Apt v Block 6222 Constr. Corp.

[*1] Apt v Block 6222 Constr. Corp. 2006 NY Slip Op 50065(U) [10 Misc 3d 1073(A)] Decided on January 19, 2006 Supreme Court, Richmond County Vitaliano, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 19, 2006
Supreme Court, Richmond County

Nellie Apt, Plaintiff(s),

against

Block 6222 Construction Corp., SINCLAIR BUILDING CORP., THADDEUS HOLDING CORP., GUL ESTATES, INC., ROBERT ARMINANTE, EDWARD DELLI PAOLI, Defendant(s).



102117/05

Eric N. Vitaliano, J.

This action arises out of a series of commercial dealings which included, among other transactions, the acquisition by defendant and movant Sinclair Building Corp. ("Sinclair") of all right and title to a certain tract of developable land on Staten Island from defendant Block 6222 Construction Corp. ("the corporation"). The complaint against Sinclair can best be characterized as a claim that Sinclair is somehow accountable to plaintiff for profit gained at her or the [*2]corporation's expense as a result of alleged wrongful conduct by others. In response, Sinclair's motion to dismiss challenges plaintiff's status and capacity to bring such an action against it. The arguments for the motion are compelling.

The complaint alleges, based not upon plaintiff's personal knowledge but only upon information and belief, that plaintiff was and is a 50% stockholder of the corporation. She brings this action against Sinclair and the other defendants in her individual capacity and derivatively as a shareholder on behalf of the corporation and all other shareholders seeking a money judgment and, perhaps, equitable relief effecting Sinclair's title to the land formerly owned and transferred to it by the corporation. As amplified in the affidavits submitted by plaintiff in connection with the instant motion, plaintiff's complaint could also be viewed, alternatively, as an action brought by a creditor of the corporation to set aside the fraudulent conveyance of real property by the corporation to Sinclair. Taking a generous reading of the pleadings to the nth degree, the papers submitted by plaintiff could even be viewed as claiming for her the status of shareholder and creditor. In any event, although plaintiff's allegations regarding her own status remain muddled, what is perfectly clear is that the complaint states no currently cognizable claim against Sinclair. Therefore, Sinclair's motion to dismiss the complaint as against it and to cancel the notice of pendency filed by plaintiff against the property Sinclair acquired from the corporation must be granted in all respects.

The bases for the Court's decision are straightforward. First, in her individual capacity, plaintiff has not made a showing of any legal interest in the subject land. The uncontradicted proof on this motion is that the subject property was owned prior to its transfer to Sinclair by the corporation and not by plaintiff individually. Further, plaintiff concedes that any claim she might have as an individual shareholder to set aside the corporation's transfer of real property by deed to Sinclair in March 2003 on account of the corporation's failure to comply with the relevant provisions of the Business Corporation Law ("BCL") was time-barred by the statute of limitations set forth in BCL §909 (c). See Affirmation in Opposition of Jonathan Silver, Esq. at ¶10 ("Silver Affirmation").

Furthermore, assuming solely for the purposes of argument, that plaintiff's complaint complies with the pleading requirements necessary to assert a derivative claim as authorized by BCL §626, the result is no different. Viewed in the light most favorable to plaintiff, plaintiff's grievance with Sinclair is that Sinclair was a beneficiary of the wrongful conduct of others. Yet, neither the complaint nor the affirmations plaintiff has submitted on this motion set forth factual allegations establishing any breach of contractual or other legal obligation owed by Sinclair to plaintiff or the corporation. More significantly, plaintiff concedes that as part of the actual sale transaction Sinclair has paid the corporation close to $1.5 million for the subject land. Silver Affirmation at ¶4. There is no hint of proof that the amount agreed upon was less than the land's fair market value. There is not even an offer of proof of what the value of the subject land was. No doubt, whether as a shareholder or a creditor, indeed, even as a total stranger to the transaction, it was within plaintiff's ability to ascertain and allege the fair market value of the property as of the time of the deed transfer in March 2003. The concession by plaintiff that significant value for the transferred property was paid by Sinclair and the absence of any showing that the property was valued above the amount plaintiff concedes was actually paid compel the conclusion that plaintiff cannot deny Sinclair was a bonafide purchaser for value notwithstanding [*3]the fact that plaintiff and/or the corporation may have been defrauded by other parties in other transactions relating to the very same land.

Moreover, even generously recasting the complaint as a claim of a creditor seeking damages and equitable relief setting aside the transfer of real property on account of it being a fraudulent conveyance, the outcome would not vary. And, essentially, for the same reason - - that no allegation of fraud by Sinclair is pled in the complaint, much less with the specificity required by CPLR 3016(b). Put another way, not only is there a failure to plead that the transaction between the corporation and Sinclair was for less than fair consideration, from the facts conceded by plaintiff on this motion the transfer by the corporation to Sinclair was a sale at significant value to the corporation. Consequently, even if plaintiff had styled the facts alleged and/or conceded as a complaint against Sinclair for fraud injuring her as a creditor of the corporation, which the complaint does not, such a complaint would not survive this motion either.

For all the foregoing reasons then, the motion of defendant Sinclair Building Corp. dismissing the complaint against it and cancelling the notice of pendency filed in this action must be, and hereby is, granted in its entirety.

This is the Decision and Order of the Court. The clerk is directed to enter judgment accordingly.

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Dated: Staten Island, New YorkHon. Eric N. Vitaliano

January 19, 2006J.S.C.