| Marc Contr., Inc. v 39 Winfield Assoc., LLC |
| 2009 NY Slip Op 04392 [63 AD3d 693] |
| June 2, 2009 |
| Appellate Division, Second Department |
| Marc Contracting, Inc., Respondent, v 39 WinfieldAssociates, LLC, Appellant. |
—[*1] Paul I. Horowitz, Mount Vernon, N.Y., for respondent.
In an action, inter alia, to recover damages in quantum meruit and for unjust enrichment, thedefendant appeals from so much of an order of the Supreme Court, Westchester County (Nicolai,J.), dated April 10, 2008, as denied those branches of its motion which were for summaryjudgment dismissing the second and third causes of action.
Ordered that the order is affirmed insofar as appealed from, with costs.
On August 7, 2001 Marc Castaldi and John Lium signed an operating agreement forming thedefendant 39 Winfield Associates, LLC, to purchase and renovate premises located at 39Winfield Avenue in Harrison, New York, and then resell the premises at a profit. Under theterms of the operating agreement, Castaldi was to provide his services in connection with theconstruction of the project "without compensation except for reimbursement at cost for expensesincurred" on the defendant's behalf. The defendant purchased the Winfield Avenue premises inOctober 2001 and over the course of the next 18 months, extensive construction and renovationwork was performed by the plaintiff Marc Contracting, Inc. It is undisputed that Castaldi is theplaintiff's principal and sole shareholder, and following the sale of the premises, a dispute aroseas to whether the plaintiff's compensation for the work it performed on the project should belimited to reimbursement of its actual construction expenses at cost, or should include overheadand profits.
The plaintiff subsequently commenced this action seeking, in its second and third [*2]causes of action, to recover damages for the services it provided tothe defendant on theories of quantum meruit and unjust enrichment. The defendant thereaftermoved, inter alia, for summary judgment dismissing the second and third causes of action,arguing that the plaintiff could not recover on the quasi-contract theories of quantum meruit andunjust enrichment because it was Castaldi's alter ego and, thus, bound by the provision of theoperating agreement requiring him to provide his services without compensation. The defendantfurther argued that the plaintiff could not recover on a quantum meruit theory because Castaldihad admitted that his company had no expectation of receiving a profit. In the order appealedfrom, the Supreme Court denied those branches of the defendant's motion which were forsummary judgment dismissing the second and third causes of action. We affirm the order insofaras appealed from.
As a general rule, the existence of a valid and enforceable written contract governing aparticular subject matter precludes recovery in quasi-contract on theories of quantum meruit andunjust enrichment for events arising out of the same subject matter (see Clark-Fitzpatrick,Inc. v Long Is. R.R. Co., 70 NY2d 382, 388 [1987]; see also IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d132 [2009]; AHA Sales, Inc. vCreative Bath Prods., Inc., 58 AD3d 6, 20 [2008]; Empire State Fuel Corp. v Warbasse-Cogeneration Tech. Partnership,L.P., 58 AD3d 534 [2009]; Whitman Realty Group, Inc. v Galano, 41 AD3d 590 [2007]).Although the defendant contends that its own operating agreement constitutes such a valid andenforceable contract, the plaintiff was not a party to this agreement, no reference was made in itto any services to be provided by the plaintiff, and it was signed by Castaldi in his individualcapacity. Thus, the operating agreement did not create an enforceable legal obligation requiringthe plaintiff to perform its services at cost (see Perrino v MTS Funding, Inc., 14 AD3d 865 [2005]).Furthermore, we reject the defendant's contention that the doctrine of piercing the corporate veilis applicable to bind the plaintiff to the operating agreement because it is Castaldi's alter ego.The doctrine of piercing the corporate veil allows the court to disregard the corporate form andhold individual shareholders responsible for corporate obligations in order to prevent fraud orachieve equity (see Matter of Morris v New York State Dept. of Taxation & Fin., 82NY2d 135, 140 [1993]; Walkovszky v Carlton, 18 NY2d 414, 417 [1966]). It is"typically employed by a third party to go behind the corporate existence in order to circumventthe limited liability of the owners" (Matter of Morris, 82 NY2d at 140-141). Under thecircumstances of this case, we reject the defendant's contention that the doctrine of piercing thecorporate veil can be utilized to bind the plaintiff to the operating agreement.
Furthermore, the court properly concluded that the defendant is not entitled to summaryjudgment dismissing the second cause of action to recover on the theory of quantum meruit onthe ground that the plaintiff had no expectation that it would receive any profit for its services.The various letters submitted by the defendant in support of its motion were insufficient todemonstrate the absence of a triable issue of fact as to whether the plaintiff performed itsservices without an expectation of payment beyond reimbursement of its actual constructioncosts (see Jaspan Schlesinger Hoffman,LLP v Bernstein, 31 AD3d 610 [2006]; Matter of Alu, 302 AD2d 520 [2003]).
The defendant's challenge to the measure of damages which the plaintiff seeks to recover israised for the first time on appeal.
The defendant's remaining contentions are without merit. Rivera, J.P., Eng, Chambers andHall, JJ., concur.