Lee v. Arnan Dev. Corp.

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: CARDONA
• Citation: Lee v. Arnan Dev. Corp., 909 N.Y.S.2d 826, 77 A.D.3d 1261 (N.Y. App. Div. 2010)
• Decision Date: 28 October 2010
• Parties: Anthony LEE et al., Respondents, v. ARNAN DEVELOPMENT CORPORATION, Doing Business as Oneonta Block Company, Appellant.

909 N.Y.S.2d 826

77 A.D.3d 1261

Anthony LEE et al., Respondents,

v.ARNAN DEVELOPMENT CORPORATION, Doing Business as Oneonta Block Company, Appellant.

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

Oct. 28, 2010.

Levene, Gouldin & Thompson, L.L.P., Vestal (David M. Gouldin of counsel), for appellant.

Scarzafava & Basdekis, L.L.P., Oneonta (John F. Scarzafava of counsel), for respondents.

Before: CARDONA, P.J., MERCURE, SPAIN, LAHTINEN and GARRY, JJ.

CARDONA, P.J.

Appeal from an order of Supreme Court (Coccoma, J.), entered July 27, 2009 in Otsego County, which denied defendant's motion for summary judgment dismissing the complaint.

Plaintiff Anthony Lee (hereinafter plaintiff) was hired by Otsego Ready Mix (hereinafter the employer) as a cement truck operator. He asserts that on August 4, 2006, following a delivery to Oneonta Block Company, he began to clean out the truck's chutes in the area where he had previously been directed to do so after completing deliveries to Oneonta. Plaintiff noted that the ground in this area was soft, with quantities of fresh, loose dirt and non-uniform chunks of concrete. According to plaintiff, in the midst of the cleaning process, he descended by ladder from the back of the truck and attempted to step onto the ground. He claims that as he did so, the soil shifted beneath his left foot, which sank approximately six to eight inches into the soft ground. This caused his knee to twist, resulting in injuries. Thereafter, plaintiff filed a workers' compensation claim with the employer and his medical expenses were paid. In March 2008, plaintiff and his wife, derivatively, commenced this action against defendant, doing business as Oneonta, alleging, among other things, negligence. Defendant moved for summary judgment dismissing the complaint and Supreme Court denied the motion, prompting this appeal.

Initially, defendant asserts that it is the alter ego of the employer and, therefore, plaintiffs are barred from recovering because workers' compensation is their exclusive remedy ( see Workers' Compensation Law § 11). Contrary to defendant's argument, however, the record does not establish that contention. Significantly, "[c]losely associated corporations, even ones that share directors and officers, will not be considered alter egos of each other if they were formed for different purposes, neither is a subsidiary of the other, their finances are not integrated, assets are not commingled, and the principals treat the two entities as separate and distinct" ( Longshore v. Davis Sys. of Capital Dist., 304 A.D.2d 964, 965, 759 N.Y.S.2d 204 [2003]; see Armstrong v. Foxcroft Nurseries, 283 A.D.2d 814, 815, 724 N.Y.S.2d 551 [2001]; Wernig v. Parents & Bros. Two, 195 A.D.2d 944, 945-946, 600 N.Y.S.2d 852 [1993] ).

Here, it is undisputed that defendant and the employer are owned by the same individual, Robert Harlem, who testified athis deposition that he is the owner, president and sole officer of five different entities, including the employer and Oneonta. While it appears that each entity may have utilized goods and services from the others at certain times and, for instance, purchased joint workers' compensation coverage, the record shows that the companies were not subsidiaries of one another and were each formed for distinct purposes ( see Buchner v. Pines Hotel, 87 A.D.2d 691, 692, 448 N.Y.S.2d 870 [1982], affd. 58 N.Y.2d 1019, 462 N.Y.S.2d 436, 448 N.E.2d 1347 [1983]; see also Allen v. Oberdorfer Foundries, 192 A.D.2d 1077, 1078, 595 N.Y.S.2d 995 [1993] ).¹ Furthermore, each company maintained its own office space in separate locations and Harlem made clear that the employer's payroll and bank account were separate from the other entities. Nor was there evidence of a joint venture ( see Barker v. Menard, 237 A.D.2d 839, 841, 655 N.Y.S.2d 186 [1997], lv. denied 90 N.Y.2d 804, 661 N.Y.S.2d 831, 684 N.E.2d 281 [1997]; Buchner v. Pines Hotel, 87 A.D.2d at 692, 448 N.Y.S.2d 870; Chalmers v. Eaton Corp., 71 A.D.2d 721, 722, 419 N.Y.S.2d 217 [1979] ). Given this proof, Supreme Court correctly denied summary judgment to defendant on this issue.

Next, defendant argues that Supreme Court erred in failing to grant its motion for summary judgment on the merits. "To demonstrate its entitlement to summary judgment, defendant was 'required to establish as a matter of law that [it] maintained the property in question in a reasonably safe condition and that [it] neither created the allegedly dangerous condition existing thereon nor had actual or constructive notice thereof' " ( Godfrey v. Town of Hurley, 68 A.D.3d 1527, 1527, 891 N.Y.S.2d 555 [2009], quoting Richardson v. Rotterdam Sq. Mall, 289 A.D.2d 679, 679, 734 N.Y.S.2d 303 [2001]; see Braudy v. Best...