Opinion
101525/2010.
Decided November 16, 2010.
On or about March 2001, the plaintiffs entered into a written contract with defendant Anthony Home Builders, by John Damato, Jr., president and shareholder, for the construction of a home located at 80 Bedell Street, Staten Island, New York [hereinafter referred to as "the home"]. Defendant Anthony Home Builders thereafter contracted with co-defendants Lo Bue Valenziano, AIA and Emanuel Lo Bue [hereinafter referred to as "the architects"] to draw up plans for construction of a three-story, two-family home at the aforementioned location. The architects contracted with non-party Gaspare Santore, Licensed Professional Engineer, to conduct soil tests. The tests were completed and it was found that the home was not near a water table and were thereafter certified. The architects submitted the plans to the Department of Buildings and received approval. As a result, construction was completed, a certificate of occupancy was issued and the closing took place on January 17, 2003. The plaintiffs took possession of the home and have resided there since.
Plaintiffs contend that, in or around, March 2010, they hired an architect to inspect the home. That architect noted that the home was built below the water table and this created a major flooding hazard for the plaintiff's basement which they desired to use as a rental apartment. The plaintiff's thereafter commenced this action on May 18, 2010, alleging two causes of action, namely, breach of contract/warranty/NY General Business Law 36-B and fraud. The defendants Lo Bue Valenziano, AIA, Emanuel Lo Bue and John Damato, Jr., in lieu of an answer, have separately moved to dismiss the complaint pursuant to CPLR § 3211. The Court notes that defendant Anthony Home Builders has failed to appear.
I. Defendant John Damato, Jr.'s Motion to Dismiss (Motion 001)
Generally, where a corporate contract is entered into by an individual, in his capacity as a representative of the corporation, he cannot be held personally liable ( Metropolitan Switch Board Co., Inc., 20 AD3d 455, 455 [2d Dept., 2005]). The exception or piercing the corporate veil' is however, allowed where "(1) the owners exercised complete domination of the corporation in respect to the transaction; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff's injury" ( Morris v. State Dep't of Taxation Fin., 82 NY2d 135, 141). In order to establish a fraud occurred the plaintiff must prove "(1) a misrepresentation or a material omission of fact which was false and known to be false by the defendant, (2) the misrepresentation was made for the purpose of inducing the plaintiff to rely upon it, (3) justifiable reliance of the plaintiff on the misrepresentation or material omission, and (4) injury" ( Shao v. 39 College Point Corp., 309 AD2d 850, 851 (2d Dept., 2003]).
Here, the defendant John Damato, Jr., has established a prima facie entitlement to dismiss the complaint as against him in his individual capacity ( Rosen v. Watermill Development Corp. , 1 AD3d 424, 425 [2d Dept., 2003]). He has presented evidence that the contract was executed between plaintiff's and the defendant Anthony Home Builders, by John Damato, Jr., in his capacity as president and shareholder. In opposition, the plaintiffs have failed to establish that defendant John Damato, Jr., acted in his personal capacity at any point in the transaction, or committed any form of fraud against plaintiffs ( Metropolitan Switch Board Co. Inc., 20 AD3d at 455; Shao v. 30 College Point Corp., 309 AD2d at 851). As such, defendant John Damato, Jr.'s motion to dismiss is hereby granted.
II. Lo Bue Valenziano, AIA, and Emanuel Lo Bue's Motion to Dismiss (Motion 002)
The Court initially notes that the first cause of action for breach of contract with the defendants is inappropriate as plaintiff's have no privity of contract with the Lo Bue Valenziano, AIA and Emanuel Lo Bue defendants.
With respect to the second cause of action, for fraud, CPLR § 213 (8) provides that the statute of limitations for a fraud is six years from the date of the wrong, or two years from the date the fraud could reasonably have been discovered, whichever is later. "The burden of establishing that the fraud could not have been discovered during the two-year period before the commencement of the action rests on the plaintiffs, who seek the benefit of the discovery exception to the six-year statute of limitations" ( Siler v. Lutheran Soc. Servs. , 10 AD3d 646, 648 [2d Dept., 2004]). Defendants contend that plaintiff's complaint should be dismissed because they took possession of the home on January 17, 2003, over seven year ago, and clearly beyond the six year statute of limitations for fraud. In opposition, the plaintiff's contend the they did not discover the fraud until March 2010. This argument is unavailing. Plaintiffs have failed to provide any evidence that they could not have reasonably discovered the fraud earlier. As such, they have failed to carry their burden in seeking the benefit of the exception to the six year statute of fraud limitation.
Furthermore, the underlying cause of action alleging fraud would also fail under defendant's CPLR § 3211 (a)(7) portion of their motion. "In considering a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), the pleaded facts are accepted as true and given every favorable inference . . . [t]he court must determine whether the factual allegations taken from the four corners of the complaint manifest any cognizable cause of action ( Klepetko v. Reisman, 2007 NY Slip Op 05231, 1 [2d Dept., 2007]; Gershon v. Goldberg , 30 AD3d 372 , 273 [2d Dept., 2006]). Additionally, that all "facts pleaded are to be presumed to be true and are to be accorded every favorable inference, although bare legal conclusions as well as factual claims flatly contradicted by the record are not entitled to any such consideration" ( Gershon v. Goldberg, 30 AD3d at 373; Dinerman v. Jewish Bd. of Family and Children's Services, Inc., ___ AD3d ___, NY Slip Op 07610, [2d Dept., 2008]).
As already indicated, in order to establish a fraud occurred the plaintiff must prove "(1) a misrepresentation or a material omission of fact which was false and known to be false by the defendant, (2) the misrepresentation was made for the purpose of inducing the plaintiff to rely upon it, (3) justifiable reliance of the plaintiff on the misrepresentation or material omission, and (4) injury" ( Shao v. 39 College Point Corp., 309 AD2d 850, 851 (2d Dept., 2003]). Here the plaintiffs, even accepting all the pleaded allegations as true, do not satisfy the elements of fraud, namely, that defendant architects knew that the soil tests were false and indicated as such to the plaintiffs to induce them to purchase the home. As a result, the complaint, even on the merits, is dismissed as against the architects defendants.
Accordingly, it is
ORDERED that defendant John Damato, Jr.'s motion to dismiss the complaint [001] is granted, and it is further
ORDERED that the complaint is hereby dismissed as against John Damato, Jr., and all the caption is hereby amended to reflect as such, and it is further
ORDERED that defendants Lo Bue Valenziano, AIA and Emanuel Lo Bue's motion to dismiss is hereby granted, and it is further
ORDERED that the complaint is hereby dismissed as against Lo Bue Valenziano, AIA and Emanuel Lo Bue and the caption is amended to reflect as such, and it is further
ORDERED that the Clerk enter judgment accordingly,