RICH v. MADISON LLC (2022)

Order, Supreme Court, New York County (Shlomo S. Hagler, J.), entered July 9, 2021, which, to the extent appealed from as limited by the briefs, granted plaintiffs' motion for summary judgment on its breach of contract claim against defendant J.A. Madison LLC and denied defendants' cross motion for summary judgment dismissing the complaint as against defendant Jonathan Adler Enterprises, LLC (JAE), unanimously affirmed, without costs.

The court correctly granted plaintiffs summary judgment on their breach of contract claim against J.A. Madison.  Contrary to defendants' contention, the consulting agreement between plaintiffs and J.A. Madison was supported by consideration, namely plaintiffs' assignment of their lease to J.A. Madison.  Although the lease assignment was executed prior to the consulting agreement, the two agreements were executed at substantially the same time and were part of the same transaction, and therefore “are regarded as contemporaneous writings and must be read together as one” (1471 Second Corp. v. NAT of N.Y. Corp., 162 A.D.3d 449, 450, 79 N.Y.S.3d 23 [1st Dept. 2018]).

Defendants' cross motion for summary judgment dismissing the complaint as against JAE was correctly denied.  Plaintiffs raised issues of fact as to whether JAE, the parent company of J.A. Madison, dominated J.A. Madison with respect to the transaction so as to justify piercing the corporate veil to hold JAE liable for J.A. Madison's breach of the consulting agreement (see Skanska USA Bldg. Inc. v. Atlantic Yards B2 Owner, LLC, 146 A.D.3d 1, 12, 40 N.Y.S.3d 46 [1st Dept. 2016], affd 31 N.Y.3d 1002, 74 N.Y.S.3d 805, 98 N.E.3d 720 [2018];  BP 399 Park Ave. LLC v. Pret 399 Park, Inc., 150 A.D.3d 507, 508, 55 N.Y.S.3d 168 [1st Dept. 2017]).  Plaintiffs pointed out that JAE paid all of J.A. Madison's debts under the consulting agreement;  J.A. Madison never had its own bank account and was dissolved while this action was pending;  the two companies occupied the same offices and had overlapping personnel, including the companies' president and controller;  and plaintiffs communicated with these two individuals in negotiating the contracts and in addressing the late payments under the consulting agreement.  These factors, taken together, at the very least, raised an issue of fact as to whether J.A. Madison was JAE's alter ego (see Fern, Inc. v. Adjmi, 197 A.D.2d 444, 445, 602 N.Y.S.2d 615 [1st Dept. 1993];  see also Fantazia Intl. Corp. v. CPL Furs N.Y., Inc. 67 A.D.3d 511, 512, 889 N.Y.S.2d 28 [1st Dept. 2009]).