Defendants x The following papers having been read on the motion: [numbered

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1 SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK Present: Hon F. Dana Winslow, Justice 5-w IAS/TRIAL PART 17 NASSAU COUNTY --against- Plaintiff, Index # 4662/01 EUGENE IOVINE, INC., TRIPLE I ELECTRICAL CONTRACTING, INC., and THE CONSTRUCTION GROUP, LLC. Motion Date: 2/22/02 Seq.: Defendants x The following papers having been read on the motion: [numbered l-53 Notice of Motion of defendant IOVINE.....*...*...*...*...*.*.*..* 1 Notice of Cross Motion of Defendants TRIPLE 1 and THE CONSTRUCTION GROUP, LLC..... i Affidavit on Opposition Reply Affirmation Supplemental Affidavit in Opposition (submitted with leave of court) In this action to recover attorney s fees for legal services rendered to defendant, EUGENE IOVINE, INC. [hereinafter IOVINE ] by the plaintiff law firm, GOLDBERG & CONNOLLY, IOVINE moves pursuant to CPLR 3211(a)(7) for an order dismissing the claims to pierce the corporate veils of defendants TRIPLE I ELECTRICAL CONTRACTING, INC. [hereinafter TRIPLE ] and THE CONSTRUCTION GROUP, LLC [hereinafter TCG ], and to strike paragraphs 3 and 4 of the second amended complaint pursuant to CPLR 3124(b). Co-defendants TRIPLE and TCG cross move pursuant to CLPR 3211(a)(7) to dismiss the complaint on grounds that the complaint fails to state a claim against them. The court determines the motions as follows: In paragraph 3 of the second amended complaint, plaintiff alleges that upon information and belief, defendant TRIPLE...is the successor in interest to and/or alter-ego of corporate defendant IOVONE and, on this basis, plaintiff seeks to hold TRIPLE liable for the alleged obligation of IOVINE for legal fees due and owing. Likewise, in paragraph 4 of the second amended complaint, plaintiff alleges that upon

2 information and belief, defendant TCG...is the successor in interest to and/or corporate alter-ego of corporate defendant IOVINE. W ith respect to the allegation that these corporations are alter-ego s IOVINE, of plaintiff claims that it is the corporate veil of IOVINE that should be pierced in order to hold the three corporate defendants liable as a single entity. To the extent plaintiff seeks the same outcome on a successor-in-interest theory, this too would be tantamount to a request to pierce the corporate veil of IOVINE. See Ioviero v. Ciga Hotels, Inc., 101 AD2d 852. In Morris v. New York State Department of Taxation and Finance, 82 NY 2d 135, , the Court of Appeals explained what it means to pierce the corporate veil: Broadly speaking, the courts will disregard the corporate form, or, to use accepted terminology, pierce the corporate veil, whenever necessary to prevent fraud or to achieve equity (International. Aircraft Tradinn Co. v. Manufacturers Trust Co., 297 N. Y ) (Id., at 417.) The concept of piercing the corporate veil is a limitation on the accepted principles that a corporation exists independently of its owners, as a separate legal entity, that the owners are normally not liable for the debts of the corporation, and that it is perfectly legal to incorporate for the express purpose of limiting the liability of the corporate owners (see, Bartle v Home Owners Coou., 309 NY ; Rapid Tr. Subwav Constr. Co. v Citv qfnew York, 259 NY 472, : Presser, Piercing the Corporate Veil 8 1.Ol, at l ). The doctrine of piercing the corporate veil is typically employed by a third party seeking to go behind the corporate existence in order to circumvent the limited liability of the owners and to hold them liable for some underlying corporate obligation (see, e.g., BiZZv v Consolidated Mach. Tool Corn,, 51 NY2d 152: Port Chester Elec. Constr. Corp. v Atlas, 40 NY2d 652; Walkovszky v Carlton, supra; Bartle v Home Owners Coop., supra). The concept is equitable in nature and assumes that the corporation itself is liable for the obligation sought to be imposed (see, 1 Fletcher, Cyclopedia of Private Corporations 8 41, at 603 [per-m ed]). Thus, an attempt of a third party to pierce the corporate veil does not constitute a cause of action independent of that against the corporation; rather it is an assertion of facts and circumstances which will persuade the court to impose the corporate obligation on its owners (see, id., at ). Further, piercing the corporate veil requires a showing that (1) one corporation exercised complete domination and control over another, (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in the plaintiffs injury, and (3) that the controlling corporation abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against that party such that the court should intervene in the interests of equity. Morris v. New York State Department of Taxation and Finance, supra; Weinstein v. Willow Lake Corp., 262 AD2d 634.

3 On its face, the plaintiffs second amended complaint fails to assert these elements. However, in deciding a motion to dismiss under CPLR 3211, the principal issue is not whether or not a cause of action has been artfully pleaded, but whether or not a viable cause of action may actually exist. Accordingly, the court may consider supplemental affidavits and exhibits in determining the motion. Guggenheimer v. Ginzburg, 43 NY2d 268; Cron v. Hargo Fabrics, Inc., 91 NY2d 362. The complaint, together with such affidavits, must be viewed in a light most favorable to the plaintiff. Cron, id. In opposition to the motion and cross-motion, plaintiff, proceeding pro se, submits the affirmation of David E. Wolf, Esq., a partner in the plaintiff law firm who states that he is familiar with the facts and circumstances of this case. He does not claim, however, to have personal knowledge concerning the corporate inter-relationship among the defendants. Mr. Wolf affirms that the legal services for which fees are claimed were rendered to IOVINE only. In support of the contention that the defendants should be treated as one entity with respect to this alleged obligation, Mr. Wolf relies on the fruits of independent investigation, namely, IOVINE ssubmission to the New York City Vendor Information Exchange System (VENDEX). Mr. Wolf contends that in its VENDEX submission, a copy of which is annexed to the moving papers, IOVINE reported, and thus admits, the following facts: a) IOVINE is the parent of TCG and controls that entity; b) The current principals and directors of IOVINE are Eugene Iovine, Michael T. Iovine, and Eugene Iovine, Jr.; c) Michael T. Iovine and Eugene Iovine, Jr. are also the principals and directors of TCG; d) TRIPLE is a related entity of IOVINE; e) Michael T. Iovine is a principal and director of TRIPLE. f) IOVINE and TCG share the same facilities. Mr. Wolf further alleges that: a) IOVINE is in financial distress, is winding down its business, and that the intent of IOVINE is, upon information and belief, to frustrate, if not defraud its creditors through the use and manipulation of TCG and TRIPLE, both of which were formed while plaintiff was still performing work for IOVINE; b) TCG, TRIPLE and IOVINE, upon information and belief, have shared and continue to share management and personnel, conduct the same or similar businesses, and have commingled resources and business opportunities.

4 In reply, plaintiff submits the affidavit of Michael T. Iovine, who identifies himself as vice-president and 10% shareholder of IOVINE. He denies that IOVINE is winding down its business, denies that IOVINE is in any financial trouble, and denies that IOVINE set up TCG and TRIPLE for purposes of avoiding an alleged obligation for legal fees. He explains that IOVINE is an electrical contractor which handles large municipal contracts and that TCG was formed in 1996 to do general construction work, something IOVINE does not do. He admits that the three principals of IOVINE also own a 75% interest in TCG but states that the remaining operating member has no ownership interest in IOVINE. With respect to TRIPLE, Michael T. Iovine states that this corporation was formed by Eugene Iovine, Jr. ( JR ) after he obtained his own electrical license in 1998, that TRIPLE is totally owned by JR, that its business in electrical work in the private sector only, that TRIPLE maintains its own books and records and accounts and that TRIPLE has nothing whatsoever to do with IOVINE. To the extent Michael T. Iovine s affidavit apparently contradicts certain representations alleged to have been made in IOVINE s VENDEX submission, at least according to plaintiff s interpretation of that document (the correctness of which the court is unable to determine on the present record), legitimate questions, at least for good-faith pleading purposes, would appear to exist. The court considers the affidavit of Michael T. Iovine solely for purposes of determining whether or not plaintiff may have a claim upon which relief may be granted as against TCG and/or TRIPLE, and whether or not there are sufficient facts and circumstances, from a pleading perspective only, to warrant the court s continuing consideration of plaintiff s request that the corporate veil of IOVINE be pierced. The court will not exercise its discretion to treat this as a summary judgment motion under CPLR 3212, nor will the court evaluate the factual contentions for that purpose since there is insufficient information, in admissible evidentiary form, before the court, and plaintiff has not been given sufficient notice of defendant s intention to address the merits of plaintiff s entitlement to equitable relief. Rather, the court deems it more appropriate, particularly at this pre-discovery stage of the litigation, to address itself solely to the issues of pleading raised and noticed under CPLR 3211(a)(7). See, I JE Construction Corp. v. Dollar Federal Savings and Loan Assoc., 92 AD2d 525. The court notes that, unlike the more typical scenario in which a plaintiff seeks to pierce a corporate veil, the plaintiff in this case makes no claim that either TCG or TRIPLE, as corporate entities, have any ownership interest in IOVINE, such that they could be held liable as principals for the obligations of IOVINE in the event IOVINE s corporate veil were to be pierced. Quite the contrary, plaintiff alleges that IOVINE is the controlling parent corporation and that IOVINE s individual owners, in whole or in part, also own the other two corporations. Nor does plaintiff seek to reach the individual owners of IOVINE, ostensibly as Eugene Iovine, Michael T. Iovine, and Eugene Iovine, Jr.. Plaintiff does, however, allege that because of their common ownership and other

5 indicia of common control and alleged wrongful efforts to shield assets, these three corporations ought to be treated as one. Under similar circumstances, where a defendant corporation (a taxi company) and 16 other corporations were alleged to have shared a common owner and operator, interchanged and commingled receipts, disbursements, assets, resources, personnel, property and place of business, such allegations, together with allegations of a wrongful attempt to limit liability by means of abusing the privilege of incorporation, it was held that the complaint seeking a piercing of the corporate veil was sufficient to withstand a motion to dismiss under CPLR 3211.Goldberg v. Lee Exp. Cab Corp., 166 Misc. 2d 668 (Supreme Court, New York County, 1995) afs d 227 AD2d 241. Giving every favorable inference to the allegations of the complaint and supplemental affidavits, as is required in a motion to dismiss, it is the determination of this court that plaintiffs pleading seeking to pierce the corporate veil of IOVINE, is sufficient to withstand an order of dismissal pursuant to CPLR 321 l(a)(7). Viewed in the light most favorable to the plaintiff, it cannot be said that the complaint is totally devoid of solid, nonconclusory allegations regarding the inter-relationship among the three defendant corporations and the interests of their respective owners, on the basis of which plaintiff seeks to pierce the corporate veil of IOVINE or treat TCG and TRIPLE as alter-ego s so that all three corporations would be treated, effectively, as one, with respect to IOVINE salleged obligation for legal fees. International Credit Brokerage Co., Inc. v. Agapon, 249 AD2d 77, citing Perez v. One Clark Street Housing Corp., 108 AD2d 144,145; and Sequa Corp. v. Christopher, 176 AD2d 498. Accordingly, the motion and cross motions to dismiss under CPLR 3211(a)(7) are denied. However, nothing in this decision should be construed to preclude TCG and TRIPLE from moving for summary judgment pursuant to CPLR 3212 upon proper evident&y support after plaintiff has had a sufficient opportunity to conduct discovery related to the issues addressed in this motion. Further, IOVINE smotion to strike paragraphs 3 and 4 of the second amended complaint pursuant to CPLR 3042(b) is denied, insofar as the allegations contained therein are neither scandalous nor prejudicial and cannot, at this juncture, be said to be wholly irrelevant. Counsel for all Parties are to appear in this part on May 16, 2002, at address the scheduling of discovery and other issues. 9:30 a.m. to Dated: April 19,2002