Aces Mechanical Corp. v. Cohen Bros. Realty & Const. Corp.

• Citation: 136 A.D.2d 503,523 N.Y.S.2d 824
• Court: New York Supreme Court Appellate Division
• Decision Date: 26 January 1988
• Parties: ACES MECHANICAL CORP., Plaintiff-Respondent-Appellant, v. COHEN BROTHERS REALTY & CONSTRUCTION CORP., et al., Defendants-Appellants- Respondents, and 780 Third Avenue Corp., et al., Defendants.

Page 824

523 N.Y.S.2d 824

136 A.D.2d 503

ACES MECHANICAL CORP., Plaintiff-Respondent-Appellant, v. COHEN BROTHERS REALTY & CONSTRUCTION CORP., et al., Defendants-Appellants- Respondents, and 780 Third Avenue Corp., et al., Defendants.

Supreme Court, Appellate Division,

First Department.

Jan. 26, 1988.

A.L. Tersigni, New York City, for plaintiff-respondent-appellant.

J.L. Schapira, New York City, for defendants-appellants-respondents.

Before MURPHY, P.J., and CARRO, ROSENBERGER, ELLERIN and SMITH, JJ.

MEMORANDUM DECISION.

Order and judgment (one paper), Supreme Court, New York County (Norman A. Mordue, J.), entered October 31, 1986, following a jury trial before Justice Myron E. Tillman, in favor of plaintiff-respondent-appellant on the first cause of action for breach of contract, which dismissed the second cause of action for fraud, granted defendants' motion to vacate the prior judgment entered September 30, 1983, only to the extent of vacating the damages awarded for fraud, and granted plaintiff's motion for judgment in the amount of $177,364 with interest, unanimously modified, on the law, to grant defendants' motion to vacate in its entirety the judgment entered September 30, 1983, assessing damages in the amount of $177,364 against defendants, to dismiss the complaint in its entirety as against defendant Cohen Brothers Realty & Construction Corp., to deny plaintiff's motion for judgment on the contract cause of action and to vacate the jury verdict on liability against defendants and remand the contract cause of action for a new trial, and otherwise affirmed, without costs.

Following commencement of plaintiff's action for breach of contract and fraud, defendants 780 Third Avenue Company, Sherman Cohen and Edward Cohen failed to submit a timely answer and a default judgment was entered against them. Pending appeal to this Court, an inquest was held to assess damages against the defaulting defendants. Defendant Cohen Brothers Realty & Construction Corp., which had submitted a timely answer, did not appear at the inquest. After a five day, non-jury hearing before Justice Martin Evans, plaintiff was awarded the sum of $177,364 on its breach of contract claim and $10 in nominal damages on its fraud claim, together with interest from November 1981. Judgment in plaintiff's favor was entered September 30, 1983. However, in January 1984, this Court, 99 A.D.2d 455, 471 N.Y.S.2d 283, ordered the defendants' default vacated and permitted them to answer on condition that they pay plaintiff $5,000 in costs. Although defendants filed a notice of appeal from the inquest judgment of September 30, 1983, the appeal was not perfected.

Defendants answered and a jury trial on the issue of liability was held before Justice Tillman. At the close of plaintiff's case defendant Cohen Brothers Realty & Construction Corp. moved for dismissal of the contract claim against it, as there was no proof that the corporation was a party to the contract. The court erred in denying the motion. There was no evidence to contradict this defendant's contention that its role in this transaction was limited to acting as an agent for a disclosed principal, 780 Third Avenue Associates. Nor was there any showing that the corporate form should be disregarded to prevent fraud or achieve equity ( Port Chester Electrical Construction Corp. v. Atlas, 40 N.Y.2d 652, 656, 389 N.Y.S.2d 327, 357 N.E.2d 983 [1976] ). Plaintiff presented no evidence that the corporate defendant was merely the alter ego of its officers and principals, the individual defendants herein who were also members of the partnerships forming 780 Third Avenue Associates. Consequently, there was no basis for holding the corporate defendant liable for the breach of a contract to which it was not a party.

We also find that plaintiff's evidence as to the existence of a contract between the parties was insufficient to support the verdict in its favor. Plaintiff relied on a back-dated "letter of intent" signed by defendant 780 Third Avenue Associates which was given to plaintiff at a meeting on October 13, 1981, as evidence of its contract. That letter states that the agreement concluded between the parties was subject to two conditions: approval by defendants' engineers of plaintiff's modifications to the plans and specifications, and "our entering into a standard form of Agreement satisfactory to" one of the owner's partners and defendants' lending institutions. The...