Geiser v Midland Elec. Contr. Corp.

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Geiser v Midland Elec. Contr. Corp. 2018 NY Slip Op 31511(U) June 20, 2018 Supreme Court, Richmond County Docket Number: 151011/2017 Judge: Kim Dollard 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: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 1] NYSCEF DOC. RICHMOND NO. 127 FILED: NYSCEF DOC. NO. COUNTY CLERK 06/25 /2018 03 : 49 RECEIVED OF THE COURT COUNTY RECEIVED NO. 151011/2017 NYSCEF: 06/27/2018 INDEX PM| 123 SUPREME INDEX NO. 151011/2017 STATE OF NEW NYSCEF: 06/25/2018 YORK OF RICHMOND FRANK GEISER, shareholder 50 percent owning Electrical and individually as derivatively of the shares of Midland ORDER Corp., Contracting Plaintiff, -against- MIDLAND KEVIN Hon. ELECTRICAL SEAN MCGINLEY, SAMANTHA FHIONNGHAILE & SONS MCGINLEY, JERSEY DOE No. unknown MCGINLEY, MCGINLEY, ELECTRICAL ELECTRICAL MIDLAND INC., CONTRACTING Dollard No. 151011/2017 AMANDA MAC n\Of ort 1 CONTRACTING 00 OO OF NEW CONTRACTING and "JOHN DOE No. 1 through CORP., 10" fictitious 10", , the last 10 names being to the Index CORP., Kim 3 L/ "JOHN and plaintiff, Defendants. The following papers numbered 1, 2, 3, 4, 5 and 6 were fully submitted on this 9* day of March, 2018: on behalf of Defendants, Electric Contracting Midland Corp., Kevin McGinley, pursuant to CPLR§ 3016 and CPLR §3211(a)(1), McGinley, (3) and (7), Exhibits and Affinnation, dismissing all claims against them in the Amended Complaint, Memorandum ofLaw........................................................................................................................................................1 Notice of Motion and Samantha (Dated September Notice of Motion 29, 2017) on behalf of Defendants, Sean McGinley, Mac Fhionnghaile Amanda McGinley, of New Jersey, pursuant to Inc. and Midland Electrical Contracting Contracting, all claims against them in the CPLR§ 3016 and CPLR §321 1(a)(1), (3), (7) and (8), dismissing Amended Complaint, Exhibits and Memorandum of Law ..........................................................................2 Affidavit(s), & Sons Electrical (Dated Affidavit (Dated Affidavit September of Frank Geiser in Opposition November to Midland Electric Motion, Exhibits and Memorandum of Law ......................3 27, 2017) of Frank Geiser in Opposition (Dated November 2 29, 2017) to Sean McKinley motion, Exhibits and Memorandum of Law..........................4 27, 2017) Amanda McGinley, Mac Fhionnghaile of law on behalf of Sean McGinley, Reply Memorandum & Sons Electrical Inc. and Midland Electrical of New Jersey ..................................................5 Contracting, Contracting (Dated January 12, 2018) of law on behalf of Midland Electrical Corp., Kevin McGinley Reply Memorandum Contracting and Samantha McGinley....................................................................................................................................................6 (Dated January 12, 2018) 1 2 of 10 .6 [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 2] NYSCEF DOC. RICHMOND NO. 127 F ILED : NYSCEF DOC. NO. complaint of Midland owner of engaged in Electrical Midland to New & Fhionnghaile Sean has an interest Midland of pursuant Corp. October 4, 2016. Midland The dissolution agreement. make contracts and may The all confer Sons Authority alleged Geiser, McGinley, moved Electrical contracts that transfer of and Geiser that employees Mac to the also from Corp. and contracts was and dissolution of the two Contracting dissolution the that agreed terms of the as an officer prudent Mac York Corp. agreement, or necessary". Fhionnghaile City Plaintiff, of of said the defendant, agreement, New that public City completion to dated states York out Corp. Contracting a breach Contracting capacity deems Electrical 3 of 10 in his the a dissolution It was carrying to Corp. and New all contracts. for is stated Agreement if McGinley Sons Corp. Electrical concerning assigned Kevin Contracting decisions ofthe defendant, complaint of son Contracting commenced amended Authority Electrical 2 family, McGinley's Winding-Up "McGinley, fraudulently & Fhionnghaile his McGinley, Midland of responsible decisions, Midland Samantha performance execution following Midland Contracting Electrical Geiser, business necessary and that Electrical Housing that Sons Midland to the complete on certain & a Dissolution states 50% company, to Electrical alleged plaintiff, of officer the belonging Midland and dissolution City of by Kevin is operated defendant, is annexed as winding-up reasonable Contracting in officer McGinley It is further The judicial York agreement alleges Plaintiff, & act with the is a Geiser, Corp. 24, 2015, would New two would McGinley June 06/25/2018 the other McGinley, funds defendant, Corp. an employee agreement Corp. by NYSCEF: Frank plaintiff, and divert and Fhionnghaile Jersey. resulted dissolution Contracting Defendant, shall for proceeding including Midland, and a director McGinley; Mac of New §l 104 and McGinley. controls on or about BCL to Electrical contracts, that Kevin owned Amanda Sean son, that Contracting and his the Contracting Electrical McGinley, dissolution The Sons by alleged proceeding Kevin RECEIVED NO. 151011/2017 NYSCEF: 06/27/2018 INDEX PM| that assets companies Electrical Contracting Kevin It is further Sons in and/or Electrical daughter other McGinley is operated convert profits, to & Fhionnghaile Jersey McGinley, works : 4 9 alleges Corp. Contracting conceal Corp. daughter-in-law, be the 03 It is alleged Corp. Contracting Electrical a scheme Mac Mac and / 2018 to be dismissed sought Electrical Contracting namely of / 25 06 RECEIVED amended shareholder and CLERK 123 The 50% COUNTY INDEX NO. 151011/2017 Housing Geiser, a fraudulent [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 3] NYSCEF DOC. RI CHMOND NO. 127 F ILED : NYSCEF DOC. NO. SAGE complaint and accounting used deposited for 03 : 4 9 The amended of action action for INDEX RECEIVED NO. 151011/2017 NYSCEF: 06/27/2018 PM| of and aiding Samantha Mac of New cause enrichment and against all & Law § 276 and defendants; all a tenth the defendants that alleges own benefit and of$18,335.27 an into Sean cause of fraud against Kevin the cause a ninth of action for Electrical Midland defendants; of action a constructive of action McGinley, McGinley cause for tortuous cause of action of action for unjust against trust of illegally cause an eighth McGinley; defendants; and cause for Amanda Inc. a seventh action a fourth McGinley, Contracting, defendants; all cause a first asserts a second McGinley; all defendants; for except complaint amended Kevin as against against in the sum the utilized further their for a third as against of action defendants all against Electrical Sons cause The McGinley; duty against conversion Creditor Kevin fiduciary a fifth Corp.; against contract Debtor breach for of and Geiser, Corp. Corp. of action. §720 Corp. Jersey. agreement to BCL Fhionnghaile Jersey, of action with interference a breach abetting McGinley, Contracting pursuant Plaintiff, Contracting causes against duty assets corporate ten funds. 06/25/2018 assets. Contracting transactions, Contracting of New dissolution fiduciary divert Electrical Electrical NYSCEF: Corp.'s Contracting financial all Electrical asserts of the breach breach transferring a sixth for to Contracting complaint Midland for system Midland Electrical Electrical that system Midland of to payable Midland alleges also accounting equipment a check of Midland bookkeeping a secondary defendants account conversion constituted amended established for / 2018 RECEIVED and The for / 25 06 123 conveyance cause CLERK COUNTY INDEX NO. 151011/2017 Kevin McGinley. The the plaintiff states that For of the A the he is not a wrong value corporation complaint move will asserting individual any individual of his a corporation, investment Citibank (See, .~i'I be dismissed on several complaint and that but claims, claims. derivative all claims first grounds, In arguing the opposition, are asserted solely that plaintiff on behalf Corp. Contracting against the amended to dismiss commingled improperly Electrical of Midland he loses defendants or incurs ' v. Plapinger. where a shareholder personal has confuse the allegations 3 4 of 10 in an effort liability 66 N.Y.2d no individual 90; 495 N.Y.S.2d a shareholder's cause of action, to maintain 309, .. derivative 485 the though solvency N.E.2d 974). and individual [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 4] NYSCEF DOC. RI CHMOND NO. 127 : F ILED NYSCEF DOC. Greenfield opn granted of v. in appropriate asserted. all replead purposes for a demand a Board as sole futile been a demand the board of directors complaint alleges interest because a director at 200, appointed asserted is on behalf claims being replead to consenting are and plaintiff is granted permission to Business Corporation Law from claims, demand action that a demand was because dissolution and never to and who and argues Corp. Kevin defendant, is the defendant before the plaintiff Contracting it would §626, of directors but made, appoints officer, winding-up the board Electrical Midland agreement McGinley, therefore alleged 644 with such based share Midland 666 upon holder N.E.2d during in the did not McKinley have would in the wrongdoer board transaction of directors or 'controlled' action where is interested 121, . 666 at issue, demand of futility, because N.Y.S.2d 644 200, is is excused first a loss of in the N.E.2d 1034). independence by a self-interested director 1934), alleged futility. in 189, in a transaction interest the plaintiff action, a demand, to control 121, 88 N.Y.2d ..2 self-interest no direct N.Y.S.2d is a 50% be suit of the a majority a shareholder that § 62.6(ç) a derivative that v. . Akers, either may Lgw commencing particularity (Marx In the present McGinley, and individual no plaintiff pursuant Corporation before with transaction Director making to Kevin that first to company in Business requirement challenged (id. of the is derivative and because dismiss futile, the Further, be claims. It is undisputed been may to replead on complaint. The the to action individual individual have would to make amended from suit. in charge and a shareholder of Directors. director Corp. to potential move requires a derivative such have next c, which commencing Contracting of eliminating defendants subdivision alludes that revt 1 18, supra.). the entire representation such leave However, 06/25/2018 NYSCEF: N.E.2d 160 986, 918. that asserts plaintiff N.Y.S.2d N.Y.S.2d 175 v. Denner, Electrical upon language The that INDEX RECEIVED NU. 1b10 06/27/2018 NYSCEF: PM : 4 9 03 188 867, 263, (Greenfield cases Midland Based eliminate 6 A.D.2d action, defendant, 6 N.Y.2d Denner, J. Breitel, In the instant the / 2018 / 25 06 RECEIVED (see, dissenting of CLERK 123 NO. rights COUNTY INDEX NO. 151011/2017 The Midland the winding with sufficient complaint Electrical up phase. 4 5 of 10 facts particularity clearly Contracting It would that would excuse Kevin forth that defendant, Corp. and that sets have been futile he for has Mr. been Geiser [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 5] NYSCEF DOC. RI CHMOND NO. 127 F ILED : NYSCEF DOC. NO. to make COUNTY a demand the president of residents. Jersey a Midland corners cognizable factual deemed to inference" f favorable dismiss in order N.Y.S.2d 372 be N.E.2d consider to remedy any.factual granted made Ryan §3211; if from of action cause the of every 268, factual possible ..92d2003. 200). N.Y.S.2d 914 815, and liberally, benefit the pursuant 43 N.Y.2d v. Ginzburg, submissions . (see, .0CPLR defects pleading ofNew Corp. any be construed must party 814, of the assignee ' of action, manifest (Guggenheimer nonmoving is vice McKinley to dismiss a cause together taken complaint . 79 A.D.3d. v. Baxter, may "The the " fail states pleading which will 17). and true, a court 9 is whether since its account. a motion is denied. move Contracting into alleged McGinley the Inc., to withstand Corp. the 06/25/2018 jurisdiction Sean defendant, Electrical check Sean lacks Contracting, Midland is sufficient dismissal that Electrical defendant, are discerned for (Hense In addition, in opposition v. Cover, to a motion 75 A.D.3d 502, to 904 750). based Accordingly, business within at this jurisdiction The or director to bring cause Electrical of action the foregoing, New York of of action action against against Contracting, State. York, Therefore, finds and/or the that with amended issues of fact respect to exist as to the extent alleged any is sufficient pleading tortuous to confer litigation. pursuant another defendants, Inc., the Court in New transact stage early cause third upon defendants these conducted conduct Sons allegations Sons the court is basis on this and NYSCEF: he where Jersey that argues Contracting ' criterion sole 182, & a complaint a motion N.Y.S.2d allegations Electrical "the at law, 410 of this RECEIVED NO. 151011/2017 NYSCEF: 06/27/2018 INDEX PM| complaint of New on the basis plaintiff that alleged whether 3211(a)(7), §3211 Fhionnghaile It is further deposited four to CPLR the Corp. Contracting In opposition, Mac defendant, contracts. to CPLR of : 4 9 circumstances, to dismiss motion Electrical pursuant In determining 275, 03 such under McGinley defendants Midland the complaint are New NYCHA Kevin upon Accordingly, to dismiss its 2018 RECEIVED Defendants, Jersey / 25 06 123 wrongdoer. both CLERK INDEX NO. 151011/2017 and to BCL officer Sean Midland §720, by its terms, or director. The McGinley, Amanda Electrical Contracting 5 6 of 10 only permits plaintiff did McGinley, of New a corporate not oppose Mac Jersey officer dismissal Fhionnghaile Corp. & [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 6] NYSCEF DOC. RICHMOND NO. 127 F ILED : NYSCEF DOC. NO. COUNTY CLERK 06 / 25 / 2018 03 : 4 9 INDEX NO. 151011/2017 RECEIVED NO. 151011/2017 NYSCEF: 06/27/2018 INDEX PM| 123 RECEIVED Samantha Electrical complaint the amended the According, alleges third McGinley, Amanda Electrical cause Contracting there and Corp, Contracting an submits McGinley Mac McGinley, ofNew that & as they Corp., she an officer employee of said Electrical 06/25/2018 Midland Further, Corp. Contracting, Samantha Sean McGinley, Inc. Contracting, of Midland are not officers of corporation. Electrical defendants, Sons an was of Midland as against Fhionnghaile Jersey she was she is an employee is dismissed of action that stating is no proof that only affidavit NYSCEF: Midland and Electrical Contracting, Corp. The move All dismiss to on the Duty, , Midland Inc. Contracting, further basis cause and of action, to be drawn therefrom the complaint alleges to Midland Electrical two corporations which respect intent to Fremowitz induce the N.Y.S.2d alleged 422, Park fifth ' Associates, (see, for and Corp., to divert fact, reliance 106 are met when Pludeman v. possible A.D.3d the facts Northem upon 950, 965 made the N.Y.S.2d are sufficient Leasing 2008). 6 7 of 10 inference 5 11), duty. knew fiduciary of his duty NYCHA of of action knowledge of the and The by forming contracts. sounding an falsity, damages (see, 597). to permit Systems. of the ..d N.E.2d 638 of fiduciary representation, grounds. same of fiduciary of a cause with §3016(b). favorable 972, breach Fiduciary in support complaint an assignment the elements fraud, on the McGinley, in a breach obtain and for abetting of Kevin of an existing Inc., . of every and aiding assisted funds of action justifiable benefit relatives defendants, cause thereon, requirements conduct used amended of by CPLR fraud 84 N.Y.2d ....792d972.999 83, 614 N.Y.S.2d of action misrepresentation reliance v. W. Pleading of to the are a material in fraud the the in the McGinley, a Breach as is required for Electrical Sons Samantha Abetting of action cause set forth v. Martinez, Contracting were fifth and Corp., and Aiding & Fhionnghaile Jersey particularity to the plaintiff causes that the allegations .~l states duty With factual for sufficient to dismiss Leon of New action of with according (see, sufficiently sufficiently plead move the cause Mac McGinley, Contracting fourth it is not as true Accepting plaintiff the that Amanda McGinley, Electrical defendants McGinley fourth Sean defendants, Inc.. a reasonable 10 N.Y.3d inference 486, 860 [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 7] NYSCEF DOC. RI CHMOND NO. 127 F ILED : NYSCEF DOC. NO. the plaintiff to support system. of of action does not 98 N.Y.2d NY, The NYCHA Corp. and whether funds allegedly cause of action The defendants. when converted eighth A fraudulent cause of that It is sufficiently scheme, with record A 774 was McGinley constituted of is such actually In moving to dismiss this Kevin McGinley the NYCHA contracts to converted. where as a matter v. Mutual that the evidence the documentary Goshen Mac to dismiss 3211(a)(1) a defense quoting stated It is further to CPLR "only a Life of law" Ins. Co. 1190). submitted documents in the best of funds. contracts. the whether of Midland interest conversion these plaintiff defendant, establishing N.E.2d that that pursuant 206, there are plaintiff, of particularity. assign granted the whether argue motion the by Electrical of Contracting the plaintiffidentifies Moreover, the Accordingly, assignment motion to dismiss this is denied. of action asserts conveyance the alleges financial complaint, defendants. not 1 N.Y.S.3d from as proceeds conversion claim it is shown creditors. 858, assignment all conclusively N.Y.S.2d by Kevin such for allegations, to determine lack to were converted. 1113, is unable contracts agreement 123 A.D.3d 746 further of plead amended for defendants contracts the or is against be appropriately may s factual 314, Court NYCHA evidence ' v. . Mitchell. LLC (YDRA. dissolution facts the system is dismissed evidence, funds from accounting conversion the of It is clear of action for those identify plaintiff refutes cause the to therefore on documentary utterly secondary of action 06/25/2018 accounting Plaintiff system unknown NYSCEF: "Sage" the to maintain agreement. presently interpretation of fraud. on documentary based and the fifth pursuant authority plaintiff of the cause sixth Fhionnghaile the INDEX RECEIVED NO. 151011/2017 NYSCEF: 06/27/2018 PM) funds". reasonable any failed dissolution but a "secondary allegations name the Accordingly, The based the in the McGinley of diverting case, defendants McGinley Kevin established present aware the that to by purpose the insufficient Of agreed the for In had alleges defendants keeping cause 0 3 : 4 9 RECEIVED as was system, is not 06 / 25 / 2018 123 The that CL ERK COUNTY INDEX NO. 151011/2017 with conveyance alleged where the fraudulent breach intent was the intent of Debtor to defraud made with complaint title pursuant sets 8 of 10 forth Law to this intent" "actual hit 7 Creditor and in such to detail details §276, provision defraud allegations (Marine as against all is established present or future of an overall Midland Bank [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 8] NYSCEF DOC. NO. 127 F ILED NYSCEF : DOC. NO. Ins. v. alleging and proving "badges of 1st Dept fraudulent and The underlie NY3d of action The on a claim party's is sought The by virtue ofthe The of action (3) that of initial is for are insufficient LP that A.D.2d 526, alleged to the parties of the inadequacy to inability and it, pay (id.). the of elements a claim its of Partners. pleading stage of the must - show for intent & K' Kissell. v. Seward that fraud the plaintiff fraud, an falsity, to induce 12 LLP. and therefore, allegations, of law litigation, claim the eighth the defendants plaintiff's factual allegations plead are sufficient other were (2) 2nd 48, enriched unjustly allegations, The to state at that to retain party Electrical . supra,). to prevail enriched, N.Y.S.2d of Midland LLC v. Mitchell. .C YDRA. the 787 480, In order was party to permit 12 A.D.3d is that defendants. other conscience refute utterly (see, the at the expense contracts not does (1) v. Walker, enrichment all against that good and N.A. NYCHA as a matter enrichment equity unjust evidence defense unjust (citibank, ofthe assignment this the and To state knowledge (Eurycleia there case, a party plaintiffs' documentary to establish a fact, the on rely transfers 257 of business, allege sufficiently may Brodslsy, of difficulty fraudulent conveyance the to defraud. intent of it is against to be recovered thrust with V. course claim after not with between usual the of and be dismissed. enrichment, and does damages" ... and In the present cause of unjust expense 2004). reliance must ninth made creditor's transferor misrepresentation 2009). 559, 553, by the in the be alleged plaintiff/creditor Assoc. relationship the of complaint Strent not transfer the associated (Wall a close include property verified material justifiable reliance, intent" Because 1974). 06/25/2018 NYSCEF: must to defraud a creditor, so commonly of intent County or defraud knowledge of a conveyance "a allege to an inference of the amended a claim at this RECEIVED NYSCEF: 06/27/2018 P 9 Actual NY Ct Sup to hinder a questionable control 1999). as "circumstances transferor's the 341, circumstances transaction, retention Corp. rise Dept Ist Misc.2d.d intent defined Such consideration, what actual gives 1999). 101 Spear. fraud," presence ..dN,) 382, A.D.2d 263 Co., (Spear cause 03 RECEIVED proved must / 2018 / 25 06 123 v, Eurich their CLERK COUNTY CHMOND RI INDEX NO. 151011/2017 Contracting conclusively court a claim finds that for unjust enrichment. The elements of tenth cause a constructive of action, trust for are a constructive (1) trust, a fiduciary or is asserted confidential 8 9 of 10 against relationship; McGinley. Kevin (2) an express The or [*FILED: RICHMOND COUNTY CLERK 06/27/2018 12:06 PM 9] NYSCEF DOC.RICHMOND NO. 127 I LED : NYSCEF DOC. implied : 49 03 INDEX RECEIVEDNO. 151011/2017 NYSCEF: 06/27/2018 PM) RECEIVED promise; In the two tenth based upon duties; that contracts cause plaintiff of every a constructive upon (see, with Lastly, as against respect the allegations indifference to civil do Kevin rise ' obligations" d good compliance faith unjust was tenth cause his fiduciary the when and up officer with enrichment complaint amended as winding NYCHA plaintiff affording of action the a claim states for McGinley. to the not to act between existed relationship permitted plaintiff's the inference, his there the construing favorable trust that v. Sharp 721). was and 06/25/2018 NYSCEF: enrichment unjust (4) a confidential McGinley and same; N.E.2d that agreement In liberally possible 351 alleges Kevin that and promise; 72, plaintiff dissolution relied assigned. were of action, of the on the N.Y.S.2d 386 shareholders; terms the in reliance at 121, percent fifty benefit a transfer (3) 40 N.Y.2d Kosmalski, since / 2018 / 25 06 123 NO. the CLERK COUNTY F INDEX NO. 151011/2017 demand for a level to (Wçiss punitive "of such v. Lowenberg, such damages, wanton as dishonesty 95 A.D.3d 405, cannot claim .« 944 to be sustained, a criminal imply N.Y.S.2d ..lidd. Isst 27, Dept., 2012). based Accordingly, the third dismissing & Fhionnghaile Corp. and Sons McGinley; cause eighth the of action Electrical Samantha the dismissing cause upon as against Contracting, Midland Inc., the against all motions fiah are granted to the McGinley, Sean defendants, dismissing of action defendants' the foregoing, Amanda McGinley, Electrical cause of and defendants; as against dismissing the all of Mac of New Contracting action extent Jersey defendants; punitive damages claim. It is further to individual Dated: June. Ordered, claims within that thirty plaintiff days is granted from the date leave of this to replead order in order and to delete in conformity E N T E R , 2018 Hon. Acting 9 10 of 10 Kim Dollard Justice Supreme Court any with reference this order.

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