Schenker, Inc. v Ashkenazie

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Schenker, Inc. v Ashkenazie 2012 NY Slip Op 30167(U) January 23, 2012 Supreme Court, New York County Docket Number: 112721/10 Judge: Eileen A. Rakower Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. ANNED ON 112512012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK L *K,B DPCQEhlT* - NEW YORK COUNTY LUCK- Index Number : 112721/2010 SCHENKER, INC. //a 74/0 INDEX NO. vs ASHKENAZIE, ISAAC MOTION DATE ,5 Sequence Number : 001 MOTION SEQ. NO. COMPEL DISCLOSURE MOTION CAL. NO. PAPERS NUM@ERED Notice of Motion/ Order to Show Cause - Affidavits - Exhibits .. z ... L Answering Affldavks - Exhibits Replying Affidavlts C ' bs s-Mot ion : x e s 0 NO Upon the foregoing papers, it is ordered that this motlon Check one: E FINAL DISPOSITION $ NON-FINAL DISPOSITION a DO NOT POST 0 REFERENCE 0 SETTLE ORDER /JUDG. 0 SUBMIT OIRDER/JUDG. Check if appropriate: [* 2] Plaintiff, - against - ISAAC ASHKENAZIE d/b/a TV & Computer Sales, TV & Furniture Sales, and Efumiture, TV & COMPUTER SALES, INC., EFURNITURE SALES, N C , and SHOPDIGITAL ONLINE. COM COW. d/b/a Efurniture, Defendants. Index No. 112721/10 ORDER AND DECISION Mot. Seq.: 001 FILED JAN 25 2012 Plaintiff, Schenker Inc., a company which provides transportation and freight services, brings this action for breach of contract, account stated and quantum meruit. Plaintiff provided freight seririces for defendants, after merging with its predecessor, non-party Bax Global, Inc. ( Bax ) in 2009, and taking over Bax s accounts. Defendants are alleged to have defaulted on payments in the total amount of $100,387.97. Defendants counterclaim in the amount of $3 8,400.00, alleging that plaintiff caused the subject goods to be damaged, destroyed, lost or stolen, and unusable, and that plaintiff over billed for its transportation services. Plaintiff alleges in its complaint that individual defendant Isaac Ashkenazie, among other things, disregarded the corporate formalities of defendants TV & Computer Sales ( TVCS ), Efurniture Sales, Inc. ( Efurniture ) and Shopdigitalonline.corn Corp. d/b/a Efurniture ( Shopdigital ) (collectively corporate defendants ), and that he exerted complete dominion and control over the corporate defendants. Plaintiff also alleges that Ashkenazie submitted misleading and selfreferencing Commercial Credit Applications for Shop Digital and TVCS in order to deceive Bax ... and obtain commercial credit . , . without proper capitalization , . . 3, 1 [* 3] 4 Plaintiff now moves to compel a response to its discovery demands served upon defendants in November 20 10. Defendants cross-move to dismiss the action as against Isaac Ashkenazie individually. In support of their cross-motion, defendants submit: a printout from the N Y S Department of State Division of Corporations, a printout from the Better Business Bureau ( BBB );the printout of an article from the BBC; and a copy of the pleadings. Defendants claim that plaintiff cannot pierce the corporate veil because all business was conducted under Shopdigital and not multiple entities, as alleged by plaintiff. Any irregularities contained in the credit applications, defendants assert, is due to the instructions of Bax s then account manager. In opposition to the cross-motion, plaintiff submits the entity information for Shopdigital, TVCS and Ehrniture, which shows that both TVCS and Efurniture are registered in New York under the same service address, and TVCS is incorporated in New Jersey. Plaintiff also submits the credit applications, one of which is for Shopdigital and the other for TVCS. Plaintiff points out that both applications list the same business locations, phone numbers, Federal Ids, and bank account numbers. Plaintiff argues that the motion is premature as there has been no discovery produced by defendants regarding the corporate entities, and that the numerous irregularities contained in the credit applications warrant denial of the motion. In support of its motion to compel, plaintiff points out that defendants have failed to respond to discovery demands and notice of deposition for Ashkenazie served upon them in November 2010. Included in its demands are, for example: corporate minute books, corporate resoultions, financial statements, tax returns, leases, bills and invoices for the corporate defendants. The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. That party must produce sufficient evidence in admissible form to eliminate any material issue of fact from the case. Where the proponent makes such a showing, the burden shifts to the party opposing the motion to demonstrate by admissible evidence that a factual issue remains requiring the trier of fact to determine the issue. The affirmation of counsel alone is not sufficient to satisfy this requirement. ( Zuckerman v. City of New York, 49 N.Y.2d 557 [ 19801). In addition, bald, conclusory allegations, even if believable, Corp., are not enough. (Ehrlich v. American Moninger Greenhouse Mfgg. 26 N.Y.2d 2 [* 4] 255 [ 19701). ( Edison Stone Corp. v. 42nd Street Development Corp.,145 A.D.2d 249,25 1-252 [ 1st Dept. 19891). The affirmation of counsel alone is not sufficient to satisfy this requirement. (Zuckerman, supra). Initially, pursuant to CPLR 3212(f), a motion for summary judgment is premature if there appears to be facts essential to justify opposition which exist, but are presently unavailable to the party opposing the motion. Moreover, a fact-laden claim to pierce the corporate veil is particularly unsuited for resolution on summary judgment. (ForumIns. Co.v. Texarkoma Tramp. Co., 229 AD2d 341 [19961). The corporate veil can be pierced where there has been, inter alia, a failure to adhere to corporate formalities, inadequate capitalization, use of corporate funds for personal purpose, overlap in ownership and directorship, or common use of office space and equipment. (Id. at 342). Here, even the limited evidence in plaintiff s possesion raises issues of fact for resolution at trial. The credit applications list two different corporations with identical contact, tax and banking information. Pursuant to CPLR 3 124: If a person fails to respond to or comply with any request, notice, interrogatory, demand, question or order under this article . . . the party seeking disclosure may move to compel compliance or a response. Despite having served discovery demands several months ago, defendants have failed to object to the requests, or produce the requested documents and answers to the interrogatories. Wherefore it is hereby ORDERED that the motion to compel is granted; and it is further ORDERED that defendants shall respond to plaintiffs discovery demands and interrogatories within 10 DAYS of service of a copy of this Order with notice of entry; and it is further ORDEmD that the failure to respond to timely respond will be deemed willful 3 [* 5] and cbntumacious; and it is further ORDERED that the cross-motion is denied; and it is further ORDERED that the parties shall appear for a preliminary conference on Tuesday March 20, 2012 at 9:30 a.m. in Room 308 at 80 Centre Street. DATED: January 23,2012 EILEEN A. M O W E R , J.S.C. FILED JAN 25 2012 NEW YORK COUNTY CLERK'S OFFICE 4

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