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

The following papers numbered 1- 3 were read and considered on Plaintiff's motion, pursuant to Civil Practice Law and Rules § 2221(d), for leave to reargue the Decision and Order of this Court dated June 5, 2026 and entered June 8, 2026; upon reargument, for an order vacating that determination and denying Defendants' motion to dismiss in its entirety; in the alternative, for an order modifying that determination to provide that the dismissal is without prejudice; in the further alternative, for an order modifying that determination to direct transfer of this action to the Supreme Court, Kings County; and for such other and further relief as the Court deems just and proper:

PAPERS NUMBERED

Notice of Motion (NYSCEF Doc. No. 88)/Affirmation of Ariel Biuskila, Esq./ Exhibits A-D (NYSCEF Doc. Nos. 89-93)/Memorandum of Law in Support

(NYSCEF Doc. No. 94) 1

Memorandum of Law in Opposition (NYSCEF Doc. No. 96) 2

Memorandum of Law in Reply (NYSCEF Doc. No. 98) 3

Upon the foregoing papers, and upon all prior proceedings had herein, Plaintiff CBO Funding LLC ("Plaintiff" or "CBO") moves for leave to reargue this Court's Decision and Order dated June 5, 2026 and entered June 8, 2026 (the "Decision"; NYSCEF Doc. No. 85), which granted Defendants' motion to dismiss the Complaint and dismissed this action with prejudice. The motion is timely, having been made within thirty days after service of a copy of the Decision with written notice of its entry. (See Civil Practice Law and Rules § 2221[d][3]; NYSCEF Doc. No. 86). For the reasons that follow, the motion is denied in all respects.

I. BACKGROUND AND PROCEDURAL POSTURE

This is a post-judgment enforcement action. Plaintiff holds a money judgment against Defendant Ruben Azrak in the sum of $6,235,421.67, entered in a separate proceeding in this Court (CBO Funding LLC v. BT Supplies, Index No. 035315/2022). Plaintiff alleges that on or about January 1, 2021, Ruben Azrak assigned forty-nine shares of Reva Holding Corp.—an entity that owns real property at 785 Flushing Avenue, Brooklyn, New York—to his spouse, Defendant Sarah Azrak, without consideration, and that on or about October 1, 2021, Sarah Azrak transferred those same shares to the Sarah Joy Azrak 2020 Family Trust (the "Trust"). A gift tax return filed in Sarah Azrak's name valued the transferred shares at $5,873,690. Plaintiff alleges that the transfers reduced Ruben Azrak's interest in Reva Holding Corp. from approximately seventy percent to twenty-one percent and were designed to defeat collection of the judgment.

The action was commenced on May 15, 2025. On a prior application, this Court denied Plaintiff's unopposed motion for a default judgment, concluding that Plaintiff had failed to establish a viable cause of action even upon an unopposed application supported by evidentiary materials. See NYSCEF Doc. No. 23. Plaintiff did not thereafter seek leave to amend.

Defendants moved to dismiss the Complaint on March 9, 2026 (Motion Sequence No. 3). While that motion was pending, Plaintiff deposed Sarah Azrak in the judgment proceeding on March 24, 2026, and, by letter dated May 4, 2026, transmitted the transcript to the Court with a request that it be considered on the pending motion. See NYSCEF Doc. No. 70.

By the Decision, the Court granted the motion and dismissed the Complaint in its entirety, with prejudice, upon two independent grounds: that venue was improperly laid in Rockland County, proper venue lying in Kings County; and that the Complaint failed to state a cause of action under Civil Practice Law and Rules § 3211(a)(7), measured against Civil Practice Law and Rules § 3013 and, as to the claims sounding in actual fraud, Civil Practice Law and Rules § 3016(b). The Court found the Complaint's consideration allegations internally contradictory; its insolvency allegations conclusory and unsupported by financial data, balance sheet information, or any asset-to-liability analysis; and its common-law fraud claim deficient for want of pleaded reliance. The Court further denied Plaintiff's request for pre-dismissal disclosure under Civil Practice Law and Rules § 3211(d). Among the papers the Decision recites as read and considered is the May 4, 2026 letter transmitting the deposition transcript.

Notice of entry was served on June 22, 2026. See NYSCEF Doc. No. 86. Plaintiff filed the present motion on July 9, 2026. Plaintiff has not, at any stage of this litigation, moved for leave to amend the Complaint, and no proposed amended pleading has been tendered to the Court.

II. THE STANDARD GOVERNING LEAVE TO REARGUE

Civil Practice Law and Rules § 2221(d)(2) provides that a motion for leave to reargue "shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion." The provision's two clauses are not redundant. The first describes what reargument is for; the second describes what it may not contain.

The remedy is committed to the sound discretion of the court (see Matter of Carter v Carter, 81 AD3d 819, 820 [2d Dept 2011]), and it is a narrow one. A motion for leave to reargue "is not designed to provide an unsuccessful party with successive opportunities to reargue issues previously decided, or to present arguments different from those originally presented." V. Veeraswamy Realty v Yenom Corp., 71 AD3d 874, 874-875 [2d Dept 2010], quoting McGill v Goldman, 261 AD2d 593, 594 [2d Dept 1999]; accord Ahmed v Pannone, 116 AD3d 802, 805 [2d Dept 2014]; Peretz v Zhenjun Xu, 205 AD3d 746, 748 [2d Dept 2022]. Its purpose "is not to serve as a vehicle to permit the unsuccessful party to argue once again the very questions previously decided." Foley v Roche, 68 AD2d 558, 567 [1st Dept 1979]; See William P. Pahl Equip. Corp. v Kassis, 182 AD2d 22, 27 [1st Dept 1992]. Where the movant merely "repeat[s] her earlier arguments and d[oes] not demonstrate that the court had overlooked or misapprehended any matter of fact or law," the motion must be denied. Peretz, 205 AD3d at 748. And leave is improvidently granted where the movant advances a contention for the first time on reargument. See Pryor v. Commonwealth Land Tit. Ins. Co., 17 AD3d 434, 435 [2d Dept 2005].

Two corollaries follow from the statutory text, and each disposes of a substantial part of this motion. First, a court cannot have overlooked material that was never placed before it; matter omitted from the prior submission is, by definition, "matters of fact not offered on the prior motion." Civil Practice Law and Rules § 2221[d][2]). Second, a court cannot have overlooked an argument that no party made.

Finally, reargument is not a substitute for appellate review. A party persuaded that the court reached the wrong result upon the record before it has a remedy, but that remedy lies in the Appellate Division.¹

III. THE 2020 INCOME TAX RETURN AND THE 2021 GIFT TAX RETURN ARE MATTERS OF FACT NOT OFFERED ON THE PRIOR MOTION

Plaintiff's insolvency showing on this motion rests principally upon two documents: Ruben Azrak's 2020 federal income tax return (Exhibit A; NYSCEF Doc. No. 90) and his 2021 Estate and Gift Tax Return, Form 709 (Exhibit D; NYSCEF Doc. No. 93). Neither was before the Court on the motion to dismiss.

As to the 2020 return, the point is conceded. Counsel's affirmation states that the document "was in Plaintiff's possession prior to commencement of this action, having been produced by Defendants, but was inadvertently omitted from the opposition papers submitted in connection with Defendants' motion to dismiss" NYSCEF Doc. No. 89 ¶ 3. That concession is dispositive on reargument. Civil Practice Law and Rules § 2221(d)(2) forecloses reliance upon "matters of fact not offered on the prior motion," and a document that a party acknowledges it failed to submit is the paradigm case of such matter. The 2021 gift tax return stands no differently. Whatever its provenance—Plaintiff represents that the document was previously submitted upon its unsuccessful default application—it was not offered on the motion to dismiss, and the Court cannot be said to have overlooked it in deciding that motion. Plaintiff anticipates the objection and expressly disclaims renewal, stating that "[b]ecause the 2020 tax return was in Plaintiff's possession prior to commencement, Plaintiff does not seek renewal under CPLR § 2221(e)" (NYSCEF Doc. No. 89 ¶ 5). The disclaimer is candid, but it does not open a different door. A party may not obtain under Civil Practice Law and Rules § 2221(d) the enlargement of the record that Civil Practice Law and Rules § 2221(e) would deny it. Were this branch of the motion treated as one for leave to renew, it would fail on its own terms: renewal requires "reasonable justification for the failure to present such facts on the prior motion" (Civil Practice Law and Rules § 2221[e][3]), and "[r]easonable justification does not exist where the 'new evidence' consists of documents which the [moving party] knew existed, and were in fact in his own possession at the time the initial motion was made." Cioffi v S.M. Foods, Inc., 129 AD3d 888, 891 [2d Dept 2015].

Exhibits A and D are therefore not properly before the Court on this application, and the branches of the motion that depend upon them are denied.

IV. THE DEBTOR AND CREDITOR LAW § 271(b) PRESUMPTION WAS NOT ADVANCED ON THE PRIOR MOTION

Plaintiff's second principal contention is that the Decision "did not cite, reference, or apply DCL § 271(b) or its presumption at any point in its insolvency analysis," and that the omission "is a misapprehension of controlling law and an independent ground for reargument." See NYSCEF Doc. No. 89 ¶ 10; See also NYSCEF Doc. No. 94 at 11-12.

The difficulty is that Plaintiff did not invoke Debtor and Creditor Law § 271(b) on the motion to dismiss. Its opposition addressed Ruben Azrak's status as a debtor under Debtor and Creditor Law § 270 and resisted dismissal principally upon the ground that disclosure was warranted under Civil Practice Law and Rules § 3211(d); it did not cite § 271(b), and it asserted no presumption of insolvency. A court does not "overlook[ ] or misapprehend[ ]" a proposition that no party placed before it (Civil Practice Law and Rules § 2221[d][2]), and a contention advanced for the first time on reargument is not a proper basis for the motion. See Pryor, 17 AD3d at 435; V. Veeraswamy Realty, 71 AD3d at 874-875.

The point is more than formal. Plaintiff's opposition affirmation represented that Plaintiff required disclosure in order to develop "evidence of Ruben Azrak's solvency at times relevant to the Complaint." NYSCEF Doc. No. 50 ¶ 4. A litigant who informs the court that it does not yet know whether the debtor was solvent, and needs discovery to find out, cannot fault the court—on reargument—for declining to hold that insolvency had been established as a matter of law by operation of a presumption the litigant never mentioned.

Were the Court to reach the substance of the theory, it would not alter the disposition. Section 271(b) presumes insolvency where a debtor "is generally not paying the debtor's debts as they become due other than as a result of a bona fide dispute." The inquiry is directed to the debtor's payment practices at the time of the challenged transfer. The transfers at issue are alleged to have occurred on January 1 and October 1, 2021. The judgment upon which Plaintiff relies was entered in 2024. Nonpayment of an obligation that did not yet exist cannot establish that the debtor was "generally not paying" his debts as they became due some three years earlier. Nor does the statute speak to a single creditor: the word "generally" contemplates a pattern across the debtor's obligations, and neither the Complaint nor the present submission alleges anything concerning Ruben Azrak's other debts in 2021, the sums then due, or any default to any other creditor. The theory assumes its statutory predicate rather than pleading it—which is the very deficiency the Decision identified.

V. THE DEPOSITION TESTIMONY OF SARAH AZRAK

A. The Transcript Was Considered, Not Overlooked

Plaintiff's lead contention is that the Decision "did not engage with or even mention the sworn deposition testimony of Sarah Azrak." NYSCEF Doc. No. 94 at 2. Unlike the tax returns, the transcript was indisputably before the Court. The contention nevertheless fails, because its premise—that silence in the analysis establishes oversight—is unsound.

The Decision recites the May 4, 2026 letter transmitting the transcript among the papers read and considered. Civil Practice Law and Rules § 2219(a) requires that an order determining a motion "recite the papers used on the motion, and give the determination or direction in such detail as the judge deems proper." It does not require a court to catalogue each item of evidence, or to explain, submission by submission, why a particular exhibit did not change the result. Concision is not oversight, and the absence of a discussion of a given exhibit is not evidence that the exhibit went unread. The Court read the transcript and considered it. It did not overlook it.

What Plaintiff in substance disputes is the weight the Court accorded that testimony and the conclusion the Court drew from it. That is a disagreement with the determination itself, and reargument does not lie to press it a second time. See V. Veeraswamy Realty, 71 AD3d at 874-875; Peretz, 205 AD3d at 748; Ahmed, 116 AD3d at 805.

B. The Transcript Does Not Supply What the Decision Found Wanting

Independently, and assuming Plaintiff's premises in full, the testimony would not have produced a different result.

Plaintiff is correct that a pleader's evidentiary submissions may be considered on a motion under Civil Practice Law and Rules § 3211(a)(7), and that affidavits "may be used freely to preserve inartfully pleaded, but potentially meritorious, claims." Rovello v Orofino Realty Co., 40 NY2d 633, 635 [1976]. Where such material is considered and the motion is not converted to one for summary judgment, "the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one." Guggenheimer v. Ginzburg, 43 NY2d 268, 275 [1977]. But that standard is not a one-way ratchet. It asks whether the plaintiff has a cause of action; and it was upon that question, with the transcript in hand, that the Court answered in the negative.

Sarah Azrak's testimony establishes what she knew and what she paid. It is silent upon the matters the Decision identified as absent. It says nothing of Ruben Azrak's assets and liabilities, at a fair valuation, upon either transfer date—the measure of insolvency prescribed by Debtor and Creditor Law § 271(a). It says nothing of the size of his remaining assets in relation to any business or transaction in which he was engaged or about to engage. It identifies no misrepresentation made to Plaintiff and no reliance by Plaintiff, and so does not touch the common-law fraud claim at all. And because Sarah Azrak is a transferee rather than the pleader, her testimony cannot resolve a contradiction internal to the Complaint; a witness may supplement a pleading's proof, but she cannot amend its allegations.

Plaintiff's assertion that the testimony satisfies "each of the statutory badges of fraud codified at DCL § 273(b)" (NYSCEF Doc. No. 89 ¶ 7) overstates the record. Section 273(b) enumerates eleven non-exclusive factors, several of which—that the debtor absconded, that he removed or concealed assets, that he transferred the essential assets of a business to a lienor who in turn transferred them to an insider—find no support in the testimony or in the pleading. That certain badges are present is a reason the actual-intent claim was analyzed rather than ignored; it is not a demonstration that the Court misapprehended the pleading standard it applied.

VI. THE STATUTORY FRAMEWORK PLAINTIFF INVOKES DOES NOT SUPPORT THE CLAIMED MISAPPREHENSION OF LAW

One further matter warrants attention, because it bears upon the premise of Plaintiff's argument rather than its application.

Plaintiff contends that the Court "applied the wrong legal standard entirely" to the claim under Debtor and Creditor Law § 274, urging that § 274 "does not require proof that the debtor was insolvent at the time of the transfers or became insolvent as a result" but instead imposes "a capitalization standard, not an insolvency standard," while § 273 supplies the insolvency test. See NYSCEF Doc. No. 94 at 12-13.

That was the law before April 4, 2020. Under the former article 10, § 273 rendered voidable a conveyance made by a person who is or will thereby be rendered insolvent, and § 274 addressed conveyances by a person engaged in a business or transaction for which the property remaining is an unreasonably small capital. But Plaintiff's own submission— correctly—is that these transfers postdate the effective date of the New York Uniform Voidable Transactions Act and that the amended Debtor and Creditor Law governs. Indeed, Plaintiff relies upon the amendment in arguing that what was formerly codified as § 276 is now § 273(a)(1). See NYSCEF Doc. No. 94 at 7.

The amendment did not preserve the former allocation of elements. Under the statute as it now reads, § 273(a)(2)(i) is the unreasonably-small-assets provision: a transfer is voidable if made "without receiving a reasonably equivalent value in exchange" at a time when the debtor "was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction." Insolvency is the province of § 274(a), which renders a transfer voidable as to a creditor whose claim arose beforehand where the debtor received less than reasonably equivalent value and "was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation."

Plaintiff's argument thus rests upon the repealed numbering. Read under the current statute that Plaintiff says governs, § 274 is the insolvency provision, and the Court's insolvency analysis was addressed to precisely the element the section prescribes. Read under the former statute, the provision does not govern transfers made in 2021 upon Plaintiff's own theory of the case. On either reading, the asserted misapprehension of law is not the Court's.

VII. THE CIVIL PRATICE LAW AND RULES § 3211(d) BRANCH REPEATS AN ARGUMENT ALREADY DECIDED

Plaintiff argues that the Decision misapprehended the record in characterizing its affirmation as "candidly admit[ting] it does not know whether those facts exist at all," and that the seven categories of evidence identified in that affirmation were "a precise articulation of what discovery would confirm" rather than a confession of ignorance. See NYSCEF Doc. No. 94 at 14.

The Court read the affirmation, understood it to acknowledge uncertainty as to essential elements of the claims pleaded, and declined upon that understanding to defer determination of the motion. Plaintiff pressed the same request for disclosure in opposition to the motion to dismiss, and the request was denied. Whether the Court's reading of Plaintiff's own affirmation was the better one is a question for appellate review; it is not a matter the Court overlooked. See Peretz, 205 AD3d at 748; See also Ahmed, 116 AD3d at 805.

In any event, Plaintiff's own papers upon this motion confirm the premise of the ruling. Civil Practice Law and Rules § 3211(d) addresses facts "essential to justify opposition" that "may exist but cannot then be stated." The provision is directed to the party who lacks access to proof, ordinarily because the proof lies within the moving party's knowledge. Plaintiff was not such a party. It held Ruben Azrak's 2020 income tax return before it commenced this action (NYSCEF Doc. No. 89 ¶ 3); it held the 2021 gift tax return, which it had already submitted upon its default application; it deposed Sarah Azrak before the motion was decided; and it had the disclosure devices of Civil Practice Law and Rules Article 52 available to it in the judgment proceeding. A party that possessed the materials and did not deploy them cannot invoke Civil Practice Law and Rules § 3211(d) to excuse the omission.

VIII. THE VENUE RULING AND THE REQUEST FOR TRANSFER

Plaintiff is correct as an abstract proposition that venue is not jurisdictional and that an improperly laid venue ordinarily calls for a change of the place of trial rather than termination of the action. The Supreme Court is a court of statewide jurisdiction, and "[a] mere defect of venue . . . is not a dismissal ground in New York practice" but results in transfer to the correct venue. Knight v New York & Presbyt. Hosp., 42 NY3d 699, 703-704 [2024]; See People v Carvajal, 6 NY3d 305, 312 [2005]; Civil Practice Law and Rules §§ 510, 511.

That proposition does not carry the motion, for two reasons.

First, Plaintiff advanced it on the motion to dismiss, arguing there that improper venue "is not a basis to dismiss an action." NYSCEF Doc. No. 54 at 4-5. The Court considered the contention and rejected it. Reargument is not the occasion upon which to press the same argument a second time. See Foley, 68 AD2d at 567; See also V. Veeraswamy Realty, 71 AD3d at 874-875.

Second, and dispositively, the venue ruling is not what disposed of this action. The Decision rested upon two independent grounds, and the second—that the Complaint fails to state a cause of action—is complete in itself. Venue does not limit this Court's power to adjudicate the sufficiency of a pleading; that is the necessary corollary of the very principle of statewide jurisdiction upon which Plaintiff relies. The determination under Civil Practice Law and Rules § 3211(a)(7) was made by a court with full authority to make it, upon a motion fully briefed by both sides, and it dismissed the Complaint in its entirety. Reconsideration of the venue discussion would leave that determination undisturbed, and there would remain no pleading to transfer. A transfer to Kings County would be an empty act.

Because leave to reargue is committed to the Court's discretion, and because no reconsideration of the venue ruling could alter the disposition of this action, the Court declines to revisit it.

IX. THE REQUEST TO MODIFY THE DISMISSAL TO ONE WITHOUT PREJUDICE

Plaintiff's remaining branch asks the Court to strike the "with prejudice" designation so that the action may be recommenced. The request is neither properly presented nor supported. It is not properly presented because Plaintiff has never moved for leave to amend. See Civil Practice Law and Rules § 3025(b) governs amendment of pleadings and directs that leave "shall be freely given." Plaintiff did not seek leave after the denial of its default motion; it did not seek leave after Defendants' motion identified the pleading defects in detail; it did not seek leave before the Decision issued; and it does not seek leave now. No proposed amended pleading has been tendered at any stage. A motion under Civil Practice Law and Rules § 2221(d) asks the Court to reconsider a determination upon the record then before it. It is not a vehicle for obtaining relief that was never requested, and it does not serve as a substitute for an application under Civil Practice Law and Rules § 3025(b).

It is not supported because the request rests upon the premise that viable repleading is possible, and the record supplies no basis upon which to assess that premise. Leave to amend is properly denied where the proposed pleading is "palpably insufficient or patently devoid of merit." Lucido v Mancuso, 49 AD3d 220, 222 [2d Dept 2008]. That inquiry cannot be conducted in the abstract. Plaintiff identifies in general terms the corrections it would make— that the consideration allegations would be conformed to Sarah Azrak's testimony, that the insolvency allegations would be supplemented with the 2020 return, and that a stray reference to "Deutsche" in paragraph 63 of the Complaint was a drafting error correctable in a single sentence (NYSCEF Doc. No. 94 at 16)—but for the reasons already stated, those materials do not reach the elements the Decision found unpleaded.

Plaintiff's difficulty is not that it was denied an opportunity to cure. It is that it was afforded several such opportunities and elected upon each occasion to stand upon the pleading as drawn. Reargument does not exist to relieve a litigant of the consequences of that choice.

CONCLUSION

Plaintiff has not identified any matter of fact or law that this Court overlooked or misapprehended in the Decision and Order of this Court dated June 5, 2026. The materials upon which it principally relies were not offered upon that motion; the statutory presumption it now invokes was never advanced; the deposition transcript was before the Court and was considered; and the balance of the motion re-urges contentions already made and decided. The Court has considered Plaintiff's remaining contentions and finds them to be without merit.

Defendants' separately pending motion for sanctions is not before the Court upon this application and is not addressed herein.

Accordingly, it is hereby

ORDERED that Plaintiff's motion, pursuant to Civil Practice Law and Rules § 2221(d), for leave to reargue the Decision and Order of this Court dated June 5, 2026, and entered June 8, 2026, is DENIED in its entirety; and it is further

ORDERED that the Decision and Order of this Court dated June 5, 2026 and entered June 8, 2026 remains in full force and effect; 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 the date hereof.

The foregoing constitutes the Decision and Order of this Court.

Dated: September 22, 2026

New City, New York

Hon. John P. Collins, Jr., J.S.C.

FOOTNOTES

1.   Defendants observe that no notice of appeal from the Decision appears upon the docket, notwithstanding Plaintiff's representation in other filings that an appeal had been taken. See NYSCEF Doc. No. 96 at 3 n.1). The Court need not resolve that question. What distinguishes reargument from appeal is the availability of appellate review, not its exercise.

John P. Collins, Jr., J.