210 East 86th Street Corp. v. Grasso

May 6, 2003
Versions:305 A.D.2d 156
758 N.Y.S.2d 654
2003 N.Y. App. Div. LEXIS 4939

Order, Supreme Court, New York County (Eileen Bransten, J.), entered April 22, 2002, dismissing a turnover proceeding to enforce a money judgment entered against respondent’s professional corporation, unanimously affirmed, without costs.

No basis exists for holding respondent personally liable for the judgment that petitioner obtained against respondent’s professional corporation for unpaid rent. Respondent completely dominated the professional corporation of which he was the only shareholder, director and employee. However, respondent did not misuse the corporate form for his personal ends so as to commit a wrong against petitioner warranting equitable intervention (see Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 143 [1993]). Respondent’s corporation was no “dummy” or sham operation. It was in existence for many years before it entered into the lease with petitioner, paid the rent thereunder for six years before defaulting, paid its taxes and, with minor record-keeping exceptions, otherwise observed corporate formalities (cf. Glockhurst Corp. v Schechter, 144 Misc 2d 204, 206-207 [1988]). It also appears that any corporate funds used to directly pay respondent’s personal expenses were reported on respondent’s personal income tax returns. Concur — Tom, J.P., Saxe, Ellerin, Lerner and Gonzalez, JJ.