Paleja v KP NY Operations LLC, 2024 NY Slip Op 02990 [227 AD3d 622]
May 30, 2024
Appellate Division, First Department
[*1]
Piyush Paleja, Respondent,
v
KP NY Operations LLC et al., Appellants, et al., Defendants.
Sage Legal LLC, Jamaica (Emanuel Kataev of counsel), for appellants.
David Abrams, Attorney at Law, New York, for respondent Order, Supreme Court, New York County (Dakota D. Ramseur, J.), entered August 22, 2022, which denied defendants KP NY Operations LLC and Gary Mulchandani’s motions to dismiss the complaint, unanimously modified, on the law, Mulchandani’s motion to dismiss granted, and otherwise affirmed, without costs.
This appeal concerns plaintiff’s alleged purchase of a 10% share in defendant KP NY Operations LLC’s restaurant. KP NY Operations LLC moved to dismiss the claims against it on the ground that plaintiff’s alleged purchase did not comply with the terms of its operating agreement. However, the documentary evidence submitted by plaintiff shows that defendant Anika Malhotra signed the original share certificates that were given to plaintiff on behalf of the restaurant, as well as the operating agreement at issue. Further, plaintiff alleges that Anika identified herself as “President KPNY Operations LLC.” Plaintiff also alleges that KPNY Operations LLC made dividend payments to him for a time, stopped those dividend payments based on an alleged financial dispute with defendant Pradeep, and acknowledged plaintiff’s ownership of the shares in letters dated December 9, 2019, and January 10, 2020. Plaintiff has thus sufficiently alleged that Anika Malhotra had apparent authority to execute the sale and that he was entitled to rely on that apparent authority ( see Indosuez Intl. Fin. B.V. v National Reserve Bank , 279 AD2d 408, 409 [1st Dept 2001]). Accordingly, the motions to dismiss were properly denied at this stage of the proceedings.
Defendants contend that Paleja’s unjust enrichment claim fails “because there is a valid and enforceable operating agreement governing the subject matter of [the] claims” ( see D’Artagnan, LLC v Sprinklr Inc. , 192 AD3d 475 , 477 [1st Dept 2021]). However, in the event Paleja’s agreement to purchase stock is deemed unenforceable, one or more of the defendants may have been unjustly enriched. At this stage in the proceedings, Paleja is entitled to plead in the alternative ( see Cohn v Lionel Corp. , 21 NY2d 559, 563 [1968]).
The motion court improperly denied Mulchandani’s motion to dismiss. A claim “seeking to hold corporate officials personally responsible for the corporation’s breach of contract is governed by an enhanced pleading standard” ( Joan Hansen & Co. v Everlast World’s Boxing Headquarters Corp. , 296 AD2d 103, 109 [1st Dept 2002]). Here, the claims against individual defendant Gary Mulchandani, which are simply that he stopped payment of Paleja’s profit-sharing checks, were not sufficiently pleaded to hold Mulchandani individually liable. Concur—Moulton, J.P., Scarpulla, Shulman, Higgitt, O’Neill Levy, JJ..