From Casetext: Smarter Legal Research

Sound Communications Inc. v. Rack

Supreme Court, Appellate Division, First Department, New York.
Oct 18, 2011
88 A.D.3d 523 (N.Y. App. Div. 2011)

Summary

Holding that "the complaint fails to state an account stated cause of action against the moving defendants" because "[a]ll of plaintiffs underlying invoices, which are annexed to the complaint, are addressed to defendant Rack and Roll, LLC only"

Summary of this case from SunQuest Enter., Inc. v. Zar

Opinion

2011-10-18

SOUND COMMUNICATIONS, INC., Plaintiff–Respondent,v.RACK AND ROLL, INC., et al., Defendants–Appellants.

Napoli Bern Ripka, LLP, New York (Denise A. Rubin of counsel), for appellants.Law Office of Steven E. Rosenfeld, P.C., New York (Isaiah Juste of counsel), for respondent.


Napoli Bern Ripka, LLP, New York (Denise A. Rubin of counsel), for appellants.Law Office of Steven E. Rosenfeld, P.C., New York (Isaiah Juste of counsel), for respondent.

Order, Supreme Court, New York County (Richard B. Lowe, III, J.), entered June 7, 2010, which denied the motion by defendants Lance Wolfson, Marla Wolfson and Premier Container Corp. pursuant to CPLR 3211(a)(7) and 3212 for an order dismissing the complaint, unanimously reversed, on the law, without costs, those defendants' motion granted and the complaint dismissed as against them.

Plaintiff sues to recover fees due under an oral agreement for services rendered in the advertisement of a product known as the “Rack and Roll Paper Towel Storage Holder.” All of plaintiff's underlying invoices, which are annexed to the complaint, are addressed to defendant Rack and Roll, LLC only. Therefore, the complaint fails to state an account stated cause of action against the moving defendants

( see e.g. Roth Law Firm, PLLC v. Sands, 82 A.D.3d 675, 676, 920 N.Y.S.2d 72 [2011] ).

Plaintiff also failed to state a fraud cause of action against the moving defendants. Plaintiff essentially alleges that defendants never intended to honor a promise to pay plaintiff's fees. “It is well settled that a cause of action for fraud will not arise when the only fraud charged relates to a breach of contract” ( Gordon v. Dino De Laurentis Corp., 141 A.D.2d 435, 436, 529 N.Y.S.2d 777 [1988] [citation omitted] ). Plaintiff's negligent misrepresentation cause of action should have been similarly dismissed because this claim also relates to an alleged contract and there is no allegation of a special relationship between plaintiff and the moving defendants ( see Morris v. Putnam Berkley, Inc., 259 A.D.2d 425, 426, 687 N.Y.S.2d 139 [1999] ). Defendants have also made a prima facie showing that the Wolfsons did not contract with plaintiff as individuals or on behalf of Premier. The moving defendants were therefore entitled to judgment as a matter of law and plaintiffs conclusory assertions were insufficient to defeat summary judgment with respect to the contract and unjust enrichment claims ( see Spaulding v. Benenati, 57 N.Y.2d 418, 425, 456 N.Y.S.2d 733, 442 N.E.2d 1244 [1982] ).

Plaintiff's argument that defendants' original answer, which was verified by counsel, contains admissions is also unavailing. The assertions in the pleading were made “upon information and belief” and do not constitute formal or informal judicial admissions ( see Scolite Intl. Corp. v. Vincent J. Smith, Inc., 68 A.D.2d 417, 421, 418 N.Y.S.2d 191 [1979] ).

The court should also have rejected plaintiff's attempt to pierce Rack and Roll's corporate veil. “The party seeking to pierce the corporate veil must establish that the owners, through their domination, abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against that party such that a court in equity will intervene” ( Matter of Morris v. New York State Dept. of Taxation & Fin., 82 N.Y.2d 135, 142, 603 N.Y.S.2d 807, 623 N.E.2d 1157 [1993] ). The complaint merely alleges that Rack and Roll functioned as the moving defendants' alter ego. It is not sufficiently alleged that Rack and Roll's status as a limited liability company was used to commit a fraud against plaintiff ( see e.g. Albstein v. Elany Contr. Corp., 30 A.D.3d 210, 818 N.Y.S.2d 8 [2006], lv. denied 7 N.Y.3d 712, 824 N.Y.S.2d 604, 857 N.E.2d 1135 [2006] ).

We have considered plaintiff's remaining arguments and find them unavailing.


Summaries of

Sound Communications Inc. v. Rack

Supreme Court, Appellate Division, First Department, New York.
Oct 18, 2011
88 A.D.3d 523 (N.Y. App. Div. 2011)

Holding that "the complaint fails to state an account stated cause of action against the moving defendants" because "[a]ll of plaintiffs underlying invoices, which are annexed to the complaint, are addressed to defendant Rack and Roll, LLC only"

Summary of this case from SunQuest Enter., Inc. v. Zar

finding that, as all of the plaintiff's invoices were addressed to the corporate defendant only, the complaint failed to state an account stated cause of action against the individual defendants and that the complaint did not allege facts sufficient to pierce the corporate veil

Summary of this case from Mckesson Medical-Surgical Inc. v. Sawhney

reversing lower court and dismissing complaint

Summary of this case from New Millennium Capital Partners III; LLC v. Sys. Evolution, Inc.
Case details for

Sound Communications Inc. v. Rack

Case Details

Full title:SOUND COMMUNICATIONS, INC., Plaintiff–Respondent,v.RACK AND ROLL, INC., et…

Court:Supreme Court, Appellate Division, First Department, New York.

Date published: Oct 18, 2011

Citations

88 A.D.3d 523 (N.Y. App. Div. 2011)
88 A.D.3d 523
2011 N.Y. Slip Op. 7262

Citing Cases

Lopinyukelis Ii, LLC v. Merch. Captial Funding, LLC

The complaint does not allege that Fidler or Pross entered into any agreement with plaintiff in their…

Argyrides v. River Terrace Apartments LLC

"The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its…