| Matter of Goldman v Chapman |
| 2007 NY Slip Op 08068 [44 AD3d 938] |
| October 23, 2007 |
| Appellate Division, Second Department |
| In the Matter of Jeffrey Goldman, Respondent, v CharlesChapman et al., Appellants, and Region Associates, Inc.,Respondent. |
—[*1] McDonough Marcus Cohn Tretter Heller & Kanca, LLP, New Rochelle, N.Y. (Frank T. Caraof counsel), for petitioner-respondent.
In a proceeding pursuant to CPLR article 52 to enforce a judgment, Charles Chapman andChapman Apex appeal from an order of the Supreme Court, Nassau County (Phelan, J.), enteredJanuary 16, 2007, which denied, in effect, their motion to dismiss the proceeding.
Ordered that the order is reversed, on the law and the facts, with costs, the motion to dismissis granted, the petition is denied, and the proceeding is dismissed.
Charles Chapman is the sole officer, director, and shareholder of two constructioncompanies: Chapman Apex and Region Associates, Inc. (hereinafter Region). In 2001 thepetitioner Jeffrey Goldman obtained a judgment against Region in the total sum of $209,320,including interest. Collection efforts were unsuccessful, and ultimately, the petitionercommenced this special proceeding to enforce the judgment by piercing the corporate veil ofRegion in order to hold Charles Chapman personally liable for Region's debt. He also sought tofind Chapman Apex liable for Region's debt under an alter-ego theory. Chapman Apex, Region,and Charles Chapman contended, inter alia, that the petition should be dismissed because thepetitioner could not make out a prima face case on its corporate veil piercing and alter egoclaims. We agree.
One of the primary and completely legitimate purposes of incorporating is to limit [*2]or eliminate the personal liability of corporate principals (seeBartle v Home Owners Coop., 309 NY 103, 106 [1955]). Generally, a party seeking to piercethe corporate veil must establish that "(1) the owners exercised complete domination of thecorporation in respect to the transaction attacked; and (2) that such domination was used tocommit a fraud or wrong against the plaintiff which resulted in the plaintiff's injury" (Matterof Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141 [1993]; see OldRepublic Natl. Tit. Ins. Co. v Moskowitz, 297 AD2d 724, 725 [2002]; Hyland Meat Co.v Tsagarakis, 202 AD2d 552 [1994]). The mere claim that the corporation was completelydominated by the owners, or conclusory assertions that the corporation acted as their "alter ego,"without more, will not suffice to support the equitable relief of piercing the corporate veil(see Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d at 141-142;Damianos Realty Group, LLC vFracchia, 35 AD3d 344 [2006]). "The decision whether to pierce the corporate veil in agiven instance depends on the particular facts and circumstances" (Damianos Realty Group,LLC v Fracchia, 35 AD3d at 344 [internal quotation marks omitted]).
Here, although the petitioner submitted evidence tending to demonstrate that CharlesChapman exercised dominion and control over Region, the petitioner failed to establish, primafacie, that Charles Chapman used such dominion and control to commit a fraud or wrong againstthe petitioner which resulted in injury, or that he failed to observe corporate formalities. Therewas also no evidence beyond the petitioner's conclusory assertions that Chapman Apex andRegion were alter egos (see Mistrulli vMcFinnigan, Inc., 39 AD3d 606 [2007]; Damianos Realty Group, LLC v Fracchia,35 AD3d at 344; John John, LLC vExit 63 Dev., LLC, 35 AD3d 540 [2006]; Treeline Mineola, LLC v Berg, 21 AD3d 1028 [2005];O'Brien-Kreitzberg & Assoc. v K.P., Inc., 218 AD2d 519 [1995]). Accordingly, thepetition should have been denied and the proceeding dismissed.
In light of our determination, it is unnecessary to reach the appellants' remaining contentions.Spolzino, J.P., Santucci, Balkin and Dickerson, JJ., concur.