| O'Donnell v Barnett |
| 2013 NY Slip Op 50599(U) [39 Misc 3d 1213(A)] |
| Decided on April 17, 2013 |
| Supreme Court, Dutchess County |
| Pagones, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
John O'Donnell,
derivatively on behalf of DDFM, LLC, Plaintiff,
against Denise Barnett, Defendant. |
The plaintiff moves for an order permitting him to rescind his bond and withdraw the funds deposited with the Dutchess County Clerk. No opposition has been submitted to the plaintiff's application.
Pursuant to a decision and order dated July 7, 2011, this court granted the plaintiff's restraining order and required the plaintiff to issue an undertaking in the amount of $250,000.00. Upon application by the plaintiff, the undertaking was subsequently reduced to $75,000.00. The plaintiff now asserts that the defendant has filed for bankruptcy protection and that the temporary restraining order is no longer needed as a result of the automatic stay. Consequently, the plaintiff requests the release of his undertaking.
It has been held that "the purpose and function of an undertaking given by a plaintiff pursuant to the provisions of CPLR 6312 (subd [b]), prior to the granting of a preliminary [*2]injunction, is to reimburse the defendant for damages sustained if it is later finally determined that the preliminary injunction was erroneously granted." (Margolies v. Encounter, Inc., 42 NY2d 475, 477 [1977].) Because the undertaking is a defendant's basis for damages, discharging the undertaking without deciding the issue of the plaintiff's liability upon the undertaking has been held to be error. (2339 Empire Mgt., LLC v. 2329 Nostrand Realty, LLC, 71 AD3d 998 [2nd Dept. 2010]; citing Schenectady Chems. v. Flacke, 113 AD2d 168 [3rd Dept. 1985]; 13 Weinstein-Korn-Miller, NY Civ Prac., ¶ 6312.04).
Notwithstanding the automatic bankruptcy stay and the plaintiff's assertion that there is no longer any need for a temporary restraining order, there has been no final determination as to whether the plaintiff is entitled to injunctive relief. Therefore, the plaintiff's motion is denied without prejudice.
The Court read and considered the following documents upon this application:
PAGES NUMBERED
1.Notice of Motion.........................1-2
Affirmation-Szalkiewicz.............1-2
Exhibit.............................A
The foregoing constitutes the decision and order of the Court.
Dated:Poughkeepsie, New York
April 17, 2013
ENTER
HON. JAMES D. PAGONES, A.J.S.C.