Cappella v Suresky at Hatfield Lane, LLC

[*1] Cappella v Suresky at Hatfield Lane, LLC 2007 NY Slip Op 52609(U) [24 Misc 3d 1225(A)] Decided on June 5, 2007 Supreme Court, Orange County Owen, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 5, 2007
Supreme Court, Orange County

Louis Cappella, Plaintiff,

against

Suresky at Hatfield Lane, LLC, Defendant.



3224/05



FINKELSTEIN & PARTNERS, LLP

Attorneys for Plaintiff

436 Robinson Avenue

Newburgh, New York 12550

RYAN & SMALLACOMBE, PLLC

Attorneys for Defendant 100 State Street, Suite 800

Albany, New York 12207

Joseph G. Owen, J.

Upon the forgoing papers, it is hereby ORDERED that the motion is granted, and the complaint is dismissed in its entirety.

Submit judgment to Orange County Clerk, as Clerk of the Court, with bill of costs.

Plaintiff Louis Cappella claims that, on September 3, 2003 and during the course of his employment as an automobile salesperson with non-party R.I Suresky & Son, Inc., he slipped and fell on an unsafe drainage area condition situated in the lot of car dealership premises located at the intersection of State Route 17A and Hatfield Lane in Goshen, New York. At the time of the incident, the premises were owned by defendant Suresky at Hatfield, LLC, a limited liability company.

Defendant claims that it is the alter ego of plaintiff's corporate employer, R.I. Suresky & Son, Inc., and that accordingly this action is barred by the operative provisions of Worker's Compensation Law. The Court agrees.

" As a general rule, when an employee is injured in the course of his [or her] employment, [the] sole remedy against [the] employer lies in [the] ability to recover under the Workers' Compensation Law (Workers' Compensation Law §11)'" (Ortega v Noxxen Realty Corp, 5 Misc 3d 1003(A), quoting Billy v Consolidated Machine Tool Corp., 51 NY2d 152, 156, [*2]rearg. denied 52 NY2d 829). Where, as here, separate legal entities are involved, the following rules apply: [I]t is settled law that "an employer's organization into separate legal entities does not preclude a finding that an employee is limited to benefits under the Workers' Compensation Law" Ramnarine v. Memorial Ctr. for Cancer & Allied Diseases, 281 AD2d 218 (1st Dept. 2001), citing Di Rie v. Automotive Realty Corp., 199 AD2d 98 (1st Dept. 1993). However, "[c]losely associated corporations, even ones that share directors and officers, will not be considered alter egos or each other if they were formed for different purposes, neither is a subsidiary of the other, their finances are not integrated, assets are not commingled, and the principals treat the two entities as separate and distinct" Longshore v. Davis Sys. of Capital Dist., 304 AD2d 964, 965 (3rd Dept. 2003).

(Lopez v Mount Kisco Country Club Realty Corp, 10 Misc 3d 1079[A]).

The Court's task has not been made easier by the parties' failure to discuss, or indeed even recognize, the statutory distinctions between a corporation and a limited liability company. Defendant, as a limited liability company, is "an unincorporated organization of one or more persons having limited liability for the contractual obligations and other liabilities of the business. . . other than a partnership or trust. . .." (Limited Liability Law §102 [m][emphasis supplied]). Limited liability companies do not have shareholders who own stock, but rather have members who have a "membership interest" (see, Limited Liability Law §102 [q] & [r]), and such a legal entity may be managed either by its members or by separate managers (see, Limited Liability Law §§401 et seq.) In short, corporations and limited liability companies are not only separate legal entities, they are entirely different statutory forms of business.

Notwithstanding these clear statutory distinctions, the motion and opposition papers are replete with confused arguments such as "[defendant] Suresky at Hatfield Lane, LLC is a corporation created solely for purposes of owning the [subject] property" (Affirmation of John F. Moore, Esq., dated February 9, 2007, p. 4, ¶13 [emphasis supplied]); and "[t]he principals of defendant corporation are Harold Suresky and Helen Suresky" (Affirmation in Opposition of Kara L. Campbell, Esq., dated March 19, 2007, p. 5, ¶13 [emphasis supplied]). It does not appear that the complaint herein even once correctly identifies defendant's form, describing it alternatively as a domestic corporation, a foreign corporation, and a "limited liability corporation" (Verified Complaint, pp. 1-2, ¶¶2,3 & 5).

This confusion has significance to the Court because the cases cited by the parties relate to the interrelationship between two corporate entities, citing to such corporate concepts as subsidiaries, parent corporations, directors and officers. Thus there is some question in the Court's mind as to whether the "alter ego" analysis has ever been applied to the relationship between a corporation and a limited liability company. The parties' recognition of this issue would have been helpful.

Nevertheless, it does appear that the doctrine applies to all "legal entities" which can be described as "alter egos" of each other (Ramnarine v Memorial Ctr. for Cancer and Allied Diseases, 281 AD2d 218, 219). As plaintiff recognizes, the pertinent inquiry is whether one legal entity "exercises complete dominion and control of [the] day-to-day operations [of another [*3]legal entity]" Almonte v Western Beef, Inc., 21 AD3d 514, 515-516). The Court's own research has revealed one case in which the alter ego doctrine was seemingly applied to the relationship between a partnership and a corporate employer (see, Braham v Country Life Realty Co., 9 Misc 3d 88).

Defendant proffers evidence to show, among other things, that Suresky at Hatfield Lane, LLC was formed solely for the purpose of owning the premises upon which plaintiff's employer, R.I. Suresky & Son, Inc., operates its car dealership; that defendant's sole member, Harold E. Suresky, is Chairman of the Board of plaintiff's employer; that defendant has no employees and does not have a separate bank account; that there is no written lease agreement between the two entities; that the two entities share the same liability policy; that all of defendant's school, real property and village tax bills are paid directly by plaintiff's employer and processed by the employer's accounting manager, Amy DeSantis; and that all bills for service and maintenance contracts benefitting defendant are paid by plaintiff's employer. Under these circumstances, defendant has met its burden of establishing a prima facie defense under Workers' Compensation Law §11 (see, Ortega v Noxxen Realty Corp., supra).

In opposition, plaintiff points out that two separate legal entities are involved; that not all of the owners/managers/officers of the two entities are the same; and that defendant is not listed on plaintiff's Workers' Compensation policy. These arguments fail to establish the existence of a factual issue. The alter ego doctrine does not require complete identity of ownership and management between the two entities, and defendant's lack of Workers' Compensation insurance is attributable to the fact that it does not have employees. The record establishes that plaintiff's corporate employer, R.I. Suresky & Son, Inc., exercises complete dominion and control over defendant Suresky at Hatfield Lane, LLC's day-to-day operations, and that accordingly defendant is plaintiff's alter ego.

So ordered.

E N T E R

_________________________________

HON. JOSEPH G. OWEN

SUPREME COURT JUSTICE

Dated: June 5, 2007

Goshen, New York

APPEARANCES:

FINKELSTEIN & PARTNERS, LLP

Attorneys for Plaintiff

436 Robinson Avenue

Newburgh, New York 12550

RYAN & SMALLACOMBE, PLLC

Attorneys for Defendant [*4]

100 State Street, Suite 800

Albany, New York 12207