Saleeby v. Remco Maintenance, LLC , 148 A.D.3d 570 ( 2017 )

Saleeby v Remco Maintenance, LLC (2017 NY Slip Op 02140)

Saleeby v Remco Maintenance, LLC

2017 NY Slip Op 02140

Decided on March 23, 2017

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on March 23, 2017
Tom, J.P., Friedman, Mazzarelli, Kapnick, Kahn, JJ.

3478 650371/16

[*1]Raymond G. Saleeby, Plaintiff-Appellant,

v

Remco Maintenance, LLC, et al., Defendants-Respondents.

Berg & Androphy, New York (Michael M. Fay of counsel), for appellant.

Mandel Bhandari LLP, New York (Robert Glunt of counsel), for Remco Maintenance, LLC, respondent.

Steptoe & Johnson LLP, New York (Charles A. Michael of counsel), for Patriarch Partners, LLC and Lynn Tilton, respondents.

Order, Supreme Court, New York County (Anil C. Singh, J.), entered July 26, 2016, which granted defendants' motions to dismiss plaintiff's claim for conversion and his contract claims as to defendants Tilton and Patriarch, unanimously affirmed, with costs.

While plaintiff pleaded facts and damages in support of his conversion claim that were independent of his breach of contract claim, his 7.5% "common interest" ownership share in a limited liability company was a type of intangible property that could not be the subject of a conversion claim (see C & B Enters. USA, LLC v Koegel, 136 AD3d 957, 958 [2d Dept 2016]; Peters v Gould, Sup Ct, NY County, Jan. 9, 2012, Kapnick, J., index No. 651505/2010, op at 19-20).

Plaintiff's breach of contract claim against Tilton, in her role as manager of Remco LLC was also properly dismissed. As a manager, Tilton is not liable for the debts of the LLC (see 6 Del C § 18-303). Plaintiff's attempt to use the limitation of liability provision in the LLC's operating agreement is unavailing. Such provisions cannot be used to create additional duties on the manager (see Fisk Ventures, LLC v Segal, 2008 WL 1961156, 2008 Del Ch LEXIS 158 [Del Ch, May 7, 2008], affd 984 A2d 124 [Del 2009]; Dawson v Pittco Capital Partners, L.P., 2012 WL 1564805, 2012 Del Ch LEXIS 92 [Del Ch, Apr. 30, 2012]).

Finally, plaintiff's claims for breach of contract against Tilton and Patriarch under an alter ego theory were properly dismissed. Plaintiff alleged no more than that Tilton was manager of Remco, and president of the entities that held a majority ownership of Remco. Patriach was alleged to simply have an ownership or management role with regard to those other entities. This was clearly insufficient to impose alter ego liability (see Doberstein v G-P Indus., Inc., C.A. No. 9995-VCP, 2015 WL 6606484, *4, 2015 Del Ch LEXIS 275, *12-15 [Del Ch, Oct. 30, 2015]).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MARCH 23, 2017

CLERK