Opinion
12857 Index No. 155267/18 Case No. 2019-5346
01-12-2021
Mark SCHER etc., Plaintiff–Appellant, v. TURIN HOUSING DEVELOPMENT FUND COMPANY, INC., et al., Defendants–Respondents.
Bierman & Associates, New York (Mark H. Bierman of counsel), for appellant. Catafago Fini LLP, New York (Tom M. Fini of counsel), for respondents.
Bierman & Associates, New York (Mark H. Bierman of counsel), for appellant.
Catafago Fini LLP, New York (Tom M. Fini of counsel), for respondents.
Acosta, P.J., Webber, Gonza´lez,Scarpulla, JJ.
Order, Supreme Court, New York County (Louis L. Nock, J.) entered June 12, 2019, which granted defendants' motion for summary judgment dismissing the amended complaint and denied plaintiff's motion for class certification, unanimously affirmed, with costs.
The motion court properly determined that the claims in the amended complaint were derivative rather than direct, and plaintiff had failed to make a prelitigation demand or allege futility, warranting dismissal. Although plaintiff urges that his claims are direct because he will suffer from diminution in the value of the proprietary shares appurtenant to his apartment, claims premised on diminution of value of shares are derivative ( Yudell v. Gilbert , 99 A.D.3d 108, 949 N.Y.S.2d 380 [1st Dept. 2012] ). Notably, plaintiff fails to identify any damages flowing to him distinct from that of the corporation as a whole ( Vaughan v. Standard Gen. L.P. , 154 A.D.3d 581, 582–583, 63 N.Y.S.3d 44 [1st Dept. 2017] ).
Because his claims are derivative, plaintiff was required to describe in the amended complaint his demand to the board to take action, or explain why such demand was futile ( Goldstein v. Bass , 138 A.D.3d 556, 556–557, 31 N.Y.S.3d 15 [1st Dept. 2016], citing Marx v. Akers, 88 N.Y.2d 189, 193, 644 N.Y.S.2d 121, 666 N.E.2d 1034 [1996] ). Although plaintiff asserted that the board sought to enter into a new regulatory agreement with HPD to keep the purchase prices for apartments in the building at the regulated rate because certain board members had placed themselves on the wait lists to purchase other apartments in the building, plaintiff failed to state particularized allegations to show how placement on such wait lists, which contained both board members and non-board members, favored defendants or influenced their decision to present the new regulatory agreement to the shareholders for a vote ( Vaughan , 154 A.D.3d at 583, 63 N.Y.S.3d 44 ). We therefore find that leave to replead would not have cured the deficiencies in the amended complaint (see Abrams v. Donati, 66 N.Y.2d 951, 954, 498 N.Y.S.2d 782, 489 N.E.2d 751 [1985] ).
Because defendants' motion for summary judgment was properly granted, we need not reach the question of whether plaintiff's motion for class certification was properly denied ( Maddicks v. Big City Props., LLC, 34 N.Y.3d 116, 123, 114 N.Y.S.3d 1, 137 N.E.3d 456 [2019] ).
We have considered plaintiff's remaining contentions and find them unavailing.