Opinion
No. 39007–11.
2012-09-20
SMAX PLUMBING, LLC, d/b/a Solar Services, Plaintiff, v. H. BITTLE & SON TOPSOIL, INC., George Heinlein, Leisure Lifestyle Homes, Inc., Westview Management, Inc., Renaissance 134 Corp., Babylon Woods Corp., Estates at Melville Hills, LLC, Greenstar Enterprises, Inc., Margaret Cardy, Llc, R.I. Miller Place Corp., Rod Staten Corp., Staten Sketch Corp., HMD Family Corp., Cottage Properties LLC and Toussie Group Ltd., Defendants.
Traub Lieberman Straus & Shrewsberry LLP, Hawthorne, for Plaintiff. Ansanelli Law Group, LLP, Amityville, for Defendants Toussie Group Ltd., Staten Sketch Corp., Greenstar Enterprises, Inc., R.I. Miller Place Corp., Margaret Cardy LLC, Rod Staten Corp., HMD Family Corp., and Babylon Woods Corp.
Traub Lieberman Straus & Shrewsberry LLP, Hawthorne, for Plaintiff. Ansanelli Law Group, LLP, Amityville, for Defendants Toussie Group Ltd., Staten Sketch Corp., Greenstar Enterprises, Inc., R.I. Miller Place Corp., Margaret Cardy LLC, Rod Staten Corp., HMD Family Corp., and Babylon Woods Corp.
ELIZABETH H. EMERSON, J.
ORDERED that this motion by the defendants Toussie Group, Ltd.; Staten Sketch Corp.; Greenstar Enterprises, Inc.; R.I. Miller Place Corp.; Margaret Cardy LLC; Rod Staten Corp.; HMD Family Corp.; and Babylon Woods Corp. for an order dismissing the complaint insofar as it is asserted against them is granted insofar as the fourth, fifth, and sixth causes of action are asserted against them; and it is further
ORDERED that the motion is otherwise denied.
The plaintiff commenced this action to recover damages for plumbing and HVAC services performed at residential properties that are allegedly owned, operated, managed, and/or controlled by the defendants. The first three causes of action seek to recover $206,913.64 for work purportedly performed by the plaintiff at 11 properties commencing in May 2009. The fourth, fifth and sixth causes of action seek to recover $16,260.74 for work purportedly performed by the plaintiff at seven different properties commencing in September 2007. The plaintiff began doing business in February 2009, but it did not file its articles of organization with the Secretary of State until April 2010.
The moving defendants seek dismissal of the complaint on various grounds. The moving defendants contend that the plaintiff is attempting to stand in the shoes of another entity, Solas Plumbing Corp. (“Solas”), and recover for plumbing work performed by Solas for III Millennium Homes LLC (“Millennium”), an entity related to the moving defendants. Relying on a November 2006 agreement between Solas and Millennium, the moving defendants contend that the plaintiff lacks standing and capacity to sue, that there is no privity of contract between the plaintiff and the moving defendants, that Solas is a necessary party to the action, that the November 2006 agreement includes a mandatory arbitration clause, that a release executed by Solas in September 2010 released the defendants from liability for the plaintiff's claims, that the complaint is not sufficiently particular, and that it fails to state a cause of action against them. Finally, the moving defendants seek to sanction the plaintiff for frivolous conduct.
In opposition, the plaintiff acknowledges that, in November 2006, prior to the formation of SMAX Plumbing, LLC (“SMAX”), Solas entered into a contract with Millennium to perform plumbing work on a residential development located in Amityville, New York. The plaintiff also acknowledges that Solas performed the work and that it released the defendants HMD Family Corp. and Renaissance 134 Corp. from any claims with respect thereto in September 2010. The plaintiff contends that the defendants thereafter retained SMAX (d/b/a Solas Services) to perform new work, which was not covered by the November 2006 agreement or September 2010 release. The plaintiffs also contend that Solas Plumbing Corp. assigned all of its accounts receivable to SMAX on September 1, 2010.
On a motion to dismiss pursuant to CPLR 3211, the sole criterion is whether the pleading states a cause of action and if, from its four corners, the factual allegations, taken together, manifest any cause of action cognizable at law (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275). The court is to liberally construe the complaint, accept the alleged facts as true, and give the plaintiff the benefit of every possible favorable inference (Leon v. Martinez, 84 N.Y.2d 83, 87). A court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint (Rovello v. Orofino Realty, 40 N.Y.2d 633, 635). When evidentiary material is considered, the inquiry turns from whether the complaint states a cause of action to whether the plaintiff actually has one. Unless it can be shown that a material fact as claimed by the plaintiff is not a fact at all and that no significant dispute exists regarding it, the complaint should not be dismissed ( Guggenheimer v. Ginzburg, supra at 275). Under CPLR 3211(a)(1), dismissal is warranted only if the documentary evidence submitted utterly refutes the plaintiff's factual allegations, conclusively establishing a defense to the asserted claims as a matter of law (Goshen v. Mut. Life Ins. Co., 98 N.Y.2d 314, 326).
The court finds that the documentary evidence submitted by the moving defendants fails to conclusively establish that the plaintiff's claims are governed by the November 2006 agreement between Solas and Millenium and the subsequent release. It is undisputed that the November 2006 agreement covered plumbing work performed by Solas at a residential development located in Amityville, New York. The complaint reveals that the plaintiff's claims are for plumbing work performed at various locations in Bellport, Medford, Huntington, Coram, Wyandanch, Centereach, Mastic Beach, and North Amityville, New York. Accordingly, the branches of the moving defendants' motion which are to compel arbitration and to dismiss the complaint due to lack of standing, lack of capacity, lack of privity, a binding release, the absence of a necessary party, and documentary evidence are denied.
The moving defendants contend that the plaintiff may not recover for plumbing services performed before it filed its articles of organization with the Secretary of State in April 2010 and before it was licensed by the Suffolk County Department of Consumer Affairs in September 2011.
CPLR 3015(e) requires that, in an action brought by a home-improvement contractor against a consumer, the contractor must plead that he is licensed by the Suffolk County Department of Consumer Affairs or face dismissal of the action pursuant to CPLR 3211(a)(7), for failure to state a cause of action. Courts have denied motions to dismiss when the consumers involved do not fall within the intended class of persons sought to be protected from fraudulent practices by home-improvement contractors, e.g. real estate developers, commercial property owners, and general contractors ( see, Toulouse v. Chandler, 5 Misc.3d 1005[A] [and cases cited therein] ). In Matter of Migdal Plumbing & Heating Corp. (Dakar Developers), (232 A.D.2d 62, 65–66), the court interpreted the term “consumer” in CPLR 3015(e) to mean a person, family, or household, or someone who actually resides in the dwelling unit where the work was performed. The moving defendants are not consumers within the meaning of CPLR 3015(e). Accordingly, the court declines to dismiss the action against them because the plaintiff was unlicensed when it performed the work.
A limited liability company is formed at the time of the filing of its articles of organization with the Department of State (Limited Liability Company Law § 203[a] ). Although the plaintiff contends that it was formed in February 2009, it did not file its articles of organization with the Secretary of State until April 2010. Thus, the plaintiff was not in existence prior to April 2010 and lacked the capacity to enter into contracts prior to that time ( see, Rubenstein v. Mayor, 41 AD3d 826, 828). However, one who contracts with or otherwise deals with an entity as a corporation thereby admits that it is a corporation and is estopped from denying the corporate existence in any action arising out of such contract or dealing ( see, Nemard Constr. Corp. v. Deafeamkpor, 21 Misc.3d 320, 323;see also, Rubenstein v. Mayor, supra ). The court finds that the moving defendants are estopped from denying the validity of the plaintiff's status as a limited liability company between February 2009, when the plaintiff claims it was formed, and April 2010, when its articles of organization were filed with the Secretary of State. Prior to February 2009, it is undisputed that the plaintiff did not exist as a limited liability company. Accordingly, the fourth, fifth, and sixth causes of action are dismissed insofar as they are asserted against the moving defendants.
Liberally construing the complaint, accepting the alleged facts as true, and giving the plaintiff the benefit of every possible favorable inference (Leon v. Martinez, 84 N.Y.2d at 87), the court finds that the remaining causes of action are sufficiently particular to give the court and the parties notice of the transactions, occurrences, or series of transactions or occurrences intended to be proved and the material elements of each cause of action (see, CPLR 3013). Accordingly, the court declines to dismiss the first, second, and third causes of action insofar as they are asserted against the moving defendants.
In view of the foregoing, the branch of the moving defendants' motion which is to sanction the plaintiff for frivolous conduct is denied.
Finally, the doctrine of judicial estoppel does not apply to preclude a party from taking a position in an action that is contrary to or inconsistent with a position previously taken by that party unless the earlier position gained judicial acceptance in some manner, i.e., a favorable judgment in a prior proceeding or a favorable ruling at an earlier stage of the same proceeding ( see, Ferreira v. Wyckoff Heights Med. Ctr, 12 Misc.3d 1180[A] at *3–*5 [and cases cited therein], affd24 Misc.3d 91 [App Term]; affd81 AD3d 587). While the plaintiff's current position may be inconsistent with prior positions asserted in this action and in another action pending in this court entitled Weinstein et al v. East End Plumbing LLC and Smax Plumbing LLC (Index No. 25629–11), the moving defendants do not contend, nor does the record reflect, that those prior positions gained judicial acceptance in any manner. Accordingly, the doctrine of judicial estoppel is inapplicable to the facts of this case.