Hidden Pond Schodack, LLC v. Hidden Pond Homes, Inc.

• Decision Date: 10 December 2020
• Docket Number: 530333
• Citation: 138 N.Y.S.3d 215,189 A.D.3d 1792
• Parties: HIDDEN POND SCHODACK, LLC, Respondent, v. HIDDEN POND HOMES, INC., et al., Appellants.
• Court: New York Supreme Court — Appellate Division

189 A.D.3d 1792

138 N.Y.S.3d 215

HIDDEN POND SCHODACK, LLC, Respondent,

v.HIDDEN POND HOMES, INC., et al., Appellants.

530333

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

Calendar Date: October 13, 2020

Decided and Entered: December 10, 2020

Talarico Law Firm, Fayetteville (Joseph R. Talarico II of counsel), for appellants.

The Law Office of Jeffrey L. Zimring, Albany (Jeffrey L. Zimring of counsel), for respondent.

Before: Egan Jr., J.P., Mulvey, Aarons and Pritzker, JJ.

MEMORANDUM AND ORDER

Pritzker, J. Appeal from an amended judgment of the Supreme Court(Zwack, J.), entered April 15, 2019 in Rensselaer County, upon an amended decision of the court partially in favor of plaintiff.

Plaintiff is a limited liability corporation, of which Mario DiGioia is the sole shareholder, that owns a parcel of property in the Town of Schodack, Rensselaer County that was approved by the Town for a development of a 24–lot residential subdivision.In 2013, plaintiff and defendantHidden Ponds Homes, Inc., of which defendantGraig Arcuri is the sole shareholder, entered into a real estate development agreement whereby it was agreed that Hidden Pond Homes would enter into construction contracts with purchasers of homes to be built on the lots in the subdivision.According to the agreement, as relevant here, plaintiff was to be compensated $72,000 for each lot transferred to Hidden Pond Homes or the ultimate purchaser of the lot.The agreement also provided that Arcuri would personally guarantee the liabilities of Hidden Pond Homes.

In March 2015, plaintiff commenced this action alleging that defendants breached the agreement and seeking money damages, as well as a declaratory judgment that it was able to convey the unsold lots on the property free of any claim by defendants.Defendants asserted several affirmative defenses and counterclaims, including a counterclaim for fraud.After a two-day nonjury trial, Supreme Court found for plaintiff on the first cause of action for breach of contract regarding three lots on the property and granted plaintiff a judgment in the amount of $59,158.33.Plaintiff's remaining causes of action and defendants' counterclaims were dismissed.Following an application by plaintiff to cancel defendants' mechanic's lien and discharge a bond, plus a request for counsel fees, the court denied the request for counsel fees but issued an amended judgment, awarding plaintiff $83,627.76, which was comprised of the initial judgment, interest, costs and disbursements.Defendants appeal.

Initially, we reject plaintiff's contention that the appeal should be dismissed because Arcuri, who is not an attorney, filed a notice of appeal on behalf of Hidden Pond Homes.¹In the interim period between relieving his trial counsel and obtaining appellate counsel, Arcuri filed a notice of appeal on behalf of himself and Hidden Pond Homes.Subsequently, after plaintiff filed a motion to dismiss the appeal, Hidden Pond Homes entered into an assignment of claim with Arcuri that specifically references this appeal as the claim being assigned.The assignment has a retroactive "effective date" predating the filing of the notice of appeal.Defendants were represented by counsel in Supreme Court and have representation on appeal, and it appears that the only action done by Arcuri in this matter without counsel was the filing of the notice of appeal.

There is no dispute that the assignment of Hidden Pond Homes' claims was a tactic to circumvent CPLR 321(a), which creates a prohibition on corporate self-representation (seeWaltman v. Berkshire Hathaway Inc. , 150 A.D.3d 433, 434, 51 N.Y.S.3d 413[2017] ).Nevertheless, the assignment complied with corporate formalities, was "legitimate" and allowed the notice of appeal to be considered properly filed, as Arcuri obtained all of Hidden Pond Homes' claims and, thus, CPLR 321(a) does not apply ( Kinlay v. Henley , 57 A.D.3d 219, 220, 868 N.Y.S.2d 62[2008];seeTraktman v. City of New York , 182 A.D.2d 814, 815, 582 N.Y.S.2d 808[1992];compareFicalora v. Town Bd. Govt. of E. Hampton , 276 A.D.2d 666, 666, 714 N.Y.S.2d 353[2000] ).Moreover, the notice of appeal otherwise complied with the necessary statutory requirements (seeCPLR 5513;see generallyHamilton Livery Leasing, LLC v. State of New York , 151 A.D.3d 1358, 1359–1360, 58 N.Y.S.3d 624[2017];compareO'Connor v. Sleasman , 14 A.D.3d 986, 987, 788 N.Y.S.2d 518[2005] ) and the retroactive assignment of Hidden Pond Homes' claims to Arcuri did not prejudice plaintiff in any way (see generallyRuffin v. Lion Corp. , 15 N.Y.3d 578, 582, 915 N.Y.S.2d 204, 940 N.E.2d 909[2010];Hamilton Livery Leasing, LLC v. State of New York , 151 A.D.3d at 1360–1361, 58 N.Y.S.3d 624 ).Thus, under these circumstances, we discern no issue with the assignment of claim having a retroactive effective date.

Turning to the merits, defendants contend that Supreme Court's verdict is not supported by the evidence at trial.In this regard, "[t]his Court reviews a nonjury verdict by conducting an independent review of the evidence, affording due deference to the trier's factual findings and credibility determinations, and rendering the judgment warranted by the record"( Old Timers Rod & Gun Club, Inc. v. Wa–A–We Rod & Gun Club, Inc. , 184 A.D.3d 1033, 1033, 127 N.Y.S.3d 159[2020];seeMatter of Jewett , 145 A.D.3d 1114, 1116, 42 N.Y.S.3d 443[2016] ).

Defendants challenge Supreme Court's use of plaintiff's exhibit Q, an accounting prepared by Arcuri and accepted by plaintiff, finding it to be a "clear accounting of the lot price, payments, and amounts due on each of the lots."Defendants do not dispute that it was proper for the court to utilize this exhibit, and even admits that it was accurate as of September 23, 2014.Rather, defendants challenge the court's decision not to award damages to defendants for subdivision costs incurred after that date.In its decision, the court noted that both DiGioia and Arcuri are sophisticated businessmen and that both witnesses had "shaped and colored their respective testimony for their own advantage."Accordingly, the court stated that portions of their testimonies were not credible and were given no weight.Pursuant to the parties' agreement, plaintiff was responsible for all costs relating to approval and completion of the subdivision.This does not include improvement costs related to the lots, as those are the responsibility of Hidden Pond Homes.At trial, Arcuri testified regarding subdivision costs and admitted into evidence several exhibits substantiating these costs.As Supreme Court properly found, many of these costs were incurred prior to the time of the September 23, 2014 accounting; thus, Arcuri, who created the accounting, had the opportunity to include these costs.As to expenses incurred after September 23, 2014, we agree with Supreme Court that defendants failed to submit proof that these expenses were to be borne by plaintiff.

Defendants also challenge Supreme Court's award of lot payments to plaintiff, contending that plaintiff was not entitled to those payments as of September 23, 2014.Pursuant to ...