CBO LLC v. SARAH AZRAK SARAH JOY AZRAK 2020 FAMILY TRUST (2026)

The following paper(s), numbered 1-5, were read and considered along with oral argument in connection with Defendant's Notice of Motion for an order: (1) pursuant to Civil Practice Law and Rules § 3211(a)(7), 3016(b), and 3013 dismissing the verified complaint in this action for failing to state a claim; and (2) pursuant to Civil Practice Law and Rules § 503(c) and 511 dismissing the action for improper venue or, alternatively, transferring venue to Kings County:

PAPERS NUMBERED

Notice of Motion (Motion Seq. No. 1)/Memorandum of Law in Support/Affirmation of Muriel Raggi, Esq./Exhibits A-D 1

Affirmation of Daryl Hagler in Opposition/Affirmation of Ariel Bouskila, Esq.-Exhibits 1-3/Memorandum of Law in Opposition 2

Memorandum of Law in Reply 3

Letter to Court from Attorney Bouskila dated May 4, 2026- Exhibit A 4

Letter to Court from Attorney Raggi dated May 5, 2026 5

PRELIMINARY STATEMENT

This matter comes before the Court on Motion Sequence No. 003, brought by Defendants Ruben Azrak, Sarah Azrak, and Sarah Joy Azrak 2020 Family Trust (collectively, "Defendants") pursuant to Civil Practice Law and Rules §§ 503, 511, 3013, 3016(b), and 3211(a)(7), seeking dismissal of the verified complaint, dated May 15, 2025 (the "Complaint"), filed by Plaintiff CBO Funding LLC ("Plaintiff" or "CBO Funding") for failure to state a claim upon which relief may be granted and for improper venue, or, in the alternative, transfer of this action to Kings County. Plaintiff opposes the motion in all respects.

Upon review of the moving papers (NYSCEF Doc. Nos. 36 and 37), Plaintiff's opposition papers (NYSCEF Doc. Nos. 49, 50, and 54), Defendants' reply papers (NYSCEF Doc. No. 67), and all prior proceedings and submissions in this action, including the Court's prior Decision and Order denying Plaintiff's unopposed motion for a default judgment (NYSCEF Doc. No. 23), and upon due deliberation, Defendants' motion to dismiss is GRANTED in its entirety for the reasons set forth herein.

BACKGROUND

The following facts are drawn from the allegations of the Complaint, which the Court accepts as true solely for purposes of this motion, from the parties' sworn submissions and the undisputed record of prior proceedings.

Plaintiff is a limited liability company that commenced a prior action in this Court under Index No. 035315/2022, captioned CBO Funding LLC v. BT Supplies West Inc. et al., arising from a personal guaranty executed by Defendant Ruben Azrak on September 9, 2020. On September 5, 2024, judgment was entered against Ruben Azrak in that action in the amount of $6,235,421.67 (the "Judgment"). The Judgment remains unsatisfied.

In or about May 2025, Plaintiff commenced the instant plenary action, alleging causes of action sounding in fraudulent conveyance under the Debtor and Creditor Law §§ 273, 274, and 276, common law fraud, and conspiracy to commit fraud. The gravamen of the Complaint is that Ruben Azrak, in anticipation of or following the entry of the Judgment, transferred property— including ownership interests in a non-Rockland entity and real property located in Queens, New York—to Defendant Sarah Azrak for no consideration and with fraudulent intent, and that Sarah Azrak thereafter transferred those assets into the Sarah Joy Azrak 2020 Family Trust to place them beyond the reach of Plaintiff as a judgment creditor.

Separately, following entry of the Judgment, Plaintiff pursued post-judgment enforcement proceedings under Article 52 of the CPLR in the Judgment Court. In September 2024, Plaintiff served post-judgment subpoenas duces tecum, information subpoenas, and deposition subpoenas upon Ruben Azrak. Despite multiple court orders requiring document production and deposition appearances—entered in September, October, and December 2025—Ruben Azrak has, according to Plaintiff's own submissions, engaged in a pattern of non-compliance, including canceling scheduled depositions on the eve of attendance. See NYSCEF Doc. No. 50 ¶ 5; NYSCEF Doc. No. 54 at 2—3).

The Court previously considered the sufficiency of Plaintiff's claims in connection with its unopposed motion for a default judgment. By Decision and Order entered on the record (NYSCEF Doc. No. 23), the Court denied that motion, finding that Plaintiff failed to establish a viable cause of action even after submitting evidentiary materials in support of an unopposed application. The Complaint has not been amended since that determination, and no new facts have been added to cure the deficiencies previously identified.

The present motion challenges the Complaint on two independent grounds: (1) improper venue under Civil Practice Law and Rules §§ 503 and 511; and (2) failure to state a claim under Civil Practice Law and Rules §§ 3211(a)(7), 3013, and 3016(b). The Court addresses each in turn.

LEGAL STANDARD

On a motion to dismiss pursuant to Civil Practice Law and Rules § 3211(a)(7), the Court must liberally construe the complaint, accept all facts alleged therein as true, and accord the plaintiff the benefit of every possible favorable inference. See Leon v. Martinez, 84 NY2d 83, 87— 88 [1994]. Nonetheless, dismissal is warranted "if the plaintiff fails to assert facts in support of an element of the claim, or if the factual allegations and inferences to be drawn from them do not allow for an enforceable right of recovery." Connaughton v. Chipotle Mexican Grill, Inc., 29 NY3d 137, 142 [2017]. Bare legal conclusions, vague and conclusory allegations, and assertions made upon information and belief without factual support do not suffice. See Pinkesz v Massachusetts Mutual Life Insurance Company, 234 AD3d 886, 888 [2d Dept 2025].

Claims sounding in fraud are subject to the heightened pleading standard of Civil Practice Law and Rules § 3016(b), which requires that "the circumstances constituting the wrong shall be stated in detail." This standard applies with equal force to claims under Debtor and Creditor Law § 276 for intentional fraudulent conveyance. See Old Republic Nat'l Title Ins. Co. v 1152 53 Mgmt., LLC, 227 AD3d 824, 826-827 [2d Dept 2024]; See also Carlyle, LLC v Quik Park 1633 Garage LLC, 160 AD3d 476, 477 [1st Dept 2018]; RTN Networks, LLC v Telco Grp., Inc., 126 AD3d 477, 478 [1st Dept 2015].

Even claims not subject to the heightened particularity requirement of Civil Practice Law and Rules § 3016(b) must still meet the notice pleading standard of Civil Practice Law and Rules § 3013, which requires that "statements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action." Conclusory allegations, standing alone, are insufficient to state a claim under this standard. See Precious Care Mgmt., LLC v. Monsey Care, LLC, 221 AD3d 922, 924 [2d Dept 2023].

DISCUSSION

I. Venue Is Improper in Rockland County

Defendants move to dismiss this action, or in the alternative to transfer it, on the ground of improper venue. Pursuant to Civil Practice Law and Rules § 503(a), the place of trial shall be in the county in which one of the parties resided when the action was commenced. For limited liability companies, Civil Practice Law and Rules § 503(c) provides that residence is determined by the county designated in the articles of organization as the location of the entity's principal office.

Here, Plaintiff asserts that venue in Rockland County is proper because it maintains its principal place of business in the county. In support of this assertion, Plaintiff's authorized representative, Daryl Hagler, submits a brief affirmation stating simply that "Plaintiff in fact maintains its principal place of business in Rockland County." See NYSCEF Doc. No. 49 ¶ 3. No specific address is provided and Plaintiff has not submitted its articles of organization or any other organizational documents in support of this representation.

Defendants have demonstrated, through sworn submissions, that Plaintiff's own prior sworn filings in this Court are directly inconsistent with that assertion. The verified complaint filed by Daryl Hagler in CBO Funding LLC v. BT Supplies West Inc. et al., Index No. 035315/2022— the very action in which the Judgment was obtained—represents Plaintiff's address as 4770 White Plains Road, Bronx, New York 10470. See NYSCEF Doc. No. 37 ¶ 6, Ex. A. A September 2025 verified petition filed by Plaintiff's own counsel, Ariel Bouskila, Esq., under penalty of perjury, also identifies Plaintiff's "principal office" as 4770 White Plains Road, Bronx, New York. See id. ¶¶ 7—8, Ex. B. And in yet another Rockland County proceeding, Plaintiff grounded venue on Civil Practice Law and Rules § 5221(a)(4)—because the underlying judgment was rendered there—not on any assertion that Plaintiff is a Rockland County resident. See id. ¶¶ 9—10, Ex. C.

Moreover, the New York Department of State Division of Corporations' records for Plaintiff list no principal executive office address and no primary location in Rockland County. The address in Rockland County appearing in those records is designated solely as the address to which the Secretary of State should forward copies of served papers—i.e., the address of Plaintiff's registered agent. See id. ¶¶ 11—13, Ex. D. It is well established that a registered agent's address does not constitute an LLC's principal office for purposes of Civil Practice Law and Rules § 503(c). See Civil Practice Law and Rules § 503(c).

Once Defendants made a sufficient showing that Plaintiff's claimed Rockland County residence was inconsistent and unsupported, the burden shifts to Plaintiff to demonstrate that venue is proper. Plaintiff has failed to meet that burden. Plaintiff offers only a conclusory one-sentence affirmation—devoid of any corroborating address or documentary support—while its own prior sworn filings affirmatively represent that its principal office is in the Bronx. Plaintiff's counsel's characterization of those prior sworn statements as the product of "error" is neither persuasive nor sufficient to override a documented record of inconsistent sworn representations.

None of the defendants reside in Rockland County. The property at issue is in Queens, New York, and the entity whose ownership interests are the subject of the alleged transfers is not a Rockland County entity. Rockland County is, accordingly, an improper venue for this action pursuant to Civil Practice Law and Rules §§ 503 and 511. This provides an independent and sufficient basis for dismissal.

The Court notes that Plaintiff argues that Defendants' failure to serve a written demand to change venue prior to making this motion deprives the Court of authority to transfer venue under Civil Practice Law and Rules § 511(b). This argument is unavailing. While Civil Practice Law and Rules § 511(b) conditions a motion to transfer venue on a prior written demand, Defendants here seek dismissal—not merely transfer—for improper venue. Where the Complaint fails to state a claim on independent grounds, as is the case here, dismissal rather than transfer is the appropriate remedy. The Court will nevertheless addresses the merits of Plaintiff's substantive claims.

II. The Complaint Fails to State a Claim

A. The Fraud-Based Claims Are Inadequately Pled Under Civil Practice Law and Rules §§ 3016(b) and 3013

The Complaint asserts a claim for fraudulent conveyance under Debtor Creditor Law § 276 (intentional fraudulent conveyance), common law fraud, and conspiracy to commit fraud. Each of these claims is subject to the heightened pleading standard of Civil Practice Law and Rules § 3016(b), which requires that the "circumstances constituting the wrong" be "stated in detail." The Complaint fails to satisfy this standard as to any of these causes of action.

With respect to the intentional fraudulent conveyance claim under Debtor Creditor Law § 276, the Complaint does no more than restate the statutory elements and baldly concludes that transfers were made "with intent to hinder, delay or defraud" creditors. Such conclusory recitations are plainly insufficient. See Zanani v. Meisels, 78 AD3d 823, 825 [2d Dept 2010]; see also Ray v. Ray, 108 AD3d 449, 451—52 [1st Dept 2013]. The Complaint alleges certain so-called "badges of fraud" in connection with the Debtor Creditor Law § 273 claim but does so in wholly conclusory fashion and in several instances on information and belief alone—an insufficient basis on which to satisfy the particularity requirement as to intent. See NYSCEF Doc. No. 1 ¶¶ 52—53; Goldenberg v Friedman, 191 AD3d 641, 643-644 [2d Dept 2021].

The common law fraud claim fares no better. To plead fraud with the required particularity, Plaintiff must allege: (1) a material misrepresentation or omission of fact; (2) knowledge of the falsity; (3) intent to induce reliance; (4) justifiable reliance by the plaintiff; and (5) resulting damages. See Abraham v. Torati, 219 AD3d 1275, 1279 [2d Dept 2023]; see also House of Spices (India), Inc. v SMJ Servs., Inc., 103 AD3d 848, 850 [2d Dept 2013]. The Complaint does not identify any specific fraudulent statement made by any defendant, identify the speaker, state when and where any statement was made, or explain why any statement was false. More fundamentally, the Complaint does not allege justifiable reliance by Plaintiff—an essential element that is wholly absent from the pleading. This failure is fatal.

The Complaint includes a "conspiracy to commit fraud" claim. As Defendants correctly note, New York does not recognize an independent cause of action for civil conspiracy to commit fraud. Conspiracy allegations serve only to connect a defendant to an underlying fraud; they do not constitute a standalone tort. The Court therefore treats this claim, to the extent any viable theory can be discerned from the pleading, as an attempt to allege aiding and abetting fraud. Even so construed, the claim fails: Plaintiff does not allege the existence of a sufficiently pled underlying fraud, does not allege knowledge of the fraud by any aider and abettor, and does not allege substantial assistance. See Goel v. Ramachandran, 111 AD3d 783, 792 [2d Dept 2013]; see also Schiano v. Harsanyi, 230 AD3d 820, 821 [1st Dept 2024]. The Complaint does not even use the phrase "aiding and abetting," and Plaintiff has not established that re-framing the claim is appropriate. The claim is dismissed.

B. The Constructive Fraudulent Conveyance Claims Are Likewise Insufficiently Pled

Plaintiff's constructive fraudulent conveyance claims under Debtor Creditor Law §§ 273 and 274 are not subject to the heightened pleading standard of Civil Practice Law and Rules § 3016(b) as they do not require proof of actual fraudulent intent. However, they must still satisfy the notice pleading requirements of Civil Practice Law and Rules § 3013, and purely conclusory allegations are insufficient to sustain them. See Precious Care Mgmt., LLC, 221 AD3d at 924.

A claim under Debtor Creditor Law § 273 requires, inter alia, that the challenged transfer was made without fair consideration and rendered the transferor insolvent. The Complaint's allegations as to both elements are entirely conclusory. With respect to consideration, the Complaint alleges in certain places that there was no consideration for the transfers, while alleging in other places that the transfers were made to satisfy an "antecedent debt." See NYSCEF Doc. No. 1 ¶¶ 14, 63. These allegations are internally contradictory—the satisfaction of an antecedent debt constitutes fair consideration as a matter of law—and neither version is supported by any non- conclusory factual allegation. See Corning Federal Credit Union v Georgilis, 217 AD3d 828, 830 [2d Dept 2023].

With respect to insolvency, the Complaint merely asserts in conclusory fashion that Ruben Azrak was insolvent at the time of the relevant transfers. No financial data, balance sheet information, asset-to-liability analysis or other factual support is provided. See Riback v Margulis, 43 AD3d 1023, [2d Dept 2007]; see also Eagle Eye Collection Corp. v. Shariff, 190 AD3d 600, 602 [1st Dept 2021]. The Complaint also references "Deutsche" in connection with an alleged awareness of insolvency without identifying who or what "Deutsche" is or its relationship to the parties—a deficiency that further illustrates the Complaint's failure to meet even the notice pleading standard. See NYSCEF Doc. No. 1 ¶ 63.

These pleading deficiencies, both individually and collectively, compel dismissal of the constructive fraudulent conveyance claims.

III. Civil Practice Law and Rules § 3211(d) Does Not Save Plaintiff's Complaint

Plaintiff invokes Civil Practice Law and Rules § 3211(d), which permits a court, in its discretion, to deny a motion to dismiss and allow discovery where "facts essential to justify opposition may exist but cannot then be stated." Plaintiff argues that the facts necessary to support its claims are within Defendants' exclusive control and that it has been unable to obtain them because Ruben Azrak has stonewalled post-judgment discovery in the Judgment Court.

This argument fails for multiple, independently sufficient reasons.

First, the Civil Practice Law and Rules § 3211(d) requirement of a showing that specific essential facts "may exist" but "cannot then be stated" is not a license to proceed with a complaint to determine whether a claim exists in the first place. The provision protects a plaintiff who has a basis for a claim but lacks access to facts uniquely within the opposing party's control needed to satisfy the pleading standard. It does not authorize speculative litigation premised on hope.

As the Second Department has made clear, "the mere hope that discovery may reveal facts essential to justify opposition does not warrant denial of the motion" under Civil Practice Law and Rules § 3211(d). See Cardona v. County of Orange, 245 AD3d 783, 786 [2d Dept 2026]; see also Morey v Babe Ruth League, Inc., 227 AD3d 694, 696 [2d Dept 2024]. Specifically, Plaintiff is seeking evidence of (1) Defendants' intent; (2) consideration or lack thereof; (3) aiding and abetting; (4) Ruben Azrak's solvency; and (5) whether transfers were made on account of an antecedent debt. See NYSCEF Doc. No. 50 ¶ 4. These are not peripheral details awaiting confirmation—they are the core elements of Plaintiff's causes of action. A plaintiff who does not know whether the central elements of its claims exist cannot invoke Civil Practice Law and Rules § 3211(d) to proceed. This is not a case of facts that "may exist but cannot then be stated," it is a case where Plaintiff candidly admits it does not know whether those facts exist at all.

Second, Civil Practice Law and Rules § 3211(d) is particularly inapt here because Plaintiff has already had access to discovery through the Article 52 post-judgment enforcement proceedings in the Judgment Court. Civil Practice Law and Rules §§ 5201—5253 provide a comprehensive and direct mechanism for a judgment creditor to obtain information concerning a judgment debtor's assets, financial condition, and transfers. Plaintiff has invoked and actively pursued those procedures, including through post-judgment subpoenas issued in September 2024, multiple court orders compelling compliance, and its own pending motion for contempt in the Judgment Court. See NYSCEF Doc. No. 54 at 2—3. Plaintiff cannot simultaneously invoke Article 52 in the Judgment Court as the proper vehicle for obtaining financial disclosure while maintaining that the same information is inaccessible in this Court. To the extent Ruben Azrak has failed to comply with discovery orders in the Judgment Court, the appropriate remedy lies within that proceeding— including motions to compel, contempt applications and other enforcement mechanisms available under Article 52.

Third, this Court has already considered the sufficiency of Plaintiff's evidence at the time it denied Plaintiff's unopposed default judgment motion. See NYSCEF Doc. No. 23. At that juncture, Plaintiff had the opportunity to submit whatever evidentiary materials it possessed -- including materials obtained through Article 52 discovery -- and the Court found them insufficient to establish a viable cause of action. Plaintiff has not amended its Complaint, has not identified any new facts, and has not offered any meaningful explanation for why the evidentiary record would be different in the plenary action than it was in the default motion context. Under these circumstances, the application of Civil Practice Law and Rules § 3211(d) would be particularly inappropriate: it would allow Plaintiff a second bite at the apple after the Court has already found Plaintiff's showing deficient.

Accordingly, Civil Practice Law and Rules § 3211(d) provides no basis to deny dismissal, and the motion is granted in full.

IV. Defendants' Reservation of Rights Under 22 NYCRR § 130-1.1

Defendants have reserved the right to seek sanctions and attorneys' fees pursuant to 22 NYCRR § 130-1.1 in the event the Complaint is dismissed, on the ground that Plaintiff commenced and maintained this action without a sufficient factual basis. The Court takes note of Defendants' reservation and is mindful of the procedural history: Plaintiff commenced this action with a complaint that the Court had already found insufficient on an unopposed application, has not amended that complaint, and has candidly acknowledged that it lacks the facts necessary to support its essential allegations. Plaintiff has, moreover, made inconsistent sworn representations to this Court regarding its principal place of business.

The Court makes no finding at this juncture as to whether the prosecution of this action constitutes frivolous conduct within the meaning of 22 NYCRR § 130-1.1. Should Defendants elect to make a separate application for fees and sanctions, the Court will consider it on a full record. Any such application must comply with the procedural requirements of 22 NYCRR § 130- 1.1(d).

CONCLUSION

For all of the foregoing reasons, it is hereby:

ORDERED that Defendants' motion to dismiss Motion Sequence No. 3 is GRANTED in its entirety; and it is further

ORDERED that the Complaint filed by Plaintiff CBO Funding LLC, dated May 15, 2025, is dismissed with prejudice as to all causes of action; and it is further

ORDERED that the Clerk of the Court is directed to enter judgment accordingly; and it is further

ORDERED that Defendants shall serve a copy of this Decision and Order with notice of entry upon Plaintiff within twenty (20) days of entry hereof; and it is further

ORDERED that any application by Defendants for sanctions and attorneys' fees pursuant to 22 NYCRR § 130-1.1 shall be made by separate motion, on notice, within thirty (30) days of entry of this Decision and Order.

This constitutes the Decision and Order of the Court.

Dated: June 5, 2026

New City, New York

John P. Collins, Jr., J.