| Commissioners of State Ins. Fund v Staulcup |
| 2012 NY Slip Op 04123 [95 AD3d 1259] |
| May 30, 2012 |
| Appellate Division, Second Department |
| Commissioners of State Insurance Fund,Respondent, v Keith Staulcup et al., Appellants, et al.,Defendant. |
—[*1] Robert R. Gulizia, Melville, N.Y., for respondent.
In an action, inter alia, to recover unpaid premiums for a workers' compensation insurancepolicy, the defendants Keith Staulcup and Keith Staulcup, doing business as Long Island SalesGroup, Inc., appeal, as limited by their brief, from (1) so much of an order of the Supreme Court,Nassau County (Parga, J.), dated March 19, 2010, as granted that branch of the plaintiff's motionwhich was for summary judgment on the complaint insofar as asserted against them, and (2) somuch of a judgment of the same court entered May 13, 2010, as, upon the order, is in favor of theplaintiff and against them in the principal sums of $160,330.08 on the first cause of action and$480,990.24 on the second and third causes of action. Justice Miller has been substituted forformer Presiding Justice Prudenti (see 22 NYCRR 670.1 [c]).
Ordered that the appeal from the order is dismissed, without costs or disbursements; and it isfurther,
Ordered that the judgment is modified, on the law, by deleting the provision thereof which isin favor of the plaintiff and against the defendants Keith Staulcup and Keith Staulcup, doingbusiness as Long Island Sales Group, Inc., in the principal sum of $160,330.08 on the first causeof action; as so modified, the judgment is affirmed insofar as appealed from, without costs ordisbursements, that branch of the plaintiff's motion which was for summary judgment on the firstcause of action insofar as asserted against the defendants Keith Staulcup and Keith Staulcup,doing business as Long Island Sales Group, Inc., is denied, the order is modified accordingly, thefirst cause of action insofar as asserted against the defendants Keith Staulcup and Keith Staulcup,doing business as Long Island Sales Group, Inc., is severed, and the matter is remitted to theSupreme Court, Nassau County, for the entry of an appropriate amended judgment.
The appeal from the order must be dismissed because the right of direct appeal therefromterminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241,248 [1976]). The issues raised on the appeal from the order are brought up for review and havebeen considered on the appeal from the judgment (see CPLR 5501 [a] [1]).
The defendant Keith Staulcup was the president and sole shareholder of the defendant L.I.Sales Group, Inc. In September 1993 an application for workers' compensation insurance(hereinafter the 1993 application) was submitted to the plaintiff, Commissioners of the StateInsurance Fund (hereinafter the SIF). The 1993 application was signed by Staulcup, who wasidentified as the applicant's president, but the applicant was identified, not as L.I. Sales Group,Inc., but as Long Island Sales Group, Inc., a nonexistent entity. After receiving the 1993application, the SIF issued a workers' compensation insurance policy (hereinafter the policy). InJune 2005, the SIF cancelled the Policy, based on nonpayment of premiums.
In October 2006 the SIF commenced the instant action against Keith Staulcup, KeithStaulcup, doing business as Long Island Sales Group, Inc. (hereinafter together the Staulcupdefendants), and L.I. Sales Group, Inc., to recover unpaid premiums on the policy in the principalsum of $160,330.08. The SIF subsequently amended its complaint to add two causes of action,asserted against the Staulcup defendants, to recover damages for statutory fraud under Workers'Compensation Law § 96 (2) and common-law fraud, respectively. The fraud causes ofaction were based on an allegation that Staulcup had made a material misrepresentation by failingto disclose, in response to a question appearing in the 1993 application, that he had been aprincipal of General Courier Services, Inc., which owed the SIF the sum of $200,123.48 inunpaid Workers' Compensation insurance premiums.
After the Staulcup defendants joined issue, the SIF moved for summary judgment on thecomplaint. The Supreme Court granted the SIF's motion, and entered a judgment in favor of theSIF. The Staulcup defendants appeal.
As a general rule, "a person entering into a contract on behalf of a nonexistent corporateentity may be held personally liable on the contract" (Spring Val. Improvements, LLC v Abajian, 40 AD3d 619, 619-620[2007]). In this case, the SIF tendered evidence showing that Staulcup applied for the policy onbehalf of a nonexistent corporate entity, Long Island Sales Group, Inc. Accordingly, the SIFdemonstrated, prima facie, that Staulcup could be held personally liable for the unpaid insurancepremiums (see Brandes Meat Corp. v Cromer, 146 AD2d 666, 667 [1989]).
However, the evidence submitted by the Staulcup defendants in opposition was sufficient toraise a triable issue of fact as to whether the use of the name "Long Island Sales Group, Inc.," onthe 1993 application was the result of a mutual mistake (see Clinton v Hope Ins. Co., 45NY 454, 460-461 [1871]; Anand v GA Ins. Co. of N.Y., 228 AD2d 397, 398-399 [1996];Flaherty v Broadway Assoc. Ltd. Partnership, 171 AD2d 938, 938 [1991]; Crivella vTransit Cas. Co., 116 AD2d 1007, 1008 [1986]; Court Tobacco Stores v Great E. Ins.Co., 43 AD2d 561, 561 [1973]). Accordingly, that branch of the SIF's motion which was forsummary judgment on the first cause of action insofar as asserted against the Staulcup defendantsshould have been denied.
The SIF made a prima facie showing of its entitlement to judgment as a matter of law on thesecond and third causes of action by demonstrating that Staulcup knowingly omitted anyreference to General Courier Services, Inc., from the 1993 application, for the purpose ofinducing the SIF to rely upon the misrepresentation (see Workers' Compensation Law§ 96; Lama Holding Co. v Smith Barney, 88 NY2d 413, 421 [1996]; Jo AnnHomes at Bellmore v Dworetz, 25 NY2d 112, 119 [1969]; Northeast Steel Prods., Inc. v John LittleDesigns, Inc., 80 AD3d 585 [2011]; see also Workers' Compensation Law§ 93 [c]; Nature's Way Envtl. Consultants & Contrs. v State Ins. Fund, 224 AD2d919 [1996]). In opposition, the Staulcup defendants failed to raise a triable issue of fact. Thus,the Supreme Court properly granted those branches of the SIF's motion which were for summaryjudgment on the second and third causes of action insofar as asserted against the Staulcupdefendants.
The Staulcup defendants' remaining contentions are without merit. Skelos, J.P., Balkin, Sgroiand Miller, JJ., concur.