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Summary Judgment Affidavits Versus A Verified Pleading: Court Finds Triable Issues of Fact

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  • Posted on: Oct 5 2020

Under New York law, a party commences a civil action by filing a summons and complaint. Generally speaking, these documents set forth the claims that are being asserted against the defendant(s). Typically, though not required in all instances, the plaintiff will verify the complaint. “A verification is a statement under oath that the pleading is true to the knowledge of the deponent .…” CPLR § 3020 (a). The verification makes the pleading sworn and, therefore, is the equivalent of an affidavit and may be used for the same purposes. CPLR § 105(u) (“A ‘verified pleading’ may be utilized as an affidavit whenever the latter is required”). Once a pleading is verified, all pleadings thereafter must be verified.

A complaint can be verified by the plaintiff or by counsel. CPLR § 3020 (d). However, when the pleading is verified by counsel pursuant to CPLR 3020 (d) (3), and not by someone with personal knowledge of the facts, the pleading is insufficient for evidentiary purposes. See McKenna v. Solomon, 255 A.D.2d 496 (2d Dept. 1998); Peterson v. Scandurra Trucking Co., 226 A.D.2d 691, 692 (2d Dept. 1996). The reason: the affirmation of an attorney which does not contain evidentiary facts from one having personal knowledge is insufficient to establish the merits of a claim. See Zuckerman v. City of New York, 49 N.Y.2d 557, 563 (1980).

The impact of a verified pleading on a motion for summary judgment was recently considered by the court in Marinelli v. RPZL, LLC, 2020 N.Y. Slip Op. 33185(U) (Sup. Ct., N.Y. County Sept. 23, 2020) (here). There, the Court denied a motion for summary judgment on the grounds that, inter alia, the verified complaint, which served as an affidavit, conflicted with defendants’ affidavits such that issues of fact were raised and could not be resolved. 

Marinelli arose from an investment by plaintiff, Gina Marinelli (“Marinelli”), in defendant, RPZL, LLC (“RPZL”), a company that provides hair extensions and hair styling services. Defendants Lisa Richards (“Richards”) and Monica Thornton (“Thornton”) own RPZL.

According to plaintiff, Richards and Thornton approached Marinelli about investing in RPZL. Plaintiff alleged that Richards and Thornton made material misrepresentations about the company’s technology and their plans to open locations across the nation: to wit, (i) RPZL had original patent, pending technology on a machine and process that could bond hair extensions to hair without damaging the hair, (ii) had secured a natural hair source that could provide RPZL with inexpensive and high-quality natural hair, and (iii) was raising additional capital to open up new store locations nation-wide. Plaintiff further alleged that Richards and Thornton promised her a paid role in the company and a spot on RPZL’s advisory board in exchange for her investing $100,000.

On December 4, 2014, plaintiff made a $100,000 investment in RPZL pursuant to which the parties signed a promissory note for that amount with a maturity date of December 4, 2017. The next day, the parties entered a side letter agreement that provided: (i) plaintiff would have the sole discretion as to whether the promissory note would convert to an equity interest or become due in full at maturity, (ii) plaintiff would act as a consultant for RPZL, (iii) plaintiff would have a position on RPZL’s advisory board, and (iv) in exchange for her role as a consultant, the principal would be increased by 15% to $115,000 and plaintiff would receive compensation in the form of a 15% payment of the principal amount on each anniversary of the promissory note until the time of its conversion.

Plaintiff claimed that she never received any payments despite performing work for RPZL. On December 5, 2017, plaintiff elected to call for the repayment of the promissory note. No payment was made, even after multiple demands. Thereafter, plaintiff filed suit.

In her complaint, plaintiff alleged four causes of action. The first cause of action, asserted against RPZL, claimed breach of contract under the promissory note. The second cause of action, asserted against all defendants, alleged fraudulent misrepresentation based upon, inter alia, defendants’ claims regarding RPZL’s patent-pending technology and natural hair source. The third cause of action, asserted against RPZL, claimed a violation of Labor Law § 198(1-a) based upon RPZL’s failure to pay plaintiff’s salary. The fourth cause of action, asserted against all defendants, claimed unjust enrichment based upon RPZL’s failure to pay plaintiff any salary or wages. 

Defendants answered the complaint, offering general denials and affirmative defenses, including that plaintiff was not employed by RPZL. Discovery was conducted and the note of issue was filed on November 15, 2019. Defendants moved for partial summary judgment dismissing the second, third, and fourth causes of action.

The Court denied the motion.

On a motion for summary judgment, the moving party must make a prima facie showing that it is entitled to judgment as a matter of law by submitting evidentiary proof in admissible form sufficient to establish the absence of any material, triable issues of fact. See CPLR § 3212(b); Jacobsen v. New York City Health & Hosps. Corp., 22 N.Y.3d 824 (2014); Alvarez v. Prospect Hosp., 68 N.Y.2d 320 (1986); Zuckerman, supra.

Once the movant meets this burden, it becomes incumbent upon the party opposing the motion to come forward with proof in admissible form to raise a triable issue of fact. See Alvarez, supra; Zuckerman, supra. However, if the movant fails to meet this burden and establish its claim or defense sufficiently to warrant a court directing judgment in its favor as a matter of law (see id.; O’Halloran v. City of New York, 78 A.D.3d 536 (1st Dept. 2010)), the motion must be denied regardless of the sufficiency of the opposing papers. See Winegrad v. New York Univ. Medical Center, 64 N.Y.2d 851 (1985). This is because “summary judgment is a drastic remedy, the procedural equivalent of a trial. It should not be granted if there is any doubt about the issue.” Bronx-Lebanon Hosp. Ctr. v. Mount Eden Ctr., 161 A.D.2d at 480 (1st Dept. 1990) (quoting Nesbitt v. Nimmich, 34 A.D.2d 958, 959 (2d Dept. 1970)).

In support of their motion, defendants submitted, inter alia, the affidavits of the individual defendants, who both averred that plaintiff was aware that (i) RPZL did not have an advisory board in place at the time she entered into the promissory note, but rather hoped to create one, (ii) that there was not any patent-pending technology on a machine and process that could bond hair extensions to hair without damaging the hair, but that RPZL was contracting with a third-party to try and develop this kind of technology, and (iii) RPZL directly manufactured its own hair extensions, and therefore was not seeking any outside hair sources.

Richards further averred that plaintiff was never an employee or consultant for RPZL, and therefore no W-2 or 1099 forms were ever issued to her.

On the fraudulent inducement claim, the Court held that because the individual defendants’ affidavits conflicted with the verified allegations in the complaint, summary judgment was inappropriate:

The defendants contend that the affidavits of Lisa Richards and Monica Thornton demonstrate that the plaintiff was aware that RPZL did not have an advisory board, patent-pending technology, or an outside hair source, and that the defendants never made any representations otherwise. However, in opposition, the plaintiff argues that these affidavits merely offer conclusory denials of her allegations, and thus only create a triable issue of fact as to whether Richards and Thornton made the alleged misrepresentations to the plaintiff. As it is well settled that a verified pleading is the equivalent of a responsive affidavit for the purposes of a motion for summary judgment, (see Travis v Allstate Ins. Co., 280 AD2d 394 [1st Dept. 2001]; CPLR 105[u]) and a triable issue of fact cannot be resolved on conflicting affidavits, the portion of the defendant’s motion seeking summary judgment on the second cause of action is denied. See Brunetti v Musallam, 11 AD3d 280 (1st Dept. 2004).

Slip Op. at *3.

As to the Labor Law claims, the Court found that the individual defendants’ affidavits conflicted with, inter alia, the verified complaint necessitating denial of the motion:

The defendants contend that they are entitled to dismissal of this claim as the affidavits of Lisa Richards and Monica Thornton demonstrate that the plaintiff was never an employee of RPZL. The affidavits aver that the plaintiff was not hired as an employee of RPZL and never received a W-2 or 1099 from the company. However, the plaintiff alleges in both her verified complaint and her affidavit in opposition to the instant motion, that she reported to Richards and Thornton daily, five days a week, from December 2014 to June 2015, and on a weekly basis thereafter. She further claims that she aided the company on legal matters, brand marketing, sourcing clients, creating promotions, performing market research, and assisting with onboarding employees. The plaintiff also submits a number of email chains where either Richards or Thornton discuss with the plaintiff her work for RPZL. These submissions raise a triable issue of fact as to the defendants exercised a sufficient degree of control over the plaintiff, such that she is an employee under the Labor Law.

Id. at *4 (citation omitted).

Takeaway

When making a motion for summary judgment, the moving party must make a prima facie showing that it is entitled to judgment as a matter of law. It can do so by submitting evidentiary proof in admissible form sufficient to establish the absence of any material, triable issues of fact. Such proof includes an affidavit of a party or someone with knowledge of the facts and circumstances relevant to the claims and defenses, authenticated documentary proof, or by a pleading verified by the party to the action that sufficiently details the facts and the basis for the relief sought. In Marinelli, plaintiff’s verified complaint constituted such proof.

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