JAMC Corp. v Liberty Blue Group LLC

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JAMC Corp. v Liberty Blue Group LLC 2017 NY Slip Op 32702(U) December 21, 2017 Supreme Court, New York County Docket Number: 150679/17 Judge: Jennifer G. Schecter Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 12/27/2017 12:26 PM 1] INDEX NO. 150679/2017 NYSCEF DOC. NO. 37 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 57 RECEIVED NYSCEF: 12/27/2017 ---------------- ------------------------x JAMC CORPORATION and CELTIC BUILDING SUPPLIES, INC. , Plaintiffs, Index No. 150679/17 -against- DECISION & ORDER THE LIBERTY BLUE GROUP LLC, et al. Defendants. -------------------------------------------x JENNIFER G. SCHECTER, J.: Pursuant to CPLR 3211, defendants The Liberty Blue Group LLC (LBG) and Florim Lajqi (Lajqi) move to dismiss certain causes of action contained in the amended complaint. Background Property owner 200 East 62nd Owner LLC entered into a construction contract with LBG, which served as the general contractor on the (Affirmation in Support, retained plaintiffs Business Supplies, supplier. Laj qi project. Ex A JAMC Inc. is the [Complaint] as at (JAMC) Corporation (Celtic) owner a ~ of 45) and LBG LBG Celtic subcontractor and Plaintiffs commenced this action against defendants alleging that plaintiffs performed work and provided materials but were not fully paid. Plaintiffs allege that defendants owe JAMC $117, 808 .12 and Celtic $38, 107. 63 16) . (Complaint at ~ Plaintiffs both filed liens. Analysis In analyzing a CPLR 3211 (a) (7) motion to dismiss, "the pleadings are necessarily afforded a liberal construction [and plaintiff is accorded] the benefit of every possible favorable inference" (Goshen v Mutual Life Ins. 2 of 7 Co. of N. Y., 98 NY2d [*FILED: NEW YORK COUNTY CLERK 12/27/2017 12:26 PM 2] NYSCEF DOC. NO. 37 RECEIVED NYSCEF: 12/27/2017 JAMC Corp. v The Liberty Blue Group LLC 314, 326 Group, Corp. INDEX NO. 150679/2017 (2002]; Access Nursing Servs. 137 AD3d 678, v Kutner, Index No 150679/17 Page 2 679 [1st Dept 2016] 121 AD3d 581, 583 v Street Consulting Greystone Funding [1st Dept 2014]). "The motion must be denied where the complaint adequately alleges, for pleading survival purposes, viable causes of action. The sole criterion on a motion to dismiss is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cognizable action at law, a motion for dismissal will failn (Harris v IG Greenpoint Corp., 72 AD3d 608, 609 [1st Dept 2010]) . Second Cause of Action: Lien Law Article 3-A Movants failed to establish entitlement to dismissal of the second cause of action, which seeks to enforce rights conferred by Lien Law article 3-A. The allegations in the complaint are sufficient to state a cause of action against LBG and Lajqi AD3d 593, 597 (Holt Constr. Corp. v Grand Palais, LLC, 108 [2d Dept 2014], lv denied 22 NY3d 853 (2013] [individual officers can be personally liable for knowingly diverting trust assets]) . 3 of 7 [*FILED: NEW YORK COUNTY CLERK 12/27/2017 12:26 PM 3] NYSCEF DOC. NO. 37 INDEX NO. 150679/2017 RECEIVED NYSCEF: 12/27/2017 JAMC Corp. v The Liberty Blue Group LLC Index No 150679/17 Page 3 Third Cause of Action: Conversion "The mere right to payment cannot be the basis of a cause of action alleging conversion since the essence of a conversion cause of action is the 'unauthorized dominion over the thing in question" (Daub v Future Tech. Enterprise, Inc., 65 AD3d 1004 [2d Dept 2009]). Here, the complaint fails to state a cause of action for conversion because movants never had actual ownership, possession or control of funds that were in plaintiffs' Gonzalez, possession 89 AD3d 705, 707 (see Orchid [2d Dept 2011]) Constr. Corp. v Therefore, the third cause of action is dismissed. Fourth Cause of Action: Alter Ego Liability Plaintiffs' fourth cause of action denominated "pierce the corporate veil/alter ego liability" must be dismissed for failure to state a cause of action. "The allegations of corporate domination are wholly conclusory and consist of no more than a recitation of the elements of the claim, 'upon information and belief'" ( 501 Fifth Ave. Co. , LLC v Al vona LLC 110 AD3d 494 [1st Dept 2013]; Albstein v Elany Contr. Corp., 30 AD3d 210, 210 [1st Dept 2006] [dismissal warranted as plaintiff failed to plead facts to substantiate conclusory claims and did "not sufficiently allege that corporate form 4 of 7 [*FILED: NEW YORK COUNTY CLERK 12/27/2017 12:26 PM 4] NYSCEF DOC. NO. 37 INDEX NO. 150679/2017 RECEIVED NYSCEF: 12/27/2017 JAMC Corp. v The Liberty Blue Group LLC Index No 150679/17 Page 4 was used to commit a fraud against her"] , 1 v denied 7 NY3d 712 [2006]; Sheridan Broadcasting Corp. v Small, 19 AD3d 331, 332 [1st Dept 2005]) . facts For example, demonstrating how Lajqi shield himself specifically and what wrong Lajqi plaintiffs did not allege used the them. did in Nor corporate did disregard form they of to allege corporate formalities. Eighth Cause of Action: Violation of the Prompt Payment Act The motion to dismiss the eighth cause of action seeking relief for violation of the Prompt Payment Act [PPA] Business Law§ 756 et seq.) is ,denied. There can be a cause of action based on noncompliance with the PPA Precast Restoration Servs., AD3d 873 (General (see, LLC v Global Precast, e.g., Inc., 131 [1st Dept 2015], lv dismissed 27 NY3d 1031 [2016]). Al though the pleaded remedies are incorrect (for example, plaintiffs allege that based on the PPA "LBG has, as a matter of law, waived the right and ability to contest the work performed" [see Precast Restoration Servs., Inc., 131 AD3d at 873; Donninger constr., Inc. v c.w. Brown, Inc., 113 AD3d 724, 725 (2d Dept 2014) (nothing in the PPA provides that a failure to timely pay or disapprove an invoice "acts as a waiver of a contractor's ability to contest")]), it is undisputed that if 5 of 7 [*FILED: NEW YORK COUNTY CLERK 12/27/2017 12:26 PM 5] NYSCEF DOC. NO. 37 INDEX NO. 150679/2017 RECEIVED NYSCEF: 12/27/2017 JAMC Corp. v The Liberty Blue Group LLC Index No 150679/17 Page 5 LBG is ultimately adjudged to have been in breach, it may be responsible for "prejudgment interest of 1% per month" (Reply Mem at 4). Plaintiffs, Therefore, the cause of action itself will remain. of course, will not necessarily be awarded the amount sought simply because the PPA may have been violated and LBG will be permitted to proceed with any applicable defenses. Ninth Cause of Action: Breach of Fiduciary Duty Plaintiffs allege that Lajqi is personally liable for the outstanding $155,915.75 along with attorneys' fees because as "the controlling shareholder, officer and/or director" of LBG he owed a fiduciary duty to its creditors (Complaint at ~~ 8788). Because in response to defendants' motion, plaintiffs have not shown any authority supporting the existence of a recognized fiduciary duty running to the plaintiffs that would support liability under the circumstances pleaded, the cause of action is dismissed.* ·None of the allegations in the ninth cause of action assert that LBG had a fiduciary duty to plaintiffs (see Complaint at ~~ 86-90) . To the extent that the ninth cause of action could somehow be construed as applying to LBG (see Complaint, Wherefore at D; Memorandum of Law in Opposition [Opp] at 9), there is no basis for finding that LBG had any fiduciary duty to the plaintiffs. 6 of 7 [*FILED: NEW YORK COUNTY CLERK 12/27/2017 12:26 PM 6] NYSCEF DOC. NO. 37 INDEX NO. 150679/2017 RECEIVED NYSCEF: 12/27/2017 JAMC Corp. v The Liberty Blue Group LLC Index No 150679/17 Page 6 Tenth Cause of Action: Limited Liability Company (LLC) Law § 409 Plaintiffs' tenth cause of action is dismissed as LLC Law § 409 does not give rise to liability to non-members of a limited liability company. Accordingly, it is ORDERED that the motion to dismiss by defendants The Liberty Blue Group LLC and Florim Lajqi is granted to the extent that the third, fourth, ninth and tenth causes of action are dismissed as against them; it is further ORDERED that the moving defendants are to answer within 20 days of the e-filing of this decision and order. This is the decision and order of the court. Dated: December 21, 2017 HON. JENN 7 of 7

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