Adam v Bonfiglio
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Adam v Bonfiglio 2021 NY Slip Op 33152(U) June 8, 2021 Supreme Court, Westchester County Docket Number: Index No. 54905/2016 Judge: Terry Jane Ruderman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 \ To commence commence the the statutory statutory time time for appeals appeals as ofright of right To youare advised to serve serve a copy copy ((CPLR CP LR 555l3(a]), 513 [a]), you are advised ··-of this order, order, with with notice notice of of entry; entry, upon upon aUparties. all parties. of SUPREME COURT COURT OF T~ESTATE THE STATE OF NEW YORK SUPREME NEW YORK COUNTY OF WESTCHESTER WESTCHESTER COUNTYOF _____________________________________ -_- ----------------r----}C ---. ----- - - . ------- .... --------. -. - . ------- .. --------- ------, --- X MARIANNE ADAM, ADAM, Executor E}CecutorUnder Last Will Will MARIANNE Under the Last and Testament Testament of of BRIAN BRIAN C. FLOOD, FLOOD, and on behalf behalf of of and LAKE MARION MARION POINT, POINT, INC. derivatively, derivatively, LAKE Inde}CNo. 54905/2016 54905/2016 IndexNo. · TRIAL TRIAL DECISION DECISION and ORDER ORDER Plaintiff, Plaintiff, -against-againstDENISE BONFIGLIO BONFIGLIO and DENNIS DENNIS BONFIGLIO BONFIGLIO as . DENISE Co-E}Cecutors of of the the Estate Estate of of VIVIAN VIVIAN BONFIGLIO, BONFIGLIO, Co-Executors DENNIS J. BONFIGLIO BONFIGLIO a/k/a alkla DAVID DAVID J. BONFIGLIO, BONFIGLIO, DENNIS Present: Present: Hon Terry Terry Jane Jane Ruderman Ruderman Hon Defendants. ._ Defendants. ______-~ ----~----------x -- ... --------- ------- .. ------ .· . ------ -- - --------- ·-. ---.. --x The trial trial of of this this matter matter was was held held on March March 30, 2021, 2021, and and the the parties parties submitted submitted post-trial post-trial The memoranda on on Mciy MCly19,2021. Based on the the evidence evidence and the the arguments, arguments, the the Court Court decides decides as 19, 2021. ,Based.on memoranda follows: follows: Plaintiff Marianne Marianne Adam, Adam, as Executor Executor of of the Estate Estate of of Brian Brian C.-Flood C.-Flood (the (the "Estate"),. "Estate"), Plaintiff brings this this actionseeking actionseeking a declaratory declaratory judgment that the Estate Estate owns owns 100% 100% of of Lake Lake Marion Marion brings judgment that Point, Inc. (the (the "Corporation"J, "Corporation"), and, in a derivative derivative cause cause of of action action on behalf behalf of of Lake Lake Marion Marion Point, Point, Inc., Inc., seeks seeks a judgment directing the the repayment repayment to the the Corporation Corporation by the the Estate Estate of ofVivjan Point, judgment directing Vivian Bonfiglio of of a $65,000 $65,000 payment payment made made to Vivian Vivian Bonfiglio Bonfiglio from from the corporate corporate account account after· after. Bonfiglio Flood's death, death, and repaymentto Dennis Bonfiglio Bonfiglio of $9,600 paid him and Flood's repaymentto the corporation corporation by Dennis of$9,600 paid to him Raven Bonfiglio corporate account Raven Bonfiglio from from the corporate account after after Flood's Flood's death death for "security "security services." services." Defendants seek seek a declaration declaration that Defendants that based based on aQtions actions taken taken in 2015, 2015, the Estate Estate owns owns only only 1 1 of 13 [*FILED: 2] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 reasonable attorneys 3.87% of of the Corporation, Corporation, and and they counterclaim for an award award of of reasonable attorneys fees and they counterclaim 3.87% i § .607.07401 ), predecessor, S607.0740l), (and its predecessor, 607.0746 (2) (and Act§S 607.0746 costs under Corporation Act Business Corporation Florida Business under Florida costs cause ·or reasonable cause without reasonable maintained without ground that "the proceeding commenced or maintained or proceeding was commenced that "the on the ground for~.n improper purpose" (see Fla. -Bus. Bus. Corp. Corp. Laws§ Laws S 607.0746 607.0746 [2}). [2]). purpose" (see an improper for Facts and Trial Trial Evidence Evidence Facts and admitted documents admitted and documents Adam, and Marianne Adam, of Marianne Plaintiff s case case consisted consisted of of the testimony testimony of Plaintiffs David and David Bonfiglio and Dennis Bonfiglio of Dennis testimony of into of the testimony consisted of case consisted Defendartts' case evidence. 1 Defendants' into evidence.' testimony. their testimony. through their evidence through Scileppi, Esq., admitted into evidence documents admitted and documents Esq., and Scileppi, their was their Flood was Brian Flood were sisters; Plaintiff sisters; ~rian Bonfiglio were Vivian Bonfiglio Adam and Vivian Marianne Adam Plaintiff Marianne Bonfiglio's son and Vivian Bonfiglio's Bonfiglio are Vivian stepfather. Defendants and Denise Denise Bonfiglio Bonfiglio and Dennis Bonfiglio Defendants Dennis stepfather. daughter. daughter. of purpose of 2012, for the Florida in 2012, The Corporation Corporation was incorporated in Florida the purpose and incorporated formed and was formed The initiated and station. Flood store and gas station. constructing and and operating operating a convenience convenience store Flood initiated and spearheaded spearheaded constructing listed in the Bonfiglio who Vivian Bonfiglio was Vivian but it was the process of formation formation of of the corporation, corporation, but who was was listed process of also Flood also and Director. initial incorporator and and President, Secretary, Treasurer Treasurer and Director. Flood President, Secretary, filings as the incorporator initial filings paid were paid funds were which funds of which out of name, out Corporation's name, opened and and funded account in the the Corporation's bank account funded a bank opened of real pieces of two pieces purchased two Corporation also purchased during process. The Corporation creation process. and creation formation and the formation during the other for parcel for $115,000, one parcel property $115,000, the other business, one contemplated business, the contemplated of the construction of property for construction derived from were derived property were $30,000. It is undisputed acquisition of of the property from the acquisition funds for the that the funds undisputed that $30,000. Flood. Flood. was. comply with Defendants' objection objection based failure to comply with CPLR CPLR 3122-a 3122-a (c) was the failure based on the Defendants' · resulted. prejudice resulted. documents and no prejudice overruled; surprised by the documents not surprised were not defendants were overruled; defendants 1 I 2 2 of 13 [*FILED: 3] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 Brian Flood 9, 2013; Marianne Marianne Adam Adam was was named named as executor Brian Flood died died on December December 9,2013; executor of of Flood's estate will, and she was was granted granted letters testamentary on March March 21, 2014. 2014. Marianne Marianne Flood's estate in his will, letters testamentary Adam Vivian Bonfiglio Bonfiglio were were two of three named residuary beneficiaries beneficiaries of Estate, Adam and Vivian of the three natnedresiduary of the Estate, along brother Anthony Privitera. Vivian Vivian Bonfiglio Bonfiglio died died after after this this action was along with with their their brother Anthony Privitera. action was commenced, Estate is being administered by her children, Denise and Dennis Dennis commenced, in 2017; 2017; her Estate being administered children, Denise Bonfiglio, and party in this action. Bonfiglio, and was substituted substituted as a party action. Following Flood's death, position as Flood's Flood's executor, Following Flood's death, Adam, Adam, in her position executbr, sought sought to obtain obtain from Vivian Vivian Bonfiglio Bonfiglio documentary regarding the ownership the Corporation. documentary substantiation substantiation regarding ownership of ofthe Corporation. While Vivian Bonfiglio Bonfiglio insisted insisted that that she was the sole owner While Vivian owner of of the gas station, station, she did not provide Adam Adam with with any documents documents by which which Adam Adam could that claim. Adam initially initially provide could confirm confirm that claim. Adam testified that that the only document she located located on that that issue issue in Flood's Flood's files was was an unsigned testified only document unsigned copy copy of of a stock Lake Marion Marion Point, Point, Inc., stating that Brian Brian Flood Flood owned stock certificate certificate issued issued by Lake stating that owned 340 shares. shares. On cross-examination, Adam acknowledged located among Flood's papers an cross-examination, Adam acknowledged that she also located among Flood' spapers , - unsigned stockholder buy-sell agreement agreement for the Corporation, reflecting that that Brian Brian Flood Flood owned unsigned stockholder buy-sell Corporation, reflecting owned 340 shares, Vivian Bonfiglio owned Dennis Bonfiglio Bonfiglio owned Adam shares, Vivian-Bonfiglio owned 330 shares shares and Dennis owned 330 shares. shares. Adam also admitted admitted to finding finding among among Flood's papers a document Exhibit D) entitled Flood's papers document (Defendants' (Defendants' Exhibit entitled of Consent Annual Meeting which appears appears to have been signed signed by Consent in Lieu Lieu of Annual Meeting of of Shareholders, Shareholders, which have been Vivian Bonfiglio, Bonfiglio and Brian Brian Flood; however, Adam Adam expressed view that that the Vivian Bonfiglio, Dennis Dennis Bonfiglio Flood; however, expressed the view purporting to be that that of Brian Flood Flood was not his, but but that that his name signature signature on the document document purporting of Brian name had been signed by someone someone else. else. She similarly similarly acknowledged among Flood's been signed acknowledged having having found found among Flood's papers papers a document entitled entitled Unanimous Unanimous Consent Consent of of Shareholders, Shareholders, from from August August 2013 2013 (Pefendants' Cpefendants' Exhibit Exhibit document '. '· similarly signed signed by Vivian Vivian Bonfiglio, Bonfiglio, Dennis Dennis Bonfiglio Bonfiglio and and Brian Brian Flood. Flood. She She further further G), similarly 3 3 of 13 [*FILED: 4] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 acknowledged independently obtained Articles of Incorporation for the Corporation, Corporation, acknowledged that that she independently obtained the Articles ofIncorporation filed with Florida Secretary April 16, 2012 2012 (Plaintiff's Exhibit 7), in which which it was filed with the Florida Secretary of of State State on April (Plaintiff s Exhibit indicated that Vivian Bonfiglio Bonfiglio was was the incorporator incorporator as well as the President, President, Secretary, Secretary, indicated that Vivian Treasurer Director of that the Corporation authorized to issue Treasurer and Director of the Corporation, Corporation, and that Corporation was was authorized issue 1000 shares. shares. Adam maintained maintained that that defendants unable to establish proper .' Adam defendants were were unable establish by competent competent and proper interest in the Corporation; validity of of evidence that they they held evidence that held an mvnership ownership interest Corporation; she challenged challenged the validity any unsigned validity of that purported purported to be signed unsigned documents, documents, and disputed disputed the validity of any documents documents that signed viewed as valid valid proof, proot~ she contended, based ,on on Flood's Flood's Flood. In the absence by Flood. absence of of what what she viewed contended, based 100% funding of time of that Flood Flood was was the. the 100% 100% owner 100% funding of the Corporation Corporation up to the time of his death, death, that owner of of the corporation. corporation. Adam's challenge validity of of the corporate that it was was Part of Part of Adam's challenge to the validity corporate documents documents was was that suspect because it was was not initially that it was was not until after suspect because initially provided provided to her. She testified testified that after she commenced this action additional documentation was provided. Defendants dispute that commenced this action that that additional documentation was provided. Defendants dispute that claim, November 7, 2014 nan1ed Nicholas Nicholas Troiano Troiano sent Adam's Adam's claim, emphasizing emphasizing that that on November 2014 an attorney attorney named counsel what he referred referred to as the "corporate counsel an email email to which which was was attached attached what "corporate .kit'' .kit" (Defendants' (Defendants' however, that that while while the email that Vivian Vivian Bonfiglio Dennis Exhibit T). It is noted, Exhibit noted, however, email asserts asserts that Bonfiglio and DeJ!Ilis Bonfiglio each owned owned 330 shares shares and Flood Flood owned shares, the list of of attachments attachments to the Bonfiglio each owned 340 shares, email, which recites various various agreements, agreements, notes, only to one stock stock email, which recites notes, minutes minutes and bylaws, bylaws, refers refers only certificate, namely namely Certificate Certificate 2 - the Stock Stock Certificate Certificate issued issued to Brian Brian Flood Flood ,-.and ,..-and does does not certificate, appear to include include Certificates Certificates 1 and and 3. Additionally, Additionally, the body body of of the Troiano, Troiano email email acknowledges acknowledges appear that the provided documents were were unsigned. unsigned. that provided documents 4 4 of 13 [*FILED: 5] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 The documents trial exhibits exhibits by defendants defendants in~lude include all three three Stock documents submitted submitted as trial Stock Certificates Marion Point, Point, Inc. on May 14,2012, 14, 2012, signed signed by'vivian by Vivian Bonfiglio Bonfiglio as Certificates issued issued by Lake Lake Marion President and Dennis Dennis Bonfiglio Bonfiglio as Secretary, Certificate Number Number 1 to Vivian Vivian Bonfiglio Bonfiglio for 330 President Secretary, Certificate Dennis shares, Number 2 to Brian Brian Flood Flood for 340 shares, shares, and Certificate Certificate Number Number 3 to Dennis shares, Certificate Certificate Number Bonfiglio for 330 shares Exhibit C). Also Also submitted submitted were were Corporate Corporate Bylaws, Bylaws, along along Bonfiglio shares (Defendants' (Defendants' Exhibit '- with a Consent Lieu of Meeting for the fiscal year year ending ending December December 31, 2012, 2012, signed signed with Consent in Lieu of Annual Annual Meeting three shareholders, that Vivian Vivian Bonfiglio Bonfiglio was elected elected Director Director of of the by the three shareholders, establishing establishing that Corporation (Defendants' Exhibit Exhibit F); and a Unanimous Unanimous Consent Consent of of Shareholders signed by Corporation (Defendants' Shareholders signed Vivian Bonfiglio, Brian Flood Flood and Dennis Dennis Bonfiglio Bonfiglio on August August 19, 2013, 2013, resolving resolving that that they,as they, as Vivian Bonfiglio, Brian Directors, hold office office until until the next next annual annual meeting meeting or until until successors successors were were Directors, would would continue continue to hold elected Exhibit G). elected (Defendants' (Defendants' Exhibit On defendants' Dennis Bonfiglio Bonfiglio testified testified to his and his mother's mother's close close relationship relationship defendants' case, case, Dennis with Brian Flood, refen-ed to as his grandfather, grandfather, and regarding regarding the, the. process process by which which the with Brian Flood, whom whom he referred Corporation was Corporation was formed formed at Flood's Flood's instigation instigation and direction, direction, with with the three three shareholders. shareholders. Dennis Bonfiglio testified that Dennis Bonfiglio testified that after after Flood Flood died, died, Vivian Vivian Bonfiglio Bonfiglio paid paid construction construction fees contractor liens of Vivian and contractor liens from her personal personal account. account. Then, Then, based based on a joint joint written written consent consent ofViyian Bonfiglio Shareholder Action Bonfiglio and Dennis Dennis Bonfiglio Bonfiglio dated dated April April 27, 2015, 2015, a notice notice of of Shareholder Action dated dated April April 30,2015 announced that raise equity equity financing financing from from its shareholders shareholders 30, 2015 announced that the Corporation Corporation intended intended to raise through of additional additional shares. shares. The "the Company through the sale of The announcement announcement stated stated that that "the Company was required required to amend amend and restate restate its articles articles of of incorporation incorporation to increase increase the the number number of of authorized authorized shares shares of of . the Company's Company's common common stock stock from from 1,000 shares shares to 10,000,000 10,000,000 shares" shares" (Defendants' (Defendants' Exhibit Exhibit Q). the Amended and and Restated Restated Articles Articles of of Incorporation Incorporation which which included included that that information information were were filed on Amended 5 5 of 13 [*FILED: 6] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 Exhibit R). April (Defendants' Exhibit 2015 (Defendants' April 29, 2015 Board of Written Consent By a document document dated dated July July 17, 17,2015, entitled Unanimous Consent of of the Board of Unanimous Written 2015, entitled Vivian Directors consisting Board of Directors of Lake executed by the Board of Directors consisting of of Vivian Point, Inc., executed Marion Point, Lake Marion Directors of Bonfiglio and Dennis Dennis ~onfiglio, ~onfiglio, it was stated stated that officers of of the the Corporation Corporation directed directed the the that the officers Bonfiglio the Corporation Corporation to issue issue to Vivian Vivian Bonfiglio 7,576 shares shares of of common common stock stock of of the Corporation out of of Bonfiglio 7,576 Corporation the capital to the of capital based on her contributions the authorized authorized but common stock, stock, based contributions of unissued common but unissued about made on or about was made contributions was recited contributions those recited Corporation of those One of Exhibit M). One (Defendants' Exhibit Corporation (Defendants' Corporation to subcontractor the Corporation of the behalf of June 17,2015, $107,720 payment subcontractor made on behalf payment made 2015, by a $107,720 June 17, Corporation.' The second the Corporation. against Precision settle a default second judgment against default judgment Inc., to settle Petroleum, Inc., Precision Petroleum, , , behalf of 2015 on behalf July 14, made on or about recited of $387,012 $387,012 made about July 14,2015 of the payment of was a payment contribution was recited contribution settle all its the general Corporation to Creative Creative Convenience Convenience Corporation, Corporation, the general contractor, contractor, to settle Corporation outstanding lawsuits lawsuits against against the Corporation. Corporation. outstanding personal her personal from her It is undisputed check for $387,012.61 $387,012.61 from wrote a check Bonfiglio wrote Vivian Bonfiglio that Vivian undisputed that handling the account, payable Creative Consulting, Consulting, the construction construction management management company company handling payable to Creative account, Exhibit I). money (Defendants' construction of of the gas station, station, to which which the Corporation Corporation owed owed money (Defendants' Exhibit construction appearing on the date appearing The date However, which the check check was question. The written is in question. was written date on which However, the date processed in that it was processed indicates that information indicates check 15,2014, processing information bank's processing the bank's but the 2014, but July 15, was July check was error. was in error. date was written date the written that the July 2015, suggest that defendants to suggest leading defendants 2015, leading Directors of of Directors Board of of the Board Consent of Written Consent In another entitled Unanimous of Unanimous Written document entitled another document that on or about Directors stated Lake dated August 'Board of of Directors stated that about 2015, the ·Board August 3, 2015, Point, Inc., dated Marion Point, Lake Marion way of July contributed $13,610 $13,610 to the Corpwation Corporation as capital capital by way of Bonfiglio contributed Vivian Bonfiglio 29, 2015, Vivian July 29,2015, site clean-up making of the Corporation Corporation for engineering engineering and site clean-up services, services, and behalf of payments on behalf making payments 6 6 of 13 [*FILED: 7] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 that the Board Board issued issued 208 shares shares of of the Corporation's Corporation's common common stock stock to Ms. Bonfiglio, Bonfiglio, setting setting the that per share price at $65.30 per share per share price $65.30 per share (Defendants' (Defendants' Exhibit Exhibit L). Defendants' final final witness witness was was David David Scileppi, Scileppi, Esq., attorney retained retained by the the Defendants' _Esq., an attorney Corporation in 2015.in 20 15in relation relation to its need need to raise raise funds funds to payoff debts. He testified testified that that he . Corporation pay off its debts. letter dated dated April April 7, 2015 2015 to Adam's Adam's attorney, attorney, in order order to inform inform Adam Adam on on behalf behalf of of the · sent a letter Flood Estate Estate that that the the Corporation Corporation intended intended to increase increase the the number number of of authorized: authorized shares shares of of Flood common stock stock from from 1,000 1,000 to 1,000,000, 1,000,000,22 and and to authorize authorize a common common stock stock offering, offering, and would would common permit the proposed offering pro permit the three three shareholders shareholders to participate participate in the proposed offering up to each each shareholder's shareholder's pro rata ownership. ownership. The The letter letter closed closed with with the instruction instruction that that if if Adam Adam did did not not respond respond by April April 17, rata 2015, it would would be assumed assumed that that she was was not interested interested in participating. participating. 2015, Scileppi testified testified that that he heard heard from from Adam's Adam's attorney attorney on April April 14, 201?, 2015, in a letter letter Scileppi stating, inter inter alia, that that Flood's Flood's Estate Estate was reserving reserving its right right to make make any claims claims to any or all of of stating, stock of of the Corporation, Corporation, based based on Flood's Flood's infusion-of infusion of funds funds into into the Corporation. Corporation. the stock Accordingly to Scileppi, Scileppi, Vivian Vivian Bonfiglio Bonfiglio was was the only only one one of of the shareholders shareholders to contribute contribute Accordingly funds. Scileppi Scileppi did not not testify testify on his direct direct examination examination as to the amount amount of of funds funds Vivian Vivian •. Bonfiglio contributed, contributed, and and how how the calculation calculation of of her her resulting resulting ownership ownership interest interest was was reached. reached. Bonfiglio cross~examination, Scileppi Scileppi acknowledged acknowledged that that it would would make make a difference difference if if Vivian Vivian On cross-examination, Bonfiglio did not not actually actually deposf depos!tt money money into !he the Corporation's Corporation's accounts, accounts, but but instead instead directly directly Bonfiglio 2 Contrary Contrary to this this information information provided provided in Scileppi's Scileppi's letter•notification letter~notification to Adam:s Adam~s attorney about about the the newly~authorized newly~authorized number number of of shares, shares, the the joint written consent consent of of Vivian Vivian attorney joint written Bonfiglio and and Dennis Dennis Bonfiglio Bonfiglio dated dated April April 27, 2015, 2015, and and the the notice notice of of Shareholder Shareholder Action Action dated· dated Bonfiglio April 30, 2015, 2015, authorized authorized not not 1I million million shares, shares, but but 10 million million shares. shares. April 2 7 7 of 13 [*FILED: 8] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 clarify his sought to clarify redirect he sought made However, on redirect Corporation. However, 'of the Corporation. creditor 'ofthe payment to a creditor made a payment essentially a "would be essentially of the company behalf of made on behalf testimony explaining that company "would payment made that a payment testimony by explaining of . issuance of problem as to the issuance apparent problem this apparent loan Recognizing this contribution." Recognizing capital contribution." then a capital and then loan and than a capital rather than loan rather been a loan have been may have what may based on what additional shares shares to Vivian Bonfiglio based capital Vivian Bonfiglio additional loan, was a loan, contribution was her contribution if her that if contribution, memorandum that post-trial memorandum their post-trial argue in their defendants argue contribution, defendants remai~ing corporation's remai~ing of the corporation's in that 100% of repayment, 100% receive, in repayment, entitled to receive, would be entitled event she would that event them. of them. merely 92.4% than merely assets rather 92.4% of rather than assets Discussion Discussion Meeting Annual Meeting Lieu of Consent in Lieu with the Consent The signed Stock Stock Certificates, Certificates, viewed of Annual along with viewed along The signed dated of Shareholders Consent of Unanimous Consent for the Shareholders dated and the Unanimous 2012, and December 31, 2012, ending December year ending fiscal year the fiscal Flood was a that Flood establish that shareholders, establish three shareholders, August 19,2013, of which signed by all three were signed which were both of 2013, both August 19, Bonfiglio and Vivian Bonfiglio that Vivian and that death, and 34% of his death, time of Corporation at the time the Corporation shareholder in the 34% shareholder information keep information apparent decision Bonfiglio's apparent Dennis Bonfiglio each owned owned 33%. decision to keep Vivian Bonfiglio's 33%. Vivian Bonfiglio each Dennis ownership. Corporation's ownership. of the Corporation's the facts of from alter the not alter does not Corporation, does the Corporation, regarding the Adam regarding from Adam apparently Bonfiglio apparently Vivian Bonfiglio that Vivian percentages that Nor respective ownership ownership percentages their respective relevant to their Nor is it relevant finds no Court finds This Court ownership. This the stock believed survivorship was stock ownership. into the built into was built of survivorship right of that a right believed that forgery. documents is a forgery. corporate documents support signature on the corporate Flood's signature that Flood's suggestion that Adam's suggestion support for Adam's him any additional not give him Flood's of 100% 100% of funding does additional ownership ownership interest. interest. does not of the funding contribution of Flood's contribution framed in re.lief as framed declaratory re,lief right to the declaratory Accordingly, establish a right failed to establish evidence failed plaintiffss evidence Accordingly, plaintiff Point, Inc. are the Marion Point, Lake Marion the complaint, complaint, namely, declaration that shares of of Lake that all the shares namely, a declaration property Estate. Flood Estate. of the Flood property of of issuance of that the issuance hold that Nor established viable Court to hold this Court grounds for this viable grounds Adam established Nor has Adam 8 8 of 13 [*FILED: 9] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 additional issuance issuance of of shares shares in 2015 was invalid. invalid. While While Adam Adam suggests suggests that that Scileppi Scileppi and the additional Gunster firm acted acted improperly improperly in the process of providing issuance of of additionai additional shares shares in providing for the issuance Gunster process of Corporation to Vivian Vivian Bonfiglio, Bonfiglio, the two premises of Adam's Adam's arguments arguments are without without merit. merit. the Corporation premises of First, at the time, time, in 2015, 2015, the co-defendants co-defendants legitimately legitimately owned owned a combined combined 66% 66% of of the shares shares in First, Corporation. Second, Second, Adam Adam did not successfully successfully establish establish that that the amounts amounts paid directly to the Corporation. paid directly creditors by Vivian Vivian Bonfiglio Bonfiglio on behalf of the Corporation Corporation could could not properly treated as properly be treated creditors behalf of capital contributions contributions unless those funds funds were were deposited deposited first into the corporate corporate account. account. Adam's Adam's capital unless those reliance on one response response in Scileppi' Scileppi' s cross-examination cross-examination is misplaced; misplaced; after after Scileppi Scileppi indicated indicated on reliance cross-examination that that "it "it would would make make a difference" difference" if if Vivian Vivian Bonfiglio Bonfiglio directly directly paid creditor cross-examination paid a creditor rather than than depositing depositing her capital capital contribution contribution into the Corporation's Corporation's accounts, accounts, he backtracked backtracked on rather redirect by explaining explaining that that a payment made on behalf of the company company "would "would be essentially essentially a redirect payment made behalf of loan loan and then then a capital capital contribution." contribution." " However, behalf o'f the Corporation However, Adam's Adam's failure failure to establish establish that that actions actions taken taken on behalf o'fthe Corporation in 2015 were improper and and invalid invalid does does not equate to a showing showing that actions, in particular, 2015 were improper not equate that those those actions, particular, the issuance of of additional additional shares shares to Vivian Vivian Bonfiglio, Bonfiglio, comported comported with with the applicable applicable standards standards and issuance procedures corporate issuance issuance of of additional additional shares. shares. Since Since defendants defendants affirmatively affirmatively seek seek a procedures for the corporate declaration that that in view view of of the 2015 issuance issuance of of additional additional shares shares to Vivian Vivian Bonfiglio, Bonfiglio, the declaration ownership interest interest of of Flood Flood Estate's Estate's in the Corporation Corporation has been diluted to3.87%, t03.87%, it is their their ownership been diluted burden Court with with evidence evidence from which which such such a determination determination of of law law may be made made... burden to provide provide the Court Their showing showing in that that regard regard is insufficient. insufficient. Their Notably, their legal legal argument argument relies relies on Vivian Vivian Bonfiglio's Bonfiglio's check check for $387,012.61 $387,012.61 Notably, their (Defendants' Exhibit Exhibit I) (they (they did not prove $400,000 contribution, contribution, as they they assert assert in their their postprove a $400,000 post(Defendants' 9 9 of 13 [*FILED: 10] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 trial memorandum). memorandum). Although Although the Court Court finds finds that that Vivian Vivian Bonfiglio Bonfiglio made made that that $387,012.61 $387,012.61 trial payment Creative Construction Construction on July July 15, 15,2015, amounts owed owed to the contractor contractor by the payment to Creative 2015, for amounts Corporation - and that that the handwritten handwritten 2014 2014 date date on that that check check was was an error error - that that fact alone alone is Corporation insufficient to demonstrate demonstrate the propriety propriety of of the procedure which additional additional sliares shares were were insufficient procedure by which purportedly issued to Vivian Vivian Bonfiglio. Bonfiglio. Defendants Defendants failed failed to present evidence establishing establishing how how purportedly issued present evidence that check check was was treated treated and used, used, and and how how it served served as the basis the Corporation's Corporation's issuance issuance of of that basis for the additional shares. shares. Indeed, Indeed, the problem problem hinted hinted at by Scileppi's Scileppi's redirect redirect testimony, testimony, that that the check check additional might not not have have properly served as a capital capital contribution, contribution, is addressed addressed by defendants' defendants' post-trial might properly served post-trial of memorandum memorandum iri iIi which which they they hastening hastening to argue argue in the alternative alternative that that if if that that amount amount c9nsisted C5)flsistedof loan, and therefore therefore could could not not serve serve as the basis basis fo the issuance issuance of of additional additional shares, shares, Vivian Vivian a loan, Bonfiglio would, would, by virtue virtue of of such such a loan, loan, be entitled entitled to repayment repayment of of the the entire entire amount, amount, leaving leaving Bonfiglio plaintiff without without any distribution distribution of of assets assets to the Flood Flood Estate. Estate. Whether Whether or not not that that is correct, correct, and and plaintiff whether Vivian Vivian Bonfiglio's Bonfiglio's estate estate prevails financially either either way, way, defendants defendants have have demonstrated demonstrated whether prevails financially their position that the Corporation Corporation validly validly issued issued additional additional shares shares to Vivian Vivian the uncertainty uncertainty in their position that Bonfiglio in 2015 2015 based on her her capital capital contributions. contributions. Bonfiglio based on Additionally, defendants defendants offered offered nothing nothing to demonstrate demonstrate that that the the number number of of issued issued shares shares Additionally, calculated properly, based on a proven proven capital capital contribution contribution. .. was calculated properly, based Defendants' motion motion for a directed directed verdict verdict at the close close of of plaintiffs case, pursuant pursuant to Defendants' plaintiff's case, CPLR 4401, 4401, is meritorious meritorious insofar insofar as plaintiff plaintiff Estate Estate brought brought a derivative derivative claim claim on behalf of CPLR behalf of Lake Marion Marion Point, Point, Inc., Inc., seeking seeking reimbursement reimbursement to the corporation, corporation, from the the estate estate of of Vivian Vivian Lake Bonfiglio for a $65,000 $65,000 payment made to Vivian Vivian Bonfiglio, Bonfiglio, and from from Dennis Dennis Bonfiglio Bonfiglio for Bonfiglio payment made $9,600 he and Ravon Bonfiglio Bonfiglio received received from from the corporation, corporation, for security security services. services. Plaintiff Plaintiff did did $9,600 and Ravon 10 10 of 13 [*FILED: 11] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 prior demand regard to the payments, which which was not make make a prior demand of of the corporation corporation with with regard the challenged challenged payments, required Business Corporation required by Florida Florida law at the time time this this action action was commenced commenced (Florida (Florida Business Corporation Act§S 607.07401 precludes the derivative Baroukh, 226 Act 607.07401 [2]). That That failure failure precludes derivative claim claim (see Collado Collado v Baroukh, So 3d 924, 926 [Fla 4th Kamen v Kemper Kemper Financial Financial Services, 924,926 4th DCA DCA 2017]; 2017]; see also Kamen Services, Inc., 500 US 90, l 02 at n.7 n. 7 ((1991). 1991 ). The of the statute, 2020, to 90,102 The subsequent subsequent amendment amendment of statute, effective effective January January 1, 1,2020, authorize futility, does not retroactively authorize a claim claim for demand demand futility, retroactively apply apply to events events in 2016. 2016. Adam's Adam's testimony that was unable make such a demand demand because testimony that she was unable to make because Vivian Vivian Bonfiglio Bonfiglio was was not speaking Board could have been been speaking to her fails to establish establish that that the required required demand demand to the Board could not have made. made. Moreover, even even if if the derivative derivative claim claim were were not precluded, evidence failed failed to Moreover, precluded, plaintiffs plaintiffs evidence sustain her burden of proof establishing that that the challenged challenged payments were improper improper or sustain burden of proof by establishing payments were unauthorized. Proof payment to Vivian unauthorized. Proof that that the $65,000 $65,000 payment Vivian Bonfiglio Bonfiglio was was made made does does not, in itself, itself, establish that was improper, improper, just finds it to be suspect. suspect. While While establish that the payment payment was just because because plaintiff plaintiff finds defendants their suggestion that the $65,000 Vivian defendants did not offer offer evidence evidence in support support of oftheir suggestion that $65,000 check check Vivian Bonfiglio wrote herself in February February 2014 2014 on the corporate corporate account account was repayment repayment for amounts amounts Bonfiglio wrote to herself advanced, it is notable notable that that during during the deposition deposition of of Vivian Vivian Bonfiglio taken before she previously previously advanced, Bonfiglio taken before her death, counsel counsel for plaintiff explain or justify $65,000 payment. her death, plaintiff did not ask her to explain justify the $65,000 payment. Plaintiffs failure to establish basis for finding precludes the money judgment Plaintiff s failure establish a basis finding an impropriety impropriety precludes money judgment plaintiff seeks on behalf of the Corporation Corporation against against Vivian Vivian Bonfiglio's Bonfiglio's estate. estate. Nor Nor did plaintiff plaintiff plaintiff seeks behalf of sustain her burden burden of of demonstrating demonstrating that that the security security services services for which which Dennis Dennis and and Ravon Ravon sustain Bonfiglio were were paid either unnecessary fraudulent. Bonfiglio paid were were either unnecessary or fraudulent. The relief is not not properly properly subject The Flood Flood Estate's Estate's claim claim for declaratory declaratory relief subject to dismissal. dismissal. A 11 11 11 of 13 [*FILED: 12] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 declaratory judgment cause action must must be disposed with a declaration, rather than than declaratory judgment cause of of action disposed of of with declaration, rather Kelly & Hayes Hayes Elec. Supply Hanover Ins. Co., 223 AD2d AD2d dismissal dismissal of of the cause cause of of action action (see Kelly Supply v Hanover 685, 686 [2d Dept However, based based upon upon the evidence, Adam is not entitled to the 685,686 Dept 1996]). 1996]). However, evidence, Adam entitled to declaration that the Flood Flood Estate Estate owns I 00% of declaration she sought sought at the outset, outset, that owns 100% of the Corporation, Corporation, nor nor is she entitled post-trial memorandum, memorandum, namely, namely, a entitled to the declaration declaration she seeks seeks at the close close of of her post-trial determination that all the funds funds remaining remaining in escrow of the "improved" determination that escrow from the sale of "improved" lot be turned over over to the estate, that the remaining deemed property of the Flood turned estate, and that remaining vacant vacant lot be deemed property of Flood Estate. The showing establishes that that plaintiff plaintiff Estate Estate owned owned 34% 34% of corporation Estate. The showing made made at trial establishes of the corporation plaintiff Estate's Estate's percentage percentage of time this this at the time time of of Flood's Flood's death. death. As to the plaintiff of ownership ownership at the time action was commenced, party satisfied their burden burden of their position. position. action was commenced, neither neither party satisfied their of establishing establishing their Plaintiff that the issuance issuance of additional shares Plaintiff did not submit submit sufficient sufficient evidence evidence to establish establish that of additional shares to Vivan defendants did not provide evidence establishing establishing that Vivan Bonfiglio Bonfiglio in 2015 2015 was was improper, improper, and defendants provide evidence that purported share share issuance applicable legal requirements. the purported issuance in 2015 properly properly comported comported with with all applicable requirements. Defendants' counterclaims counterclaims for their their costs costs and attorneys' attorneys' fees are denied. denied. The The Court Court Defendants' rejects their contention contention that action was commenced or maintained reasonable cause cause rejects their that the action was commenced maintained without without reasonable rather, defendants defendants contributed contributed to the perceived commence or for an improper improper purpose; purpose; rather, perceived need need to commence timely provide provide Adam Adam with with complete documentation, particularly particularly the the action, action, by declining declining to timely complete documentation, three signed signed stock stock certificates. certificates. three Based foregoing, it is hereby hereby Based on the foregoing, ORDERED that that plaintiff's plaintiffs derivative derivative claims claims are dismissed; dismissed; and and it is further further ORDERED I\ ORDERED that that plaintiff's plaintiffs cause cause of of action action for a declaratory declaratory judgment regarding ORDERED judgment regarding ownership of of the the Corporation granted to the extent extent of of declaring declaring that that the Estate Estate owned owned 34% 34% of of ownership Corporation is granted 12 12 of 13 [*FILED: 13] WESTCHESTER COUNTY CLERK 06/08/2021 04:43 PM NYSCEF DOC. NO. 99 INDEX NO. 54905/2016 RECEIVED NYSCEF: 06/08/2021 the Corporation's death, and this this Col!l1 unable from from the evidence Corporation's shares shares at the time time of of Flood's Flood's death, Court is unable evidence presented to render render a determination whether that that percentage percentage of presented determination as to whether of ownership ownership in the Corporation been properly of the time time this this action was commenced; Corporation had been properly altered altered as of action was commenced; and it is further further ORDERED that defendants' ORDERED that defendants' counterclaim counterclaim for attorney's attorney's fees and and costs costs is denied; denied; and it is further further ORDERED motion or application herein is denied. ORDERED that that any motion application not specifically specifically discussed discussed herein denied. Court. This This constitutes constitutes the decision decision and order order of of the Court. Dated: White White Plains, New York York Dated: Plains, New June~, 2021 June~, YJANE ~ ~~ HON~ H O .N ~ RUDERMAN, RUDERMAN, J.S.C. J.S.C. 13 13 of 13
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