Supreme Court, New York County

Decided on August 13, 2025

Index No. 654577/2024

Ariel D. Chesler, J.

[*1]

The following e-filed documents, listed by NYSCEF document number (Motion 002) 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77 were read on this motion to/for VACATE - DECISION/ORDER/JUDGMENT/AWARD.

Plaintiff B.E. derivatively on behalf of [MEDIA COMPANY]. ("Plaintiff" or "[MEDIA COMPANY]" ), commenced this action against Defendant, asserting various claims and seeking money damages (the "Commercial Action" or "CA"). In this motion sequence, Plaintiff seeks to vacate prior orders of this Court, dated September 24 and 26, 2024, which sealed this commercial action, stayed the action, and consolidated it with the ongoing matrimonial action (the "Matrimonial Action" or "MA") (Index [REDACTED]). Defendant cross-moves to dismiss this commercial action pursuant to CPLR 3211[a][4]. For the reasons discussed herein, Plaintiff's Complaint (the "Complaint") should be dismissed pursuant to CPLR 3211(a)(4), and her motion denied.

[*2]BACKGROUND

Plaintiff and Defendant were married on [REDACTED] (Defendant MA Affirmation, ¶ 5). The parties have two minor children, L.E., born [REDACTED], and C.E., born [REDACTED] (Id.). Defendant is a dual [REDACTED] citizen, which allows him to operate businesses in [REDACTED] and take advantage of tremendous government incentives offered to the film industry (Defendant MA Affidavit, ¶7).

Defendant has worked in television for more than 25 years (id. at ¶17). Prior to starting [MEDIA COMPANY] in 2010, Defendant was a staff producer and writer at [TV NEWS PROGRAM A] for 12 years (id.). Since 2010, he has created dozens of television series and specials for [REDACTED VARIOUS TV NETWORKS] (id.). He has over [REDACTED] credits on IMDB, and he is credited as an Executive Producer on 150+ television episodes (id.). Defendant has won [REDACTED] Emmys and other prestigious awards in the field of television (id.). Plaintiff has been working in hospital marketing for the past 10+ years (id. at ¶16). Since 2023, Plaintiff has also worked as a freelance assistant/associate director at [TV NEWS PROGRAM B] (id.). Prior to resuming this position, she had not worked in television production since on or about 2006, when she left her job as a production assistant/associate director at [TV NEWS PROGRAM B] (id.).

[MEDIA COMPANY] is a New York based corporation founded by Defendant as a vehicle to produce shows, series, and specials for television networks (id. at ¶17). Since it was established in its current iteration in or about 2014, Defendant has maintained his position as the Chief Executive Officer and Director of [MEDIA COMPANY] (id. at ¶9). There are no other officers of [MEDIA COMPANY] (id.). [MEDIA COMPANY] was originally formed as [BE INC] in September 2005 as a vehicle for Plaintiff's freelance writing (id.). According to Plaintiff, the mission and purpose of [BE INC]. was to serve as a multimedia company, which produced published works, documentaries and videos (Plaintiff CA Affirmation ¶3). When [BE INC] was formed she was the only shareholder. However, in or around October 9, 2014, a certificate of amendment was filed, which memorialized Plaintiff's gift of fifty percent (50%) of the shares of Corporate Plaintiff to Defendant for no consideration (id. at ¶7). Plaintiff maintains she never transferred her 50% ownership in "corporate Plaintiff" to Defendant or anyone (id. at ¶9). Plaintiff asserts that Defendant has transferred millions of dollars from the Corporation's account and that these transfers constitute conversion, misappropriation and diversion of Plaintiff's Corporate funds (Plaintiff CA Memo 3-4).

Between 2010 and 2014, Defendant operated [MEDIA COMPANY] as a dba^FN1 of [BE INC], because Plaintiff was hardly using the corporation (Defendant CA Affirmation ¶10). In 2014, Defendant officially changed the name of the entity and filed a new certificate with State (id.). In 2018, Defendant adopted new by-laws (id.). In 2024, as part of his obligations in connection with the sale of [MEDIA COMPANY] Defendant changed the name of [MEDIA COMPANY] to [HPP INC] (Defendant CA Memo., 5). As the sole shareholder, president, and CEO, Defendant was able to effectuate this change on his own (Defendant MA Affidavit, ¶9).

According to Defendant, for tax purposes only, Plaintiff and Defendant are each 50% [*3]owners of [MEDIA COMPANY], and they each receive a K1 for their respective shares of the income and liabilities each year (id. at ¶11). While [MEDIA COMPANY] was operating actively, Plaintiff occasionally acted as coordinator between the entity, the benefits department, and the tax accountant, with whom she maintained a personal relationship (id.). She also used [MEDIA COMPANY] as a passthrough for her hospital consulting work, which arrangement ended in 2019 (id.).

In or about 2019, Defendant formed [MEDIA COMPANY 2] in order to gain a competitive edge over competitor production companies by capturing lucrative [REDACTED] government tax incentives, which could not be claimed by a US production company (id. at ¶18). The [REDACTED] government reimburses [MEDIA COMPANY 2]'s costs at approximately 20-40% through two organizations, [REDACTED] (id.). [MEDIA COMPANY 2] is then able to pass these savings on to its customers [REDACTED VARIOUS TV NETWORKS, etc.] (id.). This is a massive structural advantage for [MEDIA COMPANY 2] over US production companies, including [MEDIA COMPANY], which is only possible because of Defendant's dual citizenship (id. at ¶7). A number of factors, including the ability to get projects not financially feasible in the US produced in [REDACTED] created substantial success for [MEDIA COMPANY 2] and led to multiple purchase offers in 2023 (id.).

According to Plaintiff, a significant portion of the assets allegedly misappropriated from [MEDIA COMPANY] were apparently transferred to [MEDIA COMPANY 2] or one of its subsidiaries (Plaintiff CA Memo., 5).

In or about September 2023, Defendant received an offer to purchase a majority share of [MEDIA COMPANY 2] (Defendant MA Affirmation ¶9). Defendant signed a letter of intent to sell 51% of [MEDIA COMPANY 2] to a bona fide purchaser shortly thereafter (id.). The sale closed on September 19 and Defendant received the sum of $4,942,894.78 (Defendant CA Memo., 6). Just days before the sale was slated to close, Plaintiff initiated the Commercial Action, whereby she accused Defendant of perpetrating a fraud against [MEDIA COMPANY] in public court filings, intentionally jeopardizing the sale and the receipt of millions of dollars. (see Complaint).

According to Plaintiff, the bona fide purchaser purchased assets from [MEDIA COMPANY 3] which did not belong to [MEDIA COMPANY 2]. Rather, Plaintiff contends those assets rightfully belonged to Corporate Plaintiff (Plaintiff CA Memo, 5).

Plaintiff initiated the Matrimonial Action on [REDACTED], and since that time the matter has been heavily litigated (Ward CA Affidavit ¶15).

In August 2023, the parties executed a Confidentiality Agreement and Order (the "Confidentiality Agreement") protecting from disclosure all corporate and financial documents exchanged in the discovery process, including documents relating to [MEDIA COMPANY] and [MEDIA COMPANY 2] (Confidentiality Agreement). Such an order was imperative to Defendant producing documents relating to his businesses, in large part because of the ongoing sale discussions surrounding [MEDIA COMPANY 2] and the tenuous nature of such a potentially lucrative transaction (Ward CA Affidavit ¶16).

Since early 2023, the parties have participated in multiple court conferences, including several in-chambers settlement conferences (id.). Plaintiff has filed two orders to show cause in the matrimonial action (one seeking emergency relief) (id.). The Court has made multiple pendente lite orders relating to marital assets, payment of taxes, payment of counsel fees, and discovery (See Confidentiality Agreement). The Court signed the Preliminary Conference [*4]Stipulation/Order on October 12, 2023 which set forth a detailed schedule for production of documents and related discovery (PC Order).

On November 30, 2023, in response to Plaintiff's November 8, 2023 Order to Show Cause, the Court ordered Defendant to place 65% of his share of the [MEDIA COMPANY 2] sale proceeds into a "mutually agreed upon interest bearing account" (see 11-30-23 Order). The Court simultaneously denied Plaintiff's request for counsel fees, without prejudice (id.). On February 16, 2024, the Court ordered on consent of the Defendant, Defendant to pay: (a) $90,000 toward Plaintiff's counsel and expert fees; and (b) $12,000 in tax penalties if the tax appeal (then pending) was denied (see 2-16-24 Order).

Both parties have submitted Statements of Net Worth in the matrimonial action, which identify all of the assets subject to the jurisdiction of this Court and to be considered as part of equitable distribution, including [MEDIA COMPANY] and [MEDIA COMPANY 2] (Plaintiff Statement of Net Worth); (Defendant Statement of Net Worth). Additionally, Defendant has produced tens of thousands of pages of documents in response to Plaintiff's discovery requests in the matrimonial action and provided financial information for Defendant's corporate entities in the United States and in [REDACTED] (Document Production Index).

According to Defendant, although he believed he had settled the matrimonial matter in May 2024, Plaintiff reneged on the agreement. He asserts that in response to Defendant's refusal to cede to her new settlement demands, Plaintiff commenced the Commercial Action.

Notably, Plaintiff failed to mention the existence of the Matrimonial Action in her pleadings in the commercial action and, incredulously, did not identify the matrimonial action as a related proceeding on the Request for Judicial Intervention form (CA OTSC, 2). The claims raised in the Commercial Action, specifically that Defendant fraudulently transferred funds and assets from [MEDIA COMPANY] to [MEDIA COMPANY 2], are identical to claims previously raised by Plaintiff in the Matrimonial Action, which Plaintiff failed to acknowledge in her Commercial Action pleadings (id.). Accordingly, follow a conference on the two actions and upon oral application of Defendant's counsel, the Court sua sponte issued orders to consolidate, seal and stay the Commercial Action, which the Plaintiff alleges effectively deprive the [MEDIA COMPANY] of its ability to pursue its claims (Plaintiff CA Memo., 3).

When the Court issued its sua sponte orders it made clear that they were temporary and would remain in effect pending the receipt of an anticipated motion to dismiss the commercial action and a motion to reargue/vacate the sua sponte orders (9/26/2024 Tr. 25-32). The Court also enjoined [PLAINTIFF] from commencing further litigation concerning any marital property.

DISCUSSION

Plaintiff recognizes this Court's inherent and discretionary powers to stay, seal and consolidate actions. In New York, it is well established that a court possesses inherent authority to manage its own proceedings, including issuing stays, consolidation orders, or sealing orders sua sponte when justice so requires. In Matter of JW, the Court confirmed its authority to issue sealing orders sua sponte where necessary to protect the interests of the parties and the integrity of the proceedings (see Matter of JW, 2025 NY Slip Op. 25048, 229 NYS3d 733 [Civil Ct Kings County 2025]). Courts have also recognized their inherent powers to stay an action (see Halloran v Halloran, 161 AD2d 562 [2d Dept 1990][citing CPLR 2201]), and to consolidate actions upon the oral request of a party (see Matter of Amy M, 234 AD2d 854 [3d Dept 1996]). [*5]Moreover, in Melnitzky v Apple Bank for Sav, 19 AD3d 252 [1st Dept 2005] the First Department sua sponte enjoined a party "from commencing any further litigation in the courts of the State of New York arising from or related to issues with respect to his matrimonial action, including the ownership and/or distribution of property in connection therewith, and his representation with respect thereto, without prior leave of Supreme Court of the applicable county."

Thus, a court's sua sponte issuance of a stay, consolidation, injunctive or sealing order is proper where it is done to promote judicial economy, avoid prejudice, or protect legitimate privacy concerns, so long as parties retain the opportunity to be heard thereafter.

To the extent there is a procedural concern, this motion sequence fully adheres to the requirements of due process. Plaintiff has been afforded notice and an opportunity to be heard, and the Court is presently considering Plaintiff's arguments in a careful and deliberate manner. It is well established that due process does not guarantee a particular outcome but rather mandates that a party be given meaningful notice and an opportunity to present its position before the Court renders a determination. Here, Plaintiff has availed itself of the opportunity to submit extensive motion papers, and the Court has reviewed Plaintiff's contentions. The Court's present consideration of these arguments satisfies the fundamental requirements of due process under both constitutional and New York jurisprudence.

While recognizing the Court's inherent powers, Plaintiff argues that it was inappropriate for the Court to exercise such powers in this circumstance. In particular, Plaintiff maintains that the commercial action involves issues which are entirely different than the issues in the matrimonial action because the claims in the commercial action are on behalf of the corporate plaintiff "[w]hile the Matrimonial Action involves the division of assets and other marital issues between individuals B.E. and Defendant S.E.," (Plaintiff CA Memo., 8).

Plaintiff continues on to state: "the Commercial Action is brought by the Corporate Plaintiff [REDACTED] only to recover assets belonging to it as a corporation, as a separate legal entity, which have been converted, improperly transferred and/or misappropriated by Defendant S. E.. There is nothing in the Commercial Action which, in the least, attempts to determine how the corporate assets of Corporate Plaintiff [REDACTED] should be distributed among shareholders" (Plaintiff CA Memo., 10).

Ultimately, Plaintiff maintains that there is a right to commence a derivative action, that the Court must recognize corporate personhood, and that the corporation has its own rights. While these fundamental points of course have merit in general, Plaintiff entirely fails to grapple with or address the circumstance faced by the Court here, to wit, a prior pending matrimonial action and a corporation that is marital property being considered for equitable distribution in the matrimonial action between the only two shareholders.

Without question, the two actions involve common questions of law and fact. In fact, the two actions involve identical parties and, if not identical, substantially similar claims about the same marital property which were being considered in the matrimonial action (see CPLR 602). Consolidation is proper "to avoid unnecessary duplication of trials, save unnecessary costs, and prevent the possibility of injustice arising from divergent decisions based on the same facts." (Phoenix Garden Restaurant, Inc. v. Chu, 202 AD2d 180, 180-81 [1st Dept 1994]). Yet, Plaintiff would prefer to focus on the corporate form and not the substance and implications of its redundant filing.

Litigation of the Commercial Action in a different, public Court would significantly impact the Defendant and the marital estate. Such fragmentation of proceedings is not merely a [*6]procedural concern; it strikes at the heart of the institution of marriage. Marriage itself has long been regarded as the cornerstone of social order and stability, warranting the highest level of respect and judicial protection. As the United States Supreme Court has observed, marriage is "something more than a mere contract ... [i]t is an institution, in the maintenance of which in its purity the public is deeply interested, for it is the foundation of the family and of society, without which there would be neither civilization nor progress" (Maynard v. Hill, 125 U.S. 190, 210-211 [1888]). Indeed, the Court of Appeals has noted that marriage "constitutes an institution involving the highest interests of society. It is regulated and controlled by law based upon principles of public policy affecting the welfare of the people of the State" (Fearon v Treanor, 272 NY 268, 272 [1936], appeal dismissed, 57 S.Ct. 933, 301 U.S. 667, rehearing denied, 58 S.Ct. 6, 302 U.S. 774 [1937]; see also S.F. v. J.S., 80 Misc 3d 1218(A) [Sup Ct, NY County 2023][discussing the special status of marriage and the significance of public policy and state interest in defining and regulating that status]).

Matrimonial actions, therefore, implicate both private and public interests, and courts have a duty to safeguard their integrity. To permit litigants to manipulate these proceedings for strategic or vindictive purposes, particularly through parallel actions, would undermine that duty and compromise the dignity that the law affords such matters.

Indeed, the Legislature and courts have consistently upheld the confidentiality and privacy afforded to matrimonial and family court actions. Notably, Domestic Relations Law section 235 ensures that all pleadings, affidavits and other documents filed in a matrimonial are maintained as confidential and are not freely available to the public. Other statutes such as Judiciary Law § 4 also ensure privacy for matrimonial actions. And numerous cases have enjoined or limited free speech of parties to a matrimonial action, particularly where children and custody are involved (see M.D.S. v. E.W., 83 Misc 3d 1249(A) [Sup Ct, NY County 2024][discussing caselaw limiting free speech in matrimonial matters]).

The Court notes Plaintiff's insistence that disregarding the Corporate Action would inhibit their ability to bring its claims. However, the claims brought under the Corporate Action are as a practical matter the same as the ones brought in the matrimonial action. While it is conceivable that a different result could arise under other circumstances, such as in a case where the corporation had independent shareholders whose rights would be adversely affected by consolidation with a matrimonial proceeding, that is not the situation presently before this Court. Here, Plaintiff and Defendant spouses are the sole shareholders of [MEDIA COMPANY]. Plaintiff's attempt to maintain a separate corporate action is not grounded in any legitimate need to vindicate corporate rights but rather is transparently an effort to circumvent the court's rulings in the matrimonial action and the sealing orders applicable in the matrimonial matter.

The imperative to avoid duplication in pending actions is particularly strong in the matrimonial context. "In a matrimonial action, where the essential objective is to dissolve the marriage relationship, questions pertaining to important ancillary issues like title to marital property are certainly intertwined and constitute issues which generally can be fairly and efficiently resolved with the core issue" (Boronow v. Boronow, 71 NY2d 284, 290 [1988]). The import of resolving all issues in a single action cannot be understated, as parties must " . . . be able to plan for the resolution of all issues relating to the marriage relationship in a single action" (id.) (emphasis added).

The implications of what Plaintiff is requesting in her motion to vacate, if granted, would be enormous. In essence, any unhappy party to a matrimonial action would be authorized to [*7]collaterally attack the rulings of the matrimonial judge by bringing a separate lawsuit before a different jurist on behalf of the entity that is an "asset" and simply argue that it is not the party bringing the lawsuit, but the asset itself. Then, they can make public the confidential and sensitive family affairs that public policy has sought to protect and keep confidential and render the authority and discretion of the matrimonial court effectively meaningless. There is no authority to support such an outrageous proposition, nor should such authority be created, particularly on these facts.

The corporation at issue, [MEDIA COMPANY] (aka HPP INC) is no doubt a marital asset. Defendant is the president and owner of [MEDIA COMPANY], formed during the parties' marriage, and he is the only named interested party in the formation documents. Plaintiff is a 50% shareholder. There are no other shareholders or third parties with a stake in [MEDIA COMPANY]. [MEDIA COMPANY] is identified as a marital asset on both parties' Statements of Net Worth and has been raised in the pleadings of both parties, discussed on the record at multiple court appearances, and subjected to court orders. In fact, the exact claims raised by Plaintiff in the Commercial Action, under the guise of protecting a corporation (for which there are no third-party owners or shareholders) have already been raised in the Matrimonial Action, specifically in Plaintiff's November 8, 2023, Order to Show Cause. Indeed, it was Plaintiff's dissatisfaction with the rulings made to date in this Court that precipitated her filing the Commercial Action. When Plaintiff's actions were called into question by this Court, Plaintiff then boldly suggested that the Matrimonial Action, which has been pending for more than two years, should be transferred to the commercial part and consolidated with the newly filed Commercial Action, where all of the parties' documents, records, and proceedings would be made available for public consumption and available for the world (including the parties' young [CHILDREN]) to read. This Court appropriately denied Plaintiff's request and granted Defendant's request to consolidate and seal.

Plaintiff contends that the Court is not permitted to "conflate" her individual interests with those of the corporation. However, that argument fails to acknowledge that these proceedings do not exist in a vacuum. As the Court of Appeals has made clear, matrimonial actions necessarily encompass all economic disputes arising out of the marital relationship, and they must be resolved within that framework to avoid fragmentation and inefficiency (see Boronow v. Boronow, 71 NY2d 284, 290 [ 1988]). The notion that a party may simply recast marital property claims as corporate claims to evade the equitable distribution process or confidentiality protection is unsupported in law.

Moreover, the Appellate Division has cautioned against precisely this type of procedural maneuvering. In Rossignol v Rossignol, the court emphasized that when parties seek to litigate marital property issues through corporate vehicles, courts must examine the substance of the claims to ensure the corporate form is not being misused to frustrate the administration of justice (Rossignol v Rossignol, 82 AD3d 1335 [3d Dept 2011]). There, the Wife commenced an action for divorce against the Husband where the parties' main asset for purposes of equitable distribution was a McDonald's restaurant operating LLC (id.). During the course of the divorce action, the court entered an order, inter alia, "restraining the husband from accessing funds in the marital or business banking accounts . . . and den[ying] the husband's request to liquidate and sell the LLC" (id. at 1336). Husband subsequently commenced a separate and distinct action for dissolution of the LLC (id.).

The court ordered the actions joined and consolidated for trial and subsequently [*8]dismissed the second action, on the grounds that "there was another action pending between the same parties and involving the same issues" (id.). In affirming the trial court, the Third Department rejected the husband's contention that the second action did not seek substantially the same relief as the divorce action, noting the court in the matrimonial action "is empowered to determine all issues with respect to the property owned by the parties" and cogently remarking: "Inasmuch as the husband and wife are the only owners of the LLC, and both are parties to the divorce action, we see no reason why any issues should be left for resolution after equitable distribution of the parties' property (id. at 1336-37).

Critically, the Rossignol court found "Given the availability of complete relief pursuant to Domestic Relations Law § 234 and our public policy of resolving equitable distribution within the context of a divorce action . . . we conclude that dismissal of the second action was within Supreme Court's broad discretion pursuant to CPLR 3211(a)(4)" (id. at 1337).

The circumstance in Rossignol is the exact situation presented before this Court and its holding is both binding and persuasive. In the current matter, there are no third-party shareholders whose corporate rights must be protected, and the two spouses are the only owners of the corporation. The corporate entity is effectively an extension of the marital economic unit, and it is entirely appropriate for the Court to treat the corporate and matrimonial aspects together to achieve a fair and consistent resolution. As noted, all claims and allegations will be considered and resolved pursuant to equitable distribution in the matrimonial action.

The First and Second Departments have issued similar decisions to that of the Court in Rossignol, under the presumption that marital assets should be subject to the jurisdiction of the matrimonial court and not fragmented or subject to duplicative litigation ( see St. John v. St. John, 201 AD2d 552, 552 [2d Dept 1994][dismissing plaintiff's complaint for "a constructive trust on the parties' former marital residence" because "[g]iven the pendency of a matrimonial action in which the plaintiff has, in fact, asked the matrimonial court to determine what constitutes marital property, fragmentation of the litigation would be duplicative and counterproductive."]; Karasik v. Karasik, 172 AD2d 294 [1st Dept 1991] ["The Supreme Court acted within its discretion in consolidating the actions based on the existence of common questions of law and fact, and to prevent unnecessary duplication and possible injustice resulting from divergent decisions. Further, the matrimonial action is the proper forum for resolving the issues involving equitable distribution."]). Plaintiff has not addressed or distinguished any of these controlling relevant authorities. Instead, focusing on the technical difference between an individual and a derivative claim, Plaintiff cites to cases not involving a related matrimonial action (see e,g, Sprecher v Thibodeau, 148 AD3d 654 [1st Dept 2017]).

In sum, given the circumstances and the controlling applicable case law, the Court correctly consolidated and now dismisses the corporate action pursuant to CPLR 3211 [a][4]. There is no basis to vacate the Court's orders or to find that the Court misapprehended or overlooked any applicable laws or facts (see CPLR 2221). Indeed, the corporate action must be dismissed because there was a prior pending action — the matrimonial action — which plainly provides the parties full redress of all concerns regarding [MEDIA COMPANY]. Notably, to dismiss on this ground it is sufficient that to show "a substantial identity of the parties and both actions arose out of the same subject matter or series of alleged wrongs" (see Syncora Guarantee Inc. v JP Morgan Sec., LLC, 110 AD3d 87, 95 [1st Dept 2013]).

This is not to suggest that courts should always disregard corporate formalities. There could very well be cases where corporate separateness must be maintained to protect [*9]independent stakeholder rights or preserve actual and legitimate corporate claims unrelated to the marriage. However, this case is not such a case. Plaintiff's corporate action is plainly being used as a way to avoid the matrimonial court's sealing orders, effectively weaponizing the public nature of corporate litigation to embarrass Defendant and undermine the confidentiality integral to matrimonial proceedings. Accordingly, the Court is well within its inherent authority to address this dispute as part of the matrimonial action, recognizing that it is marital in substance regardless of its caption, and that it should be decided as such to prevent any misuse of process.

In this same vein, it was necessary for the court to seal the corporate action in order to protect the same confidential information contained within the matrimonial file that is also discussed in the corporate action. In this regard, it is settled that courts have inherent authority to authorize parties to seal matters and/or file documents under seal (see Matter of Daily News, L.P. v. Wiley, 126 AD3d 511, 512 [1st Dept 2015]["Decisions to seal or disclose records fall within the inherent power of the court to control the records of its own proceedings"]]).

Under Rule 216.1 of the Uniform Civil Rules, 22 NYCRR §216.1, this Court may "seal[] the court records, whether in whole or in part" upon a "written finding of good cause." Further, "in determining whether good cause has been shown, the court shall consider the interests of the public as well as of the parties." "Although the rule does not further define 'good cause,' a standard that is difficult to define in absolute terms, a sealing order should rest on a sound basis or legitimate need to take judicial action" (Danco Lab., Ltd v. Chem. Works of Gedeon Richter, Ltd, 274 AD2d 1, 8 [1st Dept 2000][citation omitted]).

As discussed, the respect, confidentiality and judicial protection afforded to matrimonial actions, including disputes about marital property such as the corporation at issue here, is paramount. There is a compelling interest in ensuring that disputes between spouses are afforded the confidentiality provided by statute. This Court is obligated to protect that confidentiality and will not permit it to be undermined by the filing of a corporate action addressing the same concerns being considered in the matrimonial action.

Plaintiff focuses on the general presumption and preference for access to judicial proceedings and court record. Plaintiff further contends that Defendant has failed to show good cause as to why sealing is appropriate and suggests that Defendant is using the sealing of the commercial action to hide his fraud. The Court is unconvinced by Plaintiff's arguments. To the contrary, Defendant has shown good cause to seal the corporate action, which was an affront to maintaining the confidentiality of the materials in the matrimonial action. Critically, the Court can find no public interest in having access to this very private dispute between two spouses that should continue to be afforded the applicable levels of privacy. To the extent there is a public interest, it is in ensuring that this marital dispute remains personal and undisclosed to the world.

Plaintiff relies heavily on Bich v Bich (69 Misc 3d 874 [Sup Ct, NY County 2020]). However, Plaintiff's reliance on Bich is misplaced. In Bich, the court merely held that in a non-matrimonial action DRL 235 does not mandate entry of a sealing order.

The Court in Bich did not address nor does it preclude the Court's authority to seal the corporate action in the current context where there is an ongoing matrimonial matter involving the very same property. In Bich, there was no divorce action filed and the wife purposely chose not to pursue one at that time. Here, there was a serious risk that leaving the corporate action unsealed would render the confidentiality afforded to the matrimonial action meaningless. Accordingly, in this Court's view, it was both appropriate and absolutely necessary to seal the corporate action.

In the current action, the corporate claims are merely a vehicle to relitigate or circumvent issues central to the matrimonial action, thus the Court retains full authority to ensure such disputes are resolved comprehensively within the matrimonial framework, consistent with the principles articulated in Boronow and Rossignol. While the Commercial Action is not a "matrimonial action," it nonetheless involves the same parties, arises from the same set of operative facts, and concerns marital assets.

While this Court expresses no opinion as to Defendant's innocence or liability, it merely emphasizes that any determination regarding Defendant's conduct or the distribution of assets should proceed in a single forum in accordance with proper procedure. The point remains that Plaintiff is free to pursue whatever claims she deems fit against Defendant, so long as it is done through the proper channels and in the proper venue — the matrimonial action.

Accordingly, the Court concludes that the consolidation of the actions is well within its broad discretion, and that the sealing and dismissal of the corporate action is warranted. Where matrimonial and corporate claims arise from the same operative facts and involve the same parties, particularly spouses whose financial and personal interests are deeply intertwined and still ongoing in the marital action, the Court must ensure that the integrity of the matrimonial process is not undermined by procedural maneuvering. Allowing a party to proceed separately through a corporate vehicle in an attempt to relitigate or publicize issues central to a pending matrimonial action would not only circumvent this Court's authority but would undermine the sanctity of upholding the confidentiality, unity, and orderly resolution of marital disputes. Such tactics cannot be condoned.

Based on the same concerns and to prevent vexatious or harassing litigation, [PLAINTIFF] is also enjoined from commencing further litigation in New York state courts concerning issues related to the matrimonial action (see Melnitzky v Apple Bank for Sav, 19 AD3d 252 [1st Dept 2005]).

Accordingly, it is hereby

ORDERED, that the Motion to Vacate a Prior Order is denied and the action dismissed, with prejudice; and it is further

ORDERED, that the cross motion is granted and the Plaintiff's Complaint in the commercial action is dismissed; and it is further

ORDERED that [PLAINTIFF] is enjoined from commencing any further litigation in the courts of the State of New York arising from or related to issues with respect to the matrimonial action, including the ownership and/or distribution of property in connection therewith, without prior leave of Supreme Court of the applicable county.

This constitutes the Decision and Order of the Court.

DATE 8/13/2025

ARIEL D. CHESLER, J.S.C.