Commissioners of the State Ins. Fund v Ramos

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Commissioners of the State Ins. Fund v Ramos 2012 NY Slip Op 31674(U) June 6, 2012 Supreme Court, New York County Docket Number: 402464/05 Judge: Milton A. Tingling 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 612512012 [* 1] [* 2] SUPREME COURT OF THE STATE OF NEW YORK-COUNTY OF NEW YORK Plaintiff, -againstDECISION Manuel Ramos, Lenny Pereira and J. M. R. Concrete Corp., Dcfendants, -and- J. M. R. Concrete of Long Island Corp., After trial, the Court hereby finds and decides the following: In an action captioned The Commissionerg of the State Insurance Fund vs. J. M. I t Concrete of L a w Island Corp., Index No.: 404300-1997, Supreme Court, New York County, the Plaintiff received a judgmcnt. The judgment was for earned workers compensation insurance premiums which had bcen dcterrnined to be due for periods ending March 12,1996, when its coverage was cancelled for Policy No. 692-451-8. In a complaint dated July 25,2005, the Plaintiff brought an action against Manuel Ramos, Lenny Pereira and J. M. R. Concrete Corp., Defendants and J. M. Ti. Concrete of Long Island Corp., Judgment Debtor. Thc complaint alleged that Defendants Ramos and I ercira wcre two of the thrce shareholders of Officers and Directors of the Judgment Debtor; that State Insurance Fund ( SIF ) issued a policy providing workers compensation insurance coverage to the Judgment Debtor (the Policy ). On March 12,1996, SIF cancelled the Policy for non-payment of premiums due. J. M. R. Concretc Corp. ( J. M. R, ) and still is a domestic corporation. J. M. R. was was incorporated on January 11, 1996 shortly before the Policy was cancelled by S I F. Ramos [* 3] and Percira causcd ,J. M. R. to be incorporated; at all times relevant to this action Ramos and Pereira were and still arc the solc shareholders, officers and shareholders of J. M. R. J. M. K.was incorporated bccause the Judgment Debtor has accumulated debts and obligations which Hamos and/or Pcreira wanted to avoid paying, including thc debt duc to SIF, and Ramos and/or Pereira wanted to continue the business operations that the Judgment Debtor has prcviously conductcd. In thc aforementioned action, Plaintiff received a judgment entered May 6,2004 for the sum of $41 1,026.35 together with interest thercon from May 6,2004 which remains due and unpaid. ~ SIF is a crcditor of the Judgment Debtor whose claim has matured under Dcbtor and Creditors Law section 278. Ramos and/or Pereira causcd and directed the Judgmcnt Debtor to transfer certain personal propcrty including construction cquiprncnt, money, accounts receivable, office furniture, telcphone numbers, their office spacc, corporate opportunities, indeed the Judgment Debtor s entire business operation, short of the liabilities and other property to J. M. R., as well as causing J. M. R. to adopt a new name which is strikingly similar to thc namc of the ,Judgment Debtor. All of the property refcrred to as mentioned in the prior paragraph is referred to as the Transfers . Simultaneous with the making of the Transfcrs, the Judgment Debtor ccased its business operations. At the commencement of its business operations, J. M. K.used substantially the same employees as were used by the Judgment Debtor prior to the timc its business operations ceased, continued to perform substantially the same type of work that was performed by the Judgment Debtor and served the same clients as were serviced by the Judgment Debtor. -2- [* 4] 3. M. R. is a continuation of the .Judgment Debtor s business, albeit undcr a differcnt corporation. The Transfers were madc without consideration. The Transfers were not made in goad faith. The Transfers were made with Ramos and o r Pereira s approval and at thcir direction. The Transfers werc fraudulcnt as to SIF. As a result, SIF is unable to collcct the Judgment from the Judgment Debtor. Defendants submit three affirmative defenses. 1) That the Plaintiffs claims for fraudulent conveyancc pursuant to Debtor and Creditor Law are barred by the applicable Statue of Limitation; 2) The Pl?intiffs cause of action should be dismissed based on the equitable doctrine of laches; 3) The Plaintiff s Verified Complaint fails to state a cause of action for piercing the corporatc veil or alter ego theory. Dcfcndant Lenny Pereira alleged twenty-three (23) affirmative defenses and two (2) cross claims. The only relevant affirmative defenses are: 1) failure to state a cause of mtion; 2) the claims are barred by the appropriate statuc of limitations; 3) the claims are barred by the equitable doctrine of laches; 20) the claims arc barred in whole o r in part because the Plaintiff failed to reasonably attempt to collect its judgment from the judgment debtor; 21) Plaintiffs claim for interest is barred by the doctrine that interest if any is to be awarded in this type of action only from the date of judgment if any; 22) Defendant is not liable for the dcbts of the judgment debtors or any other party; 23) Defendant did not exercise complete domination over either corporate defendant, nor did he use either corporate defendant or others as his alter egos. -3- [* 5] Defendant Pereira also alleges as a cross claim; 1) that if he is liable to Plaintiff in the m nner alleged in the complaint, all of which are denied by the Defendant, then such darnagcs and injurics were caused by the negligent and or intentional actions of Defendants Manual Ramos and J. M. R. Concrete Corp.; 2) Cross Claim Dcfendant Manuel Ramos owed Defendant Lenny Yereira a fiduciary duty on account of their business relationship. Prior to trial on this matter, Plaintiff settled individually all claims against Dcfendant Lenny Pereira. Trial was held and testimony taken from examinations beforc trial of several persons including the Defendants, employees of the Defendants and employers of thc Plaintiff. Defendants Yereira and Ramos also testified. The testimony of Lcnny Percira was in a nutshell, that he had been a one third partner in J. M. R. Concrete of Long Island Corp; that one day Manuel Ramos approached him and told him they were going to shut down that Corporation and form J. M. K.Concretc Corporation in which hc and Ramos would be SO pcrcent equal owncrs. Pereira testified that although a one third owner in J. M. R. Concrete of Long Island Corporation, he was primarily a laborer and had little o r no contact with office administration o r administrativc decisions. His testimony was that he signed documents put in front of him; but relevantly he knew he was a one third partner in J. M. C. Concrete of Long Island and then IL SO% partner in J. M. R. Corporation. Pereira also testified that there was a seamless transition from J. M. R. Concrete of Long Island to J. M. R. Corporation. Employees of Old J. M. R. Concrete of Long Island worked for the New J. M. R. Corporation. All accounts receivable from J. M. C. Concrete of Long Island wcre deposited as J. M. R. Corporation. -4- [* 6] He testified that thc New J. M. R. had the same cmployees, the same officers, same address and that co-defendant Hamos ran the Old J. M. R., the New J. M. K.and made all decisions. He further testified that the Old J. M. R. wrote checks to the New J. M. R. and that the New J. M. H. had no money. He stated that he personally invested no money in the New J. M. R. Parts of the depositions testimony of Nina Palumbo, secretary at Old and New J. M. R. and Manny Ramos were read into the record. The deposition of Nina Yalurn bo indicated nothing changed, salary or job, from Old to New J. M. R. The deposition of Manny Ramos stated that a firc in the offices of the New J. M. R. in the year 2000 w h k h destroyed all records before 2000, that the New J. M. R. was named after his son Jason Michael Hsimos and that Old J. M. K.ceased doing business in 1996. He tcstified that the New -1. M. R. began in 1997 and no stock certificates were issued. He also stated that he, Pereira and Lcnny Scidin wcrc one third partners in Piedmont Realty which owned the building in which the Old and Ncw ,J. M. R. had offices. The phone numbers for the Old and Ncw J. M. R. were thc same, with the same furniture. Ramos alleges that the New J. M. R. purchased some furniture from the Old J. M. R. but the records were dcstroyed in the fire. To paraphrase famous legal dicta, this Court cannot define b.s. but it knows it when it smells it. The Court finds as a matter of law that The State Insurance Fund is a creditor of the judgment debtor and Debtors and Creditors Law sect 278. Ramos and Pereira made transfers from the Judgment Debtor simultaneously while shutting down the business of same. The transfers to the New J. M. R. were made without consideration. The transfers werc not made in good faith. The transfers made the Judgment Debtor insolvent. The transfers -5- [* 7] were fraudulent as to The State Insurance Fund. The Court finds that the New J. M. R. is the alter ego of the Judgment Debtor. The cross claims of Percira are hereby dismissed. Thc Court also finds that the Ncw J. M. K.is the altcr ego of the Judgment Debtor and that Hamos and Pereira are severally liablc for one half each of the judgment with interest. Judgmcnt is awarded to Plaintiff for $ 411,026.3s plus interest from May 6 , 2004. Scttle ,Judgment on Noticc. %9f- Datc: Jqne6, 2012 .I. -6- s. c.

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