WORLDCOM v. PREPAY USA TELECOM

The transactions that plaintiffs claim establish a commingling of personal and business funds in disregard of the corporate form involve only several thousand dollars assertedly mischaracterized as consulting fees and rent rather than salary, and could not possibly have caused the millions of dollars in damages plaintiffs claim (see, Matter of Morris v. New York State Dept. of Taxation Fin., 82 N.Y.2d 135, 141-142;cf., Ravens Metal Prods. v. McGann, 267 A.D.2d 527, 529). Accordingly, the complaint should be dismissed insofar as it seeks to pierce the corporate veil and impose personal liability against the individual defendants. However, plaintiffs were properly granted partial summary judgment on the issue of the corporate defendant's liability for breach of contract. The Addendum to that contract, in which plaintiffs consented to the corporate defendant's assignment of the contract to defendant-respondent, specifically provided that the corporate defendant was to remain bound, and the record contains no express agreement releasing the corporate defendant or any facts, other than plaintiffs' consent to the assignment, tending to imply such a release (see, Mandel v. Fischer, 205 A.D.2d 375).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.