Calabrese Bakeries, Inc. v. Rockland Bakery, Inc.

• Decision Date: 24 January 2013
• Citation: 960 N.Y.S.2d 514,102 A.D.3d 1033,2013 N.Y. Slip Op. 00367
• Parties: CALABRESE BAKERIES, INC., Individually and in the Name of and for the Benefit of B.M. Baking Company, Inc., et al., Appellants–Respondents, v. ROCKLAND BAKERY, INC., et al., Respondents–Appellants.
• Court: New York Supreme Court — Appellate Division

102 A.D.3d 1033
960 N.Y.S.2d 514
2013 N.Y. Slip Op. 00367

CALABRESE BAKERIES, INC., Individually and in the Name of and for the Benefit of B.M. Baking Company, Inc., et al., Appellants–Respondents,
v.
ROCKLAND BAKERY, INC., et al., Respondents–Appellants.

Supreme Court, Appellate Division, Third Department, New York.

Jan. 24, 2013.

[960 N.Y.S.2d 516]

Matthew C. Hug, Troy, for appellants–respondents.

Higgins, Roberts, Beyerl & Coan, PC, Niskayuna (Michael E. Basile of counsel), for Rockland Bakery, Inc. and others, respondents–appellants.

Gleason, Dunn, Walsh & O'Shea, Albany (Ronald G. Dunn of counsel), for Clark J. Seeley and others, respondents–appellants.

Before: PETERS, P.J., LAHTINEN, GARRY and EGAN JR., JJ.

EGAN JR., J.

[102 A.D.3d 1033]Cross appeals from an order of the Supreme Court (Kramer, J.), entered October 3, 2011 in Schenectady County, which, among other things, partially granted defendants' motions for summary judgment dismissing the complaint.

Plaintiff Joseph A. Melino is the president of plaintiff Calabrese Bakeries, Inc., a wholesale and retail bakery distributor. Calabrese began as a small retail operation in Rensselaer County that sold baked goods provided by defendant Rockland Bakery, Inc. In June 2002, Melino and Rockland's president, defendant Ignazio “Salvatore” Battaglia, entered into a contract, pursuant to the terms of which the parties agreed to form a new corporation, plaintiff B.M. Baking Company, Inc., which would be headquartered on Fuller Road in Albany County. Although poorly drafted, it appears from the contract that

[960 N.Y.S.2d 517]

Melino and Battaglia envisioned that B.M. Baking would act as the exclusive wholesale and retail distributor of Rockland's baked goods within a defined geographic area. Upon payment of the buy-in fee by Rockland, Calabrese and Rockland each would have a 50% ownership interest in the corporation. ¹

Approximately six months after the execution of this agreement[102 A.D.3d 1034], Melino was incarcerated on unrelated charges, and defendant Clark J. Seeley apparently stepped in to manage B.M. Baking's operations.² Shortly thereafter, according to Melino, Seeley set up various corporate entities, including defendant WTF Bakery, Inc. and defendant Portside Distributors, Inc., appropriated moneys and assets otherwise belonging to Calabrese and/or B.M. Baking ³ and, in conjunction therewith, effectively terminated the business relationship forged by Calabrese and Rockland. In early 2004, Rockland petitioned for judicial dissolution of B.M. Baking pursuant to Business Corporation Law § 1104 and, when B.M. Baking failed to appear or answer, the petition was granted. Subsequent efforts to suspend or annul the dissolution proved unsuccessful ( see Matter of Rockland Bakery, Inc. v. B.M. Baking Co., Inc., 83 A.D.3d 1080, 923 N.Y.S.2d 572 [2d Dept. 2011]; Matter of Calabrese Bakeries, Inc. v. Rockland Bakery, Inc., 83 A.D.3d 1060, 923 N.Y.S.2d 556 [2d Dept. 2011] ).

After Melino's release from prison, plaintiffs commenced this action setting forth 14 causes of action ⁴ sounding in, among other things, fraudulent inducement, breach of contract, breach of fiduciary duty and prima facie tort. Following joinder of issue and discovery, Battaglia, Rockland and defendant Rockland Bakery N.Y., Inc. (hereinafter collectively referred to as the Rockland defendants) moved for summary judgment dismissing the complaint, and Seeley, WTF and Portside, together with defendants C & C Specialties, Inc. and Joslen Developers, LLC., separately moved for similar relief. Plaintiffs opposed the respective motions contending, among other things, that they should be held in abeyance pending further discovery and the Second Department's resolution of the then-pending appeals regarding the judicial dissolution. Supreme Court denied defendants' motions as to the first, second and third causes of action alleging fraudulent inducement, breach of contract and conversion, but granted the motions as to the balance of the complaint, concluding that the remaining claims were either meritless or duplicative. Additionally, Supreme Court held that plaintiffs' claims for damages would be limited to those incurred prior to [102 A.D.3d 1035]the dissolution of B.M. Baking in March 2004. These cross appeals ensued.⁵

Initially, to the extent that plaintiffs take issue with Supreme Court's resolution of their January 2008 motion to compel discovery, we note that plaintiffs, by their own admission, did not perfect their appeal from Supreme Court's resulting

[960 N.Y.S.2d 518]

order. Additionally, “an appeal from ... an intermediate order [such as the one at issue here] does not bring up for review prior nonfinal orders” ( Abasciano v. Dandrea, 83 A.D.3d 1542, 1543, 924 N.Y.S.2d 696 [2011], citing Baker v. Shepard, 276 A.D.2d 873, 874, 715 N.Y.S.2d 83 [2000] ). Accordingly, plaintiffs' argument on this point is not properly before us.

Plaintiffs' related claim—that Supreme Court erred in failing to hold defendants' motions for summary judgment in abeyance pending further discovery—is without merit. While it is true that a motion for summary judgment may be “denied as premature when the nonmoving party has not been given reasonable time and opportunity to conduct disclosure relative to pertinent evidence that is within the exclusive knowledge of the movant or a codefendant” ( Metichecchia v. Palmeri, 23 A.D.3d 894, 895, 803 N.Y.S.2d 813 [2005] ), plaintiffs had ample time and opportunity to do so here ( see Judd v. Vilardo, 57 A.D.3d 1127, 1131, 870 N.Y.S.2d 485 [2008] ). Moreover, “a trial court has broad discretionary power in controlling discovery and disclosure, and only a clear abuse of discretion will prompt appellate action” ( Premo v. Rosa, 93 A.D.3d 919, 920, 940 N.Y.S.2d 199 [2012] [internal quotation marks and citations omitted] ). We discern no abuse of that discretion in this matter.

Nor can we say that Supreme Court erred in concluding that plaintiffs' damages, if any, must be limited to those incurred prior to the March 19, 2004 judicial dissolution of B.M. Baking.⁶ Contrary to plaintiffs'...