| Shybunko v Geodesic Homes, Inc. |
| 2009 NY Slip Op 06174 [65 AD3d 581] |
| August 11, 2009 |
| Appellate Division, Second Department |
| Stephen W. Shybunko, Appellant, v Geodesic Homes,Inc., et al., Respondents. |
—[*1] DePinto Nornes & Associates, LLP, Melville, N.Y. (David J. DePinto and David Lazer ofcounsel), for respondents.
In a proceeding pursuant to CPLR article 78 which was converted into an action for ajudgment declaring that the plaintiff was a shareholder of the defendant corporation GeodesicHomes, Inc., and to compel the defendants to permit the plaintiff to inspect the corporate booksand records, the plaintiff appeals from an order of the Supreme Court, Suffolk County (R. Doyle,J.), dated October 25, 2007, which granted the defendants' motion for summary judgment anddenied his cross motion for summary judgment.
Ordered that the order is modified, on the law, by deleting the provision thereof granting thedefendants' motion for summary judgment and substituting therefor a provision denying thatmotion; as so modified, the order is affirmed, without costs or disbursements.
The plaintiff alleged that in 1991 and 1992 he acquired a 20% interest in the defendantGeodesic Homes, Inc. (hereinafter Geodesic), from his parents the defendants Daniel J.Shybunko (hereinafter Daniel) and Carol J. Shybunko (hereinafter together the Shybunkos), whogifted shares of stock in Geodesic to him and his four siblings (hereinafter collectively thechildren). After a falling out with Daniel, in December 2003 the plaintiff commenced aproceeding pursuant to CPLR article 78, which was later converted into this action for ajudgment declaring that he was a shareholder of Geodesic, and to compel the defendants topermit him to inspect the corporate books and records.
The defendants moved for summary judgment, asserting that no valid inter vivos gift ofstock was made, as the Shybunkos contemplated a transfer of stock and prepared stockcertificates bearing the names of the children, but the transfer was never effectuated. In supportof the motion, the defendants submitted, among other things, affidavits from the plaintiff'ssiblings, who attested that the stock certificates were prepared as part of the Shybunko's "longterm succession planning," and that Daniel told them he "would hold the . . . stockcertificates in his safe deposit box until he knew how he would dispose of them," but that they"might never receive stock ownership." The defendants also submitted excerpts from thetranscript of a January 1993 family meeting, at which Daniel told his children that he was "notgiving [them] the stock," but was "keeping it" because he "still want[ed] to use that asset [as]collateral" for loans.[*2]
The plaintiff cross-moved for summary judgment,asserting that the Shybunkos made a valid inter vivos gift of a remainder interest in the stock,while Daniel reserved a life estate in the stock for himself. The plaintiff maintained that the stocktransfers were effectuated, and were memorialized by a four page document, on Geodesicletterhead, admittedly prepared and signed by Daniel and entitled "Chronological Summary."The "Chronological Summary" referred to stock transfers on December 1, 1991 and March 16,1992 and listed the "Stockholder status as of 17 March 1992" as each of the five children holding20% of the shares of stock in Geodesic. Daniel acknowledged that he gave each of the children acopy of that document, but he could not recall when. The plaintiff also asserted that Danielprovided him with a copy of a November 1998 document entitled "Daniel J. Shybunko FinancialData," which listed Daniel's initials "DJS" next to a notation of 0% stock in Geodesic, and theinitials of the five children each next to a notation of 20% stock. In addition, the plaintiff reliedon portions of the transcript from the 1993 family meeting, at which Daniel told his children"[l]egally the [stock is] yours, but I want to control it," that "[i]t's already done," and that he "putit all in writing" in case "it's ever questioned for some reason."
In the order appealed from, the Supreme Court granted the defendants' motion for summaryjudgment and denied the plaintiff's cross motion for summary judgment. The Supreme Courtfound that "a valid inter vivos gift was not made" because Geodesic's stock ledger did not reflecta transfer of stock to the children, and Daniel "manifest[ed] a clear intention . . . notto make a present gift of the stock" by retaining control of the certificates.
Although the Supreme Court properly denied the plaintiff's cross motion for summaryjudgment, it erred in granting the defendants' motion for summary judgment. "To make a validinter vivos gift the donor must intend to make an irrevocable present transfer ofownership, there must be a delivery of the gift, either by a physical delivery of the subject of thegift or a constructive or symbolic delivery, and there must be acceptance by the donee. The lawwill presume an acceptance when the gift is of value" (Matter of Partos, 203 AD2d 578,578 [1994]; see Gruen v Gruen, 68 NY2d 48 [1986]).
In opposition to the defendants' prima facie showing of entitlement to judgment as a matterof law, the plaintiff raised a triable issue of fact as to whether Daniel had the requisite donativeintent to make an irrevocable present transfer of a remainder interest in the stock and whetherthat transfer was actually effectuated (see Gruen v Gruen, 68 NY2d at 53-56; Ingramv Cunningham, 262 AD2d 454 [1999]). The mere fact that Daniel retained possession of thestock certificates and control over Geodesic's operation was not inconsistent with his intention tomake a present transfer of a remainder interest in the stock, while reserving a life estate forhimself (see Gruen v Gruen, 68 NY2d at 54; see also Bader v Digney, 55 AD3d 1290, 1292 [2008]).Furthermore, assuming that the documentation which Daniel provided to the plaintiff wasintended to memorialize the alleged stock transfers, a valid inter vivos gift of stock was notprecluded by the absence of a transfer of record on the corporate books, particularly since Danielacknowledged that he did not record other stock transfers to his wife on the corporate books(see Gruen v Gruen, 68 NY2d at 56-57; cf. Matter of Szabo, 10 NY2d 94, 98-99[1961]).
Moreover, there is a triable issue of fact as to whether the undated document entitled"Chronological History" was prepared by Daniel prior to the alleged stock transfers as a mere"planning document" or to memorialize those transfers after they occurred. Accordingly, neitherparty was entitled to summary judgment.
The defendants' remaining contentions are without merit. Florio, J.P., Miller, Covello andAustin, JJ., concur.