Summary
In Shugrue, the First Department upheld a fraud claim, finding that it was not duplicative of a related breach of contract claim where "the chief executive officer and sole shareholder of the corporate defendants, misrepresented to plaintiffs that defendants had obtained all of the required permits and approvals and had completed the construction plans for their home renovation project, which induced plaintiffs to enter into the construction contract with defendants in October 2012."
Summary of this case from JCMC Flatiron, LLC v. PR1nceton Holdings LLCOpinion
2014-05-13
Edward L. SHUGRUE III, et al., Plaintiffs–Appellants, v. Lee STAHL, et al., Defendants–Respondents.
Katsky Korins LLP, New York (Joel S. Weiss of counsel), for appellants. Rosenthal Curry & Kranz, LLP, East Meadow (Edward M. Rosenthal of counsel), for respondents.
Katsky Korins LLP, New York (Joel S. Weiss of counsel), for appellants. Rosenthal Curry & Kranz, LLP, East Meadow (Edward M. Rosenthal of counsel), for respondents.
TOM, J.P., ACOSTA, MOSKOWITZ, GISCHE, CLARK, JJ.
Order, Supreme Court, New York County (Charles E. Ramos, J.), entered August 26, 2013, which granted defendants' motion to dismiss plaintiffs' second cause of action for fraudulent inducement as against all defendants and to dismiss all claims against defendant Lee Stahl in his personal capacity, unanimously modified, on the law, to the extent of denying those portionsof the motion seeking (1) dismissal of plaintiffs' second cause of action for fraudulent inducement as against all defendants, and (2) dismissal of the second through fourth causes of action asserted as against defendant Stahl, and otherwise affirmed, without costs.
Plaintiffs' fraudulent inducement claim was not duplicative of their claim for breach of contract, since it was based on misrepresentations of then present facts that were collateral to the contract ( see GoSmile, Inc. v. Levine, 81 A.D.3d 77, 81, 915 N.Y.S.2d 521 [1st Dept.2010], lv. dismissed17 N.Y.3d 782, 929 N.Y.S.2d 83, 952 N.E.2d 1077 [2011] ), and involved a “breach of duty distinct from, or in addition to, the breach of contract” ( Non–Linear Trading Co. v. Braddis Assoc., 243 A.D.2d 107, 118, 675 N.Y.S.2d 5 [1st Dept.1998] [internal quotation marks omitted] ). Indeed, the complaint alleged that defendant Lee Stahl, the chief executive officer and sole shareholder of the corporate defendants, misrepresented to plaintiffs that defendants had obtained all of the required permits and approvals and had completed the construction plans for their home renovation project, which induced plaintiffs to enter into the construction contract with defendants in October 2012.
Supreme Court properly dismissed plaintiffs' fifth cause of action against defendant Stahl, seeking alter ego liability and to pierce the corporate veil, since such a claim does not “constitute a cause of action independent of that against the corporation” (Matter of Morris v. New York State Dept. of Taxation & Fin., 82 N.Y.2d 135, 141, 603 N.Y.S.2d 807, 623 N.E.2d 1157 [1993];Robinson v. Day, 103 A.D.3d 584, 588, 960 N.Y.S.2d 397 [1st Dept.2013] ).
Supreme Court properly dismissed the breach of contract cause of action as against defendant Stahl. There is no indication that Stahl purported to bind himself individually to the construction contract ( see Georgia Malone & Co., Inc. v. Rieder, 86 A.D.3d 406, 407–408, 926 N.Y.S.2d 494 [1st Dept.2011], affd. 19 N.Y.3d 511, 950 N.Y.S.2d 333, 973 N.E.2d 743 [2012] ).
The second, third, and fourth causes of action should not have been dismissed as against Stahl, since they allege sufficient facts to hold Stahl personally liable based on his alleged commission of various torts ( see Gjuraj v. Uplift El. Corp., 110 A.D.3d 540, 541, 973 N.Y.S.2d 172 [1st Dept.2013] ).
We have considered plaintiffs' remaining contentions for affirmative relief and find them unavailing.