| Yu Han Young v Chiu |
| 2008 NY Slip Op 01947 [49 AD3d 535] |
| March 4, 2008 |
| Appellate Division, Second Department |
| Yu Han Young, Respondent, v Cathy Chiu, Appellant, etal., Defendants. (Action No. 1.) Yu Han Young, Respondent, v Cathy Chiu et al., Appellants.(Action No. 2.) |
—[*1] Ginsburg & Misk, Queens Village, N.Y. (Hal R. Ginsburg of counsel), forrespondent.
In an action for specific performance of contracts to divide real property, and a related action,inter alia, to compel the transfer of certain property diverted in breach of a fiduciary duty, whichwere joined for trial, Cathy Chiu, a defendant in both actions, and Austin Realty Holding, LLC, adefendant in action No. 2, appeal from a judgment of the Supreme Court, Queens County(Gavrin, J.), dated November 29, 2006, which, after a nonjury trial, is in favor of the plaintiff inboth actions and against those defendants, among other things, directing specific performance ofthe contracts at issue in action No. 1 and directing the transfer of 50% of the property at issue inaction No. 2 to the plaintiff.
Ordered that the judgment is affirmed, with costs.
"The fundamental, neutral precept of contract interpretation is that agreements are construedin accord with the parties' intent" (Greenfield v Philles Records, 98 NY2d 562, 569[2002]; see Franklin Apt. Assoc., Inc. vWestbrook Tenants Corp., 43 AD3d 860, 861 [2007]). "When the terms of a writtencontract are clear and unambiguous, the intent of the parties must be found within the fourcorners of the contract giving practical interpretation to the language employed and the parties'reasonable [*2]expectations" (Costello v Casale, 281AD2d 581, 583 [citations omitted]; seeCorrenti v Allstate Props., LLC, 38 AD3d 588, 590 [2007]; Harper v Bard, 147AD2d 614, 615 [1989]). A party seeking reformation of a contract by reason of mistake mustestablish, with clear and convincing evidence, that the contract was executed under mutualmistake or a unilateral mistake induced by the other party's fraudulent misrepresentation (see M.S.B. Dev. Co., Inc. v Lopes, 38AD3d 723, 725 [2007]; Matthews vCastro, 35 AD3d 403, 404 [2006]; Kadish Pharm. v Blue Cross & Blue Shield ofGreater N.Y., 114 AD2d 439 [1985]; Janowitz Bros. Venture v 25-30 120th St. QueensCorp., 75 AD2d 203, 215 [1980]). Here, the appellants did not make such a showing.Accordingly, the determination in action No. 1 to grant the equitable remedy of specificperformance, which lies within the discretion of the court, was appropriate (see Pyros v Dengel, 35 AD3d 424,425 [2006]; Roland v Benson, 30AD3d 398, 399 [2006]; McGinnis vCowhey, 24 AD3d 629 [2005]).
Furthermore, directors and officers of corporations, in the performance of their duties, standin a fiduciary relationship to their corporation (see Schachter v Kulik, 96 AD2d 1038,1039 [1983]). As such, they owe the corporation their undivided loyalty and "may not assumeand engage in the promotion of personal interests which are incompatible with the superiorinterests of their corporation" (Foley v D'Agostino, 21 AD2d 60, 66 [1964]; seeSchachter v Kulik, 96 AD2d at 1039). Specifically, an officer or director of a corporationmay not, without consent, "divert and exploit for [his or her] own benefit any opportunity thatshould be deemed an asset of the corporation" (Commodities Research Unit [Holdings] vChemical Week Assoc., 174 AD2d 476, 477 [1991]; see Owen v Hamilton, 44 AD3d 452, 457 n 3 [2007]; Pangia &Co., CPAs v Diker, 291 AD2d 539, 540 [2002]). Here, the defendant Cathy Chiu diverted acorporate opportunity in breach of her fiduciary duty as an officer of YNC Ltd., and CNY Ltd.,by secretly establishing a competing entity and acquiring the property at issue in action No. 2, inwhich YNC Ltd., and CNY Ltd., had a "tangible expectancy" (Adirondack Capital Mgt., Inc. v Ruberti,Girvin & Ferlazzo, P.C., 43 AD3d 1211, 1215 [2007], lv denied 9 NY3d 817[2008]; see American Baptist Churches of Metro. N.Y. v Galloway, 271 AD2d 92, 99[2000]). Accordingly, the court properly directed the transfer of 50% of the property at issue inaction No. 2 to the plaintiff, a 50% shareholder in both YNC Ltd., and CNY Ltd. Mastro, J.P.,Rivera, McCarthy and Dickerson, JJ., concur. [See 13 Misc 3d 1232(A), 2006 NY SlipOp 52084(U).]