938 F.2d 20 (2nd Cir. 1991), 1560, Stroup v. GCS Service, Inc.

Docket Nº:1560, Docket 90-7902.
Citation:938 F.2d 20
Party Name:Alice STROUP, Plaintiff-Appellant, v. GCS SERVICE, INC.; Tyfam Corporation; Parker R. Tyler; Gloria B. Tyler, Defendants-Appellees.
Case Date:June 28, 1991
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 20

938 F.2d 20 (2nd Cir. 1991)

Alice STROUP, Plaintiff-Appellant,

v.

GCS SERVICE, INC.; Tyfam Corporation; Parker R. Tyler;

Gloria B. Tyler, Defendants-Appellees.

No. 1560, Docket 90-7902.

United States Court of Appeals, Second Circuit

June 28, 1991

Argued May 22, 1991.

Leonard J. Colamarino (Colamarino & Nagashima, New York City, of counsel), for plaintiff-appellant.

Page 21

Owen D. Kurtin (Susan S. Egan, Edwards & Angell, Richard G. Menaker, Menaker & Herrmann, New York City, of counsel), for defendants-appellees.

Before KEARSE, MAHONEY, and SNEED, [*] Circuit Judges.

SNEED, Circuit Judge:

Plaintiff, Alice Stroup, appeals from the entry of summary judgment dismissing her complaint in the United States District Court for the Southern District of New York. Stroup contends that the trial judge wrongly concluded that there were no triable issues of fact. We agree with the plaintiff and vacate the district judge's summary judgment order.

I.

FACTS AND PROCEEDINGS BELOW

Stroup is the daughter of defendants Parker and Gloria Tyler. Both the Tylers are officers and directors of Tyfam Corporation (Tyfam), a holding company for GCS Service, Inc. (GCS). The Tylers are also directors and Officers of GCS. Tyfam stock is apparently convertible into shares of GCS at a ratio of approximately one to ten.

In 1981, Stroup became the owner of 3060 shares of Tyfam stock. These shares could be converted into approximately 30,000 GCS shares. In 1983, in an effort to help Stroup and her husband in their attempt to purchase an apartment in Paris, the Tylers suggested that Stroup redeem her Tyfam stock for $15,000. While suggesting that the stock was undervalued at that price, both the Tylers said they would attempt to replace the 3060 Tyfam shares with 30,000 GCS shares over a period of years.

Stroup accepted her parents' offer, tendered the shares to Tyfam, and received 30,000 GCS shares in return. GCS then redeemed the shares and paid Stroup $15,000. Stroup never received any of the promised replacement GCS shares from her parents.

In 1989, Stroup filed a complaint in federal district court against Tyfam, GCS, and her parents alleging violations of rule 10b-5 and the Securities Exchange Act of 1934 (Act) and various pendent state claims for breach of contract, common law fraud, and breach of fiduciary duty. At her deposition...

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