CAROLYN E. DEMAREST, J.
Plaintiffs 762 Park Place Realty, LLC ("762 Park Place") and Avraham Lehrer ("Avraham" or "plaintiff") move, by order to show cause, for an order (i) restraining and enjoining defendant Shlomo Lehrer ("Shlomo") from disposing of or transferring the proceeds of the sale of a property known as 762 Park Place, Brooklyn, New York (the "Property"), (ii) restraining and enjoining Shlomo from taking any action on behalf of 762 Park Place, and (iii) restraining and enjoining defendant 762 Park, LLC (the "Purchaser") from disposing of or further transferring the Property. Defendant Shlomo cross-moves for an order, pursuant to CPLR 3211(a)(1), dismissing the complaint based on documentary evidence, and awarding Shlomo reasonable attorneys' fees and imposing sanctions on the plaintiff. The Court granted a temporary restraining order to the plaintiff on November 18, 2014. By order dated December 4, 2014 and on consent of all parties, the temporary restraining order was vacated as to defendant Purchaser only. By stipulation, so ordered by the Court on February 6, 2015, this action was discontinued against all defendants except Shlomo, who is now the only remaining defendant.
BACKGROUND
This action arises from the sale of a commercial building owned by 762 Park Place by Shlomo to the Purchaser. Avraham claims that Shlomo is not a member of 762 Park Place and had no authority to sell the Property. Plaintiff asserts that he is the only member of 762 Park Place and that Shlomo, who is plaintiff's brother, has never been a member of and has never had any interest in 762 Park Place. Plaintiff claims that he formed 762 Park Place in or around March 2003 for the purpose of purchasing the Property, and was assisted in the formation by an attorney, Allan Pullin, Esq. ("Pullin"). Plaintiff further claims that he purchased the Property for approximately $550,000, which he partially funded with his own money, and then spent about $500,000 to renovate the Property.
In or around 2009, plaintiff states that he began experiencing personal issues, which affected his ability to manage the Property and operate his business, AR Dental Supply, Inc., on the Property, and he asked Shlomo to operate the business and manage the Property for him. Avraham states that during this time, he was unable to pay the mortgage on the Property for about ten months and later cured the default by paying $60,000. Plaintiff claims that shortly before filing his order to show cause, he was surprised to discover that the Property had been sold on or about October 27, 2014, and that Pullin represented 762 Park Place in the transaction, even though, as plaintiff maintains, Pullin knew that no interest was ever transferred to Shlomo. Avraham further claims that he discovered two certificates that purport to give an interest in 762 Park Place to Shlomo but asserts that he never signed these documents and his signature was forged on both certificates. The first certificate, dated June 4, 2003, signed by both plaintiff and defendant, certifies that 100 shares, or fifty percent of 762 Park Place Realty, is owned by Shlomo (the "2003 Certificate"). The second certificate, dated January 8, 2008, also signed by both plaintiff and Shlomo, purports to transfer Avraham's interest in 762 Park Place to Shlomo by certifying Shlomo's ownership of 200 membership interests (the "2008 Certificate"). A third certificate, supplied by plaintiff, dated June 4, 2003, evidences plaintiff's ownership of 100 membership interests. Both of the June 4, 2003 certificates bear the handwritten notation "surrender 1/8/08".
In his opposition to the order to show cause, Shlomo asserts that he was a fifty percent owner of 762 Park Place from the date of its formation in 2003 and that Avraham transferred his fifty percent interest in 762 Park Place to Shlomo through the 2008 Certificate. In support, Shlomo annexes his 2008 Federal Income Tax Return, which lists the Property on Schedule E. Shlomo further asserts that he was present at the closing, and that he contributed at least $192,000 of his personal funds to the acquisition of the Property in 2003. In support of this claim, Shlomo annexes a document that purports to be a list of each brother's contribution to the purchase of the Property, which Shlomo claims that Avraham faxed to him on April 14, 2003 (the "Fax Document"). The Fax Document indicates that Avraham's contribution was $119,086.50 and Shlomo's contribution was $191,819. However, this document is unauthenticated and is of no probative value at this time. Shlomo further annexes a personal guaranty executed by him, Avraham, Rosa Lehrer, who is Avraham's wife, and by Shlomo as president of Moshe & David Food Corporation, which guaranteed the mortgage used to fund the purchase of the Property in the principal amount of $560,000 (the "Guaranty"). Shlomo argues that his participation in the financing and purchase of the Property is entirely inconsistent with Avraham's claim that Shlomo never had any interest in 762 Park Place.
Shlomo claims that when Avraham began experiencing marital difficulties, as well as financial problems relating to his business, he approached Shlomo and offered to transfer his fifty percent interest in 762 Park Place if Shlomo would take over the existing mortgage debt and manage the Property. Shlomo asserts that this resulted in the 2008 Certificate, which transferred Avraham's interest in the Property to Shlomo. As evidence of his assertions, Shlomo submits the affidavit of Allan Pullin, Esq., dated November 26, 2014, stating that Shlomo and Avraham were "equal partners" at the time that Pullin assisted them in acquiring the Property. Pullin also states that the 2008 Certificate was prepared in his office and both Avraham and Shlomo signed this document in his presence. Pullin further affirms that he personally wrote the notation regarding surrender on each of the 2003 Certificates.
As additional evidence of his one hundred percent ownership of 762 Park Place, Shlomo states that a foreclosure action was commenced against the Property by First Central Bank in 2010, under index number 10307/2010, which resulted in a stipulation of settlement executed by Shlomo as the managing member of 762 Park Place ("Stipulation of Settlement"). Pursuant to the Stipulation of Settlement, Shlomo agreed to pay a portion of the loan up front and to continue monthly payments on the remainder in order to avoid foreclosure. Shlomo argues that he would have no reason to enter into such an agreement unless he was the one hundred percent owner of 762 Park Place. Shlomo also points to another action currently pending in Kings County, 762 Park Place Realty, LLC v East Park II Holding Co., LLC, index number 502758/2014, in which Avraham submitted a sworn affidavit, dated May 12, 2014, stating that Avraham "was formerly the managing member of 762 Park Place Realty, LLC" (emphasis added).
On March 12, 2015, the Court so ordered a stipulation permitting Ayala Levin ("Ayala"), the sister of Avraham and Shlomo, to interpose an intervention complaint. Ayala claims that she is a fifty percent owner of 762 Park Place based on an agreement signed by the three siblings in 2008 (the "2008 Agreement"). The 2008 Agreement recites that Avraham and Shlomo were each fifty percent owners of 762 Park Place prior to 2008, at which time Avraham surrendered his fifty percent interest to Shlomo. The 2008 Agreement further provides that Shlomo agrees to transfer fifty percent of the ownership to Ayala Levin, who, "[u]pon the demise of Avraham Lehrer . . . shall transfer and assign, without consideration, all of her Membership Units in [762 Park Place] to the Avraham Lehrer Inter Vivos Life Insurance Trust". In another affidavit by Pullin, dated December 11, 2014, annexed to Shlomo's cross-motion to dismiss, Pullin attests that he prepared the 2008 Agreement and that the three siblings signed it in his presence.
DISCUSSION
"When a court rules on a CPLR 3211 motion to dismiss, it must accept as true the facts as alleged in the complaint and submissions in opposition to the motion, accord to plaintiffs the benefit of every possible inference and determine only whether the facts as alleged fit within any cognizable legal theory'" (Whitebox Concentrated Convertible Arbitrage Partners v Superior Well Services, Inc., 20 N.Y.3d 59, 63 [2012], quoting Sokoloff v Harriman Estates Dev. Corp., 96 N.Y.2d 409, 414 [2001]). "[S]uch motion may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co., 98 N.Y.2d 314, 326 [2002]).
Shlomo has submitted a great deal of documentary evidence supporting his contention that Avraham surrendered his entire interest in 762 Park Place in January 2008. Defendant has submitted the 2003 Certificates and the 2008 Certificate, which show that Avraham and Shlomo each owned 100 membership interests of 762 Park Place in 2003 and that Avraham transferred his interest to Shlomo in 2008. The 2008 Agreement recites that Avraham surrendered his fifty percent interest in January 2008. Other documents submitted by Shlomo, including his 2008 Federal tax return and the Stipulation of Settlement executed by him in relation to the foreclosure action brought by First Central Bank in 2010, refute Avraham's claim that he is the sole member of 762 Park Place and that Shlomo has never been a member of or had any interest in 762 Park Place. Moreover, Avraham's sworn affidavit in another action, 762 Park Place Realty, LLC v East Park II Holding Co., LLC, states that he was "formerly" the managing member of 762 Park Place.
Avraham's only response to the documentary evidence is that his signature was forged on the 2003 Certificate and the 2008 Certificate. However, Avraham acknowledges that he signed the 2008 Agreement. In his affidavit in opposition to defendant's motion to dismiss, dated January 23, 2015, Avraham states: "That agreement purports to transfer fifty percent (50%) of the interest in 762 Park Place, LLC to my sister in trust for my children should something happen to me. Apparently, I signed this agreement." Avraham further states in his affidavit that even if his sister does own fifty percent of 762 Park Place, Avraham still retains the remaining fifty percent ownership. However, the 2008 Agreement unambiguously recites that Avraham surrendered his fifty percent ownership in 762 Park Place in 2008, such that Shlomo "presently is the owner of 100% of the outstanding Membership Units". The document that Avraham does not dispute signing directly contradicts Avraham's own assertions and supports the claims of the defendant.
Avraham's bald assertion of forgery is insufficient to create an issue of fact contesting the authenticity of his signature on the 2003 Certificates and the 2008 Certificate (see Banco Popular North America v Victory Taxi Management, Inc., 1 N.Y.3d 381 [2004]; Peyton v State of Newburgh, Inc., 14 A.D.3d 51 [1st Dept 2004]). Avraham claims that the signature on the 2003 and 2008 Certificates does not resemble his signature and points to pre-2008 documents, such as the Guaranty and mortgage agreement, where he signed his name as "Avi Lehrer" in all capital block letters, which clearly differs from his purported signature on the Certificates. To refute this claim, Shlomo annexes a medical consent form, dated August 3, 2007, containing Avraham's signature, which appears similar to the signature on the Certificates. Further, annexed to Pullin's December 3, 2014 affidavit is a copy of Avraham's driver's license, bearing a signature similar to Avraham's purported signature on the Certificates, and which is dissimilar to the all capital printed signature that Avraham claims is his genuine signature. Moreover, the signature on the 2008 Agreement, which Avraham does not dispute signing, is similar to the signature on the Certificates and Avraham's driver's license. Based on these documents, Avraham has failed to raise an issue of fact regarding the authenticity of his signature. As the documentary evidence overwhelmingly refutes plaintiff's allegations of forgery of the Certificates, and in any case, plaintiff's admission to signing the 2008 Agreement renders the claim of forgery on the Certificates irrelevant, the motion to dismiss must be granted.
Plaintiff's motion for a preliminary injunction must be denied because Avraham does not have standing to bring a derivative action on behalf of 762 Park Place. Although members of a limited liability company may bring derivative suits on the LLC's behalf (see Tzolis v Wolff, 10 N.Y.3d 100, 102 [2008]), the documentary evidence conclusively establishes that Avraham was not a member of 762 Park Place at the time he commenced this suit. It is clear that there is no likelihood of success on the merits of Avraham's underlying claim when he does not even have standing to bring the claim and has no interest in 762 Park Place.
Defendant also moves to impose sanctions upon plaintiff Avraham Lehrer and for an award of reasonable attorneys' fees. The authority to impose sanctions is left to the court's discretion (see Landes v Landes, 248 A.D.2d 268, 269 [1st Dept 1998]). Conduct during litigation is sanctionable if it is "completely without merit in law or fact and cannot be supported by a reasonable argument for the extension, modification, or reversal of existing law" or if "it is undertaken primarily to delay or prolong the resolution of litigation, or to harass or maliciously injure another, or it asserts material factual statements that are false" (Mascia v Maresco, 39 A.D.3d 504, 505 [2d Dept 2007]). The Court finds that sanctions are warranted here because it is undisputable that Avraham had surrendered his interest in 762 Park Place prior to bringing this action. The 2008 Agreement clearly states that this is the case, and Avraham does not dispute having signed this document. Therefore, it was frivolous for Avraham to bring the instant action and assert that he was the sole member of 762 Park Place and that Shlomo had no interest in 762 Park Place.
However, the stipulation permitting intervention in this action by Ayala Levin precludes dismissal of the action as to her since her Intervenor Complaint contains her claims of fifty percent ownership and seeks relief against Shlomo, both on her own behalf and derivatively on behalf of 762 Park Place, to recover the proceeds of the sale.
CONCLUSION
Plaintiff's motion for a restraining order and preliminary injunction are denied. The temporary restraining order, dated November 18, 2014, is hereby vacated.
Defendant's motion to dismiss the complaint of Avraham Lehrer is granted. Defendant's motion for sanctions and reasonable attorneys' fees against Avraham Lehrer is also granted. Counsel for defendant shall submit an affidavit, and proper supporting documentation, indicating the reasonable attorney's fees charged in this action within 20 days. Plaintiff may submit a response to defendant's calculation of attorneys' fees within 20 days thereafter.
Counsel for Intervenor Plaintiff Levin and Defendant Shlomo Lehrer shall appear for preliminary conference on May 20, 2015.
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