The opinion of the court was delivered by: Robert W. Sweet, United States District Judge.
This action seeks damages for the reconstruction of New York City's
Central Synagogue Sanctuary (the "Synagogue"), which was destroyed by a
fire while being renovated on August 28, 1998. Third-party defendant
Trident Mechanical Systems, Inc. ("Trident"), which contracted with
Central Synagogue to do mechanical work associated with the renovations,
is a wholly-owned subsidiary of third-party defendant Dualstar
Technologies Corp. ("Dualstar"). Pursuant to Fed.R.Civ.P. 56, Dualstar
moves for summary judgment on the grounds that (1) it had no contract
with any of the parties in this action nor owed them any duty of care;
and (2) there is no evidence to support piercing the corporate veil to
hold Dualstar liable for Trident's conduct. Defendant/third-party
plaintiff Turner Construction Company ("Turner") opposes the motion. For
the reasons set forth below, the motion will be denied.
Both Trident and Dualstar are Delaware corporations. (Dualstar Rule
56.1 Statement ¶¶ 1, 2.) At all times relevant to this action,
Trident was a wholly owned subsidiary of Dualstar. (Dualstar Rule 56.1
Statement ¶ 3; Turner Rule 56.1 Statement ¶ 3.)
On February 20, 1998, Trident contracted with Central Synagogue to
conduct electrical work on the Synagogue in connection with its
renovations. Dualstar was neither a party to nor mentioned in the
contract. (McKenna Aff. Ex. B.) Dualstar has no contractual relationship
with any other party to this action.
However, another Dualstar subsidiary, Integrated Control Enterprises,
Inc. ("Integrated"), was assigned to perform the control wiring for the
HVAC system for which Trident conducted the mechanical work. (Turner Rule
56.1 Statement ¶ 11.)
Turner disputes these allegations and contends that Dualstar's practice
was to overlap its officers and directors with those of its
subsidiaries, to "bundle" contracts of its subsidiaries to service
customers such as Central Synagogue, and to control the finances of
subsidiaries such as Trident. (Turner Rule 56.1 Statement ¶¶ 4-9,
11-12.) In opposition to Dualstar's affidavits, Turner has submitted
portions of deposition testimony provided by Del Bono; Trident's president
in 1998, Peter Vrankovic ("Vrankovic"); Craig Patella; and press
releases, income statements, an insurance policy, and New York Department
of State filings from Dualstar. (Rodgers Aff. Exs. A-H.)
The circumstances giving rise to this action and its early history have
been set forth in a prior opinion of his Court, familiarity with which is
assumed. See Central Synagogue v. Turner Const. Co., 64 F. Supp.2d 347
(S.D.N.Y. 1999). Relevant proceedings are set forth below. Central
Synagogue originally filed a complaint in the New York Supreme Court on
February 25, 1999, seeking amounts in subrogation against defendants
Turner, Amis Inc. ("Amis"), and Aris Development Corporation ("Aris,"
and, together with Turner and Amis, the "Defendants"). Central's
complaint alleges state law claims of breach of contract, negligence, and
breach of fiduciary duty, and seeks damages for uninsured losses
sustained in the fire.
On December 27, 1999, Turner filed an Amended Third Party Complaint in
this Court against third-party defendants Trident (as both a division and
wholly-owned subsidiary of Dualstar), Dualstar, Atkinson Koven Feinberg
Engineers, LLP ("AKF"), Schuman Lichtenstein Claman Efron Architects
("SLCE") and Central Synagogue (collectively the "third-party
defendants"). Counterclaims were filed in both the state and federal
actions. Central Synagogue filed a complaint against the third-party
defendants on February 2, 2000.
By order of June 28, 2000, the state action and this action were
determined to be "coordinated cases," as a result of which the rights and
liabilities of all parties are to be decided by this Court.
On May 22, 2000, Central Synagogue filed a Fourth Party Complaint
against Fourth Party Defendant, Acordia, Inc. ("Acordia"). That action
was consolidated with the instant case by order of July 28, 2000.
Turner filed a Second Amended Complaint on February 8, 2001, adding
Amtex Electrical Corporation ("Amtex") as a third-party defendant. Among
other claims, the Second Amended Complaint alleges negligence and breach
of contract against Trident and Dualstar. Both Trident and Dualstar have
filed counterclaims against Turner and cross-claims against ...