Wide Win Am., Inc. v. Newmark

• Decision Date: 07 December 2012
• Docket Number: Index No. 107361/2011
• Citation: 2012 NY Slip Op 33101
• Parties: WIDE WIN AMERICA, INC., ZHEJTANG WILD WIND IMPORT-EXPORT COMPANY LTD., and ZHEJIANG TENDEX IMPORT-EXPORT COMPANY, LTD., Plaintiffs v. EDWARD NEWMARK, TIM BEARE, RICHARD MALCOLM, A DIVISION OF SAN SIMEON, INC., and MALCOLM & CO., LLC, Defendants
• Court: New York Supreme Court

2012 NY Slip Op 33101

WIDE WIN AMERICA, INC., ZHEJTANG WILD WIND IMPORT-EXPORT COMPANY LTD.,
and ZHEJIANG TENDEX IMPORT-EXPORT COMPANY, LTD., Plaintiffs
v.
EDWARD NEWMARK, TIM BEARE, RICHARD MALCOLM, A DIVISION
OF SAN SIMEON, INC., and MALCOLM & CO., LLC, Defendants

Index No. 107361/2011

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 46

DATED: December 7, 2012

DECISION AND ORDER

LUCY BILLINGS, J.S.C.:

This action requires sorting out the corporate and individual defendants' liability (1) for clothing that each of the three plaintiffs delivered to the two corporate defendants and (2) for their debt that the two individual defendants acknowledged. Plaintiffs also seek to reach the individuals by piercing the corporate veil of defendant corporation and limited liability company (LLC), which are assetless. Plaintiffs move for summary judgment on their claims. C.P.L.R. § 3212(b). Defendants, in opposition, raise the issue whether plaintiff corporations may maintain their claims because they conduct business in New York when not so authorized, N.Y. Bus. Corp. Law § 1312(a), and cross-move to dismiss the complaint against the individual defendants based on its failure to state a claim against them. C.P.L.R. § 3211(a)(7).

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I. PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

A. The Zhejiang Plaintiffs' Claims

Defendants claim that plaintiffs Zhejiang Wild Wind Import-Export Company Ltd. and Zhejiang Tendex Import-Export Company, Ltd., are foreign corporations unauthorized to transact business in New York. Defendants support their claim with admissible documents from the New York State Department of State website indicating that neither Zhejiang Wild Wind Import-Export Company Ltd. nor zhejiang Tendex Import-Export Company, Ltd., is authorized to transact business in New York. LaSonde v. Seabrook, 89 A.D.3d 132, 137 n.8 (1st Dep't 2011); L&O Realty Corp. v. Assessor, 71 A.D.3d 1025, 1026 (2d Dep't 2010); Kingsbrook Jewish Med. Ctr. v. Allstate Ins. Co., 61 A.D.3d 13, 20 (2d Dep't 2009). Defendants further rely on the complaint ¶ 2, which alleges that these two plaintiffs are foreign corporations and are conducting business in New York.

Although the foreign corporations' lack of authorization to transact business in the state is not a basis to dismiss their action, Uribe v. Merchants Bank of N.Y., 266 A.D.2d 21, 22 (1st Dep't 1999), these plaintiffs may not pursue their action until they are so authorized. N.Y. Bus. Corp. Law § 1312(a). E.g., Barklee Realty Co. v. Pataki, 309 A.D.2d 310, 315-16 (1st Dep't 2003); Hiqhfill, Inc. v. Bruce & Iris, Inc., 50 A.D.3d 742, 744 (2d Dep't 2008). Therefore the court denies the motion for summary judgment by plaintiffs Zhejiang Wild Wind Import-Export Company Ltd. and Zhejiang Tendex Import-Export Company, Ltd.

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C.P.L.R. § 3212(b); N.Y. Bus. Corp. Law § 1312(a).

B. Plaintiff Wide Win America's Claims

Defendants do not deny that defendant Newmark, as President of both Richard Malcolm, a Division of San Simeon, Inc., and Malcolm & Co., LLC, the two corporate defendants, admitted these two defendants' debt of $735,742.82 to the third plaintiff, Wide Win America, Inc. Therefore the court grants this plaintiff partial summary judgment for that amount against defendants Richard Malcolm, a Division of San Simeon, Inc., and Malcolm & Co., LLC, jointly and individually, C.P.L.R. § 3212(b) and (e), with interest from March 3, 2011, the date of that admission. C.P.L.R. § 5001(a) and (b).

Plaintiffs further claim that the individual defendants Newmark and Beare in Beare's email April 6, 2011, to Eileen Shen, President of Wide Win America, admitted their own liability for the debts listed in Newmark's communication of March 3, 2011: the $735,742.82 owed to Wide Win America and lesser amounts to each of the other two plaintiffs. Although the email is "To: edward newmark," it begins:

Hi Shen,
As we have discussed in the last few days, Edward and I fully intend to repay the amount owed to you and the factories. . . .
. . . .
We will work out an arrangement with you on future business, whereby we will pay you a commission of between 5 and 10% on goods we buy from you starting late this year, and continuing until the debt has been repaid.

V. Compl. Ex. B.

This expressed intent "to repay the amount owed to you,"

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referring to Shen's corporation Wide Win America, by the corporation Richard Malcolm, a Division of San Simeon, Inc., and the LLC Malcolm & Co., LLC, is ambiguous whether the intent is on these corporate defendants' behalf or by their principals Newmark and Beare individually. E.g., First Capital Asset Mgt. v. North Am. Consortium, 286 A.D.2d 263, 264 (1st Dep't 2001). Nowhere does either individual agree to be obligated personally, to pay personally, or to guarantee payment personally. E.g., Herman v. Ness Apparel Co., 305 A.D.2d 217, 218 (1st Dep't 2003). Particularly when considered in light of Newmark's earlier communication, Beare's email is at least equally susceptible of a contrary interpretation: an expressed intent on behalf of the corporate defendants to repay the amount owed by them. 150 Broadway Assoc. N.Y. Assoc., L.P. v. Bodner, 14 A.D.3d 1, 9 (1st Dep't 2004); First Capital Asset Mgt. v. North Am. Consortium, 286 A.D.2d at 264.

The email's final paragraph, contemplating repayment through future business between Shen's corporation and the corporate defendants, further supports this interpretation. No evidence suggests that Wide Win America's future business suddenly would transform into business with Newmark and Beare individually. Albstein v. Elany Constr. Corp., 30 A.D.3d 210 (1st Dep't 2006); 150 Broadway Assoc. N.Y. Assoc., L.P. v. Bodner, 14 A.D.3d at 7; Korea First Bank of N.Y. v. Noah Enters., Ltd., 12 A.D.3d 321, 322 (1st Dep't 2004); First Capital Asset Mgt. v. North Am. Consortium, 286 A.D.2d at 264. Similarly, plaintiff presents no

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