The opinion
TRB Acquisitions LLC v Yedid
2024 NY Slip Op 33565(U)
October 7, 2024
Supreme Court, New York County
Docket Number: Index No. 651160/2021
Judge: Jennifer G. Schecter
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
Op 30001(U), are republished from various New York
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publication.
INDEX NO. 651160/2021
NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 10/07/2024
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY: COMMERCIAL DIVISION
PRESENT: HON. JENNIFER G. SCHECTER PART 54
Justice
---------------------------------------------------------------------------------X INDEX NO. 651160/2021
TRB ACQUISITIONS LLC, E.D.Y. EQUITIES LLC,
MOTION SEQ. NO. 005
Plaintiffs,
-v-
DECISION + ORDER ON
JACK YEDID, MOTION
Defendant.
---------------------------------------------------------------------------------X
The following e-filed documents, listed by NYSCEF document number (Motion 005) 123, 124, 125, 126,
127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147,
148, 149, 150, 151, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170,
171, 172, 174, 175, 176, 177, 178, 179, 180
were read on this motion to/for SUMMARY JUDGMENT (AFTER JOINDER .
By order dated April 4, 2024, the court stayed discovery pending defendant’s motion for
summary judgment (Dkt. 115). The court explained why the motion would not be barred
by the single-motion rule (see also Massoumi v Ganju, 227 AD3d 504 [1st Dept 2024]),
that a stay was warranted based on the Court of Appeals’ determination in Gottwald v
Sebert (40 NY3d 240 [2023] [“the litigation privilege, being absolute, ‘confers immunity
from liability regardless of motive’” and “sham exception” predicated on malicious
institution of litigation was inconsistent with absolute privilege in connection with judicial
proceedings]) and its likely impact on TRB Acquisitions LLC v Yedid (215 AD3d 40, 48
[1st Dept 2023] [TRB I] [recognizing a “narrow exception” to the absolute litigation
privilege for “extortion based on threats of false testimony” for “which the protection
afforded by an absolute privilege is appropriately withdrawn”]), and that defendant may be
entitled to fees on its anti-SLAPP counterclaim because this action was continued after
Gottwald was decided on June 13, 2023 (see also Reeves v Associated Newspapers, Ltd.,
2024 WL 3892069 [1st Dept Aug. 22, 2024]).1
1
The Appellate Division determined that dismissal of this action was inappropriate prior to
summary judgment based on the single-motion rule and did not reach the merits of this court's
conclusion that plaintiffs' claims lack a substantial basis (TRB Acquisitions LLC v Yedid, 225
AD3d 508 [1st Dept 2024]). While defendant explains that the same lack of factual merit also
warrants summary judgment (Dkt. 150 at 32-37; see Massoumi, 227 AD3d at 504), that is not the
basis for this decision, which is predicated on Gottwald categorically barring the action regardless
of the strength of plaintiffs' allegations and evidence. That issue has not been addressed on appeal.
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Motion No. 005
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In opposition to summary judgment, plaintiffs rely on a narrow reading of Gottwald. While
this court explained that Gottwald “expressly abrogated the ‘lost-if-abused’ cases on which
the Appellate Division relied” (Dkt. 115 at 1; see also Dkt. 97 at 5), plaintiffs maintain that
the Court of Appeals merely abrogated the “sham exception.” Not so. The Court of
Appeals explained that the absolute litigation privilege is truly absolute and not conditional
or qualified (see Gottwald, 40 NY3d at 253). After all, the whole problem with the sham
exception is that there can only be exceptions to a conditional or qualified privilege. An
absolute privilege, by definition, is not “absolute” if it has exceptions (see id. [“The
litigation privilege, being absolute, confers immunity from liability regardless of motive”]
[emphasis added]). That is why it cannot be “lost if abused.”
To be sure, the Appellate Division in TRB I noted “a separate line of cases examining
claims founded upon perjury” where it “recognized a further exception ‘where the
testimony is part of a larger scheme to defraud’” as well as an extortion exception (see id.
at 45-46). Yet, the holding in TRB I was based on acceptance of plaintiffs’ argument “that
an exception to the absolute litigation privilege may be recognized” and that “under the
circumstances, defendant’s invocation of the absolute privilege for statements made in and
pertinent to a judicial proceeding to immunize the conduct alleged constitutes abuse of
the privilege” (id. at 48-49 [emphasis added]). These holdings are absolutely foreclosed
by Gottwald.
Here, as in Gottwald, each of the “statements was made during the course of a judicial
proceeding and each is ‘material and pertinent to the questions involved’” and because
these “statements fall squarely within the purview of the absolute litigation privilege, they
‘cannot serve as the basis for the imposition of liability’” (Gottwald, 40 NY3d at 254). By
contrast, the lost-if-abused exception can only apply when the privilege is qualified: for
example, to statements made in anticipation of litigation (see id.). Since it is undisputed
that Jack Yedid’s statements were made while the Reebok litigation was pending and that
they were pertinent to that litigation, the absolute privilege applies. This privilege cannot
be lost, even if abused. Because the absolute privilege applies to plaintiffs’ claims,
defendant is entitled to summary judgment.
Moreover, as the Appellate Division recently confirmed, a claim that lacks merit as a matter
of law necessarily lacks a “substantial basis” under the anti-SLAPP law (see Reeves, 2024
WL 3892069228 at *8-10). While plaintiffs’ claim initially did not lack a substantial basis
due to the holding in TRB I, it lacked any legal basis after Gottwald. That plaintiffs’
arguments are not frivolous does not mean that their claim has a substantial basis (see id.
at *6-7). Rather, where, as here, there is no triable issue of fact and summary judgment is
granted, the claim lacks a substantial basis within the meaning of the anti-SLAPP law
(see id. at *9). Defendant is therefore entitled to partial summary judgment on his
counterclaim (see Dkt. 117 at 39-41) to the extent that he shall recover the reasonable
attorneys’ fees incurred while this action was continued after June 13, 2023 as it lacked a
substantial basis (see Gottwald, 40 NY3d at 257 [“The award of costs and attorneys’ fees
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to defendants was made mandatory rather than a matter of discretion”]). The court will
direct entry of judgment after submission of defendant’s forthcoming fee application.
Plaintiffs’ other arguments are unavailing, including their contention that their claim is not
actually a SLAPP claim. That plaintiffs asserted a breach-of-contract claim rather than a
defamation or tort claim does not matter (Trump v Trump, 227 AD3d 635, 636 [1st Dept
2024] [“Contractual claims are not categorically outside the anti-SLAPP law, which
depends not on the type of claim but on the type of conduct”]). Here, “the subject claim
arises from the protected activity insofar as that activity constituted the means by which
the confidentiality agreement was allegedly breached, and therefore supplied the breach
element of the breach of contract claim” (id.), that is, “the speech constituting the alleged
breach was made in connection with a lawsuit or other governmental proceeding” (Beast
Investments, LLC v Celebrity Virtual Dining, LLC, Index No. 653908/2023, Dkt. 62 [Sup
Ct, NY County Feb. 16, 2024]; see Dkt. 1 at 16 [alleging that information conveyed as part
of anticipated testimony violated confidentiality and nondisparagement clauses]).
Summary judgment must be denied, however, on the portion of the counterclaim seeking
other compensatory and punitive damages. “Other compensatory damages may only be
recovered upon an additional demonstration that the action involving public petition and
participation was commenced or continued for the purpose of harassing, intimidating,
punishing or otherwise maliciously inhibiting the free exercise of speech, petition or
association rights” (Civil Rights Law § 70-a[1][b] [emphasis added]). “Punitive damages
may only be recovered upon an additional demonstration that the action involving public
petition and participation was commenced or continued for the sole purpose of harassing,
intimidating, punishing or otherwise maliciously inhibiting the free exercise of speech,
petition or association rights” (Civil Rights Law § 70-a[1][c] [emphasis
added]). Discovery is necessary to determine whether plaintiffs continued this action for
the purpose of inhibiting defendant’s exercise of his rights (see 161 Ludlow Food, LLC v
L.E.S. Dwellers, Inc., 221 AD3d 517, 518 [1st Dept 2023]).2
Accordingly, it is ORDERED that defendant’s motion for summary judgment is
GRANTED IN PART to the extent that plaintiffs’ claims are dismissed with prejudice and
summary judgment is granted on the portion of defendant’s counterclaim seeking
attorneys’ fees incurred since June 13, 2023, defendant shall e-file a fee
application (including billing records) by October 21, 2024, plaintiffs may e-file any
objections to the fee application by November 4, 2024, defendant’s motion is otherwise
DENIED, and the balance of the counterclaim is hereby severed and shall continue.
2
Defendant’s resistance to discovery makes it unclear whether he really intends to proceed with
these claims if he prevails on any appeal from this order; thus, the court would entertain a joint
request for a discovery stay by the October 28 deadline.
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Motion No. 005
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NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 10/07/2024
And it is further ORDERED that the parties shall e-file and email the court a proposed
discovery schedule on the balance of the counterclaim by October 28, 2024.
10/7/2024
DATE JENNIFER G. SCHECTER, J.S.C.
CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION
GRANTED DENIED X GRANTED IN PART OTHER
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Motion No. 005
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