Weiss v Markel

Annotate this Case

Download PDF

Weiss v Markel 2012 NY Slip Op 31515(U) May 29, 2012 Sup Ct, Nassau County Docket Number: 12279/11 Judge: Anthony L. Parga 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. "'''''''..... ----- - ----- --- - -() -- - -- -- -- -- - --------- ------ - -- - - - ---- -- - --- - - - - -. -- -- - - ----------.. ------ -..---_. ---- --.- - - --- p -.- - -- - - - [* 1] SHORT FORM ORDER SUPREME COURT- NEW YORK STATE- NASSAll COUNTY PRESENT: HON. ANTHONY L. PARGA JUSTICE --- -- - X PART 6 ILAN WEISS , a/a/o AQUA- TROL CORPORATION PlaintifC 12279111 INDEX NO. -against- MOTION DATE: 04/06/!:; SEQUENCE NO. 002 ADAM DAVID MARKEL and ADAM DAVID MARKEL , P. Defendants. --.. - X ffs. & Exs.....oo... oo....... ""'''''''''''''''''''''''OO''''''oo.......... '"'''''''''''' ..... . Notice of Motion, A Memo ran dum of Law in Sup po rt................ """'''....oo........... ........................... ............ A ffirm a tio n in positi 0 n """'''''''''...oo.. .................... """"oo........................oo............... ._. ReplyM emo rand urn of Law ................................... """"""'''''''''''''oooo..... ...... A..- Upon the foregoing papers , defendants ' motion to dismiss plaintiff's amended complaint. 3211(a)(l) and (a)(7), is denied. pursuant to CPLR infer alia that the Plaintiff brought the within action against the defendants alleging, defendants committed fraud , legal malpractice , and breach of liduciary duty relating to a loan transaction dated March 20 . 2007. On March 20 , 2007 , ColatrelJa Builders, Inc. (hereinal1er ColatrelJa ) obtained a loan from Aqua- Trol Corporation (hereinafter " Aqua-Trol" amount 01'$400 000. ) in the , which was evidenced by a note and mortgage secured by real properly in New Jersey. In addition to the $400 000. 00 loan by Aqua- Trol , a company named Land Settlement , LLC (whose managing member was defendant Adam David Markel) loaned $500 000 to Colatrella , and another individual , Danny Capozcllo On March 26 , 2007 , in connection with the loans , Aqua-Trol, , loaned $100 000 to Cola/rella, Land Settlement , 1,LC , CapozelJo executed a Loan Participation Agreement in which AquaTroI, Land Settlement. U and [* 2] and Capozello were collectively designated as the " Mortgagee " with respect to the subject property. Plaintiffs amended complaint alleges that the note , which was prepared by the defendants , specifically stated that the mortgage of March 20 , 2007 " is and will be maintained as a valid FIRST mortgage lien " on the subject property. Plaintiff alleges , however , that said representation was known to be false by defendant Adam David Markel , as , on March 2 , 2007 Colatrella issued a first mortgage on the same property to another entity, Triplets , LLC , to secure a loan in the amount of $525 000. 00. It is further alleged that defendant Adam David Markel was the notary public on the face of the document executed on March 2 , 2007. As such , plaintiff alleges that Adam David Markel was aware that anothcr entity had a first licn on the propcrty prior to Colatrella s execution of the note and mortgage on March 20 , 2007 and prior 10 Aqua Trol's execution of the Loan Participation Agrecment on March 26 , 2007. Plaintiff further alleges that the first lienholder , Triplets , LLC , commenced j )Jeclosure proceedings on the property and , in the course of such proceeding, extinguished the plaintiff's lien. No part plaintiff's loan has been satisfied. Plaintiff alleges that Aqua- Trol assigned all rights relating to the transactions at issuc to Ilan Weiss. It is further alleged in plaintiff's amended complaint that IIan Weiss personally advanced the loan monies to Colatrella in the March 20 , 2007 transaction , that he was " doing business as " Aqua- Trol at said time , and that hc was the owner of Aqua- Trol. The Court notes that Ilan Weiss is not namcd on thc mortgage or note. Defendants move to dismiss plaintiff's complaint , contending that IIan Weiss lacks legal capacity to sue as assignec of Agua- Trol and that Weiss should be estopped (I' om arguing contrary factual allegations and theories of rccovery to those which were advanced in a Ncw Jersey action entitlcd Land Seftlemen/ , 1, 1,C v. Colatrella Builders , Inc. wherein the AquaTrol in its corporate capacity, averrcd that it provided the loan to Colatrella and suhscquently sought and obtained judicia! relief arising from Co!atrella ' s fai lure to pay back the loan. DeICndants further contend that plaintiff's amended complaint fails to state a valid cause of action against them herein. De1endants first argue that thc subject loan was issued by Aqua- Trol on March 20 , 2007, but that Aqua- Tro! did not havc a valid corporate existence at the time the loan was madc. [* 3] Defendants contend that Aqua- Trol had bcen " inactive " according to the New York Secretary of State s records , since Junc 30 , 2004 , and as such , any rights that Aqua- Trol had in connection with the Colatrella loan are barred becausc Aqua- Trollacked the legal capacity to enter into the ject loans or to assign its rights to sue in connection with those loans. As such , the defendants contend that Aqua- Trol , as well as flan Weiss , lacks capacity to sue herein. fn addition , the defcndants contend that lIan Wciss also lacks capacity to sue as the plaintiff has failed to allege that the assignment of rights (i' om Aqua- rrol to flan Wciss was in writing, as required by the Loan Participation Agreement. Defendants further contend that while !Ian Weiss alleges in his amendcd complaint herein that he personally advanced the funds to Colatrella and that he was doing busincss as Aqua- Trol in the New Jersey action entitled Land Seulement , (wherein LLC v. Colafrella Builders, Inc. plaintiffs Land Settlement , LLC and Aqua- Trot obtained a default judgment against Colatrella in the amount of $1 ,490 000. 00 plus interest), it was alleged that Aqua- Trot provided the loan to Colatrella. As such , defendants contend that Ilan Wciss should be judicially estopped from taking an inconsistent position here. In opposition , plaintiff submits evidcncc that the procceds for the loan came from lIan Weiss s personal funds and that Uan Weiss advised defendants that the Joan documcnts should have been drafted to reflect a loan from IIan Weiss and not fi' om Aqua- Trot Plaintiff further argues that as the defendants werc (Ian Wciss s and Aqual- frol' s legal counscl for the transaction at issue , it is not impossible that the defendants knew that the loan was madc with the personal funds ofIlan Weiss , but drafted the loan documents in the name of an inactive corporation in order to frustrate any future action commenced by plaintiff against the defendants for their misdeeds. " FUl1her , plaintiff contends that defendant , Adam David Markel , and not the plaintiff or Aqua- Trol , verified the complaint in the New Jersey action as the " managing membcr of Land Settlement , LLC." The general rule is that where a corporate term of existence has expircd but the corporation carries on its affairs and exercises corporate powers as be/ore , it is a dc facto (Ludlum Corp. Pension Plan Trust v, MaUy s Superservice , Inc. 156 A. 548 N. Y.S.2d292 (2d Dept. 1989); Bruce Supply Corp. v. New Wave Mechanical. 111c. corporation. 2d 339 4 A.D. 3d '" [* 4] 444 , 773 N. Y.S. 2d 408 (2d Dept. 2004)). The dissolution of a corporation does not entirely (Camacho v. New York Cify Transit Aufhori terminate corporate existence. 115 A. 2d 691 496 N. Y.S. 2d 516 (2d Dept. 1985)). It is well settled that a dissolved corporation " may suc or be sued.. .in its corporate name. (Bruce Supp y Corp. v. New Wave Mechanical. Inc. 4 A. 773 N. Y.S.2d 408 (2d Dept. 2004), 3d 444 Business Corporation Law ~ 006(a)). More quoting, importantly, parties who knowingly treat a dissolved entity as a corporation are estopped tJ' 011 asserting its nonexistence to avoid obligations madc with and under the dissolved corporation, (Miotv. Miot 24 Misc. 3d AD. 3d 464 1224(A), 897 N. 910 N. Y.S. 2d 225 AD. 2d 338 436 (1S1 Dcpt. 2010); 638 N. Y.S. 2d631 2d 670 (N. Y. Sup. Ct. N. Y. Mefered Appliances , Inc. v. Cty. 2009), aff'd , 78 75 Owners (' orp. (Pi Dept. 1996); Nafional Bank of North America v Faslww 75 AD. 2d 568 , 427 N. Y.S. 2d 262 (1 sl Dept. 1980)). Conversely, ''' IXlfneither ofthc partics flo a suit) is aware that corporate status has not becn achicved , then corporation by cstoppel may apply. (13oslow Family Ltd. Partnership v, Glickenhaus Co. 7 N. Y.3d 664 , 860 N. 2d 711 (2006)(holding that wherc defendant does not dispute that it derived a benefit from the agreement and that the investment services provided were not dcpendent in any way on the nature of the plaintiff as a limited partnership, defendant is estopped fl:om dcnying the partncrship ' s validity), quoting, 8 Fletchcr , Cyclopedia of Corporations 3890 (2006)). The doctrinc of corporation by estoppel has been applied in cases whcre a dcfendant seeks to avoid liability on a contract from which the defcndant benelitted. (Jd.). In the instant matter , at this early stage in the litigation , there is insufficicnt evidcnce before this Court to determine whether Aqua- Trol was a de facto corporation at the time that the loan at issue was made to Colatrella. Thcre is also insuffcient evidence beforc this courllo determine whether corporation by estoppel applies herein. Thc defendants fail to submit any evidence to demonstrate whcther cither party hcreto knew that Aqua- Trol was not a valid corporation at thc time thc loan was made by Aqua- Trol to Colatrella. Further , the movants have failed to demonstratc that Han Weiss does not have standing to sue herein , as there is insuffcient evidence to demonstrate that Aqua- Tl')1 did not assign its rights under the Partnership Agreemcnt to Uan Weiss or that lIan Weiss did not loan the money to Colatrella " Trol. In doing business as " Aquaaddition , thc defcndants fail to submit any retainer agreement entered into between IJan [* 5] Weiss and/or Aqua- Trol and the defendants herein relating to the transaction with Colatrella. As such , defendants have failed to make a prima facie showing that the plaintiff' s amended complaint should be dismissed pursuant to CPLR ~3211 (a)( 1). Additionally, the Court has reviewed the plaintiffs amended complaint and the complaint in the New Jersey action. While defendant contends that Aqua- Trol averred that it provided the loan to Colatrella in the New Jersey action and that lIan Weiss avers herein that he provided the funds for the loan to Colatrella in this action " doing business as Aqua- Trol " thc Court notes that IIan Weiss is suing herein only as assignee of Aqua- Trol. The allegations against the defendants herein are not inconsistent with thosc of thc New Jersey action and are not duplicative of those of the New Jersey action. Further neither lIan Weiss , nor Aqua- Trol , verificd thc complaint in the New Jersey action. Finally, with respect to dcfendants ' contention that the plaintiff/ailed to state a cause of action , in considering a motion to dismiss for failure to statc a cause of action , the court must afford the pleadings a liberal construction , take the allegations of the complaint as truc and provide plaintiff the benefit of every possible inferencc. 26 A.D. 3d 628 (3d Dept. 2006), (Brooks v. Key 7h1s1 Co. Nat quoting, EBC I, lne, v. Goldman , Sachs 'l Ass ' Co. 5 N. Y . 3d 1 J (2005)). In doing so , the Court determines only whether the facts as allcged fit within any (Id, quoting, Leon v. Marfinez 84 N. Y.2d cognizable legal theory. see also, Khoury v, Khoury, 78 A. 83 , 683 N. 3d 903 , 912 N. Y.S. 2d 235 (2d Dept. 2010), 2d511 (1994); cifng, 43 N. Y.2d268 , 372 N. 2d 17 (1977)). Whethcr the plaintiff can ultimately establish its allegations is not part of the calculus in dctermining a motion to dismiss. Gougenheim v. Ginzherg, Inc. v. Goldman , Sachs Co. 5 N. Y.3d 11 (2005); see also, Sokol v. Leder 74 A.D.3J 1180 904 N. Y.S. 2d 153 (2d Dept. 2010)). Construing the plaintiff's allegations as truc (ERC 1, plaintitT's complaint sufficiently states thc cause of action alleged against defcndants hercin. Accordingly, defendants ' motion to dismiss the plaintiff's amended complaint is denicd. Defendants may serve an answer to the plaintiffs amcnded complaint within thirty (30) days of the date of this Order , to the extent an answer has not previously been provided. Plaintiff is hereby directed to servc a copy of this order upon thc Differentiatcd Case Management Part (" DCM" ) Case Coordinator of the Nassau County Supreme Court within thirty ~~~~ \ . [* 6] (30) days of the date of this Order. The parties shall appear for a Preliminary August 22 , Confcrence on 2012 at 9:30 A. M. in the OCM Part , Nassau County Supreme Court , to schedule all discovery proceedings. This constitutes the decision and order of this court. f". Dated: May 29 2012 'I!. . c. \ Anthony L. Parga ,r ENTERED Cc: Hinshaw & Culbertson , LLP 780 Third Avenue 4 Floor New York , NY 10017 Steven G. Legum , Esq. 170 Old Country Road Mineola , NY 11501- 4322 JUN 01 2012 NASSAU COUNTY COUNTY CLERK' S OfFICE

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.