Boglioli v Advantage Diagnostics Inc.

[*1] Boglioli v Advantage Diagnostics Inc. 2007 NY Slip Op 51300(U) [16 Misc 3d 1105(A)] Decided on June 25, 2007 Supreme Court, Nassau County Austin, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 25, 2007
Supreme Court, Nassau County

Lauren R. Boglioli, M.D., Plaintiff,

against

Advantage Diagnostics Inc. and John Chiaino, Defendants.



06-019637



COUNSEL FOR PLAINTIFF

Anthony T. Scotto, Esq.

585 Stewart Avenue

Suite 306

Garden City, New York 11530

COUNSEL FOR DEFENDANT

John Chiaino, Pro Se

7 Oliver Street

Port Jefferson Station, New York 11776

Leonard B. Austin, J.

Plaintiff Lauren R. Boglioli, M.D. ("Boglioli") moves for a default judgment against Defendant Advantage Diagnostics Inc. ("Advantage") and summary judgment against Defendant John Chiaino ("Chiaino").

BACKGROUND

Advantage is a domestic corporation engaged in the business of administering medical tests such as echocardiograms. Chiaino is the president of Advantage.

Advantage also performs radiological tests on patients referred to it by treating physicians and gives the test results to Boglioli, a physician in Great Neck, New York. Boglioli analyzes the test results and gives Advantage a written report of her findings and a bill for her services. Advantage then delivers the report to the treating physician. Advantage collects payment for its services as well as Boglioli's services. Advantage then pays Boglioli her share of the collected fees.

In January 2006, Advantage stopped paying Boglioli for her services. By September 2006, Advantage owed Boglioli $138,850.00.

At a meeting between Boglioli and Chiaino to discuss payment of the arrears, Chiaino executed an Acknowledgment and Guaranty ("Acknowledgment") and issued four post-dated checks totaling $70,000.00. The Acknowledgment established a detailed payment plan for the balance in excess of the $70,000.00 being paid and stipulated that notice of any default would be given along with a ten day cure period. The four post-dated checks were later discovered to be defective in that the numerical dollar amounts did not match the written dollar amounts.

On November 27, 2006, Boglioli commenced this action to recover the fees due and owing.

DISCUSSION

A.Default Judgment Against Advantage

A party may seek a default judgment against a defendant who fails to make an [*2]appearance. CPLR 3215(a). On an application for a default judgment, the moving party must present proof of service of the summons and the complaint, affidavits setting forth the facts constituting the claim, the default, and the amount due. CPLR 3215(f). The moving party must also make a prima facie showing of a cause of action against the defaulting party. See, Joosten v. Gale, 129 AD2d 531 (1st Dept. 1987).

CPLR 311(a)(1) permits an officer of a corporation to accept service on its behalf. On December 5, 2006, Advantage was duly served by Chiaino, the president of the company.

CPLR 321(a) provides that a corporation shall appear by attorney in prosecuting or defending a civil action. This statute allows for certain exceptions, none of which are applicable in the instant case.[FN1]

Even though Chiaino individually served a timely pro se answer to the complaint in which he denies the essential allegations of the complaint and claims the amount demanded was incorrectly calculated, it cannot serve as an answer for Advantage. Du-Art Film Labs., Inc. v. Wharton Intl. Films Inc., 91 AD2d 572 (1st Dept. 1982); and Evans v. Conley, 124 AD2d 981 (4th Dept. 1986), rearg. den., 69 NY2d 822 (1987). Moreover, a corporation cannot assign its status as a defendant to an individual to circumvent CPLR 321 (a). Rembrandt Personnel Group Agency v. Van-Go Transport Co., 162 Misc 2d 64 [App. Term. 1994].

A prima facie claim for breach of contract is established by setting forth the terms of the agreement, performance, and alleged breach. Furia v. Furia, 116 AD2d 694 (2nd Dept. 1986). Boglioli's affidavit describes the terms of her arrangement with Advantage. Boglioli's invoices serve as evidence that the services were rendered. The Acknowledgment, which is an admission that the sum of $141,460.00 [FN2] is owed to Boglioli, is evidence that the contract was breached. The pleadings are therefore legally sufficient to establish a prima facie cause of action for breach of contract.

Service on Advantage is proper. All notice requirements set forth in CPLR 3215(f) have been satisfied. A prima facie cause of action has been established. The motion for a default judgment against Advantage should therefore be granted.

B.Summary Judgment Against Chiaino

"The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case." Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 (1985); and Zuckerman v. City of New York, 49 NY2d 557 (1980). CPLR 3212 (b) provides that a prima facie showing is made by supporting the motion with affidavits, a copy of the pleadings and by other available proof.

A prima facie case for breach of a guaranty, such as the Acknowledgment [*3]herein, is established by showing the existence of the guaranty, the obligations therein and the failure of the guarantor to make the necessary payments. Physician's Domain, Inc. v. Grosso, 288 AD2d 362 (2nd Dept. 2001); E.D.S. Security Systems, Inc. v. Allyn, 262 AD2d 351 (2nd Dept. 1999); and Ultimate Connection, Inc. v. Friedfertig, 12 Misc 3d 1175(A) (Sup. Ct., Nassau Co. 2006).

Boglioli has established the existence of the Acknowledgment by attaching an executed copy to the pleadings. Boglioli has also established that Advantage failed to make the payments specified in the Acknowledgment by submitting copies of the returned check dated September 20, 2006 and the defective post-dated checks. However, Boglioli has failed to establish Chiaino's obligation under the Acknowledgment because she did not provide evidence showing that Chiaino was notified that the September 20, 2006 check was defective.

The terms of the Acknowledgment require that Chiaino be given notice of a default. Chiaino's obligation to guarantee this payment arises at the expiration of ten days from the date notice is given, provided the default was not cured in the interim. Without notification, the ten day cure period never took effect. Therefore, Boglioli may not sue for damages based upon the default of payment. I.J. Litwak and Co., Inc. v. General Signal Corp., O-Z Gedney Div., 293 AD2d 713 (2nd Dept. 2002), lv.app. den., 98 NY2d 613 (2002).

The Acknowledgment does not specify the type of notice to be given. However, in the Verified Complaint, Boglioli states that written notice of the default was given to both Advantage and Chiaino on or about October 6, 2006. A copy of this correspondence should have been attached to the motion papers to establish a prima facie cause of action against Chiaino on his guaranty. Therefore, Boglioli's motion for summary judgment against Chiaino must be denied without prejudice.

Plaintiff's other theories of recovery are insufficient, as a matter of law, to warrant summary judgment. A remedy in quasi-contract exists in the absence of an express contract or when a contract does not address the issue in dispute. Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 NY2d 382 (1987); and Sternberg v. Walber 36th St. Assocs., 187 AD2d 225 (1st Dept. 1993). The Acknowledgment clearly defines the circumstances under which Chiaino is liable for payments in default. Thus, a cause of action for unjust enrichment is precluded.

An action for conversion may be premised on interference with a specific and identifiable sum of money. Fiorenti v. Central Emergency Physicians, PLLC, 305 AD2d 453 (2nd Dept. 2003); and Payne v. White, 101 AD2d 975 (3rd Dept. 1984). Chiaino has not been shown to have exercised unlawful possession of a specific fund of money. Therefore, Boglioli's cause of action for conversion is without merit.

Accordingly, it is,

ORDERED, that the motion for default judgment against Advantage is granted; and it is further,

ORDERED, that the motion for summary judgment against Chiaino is denied [*4]without prejudice and with leave to renew; and it is further,

ORDERED, that the action against Chiaino is hereby severed and set for a preliminary conference on July 23, 2007; and it is further,

ORDERED, that the County Clerk, Nassau County is directed to enter a judgment in favor of the Plaintiff and against Defendant Advantage in the sum of $138,850.00 together with interest from September 20, 2006, and costs and disbursements as taxed by the Clerk.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY____________________________

June 25, 2007Hon. LEONARD B. AUSTIN, J.S.C. Footnotes

Footnote 1:The N.Y.C. Civ. Ct. Act §§ 1809 and 1809-A, Uniform Dist. Ct. Act §§ 1809 and 1809-A, Uniform City Ct. Act §§ 1809 and 1809-A, and the Uniform Just. Ct. Act §§ 501 and 1809 permit a non-attorney to represent a corporation in the defense and/or prosecution of a small claims proceeding.

Footnote 2: This sum was subsequently reduced to $138,850.00.