P.S. Docket No. MD 11-279
November 9, 2011
In the Matter of a Mail Dispute Between
LUCIANO BONANNI
and
ALLAN HAUSKNECHT, M.D.
P.S. Docket No. MD 11-279
APPEARANCE FOR DISPUTANT
LUCIANO BONANNI:
Luciano Bonanni
APPEARANCE FOR DISPUTANT
ALLAN HAUSKNECHT, M.D.:
Marci S. Zinn, Esq.
Jaspan Schlesinger, LLP
INITIAL DECISION
The disputants contest mail addressed to MRI Enterprises, LLC, at 8 Melton Drive West, Rockville Centre, NY 11570-3257 (the Rockville Centre address). Disputant Allan Hausknecht asks that a change of address request that he submitted be honored such that the mail should be delivered to the offices of MRI Enterprises, LLC, at 2689 Pitkin Avenue, Brooklyn, NY 11208-2704 (the Brooklyn address), or to its post office box. Disputant Luciano Bonanni opposes the change of address request and seeks to have the mail delivered as addressed. The Judicial Officer has directed the Rockville Centre Postmaster to hold the mail pending resolution of this mail dispute. I recommend that the Judicial Officer direct the postmaster to release the mail and deliver future mail addressed to MRI Enterprises, LLC to the Brooklyn address or as otherwise directed by Dr. Hausknecht.[1]
FINDINGS OF FACT
1. MRI Enterprises, LLC (MRI) is a limited liability company formed in 2001 under New York law. MRI operates magnetic resonance imaging facilities in New York hospitals. (Hausknecht Aff. ¶ 3; Bonanni Aff. ¶ 1; Bonanni Aff. Ex. A).
2. In 2004, MRI’s operating agreement was amended and restated, replacing the 2001 operating agreement. As reflected in the 2004 operating agreement which remains in effect, MRI is owned as follows:
40% by Horizons Investors Corp., owned by Mr. B. Fernandez
20% by Dr. Hausknecht, as an individual
20% by Adex Management Corp., owned by Mr. S. Kalish
20% by MRI Enterprises, Inc., owned by Mr. Bonanni.
(Hausknecht Aff. Exs. D, E; Bonanni Aff. ¶¶ 1, 4; Hausknecht Aff. ¶¶ 2, 9; Zinn Aff. ¶ 20).
3. The 2004 operating agreement identifies MRI’s place of business as 110 Marcus Drive, Melville, NY 11747, which was the address of MRI, Inc., a 20% owner of MRI (Hausknecht Aff. Ex. E; Bonanni Aff. ¶ 5). Neither party maintains that this originally-identified address is current for MRI.
4. The 2004 operating agreement requires a 2/3 super-majority vote of its members (by percentage of ownership) for certain enumerated actions, while all other actions require a simple majority vote of members (also by percentage of ownership). (Hausknecht Aff. Ex. E; Bonanni Aff. ¶ 6; Hausknecht Aff. ¶¶ 26-29; Hausknecht Opp. ¶ 9).
5. Section 2.3 of the 2004 operating agreement identifies the purpose of MRI as being ownership and operation of magnetic resonance imaging facilities, and related functions (Hausknecht Aff. Ex. E).
6. Section 2.4 of the 2004 operating agreement identifies MRI’s “principal place of business” as the original Melville address (Finding 3). The same section provides that this principal place of business “shall be located at such place as the members may mutually agree upon from time to time.” (Hausknecht Aff. Ex. E).
7. Section 2.6 of the 2004 operating agreement identifies the Secretary of State of New York as MRI’s agent for service of process, and provides that the address to which the Secretary of State is to mail process to MRI is established in the articles of incorporation. Section 2.6 concludes, “The members may change such address from time to time by their mutual agreement and in accordance with applicable provisions of law.” (Hausknecht Aff. Ex. E).
8. Section 4.3 of the 2004 operating agreement provides that a simple majority of MRI’s members (by percentage of ownership) constitutes a quorum and, that at any meeting with a quorum, a simple majority vote is binding unless a 2/3 super-majority is required by the operating agreement or otherwise is required by law. Section 4.5 allows any action that may have been taken at a meeting of members to be established by written consent without meeting or prior notice. Accordingly, a simple majority of members’ voting interests may bind MRI by such a consent agreement so long as a super-majority vote is not required. (Hausknecht Aff. Ex. E).
9. Section 4.8 of the 2004 operating agreement generally identifies the actions for which a super-majority vote is required. One such action, at section 4.8(o), is for the “alteration of the authorized business of [MRI], as set forth in Section 2.7.” However, the operating agreement does not include a section 2.7, and the authorized business is established in section 2.3, as referenced in Finding 5. (Hausknecht Aff. Ex. E; Bonanni Aff. ¶ 7; Hausknecht Opp. ¶ 9). None of the enumerated items in section 4.8 mention changing MRI’s address (Hausknecht Aff. Ex. E).
10. In 2005, a resolution and consent agreement (the 2005 agreement) was executed for MRI. The 2005 agreement identifies the disputed Brooklyn address as MRI’s principal office and requires its books and records to be maintained there. (Hausknecht Aff. Ex. F; Hausknecht Opp. ¶ 5; Hausknecht Aff. ¶ 10; Bonanni Aff. ¶ 9). Thereafter, MRI’s principal office has been the Brooklyn address (Hausknecht Aff. ¶ 11).
11. The 2005 agreement was signed by Dr. Hausknecht, Mr. Fernandez (on behalf of Horizons), and Mr. Kalish (on behalf of Adex), but not by Mr. Bonanni. The members signing the 2005 agreement cumulatively represented 80% (a super-majority) of MRI’s ownership (Hausknecht Aff. Ex. F; Hausknecht Opp. ¶ 6; Bonanni Aff. ¶ 9).
12. The 2005 agreement appointed Horizons and Adex as MRI’s managers, with Adex providing MRI’s day-to-day management. The address identified for Adex is the contested Rockville Centre address. The 2005 agreement also authorized Adex to designate Mr. Kalish as MRI’s chief operating officer, and authorized Horizons to designate Mr. Fernandez as MRI’s chief executive officer. (Hausknecht Aff. Ex. F). These titles – chief operating officer and chief executive officer – do not appear in the 2004 operating agreement, nor does the title “president” (Hausknecht Aff. Ex. E).
13. Also in 2005, Mr. Bonanni and MRI, Inc., filed litigation against Horizons, Mr. Fernandez, Adex, Mr. Kalish and Dr. Hausknecht in state court, in Suffolk County (Bonanni Aff. ¶ 8; Bonanni Aff. Ex. C). The current status of that case is not in the record.
14. In April 2011, another consent agreement (the 2011 agreement) was executed for MRI. The 2011 agreement includes the following resolution:
RESOLVED, that the address for [MRI] is hereby changed from 8 Melton Drive West, Rockville Centre, New York 11570 and/or c/o Solomon Kalish, to: 2689 Pitkin Avenue, Brooklyn, New York 11208 and/or P.O. Box 80221, Brooklyn, New York 11208-0221[.]
It also included related resolutions authorizing MRI’s members to inform appropriate entities about the address change. (Hausknecht Aff., Ex. G; Hausknecht Aff. ¶¶ 13-14).
15. The 2011 agreement was signed by Dr. Hausknecht as 20% owner of MRI, and by Mr. Fernandez, as president (and owner) of Horizons and 40% owner of MRI. The signers of the 2011 agreement therefore cumulatively represented 60% of MRI’s ownership, a majority but not a super-majority of ownership (Hausknecht Aff. Ex. G; Hausknecht Aff. ¶ 5). The reason for the 2011 agreement asserted by its signatories was that Mr. Kalish had been indicted on federal criminal charges. As a result, for appearances as well as other reasons, MRI wished to change its mailing address from that of Mr. Kalish, to the Brooklyn address, which is MRI’s principal office. (Hausknecht Aff. ¶¶ 4, 11, 15-16, 38; Fernandez Opp. ¶ 5; Hausknecht Opp. ¶ 15; see also Bonanni Opp. ¶ 4).
16. A print-out from the website of the New York Department of State, Division of Corporations identifies Mr. Kalish at the Rockville Centre address as the “address to which the [Department of State] will mail process if accepted on behalf of the entity.” (Bonanni Aff. Ex. D; Bonanni Aff. ¶ 10).
17. Litigation between and among MRI’s owners has been ongoing in at least two New York state courts. In May 2011, the Supreme Court of New York, in Nassau County, issued an 11-page order denying a motion for a preliminary injunction.[2] The preliminary injunction motion denied by the court, among other things sought to establish the Rockville Centre address as MRI’s mailing address, and sought to enjoin Dr. Hausknecht and others from changing that address. In denying the motion, the court described the litigation as being in a “nascent state.” The record does not reflect further proceedings in that case. (Hausknecht Aff. Ex. K (quote at p. 11); Hausknecht Aff. ¶¶ 7, 17, 20; Hausknecht Opp. ¶¶ 12-14; Bonanni Ex. C; Bonanni Aff. ¶¶ 8, 11; Bonanni Opp. ¶ 2).
18. Dr. Hausknecht, identifying himself as managing member of MRI, filed a forwarding request with the Rockville Centre Postmaster for mail addressed to MRI at the Rockville Centre address to be re-directed to the Brooklyn address or to P.O. Box 80221, Brooklyn, New York 11208 (Hausknecht Aff. Ex. A). Mr. Bonanni, as president of MRI, Inc., and 20% owner of MRI, and Mr. Kalish as president of Adex and 20% owner of MRI, filed an opposition letter with the postmaster. The letter contested the forwarding request as unauthorized because it lacked required super-majority support. The opposition letter also identified the Rockville Centre address as Mr. Kalish’s current address, and asked the postmaster to leave the address for delivery of MRI’s mail unchanged. (Hausknecht Aff. Ex. B; Bonanni Aff. ¶ 13).
19. Field counsel for the United States Postal Service forwarded the resulting mail dispute to the Judicial Officer for resolution under Postal Operations Manual § 616.21 (Hausknecht Ex. C)[3]. The case was docketed and assigned to the undersigned administrative judge (Notice of Docketing of Mail Dispute and Submittal Deadline, September 22, 2011), and is being adjudicated under the procedures established at 39 CFR Part 965. Both parties submitted sworn statements, supporting documents, and opposition statements.
DECISION
Arguments of the parties.
The parties present numerous arguments. Preliminarily, Dr. Hausknecht argues that I should not reach the merits of this dispute because res judicata, waiver/estoppel and lack of standing preclude Mr. Bonanni from contesting the change of address request. Specifically, Dr. Hausknecht argues that the state court order denying a preliminary injunction request referenced at Finding 17, is entitled to res judicata preclusive effect. He further argues that Mr. Bonanni’s pursuit of relief concerning MRI’s mailing address in that court precludes him from contesting the change of address order in this mail dispute. Dr. Hausknecht also argues that Mr. Bonanni, in contrast with his company, Horizons, is not a proper party and therefore lacks standing. He asks that I defer to the state court litigation and not rule in the mail dispute before me.
On the merits, Dr. Hausknecht argues that both the 2005 agreement and the 2011 agreement establish the Brooklyn address as the appropriate address for delivery of MRI’s mail. More specifically, he maintains that the 2004 operating agreement requires only a simple majority vote rather than a super-majority of owners to authorize a change of address, and that therefore the 2011 agreement properly constituted an official change of address for MRI. Alternatively, Dr. Hausknecht argues that even if I were to accept Mr. Bonanni’s position that a super-majority is necessary, the 2005 agreement which was signed by a super-majority, constitutes an effective change of address.
Mr. Bonanni argues that the state court’s order required the parties to maintain the status quo regarding documents and addresses. He maintains that unless one of the state courts directs the Postal Service to the contrary, the current address (the Rockville Centre address) must be used for mail delivery.
Mr. Bonanni argues that while the 2005 agreement required books and records to be maintained at the Brooklyn address, it did not require the mail to be delivered there. Mr. Bonanni asserts that the 2011 agreement should be disregarded because it was not signed by a super-majority of MRI owners which he contends is required by the 2004 operating agreement in order to change MRI’s address. The parties also make a variety of additional arguments that I deem not to be material to this decision unless otherwise indicated.
Preliminary Issues.
I reject both parties’ preliminary arguments. Application of res judicata requires among other elements, a final adjudication on the merits. See, e.g., Allen v. McCurry, 449 U.S. 90, 93 (1980). The state court’s order denying a motion for a preliminary injunction and describing the litigation as being in a nascent state (Finding 17), is not a final adjudication on the merits. Accordingly, the state court order does not carry res judicata effect, nor do I credit the argument that Mr. Bonanni has waived his ability to contest the change of address request in this proceeding or is estopped from doing so. Dr. Hausknecht initiated the change of address request here at issue. Mr. Bonanni, with an ownership interest in MRI through MRI, Inc. (Finding 2), opposed that request creating this mail dispute and possesses standing. He is free to defend his position in this case.
Mr. Bonanni’s preliminary argument that the court order precludes a change of address is similarly rejected. The order does nothing of the sort. (Finding 17).[4] While postal regulations require that mail will be delivered as directed by a court order, Postal Operations Manual § 616.3, no such court order directing delivery of mail is in the record or has been identified. Furthermore, I will not suspend this case for an indefinite period until the matter might be resolved by a court. As I ruled in Mark Lebeau and John Jurkowski, P.S. Docket No. MD 10-35 (I.D. April 13, 2010):
In the absence of an agreement by the parties to suspend action on the mail dispute, it is not appropriate for me to decline to make a decision, and it is my responsibility to decide this matter resolving the appropriate delivery of the disputed mail until such time as a court decision is issued.
The Merits.
Ordinarily, postal rules require that mail sent to a business organization such as an LLC will be delivered according to the directions of the organization’s president or equivalent official. Postal Operations Manual § 614.1. Mr. Bonanni does not claim to be MRI’s president or equivalent official, and the term does not appear in the 2004 operating agreement (Finding 12). The record remains unclear, and is insufficient to allow me to determine who presently might be considered as the equivalent official to president of MRI. Neither party effectively argues the issue, and careful examination of the sworn statements here submitted does not reveal identification of MRI’s current manager.[5] In any event, if the 2011 agreement is enforceable, it would overcome any such presidential authority to change MRI’s address. See Rev. Ernest Nash Jr. and Mary Prewitt, P.S. Docket No. MD 11-153 (I.D. July 29, 2011).
On the merits though, this case is more easily resolved than the parties’ presentations might suggest. Initially, I agree with Mr. Bonanni that the 2005 agreement does not control the result. It is plain that until the 2011 agreement, all parties believed that MRI’s appropriate mailing address was the Rockville Centre address. Mr. Bonanni certainly continues to believe that the Rockville Centre address remains the proper one for MRI. As for Dr. Hausknecht, despite protestations to the contrary, his signature on the 2011 agreement belies his alternative position that the 2005 agreement remains decisive.
The 2011 agreement is crystal clear in stating that MRI’s address was the Rockville Centre address at that time (Finding 14). The entire purpose of the 2011 agreement was to change that address from Rockville Centre to Brooklyn. (Findings 14-15). I find that the parties to this mail dispute acknowledged MRI’s address to be in Rockville Centre up until execution of the 2011 agreement. Therefore, I need only resolve whether, for purposes of this mail dispute, the 2011 agreement is enforceable based on a majority vote, or unenforceable because it lacks a super-majority. I find that it is enforceable.
MRI can be bound by a simple majority vote via a consent agreement, without notice or a meeting, see N.Y. Limited Liability Company Law § 407 (1994), so long as the action voted upon is not one of the actions enumerated in the operating agreement as requiring a 2/3 supermajority (Findings 4, 8-9). It is uncontested that the 2011 agreement was passed by a simple majority vote (Findings 14-15).
Mr. Bonanni argues that the operating agreement’s section 4.8(o), requiring a super-majority for the “alteration of the authorized business of [MRI], as set forth in Section 2.7” includes changing MRI’s business and mailing address. Initially, I note that the operating agreement does not include a section 2.7 (Finding 9). The authorized business of MRI set forth in section 2.3, identifies the purpose of MRI as being ownership and operation of magnetic resonance imaging facilities, without mention of MRI’s address (Findings 5, 9). I agree with Dr. Hausknecht’s argument that changing MRI’s address does not affect its basic authority to function.
Rather, changing MRI’s address is mentioned with specificity in two places in the 2004 operating agreement – sections 2.4 and 2.6 (Findings 6-7). Section 2.4 identifies a specific address for MRI’s “principal place of business,” which as both parties acknowledge was changed since the 2004 operating agreement became effective (Findings 6, 14). The same section also recites that this place of business may be located “at such place as the members may mutually agree upon from time to time.” (Finding 6). There is no mention of a super-majority to change that location.
The other potentially relevant reference to an address for MRI is section 2.6. This section identifies the Secretary of State of New York as MRI’s agent for service of process, and provides that the address to which the Secretary of State is to mail process to MRI is established in the articles of incorporation. Section 2.6 concludes “The members may change such address from time to time by their mutual agreement and in accordance with applicable provisions of law.” (Finding 7). Again, there is no mention of a super-majority requirement to change that location.
I find these sections of the 2004 operating agreement specifically mentioning an address for MRI without reciting a need for a super-majority vote to change that address to be persuasive. Further, following careful examination of the enumerated list of actions that do require a super-majority, I find that changing the mailing address is not among them. Accordingly, changing MRI’s address may be accomplished by a simple majority vote of owners, which was done in the 2011 agreement. (Finding 14).
While I have considered all arguments presented by the parties, Mr. Bonanni offers two other positions that deserve specific attention in this decision. He alleges that a change of address card presented by Dr. Hausknecht to the Rockville Centre Postmaster (Attachment A to Postal Service field counsel’s referral) included an unauthorized stamped signature of Mr. Kalish (Bonanni Aff. ¶ 12). While support for this allegation might be inferred from Mr. Kalish’s opposition to the change of address request (Finding 18), the record does not include specific evidence concerning this issue, nor any statement at all from Mr. Kalish (other than his submission to the state court). In any event, it is clear that this mail dispute is properly before me, as Dr. Hausknecht who maintains an ownership interest in MRI, requested the address change, and a letter by Mr. Bonanni and Mr. Kalish, also with ownership interests in MRI, opposed it. (Finding 18). I therefore need not resolve the allegation that Mr. Kalish’s signature on a change of address form was unauthorized.[6]
Mr. Bonanni also mentions that a print-out from the website of the New York State Division of Corporations supports his position. However, that print-out only applies to service of process, and does not identify Mr. Bonanni as the recipient (Findings 7, 16). The address for the recipient of process from the state authorities may be different from an LLC’s regular business mailing address. See N.Y. Limited Liability Company Law §§ 301-A(a)(3); 302(d)(4) (1999). Further, the consequences of MRI’s obligation, if any, to change its registered address for process are not before me, and identification of the registered address may have been overcome by events, namely the 2011 agreement which I have found to be enforceable. The print-out from the website of the Division of Corporations, though somewhat supportive of Mr. Bonanni’s position, is not sufficient to overcome the weight of the evidence to the contrary.
Given the continuing legal disputes involving these parties, I must emphasize that this decision deals only with the delivery of mail not its ownership.
This initial decision recommends that the Judicial Officer should issue an order directing the Rockville Centre Postmaster to forward all held mail and to deliver future mail addressed to MRI Enterprises, LLC, at 8 Melton Drive West, Rockville Centre, NY 11570-3257, to 2689 Pitkin Avenue, Brooklyn, NY 11208-2704, or as otherwise directed by Dr. Hausknecht.
Gary E. Shapiro
Administrative Judge
[1] The record consists of six affidavits, exhibits thereto, and an affirmation, and will be cited in this decision with the following conventions:
Affidavit by Dr. Hausknecht, October 12, 2011 (Hausknecht Aff.)
Affidavit by Mr. Fernandez, October 11, 2011 (Fernandez Aff.)
Affirmation by Attorney Zinn, October 12, 2011 (Zinn Aff.)
Affidavit by Mr. Bonanni, October 6, 2011 (Bonanni Aff.)
Opposition Affidavit by Dr. Hausknecht, October 26, 2011 (Hausknecht Opp.)
Opposition Affidavit by Mr. Fernandez, October 26, 2011 (Fernandez Opp.)
Opposition Affidavit by Mr. Bonanni, October 26, 2011 (Bonanni Opp.).
Exhibits attached to these sworn statements are abbreviated as Ex. In addition, Horizons Investors Corp. will be referred to as Horizons; Adex Management Corp. will be referred to as Adex; and MRI Enterprises, Inc. (as contrasted with MRI Enterprises, LLC whose mail is here in dispute and which is abbreviated herein as MRI), will be referred to as MRI, Inc.
[2] Plaintiffs in that suit, which is different from the litigation referenced at Finding 13, include Mr. Kalish and Adex. Defendants include Dr. Hausknecht, Mr. Fernandez, and Horizons.
[3] The referral incorrectly identified Mr. Bonanni as president of MRI rather than as president of MRI, Inc., which owns 20% of MRI (Hausknecht Aff. Ex. C; Zinn Aff. ¶¶ 12-17; Hausknecht Aff. ¶¶ 5, 35-36).
[4] The same state court also issued a temporary restraining order which required the parties to maintain and preserve all documents, including those stored at the Rockville Centre address. (Bonanni Aff. Ex. F). That order does not involve MRI’s mailing address either.
[5] At one point, Mr. Kalish, who is not a party and has not participated in this mail dispute, may have been its president-equivalent (see Hausknecht Aff. Ex. H). However, the state Supreme Court order states that Mr. Kalish was “removed” from MRI in March 2011 (Hausknecht Aff. Ex. K at pp. 3-4). The court order also states that Mr. Bonanni was “removed” from MRI in 2005 (id., at p. 4). At another point, Mr. Fernandez was identified as MRI’s chief executive officer, a title not found in the 2004 operating agreement (Finding 12). To add further confusion, while the sworn statements do not explain who might be a “manager” of MRI currently under New York law, Dr. Hausknecht’s letter identifies himself as MRI’s managing member (Finding 18), without explanation.
[6] Of course, were it demonstrated that Dr. Hausknecht falsely represented that Mr. Kalish signed that forwarding card, an issue on which I make no finding, Dr. Hausknecht’s credibility could be impeached. However, as this mail dispute turns on the legal issue concerning the enforceability of the 2011 agreement, the import of such a credibility determination is greatly if not completely diminished, and I need not reach it. Mr. Bonanni also argues that retention of counsel by MRI requires a super-majority and was here violated (Bonanni Opp. ¶ 1). While the 2004 operating agreement indeed requires a super-majority to retain counsel (see Hausknecht Aff. Ex. E, section 4.8(m)), the record is silent concerning the circumstances surrounding the retention of counsel, and Dr. Hausknecht rather than MRI is the disputant in this case. In any event, this issue is not before me for decision.