Opinion
2013-1949 S C
04-16-2015
Hair Studio 27, Inc., Respondent, v. Salvatore DiCarlo and HAMILTON, KANE, MARTIN ENT., INC., Appellants.
PRESENT: : , MARANO and CONNOLLY, JJ.
Appeal from a judgment of the District Court of Suffolk County, Fifth District (Vincent J. Martorana, J.), entered May 21, 2013. The judgment, after a nonjury trial, awarded plaintiff the principal sum of $4,525.54 as against both defendants.
ORDERED that the judgment is modified by providing that so much of the action as is against defendant Salvatore DiCarlo is dismissed; as so modified, the judgment is affirmed, without costs.
Plaintiff commenced this small claims action to recover a three months' security deposit withheld by defendants Hamilton, Kane, Martin Enterprises, Inc. and Salvatore DiCarlo, an officer and principal shareholder of the corporate defendant. There is no dispute that, in 2001, plaintiff and the corporate defendant, by defendant DiCarlo, executed a 10-year lease for a premises which plaintiff thereafter converted into a hair styling salon by installing, among other things, mirrors, plumbing, fixtures, a closet, an interior partition creating two rooms from one, and an exterior sign advertising the business. The lease provided that the premises must be surrendered "in the same conditions as were upon delivery and possession" and specifically required tenant to "remove all of its trade fixtures . . . before surrendering the premises . . . and . . . repair any damage . . . caused thereby." After the expiration of the lease term, plaintiff held over for several months, and surrendered possession 10 days into the final holdover month.
At a nonjury trial, plaintiff acknowledged its liability under the lease for a third of the rent due in the holdover month and conceded that the premises had not been restored to its condition at the outset of the tenancy. Three months after the surrender, the corporate defendant informed plaintiff by letter that all but a small portion of the security deposit would be withheld for plaintiff's breach of the repair/restoration provision, and attached an unsigned repair estimate as defendants' proof of damages. Defendant DiCarlo acknowledged that plaintiff had paid three months' security deposit to the corporate defendant at the outset of plaintiff's tenancy; that none of the repairs itemized in the estimate had been carried out; and that a new tenant had accepted delivery of the premises in the condition surrendered by plaintiff, having received, according to Mr. DiCarlo, a rent credit in consideration therefor. After the trial, the District Court concluded that plaintiff had established its prima face case and entered a judgment against both defendants in the principal sum of $4,525.54, representing the security deposit less the sum due as use and occupancy for the final holdover period.
The parties' lease required plaintiff, upon surrender, to restore the premises to the condition at delivery, an obligation that was not diminished by defendants having re-let the premises without performing any of the repairs (see Farrell Lines v City of New York, 30 NY2d 76 [1972]; Building Serv. Local 32B-J Pension Fund v 101 L. P., 115 AD3d 469, 471 [1014]; American Real Estate Holdings Ltd. v Citibank, N.A., 45 AD3d 277, 278 [2007]; Charlebois v Carisbrook Industries, Inc., 23 AD3d 821, 822 [2005]). However, having invoked the restoration clause as an affirmative defense, defendants had the burden to establish their damages, by expert testimony, two itemized repair estimates, or an itemized bill or invoice, receipted or marked paid (see UDCA 1804; Cortes v Adams Concrete & Constr., 25 Misc 3d 133[A], 2009 NY Slip Op 52180[U] [App Term, 9th & 10th Jud Dists 2009]; see also Milliner v Shahar, 45 Misc 3d 133[A], 2014 NY Slip Op 51668[U] [App Term, 2d, 11th & 13th Jud Dists 2014]; Hayes v White Oaks Group, LLC, 6 Misc 3d 1039[U], 2005 NY Slip Op 50350[U], *3 [Ossining Just Ct 2005]). Defendants' single, unsigned repair estimate was insufficient to prove damages to offset the amount due plaintiff and, thus, to the extent that the judgment awarded plaintiff the principal sum of $4,525.54 as against defendant Hamilton, Kane, Martin Ent., Inc., we find that "substantial justice [was] . . . done between the parties according to the rules and principles of substantive law" (UDCA 1807; see UDCA 1804; Williams v Roper, 269 AD2d 125, 126 [2000]).
However, we find that the judgment, insofar as it was entered against defendant DiCarlo, was improper. "A corporate officer who executes a contract acting as an agent for a disclosed principal is not liable for a breach of the contract unless it clearly appears that he or she intended to bind himself or herself personally" (Ho Sports, Inc. v Meridian Sports, Inc., 92 AD3d 915, 916-917 [2012], quoting Stamina Prods., Inc. v Zintec USA, Inc., 90 AD3d 1021, 1022 [2011]). There is no evidence that Mr. DiCarlo agreed to bind himself personally with respect to the transaction with plaintiff (GMS Batching, Inc. v TADCO Const. Corp., 120 AD3d 549, 552 [2014]; McDonagh Real Estate & Dev. v Kwilecki, 158 AD2d 372 [1990]; Vessa v Gull Wing Motors, Inc., 38 Misc 3d 129[A], 2012 NY Slip Op 52390[U] [App Term, 9th & 10th Jud Dists 2012]; Rebatta v Allyn, 2 Misc 3d 132[A], 2004 NY Slip Op 50117[U] [App Term, 9th & 10th Jud Dist 2004]). Consequently, substantial justice (UDCA 1804, 1807) requires that the judgment be modified by dismissing so much of the action as was asserted against defendant DiCarlo, since he cannot be adjudged personally liable for the security deposit accepted by the corporate defendant pursuant to the lease agreement.
Garguilo, J.P., Marano and Connolly, JJ., concur.
Decision Date: April 16, 2015