Bowles v. Errico

• Decision Date: 19 July 1990
• Citation: 163 A.D.2d 771,558 N.Y.S.2d 734
• Parties: Ralph F. BOWLES, Individually and as Executor of the Estate of Lucretia Bowles, Deceased, Appellant, v. Leonard ERRICO, Individually and Doing Business as Prudential Van & Storage Company of America et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 734

558 N.Y.S.2d 734

163 A.D.2d 771

Ralph F. BOWLES, Individually and as Executor of the Estate

of Lucretia Bowles, Deceased, Appellant, v. Leonard ERRICO, Individually and Doing Business as

Prudential Van & Storage Company of America et

al., Respondents.

Supreme Court, Appellate Division,

Third Department.

July 19, 1990.

Holmberg, Galbraith, Holmberg, Orkin & Bennett (Anna K. Holmberg, of counsel), Ithaca, for appellant.

Treman & Clynes, Office of Harris, Beach, Wilcox, Rubin & Levey (Mark B. Wheeler, of counsel), Ithaca, for respondents.

Before KANE, J.P., and WEISS, MIKOLL, MERCURE and HARVEY, JJ.

HARVEY, Justice.

Appeals (1) from an order of the Supreme Court (Ellison, J.), entered September 20, 1989 in Tompkins County, which granted defendant's motion for summary judgment dismissing the complaint, and (2) from the judgment entered thereon.

This action is the third lawsuit commenced by plaintiff to recover damages for his spouse's injuries and death occurring as a result of a motor vehicle accident on June 16, 1985. On that day, the station wagon automobile in which plaintiff's decedent was driving was struck from behind by an out-of- control furniture moving truck owned by Prudential Van Lines, Inc. (hereinafter Prudential) and operated by Pedro Heredia. Plaintiff thereafter commenced suit against Heredia and Prudential, whom plaintiff named as Heredia's employer. Both defendants defaulted in this action and, following an inquest for damages, plaintiff was ultimately granted judgment by default for an amount over $400,000. That judgment was not satisfied. Consequently plaintiff commenced a direct action against Prudential's insurance carrier. In that case, judgment was entered against the carrier in the amount of the policy limit, $100,000, plus interest, and this judgment was apparently fully satisfied.

Thereafter, plaintiff allegedly discovered that Prudential's truck was apparently the only asset of that corporation and that the furniture moving operation headquartered at Prudential's business address appeared to be operated by an entity known as Prudential Van & Storage Company of America, a name under which defendant, Prudential's president, was also conducting business. As a result, plaintiff then commenced a wrongful death action against defendant ^* claiming now that defendant, not Prudential, was Heredia's true employer. After initially defaulting in this action, defendant successfully moved to open the default judgment and was permitted to answer and defend the action. Following defendant's examination before trial, defendant moved for summary judgment dismissing the complaint arguing that judgment should be granted to him as a matter of law because Heredia was Prudential's employee and no triable issues were presented which would indicate that Prudential was a sham corporation as alleged by plaintiff. Additionally, defendant argued that plaintiff should be judicially estopped from contradicting his earlier representation that Prudential was Heredia's employer. Supreme Court granted defendant's motion and plaintiff appeals.

The complaint was properly dismissed. The crux of plaintiff's lawsuit is his contention that Heredia was actually not employed by Prudential but rather was an employee of defendant. Plaintiff alleges that Prudential was merely a hollow corporate front behind which defendant impermissibly hid to escape personal liability and that Prudential was only an alter ego of defendant. However, in our view, plaintiff has failed in his burden of establishing a basis for disregarding the corporate form in this instance (see, 13 NY Jur 2d, Business Relationships, § 26, at 288). The law is well settled that a business can lawfully be incorporated for the very purpose of enabling its proprietors to escape personal liability (see, Walkovszky v. Carlton, 18 N.Y.2d 414, 417, 276 N.Y.S.2d 585, 223 N.E.2d 6). Generally, a corporate entity will be disregarded only to prevent fraud, illegality or to achieve equity (Matter of Guptill Holding Corp. v. State of New York, 33 A.D.2d 362, 364, 307 N.Y.S.2d 970, affd 31 N.Y.2d 897, 340 N.Y.S.2d 638, 292 N.E.2d 782). This holds true even when the corporation is controlled by a single shareholder (see, Matter of Gifford, 144 A.D.2d 742, 535 N.Y.S.2d 154; Weis v. Selected Meat Packers, 91 A.D.2d 1085, 458 N.Y.S.2d 313). Where one individual appears to exercise complete dominion and control, the factors to be examined in determining whether to pierce the corporate veil are:

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