Matter of Trio Asbestos Removal Corp. v Marinelli

Matter of Trio Asbestos Removal Corp. v Marinelli 2009 NY Slip Op 09480 [68 AD3d 1008] December 15, 2009 Appellate Division, Second Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected through Wednesday, February 10, 2010

In the Matter of Trio Asbestos Removal Corp., Appellant,
v
Nicholas Marinelli, Respondent.

—[*1] Davidoff Malito & Hutcher LLP, New York, N.Y. (Larry Hutcher and Peter M. Ripin of counsel), for appellant. Greenfield Stein & Senior, LLP, New York, N.Y. (Gary B. Freidman and Jeffery H. Sheetz of counsel), for respondent.

In a proceeding pursuant to CPLR 7601 to enforce a valuation provision of the parties' shareholders' agreement, the petitioner appeals from a judgment of the Supreme Court, Queens County (Agate, J.), entered June 23, 2008, which, upon an order of the same court dated April 25, 2008, granting that branch of the respondent's motion which was to dismiss the proceeding on the ground that the petitioner breached the parties' shareholders' agreement by failing to provide a valuation of the respondent's shares in the petitioner as required by section 3.4 (d) of the shareholders' agreement, and denying its cross motion to confirm a valuation of the respondent's shares and for specific performance of a contract for the sale of the respondent's shares, dismissed the proceeding.

Ordered that the judgment is affirmed, with costs.

The Supreme Court properly denied the petitioner's cross motion, inter alia, to confirm a valuation of the respondent's shares provided by the petitioner's accountants, inasmuch as that valuation was not the independent work of the "accountants servicing the [petitioner] Corporation," as required by section 3.4 (d) of the shareholders agreement (see Matter of Trio Asbestos Removal Corp. v Marinelli, 37 AD3d 475, 477 [2007]). Moreover, the Supreme Court properly dismissed the proceeding on the ground that the petitioner breached the subject shareholders' agreement by repeatedly failing to obtain and provide a valuation of the respondent's shares by means provided for in the shareholders' agreement (see CPLR 7601). We reject the petitioner's contention that it could not be liable for a breach of the contract because the accounting firm was a third party over which it had no control. To the contrary, the petitioner controlled which accounting firm was retained to service it, and was not required to continue to employ accountants who would not, or could not, provide an independent valuation. Fisher, J.P., Angiolillo, Eng and Lott, JJ., concur.