In a May 16, 2011 decision by Justice Warshawsky, the court denied the defendants’ motion to dismiss the complaint pursuant to CPLR § 3211(a)(7), upon finding that the plaintiff adequately pled causes of action pursuant to the Debtor and Creditor Law. The crux of the plaintiff’s complaint, which sought to recover monies from a previously awarded judgment for unpaid rent against the defendant corporation, was that during the pendency of the action, the wife of the corporation’s principal formed a new entity and transferred the corporations’ assets thereto, rendering the defendant corporation incapable of paying the judgment. In denying the motion, the court determined that the plaintiff properly pled the causes of action for fraudulent conveyances under sections 276, 273-a, 273, and 275 of the Debtor-Creditor law, because the complaint alleged that the defendants transferred the funds in order to hinder or delay the plaintiff from collecting on its judgment and rendered the defendant unable to satisfy the judgment, and were not subject to the heightened pleading requirements of CPLR §3016(b). The court also found that, while there is no separate cause of action for piercing the corporate veil, it held that dismissal of the allegations regarding veil-piercing—that the defendants abused the corporate form in order to perpetrate a fraud upon the plaintiff—was not required because those facts were sufficient to entitle the plaintiff to the relief sought on its other claims.
K.B.K. Huntington Corp. v James Anthony Cleaners, Inc., Sup Ct, Nassau County, May 16, 2011, Warshawsky, J, Index No. 005150/08