On August 25, 2023, Justice Chan of the New York County Commercial Division issued a decision in DBI Lease Buyback Servicing LLC v. Mullen Auto., Inc., 2023 NY Slip Op. 32995(U), rejecting a request for advancement of fees, explaining:
Plaintiffs’ request for advancement of fees is also denied. Plaintiffs have not demonstrated irreparable injury should they not be paid funds to litigate. Plaintiffs misplace their reliance on cases awarding advance of fees for affirmative claims on summary judgment motions, wherein irreparable injury does not need to be demonstrated. Plaintiffs’ reliance on Dupree v Scottsdale Ins. Co. (96 AD3d 546 [1st Dept 2012]) is also not on point. That case involved an insurer’s obligation to advance legal defense expenses.
Finally, plaintiffs point to Kaloyeros v Fort Schuyler Mgmt. Corp. (55 Misc 3d 1082, 1090 [Sup Ct, NY County 2017], affd, 157 AD3d 1152 [3d Dept 2018]) which recognized that the failure to advance legal expenses can potentially constitute irreparable harm under a not-for-profit corporation law. Nonetheless, the present case does not involve not-for-profit law. And just as the Kaloyeros court found that plaintiff had not made its showing of irreparable injury, plaintiffs here have not made their showing. That their attorney stated at oral argument that they are a small fund without a litigation fund is insufficient. The court in Kaloyeros also distinguished between defensive proceedings and prosecution of affirmative claims, the latter of which the court found to be unavailable under the not-for-profit corporation law. Given this finding, the court need not and does not determine whether advancement of fees would even be appropriate without consideration of the lack of success plaintiffs have thus far had in litigating a failed motion for contempt and a now-dismissed action.
(Internal citations omitted).