| Hill v Murphy |
| 2009 NY Slip Op 04381 [63 AD3d 680] |
| June 2, 2009 |
| Appellate Division, Second Department |
| Joe Hill et al., Appellants, v Michael Murphy et al.,Respondents. |
—[*1] Cohen & Warren, P.C., Smithtown, N.Y. (Michael F. Cohen and Evan M. Gitter of counsel),for respondents.
In an action, inter alia, to recover damages for breach of fiduciary duty, the plaintiffs appeal(1), as limited by their brief, from so much of an order of the Supreme Court, Nassau County(Phelan, J.), entered July 17, 2007, as granted the defendants' motion to dismiss the complaintpursuant to CPLR 3211 (a) (7), and (2) from so much of an order of the same court enteredOctober 23, 2007, as, upon reargument, adhered to the original determination.
Ordered that the appeal from the order entered July 17, 2007 is dismissed, as that order wassuperseded by the order entered October 23, 2007, made upon reargument; and it is further,
Ordered that the order entered October 23, 2007 is modified, on the law, by deleting theprovision thereof, upon reargument, adhering to so much of the original determination in theorder entered July 17, 2007, as granted that branch of the defendants' motion which was todismiss the eighth cause of action pursuant to CPLR 3211 (a) (7), and substituting therefor aprovision, upon reargument, vacating so much of the order entered July 17, 2007, as granted thatbranch of the motion, and thereupon denying that branch of the motion; as so modified, the orderentered October 23, 2007 is affirmed insofar as appealed from; and it is further,[*2]
Ordered one bill of costs is awarded to the defendants.
The plaintiffs are shareholder tenants in a residential cooperative corporation and thedefendants are individual members of the cooperative's Board of Directors (hereinafter theBoard). The plaintiffs commenced this action against the defendants in their individualcapacities, alleging, primarily, that the Board had made several determinations which singledthem out for harmful treatment. The Supreme Court granted the defendants' motion to dismissthe complaint pursuant to CPLR 3211 (a) (7) and, in an order made upon reargument, adhered toits original determination. We modify the order made upon reargument to reinstate the eighthcause of action.
The Supreme Court properly granted those branches of the defendants' motion which were todismiss the first seven causes of action for failure to state a cause of action. "On a motion todismiss pursuant to CPLR 3211 (a) (7), the court must determine, accepting as true the factualaverments of the complaint and according the plaintiff the benefit of all favorable inferences,whether the plaintiff can succeed upon any reasonable view of the facts as stated" (Schneiderv Hand, 296 AD2d 454 [2002]). The first seven causes of action were based uponallegations that the defendants had allowed a nonparty Board member to dominate and controlthe Board, and that such domination and control resulted in Board actions which harmed theplaintiffs and treated them differently from other shareholders in the cooperative. Althoughunequal treatment of shareholders is sufficient to overcome the directors' insulation from liabilityunder the business judgment rule, individual directors and officers may not be subject to liabilityabsent the allegation that they committed separate tortious acts (see Konrad v 136 E. 64th St.Corp., 246 AD2d 324, 325-326 [1998]; DeCastro v Bhokari, 201 AD2d 382, 383[1994]). Here, because the first seven causes of action are devoid of allegations that any of thedefendants acted tortiously other than in their capacity as Board members, the Supreme Courtproperly concluded that those causes of action should be dismissed pursuant to CPLR 3211 (a)(7) (see Meadow Lane Equities Corp. v Hill, 63 AD3d —, 2009 NY Slip Op04395 [2009] [decided herewith]; Pelton v 77 Park Ave. Condominium, 38 AD3d 1, 9-10 [2006]; Brasseur v Speranza, 21 AD3d297, 298 [2005]; Konrad v 136 E. 64th St. Corp., 246 AD2d at 326; DeCastro vBhokari, 201 AD2d at 383).
However, the Supreme Court should have denied that branch of the defendants' motionwhich was to dismiss the eighth cause of action to recover damages for trespass pursuant toCPLR 3211 (a) (7) (see Meadow Lane Equities Corp. v Hill, 63 AD3d —, 2009NY Slip Op 04395 [2009] [decided herewith]). Accepting the allegations set forth under thatcause of action as true, and affording the plaintiffs the benefit of every favorable inference(see Schneider v Hand, 296 AD2d at 454), the plaintiffs adequately pleaded a cause ofaction to recover damages for trespass (see Curwin v Verizon Communications [LEC], 35 AD3d 645[2006]; Kaplan v Incorporated Vil. ofLynbrook, 12 AD3d 410, 412 [2004]; Zimmerman v Carmack, 292 AD2d 601,602 [2002]).
The plaintiffs' remaining contentions are without merit. Spolzino, J.P., Santucci, Florio andBalkin, JJ., concur.