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

• Citation: 138 N.Y.S.3d 215,189 A.D.3d 1792
• Decision Date: 10 December 2020
• Docket Number: 530333
• 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

138 N.Y.S.3d 216

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.

138 N.Y.S.3d 217

189 A.D.3d 1792

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 defendant Hidden Ponds Homes, Inc., of which defendant Graig Arcuri is the sole shareholder, entered into a real estate development agreement whereby it was agreed that Hidden Pond Homes would enter into construction

189 A.D.3d 1793

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.¹ In 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 (see

189 A.D.3d 1794

Waltman 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"

138 N.Y.S.3d 218

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] ; see Traktman v. City of New York , 182 A.D.2d 814, 815, 582 N.Y.S.2d 808 [1992] ; compare Ficalora 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...