The plaintiffs move for summary judgment on their complaint and dismissing the defendant's claims against them. The plaintiffs move separately for an order directing a valuation proceeding, an expedited discovery schedule and the entry of a confidentiality order. Defendant Malfitano cross-moves to compel discovery and for a limited order of confidentiality. The defendant moves separately for an order vacating a judgment entered February 15, 2008 and for an order directing reimbursement of referee's fees in the sum of $2,223.00 along with attorney's fees. Defendant Malfitano also moves for an order granting him leave to amend his verified answer and for partial summary judgment. The plaintiffs move for an order directing that the affidavit of Jennifer L. Chunias be filed under seal.

After submission of the plaintiffs' motion to seal, the defendant's counsel advised by correspondence that the defendant had no objection to the motion. There being no opposition, the plaintiffs' motion is granted, which order shall specifically include the confidential affidavit of Jennifer L. Chunias dated September 1, 2009; the confidential affidavits of Marc Malfitano dated July 23, 2009 and September 14, 2009 respectively; and the defendant's memorandum of law dated July 23, 2009. The court has signed an order sealing those affidavits simultaneous with the execution of this decision and order.

Defendant Malfitano seeks leave to amend his pleading to add three new counterclaims. The plaintiffs commenced this action on or about January 11, 2007. Defendant Malfitano filed and served a verified answer and counterclaims on or about January 16, 2007. The plaintiffs subsequently moved for leave to amend their verified complaint, which leave was granted. The defendant served a verified answer with counterclaims on or about January 8, 2008. The plaintiffs served a reply to the counterclaims on or about January 29, 2008. On or about February 18, 2008, the defendant served an amended verified answer to the amended verified complaint. This included cross-claims against the partners of Poughkeepsie Galleria Company. On March 10, 2008, the plaintiffs and the Pyramid co-defendants served a reply. In the interim, the Supreme Court, Appellate Division, Second Judicial Department issued a decision and order dated April 21, 2009. The defendant now seeks leave to amend his answer apparently to add [*2]three new counterclaims.

The defendant has failed to provide a copy of the proposed amended pleadings. Based on the grounds asserted by defendant, the proposed additional claims are palpably insufficient and patently devoid of merit. (Lucido v. Mancuso, 49 AD3d 220, 230 [2d Dept. 2008].) Therefore, it is ordered that defendant Malfitano's motion for leave to amend his pleading is denied.

It is well settled that in order "to obtain summary judgment, it is necessary that the movant establish his or her cause of action or defense sufficiently to warrant the court as a matter of law in directing judgment' in his or her favor (CPLR 3212[b]), and he or she must do so by tender of evidentiary proof in admissible form." (Friends of Animals, Inc. v. Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979].) Parties opposing a motion for summary judgment are obliged to lay bare their evidentiary proof in admissible form in order to show that their allegations are capable of being established at a trial. (Albouyeh v. County of Suffolk, 96 AD2d 543 [2d Dept. 1983] aff'd 62 NY2d 681 [1984].) Bare conclusory allegations, expressions of hope or unsubstantiated assertions are insufficient. (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980].)

The plaintiffs' complaint seeks a declaratory judgment that defendant Malfitano's purported dissolution of the Poughkeepsie Galleria Company was a "wrongful" dissolution and that the partnership may continue its business under New York Partnership Law. The plaintiffs also allege that defendant Malfitano breached the partnership agreement by his conduct and breached his fiduciary duty to the partnership. The complaint alleges that defendant Malfitano breached a covenant of good faith in fair dealing and that he was guilty of tortious interference with the partnership's prospective business advantage. The complaint also asserts a cause of action for trade libel. Defendant Malfitano has filed and served an amended verified answer to the complaint, which contains seven counterclaims against the plaintiffs which are also denominated as cross-claims against the Pyramid co-defendants. The defendant's first counterclaim asserts that the partnership was effectively and appropriately dissolved by his actions. The second counterclaim generally asserts that the partnership has been inappropriately conducting business when it should be winding up its affairs pursuant to dissolution. The third counterclaim contends that a receiver should be appointed to supervise wrapping up the affairs of the corporation. The fourth counterclaim asserts that the court must dissolve the partnership. The fifth counterclaim demands compensation from the partnership. The sixth counterclaim alleges a breach of fiduciary duty based on the assertion that the partnership has excluded Malfitano from its business. The seventh counterclaim asserts the same allegation as against the Pyramid co-defendants.

In a decision and order dated May 29, 2008, this court granted the plaintiffs' motion for summary judgment on counts one and two ^[FN1] of their amended complaint and dismissed Malfitano's first, second and fourth counterclaims. That decision and order was affirmed by the Supreme Court, Appellate Division, Second Judicial Department in a decision and order dated April 21, 2009.

On this application, the plaintiffs have established that they are entitled to judgment as a [*3]matter of law dismissing each of defendant Malfitano's seven counterclaims/cross-claims set forth in his amended verified answer. The defendant has failed to present any evidence which would establish that there are triable issues of fact. Therefore, it is ordered that the motions by the plaintiffs and the Pyramid co-defendants are granted and each of defendant Malfitano's counterclaims/cross-claims is dismissed. It is further ordered that defendant Malfitano's motion for summary judgment is denied.

In its decision and order dated April 21, 2009, the appellate division remitted the matter to this court:

"for further proceedings on the issue of damages on the second cause of action and the entry thereafter of a judgment, inter alia, declaring that the defendant wrongfully dissolved the Poughkeepsie Galleria Partnership."

Because of the extensive motion and appellate practice in this action since its inception, the parties have been unable, or unwilling, to conduct meaningful discovery and the court has not been in a position to supervise discovery. While neither attorney has submitted an affirmation of good faith effort as required by 22 NYCRR §202.7, the incredibly litigious nature of the parties as demonstrated by the history of this action precludes the possibility of any good faith effort to resolve even the simplest dispute. After wading through the respective recriminations proffered by the parties on these motions, the court has determined that the litigants accidentally agree on the need for a confidentiality order governing any discovery in this action. While they disagree on the scope of discovery, the parties each seek to compel discovery from the other. Under the circumstances presented, the court finds that it is necessary and appropriate to protect the confidentiality of the items which will be the subject of discovery in this action. The parties have submitted proposed confidentiality orders. The court has determined that the plaintiffs' proposed order thoroughly addresses the respective concerns of the parties and has executed the same simultaneous with this decision and order. Therefore, it is ordered that the parties shall simultaneously exchange on January 22, 2010 the following documents:

1.Financial statements and/or tax returns of the partnership for the years 2003 through and including 2006;

2.All documents reflecting the partnership's annual operating statements and cash flow for the years 2003 through and including 2006;

3.Any appraisals or valuations of the partnership prepared between January 1, 2003 and November 24, 2006;

4.All documents sufficient to show plaintiffs' calculation of damages sustained by the plaintiffs as the result of the defendants' wrongful dissolution; and,

5.All documents supporting the plaintiffs' claims for damages.

It is further ordered that the plaintiffs provide the defendant's counsel with copies of all expert reports regarding valuation and damages on or before January 22, 2010 and the defendant [*4]shall serve his expert reports on or before February 26, 2010.

It is ordered that all depositions will be conducted in the City of Poughkeepsie and shall be completed on or before March 12, 2010.

By decision and order dated April 21, 2009, the Appellate Division, Second Department denied an award of costs and disbursements which had already been reduced to judgment and directed the plaintiffs to pay one half of the referee's fees in the amount of $2,223.00. Defendant Malfitano avers that plaintiffs have failed to comply with that order. There being no opposition, it is ordered that the Dutchess County Clerk shall vacate a judgment against defendant Malfitano entered on February 15, 2008 in the amount of $38,366.72. It is further ordered that plaintiffs are directed to remit the sum of $2,223.00 to defendant Malfitano within fifteen days of the date of this order.

The parties are directed to appear for a compliance conference on April 20, 2010 at 10 a.m. Adjournments are only granted with leave of the Court.

The foregoing constitutes the decision and order of the Court.

Dated:Poughkeepsie, New York

December 14, 2009

ENTER

HON. JAMES D. PAGONES, A.J.S.C.