State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: March 10, 2016 521166 

________________________________

NORTHEAST UNITED CORPORATION,

Appellant,

v MEMORANDUM AND ORDER

JAMES LEWIS et al., 

Respondents.

________________________________

Calendar Date: January 5, 2016

Before: McCarthy, J.P., Egan Jr., Lynch and Clark, JJ.

__________

McDonough & Artz, PC, Binghamton (Philip J. Artz of

counsel), for appellant.

Pope, Schrader & Pope, LLP, Binghamton (Alan J. Pope of

counsel), for respondents.

__________

McCarthy, J.P.

Appeal from an order of the Supreme Court (Reynolds

Fitzgerald, J.), entered May 18, 2015 in Broome County, which,

among other things, granted a motion by defendants James Lewis

and Robert Hall to dismiss the complaint against them.

Plaintiff, a general contractor, and defendant James L.

Lewis, Inc. (hereinafter Lewis, Inc.), a plumbing subcontractor,

contracted for Lewis, Inc. to provide and install various

apparatuses as part of a construction project. Thereafter,

plaintiff commenced this action for breach of contract against

Lewis, Inc. and fraud against defendants James Lewis and Robert

Hall, the respective president and vice-president of Lewis, Inc.,

alleging damages based on the further allegations that Lewis,

Inc. had used improper materials for the work. That same month,
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plaintiff moved by order to show cause for an order of attachment

against defendants, seeking to attach the proceeds of an imminent

arbitration between plaintiff and Lewis, Inc. Lewis and Hall

moved to dismiss the complaint against them. Supreme Court

granted Lewis and Hall's motion to dismiss the complaint against

them and denied plaintiff's application for an order of

attachment. Plaintiff now appeals, and we affirm. 

A cause of action for fraud does not exist where the

alleged fraudulent act is premised upon a breach of a contractual

obligation (see New York State Workers' Compensation Bd. v Marsh

U.S.A., Inc., 126 AD3d 1085, 1088 [2015]; Salvador v Uncle Sam's

Auctions & Realty, 307 AD2d 609, 611 [2003], lv dismissed 1 NY3d

566 [2003]). Plaintiff contends that it alleged a fraud in the

inducement cause of action that would apply in the event that the

contract contradicted the promises that Hall and Lewis had made

prior to the contract's execution. Granting plaintiff that

premise, we nonetheless reject its argument as a matter of law. 

According to plaintiff's allegations, prior to entering

into the contract, both Hall and Lewis assured plaintiff that

they would not substitute materials without plaintiff's

permission.1 The contract reveals that Lewis, Inc. agreed to

perform the work "in strict accordance" with the contractual

specifications, which specifications allowed for substitutions of

materials in certain instances without plaintiff's permission. 

Even accepting plaintiff's allegations as true, a sophisticated

business entity cannot justifiably rely on oral representations

when it thereafter enters into a contract containing terms that

directly contradict those oral representations (see Bank of Am.,

N.A. v Lang Indus., Inc., 127 AD3d 1457, 1459 [2015]; Sorenson v

Bridge Capital Corp., 52 AD3d 265, 266 [2008], lv dismissed 12

NY3d 748 [2009]; West v Szwalla, 234 AD2d 638, 638 [1996];

Dunkin' Donuts of Am. v Liberatore, 138 AD2d 559, 560 [1988]). 

Accordingly, plaintiff's fraud cause of action is subject to

1 Although plaintiff contends that Lewis made his

representation after plaintiff had already signed the contract,

plaintiff acknowledges that the contract was still in its control

and that it had not yet delivered the contract to Lewis, Inc.
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dismissal, either as duplicative of the contract cause of action

or, in the alternative, based on plaintiff's own allegations that

it relied on oral representations that were contradicted by the

terms of the contract that it thereafter entered into. 

Further, Supreme Court did not abuse its discretion in

denying plaintiff's motion for attachment. As relevant here, the

remedy of attachment is available where a plaintiff "has demanded

and would be entitled . . . to a money judgment against one or

more defendants, when . . . the defendant, with intent to defraud

his [or her] creditors or frustrate the enforcement of a judgment

that might be rendered in [the] plaintiff's favor, has assigned,

disposed of, encumbered or secreted property, or removed it from

the state or is about to do any of these acts" (CPLR 6201 [3]). 

Attachment is a drastic remedy, and "CPLR 6201 is strictly

construed in favor of those against whom it may be employed"

(Grafstein v Schwartz, 100 AD3d 699, 699 [2012]; see Glazer &

Gottlieb v Nachman, 234 AD2d 105, 105 [1996]). Plaintiff put

forward proof that the offices of Lewis, Inc. appeared to be for

sale, that Lewis, Inc. did not have any visible assets or

vehicles at those offices and that Lewis resided in Texas. A

contractor who worked in the same area as Lewis, Inc. averred

that Lewis, Inc. had ceased operation. Hall provided contrary

evidence, averring that Lewis, Inc. continued to operate. Even

assuming that plaintiff's proof was sufficient to establish that

Lewis, Inc. was beginning efforts to wind down as a corporate

entity, such proof, on its own, does not give rise to the

inference that these efforts were for the purpose of secreting

assets in order to frustrate a potential judgment. Accordingly,

Supreme Court did not abuse its discretion in finding that

plaintiff failed to satisfy the exacting standard for attachment

pursuant to CPLR 6201 (3) (see Societe Generale Alsacienne De

Banque, Zurich v Flemingdon Dev. Corp., 118 AD2d at 773; Computer

Strategies v Commodore Bus. Machs., 105 AD2d 167, 167 [1984]). 

Plaintiff's remaining arguments are unpreserved and/or without

merit. 

Egan Jr., Lynch and Clark, JJ., concur.
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ORDERED that the order is affirmed, with costs.

ENTER:

Robert D. Mayberger

Clerk of the Court