Moving and Storage of Westchester, d/b/a Moving America of
Westchester. A few (Ex. K, O and P) refer to him as General
Manager of Bobsan, Inc. None of the complaints concern Moving
America in Newburgh, New York or Orange County, where plaintiff
lived (in Middletown). Many do not refer to Mr. Adamo at all.
Most of the complaints concern breakage or faulty estimates. Some
of the formal complaints resulted in fines being imposed against
the company that was the subject of the complaint. Some were
dismissed. Some were not formal complaints at all.
After submission of the letter and the complaints, Justice
Schwartz transferred the case to White Plains, and I was assigned
to hear it. Subsequently, Adamo moved for judgment on the
pleadings or, in the alternative, for summary judgment pursuant
to Federal Rule of Civil Procedure 56, dismissing the claim on
the ground that it states no complaint against him.
Whether considered on the pleadings alone or as a motion for
summary judgment, the motion must be granted.
The law is well settled that when a complainant seeks to pierce
the corporate veil, she must prove both that the individual
defendant "exercised complete domination of the corporation in
respect to the transaction attacked" and also that "such
domination was used to commit a fraud or wrong against the
plaintiff which resulted in plaintiff's injury." Morris v. New
York State Dep't of Taxation and Finance, 82 N.Y.2d 135,
603 N.Y.S.2d 807, 623 N.E.2d 1157 (1993). As a matter of pure
pleading, the instant Complaint does neither.
Insofar as the exercise of complete domination is concerned,
the critical element of ownership over something is alleged on
information and belief, which is insufficient to withstand a
motion to dismiss. "In order to allege properly a cause of action
against a shareholder or officer, a plaintiff must do more than
conclusorily state the shareholder or officer exercises dominion
and control over the corporation." See, e.g.,
Strojmaterialintorg v. Russian Am. Commercial Corp., 815 F. Supp. 103,
105 (E.D.N.Y. 1993) (citations omitted); Cresser v.
American Tobacco Co., 174 Misc.2d 1, 5, 662 N.Y.S.2d 374, 377
(N.Y.Sup.Ct. 1997) ("Recasting the . . . criteria for piercing
the corporate veil and framing them as allegations in the
complaint does not, without more, sustain a cause of action. . .
."). Moreover, it is not even alleged what corporation Mr. Adamo
had ownership of. More important, the Complaint says nothing
about how Mr. Adamo exercised domination and control over any
corporation with respect to Mrs. Triemer's move. It does not
contain a single non-conclusory allegation about his connection
to Mrs. Triemer. And the one and only allegation against Mr.
Adamo concerning the transaction attacked — the contention in the
Ninth Count that the three individual defendants "misused the
corporate form for the express purpose of committing and
facilitating the fraud and wrongful acts set forth above" — does
not include a single specific allegation of how plaintiff misused
the corporate form. Disregard of the corporate form is highly
disfavored under New York law, see, e.g., William Wrigley Jr.,
Co. v. Waters, 890 F.2d 594, 600 (2d Cir. 1989), and depends on
a showing of fraud, which is subject to the strict pleading
requirements of Federal Rule of Civil Procedure 9(b) (requiring
the pleading of fraud with particularity). This skimpy pleading
cannot be sustained.
The failure to plead fraud with particularity, as required by
Federal Rule 9(b), means that plaintiff has failed to plead
adequately the second of the two requirements for piercing the
corporate veil. The closest reading of this Complaint fails to
disclose a single thing that Mr. Adamo allegedly did to deceive
or defraud the plaintiff in connection with her move.
Viewing the record under Federal Rule 56(b), defendant is
equally entitled to dismissal. Mr. Adamo has put in an affidavit
averring that he is not and was not a
shareholder or officer of any of the corporate defendants,
admitting that he was sometimes listed as a corporate officer of
Bobsan but contending that this was an error. Adamo also avers
that he never had any connection with the plaintiff. While
arguably plaintiff should be given an opportunity to take
discovery concerning the former point — though she could and
should have done so as soon as the motion was made — it is
unnecessary to afford her that opportunity. Her failure to
controvert Adamo's claim that he never had any dealings with her
— a matter as to which she is personally equipped to testify —
effectively disposes of her claim against him, given the
strictures of New York's piercing the corporate veil doctrine. It
also means that there is no reason to grant her leave to replead.
Mrs. Triemer has suffered a tremendous loss, and it is more
than unfortunate that she will apparently have no redress for it.
But the fact that whatever corporation entered into a contract
with her has gone out of existence does not give her recourse
against Mr. Adamo.
This constitutes the decision and order of the Court.
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