Yellow Book of NY, Inc. v Midtown Karate Dojo, Inc.
Annotate this CaseDecided on January 18, 2006
District Court of Nassau County, First District
YELLOW BOOK OF NEW YORK, INC. f/k/a YELLOW BOOK OF NEW YORK, L.P., Plaintiff(s)
against
MIDTOWN KARATE DOJO, INC. and DAVID BAKER, Defendant(s)
1259/04
Goldman, Horowitz & Cherno, LLP, attorneys for Plaintiff, 900 Merchants Concourse, Suite 414, Westbury, New York 11590, 516-228-0348; Law Offices of Gamiel A. Ramson, attorneys for Defendant, 277 Broadway, New York, New York 10007, 212-962-0801.
Scott Fairgrieve, J.
Plaintiff brings an action to recover $6,588.00 for advertising printed in plaintiff's Yellow Pages for the period March 28, 2002 through June 30, 2003.
Plaintiff claims that 12 monthly payments in the sum of $549.00 were to be paid pursuant to the contract dated March 28, 2002, for a total of $6,588.00. Additionally, attorney fees of $2,195.00 are sought pursuant to paragraph 13 of the contract.
The contract was executed by David Baker as President of Midtown Karate Dojo, Inc. The contract submitted is cut off in part on the left margin side. However, the contract refers the signer to paragraph 15 on the reverse side which states: 15 A).The person signing this agreement warrants that he is authorized to sign it. B). The signer of the contract, does by his execution of this agreement, personally undertake and assume the full performance hereof including payments of amounts [*2]due hereunder.
Based upon the above, plaintiff contends that the defendant Midtown Karate Dojo, Inc. is liable because David Baker signed on behalf of the corporation as President. Additionally, plaintiff further contends that David Baker agreed to be individually liable for the debt pursuant to paragraph 15.
Plaintiff's attorney states that "Individually and for Company" appears below the signature of David Brown; this is cut off on the copy of the contract given to the court.
The affidavit of David Brown, dated October 20, 2005, fails to refute that the advertising was placed by defendant. Mr. Brown denies any intent to be personally bound by the contract and attacks the contract print size as void pursuant to Personal Property Law Section 402(1).
Mr. Brown claims that the Yellow Book representative fraudulently induced him to execute the contract because "consumers use the defendant Yellow Book, more than its chief competitor, Verizon Yellow Pages." However, no factual basis is provided to the Court to establish the fraudulent basis of this statement.
Defendants also attack the contract because a fully executed contract was not received by them.
DISCUSSION
Plaintiff cites Yellow Book Co., Inc. v. Mega, 190 Misc 2d 108, 736 NYS2d 832 (App. Term, 2d Dept 2001) for the proposition that defendant Brown is personally liable. In Yellow Book Co., the court held that the individual was personally liable because: As previously held by this court in Yellow Book Co., Inc. v. Baum (N.Y.L.J., Jan. 2, 2001, [App. Term, 9th & 10th Jud. Dists.]), which involved the same unambiguous contract, the aforementioned language made the individual defendant aware that by signing the subject contract, she was personally bound thereby and would be liable for any nonpayment thereof. While defendant Mega contends that by writing the letters "PRS" (to indicate that she was president of the corporate defendant) after her signature she was not incurring personal liability, such contention is without merit (see, Valley Stream Aluminum Mfg. Co. v Levitt, N.Y.L.J., May 5, 1997 [App. Term, 9th & 10th Jud Dists]). Contrary to the lower court's findings, this is not a case where the plaintiff attempted to "trap an unwary person" into making an unintended assumption of personal liability by inserting an obscure clause in the midst of a lengthy and complex contract (Yellow Book Co., Inc. v. Baum, supra; Yellow Book of New York LP v. Kim, 2001 WL 1700320, decided herewith; see, Florence Corp. v. Penguin Constr. Corp., 227 AD2d 442, 642 NYS2d 697; Goodfellow Auto Body [*3]Supplies of Alluminum Mfg. Co. v. DeMarco, N.Y.L.J., June 25, 1999 [App. Term, 9th & 10th Jud Dists]; Valley Stream Aluminum Mfg. Co. v. Levitt, supra; cf., Salzman Sign Co. v. Beck, 10 NY2d 63, 217 NYS2d 55, 176 N.E.2d 74).
However, in Yellow Book v. DePante, 309 AD2d 859, 766 NYS2d 44 (App. Div., 2nd Dept 2003), the Second Department held that a question of fact existed as to whether the individual was personally liable based upon the same language present in this case: The individual defendant, Dominick DePante, an office manager employed by the corporate defendant, Boulevard Carriage Corporation, printed and signed his name on the face of two advertising form contracts executed on behalf of the corporate defendant. A clause on the reverse side of the contract provided that "the signer of the contract, does, by his execution of this agreement, personally undertake and assume the full performance hereof including payments of amounts due hereunder." An agent who signs an agreement on behalf of a disclosed principal will not be held liable for its performance unless the agent clearly and explicitly intended to substitute his personal liability for that of his principal (see Savoy Record Co. v. Cardinal Export Corp., 15 NY2d 1, 4-6, 254 NYS2d 521, 203 N.E.2d 206; Salzman Sign Co. v. Beck, 10 NY2d 63, 67, 217 NYS2d 55, 176 N.E.2d 74; Star Video Entertainment v. J & I Video Distrib., 268 AD2d 423, 702 NYS2d 91; American Media Concepts v. Atkins Pictures, 179 AD2d 446, 578 NYS2d 193; Paribas Props. v. Benson, 146 AD2d 522, 536 NYS2d 1007). Although DePante printed his name beside the corporation's name and signed the form contracts, there is a triable issue of fact as to whether he should be held personally liable for the amounts due under these advertising agreements (see Bank of NY v. Zator, 274 AD2d 488, 712 NYS2d 382; Star Video Entertainment v. J & I Video Distrib., supra; American Media Concepts v. Atkins Pictures, supra; cf. Florence Corp. v. Penguin Contr. Corp., 227 AD2d 442, 642 NYS2d 697).
Based upon the above, the Court finds that a question of fact exists requiring a trial to determine whether defendant David Brown is individually liable for the contract.
However, the Court grants summary judgment in favor of the plaintiff against the corporation defendant because Mr. Brown executed the contract on behalf of the corporate defendant which is bound by the signature of its agent. See, Bank of India v. Wegard Myers, 257 AD2d 183, 691 NYS2d 439 (1st Dept 1999). The Court rejects defendant's claim of fraud because there is no basis to support the alleged misrepresentation that consumers use Yellow Book more than Verizon Yellow Pages; thus, there is no issue of fact created. See, Kovach v. Hinchey, 276 AD2d 942, 714 NYS2d 791 (3d Dept 2000).
The Court rejects defendant's claims that the within contract is subject to Article 4 of the NY Personal Property Law. The contract is not subject to the size print requirement of the NY Personal Property Law because this constitutes a commercial transaction and not a consumer oriented [*4]agreement. See, Granite Auto Leasing Corp. v. Jeff-Mar Bus Leasing Corp., 44 AD2d 553, 353 NYS2d 217 (2nd Dept 1974).
Lastly, the failure of the plaintiff to sign the contract does not affect its validity where the parties have acted in reference to the agreement and by conduct have indicated to be bound by same. 22 NY Jur. 2d, Contracts, Section 18; Consarc Corp. v. Marine Midland Bank, 996 F.2d, 568 (C.A.2 NY, 1993).
CONCLUSION
Plaintiff is granted summary judgment against the corporate defendant Midtown Karate Dojo, Inc., for the principal amount demanded in the complaint, together with interest and the attorneys fees requested.
The claim against the individual David Brown is severed because issues of fact exist as to his personal liability. This case is set down for a discovery conference in Civil 3, Room 279, District Court Nassau County, 99 Main Street, Hempstead, New York, on the 1st day of February, 2006 at 9:30 a.m.
The foregoing constitutes the Decision and Order of the Court.
So ordered:
DISTRICT COURT JUDGE
Dated:January 18, 2006
CC:Goldman, Horowitz & Cherno, LLP
Law Offices of Gamiel A. Ramson
SF/mp
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