MOL in Support of Opposiiton to Def Mot SJ Mot # 9 Final

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SUPREME COURT OF THE STATE OF NEW YORK COUNTRY OF WESTCHESTER ______________________________ DANIEL PETER MORRIS | Index No. 51874/2017 | (Formerly Index No. 31136/2010) and | Judge: Sam D. Walker | LUCILLE AIOSA MORRIS, | Mot. Seq. No. 9 Plaintiffs, | | PLAINTIFFS’ MEMORANDUM OF LAW vs. | IN OPPOSITION | TO DEFENDANT’S MOTION STEPHANIE L. ZIMMER | FOR SUMMARY JUDGMENT Defendant | TO DISMISS ALL ALLEGED CLAIMS & | IN SUPPORT OF PLAINTIFFS’ ______________________________ NOTICE OF CROSS MOTION TO THE SUPREME COURT OF THE STATE OF NEW YORK

[01] We, Plaintiffs, Daniel Peter Morris and Lucille Aiosa Morris, are plaintiffs in the

above identified action, and respectfully submit this Memorandum of Law (“MOL in

support of Plaintiffs’ Affidavit in Opposition to the Defendant’s Motion Seq. # 9 for

Summary Judgment and to Dismiss all Alleged Claims with a return date of July 19, 2017

and in support of Plaintiffs’ Notice of Cross Motion (“NOCM”) submitted herewith with a

return date of July 19, 2017 for and Order as set out in the NOCM.

[02] Paragraphs of Plaintiffs’ Affidavit (“PA”) submitted herewith are referred to as PA ¶ #

and exhibits thereof as Ex.#. Acronyms not defined herein are in PA and NOCM.

[03] Plaintiffs note the Motion was served in 06/08/2017 and without providing a reason

17 days later on 06/25/2017 Defendant added Exhibits 1 & 2 to NYSCEF which are not

referred to the Motion papers. Plaintiffs object to this since there is no provision in the

CPLR permitting this and the Defendant has not requested permission of the court to do

this. Exhibit 1 is the Notice of Entry (Doc. # 39) of the DECISION & ORDER Motion

Sequence 1& 2 (Doc#1_p. 1194-1200.) (PA ¶ 2.) Defendant gives no reason for providing

FILED: WESTCHESTER COUNTY CLERK 07/08/2017 09:44 PM INDEX NO. 51874/2017

NYSCEF DOC. NO. 66 RECEIVED NYSCEF: 07/08/2017

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Exhibit 1. To the extent that it may be Defendant’s implicit purpose to somehow after such a

long delay to seek leave to renew or reargue under CPLR § 2221(e) and (d), respectively, this

should not be considered since the Defendant has not made such a request in her Notice of

Motion (Doc. # 53). Both CPLR § 2221(e) and (d) require under (1) that such motion “shall be

identified specifically as such.” Also, Defendant’s Motion papers do not make any attempt to

satisfy the requirements of CPLR § 2221(d) (2) that the motion “shall be based upon matters of

fact or law allegedly overlooked or misapprehended by the court in determining the prior motion,

but shall not include any matters of fact not offered on the prior motion.” Also, Defendant’s

Motion papers do not make any attempt to satisfy the requirements of CPLR § 2221(e) (2) that

that the motion “shall be based upon new facts not offered on the prior motion that would change

the prior determination or shall demonstrate that there has been a change in the law that would

change the prior determination.” The Motion cites no new facts or change in the law that would

change the prior determination.” The Motion cannot be a motion under CPLR § 2221(e) or (d)

and request it be denied for that reason.

[04] Although Defendant’s Motion is entitled “DEFENDANT'S MOTION FOR

SUMMARY JUDGMENT,” it is not a motion for summary judgment but is a third attempt

at a motion to dismiss. (PA ¶ 7.) A defendant’s motion to dismiss is for accelerated

judgment taking the allegations of fact in the complaint as true without evidence to prove

the allegations essentially showing that three is no theory based on those facts that can lead

to dependent’s liability to plaintiff. A defendant’s motion for summary judgment is for

accelerated judgment requiring dispositive evidence to show plaintiffs cannot prove under

any theory of liability a case against defendant. If no evidence is provided in a defendant’s

motion for summary judgment, it is a motion to dismiss. Defendant’s Mot. Seq. # 9 has no



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evidence. There are no exhibits and it refers to no evidence in the record of the Present

Action. Thus it is a “3rd Motion to Dismiss” for essentially the same reasons as Defendant’s

2nd Motion to Dismiss. This 3rd Motion to Dismiss should be denied for the same reason

that the 2nd Motion to Dismiss was denied stating Defendant has already made a motion to

dismiss before this court, which was denied. Unless the objection is not subject to waiver,

CPLR 3211 only permits one motion to dismiss per action, CPLR 3211(e).” (PA ¶¶ 7-9.)

CPLR 3211 (subd [e]), the first sentence of which speaks to a motion "before service of the responsive pleading" and mandates that "no more than one such motion shall be permitted," Rich v. Lefkovits, 56 N.Y.2d 276, 282 (N.Y. June 10, 1982)

[05] Defendant’s Motion provides no evidence to establish facts necessarily warranting

summary judgment be granted to her. The Motion is essentially the same as Defendant’s 2nd

Motion to Dismiss denied by Decision and Order dated 09/30/2016 (PA¶ 7) the Motion should

be denied under the Law of the Case.

The Court finds that this instant motion for summary judgment is based on the same arguments and facts that … raised on the prior motion to dismiss and Plaintiff has raised the identical arguments in opposition …Accordingly, this Court's prior determinations … constitutes the law of the case on those issues. See, J-Mar Serv. Ctr., Inc. v. Mahoney, Connor & Hussey, 45 A.D.3d 809, 809, 847 N.Y.S.2d 130 (2d Dept 2007). Since there has been no showing of any change in circumstances …, this Court's determination of these issues on the prior motions are binding upon this Court in deciding the instant motion. Del Pozo v Impressive Homes, 2011 N.Y. Misc. LEXIS 549, 8-9 (N.Y. Sup. Ct. Jan. 7, 2011)

[06] Moreover, Defendant filed a Notice of Appeal of Decision & Order of 09/30/2016, but

did not perfect it and it was dismissed on Plaintiffs Motion to the Appellate Division (PA ¶ 14).

We conclude that the rule to be followed is that a prior dismissal for want of prosecution acts as a bar to a subsequent appeal as to all questions that were presented on the earlier appeal. Bray v. Cox, 38 N.Y.2d 350, 353 (N.Y. 1976) While defendant was adequately informed of his right to appeal, he failed to perfect it in a timely manner and therefore abandoned any right to an appeal he may have had People v. West, 100 N.Y.2d 23, 28 (N.Y. May 1, 2003)



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[O]n an appeal from an intermediate order that is dismissed on the motion of the appellate court, the party is estopped for reasons of judicial economy from seeking review of issues which could have been raised on the original appeal. ( Bray v Cox, 38 NY2d 350.) Riverbay Corp. v. Steiner, 144 Misc. 2d 530, 535 (N.Y. Sup. Ct. June 28, 1989)

An appellate court's resolution of an issue on a prior appeal constitutes the law of the case and is binding on the Supreme Court, as well as on the appellate court …"[T]he 'law of the case' operates to foreclose reexamination of [the] question absent a showing of subsequent evidence or change of law" (citations omitted) J-Mar Serv. Ctr., Inc. v. Mahoney, Connor & Hussey, 45 A.D.3d 809 (N.Y. App. Div. 2d Dep't Nov. 27, 2007)

Thus Defendant on their Motion is precluded form what she has abandoned any right to

pursue and which has been decided against her under the law of the case.

[07] As stated in PA ¶ 11 M9 ¶¶ 1-19 are in the nature of an affidavit and M9 ¶¶20-37 are

in the nature of a memorandum of law in support of the Motion, respectively. PA

responded in detail to M9 ¶¶ 1-19. This MOL responds to M9 ¶¶ 20-37. Plaintiffs note that

although M9 ¶¶ 1-19 has been presented as though it is an affidavit, there are no facts

referred to (PA ¶ 8). By the Defendant’s admission: (1) the owners of Auctions were

Defendant and Debra and D.M. Zimmer (M9 ¶ 6_s.5; PA ¶ 25); and (2) Auctions was a third

party transferee of the Stolen Money (M9 ¶ 10 ; PA ¶ 32). Thus by Defendant’s admission

as an owner of Auctions, Defendant had legal title to the Stolen Money. This is the un-

abrogated common law rule. Defendant cites no statute to the contrary. The Supreme Court

of Florida has expressly adopted this rule for Florida statutes:

Florida Statutes, expressly made the common law of England a part of the law of this jurisdiction. ..[T]his common law has been in effect in this jurisdiction, except insofar as it has been modified or superseded by statute. State v. Egan, 287 So. 2d 1, 3 (Fla. 1973) “When the common law is clear we have no power to change it.” Id at 7.

New York State Courts state: “common-law principles govern[] …unchanged, unless explicitly



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modified by statute” Kosa v. Legg, 12 Misc. 3d 369, 371 (N.Y. Sup. Ct. 2006). “In order to

abrogate a common-law principle, the statute must speak directly to the question addressed by

the common law.” (quotes & citations omitted). United States v. Texas, 507 U.S. 529, 534.

[08] M9 ¶ 1 appears to be requesting special consideration since defendant is pro se.

N.Y. Courts hold pro se parties to the same standard as an attorney. (PA ¶ 10.)

Although courts will routinely afford pro se litigants some latitude …, a pro se litigant "acquires no greater right than any other litigant" and will be held to the same standards of proof as those who are represented by counsel (Citations omitted). Duffen v. State, 245 A.D.2d 653, 653-654 (N.Y. App. Div. 3d Dep't Dec. 4, 1997) Although the plaintiff appeared pro se at the trial, she did so at her peril. "A litigant appearing pro se acquires no greater right than any other litigant and such appearance may not be used to deprive defendants of the same rights enjoyed by other defendants" (citations omitted.). Roundtree v. Singh, 143 A.D.2d 995, 996 (N.Y. App. Div. 2d Dep't Oct. 31, 1988)

[09] M9 ¶¶ 20-21 cites NY Court decisions directed to summary judgment and refers to

CPLR § 3212(b). Since the Motion cites no facts, Defendant has not made a prima facie

showing of entitlement to summary judgment and the Motion should not be grant.

“[The] proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers " Alvarez v. Prospect Hosp., 68 NY2d 320, 324, 501 N.E.2d 572, 508 N.Y.S.2d 923 [1986]).

[10] M9 ¶ 22 states: “In a motion for summary judgment a party may move for summary

judgment, identifying each claim or defense - or the part of each claim or defense - on

which summary judgment is sought. The court shall grant summary judgment if the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” The Motion has not identified the part of each claim on

which summary judgment is sought and on which there is no genuine issue of material fact



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entitling Defendant to judgment as a matter of law. (See NOCM Request 1). Defendant’s

affidavit identifies wrong part of the Amd.Cp. for theories of liability against Defendant.

Under CPLR 3017(a) a complaint is not limited to stated theories of liability. (PA ¶20). M9 ¶

22 ends asserting: “There are no issues of genuine dispute and Defendant is entitled to

judgment as a matter of law,” but identifies no issue satisfying this assertion.

[11] M9 ¶ 23 asserts “Morris attempts to rely upon Section 608 .4225 of the Florida LLC

law that provides, subject to sections 608.4226 and 608.423, each manager and managing

member of a limited liability company ‘shall owe a duty of loyalty and duty of care to the

limited liability company’ § 608.4225 (1) Fla. Stat.” Defendant does not identify where

Plaintiffs cite to of rely on these sections of Florida Statutes. Defendant does not deny that

she knew or should have known that the Stolen Money was in the Auctions’ bank account.

Defendant does not explain why these sections cut off Plaintiffs’ ownership interest in their

personal property, the Stolen Money, or why they permit her to keep the Stolen Money to

use for her own benefit even though she is not a BFPV (PA¶¶ 28, 30(a) 39, 54) and even

though Auctions committed a crime in acquiring the Stolen Money (PA¶¶ 30, 37, 53).

[A] corporation may be held criminally responsible for illegal acts of its employees if the acts are (a) related to and committed within the course of employment, (b) committed in furtherance of the business of the corporation, (c) authorized or acquiesced in by the corporation.. (Citations omitted State v. Municipal Auto Sales, Inc., 222 So. 2d 278, 279 (Fla. Dist. Ct. App. 3d Dist. 1969)

[12] Without citing to specific language, the Defendant appears to be asserting that the

cited sections of the Florida statute makes a bank account of a Florida LLC a safe haven for

stolen property. D.H. Zimmer acting as an Auctions’ managing member, thus acting as

Auctions, put the Stolen Money into Auctions’ bank account. Under the Florida statute

applicable at that time the Stolen Money was Defendant’s personal property.



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Section 608.405, Florida Statutes (2008), provides that "[o]ne or more persons may form a limited liability company." A person with an ownership interest in an LLC is described as a "member," which is defined in section 608.402(21) as "any person who has been admitted to a limited liability company as a member in accordance with this chapter and has an economic interest in a limited liability company which may, but need not, be represented by a capital account." …. Fla. Stat. (2008). Section 608.431 provides that "[a]n interest of a member in a limited liability company is personal property." Olmstead v. FTC, 44 So. 3d 76, 79 (Fla. June 24, 2010) (Florida Supreme Court)

[13] The Stolen Money was stolen and put into Auctions bank account in 2004. The

Present Actions was filed in 2010. From 2004 to 20010 the text of 608.431 (Ex.# 35) is

“Nature of interest of member in limited liability company.--An interest of a member in a

limited liability company is personal property.”

[14] Defendant does not explain why, when she is not a BFPV and has legal title to

Plaintiffs’ property, Florida statutes have abrogated Plaintiffs’ common law rights to it

when the Defendant has not specifically identified what Florida statute cuts off that

common law right. Rest.Rest.3rd §108 states: “(2) A third party who acquires an interest in trust

property through a breach of trust is entitled to retain or enforce the interest to the extent the

third party is protected as a bona fide purchaser.”

[15] There is nothing in this that can be read to limit a third party to the initial transferee to

cut off a transfer to subsequent transferee in a chain of transfers. SCOTUS applies this common

law rule stating: "[T]he third person takes the property subject to the trust” Harris Trust & Sav.

Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 250 (U.S. 2000). This applies to a chain of

transferees until “once a purchaser takes property in good faith and without notice, the chain is

broken and that person or any subsequent holder ‘takes the property relieved from the trust.”"

Keach v. U.S. Trust Co., N.A., 254 F. Supp. 2d 1048, 1053 (C.D. Ill. 2003) This is a well-

established common law rule that applies even when the initial transferor is not a trustee



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Where a person has an equitable interest in property held by another who is not in a fiduciary relation to him, and the holder transfers the property to a third person who is not a bona fide purchaser, the equitable interest is not cut off by such transfer and the equitable claimant can enforce it against the third person. Restat 1st of Restitution, § 168 Comment on Subsection (1)(b)

“A constructive trust or an equitable lien can be imposed on the product of wrongfully obtained

property even when that product has been transferred to an innocent donee, Restatement of

Restitution § 161 comment d, § 168; 5 Scott, The Law of Trusts, § 510 at 3597; Dobbs,

Handbook on the Law of Remedies, § 4.7 at 283, § 9.6 at 650-51, since the equitable interests

that attached to the product before it was transferred are not cut off by the transfer,

Restatement of Restitution § 168; 5 Scott, The Law of Trusts, § 510 at 3597.” (Emphasis added)

In re Marriage of Allen, 724 P.2d 651, 659-660 (Colo. 1986). Plaintiffs’ equitable interest in

their money is not cut off by a transfer in to the Auctions Bank Account. “[A] corporation

created by and doing business in a particular state, is to be deemed to all intents and purposes as

a person” Louisville, C. & C. R. Co. v. Letson, 43 U.S. 497, 558 (U.S. 1844). A “corporation is

a person” Carden v. Arkoma Assocs., 494 U.S. 185, 201 (U.S. 1990). “The extent of the

capacity of a corporation to take and hold property in trust is the same as that of a natural

person.” Restat. 2d of Trusts, § 96. “The term ‘person’ includes corporations” Restat 3d of

Trusts, § 3. “

The true owner of property has the right to have his property restored to him, not as a debt due and owing, but because it is his property wrongfully withheld.…[E]xcept purchasers for value and without notice, all the property belonging to the trust, however much it may have been changed in its form or its nature or character, and all the fruits of such property, whether in its original or altered state, continue to be subject to and affected by the trust. Pennell v. Deffell, 4 De G. M. & G. (Eng. Ch.) *372 Windstanley v. Second Nat’l Bank of Louisville, 13 Ind. App. 544, 547 (Ind. Ct. App. 1895)

[16] This common law principle is applied in Corporation of President of Church of

Jesus Christ of Latter—Day Saints v. Jolley, 24 Utah 2d 187, 188-189 (Utah 1970) in



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which boyfriend embezzled money from his employer and used it to buy cars for his

girlfriend who gave no value for them. The Supreme Court of Utah impressed a

constructive trust on the girlfriend who was required to pay to the employer the money used

to buy the cars. If Defendant is correct, if the boyfriend first put the embezzled money into

an LLC bank account from which the cars were purchased, the employer could not recover

the money form the girlfriend. There is no legal justification for such a result.

[17] The Restatements of the Law 3d, Restitution and Unjust Enrichment, § 55 states :

COMMENTS & ILLUSTRATIONS: a. General principles and scope; relation to other sections. The present section offers a paraphrase of Judge Cardozo's more eloquent statement:

A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee.

Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 386, 122 N.E. 378, 380 (1919). The remedy described by § 55 is intended to be the same, in scope and in function, as the remedy described by Cardozo.

Restat 1st of Restitution, § 161 Comment (d) states: d. Enforcement against transferee. If property which is subject to an equitable lien is transferred to a third person who has notice of the equitable lien or who does not give value, the equitable lien can be enforced against the property in the hands of the third person (see § 168). On the other hand, an equitable lien, like other equitable interests, is cut off if the property is transferred to a bona fide purchaser (see § 172). Restat 1st of Restitution, § 161

§ 172 Bona Fide Purchase (1)Where a person acquires title to property under such circumstances that otherwise he would hold it upon a constructive trust or subject to an equitable lien, he does not so hold it if he gives value for the property without notice of such circumstances. (2) In the Restatement of this Subject such a transferee is called a bona fide purchaser. Restat 1st of Restitution, § 172



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§ 66 Bona Fide Purchaser A purchaser for value and without notice acquires the legal interest that the grantor holds and purports to convey, free of equitable interests that a restitution claimant might have asserted against the property in the hands of the grantor. Restat 3d of Restitution and Unjust Enrichment, § 66

The New York Court of Appeals states:

Unjust enrichment, however, does not require the performance of any wrongful act by the one enriched … Innocent parties may frequently be unjustly enriched. What is required, generally, is that a party hold property "under such circumstances that in equity and good conscience he ought not to retain it" …. A bona fide purchaser of property upon which a constructive trust would otherwise be imposed takes free of the constructive trust, but a gratuitous donee, however innocent, does not (Citations omitted. Simonds v. Simonds, 45 N.Y.2d 233, 242 (N.Y. 1978) “[O]ne who possesses equity in an asset is entitled to restitution of the asset by a subsequent title holder who paid no value even if the latter had no knowledge of the predecessor’s equitable interest.” Rogers v. Rogers, 63 N.Y.2d 582, 585-586 (N.Y. 1984)

[18] Defendant hasn’t alleged being a BFPV. In discovery she admitted giving no value for the

Stolen Money (PA ¶30), waiving this affirmative defense. “The defendants were bound to make

out by a fair preponderance of the evidence the affirmative assertion of their status as purchasers in

good faith and for a valuable consideration.” Wood v Webster, 271 N.Y. 57, 59 (1936).

[19] Boyer v. Belavilas 474 F.3d 375 (7th Cir. 2007), a bankruptcy case, is an example of

finding successive transferees jointly and severally liable for the same transferred asset

(money.). In Boyer v. Belavilas father and mother owned a business, D-Man. They received

insurance proceeds from business loss and deposited it into UTMA accounts, one for each of

two children. Mother was custodian thereof and transferred it to “Other Entities” controlled

by father who then filed for bankruptcy. Court found mother, children and Other Entities

jointly and severally liable for $183,130 to the bankruptcy estate. The children were so found



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even though the accounts had no money in them since mother transferred it to Other Entities.

The District Court affirmed the bankruptcy judge’s order (Ex.# 30) stating at opinion page 2

“[t]he children had no knowledge of, and gave no consideration for these transfers [into the

UMTA accounts] and at page 6 “after transfer into their accounts, the insurance proceeds

legally belonged to the children” (Ex.# 39.). Even though the District Court decision was

reversed on other grounds the Seventh Circuit opinion on appeal states:

One major difference between UTMA custodial accounts and common-law trusts is that a trustee acquires legal title to the assets, while title under the UTMA vests in the beneficiary, though control remains with an adult custodian Boyer v. Belavilas, supra at 377 [The two children] were—at least initially—beneficiaries of the money transferred into the UTMA accounts. The problem is not so much with the idea that minors can be “beneficiaries” even though adults control the purse strings as it’s with the consequence of the bankruptcy court’s joint-and-several-liability judgment. Debts attributable to actual fraud cannot be discharged in bankruptcy… so [the two children] may be stuck with this obligation for life and must pay from income they earn as adults, even though they never saw a penny of the money from D-Man’s insurance and never had a chance to prevent their parents’ financial chicanery. Boyer v. Belavilas, supra at 378

By analogy the Stolen Money is Defendant’s personal property and she is liable to Plaintiffs

for it even if she didn’t know about it. She unambiguously knew it when she submitted her

Federal Action Affidavit.

[20] M9 ¶ 23_s.2 asserts “Morris is correct in that the loyalty and duty of care is to the

limited liability company and all of the members of the limited liability company.”

Defendant does not specifically identify where Plaintiffs said this (they didn’t) or where the

Florida LLC Statute expressly states members have no duty to return to the true owner

property stolen by the LLC from the true owner. Even if what the Defendant alleges that

the statutes says is correct, Defendant identifies no part of the statute that says that all

common law rules or principals are expressly abrogated as the Florida Supreme Court in



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State v. Egan (supra.) states it must to cut off the common law. An express statutory

provision on a manager’s duty of loyalty and care does not mean that it is limited to that and

only to that. A statute is read that way only when it expressly states that.

[21] M9 ¶ 23_s.3 asserts in regards to the duty: “It is not to someone who admits to

having no business dealings with the limited liability company nor filed any direct claim of

cause of action against the limited liability company.” Defendant does not identify where

Plaintiffs admitted having no business dealing with Auctions. Defendant provides no

statutory justification of this assertion or why it matters at all. It is in conflict with common

law principles. Auctions took the Stolen Money subject to a constructive trust for the

benefit of Plaintiffs. The Defendant has legal title to it. In a chain of transfers a non-BFTV

transferee is liable to the true owner even though the true owner had not dealings with that

person. There is a cause of action against the first transferee (the children) and a later

transferee (“Other Entities”) as there was in Boyer v. Belavilas (supra.) and any in the chain

of transferees Keach v. U.S. Trust Co., N.A (supra.) Plaintiffs respectfully request leave to

amend the caption of the Present Action to add Auctions if the Court is of the view that is

necessary in response to Defendant’s unreasonably long delay in raising this issue

[22] M9 ¶ 24_ss.1-2 alleges Florida courts “speak of a strict standard applying for those

who wish to pierce the corporate veil of a LLC.” The alleged strict standard doesn’t permit

an Auctions’ managing member without authorization to put the Stolen Money into

Auctions’ bank account. M9 ¶ 24_s.3 cites Dania Jai-Alai Palace, Inc. Cv. Sykes, .450 So.

2d 1114, 1121 (Fla. 1984) and Sreinhardt v. Banks, 511 So. 2d 336 (Fla. 4th DCA 1987).

In M9 ¶ 24_s.3 Defendant misstates the standard of these cases. “Perhaps the leading Florida

case on piercing corporate veil [is] Dania Jai-Alai [id.].” Turner Murphy Co. v. Specialty



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Constructors, 659 So. 2d 1242, 1245 (Fla. Dist. Ct. App. 1st Dist. 1995). Referring to Dania

Jai-Alai Palace, Inc. v. Sykes, 450 So.2d 1114 (Fla. 1984) Florida Ct. App. states:

Under the supreme court's holding in Sykes appellee was required to prove "improper conduct," in order to pierce the corporate veil and hold the individual appellant liable. Steinhardt v. Banks, 511 So. 2d 336, 337 (Fla. Dist. Ct. App. 4th Dist. June 17, 1987)

[T]he supreme court spoke repeatedly of "improper conduct," and the quotations from the precedents upon which it relied referred to conduct that has a bad aroma. Steinhardt v. Banks, 511 So. 2d 336, 338 (Fla. Dist. Ct. App. 4th Dist. June 17, 1987)“

D. H. Zimmer’s act in criminally stealing Plaintiffs’ Stolen Money and as an Auctions

managing member acting as Auctions putting the Stolen Money in to the Auction’s bank

account is a crime by Auctions (PA¶¶ 31, 34, 35, 53, 56, 57). It is also conversion by

Auctions of the Stolen Money. Penal Law 812.022 (2) (Ex.# 37) states “proof of possession

of property recently stolen, unless satisfactorily explained, gives rise to an inference that the

person in possession of the property knew or should have known that the property had been

stolen.” Fla. Stat. § 1.01(3) states “The word ‘person includes …corporations.” Auctions is

a person who knowingly committed a crime. Under Florida law

A claim for conversion has three elements: (1) act of dominion wrongfully asserted; (2) over another's property; and (3) inconsistent with his ownership therein. …Thus, Defendant Goble [owner of LLC NAC] may be liable for conversion if [Plaintiff] proves that NAC committed conversion and that NAC's corporate veil should be pierced. N. Am. Clearing, Inc. v. Brokerage Computer Sys., 2009 U.S. Dist. LEXIS 82961, 19-20 (M.D. Fla. Sept. 10, 2009)

Thus under Florida law conversion by an LLC is sufficient to pierce the LLC’s veil. Auctions’

knowingly taking possession of the Stolen Money is an act of dominion wrongfully asserted over

Plaintiffs property and is inconsistent with Auctions’ ownership of the Stolen Money since it is

Plaintiffs’ property and thereby is conversion. Auctions criminal act of conversion is “conduct

that has a bad aroma” Steinhardt v. Banks, (supra.) warranting piercing Auctions’ veil.



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[23] Plaintiffs didn’t invest the Stolen-Money in Auctions, purchase goods of services from it,

or have a contractual relationship therewith in regards to the Stolen Money and thus didn’t

surrender its equitable interest therein to Auctions. The Stolen-Money is in the Auctions’ bank

account because of the tort of breach of trust, conversion and a criminal act under Penal Law

812.022 (2) (Ex.# 37). The corporate veil cannot be “used as a cloak for wrongdoing” Dania

Jai-Alai Palace, Inc. v. Sykes, (supra at 1118). Defendant is asserting Auctions veil can cloak

Auctions’ crime, i.e. wrong doing.

[24] The Limitation of liability (“LOL”) of “LLC-Stakeholders” (members, managing

members and managers) is setout in Fla. §608.4227 (Ex.# 35) “Liability of members, managing

members, and managers:

(1)…the members, managers, and managing members of a limited liability company are not liable, solely by reason of being a member or serving as a manager or managing member, under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company;

D.H. Zimmer putting the Stolen-Money into the Auctions’ bank account isn’t “a debt, obligation,

or liability” of Auctions. These require Plaintiffs voluntary surrender of a property right to

Auctions. Thus the LOL, i.e. corporate veil, doesn’t apply to a crime or conversion by Auctions,

D.H. Zimmer acting as it, knew it had money belonging to someone else. Auctions had a duty to

return the money to its rightful owner, Plaintiffs. Auctions didn’t do that, but instead paid the

personal bills and expenses of the Zimmer Family Members and made cash distribution thereto

directly from Stolen-Money. Auctions knowingly, tortiously and criminally used the Stolen-

Money for more than 13 years. These acts are torts and is “prima facie evidence of negligence”

Fla. Dep't of Corr. v. Abril, 969 So. 2d 201, 205 (Fla. 2007.). “[T]he concept of piercing the

corporate veil does not apply in the case of a tort, even where an intentional tort has not been

alleged.” Florida Specialty, Inc. v. H 2 Ology, Inc., 742 So. 2d 523, 527-528 (Fla. Dist. Ct. App.



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1st Dist. 1999) . “If a corporate officer knowingly participates in a tortious act, there is no need

to pierce the corporate veil in order to impose personal liability.” Walker v. Federal Deposit Ins.

Corp., 970 F.2d 114, 122 (5th Cir. Tex. 1992). D.H. Zimmer was an Auctions’ officer who

acting as Auctions converting the Stolen Money and committed a crime under Penal Law

812.022 (2) (supra.) (Ex.# 37) when he put it in the Auctions’ bank account which is the

personal property of the Defendant. Fla. St.§ 608.431 (supra.) (Ex.# 35.)

[25] M9 ¶ 24_s. 4 states: “Auctions was properly organized and flawlessly transacted

business for years selling more than 6,000 items on eBay while maintaining a 100'%

positive feedback rating.” This is a conclusory allegation since there is no evidence

provided to support this and it should thus be ignored. In response to Plaintiffs’ discovery

demands (Doc. ## 6, 7, 9, 10 and 11) Defendant’s responses (Doc. ## 25, 28, 29, 23 and 24,

respectively) did not produce any evidence that Auctions had any actual business as set out

in Plaintiffs Objections (Doc.## 14, 13, 33, 15 and 16 respectively) (see Table Ex.# 21.)

Thus Auctions “never actually had any business” Amd.Cp.¶ 668 (PA ¶ 54) and thus no veil

Defendant should be precluded from providing such evidence in a reply. To do so is

prejudicial to Plaintiffs since they cannot under the URTC submit a sur-reply.

[26] M9 ¶ 25_s.1 asserts “To pierce the corporate veil three factors must be proven by

preponderance the evidence.” M9 ¶ 25_ss. 4-5 cites a number of Florida decisions in

support. Florida Supreme Court’s leading case in this Dania Jai-Alai (supra.) does not

specifically enumerate a three factor test. “Whether there has been improper conduct is a jury

question. Dania Jai-Alai.[supra.)]” Seminole Boatyard v. Christoph, 715 So. 2d 987, 990 (Fla.

Dist. Ct. App. 4th Dist. June 24, 1998).

"The decision whether to pierce the corporate veil in a given instance depends on the particular facts and circumstances" …"Veil-piercing is a fact-laden claim that is not well



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suited for summary judgment resolution" (Citations omitted.) Damianos Realty Group, LLC v. Fracchia, 35 A.D.3d 344 (N.Y. App. Div. 2d Dep't 2006)

[27] This is a more recent statement by a Florida court:

A general principle of corporate law is that a corporation is a separate legal entity, distinct from the individual persons comprising them, and, absent some basis to pierce the corporate veil, there is no basis for imposing liability for corporate debts and obligations upon the individuals. See Gasparini v. Pordomingo, 972 So. 2d 1053, 1055 (Fla. 3d DCA 2008). Three factors must be proven to "pierce the corporate veil" and hold an individual shareholder liable for the debts of the corporation:

"(1) the shareholder dominated and controlled the corporation to such an extent that the corporation's independent existence, was in fact non-existent and the shareholders were in fact alter egos of the corporation; (2) the corporate form must have been used fraudulently or for an improper purpose; and (3) the fraudulent or improper use of the corporate form caused injury to the claimant."Id. (quoting Seminole Boatyard, Inc. v. Christoph, [supra. ].

Beltran v. Miraglia, 125 So. 3d 855, 858 (Fla. Dist. Ct. App. 4th Dist. Apr. 10, 2013). [28] Plaintiffs note the Florida LLC statute does not use the term “shareholder.”

Plaintiffs understand this to mean an LLC-Stakeholder (supra.). In the cases cited by

Defendant and Plaintiff above the first (#1) of the three factors firstly or initially refers to

“shareholder,” singular, and secondly refers to “shareholders,” plural. Plaintiffs understand

this to mean that in a multi-shareholder LLC, any one of the shareholders can satisfy that

criteria to pierce the veil. That is all the shareholders do not have to dominate or control the

LLC, but only one of them has to, for the veil to be pierced. There is only one veil

corresponding to the LLC not multiple veils corresponding to each stakeholder separately.

Defendant does not dispute the allegation of:Amd.Cp. that Auctions was dominated by D.H.

Zimmer and S. Zimmer by alleging: (1) Auctions is the "alter ego" of D. .H. Zimmer and S.

Zimmer (Amd.Cp. ¶ 140); (2) “[Auctions] operates out of [David .H. and Sherry Zimmer’s]

home, the only checks written out of the corporate accounts were written by [David .H. and



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Sherry Zimmer] and [David .H. and Sherry Zimmer] used these funds as their personal bank

account to pay all their personal bills”(Amd.Cp. ¶ 138); and (3) “[David H. Zimmer] signed

all checks; withdrawals from the account were checks were written on the Complete Auctions

account mostly for the Debtors' household expenses and ATM withdrawals for what appears to

be daily spending for personal expenses by [David .H. and Sherry Zimmer].” (Amd.Cp. ¶ 111)

(PA ¶ 54.) Thus the first factor is satisfied. It’s not necessary as asserted in M9 ¶ 25_s.2 that

the Defendant dominate or control Auctions. It’s sufficient that D.H. and/or S. Zimmer did.

[29] As to factor 2, Plaintiffs have show in PA and herein that Auctions was used for an

improper purpose. M9 ¶ 25_s.2 incorrectly assert “Defendant did not use the corporate form

fraudulently or for an improper use.” It is only necessary the any Auctions Stakeholder,

acting as Auctions, do so to satisfy factor 2. D.H. Zimmer acting as Auctions engaged in an

improper purpose, i.e. criminally converting the Stolen Money to Auctions’ improper use.

That is sufficient to pierce Auctions veil.

[30] Defendant doesn’t comment on factor 3. Plaintiffs were harmed by Auctions when it

knowingly took possession of (converted) the Stolen Money denying Plaintiffs their property.

[31] M9 ¶ 25_s.3 states: “Morris admittedly did not transact business with [Auctions]”.

Defendant is admitting this. That is a reason for why the equitable principle of piercing the

corporate veil doesn’t apply. The corporate veil applies only to legitimate uses of the

corporate form. If Plaintiffs did not transact business with Auctions, they could not have

surrendered their ownership interest in the Stolen Money to Auctions, as would occur in a

legitimate business transaction. D. H. Zimmer, the larcenist, cannot surrender Plaintiffs

ownership interest in the Stolen Money to Auctions.



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[32] M9 ¶ 25_s.3 states: Plaintiffs “did not name or file any claim .whatsoever against

Complete Auctions and as such has no claim against Complete Auctions or Defendant.”

Defendant’s Notice of Motion (Doc. # 53; Ex.# 6) has no request directed to this as required

by CPLR § 2214 (a) which states "A notice of motion shall specify… the relief demanded and

the grounds therefore.” (Emphasis added.) Relief cannot be requested in an affidavit and

memorandum of law in support of a motion. To the extent that Defendant appears to be

seeking relief under CPLR § 3211(a) (10) for this purpose directed to Auctions, defendant

did not ask for that in her 1st or 2nd Motions to Dismiss and did not do so in her answer to

the Complaint and the Amended Complaint and have thereby waived that. Also, in regards

to Defendant’s Answer to the Complaint (Ex.# 20 D1/p.261), the Amd.Cp. (filed

04/22/2011) at ¶ 157 (Ex.#1 D1/p.303) states “Defendant … raises the affirmative defense of

‘Failure to Joint a Necessary Party’ at page 2 of the Answer, but identifies no other party who is

necessary.” Defendant’s later filed 1st Motion to Dismiss (Ex.# 7; filed 05/01/2011) does not

respond and has thus waived any such argument. (PA ¶ 54).

[33] Defendant has not alleged or established that Auctions is a necessary under CPLR §

1001(a). Auctions may be a permissible party under CPLR § 1002, but not a necessary

party under CPLR § 1001(a). It is Defendant’s burden to establish Auctions is necessary,

but has not done so. If for some reason the Court entertains this improper request, joinder

of Auctions should be excused under CPLR § 1001(b). Auctions is a Florida LLC.

Defendant has introduced no evidence that Auction s had any actual business on this Motion

and in discovery. Thus Auctions has no business in New York and a N.Y. Court most likely

has no jurisdiction over Auctions. CPLR § 1001(b) provides: “If jurisdiction over him can

be obtained only by his consent or appearance, the court, when justice requires, may allow



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the action to proceed without his being made a party.” Thus Plaintiffs request the Court

permit this action to proceed without Auctions. For the reasons given herein and PA the

Amd.Cp. states a claim against Auctions. Auctions is mentioned 229 times in the Amd.Cp.

Under F.S.A.§608.463 (Ex.# 35) “(1) Process against a [LLC] may be served: (a) in

accordance with chapter 48…as if [it]… were a partnership.” F.S.A. §48.061(Ex.# 36)

Service on partnerships and limited partnerships states “(1) Process against a partnership

shall be served on any partner and is as valid as if served on each individual partner.” Thus

service on Defendant is service on Auctions and all the Autions’ Stakeholders and Auctions

has been adequately served in the Present Action.. If it is necessary to amend the complaint

in of the Present Action to name Auctions, Plaintiffs request the Court permission to do so.

[34] Defendant provides no reason for why there has to be a claim against Auctions or

any legal authority in support thereof. Plaintiffs deny it is necessary. Amd.Cp. sets the

facts out in detail. Auctions is a constructive trustee of the Stolen Money, so is Defendant.

[35] M9 ¶ 26_s.1 states: “the fiduciary obligation of each manager and managing member

would remain to the limited liability company and all of the members of the limited liability

company.” It is not clear why this is relevant. Defendant is an owner, not a manager or

managing member of Auctions.

[36] M9 ¶ 26_s.2 “Morris tries to create some type of third party transferee responsibility

to Defendant but Complete Auctions was not the third party transferee as there is no

obligation to a third party whose money is transferred in.” Third party transferee liability is

based on a longstanding principle of the common law. Defendant does no identify a Florida

statute that abrogates it as required by the Florida Supreme Court (See Egan supra.)

“Whenever the legal title to property is obtained through means or under circumstances



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'which render it unconscientious for the holder of the legal title to retain and enjoy the

beneficial interest, equity impresses a constructive trust on the property thus acquired in

favor of the one who is truly and equitably entitled to the same, although he may never,

perhaps, have had any legal estate therein; and a court of equity has jurisdiction to reach the

property either in the hands of the original wrongdoer, or in the hands of any subsequent

holder, until a purchaser of it in good faith and without notice acquires a higher right and

takes the property relieved from the trust.'" Moore v. Crawford, 130 U.S. 122, 128, 32 L.

Ed. 878, 9 S. Ct. 447 (1889). SCOTUS in Harris Trust v. Salomon, 530 U.S. 238, 249-251

(U.S. 2000) quotes Moore v. Crawford & states under the common law of trust an innocent

third person [transferee] takes the property subject to the trust.

Salomon protests that it would contravene common sense … to … impose[] civil liability on a party, such as a nonfiduciary party … that is not a "wrongdoer”…But this reductio ad absurdum ignores …[t]he common law of trusts, …[which] plainly countenances the sort of relief sought by petitioners against Salomon here. The constructive trust is based on property, not wrongs” (Citation omitted). that a transferee was not ‘the original wrongdoer’ does not insulate him from liability for restitution. … “(‘The constructive trust is based on property, not wrongs’).

“[E]quitable liens and constructive trusts share the same substantive basis; both are remedies in

equity to redress unjust enrichment.…The [equitable] lien is imposed for reasons that, in

principle, are the same as those that warrant the constructive trust.” Cadle Co. v. Mangan (In re

Flanagan), 503 F.3d 171, 183 (2d Cir. Conn. 2007). Accord N.Y. Court of Appeals Simonds

v. Simonds (supra.) Defendant has been unjustly enriched. Under Florida law the Stolen

Money in Auctions is the personal property of Defendant. (supra.)



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[37] M9 ¶ 26_s.2 ends stating “so in essence, Morris is speciously attempting to create a

trust relationship out of whole cloth that simply does not exist.” This directly conflicts with

the unabrogated common law.

[38] M9 ¶ 27_s.1 against asserts “Morris failed to name Complete Auctions as a

defendant.” This has been addressed above.

[39] M9 ¶ 27_s.2 “Morris failed to allege the Florida Uniform Fraudulent Transfer Act in

any pleadings.” Doesn’t say why it matters. It codifies the common law. (Ex.# 34.)

[40] M9 ¶ 27_s.3 again states “plaintiffs admit that they had no business dealings with

Complete Auctions.” But, does not identify where. M9 ¶ 27_s.3 continues stating “such

that there could be no claim for piercing the corporate veil either express or conjured up by

Morris in their attempt to sustain an action against Defendant.” As stated above Defendant

admits Plaintiffs had no business dealing with Auctions, for that reason alone Auctions veil

should not be “used as a cloak for [the] wrongdoing” Dania v. Sykes (supra.) of Auctions.

[41] M9 ¶¶ 28-34 are directed to an attempt to assert latches against Plaintiffs in filing the

Present Action. Laches does not apply.

Laches is a purely equitable defense which may not be interposed in an action at law to recover for the tort of fraud ( Brown v Lockwood, 76 AD2d 721, 729 [2d Dept 1980]). An action for an equitable remedy to enforce a legal right is not barred by inaction until the legal remedy is barred by the Statute of Limitations ( Galway v Metropolitan El. Ry. Co., 128 NY 132). That branch of the motion seeking dismissal of the complaint on the ground of laches is denied. International Ass'n of Machinists & Aerospace Workers v. Allegis Corp., 144 Misc. 2d 983, 989 (N.Y. Sup. Ct. Aug. 2, 1989) We have defined laches as an equitable bar, based on a lengthy neglect or omission to assert a right and the resulting prejudice to an adverse party Saratoga County Chamber of Commerce v. Pataki, 100 N.Y.2d 801, 816 (N.Y. June 12, 2003)



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[42] Defendant’s 1st Motion to Dismiss (Ex.# 7) for statute of limitations was denied by

Decision and Order of 08/16/2012 (Ex.# 3). If the present action is not bared by statute of

limitations laches does not apply. M9 ¶ 35 is responded to in the Notice of Cross Motion.

M9 ¶¶ 36 & 37 is essentially the same as ¶¶ 11, 12, 15, 17, 18, 22 of Defendant’s

Counterclaim (Ex.# 31)(see Ex.# 32 for ¶¶) which was denied by Decision & Order

08/16/2012 (Ex.# 3.) Thus requests of M9 ¶¶ 36 & 37 are barred by law of the case.

PIERCING CORPORATE VEIL UNDER FLORIDA LAW

[43] Dania Jai-. v. Sykes supra at 1118 summarizes its view of veil piercing quoting "The

Disregard of Corporate Fiction" © 1927 by Wormser states: “’the courts will draw aside the web

of entity, will regard the corporate company as an association of live, up-and-doing, men and

women shareholders, and will do justice between real persons’” quoting from Barnes v. Lieberg,

146 Fla. at 238, 1 So.2d at 254. That is when the corporate veil is “set aside” or pierced, what

remains is “an association of live, up-and-doing, men and women shareholders,” that is a

partnership as to which the court “will do justice between real persons.”

a corporation cannot be formed for the purpose of accomplishing a fraud, or other illegal act, under the guise of the fiction that a corporation is a legal entity separate and distinct from its members. When this is attempted the fiction will be disregarded by the courts and the acts of the real parties dealt with as though no corporation had been formed. (Emphasis added.) Biscayne Realty & Ins. Co. v. Ostend Realty Co supra at 18 Supreme Court of Florida

[44] When the corporate veil is pierced it’s “as though no corporation had been formed”, i.e.

an effective partnership. Uniform Partnership Act (”UPA”) 1997 Section 101(6) (SA[32]_p.281)

states “‘Partnership’ means an association of two or more persons to carry on as co-owners a

business for profit formed.” (Cf. Malone v. Hines, 36 Ark. App. 254, 261 (Ark. Ct. App. 1992).

Once the Auctions’ veil is pierced, what’s left is “as though no corporation had been formed.”

Biscayne Realty supra. Dania Jai-. v. Sykes says there is one “web of entity.” i.e., one veil.



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[45] UPA §306 states “all partners are liable jointly and severally for all obligations of the

partnership unless otherwise agreed by the claimant or provided by law.” Thus under Dania Jai-

Alai Palace, Inc. v. Sykes when the corporate veil is pierced all LLC-Stakeholders are jointly and

severally liable as all partners are in a partnership. “Under Florida law, the ‘corporate veil’ may

be disregarded to hold the shareholder or managing member personally liable” Hudson & Keyse,

LLC v. Goldberg & Assocs., LLC, 2009 U.S. Dist. LEXIS 24728, 6-7 (03/24/09). Thus since the

Auctions veil should be pierced, Defendant should be found jointly and severally liable with D.H.

Zimmer for Auctions’ improper purpose of criminally converting and using Plaintiffs’ money.

At the time D.H. Zimmer put the Stolen-Money into Auctions’ bank-account, D.H. Zimmer and

S. Zimmer were managing members and D.Zimmer, D.M. Zimmer (both later became managing

members) and Defendant, were members, shareholders or owners.

[46] Defendant shouldn’t be permitted to escape liability by intentional ignorance. Briggs

Transp. Co. v. Starr Sales Co., 262 N.W.2d 805, 811 (Iowa 1978). She had a duty to know what

was going on in Auctions and by voluntarily being a member of Auctions, its property was her

personal property and she cannot “claim to have acted in ignorance of what it was [her] duty to

know concerning the conduct and condition of the affairs of [Auctions]” Gantenbein v. Bowles,

103 Ore. 277, 292 (Or. 1922); Under Florida Law the corporate veil can be pierced by showing:

[T]hat the corporation is in actuality the alter ego of the stockholders and that it was organized or after organization was employed by the stockholders for fraudulent or misleading purposes, or in some fashion that the corporate property was converted or the corporate assets depleted for the personal benefit of the individual stockholders, or that the corporate structure was not bona fidely established or, in general, that property belonging to the corporation can be traced into the hands of the stockholders. (Citation omitted, emphasis added.)

Dania Jai-Alai Palace, Inc. v. Sykes, supra at 1120



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[47] Defendant is jointly and severally liable with D. H. Zimmer for knowingly and

wrongfully benefiting, as an owner of Auctions, from D.H. Zimmer’s criminal conversion of the

Stolen Money by putting it into the Auctions bank account. “[W]illful blindness … of serious

wrongdoing …, is sufficient to give rise to a strong inference that [defendant] acted with a

severely reckless state of mind.” Zuckerman v. Smart Choice Auto. Group, Inc., 2000 U.S.

Dist. LEXIS 14676, 16-17 (M.D. Fla. May 18, 2000). Defendant’s response to most discovery

request was she had and knew nothing (Ex.# 21.)

[48] The only evidence on the Motion is from the Amd.Cp. showing D.H.

Zimmer stealing Plaintiffs’ money and putting it into the Auctions bank account.

Auctions was an alter ego of D.H. Zimmer and S. Zimmer who used the Auctions bank

account as a personal bank account to pay the Zimmer Family Members personal bills

and expenses, to make cash distributions thereto directly from the Stolen-Money and

there is no evidence Auctions actually had any business or this bank account was used for

Auctions’ purposes. Stolen-Money is thus “traced into the hands of the [LLC-

Stakeholders of Auctions]” Dania v. Sykes, supra at 1120. Auctions was used by D.H.

Zimmer for a fraudulent or misleading purpose after organization, i.e. to take possession

of the Stolen Money and to put into Auctions for this illegal purpose, in attempt to put it

out of reach of Plaintiffs to recover it.. Under Dania Auctions’ veil should be pierced.

[49] Plaintiffs found no authority stating each LLC-Stakeholder has to participate in the

improper use of the LLC or each must have committed or contributed to a wrong. Once the

wrong is committed by the LLC resulting in veil piercing, it’s as if no LLC was ever formed

resulting in every LLC-Stakeholder, including innocent ones, being liable as in a partnership.

D.H. Zimmer’s “improper action” (F.S.A.§608.701) (Ex.# 35) and “knowing violation of the



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law" (F.S.A.§608.4225 (Ex.# 35)) as an Auctions’ managing member putting the Stolen Money

into Auctions is self-piercing of Auctions’ veil. The corporate veil will be pierced to prevent

fraud or injustice, Dania. v. Sykes supra. at 1121, which is done by finding Defendant jointly

and severally liable with D.H. Zimmer and liable to Plaintiffs for the Stolen Money.

[50] The causation has to be associated with the LLC, it must be the cause of the plaintiff’s

harm. An LLC as a fictitious person acts through its LLC-Stakeholders. “[T]he corporation

could act only through its officers and agents” West Valley Estates, Inc. v. State, 286 So. 2d

208, 209 (Fla. Dist. Ct. App. 2d Dist. Dec. 5, 1973). Thus an LLC is caused to act by a natural

person. For an LLC-Stakeholder to be liable as a result of veil piercing doesn’t require such

person to be the cause of the piercing. Once veil is pierced all LLC-Stakeholders are personally

liable as partners because it is “as though no corporation had been formed” Dania. v. Sykes

supra. To require each LLC Stakeholders to be the cause or contribute to the cause of Plaintiffs’

harm requires such LLC-Stakeholder to commit or participate in the commission of a tort.

Under Florida law a person who commits a tort is liable without piercing the corporate veil.

Florida Specialty, Inc (supra.) Thus to require a LLC-Stakeholders to commit a tort to pierce

Auctions’ veil renders the principle of piercing the corporate veil as to them a nullity. LLC-

Stakeholders have significant advantages from LLC status which don’t come free. Defendant

chose to be LLC-Stakeholders and thereby subject to its consequences, but, disregards this.

[51] Plaintiffs request this Court to find the Auctions corporate veil pierced and the

Defendant liable to Plaintiffs.

[52] Defendant’s belatedly submitted Exhibit 2 (PA ¶2) is the US 2nd Circuit decision in the

Federal Appeal ((Doc.# 62) PA ¶2) which is a summary order, the first line of which states

“Ruling by summary order do not have precedential effect.” Since this is a ruling on motions



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for summary judgment, no determination of fact has been made. Summary judgment is made by

a judge before a trial on alleged undisputed facts. Plaintiffs disagreed with and disputed the 2nd

Cir. Decision by writ of certiorari. SCOTUS does not review all incorrectly decided US Circuit

Court decisions. Determinations of fact can only be made after a trial by the trier of fact. For

the reasons given in NOCM Requests 5-8 & 29 this decision cannot have res judicata or

collateral estoppel effect on the Present Action. It can not have res judicata effect under any

circumstances since the Defendant was not a party to the Federal Action. It can not have

collateral estoppel effect under any circumstances in regards to the allegations in M9 ¶ 6_s.4

with respect ““[Defendant’s] sister Debra and [Defendant’] brother David” since no facts

were decided by a trier of fact with respect to them in the Federal Action.

[53] Collateral estoppel and res judicata do not apply to the US2ndCir-Decision since

Defendant is not a party to the Federal Action and there were no ultimate facts decided there

relevant to the Defendant in the Present Action. If the Defendant believes there were ultimate

facts decided there relevant to the Defendant in the Present Action, it is the Defendant’s burden

to state what she believes that to be so that Plaintiffs can respond to such an allegation. “This

doctrine [collateral estoppel] provides that, in general, identical parties, or those in privity with

them, are precluded from relitigating an issue of ultimate fact already decided in another

forum.” People ex rel. Jones v. New York State Div. of Parole, 168 Misc. 2d 937, 939 (N.Y.

Sup. Ct. 1996). “In New York, res judicata, or claim preclusion, bars successive litigation based

upon the ‘same transaction or series of connected transactions’ (see Siegel, NY Prac § 447 [4th

ed.]) if: (i) there is a judgment on the merits rendered by a court of competent jurisdiction, and

(ii) the party against whom the doctrine is invoked was a party to the previous action, or in



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privity with a party who was” Matter of People of the State of New York, by Eliot Spitzer, as

Attorney Gen. v. Applied Card Sys., Inc., 11 N.Y.3d 105, 122 (N.Y. 2008) (PA ¶ 20).

[54] A Federal Court’s decision on state law has no presidential or controlling effect on a

State Court. The Present Action is not the same action as the Federal Action. Even if a

proceeding in federal and state court are similar, the federal court action in applying state law is

not controlling on the state court:

Here, petitioner commenced similar proceedings in federal and state court. … Contrary to petitioner's argument that respondents cannot show prejudice because the federal court decision binds them on the merits of this case through collateral estoppel, the issues raised are primarily questions of law "to which collateral estoppel is inapplicable" (Brown v State of New York, 9 AD3d 23, 27, 776 NYS2d 643 n 2 [2004]). Additionally, the issues raised here require interpretation of state statutes. Federal court rulings on issues of state law are not binding on state courts . (Citations omitted Emphasis added)

Matter of Oneida Indian v. Pifer. 43 A.D.3d 579. 580-581 (N.Y. App. Div. 3d Dep't 2007)

[55] The N.Y. Court of Appeals in 1989 agreed that federal court rulings on issues of state

law are not binding on state court stating:

[T]he Federal courts, including the [U. S.] Supreme Court, have no power to authoritatively construe State statutes, where a State statute comes before the [United States] Supreme Court broadly construed by the State courts, the Supreme Court is bound by that interpretation of State law. People v. Dietze, 75 N.Y.2d 47, 59 (N.Y. 1989)

[56] The New York Appellate Division, Second Department, states:

The construction by State courts of a State statute is binding on the Federal courts, there being no Federal question involved, even though such courts disagree with the soundness of the interpretation. Marsich v. Eastman, 244 A.D. 295, 296 (N.Y. App. Div. 1935) Affirmed 269 N.Y. 631

[57] Thus Defendant’s dependence on the Federal Action as dispositive of all the claims in

the Present Action against her is misplaced. A federal court’s interpretation of and application

of state law is not controlling on a state court. The Federal Action is not directed to all the facts



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alleged in the Amd.Cp.. There are common and different facts. Defendant failed to met her

burden in indentifying determinations in the Federal Action on those common facts that result

per se in granting the Motion. There is none. .

[58] The only part of the 2nd Cir. Decision relevant is p.4, ll 16-19 which states

Even assuming (without deciding) that a constructive trust was created when Zimmer deposited the stolen money, plaintiffs presented insufficient evidence to permit a reasonable fact finder to pierce the corporate veil of Auctions, the owner of eh bank, account the reach the Zimmer Relatives.

Plaintiffs disagree. Auctions had no actual business and it committed a crime in knowingly

receiving and converting the Stolen Money to its own purposes. A U.S. Circuit Court of Appeals

has no authority to decide facts in federal practice. That is the sole function of the trier of fact,

after a trial. In this action it is the Defendant’s burden to identify the evidence to have summary

judgment granted to her. She has cited no evidence.

CONCLUSION

[59] The statutorily unabrogagted common law is when a person (“B”) has possession of

another’s (A’s) property (including money) for which that person B, gave no value to the

other person A, the person B, holds the property in a constructive trust for the benefit of the

other person A. Under the statutorily unabrogagted common law person B can be a

corporation, non-natural person. Without citing any authority, Defendant appears to be

asserting that the statutorily unabrogagted common law does not apply to Auctions because

it is an LLC. There is no authority cited for this, is in conflict with Florida statutory and

decisional law (supra.). Defendant’s position makes no logical or legal sense.

[60] The following illustrates Defendant’s position. Assume there is a reliable witness

who can testify to these facts. Three persons P, D and E are in front of an ATM machine.



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►SCENARIO 1: P is holding a $100 bill and asks D, who gave no value for it, to hold it,

so as not to loose it, while P bends down to pick up a purse P dropped. Between the time P

bends down to pick up the purse and straightens up D give the $100 bill to E who gave no

value for it and who did not know D got the $100 bill from P for no value. Under the

common law of trusts: (1) D is a constructive trustee of the $100 bill for the benefit of P

because D gave P no value for it; and (2) E is a constructive trustee of the $100 bill, as a

subsequent holder of it, for the benefit of P because E gave D no value for it.

►SCENARIO 2: Assume same facts as SCENARIO 1, except between the times P bends

down and straightens up, D feeds the $100 bill into the ATM machine into his LLC bank

account without P’s authorization and consent and immediately extracts it out giving it to E.

P demands E return the $100 bill. E says I do not have to since when D feed the $100 bill

into the LLC bank account because of the LLC corporate veil that stripped you of your

ownership interest. This is an absurd result that has no common sense or legal justification

and is not the purpose of the corporate veil. Such a result is in direct conflict with the

Florida Supreme Court saying the corporate veil cannot be “used as a cloak for wrongdoing”

Dania Jai-Alai Palace, Inc. v. Sykes, (supra at 1118). This result if adopted would legally

sanction a larcenist like D.H. Zimmer defrauding an innocent person of their money placing

it out of their reach by putting it into an LLC bank account for an LLC having no business

from where he distributes it to a non-BFPV third person who is free to open and notoriously

use it without consequence. This is contrary to law.

But [Defendant an Auctions’ member], as an officer and owner of a close corporation is not individually immune from personal liability for actual damages under the doctrine which permits piercing the corporate veil. As a major corporate officer [Defendant an Auctions’ member], could not avoid liability by emulating the three fabled monkeys, hearing, seeing and speaking no evil.



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Briggs Transp. Co. v. Starr Sales Co., 262 N.W.2d 805 (Iowa 1978)

[61] Boyer v. Belavilas is an example of a case finding successive transferees jointly and

severally liable for the same transferred asset (money) where under the common law children

(having legal title) were jointly and severally liable with mother and Other Entities, even though

the children didn’t have the money and Other Entities had it. To find a corporate veil prevents

recovery from LLC-Stakeholders who are in possession of stolen property is a reductio ad

absurdum. D.H. Zimmer, the thief who stole Plaintiffs’ money, did not have good title to it and

couldn’t convey good title to it to Auctions or Defendant, who had legal title to it, even if she

paid value for it. Plaintiffs can sue Defendant for recovery of the Stolen-Money (Remedies §§

4.7, 9.6 Dobbs © 1973.) Nothing in F.S.A.§608 abrogates this common law rule.

[62] Protection of the corporate structure (veil) applies to the corporate entity not to Stolen-

Money in its bank account. D.H. Zimmer’s crime and conversion in putting Stolen Money into

bank account nominally in the name of Auctions cannot result in Plaintiffs surrendering their

ownership interest in Stolen-Money to Auctions. Plaintiffs’ ownership interest can only be

surrendered to Auctions by Plaintiffs investing it in Auctions or acquiring its goods or services.

Defendant uses the “fictitious” corporate structure as a “cloak for wrongdoing” which the

Supreme Court of the Florida prohibits:

When the conception of corporate entity is employed to defraud creditors, to evade an existing obligation, to circumvent a statute, … or to protect knavery or crime, the courts will draw aside the web of entity, will regard the corporate company as an association of live, up-and-doing, men and women shareholders, and will do justice between real persons. …[The conception of corporate entity cannot be] …used as a cloak for wrongdoing. Dania Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114, 1118 (Fla. 1984)

[63] We respectfully request the Court grant all requests of Plaintiffs’ Notice of Cross

Motion and deny the requests of Defendant’s Motion Seq. No. 9 for the reasons given herein, in

Notice of Cross Motion and in Plaintiffs’ Affidavit in Support thereof.



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. .

Respectfully submitted,

___________________________________

July 8, 2017

Signature

Daniel Peter Morris Plaintiff Pro se, Attorney Attorney for Plaintiff Lucille Aiosa Morris P. O. Box 1165 White Plains, NY 10602 Telephone Number 914-945-3217



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MOL in Support of Opposiiton to Def Mot SJ Mot # 9 Final

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