and that the RNM name was used by Aini for purposes of tax avoidance and by REC as an accommodation to Aini and for its own record keeping convenience given the fact that it was shipping to "RNM" per Aini's direction.
Third, even if the RNM referred to in Guterman's testimony was a corporate entity, the Court nevertheless would hold Aini personally liable. It certainly is true, as Aini now argues, that the separate existence of a New York corporation is not easily disregarded.
But to put the argument in terms of whether the corporate veil of any RNM corporation should be pierced, on reflection, is to mischaracterize the issue.
An individual who is a controlling shareholder may cause the corporation to do business that ultimately redounds to the shareholder's benefit. Where that occurs, the shareholder is entitled to the protection of the corporation's separate existence absent satisfaction of the piercing requirements. But such a shareholder also may conduct business him- or herself, including business that redounds to the benefit of the corporation. Where that occurs, the shareholder is personally liable for the shareholder's actions.
In this case, the evidence as to what Aini was doing when he ordered goods from REC is susceptible of either interpretation. Some evidence -- most notably the fact that REC's books appear to have reflected part of REC's account receivable from Aini's interests under the RNM name -- points in Aini's favor because it provides at least a suggestion that REC was looking for payment to RNM, whatever it was, rather than to Aini. Other evidence, however, points in the opposite direction. Aini used and dropped company names as if upon whim, at least in the case of "RNM Corporation" apparently without ever actually forming the corporate entity. The parties had an established course of dealing in which Aini ordered goods and later supplied names to be invoiced and used on shipping documents, which is at least consistent with a view that REC was relying on Aini's credit, not the credit of these names. Moreover, Aini's explanation to Jedouane that he used the various names essentially for tax avoidance permits the conclusion that Jedouane reasonably expected that Aini's use of the names would not affect REC's ability to collect for the goods.
Having considered all of the evidence on the point, this Court finds that Aini's purchases from REC were made by him in his individual capacity, that REC was entitled to and did rely on Aini's personal credit in supplying the goods to him on open account, and that the obligation to pay for the goods is Aini's.
The Computation of Damages
Each of Aini's assertions regarding supposed errors in the computation of damages is flatly wrong.
First, Aini argues that the Court relied upon DX XE and XF although, he contends, they were not received in evidence.
In fact, the documents were received in evidence.
In any case, Guterman testified to the amount owed, and his deposition was received without objection. The Court's determination therefore is supported independent of DX XE and DX XF.
Second, Aini claims that the amount that Guterman testified was owed was mistaken because Guterman assumed that REC was entitled to $ 1 per tube of TOPICLEAR whereas Aini asserts that the price should have been only 60 cents.
This argument was not made at trial and no justification has been offered for belatedly raising it now. The Court therefore declines to consider it. In any case, however, the argument is without merit. To begin with, the 1992 Agreement (described in Aini I) demonstrates that the agreed price was $ 1 per tube.
Second, there is not a shred of evidence -- either in the trial record or on this motion -- that there ever was any overcharge.
The Claim of Payment
Aini now contends that a stack of checks received in evidence at trial were payments for goods sold and delivered, the prices for which are included in the sum that Guterman testified still was outstanding.
He therefore argues that the Court mistakenly rejected his payment defense.
As REC's memorandum points out, the total of the checks upon which Aini relies is far less than the total amount of goods sold by REC to Aini during the relevant period. In consequence, even assuming that the checks all were payments on the open account, the balance due on that account would far exceed the amount of the judgment against Aini.
Authority to Sue
The last point made by Aini is that the Court should not have entered judgment in favor of REC because "REC was involved in a bankruptcy proceeding" in France from August 1993 through August 1995, there is no evidence that the individuals who have acted for it in this litigation were authorized to do so, and "it is likely that the Commissioner of Accounts appointed by the French Bankruptcy Court is not even aware of the existence of these proceedings . . ."
The only remotely relevant evidence tendered is a letter from a French attorney which notes that REC was ordered reorganized in 1993 by the Court of Commerce of Paris, that a court-appointed trustee submitted a report proposing a continuation plan, that the continuation plan was authorized in August 1995, and that the manager of REC was directed in December 1995 to provide certain documents to the Paris court.
No evidence is provided as to whether the French proceedings have been concluded
or as to the right of the company and its officers to conduct corporate business during the pendency of such a proceeding.
Whatever Aini's position is now, it is a position that he never took prior to the entry of judgment against him. There is no showing that he could not have raised the point previously. Even if the application is considered under Rule 54(b), this alone would warrant rejection of Aini's contention. But even if the Court were to consider the matter as having been raised prior to the entry on July 7, 1997 of the interlocutory judgment, it would reject Aini's position.
Rule 8(c) of the Federal Rules of Civil Procedure requires that a party against whom a claim is asserted "set forth affirmatively" a variety of enumerated defenses "and any other matter constituting an avoidance or affirmative defense." Rule 9(a) provides that "when a party desires to raise an issue as to the legal existence of any party or the capacity of any party to sue or be sued or the authority of a party to sue or be sued in a representative capacity, the party desiring to raise the issue shall do so by specific negative averment, which shall include such supporting particulars as are peculiarly within the pleader's knowledge."
As nearly as the Court can determine, Aini now is suggesting either that REC lacks the capacity to sue, that its bringing of the claim against Aini was not duly authorized, that a French trustee (if there is one) is the real party in interest, or all three. None of these defenses was pleaded, asserted in the pretrial order, or raised prior to the entry of judgment. In consequence, to whatever extent these contentions might have been defenses had they been timely asserted, Aini's failure to file a reply or otherwise to assert them in a timely fashion waived them.
Even if it did not. Aini has failed to provide any factual support for his assertions.
For the foregoing reasons, Jacob Aini's motion to vacate so much of the interlocutory judgment as awarded money damages in favor of Laboratorie REC and against him, which is treated as applying also to the final judgment entered earlier this month, is denied in all respects. This case is closed.
Dated: September 30, 1997
Lewis A. Kaplan
United States District Judge