Nuccio v. Chou , 183 A.D.2d 511 ( 1992 )

— Judgment, Supreme Court, New York County (Carmen Beauchamp Ciparick, J.), entered November 28, 1990, which, after a jury trial, awarded the plaintiffs the principal sum of $662,355 in compensatory damages, reduced by pre-trial settlements totalling $573,125, and $500,000 in punitive damages against the defendant Catherine Chou, reversed, on the law and the facts, the causes of action alleging that the defendants were severally liable are dismissed as to the defendant Catherine Chou, and a new trial is ordered on the remaining portions of the complaint, without costs; and appeal from an order of the same court, entered April 15, 1991, which, inter alia, denied the defendants’ post-trial motion to set aside the verdict, dismissed as moot.

The record fails to support the jury’s apportionment of 67 percent liability to the defendant Catherine Chou. In addition, several other errors committed during the course of this trial mandate a reversal and new trial.

The plaintiffs alleged that Mrs. Chou deliberately failed to support their building while performing excavation work, in order to cause substantial damage so that the plaintiffs would be forced to sell their property to her. They maintain on appeal that rather than being the unsophisticated, passive owner the defense makes her out to be, Mrs. Chou, in reality, was the force behind the attempt to take over the plaintiffs’ property.

However, contrary to the protestations of the plaintiffs and the conclusion reached by the dissent, the record reveals that Mrs. Chou was not "involved at all critical stages of the construction project,” nor was her presence, interest in and control over the project "pervasive.” Instead, the record reveals that Robert Chou was in control and that property owned by the couple was merely placed in Mrs. Chou’s name. Robert Chou first brought the property to his wife’s attention, after he discussed the purchase price with the seller. Although Mrs. Chou once drove by the property prior to purchasing it, she never once visited the site during construction, nor did she ever look at photographs of the construction as it progressed. The plaintiff, Josephine Nuccio, never saw Mrs. Chou prior to trial and testified that Robert Chou was the person who purportedly made the overtures to her and her sister concerning the purchase of the Nuccio property.

Robert Chou, who has a masters degree in mechanical engineering, guaranteed the construction loan the bank made to his wife and had authority to draw checks on that account. While Mrs. Chou was the sole stockholder of Hiyee Realty, a company incorporated by an attorney chosen by her husband, she had no real estate license. She testified that she never worked in the real estate business, but instead just owned property.

Robert Chou hired the architect, the excavator, the companies that did the underpinning, the floating and the concrete work on the project and paid them for their services. Mr. Chou testified that in general, his wife relied on him to make decisions concerning the purchase and development of their properties. He never discussed with her the hiring of personnel on the project or problems that arose. Mrs. Chou testified that she never discussed summonses issued by the City for excavation violations with her husband because she didn’t want to hear about them. None of the workers on the project testified to having had any discussions or meetings with Mrs. Chou. Their sole contact on the project was Robert Chou. While Mrs. Chou never visited the project, Mr. Chou was at the construction site on an almost daily basis.

The jury’s determination to assess a proportionate share of responsibility against Mrs. Chou reflecting independent, non-vicarious fault on her part is against the weight of the credible evidence, in light of the fact that she delegated all responsibility for the project to Hiyee Construction, not only by contract but in actual practice. The evidence simply fails to support the conclusion that Mrs. Chou was 67 percent responsible for the collapse of the building while the general contractor, the architect and the subcontractors, who performed the actual work on the project, were assessed with only 33 percent of the responsibility, and while Hiyee Construction and its principal, Robert Chou, who hired the various contractors, were assessed with only 1 percent of the responsibility. Moreover, there was no proof of a conspiracy since the plaintiffs failed to demonstrate that Mr. Chou was carrying out Mrs. Chou’s instructions. There was no evidence to support the plaintiffs’ theory that Mrs. Chou ratified, participated in, ordered or was even aware of Mr. Chou’s approaches to the plaintiffs or was otherwise involved in any purported scheme to force them from their home. Accordingly, those portions of the causes of action alleging that the defendants were severally liable are dismissed as to Mrs. Chou.

With regard to Hiyee Realty, the court charged the jury that it was the plaintiffs’ contention that Hiyee Realty, through Mrs. Chou, misrepresented to various contractors and the Department of Buildings, that it was the actual owner of 259-263 Elizabeth Street and that Mrs. Chou "sought to limit her liability by entering into certain contracts, and she further permitted her husband, Robert Chou, to hold himself out as president of Hiyee Realty when he was not.” The claim was not supported by legally sufficient evidence and was irrelevant to the charges alleged. There was no claim that these representations as to the ownership of the property were made to the plaintiffs or that they relied on these representations to their detriment. The charge provided by the court, however, was highly prejudicial to Mrs. Chou, since it implied that using a corporation to insulate an individual from personal liability was improper. It is well-settled that a corporation may be established for the very purpose of enabling the owners of a business to escape personal liability (see, Walkovszky v Carlton, 18 NY2d 414; Bowles v Errico, 163 AD2d 771).

Further error was committed by the trial court’s denial of the defense request for a missing witness charge as to Cira Nuccio, Josephine Nuccio’s sister, to whom Robert Chou allegedly made a request to purchase her property. The plaintiffs partly based their claim that Mrs. Chou purposely caused their building to collapse in order to coerce them into selling their property on this purported conversation between Cira Nuccio and Robert Chou. Since Mr. Chou denied ever having such conversation, and since Cira Nuccio was available and knowledgeable about a material issue about which she could provide non-cumulative testimony, a missing witness charge should have been provided in accordance with the defense request (People v Gonzalez, 68 NY2d 424). The error was not cured by permitting defense counsel to comment on the failure to call the witness in summation (Safdie v City of New York, 138 AD2d 361).

The court also improperly permitted counsel for the plaintiffs to ask Mr. Chou, on direct examination, whether he did "anything to protect the Nuccio property after it collapsed,” to which he replied that he took steps to shore up the walls. The questioning improperly created the inference that these steps should have been taken prior to the collapse (see, Richardson, Evidence § 168 [Prince 10th ed]).

Certain errors committed by counsel for the plaintiffs added to the unfairness of these proceedings. Counsel made himself an unsworn witness and attempted to vouch for the credibility of his clients (see, Sanchez v Manhattan & Bronx Surface Tr. Operating Auth., 170 AD2d 402). He also implied that defense counsel made up the defense raised by the defendants, injected racial overtones into the case, labeled the defendants’ expert a hired gun and insinuated that the defense experts were unworthy of belief because they were being compensated (see, Berkowitz v Marriott Corp., 163 AD2d 52; La Russo v Pollack, 88 AD2d 584; Caraballo v City of New York, 86 AD2d 580).

Based on the foregoing, the judgment must be reversed and a new trial ordered. Concur — Murphy, P. J., Sullivan and Rosenberger, JJ.