DECISION AND ORDER Upon the foregoing electronically submitted papers, items numbered 8 through 33 on the New York State Electronic Filing System (“NYSCEF”), the Defendants move pursuant to CPLR Rule 3211(a)(8), as to Defendant SAMUEL NUNBERG (“Nunberg”), to dismiss the Complaint for the failure of the Plaintiff to make personal service upon him as required under CPLR §308(2), at his actual place of business, dwelling place or usual place of abode; and pursuant to CPLR 3211(a)(1), the Defendants move to dismiss each of the causes of action in the Complaint against Defendants, WINSTON ASHE, INC. (“Winston Ashe”), Nunberg, VANNIN HEALTHCARE GLOBAL, LTD. (“Vannin”), and OLIVER VAN VEEN (“Van Veen”), based upon documentary evidence, and further move pursuant to CPLR 3211(a)(7), for dismissal of each causes of action in the Complaint and for dismissal of the Plaintiff’s claim for punitive damages against Defendants, Winston Ashe, Nunberg, Vannin, and Van Veen, respectively, because the Complaint fails to state a cause of action; and pursuant to CPLR 3016(b), dismissal of the cause of action of fraud in the Complaint against Defendants, Winston Ashe, Nunberg, Vannin, and Van Veen, respectively, because the Complaint fails to allege fraud with requisite detail and specificity as to each Defendant. In the case at bar, the Plaintiff sought to obtain wholesale quantities of Personal Protective Equipment (PPE) to satisfy its government and private sector consumers. The Complaint provides that the Plaintiff initially made contact with the Defendant Vannin through a mutual business acquaintance, non-party Tanjila Islam (“Islam”), who owns Mosaic Health, LLC (“Mosaic”). Islam informed Plaintiff that Vannin is a supplier of PPE and other medical equipment throughout the United Kingdom, and that Vannin could easily satisfy Plaintiff’s needs, representing to the Plaintiff that Vannin sourced PPE direct through factories. Oliver Van Veen is identified in the Complaint as the current President and Business Director of Vannin. The Plaintiff maintains its principal place of business in Nassau County, New York. Vannin is a company registered with the Department for Enterprise of the Isle of Man, a British Crown Dependency, and Oliver Van Veen resides in the Isle of Man. All captioned Defendants are represented by the same counsel. On September 14, 2020, the Plaintiff and Vannin entered into a contract for the initial purchase of 450,000 boxes of vinyl gloves at a rate of $6.00 per box, and 450,000 boxes of nitrile gloves at a rate of $8.45 per box, to be delivered no later than October 31, 2020. The Plaintiff contends that Nunberg participated in the calls between the Plaintiff and Defendant Vannin and drafted the contract between Plaintiff and Vannin. The Contract between the Plaintiff and Vannin had been signed by the Plaintiff’s principal and Peter M. Van Veen, as CEO of Vannin. The contract has a choice of law provision which provides that the agreement is to governed by the law of the State of New York, and can only be modified through a writing. The Complaint provides that on October 2, 2020, Plaintiff wired Mosaic $507,000 as a refundable deposit. This deposited was forwarded by Mosaic to Winston Ashe, though the Complaint provides that Mosaic initially represented to Plaintiff that the funds were forwarded to Defendant Nunberg’s attorney escrow account. Plaintiff contends that both Mosaic and Vannin had assured Plaintiff that the deposit would not leave Mosaic’s account until Plaintiff received the delivery of the gloves. After Vannin failed to provide the Plaintiff with the PPE, the Complaint provides that Plaintiff made several demands for the return of its deposit. After being informed by Ms. Islam that Mosaic transferred the money to Nunberg’s escrow account “for safekeeping,” the Plaintiff’s Principal contacted Nunberg and demanded that its deposit be refunded. The Complaint further provides that Nunberg claimed he would need to speak with Vannin before refunding the deposit, as the funds had not been transferred to his account directly by the Plaintiff and that Nunberg was obligated to confirm with Vannin that the sums held were in fact the Plaintiff’s deposit. On November 20, 2020, Paragraph 25 of the Complaint provides that Van Veen presented Plaintiff with a screen shot of a bank account from Winston Ashe, “which purported to show [an account] balance of approximately $2.9 million dollars, which Vannin represented had included Plaintiff’s money. The Complaint provides that Van Veen represented this screenshot as Nunberg’s “lawyer account,” implying that the deposit was secured in an attorney escrow account. (NYSCEF Doc. 2, Complaint at Paragraph 25, fn 4). It is significant to note that the deposit was held in an account under the custodianship of Winston Ashe, and not by Nunberg in his capacity as an attorney at law. Nunberg is an attorney admitted to the bar in the State of New York and District of Columbia and is also the President and sole shareholder of Winston Ashe. The Complaint alleges that Nunberg at sometimes would characterize himself as a business person with an “upside” on the deal, but at other times as being “just an attorney” who had “no idea” about the Winston Ashe “screenshot” produced by Van Veen which provided that the Winston Ashe account possessed significant funds. Nunberg informed Plaintiff that the “Winston [Ashe] account had been empty for a very long time.” The Complaint also provides that Nunberg informed Plaintiff that Vannin had encountered legal difficulties in the United Kingdom and that it “cannot pay you what it does not have.” On April 27, 2021, after several months of haggling with Nunberg and Vannin, the Plaintiff received a wire transfer from Vannin in the sum of $25,000. However, no further refund of the Plaintiff’s deposit was provided by the Defendants, no PPE was ever delivered, and the Plaintiff contends that the balance of funds remains outstanding. The Defendants premise their motion for dismissal upon documentary evidence (CPLR 3211[a][1]) and the purported failure of the Plaintiff to state viable causes of action (CPLR 3211[a][7]). The Defendants contend that Plaintiff’s breach of contract cause of action must be dismissed as to Defendants Winston Ashe, Nunberg, and Oliver Van Veen because none of these parties signed the underlying contract between Plaintiff and Vannin, as Peter M. Van Veen was the Chairman of Vannin at the time of the contract’s signing, using the contract as their documentary “proof” that these individuals were not in privity with the Plaintiff at the time of signing. Additional documents were submitted by the Defendants to “clarify” Nunberg’s role in this transaction, and these included Nunberg’s attorney retainer agreement (“Retainer Agreement”) with Vannin, along with an agreement between Vannin and Winston Ashe (“Account Agreement”) which describes a Chase Bank Account (“Chase Account”) held by Winston Ashe in which Winston Ashe and Vannin agreed that all moneys deposited by third parties into the Chase Account described in the agreement would be solely for the benefit of Vannin and that all payments, withdrawals or transfers made from the Chase Account are to be done only at the direction of Vannin. Both the Retainer Agreement and the Account Agreement were in effect during the course of dealings between Plaintiff, Vannin, and Nunberg at issue during the time frame of this litigation. Oliver Van Veen contends in his Affirmation1 that the action at bar should be dismissed against him as he was not a signatory to the underlying contract, but rather that it was his father, Peter Van Veen who signed the contract. The Defendants submitted Directors Reports and Financial Statements from Vannin which provide that Peter Van Veen was a Director as of October 21, 2020, but that Peter van Veen resigned as a Director as of January 27, 2021, and was replaced by Oliver Van Veen on January 27, 2021. As of January 27, 2021, Oliver Van Veen served as Director/Chair of Vannin, succeeding his father. (NYSCEF Doc. 30). In reviewing a motion to dismiss for failure to state a cause of action pursuant to CPLR §3211(a)(7), the court is to accept all facts alleged as being true, accord Plaintiff the benefit of every possible favorable inference, and determine only whether the alleged facts fit within any cognizable legal theory (see Delbene v. Estes, 52 AD3d 647 [2nd Dept. 2008]; see also 511 W.232nd Owners Corp. v. Jennifer Realty Co., 98 NY2D 144 [2002]. Pursuant to CPLR §3026, the complaint is to be liberally construed. Leon v. Martinez, 84 NY2d 83 [1994]. It is not the court’s function to determine whether plaintiff will ultimately be successful in proving the allegations. Aberbach v. Biomedical Tissue Services, 48 AD3d 716 [2nd Dept. 2008]; see also EBCI, Inc. v. Goldman Sachs & Co., 5 NY3D 11 [2005]. The pleaded facts, and any submissions in opposition to the motion, are accepted as true and given every favorable inference (see 511 W. 323nd Owners Corp. v. Jennifer Realty Co., 98 NY2d at 151-152; Dana v. Malco Realty, Inc., 51 AD3d 621 [2d Dept 2008]; Gershon v. Goldberg, 30 AD3d 372, 373 [2d Dept 2006]). However, a court may consider evidentiary material submitted by a defendant in support of a motion to dismiss a complaint pursuant to CPLR §3211 (a)(7) (see CPLR §3211[c]; Sokol v. Leader, 74 AD3d at 1181). “When evidentiary material is considered” on a motion to dismiss a complaint pursuant to CPLR §3211(a)(7), the criterion is whether the plaintiff has a cause of action, not whether they have properly stated one, and unless it has been shown that a material fact as claimed is not a fact at all or that no significant dispute exists, the dismissal should not be granted (Guggenheimer v. Ginzburg, 43 NY2d at 275; see Sokol v. Leader, 74 AD3d at 1182). The Plaintiff argues that its causes of action may be maintained under the doctrine of “piercing the corporate veil” and as such survives a motion to dismiss the complaint. A party seeking to pierce the corporate veil must allege facts that, if proved, establish that the party against whom the doctrine is asserted (1) exercised complete domination over the corporation with respect to the transaction at issue, and (2) through such domination, abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against the plaintiff such that a court in equity will intervene (Olivieri Constr. Corp. v. WN Weaver St., LLC, 144 AD3d 765, 766 [2d Dept 2016]). A cause of action under the doctrine of piercing the corporate veil is “not required to meet any heightened level of particularity in its allegations. (Id. at 767). Domination alone is insufficient to invoke the doctrine of piercing the corporate veil, there must be proof of wrongdoing or injustice to the plaintiff. (TNS Holdings v. MIKI Sec. Corp., 92 NY2d 335 [1998] see also TIAA Globial Invs, LLC v. One Astoria Sq LLC, 127 AD3d 75 [1st Dept 2015; Shisgal v. Brown, 21 Add 845 [1st Dept 2005]) Factors to be considered include the failure to adhere to corporate formalities, inadequate capitalization, personal use of corporate funds, and commingling of assets (Olivieri, at 144 AD3d at 767 see also Peery v. United Capital Corp., 84 AD3d 1201 [2nd Dept 2011]). Vannin is a closely held family owned business in which the Defendant Oliver Van Veen succeeded his father (the original signatory of the Contract) as Chairman and Chief Executive Officer. For the purposes of deciding a pre-answer motion to dismiss, the Court must consider the allegations raised by the Complaint to be truthful, including its allegation that members of the Van Veen family purportedly squandered company assets to pay for personal use such as luxury items instead of refunding the Plaintiff’s deposit paid for undelivered goods. The Plaintiff’s contend such practices by Vannin’s owners evince a lack of corporate formality that warrants piercing the corporate veil, and the failure of the Vannin and its officers to remit the purchased PPE or refund the balance for undelivered goods constitutes harm to the Plaintiff. Further, for the purposes of deciding this motion to dismiss, it is presumed that the Plaintiff’s allegation that its deposit was not refunded is truthful, and that the taking and failure to return the deposit implicates tortious conduct, including fraud and conversion. “Every person is liable who personally or by agent commits an act of conversion or who participates by instigating, aiding or assisting another.” (Passaic Falls Throwing Co. v. Villeneuve-Pohl Corp., 169 A.D. 727, 729 [1st Dept 1915]). Applying the agency theory articulated in Passaic Falls Throwing Co., Supra, if the Plaintiff’s allegations are presumed truthful, and if its deposit was not properly refunded, then dismissal of these actions would be premature. However, summary judgment in favor of Oliver Van Veen may ultimately be proper if, after the discovery process is completed and evidence is marshaled in admissible form, it is established that Vannin adhered to corporate formalities and that Oliver Van Veen had in no way participated in the alleged failure to refund the Plaintiff’s deposit, or acted in any way which ratified the acts and agreements of his predecessor. Similarly, dismissal of the complaint against Winston Asche would be improper, since Nunberg (through Winston Ashe) was entrusted with funds to be held under deposit. Significantly, Nunberg did not maintain control over the transaction by marshaling the Plaintiff’s deposit to his lawyer’s IOLA account, but rather held the Plaintiff’s funds in a bank account where Winston Ashe exercised mere nominal custodianship, and had in fact ceded all control over the Chase Account to Vannin. By marshaling the deposit to the Chase Account held solely for the benefit of Vannin, Nunberg abdicated any objective control over the deposited funds and permitted Vannin and its principals unfettered access to the funds maintained nominally in the Winston Ashe Chase Account at their pleasure. With respect to service of process, the affidavit of service upon Nunberg provides that on July 14, 2022, at approximately 11:00 am, the Plaintiff’s process server served the Summons and Complaint upon a person of suitable age and discretion at 354 East 91st Street. The Affidavit of Service further provides that service of process was accepted by a doorman at Nunberg’s former address who refused to provide the process server access to 354 East 91st Street apartment and refused to provide the process server his full name, and that service was completed by mailing the Summons and Complaint to 354 East 91st Street on July 15, 2022 (NYSCEF Doc 4). In seeking dismissal of the Complaint, Nunberg contends that the Plaintiff attempted to serve him at a former address from which he had moved. Nunberg’s affidavit in support of dismissal objects to the based upon a demonstration that his lease expired at 354 E. 91st Street Suite 1601, New York, New York 10128 (354 East 91st Street) on March 31, 2021 and that he relocated “his permanent and actual residence to Palm Beach County, Florida, and has resided there continuously until the present time.” Nunberg asserts that his relocation to Florida is established by his acquisition of a Florida driver’s license, change of address for purposes of his registration as a member of the bars of the State of New York and the District of Columbia, and in documents filed with the State of Florida which provide that Winston Ashe is a New York Corporation doing business in Florida (NYSCEF Docs 11-15). Further, Winston Ashe’s filing with the New York Department of State describes Winston Ashe as an Active Domestic Business Corporation with Nunberg as the agent for service of process, with service address located at 535 E 86th Street, Suit 2J, New York, New York 10028, and not at 354 had East 91st Street, Nunberg’s prior residence. Nunberg argues that service of process would not be considered proper where conclusory statements printed in an affidavit as to the dwelling place of the person served is refuted by the weight of the evidence submitted by the defendant to the contrary. (Doe v. Abdulaziz Fahd Alsaud, 12 F. Supp 3d 684 [US District Court for Southern District of New York 2014]). In determining whether service of process is proper, the plaintiff bears the ultimate burden of proving by a preponderance of the evidence that jurisdiction over a defendant was obtained. (Sinay v. Schwartzman, 148 AD3d 1069 [2nd Dept 2017]). A process server’s affidavit of service creates a presumption of proper service. (Machovec v. Svoboda, 120 A.D.3d 772 [2nd Dept. 2014]). A mere denial of receipt of a summons and complaint is inadequate to overcome the presumption of proper service created by an affidavit of service. (Commissioners of State Ins. Fund v. Nobre, Inc., 29 A.D.3d 511 [2nd Dept. 2006], citing Carrenard v. Mass, 11 A.D.3d 501 [2nd Dept. 2004]; Truscello v. Olympia Const., Inc., 294 A.D.2d 350 [2nd Dept. 2002]; Wieck v. Halpern, 255 A.D.2d 438 [2nd Dept. 1998]). Further, an apartment house doorman may be considered a person of suitable age and discretion of a tenant in an apartment house to whom a summons and complaint may properly be delivered for the purposes of alternative service under CPLR 308[2]. (F.I. Du Pont, Glore Forgan & Co. v. Chn, 41 NY2d 794 [1977] see also Charnin v. Cogan, 250 AD2d 513 [1st Dept 1998]). By analogy, if a process server is denied entry to the defendant’s actual apartment by a door man because a tenant is not home, the outer bounds of the actual dwelling place is extended from the residence to the location at which the process server’s progress was hindered. (Ledesma v. Good Luck Realty Corp, 2012NY Slip OP. 30360[U] 2012 NY Misc Lexis 661 (Sup Ct New York County 2012] citing to F.I. Du Pont, Glore Forgan & Co. v. Chn, 41 NY2d 794 [1977]; Fayed v. Barak, 39 AD3d 371 [1st Dept 2007]). The Plaintiff contends that Nunberg should be estopped from asserting the defense of lack of personal service. The Plaintiff’s representation that Nunberg conducted business at 354 East 91st Street during the course of the parties dealings is supported by a document which the Defendants themselves filed with the Court in support of their application for dismissal of the Complaint. Winston Ashe had used 354 East 91st Street as its address in the Account Agreement between Vannin and Winston Ashe Inc, a seminal document in this case, one which establishes the agency relationship between Winston Ashe and Vannin as well as the ultimate custodianship and control over the Chase Account where the Plaintiff’s funds had been deposited. (NYSCEF Doc 21). Defendants have been estopped from asserting the defense of defective service in situations where a Plaintiff detrimentally relies upon the Defendant’s representation of their residency. (Deas v. Brunke, 199 AD2d 43 [1st Dept 1993] [defendant driver estopped from contesting validity of service when he provided plaintiff with his mailing address instead of his residence). Similarly, there is a line of cases in which a defendants have been estopped from contesting the validity of service when Plaintiff's rely upon Defendants' representations regarding their residency made to the Department of Motor Vehicles or similar licensing authorities. (Benjamin v. Avis Rent-A-Car Systems, 208 Ad2d 449 [1st Dept 1994]; Melton v. Brotman Foot Care Group, 198 AD2d 481 [2nd Dept 1993]). Nunberg’s affidavit does not explicitly provide that he never received the Summons and Complaint. As the chief executive and sole shareholder of Winston Ashe, Nunberg would have received a copy of the Summons and Complaint. Further, Nunberg’s affidavit does not provide that he informed the Plaintiff or even his Co-Defendants of his relocation to Florida, notwithstanding his offer of proof that he reported his move to Florida to the New York and District of Columbia bars as well as to the New York Department of State. Significantly, the Defendants do not challenge service of process upon Winston Ashe through service upon the Secretary of State of the State of New York (BCL 306). Winston Ashe does not dispute receipt of the summons and complaint, but nevertheless, “the mere denial of receipt of the summons and complaint [by a corporation would be] insufficient to rebut the presumption of proper service created by service upon the Secretary of State.” (Thas v. Dayrich Trading, Inc., 78 AD3d 1163 [2nd Dept 2010]). Had this been an actual case of “sewer service” — and had Nunberg not been aware of the Plaintiff’s lawsuit due to the failure to receive service — Nunberg would not have been in a position to have filed a pre-answer motion, but instead would be seeking to vacate a default. Nunberg’s participation in the transaction at bar is complicated by his dual capacity as attorney and agent for Vannin through Winston Ashe. “Here it is shown that a lawyer acted for his client in a dual capacity, that is, both professionally and as a negotiator seeking to bring about an agreement in consummating a transaction, the rules applicable to agents govern his actions as negotiator.” (Gallagher v. Akoff Realty Corp., 197 Misc 460, 461 [Sup Ct, Queens County 1950]; see also Myles E. Rieser Co. V. Loew’s Inc., 194 Misc 119 [Sup Ct, New York County 1948]). Furthermore, the New York and District of Columbia bar registration reports submitted by Nunberg in support of his application for dismissal of the Complaint provide that Nunberg’s email address as reported to these bars is returnable to Winston Ashe as a commercial organization, and not to Nunberg’s law practice, thus evincing a lack of formal separation between Nunberg as lawyer and Nunberg as corporate officer. Equity would enjoin Nunberg from utilizing a discrepency in service of process to avoid a Complaint in which his single shareholder closely held corporation was properly served, and which alleges acts which in part implicate the utilization of vaguely defined professional structures — particularly his dual role as attorney and business agent for Vannin — to allegedly thwart the return of the Plaintiff’s converted deposit. Ultimately, Nunberg’s application to dismiss the Complaint against him personally on technical grounds related to personal service must be viewed as an attempt to benefit from the ambiguous ethical space created by his dual representation of Vannin as attorney and business agent, in that he seeks dismissal of a matter in which he was entrusted with a significant deposit of funds which the Plaintiff contends was converted for the personal use of Nunberg’s client. Based upon the allegations set forth in the Complaint, and upon review of the papers submitted herein, Nunberg’s dual capacity as Vannin’s attorney and business representative significantly contributed to the complications encountered in this matter. The express terms of the Account Agreement — a document Nunberg produced as an exhibit to his motion to dismiss the Complaint — tend to establish that Nunberg conceded all authority to Vannin to access the monies in the Chase Account, which including the Plaintiff’s funds, and that he used his residency at 354 East 91st Street as a business address for Winston Ashe. Accordingly, in the interests of justice and equity, given the circumstances presented in this case, including but not limited to the actual receipt of the Summons and Complaint upon Nunberg through Winston Ashe, and the significant responsibilities of Nunberg as at attorney at law and officer of the Court, it is determined that Nunberg is estopped from denying receipt of service of process since he made material representations to the parties that he worked from his home office and that he had in fact received service of the Summons and Complaint as the sole shareholder of Winston Ashe. Accordingly, branch 1 of the Defendants’ motion is DENIED, and it is further ORDERED, that given the factual differences between the parties, the Defendants’ motion to dismiss is DENIED in its entirety, however said denial of the motion to dismiss is without prejudice to any party herein to the filing of summary judgment after the completion of discovery, and further ORDERED, that the Defendants shall file their Answers with the Court within 30 days of the date of this Decision and Order, and it is further ORDERED, all other requested relief, not specifically addressed herein, is hereby DENIED. This constitutes the Decision and Order of the Court. Dated: May 1, 2023
