NEWGARDEN v. David Blumenkrantz, respondent-Appellant, et al., defendants (and a third-Party action). (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract and to recover on an account stated, the plaintiffs appeal, and the defendant David Blumenkrantz cross-appeals, from an order of the Supreme Court, Kings County (Carolyn E. Wade, J.), dated November 21, 2024.  The order, insofar as appealed from, denied those branches of the plaintiffs' motion which were for summary judgment on the issue of liability on so much of the cause of action to recover damages for breach of contract as alleged that the defendant Havemeyer Estates, LLC, failed to pay license fees and legal fees and the cause of action to recover on an account stated, and granted those branches of the cross-motion of the defendant David Blumenkrantz which were for summary judgment dismissing the causes of action to recover damages for fraud, negligence, gross negligence, and nuisance insofar as asserted against him.  The order, insofar as cross-appealed from, denied that branch of the cross-motion of the defendant David Blumenkrantz which was for summary judgment dismissing the cause of action to recover on an account stated insofar as asserted against him.

ORDERED that the order is modified, on the law, (1) by deleting the provision thereof denying that branch of the plaintiffs' motion which was for summary judgment on the issue of liability on so much of the cause of action to recover damages for breach of contract as alleged that the defendant Havemeyer Estates, LLC, failed to pay license fees after June 2020 and legal fees, and substituting therefor a provision granting that branch of the motion, and (2) by deleting the provision thereof denying that branch of the cross-motion of the defendant David Blumenkrantz which was for summary judgment dismissing the cause of action to recover on an account stated insofar as asserted against him, and substituting therefor a provision granting that branch of the cross-motion;  as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

In early 2019, the defendant Havemeyer Estates, LLC (hereafter Havemeyer), commenced construction work on its property located at 20 Havemeyer Street in Brooklyn.  In connection with the work, Havemeyer and the plaintiff Mark A. Newgarden executed an access agreement permitting Havemeyer to enter Newgarden's adjacent property, located at 18 Havemeyer Street, to conduct certain work related to the construction on Havemeyer's property.  Under the access agreement, Havemeyer agreed to pay a license fee during the term of the agreement and an additional amount during the period after the lease term concluded until the work contemplated by the agreement was completed.  The access agreement also required Havemeyer to pay legal fees incurred from breaches of the access agreement.

The plaintiffs subsequently commenced this action, inter alia, to recover damages for breach of contract based on Havemeyer's alleged failure to pay license fees and legal fees and to recover on an account stated against Havemeyer and the defendant David Blumenkrantz, a member of Havemeyer (hereinafter together the Havemeyer defendants).  The plaintiffs moved, among other things, for summary judgement on the issue of liability on so much of the breach of contract cause of action as alleged that Havemyer failed to pay license fees and legal fees and on the cause of action to recover on an account stated.  Blumenkrantz cross-moved for summary judgment dismissing the complaint insofar as asserted against him.  In an order dated November 21, 2024, the Supreme Court, inter alia, denied those branches of the plaintiffs' motion, denied that branch of Blumenkrantz's cross-motion which was for summary judgment dismissing the cause of action to recover on an account stated insofar as asserted against him, and granted those branches of Blumenkrantz's cross-motion which were for summary judgment dismissing the causes of action to recover damages for fraud, negligence, gross negligence, and nuisance insofar as asserted against him.  The plaintiffs appeal, and Blumenkrantz cross-appeals.

The Supreme Court erred in denying that branch of the plaintiffs' motion which was for summary judgment on the issue of liability on so much of the breach of contract cause of action as alleged that Havemeyer failed to pay license fees after the COVID–19 shutdown ended in June 2020.  The plaintiffs established, prima facie, that Havemeyer breached the provisions of the access agreement requiring the payment of license fees.  In opposition, Havemeyer failed to raise a triable issue of fact.  In particular, while Havemeyer stopped making payments around the time of the COVID–19 shutdown, it did not resume making payments to the plaintiffs once the shutdown ended in June 2020.  Therefore, even if the force majeure clause of the access agreement applied, Havemeyer breached the access agreement by failing to pay license fees after the COVID–19 shutdown ceased to exist.  For similar reasons, the court should have awarded summary judgment to the plaintiffs on the issue of liability on so much of the breach of contract cause of action as sought legal fees stemming from this breach of the access agreement.

The Supreme Court properly denied that branch of the plaintiffs' motion which was for summary judgment on the issue of liability on the cause of action to recover on an account stated insofar as asserted against Havemeyer.  “ ‘An account stated is an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due’ ” (Fleetwood Agency, Inc. v. Verde Elec. Corp., 85 A.D.3d 850, 851, 925 N.Y.S.2d 576, quoting Jim–Mar Corp. v. Aquatic Constr., 195 A.D.2d 868, 869, 600 N.Y.S.2d 790;  see American Express Centurion Bank v. Cutler, 81 A.D.3d 761, 762, 916 N.Y.S.2d 622).  “An agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account” (American Express Centurion Bank v. Cutler, 81 A.D.3d at 762, 916 N.Y.S.2d 622;  see Landau v. Weissman, 78 A.D.3d 661, 662, 913 N.Y.S.2d 107).

Here, the plaintiffs failed to make a prima facie showing of their entitlement to judgment as a matter of law on the issue of liability on the cause of action to recover on an account stated insofar as asserted against Havemeyer.  The plaintiffs did not submit sufficient evidence to establish that Havemeyer retained the account statements without objecting to them within a reasonable period of time.  Specifically, in an email dated June 17, 2020, Havemeyer raised the force majeure provision of the access agreement as a basis for objecting to the fees sought by the plaintiffs.

The Supreme Court properly granted that branch of Blumenkrantz's cross-motion which was for summary judgment dismissing the fraud, negligence, gross negligence, and nuisance causes of action insofar as asserted against him.  Blumenkrantz, as a member of Havemeyer, a limited liability company, cannot personally be held liable for any debts, obligations, or liabilities of the limited liability company, “whether arising in tort, contract or otherwise” (Limited Liability Company Law § 609[a];  see Matter of DePetris v. Traina, 211 A.D.3d 939, 940–941, 181 N.Y.S.3d 298).  Blumenkrantz established his prima facie entitlement to judgment as a matter of law by submitting evidence that he is member of Havemeyer.  In opposition, the plaintiffs failed to raise a triable issue of fact as to whether piercing the corporate veil would be appropriate under the circumstances.  Moreover, the plaintiffs failed to establish that discovery may result in disclosure of evidence that would support their argument that piercing the cooperate veil would be appropriate here (see Anzel v. Pistorino, 105 A.D.3d 784, 786, 962 N.Y.S.2d 700;  cf.  Sepulveda v. Cammeby's Mgt. Co., LLC, 119 A.D.3d 927, 989 N.Y.S.2d 885).

The Supreme Court should have granted that branch of Blumenkrantz's cross-motion which was for summary judgment dismissing the cause of action to recover on an account stated insofar as asserted against him.  The account stated was on Havemeyer receiving bills for unpaid license fees based on the access agreement it entered into with Newgarden.  Blumenkrantz demonstrated his prima facie entitlement to judgment as a matter of law by submitting evidence that Havemeyer was responsible for paying the license fees.  In opposition, the plaintiffs failed to raise a triable issue fact.  In particular, the plaintiffs failed to submit evidence showing that piercing the corporate veil would be appropriate under the circumstances or that further disclosure would result in such evidence (see St. Marks Assets, Inc. v. Sohayegh, 167 A.D.3d 458, 459, 90 N.Y.S.3d 30;  Damianos Realty Group, LLC v. Fracchia, 35 A.D.3d 344, 345, 825 N.Y.S.2d 274).

The plaintiffs' remaining contentions are without merit.

LASALLE, P.J., CONNOLLY, TAYLOR and GOLDBERG VELAZQUEZ, JJ., concur.