In a December 17, 2010 decision by Justice Bucaria, the Court granted in part and denied in part cross-motions for summary judgment. Plaintiff Utility Audit Group (“UAG”) is in the business of consulting with commercial tenants with regard to alleged overcharges by their landlords. Individual defendants were owners of Apple Mac & R Corp., later dissolved by proclamation of the State in 1994. Notwithstanding the dissolved status, in 2003 Apple Mac entered into an agreement with UAG to review rent charges and negotiate with the landlord. A settlement was reached with the landlord in 2004. Ultimately, UAG tendered a bill for $367,612 to Apple Mac, and later brought an action to collect on amounts owed. Judgment on liability was ultimately granted. UAG then commenced the instant action against the individuals on the theory they were personally liable for the fee.
In support of their motion for dismissal, Defendants argue that the nunc pro tunc reinstatement of Apple Mac by the Department of State shields them from personal liability or piercing the corporate veil. The Court considered whether the implied warranty of authority had been breached by the defendants. To avoid a claim of breach, the Court concluded that defendants had the burden to establish that they had no knowledge of Apple Mac’s dissolution or that their actions in entering into the contract with UAG were done so in good faith. Having failed to meet that burden, the court denied defendants’ motions for summary judgment for personal liability on the contracts. However, as to the claims for quantum meruit, the Court granted the motion of defendants, dismissing those claims. The Court also denied UAG’s motion for summary judgment on the ground that UAG did not establish that it conferred benefits on defendants personally.
Utility Audit Group v.Flanagan, Sup Ct, Nassau County, December 17, 2010, Bucaria, J, Index No. 016605-09.