DeMarco v. Clove Estates, Inc.

Appellate Division of the Supreme Court of New York

DeMarco v. Clove Estates, Inc.

250 A.D.2d 724, 672 N.Y.S.2d 784, 1998 N.Y. App. Div. LEXIS 5753

Appellate Division of the Supreme Court of the State of New York·Decided May 18, 1998·Published·Cited by 6 cases

Opinion

—In a purported shareholders’, derivative action pursuant to Business Corporation Law § 626, the plaintiff appeals from a judgment of the Supreme Court, Westchester County (Colabella, J.), entered December 17, 1996, which, after a nonjury trial, dismissed the complaint.

Ordered that the judgment is affirmed, with one bill of costs payable to the respondents appearing separately and filing separate briefs.

The Supreme Court properly dismissed the complaint in its entirety. Even assuming there was a validly-formed corporation, the plaintiff failed to establish his status as a shareholder under the “contemporaneous ownership” rule of Business Corporation Law § 626 (b) (see, Independent Investor Protective League v Time, Inc., 50 NY2d 259; Toussier y Asociados, S.C. v Rivero, 184 AD2d 397). Further, “the unquestionable thrust of [the plaintiffs] objective here is to vindicate his personal rights as an individual and not as a stockholder on behalf of the corporation” (Rossi v Kelly, 96 AD2d 451, 452; see, Chalmers v Eaton Corp., 71 AD2d 721). Thus, the plaintiff lacks standing [725]*725to maintain this action. Sullivan, J. P., Pizzuto, Altman and Friedmann, JJ., concur.

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—In a purported shareholders’, derivative action pursuant to Business Corporation Law § 626, the plaintiff appeals from a judgment of the Supreme Court, Westchester County (Colabella, J.), entered December 17, 1996, which, after a nonjury trial, dismissed the complaint.

Ordered that the judgment is affirmed, with one bill of costs payable to the respondents appearing separately and filing separate briefs.

The Supreme Court properly dismissed the complaint in its entirety. Even assuming there was a validly-formed corporation, the plaintiff failed to establish his status as a shareholder under the “contemporaneous ownership” rule of Business Corporation Law § 626 (b) (see, Independent Investor Protective League v Time, Inc., 50 NY2d 259; Toussier y Asociados, S.C. v Rivero, 184 AD2d 397). Further, “the unquestionable thrust of [the plaintiffs] objective here is to vindicate his personal rights as an individual and not as a stockholder on behalf of the corporation” (Rossi v Kelly, 96 AD2d 451, 452; see, Chalmers v Eaton Corp., 71 AD2d 721). Thus, the plaintiff lacks standing [725]*725to maintain this action. Sullivan, J. P., Pizzuto, Altman and Friedmann, JJ., concur.

DeMarco v. Clove Estates, Inc., 250 A.D.2d 724, 672 N.Y.S.2d 784, 1998 N.Y. App. Div. LEXIS 5753 (N.Y. Ct. App. 1998).

Pincite

250 A.D.2d 724 (DeMarco v. Clove Estates, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Opinion

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