| North Fork Preserve, Inc. v Kaplan |
| 2009 NY Slip Op 09006 [68 AD3d 732] |
| December 1, 2009 |
| Appellate Division, Second Department |
| North Fork Preserve, Inc., et al., Appellants, v MyronKaplan et al., Respondents. |
—[*1] Rosenberg Calica & Birney LLP, Garden City, N.Y. (Ronald J. Rosenberg and Lesley A.Reardon of counsel), for respondents.
In a shareholder's derivative action, inter alia, to recover damages for fraud, waste ofcorporate assets, and breach of fiduciary duty, the plaintiffs appeal (1) from an order of theSupreme Court, Suffolk County (Emerson, J.), dated January 10, 2008, which granted thedefendants' motion for summary judgment dismissing the amended complaint, and (2) from somuch of an order of the same court dated September 25, 2008, as denied that branch of theirmotion pursuant to CPLR 2221 which was for leave to renew their opposition to the defendants'motion for summary judgment.
Ordered that the order dated January 10, 2008 is affirmed; and it is further,
Ordered that the order dated September 25, 2008 is affirmed insofar as appealed from; and itis further,
Ordered that one bill of costs is awarded to the defendants.
The plaintiffs are the minority shareholders in a corporation known as North Fork Preserve,Inc. (hereinafter NFPC), which owns and operates a private hunting and fishing club in the Townof Riverhead. In 2004 the plaintiffs commenced this action against the majority shareholders,inter alia, to recover damages for fraud, bad faith, the waste of corporate assets, and breach oftheir fiduciary duties. The amended complaint contains two causes of action, namely, ashareholder's derivative cause of action under Business Corporation Law § 626, and acause of action against the directors and officers for misconduct under Business CorporationLaw § 720. Among other allegations, the amended complaint lists 14 categories ofwrongdoing in subparagraphs (a) through (n) of paragraphs 16, 60, and 111.
In an order dated June 9, 2005, the Supreme Court, inter alia, dismissed claims based on[*2]four categories of wrongdoing on the ground that they weretime-barred. In a decision and order dated July 5, 2006, this Court modified that order, inter alia,by dismissing claims based on seven additional categories of misconduct on the grounds thatthey were either time-barred, failed to state a cause of action, or were flatly contradicted bydocumentary evidence. Nevertheless, this Court agreed with the Supreme Court that theamended complaint, when viewed as a whole, stated a cognizable claim that the minorityshareholders had been frozen out of the management of the corporation (see North Fork Preserve, Inc. vKaplan, 31 AD3d 403 [2006]).
After extensive discovery, the defendants moved for summary judgment dismissing theremaining claims in the amended complaint. Although the defendants had made two previousmotions for summary judgment, the third motion did not violate the general proscription againstsuccessive motions for summary judgment since it was based on deposition testimony andnumerous documents that had been elicited after the prior motions were denied (see Auffermann v Distl, 56 AD3d502 [2008]; Kobre v United JewishAppeal-Fedn. of Jewish Philanthropies of N.Y., Inc., 32 AD3d 218 [2006]; Staib vCity of New York, 289 AD2d 560 [2001]).
The Supreme Court properly determined that the defendants established, prima facie, thatthey were entitled to judgment as a matter of law based on the business judgment rule, whichbars "judicial inquiry into actions of corporate directors taken in good faith and in the exercise ofhonest judgment in the lawful and legitimate furtherance of corporate purposes" (Auerbach vBennett, 47 NY2d 619, 629 [1979]). Inasmuch as the plaintiffs failed to produce anyevidence to substantiate their allegations of fraud, bad faith, the waste of corporate assets, or thebreach of fiduciary duty, the Supreme Court properly granted the defendants' motion forsummary judgment dismissing all of the remaining claims in the amended complaint (seeBennett v Instrument Sys. Corp., 66 AD2d 708 [1978]; Greenbaum v American MetalClimax, 27 AD2d 225 [1967]).
Finally, the Supreme Court providently exercised its discretion in denying that branch of theplaintiffs' motion which was for leave to renew their opposition to the defendants' motion forsummary judgment, since the alleged new evidence was improperly submitted for the first timein the plaintiffs' reply papers (see GJFConstr. Corp. v Cosmopolitan Decorating Co., Inc., 35 AD3d 535 [2006]; Adler vSuffolk County Water Auth., 306 AD2d 229 [2003]). In any event, the plaintiffs did notoffer a reasonable justification for their failure to present this evidence on the prior motion(see CPLR 2221 [e]; Williams vNassau County Med. Ctr., 37 AD3d 594 [2007]). Mastro, J.P., Santucci, Belen andChambers, JJ., concur. [Prior Case History: 2008 NY Slip Op 30072(U).]