Hovering Around Long Island, Inc. v. Sklar, 2007 NY Slip Op 32580(U) (N.Y. Sup. Ct. 8/17/2007), 0024403/2004
| Decision Date | 17 August 2007 |
| Docket Number | 0024403/2004,Mot Seq: 003M D |
| Citation | 2007 NY Slip Op 32580 |
| Parties | HOVERING AROUND LONG ISLAND, INC., and ALBERT ILARDI, Plaintiffs, v. STUART SKLAR, Defendant. |
| Court | New York Supreme Court |
SCOTT MICHAEL MISHKIN, P.C., Islandia, New York, Attorney for Plaintiff.
LAW FIRM OF ANTHONY D. DENARO, P.C., Hempstead, New York, Attorney for Defendant.
Upon the following papers numbered 1 to 14 read on this Motion: Notice of Motion and supporting papers 1-8; Affirmation in opposition and supporting papers 9-10; Reply affirmation and supporting papers 11-14; it is,
ORDERED that the motion of the Defendant, Stuart Sklar, to dismiss the Plaintiffs' Complaint is denied.
The Defendant, Stuart Sklar, has moved for dismissal of the complaint of the Plaintiffs, Hovering Around Long Island and Albert Ilardi, pursuant to CPLR § 3211(a)(7) and CPLR § 3211(a)(10). A motion to dismiss a complaint based upon CPLR § 3211(a)(7) will be successful if the complaint fails to state any cognizable cause of action against the Defendant. A motion pursuant to CPLR § 3211(a)(10) will be granted when it is shown that a person who is indispensable to the action has not been joined in the action as a party and that person cannot be joined as a party in the action.
The Defendant's moving papers have not shown an entitlement to dismissal of the action to the extent that the motion is based upon CPLR § 3211(a)(10).
The attorney for the Defendant is asserting that Quality Mica, Inc., the entity that the Plaintiff Hovering Around Long Island wrote checks to for payment for furniture, is the indispensable Defendant that should have been made a party to this action. When this action was commenced in 2004, the Plaintiffs had named Quality Mica, Inc. as a Defendant and it was Plaintiffs' subsequent choice to discontinue the action against the then corporate Defendant, Quality Mica, Inc. At that time the complaint was amended to name Sklar as a Defendant in his individual capacity. A review of the amended complaint, as this Courtpreviously found in the decision permitting a supplemental amended complaint, states a cause of action against the individual Defendant Sklar (see, Wolstencroft v. Sassower, 124 A.D.2d 582, 507 N.Y.S.2d 728; see also, Shields v. Katz, 143 A.D.2d 743, 533 N.Y.S.2d 451) because joint tort-feasors are not necessary parties (see, Hecht v. City of New York, 60 N.Y.2d 57, 62, 467 N.Y.S.2d 187, 454 N.E.2d 527; Amsellem v. Host Marriott Corp., 280 A.D.2d 357, 721 N.Y.S.2d 318; Siskind v. Levy, 13 A.D.2d 538, 539, 213 N.Y.S.2d 379). Whether the Plaintiffs will be successful in this action against Sklar is another issue that is not being determined by this order.
The Defendant also alleges that the Amended Complaint does not state a cause of action against him (see, CPLR § 3211(a)(7)). "On the question of whether the complaint states a cause of action sufficient to withstand a motion to dismiss pursuant to CPLR 3211(a)(7), the pleading is to be liberally construed, the facts alleged in the complaint accepted as true, and the plaintiff accorded the benefit of every favorable inference (see Leon v. Martinez, 84 N.Y.2d 83, 87 [614 N.Y.S.2d 972, 638 N.E.2d 511])" (Fay Estates v. Toys "R" Us, Inc., 22 A.D.3d 712, 714, 803 N.Y.S.2d 135).
The first three causes of action in the amended complaint attached to the motion to dismiss allege claims against the Defendant Sklar personally.1 The final cause of action in the proposed amended complaint seeks to pierce the corporate veil and impose liability on Sklar on that basis.
The proposed complaint states in relevant part:
Sklar told Ilardi that it would be "no problem" for him to manufacture a custom-made bedroom set as depicted***.
On November 6, 2002, Sklar orally offered to Ilardi to manufacture a custom-made bedroom set***.
Over the next two(2) years, Ilardi went to Mica's office*** every Saturday to inquire of Sklar as to the status***.
During these visits, Sklar told Ilardi "You're next in line," and "You're the next priority."
During these visits Sklar admitted his delay in processing Ilardi's order.
On or about June 2004, Sklar told Ilardi that he was "next in line" to receive his furniture. As a Shareholder, Officer, and Director, of Mica, Sklar exercises dominion and control over the corporation which is so complete that the corporation has no separate mind, will, or existence of its own.
***Sklar exercised his dominion and control to purposefully and willfully refuse to perform his duties under the terms of the offered and accepted agreement, and maliciously convert the purchased goods to his own use.
Because Sklar accepted Fifteen Thousand Eight Hundred Twenty Three ($15,823.63) Dollars and Sixty-Three Cents from plaintiffs, failed to deliver the purchased goods, and maliciously converted the purchased goods for his own use, the plaintiffs have been damaged by Sklar's dominion and control in the amount of Fifteen Thousand Eight Hundred Twenty Three ($15,823.63) Dollars and Sixty-Three Cents.
In his affirmation in support of the motion to dismiss, the attorney for the Defendant states that the action of the Plaintiffs is based upon the premise that the agreement in 2002 to construct the furniture was made between the Plaintiffs and the Defendant Sklar but in reality the agreement was between the Plaintiffs and Quality Mica, Inc. However, while the Amended Complaint can be read to support this view, the pleading should be given a broader interpretation upon a fair reading of the alleged facts.
A simple breach of contract is not considered a tortious act unless a duty independent of the contract is alleged to have been violated (see, Probst v. Cacoulidis, 295 A.D.2d 331, 743 N.Y.S.2d 509). Further, in an appropriate case, it is possible that the personal liability protection afforded a corporate entity may be lost and the corporate veil may be pierced even if a tortious act was not committed by the individual Defendant.
A corporation has an existence separate and distinct from that of the shareholders of the corporation (see, Billy v. Consolidated Machine Tool Corp., 51 N.Y.2d 152, 432 N.Y.S.2d 879, 412 N.E.2d 934). Under ordinary circumstances a shareholder such as Sklar would not be personally liable for the acts and obligations of the Quality Mica, Inc. and this is true even where the corporation has only one shareholder who is necessarily carrying on the business of the corporation alone (see, Bowles v. Errico, 163 A.D.2d 771, 558 N.Y.S.2d 734). However, when equity requires, in extremely circumscribed fact patterns, a Plaintiff may go behind or "pierce" the limited liability of the corporate existence in order to impose personal liability on a shareholder and to hold the owner liable for some corporate obligation. The Plaintiff must show that the owner exercised complete domination of the corporation with respect to the specific transaction in issue and that such domination was used to commit a fraud or wrong against the plaintiff which resulted in the Plaintiffs injury. Generally, in support of the cause of action, the Plaintiff will show that the Defendant misused the corporation because the corporation was inadequately capitalized, personal funds and corporate funds were commingled by the Defendant and the individual sought to be held responsible for the corporate debt operated the corporation without regard to corporate formalities. The Plaintiff may also show that the corporation was used for the purpose of perpetrating a fraud.
Therefore, although the corporate form is a legitimate means of avoiding personal liability, the Court may disregard the corporate form and impose liability upon the individual Defendant upon a showing that the Defendant abused the status of the corporate entity that contracted with the Plaintiff and that, as a result of the individual Defendant's failure to respect the corporate...
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