Mega Personal Lines Inc. Supreme Court Decision

Corporate LawMega Personal Lines Inc. Supreme Court Decision

IN RE: MEGA PERSONAL LINES INC., 

  • Appellant, v. Robert L. HALTON et al., 
  • Respondents. Mega Group Inc., Appellant.
  • Decided: August 01, 2002

Before: CARDONA, P.J., MERCURE, PETERS, CARPINELLO and LAHTINEN, JJ. Tabner, Ryan & Keniry, Albany (Eric N. Dratler of counsel), for Mega Personal Lines Inc., the appellant. De Graff, Foy, Holt-Harris & Kunz L.L.P., Albany (Scott C. Paton of counsel), for Mega Group Inc., the appellant. Ianniello, Anderson & Reily, Clifton Park (Matthew I. Mazur of counsel), for respondents.

The appeal of the Supreme Court, dated October 2, 2001, in Saratoga County, which, in a proceeding under CPLR 5239, inter alia, rejected a motion by respondents Robert L. Halton and Diane Halton to disregard the requisition.

Petitioner initiated this procedure under CPLR 5239 pursuing a decision that certain property was conducted upon by respondents to partly fulfill a decision that respondents kept against Mega Group Inc. were the property of petitioner and not Mega Group. Respondents proceeded to disregard the requisition claiming that the dealing in which Mega Group purported to move its assets to the petitioner was defrauding. Discovering that respondents had driven for overview assessment and that objective points existed, Supreme Court rejected the motion and, thus, called a trial. 

Petitioner appeals.1 “The exact examination applied to the motion for overview assessment is used to specify a particular procedure* * * ” (Matter of Jones v. Marcy, 135 A.D.2d 887, 888, 522 N.Y.S.2d 285 [citations omitted]; see, Matter of Port of N.Y. Auth. v. 62 Cortlandt St. Realty Co., 18 N.Y.2d 250, 255, 273 N.Y.S.2d 337, 219 N.E.2d 797, cert. denied 385 U.S. 1006, 87 S.Ct. 712, 17 L.Ed.2d 544). 

Therefore, if real objective points exist, they must be resolved in a trial (see, CPLR 5239; Matter of American Pride Constr. v. Russ Freeman Excavating, 182 A.D.2d 940, 581 N.Y.S.2d 932). 

In the present request, respondents are resisting an outline decision and, hence, the proof in the document must be considered in the light most advantageous to them (see, Barker v. Kallash, 63 N.Y.2d 19, 23, 479 N.Y.S.2d 201, 468 N.E.2d 39).

Respondents filed a $500,000 counterclaim on Mega Group, a financially unsettled insurance agent, in March 2000. Soon after, in April 2000, Mega Group alleged to sell its assets, but not its disadvantages, to the petitioner. Respondents ultimately received a $441,342 judgment on their counterclaim on Mega Group in October 2000 (Mega Group v. Halton, 290 A.D.2d 673, 736 N.Y.S.2d 444).

Petitioner alleges that its trade with Mega Group was not defrauding since it paid $427,000 to Mega Group. The document shows important objective points concerning the exact payment settled. For instance, a portion of the $127,000 debt owed by Mega Group to its president. Nevertheless, no documents were presented to confirm the debt. Similarly, the assets acquired by the petitioner from Mega Group allegedly contained a cash bank statement of $50,649, which decreased the alleged acquisition expense by the portion in the bank statement. Additionally, it merits citing that the petitioner did not include until 10 days after the deal, it did not acquire an agent’s ownership until December 2000 and, between April 2000 and December 2000, Mega Group resumed to acquire profit sharing and commission expenses that it had alleged of selling to petitioner.2

Moreover, petitioner’s president was an ex-officer of Mega Group. Petitioner’s argument that it is entitled to an overview judgment in its favor is devoid of merit. At the time of the alleged transfer of Mega Group’s assets to the petitioner, a protestation had been declared against Mega Group for $500,000, such a claim resulted in a decision in favor of respondents and the majority of the assessment stays unpaid. The timing of the sale, the relationship of the parties to the sale, and the lack of transparency concerning the real review for the sale are among the host of occasions introducing substantial matters as to whether the sale was defrauding within the purpose of the Debtor and Creditor Law (see, Debtor and Creditor Law §§ 273-a, 276; Matter of Prudential Blake Realty v. Schenectady Indus. Dev. Agency, 255 A.D.2d 622, 679 N.Y.S.2d 453; Blakeslee v. Rabinor, 182 A.D.2d 390, 582 N.Y.S.2d 132, lv. denied 82 N.Y.2d 655, 602 N.Y.S.2d 804, 622 N.E.2d 305).

ORDERED that the order is confirmed, with expenses.

FOOTNOTES

1. Mega Group, although not a party to the proceeding before Supreme Court, moved before this Court to intervene as an interested party and, upon the grant of its motion, it has submitted a brief supporting the position of the petitioner.

2. Since the petitioner was not yet licensed to do business, Mega Group collected the money, deposited it in its account, and then remitted the same to the petitioner. This fund supplied a source for respondents’ execution.

LAHTINEN, J. CARDONA, P.J., MERCURE, PETERS and CARPINELLO, JJ., concur.

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