| McCloud v Bettcher Indus., Inc. |
| 2011 NY Slip Op 09739 [90 AD3d 1680] |
| December 30, 2011 |
| Appellate Division, Fourth Department |
| Anthony McCloud, Respondent, v Bettcher Industries, Inc.,Appellant, et al., Defendant. |
—[*1] Lipsitz Green Scime Cambria LLP, Buffalo (John A. Collins of counsel), forplaintiff-respondent.
Appeal from an order of the Supreme Court, Erie County (Frank A. Sedita, Jr., J.), enteredJanuary 28, 2011 in a personal injury action. The order denied the motion of defendant BettcherIndustries, Inc. for summary judgment.
It is hereby ordered that the order so appealed from is unanimously reversed on the lawwithout costs, the renewed motion is granted and the complaint against Bettcher Industries, Inc.is dismissed.
Memorandum: Plaintiff commenced this action seeking damages for injuries he sustainedwhile operating a breader machine. Bettcher Industries, Inc. (defendant) appeals from an orderdenying its renewed motion for summary judgment dismissing the complaint against it. It isundisputed that the breader machine was manufactured by Sam Stein Associates (Stein).Approximately 21 years prior to the incident, defendant purchased all of the common stock ofStein pursuant to a written stock purchase agreement. Plaintiff sought to pierce the corporate veilto hold defendant liable for his injuries as the parent corporation of Stein, its subsidiary. Weagree with defendant that, as a shareholder, it cannot be held liable for the torts of its subsidiary.
It is well settled that "liability can never be predicated solely upon the fact of a parentcorporation's ownership of a controlling interest in the shares of its subsidiary. At the very least,there must be direct intervention by the parent in the management of the subsidiary to such anextent that 'the subsidiary's paraphernalia of incorporation, directors and officers' are completelyignored" (Billy v Consolidated Mach. Tool Corp., 51 NY2d 152, 163 [1980], reargdenied 52 NY2d 829 [1980], quoting Lowendahl v Baltimore & Ohio R.R. Co., 247App Div 144, 155 [1936], affd 272 NY 360 [1936], rearg denied 273 NY 584[1937]). A plaintiff "seeking to pierce the corporate veil must establish that the owners, throughtheir domination, abused the privilege of doing business in the corporate form," therebyperpetrating a wrong that resulted in injury to the plaintiff (Matter of Morris v New YorkState Dept. of Taxation & Fin., 82 NY2d 135, 142 [1993]; see Gateway I Group, Inc. v Park Ave.Physicians, P.C., 62 AD3d 141, 145 [2009]; Lawlor v Hoffman, 59 AD3d 499 [2009]). "Factors to beconsidered in determining whether the [parent company] has 'abused [that] privilege'. . . include whether there was a 'failure to adhere to corporate formalities,inadequate capitalization, [*2]commingling of assets, and use ofcorporate funds for personal use' " (EastHampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d 122, 127 [2009],affd 16 NY3d 775 [2011]). Here, defendant established that its conduct with respect toStein did not constitute an abuse of the privilege of doing business in the corporate form (seeLawlor, 59 AD3d 499), and plaintiff failed to raise a triable issue of fact sufficient to defeatthe renewed motion (see generally Zuckerman v City of New York, 49 NY2d 557, 562[1980]).
In light of our determination, we need not address defendant's contention regarding thealleged improper characterization of the deposition testimony of its chief executive officer.Present—Smith, J.P., Fahey, Carni, Sconiers and Gorski, JJ.