Dardashtian et al v. Gitman et al

Filing 214

MEMORANDUM AND ORDER re: 180 FIRST MOTION for Summary Judgment and 209 Report and Recommendations: This Court adopts Judge Lehrburger's Report and Recommendation in its entirety; 1. Summary judgment is granted to plaintiffs on Counts Tw o, Five, Seven, Ten, Twelve, Eighteen, Nineteen, and Twenty of the Amended Complaint, except with respect to the purchase price for redemption under Count Twenty. 2. Defendant David Gitman is permanently removed as co-manager of the plaintiff compani es. 3. Determination of the purchase price for redemption of defendant David Gitman's interests in the plaintiff companies, pursuant to Section 11.5 of the CSV Operating Agreement, is referred to Magistrate Judge Lehrburger for his report and re commendation. 4. Summary judgment is granted to plaintiffs dismissing all of defendants' Counterclaims First through Ninth, except denied with respect to the Second Counterclaim for Gitman's individual claim for breach of fiduciary duty, li mited solely to the issue of the propriety of Dardashtian's receipt of health insurance and $10,000 in distributions. 6. Defendants' request for a jury trial is stricken as contractually waived pursuant to Section 17.9 of the CSV Operating Agreement. 7. Summary judgment is denied as premature without prejudice as to plaintiffs' claim for attorney's fees. (Signed by Judge Louis L. Stanton on 3/30/21) (ml)

Case 1:17-cv-04327-LLS-RWL Document 214 Filed 03/30/21 Page 1 of 5
USDC SON\'
DOCl \lE \T
ELEl lRO\ICALLY FILED
UNITED STATES DISTRICT COURT
DOC#:
SOUTHERN DI STRICT OF NEW YORK
DATE FlLED:_......,../__ / 2_\_
3 '3 0 _
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MICHAEL DARDASHTIAN , et al .,

I
I

Plaintiffs ,

17 Civ . 4327

- against -

(LLS)

MEMORANDUM AND ORDER

DAVID GITMAN , et al .,
Defendants.

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Judge Lehrburger recommends that
Dardashtian is entitled to summary judgment on all of
his affirmative claims at issue on this motion except
with respect to the purchase price to be paid upon
redemption , and on all of Gitman ' s counterclaims with
the sole, and very limited , exception that Dardashtian
allegedly breached his fiduciary duty by receiving
health insurance that Gitman opted not to take , and
drawing two small distributions while Gitman was
working full time for another company .
R&R at 2 , Dkt. 209 . " Further , Gitman ' s removal as co - Manager
should be made permanent prior to redemption ." Id . at 35 .
" Summary judgment should be DENIED as premature without
prejudice as to Plaintiffs '

claim for attorney ' s fees ." Id . at

80 .

Gitman objects to Judge Lehrburger ' s Report and
Recommendation , arguing that it impermissibly resolves disputed
fact is sues and defers to the movant :
This Court should decline to follow the Report
since the Reports makes numerous determinations with
respect to issues of fact that is exclusively reserved
for the trier of facts. The Report disregards factual
disputes and makes factual determinations after
improperly weighing the factual issues by giving

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Case 1:17-cv-04327-LLS-RWL Document 214 Filed 03/30/21 Page 2 of 5

deference to the movant with respect to the issues
that are present in this case .
Obj . to R&R at 2 ; see also id . at 7 ("The Report completely
discredits David Gitman ' s affidavit rather than giving
reasonable deference to David Gitman ' s affidavit as the
nonmovant in this summary judgment motion." )
As Judge Lehrburger explained ,
the court must inquire whether "there is sufficient
evidence favoring the nonmoving party for a jury to
return a verdict for that party ." Anderson , 477 U. S .
at 249 . Summary judgment ma y be granted , however ,
where the nonmovant ' s e v idence is conclusory ,
speculative, or not significantly probative . Id. at
249 - 50 . If there is nothing more than a "metaphysical
doubt as to the material facts, " summary judgment is
proper. Matsushita Electric Industrial Co . v . Zenith
Radio Corp ., 475 U. S. 574 , 586 (1986) .
R&R at 34 ; see also Weeks v . ARA Servs ., 869 F . Supp . 194 ,
196 (S . D. N . Y. 1994)

("Ge~eralized and conclusory affidavits

are insufficient to withstand defendants ' motion for
summary judgment.").
Judge Lehrburger correctly found that Gitman offered
insufficient admissible e v idence to support his assertions
beyond his own conclusory affidavit , and that no reasonable
juror could believe most of those assertions.

1

For instance ,

Judge Lehrburger found that

1

On those few issue s he found sub j ect to re as onable di s put e , J udge
Leh rburger r ecommended that s ummary judgment be d e nied .

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Case 1:17-cv-04327-LLS-RWL Document 214 Filed 03/30/21 Page 3 of 5

Gitman ' s attempt to justify his actions as
protecting CSV and ChannelReply rather than harming
them are without any evidentiary basis . ( See Gi tman
Aff . ~~ 112 , 135 ( " [I] believ[ed] I was protecting the
interests of the Company " and "I never intended to use
the money for my benefit. " ) .) To recap , there is no
evidence that , or explanation (let alone one that a
reasonable juror could find ) why , the measures he took
- depleting CSV ' s bank account , transferring assets to
himself and to CRINC , depriving Dardashtian of access
to virtually all ChannelReply data and operations ,
etc . - were necessary to accomplish the sale of NDAP.
Nor is there any evidence of an actual agreement to
give Gitman a controlling 67 . 5 % of ChannelReply or any
explanation of how the steps Gitman took were meant
" to formalize the agreed upon ownership percentages ."
(SUF Response~ 42 . ) And , no reasonable juror could
find that Gitman acted on advice of CS V' s corporate
counsel , because the lawyer Gitman retained - with CSV
funds - to advise him about CRINC was his personal
attorney . (See 6/8/2017 Tr . at 2 ) (attorney Farooq
stating to the Court that " I represent David Gitman
and DalvaVentures , LLC , and Channel Reply , Inc ." ).) No
reasonable juror could find that Gitman acted for the
good of CSV or its businesses as opposed to Gitman ' s
own self - interest .
R&R at 37 - 38 ; see also id . at 47

("Nor can it be genuinely

disputed that Gitman breached his fiduciary duty not only
to CSV but also to Dardashtian , his co - Manager and co Member ." ) , 49

("Gitman ' s indisputable breaches of the CSV

Operating Agreement have been discussed above in the
context of CSV ' s right to redemption and Gitman ' s acts of
misconduct ." ) , 7 - 9 (Gitman presents no evidence beyond his
own conclusory , counterproductive affidavit to dispute
Dardashtian ' s evidence that ChannelReply is a proprietary

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Case 1:17-cv-04327-LLS-RWL Document 214 Filed 03/30/21 Page 4 of 5

trade secret) , 57

("Plaintiffs have presented indisputable

evidence that Gitman converted CSV's property ." ) .
This Court adopts Judge Lehrburger ' s Report and
Recommendation in its entirety.
It is ORDERED that
1. Summary judgment is granted to plaintiffs on Counts Two,
Five , Seven , Ten , Twelve , Eighteen , Nineteen , and Twenty of the
Amended Complaint , except with respect to the purchase price for
redemption under Count Twenty.
2 . Defendant David Gitman is permanently removed as co manager of the plaintiff companies.
3 . Determination of the purchase price for redemption of
defendant David Gitman ' s interests in the plaintiff companies ,
pursuant to Section 11 . 5 of the CS V Operating Agreement , is
referred to Magistrate Judge Lehrburger for his report and
recommendation .
4 . Summary judgment is granted to plaintiffs dismissing all
of defendants ' Counterclaims First through Ninth, except denied
with respect to the Second Counterclaim for Gitman ' s individual
claim for breach of fiduciary duty , limited solely to the issue
of the propriety of Dardashtian ' s receipt of health insurance
and $10,000 in distributions .

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Case 1:17-cv-04327-LLS-RWL Document 214 Filed 03/30/21 Page 5 of 5

6 . Defendants '

request for a jury trial is stricken as

contractually waived pursuant to Section 17 . 9 of the CSV
Operating Agreement .
7 . Summary judgment is denied as premature without
prejudice as to plaintiffs '

claim for attorney ' s fees .

So ordered .
Dated:

March 30 , 2021
New York , New York

LOUIS L . STANTON
U. S . D. J .

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