In this motion, defendants in Vitale v Sonzone (Index No. 111440/2011) (Sunrise), move for summary judgment dismissing all claims against them.^[FN1] Plaintiffs oppose the motion. For the reasons below, the Court denies the motion.

The undisputed facts are as follows: In late 2001, Joseph Vitale formed a company which he named Titan Electrical and Elevator Contracting Company (Titan I).^[FN2] Mr. Vitale was the sole owner of the company. He hired and determined the salaries of his employees but did not receive a salary himself, instead withdrawing money from Titan I's bank account at will. In addition, when he received business referrals from someone named "Ramo" who worked at a Bernstein Realty building, he paid Ramo what Mr. Vitale calls a commission and Sunrise calls a kickback. Further, Titan I did not file some or all required tax returns during its operation.

In December 2004, Mr. Vitale formed Titan Electrical Company of New York (Titan II). The business became operational after, on August 31, 2005, Mr. Vitale and Mr. Sonzone entered into a partnership. In his capacity as an electrician, Mr. Vitale's business had worked with Mr. Sonzone's and his general contracting business Sunrise Contracting. The parties' partnership agreement provided:

It is hereby resolved that Joseph Vitale shall transfer rights, title and interest (50% of the outstanding share of stock representing 50 shares of common stock effective August 31, 2005, of [Titan II] to Mario Sonzone.

In lieu of consideration, Mr. Sonzone will handle the administrative and financial aspects of the corporation and contribute capital as necessary, assume 50% of all current and [*2]future assessed and/or unassessed liability and claims of [Titan II] from actions of stockholder and officer.

It is hereby resolved that Mr. Sonzone shall be a Corporate Stockholder effective immediately.

It is further resolved that the following shall constitute the corporate officers as of this date:

PRESIDENT: Mario Sonzone

SECY/TREASURER: Joseph Vitale

It is further resolved that ownership in said corporation as of this date shall be as follows:

MARIO SONZONE: 50%

JOSEPH VITALE: 50%^[FN3]

The parties agree that, in addition, Mr. Sonzone would give money to Mr. Vitale and Titan I so that the company could clear up its debts and pay back taxes. The parties dispute whether this money was a loan or was part of the agreement that Titan II would pay the expenses and liabilities of Titan I. In March 2007 Titan II ceased its operations. Sunrise contends that Mr. Vitale began working for Titan III and other entities before this point. Following the dissolution of Titan II, Mr. Vitale entered into a partnership with Kim Dwyer and formed Titan Electrical Industries, Inc. (Titan III). Apparently, Mr. Vitale is no longer associated with Titan III.

The current lawsuit, which Mr. Vitale brings against Sunrise on behalf of himself and Titan II, alleges that Sunrise misappropriated company funds by paying Mr. Sonzone and other defendants for fictitious services to Titan II. Among these misappropriations and fictitious services, Sunrise allegedly used the corporate credit card to pay personal expenses, failed to pay for work Titan II performed for Sunrise, and converted tools and materials which belonged to Titan II. There are nine causes of action: 1) Sunrise breached its contract with plaintiffs by taking back far more than the money it had loaned to Titan II; 2) Sunrise breached the contract by using the corporate credit card for Mr. Sonzone's personal expenses including a car; 3) Sunrise breached the contract by using the corporate credit card for Mr. Lagano's personal expenses; 4) Sunrise unjustly enriched itself by the breach described in the first cause of action, in particular by making payments to dummy companies; 5) Mr. Vitale is entitled to an accounting to determine the full amount due to him as 50% owner of Titan II, entitled to 50% of the profits of the business; 6) Sunrise is obliged to indemnify Mr. Vitale for any tax indebtedness which he may have incurred due to misinformation Mr. Sonzone provided for the preparation of Titan II's 2005, 2006, and 2007 tax returns; 7) Sunrise Contracting breached its contract with Titan I and Mr. Vitale when it failed to pay for electrical work Titan I performed; 8) Sunrise Contracting owes the money described in the seventh cause of action based on quantum meruit, and 9) Sunrise Contracting was unjustly enriched by the actions described in the seventh cause of action.

In the answer, Sunrise denies its liability on all nine causes of action and asserts a number of affirmative defenses. In addition, among many other allegations, it alleges that Titan II did not repay the money that Sunrise loaned to it for the purpose of winding up the affairs of Titan I; that although Mr. Vitale could finish up his work on behalf of Titan I he otherwise [*3]agreed to work exclusively for Titan II, and yet he misappropriated business opportunities which should have belonged to Titan II; that, in order to take money from Titan II's coffers Mr. Vitale asked for money for salaries, tools and supplies Titan II did not actually need; that Mr. Vitale misappropriated payments and receivables; that he used office space granted to Titan II for unrelated purposes; and that he released mechanics liens belonging Titan II in exchange for money he kept for himself.^[FN4] Sunrise asserts numerous counterclaims, which generally assert that 1) any damages to Titan II were caused by Mr. Vitale rather than Mr. Sonzone; 2) Mr. Vitale breached his contract in numerous respects; 3) Mr. Vitale breached his fiduciary duty and the covenant of good faith and fair dealing in his interactions with Mr. Sonzone; 4) Sunrise is entitled to its share of profits based on the money Mr. Vitale had misappropriated; 5) under Business Corporation Law 720, among other laws, Mr. Vitale is liable for attorneys' fees and expenses; and 6) Mr. Vitale has breached the settlement agreement resolving the Nassau County action (See fn. 4).

Sunrise argues that summary judgment is appropriate because there are no triable issues of fact. First, Sunrise states that Titan II and Mr. Vitale's contentions are contradicted by the statements in Mr. Vitale's deposition and are, moreover, speculative. It states that as Titan II never earned a profit, it is impossible that Sunrise converted profits. It contends that Mr. Vitale cannot simultaneously concede that he charged personal expenses on the corporate credit card and attempt to recover similar expenses that Mr. Sonzone and Mr. Lagano allegedly charged to the company, especially as the parties agreed that such charges were authorized without the need for corporate approval. In parti delicto bars recovery, it states, because any profits Titan II may have made were due to its failure to pay taxes, its payments of kickbacks, and other acts of malfeasance, and Mr. Vitale allegedly was behind all these schemes. Moreover, Mr. Vitale depleted Titan II's resources through his expenditures — which, moreover, he did not report as taxable income. For similar reasons, his claims for unjust enrichment and quantum meruit and his demand for an accounting must fail. Sunrise finally argues that there is no merit to plaintiffs' sixth cause of action, for indemnification for any tax liability, and that, moreover, plaintiffs agreed to withdraw this cause of action.

Sunrise also submits an affidavit from Gary Berthold, who states he was an electrical worker for Titan II from around September 2005 to March 2007. Among other things, the affidavit asserts that at meetings between the partners at which he was present, Mr. Vitale stated that he would perform the elevator inspections under the auspices of Titan II, that Mr. Vitale would repay Mr. Sonzone for money loaned for Titan I salaries, and that Mr. Vitale stated he was responsible for Titan I's outstanding accounts and debts. He additionally attested that a portion of the employees' salaries were paid in cash and not reported on W-2 forms as required. He stated that Titan III took over jobs that Titan II had bid on or partially performed, and that Mr. Vitale made baseless claims against his partner in Titan III as well.

In opposition, plaintiffs first rely on the affidavit of Mr. Vitale. He clarifies that after he and Mr. Sonzone formed their partnership, Mr. Sonzone maintained the company's books and records, including a QuickBooks file, and he kept these documents at his home office. He states [*4]that Mr. Sonzone did not provide him with easy access to these records and, in fact, concealed such records. In addition, Mr. Sonzone controlled the company's bank account, issued checks and provided for payroll and other expenses from this account. He acknowledges that he paid Titan II's employees in cash as well as by check, blaming his poor bookkeeping and recordkeeping skills and stating this is part of why he partnered with Mr. Sonzone and hired Steven A. Koenig as the company's accountant. Mr. Vitale alleges he brought in over $1.5 million in business to Titan II.

Additionally, according to plaintiffs, the payments to Ramo were legal. Plaintiffs note that Mr. Sonzone did not object to the payments when he provided the money from Titan II's coffers. He alleges that, contrary to the terms of the partnership, Titan II paid around $15,000 for Sunrise Contracting's insurance, and that despite the apparent profitability of the company Mr. Sonzone perpetually claimed that Titan II owed Sunrise money and that Titan II was not profitable. He also attests to other alleged financial issues, including his allegation that Mr. Sonzone created dummy companies through which he siphoned Titan II's profits. Moreover, plaintiffs allege that Sunrise colluded with Mr. Koenig, the accountant, whom they sue in the related action. Therefore, they allege, Mr. Koenig did not respond to Mr. Vitale's requests for more information and for a complete record of his audit of the company. Plaintiffs attach several QuickBooks printouts Mr. Vitale ultimately obtained in 2007 and 2008. Allegedly these documents show that while Mr. Sonzone ran the finances and kept the records of Titan II, he used this control to make improper payments to himself, Sunrise and the dummy companies. He states that these payments exceeded Sunrise's financial contributions to the Titan II by over $280,000.00. Plaintiffs argue that defendants' equitable arguments must fail because defendants, rather than plaintiffs, have unclean hands. Finally, Mr. Vitale states that the work he allegedly performed in violation of the partnership's terms was elevator work. He states that he was entitled to perform such work independently and, in fact, Titan II was not insured to perform elevator inspections and related work.

Interestingly, plaintiffs also submit an affidavit by Gary Berthod, the electrician. In this affidavit, Mr. Berthod states that he met with Mr. Sonzone's counsel in August of 2013 but he does not recall reading or signing the affidavit. Moreover, he challenges the statements in the affidavit on which Sunrise relies. Instead, he states, at the meetings he attended Mr. Sonzone offered to pay overdue payroll and other material expenses in exchange for jobs that Mr. Vitale transferred to Titan II from Titan I, and that Mr. Sonzone did not expect Mr. Vitale to repay the money. He states that, contrary to the statement in the affidavit Sunrise submitted, the partners did not discuss elevator work and Mr. Vitale never stated he would perform elevator inspections on behalf of Titan II. He states that Mr. Sonzone handled all the money for Titan II and presumably approved of Mr. Vitale's practice of taking cash to pay some of the salaries of Titan II employees. He denies that he saw Mr. Vitale take jobs away from Titan II on behalf of his new company, Titan III, and states that instead Titan III did not commence operations until after Titan II ceased operations. He asserts that he never saw Mr. Vitale pay employees with a combination of W-2 wages and cash, and challenges other assertions as well.

In Schmidt v One New York Plaza (153 AD3d 427, 428 [1st Dept 2017]), the First Department reaffirmed the standard of review for a summary judgment motion:

On a motion for summary judgment, the moving party has the initial burden of establishing its entitlement to judgment as a matter of law with evidence sufficient to eliminate any material issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [*5][1985]). The facts must be viewed "in the light most favorable to the non-moving party" (Ortiz v Varsity Holdings, LLC, 18 NY3d 335, 339 [2011]). Summary judgment should not be granted where there is any doubt as to the existence of triable issues or there are any issues of fact (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

In the case at hand, the issues are far too involved, and the parties' stances far too contradictory, for summary judgment to be appropriate based on the evidence Sunrise has submitted. Defendants did not provide a complete copy of Mr. Vitale's deposition, and sometimes the answers to follow up questions are missing. Moreover, at the deposition Mr. Vitale stated that Mr. Sonzone had agreed to pay the debts of the company, and that both partners used the company credit card for personal expenses. To the extent that Mr. Vitale allegedly contradicts himself, this raises issues of credibility which are for the factfinder. Even if defendants' motion satisfied their prima facie burden, the Court would find that in their opposition plaintiffs have shown that triable issues exist. Among other things, each side has relied in part on the supposed affidavit of Mr. Berthod — who, in the second document, denies everything he purportedly said in the first. Therefore, it is

ORDERED that the motion for summary judgment is denied.