| Dana v Shopping Time Corp. |
| 2010 NY Slip Op 06616 [76 AD3d 992] |
| September 21, 2010 |
| Appellate Division, Second Department |
| Steven Dana, Doing Business as Steven DVD, et al., Appellants, etal., Plaintiffs, v Shopping Time Corp. et al., Defendants, and Binyamin Bracha,Respondent. |
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In an action, inter alia, to recover damages for breach of contract and fraud, the plaintiffsSteven Dana, doing business as Steven DVD, Shepher Distributors & Sales Corp., ChanoInternational, Inc., BDI Imports, Inc., Magland Corp., Goldstone Hosiery Co., Inc., L & RDistributors Inc., doing business as Allied Supply, I. Lehrhoff & Co, Inc., Circle Imports, Inc.,Brooklyn Lollipop Imports & Exports, Inc., New Concord Enterprise, Inc., KennedyInternational, Inc., Regent Baby Products Corp., doing business as Baby King, and LibertyDistributors, Inc., appeal (1), as limited by their brief, from so much of an order of the SupremeCourt, Kings County (Demarest, J.), dated July 7, 2008, as granted those branches of the motionof the defendant Binyamin Bracha pursuant to CPLR 3211 (a) (7) which were to dismiss thecomplaint insofar as asserted against him by the appellants, and denied their cross motion, amongother things, to adjudge that defendant in contempt of court based on a violation of an order ofattachment, and (2) from an order of the same court dated December 18, 2008, which deniedtheir motion pursuant to CPLR 2221 for leave to renew and reargue.
Ordered that the order dated July 7, 2008, is modified, on the law, by deleting the provisionsthereof granting those branches of the motion of the defendant Binyamin Bracha pursuant toCPLR 3211 (a) (7) which were to dismiss the complaint insofar as asserted against him by theappellants, and substituting therefor a provision denying those branches of the motion; as somodified, that order is affirmed insofar as appealed from, without costs or disbursements; and itis further,
Ordered that the appeal from so much of the order dated December 18, 2008, as denied thatbranch of the motion which was for leave to reargue is dismissed, without costs ordisbursements, as no appeal lies from an order denying reargument; and it is further,
Ordered that order dated December 18, 2008, is affirmed insofar as reviewed, without costsor disbursements.
In the instant action, several plaintiffs (hereinafter the appellants), among others, seek [*2]to recover damages against the respondent, Binyamin Bracha, andseveral corporate defendants, for goods sold and delivered to them and not paid for, based uponthe theories of breach of contract, an account stated, and fraud. The complaint alleges that Brachacontrolled those corporate defendants, and although "the corporate defendants herein are formallydistinct corporations, they act as a single corporate entity—placing joint orders, makingpayments on each others' behalf, commingling assets and conducting business jointly." Thecomplaint alleges a pattern: a corporate defendant would order more merchandise than usual,with an intent not to pay for the merchandise ordered.
Bracha moved, inter alia, to dismiss the action against him pursuant to CPLR 3211 (a) (7),claiming the complaint failed to state a cause of action against him individually, since theappellants' contracts were with the corporate defendants.
The appellants cross-moved, inter alia, to hold Bracha in contempt of court based on aviolation of an order of attachment. In opposition to his motion to dismiss, the appellantssubmitted affidavits asserting that Bracha transferred inventory sold by them to the corporatedefendants to stores in Florida operated by other corporations owned by him. The plaintiff L & RDistributors, Inc., doing business as Allied Supply (hereinafter L & R), submitted an affidavitfrom its credit manager stating that it sold merchandise on credit to the corporate defendants inreliance upon a "new account application," signed by Bracha, which contained a statementrepresenting that the signer "individually personally guarantee[d] all invoices due Allied Supply."
In an order dated July 7, 2006, the Supreme Court, inter alia, granted Bracha's motion todismiss the complaint insofar as asserted against him, and denied the cross motion. Theappellants moved for reargument and renewal, and in an order dated December 18, 2008, theSupreme Court denied that motion.
A motion to dismiss a cause of action pursuant to CPLR 3211 (a) (7) should not be granted "'if, taking all facts alleged as true and according them every possible inference favorable to theplaintiff, the complaint states in some recognizable form any cause of action known to our law' "(Sonne v Board of Trustees of Vil. ofSuffern, 67 AD3d 192, 200 [2009], quoting Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker,LLP, 38 AD3d 34, 38 [2006]; see AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5NY3d 582, 591 [2005]; Leon v Martinez, 84 NY2d 83, 87-88 [1994]). In makingsuch a determination, evidentiary material may be considered to "remedy defects in thecomplaint" (Rovello v Orofino Realty Co., 40 NY2d 633, 636 [1976]; see Leon vMartinez, 84 NY2d at 88), "and, unless it can be shown that a material fact as claimed by thepleader to be one is not a fact at all and unless it can be said that no significant dispute existsregarding it," dismissal may not be predicated on such evidentiary material (Guggenheimer vGinzburg, 43 NY2d 268, 275 [1977]; see 511 W. 232nd Owners Corp. v Jennifer RealtyCo., 98 NY2d 144, 151 [2002]).
Although general allegations that the defendant entered into contract with the intention not toperform are insufficient to support a cause of action sounding in fraud (see Gupta RealtyCorp. v Gross, 251 AD2d 544, 545 [1998]), the allegations in the instant case indicate thatBracha, exercising dominion and control over the corporate defendants and commingling theirassets with each other and other corporations owned by him, ordered merchandise in the name ofthe corporate defendants, as a pretext, to supply other corporations owned by him. Thoseallegations were sufficient to state a cause of action sounding in fraud, in that Bracha allegedlymade material representations that were false, knowing that they were false and with the intent todeceive the appellants, and the appellants, justifiably relying on those representations, wereinjured as a result (see Heaven vMcGowan, 40 AD3d 583, 584-585 [2007]; Cohen v Houseconnect Realty Corp.,289 AD2d 277, 278 [2001]). The appellants' allegations could also justify piercing the corporateveil on the ground that Bracha exercised complete domination over the corporate defendants,abusing the privilege of operating in a corporate form, and thereby perpetrating a wrong whichharmed the appellants (see EastHampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d 122, 126 [2009];John John, LLC v Exit 63 Dev.,LLC, 35 AD3d 540, 541 [2006]; Austin Powder Co. v McCullough, 216 AD2d825 [1995]). It is further alleged that Bracha personally guaranteed the debt owed to L & R. Inview of the foregoing, those branches of Bracha's motion which were to dismiss the complaintinsofar as asserted against him by the appellants should have been denied.
There is no basis in the record to overturn the determination of the Supreme Court whichdeclined to hold Bracha in contempt of court based upon a violation of an order of attachment.We note that the order of attachment is not included in the record. Nor is there a sufficient basisin the record to grant judgment against the Bracha based upon his failure to timely appear andmove to dismiss (see Trimble v SASTaxi Co. Inc., 8 AD3d 557, 558 [2004]).
The appellants' remaining contentions are without merit or are not properly before this Court.Skelos, J.P., Hall, Roman and Sgroi, JJ., concur.