Cаlabrese Bakeries, Inc., Individually and in the Name of and for the Benefit of B.M. Baking Company, Inc., et al., Appellants-Respondents, v Rockland Bakery, Inc., et al., Respondents-Appellants.
Supreme Court, Appellate Division, Third Department, New York
102 AD3d 1033 | 960 NYS2d 514
Plaintiff Joseph A. Melino is the president of plaintiff Calabrese Bakeries, Inc., a wholesale and retail bakery distributor. Calabrese began as a small retail operation in Rensselaer County that sold baked goods provided by defendant Rockland Bakery, Inc. In June 2002, Melino and Rockland‘s president, defendant Ignazio “Salvatore” Battaglia, entered into a contract, pursuant to the terms of which the parties agreed to form a new corporation, plaintiff B.M. Baking Company, Inc., which would be headquartered on Fuller Road in Albany County. Although poorly drafted, it appears from the contract that Melino and Battaglia еnvisioned that B.M. Baking would act as the exclusive wholesale and retail distributor of Rockland‘s baked goods within a defined geographic area. Upon payment of the buy-in fee by Rockland, Calabrese and Rockland each would have a 50% ownership interest in the сorporation.1
Approximately six months after the execution of this agree
After Melino‘s release from prison, plaintiffs commenced this action setting forth 14 causes of action4 sounding in, among other things, fraudulent inducement, breach of contract, breach of fiduciary duty and prima facie tort. Following joinder of issue and discovery, Battaglia, Rockland and defendant Rockland Bakery NY, Inc. (hereinafter collectively referred to as the Rockland defendants) moved for summary judgment dismissing the complaint, and Seeley, WTF and Portside, together with defendants C&C Specialties, Inc. and Joslen Developers, LLC., separately moved for similar relief. Plaintiffs opposed the respective motions contending, among other things, that they should be held in abeyance pending further discovery and the Second Department‘s resolution of the then-pending appeals regarding the judicial dissolution. Supreme Court denied defendants’ motions as to the first, sеcond and third causes of action alleging fraudulent inducement, breach of contract and conversion, but granted the motions as to the balance of the complaint, concluding that the remaining claims were either meritless or duplicative. Additionally, Supremе Court held that plaintiffs’ claims for damages would be limited to those incurred prior to
Initially, to the extent that plaintiffs take issue with Supreme Court‘s resolution of their January 2008 motion to compel discovery, we note that plaintiffs, by their own admission, did not perfect their appeal from Supreme Court‘s resulting order. Additionally, “an appeal from . . . an intermediate order [such as the one at issue here] does not bring up for review prior nonfinal orders” (Abasciano v Dandrea, 83 AD3d 1542, 1543 [2011], citing Baker v Shepard, 276 AD2d 873, 874 [2000]). Accordingly, plaintiffs’ argument on this point is not properly before us.
Plaintiffs’ related claim—that Supreme Court erred in failing to hold defendants’ motions for summary judgment in abeyance pending further discovery—is without merit. While it is true that a motion for summary judgment may be “denied as premature when the nonmoving party has not been given reasonable time and opportunity to conduct disclosure relative to pertinent evidence that is within the exclusive knowledge of the movant or a codefendant” (Metichecchia v Palmeri, 23 AD3d 894, 895 [2005]), plaintiffs had ample time and opportunity to do so here (see Judd v Vilardo, 57 AD3d 1127, 1131 [2008]). Moreover, “a trial court has broad discretionary power in controlling discovery and disclosure, and only a clear abuse of discretion will prompt appellate action” (Premo v Rosa, 93 AD3d 919, 920 [2012] [internal quotation marks and citations omitted]). We discern no abuse of that discretion in this matter.
Nor can we say that Supreme Court erred in concluding that plaintiffs’ damages, if any, must be limited to those incurred prior to the March 19, 2004 judicial dissolution of B.M. Baking.6 Contrary to plaintiffs’ assertions, the underlying contract does not evidence the parties’ intent to create a joint venture between Calabrese and Rockland “in which the corporаte entity, [i.e., B.M. Baking], was a mere conduit” for the distribution of goods (Rinaldi v Casale, 13 AD3d 603, 605 [2004]), nor does it demonstrate that Calabrese and Rockland retained certain rights that were “independent of and extrinsic to the corporate entity” formed thereunder (Sagamore Corp. v Diamond W. Energy Corp., 806 F2d 373, 379 [1986] [internal quotation marks and citation omitted]). As such, this matter falls within the general rule that where the parties chart a course “to conduct business through a corporation, . . . they are not at one and the same time joint venturers and stockholders, fiduciaries and nonfiduciaries, personally liable and nоt personally liable” (Weisman v Awnair Corp. of Am., 3 NY2d 444, 449 [1957]; accord D‘Orazio v Mainetti, 24 AD3d 915, 917 [2005]; see generally Lombard & Co., Inc. v De La Roche, 46 AD3d 393, 393-394 [2007], lv dismissed 11 NY3d 782 [2008]; compare Sagamore Corp. v Diamond W. Energy Corp., 806 F2d at 379). Accordingly, the limitation imposed by Supreme Court will not be disturbed.
We now turn to the specific causes of action set forth in plaintiffs’ complaint. The first cause of action sounds in fraudulent inducement and essentially is based upon a misrepresentation allegedly made by Battаglia and/or Rockland “that certain corporate, institutional and government[al] entities . . . would become customers of [B.M. Baking].” While it is true that “a misrepresentation premised directly on the same actions giving rise to a breach of contract does not give risе to a separate cause of action for fraud” (Kosowsky v Willard Mtn., Inc., 90 AD3d 1127, 1129 [2011]), we are satisfied that the conduct alleged in plaintiffs’ first cause of action “is sufficiently discrete from that underlying [plaintiffs‘] breach of contract claim to state a separate cause of action” (id. at 1129). More to the point, in view of the conflicting proof contained in the voluminous record before us, including Melino‘s examination before trial testimony and Battaglia‘s affidavits, we agree with Supreme Court that questions of fact preclude an award of summary judgment as to this cause of action.
With respect to plaintiffs’ second cause of action, wherein plaintiffs allege that Battaglia and/or Rockland breached the underlying contract by violating the exclusive distribution clause contained therein and charging B.M. Baking “morе than the lowest wholesale price charged to other wholesale customers,” the Rockland defendants argue only that Supreme Court should have dismissed this claim due to plaintiffs’ inability to prove damages. We disagree. In light of Melino‘s incarceration, which neсessarily limited his knowledge of B.M. Baking‘s daily operations and his access to relevant corporate records, as well as the limited business records (invoices, receipts, tax returns, etc.) apparently still remaining, plaintiffs indeed may have a difficult time proving the damages alleged. However, Supreme Court correctly concluded that—in view of the conflicting
We reach a similar conclusion regarding plaintiffs’ third cause of action alleging, among other things, that Seeley and the Rockland defendants converted and misappropriated “assets, funds, customer accounts аnd business opportunit[ies]” otherwise properly belonging to plaintiffs (see generally Salatino v Salatino, 64 AD3d 923, 925 [2009], lv denied 13 NY3d 710 [2009] [elements of conversion]). Again, while plaintiffs indeed may find it difficult to specifically identify, trace and document the property allegedly appropriated, the confusing and сonflicting proof in the record precludes an award of summary judgment as to this cause of action.
Plaintiffs’ remaining claims—with one exception—do not warrant extended discussion. Plaintiffs’ fourth cause of action is either a rehash of the previously stated conversion claim or an attempt to collaterally attack the long-resolved judicial dissolution of B.M. Baking, and plaintiffs’ fifth cause of action seeking an accounting, together with their sixth cause of action (fraudulent representation), eighth cause of action (сonversion), tenth causes of action (violation of
We do, however, find merit to plaintiffs’ claim that Supreme
Although Battaglia averred that he “did not appear for any meeting wherein directors or officers [of B.M. Baking] were elected” and Seeley, in turn, asserted that he was not an employee of either Calabrese or B.M. Baking, the documentary evidence tendered by plaintiffs—including corporate resolutions/minutes naming Battaglia as a director and vice-president of B.M. Baking and two documents wherein Seeley identified himself as the manager of “Calabrese Rockland Baker[y]“—wаs sufficient to raise a question of fact on this point. Accordingly, Supreme Court‘s order must be modified to the extent of denying defendants’ motions for summary judgment dismissing plaintiffs’ seventh cause of action, thereby permitting plaintiffs to go forward with respect to their breach of fiduciary duty claim against Battaglia and Seeley. The parties’ remaining contentions, to the extent not specifically addressed, have been examined and found to be lacking in merit.
Peters, P.J., Lahtinen and Garry, JJ., concur. Ordered that the order is modified, on the law, without costs, by reversing so much thereof as granted defendants’ motions for summary judgment dismissing the seventh cause of action; motions denied to that extent; and, as so modified, affirmed.