Wendy Ull, as Trustee of the Jeffrey Ull 2009 Management Trust, Plaintiff-Appellant,
Royal Car Park LLC, et al., Defendants-Respondents.
DelBello Donnellan Weingarten Wise & Wiederkehr, LLP,
White Plains (Peter S. Dawson of counsel), for appellant.
Gambrell & Russell, LLP, New York (Donald Rosenthal of
counsel), for Royal Car Park LLC, Fiesta Car Park LLC, Sharp
Car Park LLC, Paramount Car Park LLC, Sunny Car Park LLC,
Crest Car Park LLC, Chelsea Car Park LLC, Noble Car Park LLC,
Richard Ull and Jennifer Ull, respondents.
Rosenberg Calica & Birney LLP, Garden City (John S.
Ciulla of counsel), for Jeffrey Ull, respondent.
Richter, J.P., Gische, Gesmer, Kern, GonzÃ¡lez,
Supreme Court, New York County (John J. Kelley, J.), entered
on or about September 26, 2018, which granted defendants'
motions for summary judgment dismissing the complaint in its
entirety pursuant to CPLR 3212, unanimously modified, on the
law, to deny the motion as the claim for an accounting
against defendants Richard Ull and Jennifer Ull, and
otherwise affirmed, without costs.
claims that distributions from the defendant LLCs were
required to be paid in one-third shares to her children,
defendants Richard Ull and Jennifer Ull, and to the Jeffrey
Ull 2009 Management Trust (Trust), of which her third child,
defendant Jeffrey Ull, was the beneficiary, and that instead,
Richard and Jennifer, who manage the LLCs, diverted
distributions from the Trust in order to pay Jeffrey directly
or to pay other individuals on his behalf.
court properly granted summary judgment dismissing the claim
of breach of fiduciary duty against defendants Richard and
Jennifer. They established prima facie entitlement to summary
judgment by submitting evidence that distributions paid to
the Trust were comparable to those paid to Richard and
Jennifer, that certain nonequal distributions were made to
account for repayment of loans made by Jennifer and the
Trust, and that other characterizations of income or funds
were based on their accountant's advice and tax concerns.
They also averred that Jeffrey did not receive any payments,
directly or through other individuals. The business judgment
rule "bars judicial inquiry into actions of corporate
directors taken in good faith and in the exercise of honest
judgment in the lawful and legitimate furtherance of
corporate purposes" (Auerbach v Bennett, 47
N.Y.2d 619, 629 ). In seeking to rebut defendants'
prima facie case, and to overcome the business judgment rule,
plaintiff cited certain discrepancies in the financial
documents, but those, without more, did not raise any triable
issue whether Richard or Jennifer acted in bad faith and/or
diverted funds from the Trust to Jeffrey directly or to
others on his behalf.
light of the foregoing, the claim against Jeffrey for aiding
and abetting breach of fiduciary duty also was properly
dismissed (Kaufman v Cohen, 307 A.D.2d 113, 125 [1st
Dept 2003]), as was the claim of conversion against all
defendants (Lemle v Lemle, 92 A.D.3d 494, 497 [1st
Dept 2012]; see Thyroff v Nationwide Mut. Ins. Co.,
8 N.Y.3d 283, 288-289 ).
court also properly dismissed the accounting cause of action
against Jeffrey. There is no evidence that Jeffrey, who did
not manage the LLCs, has any fiduciary relationship to
plaintiff (Saunders v AOL Time Warner, Inc., 18
A.D.3d 216, 217 [1st Dept 2005]; see Unitel Telecard
Distrib. Corp. v Nunez, 90 A.D.3d 568, 569 [1st Dept
2011]). Regarding Richard and Jennifer, they owe the Trust
fiduciary obligations and consequently, the Trust has a right
to an accounting. The trustee need not show that she does not
have an adequate remedy at law (see Mullin v WL Ross
& Co. LLC, 173 A.D.3d 520');">173 A.D.3d 520 [1st Dept 2019]
the court properly concluded that there was no basis to deny
summary judgment on the ground that discovery was not
complete (CPLR 3212[f]; Frierson v Concourse Plaza
Assoc., 189 A.D.2d 609, 610 [1st Dept 1993]). Her vague
allegations that her children colluded in order to pay
Jeffrey directly rather than pay the Trust, of which she is
the trustee, do not support a request for disclosure pursuant
to CPLR 3212(f) (Citibank, ...