ORDERED that this action is restored to the court's calendar pursuant to a stipulation dated May 14, 2010; and it is further

ORDERED that the plaintiff is directed to serve a copy of this order on the Calendar [*2]Department; and it is further

ORDERED that the branch of the motion by the plaintiff which is for leave to amend the complaint to add Georgios Stamou, a/k/a George Stamou, as a defendant is granted without opposition; and it is further

ORDERED that the plaintiff is directed to serve and file an amended complaint within 30 days after the date of entry of this order; and it is further

ORDERED that the plaintiff is directed to serve Georgios Stamou, a/k/a George Stamou, personally with a supplemental summons and amended complaint within 30 days after the date of entry of this order; and it is further

ORDERED that the caption shall hereafter read as follows:

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF SUFFOLK

_____________________________________x

GENEVIEVE ROSSIELLO,

Plaintiff,

-against-

DIVINE MEDIA GROUP, LLC, and

GEORGIOS STAMOU, a/k/a

GEORGE STAMOU,

Defendants.

_____________________________________x; and it is further

ORDERED that the branch of the motion by the plaintiff which is for partial summary judgment is granted as to the fourth cause of action for conversion against the defendant Divine Media Group, LLC, on the issue of liability only; and it is further

ORDERED that the branch of the motion by the plaintiff which is for partial summary judgment is otherwise denied; and it is further

ORDERED that the parties are directed to appear for a status conference, which shall be held on November 14, 2013 at 9:45 a.m., Supreme Court, Courtroom 7, Arthur M. Cromarty Criminal Court Building, 210 Center Drive, Riverhead, New York 11901. [*3]

On March 18, 2010, the court granted the plaintiff's application for an order of default on the record, and the matter was marked "disposed." Pursuant to a stipulation dated May 14, 2010, the parties agreed to vacate the defendant's default and to restore the matter to the court's calendar. The court subsequently conferenced the matter, but it continued to be marked as "disposed" in the court's computer system. The error was not brought to the court's attention until the plaintiff made this motion. Accordingly, the matter is hereby restored to the court's calendar, and the parties are directed to appear for a status conference.

The plaintiff and the defendant LLC entered into an oral agreement to create a film based on a script provided by the plaintiff. The defendant LLC agreed to produce the film, and the plaintiff agreed to finance it. Georgios Stamou has a 50% ownership interest in the defendant LLC, and he is its only employee. The plaintiff alleges that she gave the defendant LLC $328,000, none of which was used to produce the film and none of which has been returned to her, despite her demands therefor. The plaintiff commenced this action against the LLC in 2009, alleging causes of action to recover damages for unjust enrichment, fraud, breach of fiduciary duty, and conversion. Also in 2009, Stamou filed for bankruptcy. The plaintiff, who was not scheduled as a creditor in Stamou's bankruptcy petition, sought to file a late claim in the bankruptcy case. Pursuant to a so-ordered stipulation dated May 10, 2011, the parties agreed to allow the Bankruptcy Court to determine whether the defendant LLC's corporate veil should be pierced and whether Stamou should be held personally liable for the LLC's indebtedness to the plaintiff, if any. On February 28, 2012, the Bankruptcy Court held an evidentiary hearing on those issues at which Stamou, the plaintiff, and her husband testified.

In an order dated January 17, 2013, the Bankruptcy Court found that the defendant LLC had converted the plaintiff's funds and pierced the corporate veil to hold Stamou personally liable for the LLC's obligations to the plaintiff. The Bankruptcy Court found that Stamou was, for all practical purposes, the sole decision-maker for the LLC; that he dominated and controlled the LLC; and that he abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against the plaintiff.The Bankruptcy Court found that Stamou had transferred $143,811 of the plaintiff's funds from the LLC's business checking account to his personal savings account and that he had returned only $32,345 to the LLC's account, leaving $111,466 that was neither returned nor accounted for. The Bankruptcy Court also found that Stamou had used the plaintiff's money for his own personal benefit, but declined to make any findings on the propriety of any individual expenditures by Stamou in the absence of a written agreement between the parties regarding exactly how the plaintiff's funds could be used.

The plaintiff moves to add Stamou as a defendant in this action and for partial summary judgment against both Stamou and the defendant LLC based on the Bankruptcy Court's findings. The plaintiff contends that the Bankruptcy Court's decision establishes that Stamou converted at least $111,466 of the plaintiff's funds. The plaintiff, therefore, contends that she is entitled to judgment as a matter of law on the issue of liability against both Stamou and the defendant LLC, to an immediate award of damages in the amount of $111,466, and to a hearing on any additional damages. [*4]

Stamou has submitted an affidavit on behalf of himself and the defendant LLC opposing only that branch of the motion which is for partial summary judgment. Stamou is not currently a party to this action and the court will not have jurisdiction over him until he is personally served pursuant to CPLR 308. Accordingly, the branch of the plaintiff's motion which is for partial summary judgment against Stamou is denied as premature.

The equitable doctrine of collateral estoppel is based upon the general notion that it is not fair to permit a party to relitigate an issue that has already been decided against it (see, Matter of Juan C. v Cortines, 89 NY2d 659, 667). Its essential ingredients are, first, that the identical issue necessarily must have been decided in the prior action and be decisive of the present action and, second, that the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination (Id.). Collateral estoppel is not limited to parties, however. It also applies to those in privity with the parties in the prior action (see, Casa de Meadows Inc. [Cayman Is.] v Zaman, 76 AD3d 917, 922). A rigid test is not appropriate in evaluating questions of privity, which requires a flexible analysis of the facts and circumstances of the actual relationship between the party and nonparty in the prior litigation (see, Syncora Guar. Inc. v J.P. Morgan Sec. LLC, _____ AD3d _____, 2013 NY Slip Op 05602). Corporate affiliation, without more, is insufficient to establish privity (Id.). However, allegations that two parties acted as a single entity without regard to corporate formality to perpetrate a fraud are sufficient to support a finding of privity for res judicata and collateral estoppel purposes (Id.; see also, UBS Sec. LLC v Highland Capital Mgt. L.P., 93 AD3d 489, 490).

The court finds that, although the defendant LLC was not a party to the Bankruptcy Court proceeding, the record reflects that it is in privity with Stamou, the debtor in that proceeding. The Bankruptcy Court determined, after a full evidentiary hearing at which Stamou testified, that he and the defendant LLC operated as a single entity to commit the tort of conversion by transferring the plaintiff's funds from the LLC's business account to Stamou's personal account without the plaintiff's authorization. The plaintiff's fourth cause of action in this proceeding is a cause of action against the defendant LLC for conversion. Thus, the Bankruptcy Court decided an issue that is decisive of the present action, and Stamou, who is in privity with the defendant LLC, had a full and fair opportunity to contest that determination in the Bankruptcy Court. Accordingly, the court finds that collateral estoppel applies to the plaintiff's conversion claim and grants summary judgment against the defendant LLC on the issue of liability for conversion.

Stamou and the defendant LLC correctly contend the Bankruptcy Court made no findings on the amount of their liability to the plaintiff. Contrary to the plaintiff's contentions, the Bankruptcy Court did not find that Stamou had converted at least $111,466 of the plaintiff's funds. The Bankruptcy Court found that $111,466 was taken from the LLC's business account and used by Stamou for his own personal benefit, but explicitly refrained from expressing an opinion about the propriety of any individual expenditures by Stamou:

It is clear that [Stamou] and [the plaintiff] disagree over whether each expenditure...was legitimate and authorized. However, due to the absence of any written agreement between the [*5]parties as to exactly how [the plaintiff's] funds could be used, this Court refrains from making a determination as to whether each expense was appropriate and legitimate. The Court is not making any finding as to the validity of individual expenses. The issue at this point is whether the [defendant LLC] was dominated such that the corporate veil should be pierced. Since funds were commingled between personal and business accounts with no apparent legitimate business reason, this factor weighs heavily in favor of piercing the corporate veil.

For the foregoing reasons, the Court finds that the corporate veil should be pierced and [Stamou] is liable for [the defendant LLC's] obligations to [the plaintiff]. This Memorandum Decision does not make any findings as to the amount of [the plaintiff's] claim or whether the claim should be discharged. Having determined that [Stamou] is liable for [the defendant LLC's] obligations to the [the plaintiff], [the plaintiff] shall be entitled to file a proof of claim in this case, to which the debtor may object as to the amount.

In view of the foregoing, the court finds that there are questions of fact on the issue of damages. Accordingly, the motion is denied insofar as the plaintiff seeks an immediate award of damages in the amount of $111,466. The parties are directed to proceed to trial on the remaining issues and the issue of damages.

Dated:September 20, 2013

J.S.C.