Office of James M. Haddad, New York (James M. Haddad of
counsel), for appellant.
Venturini & Associates, New York (August C. Venturini of
counsel), for Sheryl Romanoff, GHC NY Corp. and New Roads
Realty Corp., respondents.
Brisbois Bisgaard & Smith LLP, New York (Cristina R.
Yannucci of counsel), for Michael A. Zimmerman, respondent.
& Loeb LLP, New York (David M. Satnick of counsel), for
55 Gans Judgment LLC, 55 Gans Lender LLC and Griffon
Gansevoort Holdings LLC, respondents.
Garfinkel Margolis Bergson LLP, New York (Robert J. Bergson
of counsel), for Frank Platt, respondent.
Richter, J.P., Mazzarelli, Kahn, Gesmer, JJ.
Supreme Court, New York County (Anil C. Singh, J.), entered
September 29, 2014, which granted the motion by defendants 55
Gans Judgment LLC (Gans Judgment), 55 Gans Lender LLC (Gans
Lender), Griffon Gansevoort Holdings LLC's (Griffon,
together with Gans Judgment and Gans Lender, the Gans
defendants) to dismiss the fourth cause of action for
rescission, unanimously affirmed. Orders, same court and
Justice, entered February 5, 2015, which, insofar as appealed
from as limited by the briefs, (a) granted defendant Michael
Zimmerman's motion to dismiss the complaint, (b) granted
so much of the motion by defendants Gerald Romanoff
(Gerald), Sheryl Romanoff (Sheryl), New Roads Realty Corp.
(New Roads), and GHC NY Corp.'s (GHC) to dismiss the
complaint as sought dismissal of the complaint as against
Sheryl, those portions of the first cause of action that seek
recovery for wrongs that occurred before February 7, 2011,
those portions of the third cause of action that seek
recovery against Gerald in relation to GHC and for
transactions preceding January 4, 2009, and the fourth,
fifth, and sixth causes of action; and (c) denied
plaintiff's motion for leave to amend the complaint,
unanimously affirmed, without costs. Order, same court and
Justice, entered October 22, 2015, which, to the extent
appealed from as limited by the briefs, granted the Gans
defendants' motion for summary judgment dismissing the
complaint against them, unanimously affirmed, without costs.
derivative action, plaintiff Nicholas Romanoff, a 1%
shareholder in New Roads, which entity, through a wholly
owned subsidiary, GHC, owns a five-story commercial building
in Manhattan, seeks damages and to set aside a conveyance of
real property based upon, inter alia, alleged breaches of
fiduciary duty by his now deceased grandfather, Gerald
Romanoff, whose action were allegedly aided and abetted by
the other defendants.
court properly applied the doctrine of in pari delicto to
dismiss the fourth cause of action for rescission and second
cause of action for aiding and abetting, and to deny leave to
amend the second cause of action. "The doctrine of in
pari delicto mandates that the courts will not intercede to
resolve a dispute between two wrongdoers" (Kirschner
v KPMG LLP, 15 N.Y.3d 446, 464 ). Under the
doctrine, which operates under agency principles, "the
acts of a corporation's authorized agents, such as its
officers, are imputed to the corporation even if [the]
particular acts were unauthorized'" (New
Greenwich Litig. Trustee, LLC v Citco Fund Servs. (Europe)
B.V., 145 A.D.3d 16, 23 [1st Dept 2016] [quoting
Kirschner, 15 N.Y.3d at 465]). The doctrine
"requires immoral or unconscionable conduct that makes
the wrongdoing of the party against which it is asserted at
least equal to that of the party asserting it"
(Chemical Bank v Stahl, 237 A.D.2d 231, 232 [1st
Dept 1997][citation omitted]).
the application of an exception to the in pari delicto rule,
Gerald's conduct, as an officer and director of GHC and
New Roads, is imputed to the corporations. While the other
defendants are alleged to have aided and abetted Gerald's
conduct, those defendants' culpability is at most equal
to that of Gerald. The "adverse interest" exception
does not apply as Gerald, by the complained of conduct, did
not " totally abandon his principal's
interests" or act "entirely for his own or
another's purposes" (Kirschner, 15 N.Y.3d
at 466 [emphasis in original; see also Concord Capital
Mgt., LLC v Bank of America, N.A., 102 A.D.3d 406');">102 A.D.3d 406 [1st
Dept 2013], lv denied 21 N.Y.3d 851');">21 N.Y.3d 851 ).
Plaintiff's contention that "GHC received absolutely
no benefit from this arrangement" is belied by the
settlement agreement at issue, which resolved a foreclosure
action, releasing $9 million in debt that was incurred by
GHC, resolved a judgment of over $16 million entered against
GHC as guarantor, and provided GHC with a $245, 000 payment.
remedy of rescission is unavailable because money damages are
available and will make plaintiff whole (Rudman v Cowles
Communications, 30 N.Y.2d 1, 13 ; Lichtyger v
Franchard Corp., 18 N.Y.2d 528, 537 ). Any right
to redeem the mortgaged property was extinguished upon
conveyance of the property to a subsequent grantee, which
terminated the grantor's interest in the premises
(see Josephson v Ginsburg Realty Co., 169 AD 189,
190-191 [1st Dept 1915], affd 222 NY 609 ;
Bancplus Mtge. Corp. v Galloway, 203 A.D.2d 222, 223
[2d Dept 1994]).
court properly dismissed so much of plaintiff's breach of
fiduciary duty claim as was premised on acts and/or omissions
occurring prior to February 7, 2011, as time-barred. Where,
as here, the remedy sought is purely or primarily monetary, a
breach of fiduciary duty claim is governed by a three-year
statute of limitations (see CPLR 214; IDT
Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d
132, 139 ; Carlingford Ctr. Point Assoc. v MR
Realty Assoc., LP, 4 A.D.3d 179, 179-180 [1st Dept
2004]). Incidental allegations of fraud do not extend the
statute (see Powers Mercantile Corp. v Feinberg, 109
A.D.2d 117, 120 [1st Dept 1985], affd 67 N.Y.2d 981');">67 N.Y.2d 981
failure to allege that he demanded an accounting and that
Gerald refused to comply with the request warranted dismissal
of the claim for an accounting from GHC (see Unitel
Telecard Distrib. Corp. v Nunez, 90 A.D.3d 568, 569 [1st
Dept 2011]; Adam v Cutner & Rathkopf, 238 A.D.2d
234, 241 [1st Dept 1997]).
is collaterally estopped from asserting a proposed cause of
action under Business Corporation Law § 909 and Delaware
General Corporation Law § 271, as the issue of
plaintiff's standing to bring individual claims as a
shareholder was necessarily decided in a prior proceeding
(see generally D'Arata v New York Cent. Mut. Fire
Ins. Co., 76 N.Y.2d 659, 664 ). Moreover, the
proposed claim is without merit (see CPLR 3025[b];
MBIA Ins. Corp. v Greystone & Co., Inc., 74
A.D.3d 499 [1st Dept 2010]). Actions brought pursuant to
Business Corporation Law § 909 must be commenced within
one year of the challenged conveyance (see Business
Corporation Law § 909[c]). The Delaware General
Corporation Law § 271 claim fails as the conveyance was
made pursuant to the written consent of the ...