KINLAY v. LLC (2008)

Order, Supreme Court, New York County (Herman Cahn, J.), entered November 21, 2007, which granted defendants-respondents' motion to dismiss all claims pleaded by the corporate plaintiff, unanimously reversed, on the law, with costs, the motion denied, and the claims of the corporate plaintiff reinstated.

The individual plaintiff is the owner and chief executive officer of the corporate plaintiff.   Two months after plaintiffs' attorney was relieved by the court, defendants moved to dismiss the claims of the corporation pursuant to CPLR 321(a), which requires a corporation to appear by an attorney.   The corporation then assigned all of its claims in the action to the individual plaintiff, admittedly to evade CPLR 321(a), a perfectly legitimate tactic (Kamp v. In Sportswear, 39 A.D.2d 869, 332 N.Y.S.2d 983 [1972], revg. on dissenting opn. at App. Term, 70 Misc.2d 898, 335 N.Y.S.2d 306 [1972];  see also Medical Facilities v. Pryke, 172 A.D.2d 338, 568 N.Y.S.2d 406 [1991];  Traktman v. City of New York, 182 A.D.2d 814, 582 N.Y.S.2d 808 [1992] ).   Nevertheless, the motion court dismissed the corporation's claims, finding the assignment to be “obviously a ploy” to avoid the law.   On appeal, defendants acknowledge that good consideration was given for the assignment and do not otherwise challenge its validity.   Instead they appear to argue that the appeal should be dismissed because the corporation fell into default once it purported to maintain the action without counsel, that the motion court's dismissal of the corporation's claims was in effect a default judgment, that no appeal lies from a default judgment, and that the corporation's remedy is to retain counsel and move to vacate its default.   The argument is contrary to the above authorities and lacks merit.   The individual plaintiff has obtained all of the corporation's claims, and thus CPLR 321(a) does not apply.