Opinion
No. 11325/09.
2012-06-14
SHEVY'S CUSTOM WIGS, INC., Plaintiff, v. Chaya HALON, Lawrence Grossberger, Chaya Halon d/b/a Flip Wigs, Chaya Halon d/b/a Flip Lakewood, and The Wig Shop, Inc., Defendants.
Geoffrey S. Hersko, Esq., Great Neck, for Plaintiff. Leo Salzman, Esq., Brooklyn, for Defendant.
Geoffrey S. Hersko, Esq., Great Neck, for Plaintiff. Leo Salzman, Esq., Brooklyn, for Defendant.
CAROLYN E. DEMAREST, J.
The following papers numbered 1 to 15 read herein:
+-----------------------------------------------------------------------------+ ¦Papers ¦Numbered ¦ +-------------------------------------------------------+---------------------¦ ¦Notice of Motion/Order to Show Cause/ Petition/Cross ¦1–3 7–8 11–12 ¦ ¦Motion and Affidavits (Affirmations) Annexed ¦ ¦ +-------------------------------------------------------+---------------------¦ ¦Opposing Affidavits (Affirmations) ¦49–10 13–14 ¦ +-------------------------------------------------------+---------------------¦ ¦Reply Affidavits (Affirmations) ¦515 ¦ +-------------------------------------------------------+---------------------¦ ¦Affidavit (Affirmation) ¦ ¦ +-------------------------------------------------------+---------------------¦ ¦Other Papers Plaintiff's Memorandum of Law ¦6 ¦ +-----------------------------------------------------------------------------+
In this action by plaintiff Shevy's Custom Wigs, Inc. (plaintiff) against defendants Chaya Halon (Halon), Chaya Halon d/b/a Flip Wigs, and Chaya Halon d/b/a Flip Lakewood (the Halon defendants), the Wig Shop, Inc.(the Wig Shop), and Lawrence Grossberger (Grossberger) (collectively, defendants) seeking to recover payment in the principal amount of $90,889.97 for wigs and services allegedly delivered by it and asserting claims for an account stated, goods sold and delivered, breach of contract, and unjust enrichment, plaintiff moves, pursuant to CPLR 3212, for an order granting it partial summary judgment in its favor as against the Halon defendants for the relief demanded in its verified complaint and dismissing the verified answer and affirmative defenses of the Halon defendants on the claimed ground that no triable issues of fact exist.
Grossberger moves, pursuant to CPLR 3212, for summary judgment dismissing plaintiff's complaint as against him pursuant to the first affirmative defense contained in defendants' verified answer. Halon moves, pursuant to CPLR 3212, for summary judgment dismissing plaintiff's complaint as against her pursuant to the first affirmative defense contained in defendants' verified answer, and, in the event that the court declines to grant her summary judgment, then, alternatively, for an order, pursuant to CPLR 3025(b), granting defendants leave to amend their answer by adding thereto a counterclaim against plaintiff for work, labor, and services rendered.
Plaintiff's motion, insofar as it sought an order, pursuant to CPLR 2001 and 305, granting it leave to correct and/or amend the summons and the caption in this action to correctly denominate Chaya Halon d/b/a Flip Wigs and Chaya Halon d/b/a Flip Lakewood as two of the defendants in this action, in place and in stead of the originally named defendants, Flip Wigs and Flip Lakewood, which are assumed names under which Halon allegedly operated her business and are not incorporated business entities, was previously granted by the court at oral argument, and the caption, as now amended, appears above in this decision and order.
BACKGROUND
No Statements of Material Facts have been submitted by plaintiff or defendants ( see Rule 19–a of the Rules of the Commercial Division of the Supreme Court).
Plaintiff is a domestic corporation in the business of designing, manufacturing, marketing, selling, and styling wigs and hairpieces. Elon Emanuel (Emanuel) and his wife, Shevy, are the sole shareholders and directors of plaintiff. Halon is an individual engaged in the business of selling wigs, which are sold in a salon in the basement of her home at 2713 Avenue N in Brooklyn, New York, and at retail shops in Cedarhurst, New York, and in Lakewood, New Jersey.
By at least the year 2001, Halon began purchasing wigs wholesale from plaintiff and sold them at a retail price to her customers. Halon initially operated her business under the assumed names of Flip Wigs and Flip Lakewood. By a certificate of incorporation filed on May 16, 2007, the Wig Shop was incorporated. Halon is the sole shareholder and director of the Wig Shop. According to Halon, once the Wig Shop was formed, she operated her wig business through the Wig Shop with all of her wigs being sold by the Wig Shop, and all of her dealings with plaintiff, including her purchases and payments, being made solely through the Wig Shop. Grossberger is employed as the bookkeeper for Halon's business.
Plaintiff asserts that at Halon's direction and request, as it filled and delivered the orders by Halon, it delivered the wigs and invoices for the wigs to either Halon at her home, or to Flip Wigs or Flip Lakewood. Plaintiff alleges that pursuant to Halon's request, it maintained three separate accounts for Halon, namely, one for Halon, one for Flip Wigs, and one for Flip Lakewood. Plaintiff sent separate invoices for each of these accounts.
Plaintiff claims that as an accommodation to Halon and at her instruction, it customized certain products for her by specially pre-cutting and/or styling the wigs sent to her, Flip Wigs, and Flip Lakewood. Each of the invoices explicitly stated: “No refunds will be accepted for pieces that have been washed, cut or are missing tags.”
According to Halon, many of the wigs that the Wig Shop had purchased from plaintiff became knotted and were damaged, and were returned to her by the customers who purchased them from her salons. Halon, in turn, returned many of these wigs to plaintiff for repairs, which plaintiff then repaired and returned to her. Halon claims that some of these wigs were not satisfactorily repaired by plaintiff and that she had to give her customers new wigs.
According to plaintiff, in or around February and March 2008, Halon stopped making payments on the accounts and returned some unsold wigs sent to her that had been pre-cut. Halon claims that plaintiff demanded that she return all of the wigs in her possession to it. In addition, Halon and Grossberger initiated a charge reversal of a payment of $11,500 made to plaintiff through Grossberger's American Express card in order to recover sums that had already been paid to plaintiff for goods sold and delivered to Halon.
On May 8, 2009, plaintiff filed this action against defendants. Plaintiff's verified complaint alleges a first cause of action for an account stated; a second cause of action for goods sold, delivered, and accepted; a third cause of action for breach of contract; and a fourth cause of action for unjust enrichment. Defendants interposed their verified answer, dated June 5, 2009 and filed on June 10, 2009, which sets forth four affirmative defenses. Defendants' first affirmative defense alleges that all transactions between the parties from May 16, 2007, the date of the Wig Shop's incorporation, and thereafter, have been solely through the Wig Shop, and that any liability to plaintiff is solely that of the Wig Shop, with no liability on the part of Halon personally, or on the part of Grossberger, who, is merely an employee of defendants. Defendants' second, third, and fourth affirmative defenses allege, respectively, that there was payment in full, that any merchandise or invoices sent to the location of 3000 Avenue K was never received, and that the goods sold by plaintiff to them were standard out-of-the-box wigs without any customization on the part of plaintiff. Discovery has taken place, including the production of documents and the depositions of Halon, Grossberger, and Emanuel. Plaintiff filed its note of issue on October 12, 2011.
Plaintiff filed this motion for summary judgment on December 21, 2011 and Halon and Grossberger filed their respective motions on December 27, 2011 ( see Part C Rule 6 of the Kings County Supreme Court Uniform Civil Term Rules). Oral argument on these motions took place on January 11, 2012, but the determination of these motions was deferred pending mediation, on consent of the parties ( see Rule 3 of the Rules of the Commercial Division of the Supreme Court). Since the court has now been informed that mediation was unsuccessful, it must resolve the issues presented on these motions.
DISCUSSION
Plaintiff, in support of its motion, argues that it is entitled to summary judgment as against the Halon defendants on its cause of action for goods sold, delivered, and accepted and its cause of action for an account stated as against the Halon defendants. Plaintiff attempts to establish its entitlement to summary judgment by submitting three sets of invoices and the notarized affirmation of Emanuel, who sets forth that there are outstanding balances on these invoices.
“In an action for goods sold and delivered, a plaintiff must demonstrate that on a certain date, it sold and delivered certain goods to the defendant at the defendant's request; that the goods were of reasonable value or agreed price; and that payment was demanded by the plaintiff, but not made” (Liquid Media, Inc. v. TGG Digital Media, LLC, 2010 N.Y. Slip Op 30648[U] [Sup Ct, Nassau County 2010]; see also Boise Cascade Off. Prods. Corp. v. Gilman & Ciocia, Inc., 30 AD3d 454, 454 [2d Dept 2006]; Neuman Distribs. v. Falak Pharm. Corp., 289 A.D.2d 310, 311 [2d Dept 2001] ). A buyer may defeat or diminish the seller's action for goods sold and delivered by alleging a breach of the underlying sales agreement or raising issues regarding the nonconformity of goods, which, if established, could diminish or negate a seller's recovery ( see generallyUCC 2–607, 2–714, 2–717; Created Gemstones v. Union Carbide Corp., 47 N.Y.2d 250, 255 [1979] ).
“An account stated represents an agreement between the parties reflecting amounts due on prior transaction” (M & A Constr. Corp. v. McTague, 21 AD3d 610, 611 [3d Dept 2005]; see also Jim–Mar Corp. v. Aquatic Constr., 195 A.D.2d 868, 869 [3d Dept 1993], lv denied82 N.Y.2d 660 [1993] ). Where “there is any dispute regarding the correctness of the account, the cause of action fails” (M & A Constr. Corp., 21 AD3d at 612;see also Abbott, Duncan & Wiener v. Ragusa, 214 A.D.2d 412, 413 [1st Dept 1995] ). “Oral objections to an account stated are sufficient to defeat a motion for summary judgment” (Prudential Bldg. Maintenance Corp. v. Burton Siedman Assoc., 86 A.D.2d 519, 519 [1st Dept 1982]; see also James Talcott, Inc. v. United States Tel. Co., 52 A.D.2d 197, 201 [1st Dept 1976] ).
Plaintiff contends that it provided goods and services to the Halon defendants at their specific instance and request, and that the goods were billed to the accounts specified by them. Plaintiff has submitted invoices dated between May 1, 2007 and February 14, 2008 (plaintiff's exhibit G), which are addressed to Halon at 2713 Avenue N, in Brooklyn. Plaintiff denominates these invoices as being for the Halon account. Plaintiff has also submitted invoices dated between November 20, 2007 and April 2, 2009 (plaintiff's exhibit I), which are addressed to “Flip” at 3000 Avenue K, in Brooklyn. Plaintiff asserts that these invoices are for the Flip Wigs account.
Plaintiff alleges that with respect to the Halon account and the Flip Wigs account, Halon made intermittent payments on account of the merchandise that was ordered and accepted, which were applied, at its discretion or at Halon's request, either to a specific invoice, or to the most aged invoice, but that Halon did not pay the outstanding amounts due in full and the invoices remained open and outstanding. Plaintiff asserts that in or around February 2008, Halon stopped making payments on the Halon account and the Flip Wigs account and, instead, returned certain wigs that had been charged to these accounts, some of which had been customized pursuant to her order and thus rendered unmarketable.
With respect to the Flip Lakewood account, plaintiff has submitted a Customer Transaction Report (plaintiff's exhibit J), which lists charges incurred by Flip Lakewood between April 18, 2007 and March 28, 2008. Plaintiff alleges that in or around March 2008, Halon stopped making payments on the Flip Lakewood account and returned 41 hairpieces to plaintiff. An invoice dated March 28, 2008 (plaintiff's exhibit K) is addressed to Flip Lakewood at 714 South Lake Drive in Lakewood, New Jersey, for 41 damaged pieces returned, totaling $12,300. The Customer Transaction Report reflected that on March 28, 2008, the outstanding balance due on the Flip Lakewood account was in the sum of $54,985.98, which included the sum of $12,300 charged to Flip Lakewood for work done by plaintiff on these 41 allegedly damaged hairpieces that were returned to plaintiff. The Customer Transaction Report shows that on December 4, 2008, following the application of credit for returned goods, the balance due on the Flip Lakewood account was in the sum of $7,985.98. Plaintiff asserts that no part of this $7,985.98 has been paid.
Plaintiff has submitted a letter dated March 20, 2009, which was addressed to the Wig Shop, Halon, Flip Wigs c/o Halon, and Flip Lakewood c/o Halon (plaintiff's exhibit H). In this letter, Emanuel stated that the accounts under the names of Halon, Flip, and Flip Lakewood were overdue. He specifically set forth that $19,785 was owed on the Halon account, that $63,108.99 was owed on the Flip account, and that $7,985.98 was owed on the Flip Lakewood account. He demanded payment of the total amount of $90,889.97 as the monies due for the goods and services that had been previously billed.
Plaintiff asserts that, by these submissions, it has demonstrated that Halon, either in her individual capacity or in her capacity as doing business under the assumed names of Flip Wigs and Flip Lakewood that she adopted, is liable to it on its causes of action for goods sold and delivered and for an account stated. In opposition, the Halon defendants have submitted Halon's notarized affirmation.
Halon, in her affirmation, asserts that her relationship with plaintiff lasted until February 2008, when plaintiff ordered defendants to send back every one of its wigs that they had in their possession, which she did, resulting in the return of a total of 127 wigs. Halon states that she was forced to return these wigs, and that plaintiff then billed her again for “repairs” to these wigs, which she did not in any way re-style and for which she had been already charged an extra $100 to have sent to her as pre-cut. Halon asserts that of the $90,889.97 claimed by plaintiff, $25,800 and $7,985 (for a total of $33,785) are for “sham repairs.” Halon asserts that as to the balance of the claim, $57,104.97, there was non-delivery, duplicate billing, and charges for wigs that were returned to plaintiff.
It is undisputed that Halon had returned many wigs to plaintiff for repairs, and Halon raises defenses that plaintiff had sent her wigs of inferior and non-conforming quality. Thus, there are triable issues of fact as to whether plaintiff is entitled to payment for goods sold and delivered so as to preclude summary judgment in favor of plaintiff on its cause of action seeking recovery for goods sold and delivered ( see Elmo Mfg. Corp. v. American Innovations, Inc., 44 AD3d 703, 704 [2d Dept 2007] ). There are also triable issues of fact as to whether there were prompt oral objections to the account stated which preclude the granting of summary judgment to plaintiff on its cause of action for an account stated ( see id.; United Consol. Indus. v. Mendel's Auto Parts, 150 A.D.2d 768, 769 [2d Dept 1989] ). Therefore, plaintiff's motion, insofar as it seeks partial summary judgment in its favor, must be denied.
While plaintiff, in its memorandum of law, only seeks summary judgment in its favor with respect to its causes of action for goods sold and delivered and for an account stated, it also would not be entitled to summary judgment in its favor on its causes of action for breach of contract and unjust enrichment.
Plaintiff, in its motion, also seeks summary judgment dismissing defendants' affirmative defenses. Defendants oppose such dismissal.
Halon, in addition to opposing plaintiff's motion insofar as it seeks summary judgment dismissing defendants' first affirmative defense, seeks, in her motion, summary judgment in her favor based upon defendants' first affirmative defense. This first affirmative defense alleges that all transactions between the parties have been solely through the Wig Shop and that the liability to plaintiff, if any, is solely on the part of this corporate defendant. Halon has submitted the certificate of incorporation for the Wig Shop, which was formed on May 16, 2007. Halon has also submitted copies of several checks dated from June 2007 to December 2007 from the Wig Shop made payable to plaintiff for its invoices, and the corporate tax returns of the Wig Shop for each year from 2007 to date. Halon asserts that once the Wig Shop was formed, all payments to plaintiff were made by the Wig Shop and plaintiff accepted those checks without any objections. Halon argues that since the dates of the invoices were after May 16, 2007, they are solely the responsibility of the Wig Shop and she cannot be held individually liable for them.
Plaintiff, in opposition to Halon's motion and in support of its motion, contends that defendants' first affirmative defense is disproved by e-mails by Grossberger sent in December 2007, after the formation of the Wig Shop on May 16, 2007. Plaintiff asserts that these e-mails demonstrate that the goods and services were billed to the accounts of Halon, individually, Halon d/b/a Flip Wigs, and Halon d/b/a Flip Lakewood, pursuant to the direction of Halon, as set forth in the e-mails of Grossberger. Specifically, on December 5, 2007, seven months after the incorporation of the Wig Shop, Grossberger stated, in an e-mail to Rivky Margulies (Margulies), an employee of plaintiff, that: “[y]ou need to be on top of Lakewood's payments. Lakewood is a separate entity and should no way affect the Flip Brooklyn and Chaya Halon accounts.” Thereafter, an e-mail dated December 18, 2007 from Grossberger to Margulies stated: “[p]lease send me account statements for Flip and Chaya,” and in response to an e-mail from Margulies asking whether Grossberger wanted updates on Lakewood, Grossberger, in an e-mail dated December 24, 2007, responded “yes.”
These e-mails suggest that the accounts may have been separately maintained under the names of Halon, Flip Wigs, and Flip Lakewood pursuant to Halon's direction, through her employee, Grossberger. Furthermore, the invoices on the Halon account begin on April 18, 2007, prior to the incorporation of the Wig Shop on May 16, 2007. In addition, it is undisputed that Halon had a prior course of dealing with plaintiff since at least 2001, which was prior to the incorporation of the Wig Shop.
It is well established that “a corporation exists independently of its owners, as a separate legal entity, that the owners are normally not liable for the debts of the corporation, and that it is perfectly legal to incorporate for the express purpose of limiting the liability of the corporate owners” (Matter of Morris v. New York State Dept. of Taxation & Fin., 82 N.Y.2d 135, 140 [1993] ). Here, plaintiff does not seek to pierce the corporate veil of the Wig Shop, but argues that it dealt directly with Halon and with Flip Wigs and Flip Lakewood, under which Halon conducted business with it. There was no written contract signed by the parties pursuant to which they conducted their business, and it is unclear as to whether plaintiff, in fact, dealt with Halon individually or solely through the Wig Shop. It is also unclear as to whether the separate accounts were set up merely based upon the location of the salons or were meant to represent separate entities.
Therefore, the court finds that triable issues of fact are raised as to whether Halon is personally responsible for payment for the goods sent to her directly or sent to her under the names of Flip Wigs or Flip Lakewood, and whether she represented to plaintiff that Flip Wigs and Flip Lakewood were entities separate from the Wig Shop. Thus, triable issues of fact exist as to whether Halon's entire course of conduct renders her personally liable to plaintiff for the debts at issue ( see Nebraskaland, Inc. v. Best Selections, 303 A.D.2d 662, 664 [2d Dept 2003] ). Consequently, both plaintiff's motion for partial summary judgment dismissing defendants' first affirmative defense and Halon's motion for summary judgment dismissing plaintiff's complaint as against her must be denied.
Insofar as plaintiff's motion seeks dismissal of defendants' second affirmative defense, plaintiff asserts that the Halon defendants are unable to establish that payment in full was ever made. The Halon defendants, however, dispute this issue. They claim that since the wigs sent by plaintiff were damaged, they do not owe plaintiff any further monies as payment for them. As discussed above, Halon further claims that plaintiff ordered her to send back every one of its wigs that she had in her possession, in February 2008, and that, after being forced to return these wigs, plaintiff billed her again for “repairs” to these wigs, which she did not in any way re-style and for which she had already been charged an extra $100 as pre-cut. Halon, therefore, maintains that there was non-delivery, duplicate billing, and charges for wigs that had been returned to plaintiff. Thus, issues of fact exist as to this affirmative defense, so that its dismissal is not warranted.
Defendants' third affirmative defense alleges that any merchandise, invoices, or correspondence sent to the location at 3000 Avenue K, in Brooklyn, was not received since they never conducted business at that location. Plaintiff asserts that this defense should be dismissed because Halon and Grossberger have not specifically stated what goods were not received. However, Halon testified, at her deposition, that she never conducted business at that location (Halon's Dep. Transcript at 16), and Emanuel admitted, at his deposition, that defendants did not conduct business at 3000 Avenue K (Emanuel's Dep. Transcript at 21). The invoices for “Flip” reflect that they are directed to the 3000 Avenue K address .
Thus, since this would be relevant, at least as to plaintiff's claim for an account stated, dismissal of this affirmative defense must be denied.
Emanuel testified, at his deposition, that plaintiff sent letters to 3000 Avenue K, but also sent copies of letters to the Halon defendants' current address and that invoices were delivered with the goods to their current address (Emanuel's Dep. Transcript at 21).
Defendants' fourth affirmative defense asserts that the goods sold to them by plaintiff were without any customization on the part of plaintiff. In seeking dismissal of this affirmative defense, plaintiff asserts that the wigs were pre-cut for the Halon defendants. In this regard, Emanuel testified, at his deposition, that when wigs were cut for an order, this was specifically done for the customer (Emanuel's Dep. Transcript at 15). However, Emanuel had “no clue” as to how many various styles of pre-cut wigs there were, and that it would depend on the customer whether plaintiff could resell a wig that it had pre-cut for another customer ( Id. at 15, 17). During the course of their deposition testimony, both Halon and Grossberger acknowledged that the Halon defendants purchased pieces from plaintiff that were pre-cut (Halon's Dep. Transcript at 19, 29; Grossberger's Dep. Transcript at 75). Halon further acknowledged that plaintiff would not take back pieces if they were cut (Halon's Dep. Transcript at 47). Halon, however, argues that the legend on plaintiff's invoices, which stated that “no refunds will be accepted for wigs that have been washed, cut or have missing tags,” should not apply to wigs that plaintiff itself pre-cut, and which plaintiff demanded back.
Halon states that she asked plaintiff to cut wigs in a certain style, which was one of a number of different standard styles, and that plaintiff billed her $100 over the invoice price of each wig for this service. Halon asserts that these pre-cut wigs were never re-styled prior to sale. Halon claims that the wigs that were sent to her were of standard sizes, lengths, and colors, and were not customized for her, and that “[t]he wig market for Orthodox Jewish women is a thriving market, and there is practically no wig that cannot be sold, except if it is severely damaged.”
The court thus finds that triable issues of fact have been raised as to whether the exclusion on the invoice applied to wigs that were pre-cut by plaintiff or only to wigs that were subsequently cut by Halon and as to the extent that the pre-cut wigs were customized for Halon so that they could not be marketed and sold to other customers. Consequently, dismissal of defendants' fourth affirmative defense must be denied.
Grossberger, in his motion, seeks summary judgment dismissing plaintiff's complaint as against him based upon the first affirmative defense in defendants' answer, which states that all transactions involving plaintiff were made solely through the corporate defendant, the Wig Shop, and further states that he was merely an employee of the co-defendants, who did not personally conduct any transactions with plaintiff, so that there could be no liability on his part. Grossberger, in his notarized affirmation in support of his motion, asserts that the open invoices for which plaintiff now seeks recovery were not his personal obligation, as evidenced by the lack of any record of any wigs being shipped to him. He maintains that his connection to this matter was solely that of an employee.
In opposition to Grossberger's motion, plaintiff argues that while Grossberger seeks to evade liability based upon his status as an employee, Grossberger had managerial responsibility for the business of Halon, individually, and d/b/a Flip Wigs and Flip Lakewood, as well as the corporate defendant, the Wig Shop. In support of this argument, however, plaintiff merely points to Halon's deposition testimony that Grossberger “is the person who runs the business for [her], the numbers, the money, the paperwork” (Halon's Dep. Transcript at 11). Plaintiff contends that Grossberger had de facto control of defendants' business operations based upon Halon's deposition testimony that she did not have the slightest idea of how the books of her business were maintained, and that it is only “[o]nce in a while, if [she] feel[s] like things are seemingly getting out of hand,” that she would ask Grossberger “to sit down with [her] and explain to [her] what's going on and if there's a need for [her] intervention” ( Id. at 12–13).
Grossberger, however, testified, at his deposition, that he is an employee of the Wig Shop (Grossberger's Dep. Transcript at 4), who performs mostly an administrative function, which includes bookkeeping, and that he has no ownership interest in the Wig Shop ( Id. at 15). Grossberger notes that in paragraph 12 of the complaint, plaintiff acknowledged that he is Halon's employee. Furthermore, Emanuel, at his deposition, admitted that Grossberger is an employee of Halon (Emanuel's Dep. Transcript at 30), and plaintiff has conceded that it was aware of Grossberger's employment status. Emanuel also conceded that plaintiff did not ship any wigs to Grossberger personally ( Id. at 29–30).
Plaintiff points to the fact that its charges were paid, from time to time, through Grossberger's American Express account, and that Grossberger admitted, in paragraph 2 of the answer, and at his deposition, that he implemented the charge back of $11,450 on that account (Grossberger's Dep. Transcript at 89–95). Plaintiff contends that this was a misappropriation and diversion by Grossberger of funds that were due and payable to it, which caused it to suffer damages in the aggregate sum of at least $11,500, and that Grossberger was unjustly enriched as a result of the charge back. Plaintiff argues that this gives rise to a cognizable claim as against Grossberger.
This argument must be rejected. Grossberger testified, at his deposition, that he added the Wig Shop as a company name to his American Express account, and that it was the Wig Shop's transaction that was charged to his American Express card (Grossberger's Dep. Transcript at 42–43). Grossberger explains that the American Express account was a business account, which put both his individual name and the business name on the card, but separated his personal charges from the business charges. This is confirmed by the American Express card bill for the period of February to March 2008, which designated the charges at issue by plaintiff, including a February 28, 2009 charge for $11,450 and a March 5, 2008 charge for $11,450, under the heading of “New Activity For the Wig Shop” (defendants' exhibit D). The notice by American Express of the dispute, dated August 6, 2008, and a notice of a re-dispute, dated May 27, 2008, sent to plaintiff likewise lists the Wig Shop, as opposed to Grossberger, as the name of the customer who was disputing plaintiff's charges and requesting a credit for defective merchandise received from plaintiff's establishment. Grossberger has thus demonstrated that he did not receive any merchandise from plaintiff, that he did not initiate the charge, and that no benefit accrued to him personally from either the charge or the reversal of the charge since the American Express card was in the name of the corporation, the Wig Shop, and it was the corporation that was responsible for the payment of the charge. As noted above, plaintiff has conceded that it was aware of Grossberger's employment status, and it has been shown that the charges were made pursuant to his employment ( see Wiernik v. Kurth, 59 AD3d 535, 537 [2d Dept 2009] ).
“It is well established that officers or agents of a company are not personally liable on a contract if they do not purport to bind themselves individually” (Georgia Malone & Co., Inc. v. Rieder, 86 AD3d 406, 408 [1st Dept 2011]; see also Salzman Sign Co. v. Beck, 10 N.Y.2d 63, 67 [1961];Stern v. H. DiMarzo, Inc., 77 AD3d 730, 731 [2d Dept 2010], quoting Wiernik, 59 AD3d at 537 [2009] [“persons may not be held personally liable on contracts of their corporations, provided they did not purport to bind themselves individually under such contracts”]; PNC Capital Recovery v. Mechanical Parking Sys., 283 A.D.2d 268, 270 [1st Dept 2001], lv dismissed96 N.Y.2d 937 [2001],appeal dismissed98 N.Y.2d 763 [2002];Westminster Constr. Co. v. Sherman, 160 A.D.2d 867, 868 [2d Dept 1990] ). In order to hold an agent of a company personally liable, “[t]here must be clear and explicit evidence of the agent's “intention to substitute or superadd his [or her] personal liability for, or to, that of his [or her] principal” ‘ “ (Stamina Prods., Inc. v. Zintec USA, Inc., 90 AD3d 1021, 1022 [2d Dept 2011], quoting Star Video Entertainment v. J & I Video Distrib., 268 A.D.2d 423, 423–424 [2d Dept 2000], quoting Savoy Record Co. v. Cardinal Export Corp., 15 N.Y.2d 1, 4 [1964] ).
Here, the individual defendant, Grossberger, has made a prima facie showing of his entitlement to judgment as a matter of law by submitting evidentiary proof that he, at all times with respect to his dealings with plaintiff, including the use and charge back of his American Express card, was acting on behalf of a disclosed principal, solely in his capacity as an employee, and that he did not purport to bind himself individually to plaintiff for any of the debts incurred for the wigs ( see Stamina Prods., Inc., 90 AD3d at 1022;Georgia Malone & Co., Inc. v. Rieder, 86 AD3d 406, 408 [1st Dept 2011]; Stern, 77 AD3d at 731;Khiyayev v. MikeSad Enters., Inc., 66 AD3d 845, 846 [2d Dept 2009]; Wiernik, 59 AD3d at 537;Colucci v. AFC Constr., 54 AD3d 798, 799 [2d Dept 2008] ). Thus, Grossberger is entitled to summary judgment dismissing plaintiff's complaint as against him ( seeCPLR 3212[b] ).
Since the court has denied Halon's motion, insofar as it seeks summary judgment dismissing the complaint as against her, it must address that branch of Halon's motion which alternatively requests an order, pursuant to CPLR 3025(b), allowing defendants to amend their answer by adding a counterclaim against plaintiff for work, labor, and services rendered. This proposed counterclaim appears to allege that plaintiff's wigs were not first quality, that damaged pieces kept coming back to Halon several times, that she had to replace plaintiff's wigs with a different brand for her customers, and that the Halon defendants were forced to return wigs that Halon and her staff had spent time repairing, re-washing, and re-conditioning. Halon asserts that the proposed counterclaim for work, labor, and services is also premised upon a series of invoices allegedly sent by the Wig Shop to plaintiff between June 22, 2008 and December 16, 2008, which purported to bill plaintiff for customer service time related to damaged pieces, and the cost to replace pieces which were returned to the Wig Shop.
Plaintiff asserts that as a threshold matter, Halon, as an individual, lacks standing to assert this counterclaim on behalf of the corporate defendant, the Wig Shop. In this regard, it is noted that this motion actually seeks to amend the answer on behalf of defendants, rather than Halon personally, and they are all represented by the same counsel.
Leave to amend a pleading should be freely granted absent prejudice or surprise ( seeCPLR 3025[b]; Edenwald Contr. Co. v.. City of New York, 60 N.Y.2d 957, 959 [1983];Dickinson v. Igoni, 76 AD3d 943, 946 [2d Dept 2010] ). Plaintiff contends that Halon's request for leave to amend her answer is untimely sought, following its filing of its note of issue, and that it would, therefore, be prejudiced by the assertion of this counterclaim at this juncture of the action.
Halon, however, contends that there would be no prejudice or surprise to plaintiff by the amendment of defendants' answer to assert this counterclaim because the basis of her counterclaim was set forth both in her deposition testimony and in the invoices that were sent to plaintiff documenting her claim, which were marked as exhibits at her deposition and were also provided to plaintiff as part of the document discovery.
Specifically, Halon, at her deposition, testified that plaintiff's claims are unjustified “because [of] the amount of time, effort, [and] energy that [she] put into [repairing plaintiff's] damaged wigs [which she] feel[s plaintiff] ends up owing [her]” (Halon's Dep. Transcript at 25). Halon explained that the wigs that she took off her walls and which she was forced to return to plaintiff were “damaged pieces from customers that [she] either had to spend time repairing, re-washing, re-conditioning or actually replacing with a different brand [of] wig for [her] customer[s]” because they were not first quality ( Id. at 26–29). Halon has also submitted copies of the invoices sent to plaintiff, billing plaintiff for customer service time related to allegedly damaged pieces and the cost to replace pieces which were returned to the Wig Shop. Thus, in view of this deposition testimony and these invoices previously submitted to plaintiff during discovery, plaintiff would be unable to demonstrate surprise caused by defendants' delay in interposing this counterclaim. Defendants, however, have offered no explanation for their failure to plead this counterclaim in their original answer and have first sought to interpose their claim only after the note of issue has been filed, in response to plaintiff's motion for summary judgment.
Plaintiff asserts that Halon cannot demonstrate that the proposed counterclaim has any merit. Plaintiff points to the fact that it was only after it had sent invoices to the Halon defendants and sought payment on the invoices, and after the Halon defendants had already stopped making payments on the invoices, that the Wig Shop sent these invoices to it. Plaintiff further claims that the services set forth in the Wig Shop's invoices were provided solely for the benefit of defendants and their customers, and were not made at plaintiff's instance or request, and did not inure to its benefit.
“Since the court must examine the proposed pleading for patent sufficiency, it is axiomatic that the proposed pleading must be provided with a motion seeking leave to amend the same and that a failure to do so warrants denial of the motion” ( Lebron v. St. Vincent Med. Ctr., 21 Misc.3d 1147[A], 2008 N.Y. Slip Op 52542[U], *7 [Sup Ct, Bronx County 2008]; see also Loehner v. Simons, 224 A.D.2d 591, 591 [2d Dept 1996]; Branch v. Abraham & Strauss Dept. Store, 220 A.D.2d 474, 475 [2d Dept 1995]; Goldner Trucking Corp. v. Stoll Packing Corp., 12 A.D.2d 639, 640 [2d Dept 1960] ). A motion to amend a pleading which does not contain a copy of the proposed amendment is fatally deficient and must be denied ( see Muro–Light v. Farley, 2012 N.Y. Slip Op 03420, *2 [2d Dept 2012]; Pollak v. Moore, 85 AD3d 578, 579 [1st Dept 2011]; Chang v. First Am. Tit. Ins. Co. of NY, 20 AD3d 502, 502 [2d Dept 2005]; Ferdinand v. Crecca & Blair, 5 AD3d 538, 540 [2d Dept 2004], lv denied3 NY3d 609 [2004] ).
Defendants have failed to annex a copy of their proposed amended pleading, and it cannot be ascertained from the moving papers precisely what allegations the proposed counterclaim would contain. Thus, denial of Halon's motion, insofar as it seeks leave to amend defendants' answer, is mandated.
CONCLUSION
Plaintiff's motion for partial summary judgment in its favor as against the Halon defendants and dismissing the affirmative defenses in defendants' answer is denied in its entirety. Halon's motion, insofar as it seeks summary judgment dismissing plaintiff's complaint as against her individually pursuant to the first affirmative defense in defendants' answer, is denied. Grossberger's motion for summary judgment dismissing plaintiff's complaint as against him pursuant to the first affirmative defense in defendants' answer, is granted. Halon's motion, in the alternative, for an order, pursuant to CPLR 3025(b), for leave to amend defendants' answer by adding a counterclaim against plaintiff, is denied.
A final settlement conference, with the parties, is scheduled for August 1, 2012 at 2:30 P.M..
This constitutes the decision and order of the court.