Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lightning Capital Holdings LLC v. Erie Painting and Maintenance, Inc.

Supreme Court of New York, Third Department

April 6, 2017

LIGHTNING CAPITAL HOLDINGS LLC, Respondent,
v.
ERIE PAINTING AND MAINTENANCE, INC., et al., Appellants.

          Calendar Date: February 15, 2017

          Magavern Magavern Grimm, LLP, Buffalo (Edward J. Markarian of counsel), for appellants.

          Harris Beach, PLLC, Albany (Victoria A. Graffeo of counsel), for respondent.

          Before: McCarthy, J.P., Garry, Rose, Mulvey and Aarons, JJ.

          MEMORANDUM AND ORDER

          AARONS, J.

         Appeal 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 amended complaint.

         In 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.

         In 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.

         "Upon 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 [2016] [internal quotation marks, brackets, ellipsis and citation omitted], lv dismissed 28 N.Y.3d 1044 [2016]). 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 [2001]; George Strokes Elec. & Plumbing v Dye, 240 A.D.2d 919, 920 [1997]; see generally Whelan v Longo, 7 N.Y.3d 821, 822 [2006]). "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 [1987] [internal quotation marks and citations omitted]).

         We 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 [1]. 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 [2]. 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 [2016]; Delaware County v Leatherstocking Healthcare, LLC, 110 A.D.3d 1211, 1213 [2013]; Elliott v Gian, 19 A.D.2d 196, 198 [1963]). 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 [1990]; DeLarco v DeWitt, 136 A.D.2d 406, 408 [1988]; cf. Martinez v Desai, 273 A.D.2d 447, 447-448 [2000]).

         We also 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 [1996], lv denied 88 N.Y.2d 815');">88 N.Y.2d 815 [1996]). 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 [2005]; George Strokes Elec. & Plumbing v Dye, 240 A.D.2d at 920; Weiss v Goldfeder, 201 A.D.2d 644, 645 [1994]). As such, summary judgment should have been granted in defendants' favor.

          McCarthy, J.P., Garry, Rose and Mulvey, JJ., concur.

         ORDERED that the order is reversed, on the law, with costs, motion granted ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.