# 26 Bowery LLC v. Ng

> United States Bankruptcy Court, S.D. New York · March 6, 2024

URL: https://www.frixlaw.com/law-library/cases/10461160

## Case

- **Court:** United States Bankruptcy Court, S.D. New York
- **Decided:** March 6, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10461160

## How later opinions describe it (automated extraction)

- concluding that the embezzled funds were sufficiently identifiable and traceable to sustain a cause of action for conversion

## Opinion text

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re: NOT FOR PUBLICATION

Chapter 11
26 BOWERY LLC and
2 BOWERY HOLDING LLC, Case No. 22-10412 (MG) and
22-10413 (MG)

Debtors. (Jointly Administrated)
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26 BOWERY LLC and
2 BOWERY HOLDING LLC,

Plaintiffs, Adv. Pro. No. 23-01145 (MG)
v.

STEVEN NG

Defendant.
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MEMORANDUM OPINION AND ORDER GRANTING
JUDGMENT OF POSSESSION AND PAYMENT OF
UNJUST ENRICHMENT AND CONVERTED FUNDS IN FAVOR OF PLAINTIFFS

A P P E A R A N C E S:

RAVERT PLLC
Special Litigation Counsel for Plaintiffs
16 Madison Square West, Floor 12, #269
New York, New York 10010
By: Gary O. Ravert, Esq.

LAW OFFICES OF ROBERT S. LEWIS, P.C.
Attorney for Defendant Steven Ng
53 Burd Street
Nyack, New York 10960
By: Robert S. Lewis, Esq.
MARTIN GLENN
CHIEF UNITED STATES BANKRUPTCY JUDGE

This Opinion follows the trial held on February 5, 2024 on the adversary complaint (the
“Complaint,” ECF Doc. #1) of 26 Bowery LLC (“26 Bowery”) and 2 Bowery Holding LLC (“2
Bowery” and, together with 26 Bowery, the “Debtors” or “Plaintiffs”) that asserts 11 causes of
action against defendant Steven Ng (the “Defendant”). The Defendant is a party to a three-year
lease (the “Lease,” PX1-19) for Apartment 4 (the “Apartment”) at 2 Bowery, New York, NY
10013 (the “Property”). The Opinion constitutes the Court’s findings of fact and conclusions of
law.
Since the initial filing of the Complaint, the Debtors have narrowed the relief sought to
the following: (i) a declaratory judgment that the Lease is void ab initio (Count I) or, to the
extent it exists and is valid, is rescinded (Count II); (ii) an order and judgment avoiding the Lease
and deeming all transfers of cash of the Debtors (the “Cash Transfers”) to the Defendant as
actual or constructive fraudulent conveyances (Count III); (iii) an order and judgment for
conversion of the Debtors’ cash in the amount of $103,035.00 on account of the Cash Transfers
(Count VII); (iv) an order and judgment for unjust enrichment in the amount of $34,515.36 with
respect to the Lease and unjust enrichment with respect to the Cash Transfers in an unspecified
amount (Count VIII); and (v) an order and judgment for civil conspiracy in the amount of
$444,572.99 to $1,808,979.09 (Count IX). (See Joint Pretrial Order (the “Pretrial Order), ECF

Doc. # 22 at 49–50; Plaintiffs’ Memorandum of Law in Support of Complaint (the “Supporting
Memo”), ECF Doc. # 21 ¶ 23; Plaintiffs’ Statement of Withdrawal of Count VI of Complaint
(“Statement of Withdrawal”), ECF Doc. # 23; Plaintiffs’ Statement of Calculations of Amount of
Converted Funds (Count VII – Steven Ng Only), Unjust Enrichment Amount (Count VIII – Steven
Ng and Barbara Mak), and Damages for Civil Conspiracy (Count IX – Steven Ng Only)
(“Statement of Calculations”), ECF Doc. # 24 at 2–5.) With respect to Counts I, II, and III, the
Debtors are also seeking an immediate judgment possession of the Apartment with a warrant of
eviction or writ of assistance and immediate execution of the same. (Supporting Memo ¶ 5.)
In support of the Complaint and the relief sought, the Debtors filed (i) the Supporting

Memo and (ii) the declaration of Brian Ryniker, member of financial advisory firm RK
Consultants LLC and independent manager (the “Independent Manager”) to the Debtors (the
“Ryniker Decl.,” ECF Doc. # 21-1). Numerous exhibits and the Ryniker Decl. were offered in
evidence by Plaintiffs’ counsel and admitted in evidence at the trial. Defendant’s counsel cross-
examined Mr. Ryniker. Other than the cross-examination of Mr. Ryniker, Defendant’s counsel
did not offer any other evidence at trial.
For the reasons discussed below, the Court GRANTS (i) with respect to Count I, a
judgment of possession in favor of the Debtors and against the Defendant, to take immediate
possession of the Apartment; (ii) with respect to Count VII, a judgment in favor of the Debtors
and against the Defendant in the amount of $103,035.00; (iii) with respect to Count VIII, a

judgment in favor of the Debtors and against the Defendant in the amount of $19,250.00 for
unjust enrichment; and (iv) with respect to Count IX, a judgment in favor of the Defendant and
against the Debtors. Finally, with respect to the affirmative defenses, the Court GRANTS a
judgment DISMISSING the Defendant’s affirmative defenses. For avoidance of doubt, ALL
OCCUPANTS of the Apartment must immediately vacate the Apartment.
I. BACKGROUND
A. The Debtors and the Commencement of the Chapter 11 Case
The Debtors are fee owners of the Property. (Ryniker Decl. ¶ 4.) The Property is a
multi-family, mixed-use residential and commercial, 5-story building in Chinatown, Manhattan.
(Id. ¶ 12.) The Debtors entered into two loan agreements, dated April 26, 2019, borrowing a
total of $8.6 million from two lenders, which were secured and cross-collateralized by certain
notes, mortgages, security agreements, membership pledge agreements, and guaranties. (Id. ¶ 4.)
On March 31, 2023, the Debtors executed amended and restated operating agreements

and appointed RK Consultants LLC, by its member Brian Ryniker, as Independent Manager.
(Id. ¶ 5.) The Independent Manager commenced the Debtors’ voluntary Chapter 11 cases on
March 31, 2022 (the “Petition Date”), which are being jointly administered. (Id. ¶ 6.)
B. The Lease Agreement
The Defendant, along with his brother Wilson Ng, are co-members and managers of the
Debtors. (See Supporting Memo at 1.) The Defendant concedes that the Lease, which provides
for a monthly rent of $550.00, established rent that is substantially less than market rate and the
amount recited on the certified rent roll for the Property (the “2 Bowery Certified Rent Roll”).
(PX1A ¶¶ 140, 142, 145–46.)
The Defendant indicates that he and Wilson Ng signed the Lease, but the terms of the

Lease were never enforced. (PX1A ¶¶ 144, 151.) The Defendant admitted that he did not pay
rent, the security deposit, or register utilities in his name as required under the Lease. (Id. ¶¶
153–55.) In fact, he conceded that “there is no documentary evidence that [he] ever paid rent
under the [Lease]” or the security deposit. (Id. ¶¶ 156–57.) Notwithstanding the foregoing,
neither he nor Wilson Ng ever enforced the Lease. (Id. ¶ 151 (admitting that “neither Wilson Ng
nor Steven Ng enforced the terms of the Steven Ng Lease”).)
C. The Cash Transfers
The Debtors indicate that the Defendant was in receipt of “numerous Cash Transfers”
that the Defendant failed to turn over to the Debtors. (Supporting Memo ¶ 40.) The Debtors’
papers are nonetheless unclear as to what transactions constitute the Cash Transfers or its total
amount. (See, e.g., id. (“Without an accounting, the Debtors cannot be sure they have identified
all of such Cash Transfers . . . .”); id. (asserting that the Defendant admitted to receiving and
depositing personal account checks for “thousands of dollars”); id. (alleging that there were

“numerous Cash Transfers from Debtor bank accounts . . . to the personal bank accounts of [the
Defendant] and Wilson Ng”); id. ¶ 51 (“The Debtors’ evidence demonstrates that [the
Defendant] is liable to the Debtors for conversion of unknown sums of cash belonging to the
Debtors.”).)
At the close of trial, however, the Debtors filed the Statement of Calculations, which
indicates that with respect to their claim for conversion on account of the Cash Transfers, the
Defendant was in receipt of $103,035.00 of the Debtors’ funds. (Statement of Calculations at 2.)
Specifically, Exhibit A to the Statement of Calculations identifies the individual transactions
comprising the Cash Transfers, including where each transaction is reflected in the evidence
admitted in this case. The Cash Transfers, which span May 3, 2019 through April 5, 2022,

consist of transactions to the Defendant from (i) a Debtor bank account or (ii) the Chouk King
Co. Chase bank account—the account of the former owner of 2 Bowery that the Defendant and
Wilson Ng admittedly still use. (Id. at 3; PX1A ¶¶ 301–303 (Defendant admitting the continued
use of the Chouk King Co. bank account).) Funds transferred from the Chouk King Co. Chase
bank account allegedly relate to T-Mobile rents. (Id. at 3.) Accordingly, for purposes of this
Opinion, the transactions identified on Exhibit A to the Statement of Calculations in the total
amount of $103,035.00 shall constitute the Cash Transfers that are subject to this Court’s ruling.
The Defendant has conceded that he received certain of the Cash Transfers: (i) Wilson
Ng’s transfer of $38,000.00 to the Defendant from 2 Bowery’s bank account (see PX1A ¶ 284
(admitting that “on May 3, 2019, Wilson Ng wrote a check to [the Defendant] in the amount of
$38,000 from [2 Bowery’s] Bank of America1 account . . . which was deposited into [the
Defendant’s] personal account”); (ii) the Defendant’s receipt and deposit of “personal account
checks for ‘thousands of dollars’ from the [2 Bowery] bank account” (Supporting Memo ¶ 40;

see PX1A ¶ 287 (admitting that Wilson Ng wrote “additional checks for thousands of dollars
from [2 Bowery’s] Bank of America account . . . to [the Defendant] which [the Defendant
deposited in his personal bank”); and (iii) the Defendant’s possession of at least $25,000 in cash
rent from T-Mobile (see PX7 at 108:5–21 (conceding that he was holding “over $25,000” in cash
rent from T-Mobile)).
D. The Adversary Proceeding
On July 21, 2023, the Debtors filed the Complaint, commencing this adversary
proceeding. As discussed, the Plaintiffs are seeking (i) an immediate judgment possession of the
Apartment with a warrant of eviction or writ of assistance and immediate execution of the same
with respect to Counts I, II, and III; (ii) an order and judgment avoiding the Lease as an actual or

constructive fraudulent conveyance and deeming the Cash Transfers to be the same (Count III);
(iii) an order and judgment for conversion of the Debtors’ cash in the amount of $103,035.00 on
account of the Cash Transfers (Count VII); (iv) an order and judgment for unjust enrichment in
the amount of $34,515.36 with respect to the Lease and unjust enrichment with respect to the
Cash Transfers in an unspecified amount (Count VIII); and (v) an order and judgment for civil
conspiracy in the amount of $444,572.99 to $1,808,979.09 (Count IX).

1 The Statement of Calculations indicates that, which respect to the $38,000.00 transfer made on May 3,
2019, 2 Bowery’s bank account is with TD Bank and not Bank of America. (See also Ryniker Decl. ¶ 351 (“On
May 3, 2019 . . . at least $38,000 . . . in the possession of [2 Bowery] at its TD Bank account ending 1828 was
deposited into the personal bank account . . . of Steven Ng.”).) As the Statement of Calculations provides a detailed
accounting of the transactions, including relevant account numbers, the Court will adopt the information set forth in
the Statement of Calculations concerning 2 Bowery’s bank account.
On October 13, 2023, the Defendant filed the Answer, opposing the relief sought and
asserting 11 affirmative defenses in response to all claims asserted. The relevant affirmative
defenses are as follows: (i) failure to state a cause of action as to all counts; (ii) barred by
doctrine of laches as to all counts; (iii) to the extent the Lease was previously terminated through

an action for eviction or ejectment, dismissal for lack of any justiciable controversy as to Counts
I and II; (iv) to the extent any recovery for any voided transfer was previously made pursuant to
11 U.S.C. § 544, the Debtors are entitled only to a single satisfaction of debt as to Count III; (v)
time-barred by the applicable statute of limitations as to Count III; and (vi) inapplicability of the
alleged governing statutes since the Defendant is “not a debtor of the Plaintiff[s]” as to Count III.
(Answer ¶¶ 4–26.) No affirmative defenses were raised as to Counts VII, VIII, and IX.
On January 31, 2024, the Court entered the Pretrial Order, which, among other things,
amended the pleadings to “embrace” only the contentions of the parties set forth therein.
(Pretrial Order at 3.) As reflected in the Pretrial Order, the Defendant did not submit any
contentions, issues to be tried, or evidentiary support in opposition to the relief sought. (See id.

§§ IV(B), V(2), VII, X.)
On February 5, 2024, the Court held an in-courtroom trial during which the Plaintiffs
indicated that they would be seeking relief with respect to Counts I, II, III, VII, VIII, and IX. At
trial, Plaintiffs offered exhibits PX1 through PX17, PX1-1 through PX1-39, and PX6A into
evidence. The Defendants did not object and all exhibits were admitted into evidence.
II. LEGAL STANDARD
A. Requirements for an Enforceable Valid Contract
Generally, the interpretation of leases is subject to the “same rules of construction [that] .
. . are applicable to contracts generally.” Himmelberger v. 40-50 Brighton First Road
Apartments Corp., 943 N.Y.S.2d 118, 120 (N.Y. App. Div. 2012). For a contract to be valid,
there must be an offer, acceptance, consideration, mutual assent, and an intent to be bound.
Kolchins v. Evolution Markets, Inc., 128 A.D.3d 47, 59, 8 N.Y.S.3d 1 (N.Y. App. Div. 2015).
Where objective evidence demonstrates that the parties intended to be bound by an agreement,

that agreement may be enforced—even if it is unsigned. See Flores v. Lower East Side Serv.
Ctr., Inc., 4 N.Y.3d 363, 369 (N.Y. 2005). It is the “party seeking to enforce the contract [that]
bears the burden at trial to establish that a binding agreement was made and to prove its terms.”
Kramer v. Greene, 36 N.Y.S.3d 448, 450 (N.Y. App. Div. 2016). The absence of any of these
essential elements of a contract is a bar to its enforceability. 22 N.Y. Jur. 2d, Contracts § 9; see
Kensington Court Assocs. v. Gullo, 579 N.Y.S.2d 485 (N.Y. App. Div. 1992) (“If an agreement
is not reasonably certain in its material terms, there can be no legally enforceable contract.”)
(citation omitted).)
As a threshold matter, for a contract to be binding, “there must be a manifestation of
mutual asset sufficient definite to assure that the parties are truly in agreement with respect to all

material terms.” Matter of Express Indus. & Term. Corp. v. New York State Dept. of Transp., 93
N.Y.2d 584, 589 (N.Y. 1999). “Such manifestations may be expressed through a party’s written
or spoken words, silence, or conduct, so long as the party ‘intends to engage in the conduct and
knows or has reason to know that the other party may infer from his conduct that he assents.’”
Wu v. Uber Tech., Inc., 186 N.Y.S.3d 500, 586 (N.Y. App. Div. 2022) (quoting the Restatement
(Second) of Contracts § 19 [1]-[2]).
A contract must also be supported by consideration—each party must receive “something
of value.” Apfel v. Prudential-Bache Secs. Inc., 616 N.E.2d 1095, 1097 (N.Y. 1993). To satisfy
this requirement, it is sufficient that if something of “real value in the eye of the law was
exchanged.” Id. (internal quotations and citations omitted). Generally, “[m]utual promises or
obligations of parties to a contract, either express or necessarily implied, may furnish the
requisite consideration.” Oscar Schlegel Mfg. Co. v. Peter Cooper’s Glue Factory, 231 N.Y.
459, 461 (N.Y. 1921); see also NCSPlus Inc. v. WBR Mgmt. Corp., 949 N.Y.S.2d 317, 325 (N.Y.

App. Div. 2012).
Lastly, the parties must intend to be bound. See Four Seasons Hotels Ltd. v. Vinnik, 515
N.Y.S.2d 1, 5 (N.Y. App. Div. 1987) (“There can be no contract absent a mutual intent to be
bound.”). In determining whether such intent exists is a “mixed question of law and fact.” Id.
This means that “the question is to be decided by the court if determinable from the language
employed in the written instrument, and if not so determinable—if resort must be had to disputed
evidence or inferences outside the written words of the instrument—then by the finder of the
facts.” Id. (citation omitted). Generally, an “objective test is . . . to be applied.” Id. at 6. “This
means the manifestation of a party’s intention rather than the actual or real intention is ordinarily
controlling, for a contract is an obligation attached, by the mere force of law, to certain acts of

the parties, usually words, which ordinarily accompany and represent a known intent.” Id.
(quoting 21 N.Y. Jur. 2d Contracts § 29). Accordingly, a court should “not put disproportionate
emphasis on any single act, phrase or other expression but, instead, on the totality of these, given
the attendant circumstances, the situation of the parties, and the objectives they were striving to
attain.” Id. (citing Brown Bros. Elec. Contractors, Inc. v. Beam Constr. Corp., 41 N.Y.2d 397,
399–400 (N.Y. 1977)).
B. Unjust Enrichment
To prevail on a claim of unjust enrichment under New York law, “a plaintiff must
establish that the defendant benefitted at the plaintiff’s expense and that equity and good
conscience require restitution.” Whitman Realty Grp., Inc. v. Galano, 838 N.Y.S.2d 585, 587
(N.Y. App. Div. 2007) (citation omitted). In other words, “[t]o state a cause of action for unjust
enrichment, a plaintiff must allege that it conferred a benefit upon the defendant, and that the
defendant will obtain such benefit without adequately compensating plaintiff therefor.” Smith v.

Chase Manhattan Bank, USA, N.A., 741 N.Y.S.2d 100, 102 (N.Y. App. Div. 2002) (quoting
Nakamura v. Fujii, 253 A.D.2d 387, 390 (N.Y. App. Div. 1998)). Generally, recovery for unjust
enrichment is “barred by a valid and enforceable contract.” Whitman, 838 N.Y.S.2d at 588.
C. Conversion Under New York Law
Under New York law, conversion occurs “when someone, intentionally and without
authority, assumes or exercises control over personal property belonging to someone else,
interfering with that person’s right of possession.” Petrone v. Davidoff Hutcher & Citron, LLP,
54 N.Y.S.3d 25, 27 (N.Y. App. Div. 2017) (quoting C&B Enters. USA, LLC v. Koegel, 136
A.D.3d 957, 958, 26 N.Y.S.3d 185 (N.Y. App. Div. 2016)); see also Peters Griffin Woodward,
Inc. v. WCSC, Inc., 452 N.Y.S.2d 599, 600 (N.Y. App. Div. 1982) (“Conversion is an

unauthorized assumption and exercise of the right of ownership over goods belonging to another
to the exclusion of the owner’s rights.”). The “[t]wo key elements of conversion are (1)
plaintiff’s possessory right or interest in the property and (2) defendant’s dominion over the
property or interference with it, in derogation of plaintiff’s right.” Colavito v. New York Organ
Donor Network, Inc., 827 N.Y.S.2d 96, 100 (N.Y. 2006) (citations omitted).
“Money, if specifically identifiable, may be the subject of a conversion action.” Peters
Griffin, 452 N.Y.S.2d at 600; see also Republic of Haiti v. Duvalier, 626 N.Y.S.2d 472, 475
(N.Y. App. Div. 1995) (“Where the property is money, it must be specifically identifiable and be
subject to an obligation to be returned or to be otherwise treated in a particular manner.”)
(citation omitted). See, e.g., Simpson & Simpson, PLLC v. Lippes Mathias Wexler Friedman
LLP, 14 N.Y.S.3d 258, 260 (N.Y. App. Div. 2015) (concluding that the embezzled funds were
sufficiently identifiable and traceable to sustain a cause of action for conversion). Generally,
funds of a specific named bank account are considered sufficiently identifiable. Republic of

Haiti, 626 N.Y.S. 2d at 475. This element for an action involving the conversion of money
“seeks not to ensure that a specific description of each bill is proved but that the amount
converted is ascertained.” Family Health Mgmt., LLC v. Rohan Devs., LLC, 171 N.Y.S.3d 44,
51 (N.Y. App. Div. 2022) (internal quotation marks and citation omitted).
D. Civil Conspiracy
Generally, while New York does not recognize an independent cause of action for civil
conspiracy, “a plaintiff may plead the existence of a conspiracy in order to connect the actions of
the individual defendants with an actionable, underlying tort and establish that those actions were
part of a common scheme.” Litras v. Litras, 681 N.Y.S.2d 545, 546 (N.Y. App. Div. 1998)
(citations omitted). A bare conclusory allegation of conspiracy is insufficient. Blanco v.

Polanco, 986 N.Y.S.2d 151, 155–56 (N.Y. App. Div. 2014) (citation omitted).
To establish a claim of civil conspiracy, “a plaintiff must demonstrate the primary tort,
plus the following four elements: (1) an agreement between two or more parties; (2) an overt act
in furtherance of the agreement; (3) the parties’ intentional participation in the furtherance of a
plan or purpose; and (4) resulting damage or injury.” Norex Petroleum Ltd. v. Blavatnik, No.
650591/11, 2015 WL 5057693, at *12 (N.Y. Sup. Ct. Aug. 25, 2015) (quoting Abacus Fed. Sav.
Bank v. Lim, 75 A.D.3d 472, 474, 905 N.Y.S.2d 585 (N.Y. App. Div. 2010)). An allegation of
conspiracy “carries no greater burden, but also no less, than to assert adequately common action
for a common purpose by common agreement or understanding among a group, from which
common responsibility derives.” Faulkner v. City of Yonkers, 105 A.D.3d 899, 900, 963
N.Y.S.2d 340 (N.Y. App. Div. 2013) (citations omitted).
III. DISCUSSION
A. The Lease
1. The Lease is Void

A consideration of the totality of the evidence supports the conclusion that the Lease is
unenforceable given the parties’ lack of intent to be bound. See Brown Bros., 41 N.Y.2d at 399–
400 (stating that the existence of a binding contract is “not dependent on . . . subjective intent”
but rather “totality” of the parties’ “objective manifestations . . . as gathered by their expressed
words and deeds”); Flores, 4 N.Y.3d at 495–96 (considering whether it is “evident from the
totality of circumstances that the parties intended to be bound”). Here, there is no dispute that
the Defendant and Wilson Ng “mutually assented to the Lease.” (See Supporting Memo ¶ 14
(“The Debtors do not dispute that signatories Steven Ng and Wilson Ng mutually assented to the
purported lease.”).) However, the evidence overwhelmingly supports that, notwithstanding their
entry into the Lease, the parties lacked any intent to be bound. The Defendant admitted that he

did not pay rent or the security deposit and did not register utilities under his name as otherwise
required under the Lease. (PX1A ¶¶ 153–55; see also id. ¶¶ 156–57 (admitting also that there is
no documentary evidence that the Defendant ever paid rent or the security deposit).) Despite the
Defendant’s nonpayment and otherwise compliance with the terms of the Lease, neither Wilson
Ng nor Steven Ng ever enforced the terms of the Lease. (Id. ¶ 224 (admitting that the Lease was
never enforced).) Therefore, the totality of the evidence reflects that the parties lacked intent to
be bound.
Even if the parties did intend to be bound by the terms of the Lease, their conduct
suggests that the Lease was abandoned. “To establish abandonment of a contract by conduct, it
must be shown that the conduct is mutual, positive, unequivocal, and inconsistent with the intent
to be bound.” Rosiny v. Schmidt, 185 A.D.2d 727, 732, 587 N.Y.S.2d 929 (N.Y. App. Div.
1992). None of the parties to the Lease admittedly complied with or sought to enforce the terms
of the Lease, indicating both mutuality and conduct that were inconsistent with an intent to be

bound.
While the Defendant denies that the parties did not intend the Lease to be binding on its
terms, the Defendant has offered no contentions, issues to be tried, witnesses, or exhibits in
support of its denial or its opposition generally. (See PX1A ¶ 158 (denying as to the Defendant
that “[n]either Wilson Ng nor Steven Ng intended for the . . . Lease to be binding according to its
terms”); Pretrial Order IV(B), V(2), VII, X (reflecting that the Defendant did not offer anything
in support of its opposition).) Given that the Lease is unenforceable, the Court GRANTS
judgment for the Debtors on Count I, which seeks declaratory judgment that the Lease is void ab
initio, as well as an immediate judgment of possession of the Apartment with a warrant of
eviction or writ of assistance granting immediate possession.

In light of the foregoing, the Court does not need to reach Count II (Recission of Lease)
or Count III (Actual or Constructive Fraudulent Conveyance) as it relates to the Lease since both
counts are predicated on the existence of a valid and enforceable lease. (See e.g., Supporting
Memo ¶ 23 (indicating that Count II seeks recission of the Lease to the extent it exists and is
valid).)
2. Defendants were Unjustly Enriched
As the Lease is deemed void and the Defendant has otherwise enjoyed the benefits of the
Property without admittedly paying any rent, the Plaintiffs are entitled to judgment for unjust
enrichment in the amount of $19,250.00. This figure represents the total amount of unpaid rent
over the period of the Lease from May 1, 2021 through March 31, 20242 that has lapsed thus far
at a monthly rent of $550.00 as set forth therein. The Plaintiffs seek payment of $34,515.36,
using the $958.76 per month rent figure for the Apartment set forth in the 2 Bowery Certified
Rent Roll. (See Statement of Calculations at 4.) However, given that the Defendant had

executed the Lease for the monthly rent of $550.00, the Court adopts this figure for purposes of
computing unjust enrichment. Accordingly, the Court GRANTS judgment in favor of the
Debtors on Count VIII as it relates to the Lease in the amount of $19,250.00.
B. Cash Transfers
The Defendant is liable for conversion of the Cash Transfers in the amount of
$103,035.00 as set forth in the Statement of Calculations. Under New York law, conversion is
established where (i) a plaintiff maintains a possessory right or interest in the property and (ii)
the defendant’s dominion over the property or interference with it is “in derogation of plaintiff’s
right.” Colavito, 827 N.Y.S.2d at 100. Each of these elements are satisfied here.
First, the Cash Transfers are comprised of funds either transferred from the Debtors’

accounts or from the Chouk King Co. account to the Defendant. The Defendant has conceded
that funds from the latter are comprised of T-Mobile rents, which the Debtors are entitled to.
Specifically, four transactions in the total amount of $43,270.00 were transferred to the
Defendant directly from the Debtors’ accounts. (See Statement of Calculations, Ex. 1 (reflecting
$42,420.00 in total transferred from 2 Bowery’s TD Bank account and $850.00 in total
transferred from 26 Bowery’s Bank of America account).) Meanwhile, the remaining
transactions involve a series of transfers from the Chouk King Co. Chase account in the total

2 The Lease specifies “4/31/2024” as the termination date of the Lease, which the Court believes should be
April 30, 2024. As April 2024 has not yet commenced, the April rent is not included in the unjust enrichment
award.
amount of $59,765.00, which the Defendant has admitted includes rent from T-Mobile. (See,
e.g., PX-7 at 108:18–109:17 (confirming that the Debtor is holding $25,000 of T-Mobile rents).)
Such funds belong to the Debtors.
Notably, the Statement of Calculations, which identifies each individual Cash Transfer,

makes clear that the funds are specifically identifiable and traceable for purposes of determining
liability for conversion. See Republic of Haiti, 626 N.Y.S. 2d at 475 (indicating the funds at a
specifically named bank account may be deemed “sufficiently identifiable”); Family Health, 171
N.Y.S.3d at 51 (concluding that because the parties did not dispute that the plaintiffs sent
$96,000.00 to the defendant, which the defendant retained, the money was “identified so far as
was needful”).
The Defendant has not offered anything to suggest that the Cash Transfers are not
property of the Debtors. (See Pretrial Order IV(B), V(2), VII, X (reflecting that the Defendant
did not offer anything, including evidence, in opposition).) The Court has no reason to find
otherwise. Accordingly, the Debtors maintain a possessory interest in the Cash Transfers and the

first element of conversion is satisfied.
Second, it is undisputed that the Defendant has not returned the funds comprising the
Cash Transfers to the Debtors, in which the Debtors maintain a possessory interest. With respect
to the T-Mobile rents in particular, the Defendant has conceded that such funds remain in his
possession. (See e.g., PX7 at 105:15–22 (confirming that a transfer of funds from the Chouk
King Co. account was T-Mobile rental money that was transferred to the Defendant and remains
in his possession); id. at 107:13–23 (conceding that he took the T-Mobile rental money “out in
cash”); id. 108:18–109:17 (confirming that he is possession of a total of $25,000 of funds
comprising T-Mobile rents that the Debtors are entitled to).)
Additionally, the Debtors have requested that such funds be returned, which the
Defendant has not yet done. (See id. at 108:22–109:3 (“At this point I am requesting an
accounting of the TMobile [sic] money and the turnover of all the money that was from the rent
from TMobile to the debtors that is sitting in Mr. Ng’s account.”); id. at 109:14–17 (“I was

requesting all of the money which is the [D]ebtors’ money, whether it’s before or after the
petition”).) Where “possession of the property is originally lawful, a conversion occurs when the
defendant refuses to return the property after a demand.” Core Dev. Group LLC v. Spaho, 157
N.Y.S.3d 416, 419 (N.Y. App. Div. 2021) (quoting Matter of White v. City of Mount Vernon, 221
A.D.2d 345, 346, 633 N.Y.S.2d 369 (N.Y. App. Div. 1995)). On the whole, “conversion is
concerned with the superior right of possession of such property, not title ownership.” Core
Dev., 157 N.Y.S.3d at 419. Therefore, as the Defendant’s possession of the Cash Transfers has
interfered with the Debtors’ possessory rights, the second element of conversion is also satisfied.
Accordingly, the Court GRANTS judgment in favor of the Debtors on Count VII,
DIRECTING that the Cash Transfers in the total amount of $103,035.00 be returned to the

Debtors. In light of the foregoing, the Court need not reach Count III (Actual or Constructive
Fraudulent Conveyance), or Count VIII (Unjust Enrichment) as they relate to the Cash Transfers.
C. Civil Conspiracy
The Debtors also assert that the Defendant is liable for civil conspiracy in the amount of
$444,572.99 to $1,808,979.09, which is predicated on the 10 leases he and Wilson Ng executed
to family members. (See Supporting Memo ¶ 57; Statement of Calculations at 4 and Ex. 2.)
However, to prevail on a claim for civil conspiracy, a party must first demonstrate that an
agreement between two or more parties exist. See Norex Petroleum, 2015 WL 5057693, at *12.
The Debtors have failed to establish this threshold element.
In support of their contention that the Defendant engaged in civil conspiracy, the Debtors
rely solely on circumstantial evidence that they believe reflects a “common agreement or
understanding between [the Defendant] and Wilson Ng.” (Supporting Memo ¶ 59.) Specifically,
the Debtors indicate that there “there was a common design or objective, namely the continued

use and occupancy of nearly all of the [Debtors’] valuable leaseholds by insiders for no
consideration . . . to the detriment of the [Debtors].” (Id.) Indeed, the Debtors acknowledged at
the hearing before this Court on February 5, 2024 that they did not have proof of conspiracy, but
that the circumstantial evidence was “overwhelming.” Circumstantial evidence, however, is not
enough. See, e.g., Faulkner, 105 A.D.3d at 901 (holding that civil conspiracy did not exist
because even if it were factually true that the appellant advised her former husband to falsely tell
the police that the plaintiff had hit him, “the plaintiff failed to submit any evidence to
demonstrate that the appellant and her former husband entered into an agreement to make a false
[police] report.”) (emphasis added). The Debtors have cited to no case law indicating otherwise.
Accordingly, the Court orders that judgment be entered in favor of Defendant and against the

Debtors on Count IX.
D. Dismissal of the Affirmative Defenses is Warranted
Dismissal of the Defendant’s affirmative defenses is also warranted. Generally, a
defendant asserting an affirmative defense bears the burden of proof with respect to that defense.
Barton Grp., Inc. v. NCR Corp., 796 F. Supp.2d 473, 498 (S.D.N.Y. 2011); see Leopold v.
Baccarat, Inc., 239 F.3d 243, 245 (2d Cir. 2001) (“It is well-established that a defendant . . .
bears the burden of proving its affirmative defense.”); Nat’l Commc’ns Ass’n Inc. v. AT&T
Corp., 238 F.3d 124, 131 (2d Cir. 2001) (“The general rule is that the party that asserts the
affirmative of an issue has the burden of proving the facts essential to its claim.”) (quoting
Auburndale State Bank v. Dairy Farm Leasing Corp., 890 F.2d 888, 893 (7th Cir. 1989)). Here,
the Defendant has not offered any argument, facts, or evidence in support of the relevant
affirmative defenses asserted. (See Pretrial Order §§ IV(B), V(2), VII, X (submitting no
contentions, issues to be tried, exhibits, or witnesses for the Court’s consideration).) Therefore,

the Defendant has not carried his burden with respect to any of the affirmative defenses.
Judgment must be entered in favor of the Debtors and against the Defendant DISMISSING the
affirmative defenses.
IV. CONCLUSION
For the reasons stated, the Court orders that on or before 5:00 pm, March 13, 2024,
counsel for Debtors shall prepare a proposed Judgment consistent with this Opinion.
IT IS SO ORDERED.
Dated: March 6, 2024
New York, New York

Martin Glenn

MARTIN GLENN
Chief United States Bankruptcy Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10461160. Public record. Not legal advice.