134 EMMUT PROPERTIES LLC v. Yuan Sheng Situ also known as Su Hua Situ, Defendant–Appellant. (2022)

Order, Supreme Court, New York County (Kathy J. King, J.), entered on or about September 16, 2021, which denied defendant Su Hua Situ's (Su) motion to dismiss the complaint pursuant to CPLR 3211 and granted plaintiff's motion to amend the complaint to add Yuan Sheng Situ (Yuan) and Su as individual defendants and assert a veil-piercing claim against them, unanimously affirmed, without costs.

The motion court properly granted plaintiff's motion to amend the complaint, as the proposed amendment was not palpably insufficient or devoid of merit (see Fairpoint Cos., LLC v. Vella, 134 A.D.3d 645, 645, 22 N.Y.S.3d 49 [1st Dept. 2015]).  The party seeking to pierce the corporate veil must allege “particularized statements detailing fraud or other corporate misconduct” by individuals in complete control of the corporation (Sheridan Broadcasting Corp. v. Small, 19 A.D.3d 331, 332, 798 N.Y.S.2d 45 [1st Dept. 2005] [internal quotation marks omitted];  see also TNS Holdings, Inc. v. MKI Sec. Corp., 92 N.Y.2d 335, 339, 680 N.Y.S.2d 891, 703 N.E.2d 749 [1998)]).  The amended complaint permits an inference of corporate abuse by the individual defendants (see Max Markus Katz, P.C. v. Sterling National Bank, 206 A.D.3d 533, 534, 171 N.Y.S.3d 90 [1st Dept. 2022]).  Specifically, it alleges that the lease Su negotiated on behalf of Yuan and defendant Galaxy Lighting 136, Inc. resulted in inequitable consequences because defendants failed to pay plaintiff any rent for approximately one year, from the date they occupied the premises until the time plaintiff regained possession.  The affidavits and supporting text messages and emails submitted as exhibits to plaintiff's motion identify Su as the person plaintiff's agents communicated with to negotiate the lease.  In addition, plaintiff's affiants personally observed Su at Galaxy on almost a daily basis.  The affidavits further allege that Su and Yuan conspired to perpetrate a wrong by opening a judgment proof shell company, Galaxy, to avoid paying rent.

In light of the foregoing, the court correctly denied Su's motion to dismiss the original complaint (see Roam Capital, Inc. v. Asia Alternatives Mgt. LLC, 194 A.D.3d 585, 586, 144 N.Y.S.3d 339 [1st Dept. 2021]).