERED that the orders dated October 1, 2015, are affirmed, without costs or disbursements.

         Four managing members-Michael Meagher, Michael Meyer, and Stephen Smith (hereinafter collectively the plaintiffs), and Drew Doscher-formed two limited liability companies, 148 South Emerson Partners, LLC (hereinafter Emerson Partners), and 148 South Emerson Associates, LLC (hereinafter Emerson Associates). Emerson Partners was formed to "own, lease and manage'' real property located at 148 South Emerson Avenue in Montauk (hereinafter the property). Emerson Associates was formed to "own and manage a restaurant business" on the property known as "The Sloppy Tuna.' Originally, the managing members each held a 25% ownership interest in each company.

         In July 2012, the managing members executed an agreement entitled "Assignment of Units, " pursuant to which Meagher and Smith assigned their respective ownership interests in Emerson Associates to Meyer and Doscher. On December 10, 2012, Meagher and Smith were each paid the sum of $230, 000 by a check drawn on the account of Emerson Associates. The "memo" on both checks stated, "Return on Capital #1.'' Thereafter, a dispute arose as to whether Meagher and Smith had transferred their ownership interests in both Emerson Associates and Emerson Partners to Meyer and Doscher.

         In February 2014, the plaintiffs commenced Action No. 1 against, inter alia, Doscher, seeking a declaration that each of the managing members holds a 25% ownership interest in Emerson Partners. The plaintiffs subsequently moved for summary judgment on the complaint.

         In October 2014, Meyer, individually and derivatively on behalf of Emerson Associates, along with Meagher and Smith as nominal plaintiffs, commenced Action No. 2 against Emerson Associates and Doscher, seeking, inter alia, an accounting of Emerson Associates. The plaintiffs subsequently moved, in that action, to appoint a temporary receiver for Emerson Associates.

         In an order and judgment dated February 19, 2015, the Supreme Court, in effect, granted the plaintiffs' motion in Action No. 1 for summary judgment on the complaint and, in effect, declared that Meagher and Smith each hold a 25% ownership interest in Emerson Partners. In addition, the court granted the plaintiffs' motion in Action No. 2 to appoint a temporary receiver for Emerson Associates. Doscher appeals from the order and judgment.

         Thereafter, the court-appointed temporary receiver filed two separate motions for interim compensation. Doscher filed two separate cross motions, inter alia, to direct the plaintiffs to pay the interim compensation sought by the court-appointed temporary receiver. In two orders, both dated October 1, 2015, the Supreme Court granted the separate motions of the ...


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