Opinion
2012-12-20
Dale SITLER, as Executor of the Estate of Daniel C. Sitler, Deceased, Appellant, v. SARATOGA ASSOCIATES LANDSCAPE ARCHITECTS, ARCHITECTS, ENGINEERS, AND PLANNERS, P.C., Respondent.
Pentkowski, Pastore & Freestone, Clifton Park (David H. Pentkowski of counsel), for appellant. Lemery Greisler, LLC, Albany (Paul A. Levine of counsel), for respondent.
Pentkowski, Pastore & Freestone, Clifton Park (David H. Pentkowski of counsel), for appellant. Lemery Greisler, LLC, Albany (Paul A. Levine of counsel), for respondent.
Before: PETERS, P.J., SPAIN, KAVANAGH, McCARTHY and EGAN JR., JJ.
KAVANAGH, J.
Appeal from an order and judgment of the Surrogate's Court of Saratoga County (Seibert Jr., S.), entered October 18, 2011, upon a decision of the court in favor of defendant.
At the time of his death, decedent owned 1,679 shares of defendant. A shareholder's agreement then in effect provided that when a shareholder died, defendant would purchase his or her shares and pay the adjusted book value for each share of stock. After decedent died on January 11, 2007, defendant paid his estate $114,054.47 for his stock—or $67.93 per share. Plaintiff, as executor of decedent's estate, commenced this action in Supreme Court claiming that defendant did not properly calculate the adjusted book value to be paid for decedent's shares, and argued that the adjusted book value used in making this purchase should have been $175 per share. After this action was transferred from Supreme Court to Surrogate's Court, a trial was conducted and Surrogate's Court found that defendant had correctly established the value of decedent's shares in accordance with the shareholder's agreement, and dismissed the complaint. Plaintiff now appeals.
“ ‘Construction of an unambiguous contract is a matter of law, and the intention of the parties may be gathered from the four corners of the instrument and should be enforced according to its terms' ” (Matter of Stevens v. Allied Bldrs., Inc., 74 A.D.3d 1757, 1758, 905 N.Y.S.2d 388 [2010], quoting Beal Sav. Bank v. Sommer, 8 N.Y.3d 318, 324, 834 N.Y.S.2d 44, 865 N.E.2d 1210 [2007];see Matter of Matco–Norca, Inc., 22 A.D.3d 495, 496, 802 N.Y.S.2d 707 [2005];Stern v. Birnbaum, 206 A.D.2d 514, 515, 615 N.Y.S.2d 62 [1994];see also Rehberger v. Richtberg, 295 A.D.2d 490, 491, 744 N.Y.S.2d 477 [2002];Walker & Zanger [ W. Coast] v. Zanger, 241 A.D.2d 345, 345, 660 N.Y.S.2d 975 [1997] ). Here, the shareholder's agreement provides that “the methods of valuation set forth herein [are] the sole methods that will be used to value [the] [s]hares for all purposes.” Pursuant to the agreement, defendant was to purchase decedent's shares at a purchase price “computed by determining the [a]djusted [b]ook [v]alue of the [defendant] ... as of the date of death.” “ ‘Adjusted [b]ook [v]alue of [defendant]’ shall mean the amount computed by [defendant's] business office in accordance with [defendant's] regular accounting practices and approved by the Board of Directors.”
Prior to decedent's death, it had been defendant's practice to calculate the adjusted book value of its stock without accounting for accrued taxes as a liability, thus artificially inflating the value of its stock. In 2006, the Adirondack Trust Company notified defendant that it would not renew defendant's line of credit unless the firm's financial statements were prepared and certified by an independent certified public accountant. As a result, defendant and its board of directors approved a procedure whereby the firm's financial statements would henceforth be prepared using generally accepted accounting principles and include deferred income tax as a liability on the balance sheet. Thus, the calculation of $67.93 as the adjusted book value of a share of stock as of December 31, 2006 fully comported with this accounting practice, and the payment made for decedent's shares complied with the terms of the shareholder's agreement. Therefore, Surrogate's Court properly dismissed plaintiff's complaint and its order and judgment must be affirmed.
Prior to decedent's death and before accrued tax liabilities were included in this calculation, the adjusted book value for each share of stock for the quarter ending in June 2006 was set at $146.23 and for the quarter ending in September 2006 was $153.26.
Decedent, as president of defendant, was involved in the negotiations with the Adirondack Trust Company regarding the line of credit.
It is agreed that prior to December 31, 2006, the regular accounting practices employed by defendant only included current liabilities and not deferred income taxes in calculating the adjusted book value of a share of stock.
Plaintiff's remaining claims, to the extent not specifically addressed herein, have been considered and found to be without merit.
ORDERED that the order and judgment is affirmed, with costs.