| Javaheri v Old Cedar Dev. Corp. |
| 2011 NY Slip Op 04004 [84 AD3d 881] |
| May 10, 2011 |
| Appellate Division, Second Department |
| Kourosh Javaheri, Appellant, v Old Cedar DevelopmentCorp. et al., Defendants, M. Pierre Rafiy et al., Appellants, and Nourollah Sassouni,Respondent. |
—[*1] The Scher Law Firm, LLP, Carle Place, N.Y. (Christopher G. Kirby of counsel), forrespondent-appellant. Cox Padmore Skolnik & Shakarchy LLP, New York, N.Y. (Sanford Hausler of counsel), forrespondent.
In an action, inter alia, for a judgment declaring that the plaintiff validly accepted an offer topurchase one share of stock of the defendant Old Cedar Development Corp. from the defendantHarvey R. Manes, the defendants M. Pierre Rafiy, Nejatolah Sassouni, David Rafiy, and SandraRafiy-Layne appeal, as limited by their brief, from so much of an order of the Supreme Court,Nassau County (Galasso, J.), dated April 29, 2010, as denied their motion for summaryjudgment, in effect, (1) declaring that the plaintiff did not validly accept an offer to purchase oneshare of stock of the defendant Old Cedar Development Corp. from the defendant Harvey R.Manes, (2) declaring that the sale in 1999 of 4.5 shares of stock of the defendant Old CedarDevelopment Corp. by the defendants Harvey R. Manes and Barbara Manes to the defendantsDavid Rafiy and Sandra Rafiy-Layne is valid, (3) dismissing, as time-barred, so much of the firstcause of action in the amended complaint as alleged that, in consummating the sale of one shareof stock of the defendant Old Cedar Development Corp. in 1988, the defendants Harvey R.Manes and Barbara Manes and the defendant Nejatolah Soussani failed to comply with the termsof a shareholders' agreement entered into by the shareholders of the defendant Old CedarDevelopment Corp., (4) dismissing the second cause of action in the amended complaint insofaras asserted against the defendants M. Pierre Rafiy and Nejatolah Sassouni, and (5) dismissing somuch of the fourth cause of action in the amended complaint as was to recover damages forunjust enrichment against the defendant M. Pierre Rafiy and for a permanent injunction againstthe defendants M. Pierre Rafiy, David Rafiy, and Sandra Rafiy-Layne, and the plaintiff separatelyappeals, as limited by his brief, from so much of the same order as granted the motion of thedefendant Nourollah Sassouni for summary judgment dismissing the cause of action seeking toimpose a constructive trust upon four shares of stock of the defendant Old Cedar DevelopmentCorp. in the possession of the defendant Nourollah Sassouni.[*2]
Ordered that the order is modified, on the law, (1) bydeleting the provision thereof denying that branch of the motion of M. Pierre Rafiy, NejatolahSassouni, David Rafiy, and Sandra Rafiy-Layne which was for summary judgment, in effect,declaring that the plaintiff did not validly accept an offer to purchase one share of stock of thedefendant Old Cedar Development Corp. from the defendant Harvey R. Manes, and substitutingtherefor a provision granting that branch of the motion, (2) by deleting the provision thereofdenying that branch of the motion of those defendants which was for summary judgmentdeclaring that the sale in 1999 of 4.5 shares of stock of the defendant Old Cedar DevelopmentCorp. by the defendants Harvey R. Manes and Barbara Manes to the defendants David Rafiy andSandra Rafiy-Layne is valid, and substituting therefor a provision granting that branch of themotion, (3) by deleting the provision thereof denying that branch of the motion of thosedefendants which was for summary judgment dismissing, as time-barred, so much of the firstcause of action in the amended complaint as alleged that, in consummating the sale of one shareof stock of the defendant Old Cedar Development Corp. in 1988, the defendants Harvey R.Manes and Barbara Manes and the defendant Nejatolah Soussani failed to comply with the termsof a shareholders' agreement entered into by the shareholders of the defendant Old CedarDevelopment Corp., and substituting therefor a provision granting that branch of the motion, (4)by deleting the provision thereof denying that branch of the motion of those defendants whichwas for summary judgment dismissing so much of the second cause of action in the amendedcomplaint insofar as asserted against the defendants M. Pierre Rafiy and Nejatolah Sassouni aswas based upon their alleged acts or omissions occurring more than six years prior to thecommencement of this action or was related to the sale in 1999 of 4.5 shares of stock of thedefendant Old Cedar Development Corp. by the defendants Harvey R. Manes and Barbara Manesto the defendants David Rafiy and Sandra Rafiy-Layne, and substituting therefor a provisiongranting that branch of the motion, and (5) by deleting the provision thereof denying that branchof the motion of those defendants which was for summary judgment dismissing so much of thefourth cause of action in the amended complaint as sought to recover damages for unjustenrichment from the defendant M. Pierre Rafiy and for a permanent injunction against thedefendants M. Pierre Rafiy, David Rafiy, and Sandra Rafiy-Layne and substituting therefor aprovision granting that branch of the motion; as so modified, the order is affirmed insofar asappealed from, with one bill of costs to the defendants appearing separately and filing separatebriefs, and the matter is remitted to the Supreme Court, Nassau County, for the entry of ajudgment, inter alia, declaring that the plaintiff did not validly accept an offer to purchase oneshare of stock of the defendant Old Cedar Development Corp. from the defendant Harvey R.Manes, and that the sale in 1999 of 4.5 shares of stock of the defendant Old Cedar DevelopmentCorp. by the defendants Harvey R. Manes and Barbara Manes to the defendants David Rafiy andSandra Rafiy-Layne is valid.
Old Cedar Development Corp. (hereinafter Old Cedar), a closely held corporation formed in1987, owns the real property upon which a country club is located. One hundred shares of stockof Old Cedar were issued by the corporation. A shareholders' agreement was executed thatprovides a procedure for the sale of shares, whereby a shareholder is required first to offer theshares to the corporation and other shareholders before accepting a higher purchase offer from anonshareholder. The shareholders' agreement provided that, if neither the corporation nor theother shareholders matched the pending purchase offer, the shareholder seeking to sell couldaccept the pending offer. In 1987 the defendant shareholder Jamshid Lavi sold three shares toNourollah Sassouni. In 1990 Lavi sold another share to Nourollah Sassouni. In 1988 thedefendant shareholders Harvey R. Manes and Barbara Manes (hereinafter together the Maneses)attempted to sell their 5.5 shares by selling 4.5 shares to Lavi and 1 share to Nejatolah Sassouni.The sale to Lavi was never consummated, and the existing shareholders of Old Cedar decided topermit the Maneses to auction 3 of those 4.5 shares to the highest bidder. An auction wasconducted, but the winning bidder never received those shares. The winning bidder commencedan action for specific performance of the agreement to sell him the three shares, but that actionwas ultimately unsuccessful (see Lavi vOld Cedar Dev. Corp., 19 AD3d 372 [2005]).
In 1999 the Maneses received an offer from nonshareholders David Rafiy and SandraRafiy-Layne to purchase their remaining 4.5 shares. In accordance with the shareholders'agreement, the Maneses first offered the shares to the corporation and existing shareholders. Noshareholder matched the offer made by the two nonshareholders, and the Maneses consequentlysold the shares to the defendants David Rafiy and Sandra Rafiy-Layne. In 2001, notingshareholder confusion over the effect [*3]and validity of theManeses' transaction with Nejatolah Sassouni, Harvey R. Manes offered the one share that wasthe subject of that transaction for sale to the corporation and existing shareholders. The plaintiff,who was already a shareholder of Old Cedar, accepted the offer, but no further action was takenin relation to the proposed sale.
On or about September 13, 2002, the plaintiff commenced this action challenging the validityof the sales of shares to David Rafiy and Sandra Rafiy-Layne, and seeking a judgment declaring,inter alia, that one share was duly offered to him for sale by Harvey R. Manes in 2001. Theplaintiff asserted that he duly accepted the offer, and that he is entitled to possession of the shareupon payment. A separate cause of action sought specific performance of the purchase and salesagreement. The plaintiff further asserted a cause of action against M. Pierre Rafiy and NejatolahSassouni, alleging violations of the Business Corporation Law and their fiduciary duties asofficers and directors of Old Cedar. The plaintiff also sought a judgment declaring that theManeses' 1999 sale of 4.5 shares of Old Cedar stock to David Rafiy and Sandra Rafiy-Layne isinvalid, and sought, on behalf of Old Cedar, to impose a constructive trust on the sharespurchased by the defendant Nourollah Soussani in 1987 and 1990.
Nourollah Sassouni moved for summary judgment dismissing, as time-barred, the cause ofaction challenging his purchase of shares from Lavi in 1987 and 1990. In that cause of action, theplaintiff, purportedly on behalf of Old Cedar, sought the imposition of a constructive trust uponthose shares. The defendants M. Pierre Rafiy, Nejatolah Sassouni, David Rafiy, and SandraRafiy-Layne (hereinafter collectively the Rafiy defendants) separately moved for summaryjudgment, in effect, declaring that the plaintiff did not validly accept an offer from Harvey R.Manes to purchase one share of Old Cedar stock, declaring that the sale in 1999 of 4.5 shares ofOld Cedar stock by the Maneses to David Rafiy and Sandra Rafiy-Layne is valid, dismissing, astime-barred, so much of the first cause of action in the amended complaint as alleged that theManeses and Nejatolah Soussani failed to comply with the terms of the shareholders' agreementin consummating the 1988 sale of one share, dismissing the second cause of action in theamended complaint insofar as asserted against M. Pierre Rafiy and Nejatolah Sassouni, anddismissing so much of the fourth cause of action in the amended complaint as sought to recoverdamages for unjust enrichment against M. Pierre Rafiy, and for a permanent injunction againstM. Pierre Rafiy, David Rafiy, and Sandra Rafiy-Layne. The Supreme Court granted the motionof Nourollah Sassouni and denied the Rafiy defendants' separate motion. The Rafiy defendantsappeal from so much of the order as denied their motion and the plaintiff separately appeals fromso much of the order as granted Nourollah Sassouni's motion. The trial was stayed pendingdetermination of the appeals. We modify the order.
The Supreme Court properly granted the motion of Nourollah Sassouni for summaryjudgment dismissing, as time-barred, the cause of action seeking to impose a constructive trustupon the four Old Cedar shares in his possession. The challenged transactions occurred in 1987and 1990. On a previous appeal, this Court determined that the Supreme Court erred in grantingNourollah Sassouni's motion to dismiss that cause of action as time-barred pursuant to CPLR3211 (a) (5), reasoning that Nourollah Sassouni failed to demonstrate that he should not beequitably estopped from asserting the statute of limitations as a defense (see Javaheri v Old Cedar Dev. Corp.,22 AD3d 804 [2005]). Accordingly, we expressly reinstated that cause of action. Theevidence submitted by Nourollah Soussani on the motion before us on this appeal, however,established that his transactions with Lavi were not kept secret from the other shareholders, butwere discussed both at a shareholder meeting which the plaintiff attended, and in letters sent tothe plaintiff. Moreover, Nourollah Sassouni proffered evidence that he received distributionchecks, signed by the plaintiff, which reflected Nourollah Soussani's ownership of the disputedshares. Accordingly, on his motion for summary judgment, Nourollah Sassouni established thathe should not be equitably estopped from asserting the statute of limitations as a defense. Inopposition, the plaintiff failed to raise a triable issue of fact as to whether any action orrepresentation on the part of Nourollah Sassouni induced him to forego the timelycommencement of an action to challenge the transactions (see Putter v North Shore Univ. Hosp., 7 NY3d 548, 552 [2006]; Zumpano v Quinn, 6 NY3d 666,673-674 [2006]).
The Supreme Court erred, however, in denying those branches of the Rafiy defendants'motion which were for summary judgment, in effect, declaring that the plaintiff did not validlyaccept an offer by Harvey R. Manes to purchase one share of Old Cedar stock, and dismissing somuch of the fourth [*4]cause of action in the amended complaintas was to recover damages for unjust enrichment against M. Pierre Rafiy and for a permanentinjunction against M. Pierre Rafiy, David Rafiy, Sandra Rafiy-Layne. Contrary to the plaintiff'scontention, the evidence submitted on the motion established that the Maneses' 1988 sale of oneshare of Old Cedar stock to Nejatolah Sassouni was consummated by payment of the purchaseprice and transfer of the stock certificate. Insofar as the first cause of action for declaratory reliefasserts that the Maneses and Nejatolah Soussani failed to comply with the shareholders'agreement in consummating that sale, the cause of action is untimely (see CPLR 213),and the plaintiff failed to raise a triable issue of fact as to whether equitable estoppel applies (see Pahlad v Brustman, 8 NY3d901 [2007]; Zumpano v Quinn, 6 NY3d at 673-674). Although so much of the firstcause of action as sought a determination of the plaintiff's rights pursuant to his purported 2001acceptance of the offer made by Harvey R. Manes to sell one share is timely, that share wasowned by Nejatolah Sassouni at the time of the offer and, thus, the offer was not valid and theplaintiff obtained no rights by accepting it. Consequently, the plaintiff is not entitled toownership of that share by virtue of his acceptance of that invalid offer. Accordingly, theSupreme Court should have awarded the Rafiy defendants summary judgment declaring that theplaintiff did not validly accept the 2001 offer by Harvey R. Manes to purchase the share of stock.
The statute of limitations applicable to the second cause of action in the amended complaintis six years (see CPLR 213 [7]; Toscano v Toscano, 285 AD2d 590, 591 [2001];Rupert v Tigue, 259 AD2d 946, 946-947 [1999]). Accordingly, allegations related toconduct and events occurring more than six years prior to commencement of this action areuntimely. Further, allegations challenging the Maneses' proper sale of 4.5 Old Cedar shares toDavid Rafiy and Sandra Rafiy-Layne are without merit as a matter of law (see Gallagher vLambert, 74 NY2d 562, 567 [1989]). However, the second cause of action also timelyalleges breaches of duty by M. Pierre Rafiy and Nejatolah Sassouni unrelated to that sale. Insupport of their motion, the Rafiy defendants failed to address these additional allegations,necessitating denial of this branch of their motion, regardless of the sufficiency of the oppositionpapers (see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; Winegrad vNew York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Accordingly, the Supreme Courtproperly denied that branch of the Rafiy defendants' motion which was for summary judgmentdismissing so much of the second cause of action in the amended complaint as was unrelated tothe 1999 sale of the 4.5 shares to David Rafiy and Sandra Rafiy-Layne insofar as asserted againstM. Pierre Rafiy and Nejatolah Soussani.
As to the fourth cause of action in the amended complaint, the Rafiy defendants made aprima facie showing that the Maneses' sale of 4.5 shares to David Rafiy and Sandra Rafiy-Laynewas effected in accordance with the shareholders' agreement, and was supported byconsideration. In opposition, the plaintiff failed to raise a triable issue of fact. "[M]ereconclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" toraise a triable issue of fact (Zuckerman v City of New York, 49 NY2d 557, 562 [1980];see Pandey v Parikh, 57 AD3d634, 635 [2008]; Re-Max ClassicRealty, Inc. v Berger, 25 AD3d 680, 681 [2006]). Further, the unsuccessful action forspecific performance of an earlier agreement to purchase three of the shares ultimately purchasedby these defendants (see Lavi v OldCedar Dev. Corp., 19 AD3d 372 [2005]) does not affect the validity of the sale.Accordingly, the Supreme Court should have awarded the Rafiy defendants summary judgmentdismissing so much of the fourth cause of action as was to recover damages for unjustenrichment against M. Pierre Rafiy and for a permanent injunction insofar as asserted against M.Pierre Rafiy, David Rafiy, and Sandra Rafiy-Layne, and declaring that the Maneses' 1999 sale of4.5 Old Cedar shares to David Rafiy and Sandra Rafiy-Layne is valid.
Since this is, in part, a declaratory judgment action, the matter must be remitted to theSupreme Court, Nassau County, for the entry of a judgment, inter alia, declaring that the plaintiffdid not validly accept an offer to purchase one share of Old Cedar stock from Harvey R. Manesin 2001 and that the 1999 sale of 4.5 shares of Old Cedar stock by the Maneses to David Rafiyand Sandra Rafiy-Layne is valid (see Lanza v Wagner, 11 NY2d 317, 334 [1962],appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Dillon, J.P.,Covello, Eng and Chambers, JJ., concur.