[*1]
Cristillo v Drabin
2008 NY Slip Op 51078(U) [19 Misc 3d 1140(A)]
Decided on June 3, 2008
City Court Of Rochester
Morse, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on June 3, 2008
City Court of Rochester


John Cristillo, Plaintiff,

against

Daniel Drabin, CUSTOM CONSTRUCTION SERVICES, INC., Defendants.




07 - SC - 24799



James A. Marino, Esq. (counsel for the plaintiff)

Michael R. Law, Esq. (counsel for the defendant)

Thomas Rainbow Morse, J.

The court has conducted a de novo small claims proceeding in the above matter and has taken sworn testimony regarding the plaintiff's request for a $ 4,500 judgment representing a portion of the funds already paid to the defendant for an incomplete stamped concrete patio project.[FN1] The plaintiff alleges that the work was not going to be performed in accordance with his understanding of the oral agreement between the parties. The defendant asserts that the parties had a falling out in the middle of the job because the plaintiff was insisting on seeing a sample of the finished product at the 11th hour. The plaintiff testified he stopped work on the project and is seeking compensation for money paid to the defendant before work ended. The defendant testified he stopped work on the job (even though he had $ 1,000 - $1,500 more into the job than he had been paid) believing he would never be able to satisfy the plaintiff. In short, the parties in this home remodeling case disagree about almost everything. Yet, their conflict could have been easily avoided had they complied with the provisions of the General Business Law [GBL] which calls for a written contract signed by both parties in most home remodeling situations. For the reasons which follow, the court concludes that the plaintiff is entitled to recover $ 1,777.10.



Perils Risked Absent A Signed Written Agreement

Although the parties first talked about stamped patio work in the late summer of 2006, leading to an estimate by the defendant in September of that year, there is no document signed by [*2]both the plaintiff and the defendant relating to the project. In fact, it appears that the first time that the defendant requested the plaintiff's signature was after several days of work on the job and just before the concrete was to be poured. While such an isolated oversight by the defendant who has been engaged in this business for over twenty-eight years might be understandable, the defendant forthrightly testified that it was his normal and ordinary course of business to order concrete before having a customer sign-off on a contract. Such a business practice, however, contravenes state law. [FN2]

In fact, if the shoe was on the other foot and the defendant was suing in small claims court for money owed him, he would face insurmountable obstacles. Most notably, given his normal business practice, the defendant could neither sue for breach of contract nor lost profits without proof that Mr. Cristillo "signed the estimate or any agreement setting forth the responsibilities of each party." [FN3] Also, because there is no equity jurisdiction in small claims court, he could not recover based on a theories of unjust enrichment or quasi contract for the value of work performed.[FN4]

Lastly, had the defendant complied with the GBL he could raise arguments regarding the plaintiff's behavior the night before and the day of concrete delivery because such a contract necessarily contains an implicit agreement between the parties that each will get a bargained-for result. The homeowner will get the renovation sought and the contractor will get paid. As noted by the Court of Appeals seventy five years ago "in every contract there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract, which means that in every contract there [*3]exists an implied covenant of good faith and fair dealing." [FN5]

The shoe, however, is not on the other foot. This case involves the homeowner suing the remodeler. Thus, the question then becomes how the GBL applies in this case and whether the Builder can use its provisions as a sword rather than a shield.



General Business Law Article 36

To protect consumers, New York requires that "[e]very home improvement contract [with an aggregate materials and labor value over $ 500][FN6] shall be evidenced by a writing and shall be signed by all the parties to the contract."[FN7] Furthermore, the "writing shall be legible, in plain English, and shall be in such form to describe clearly any other document which is to be incorporated into the contract."[FN8] Lastly, "[b]efore any work is done, the owner shall be furnished a copy of the written agreement, signed by the contractor." There are a number of required components of the contract relating to completion date, [FN9] scope of the job,[FN10] progress payments,[FN11] [*4]preservation of funds before completion,[FN12] and right to cancel.[FN13]

As noted earlier, the parties had no such agreement. Nonetheless, the behavior of the parties may evidence a meeting of minds and an enforceable verbal contractual relationship if there is "a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms." [FN14] The problem with this theory of recovery in this case centers on the definiteness of the parties agreement regarding the manner in which the desired "Olde English" patio was to be created.

The Verbal Dis-Agreement

The first discussions between the parties in 2006 involved a desire by the plaintiff to have the defendant construct a patio behind his house under his deck because he had seen the quality of work performed by the defendant on a house in his neighborhood.[FN15] Their discussions led to a verbal estimate over the phone in last summer 2006 for a poured concrete patio. In 2007, the parties focused on Increte's "Olde English" slate style. [FN16] The record is not as clear as to when the defendant told the plaintiff increte forms would not be used. However, both written estimates in October 2007, refer to saw cuts to be made by the defendant without referring to beveling. The first estimate described the job as follows:

To excavate & pour approx. 1000 sq. ft. of stamped patio using silver color & dark grey release.$8,500.00

1,000 sq. ft @ $ 9.00 per sq$ 9,000.00

Price includes slate texture concrete 4 to 5" Thick w fiber mesh reinforcement saw cut control joints power wash & sealer w non-stain grit additive.
[*5]
Terms are down upon completion of prep work & upon completion of pour

$ 3,000.00

$ 3,000.00

$ 3,000.00

According to the testimony before this court, the negotiated $ 500 reduction in estimated cost was based the plaintiff's representation that he had competing bids at that level and the defendant's agreement to match that price.

The site was excavated during the first week of October. Ten days later, a new estimate was delivered to the plaintiff along with the first request that he sign the estimate prior to delivery of the concrete. It described the job as follows:

As per conversation

Slate texture mats

Saw cut pattern 2' x 2' Running Bond


[ image deleted ]

Re hook up perimeter Drain tile 10/15 - GC

Remove existing wood threshold 10/15GC
Compact stone base 10/15GC

Customer sign & date

Please Sign Ready to pour_______________________________
Color silver grey & Dark Grey Release
Sealer w/non skid additive


This second "estimate", however, didn't even come close to satisfying the requirements of the GBL § 771. In fact, the only statutory provision it encompassed was the proposed "job description." Remarkably, it did not set forth the estimated or negotiated price to be paid upon completion although the defendant's pre-printed form contained a space for that information to be written into the document.

On the evening before the truck was to scheduled to pour the concrete so the defendant's crew could stamp it prior to cutting the running bond, the plaintiff called the defendant he told the defendant would not sign the second estimate. According to his testimony, he questioned why the estimate didn't note that the saw cuts would be beveled. The defendant described a different conversation in his testemony focusing on his assertion that the plaintiff was for the first time requiring a sample of the finished product before he would sign. They spoke on the phone twice that night. Regardless of the substance of their exchange, it is clear to the court that the tone of [*6]their conversation turned toxic.

Following their last phone conversation, the plaintiff told the court that he moved the defendant's tamping machine into his basement which had been left on the adjacent patio. He also went out to the defendant's truck and removed all the tools it contained and put them inside his garage. He then moved the truck from his yard to the street. According to the plaintiff, he moved the truck to protect his lawn and put the truck in the only "optimum spot" on the street he could find which just happened to be near a fire hydrant. He admitted in this proceeding, however, that its location might not have been the best spot in terms of the ability of a firefighters to respond appropriately. At some point after moving the truck the plaintiff must have reached the that same conclusion, but rather than going back out to relocate the truck, he called the police to complain that it was near the hydrant. Although the plaintiff seemed unable or unwilling to recall in his testimony before the court exactly how close to the hydrant the truck was, the court credits the testemony of Deputy Hagen that he parked the defendant's right next to the hydrant.

The court also credits the testimony of Deputy Hagen regarding the plaintiff's evasive answers to law enforcement when the deputy responded to the plaintiff's house the morning following the phone conversations to investigate the whereabouts of the defendant's tools. The court finds that the plaintiff's response to the direct questions posed by Deputy Hagen regarding the tool's location mirrored his obscure and allusive answers before this court regarding the location of the truck relative to the hydrant. His lack of candor when he told the deputy that the tools were "not there" but that "they were safe", together with his performance before the court, raise serious questions concerning his credibility.

That is not to say that the court finds all of the defendant's testemony believable. Given the acrimonious interaction between the parties on the phone, it seems highly unlikely that the defendant was actually surprised that there were problems with the job the following morning. Moreover, given the defendant's response to counsel's appropriate courtroom cross-examination, and the extreme actions of the plaintiff regarding the defendant's tools, it seems reasonable to the court that contrary to the defendant's testimony there may have been some phone negotiation between the parties regarding the monetary value of an incomplete job.

The defendant's appraisal that the work already performed by the defendant was worth $1,000 to $1,500 more than the funds already received was contradicted by other testemony. At the point the job was terminated, the defendant had estimated the job, purchased materials and had one employee work a total of approximately twelve hours on three days. However, almost twice as many work hours would be required before the job would be completed. The stone was not tamped, accordingly not all the prep work had been completed. On the morning of the pouring, at least eighteen work hours would be required for the labor intensive efforts connected to tamping, pouring, stamping, cutting and beveling which the defendant testified could be completed in approximately six hours by the three employees there that day. Those tasks were to be followed the following day, once the concrete cured, by power washing, sealing and backfilling.

Thus, while this court finds portions of both parties testemony suspect, it has no difficulty believing that at the point Deputy Hagen left, each of the parties had repudiated any verbal [*7]agreement by "an unqualified and clear refusal to perform with respect to the entire contract." [FN17] What is left for the court to determine, therefore, is whether any portion of the money paid by the plaintiff should be refunded.

One financial aspect of this job is not disputed by the parties. They both agree that the defendant is entitled to be compensated for the cost of materials still on site worth: $ 1,260.51. [FN18] Given this stipulation, the plaintiff's demand for return of $ 4,500 would require that this court find that the value of the work prep work completed overhead and profit margin at the point the agreement disintegrated was $ 249.49. Such a finding would be absurd especially given the testemony of the plaintiff's own witness, Anthony Florino.

The court finds Mr. Florio's testimony credible although he had limited information about the manner in which the job was to be performed and there was a four month lapse between his inspection and termination of the job.[FN19] Even with those impediments, he determined that the "approximate value of the work done to date excluding the cost of color, release and sealer left on site would be $1,000 -1,5000." Accordingly, viewing the plaintiff's proof in its best possible light, his recovery should be limited to the range of $ 3,677.10 to $4,177.10.



Joint and Several Liability

Because the plaintiff has sued Mr. Drabin individually in addition to suing "Custom Construction Services, LLC", it is necessary to address the liability of each defendant in this action. While Limited Liability Companies (LLC) have been creatures of statute in New York since 1994, the law governing them roughly parallels long standing New York corporate and partnership law principles when it comes to personal liability.[FN20] Limited Liability companies are often formed for the same reasons as partnerships and corporations and when a LLC has been [*8]shown to exist, New York Law curtails members and agents personal liability. [FN21]

Such limited liability companies are "formed at the time of the filing of the initial articles of organization with the department of state." [FN22] The operating agreement setting forth the purpose of the LLC and the rights and responsibilities of its members and agents is a necessary statutory component of a properly formed LLC. [FN23] A duly constituted LLC may " sue or be sued, or institute, participate in or defend any action or proceeding, whether judicial, arbitrative, administrative or otherwise, in its name." [FN24] In addition, the statute allows an LLC to indemnify its members from personal liability.[FN25]Accordingly, if at the time of this small claims proceeding evidence of the filed articles of organization of "Custom Construction Services LLC" had been offered into evidence before the court along with a written contract signed by both parties, then Mr. Drabin might be absolved of liability as a member or agent of the LLC since "when one party to a written contract is known to the other to be in fact acting as agent for some known principal, he does not become personally liable whether he signs individually or as an agent." [FN26] No such evidence, however, was introduced in this proceeding.

Moreover, in this case there is no written contract between the parties. The only written documents addressing the proposed work are two estimates containing the name "Custom [*9]Construction Services, LLC" which are both signed by Mr. Drabin. There is no indication on the estimates that such a recognized legal entity in fact exists or existed at the time the work was done at the plaintiff's house. Nor is there proof before this court that Mr. Drabin signed as agent for the LLC or as a member of the LLC. Had there been a written contract signed by both parties which contained such information, any argument regarding Mr. Drabin's lack of personal responsibility to the plaintiff might be more convincing.

If the LLC is indeed more than just a name on estimate letterhead, it could have been shown that Mr. Drabin was only acting as an agent or LLC member and motions could have been made at the close of the plaintiff's proof or at the conclusion of all the proof concerning immunity for an agent of a disclosed principal. Counsel for the plaintiff would have then had the opportunity to challenge such assertions through cross-examination or direct proof and present legal arguments against such a finding. Yet, the court was not presented with an opportunity to rule on the question during the proceeding.

It seems appropriate in this case to charge both defendants with the responsibility of presenting such evidence regarding their legal identity and relationship with one another. While summary judgment may be appropriate when there is no question that an individual is acting as an agent of a disclosed principle,[FN27] it is not justified if such agency immunity is a disputed fact presenting a trial issue.[FN28] Especially in this case, where a signed "home improvement contract" was required, the court finds it consistent with public policy to place the burden on the defendants to bring such evidence to the attention of the court. As observed by the Fourth Department, if "agents fail to disclose their principal when it is within their power to do so, they should not escape liability." [FN29] Similarly, having not presented critical evidence before this court regarding the relationship between and legal identity of the defendants, neither Mr. Drabin nor "Custom Construction Services, LLC" should be able to escape liability here.[FN30]

Even without a written contract, however, Mr. Drabin could have furthered any argument negating personal liability by accepting a personal or teller's check made out to "Custom Construction Services, LLC" when he and the plaintiff went to the bank after the stone was delivered. Instead, he accepted payment of $6,000 cash. Since "[k]nowledge of the real principal [*10]is the test, and this means actual knowledge, not suspicion," [FN31] it would not be unreasonable for the plaintiff to have assumed that he was paying Mr. Drabin individually. In an analogous situation, the Fourth Department reversed an order granting summary judgment and found a triable issue existed because

there was no written agreement to absolve [the individual defentant]and the parties disagree regarding whether it was their intention that [he] be personally bound. Further, no documentaruy proof was submitted which clearly shows the intention to relieve [him] of liability. Although the invoices indicate that the goods were sold and shipped to "Kimco Warehousing Inc/Dana Linstrom & Assoc" and it is clear from the other proof that Lindstrom acted for those entities, the documentary proof does not unequivocally indicate an agreement that plaintiff would look excusively to the corporate defendants for payment.[FN32]


Absent such evidence and testimony before this court that Mr. Drabin acted only as a member or agent of such a limited liability corporation at the time of the oral remodeling contract, this court is constrained to find joint and several liability as to both defendants.[FN33]

ConclusionArticle 36 of the General Business Law is at its heart a consumer protection law. Sanctions may be imposed on builders but not homeowners for non-compliance. Underlying GBL Section 771 is a legislative concern that the myriad problems which might arise in home construction or remodeling work need to be clearly spelled out in a written contract signed by the homeowner and contractors to avoid unrealized expectations by parties which often precipitate protracted legal battles. That section incorporates the common law requirement that in order to be enforceable, all contracts represent a "meeting of the minds" between the parties.[FN34]

It is incomprehensible to this court that these parties did not honor the maxim that reasonable people "hope for the best but plan for the worst." They should have complied with the General Business Law and signed a home improvement contract which clearly set forth all of their rights and responsibilities. [*11]

The court finds it would neither be in the interest of justice nor consistent with the legislative intent of our consumer protection statutes to allow the defendant to benefit from his failure to comply with the requirements of the General Business Law by retaining the entire amount he has received. It is clear from the record before the court that while prep work is vital even for a patio built to withstand foot traffic, the defendant had not purchased materials and performed work which represented over two thirds of the contract price. [FN35] In addition, it appears to the court that at some point, the defendant realized that if he wanted to be sure to be paid for the undelivered concrete he needed a signed contract. Whether intentional or inadvertent, this oversight dictates that the unused truck of concrete be charged to the defendant as a cost of doing buisness in a manner inconsistent with the General Business Law.

On the other side of the ledger, it is just as inexplicable that the plaintiff would not have insisted that each estimate contain a description of the job which delineated either use of "Increte forms" or "hand-beveled saw cuts" before he paid $ 6,000 to the defendant. His lapse of judgment in securing the defendant's tools under circumstances that some might characterize as bordering on extortion and stonewalling a deputy sheriff, diminish his argument that substantial requires recovering in any amount approaching $4,500.

Accordingly, consistent with the court's responsibility "to do substantial justice between the parties according to the rules of substantive law"[FN36] and consonant with its authority to "condition the entry of such judgment upon such terms as the court shall deem proper",[FN37] it is hereby

HELD that the credible proof before the court demonstrates that the defendant had completed 40% of the work necessary to complete the job representing $3,400 of the total cost of the job.[FN38] And it is further

HELD that the plaintiff has retained $ 822.90 in unused materials. Therefore, it is hereby

ORDERED that the Plaintiff is entitled to a judgment against the defendants, jointly and [*12]severally, in the amount of $ 1,777.10. And it is further

ORDERED that this court's judgment order is stayed until July 5, 2008, to allow the defendants time to pay the amount ordered without a judgment being entered. And it is further

ORDERED that if payment is not made by July 5, 2008, the judgment shall be entered in favor of the plaintiff without further appearance before the court after receipt of plaintiff's written request for entry of a judgment accompanied by a notarized affidavit indicating that no appeal of this order has been taken by either party and that payment was not made by the defendants as ordered.

The foregoing constitutes the decision and order of the court.

ENTER,

Dated:June 3, 2008_______________________________________

Rochester, New YorkHon. Thomas Rainbow Morse, JCC

cc:James A. Marino, Esq. (counsel for the plaintiff)

Michael R. Law, Esq. (counsel for the defendant)

Footnotes


Footnote 1:Although there are two defendants named in the caption, the body of this opinion will refer to both defendants in the singular as "the defendant". The defendant does business in Monroe County thus giving this court subject matter jurisdiction over this case which concerns improvement to real estate in the Town of Victor in adjoining Ontario County. Uniform City Court Act [UCCA] § 801.

Footnote 2:The defendant may wish to seek legal advice in drafting a boilerplate fill-in-the-blank written estimate which once signed by both parties would constitute a writing within the meaning of the general business law to avoid the possibility of imposition of statutory sanctions. See GBL § 773.

Footnote 3:Precision Foundations v. Ives 4 AD3d 589, 591(3rd Dept.,2004)(no recovery under GBL § 771). Compare Mindich Developers, Inc. v. Milstein, 227 AD2d 536, 537(2nd Dept., 1996)(" the plaintiff cannot recover for lost profits for work not performed where there was neither strict compliance with General Business Law § 771") with Wowaka & Sons, Inc. v. Pardell, 242 AD2d 1, 7-8(2nd Dept., 1998)("an unwritten contract which obviously ignores all of the requirements of General Business Law article 36-A, such as that in Mindich Developers v. Milstein, or one which lacks so many essential terms as to demonstrate that there was no true meeting of the parties' minds, may be unenforceable.")(citations omitted).

Footnote 4:Cucinotta v. Hanulak, 231 AD2d 904, 905(4th Dept., 1996)("Small Claims Part has no equitable powers and cannot grant equitable relief."). See Frank v. Feiss, 266 AD2d 825 (4th, 1999)(No equity jurisdiction in small claims); Clark v Torian, 214 AD2d 938 (3rd Dept., 1995). He could, however, sue for that on the regular civil side of the court. See also Capital Heat, Inc. v. Buchheit, 46 AD3d 1419, 1420 (4th Dept., 2007); and Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 NY2d 382, 388(1987)(unjust enrichment) (citations omitted).

Footnote 5:Kirke La Shelle Co. v. Paul Armstrong Co. 263 NY 79, 87 (1933); Compare Miller v. Universal Pictures Co., 10 NY2d 972, 974 (1961)( the parties "assumed a fiduciary relationship which had its origin in the contract, and which imposed upon them the duty of utmost good faith").

Footnote 6:General Buisness Law Article 36, §771[hereinafter "GBL" without reference to article 36].

Footnote 7:GBL § 770.

Footnote 8:GBL § 771(2)

Footnote 9:"The approximate dates, or estimated dates, when the work wil begin and be substantially completed, including a statement of any contingencies that would materially change the approximate or estimated completion date. In addition to the estimated or approximate dates, the contract shall also specify whether or not the contractor and the owner have determined a definite completion date to be of the essence." GBL § 771(b).

Footnote 10:"A description of the work to be performed, the materials to be provided to the owner, including make, model number or any other identifying information, and the agreed upon consideration for the work and materials." GBL § 771( c).

Footnote 11:"If the contract provides for one or more progress payments to be paid to the home improvement contractor by the owner before substantial completion of the work, a schedule of such progress payments shopwing the amount of each payment, as a sum in dollars and cents, and specifically identifying the state of completion of the work or services to be supplied before each such progress payment is due. The amount of any such progress payments shall bear a reasonable relationship to the amount of work to be performed, materials to be purchased, or expenses for which the contractor would be obligated at the time of payment." GBL § 771(f).

Footnote 12:"A notice to the owner purchasing the home improvement that...the home improvement contractor is legally required to deposit all payments received prior to completion in accordance with subdivision four of section seventy-one-a of the lien law...." GBL § 771(e).

Footnote 13:"A notice to the owner that, in addition to any right otherwise to revoke an offer, the owner may cancel the home improvement contract until midnight of the third business day after the day on which the owner has signed an agreement or offer to purchase relating to such contract...." GBL § 771(h).

Footnote 14:Flores v. Lower East Side Service Ctr., Inc. 4 NY3d 363, 368(2005)("an unsigned contract may be enforceable, provided there is objective evidence establishing that the parties intended to be bound.").

Footnote 15:Defendant's exhibit D before this court depicts the patio area as it appeared in February, 2008. It is illustrative, however, of the relative size and location of the area in which work was to be done with the un-tamped gravel in place.

Footnote 16:Plaintiff's exhibit # 2 before this court.

Footnote 17:O'Connor v. Sleasman 37 AD3d 954, 956(3rd Dept.,2007).

Footnote 18:The sealing and additives for the concrete for this job were purchased at a cost $ 822.90 by the defendant, delivered to the plaintiff and have been retained by him in his basement. Defendant's exhibit B. On October 5, 2007, stone for the base under the concrete was delivered to the work site using stone slinger at a cost of $ 437.61. Defendant's exhibit C.

Footnote 19:He found that "approximately 1,000 SF was dug out to an approximate depth of 1 ½ - 2 " with gravel in place. There were no forms around the perimeter. The grade was not final, level or ready for pouring of concrete. I also noted damage to one of the posts supporting the second floor deck above." Plaintiff's exhibit #1. His estimate presupposed that wire mesh and rebar would reinforce the concrete. The first estimate, however, clearly indicates "fibre mesh" would accomplish that purpose.

Footnote 20:As one Federal Judge recently observed, "[n]ew York courts have long held corporations exist independently of their owners as separate legal entities, that individual owners or parent corporations are not ordinarily held liable for the debts of their properly maintained subsidiaries, and that incorporation for the express purpose of limiting liability is perfectly legal." Bagel Bros. Maple, Inc. V. Ohio Farmers, Inc. 279 BR 55, 67 (W.D.NY, 2002).

Footnote 21:New York Limited Liability Corporation Law (LLCL) § 609(a). "Neither a member of a limited liability company, a manager of a limited liability company managed by a manager or managers nor an agent of a limited liability company (including a person having more than one such capacity) is liable for any debts, obligations or liabilities of the limited liability company or each other, whether arising in tort, contract or otherwise, solely by reason of being such member, manager or agent or acting (or omitting to act) in such capacities or participating (as an employee, consultant, contractor or otherwise) in the conduct of the business of the limited liability company."

Footnote 22:LLC § 203(d)(" The filing of the articles of organization shall, in the absence of actual fraud, be conclusive evidence of the formation of the limited liability company as of the time of filing or effective date if later, except in an action or special proceeding brought by the attorney general. A limited liability company formed under this chapter shall be a separate legal entity, the existence of which as a separate legal entity shall continue until the cancellation of the limited liability company's articles of organization."

Footnote 23:LLCL § 417 provides that "(a) Subject to the provisions of this chapter, the members of a limited liability company shall adopt a written operating agreement that contains any provisions not inconsistent with law or its articles of organization relating to (i) the business of the limited liability company, (ii) the conduct of its affairs and (iii) the rights, powers, preferences, limitations or responsibilities of its members, managers, employees or agents, as the case may be."

Footnote 24:LLCL § 202(a).

Footnote 25:LLCL § 420 provides that "[s]ubject to the standards and restrictions, if any, set forth in its operating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless, and advance expenses to, any member, manager or other person, or any testator or intestate of such member, manager or other person, from and against any and all claims and demands whatsoever; provided, however, that no indemnification may be made to or on behalf of any member, manager or other person if a judgment or other final adjudication adverse to such member, manager or other person establishes (a) that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated or (b) that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled."

Footnote 26:Ell Dee Clothing Co. V. Marsh, 247 NY 392, 397 (1928)(citation omitted)

Footnote 27:Panasuk v. Viola Park Realty, LLC, 41 AD3d 804(2d Dept., 2007)(" On his motion for summary judgment, Bergstol established his prima facie entitlement to judgment as a matter of law by demonstrating that he did not purport to bind himself individually under the contract "). See also Matias ex rel. Palma v. Mondo Properties LLC , 43 AD3d 367, 368(1st Dept.,2007)("Appellants submitted competent evidence that neither of them owned or managed either 1040 or 1045 Boynton Avenue in an individual capacity.").

Footnote 28:Universal Industries Corp. V Lindstrom, 92 AD2d 150, 152(4th Dept., 1983).

Footnote 29:Tarolli Lumber Co., Inc. V. Andreassi, 59 AD2d 1011, 1012 (4th Dept., 1977).

Footnote 30:Since there is no proof that the LLC actually exists, if the court were to find only single defendant liability, which it does not, it would deny a judgment as to "Custom Construction Services, LLC" leaving Mr. Drabin individually liable. See cases cited in footnote 33, infra.

Footnote 31:Ell Dee Clothing v. Marsh, 247 NY at 397. See also Action Temporaries Management Co., Inc. V. Stratmar Systems, Inc. 101 F3d 108 (2nd Cir., NY, 1996)

Footnote 32:Universal Industries Corp. V Lindstrom, 92 AD2d 150, 151-52( Dept., 19 ). See also Cobb v. Knapp (NY 1877).

Footnote 33:Compare Tarolli Lumber Co., Inc. V. Andreassi, 59 AD2d 1011, 1012 (4th Dept., 1977)("At the time the first purchases were made the defendants were individually liable because their later formed corporation had not yet been formed. One who assumes to act as agent for a principal which has no legal status or existence renders himself liable on the contract so made.") with Bagel Bros. Maple, Inc. V. Ohio Farmers, Inc. 279 BR 55, 67 (W.D.NY, 2002)(the court recognized in dicta, however, that "non-disclosure might conceivably provide a basis for imposing individual liability".)

Footnote 34:Express Industries and Terminal Corp. v. New York State Dept. of Transp. 93 NY2d 584, 589 (1999)(citation omitted).

Footnote 35:Since the defendant testified he usually takes one-third draws, he should have only received $5,666.67, not $ 6,000, from the plaintiff on a $ 8,500 contract based on his customary business practice.

Footnote 36:Uniform City Court Act § 1804. In large part, proceedings in small claims "shall not be bound by statutory provisions or rules of practice, procedure, pleading or evidence." Id. Importantly, while Supreme Court rules may apply in small claims "so far as the same can be made applicable and are not in conflict with the provisions of [the UCCA]; in case of conflict, the Provisions of [the UCCA] shall control." UCCA § 1804. See Williams v. Roper, 269 AD2d 125 (1st Dept. , 2000) app. dism. 95 NY2d 898 (2000); see also Cruz v. Beechwood RB LLC., 11 Misc 3d 126(A) (N.Y.Sup.App.Term,2006).

Footnote 37:Uniform City Court Act § 1805(a).

Footnote 38:Compare Latiuk v. Faber Const. Co, Inc., 269 AD2d 820(4th Dept., 2000)(in a contract case damages would be "the contract price less the cost of completion and the cost of repairing work improperly done ")(citations omitted).