Calendar Date: February 15, 2017
Magavern Magavern Grimm, LLP, Buffalo (Edward J. Markarian of
counsel), for appellants.
Beach, PLLC, Albany (Victoria A. Graffeo of counsel), for
Before: McCarthy, J.P., Garry, Rose, Mulvey and Aarons, JJ.
MEMORANDUM AND ORDER
from an order of the Supreme Court (J. Sise, J.), entered
September 14, 2015 in Montgomery County, which denied
defendants' motion for summary judgment dismissing the
2009, defendant Erie Painting and Maintenance, Inc.
contracted with the New York State Thruway Authority to
perform rehabilitation work on a dam. In connection with this
project, All Seasons Contracting, Inc. purportedly supplied
and rented equipment and materials to Erie. In June 2010, All
Seasons filed a petition for chapter 11 bankruptcy. During
the pendency of the bankruptcy proceeding, plaintiff
purchased All Seasons' assets and acquired its interest
in its business contracts. On September 6, 2011, an order was
entered dismissing All Seasons' bankruptcy petition.
October 2012, plaintiff commenced this action alleging that,
from April 1, 2010 to September 1, 2011, All Seasons
submitted invoices to Erie totaling $428, 908.80 with respect
to equipment and materials rented from All Seasons to Erie
and that Erie failed to pay such invoices. The amended
complaint also asserted derivative claims against defendant
Western Surety Company, which, in 2009, had issued a payment
bond on behalf of Erie for the purpose of protecting all
labor and material suppliers. Following joinder of issue,
defendants moved for summary judgment dismissing the amended
complaint. Supreme Court denied the motion, prompting this
appeal by defendants.
the filing of a voluntary bankruptcy petition, all property
which a debtor owns, including a cause of action, vests in
the bankruptcy estate" (Central Natl. Bank,
Canajoharie v Scotty's Auto Sales, Inc., 138 A.D.3d
1263, 1264  [internal quotation marks, brackets,
ellipsis and citation omitted], lv dismissed 28
N.Y.3d 1044 ). As such, a debtor's failure to list
a legal claim as an asset in its bankruptcy proceeding
precludes the debtor from pursuing such claim on its own
behalf inasmuch as the claim remains the property of the
bankruptcy estate (see Mehlenbacher v Swartout, 289
A.D.2d 651, 652 ; George Strokes Elec. &
Plumbing v Dye, 240 A.D.2d 919, 920 ; see
generally Whelan v Longo, 7 N.Y.3d 821, 822 ).
"The only property that may revest in the debtor in its
individual capacity at the conclusion of the proceeding is
property that was dealt with in the bankruptcy or
abandoned" (Dynamics Corp. of Am. v Marine Midland
Bank-N.Y., 69 N.Y.2d 191, 195-196  [internal
quotation marks and citations omitted]).
conclude that defendants established that plaintiff lacked
capacity to sue Erie on the causes of action for breach of
contract, an account stated and unjust enrichment/quantum
meruit . The documentary evidence demonstrates
that, on October 22, 2010, Erie received nine invoices from
All Seasons seeking payment for equipment and materials
provided and rented from All Seasons to Erie between April
2010 and November 2010 . All of these invoices stated that
payments were "[d]ue on receipt." Erie did not pay
these invoices and, instead, immediately returned them to All
Seasons with a "disputed" notation stamped on them.
Under these circumstances, the claims asserted by plaintiff
against Erie accrued prior to the termination of the
bankruptcy proceeding, which was in September 2011 (see
Kyer v Ravena Coeymans-Selkirk Cent. Sch. Dist., 144
A.D.3d 1260, 1262 ; Delaware County v
Leatherstocking Healthcare, LLC, 110 A.D.3d 1211, 1213
; Elliott v Gian, 19 A.D.2d 196, 198 ).
More to the point, the omission of these claims from the list
of All Seasons' schedule of assets in the bankruptcy
proceeding precludes plaintiff from pursuing them on its own
behalf because they were not "dealt with" in such
proceeding (Dynamics Corp. of Am. v Marine Midland
Bank-N.Y., 69 N.Y.2d at 195; see Ervolino v
Scappatura, 162 A.D.2d 654, 655 ; DeLarco v
DeWitt, 136 A.D.2d 406, 408 ; cf. Martinez v
Desai, 273 A.D.2d 447, 447-448 ).
find that plaintiff had knowledge of the facts giving rise to
its claims inasmuch as, prior to the termination of the
bankruptcy proceeding, the managing member of plaintiff was
provided with copies of the outstanding invoices and was
advised by All Seasons' former owner that payments were
due by Erie (see Cafferty v Thompson, 223 A.D.2d 99,
101 , lv denied 88 N.Y.2d 815');">88 N.Y.2d 815 ).
Furthermore, we disagree with plaintiff's assertion that
the listing of the equipment and materials underpinning the
instant causes of action in the bankruptcy schedule of assets
constituted a sufficient disclosure of the causes of action
themselves (see Central Natl. Bank, Canajoharie v
Scotty's Auto Sales, Inc., 138 A.D.3d at 1264;
Technology Outsource Solutions, LLC v ENI Tech.,
Inc., 21 A.D.3d 1280, 1281-1282 ; George
Strokes Elec. & Plumbing v Dye, 240 A.D.2d at 920;
Weiss v Goldfeder, 201 A.D.2d 644, 645 ). As
such, summary judgment should have been granted in
McCarthy, J.P., Garry, Rose and Mulvey, JJ., concur.
that the order is reversed, on the law, with costs, motion