Cunningham v. Mary Agnes Manor Mgmt., L.L.C.

188 A.D.3d 1560

136 N.Y.S.3d 584

Kevin M. CUNNINGHAM, as Administrator of the Estate of Patrick Cunningham, Deceased, Plaintiff-Appellant,

v.MARY AGNES MANOR MANAGEMENT, L.L.C., Mary Agnes Manor Realty, L.L.C., Neil Zyskind, Defendants-Respondents, et al., Defendants.

392

CA 19-01231

Supreme Court, Appellate Division, Fourth Department, New York.

Entered November 13, 2020

FRIEDLANDER & MOSHER, P.C., ITHACA (WILLIAM S. FRIEDLANDER OF COUNSEL), FOR PLAINTIFF-APPELLANT.

HURWITZ & FINE, P.C., BUFFALO (PATRICK B. CURRAN OF COUNSEL), FOR DEFENDANTS-RESPONDENTS.

PRESENT: WHALEN, P.J., CENTRA, PERADOTTO, WINSLOW, AND BANNISTER, JJ.

MEMORANDUM AND ORDER

Appeal from an order of the Supreme Court, Erie County (E. Jeannette Ogden, J.), entered May 9, 2019. The order granted the motion of defendants Mary Agnes Manor Management, L.L.C., Mary Agnes Manor Realty, L.L.C., and Neil Zyskind to dismiss plaintiff's first amended complaint against them and denied plaintiff's cross motion for leave to file a second amended complaint.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying the motion in part and reinstating the first cause of action in the first amended complaint against defendants Mary Agnes Manor Management, L.L.C., Mary Agnes Manor Realty, L.L.C., and Neil Zyskind insofar as it is based on theories of vicarious liability, and reinstating the second and fifth causes of action in the first amended complaint against those defendants, and granting the cross motion upon condition that plaintiff shall serve the proposed second amended complaint within 30 days of the date of entry of the order of this Court, and as modified the order is affirmed without costs.

Memorandum: Plaintiff, as administrator of decedent's estate, commenced this action to recover damages arising from injuries decedent suffered while he was a patient at a nursing home facility and was assaulted by another resident of the facility, who had a history of, inter alia, mental illness and violent behavior. Plaintiff's first amended complaint asserted causes of action against, among others, defendants Mary Agnes Manor Management, L.L.C., and Mary Agnes Manor Realty, L.L.C., (collectively, MAM defendants), and Neil Zyskind (collectively, defendants), and alleged that defendants owned and operated the facility where decedent was injured. In lieu of answering the first amended complaint, defendants moved pursuant to CPLR 3211 (a) (7) to dismiss the first amended complaint against them. Plaintiff opposed the motion and cross-moved for leave to file a second amended complaint that would include additional factual allegations with respect to the cause of action for negligence and the causes of action based on violations of the Public Health Law. Supreme Court granted defendants' motion, dismissed the first amended complaint against defendants in its entirety, and denied plaintiff's cross motion. Plaintiff appeals.

With respect to the first cause of action in the first amended complaint, we agree with plaintiff that he adequately stated a cause of action for negligence premised on a theory of vicarious liability based on the doctrine of piercing the corporate veil or alter ego. "[T]o withstand a motion to dismiss, [a] plaintiff must plead sufficient facts to reflect that the defendant's domination and control over the corporation was so complete that the corporation had no separate mind, will, or existence of its own" (Robert L. Haig, Commercial Litigation in New York State Courts § 8:67.50 [4th ed 2 West's NY Prac Series Sept. 2019 Update]; see Sky-Track Tech. Co. Ltd. v. HSS Dev., Inc. , 167 A.D.3d 964, 965, 91 N.Y.S.3d 119 [2d Dept. 2018] ). The plaintiff must allege that the domination and control constituted a fraud or an "abuse [of] the privilege of doing business in the corporate form to perpetrate a wrong or injustice" ( Matter of Morris v. New York State Dept. of Taxation & Fin. , 82 N.Y.2d 135, 142, 603 N.Y.S.2d 807, 623 N.E.2d 1157 [1993] ; see Abbott v. Crown Mill Restoration Dev., LLC , 109 A.D.3d 1097, 1101, 972 N.Y.S.2d 117 [4th Dept. 2013] ). Here, plaintiff alleges that the MAM defendants were operated in such a way "as if they were one by commingling them on an interchangeable basis or convoluted separate properties, records or control." Significantly, plaintiff alleged that the corporate formalities were conduits to avoid obligations to the facility's residents, and thus the allegations are sufficient to state a cause of action for negligence under a theory of piercing the corporate veil or alter ego (see generally Abbott , 109 A.D.3d at 1102, 972 N.Y.S.2d 117 ).

Similarly, plaintiff's claims in the negligence cause of action that defendants are vicariously liable under theories of agency and joint venture are also sufficiently stated. "The elements of a joint venture are an agreement of the parties manifesting their intent to associate as joint venturers, mutual contributions to the joint undertaking, some degree of joint control...