Launay v. Launay, Inc.

497 A.2d 443, 1985 D.C. App. LEXIS 467
CourtDistrict of Columbia Court of Appeals
DecidedAugust 23, 1985
Docket83-1345
StatusPublished
Cited by34 cases

This text of 497 A.2d 443 (Launay v. Launay, Inc.) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Launay v. Launay, Inc., 497 A.2d 443, 1985 D.C. App. LEXIS 467 (D.C. 1985).

Opinions

BELSON, Associate Judge:

This litigation arose out of the breakdown of the efforts of certain members of two families, the Launays and the Arpads, to collaborate in the business of repairing and selling antiques. The principal dispute was over the ownership of corporate shares formerly owned by a deceased founder, Michael Arpad. The already complicated dispute became more entangled because of lapses in pleading and practice. Unsuccessful as plaintiffs, the Launays now appeal (1) the dismissal of Count I of their original complaint, the count in which they sought enforcement of a buy-sell agreement, (2) the award of counsel fees to the Arpads imposed upon the dismissal of all counts of the original complaint except Count V, seeking accounting and partition of real property, (3) the dismissal with prejudice of their amended complaint, including a shareholders’ derivative count, a count in defamation, and also the count in accounting and partition that had survived the first motion to dismiss, and (4) the refusal of the trial court to vacate the dismissal of the amended complaint. We reverse both the dismissal of original Count I (enforcement of the buy-sell agreement) and the award of attorneys’ fees. We affirm the dismissal of the derivative and defamation counts of the amended complaint, but reverse the dismissal of the count seeking accounting and partition.

[446]*446I

A brief recitation of the tangled procedural history of the case is necessary. The plaintiffs in this civil action were Raymond Launay and Daniele Launay, husband and wife (the Launays). The defendants were the estate of Michael Arpad, Vivian Arpad (the widow of Michael Arpad), and Sheldon Arpad (the son of Michael and Vivian) (the Arpads) and also Launay, Inc., a District of Columbia corporation.

The Launays sought in their original complaint: specific enforcement of a buy-sell agreement concerning shares of Lau-nay, Inc. (Count I); damages for breach of an agreement to operate jointly Launay, Inc. (Count II); liquidation of Launay, Inc. (Count III); damages for defamation (Count IV); and an accounting and partition of real property (Count V). The Ar-pads moved to dismiss the original complaint, asserting that none of its five counts stated a cause upon which relief could be granted. They stated the following additional grounds for dismissal of certain counts: Count I was barred by the statute of limitations; Counts II and III were miscast since they sought damages for the Launays rather than for the corporation and Count IV failed to set forth with the required specificity the claim that Sheldon Arpad impugned the business reputation of Mr. Launay.

The Arpads also contended that all claims against the estate of Michael Arpad were barred by noncompliance with probate presentation requirements. D.C.Code §§ 20-102, -901 to -905 (1981).

After a hearing, Judge Norman dismissed with prejudice the demand for specific performance of the buy-sell agreement, Count I; dismissed, with plaintiffs’ consent, Counts II, III, and IV, with leave to amend; and denied the motion to dismiss Count V. Attorneys’ fees and costs were awarded to the Arpads in the amount of $1,153.

The Launays thereafter filed an amended complaint consisting of three counts: Count I, a derivative action (a restatement of Counts II and III of the original complaint); Count II, a defamation action; and Count III, the accounting and partition claim which had been Count V of the original complaint and had survived the first motion to dismiss. The Arpads moved to dismiss the amended complaint. They argued that Count I did not meet the pleading requirements for shareholder derivative actions, Super.Ct.Civ.R. 23.1, in that the complaint failed to state that the action was not collusive, and the complaint was not verified. They asserted that the defamation charge still lacked the requisite specificity. Finally, they argued, there was no basis in fact for the accounting and partition sought in Count III of the amended complaint.

Along with their amended complaint, the Launays filed a motion to reconsider and vacate the order dismissing the specific performance count and awarding attorneys’ fees, and requested a hearing on the motion. The Arpads opposed this motion also. Because Judge Norman had retired, the Launays’ motion to reconsider was referred to another judge. The motion for reconsideration was initially set for hearing on September 15, 1983, but was continued by consent to September 30, 1983.

On October 12, 1983, Judge Goodrich dismissed with prejudice the Launays’ amended complaint. The order noted the Lau-nays’ lack of opposition to the motion to dismiss. The Launays moved for relief from the dismissal under Super.Ct.Civ.R. 60(b), on October 24, 1983. The Arpads opposed. On November 4, 1983, Judge Wolf refused to vacate the dismissal. At the hearing on the motion, the Launays were permitted to place in the record a proposed second amended complaint correcting the pleading defects of the derivative action. They also proffered, but did not make a part of the record, an opposition to the Arpads’ motion to dismiss the first amended complaint. This timely appeal is taken from Judge Wolf’s denial of relief from the order of dismissal, Judge Goodrich’s dismissal of the. amended com[447]*447plaint, and Judge Norman’s dismissal of Count I of the original complaint and award of attorneys’ fees.

II

We turn first to appellant’s challenge to Judge Norman’s dismissal of the original complaint’s first count, which called for specific performance of the buy-sell agreement. We summarize here the allegations of that count. Raymond Launay and Michael Arpad formed Launay, Inc., in 1962 to carry on the business of repairing and selling antiques. One hundred shares of capital stock of Launay, Inc. were authorized. The corporation issued 54 shares to Michael and Vivian Arpad as tenants by the entirety, and 46 shares to Raymond and Daniele Launay. On the day the stock was issued, Raymond Launay and Michael Ar-pad agreed that the stock would be issued to each of them individually so that the survivor could purchase the stock of the other upon his death. The corporate bylaws and minutes described the buy-sell agreement, but the stock certificates and ledger did not refer to the restriction. Raymond Launay and Michael Arpad operated Launay, Inc. for 20 years with the understanding that the stock had been issued solely to each and, upon the death of the other, would be subject to purchase by the survivor. When Michael Arpad died, Raymond Launay notified Vivian Arpad of his election to purchase Michael Arpad’s stock at book value, but Vivian Arpad asserted that she had owned the stock jointly with her husband. Based on these allegations, the Launays asked the court to direct the sale of the contested 54 shares to Raymond Launay.

The Arpads moved to dismiss Count I contending that it failed to state a claim upon which relief could be granted because, by operation of law, Vivian Arpad, a tenant by the entirety, had succeeded to the full and complete ownership of the 54 shares. Michael Arpad, they argued, could not have unilaterally defeated Vivian Ar-pad’s right of survivorship even if, as the Launays asserted, he had agreed to the buy-sell agreement.

The Arpads’ motion to dismiss Count I was to be treated as a motion for summary judgment because it referred to an affidavit and certain documents.1

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Bluebook (online)
497 A.2d 443, 1985 D.C. App. LEXIS 467, Counsel Stack Legal Research, https://law.counselstack.com/opinion/launay-v-launay-inc-dc-1985.