General “Further Relief” Clause Permits Court-Ordered Accounting; Unambiguous Governance Documents Control Dealership Management Despite Prior Agreements and Claimed Nonreview

1. Introduction

Case: Darwish Auto Group, LLC v TD Bank, N.A., 2026 NY Slip Op 01102 (App Div, 3d Dept Feb. 26, 2026).
Parties and posture: Plaintiffs Darwish Auto Group, LLC (DAG) and Darwish General Corp. (DGC) sued amid a governance and control dispute involving dealership bank accounts and operational authority. Defendant-appellant Walid Darwish (the founder/owner of plaintiffs at formation and the operating principal of the dealerships) appealed from: (i) a preliminary-injunction-related order requiring him to provide an accounting and monthly statements concerning dissipated advance funds; (ii) a separate preliminary injunction order requiring him to post an undertaking; and (iii) an order granting plaintiffs partial summary judgment (declaratory relief; breach of contract; breach of fiduciary duty) and dissolving the “no-sale” preliminary injunction.

Business background: In 2021, Darwish formed entities to acquire and operate ten upstate New York car dealerships. He obtained $62 million in funding from 2427 Investments, Inc. (an affiliate of Potamkin Automotive Group), but the financing required a reorganization: plaintiffs were to be governed by three-member governing bodies (including Darwish and two lender affiliates, Barry Frieder and Mark Manzo), with no unilateral authority in a single person. Darwish would manage the dealerships under an employment agreement, reporting to the governing bodies.

Core disputes: Plaintiffs alleged Darwish unilaterally altered access to dealership TD Bank accounts and interfered with governing-body directives, including potential dealership sales. The dispute escalated when plaintiffs discovered an unauthorized multi-million-dollar advance from Ford Motor Credit Company LLC (the “Ford Advance”) and later another from Nissan Extended Services North America (the “Nissan Advance”), which Darwish deposited into his personal account and largely spent for personal purposes.

Key issues on appeal: (1) whether Supreme Court could direct an accounting of the Ford Advance funds even though the motion did not specifically request an accounting; (2) whether the undertaking issue remained justiciable after dissolution of the injunction; and (3) whether the amended governance and transaction documents unambiguously vested management and sale authority in the governing bodies (defeating Darwish’s claims of sole control), supporting summary judgment on declaratory relief, breach of contract, and fiduciary duty.

2. Summary of the Opinion

  • Accounting order affirmed: The Third Department held Supreme Court did not exceed its authority by directing an accounting and monthly statements concerning Ford Advance funds. The motion’s general request for “further relief” permitted relief “not too dramatically unlike that which was actually sought,” and the accounting served the same protective purpose as enforcing the anti-dissipation injunction.
  • Undertaking appeal dismissed as moot: Because Supreme Court dissolved the preliminary injunction that triggered the undertaking requirement, and no undertaking had been posted, the amount-of-undertaking challenge was moot and did not warrant application of the mootness exception.
  • Partial summary judgment affirmed: The court upheld declarations that plaintiffs’ governing bodies control plaintiffs and the dealerships (including sale authority), rejected defenses (waiver/modification/abandonment, estoppel, fraudulent inducement, oppression), and affirmed summary judgment for breach of fiduciary duty (conversion/misuse of Ford and Nissan Advances) and breach of contract (violation of employment agreement obligations to follow governing-body policies and directives).
  • Defendant’s cross-motion properly denied: Certain counterclaims/third-party claims turned on disputed facts (notably alleged misuse of Darwish’s confidential bank token), and other claims failed on prima facie proof; an argument raised only in reply on appeal was deemed abandoned.

3. Analysis

3.1. Precedents Cited (and how they shaped the ruling)

A. Court’s power to grant relief not precisely demanded (accounting ordered under a general prayer)

  • Meadow at Clarke Hollow Bay, LLC v White, 155 AD3d 1325 (3d Dept 2017) and Willette v Willette, 53 AD3d 753 (3d Dept 2008): These cases anchor the principle that where a motion includes a general request for “further relief as the Court deems just,” the court may grant relief not explicitly demanded so long as it is not “too dramatically unlike” what was sought. The Third Department applied this directly: an accounting was functionally aligned with plaintiffs’ effort to enforce the anti-dissipation order regarding the Ford Advance.
  • Bank of Am., N.A. v Amigon, 241 AD3d 479 (2d Dept 2025) (contrasted): Cited to underscore that such relief must rest on a sufficient evidentiary basis; here, the record supported the need for an accounting.
  • Czajka v Pendell, 174 AD3d 970 (3d Dept 2019): Used for the “substantial prejudice” check—granting unrequested-but-related relief is improper if it materially prejudices the opposing party. The court found no such prejudice to Darwish.

B. Mootness after dissolution of an injunction (undertaking challenge)

  • General Elec. Co. v Metals Resources Group, 293 AD2d 417 (1st Dept 2002) and Honeywell, Inc. v Technical Bldg. Servs., 103 AD2d 433 (3d Dept 1984): These cases support dismissal of appeals that no longer present a live controversy, and caution that the mootness exception is limited. Once the injunction was dissolved, the undertaking obligation terminated, mooting the dispute over its amount.

C. Contract interpretation and unambiguous governance documents control (no parol evidence; four corners)

  • Harris v Reagan, 177 AD3d 1056 (3d Dept 2019) and Maldonado v DiBre, 140 AD3d 1501 (3d Dept 2016), lv denied 28 NY3d 908 (2016): Confirm that declaratory relief turning on governance documents is analyzed under ordinary contract interpretation principles.
  • Ficel Transp., Inc. v State of New York, 209 AD3d 1153 (3d Dept 2022) and Greenfield v Philles Records, 98 NY2d 562 (2002): Establish that party intent is best gleaned from the contract language itself; courts enforce clear language as written.
  • Donohue v Cuomo, 38 NY3d 1 (2022) and U.S. Bank N.A. v DLJ Mtge. Capital, Inc., 38 NY3d 169 (2022): Reaffirm New York’s “plain meaning” rule—complete, clear, unambiguous agreements must be enforced according to their terms.
  • Daire v Sterling Ins. Co., 204 AD3d 1189 (3d Dept 2022) and Integrity Intl., Inc. v HP, Inc., 211 AD3d 1194 (3d Dept 2022): Emphasize ambiguity as a legal question resolved from the “four corners” without resort to outside sources.

D. Merger clauses foreclose reliance on prior governing documents

  • Xi Mei Jia v Intelli-Tec Sec. Servs., Inc., 114 AD3d 607 (1st Dept 2014) and Kindler v Newsweek, Inc., 277 AD2d 159 (1st Dept 2000): These cases support enforcing merger clauses that supersede “all prior and contemporaneous” agreements on the same subject matter. The court used them to reject Darwish’s reliance on original governance documents that gave him sole control before the financing restructuring.

E. Signed agreements bind sophisticated parties even if not read

  • Wu v Uber Tech., Inc., 43 NY3d 288 (2024), Chimart Assoc. v Paul, 66 NY2d 570 (1986), and Da Silva v Musso, 53 NY2d 543 (1981): These authorities reinforce that a sophisticated party represented by counsel is generally bound by documents he signs; a claimed failure to read does not negate enforceability absent recognized grounds (e.g., fraud sufficient to invalidate assent).

F. Collateral agreements (manufacturer agreements) do not supplant governance documents

  • Zinter Handling, Inc. v General Elec. Co., 101 AD3d 1333 (3d Dept 2012): Used to reject the argument that separate manufacturer/franchise agreements (naming Darwish as “Dealer Principal,” etc.) determine plaintiffs’ internal management structure or override the amended governing documents.

G. Conditions precedent and effectiveness of agreements

  • Rooney v Slomowitz, 11 AD3d 864 (3d Dept 2004) and MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640 (2009) (compared): The court relied on these to hold manufacturer approval was not a condition precedent to the amended governing documents taking effect, because the documents did not make such approval an express precondition.

H. Parol evidence cannot create fact issues where contract is unambiguous

  • Gaudette v Gaudette, 222 AD3d 1313 (3d Dept 2023), United States Fid. & Guar. Co. v Delmar Dev. Partners, LLC, 14 AD3d 836 (3d Dept 2005), and Estate of Hatch v NYCO Mins., 245 AD2d 746 (3d Dept 1997): Cited to reject reliance on postclosing conduct or other extrinsic evidence to contradict clear governance language.

I. Waiver/abandonment/modification defenses

  • Steven Strong Dev. Corp. v Washington Med. Assoc., 303 AD2d 878 (3d Dept 2003): Used by comparison to show abandonment requires unequivocal conduct; here, the lender-affiliated governing members consistently exercised governance rights, negating abandonment.
  • Del Gallo Country Pools, Inc. v Kulbako, 173 AD3d 1399 (3d Dept 2019) and Turk v Anello, 280 AD2d 819 (3d Dept 2001): Support enforcing “no-oral-modification” clauses requiring signed writings—none existed here.

J. Fraud/estoppel/oppression arguments rejected as a matter of law

  • Suber v Churchill Owners Corp., 228 AD3d 414 (1st Dept 2024) and DuBow v Century Realty, Inc., 172 AD3d 622 (1st Dept 2019): Cited as support for rejecting certain equitable theories on the record presented.
  • Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., 7 NY3d 96 (2006) (compared): Referenced to illustrate the boundaries of viable fraud-based challenges; the court found defendant’s attempts insufficient here.

K. Fiduciary duty elements and misuse of corporate funds

  • Amici v Mazza, 234 AD3d 1170 (3d Dept 2025), lv denied 44 NY3d 902 (2025) and Delibasic v Manojlovic, 174 AD3d 1096 (3d Dept 2019): Provide the elements of a breach of fiduciary duty claim (fiduciary relationship, misconduct, causation/damages).
  • Chan v Havemeyer Holdings LLC, 223 AD3d 403 (1st Dept 2024) and M & M Country Store, Inc. v Kelly, 159 AD3d 1102 (3d Dept 2018): Reinforce that managers/directors owe duties of good faith and may not convert company funds for personal benefit.
  • Taylor v Wynkoop, 132 AD3d 843 (2d Dept 2015), Calabrese Bakeries, Inc. v Rockland Bakery, Inc., 102 AD3d 1033 (3d Dept 2013), and Alexander & Alexander of N.Y. v Fritzen, 147 AD2d 241 (1st Dept 1989): Support granting summary judgment where evidence conclusively shows diversion of funds and resulting damages.
  • Ithaca Montessori Sch. v Pfeffer, 239 AD3d 1128 (3d Dept 2025) and JPMorgan Chase Bank, N.A. v Verderose, 154 AD3d 1198 (3d Dept 2017): Used to reject conclusory, unsupported assertions offered to raise a triable issue (here, that advances were “compensation”).

L. Summary judgment standards and breach of employment agreement

  • Golobe v Mielnicki, 44 NY3d 86 (2025): Cited for the standard of construing evidence in the light most favorable to the nonmovant—yet defendant still failed to raise triable issues.
  • Liberty Mut. Ins. Co. v PMI Newco, LLC, 225 AD3d 941 (3d Dept 2024): Used to support affirmance of summary judgment where no triable issues exist on breach.

M. Denial of defendant’s cross-motion due to factual disputes; abandonment of reply-brief arguments

  • Marcellus Energy Servs. LLC v Tompkins Ins. Agencies, Inc., 238 AD3d 1366 (3d Dept 2025): Supports denial of summary judgment when material factual disputes require trial (here, alleged misuse of the bank token).
  • Stone Cast, Inc. v Couch, Dale Marshall P.C., 242 AD3d 1415 (3d Dept 2025): Used to deem an argument raised for the first time in a reply brief abandoned.

N. Summary judgment on an unpleaded theory where no prejudice

  • Village of Sharon Springs v Barr, 165 AD3d 1445 (3d Dept 2018): The court invoked this to address defendant’s procedural objection: even if plaintiffs’ amended complaint did not expressly discuss the advances within the fiduciary-duty claim, summary judgment may be granted on an unpleaded cause where the proof supports it and the opponent was not misled to prejudice.

3.2. Legal Reasoning

A. The accounting order as permissible, related relief

The court treated the accounting directive not as an impermissible sua sponte expansion, but as an equitable and managerial tool to protect assets and enforce prior restraints. The doctrinal steps were:

  1. Procedural hook: Although the notice of motion did not expressly request an accounting (see CPLR 2214 [a]), the inclusion of “further relief as the Court deems just” gave the court discretion to fashion relief aligned with the motion’s purpose (following Meadow at Clarke Hollow Bay, LLC v White and Willette v Willette).
  2. Functional similarity: The accounting served the same goal as the requested enforcement of the anti-dissipation order—stopping continued depletion and clarifying what remained.
  3. Record support and fairness: The directive rested on an adequate evidentiary basis (distinguishing Bank of Am., N.A. v Amigon) and created no substantial prejudice (Czajka v Pendell).

B. Mootness and the undertaking

Under CPLR 6312 (b), an undertaking is tied to the life of the preliminary injunction. Once Supreme Court dissolved the no-sale injunction, Darwish’s obligation to post an undertaking ceased. With no undertaking posted, there was no practical relief the appellate court could grant regarding the amount, rendering the appeal moot. The court declined to apply the mootness exception (General Elec. Co. v Metals Resources Group; Honeywell, Inc. v Technical Bldg. Servs.).

C. Declaratory relief: governance documents unambiguously vested control in the governing bodies

The opinion’s centerpiece is a straightforward application of New York contract interpretation to a complex, multi-document dealership acquisition structure:

  • Integrated transaction documents: The Borrowing Agreement, amended Operating Agreement (DAG), Shareholder’s Agreement (DGC), and employment agreement were treated as cohesive components of the financing deal.
  • Plain language controls: The governing documents unambiguously required majority action by a three-member body to authorize actions and granted the governing bodies authority over dealership affairs (including sale authority). Under Donohue v Cuomo and U.S. Bank N.A. v DLJ Mtge. Capital, Inc., that ended the inquiry absent ambiguity.
  • Merger clause defeats “old documents”: Defendant’s reliance on original documents granting him sole control failed because the amended documents superseded them (Xi Mei Jia v Intelli-Tec Sec. Servs., Inc.; Kindler v Newsweek, Inc.).
  • “I didn’t read it” is not a triable defense: The court emphasized defendant’s sophistication and representation by counsel, invoking Wu v Uber Tech., Inc., Chimart Assoc. v Paul, and Da Silva v Musso.
  • Dealership operating agreements and ownership: Defendant’s “sole owner” theory was undermined by operating-agreement language (member-managed; “initial” member; plaintiffs’ capital contributions in exchange for ownership), and by the Borrowing/Contribution Agreements reflecting plaintiffs’ 50% interests. Read together, they “conclusively” defeated his narrative.
  • Manufacturer agreements are external constraints, not internal governance: While manufacturer agreements may regulate who can serve as dealer principal from the franchisor’s standpoint, they do not rewrite the internal corporate allocation of authority established in the amended documents (Zinter Handling, Inc. v General Elec. Co.).
  • No unexpressed condition precedent: The court rejected the claim that manufacturer approval was required for effectiveness because the documents did not make it an explicit condition precedent (Rooney v Slomowitz; compare MHR Capital Partners LP v Presstek, Inc.).
  • No parol evidence to create ambiguity: Postclosing conduct could not be used to contradict unambiguous text (Gaudette v Gaudette; United States Fid. & Guar. Co. v Delmar Dev. Partners, LLC; Estate of Hatch v NYCO Mins.).
  • Defenses of waiver/modification/abandonment failed: The lender-affiliated members continued to exercise governance, negating abandonment (compare Steven Strong Dev. Corp. v Washington Med. Assoc.), and no signed writing modified/waived the documents as required (Del Gallo Country Pools, Inc. v Kulbako; Turk v Anello).

D. Fiduciary duty: personal receipt and spending of dealership advances as misconduct

The fiduciary-duty holding rests on unusually direct proof: the advances were contractually described as paid to the dealerships, but defendant admitted they were deposited into his personal account, not recorded in dealership books, and spent on personal debts, a home for his parents, and a relative’s business. Applying Amici v Mazza and Delibasic v Manojlovic, the court found:

  • Duty: undisputed fiduciary status as manager/director, with duties of good faith and loyalty (also referencing Business Corporation Law § 717 [a] and Limited Liability Company Law § 409 [a]).
  • Breach: conversion/diversion of funds to personal purposes (see Chan v Havemeyer Holdings LLC; M & M Country Store, Inc. v Kelly).
  • Damages: plaintiffs incurred damages from the diversion and the corresponding obligations tied to the advances.
  • No triable issue from conclusory “compensation” claim: defendant offered only unsupported assertions contrary to a written compensation scheme (Ithaca Montessori Sch. v Pfeffer; JPMorgan Chase Bank, N.A. v Verderose).

The court also neutralized a pleading-based objection via Village of Sharon Springs v Barr, holding summary judgment may rest on an unpleaded theory if proof supports it and there is no prejudice.

E. Breach of contract: employment agreement required compliance with governance directives

The employment agreement required defendant to follow policies and procedures of the governing bodies and allowed them to extend/curtail his duties. The record established repeated refusal to recognize majority governance decisions (including dealership sales efforts) and interference with TD Bank account access. Even under the nonmovant-friendly lens of Golobe v Mielnicki, defendant failed to raise triable issues; summary judgment was affirmed consistent with Liberty Mut. Ins. Co. v PMI Newco, LLC.

F. Denial of defendant’s cross-motion

The court found certain claims could not be resolved on summary judgment because they depended on disputed facts—particularly allegations concerning misuse of defendant’s confidential bank token (see Marcellus Energy Servs. LLC v Tompkins Ins. Agencies, Inc.). Other claims failed for lack of prima facie proof. An argument first advanced in reply was treated as abandoned (Stone Cast, Inc. v Couch, Dale Marshall P.C.).

3.3. Impact

  • Procedural impact (trial courts): The decision reinforces that New York trial courts may order an accounting as ancillary relief—even if not expressly demanded—where a motion contains a general “further relief” clause and the relief is closely aligned with the motion’s protective purpose, supported by evidence, and non-prejudicial. This is particularly significant in business disputes involving alleged dissipation of funds.
  • Transactional impact (dealership and private-equity financing): Financing-driven governance restructuring will be enforced as written. Sophisticated signatories cannot evade integrated governance allocations by pointing to pre-deal documents, claiming nonreview, or invoking external manufacturer agreements as internal governance overrides.
  • Fiduciary-duty enforcement: The opinion signals that direct routing of business advances into a fiduciary’s personal account—especially coupled with non-recordation on company books and personal expenditures—can support summary judgment liability for breach of fiduciary duty.
  • Litigation strategy: Parties should expect merger clauses, no-oral-modification provisions, and unambiguous majority-governance mechanisms to be dispositive on declaratory claims at summary judgment. Defendants relying on equitable defenses must offer concrete, admissible evidence rather than conclusory narratives.
  • Mootness discipline: Challenges to undertaking amounts may evaporate if the underlying injunction is dissolved—encouraging litigants to pursue timely stays or expedited relief if undertaking issues are central.

4. Complex Concepts Simplified

  • Preliminary injunction: A temporary court order preserving the status quo while a case is litigated (here, initially preventing dissipation of Ford Advance funds; separately, preventing sale of dealerships).
  • Undertaking (CPLR 6312 [b]): A bond-like security posted by a party obtaining/subject to an injunction, designed to cover damages if the injunction is later found improper. If the injunction is dissolved, the undertaking issue typically becomes academic.
  • Accounting (in this context): A court-ordered disclosure explaining where money went—used to trace funds and prevent continued dissipation.
  • Merger clause: A contract term stating the agreement supersedes prior agreements on the same subject, preventing parties from relying on earlier drafts or old deal terms to change the meaning of the final contract.
  • Parol evidence rule: If a written agreement is clear and complete, courts generally will not consider outside statements or later conduct to contradict its meaning.
  • Condition precedent: An event that must occur before a contract becomes effective. Courts require clear language before treating something as a condition precedent.
  • Fiduciary duty: A duty of loyalty and good faith owed by managers/directors to the entity. Using entity money for personal purposes is a classic breach.
  • Summary judgment: A pretrial ruling when there are no material fact disputes and the movant is entitled to judgment as a matter of law; unsupported or conclusory assertions usually cannot defeat it.

5. Conclusion

Darwish Auto Group, LLC v TD Bank, N.A. delivers two practical takeaways with broad relevance to New York commercial litigation. First, a motion’s general request for “further relief” can empower a court to order an accounting as closely related, protective relief—so long as the evidentiary basis is adequate and no substantial prejudice results. Second, in governance disputes arising from leveraged acquisitions, unambiguous, integrated governing documents (with merger and no-oral-modification clauses) will be enforced according to their terms, and sophisticated parties cannot manufacture ambiguity through prior documents, claimed nonreview, manufacturer-facing agreements, or postclosing conduct. The decision also underscores that diversion of business advances into a fiduciary’s personal account can warrant summary judgment liability for breach of fiduciary duty, and that undertaking disputes may become moot once the underlying injunction dissolves.