World Ambulette Transp., Inc. v. Kwan Haeng Lee

• Decision Date: 16 May 2018
• Docket Number: 2015–10576,Index No. 5641/13
• Citation: 78 N.Y.S.3d 137,161 A.D.3d 1028
• Parties: WORLD AMBULETTE TRANSPORTATION, INC., respondent, v. KWAN HAENG LEE, appellant.
• Court: New York Supreme Court — Appellate Division

161 A.D.3d 1028

78 N.Y.S.3d 137

WORLD AMBULETTE TRANSPORTATION, INC., respondent,

v.KWAN HAENG LEE, appellant.

2015–10576

Index No. 5641/13

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

Argued—January 11, 2018

May 16, 2018

Michael Konopka & Associates, P.C., New York, N.Y. (Jose G. Rivera of counsel), for appellant.

Rha & Kim, LLP, Bayside, N.Y. (Andrew D. Grossman of counsel), for respondent.

REINALDO E. RIVERA, J.P., ROBERT J. MILLER, VALERIE BRATHWAITE NELSON, ANGELA G. IANNACCI, JJ.

DECISION & ORDER

In an action, inter alia, to recover damages for conversion, the defendant appeals from a judgment of the Supreme Court, Queens County (Marguerite A. Grays, J.), entered March 4, 2016. The judgment, insofar as appealed from, upon the granting of those branches of the plaintiff's motion pursuant to CPLR 4401, made at the close of evidence, which were to dismiss the defendant's second and third counterclaims, and upon a decision of the same court dated July 17, 2015, made after a nonjury trial, is in favor of the plaintiff and against the defendant in the total sum of $12,014.05 on the second cause of action and, in effect, dismissing the defendant's counterclaims.

ORDERED that on the Court's own motion, the defendant's notice of appeal from the decision is deemed to be a premature notice of appeal from the judgment (see CPLR 5520[c] ); and it is further,

ORDERED that the judgment is modified, on the law and the facts, by deleting the provision thereof which is in favor of the plaintiff and against the defendant, in effect, dismissing the defendant's third counterclaim, and substituting therefor a provision in favor of the defendant and against the plaintiff on the third counterclaim and directing the plaintiff to permit the defendant to examine its books and records; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements, and that branch of the plaintiff's motion pursuant to CPLR 4401 which was to dismiss the defendant's third counterclaim is denied.

The plaintiff, a corporation providing medical transportation services, was incorporated by nonparty Dae Chong Chang (hereinafter Chang) in February 2010. The plaintiff commenced this action against the defendant, a former employee, inter alia, to recover damages for conversion. Specifically, the plaintiff alleged that the defendant misused corporate funds to pay for personal expenses.

In his answer, the defendant denied the allegations against him and asserted counterclaims to recover damages for breach of contract and wrongful termination of employment, and for an accounting. According to the defendant, he and Chang were equal shareholders of the plaintiff in accordance with an oral agreement they made approximately February 2010 when the plaintiff was formed. The defendant alleged that he and Chang thereafter executed a written agreement dated January 2, 2012 (hereinafter the written agreement). The defendant asserted that the written agreement was a "shareholder agreement," representing that he owned 49% of the plaintiff's shares. Chang denied these allegations and asserted that the written agreement was a "profit-sharing agreement," in which he promised to pay the defendant 49% of the plaintiff's profits from 2012.

At a nonjury trial, Chang and the defendant gave conflicting testimony as to their understanding of the written agreement, the circumstances under which it was executed, and the defendant's employment at the plaintiff. They also gave conflicting testimony as to whether the defendant was authorized to use funds in the plaintiff's checking account to pay for various personal expenses, or whether certain transactions reflected on the plaintiff's bank records were made on behalf of the plaintiff.

At the close of evidence, the plaintiff moved pursuant to CPLR 4401 to dismiss the defendant's counterclaims. The Supreme Court granted those branches of the plaintiff's motion which were to dismiss the defendant's second and third counterclaims, alleging wrongful termination of employment and for an accounting, respectively.

In a decision dated July 17, 2015, the Supreme Court, citing extrinsic evidence presented at trial relating to the parties' intent, concluded that the parties had "entered into nothing more than a profit sharing agreement, despite the wording of the agreement dated January 2, 2012." Accordingly, the court dismissed the defendant's first counterclaim, alleging breach of contract. In addition, the court determined that the defendant made unauthorized expenditures totaling $8,496.81. Based on these findings, the court, inter alia, determined that the defendant was liable for conversion as alleged in the second cause of action of the plaintiff's complaint. A judgment was subsequently entered upon the decision. The defendant appeals.

" ‘In reviewing a determination made after a nonjury trial, this Court's power is as broad as that of the trial court, and it may render the judgment it finds warranted by the facts, taking into account that in a close case the trial court had the advantage of seeing and hearing the witnesses’ " ( Quadrozzi v. Estate of Quadrozzi , 99 A.D.3d 688, 691, 952 N.Y.S.2d 74, quoting BRK Props., Inc. v. Wagner Ziv Plumbing & Heating Corp. , 89 A.D.3d 883, 884, 933 N.Y.S.2d 99 ; see Northern Westchester Professional Park Assoc. v. Town of Bedford , 60 N.Y.2d 492, 499, 470 N.Y.S.2d 350, 458 N.E.2d 809 ; Bryant v. Broadcast Music, Inc. , 143 A.D.3d 934, 935, 39 N.Y.S.3d 520 ; Neiss v. Fried , 127 A.D.3d 1044, 1046, 9 N.Y.S.3d 76 ). "Where the trial court's findings of fact rest in large measure on considerations relating to the credibility of witnesses, deference is owed to the trial court's credibility determinations" ( Bennett v. Atomic Prods. Corp. , 132 A.D.3d 928, 930, 18 N.Y.S.3d 443 ; see Neiss v. Fried , 127 A.D.3d at 1046, 9 N.Y.S.3d 76 ).

Contrary to the defendant's contention, we agree with the Supreme Court's determination that he was liable for conversion. In order " ‘[t]o establish a cause of action to recover damages for conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question to the exclusion of the plaintiff's rights’ " ( National Ctr. for Crisis Mgmt., Inc. v. Lerner , 91 A.D.3d 920, 920, 938 N.Y.S.2d 138, quoting Cusack v. American Defense Sys., Inc. , 86 A.D.3d 586, 587, 927 N.Y.S.2d 381 ; see Nugent v. Hubbard , 130 A.D.3d 893, 895, 15 N.Y.S.3d 71 ; Mackey Reed Elec., Inc. v. Morrone & Assoc., P.C. , 125 A.D.3d 822, 824, 6 N.Y.S.3d 65 ). " ‘[C]onversion occurs when funds designated for a particular purpose are used for an unauthorized purpose’ " ( Petrone v. Davidoff Hutcher & Citron, LLP , 150 A.D.3d 776, 777, 54 N.Y.S.3d 25, quoting East Schodack Fire Co., Inc. v. Milkewicz , 140 A.D.3d 1255, 1256, 34 N.Y.S.3d 640 ; see Goldberger v. Rudnicki , 94 A.D.3d 1047, 1048, 944 N.Y.S.2d 157 ; Lemle v. Lemle , 92 A.D.3d 494, 497, 939 N.Y.S.2d 15 ; Meese v. Miller , 79 A.D.2d 237, 243–244, 436 N.Y.S.2d 496 ).

Here, the plaintiff presented credible proof that the defendant made numerous unauthorized purchases using the plaintiff's debit card, and the defendant failed to present a persuasive defense. Accordingly, we agree with the Supreme Court's determination that the defendant was liable for conversion (see Lemle v. Lemle , 92 A.D.3d at 497, 939 N.Y.S.2d 15 ; National Ctr. for Crisis Mgmt., Inc. v. Lerner, 91 A.D.3d at 921, 938 N.Y.S.2d 138 ; Lerner v. Ayervais , 66 A.D.3d 644, 645, 886 N.Y.S.2d 498 ; see also BNG Props., LLC v. Sanborn , 153 A.D.3d 1221, 1222, 59 N.Y.S.3d 712 ; Zwarycz v. Marnia Const., Inc. , 130 A.D.3d 922, 923, 15 N.Y.S.3d 86 ; Gomez v. Eleni, LLC , 122 A.D.3d 797, 798–799, 997 N.Y.S.2d 458 ).

However, we disagree with the Supreme Court to the extent that it determined that the parties' written agreement constituted nothing more than a profit-sharing agreement. "A court's fundamental objective in interpreting a contract is to determine the parties' intent from the language employed and to fulfill their reasonable expectations" ( Landmark Ventures, Inc. v. H5 Tech., Inc. , 152 A.D.3d 657, 658, 58 N.Y.S.3d 591 ; see W.W.W. Assoc. v. Giancontieri , 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 566 N.E.2d 639 ; St. John's Univ., N.Y. v. Butler Rogers Baskett Architects, P.C. , 92 A.D.3d 761, 763, 938 N.Y.S.2d 578 ). To this end, " ‘a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms’ " ( Legum v. Russo , 133 A.D.3d 638, 639, 20 N.Y.S.3d 124, quoting MHR Capital Partners LP v. Presstek, Inc. , 12 N.Y.3d 640, 645, 884 N.Y.S.2d 211, 912 N.E.2d 43 ). A contract is ambiguous if the terms are "reasonably susceptible of more than one interpretation" ( Chimart Assoc. v. Paul , 66 N.Y.2d 570, 573, 498 N.Y.S.2d 344, 489 N.E.2d 231 ; see Evans v. Famous Music Corp. , 1 N.Y.3d 452, 458, 775 N.Y.S.2d 757, 807 N.E.2d 869 ; Greenfield v. Philles Records , 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565, 780 N.E.2d 166 ). "Whether or not a writing is ambiguous is a question of law to be resolved by the courts" ( W.W.W. Assocs. v. Giancontieri , 77 N.Y.2d at 162, 565 N.Y.S.2d 440, 566 N.E.2d 639 ; see Arnell Constr. Corp. v. New York City Sch. Constr. Auth. , 144 A.D.3d 714, 716, 41 N.Y.S.3d 101 ). "[A] court should determine the intent of the parties from within the four corners of the contract without looking to extrinsic evidence to create ambiguities" ( Hoeg Corp. v. Peebles Corp. , 153 A.D.3d 607, 608, 60 N.Y.S.3d 259 ; see Brad H. v. City of New York , 17 N.Y.3d 180, 186, 928 N.Y.S.2d 221, 951 N.E.2d 743 ; Consedine v. Portville Cent. School Dist. , 12 N.Y.3d 286, 293, 879 N.Y.S.2d 806, 907 N.E.2d 684 ; Innophos, Inc. v. Rhodia, S.A. , 10 N.Y.3d 25, 29, 852 N.Y.S.2d 820, 882 N.E.2d 389 ; ...