| Kats v East 13th St. Tifereth Place, LLC |
| 2010 NY Slip Op 03876 [73 AD3d 706] |
| May 4, 2010 |
| Appellate Division, Second Department |
| Philip Kats et al., Appellants, v East 13th Street TiferethPlace, LLC, et al., Respondents. |
—[*1] Michael M. Cohen, New York, N.Y., for respondents Rychik Development Corporation andSam Rychik.
In an action, inter alia, to recover damages for breach of contract and fraud, the plaintiffsappeal from an order of the Supreme Court, Kings County (Partnow, J.), dated November 18,2008, which granted that branch of the defendants' motion which was, in effect, pursuant toCPLR 3211 (a) (7) to dismiss the complaint insofar as asserted against the defendants RychikDevelopment Corporation and Sam Rychik.
Ordered that the order is affirmed, with costs.
Upon a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211 (a)(7), the complaint must be liberally construed in the light most favorable to the plaintiff,accepting the facts as alleged to be true (see Leon v Martinez, 84 NY2d 83, 87-88[1994]; Wilner v Allstate Ins. Co.,71 AD3d 155, 159 [2010]).
Here, the plaintiffs failed to state a cause of action against the defendants RychikDevelopment Corporation (hereinafter RDC) and Sam Rychik. In their complaint, the plaintiffsalleged various claims, including breach of contract and fraud, against the defendant East 13thStreet Tifereth Place, LLC (hereinafter the Seller), arising from their purchase of condominiumunits from the Seller. Rychik is a member of the Seller, and an officer and shareholder of RDC,which built the condominium units. The plaintiffs contend that their complaint adequately statesa basis for imposing liability on Rychik and RDC for the causes of action they asserted againstthe Seller on a theory that those defendants induced the Seller to breach the sales contracts fortheir own profit.
Contrary to the plaintiffs' contention, the liability of RDC cannot be premised on the theorythey propound, which is an exception to the general rule of immunity for corporate officers, andnot for entities, who act in good faith in their corporate capacity (see Murtha v Yonkers ChildCare Assn., 45 NY2d 913, 915 [1978]; AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d 6, 23[2008]; BGW Dev. Corp. v Mount Kisco Lodge No. 1552 of Benevolent & Protective Orderof Elks of U.S. of Am., 247 AD2d [*2]565 [1998]). Nor doesthe complaint adequately allege this basis of liability against the individual defendant Rychik."To hold officers or employees liable for causing their corporation to breach its contract, it is notsufficient merely to allege, in conclusory form, that they acted for personal profit or committedindependently tortious acts" (Citicorp Retail Servs. v Wellington Mercantile Servs., 90AD2d 532, 533 [1982]). The conclusory allegations in the complaint establish, at most, thatRychik might derive a financial benefit as a stockholder of the Seller, which is insufficient toestablish that his predominant motive was to obtain an individual pecuniary benefit, rather thanto advance the interests of the corporation (see Ruti v Knapp, 193 AD2d 662, 663[1993]; Rothschild v World-Wide Automobiles Corp., 24 AD2d 861 [1965]). The actsand omissions attributed to Rychik which form the basis of the breach of contract claim werecommitted in his capacity as a corporate officer, and the plaintiffs have failed to adequatelyallege independent torts. Thus, the plaintiffs have not stated a cause of action holding Rychikpersonally liable on the theory that he induced the breach of contract for personal gain (seeAHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d at 23; S.F.P. Realty Corp. v G.S.Rockaway Dev., 206 AD2d 417 [1994]).
The plaintiffs' remaining contentions are without merit. Skelos, J.P., Angiolillo, Leventhaland Roman, JJ., concur.