Opinion
Index No. 654766/2022 Motion Seq. No. 007
01-09-2024
PETAL AND COMPANY PRODUCTIONS LLC, Plaintiff, v. NORWOOD CONSULTING GROUP LLC, ARTISTIC HOLIDAY DESIGNS LLC, HOLIDAY CREATIONS PRO, INC., DEREK NORWOOD Defendant.
Unpublished Opinion
PART 11M
MOTION DATE 08/09/2023
DECISION + ORDER ON MOTION
HON. LYLE E. FRANK, JUDGE
The following e-filed documents, listed by NYSCEF document number (Motion 007) 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 179, 180, 181, 182, 183, 189, 190, 191, 192, 193, 194, 195, 196, 197 were read on this motion to/for JUDGMENT - SUMMARY.
Background
This action involves a series of contracts for services performed in connection with the Amaze Light Festival. Plaintiff PET AL AND COMPANY PRODUCTIONS LLC ("plaintiff') commenced this action for breach of contract and unjust enrichment against defendants NORWOOD CONSULTING GROUP LLC, ARTISTIC HOLIDAY DESIGNS LLC, HOLIDAY CREATIONS PRO, INC., DEREK NORWOOD ("defendants") alleging defendants to pay plaintiff for work involving the design, installation, and eventual removal of various elements of the festival. Plaintiff now moves for summary judgement on its first, third, sixth, seventh and ninth causes of action.
Standard
It is a well-established principle that the "function of summary judgment is issue finding, not issue determination." Assaf v Ropog Cab Corp., 153 A.D.2d 520, 544 [1st Dept 1989], As such, the proponent of a motion for summary judgment must tender sufficient evidence to show the absence of any material issue of fact and the right to entitlement to judgment as a matter of law. Alvarez v Prospect Hospital, 68 N.Y.2d 320, 501 [1986]; Winegrad v New York University Medical Center, 64 N.Y.2d 851 [1985], Courts have also recognized that summary judgment is a drastic remedy that deprives a litigant of his or her day in court. Therefore, the party opposing a motion for summary judgment is entitled to all favorable inferences that can be drawn from the evidence submitted.
Discussion
i. Breach of Contract
To establish breach of contract a plaintiff must establish (1) the existence of a valid contract, (2) its own performance under the contract, and (3) defendant's breach of its obligations under the contract." Samson Lift Tech., LLC v Jerr-Dan Corp., 2014 NY Slip Op 33479[U], *3 (Sup Ct, NY County 2014).
Here, there is no dispute as to the existence of a series of contracts between the parties. Rather, plaintiff alleges it performed all obligations under the parties' contracts and moves for summary judgment on the grounds that defendant is in breach for failure to remit payment. In support of plaintiffs motion for summary judgment it submits images of what it alleges are the completed work it performed in connection with the contract, the affidavit of Petal's managing member Michael Guri, invoices it alleges are unpaid, and correspondence between the parties.
In opposition to plaintiffs motion for summary judgment, defendants contend there is a genuine dispute of material fact as to plaintiffs performance under the contracts, and thus summary judgment is not appropriate at this juncture. Defendants argue plaintiff performed substandard work and thus did not itself perform fully under the contract.
Here, Plaintiff has failed to establish their prima facie showing of entitlement to judgement as a matter of law. Plaintiffs images and correspondence between the parties do not establish as a matter of law plaintiffs performance and defendants' breach. The Court finds that the plaintiffs motion is premature. The Court agrees with defendants that there are questions of fact that require additional discovery. Thus, summary judgment as to plaintiffs breach of contract is denied.
ii. Tortious interference
To recover damages for tortious interference with contract, the plaintiff must prove the "existence of a valid contract with a third party, the defendant's knowledge of that contract, the defendant's intentional and improper procurement of a breach of that contract, and damages." Stuarts v. Edelman, 196 A.D.3d 711,712 (2d Dept 2021).
Next, plaintiff alleges Norwood, Chief Executive Officer and principal of Artistic Holiday, tortiously interfered with the parties' contracts when he "intentionally neglected to remit requisite payments to Plaintiff...That is, Norwood Consulting/Artistic Holiday's nonpayment led to a breakdown in relations between the parties." However, plaintiff further acknowledges, "Norwood signed the Festival Contracts on behalf of Artistic Holiday." As such, if Norwood was acting as an agent of Artistic Holiday, there was no interference in a third-party contract, and the allegation rather is duplicative of its breach of contract for nonpayment claim.
Moreover, even assuming Mr. Norwood was a third party for the purposes of a tortious interference claim, plaintiff has still failed to establish its prima facie case. Plaintiff alleges, "Norwood subsequently fabricated a story involving an alleged failure by Plaintiff to carry out its obligations under the Festival Contracts to justify nonpayment. This sequence of actions - the deliberate nonpayment, the false promises, the creation of an unfounded narrative to support nonpayment, and Plaintiffs resulting damages in the amount of at least $451,693.60 - collectively establish tortious interference with contract." However, plaintiff s allegations are conclusory. Thus, summary judgement as to plaintiffs tortious interference claim is denied.
iii. Anticipatory Repudiation
Next, plaintiff seeks summary judgment on its claim for anticipatory repudiation. Plaintiff alleges defendants "unmistakably demonstrated their refusal to honor the Festival Contracts" by failing to remit payment. Plaintiff s anticipatory repudiation claim is premised on the same conduct as its breach of contract claim, failure to remit payment under the contracts at issue. For the same reasons set forth above, the Court summary judgment is premature.
iv. Declaratory Judgment
Next, plaintiff alleges "Artistic Holiday had been operating under a different name, Norwood Consulting, a fact that Defendant consciously chose not to disclose to Plaintiff." Plaintiff alleges as such, "this lack of transparency, combined with the absence of the name "Norwood Consulting" on the Festival Contracts, clearly evidences that Norwood was acting as an agent of an undisclosed principal (Norwood Consulting) and thus, Norwood is personally liable to Plaintiff for the Festival Contracts. However, defendant denies the existence of an undisclosed principal and contends the parties to the agreement are clearly stated and legitimate participants.
The Court finds plaintiff has failed to establish it is entitled to such declaratory judgment. Plaintiff only supports its assertions with conclusory statements and thus has not presented sufficient evidence to support a finding of summary judgement.
v. Piercing of the Corporate Veil
A party seeking to pierce the corporate veil must establish (1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiffs injury. Skanska USA Bldg. Inc. v Atlantic Yards B2 Owner, LLC, 146 A.D.3d 1 (1st Dept 2016). In determining whether piercing of the corporate veil is warranted, New York Courts will consider factors such as 1) the absence of the formalities and paraphernalia that are part and parcel of the corporate existence, i.e., issuance of stock, election of directors, keeping of corporate records and the like, (2) inadequate capitalization, (3) whether funds are put in and taken out of the corporation for personal rather than corporate purposes (4) overlap in ownership, officers, directors, and personnel, (5) common office space, address and telephone numbers of corporate entities, (6) the amount of business discretion displayed by the allegedly dominated corporation, (7) whether the related corporations deal with the dominated corporation at arm's length, (8) whether the corporations are treated as independent profit centers, (9) the payment or guarantee of debts of the dominated corporation by other corporations in the group, and (10) whether the corporation in question had property that was used by other of the corporations as if it were its own." Shisgal v. Brown, 21 A.D.3d 845 (1st Dept 2005).
Here, the Court finds plaintiff has failed to make the necessary showing for the Court to find Derek Norwood personally liable as a matter of law. Defendant concedes to revenue issues but contends such issues do not rise to the level of undercapitalization. Plaintiff has not presented enough evidence to established by a preponderance of the evidence Artistic Holiday was undercapitalized. Regardless, as discussed above, undercapitalization alone is not sufficient to warrant a finding of individual liability in disregard of the corporate form.
vi. Unjust enrichment
Lastly, the Court finds plaintiff has failed to establish its prima facie case for unjust enrichment for the same reasons set forth above.
Accordingly, it is hereby
ADJUDGED plaintiffs motion for partial summary judgement is denied in its entirety.