TMCC, Inc. v. Jennifer Convertibles, Inc.

• Court: New York Supreme Court — Appellate Division
• Citation: TMCC, Inc. v. Jennifer Convertibles, Inc., 176 A.D.3d 1135, 111 N.Y.S.3d 102 (N.Y. App. Div. 2019)
• Decision Date: 23 October 2019
• Docket Number: Index No. 601748/18,2018–09630
• Parties: TMCC, INC., et al., Appellants, v. JENNIFER CONVERTIBLES, INC., Respondent.

176 A.D.3d 1135

111 N.Y.S.3d 102

TMCC, INC., et al., Appellants,

v.JENNIFER CONVERTIBLES, INC., Respondent.

2018–09630

Index No. 601748/18

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

Argued - May 31, 2019

October 23, 2019

The Law Office of Gregory A. Goodman, P.C. (The Law Office of Jason Tenenbaum, P.C., Garden City, NY, of counsel), for appellants.

Olshan Frome Wolosky, LLP, New York, N.Y. (Joseph B. Weiner and Nicholas S. Hirst of counsel), for respondent.

WILLIAM F. MASTRO, J.P., JOSEPH J. MALTESE, FRANCESCA E. CONNOLLY, ANGELA G. IANNACCI, JJ.

DECISION & ORDER

In an action to recover damages for breach of a lease, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Timothy S. Driscoll, J.), entered June 21, 2018. The order, insofar as appealed from, granted that branch of the defendant's motion which was pursuant to CPLR 3211(a) to dismiss the complaint.

ORDERED that the order is affirmed insofar as appealed from, with costs.

Nonparty Hartsdale Convertibles, Inc. (hereinafter Hartsdale), allegedly entered into a commercial lease whereby it agreed to pay the plaintiffs certain rent. Hartsdale allegedly was a wholly owned subsidiary of the defendant, Jennifer Convertibles, Inc. (hereinafter JCI). Hartsdale allegedly breached the lease by failing to make payments in accordance therewith.

The plaintiffs commenced this action against JCI, alleging that JCI was liable for Hartsdale's alleged breach of the lease. The plaintiffs alleged in the complaint that Hartsdale was a "dummy corporation" of JCI, the subject premises had JCI branding, and JCI made all payments to the plaintiffs. JCI moved, inter alia, pursuant to CPLR 3211(a) to dismiss the complaint. The Supreme Court granted that branch of JCI's motion which was to dismiss the complaint, and the plaintiffs appeal.

On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the facts as alleged in the complaint must be accepted as true, the plaintiff is accorded the benefit of every possible favorable inference, and the court's function is to determine only whether the facts as alleged fit within any cognizable legal theory (see Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ; Grant v. DiFeo, 165 A.D.3d 897, 898–899, 86 N.Y.S.3d 575 ; Kupersmith v. Winged Foot Golf Club, Inc., 38 A.D.3d 847, 848, 832 N.Y.S.2d 675 ). "However, bare legal conclusions are not presumed to be true and are not accorded every favorable inference" ( Grant v. DiFeo, 165 A.D.3d at 899, 86 N.Y.S.3d 575 ; see Kupersmith v. Winged Foot Golf Club, Inc., 38 A.D.3d at 848, 832 N.Y.S.2d 675 ). "Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all, and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate" ( Cassese v. SVJ Joralemon, LLC, 168 A.D.3d 667, 669, 92 N.Y.S.3d 127 ; see Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17 ).

" ‘A party seeking to pierce the corporate veil must establish that (1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in the plaintiff's injury’ " ( Peery v. United Capital Corp., 84 A.D.3d 1201, 1202, 924 N.Y.S.2d 470, quoting Gateway I Group, Inc. v. Park Ave. Physicians, P.C., 62 A.D.3d 141, 145, 877 N.Y.S.2d 95 [internal quotation marks omitted]; see Matter of Morris v. New York State Dept. of Taxation & Fin., 82 N.Y.2d 135, 141, 603 N.Y.S.2d 807, 623 N.E.2d 1157 ). "Evidence of domination alone does not suffice without an additional showing that it led to inequity, fraud or malfeasance" ( TNS Holdings v. MKI Sec. Corp., 92 N.Y.2d 335, 339, 680 N.Y.S.2d 891, 703 N.E.2d 749 ; see Matter of Morris v. New York State Dept. of Taxation & Fin., 82 N.Y.2d at 141–142, 603 N.Y.S.2d 807, 623 N.E.2d 1157 ).

We agree with the Supreme Court's determination that JCI was entitled to dismissal of the complaint pursuant to CPLR 3211(a)(7). Accepting the facts alleged in the complaint as true, and according the plaintiffs the benefit of every favorable inference (see Leon v. Martinez, 84 N.Y.2d at 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ), the complaint, even amplified by ...