Opinion
September 29, 1992
Appeal from the Supreme Court, New York County (Beverly S. Cohen, J.).
Respondent demanded arbitration pursuant to an agreement between himself and a corporate entity, which agreement was signed by petitioner in a representative capacity. Recognizing that an individual who in a representative capacity signs an agreement containing an arbitration clause cannot be compelled to arbitrate (see, Johnston v Silverman, 167 A.D.2d 284), respondent seeks to pierce the corporate veil, relying primarily on the corporation's admitted failure to follow corporate formalities. Respondent, however, has failed to raise an issue of fact sufficient to require a hearing pursuant to CPLR 7503 (a) on whether the corporation was petitioner's alter ego (cf., Matter of Pile Found. Constr. Co. [Howell Co.], 159 A.D.2d 352). As we stated in Feigen v Advance Capital Mgt. Corp. ( 150 A.D.2d 281, 282, lv denied 74 N.Y.2d 874), "[t]he alter ego theory is simply insufficient to support claims for breach of contract against individuals in the absence of factual allegations demonstrating fraud or other corporate misconduct or that the individuals in question conducted business in their personal rather than corporate capacity" (see also, Port Chester Elec. Constr. Corp. v Atlas, 40 N.Y.2d 652, 657). Here, there are no allegations of fraud, and no evidence that petitioner used the corporation to conduct anything other than the business for which the corporation was formed. The internal error committed by the bank regarding a transfer of funds does not raise an issue of fact as to any self-dealing by petitioner.
Concur — Carro, J.P., Kupferman, Ross and Asch, JJ.