On February 13, 2024, Justice Ruchelsman of the Kings County Commercial Division issued a decision in David v. Arbie Processing, LLC, 2024 NY Slip Op. 30476(U), holding that allegations of domination, without more, were insufficient to support veil piercing claims, explaining:
Turning to the motion seeking to dismiss the individual defendants Ron and Elizbeth Borvinsky, to succeed on a request to pierce the corporate veil the plaintiff must demonstrate that (1) the owners exercised complete dominion ‘bf the corporation in respect to the transaction attacked; and (2) that such dominion was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff’s injury. As the Court of Appeals observed, at the pleading stage a plaintiff must do more than merely allege that defendant engaged in improper acts or acted in bad faith while representing the corporation. Rather, the plaintiff must allege facts demonstrating such dominion over the corporation and that through such domination, abused the privilege of doing business in the corporate form to perpetuate a wrong or injustice against the plaintiff such that a court in equity will intervene. Factors to be considered in determining whether an individual has abused the privilege of doing business in the corporate or LLC form include the failure to adhere to corporate or LLC formalities, inadequate capitalization, commingling of assets, and the personal use of corporate or LLC funds. Thus, mere conclusory statements that the individual dominated the corporation are insufficient to defeat a motion to dismiss.
In this case there is no evidence presented at all demonstrating either defendant acted in ways in which the corporate veil can be pierced. Therefore, the motion seeking to dismiss the individual defendants is granted.
(Internal quotations and citations omitted).