The following e-filed documents, listed by NYSCEF document number (Motion 003) 66, 67, 68, 69, 70, 71, 72, 73 were read on this motion to/for DISMISSAL. DECISION + ORDER ON MOTION Upon the foregoing documents, the defendants’ motion to dismiss the Amended Complaint (the AC; NYSCEF Doc. No. 62) must be denied in its entirety. Simply put, the well-pled AC alleges sufficient facts, which taken as true as the Court must, are sufficient to pierce the corporate veil and hold Mr. Taverna personally liable (James v. Loran Realty v. Corp., 85 AD3d 619, 619 [1st Dept 2011]). For completeness, the allegations (as now pled) amount to more than Mr. Taverna’s company over-charged us. As pled, the allegations, indicate that Mr. Taverna failed to observe corporate formalities so that he could overcharge and defraud the plaintiffs. Relevant Facts and Circumstances This is a case involving Mr. Taverna’s alleged fraud and overcharging the plaintiffs for certain renovation work and for charging them for work that was never authorized and/or never performed. In perpetrating this scheme, Mr. Taverna is alleged to have abused the corporate form of his various entities such that at this early state of litigation the plaintiffs should be entitled to proceed against him personally. To wit, according to the well pled AC, The Management Group Inc., NY (TMG) and NY Interior Construction of NY, Inc. (NYIC) are the mere alter egos of Mr. Taverna. He owned, dominated and controlled them as their sole shareholder and President and never observed proper corporate formalities because, among other things, Mr. Taverna regularly comingled funds of those two entities with each other and certain other bank accounts under his dominion and control and because he used these companies as his “personal piggy banks”. Reference is made to a Management Agreement (the Management Agreement; NYSCEF Doc. No. 2) dated September 23, 2003, between Jean Hieber and the Management Group, Inc. (TMG) pursuant to which the parties agreed that Mr. Taverna’s company, TMG, would manage the properties located at 682-684 Fulton Ave., Hempstead, 60 Plainfield Floral Park, and 1445-1449 Broadway (the Properties) and only charge fair and reasonable prices. This as alleged he failed to do. More importantly as relevant to the instant motion, he commingled funds and misappropriated corporate assets for his own personal use, including leasing a portion of the property to his daughter so that she could sub-let it for a profit without first obtaining disinterested approval from the plaintiffs. Pursuant to the Management Agreement, TMG was to (i) make a conscientious effort to hire reliable service people to maintain the Properties who would charge a fair and reasonable amount and (ii) deposit all owner funds in a special account and keep proper records and accounts of the Properties: 2. Will deposit all owner funds in a Special Custodial Account. Agent will pay Real Estate Taxes, utilities and service contractors on a timely basis and will notify owner if there are not sufficient funds to make said timely payments. 3. Keep proper records and accounts of all receipts of rent and disbursements and expenses including those for repairs and maintenance. … 5. Will inform Owner of any repairs and replacements necessary to preserve the integrity of the premises. Will secure the approval of the Owner prior to authorizing trades people to make such repairs or replacements. Agent shall make a conscientious effort to obtain and use the services of reliable trades people known to the agent and whose charges are fair and reasonable. Agent will not enter into any new service contract without written approval of the owner. NYSCEF Doc. No. 2 §§2,3,5). The AC alleges that Mr. Taverna caused his companies to breach the contract and his fiduciary duties by (i) failing to seek out competitive bids for maintenance and repairs and instead merely hired his own company, (ii) then, he overcharged the plaintiffs for work which he and his companies performed, (iii) transferred funds which belonged to the plaintiffs into bank accounts of entities which he controlled and (iv) charged the plaintiffs for renovations which were never authorized: 28. Rather than “make a conscientious effort” to find contractors who charged fair and reasonable prices by, for example, soliciting competitive bids for various repair and maintenance services that the Properties needed, TMG-at Taverna’s direction-hired Taverna’s construction company, NY1C, to perform repairs and construction services for the Properties from 2003 until September 1, 2020, when Plaintiffs finally terminated the Management Agreement. 29. Upon information and belief, Taverna either (a) failed to memorialize the terms of any construction or services contracts between TMG and NYIC, or (b) personally signed any formalized agreements between TMG and NYIC on behalf of both sides, serving as his own counterparty. 30. This arrangement-by which NYIC was retained without soliciting bids to determine the best price for the services needed-allowed Taverna to not only collect both management fees and. construction fees (and to freely engage in double-billing, which he did), but to also profit from the work his own company did on the Properties. 33. But Plaintiffs learned in 2020 that the opposite was true. For example, Taverna was having NY1C charge Plaintiffs an additional 22.75 percent in fees for basic maintenance and repairs and, worse, was charging them for construction work that was not actually performed. 41. Using the Astoria property-a three-story walk-up building with a commercial unit on the first floor and three apartments on the second and third floors-as an example: Taverna and TMG had NYIC perform service call repairs, such as repairing the main door and a stove in an apartment, for which NY1C invoiced HA not only for the amount of the repair work, but also for fees totaling 22.75 percent of that amount, including a 15 percent contractor fee, along with general conditions (5.75 percent) and insurance (2 percent or 3 percent). On information and belief, Taverna routinely paid those excessive fees from HA’s bank accounts to NYIC for any work NYIC claimed to have done at the Astoria property. In 2020, Taverna and TMG deceived Plaintiffs about the nature of work they caused to be done to the second-floor rear one-bedroom unit. Representing to Plaintiffs in communications in March, May, and July 2020 that the unit needed to be renovated, and Defendants would begin emptying it and obtaining proposals for the necessary work. In fact, Defendants had already completely gutted the unit and-without authorization-paid NY1C from HA’s bank account: (a) more than $10,000 in February and March 2020 for the demolition work; and (b) more than $14,000 in March and April 2020 for electrical and plumbing work. Those charges supposedly paid for work done to renovate the unit, which the April invoice stated was 68 percent complete. In reality, it was nowhere close to that. Worse, all of NYIC’s invoices to HA for the work included additional fees of 22.75 percent or 23.75 percent for general conditions, insurance, and contractor fees, and all were stamped paid by TMG on the same date listed on the NYIC invoice. Taverna and TMG drained HA’s bank account and made the Astoria building unable to pay for its own expenses by having NYIC perform expensive and unauthorized renovations, with HA paying over $200,000 to NYIC from 2018- 2020, leaving just $809.48 in HA’s account as of May 2020. TMG and NYIC-both at Taverna’s direction-renovated the third-floor unit without HA’s authorization for a cost, on information and belief, that exceeded $130,000 (and in a manner that Plaintiffs later learned created illegal conditions), and then rented the unit to Taverna’s daughter, Taylor Taverna, without a lease, all the while paying rent from a joint account and allowing her to sublet the bedrooms for a profit 56. At all relevant times, TMG and NYIC were the alter egos of Taverna, who, upon information and belief, exercised total control over both TMG and NY1C. 57. Upon information and belief, neither TMG nor NY1C observed any corporate formalities-such as having regular board meetings. 58. Upon information and belief, Taverna regularly siphoned funds from TMG and NYIC whenever he saw fit, regardless of whether doing so would leave either entity undercapitalized. On the contrary, he used the entities as his own personal piggy banks and intermingled funds between and among them regardless of whether those funds had designated purposes or were even properly the property of the entities in question (NYSCEF Doc. No. 62,
