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Decided on November 15, 2004
Supreme Court, Nassau County

18170-01
COUNSEL FOR PLAINTIFF Bernard Ouziel, Esq. 13 Schoolhouse Lane Great Neck, New York 11020 COUNSEL FOR DEFENDANT Pieper, Hoban & Royce, P.C. 92 Willis Avenue Mineola, New York 11501
Leonard B. Austin, J.
Defendants move for summary judgment dismissing the complaint and granting summary judgment on their counterclaim. Plaintiffs cross-move for summary judgment on their action and dismissing the counterclaim.
BACKGROUND
Plaintiff 83 Northport Corp. ("83 Northport") is a domestic corporation formed in 1990 to own commercial realty located at 83 Main Street, Northport, New York. ("Northport property"). Farrell
M. Fleming ("Fleming"), Edward W. Glackin II ("Glackin"), Brian H. Madden ("Madden") and Stephen Asch ("Asch") were principals of 83 Northport with each owning a 25% interest. All of the principals of 83 Northport were directors of the corporation. Fleming was initially the President while Madden was initially the corporate Secretary. At some point, Madden became the President of 83 Northport.
Defendant Ravesh Sarva ("Sarva") is a certified public accountant. Sarva is also engaged in arranging private mortgage financing through his accounting clients.
Sarva arranged for secondary mortgage financing on the Northport property. As a condition to providing the financing, 83 Northport entered into an escrow agreement whereby it assigned to
P.S.R.S. Realty Corp. ("PSRS") the leases on the Northport property. PSRS is a real estate management corporation of which Sarva is President.
Pursuant to the terms of the escrow agreement, all rent on the Northport property was to be paid the PSRS. PSRS was to use the rent money and any portion of the second mortgage proceeds not disbursed at closing to pay for asbestos remediation and construction at the premises. The rent money was then to be used to pay the interest on the first and second mortgages, the real estate taxes on the property, to pay for casualty and liability insurance premiums and all other lienable charges against the property. Any funds remaining in the escrow account after the first and second mortgages on the property had been paid in full would be paid over to 83 Northport.
In 1992, Fleming, Glackin, Madden and Asch formed a New Jersey corporation, Kennedy Blvd., Inc. ("Kennedy Blvd."), for the purposes of owning commercial real estate located at 2860

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