Summary
affirming the denial of a motion to dismiss by parent company where plaintiff alleged that parent had undercapitalized subsidiary, leaving subsidiary unable to cover its rent obligations
Summary of this case from Parnell v. Tremont CapitalOpinion
April 30, 1991
Appeal from the Supreme Court, New York County (Harold Tompkins, J.).
New York law permits a litigant to disregard the corporate form where a corporation is shown to be a mere shell dominated and controlled by another for the latter's own purposes (Mikropul Corp. v. Desimone Chaplin-Airtech, 599 F. Supp. 940). The allegations that Arlen, the parent incorporator and sole owner of the undercapitalized subsidiary (defendant Dunville Realty), sharing common officers and directors with Dunville, exercising free access to Dunville's bank accounts for payment of its own salaries and operating expenses as well as those of other Arlen subsidiaries, thus depleting all of Dunville's liquid assets before plaintiff could satisfy its judgment for more than $500,000 in delinquent rent, sufficiently plead a cause of action for piercing the corporate veil (Eastern States Elec. Contrs. v Crow Constr. Co., 153 A.D.2d 522, 523; Matter of Sbarro Holding [Shiaw Tien Yuan], 91 A.D.2d 613, 614; Conan Props. v. Mattel, Inc., 619 F. Supp. 1167).
The claim for reasonable counsel fees in this enforcement action is sufficiently related to the underlying summary proceeding to warrant inclusion under the broadly worded paragraph 30.02 of the amended complaint. We further hold that the cause of action alleging fraudulent conveyances, in contravention of sections 273 through 276-a of the Debtor and Creditor Law, was sufficiently pleaded.
Concur — Murphy, P.J., Carro, Ellerin, Wallach and Asch, JJ.