The opinion
Rotenstreich v Lesches
2024 NY Slip Op 31898(U)
May 31, 2024
Supreme Court, New York County
Docket Number: Index No. 655503/2023
Judge: Melissa A. Crane
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
Op 30001(U), are republished from various New York
State and local government sources, including the New
York State Unified Court System's eCourts Service.
This opinion is uncorrected and not selected for official
publication.
INDEX NO. 655503/2023
NYSCEF DOC. NO. 117 RECEIVED NYSCEF: 05/31/2024
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
PRESENT: HON. MELISSA A. CRANE PART 60M
Justice
----------------------------------------------------------------- ----------------X INDEX NO. 655503/2023
NAFTALI ROTENSTREICH, CHABAD OF GRAMERCY
PARK MOTION DATE N/A
Plaintiff, MOTION SEQ. NO. 004
- V -
INTERIM
SHAYA LESCHES, YJP FOUNDATION, INC., DECISION + ORDER ON
MOTION
Defendant.
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The following e-filed documents, listed by NYSCEF document number (Motion 004) 86, 87, 88, 89, 90,
91, 92, 93, 94, 95, 96,101,102,103,108,113
were read on this motion to/for DISMISS
Per the reasoning on the record, the court grants that part of the motion to dismiss the
petition to the extent that it seeks to vacate the part of the arbitration award concerning the "YJP
Premises." As stated on the record, the award does not violate the rule against perpetuities
because the parties have not yet entered into a lease. Any lease the parties enter into must
necessarily comply with various aspects of New York law, including, e.g., safety regulations and
the rule against perpetuities. Nor does the award fail by virtue of the statute of frauds (see
Tauber v Gross, 216 AD3d 1066, 1067 [2d Dep't 2023] [in suit concerning agreement to sell real
property in Monsey, NY "appellant's arguments concerning the statute of frauds, and the proof,
or lack thereof, before the arbitration tribunal relate to the merits of the dispute and do not
constitute a basis for vacating the arbitration award"]).
Also as stated on the record, and as this court already determined in the decision and
order on motion 1, dated 11/15/2023 [EDOC 34], "petitioners cannot establish that the panel
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Motion No. 004
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INDEX NO. 655503/2023
NYSCEF DOC. NO. 117 RECEIVED NYSCEF: 05/31/2024
exceeded their authority" because the parties agreed to binding arbitration of "all controversies
[claims and counterclaims] between the undersigned parties" as well as "interests in ... properties
relating to YJP and CGP" [EDOC 29]. Moreover, petitioner participated in the entire arbitration,
including the part dealing with the mansion (the "YJP Premises"). Nor is the arbitration award
inconsistent with respect to awarding the YJP Premises to YJPF as the panel found that
Petitioner "agreed that the creation of a new YJPF was intended to serve as the successor to YJP
D/B/A CGP" (Award, EDOC 69 at pg 3, section 1).
Nor has petitioner established bias. The decision of the panel was unanimous, including
the decision of petitioner's chosen arbitrator. Petitioner has failed to show by clear and
convincing evidence that there was corruption, fraud or misconduct in procuring the arbitration
award (Tauber, 216 AD3d at 1068). The court finds the remainder of Petitioner's arguments to
vacate that part of the arbitral award concerning the "YJP Premises" to be unavailing.
Nevertheless, as explained on the record, that part of the award that punted "[a]ll disputed
issues regarding salaries, conflicts of interest( s), involving the employees and directors of YJPF"
to "the trustees and/or board of the newly created YJPF," defeated most of the reason for the
arbitration in the first place (see EDOC 68 [where the parties agreed that the above issues would
be put to the arbitrators]).
The award leaves open the possibility for subsequent decisions from the arbitral panel
(see EDOC 69 pg 4). Accordingly, the court remands to the arbitral panel all issues concerning
Lesches' alleged: (1) misappropriation of Chabad' s funds and resources to run a rival business,
while simultaneously taking a salary from Chabad; (2) misappropriation of Chabad' s funds to
purchase a townhouse for his family; and (3) solicitation of YJP personnel to work for his rival
business (EDOC 66). Moreover, the panel should consider Lesches' counterclaims, including
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Motion No. 004
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that Petitioner created a new company to compete with YJP. These issues collectively are the
"non-YJP Premises disputes." The parties are free to agree to a new panel, or this court, to decide
these remaining issues. Lacking agreement, the present panel will decide the non-YJP Premises
disputes. The parties have 30 days to either return to the existing arbitration panel, appear before
a new arbitration panel, or stipulate to have the non-YJP Premises disputes resolved by this
court.
The court has considered the parties' remaining contentions and finds them unavailing.
Accordingly, it is
ORDERED THAT the motion to dismiss the amended petition (MS 04) is granted to the
extent that the amended petition seeks to vacate the part of arbitration award concerning the YJP
Premises; and it is further
ORDERED THAT that remainder ofrespondent's motion to dismiss the Amended
Petition and cross motion to confirm the arbitration award is held in abeyance pending the
further arbitration proceedings contemplated in this interim decision and order; and it is further
ORDERED THAT the non-YJP Premises disputes are remanded to the arbitral panel for
decision. The parties must appear before the arbitration panel within 30 days to resolve those
issues or, alternatively, the parties may appear before a new arbitration panel [by agreement] or
the court [by agreement] to resolve the non-YJP Premises issues within 30 days of the date of
this interim decision and order; and it is further
ORDERED that the parties must email the court, cc'ing all sides, at SFC-
Part60@nycourts.gov to advise whether they are appearing before the existing arbitral panel, a
new panel, or the court; and it is further
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Motion No. 004
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NYSCEF DOC. NO. 117 RECEIVED NYSCEF: 05/31/2024
ORDERED THAT the parties must appear for a status conference over Microsoft Teams
on 9/3/24 at 10:30 a.m.
2024053i.~032GFA416B50C0)\~f'A7Cl
5/31/2024
DATE MELISSA A. CRANE, J.S.C.
CHECK ONE:
CASE DISPOSED ~ NON-FINAL DISPOSITION
□ DENIED
□
GRANTED GRANTED IN PART OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
□
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE
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Motion No. 004
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