Chiulli v. Reiter

130 A.D.2d 617, 515 N.Y.S.2d 547, 1987 N.Y. App. Div. LEXIS 46631

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: May 18, 1987
• Status: Published

Opinion

In an action to recover damages for fraud and for an order enjoining the defendant from acting as the president of the Cross Westchester Development Corporation, the plaintiff appeals from an order of the Supreme Court, Westchester County (Walsh, J.), entered August 11, 1986, which dismissed, with prejudice, the second cause of action asserted in the complaint.

Ordered that the order is affirmed, with costs.

The Supreme Court correctly determined that the plaintiff’s second cause of action alleging that an election of the directors of the Cross Westchester Development Corporation was invalid, involved an issue which had already been litigated in a prior proceeding pursuant to Business Corporation Law § 619. For this reason, and because a proceeding pursuant to Business Corporation Law § 619 is the exclusive method available to a shareholder to test the validity of an election of a director, the second cause of action was properly dismissed (see, Matter of Schmidt [Magnetic Head Corp.], 97 AD2d 244; see also, Chiulli v Cross Westchester Dev. Corp., 130 AD2d 616 [decided herewith]). Lawrence, J. P., Fiber, Sullivan and Harwood, JJ., concur.