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THE ALLEGATIONS IN THE COMPLAINT WERE NOT SUFFICIENT TO SUPPORT LIABILITY ON A PIERCING-THE-CORPORATE-VEIL THEORY AND THE HOPE THAT DISCOVERY WOULD REVEAL SOMETHING WAS NOT A BASIS FOR DENIAL OF THE MOTION TO DISMISS (FIRST DEPT).

The First Department, reversing Supreme Court, determined the complaint did not allege sufficient facts to hold defendant MMC liable on a piercing-the-corporate veil theory in this medical malpractice case:

… [T]he complaint does not contain allegations sufficient to support holding MMC liable on a theory of piercing the corporate veil, since it does not allege facts supporting a finding that MMC completely dominated and controlled Nyack Hospital or abused the privilege of doing business in the corporate form (CPLR 3211[a][7] … ). Moreover, the lack of discovery does not excuse plaintiff’s failure to plead any facts that would support piercing the corporate veil …, and the hope that something will turn up in discovery is an insufficient basis to deny the motion to dismiss … . Yovich v Montefiore Nyack Hosp., 2023 NY Slip Op 00047, First Dept 1-5-23

Practice Point: If a complaint doesn’t allege facts demonstrating complete domination and control or abuse of the privilege of doing business in the corporate form the cause of action relying on the piercing-the-corporate-veil theory will be dismissed. The hope that discovery will reveal something relevant is not enough to prevent dismissal.

 

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