The following papers numbered _ to _ were read on these motions (Seq. No. 4) noticed on _ and duly submitted as No.on the Motion Calendar of _
Sequence No. 3 Doc. Nos.
Notice of Motion — Exhibits and Affidavits Annexed 73-75
Cross Motion — Exhibits and Affidavits Annexed
Answering Affidavit and Exhibits, Memorandum of Law 76-80 81
Reply Affidavit
Upon the foregoing papers, the motion listed above is decided in accordance with the annexed decision and order.
In this foreclosure action, an Order to Show Cause with Restraining Notice was filed with this Court by Sabit Kajtazi to pierce the corporate veil of 3254 Cambridge Realty, LLC (“the LLC”) in order to satisfy a Judgment held by Sabit Kajtazi with surplus funds on deposit with the County Clerk in respect to this matter and restrain the disbursement of said surplus funds pending the outcome of this motion to pierce the corporate veil.
Claimants Sofe Krasniqi, the LLC and Defendant Rifat Krasniqi submitted opposition to said Order to Show Cause.
Property address 3254 Cambridge Avenue, Bronx NY 10463, was sold at auction on November 19, 2018 in Supreme Court, Bronx County pursuant to Judgment of Foreclosure and Sale entered on August 20, 2018 in the Supreme Court of the State of New York, County of Bronx for $760,000.00.
Notice of Claim to surplus monies by Sabit Kajtazi was filed on November 11, 2019. Mr. Kajtazi in his Notice of Claim attaches a Confession of Judgment dated March 22, 2017 against Debtor Rifat Krasniqi, 3254 Cambridge Avenue, Bronx New York 10463 and Judgment against Rifat Krasniqi, 3254 Cambridge Avenue, Bronx NY filed April 3, 2017 with Clerk of the Court, Bronx County in the sum of $378,480.00. Said Confession of Judgment and Judgment are against Rifat Krasniqi as an individual and not against the LLC the previous owner of the foreclosed property.
Mr. Kajtazi seeks to pierce the corporate veil of the LLC and for a restraining order on the surplus monies which are the subject of this action. Judgment Creditor asserts that Mr. Krasniqi is the sole member or shareholder of the LLC, that he exercises complete control over the entity, and the LLC is an alter ego to himself.
Ms. Krasniqi maintains that she and her husband purchased the subject property in 2000 as husband and wife. In 2006, they then transferred the propertys ownership to the LLC, an entity which was to be co-owned by them equally. The property went into foreclosure and was eventually sold at a foreclosure sale in 2019. Surplus funds were available after the sale of the property, and Ms. Krasniqi filed a Notice of Claim for her share of the funds.
Claimant, the LLC and Defendant Rifat Krasniqi maintain that Rifat Krasniqi and Sofe Krasniqi are still 100% owners of the LLC. It is therefore their contention that the Judgment Creditors Order to Show Cause seeking the equitable relief of piercing the corporate veil, and other additional relief be denied in its entirety.
A plaintiff seeking to pierce the corporate veil must demonstrate that a court in equity should intervene because the owners of the corporation exercised complete domination over the corporation in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a wrong that resulted in injury to the plaintiff (see Love v Rebecca Dev., Inc., 56 AD3d 733, 868 N.Y.S.2d 125 [008]). A plaintiff seeking to pierce the corporate veil bears a heavy burden (see ABN AMROBank, N.V. v MBIA Inc., 17 NY3d 208, 235, 928 N.Y.S.2d 647, 952 N.E.2d 463). Here, judgment creditor did not establish that piercing the corporate veil is warranted.
Judgment creditors conclusory assertions that Rifat Krasniqi is the sole member of the LLC, and that Rifat Krasniqi exercises complete control of the entity, is not supported by evidence.
Accordingly, it is hereby,
ORDERED that the movants motion to pierce the corporate veil and restraining the disbursement of surplus funds is denied in its entirety.
This is the Decision and Order of the Court.
Adrian N. Armstrong, J.