Nemard Construction Corp. v. Deafeamkpor

21 Misc. 3d 320
CourtNew York Supreme Court
DecidedAugust 22, 2008
StatusPublished

This text of 21 Misc. 3d 320 (Nemard Construction Corp. v. Deafeamkpor) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nemard Construction Corp. v. Deafeamkpor, 21 Misc. 3d 320 (N.Y. Super. Ct. 2008).

Opinion

OPINION OF THE COURT

Dominic R. Massaro, J.

Defendant Vicky Deafeamkpor moves for an order, pursuant to CPLR 4404 (a), alternatively seeking to (1) set plaintiff’s verdict aside, (2) dismiss the underlying complaint, (3) order a new trial, and (4) stay all efforts at collection. She challenges the verdict because plaintiff is neither registered as a corporation by the State nor properly licensed by New York City.

Ms. Deafeamkpor wants the verdict set aside, in essence, because she claims Nemard Construction Corp. lacked the capacity to commence this action inasmuch as it is not a corporate entity. This despite the fact plaintiff held itself out as such. Further, plaintiff is not entitled to maintain the case because it is not licensed under the Administrative Code of the City of New York (see Administrative Code of City of NY § 20-385 et seq. [hereinafter the Code]; see generally Hughes & Hughes Contr. Corp. v Coughlan, 202 AD2d 476 [2d Dept 1994]).

The instant breach of contract resulted in the jury rendering a unanimous verdict in plaintiffs favor. It centered on defendant’s failure to pay for improvements to a residential property located at 907 East 156th Street, Bronx County. Pursuant to the parties’ December 26, 2003 contract, plaintiff furnished labor and materials improving defendant’s home in the value of $162,895. Plaintiff maintained that defendant paid only $41,718, leaving $121,987 unpaid. Of that amount, the jury returned a [322]*322plaintiffs verdict for $89,400, together with $700 in costs and $636.70 in disbursements. Defendant does not explain why the licensing issue was not raised timely, except to aver that plaintiff did not conform to the requirement of CPLR 3015 (e), which mandates that a plaintiff set forth that it is properly licensed to do business and that the interests of justice require that a defendant be allowed to raise the issue at this time.1 Further, plaintiff failed to plead its corporate status as required by CPLR 3015 (b).2

Plaintiff opposes defendant’s seeking of posttrial relief, holding forth that the jury properly rendered its verdict in finding that Ms. Deafeamkpor improperly discharged plaintiff and failed to fully pay for the renovations performed. Plaintiff argues that the motion to vacate should be denied because defendant failed to raise objection before trial to plaintiffs failure to obtain a city license (see Administrative Code § 20-387) or failure to register as a corporation with the New York Secretary of State, as required (see Business Corporation Law § 104). Likewise, defendant failed to move for summary judgment or to raise any objection during trial. Therefore, plaintiff argues that defendant waived her right to object upon these grounds. Additionally, plaintiff maintains that it showed good faith on the issue because it filed a business certificate with the Bronx County Clerk in 1995 certifying that it was conducting business under the name “Nemard Construction.”3

Finally, plaintiff sees no reason for a new trial — even if defendant’s claim that plaintiff was unlicensed is accurate. Plaintiff says defendant cites no error in the trial’s conduct that occurred because of this legal mistake. Plaintiff urges that should the court find that defendant’s arguments concerning its legal status are valid, then the only recourse is to dismiss the action.

[323]*323In reply, defendant points out the critical fact that plaintiff admits never having been licensed as a home improvement contractor. Therefore, plaintiff is not entitled to any verdict under contract or quantum meruit (see CPLR 3015 [e]). Further, because plaintiff is not a legally incorporated entity, it has no standing to seek compensation; that is, it lacked the legal ability to commence the within action (see Administrative Code §§ 20-385 — 20-387).

Failure to Register with the State

Initially, the court notes that its discretionary power to set aside a jury verdict and order a new trial must be exercised with considerable caution. Absent indications that substantial justice was not done, a successful litigant is normally entitled to the benefits of a favorable verdict (see Nicastro v Park, 113 AD2d 129 [2d Dept 1985]). The court turns first to defendant’s demand that the verdict must be set aside and the complaint dismissed because plaintiff is not a corporation cognizable under state law. The court denies this branch of defendant’s motion.

One who contracts with or otherwise deals with an entity as a corporation thereby admits that it is a corporation and is estopped to deny the corporate existence in any action arising out of such contract or dealing (see Puma Indus. Consulting, Inc. v Daal Assoc., Inc., 808 F2d 982 [2d Cir 1987]; but see Cary Oil Co., Inc. v MG Ref. & Mktg., Inc., 230 F Supp 2d 439 [SD NY 2002] [Puma distinguished where defendant had no reason to know the plaintiff was not a corporation]). The “corporation by estoppel” doctrine precludes defendant from denying the validity of plaintiffs status in this action (see generally Boslow Family Ltd. Partnership v Glickenhaus & Co., 7 NY3d 664 [2006]). This doctrine relies upon the principle that one who recognizes an organization as a corporation in business dealings, as defendant did here, should not be allowed to quibble on matters which are of little or no concern and do not affect substantial rights (see Rubenstein v Mayor, 41 AD3d 826 [2d Dept 2007]). Defendant cannot dispute that she derived a benefit from the agreement with plaintiff and that the services provided were not dependent in any way on the plaintiffs legal status. The court holds, therefore, that defendant is estopped from denying the corporation’s validity. It is noted that defendant claimed no prejudice if the sole proprietorship were to be substituted for the corporation (see generally Tilden Dev. Corp. v Nicaj, 49 AD3d 629 [2d Dept 2008]).

[324]*324Failure to Obtain a License from the City

The court now considers defendant’s contention concerning plaintiffs failure to obtain a license to operate as a home improvement contractor in New York City. It is here, rather than with the issue of incorporation, that makes for plaintiffs difficulty.

Under the Code, a person or business must have a home improvement contractor license if engaged in construction, repair, or remodeling involving an addition to any land or building used as a residence. This includes, but is not limited to, construction, replacement, or improvement of “driveways, swimming pools, terraces, patios, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements to structures or upon land which is adjacent to a dwelling house” (,see Administrative Code § 20-386 [2]). Since 1983, the CPLR has required pleading the Department of Consumer Affairs license where the plaintiff is suing a consumer upon a claim arising out of the business that requires the license (see B & F Bldg. Corp. v Liebig, 76 NY2d 689 [1990]). The business is required to plead and identify the license (see CPLR 3015 [e]; Chosen Constr. Corp. v Syz, 138 AD2d 284 [1st Dept 1988]).

There is no dispute that plaintiff had no home improvement contractor’s license when it conducted the work on defendant’s residence. Likewise, there is no dispute that the services plaintiff performed require such a license.

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Bluebook (online)
21 Misc. 3d 320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nemard-construction-corp-v-deafeamkpor-nysupct-2008.