Opinion
15418 Index No. 656282/19 Case No. 2020–04685
03-03-2022
PARK ARMORY LLC, Plaintiff–Respondent, v. ICON PARKING SYSTEMS LLC, et al., Defendants–Appellants.
Melito & Adolfsen P.C., New York (John H. Somoza of counsel), for appellants. Cervini Swanson LLP, New York (Scott L. Swanson of counsel), for respondent.
Melito & Adolfsen P.C., New York (John H. Somoza of counsel), for appellants.
Cervini Swanson LLP, New York (Scott L. Swanson of counsel), for respondent.
Manzanet–Daniels, J.P., Singh, Scarpulla, Higgitt, JJ.
Order, Supreme Court, New York County (Laurence L. Love, J.), entered November 2, 2020, which denied defendants’ motion to dismiss the complaint, unanimously modified, on the law, the motion granted to the extent of dismissing all the claims except for the breach of contract, unjust enrichment, conversion, and accounting claims against Park Armory Management LLC, and otherwise affirmed, without costs.
Plaintiff failed to allege facts sufficient to hold defendants Icon Parking Systems LLC (Icon) and Citizens Icon Holdings LLC (Citizens) (together Icon defendants) liable under an alter ego or veil-piercing theory. The allegations that those defendants controlled and dominated defendant Park Armory Management LLC (PAM) for the purpose of abusing PAM's corporate form in order to divest assets from plaintiff for their benefit are conclusory. The allegations that the Icon defendants, as parent companies, controlled and performed PAM's executive operations, alone, are insufficient to raise an inference of abuse of the corporate form (see TNS Holdings v. MKI Sec. Corp., 92 N.Y.2d 335, 339, 680 N.Y.S.2d 891, 703 N.E.2d 749 [1998] ; Art Capital Bermuda Ltd. v. Bank of N.T. Butterfield & Son Ltd., 169 A.D.3d 426, 427, 94 N.Y.S.3d 29 [1st Dept. 2019] ). Thus, all the claims against the Icon defendants based on an alter ego or veil-piercing theory should have been dismissed. All other claims as against the Icon defendants should have been dismissed for failure to state a claim, as indicated infra.
Plaintiff has pleaded breach of the Management Agreement by alleging facts showing that PAM failed to maintain the prior approved insurance coverage or to give plaintiff notice of the modifications of the coverage; failed to notify plaintiff of any increase in insurance deductibles in excess of $5,000; failed to submit accurate monthly reports and all revenues to plaintiff; and failed to give plaintiff notice of the $85,000 liability incurred in connection with a Kings County personal injury action. To the extent defendants argue that the $85,000 liability constituted legal fees that are excluded from "costs of operation" that required prior approval, it is more appropriately resolved on summary judgment.
The claims for fraud (see Principia Partners LLC v. Swap Fin. Group, LLC, 194 A.D.3d 584, 584, 144 N.Y.S.3d 338 [1st Dept. 2021] ), breach of the implied duty of good faith and fair dealing (see Mill Fin., LLC v. Gillett, 122 A.D.3d 98, 104–105, 992 N.Y.S.2d 20 [1st Dept. 2014] ), and breach of fiduciary duty (see William Kaufman Org. v. Graham & James, 269 A.D.2d 171, 173, 703 N.Y.S.2d 439 [1st Dept. 2000] ) are dismissed as duplicative of the breach of contract claim. These claims all arise from the same allegations as those underlying the contract claim. Absent viable causes of action for fraud and breach of fiduciary duty, the aiding and abetting claims are dismissed (see Habberstad v. Revere Sec. LLC, 183 A.D.3d 532, 533, 122 N.Y.S.3d 888 [1st Dept. 2020] [aiding and abetting fraud]; Doppelt v. Denahan, 144 A.D.3d 573, 573, 42 N.Y.S.3d 107 [1st Dept. 2016], lv denied 29 N.Y.3d 903, 2017 WL 1169428 [2017] [aiding and abetting breach of fiduciary duty]).
Plaintiff has stated a claim for unjust enrichment and conversion based on allegations that PAM retained plaintiff's equipment, signages, and operating income after termination of the parties’ relationship (see Sebastian Holdings, Inc. v. Deutsche Bank AG, 78 A.D.3d 446, 447–448, 912 N.Y.S.2d 13 [1st Dept. 2010] ). The claims, insofar as based on other allegations, are duplicative of the breach of contract claim. As to the claim for an accounting, plaintiff has pleaded entitlement to the books and records under the contract and as an equitable remedy (see Atlantis Mgt. Grp. II LLC v. Nabe, 177 A.D.3d 542, 543, 113 N.Y.S.3d 79 [1st Dept. 2019] ; Morgulas v. Yudell Realty, Inc., 161 A.D.2d 211, 213, 554 N.Y.S.2d 597 [1st Dept. 1990] ).