Bao v. Wang

Background

Plaintiffs Shuzhong Bao and Bibo Zeng sued Defendants Xuguang Wang, also known as Jason Wang, Yifen Bao, Zoe Wang, Sunwoo Trade Inc., and 506 Piermont Avenue Holding Corp. The complaint asserted claims for breach of contract, unjust enrichment, and fraud. Plaintiffs alleged that Defendants received $867,000 after promising Plaintiffs ownership interests connected to a restaurant business and two companies.

Plaintiffs moved for restraint and attachment of two properties: 506 Piermont Avenue in Piermont, New York, and 11 Iron Latch Court in Saddle River, New Jersey. Their motion sought a preliminary injunction, restraint of assets under New York Civil Practice Law and Rules § 5229, or an order of attachment under § 6201(3). Plaintiffs submitted no declarations, affidavits, exhibits, or other factual information supporting the motion beyond allegations drawn from the complaint. Defendants stated that they did not object to attachment of 506 Piermont Avenue, but opposed attachment of 11 Iron Latch Court.

Court’s analysis

The court treated the request concerning 506 Piermont Avenue as unopposed and granted the requested relief for that property. It ordered Defendants not to dispose of or encumber the property before the lawsuit’s final disposition unless Plaintiffs gave express written consent.

The court denied all requested relief concerning 11 Iron Latch Court. For a preliminary injunction, Plaintiffs had to show likely irreparable harm, meaning harm that could not be fully remedied with money. The court found that Plaintiffs had not shown any actual and imminent threat that Defendants would sell or transfer the property, or explained why sale proceeds would not be enough to satisfy a judgment. The court also noted that the complaint appeared to seek monetary damages, but it did not decide whether that affected the court’s authority to issue an injunction because Plaintiffs failed to show irreparable harm.

The court denied restraint under New York Civil Practice Law and Rules § 5229 because that remedy requires the requesting party already to have obtained a favorable verdict or decision. No verdict or decision had been entered in this case.

The court also denied attachment under § 6201(3). Plaintiffs had to show, among other things, a probable chance of success on their claims and that Defendants had acted, or were about to act, with intent to defraud creditors or frustrate enforcement of a possible judgment. The court found that Plaintiffs had not addressed or supported probable success and had provided no evidentiary facts proving fraudulent intent. Past property sales and Defendants’ refusal to use sale proceeds to repay Plaintiffs were insufficient. The court further rejected Plaintiffs’ reliance on the family relationship as a supposed indicator of fraud because the cited principle concerns family transfers used to shield assets from creditors, not an alleged fraud between family members.

Ruling

The court granted in part and denied in part Plaintiffs’ motion for restraint and attachment. It granted the requested protection for 506 Piermont Avenue and denied the preliminary-injunction request, the § 5229 restraint request, and the § 6201(3) attachment request concerning 11 Iron Latch Court. Judge Andrew E. Krause directed the Clerk of Court to terminate the motion.