| Roth v R & P Rest. Corp. |
| 2009 NY Slip Op 09449 [68 AD3d 961] |
| December 15, 2009 |
| Appellate Division, Second Department |
| Herman Roth et al., Respondents, v R & P RestaurantCorp., Doing Business as "Moscow CafÉ," et al., Appellants. |
—[*1] Peter Dibona, P.C., Brooklyn, N.Y. (Rothstein Law, PLLC [Eric E. Rothstein], of counsel),for respondents.
In an action, inter alia, for specific performance of a contract dated March 31, 2004, for thesale of a business, the defendants appeal, as limited by their brief, from so much of an order ofthe Supreme Court, Kings County (Saitta, J.), dated June 26, 2008, as denied those branches oftheir motion which were to dismiss the amended complaint pursuant to CPLR 3211 (a) (1) and(7).
Ordered that the order is affirmed insofar as appealed from, with costs.
The two plaintiffs and the defendant Adolf Makarovsky were three of five shareholders whotogether owned two restaurant corporations: R & P Restaurant Corp., doing business as the"Moscow CafÉ" (hereinafter the Moscow CafÉ) and G & R Restaurant Corp., whichoperated the Winter Garden Restaurant. The restaurants were located in Brooklyn on contiguousparcels of property.
In early 2004 the five shareholders decided to separate the corporations so that one groupwould control one restaurant and the other group would control the other restaurant. All fiveshareholders were represented by the same attorney, who drafted two identical agreements. OnMarch 29, 2004 they signed one agreement which applied to the Winter Garden Restaurant andanother which applied to the Moscow CafÉ. They also signed an identical agreement withrespect to the Moscow CafÉ on March 31, 2004, but the reasons for doing so are not clearfrom this record. In the first agreement, Makarovsky and two others sold their ownership interestin the Winter Garden Restaurant to the plaintiffs. In the second agreement, the plaintiffs soldtheir ownership interest in the Moscow CafÉ to Makarovsky and the other twoshareholders, who eventually sold their shares to Makarovsky. Each agreement contained a rightof first refusal provision stating, in pertinent part, that: "[i]n the future, if a Shareholder desires tosell or transfer all of his shares, such Shareholder . . . shall give written noticethereof to the other Shareholders and the Corporation . . . [t]he offeror's notice alsoshall contain an offer to sell such shares to the [*2]otherShareholders and the Corporation . . . [f]or a period of sixty days after receipt ofofferor's notice . . . the other shareholders, or any of them, shall have the right topurchase all or any part of the shares offered for the price and upon the terms and conditionsprovided in this article, by giving notice of intention to purchase to the offeror, the othershareholders and the Corporation within the initial option period."
In early 2006 a nonshareholder offered Makarovsky the sum of $250,000 for the MoscowCafÉ. Shortly thereafter, Makarovsky sent an unsigned right of first refusal letter to theplaintiff Herman Roth, but did not send one to the plaintiff Yuri Greene. Roth rejected the letteras deficient and warned Makarovsky that he might seek to enjoin the sale if he did not receiveproper notice. In response, Makarovsky sent a signed right of first refusal letter to both Roth andGreene, indicating that the proposed sale price was now $350,000. This letter, too, was rejectedas deficient.
In April 2006 the plaintiffs commenced this action, inter alia, to enjoin the proposed sale.They also sought a preliminary injunction enjoining the sale, which the Supreme Court granted.In November 2007, on consent of the defendants, the plaintiffs amended their complaint to add acause of action for specific performance of the agreement dated March 31, 2004. In April 2008the defendants moved, among other things, to dismiss the amended complaint pursuant to CPLR3211 (a) (1) and (7). The Supreme Court denied the motion, finding that the term "shareholders,"as employed in the two agreements, was ambiguous. We affirm.
In support of that branch of their motion which was to dismiss the amended complaintpursuant to CPLR 3211 (a) (1) based upon documentary evidence, the defendants relied solelyupon the agreement involving the Moscow CafÉ. The Supreme Court properly denied thisbranch of the motion since the document failed to resolve all factual issues as a matter of law andfailed to conclusively dispose of the plaintiffs' claim (see Stein v Garfield RegencyCondominium, 65 AD3d 1126 [2009]; Shaya B. Pac., LLC v Wilson, Elser, Moskowitz,Edelman & Dicker, LLP, 38 AD3d 34, 38-39 [2006]).
In determining a motion to dismiss for failure to state a cause of action pursuant to CPLR3211 (a) (7), the court should "accept the facts as alleged in the complaint as true, accordplaintiffs the benefit of every possible favorable inference, and determine only whether the factsas alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88[1994]). Where, as here, the parties submit evidentiary material to be considered by the court,"the criterion is whether the proponent of the pleading has a cause of action, not whether he hasstated one" (Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). Applying theseprinciples, the amended complaint is sufficient to withstand a motion to dismiss pursuant toCPLR 3211 (a) (7). Accordingly, the Supreme Court correctly denied the branch of thedefendants' motion which was to dismiss the amended complaint pursuant to CPLR 3211 (a) (7)(see Melnicke v Brecher, 65 AD3d 1020 [2009]). Dillon, J.P., Florio, Balkin andLeventhal, JJ., concur.