In motion sequence 002, plaintiff Saul Chase moves, (1) pursuant to CPLR §§ 1001 and 1002, to add Stendhal New York, Inc. as a party defendant; (2) pursuant to CPLR § 3211, dismissing defendants' counterclaim and defenses; (3) pursuant to § 3212, for summary judgment for the relief requested in his complaint; and (4) pursuant to 22 NYCRR Part 130, for an award of costs and the imposition of financial sanctions against defendants and their counsel for frivolous conduct. In motion sequence 003, defendants Maya Stendhal d/b/a Stendhal Gallery and Maya Stendhal move, pursuant to CPLR § 3212, for summary judgment dismissing the complaint, or alternatively, for summary judgment on their first counterclaim and to dismiss the complaint as to defendant Maya Stendhal.

On December 8, 2006, this Court issued an interim order granting plaintiff's motion, in part, adding Stendhal New York, Inc. as a defendant in this action, as such application was without opposition from defendants. However, the Court sua sponte vacates its December 8, 2006 order, since, as detailed below, there is no basis to add Stendhal New York, Inc. as a party, since all transactions which are the subject of this lawsuit, were between plaintiff, and defendants Maya Stendhal d/b/a Stendhal Gallery and Maya Stendhal, individually.^[FN1]

[*2]Background

On July 13, 2004, plaintiff, a known artist, entered into an Artist Agreement ("the Agreement"^[FN2]) with Maya & Harry Stendhal and the Stendhal Gallery ("Stendhal Gallery" or "the Gallery").^[FN3] The terms of the Agreement gave the Stendhal Gallery the exclusive rights to represent selected art works by plaintiff in the Gallery, and the right to keep plaintiff's works of art on consignment for one year, with the mutual option to extend the Agreement and consignment for an additional year.

Plaintiff agreed to consign select works for sale to the Stendhal Gallery. These works were to be listed at retail value. Pursuant to the Agreement, plaintiff was entitled to 50% of the established retail purchase price of works sold and was to be paid up to thirty days after payment was received on all transactions. Further, the Agreement provides that the Stendhal Gallery was to pay all costs associated with advertising, announcements, and mailings. Plaintiff and the Gallery were to spilt financial responsibility for the transport of artworks between plaintiff's art studio and the Stendhal Gallery.

Plaintiff alleges that, between August and October 2004, defendants sold three works by plaintiff, and failed to pay him 50% of the total sales price, as provided for in the Agreement. Plaintiff alleges that, as a result of defendants' breach of the Agreement, he removed the remaining works of art from the Gallery in November 2004. Plaintiff also alleges that he made a loan to defendants during the period of December 2003 through October 2004 in the amount of $75,000, and defendants have yet to pay him back. Defendants argue that the $75,000 was an advance to sustain the costs of the show.

Plaintiff seeks repayment of the alleged loan and damages for breach of the Agreement for failure to pay his share of the sales. Defendants counter-claim that plaintiff breached the Agreement by removing his art work before the end of the consignment period, causing at least $120,000 in damages.

Analysis

In order to grant summary judgment, the court must determine whether a material and triable issue of fact exists. See Brown v LaFontaine-Rish Med. Assocs., 295 AD2d 167 (1st Dept 2002). After the movant makes a prima facie case, the burden shifts to the opposing party to produce evidentiary proof sufficient enough [*3]to establish the existence of material issues of fact that is require a trial. Winegrad v New York Medical Univ. Med. Cen., 64 NY2d 851 (1985).

Here, plaintiff has sufficiently made a prima facie case to warrant the granting of plaintiff's motion for summary judgment. Specifically, plaintiff has established that defendants failed to pay him on the following sales: "Architectural Ruins" sold for $40,000 in August 2004 to Larry Dinkin (See Larry Dinkin's Affidavit [dated invoice attached from Stendhal Gallery], Plaintiff's Exhibit L); "Theatrical Glory" sold for $40,000 in October 2004 to an unidentified buyer; and "Magnificent Billboard on a Sultry Day" sold for $13,000 in September 2004 to "a friend" of Maya Stendhal. Defendants do not deny that these three works were sold at these prices and during these months. Further, defendants acknowledge that they did not pay plaintiff his share for these sales. Therefore, it is defendants' burden to produce sufficient evidence to establish the existence of a material issue of fact, which they failed to do.

Defendants argue that the parties agreed to put plaintiff's share of profits from the sales of his works towards the costs of maintaining plaintiff's two month exhibit at the Gallery. See Maya Stendhal's Affidavit in Opposition, ¶ 76. However, defendants' argument is contradicted by the plain language of the Agreement and defendant Maya Stendhal's own deposition testimony.

The Agreement specifically states that plaintiff is entitled to 50% of the retail sale price of his art works up thirty days after payment was received. The Agreement also provides that the Stendhal Gallery was to advertise exhibitions in appropriate publications; was to print a standard color card to accompany exhibitions at the Gallery's expense; was to pay all costs associated with advertising, announcements, and mailings; and was to provide insurance on all works consigned. The only costs that plaintiff was responsible for, pursuant to the Agreement, were the framing costs and partial transportation costs.

Further, in her deposition on May 4, 2006, Maya Stendhal admitted that, as of June 7, 2005, she owed plaintiff "for commissions on his part of the sales." Plaintiff's Notice of Motion, Exhibit G, page 6. In light of this statement and other statements made by Ms. Stendhal in her deposition, the Court disregards the portion of Ms. Stendhal's affidavits, sworn to after the deposition, which state that Plaintiff advised her to put his share of the profits towards the exhibit. The statements made in her affidavits contradict her deposition testimony, and therefore, do not have to be considered by the Court. See Gloth v Brusco Equities, LLC, Inc., 1 AD3d 294 (1st Dept 2003). Moreover, where a contract is clear, as is the case here, evidence outside of the four corners of the document as to what was really intended but, unstated or misstated is generally inadmissible to add or vary the writing. See W.W.W. Associates v. Frank Giancontieri, 77 NY2d 157, 162 (1990). Thus, based on the documentary evidence, defendants have failed to meet their burden and have not raised a triable issue of fact to warrant a denial of plaintiff's motion for summary judgment. [*4]

In their answer, defendants assert the defense that, as part of the Agreement wherein plaintiff used the services of defendants to sell his art works, plaintiff was required to consign certain works to the defendants for one year, and plaintiff breached this Agreement when he removed his art works from the Stendhal Gallery in November 2004. Defendants argue, therefore, that the plaintiff is not entitled to seek enforcement of his 50% share of profits.

Plaintiff does not deny that he removed his art works in November 2004, before the end of the one year consignment period. However, plaintiff argues that he removed the works because defendants breached the Agreement by failing to timely pay him his share of the profits from the sale of "Architectural Ruins," "Theatrical Glory," and "Magnificent Billboard on a Sultry Day." Defendants try to assert that plaintiff removed his works for other reasons, but in her deposition, Maya Stendhal specifically states that when plaintiff removed his works from the Gallery, plaintiff's issue "was more about the commissions; [plaintiff] felt, that he needed to get paid for the commission." Plaintiff's Notice of Motion, Exhibit G, page 12. Therefore, it is acknowledged by defendants that plaintiff removed his works because he had not been paid.

It is well settled that when one party "materially breaches a contract, the non-breaching party must choose between two remedies: it can elect to terminate the contract or continue it." Awards.com, LLC v Kinko's, Inc.,42 AD3d 178 (1st Dept 2007); see also Inter-Power, Inc. v Niagara Mohawk Power Corp., 259 AD2d 932, 934 (3rd Dept 1999). Here, defendants breached the parties' Agreement when they failed to pay plaintiff his share of the profits within the contractual time period. Plaintiff was therefore acting within his rights when he repudiated the Agreement by removing his works of art from the Stendhal Gallery.

It is clear from the evidence that defendants were paid $40,000 for "Architectural Ruins" in August 2004 (See Larry Dinkin's Affidavit [dated invoice attached from Stendhal Gallery], Plaintiff's Exhibit L), that they failed to give plaintiff his share of the profits within the thirty days of payment, and that defendants therefore breached of the Agreement. Defendants also admit that they failed to pay plaintiff his share of the profits from the sale of "Magnificent Billboard on a Sultry Day" for $13,000 in September 2004. Defendants have not produced evidence as to when they were paid for this painting, but they do not dispute plaintiff's assertion that it was in September 2004. Therefore, it has been established that defendants did not pay the plaintiff within the thirty days of receipt of the monies for this work.

Finally, defendants also failed to pay plaintiff for the sale of "Theatrical Glory" for $40,000 in October 2004. Defendants did render two checks to plaintiff, totaling $20,000, for this painting in December 2004, after plaintiff removed his works, but both of the checks bounced. Defendants took no further action to pay plaintiff his share of the money owed. See Plaintiff's Notice of Motion, Exhibit M; Plaintiff's [*5]Notice of Motion, Exhibit G, pages 13-17.

Defendants argue that their failure to pay the plaintiff for the sales of these works was not a material breach, because the delay in payment of the commissions by itself does not go to the very essence of the Agreement. This Court disagrees. It is undisputed that the purpose of this Agreement was for the parties to make money by displaying and selling plaintiff's works in defendants' possession. Further, the Agreement specifically provides the time period in which defendants had to pay plaintiff. Plaintiff in fact consigned his works to defendants, defendants exhibited them, and the parties anticipated sales and profits as a result. Defendants sold some works, collected the profits from those sales, and failed to pay plaintiff his share within the contractual time period; contrary to defendants' arguments, such failure to pay plaintiff goes to the essence of the Agreement. See Daiichi Seihan USA v Infinity USA, Inc., 214 AD2d 487 (1st Dept 1995); Hooker v Wooten, 237 AD2d 572 (2nd Dept 1997). Thus, plaintiff is entitled to summary judgment on his claim that defendants breached the Agreement by their failure to timely pay plaintiff his share from the sale of his artwork.

Plaintiff also moves for summary judgment in regard to the alleged $75,000 loan he made to the defendants. Plaintiff has sufficiently made a prima facie case that he made loans to the defendants in the amount of $75,000 between December 2003 and October 2004. Plaintiff has presented evidence to establish that such loans were made with the intention that he would be repaid. Again, the burden shifts to defendants to raise a triable issue of fact as to whether these payments were loans. The Court notes that these loans are outside of the provisions of the Agreement. Further, since the Court has found, as a matter of law, that plaintiff had the right to terminate the Agreement, any defense in regard to plaintiff's removal of his works from the Gallery is inapplicable.

Defendants argue that the money given to them by plaintiff was "an advance given to sustain the carrying costs of the show which plaintiff stated would not be owing from defendants, but would be deducted from future commissions which plaintiff claimed would be sales sure to take place." Defendants' Verified Answer and Counterclaim, ¶ 7. This admission clearly shows that defendants were to pay back the $75,000 to plaintiff. Defendants admit that they were to pay back plaintiff through future commission, and not "out-of-pocket" per se. The fact that defendants had to pay back plaintiffs with defendants' share of the sales' profits, does not alter that this was money that defendants agreed in fact to pay back to plaintiff, and therefore, a loan.

Further, Ms. Stendhal admitted in her May 4, 2006 deposition, that she owed plaintiff "for putting up the money for [*6]his own exhibit, which I generously said that I would give him back, which I didn't have to." Plaintiff's Notice of Motion, Exhibit G, page 6.

Defendants argue that plaintiff withdrew his artworks from the Stendhal Gallery prematurely, and thus, deprived defendants of the opportunity to obtain future commissions to pay the plaintiff back for his "advance." However, defendants acknowledge that their shares of commissions totaled $96,500 before plaintiff even removed his works from the Gallery. Therefore, plaintiff's removal of his works as a result of defendants' breach of the Agreement is not a legal basis for defendants' failure to repay the loan.

The Court has considered the parties' remaining arguments and finds them moot or without merit. Therefore, in light of the foregoing decision, plaintiff's motion for summary judgment is granted.

Plaintiff's motion to dismiss defendants' counterclaim for breach of the Agreement is also granted. Defendants seek at least $120,000 in damages for plaintiff's alleged breach of the Agreement. However, this Court has held above that plaintiff was well within his rights to terminate the Agreement and remove his works of art. Defendants therefore cannot recover on their claim that plaintiff breached the Agreement.

Plaintiff's motion for sanctions is denied. Although the Court is wary of defendants' conduct throughout the discovery period and in bringing their counterclaim, it is not so egregious as to warrant sanctions at this stage.

Defendants also move for summary judgment on their counterclaim and to dismiss the complaint. Such motion is denied as moot in light of the foregoing decision.However, the Court will address defendants' motion to dismiss plaintiff's claims as asserted against defendant Maya Stendhal.

Defendants argue that Maya Stendhal entered into the Agreement on behalf of the gallery, a corporate entity, and not in her individual capacity. "When an agent acts on behalf of a disclosed principal, the agent will not be personally liable for a breach of contract unless there is clear and explicit evidence of the agent's intention to be personally bound." Weinreb v Stinchfield, 19 AD3d 482, 483 (2nd Dept 2005). With respect to disclosed principals which are corporations, Business Corporation Law (BCL) § 301(a) provides, with exceptions not relevant here, that:

the name of a domestic or foreign corporation:

(1) Shall contain the word "corporation," "incorporated" or"limited", or an abbreviation of one of such words; or, in the case of a foreign corporation, it shall, for use in this state, add at the end of its name one of such words or an abbreviation thereof.

Here, the Agreement provides that it is between plaintiff and Maya & Harry Stendhal and "Stendhal Gallery". The agreement was signed by defendant Maya Stendhal above a line that indicates "for [*7]Stendhal Gallery".^[FN4] The Agreement fails, however, to contain any indication that "Stendhal Gallery" is a corporate entity as required by BCL § 301(a). Additionally, glaringly absent from the record is an allegation that it was disclosed to plaintiff that defendant Maya Stendhal was acting on behalf of a corporate entity, rather than in her individual capacity or on behalf of a non-corporate business entity, "Stendahl Gallery", as provided in the Agreement.

Moreover, no evidence has been supplied to establish that "Stendhal Gallery" is in fact a corporate entity which would arguably shield defendant Maya Stendhal from liability. One who acts as an agent for a principal with no legal status will be personally liable on the contract. Tarolli Lumber Co. v Andreassi, 59 AD2d 1011 (4th Dept 1977). Defendants admit that the subject gallery is incorporated under the name "Stendhal New York, Inc.", and not under the name of "Stendhal Gallery", the business name provided in the Agreement. [See ¶43, Maya Stendhal Affidavit in Opposition to Plaintiff's Motion for Summary Judgment]. Thus, as it is undisputed that it was not disclosed to plaintiff that defendant Maya Stendhal was acting on behalf of a corporate entity, and as it is also undisputed that "Stendhal Gallery" - the name supplied on the agreement - is not a corporation which could have potentially insulated defendant Maya Stendhal from personal liability, defendants' arguments for dismissal of plaintiff's claims as against defendant Maya Stendhal fail. See Nico Construction Co. v Dorn, 214 AD2d 355 (1st Dept 1995); New England Marine Contractors v. Martin, 156 AD2d 804 (3rd Dept 1987).

Accordingly, it is

ORDERED that plaintiff's motion for summary judgment is granted against defendants Maya Stendhal d/b/a Stendhal Gallery and Maya Stendhal (individually), in the amount of $121,500, together with interest as prayed for allowable by law [at the rate of 9% per annum from the date of the breach,] until entry of judgment, as calculated by the Clerk of the Court, together with costs and disbursements to be taxed by the Clerk upon submission of an appropriate bill of costs; and it further

ORDERED that plaintiff's motion dismissing defendants' counterclaim and defenses is granted; and it further

ORDERED that plaintiff's motion for the imposition of financial sanctions against defendants and their counsel for frivolous conduct is denied; and it further

ORDERED that defendants' motion for summary judgment dismissing the complaint and [*8]on their first counterclaim is denied; and it is further

ORDERED that Clerk is to enter judgment accordingly; and it is further

ORDERED that within 30 days of entry of this order, plaintiff shall serve a copy upon defendants with notice of entry.

Date:_____________________

______________________________

Hon. Doris Ling-Cohan, J.S.C. C:\htformat\f5172370.txt