Wolberg Electrical Supply Co. v. Kwiatkowski

235 A.D.2d 731, 652 N.Y.S.2d 375, 1997 N.Y. App. Div. LEXIS 336

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: January 16, 1997
• Status: Published

Opinions

Yesawich Jr., J.

Appeal from an order of the Supreme Court (Kahn, J.), entered December 4, 1995 in Albany County, which granted plaintiff’s motion for summary judgment.

Plaintiff seeks to recover from defendant sums allegedly due and owing for supplies purchased for the latter’s business in 1992 and 1993. In response, defendant avers that the debts in question are not his personal liabilities, but those of his now-defunct corporation, Kwiatkowski Electric Company, Inc. (hereinafter KECI), for which he bears no individual responsibility. Supreme Court having granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for similar relief, defendant appeals.

In support of its claim that defendant is individually liable for these amounts, plaintiff relies primarily upon a credit application and "guaranty” defendant signed in 1981, by which, plaintiff contends, defendant agreed to assume responsibility for KECI’s debt. The purported "guaranty” (which was executed years before KECI was even formed) is of little aid to plaintiff, however, for it does not refer, or relate in any way, to indebtedness incurred by KECI or any other corporation. Indeed, the document is essentially meaningless, for it constitutes nothing more than an agreement by defendant to guarantee payment of his own obligations; the credit agreement merely establishes that plaintiff initially agreed to extend credit to defendant in his personal capacity, a fact that is not disputed.

In opposition to plaintiff’s motion, defendant has proffered evidence tending to show that during the time period at issue, he transacted business with plaintiff only as a representative of KECI. These submissions—which include, in addition to items demonstrating that the goods in question were consistently ordered and paid for by KECI, a notice defendant swears was mailed to plaintiff shortly after the corporation was formed, stating that all further business was to be transacted with the corporate entity, of which he was president—are sufficient to raise a triable question of fact with respect to whether plaintiff had actual knowledge that defendant was doing business during the relevant time period as an agent of the corporation (see, Tarolli Lbr. Co. v Andreassi, 59 AD2d 1011, 1012).

This is not a situation where the putative debtor is attempting to rely on notice given after the liabilities were incurred (compare, Rothschild Sunsystems v Pawlus, 129 AD2d 933, 934, Iv denied 70 NY2d 610; Ardwin v Englert, 81 AD2d 960, 961, affd 56 NY2d 936), or on the use of corporate checks and stationery alone without any explicit notification of the change in status (compare, Tarolli Lbr. Co. v Andreassi, supra, at 1012). Rather, the evidence, viewed in the light most favorable to defendant, as it must be at this juncture, demonstrates that he clearly and unequivocally notified plaintiff, prior to the subject transactions, of his intent to thereafter conduct business only in the corporate form. Given these circumstances, it cannot be said that defendant is chargeable with the debts at issue as a matter of law (see, e.g., Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404). Plaintiff’s conflicting evidence, suggesting that defendant continued, even after incorporating, to accept invoices addressed to him personally, and to sign those invoices without further indicating his agency status, does, however, create a question of fact, rendering summary judgment in defendant’s favor equally inappropriate.

Mikoll, J. P., Mercure and Crew III, JJ., concur.