Esrail v Pour

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Esrail v Pour 2011 NY Slip Op 32204(U) July 27, 2011 Supreme Court, Nassau County Docket Number: 020835-10 Judge: Timothy S. Driscoll 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. .................................. ........ ....... ........... [* 1] SUPREME COURT - STATE OF NEW YORK SHORT FORM ORDER Present: HON. TIMOTHY S. DRISCOLL Justice Supreme Court -------------------------------------------- x JOSEPH ESRAL and MASTER HOLDINGS, INC., Plaintiffs, - against - TRIAL/IAS PART: 20 NASSAU COUNTY Index No: 020835Motion Seq. Nos: I and 2 Submission Date: 6/9/11 DAVID E. POUR, ESQ. AlA DAVIT ESHAGH POUR, DAVID E. POUR & ASSOCIATES, LLP, ROMINA POUR, MOUSSA YEROUSHALMI a/ka MIKE YEROUSH, Al UNIVERSAL CONSTRUCTION REALTY, LLC, FARZANEH YERSOUSHALMI ROKA PROPERTIES CORP. and ROBERT KAHEN, Defendants. -------------------------------------------------------------------- X Papers Read on these motions: Support and Exhibits................ in Support................................................ Notice of Cross Motion, Affirmation in SupportOpposition, Notice of Motion, Affidavit in Memorandum of Law. Affidavit an d Exhi its............................................... ..... .... Affirmation in Opposition............ Law in Opposition............................................ Reply Affirmation in Support and Exhibits.............................. Reply Memorandum of Law in Support................................... Memorandum of This matter is before the cour on 1) the motion filed by Defendants Roka Properties Corp. (" Roka ) and Robert Kahen (" Kahen ) on Februar 8 , 2011 , and 2) the cross motion fied by Plaintiffs Joseph Esrai1 (" Esrail" ) and Master Holding, Inc. (" Master Holding ) (collectively Plaintiffs ) on March 22 2011 , both of which were submitted on June 9 , 2011. For the reasons set fort below, the Cour 1) grants the motion of Defendants Roka and Kahen and dismisses the [* 2] seventh cause of action in the Complaint against them; and 2) denies Plaintiffs ' cross motion. BACKGROUND Relief Sought A. Defendants Roka and Kahen move for an Order, pursuant to CPLR 3211(a)(7), dismissing the Complaint against them. Plaintiffs oppose the motion and cross move for an Order, pursuant to CPLR consolidating the above-captioned action ("Instant Action ) with a related matter titled 602 Roka Master Holding, Inc. and Joseph Esrail et al. Nassau County Index Number , curently pending before the Honorable Ute W. Lally (" Foreclosure Action Properties Corp. 21782- v. ). Roka and Kahen oppose Plaintiffs ' motion. B. The Paries ' History On November 22 2010 , Defendant Roka, as mortgagee , commenced the Foreclosure Action against Master Holdings and Esrail (" Mortgagors ), to foreclose a mortgage (" Mortgage on, propert (" Propert") located at 3 Harbor Park Drive , Port Washington , New York , 1 executed by Master Holdings on Janua 5 2007. Esrail , as principal of Master Holdings , personally guaranteed the Mortgage. Master Holdings also executed and delivered a promissory note in the amount of$1 200 000. 00 in favor of Roka. The complaint in the Foreclosure Action (Ex. C to Soleymanadeh Aff. in Supp./Opp. alleges that Master Holdings defaulted under the Mortgage. The Mortgagors served an Answer with Affirmative Defenses and Counterclaims in the Foreclosure Action (id) in which they asserted affirmative defenses including unclean hands , laches and estoppel. The motion for sumar judgment of foreclosure fied by the plaintiffs in the Foreclosure Action is pending before Justice Lally. In the Instat Action , commenced on November 5 2010 , Plaintiffs allege inter alia that under the influence and direction of Defendant David E. Pour , Esq. ("David Pour ), Plaintiffs agreed to paricipate in the purchase of the Propert in reliance on David Pour s representations that the Propert was a " good deal" (Compl. at,- 27) and Plaintiffs would quickly realize a 1 The Complaint in the Instant Action describes the Propert as being located at 3 Harbour Park Drive. ," [* 3] 29). Plaintiffs fuher allege that they agreed to the loan that is the subject of the Foreclosure Action " under the influence and direction " of David Pour at 48). (id substantial profit from the investment (id. at The Complaint in the Instant Action asserts seven causes of action: breach of fiduciar duty, negligence and undue influence against David Pour , (first , second, third causes of action); misrepresentation and fraud against David Pour and Defendant Al Universal Construction Realty, LLC (" AI Universal") (fourh and fifth causes of action); and unjust enrichment against Defendants Romina Pour, the wife of David Pour, and Farzaneh Yersouchalmi , the wife of Defendant Moussa Yersouchalmi , the controlling officer, director, shareholder of defendant Al Universal (sixth cause of action). The seventh cause of action , which seeks to pierce the corporate veil , is asserted against Roka and Al Universal. Plaintiffs allege that Kahen, the " alter ego " of Roka (Compl. at used Roka " simply and for no other reason than as a ta at and credit shelter (id. 124), 125). Plaintiffs allege that , as a result all caus s of action asserted against Roka ar hereby imputed on and asserted against Defendants (sic) Robert Kahen at 124). (id. B. The Paries ' Positions Roka and Kahen submit inter alia that 1) the only claim asserted against them , a cause of action to pierce the corporate veil , is not a valid independent claim; 2) Plaintiffs ' failure to state a viable independent claim against Roka necessarily implies that there are no causes of action to impute to Kahen; 3) any allegations regarding Roka or Kahen are either false conclusory or otherwse insufficient to support claims against Roka or Kahen , as demonstrated by documentation refuting Plaintiffs ' allegation that David Pour is a controllng officer director and shareholder of Roka; 4) Plaintiffs have not alleged any specific misrepresentations or wrongdoing related to Roka, or alleged other improper conduct by Roka or Kahen; and 5) even assuming, arguendo that the alleged misrepresentations were made , Plaintiffs disclaimed reliance on those misrepresentations pursuant to specific applicable language in the loan documents they executed , including language in paragraph 18.3 of the Mortga e (Ex. E to Kahen Aff. in Opp./Supp. ) that " (n)o par is relying upon any oral agreement or other understading not expressly set forth in the Loan Documents. [* 4] Esrail affirms inter alia that 1) David Pour never disclosed his familal and legal relationship to Roka; and 2) David Pour prepared the loan and Mortgage documents on behalf of Roka. Plaintiffs submit that " Pour and '" Roka have colluded with each other and are attempting to acquire the (PJropert for themselves in the amount of Plaintiff's alleged loan of $1.2 mm though the foreclosure process 31). Plaintiffs argue " (Soleymanzadeh Aff. in Supp./Opp. at that the Cour should deny Defendants ' motion to dismiss on the grounds that discovery may reveal fuer details about the Defendants ' relationship and provide Plaintiffs with grounds to amend the Complaint to include additional information in support of their claims against Roka and Kahen. RULING OF THE COURT Standards of Dismissal A motion interposed pursuant to CPLR ~ 3211 (a)(7), which seeks to dismiss a complaint for failure to state a cause of action , must be denied if the factu allegations contained in the complaint constitute a cause of action cognizable at law. Guggenheimer W 232 268 (1977); 511 v. Y.2d Ginzburg, 98 N. Y.2d 144 (2002). When entertaining such an application , the Cour must liberally constre the pleading. In so doing, the Cour must accept the facts alleged as true and accord to the plaintiff every favorable inference Owners Corp. which may be drawn therefrom. v. Leon however, the Cour wil not presume flatly contradicted by the evidence. v. Jennifr Realty Co. Martinez 84 N. Y.2d 83 (1994). On such a motion as tre Palazzolo bare legal conclusions and factual claims which are v. Herrick, Feinstein 298 A. 2d 372 (2d Dept. 2002). B . . Piercing the Corporate Veil Generally, a corporation exists independently of its owners , who are not personally liable for the corporation s obligations. Moreover , individuals may incorporate for the express oflimiting their liability. citing Bartle AD. 2d 386 , v. East Hampton v. purose Sandpebble 66 AD.3d 122 , 126 (2d Dept. 2009), Home Owners Coop. 309 N. Y. 103 , 106 (1955) and Lieberman , 229 387 (2d Dept. 1996). The concept of piercing the corporate veil is an exception to this general rule , permitting, under certain circumstances owners for the obligations of their corporations. Seuter v. , the imposition of personal liability on East Hampton 66 A. D.3d at 126 , citing Matter [* 5] of Morris NY.S Dept. Of Taxation 82 N. Y.2d v. 135 , 140- 41 (1993). A plaintiff seeking to pierce the corporate veil must demonstrate that a cour should intervene because the owners of the corporation exercised complete domination over it in the transaction at issue. Plaintiff must fuer demonstrate that , in exercising this complete domination , the owners of the corporation abused the privilege of doing business in the corporate form , thereby perpetrating a wrong that caused injur to plaintiff. 126 , citing, inter alia , Love v. Rebecca Dev. , Inc. 56 AD. 3d East Hampton 66 A.D.3d at 733 (2d Dept. 2008). In determining whether the owner has " abused the privilege of doing business in the corporate form " the Cour should consider factors including 1) a failure to adhere to corporate formalities 2) inadequate capitalization , 3) commingling of assets and 4) use of corporate use. 66 AD.3d at 127 , quoting East Hampton, Milennium Constr. , LLC v. fuds for personal Loupolover AD.3d 1016 , 1016- 1017 (2d Dept. 2007). A separate cause of action to pierce the corporate veil does not exist independent from the claims asserted against the corporation. East 38 Street Associates, L.P. v. George Feher Associates, Inc. 226 AD.2d 167 , 168 (1st Dept. 1996. Rather , it is an assertion offacts and circumstances which will persuade the cour to hold the owners liable for a corporation obligations. Old Republic Nat. Title Ins. Co. 2002), quoting C. Matter of Morris v. v. NY.S Moskowitz 297 AD. 2d 724 , 725 (2d Dept. Fin. 82 N. Y.2d Dept. Of Taxation Application of these Principles to the Instat 135 , 141 (1993). Action Viewing the Complaint liberally and in the light most favorable to Plaintiffs , the Cour concludes that the allegations are insufficient to sustain the sole cause of action against Kahen and Roka, based on piercing the corporate veil. Plaintiffs have not alleged wrongful conduct by Roka, or facts supporting personal liability of Kahen for Roka s conduct , assuming that it were wrongful. Moreover, the Cour denies Plaintiffs ' application to hold Defendants abeyance pending fuher disclosure that might reveal ' motion in inter alia conversations between Defendants David Pour and Roka based on the Cour' s conclusion that the sole cause of action against Roka and Kahen for piercing the corporate veil is not a viable independent cause of action. In light of the Cour' s dismissal of the Instant Action against Defendants Roka and [* 6] Kahen , the Cour denies Plaintiffs ' motion to consolidate. All matters not decided herein are hereby denied. This constitutes the decision and order of the Cour. The Cour directs counsel for Plaintiffs and counsel for the remaining Defendants to appear before the Court for a Preliminar Conference on September 7 , 2011 at 9:30 a. ENTER DATED: Mineo1a, NY July 27 2011 ENTEPI;D AUG 03 2011 NASSAU COUNTY S OFFICE COUNTY CLERK'

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