Simplicity Pattern Co. v. Miami Tru-Color Off-Set Service, Inc.

Appellate Division of the Supreme Court of New York

Simplicity Pattern Co. v. Miami Tru-Color Off-Set Service, Inc.

210 A.D.2d 24, 619 N.Y.S.2d 29

CourtAppellate Division of the Supreme Court of the State of New York

DecidedDecember 1, 1994

StatusPublished

Cited by13 cases

This text of 210 A.D.2d 24 (Simplicity Pattern Co. v. Miami Tru-Color Off-Set Service, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Simplicity Pattern Co. v. Miami Tru-Color Off-Set Service, Inc., 210 A.D.2d 24, 619 N.Y.S.2d 29 (N.Y. Ct. App. 1994).

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Opinion

—Order, Supreme Court, New York County (Myriam Altman, J.), entered August 5, 1993, which granted plaintiff’s motion to [25]*25compel production of an officer of defendant Tru-Color, Ltd. at trial; and judgment entered May 4, 1994 (Walter Schackman, J., upon decision of Myriam Altman, J.), after a non-jury trial in favor of plaintiff in the amount of $325,924.13, unanimously affirmed, with costs.

The trial court properly decided that an adverse inference could be drawn against Miami Tru-Color for its failure to produce its president at trial for breach of a sublease by TruColor, a dissolved corporation, since dissolution does not affect liability occurring prior to dissolution and such a corporation remains obligated to respond to subpoenas (Business Corporation Law § 1006 [a], [b]; see, In re Grand Jury Subpoenas Issued to Thirteen Corps., 775 F2d 43, 48), and Mr. Melton was president of both corporations and under the control of Miami Tru-Color (see, Fisch, New York Evidence §§ 1125, 1126 [2d ed]).

The trial court also properly pierced the corporate veil as Tru-Color was the mere instrumentality and alter ego of Miami Tru-Color as the latter dominated the affairs of the former, which domination caused the wrong to plaintiff by stopping payment of rent and breaching the lease (see, Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141). The court properly weighed the evidence which revealed, inter alia, the absence of the formalities and paraphernalia of corporate existence of Tru-Color; its inadequate capitalization; an overlap in ownership, officer, directors and personnel; common addresses and telephone numbers; payments of Tru-Color’s debts by Miami Tru-Color; and use by Miami Tru-Color of Tru-Color’s property (see, Passalacqua Bldrs. v Resnick Developers S., 933 F2d 131, 139). Further, funds were shifted back and forth to the extent that Tru-Color was insolvent at the time the breach occurred (see, Directors Guild v Garrison Prods., 733 F Supp 755, 762). Concur—Ellerin, J. P., Wallach, Ross and Williams, JJ.

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—Order, Supreme Court, New York County (Myriam Altman, J.), entered August 5, 1993, which granted plaintiff’s motion to [25]*25compel production of an officer of defendant Tru-Color, Ltd. at trial; and judgment entered May 4, 1994 (Walter Schackman, J., upon decision of Myriam Altman, J.), after a non-jury trial in favor of plaintiff in the amount of $325,924.13, unanimously affirmed, with costs.

The trial court properly decided that an adverse inference could be drawn against Miami Tru-Color for its failure to produce its president at trial for breach of a sublease by TruColor, a dissolved corporation, since dissolution does not affect liability occurring prior to dissolution and such a corporation remains obligated to respond to subpoenas (Business Corporation Law § 1006 [a], [b]; see, In re Grand Jury Subpoenas Issued to Thirteen Corps., 775 F2d 43, 48), and Mr. Melton was president of both corporations and under the control of Miami Tru-Color (see, Fisch, New York Evidence §§ 1125, 1126 [2d ed]).

The trial court also properly pierced the corporate veil as Tru-Color was the mere instrumentality and alter ego of Miami Tru-Color as the latter dominated the affairs of the former, which domination caused the wrong to plaintiff by stopping payment of rent and breaching the lease (see, Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 141). The court properly weighed the evidence which revealed, inter alia, the absence of the formalities and paraphernalia of corporate existence of Tru-Color; its inadequate capitalization; an overlap in ownership, officer, directors and personnel; common addresses and telephone numbers; payments of Tru-Color’s debts by Miami Tru-Color; and use by Miami Tru-Color of Tru-Color’s property (see, Passalacqua Bldrs. v Resnick Developers S., 933 F2d 131, 139). Further, funds were shifted back and forth to the extent that Tru-Color was insolvent at the time the breach occurred (see, Directors Guild v Garrison Prods., 733 F Supp 755, 762). Concur—Ellerin, J. P., Wallach, Ross and Williams, JJ.

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210 A.D.2d 24, 619 N.Y.S.2d 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/simplicity-pattern-co-v-miami-tru-color-off-set-service-inc-nyappdiv-1994.

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