CPLR R. 3211 Roundup: CPLR R. 3211(a)(1,3,5,7); CPLR R. 3211(e) and CPLR § 205 with CPLR § 321

In Pari Delicto 

CPLR R. 3211

(a)(1) defense is founded upon documentary evidence

(a)(3) the party asserting the cause of action has not legal capacity to sue

(a)(5) the
cause of action may not be maintained because of arbitration and award,
collateral estoppel, discharge in bankruptcy, infancy or other
disability of the moving party, payment, release, res judicata, statute
of limitations, or statute of frauds

(a)(7)  pleading fails to state a cause of action

CPLR § 205 Termination of action

(a) New action by plaintiff.

CPLR § 321 Attorneys
(a) Appearance in person or by attorney

Symbol Tech., Inc. v Deloitte & Touche, LLP, 2009 NY Slip Op 07826 (App. Div., 2nd, 2009)

To obtain a dismissal pursuant to CPLR 3211(a)(1), the defendant
must establish that the documentary evidence which forms the basis of
the defense be such that it resolves all factual issues as a matter of
law and conclusively disposes of the plaintiff's claim (see Leon v Martinez, 84 NY2d 83; see also Sheridan v Town of Orangetown, 21 AD3d 365).

CPLR 3211(a)(7) permits the court to dismiss a complaint that
fails to state a cause of action. The complaint must be liberally
construed and the plaintiff given the benefit of every favorable
inference (see Leon v Martinez, 84 NY2d 83; Aberbach v Biomedical Tissue Serv., Ltd., 48 AD3d 716; Mitchell v TAM Equities, Inc., 27
AD3d 703). The court must also accept as true all of the facts alleged
in the complaint and any factual submissions made in opposition to the
motion (see 511 West 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144; Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409; Alsol Enters., Ltd. v Premier Lincoln-Mercury, Inc., 11
AD3d 493). If the court can determine that the plaintiff is entitled to
relief on any view of the facts stated, its inquiry is complete and the
complaint must be declared legally sufficient (see Campaign for Fiscal Equity v State of New York, 86 NY2d 307, 318; see also Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409; Stucklen v Kabro Assoc., 18
AD3d 461). While factual allegations contained in the complaint are
deemed true, bare legal conclusions and facts flatly contradicted on
the record are not entitled to a presumption of truth (see Lutz v Caracappa, 35 AD3d 673, 674l; Matter of Loukoumi, Inc., 285 AD2d 595).

Finally, CPLR 3211(a)(5) permits the defendant to seek and
obtain a dismissal of one or more causes of action asserted against it
on the ground that the cause of action is barred by the statute of
limitations.

***

The doctrine of in pari delicto is an equitable defense based on
agency principles which bars a plaintiff from recovering where the
plaintiff is itself at fault
(see Ross v Bolton, 904 F2d 819, 824-825; Matter of Food Management Group v Rattet, 380 BR 677, 693-694; Albright v Shapiro, 214 AD2d 496; Bullmore v Ernst & Young Cayman Is., 20
Misc 3d 667, 670). Moreover, the misconduct of managers acting within
the scope of their employment will normally be imputed to the
corporation (see Wight v Bank America Corp., 219 F3d 79, 86; Center v Hampton Affiliates, 66 NY2d 782, 784; Christopher S. v Douglaston Club, 275
AD2d 768, 769). The underlying concept is that the actions of an agent
can be imputed to a corporation when its agent acts within the scope of
his or her employment (see Center v Hampton Affiliates, 66 NY2d at 784).

Under New York law, the doctrine of in pari delicto is subject to the "adverse interest" exception [FN2] (see Center v Hampton Affiliates, 66
NY2d 782). In this case, Symbol's amended complaint is sufficient to
trigger the adverse interest exception to the in pari delicto doctrine.

The "adverse interest" exception is a method by which a
plaintiff corporation can demonstrate that its agent's actions should
not be imputed to it. The corporation must show that the agent's fraud
was entirely self-interested and that the corporation did not benefit
in any way
(see 546-552 West 146th St., LLC v Arfa, 54 AD3d 543; Capital Wireless Corp. v Deloitte & Touche, 216
AD2d 663, 666). If the agent was acting solely for his or her own
benefit and to the detriment of the corporation, it cannot be said that
the agent was acting in the scope of his or her employment (see Center v Hampton Affilliates, 66 [*4]NY2d at 784).

This exception has been defined very narrowly in New York (see 546-552 West 146th St., LLC v Arfa, 54
AD3d 543). Under this narrow exception, management misconduct will not
be imputed to the corporation if the officer acted entirely in his own
interest and adversely to the interest of the corporation (see Center v Hampton Affiliates, 66
NY2d at 785). "The theory is that where an agent, though ostensibly
acting in the business of the principal, is really committing a fraud
for his own benefit, he is acting outside of the scope of his agency,
and it would therefore be most unjust to charge the principal with
knowledge of it" (Wight v Bank America Corp., 219 F3d 79, 87).
The adverse interest exception applies only when the agent has "totally
abandoned" the principal's interests and is acting entirely for his own
or another's purposes (Center v Hampton Affiliates, 66 NY2d at 785).

Credigy Receivables, Inc. v Agiwal, 2009 NY Slip Op 07790 (App. Div., 2nd, 2009)

The appeal from the intermediate order dated February 7, 2008, must
be dismissed because the right of direct appeal therefrom terminated
with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on appeal from that order are brought up for [*2]review and have been considered on appeal from the judgment (see CPLR 5501[a][1]).

The defendant's motion to dismiss the complaint based on lack of
personal jurisdiction was properly denied on the ground that the
objection of improper service of the summons and complaint was waived
by the defendant's failure to move to dismiss on that ground within 60
days of service of the answer (see CPLR 3211[e]).

In its motion for summary judgment, the plaintiff established
its entitlement to judgment as a matter of law against the defendant in
the principal sum of $55,682.32, and the defendant failed to raise a
triable issue of fact in response thereto (see Alvarez v Prospect Hosp., 68 NY2d 320).

Moran Enters., Inc. v Hurst, 2009 NY Slip Op 07807 (App. Div., 2nd, 2009)

The Supreme Court erred in dismissing the complaint pursuant to CPLR
3211(a)(5).
The principle of res judicata bars relitigation of claims
where a judgment on the merits exists from a prior action between the
same parties involving the same subject matter (see Matter of Hunter,
4 NY3d 260, 269). Dismissal of the prior action insofar as asserted by
MEI was upheld by this Court on the ground that MEI failed to appear by
an attorney as required by CPLR 321(a) (see Moran v Hurst, 32
AD3d 909). Such was not a

determination on the merits and thus res
judicata does not apply to bar commencement of another action based on
the same transactions
(see Sclafani v Story Book Homes, 294 AD2d 559; Matter of Farkas v New York State Dept. of Civ. Serv.,
114 AD2d 563). Moreover, since the issue of MEI's capacity to commence
an action was not determined on appeal, collateral estoppel does not
bar relitigation of that issue
(see Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 200; Sabbatini v Galati, 43 AD3d 1136; Bergstol v Town of Monroe, 305 AD2d 348).

Further, this action was timely commenced pursuant to CPLR
205(a). Contrary to the Berger defendants' contention, the prior action
was commenced by MEI within the meaning of CPLR 205(a), despite its
dismissal for MEI's failure to appear by an attorney (see Carrick v Central Gen. Hosp., 51 NY2d 242, 249; George v Mt. Sinai Hosp.,
47 NY2d 170, 176-179). Further, the prior action was not terminated by
a final judgment on the merits or in another manner which would
preclude application of CPLR 205(a) to extend the statute of
limitations.

Although not addressed by the Supreme Court, that branch of the
Berger defendants' cross motion which was to dismiss the complaint
insofar as asserted against those defendants on the alternate ground
that MEI lacked the capacity to commence this action against those
defendants should have been granted (see CPLR 3211[a][3]; Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 545).

***

Hurst represented MEI prior to its dissolution. Accordingly, MEI
retained the capacity to commence an action against her arising from
such representation
(see Business Corporation Law § 1006[b]; cf. Syzygy Sys. Corp. v Bader,
243 AD2d 336). However, the Berger defendants were not retained until
after MEI was dissolved and, contrary to MEI's contention, this action
does not relate to the winding up of its affairs
(see Business Corporation Law § 1006[a][4], [b]; 2 N. Broadway Food, Inc. v Anduze, 33 AD3d 992; St. James Constr. Corp. v Long, 253 AD2d 754; Syzygy Sys. Corp. v Bader, 243 AD2d 336; see also In re C-TC 9th Ave. Partnership,
113 F3d 1304, 1309). MEI therefore lacks the capacity to use the courts
of this state to enforce obligations arising out of the Berger
defendants' representation of the corporation until it has secured
retroactive de jure status by payment of delinquent franchise taxes
(see 2 N. Broadway Food, Inc. v Anduze, 33 AD3d 992; Syzygy Sys. Corp. v Bader, 243 AD2d 336; Brandes Meat Corp. v Cromer, 146 AD2d 666; Lorisa Capital Corp. v Gallo,
119 AD2d 99, 114). Accordingly, the Supreme Court should have granted
that branch of the cross motion of the Berger defendants which was to
dismiss the complaint insofar as asserted against them pursuant to CPLR
3211(a)(3).

As the complaint survives insofar as asserted against Hurst,
MEI's cross motion to compel her to answer the complaint also should
have been granted.

Outlook Realty, LLC v U.S. Underwriters Ins. Co., 2009 NY Slip Op 07603 (App. Div., 2nd, 2009)

"Generally, it is [the burden] for the insured to establish coverage
and for the insurer to prove that an exclusion in the policy applies to
defeat coverage" (Consolidated Edison Co. of N.Y. v Allstate Ins. Co., 98 NY2d 208, 218; see Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311; Essex Ins. Co. v Pingley, 41
AD3d 774, 776). In the instant case, the defendants conclusively
established with documentary evidence that the policy exclusion for
"independent contractors" "performing operations" for the plaintiff
applied to defeat coverage for the instant loss (see Metropolitan Heat & Power Co., Inc. v AIG Claims Servs., Inc., 47 AD3d 621, 622; Brooklyn Hosp.-Caledonia Hosp. v Medical Malpractice Ins. Assn., 286
AD2d 410, 411). The plaintiff failed to refute that documentary
showing. Accordingly, the Supreme Court properly granted those branches
of the defendants' motion which were pursuant to CPLR 3211(a)(1) and to
declare that they were not obligated to defend or indemnify the
plaintiff in the underlying action
.

Khiyayev v MikeSad Enters., Inc., 2009 NY Slip Op 07596 (App. Div., 2nd, 2009)

"A party seeking dismissal on the ground that its defense is founded
on documentary evidence under CPLR 3211(a)(1) has the burden of
submitting documentary evidence that resolves all factual issues as a
matter of law, and conclusively disposes of the plaintiff's claim'"
(Sullivan v State of New York, 34 AD3d 443, 445, quoting Nevin v Laclede Professional Prods., 273 AD2d 453).

Here, the documentary evidence submitted by the defendants,
i.e., the subject contract entered into between the plaintiff and the
defendant MikeSad Enterprises, Inc., established that the individual
defendant executed the contract solely in his corporate capacity, and
did not purport to bind himself individually under the contract
(see Wiernik v Kurth, 59 AD3d 535; Gordon v Teramo & Co., 308 AD2d 432; Kopec v Hempstead Gardens, 264 AD2d 714, 715; Westminster Construction Co. v Sherman, 160 AD2d 867; see also Salzman Sign Co. v Beck, 10 NY2d 63, 67; Dulik v Amante, 173
AD2d 674). Accordingly, the Supreme Court properly granted that branch
of the defendants' motion which was to dismiss the complaint insofar as
asserted against the individual defendant.

De Paulis Holding Corp. v Vitale, 2009 NY Slip Op 07576 (App. Div., 2nd, 2009)

Nor did the Supreme Court err in refusing to grant that branch of the
defendant's motion which was to dismiss the complaint for failure to
state a cause of action pursuant to RPAPL 1501. In deciding a motion to
dismiss pursuant to CPLR 3211(a)(7), "we must accept as true the facts
as alleged in the complaint and submissions in opposition to the
motion, accord [the plaintiff] the benefit of every possible favorable
inference and determine only whether the facts as alleged fit within
any cognizable legal theory" (Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414; Richmond Shop Smart, Inc. v Kenbar Dev. Ctr., LLC, 32 AD3d 423).
The defendant argues that the documentary evidence of the deed "flatly
contradicted" the plaintiff's factual allegations and thus the
allegations of the complaint should not be deemed true (see Ark Bryant Park Corp. v Bryant Park Restoration Corp., 285
AD2d 143). However, "in cases where the court has considered extrinsic
evidence on a CPLR 3211 motion . . . [t]he motion should [only] be
granted where the essential facts have been negated beyond substantial
question by the affidavits and evidentiary matter submitted'" (Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76, affd 94 NY2d 659, quoting Blackgold Realty Corp. v Milne, 119 AD2d 512, 513, affd 69 NY2d 719).

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