P R E S E N T :

HON. IRA B. HARKAVY, Justice.

-X _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ - - - CHANA LEVY, AS EXECUTRIX OF THE ESTATE OF ELIEZER LEVY, DECEASED,

Plaintiff,

- against -

DON JOEL LEVY, et al.,

At an IAS Term, Part 42 of the Supreme Court of the State of New York, held in and for the County of Kings, at the Courthouse, at Civic Center, Brooklyn, New York, on the 7’ day of June, 2005.

The following u a ~ m numbered 1 to 9 read on this motion:

Index No. 21600/03

Notice of MotiodOrder to Show Cause/ PetitiodCross Motion and Affidavits (Affirmations) Annexed

Opposing Affidavits (Affirmations)

Reply Affidavits (Affirmations)

Other Papers

Papers Numbered

1-2 3-6

7-8

9

U .)on the foregoing papers in this action by plaintiff Chana Levy, as Executrix of the

Estate of Eliezer Levy, Deceased (plaintiff) for an accounting, defendants Don Joel Levy

(Rabbi Don Yoel), Donel Corporation (Donel Corp.), Committee for the Furtherance of

Torah Otservance (the CFTO), Va’ad Hakashrut D’ America (the Va’ad), and Committee for

the Advancement of Torah (CAT) (collectively, defendants) move for summary judgment

dismissing plaintiffs complaint as against them. Plaintiff cross moves, pursuant to CPLR

222 1, for leave to renew her opposition to defendants’ prior motion to dismiss the second

cause of action of her amended complaint, which resulted in the October 7,2004 decision

and order dismissing said cause of action. Plaintiff requests such renewal based upon the

ground of allegedly newly discovered evidence that the signature of Eliezer Levy (Eliezer)

on the April 6, 1998 assignment was forged. Plaintiff seeks, upon such renewal, an order

vacating the October 7,2004 decision and order, and leave to amend her amended complaint

to state a claim that the assignment is void and of no force and effect because Eliezer’s

signature thereon was a forgery. Plaintiff further seeks, in her cross motion, an order,

pursuant to CPLR 3 126, compelling defendants to produce evidence in response to her

Decembe:. 8,2003 notice to produce.

George Goldstein d/b/a O.K. Laboratories was in the business of, inter alia, providing

kosher food certification under trademarked symbols, i.e., the Circle K Marks (a circle with

the letter k inside). O K Laboratories would inspect facilities of food manufacturers and

certify tl iat their products were prepared in accordance with Jewish dietary (kashruth) laws,

and, if certified, the manufacturers were permitted to print the Circle K Marks on their

product 5 . In February 1968, pursuant to an Agreement of Sale, George Goldstein d/b/a O.K.

Laboratories sold to Rabbi Bernard Levy and the Va’ad, a non-profit religious corporation

which wi:s formed on December 15, 1963, his business, which included the business of

publishin: a kosher food guide (the Jewish Homemaker), the Circle K Marks, the goodwill

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thereof, and the renewal of contracts with companies which with George Goldstein did

business. While the Agreement of Sale did not allocate the assets as between Rabbi Bernard

Levy and the Va’ad, Rabbi Bernard Levy allocated to himself the Circle K Marks and the

right to license them, and he allocated the renewal contracts and client lists to the Va’ad for

use in its kashruth certification business.

Beginning with the purchase of George Goldstein’s kashruth certification business and

continuing until September 197 1, Rabbi Bernard Levy, as the owner of the Circle K Marks,

licensed ;he Circle K Marks to the Va’ad, which continued its operations of providing

kashruth certification to food manufacturers and using the Circle K Marks to identify

products which met the standards represented by these marks, as set by Rabbi Bernard Levy.

Rabbi Bernard Levy and his wife, Thelma Levy, were trustees of the Va’ad and there were

four other trustees. Rabbi Bernard Levy was also employed by the Va’ad and received a

salary from it.

In September 1971, Rabbi Bernard Levy and others formed the CFTO, a non-profit

reli Fious corporation which succeeded to the Va’ad in providing kashruth certification under

the Circle K Marks. Rabbi Bernard Levy, together with Zvi Gartenhaus and Frumma

Gartenhaus (his son-in-law and daughter), were trustees of the CFTO, and Rabbi Bernard

Levy was employed by and received a salary from the CFTO.

Both the Va’ad and the CFTO operated under the trade name, OK. Laboratories and

variants Ciereof (OK Labs, Organized Kashuth Laboratories). Rabbi Bernard Levy licensed

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the Circle K Marks and the O.K. Laboratories trade names to the Va’ad and the CFTO on a

royalty-free, exclusive basis. All fees paid by the food manufacturers were paid to the Va’ad

and the CFTO.

Rabbi Bernard Levy died on April 4,1987, and, in December 1988, Thelma Levy, as

the Executrix of his estate, filed a Certificate of Discontinuance of Business of OK.

Laboratories, “for the reason that [she] . . . ha[d] sold, transferred and assigned all of the said

unincorporated business (including, without limitation, the goodwill and business name)” to

Rabbi Don Yoel and Eliezer, who were her and Rabbi Bernard Levy’s sons. The December

1988 assi2nment provided that Thelma Levy, as Executrix of the Estate of Bernard Levy,

assigned -0 Rabbi Don Yoel and Eliezer “all of the interest of said Estate in and to the

unincorporated business O.K. Laboratories, including without limitation, the goodwill and

the name of said business.” By a separate assignment dated December 29, 1988, Thelma

Levy, as Executrix, assigned to Rabbi Don Yoel and Eliezer, doing business as OK.

Laboratories, “all rights, title, and interest in and to the [Circle K trademark (one of the

Circle K Marks\I. topether with the goodwill of the business symbolized by the mark.” The

Certificate of Discontinuance of Business further provided that Rabbi Don Yoel and Eliezer

would conduct business in partnership and would simultaneously file a Business Certificate

for Partners.

A 3usiness Certificate for Partners, which certified that Rabbi Don Yoel and Eliezer

were conducting business as members of a partnership under the name of O.K. Laboratories,

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was filed by them on December 29, 1988. There was no written partnership agreement

relating to this partnership. As partners, Eliezer and Rabbi Don Yoel continued licensing the

use of the Circle K Marks royalty-free to the CFTO. After Rabbi Bernard Levy’s death,

Thelma Levy, Malka Levy, and Rabbi Don Yoel became the trustees of the CFTO.

On October 9,1996 Rabbi Don Yoel and Eliezer formed the corporation, Donel Corp.,

under Business Corporation Law 0 402, with each of them holding 50% of its shares. By

assignment dated January 15,1997, Rabbi Don Yoel and Eliezer assigned to Donel Corp. “all

right, title, and interest in [the Circle K Marks, the OK Labs trademark, and other marks

owned by them], together with the goodwill of the business symbolized by and associated

with said -rademarks, service marks and certification marks.” On December 16,1997, CAT,

a successor to the CFTO, was formed as a non-profit religious corporation. The trustees of

CAT wer ; Rabbi Don Yoel, Rikal Fogelman, and Thelma Levy. Rabbi Don Yoel was the

president of CAT and Thelma Levy was its secretary and treasurer. All kosher certification

agreements held by the CFTO were assigned to CAT. CAT provided kashruth certification

to mnnuf?durers, and oper3tw-l under the trade nnme O.M. 1 nhoratnrks. none1 C‘orp.

licensed CAT to use the Circle K Marks royalty-free.

By a document entitled “General Assignment,” dated April 6, 1998, Eliezer assigned

his 50% shares of Donel Corp. to Rabbi Don Yoel. The assignment is executed by Eliezer

in two places and by Thelma Levy. It contains a statement by Thelma Levy that as long as

she and Eiiezer are alive, she “will use [her] influence as a director of [CAT] that [he] should

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be compensated at a salary of $8 1,640 - - which will be subject to cost of living increases,”

and that ‘‘Itlhis is with the assumption that [he] will perform [his] duties in the same manner

as [he] performed them in the past.”

On July 29, 1998, Eliezer died. On June 9, 2003, plaintiff, as the Executrix of

Eliezer’s estate, commenced this action, setting forth a cause of action for an accounting of

the partnership between Eliezer and Rabbi Don Yoel. On June 30,2004, plaintiff amended

her comp aint to assert a second cause of action for a judgment declaring the April 6, 1998

assignme it of Eliezer’s shares in Done1 Corp. to Rabbi Don Yoel null and void based upon

the ground that it was made for inadequate consideration. By decision and order dated

October 7, 2004, the court found that since the assignment was in writing and signed, the

amount o 7 consideration could not affect its validity, and that the assignment was valid and

enforceat le. It, therefore, dismissed plaintiffs second cause of action.

Defendants’ instant motion seeks summary judgment dismissing plaintiffs complaint,

which consists of her remaining cause of action for an accounting. In addressing such

motion, t*ie court notes that the six-year Statute of Limitations for an action seeking an

accounting begins to run when the partnership is dissolved (Partnership Law 0 74; CPLR 2 13

[l]; Mill: v O’Donnell, 188 AD2d 692, 693 [1992]). Thus, where partners transfer a

partnership’s assets to a corporation that takes over the business of the partnership, the

partnership is considered dissolved upon such transfer, and the cause of action for an

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accounting accrues at that time (see Judelson v Weintraub, 55 AD2d 906, 907 [1977];

Hutchinson v Sperry, 158 App Div 704,708 [1913], afld 214 NY 616 [1915]).

Defendants, in support of their motion, assert that the partnership between Eliezer and

Rabbi Do 1 Yoel was dissolved when, on January 15,1997, they assigned the Circle K Marks,

“together with the goodwill of the business symbolized by and associated with said

trademarks, service marks and certification marks” to Donel Corp. They assert that the

Statute of Limitations on plaintiffs cause of action for an accounting, therefore, accrued at

that time, and, since plaintiff failed to commence this action until more than six years from

that time, her present action is barred by the applicable Statute of Limitations (see Mills, 188

AD2d at 693-694; Hutchinson, 158 App Div at 708).

Plaintiff, in opposition, argues that the partnership’s kashruth certification business

was bein& run and carried on through the various religious corporations (i.e., the Va’ad, the

CFTO, ar d CAT), which employed the kashruth inspectors, paid their salaries and all other

expenses of the business, and collected all of the fees paid by the food manufacturers who

wiqhed I I I be certifirrl. She stnteq thnt the 1 evy family receivcd their personal income from

the religious corporations, and that Donel Corp. received no income and held the trademark

as its only asset which, on a tax return, it assigned a value of only $2,500. Plaintiff contends

that no pi rt of the kosher certification business whatsoever was passed on to Donel Corp.

other than the ownership of the Circle K Marks, which was licensed back to the religious

corporation, and that this trademark was merely one component of the partnership business

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of Eliezer and Rabbi Don Yoel. She argues that the kashruth certification business did not

merge into Donel Corp., but that, instead, the actual partnership business continued to be

carried or- through the religious corporations. She claims that defendants have thus denied

her and her children a share in the family business.

Or a motion for summary judgment, however, once the moving party has established

that it is entitled to summary judgment, the opposing party must lay bare its proof and

demonstr :te the existence of a triable issue of fact (Roberts v Rubio, 189 AD2d 867, 867

[ 19931). Here, plaintiff has failed to submit any evidentiary facts showing that after the

ownership interests in the Circle K Marks were transferred to Donel Corp., any other

business was conducted by Eliezer and Rabbi Don Yoel as partners. Rather, the evidentiary

facts subriitted show that prior to the January 15, 1997 assignment to Donel Corp., the only

business .hat Rabbi Don Yoel and Eliezer had conducted as partners was to hold the

ownership interest in, and right to exploit, the Circle K Marks. They did not perform any

services, but only set the standards for using the Circle K Marks and licensed the right to use

the marks royalty-free to the reliyious corporations. Both before and after the transfer of the

Circle K Marks to Donel Corp., the certification of kosher products was carried out by the

religious corporations.

As noted above, the trustees and officers of the religious corporations were persons

other than Eliezer. There is no evidence that Eliezer received any profits from the religious

corporations, and the evidence discloses that Eliezer never reported income from any

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purported interest in the kashruth certification business on his tax returns. Eliezer is not

alleged to have exercised control over the religious corporations through which the purported

partnership is alleged to have conducted its affairs. Indeed, at plaintiffs deposition, plaintiff

testified that Eliezer did not say anything to her that indicated that he had an ownership

interest in a kosher supervision business, and she could not recall him ever telling her that

he was a partner in a kosher certification business, or him ever complaining that he was not

receiving his share of any such business.

Moreover, Eliezer had no ownership interest in the religious corporations. The

religious :orporations are subject to article 10 of the Religious Corporations Law, and the

Religious Corporations Law prescribes and limits the powers and duties of the trustees and

other officers (see Religious Corporations Law $ 5). The powers of the religious

corporations with respect to the handling of funds are expressly set forth in the Religious

Corporations Law. The assets of a religious corporation do not belong to any one individual

or group, and the trustees must administer the religious corporation’s property or revenues

“in accordance with the discipline, rules and usages of the Corporation and of the

ecclesiastical governing body, if any, to which the corporation is subject” ( Walker Memorial

Bapist CI urch v Saunders, 285 NY 462,467 [ 19411, quoting Religious Corporations Law

$ 5 ; see also Beth Jacob of Boro Park v Morgen Appliances, 196 Misc 677, 678 [ 19491).

Here, pla’ntiff has not shown that Eliezer ever received any monies from business with,

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through, or conducted by the religious corporations during his lifetime other than receiving

a salary for work performed by him.

Plcintiff points to the fact that in a March 30, 1995 letter (submitted in connection

with trademark infringement litigation), defendants stated that Rabbi Don Yoel was a

principal member of and employee of CFTO. This same letter, however, states that while

Rabbi Don Yoel and Eliezer owned the trademark and licensed it to O.K. Laboratories and

were its employees, “neither [of them] conducted business as O.K. Laboratories or otherwise

performed certification services other than as an employee of O.K. Laboratories.” Thus,

plaintiff cannot establish that a partnership continued to conduct business by relying upon

the kashndh certification work carried out by the religious corporations that Eliezer did not

control and from which he did not receive any profits.

Plaintiff’s relianceuponBZankvBZank(222 AD2d 85 1,852-853 [ 1995]), which states

the established general principle that persons can form a corporation and still be partners as

between tliemselves, is misplaced. Blank (222 AD2d at 852) involved a motion to dismiss,

pursuant to CPLR 321 1 (a) (7), wherein the alleged fwts in the complaint were required to

be accepted as true and accorded the benefit of every possible inference in the plaintiffs

favor. Srmilarly, plaintiff‘s reliance upon Sagamore Corp. v Diamond West Energy

Corporation (806 F2d 373,379 [2d Cir 1986]), Arditi v Dubitzky (354 F2d 483,486-487 [2d

Cir 1965]), and Paretti v Cavalier Label Co. (702 F Supp 81, 84 [SD NY 1988]), is also

misplaced. In Sagamore (806 F2d at 379), there were evidentiary facts that the parties

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therein clearly intended the joint venture agreement to survive the formation of the

corporation; in Arditi (354 F2d at 487), the plaintiff was permitted to show that it was the

intention of the parties to set up the corporation only as a means of carrying out a joint

venture; and in Paretti (702 F Supp at 84), there was evidentiary proof of an ongoing

partnership conducted in corporate form. Here, plaintiff, in response to defendants’ prima

facie showing on this motion, has failed to sustain her burden of producing any evidentiary

proof so i s to raise a triable issue of fact as to whether any partnership activity took place

following the January 15, 1997 assignment to Done1 Corp. Consequently, defendants’

motion for summary judgment must be granted (see CPLR 213 [ 11,321 1 [a] [5], 3212 [b];

Partnersh’p Law 6 74).

P1: intiff, by her cross motion, now seeks leave to renew her opposition to defendants’

prior motion to dismiss her second cause of action. She bases her request for renewal on the

ground that she has newly discovered evidence. Specifically, she asserts that she has now

retained new counsel, who retained two handwriting experts. These two handwriting experts

have con-pared the two sipaturcs of Eliexr on a copy of the April 6. 1998 General

Assignment with original cancelled checks bearing Eliezer’s signature, and opine that the

signature:. on the assignment are forgeries. Defendants’ handwriting expert disputes the

findings of plaintiffs experts and points out that such experts did not review the original

document. Defendants also point to plaintiffs deposition testimony that Eliezer told her that

“he signed some paper’’ that would “assure that after [Thelma Levy] passed away [Rabbi]

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Don [Y]o 21 would keep paying him,” and that the signature on the assignment “look[ed] like”

Eliezer’s signature.

In any event, is well settled that “[a] motion for leave to renew must be ‘based upon

new facts not offered on the prior motion that would change the prior determination,’ and the

movant must state a ‘reasonable justification for the failure to present such facts on the prior

motion”’ (Yarde v New York City Tr. Auth., 4 AD3d 352,353 [2004], quoting CPLR 2221

[e]; see also Greene v New York City Hous. Auth., 283 AD2d 458,459 [2001]). A motion

\ L ! ! L ~ l \ ~1 I - ‘ i i b ~ J , ~ C L ~ W L ~ chLtncc I I C G I I ~ i \ c i i

diligence in making their first factual presentation”’ (Welch Foods v Wilson, 247 AD2d 830,

830-83 1 [ 19981, quoting Mundo v SMS Hasenclever Maschinenfabrik, 224 AD2d 343,344

[ 19961). ‘f the evidence that is asserted to be newly discovered could have been discovered

with due diligence, the motion to renew should be denied (Welch Foods, 247 AD2d at 830-

83 1 ; Mur do, 224 AD2d at 344; Ulster Sav. Bank v Goldman, 183 Misc 2d 893, 895-896

p a n i c s ~ 1 1 u h t i e I I O ~

[2000]).

Hrre, plaintiff, to justify her failure to submit these expert opinions in opposing

defendanrs’ prior motion, only asserts that she did not previously submit this allegedly new

evidence of forgery because the idea of forgery would not have occurred to her in her

“darkest dreams.” Such assertion, however, does not provide reasonable justification for

renewal of the motion. Plaintiff has been in possession of the April 6,1998 assignment since

it was produced to her in a prior litigation by defendants in February 2000, more than five

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years ago. Plaintiff does not adequately explain why she did not seek to have the assignment

analyzed earlier (see Greene, 283 AD2d at 459; Cole Hatchard v Grand Union, 270 AD2d

447,448 [2000]; Welch Foods, 247 AD2d at 83 1; Mundo, 224 AD2d at 344).

Moreover, there are no newly discovered facts, but only new opinions by experts hired

by plainti ‘f concerning the veracity of a document which plaintiff has had in her possession

for at least five years. This does not constitute a legitimate basis for renewal (see Sample v

Levada, 8 AD3d 465,467 [2004]; Matter of Shapiro v State of New York, 259 AD2d 753,

753-754 [ 19991; Welch Foods, 247 AD2d at 830-831; Mundo, 224 AD2d at 344).

Plaintiff, in support of her cross motion, also argues that Donel Corp.’s Shareholders’

Agreement provided a mechanism for the transfer of shares which was not followed with

respect to Eliezer’s shares. Such argument, however, is a new argument, which was not

raised in opposition to defendants’ prior motion, and a motion to reargue was not timely

brought herein (see CPLR 2221 [d]; Foley v Roche, 68 AD2d 558, 567-568 [1979]).

Furthermln-e, parties to a written agreement may modify it and vary or waive its terms (see

e.,y. Gericrd Elcc. &pita1 Commercial Automotive Finance v Spartan Motors, Ltd., 246

AD2d 41, 52 [1998]; Matter of Estate of Prime, 184 Misc 2d 796, 799 [2000]).

Consequently, inasmuch as plaintiff has failed to set forth a valid basis for renewal, or any

good cause shown to replead her second cause of action, her cross motion, to the extent that

it seeks such relief, must be denied.

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Plaintiff, by her cross motion, also seeks an order compelling defendants to produce

financial records of O.K. Laboratories, Done1 Corp., the Va’ad, the CFTO, and CAT.

However, “discovery as to fiscal matters in an action for an accounting may not be obtained

in the usual situation unless and until [the] plaintiff establishes a right to an accounting”

( Wolther v Samuel, 1 10 AD2d 506,507 [ 19851; see also LSYIntl. v Kerzner, 140 AD2d 256,

256 [ 19881). Here, as discussed above, plaintiff has failed to demonstrate such a right, and

plaintiff has not demonstrated how these financial records are necessary in order for her to

oppose defendants’ motion (see CPLR 3212 [ f l ) .

Plaintiff asserts that financial discovery will show that the corporations were merely

subordina:e entities in an overall partnership which ran a multi-million dollar business, of

which the trademark was just one component. To support this assertion, plaintiff only states

that these documents should demonstrate the payment of salaries and personal expenses to

members of the Levy family. The payment of salaries to employees of the religious

corporaticm., though, is admitted by defendants, and plaintiffs speculation regarding

impropric’ ics in payments cannot establish nnv interest by El iww in the alleyed partnership

at issue or provide a basis for postponing the granting of defendants’ motion for summary

judgment (see generally Dunn v 726Main & Pine, Inc., 255 AD2d 981,982 [ 19981; Limpar

Realty Corp. v Uswiss Realty Holding, 1 12 AD2d 834,837 [ 19851; La Scala v D Yngelo, 104

AD2d 930, 93 1 [ 19841). Therefore, plaintiffs cross motion, insofar as it seeks an order

compelling the production of these documents, must be denied.

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Accordingly, defendants’ motion for summary judgment dismissing plaintiffs

complaint as against them, is granted. Plaintiffs cross motion for leave to renew her

opposition to defendants’ prior motion to dismiss her second cause of action, and an order,

pursuant to CPLR 3126, compelling defendants to produce evidence in response to her

December 8,2003 notice to produce, is denied in its entirety.

This constitutes the decision, order, and judgment of the court.

J.S.C.

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