The following papers and the attachments and exhibits thereto have been read on this motion:

Notice of Motion1

Notice of Motion2

Notice of Cross Motion3

Memorandum of Law in Support of Motion4

Defendants' Memorandum of Law in Support

of Motion and in Opposition to Cross Motion5

Plaintiff's Memorandum of Law in Support and

Opposition6

Reply Memorandum7

Plaintiff's Reply Memorandum8

Introduction

In this action for a declaratory judgment, defendant Zhang Fuan Wong moves (mot. seq. #009), pursuant to CPLR 3212, Limited Liability Company Law § 607 and Judiciary Law § 130-1.1, for an order: (1) dismissing the complaint, with prejudice; (2) granting defendant Wong fees and costs of this motion; and (3) sanctioning the plaintiff and its attorneys for frivolous conduct and awarding judgment in favor of defendant Wong in the amount of $70,709.86. Defendant Alan Chu Yu Mung (also sometimes referred to as Alan Chu Ya Mung) and 44 W 37 Street, LLC ("44 LLC") moves (mot. seq. # 010), pursuant to CPLR 3212, for an order granting summary judgment dismissing the complaint.

Plaintiff, Born to Build LLC, cross moves (mot. seq. #011), for an order: (1) pursuant to CPLR 3212(b), granting partial summary judgment dismissing defendants' counterclaim; and (2) granting permission to serve and file an amended complaint. The motions and the cross motion are decided as set forth herein.

Factual and Procedural Background

On May 24, 2011, the plaintiff obtained a default judgment against defendant Ibrahim Saleh in the amount of $3,563,307.58, in an action entitled Born To Build LLC v Saleh, et. al., [*2]Supreme Court, Nassau County, Index No. 2345/2011. Believing that defendant Saleh had a membership interest in defendant 44 LLC, the plaintiff issued an Execution with Notice to Garnishee to 44 LLC in an effort to enforce the default judgment against Saleh. Saleh's interest in 44 LLC was purportedly sold to the plaintiff at a marshal's sale on June 27, 2011.

On June 28, 2011, the plaintiff commenced this action seeking a declaratory judgment that the plaintiff is the sole owner and member of 44 LLC, or the owner of such lesser membership interest in 44 LLC as the court determines to have belonged to defendant Saleh as of the time of the marshal's sale of that interest on June 27, 2011. Defendants Wong, Mung and 44 LLC served and filed an answer containing a counterclaim asserting that the plaintiff's complaint is frivolous and sanctionable. The plaintiff served a reply to the counterclaim.

Defendants Mung and 44 LLC previously moved for summary judgment dismissing the plaintiff's complaint on the grounds that the execution and levy were not properly served on defendant 44 LLC and that the sale was not properly advertised, thus invalidating both the levy and sale of defendant Saleh's purported interest in defendant 44 LLC to the plaintiff. By order dated October 7, 2013, this court denied that motion for summary judgment, holding that defendants Mung and 44 LLC failed to establish entitlement to judgment as a matter of law on the limited jurisdictional issue presented.

Defendants Wong, Mung and 44 LLC now move for summary judgment dismissing the complaint, arguing that the plaintiff has failed to state a claim for which relief can be granted because Saleh did not own a membership interest in 44 LLC, and even if he did, the plaintiff may not obtain such a membership interest in a limited liability company.

Although defendants Mung and 44 LLC previously moved for summary judgment, this court may consider defendants' instant motions for summary judgment. While multiple summary judgment motions in the same action should be discouraged in the absence of a showing of newly discovered evidence or other sufficient cause, a subsequent summary judgment motion may be properly considered when it is substantively valid and when the granting of the motion will further the ends of justice while eliminating an unnecessary burden on the resources of the courts (Valley Natl. Bank v INI Holding, LLC, 95 AD3d 1108 [2d Dept 2012]). The respective motions for summary judgment made by defendants Wong, Mung and 44 LLC herein are substantively valid and shall serve to eliminate an insupportable cause of action.

According to the terms of the Operating Agreement for defendant 44 LLC, 44 LLC is a member managed limited liability company which owns and manages the real property known as 44-46 West 37th Street, New York, New York. The Operating Agreement, dated March 5, 2010, lists defendant Saleh as the registered agent (Operating Agreement, p. 12) and general manager (Operating Agreement, p. 18), as well as a member holding a 30% interest in defendant 44 LLC (Operating Agreement, p. 31). Defendants Mung and Wong are listed in the Operating Agreement as the other members of 44 LLC (Operating Agreement, p. 31). However, a Modification Agreement, dated April 1, 2011, purportedly modifies the Operating Agreement by [*3]removing defendant Saleh as a member and as manager of defendant 44 LLC, leaving defendants Mung and Wong as the sole members of 44 LLC, each with a 50% interest in the limited liability company.

The moving defendants argue that assuming, arguendo, Saleh did have a membership interest in 44 LLC at the time of the levy and sale on June 27, 2011, the plaintiff may not obtain such an interest. CPLR 5201(b) provides, in relevant part, that a money judgment may be enforced against any property which could be assigned or transferred. The Operating Agreement for 44 LLC provides that membership interests in 44 LLC may not be voluntarily transferred (Operating Agreement, p. 22). However, even if Saleh's purported interest in 44 LLC were deemed to be transferable or assignable despite this provision in the Operating Agreement, the plaintiff's interest as an assignee would be limited to the assignor's share of the profits and losses of 44 LLC.

The Court's Determination

Section 603(a) of the Limited Liability Company Law provides that except as provided in the operating agreement, a membership interest in a limited liability company is assignable in whole or in part, but the only effect of an assignment of a membership interest is to entitle the assignee to receive the distributions and allocations of profits and losses to which the assignor would be entitled.

Section 607 of the Limited Liability Company Law provides that:

(a) On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the membership interest of the member with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the membership interest. This chapter does not deprive any member of the benefit of any exemption laws applicable to his or her membership interest.

(b) No creditor of a member shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the limited liability company.

As previously cited by this court in its October 7, 2013 order in this matter, in Boyce v Willner (2013 WL 358604 [Sup Ct, New York County 2013]), a judgment creditor moved pursuant to CPLR 5225, 5233 and 5234 for an order directing the judgment debtor to turn over title to its ownership interest in a limited liability company and directing the sale of the shares or title and distribution of the proceeds to the judgment creditor up to the amount of his judgment. Citing Limited Liability Law Section 607, Hon. Charles E. Ramos held that the statute did not provide for a turnover of the judgment debtor's membership interest itself and that the judgment creditor could not be forced upon the limited liability company as a member. The judgment creditor was directed to apply for alternative relief, such as provided in Limited Liability [*4]Company Law § 607.

The plaintiff argues that section 607 of the Limited Liability Company Law is not an exclusive remedy and that Boyce v Willner (supra) should not be followed to the extent that it suggests to the contrary. In support of this position, the plaintiff relies upon Hirtenstein v Largotta (2011 WL 3565811 [Sup Ct, New York County 2011]), where, upon default, the court granted a judgment creditor's request for the turnover of documents representing the judgment debtor's interests in several limited liability companies so that the judgment creditor could effectuate the turnover of the judgment debtor's property and ultimately enforce its judgment. The fact that the decision in that matter was rendered on default and was limited to document turnover limits the applicability of that decision to the instant matter. The plaintiff further relies upon 3 West 16th Street, LLC v Ancona (2013 WL 5459456 [Sup Ct, New York County 2013]), a decision rendered in a fraudulent conveyance action, which recited in dicta that a creditor may be able, in rare circumstances, to foreclose on a member's interest in a limited liability company and obtain more than a mere assignment. Given the context of that decision, its holding is of limited utility herein.

The plaintiff's reliance upon comparisons to the Partnership Law to justify a levy and sale of a membership interest in a limited liability company is unavailing as limited liability companies do not fall within the ambit of the Partnership Law and the existence and character of partnerships and limited liability companies are statutorily dissimilar (Matter of 1545 Ocean Ave., LLC, 72 AD3d 121 [2d Dept 2010]).

A plain reading of Sections 603(a) and 607 of the Limited Liability Company Law make it clear that, at best, a creditor, such as the plaintiff, may only obtain an interest in a member's share of the profits and losses of a limited liability company, not the membership interest itself. Accordingly, the relief sought by the plaintiff in its complaint is legally unattainable and its cause of action for a declaration that it has a membership interest in 44 LLC—the sole cause of action in the complaint, must be dismissed.

In view of the foregoing, the branch of the cross motion to amend the complaint, is denied. It is additionally noted that the proposed amended pleading annexed to the cross motion is in the form of a complaint and not a special proceeding as contemplated by section 607 and otherwise contains the same defective declaratory judgment cause of action which the court has determined to be without any merit.

The branch of the cross motion seeking dismissal of the defendants' counterclaim, which asserts that plaintiff's complaint is frivolous and sanctionable, is granted, inasmuch as New York does not recognize an independent cause of action for the imposition of sanctions under either CPLR 8303-a or 22 NYCRR § 130-1.1 (Cerciello v Admiral Ins. Brokerage Corp., 90 AD3d 967 [2d Dept 2011]).

So much of defendant Wong's motion that seeks the fees and costs of her motion, as well [*5]as sanctions against the plaintiff and its counsel, is denied as a matter of discretion.

The remaining arguments of the parties have been considered and found to be without merit.

Accordingly, it is hereby ordered that defendant Wong's motion (mot. seq. #009) for summary judgment dismissing the plaintiff's complaint and defendants Mung and 44 LLC's motion (mot. seq. #010) for summary judgment dismissing the plaintiff's complaint are granted; plaintiff's cross motion (mot. seq. #011) is granted to the extent that defendants' counterclaim is dismissed, and; the remainder of the motions and cross motion are otherwise denied.

This constitutes the decision and order of the court.

_____________________________

Hon. Vito M. DeStefano, J.S.C.