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Madison Home Equities, Inc. v. Echeverria

Appellate Division of the Supreme Court of New York, Second Department
Nov 22, 1999
266 A.D.2d 435 (N.Y. App. Div. 1999)

Opinion

Argued June 21, 1999

November 22, 1999

An appeal from the Supreme Court, Nassau County, DeMaro, J.

Kapson Ginsburg Misk, Queens Village, N.Y. (Hal R. Ginsburg of counsel), for appellants.

Ackerman Raphan and Sultzer, Oceanside, N.Y. (Stacey Ann Pena of counsel), for respondent.

DANIEL W. JOY, J.P., GABRIEL M. KRAUSMAN, HOWARD MILLER, SANDRA J. FEUERSTEIN, JJ.


MEMORANDUM BY THE COURT

In an action to recover damages for fraud, the defendants appeal from an order of the Supreme Court, Nassau County (DeMaro, J.), dated August 4, 1998, which denied their motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, on the law, with costs, the motion is granted, and the complaint is dismissed.

The lynchpin of the plaintiff's action to recover damages for fraud is a letter dated October 19, 1994, typed on the letterhead of the corporate defendant and signed by the individual defendant, who was the sole shareholder, director, and officer of the corporate defendant. The letter represented that certain premises "will be delivered vacant at closing", and was signed by the individual defendant in his corporate capacity. Accordingly, the plaintiff failed to meet its burden of piercing the corporate veil so as to impose personal liability on the individual defendant (see, Matter of Morris v. New York State Dept. of Taxation Fin., 82 N.Y.2d 135, 141-142 ; Kopec v. Hempstead Gardens, Inc., 264 A.D.2d 714 [2d Dept., Sept. 13, 1999]).

Summary judgment should also have been granted to the corporate defendant since the statement in the letter was a promissory statement relating to future action (see, Rapanakis v. Athanasiou, 250 A.D.2d 583 ; Kopec v. Hempstead Gardens, Inc., supra) and, in any event, the plaintiff "had the means available to [it] of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation" (Schumaker v. Matler, 133 N.Y. 590, 596 ; see also, Jachetta v. Vivona Estates, 249 A.D.2d 512 ).

JOY, J.P., KRAUSMAN, and FEUERSTEIN, JJ., concur.


I believe that the plaintiff met its burden of demonstrating the existence of a triable issue of fact sufficient to defeat the defendant's motion for summary judgment. Accordingly, I respectfully dissent.

The plaintiff commenced this action against the defendants alleging that it was induced to approve a mortgage to a third party based upon a letter purportedly sent to it by the corporate defendant stating that the premises to be burdened by the mortgage would be "delivered vacant at closing". Shortly after the closing of title, it was discovered that the premises were occupied by rent-stabilized tenants. After the mortgagor defaulted, the plaintiff acquired the premises in foreclosure.

I believe that the Supreme Court correctly denied summary judgment because issues of fact exist as to whether the representation allegedly made by the corporate defendant was made with a preconceived and undisclosed intention of not performing it (see,Graubard Mollen Dannet Horowitz v. Moskovitz, 86 N.Y.2d 112 ;Deerfield Communications Corp. v. Chesebrough-Ponds, Inc., 68 N.Y.2d 954 ;Channel Master Corp. v. Aluminum Ltd. Sales, 4 N.Y.2d 403 ;Sabo v. Delman, 3 N.Y.2d 155 ; Couri v. Westchester Country Club, 186 A.D.2d 712 ). There is also an issue of fact regarding the individual defendant's liability, since a corporate officer may be individually liable for fraudulent acts or false representations in which he participates, even though his actions may be in furtherance of the corporate business (see, A-1 Check Cashing Serv. v. Goodman, 148 A.D.2d 482 ; see also, Westminster Constr. Co. v. Sherman, 160 A.D.2d 867 ; Widlitz v. Scher, 148 A.D.2d 530 ).


Summaries of

Madison Home Equities, Inc. v. Echeverria

Appellate Division of the Supreme Court of New York, Second Department
Nov 22, 1999
266 A.D.2d 435 (N.Y. App. Div. 1999)
Case details for

Madison Home Equities, Inc. v. Echeverria

Case Details

Full title:MADISON HOME EQUITIES, INC., respondent, v. LUIS FERNANDO ECHEVERRIA, et…

Court:Appellate Division of the Supreme Court of New York, Second Department

Date published: Nov 22, 1999

Citations

266 A.D.2d 435 (N.Y. App. Div. 1999)
698 N.Y.S.2d 703

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