Opinion
240 Index No. 652637/13 Case No. 2022-04043
05-11-2023
BRANDSWAY HOSPITALITY, LLC., also known as Brandsway Hospitality, Plaintiff-Appellant, v. DELSHAH CAPITAL LLC, Defendant-Respondent, Michael J. Shah, Nonparty Respondent.
Fishman Decea & Feldman, Armonk (Thomas B. Decea of counsel), for appellant. Woods Oviatt Gilman LLP, Buffalo (William F. Savino of counsel), for respondents.
Fishman Decea & Feldman, Armonk (Thomas B. Decea of counsel), for appellant.
Woods Oviatt Gilman LLP, Buffalo (William F. Savino of counsel), for respondents.
Oing, J.P., Singh, Gonza´lez, Kennedy, Scarpulla, JJ.
Order, Supreme Court, New York County (Shlomo S. Hagler, J.), entered on or about January 10, 2022, which, to the extent appealed from as limited by the briefs, denied plaintiff's motion for leave to file a fourth amended complaint to add a second cause of action to pierce the corporate veil of defendant and hold its principal, nonparty Michael J. Shah, liable for breach of contract, unanimously affirmed, with costs.
Supreme Court providently denied the motion to amend ( CPLR 3025[b] ; see Kimso Apts., LLC v. Gandhi, 24 N.Y.3d 403, 411, 998 N.Y.S.2d 740, 23 N.E.3d 1008 [2014] ). Plaintiff alleged in the first and second amended complaints, filed in 2014, that defendant wrongfully diverted business funds from the restaurant at issue to defendant's other projects — the alleged basis for holding Shah individually liable for defendant's breach of contract — and acknowledged in its April 2016 responses to interrogatories that it knew about defendant's use of funds for other facilities. Plaintiff then waited until October 2021, almost two years after filing the note of issue, to seek leave to pierce the corporate veil, without proffering an excuse for the delay (see Cseh v. New York City Tr. Auth., 240 A.D.2d 270, 272, 658 N.Y.S.2d 618 [1st Dept. 1997] ; Sutton Apts. Corp. v. Bradhurst 100 Dev. LLC, 160 A.D.3d 508, 509–510, 75 N.Y.S.3d 150 [1st Dept. 2018] ; Barry v. Clermont York Assoc. LLC, 144 A.D.3d 607, 608, 42 N.Y.S.3d 123 [1st Dept. 2016] ). The court appropriately found that the need for plaintiff to prove abuse of the corporate form would entail substantial discovery and lead to further delay (see Ness Tech. SARL v. Pactera Tech. Intl. Ltd., 180 A.D.3d 607, 608, 119 N.Y.S.3d 123 [1st Dept. 2020] ).
In addition, the proposed amendment is palpably insufficient as a matter of law (see 1781 Riverside LLC v. Hidalgo, 209 A.D.3d 418, 419, 176 N.Y.S.3d 24 [1st Dept. 2022] ). There is no independent cause of action to pierce the corporate veil (see Chiomenti Studio Legale, L.L.C. v. Prodos Capital Mgt. LLC, 140 A.D.3d 635, 636, 33 N.Y.S.3d 714 [1st Dept. 2016] ; Matter of Morris v. New York State Dept. of Taxation & Fin., 82 N.Y.2d 135, 141, 603 N.Y.S.2d 807, 623 N.E.2d 1157 [1993] ), and a breach of contract claim, without more, "does not constitute a fraud or wrong warranting the piercing of the corporate veil" ( Skanska USA Bldg. Inc. v. Atlantic Yards B2 Owner, LLC, 146 A.D.3d 1, 12, 40 N.Y.S.3d 46 [1st Dept. 2016], affd 31 N.Y.3d 1002, 74 N.Y.S.3d 805, 98 N.E.3d 720 [2018] ; see Kahan Jewelry Corp. v. Coin Dealer of 47th St. Inc., 173 A.D.3d 568, 569, 105 N.Y.S.3d 385 [1st Dept. 2019] ). To the extent plaintiff sought to allege that defendant or the restaurant's financial records were manipulated after this action was commenced, such allegation is not relevant to the single breach of contract claim that survived the parties’ summary judgment motions (see Brandsway Hospitality, LLC v. Delshah Capital LLC, 173 A.D.3d 457, 458, 103 N.Y.S.3d 42 [1st Dept. 2019] ; see also Matter of Morris, 82 N.Y.2d at 141, 603 N.Y.S.2d 807, 623 N.E.2d 1157 ). We have considered plaintiff's remaining contentions and find them unavailing.