IS COMPANY LLC v. OLSEN (2025)

Order, Supreme Court, New York County (Robert R. Reed, J.), entered on or about January 16, 2024, which, insofar as appealed from as limited by the briefs, granted the motion by defendants George L. Olsen, Paul Levinsohn, Empire Gateway LLC, Chambers Holdings LLC, New York City Regional Center, LLC, and Manhattan Chrystie Street Development Fund, LLC (MCSDF) to dismiss the causes of action for abuse of process, tortious interference with prospective economic advantage, and for a declaration of contractual indemnification obligations, unanimously affirmed, with costs.  Appeal from so-ordered transcript, same court and Justice, entered on or about January 26, 2024, unanimously dismissed, without costs.

Supreme Court properly dismissed the cause of action for abuse of process.  The cause of action was based on allegations that MCSDF improperly served third-party subpoenas in the related actions for no legitimate purpose, but rather were served to obtain the collateral advantage of forcing an early buyout.  However, the Justice presiding over this matter presides over the related actions and rejected these allegations, finding that the subpoenas, which plaintiffs did not seek to quash, sought relevant disclosures and served a legitimate litigation purpose to obtain information with respect to its claims (see Dashdevs LLC v. Capital Mkts. Placement, Inc., 210 A.D.3d 525, 526, 179 N.Y.S.3d 29 [1st Dept. 2022];  Zeckendorf v. Kerry H. Lutz, P.C., 282 A.D.2d 295, 723 N.Y.S.2d 360 [1st Dept. 2001]).

Supreme Court also properly dismissed the cause of action for tortious interference with prospective economic advantage.  Because the cause of action for abuse of process was insufficiently pleaded, that tort cannot serve as the factual predicate for the “wrongful means” by which MCSDF allegedly interfered with appellant's prospective economic advantage (see 534 E. 11th St. Hous. Dev. Fund Corp. v. Hendrick, 90 A.D.3d 541, 542, 935 N.Y.S.2d 23 [1st Dept. 2011]).  Nor does the complaint include any other allegations sufficient to form a predicate tort for this cause of action (see Gans v. Wilbee Corp., 199 A.D.3d 564, 565, 158 N.Y.S.3d 81 [1st Dept. 2021];  Devash LLC v. German Am. Capital Corp., 104 A.D.3d 71, 79, 959 N.Y.S.2d 10 [1st Dept. 2013], lv denied 21 N.Y.3d 863, 2013 WL 4561705 [2013]).

Finally, based on controlling Delaware Supreme Court law, the contractual indemnification claim as asserted in the complaint is not ripe for adjudication, as the underlying claim relating to the indemnification obligation has not been finally decided (see LaPoint v. AmerisourceBergen Corp., 970 A.2d 185, 198, [Del. 2009];  Scharf v. Edgcomb Corp., 864 A.2d 909, 919 [Del. 2004]).