Compass Concierge, LLC v. 42 Duane Realty Corp.
| Decision Date | 01 August 2022 |
| Docket Number | Index Nos. 157509/2021,001 |
| Parties | COMPASS CONCIERGE, LLC, Plaintiff, v. 42 DUANE REALTY CORP. and STEPHEN CORELLI, Defendants. |
| Court | New York Supreme Court |
Unpublished Opinion
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18 were read on this motion to/for DISMISSAL.
In this breach of contract action, defendants 142 Duane Realty Corp. and Stephen Corelli move, pursuant to CPLR 3013, 3211(a)(1) and 3211(a)(7), for an order dismissing the complaint (motion seq. no. 001). Plaintiff Compass Concierge, LLC opposes the motion and cross-moves, pursuant to CPLR 3212, for summary judgment against defendants, seeking to recover the sum of $293,692.17, plus interest and litigation expenses. After consideration of the parties' contentions, as well as a review of the relevant statutes and case law, defendants' motion to dismiss and plaintiffs cross motion for summary judgment are decided as follows.
Plaintiff is a real estate brokerage providing services related to property renovations and sales (Doc No. 1 at 3). Defendant 142 Duane Realty Corp. ("142 Duane") is a realty company which owns a penthouse apartment located at 142 Duane Street in Manhattan ("the property") (Doc No. 1 at 3). In April 2019, plaintiff and 142 Duane entered into a renovation services agreement ("the agreement") which provided, among other things, that plaintiff would pay various contractors to perform "non-structural" work on the property, with 142 Duane later repaying plaintiff for covering the cost of the contractors' services (Doc No. 2 at 1). Such repayment was to come from the proceeds of 142 Duane's sale of the property or, if the property did not sell within 12 months of the agreement's execution, directly from 142 Duane (Doc No. 2 at 1). The agreement also provided that 142 Duane would incur a termination fee if it terminated a prior listing agreement or if such listing agreement expired, with payment of the termination fee due within 15 days of such termination or expiration (Doc No. 2 at 1). The agreement was signed by plaintiff as well as defendant Stephen Corelli as "[authorized [signatory" for 142 Duane (Doc No. 2 at 2-3).
Plaintiff alleges in its complaint that the property did not sell within 12 months of the agreement's execution and that the listing agreement expired in October 2020 (Doc No. 1 at 4). After plaintiffs demands for repayment of the contractor costs and payment of the termination fee went unanswered, it commenced the instant action seeking to recover $293,692.17 plus interest and litigation expenses (Doc No. 1 at 6-7). In its complaint, plaintiff asserted causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit, and unjust enrichment (Doc No. 1).
Defendants now move, pursuant to CPLR 3013, 3211(a)(1), and 3211(a)(7), for an order dismissing the complaint (Doc No. 6). In support of the motion, defendants submit a copy of the agreement between plaintiff and 142 Duane (Doc No. 9). Plaintiff opposes the motion, arguing that Corelli is personally bound by the agreement, thereby making it unnecessary to pierce the corporate veil to hold him individually liable, and that the quantum meruit and unjust enrichment claims are not duplicative of the breach of contract claim (Doc No. 14). Plaintiff also cross-moves, pursuant to CPLR 3212, for an order granting summary judgment in its favor (Doc No. 12). Defendants oppose the cross motion on the ground that summary judgment cannot be granted at this procedural stage because issue has not been joined (Doc No. 17).
"When determining a motion to dismiss, the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Goldman v Metropolitan Life Ins. Co., 5 N.Y.3d 561, 570-571 [2005] [internal quotation marks and citations omitted]). The inquiry is "whether the proponent of the pleading has a cause of action, not whether he [or she] has stated one" or whether the proponent can ultimately prove his or her allegations (Leon v Martinez, 84 N.Y.2d 83, 88 [1994] [internal quotation marks and citations omitted]; see Bay Ridge Lodge 758, Free & Accepted Masons v Grand Lodge of Free & Accepted Masons of the State of N.Y., 202 A.D.3d 1035, 1036 [2d Dept 2022]). Pursuant to CPLR 3211(a)(1), however, "dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Charles Schwab Corp. v Goldman Sachs Group, Inc., 186 A.D.3d 431, 435 [1st Dept 2020] [internal quotation marks and citations omitted]).
In order to pierce the corporate veil and hold a corporation's principal individually liable, "[a] plaintiff must allege facts that, if proved, indicate that the shareholder exercised complete domination and control over the corporation and abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice" (East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 16 N.Y.3d 775, 776 [2011] [internal quotation marks and citation omitted]). In doing so, the plaintiff "must do more than merely allege that defendant engaged in improper acts or acted in bad faith while representing the corporation" (Cortlandt St. Recovery Corp. v Bonderman, 31 N.Y.3d 30, 47 [2018]). In its complaint, plaintiff alleges that Corelli was a principal of 142 Duane but makes no additional specific allegations that he dominated the corporation or used it in any illicit way (Doc No. 1 at 2-3). Therefore, plaintiff has "failed to allege particularized facts to warrant piercing the corporate veil so as to allow the claims against the principal[] to continue" (20 Pine St. Homeowners Assn. v 20 Pine St. LLC, 109 A.D.3d 733, 735 [1st Dept 2013]; see Kahan Jewelry Corp. v Coin Dealer of 47th St. Inc., 173 A.D.3d 568, 569 [1st Dept 2019]).
In any event, defendants' documentary evidence - a copy of the agreement at issue (Doc No. 9 at 10-12) - refutes plaintiffs claims against Corelli. The agreement contains numerous references to "Client," which is identified as 142 Duane on the second and third pages (Doc No. 9 at 10-12). Corelli's name only appears on the signature lines in the agreement, where he is designated as an "[authorized [signatory" for 142 Duane (Doc No. 9 at 11-12). Thus, he did not sign the contract in his individual capacity (see MBM Company I, LLC v Ballistic Bodyworks, Inc., 2018 NY Misc. LEXIS 8134, *6 [Sup Ct, Dutchess County 2018, Brands, J.]).
To sustain a cause of action for breach of contract, there must be a valid contract between the parties, performance by the plaintiff, a breach by the defendant, and damages suffered by plaintiff as a result of that breach (see Alloy Advisory, LLCv 503 W. 33rd St. Assoc, Inc., 195 A.D.3d 436, 436 [1st Dept 2021]). Reviewing the documentary evidence, the only parties to the agreement are 142 Duane and plaintiff (Doc No. 9 at 10-12). Since Corelli was not a party to the agreement, there can be no breach of contract claim against him (see Harris v Seward Park Hous. Corp., 79 A.D.3d 425, 426 [1st Dept 2010]).
Similarly, there can be no cause of action against Corelli for breach of the implied covenant of good faith and fair dealing. To maintain such a claim, there must be some contractual relationship from which the covenant of good faith and fair dealing can be implied (see Core Dev. Group LLC v Spaho, 199 A.D.3d 447, 449 [1st Dept 2021]). Given that Corelli was not a party to the agreement, plaintiffs claim against him for breach of the implied covenant of good faith and fair dealing is also dismissed.
"Although privity is not required for an unjust enrichment claim," there must still be some "relationship between the parties that could have caused reliance or inducement" (Mandarin Trading Ltd. v Wildenstein, 16 N.Y.3d 173, 182 [2011]). The documentary evidence demonstrates that there was no such relationship between plaintiff and Corelli. Therefore, plaintiff cannot assert an unjust enrichment claim against him (see Georgia Malone & Co., Inc. v Rieder, 86 A.D.3d 406, 408-410 [1st Dept 2011], affd 19 N.Y.3d 511 [2012]).
The absence of such a relationship also dooms plaintiffs quantum meruit claim against Corelli. One of the required elements for maintaining a cause of action for quantum meruit is "acceptance of the services by the person to whom they are rendered" (Freedman v Pearlman, 271 A.D.2d 301, 304 [1st Dept 2000]; accord Soumayah v Minnelli, 41 A.D.3d 390, 391 [1st Dept 2007]). Here, 142 Duane, not Corelli, was the entity listed as the "Client" in the agreement (Doc No. 9 at 10-12). Since any services rendered by plaintiff would have been accepted by 142 Duane, plaintiffs quantum meruit claim against Corelli is dismissed as well (see Georgia Malone & Co., Inc., 86 A.D.3d at 410).
As a first cause of action, plaintiff asserts a claim against 142 Duane for breach of contract, alleging that the agreement represented a valid contract, that plaintiff performed pursuant to the terms of the agreement, that 142 Duane breached the agreement when it did not repay plaintiff, and that plaintiff suffered damages due to 142 Duane's breach (Doc No. 1 at 4-5). Plaintiff further alleges that it is entitled to $293,692.71 in damages (Doc No. 1 at 5). As a second cause of action, plaintiff asserts a claim against 142 Duane...
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