| NPR, LLC v Met Fin Mgt., Inc. |
| 2009 NY Slip Op 05525 [63 AD3d 1128] |
| June 30, 2009 |
| Appellate Division, Second Department |
| NPR, LLC, Respondent, v Met Fin Management, Inc., etal., Appellants. |
—[*1] Larkin, Axelrod, Ingrassia & Tetenbaum, LLP, Newburgh, N.Y. (James Alexander Burke ofcounsel), for respondent.
In an action pursuant to Debtor and Creditor Law article 10 to recover damages based upon afraudulent conveyance, the defendants appeal from an order and interlocutory judgment (onepaper) of the Supreme Court, Orange County (Alessandro, J.), dated December 4, 2007, which,inter alia, granted that branch of the plaintiff's motion which was for summary judgment on thefirst and second causes of action, granted that branch of the plaintiff's motion which was forpartial summary judgment on the issue of liability for an award of an attorney's fee and forpunitive damages, denied their cross motion for summary judgment dismissing the complaint,and is in favor of the plaintiff and against them in the principal sum of $160,480.34 on the firstand second causes of action.
Ordered that the order and judgment is modified, on the law, by deleting the provisionthereof granting that branch of the plaintiff's motion which was for partial summary judgment onthe issue of liability on its claim for punitive damages and substituting therefor a provisiondenying that branch of the motion, and deleting the provision thereof denying that branch of thedefendants' cross motion which was for summary judgment dismissing the claim for punitivedamages and substituting therefor a provision granting that branch of the defendants' crossmotion; as so modified, the order and judgment is affirmed, with costs to the plaintiff.
The Supreme Court properly awarded the plaintiff summary judgment on its causes of actionpursuant to Debtor and Creditor Law §§ 273 and 276, and properly found thedefendants liable to the plaintiff for an award of an attorney's fee pursuant to Debtor and CreditorLaw § 276-a. The plaintiff established its prima facie entitlement to judgment as a matterof law on its first cause of action by demonstrating that it was a creditor of its tenant and that therelease or cancellation of the subleases, without consideration, rendered the tenant insolvent(see Debtor and Creditor Law §§ 270, 271 [1]; § 273; Rima 106 vAlvarez, 257 AD2d 201 [1999]; O'Brien v Whigam, 9 App Div 113 [1896]). Inaddition, the plaintiff established the following indicia of the fraudulent intent of both the debtorand Met Fin Management, Inc. (hereinafter Met Fin): (1) a close relationship between the partiesto the transaction, (2) the inadequacy or absence of consideration, (3) the debtor's knowledge ofits debt to the plaintiff and its inability to pay it, (4) the fact that the subleases were the only assetthat the debtor owned sufficient to pay its obligation to the plaintiff, (5) the representation of thedebtor and the [*2]defendants by the same attorney, and (6) theexistence of a pattern or series of transactions or course of conduct after the debtor incurred itsobligation to the plaintiff (see Cadle Co. v Organes Enters., Inc., 29 AD3d 927 [2006];Dempster v Overview Equities, 4 AD3d 495 [2004]). In response to these showings, thedefendants failed to tender evidence in admissible form sufficient to raise a triable issue of fact(see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).
In addition, the Supreme Court properly pierced the corporate veil of Met Fin and held theindividual defendant liable to the plaintiff. The individual defendant exercised completedomination of the corporation, which domination was used to commit a fraud or wrong againstthe plaintiff, and abused the privilege of doing business in the corporate form (cf. Matter ofMorris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141 [1993];Millennium Constr., LLC v Loupolover, 44 AD3d 1016 [2007]; see Ventresca RealtyCorp. v Houlihan, 41 AD3d 707 [2007]).
However, the Supreme Court should have granted that branch of the defendants' crossmotion which was for summary judgment dismissing the claim for punitive damages. Thedefendants' misconduct was not so gross and wanton as to justify an award of punitive damages(see James v Powell, 19 NY2d 249, 260 [1967]; Cadle Co. v Organes Enters., Inc.,29 AD3d 927 [2006]; Abalon Precision Mfg. Corp. v Flair Intl. Corp., 19 AD3d 338[2005]; Marine Midland Bank v Murkoff, 120 AD2d 122, 131-132 [1986]; cf. Keen vKeen, 113 AD2d 964 [1985]).
The plaintiff's remaining contention is without merit (see CPLR 2001; Matter ofTagliaferri v Weiler, 1 NY3d 605 [2004]). Skelos, J.P., Fisher, Belen and Lott, JJ., concur.