Opinion
600435/2006.
Decided May 8, 2008.
Edward B. Geller, Esq., Frank, Frank, Goldstein Nager P.C., New York, NY, Plaintiff's Attorney.
Moshe Assis, Esq., New York, NY, Defendant's Attorney.
The court shall grant plaintiff's motion for summary judgment to the extent that plaintiff shall have judgment of liability on its claims for goods delivered and not paid for. Plaintiff's motion for summary judgment on its claim for an account stated must be denied. The court shall grant the cross-motion of defendant David Assis for summary judgment dismissing the complaint against him individually.
With respect to the cross-motion, plaintiff states that it sold and delivered the goods to defendant, "at defendant's special instance and request", and appends Purchase Orders sent by defendant to plaintiff that are captioned "MONY DBA MONIE". Implicit in plaintiff's argument is the suggestion that the "dba" set forth on the Purchase Orders was an assumed name used by defendant David Assis, which obligates him individually under the Purchase Orders. Plaintiff appends also records of the New York State Secretary of State that state that corporate entities known as Monie Fashions, Inc. and Mony Fashions Fulton Inc. were dissolved by proclamation in 1992 and 1998, respectively. Finally, plaintiff states also that a company named Mony Fashions Fulton, Inc. exists and occupies the location where the goods were delivered. Plaintiff asserts that such entity actually received the goods and is therefore also liable to the plaintiff for the goods.
Defendant Assis argues that he is not personally liable. He admits that the goods in question were sold and delivered to defendant Mony Fashions Fulton, Inc. He alleges that Mony Fashions Fulton, Inc. is a close family owned business, of which he is one of the shareholders and officers. He never denies that the Monie Fashions, Inc. and Mony Fashions Fulton, Inc. were dissolved, but merely argues that the dissolution of Monie Fashions, Inc. was in error, and appends a letter dated July 10, 2007 for the United States Internal Revenue Service that provides the employer identification number assigned to the latter corporation. He contends that Purchase Orders captioned "MONY DBA MONIE" "were accepted and retained by Plaintiff without objection," and so concedes that he sent plaintiff Purchase Orders so captioned.
While it is true that Business Corporation Law § 301 requires that the name of a corporation "contain the word corporation', incorporated' or limited', or an abbreviation of one of such words", none of which are included in "MONY DBA MONIE", plaintiff does not allege that defendant Assis failed to disclose his status as a corporate agent or that it was misled into believing that defendant was acting individually by the use of the "dba" moniker. In that regard, this case is distinguishable from Albany Miron Lumber Corp. v Pellerin, 233 AD2d 815 (3d Dept 1996) (defendant personally liable for the debts at issue where defendant never informed plaintiff that he was acting on behalf of corporation).
Although defendant was unaware of the dissolution of two of the entities, he does not deny that the corporation named as defendant in the Complaint, which still exists, received the goods. On that basis, Suraleb, Inc. v International Trade Club, Inc. , 13 AD3d 612 (2d Dept 2004), which involved a corporation that was dissolved six months prior to the date of the transaction in question, is inapplicable here.
Furthermore, plaintiff never avers that defendant Assis, individually, received the goods, but concedes that Mony Fashions Fulton, Inc. received them, a fact that is not contested by defendant Assis. Therefore, the action is properly dismissed against the individual defendant.
As to its motion for summary judgment on the second cause of action on its endorsed complaint, plaintiff contends that defendant retained the invoices without protest thus establishing an account stated. Defendant Assis, on behalf of the corporate defendant, asserts in response that a timely objection was made to the invoices that the goods were non-conforming and not timely delivered. The contending factual allegations of the parties on an essential element of plaintiff's account stated claim warrant denial of summary judgment on that cause of action. "Oral objections to an account stated are sufficient to defeat a motion for summary judgment." Prudential Bldg. Maintenance Corp. v Burton Siedman Associates, Inc., 86 AD2d 519 (1st Dept 1982). See also Talcott, Inc. v U.S. Tel. Co., 52 AD2d 197 (1st Dept 1976).
As for plaintiff's first cause of action for "goods sold and delivered" and "demand made no part paid", defendant Assis admits liability on the part of the corporate defendant when he states "MONY FULTON is entitled to offset the amounts owed to Plaintiff in amounts estimated to be in excess of 50% of the total amounts claimed for all goods delivered to Defendant" [emphasis supplied].
The corporate defendant, by its agent, also admits that it accepted the goods delivered and rejected none of them. Indeed, the corporate defendant states that it sold the goods, though allegedly at a discount. Article 2 of the Uniform Commercial Code governs, of which the Appellate Division, Third Department stated:
Notably, rejection of nonconforming goods must take place within a reasonable time after delivery and reasonable notice must be given to the seller (UCC 2-602 [1]). Acceptance takes place when the buyer informs the seller that the goods are conforming, or in spite of their nonconformity they will be retained, or fails to reject them after a reasonable opportunity to inspect them or acts inconsistently with the seller's ownership (UCC 2-606 [1]).
B. Milligan Contracting Inc. V Andrew R. Mancini Associates, Inc., 174 AD2d 136, 138 (3rd Dept 1992).
There is no dispute in the record at bar that defendant sold the goods, which as a matter of law is inconsistent with plaintiff's ownership of such goods. On such facts alone, plaintiff would be entitled to a summary judgment on the cause of action for goods sold and delivered. However, the B. Milligan court went on to observe:
Nevertheless, as the Court of Appeals has noted, a buyer may defeat or diminish a seller's substantive action for goods sold and delivered by interposing a valid counterclaim for breach of an underlying sales agreement' ( Created Gemstones v. Union Carbide Corp., 47 NY2d 250).***Accordingly, plaintiff is not entitled to summary judgment on its goods sold and delivered theory (see, Belfont Sales Corp. v Gruen Indus., 112 AD2d 96).
B. Milligan Contracting Inc., supra.
Here, defendant, in its answer, interposes a counterclaim for breach of contract. As the papers raise triable issues of fact with respect to such counterclaim, plaintiff is not entitled to summary judgment on its goods sold and delivered claim. However, this court determines that plaintiff is entitled to a partial summary judgment of liability on its cause of action for goods sold and delivered. In this regard, it is distinguishable from Belfont Sales Corp. v Gruen Industries, Inc., 112 AD2d 96 (1st Dept 1985), which involved a defendant's breach of warranty claim, which is not an issue here.
Accordingly, it is ORDERED that plaintiff DeVanlay US, Inc. d/b/a Lacoste's motion for summary judgment on its first cause of action for goods sold and delivered is GRANTED only to the extent that plaintiff shall have a partial summary judgment of liability against defendant Mony Fashions Fulton, Inc. on such claim; and plaintiff's motion is otherwise DENIED; and it is further
ORDERED that defendants' cross-motion for partial summary judgment is GRANTED to the extent that the action is DISMISSED against defendant David Assis d/b/a Mony's and the Clerk is directed to enter judgment accordingly; and it is further
ORDERED that the issue of the amount of damages to be entered on the judgment for plaintiff's cause of action for goods sold and delivered shall be determined at the trial or other disposition of the remaining cause of action of plaintiff and counterclaims of defendant Mony Fashions Fulton, Inc.; and it is further
ORDERED that the parties shall appear for a preliminary conference in IAS Part 59, 111 Centre Street, Room 659, New York, on June 17, 2008, 9:30 AM.
This is the decision and order of the court.