Opinion
600511/05.
Decided February 1, 2006.
Defendants move to dismiss the complaint on the grounds of international comity, and pursuant to CPLR 3211 (a) (1), (a) (3), and (a) (7). In the alternative, they move for a stay under CPLR 2201.
Background
This action is brought by plaintiff, claiming to be a shareholder in defendant Sea Trade Maritime Corporation, a Greek shipping corporation, to enforce an alleged inter vivos gift of certain shares of the corporation. Defendants contend that there was no inter vivos gift, and the shares are subject to testamentary disposition by a Greek court.
In July 1992, defendant Sea Trade was formed, under the laws of Liberia, by Ilias Eliades (Ilias), the brother-in-law of plaintiff Captain Stelios Coutsodontis and of his sister, defendant Anna Peters. Ilias was married to the sister of Coutsodontis and Anna Peters, Athena Eliades (Athena). The two resided in Greece. Sea Trade issued 500 bearer shares. Defendants allege that 475 shares were issued to Ilias, and the remaining 25 shares were issued to defendant George Peters, son of Anna Peters.
Shortly after Sea Trade's formation, it purchased a cargo vessel known as the Athena (the Vessel). On August 18, 1992, a power of attorney was executed appointing George Peters to control the management aspects of Sea Trade. In July 1994, defendants allege that Ilias decided to give George Peters 25 more shares and to give 150 shares to Anna Peters, out of Ilias' shares. Defendants further allege, that in order for Anna Peters to become a shareholder, in accordance with Sea Trade's Articles of Incorporation, consent to the transfer had to be given by the other two shareholders. This consent was allegedly given in writing on July 24, 1994. See Affidavit of George Peters, Exhibit 3.
In 1996, Ilias died leaving his shares to Athena, his wife. After Ilias' death, George Peters continued to manage the affairs of the corporation. In July 1999, Athena drafted and executed a will (the 1999 Will) in Greece. The 1999 Will is alleged to have left certain real property to Anna Peters, Coutsodontis, and Coutsodontis' daughter, but made no mention of the Sea Trade shares.
In 1995, George Peters entered into a ten year employment agreement with Sea Trade, which he executed on behalf of Sea Trade.
On August 2, 2000, Athena wrote, "The undersigned Athena E. Eliadou am the owner of 500 shares of the company (i.e the total)Sea Trade Maritime Corp. Of Liberia who is the lawful and exclusive owner of the under Greek flag diesel propulsed ship (Athena) of approximately gross ton capacity 61,500.
After my death I leave 50% of the above shares, ie, the 250 shares to my sister Anna Peters or to her descendants. The remaining 250 shares (i.e. 50%) to my brother Stelio L. Coutsodontis or to his descendants.
Athena E. Eliadou" (August 2000 Writing)
Plaintiff provided the court with the handwritten document by Athena in Greek, and a translation of the writing into English. The translation of this writing spells Athena's last name "Eliadou." However, there is no dispute that Athena wrote and signed the writing, or as to the content of the writing.
On September 14, 2000, Athena wrote another document stating, "The enclosed shares no 9 i.e. 250 (ie 50%) belong to me Athena Eliadou and after my death will belong to my brother Steliio L. Coutsodontis or his descendant.
And the enclosed shares No. 10 i.e. 50 belong to me Athena Eliadou, and after my death will belong to my sister Anna Peters or her descendants (i.e. 10%).
The enclosed shares referred to belong to the company (Sea Trade Maritime Corp. Of Liberia which is the lawful and exclusive owner of the under Greek flag diesel propulsed vessel (Athena) of approx. 61500 tons dead weight. Athens 14 September 2000 Athena Eliadou" (September 2000 Writing)
See Footnote 2.
Coutsodontis alleges that, after Athena wrote the August 2000 Writing, she gave Anna Peters 200 Sea Trade shares, and that is why Athena wrote the September 2000 Writing changing the amounts of Sea Trade shares. However, defendants allege that Anna Peters was already in possession of 150 shares, given to her in 1994, and George Peters was in possession of the other 50 shares, given to him in 1992 and 1994. Defendants further allege that Athena wrote the September 2000 Writing upon her realization that she did not own 500 shares of Sea Trade, but rather, only 300 shares.
Athena died in Greece on January 13, 2003.
In January 2003, Coutsodontis and Anna Peters went to Athena's home, and removed 300 Sea Trade shares from a safe. Coutsodontis took 250 shares and Anna Peters took 50 shares. Coutsodontis alleges that, before her death, Athena gave the keys to her safe to both Coutsodontis and Anna Peters. Anna Peters alleges that the parties took the safe key from a drawer in Athena's home the day they removed the shares.
After Athena's death, Coutsodontis submitted the 1999 Will for probate in the Greek courts. Probate was allegedly granted on March 28, 2003. In January 2005, Anna Peters commenced an action in Greece against Coutsodontis seeking, among other things, a declaration that the August 2000 and September 2000 "holographic wills" were null and void because of fraud. Thus, Anna Peters claims that the Greek court must activate testamentary succession under the 1999 Will to distribute the remaining 300 shares of Sea Trade. In February 2005, Coutsodontis commenced this action for (1) a declaration that he is a lawful shareholder of Sea Trade, based on the inter vivos gift Athena gave him in the August 2000 and September 2000 Writings; (2) an accounting of Sea Trade; (3) corporate waste; and (4) the appointment of a receiver for Sea Trade.
After the within motion was submitted, Anna Peters withdrew the Greek action. She then commenced a new action. Counsel disagree as to the import of the new action, and whether it should have any effect on the within action. In any event, this motion is decided based on New York law.
To the extent that the parties seek a declaration of the validity of the 2000 writings, etc., under Greek law, they are better left to the Greek courts. This is especially so since the Greek courts have previously apparently ruled on the validity of the 1999 Will, and an action is pending there relating to the 2000 writings.
Analysis
Defendants argue that Coutsodontis' complaint fails to state a claim that he is a shareholder of Sea Trade, and is entitled to shareholder benefits, because the August 2000 and September 2000 Writings are holographic wills, and not evidence of an inter vivos gift.
"While it is true that allegations in a complaint are to be taken as true when considered on a motion to dismiss pursuant to CPLR 3211, allegations consisting of bare legal conclusions, as well as factual claims inherently incredible or flatly contradicted by documentary evidence are not entitled to such consideration.'" Tal v. Malekan, 305 AD2d 281 (1st Dept 2003) (citation omitted). Here, Coutsodontis' allegations are contradicted by the documentary evidence presented, mainly the August 2000 and September 2000 Writings.
Under New York law, in order "to make a valid inter vivos gift there must exist the intent on the part of the donor to make a present transfer; delivery of the gift, either actual or constructive to the donee; and acceptance by the donee." Gruen v. Gruen, 68 NY2d 48, 53 (1986). "An inter vivos gift requires that the donor intend to make an irrevocable present transfer of ownership; if the intention is to make a testamentary disposition effective only after death, the gift is invalid unless made by will." Id. The August 2000 and September 2000 Writings clearly show Athena's intention was to make a testamentary disposition to Coutsodontis and Anna Peters, effective only after her death. The Writings do not show an intent to make a lifetime gift of a remainder interest to her siblings, while Athena retained a life estate. This is evidenced by the fact that each of the writings indicates that the transfer was to happen "after my death." See August 2000 and September 2000 Writings, Coutsodontis' Affidavit, Exhibits C and D.
Coutsodontis also claims that there is evidence of an inter vivos gift, sufficient to overcome a motion to dismiss, because constructive or symbolic delivery of the Sea Trade shares was effectuated when Athena gave Coutsodontis and Anna Peters keys to the safe containing the shares. Coutsodontis cites In re Carroll ( 100 AD2d 337 [2nd Dept 1984]), which holds that the delivery requirement for an inter vivos gift of registered stock certificates may be fulfilled by symbolic delivery. Assuming Coutsodontis' claim is true, delivery was still not effectuated by the delivery of the key. In re Carroll is distinguishable, because the Sea Trade shares are bearer shares. The Second Department distinguishes bearer securities stating that "distinguishable, of course, are cases involving bearer securities because, with such instruments, unless there has been a physical delivery, the donor retains title and the right to revoke." In re Carroll, 100 AD2d 337, 341 (2nd Dept 1984); See also NY UCC 8-301 . Thus, physical delivery of the Sea Trade shares was required under New York law.
Coutsodontis also argues that the motion to dismiss must be denied, as he is the presumed owner of 250 Sea Trade shares, because he currently possesses them. This argument is irrelevant, because Coutsodontis took the shares after Athena's death. Since there was no inter vivos gift, those shares were part of Athena's estate, and were wrongfully removed.
The remaining arguments of both parties were considered by the court, and need not be addressed in light of the foregoing decision.
Accordingly, it is
ORDERED that the motion to dismiss is granted and the complaint is dismissed with costs and disbursements to defendants as taxed by the Clerk of the Court; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.