| Fantazia Intl. Corp. v CPL Furs N.Y., Inc. |
| 2009 NY Slip Op 08165 [67 AD3d 511] |
| November 12, 2009 |
| Appellate Division, First Department |
| Fantazia International Corp.,Respondent-Appellant, v CPL Furs New York, Inc., Respondent, and CentropelPelzhandel GmbH, Appellant-Respondent. (And Another Action.) |
—[*1] Joseph J. Haspel, Goshen, for respondent-appellant.
Order, Supreme Court, New York County (Paul G. Feinman, J.), entered June 23, 2008,which granted defendants' post-trial motion to set aside the jury verdict as against the weight ofthe evidence only to the extent of setting aside the finding that defendant CPL Furs was the alterego of defendant Centropel and directed a new trial on this issue, unanimously modified, on thelaw, judgment granted to Centropel to the effect that it did not dominate and control CPL for thepurpose of piercing the corporate veil, and otherwise affirmed, without costs. The Clerk isdirected to enter judgment dismissing the complaint as against Centropel.
In order to pierce the corporate veil, a plaintiff must show that the dominant corporationexercised complete domination and control with respect to the transaction attacked, and that suchdomination was used to commit a fraud or wrong causing injury to the plaintiff (see Matter ofMorris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141 [1993]). Factors to beconsidered include the disregard of corporate formalities; inadequate capitalization;intermingling of funds; overlap in ownership, officers, directors and personnel; common officespace or telephone numbers; the degree of discretion demonstrated by the allegedly dominatedcorporation; whether dealings between the entities are at arm's length; whether the corporationsare treated as independent profit centers; and the payment or guaranty of the corporation's debtsby the dominating entity. No one factor is dispositive (see Freeman v Complex ComputingCo., Inc., 119 F3d 1044, 1053 [2d Cir 1997]).
Initially, the court correctly determined that there was insufficient evidence of Centropel'sdomination and control of CPL. The corporations kept separate bank accounts, books andrecords, were incorporated at different times for legitimate business purposes, filed separate taxreturns, there was substantial compliance with corporate formalities, transactions between thetwo companies were conducted at arm's length, and there was no evidence that CPL [*2]was undercapitalized. That the president of CPL was also asubboard member and consultant to Centropel is insufficient for finding such domination (seeMatter of Island Seafood Co. v Golub Corp., 303 AD2d 892, 895 [2003]). The evidenceplaintiff points to in support of domination is unpersuasive. Thus, the trial court should havedirected entry of judgment in Centropel's favor on this issue, as plaintiff has failed to offer anyevidence that Centropel's alleged domination and control over CPL was used to commit a wrongthat was the proximate cause of plaintiff's loss (see Musman v Modern Deb, 50 AD2d761, 762 [1975]; Lowendahl v Baltimore & Ohio R.R. Co., 247 App Div 144, 157[1936], affd 272 NY 360 [1936]). Evidence at trial established that plaintiff's alleged losswas solely due to the failure of CPL to pay plaintiff certain commissions. Plaintiff failed todemonstrate that Centropel's alleged domination and control of CPL caused this loss. While it istrue that one corporation's exercise of domination and control which left the subservientcorporation nothing more than a judgment-proof empty shell would constitute a wrong against acreditor, plaintiff has offered no evidence whatsoever that CPL is either judgment-proof, or thatit was put in that position by Centropel's domination (cf. Teachers Ins. Annuity Assn. of Am. v Cohen's Fashion Opt. of 485Lexington Ave., Inc., 45 AD3d 317, 318 [2007]). Concur—Mazzarelli, J.P.,Sweeny, Catterson, Acosta and Abdus-Salaam, JJ.