Cornwall Mgt. Ltd. v Kambolin

Cornwall Mgt. Ltd. v Kambolin 2016 NY Slip Op 04680 Decided on June 14, 2016 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on June 14, 2016
Friedman, J.P., Andrias, Moskowitz, Kapnick, Webber, JJ.
862 653675/13

[*1]Cornwall Management Ltd., et al., Plaintiffs-Respondents,

v

Peter Kambolin, et al., Defendants-Appellants, Oleg Batrachenko, et al., Defendants.

Tannenbaum Helpern Syracuse & Hirschtritt LLP, New York (Paul D. Sarkozi of counsel), for appellants.

Moses & Singer LLP, New York (Robert D. Lillienstein of counsel), for respondents.

Order, Supreme Court, New York County (Melvin L. Schweitzer, J.), entered August 11, 2014, which, to the extent appealed from, denied defendants Peter Kambolin and Atlant Capital Holdings, LLC's motion to dismiss the cause of action for suit on judgment as against them, unanimously reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment dismissing the complaint as against said defendants.

The allegations that defendants Kambolin and Atlant Capital Holdings controlled and dominated defendant Thor United are insufficient to state a cause of action for alter ego liability (see e.g. 501 Fifth Ave. Co. LLC v Alvona LLC., 110 AD3d 494 [1st Dept 2013]; Morpheus Capital Advisors LLC v UBS AG, 105 AD3d 145, 153-154 [1st Dept 2013], revd on other grounds 23 NY3d 528 [2014]; Andejo Corp. v South St. Seaport Ltd. Partnership, 40 AD3d 407, 407 [1st Dept 2007]). The complaint alleges, upon information and belief, only that Kambolin, after relinquishing his interest in Thor United, continued to dominate it by controlling its bank account and decision making, and that Thor United and other entities controlled by Kambolin, including Atlant Capital, commingled funds and shared a business address. It alleges no specific facts to establish actions taken by Thor United or its owners in connection with the loans and the alleged scheme to avoid their repayment or that Kambolin's control of Thor United encompassed any such actions.

Nor does it allege any of the other factors that support a veil-piercing claim, such as a lack of corporate formalities or undercapitalization. Contrary to plaintiffs' argument, Tap Holdings, LLC v Orix Fin. Corp. (109 AD3d 167 [1st Dept 2013]) does not compel a different result. The operative pleading in Tap Holdings, unlike here, alleged that the owners of the entity whose veil the plaintiff sought to pierce abused the corporate form for the purpose of harming noteholders (id. at 175).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: JUNE 14, 2016

CLERK