In a July 7, 2011 decision by Justice Hinds-Radix, the court granted the plaintiff’s motion for summary judgment on his cause of action for breach of an employment agreement and claim under Labor Law § 198, and concluded the plaintiff was entitled to a declaratory judgment that his employment was terminated without cause, upon finding that the plaintiff established prima facie that his employment was not terminated “for cause” as defined in the parties’ contract and that the defendants’ failed to provide for the contractual notice and cure period. The court rejected the defendants’ argument that the employment contract was void and unenforceable because they were induced to enter into it by the plaintiff’s fraudulent misrepresentations as to his title and experience at his prior employment. The court ruled that the defendants failed to establish a justifiable reliance on the purported misrepresentations, and noted a crucial factor was that the defendant Sussman, a sophisticated businessman, failed to adequately verify the plaintiff’s experience even though the means to do so were at his disposal. The court did not determine the amount of compensation owed to the plaintiff under the Labor Law, finding no proof that the plaintiff was entitled to additional payments claimed and because the plaintiff incorrectly asserted that “wages” under the Labor Law included his executive severance.
The court granted the motion by defendant Sussman to dismiss the complaint against him in the entirety, which asserted that Sussman, the corporation’s sole shareholder, could not be liable for the corporation’s obligations and the employment agreement could not be imputed to him personally. The court agreed, finding that the plaintiff failed to establish the principal elements to pierce the corporate veil and hold Sussman liable because he did not establish that Sussman comingled the corporation’s assets with his own or used them for his personal benefit and, therefore, did not establish that Sussman was the “alter ego” of the corporation.
Kleinman v Blue Ridge Foods, LLC, Sup Ct, Kings County, July 7, 2011, Hinds-Radix, J, Index No. 9603/10