Berger v. Friedman

• Citation: 151 A.D.3d 678,54 N.Y.S.3d 671
• Parties: Meryl R. BERGER, suing individually and derivatively on behalf of nominal defendant I.G. Federal Electrical Supply Corporation, respondent, v. Ira M. FRIEDMAN, et al., defendants-appellants, I.G. Federal Electrical Supply Corporation, nominal defendant-appellant.
• Decision Date: 07 June 2017
• Court: New York Supreme Court Appellate Division

151 A.D.3d 678

54 N.Y.S.3d 671

Meryl R. BERGER, suing individually and derivatively on behalf of nominal defendant I.G. Federal Electrical Supply Corporation, respondent,

v. Ira M. FRIEDMAN, et al., defendants-appellants,I.G. Federal Electrical Supply Corporation, nominal defendant-appellant.

Supreme Court, Appellate Division, Second Department, New York.

June 7, 2017.

Meltzer, Lippe, Goldstein & Breitstone, LLP, Mineola, NY (Thomas J. McGowan and Loretta Gastwirth ), for defendants-appellants and nominal defendant-appellant (one brief filed).

Farrell Fritz, P.C., Uniondale, NY (James Wicks and Aaron E. Zerykier of counsel), for respondent.

WILLIAM F. MASTRO, J.P., JOHN M. LEVENTHAL, LEONARD B. AUSTIN, and SHERI S. ROMAN, JJ.

Appeal from an order of the Supreme Court, Queens County (Duane A. Hart, J.), entered November 4, 2015. The order denied the defendant's motion pursuant to CPLR 3211(a) to dismiss the complaint.

ORDERED that the appeal by the nominal defendant is dismissed, as that party is not aggrieved by the order appealed from (see CPLR 5511 ); and it is further,

ORDERED that the order is affirmed on the appeal by the defendants; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

The nominal defendant, I.G. Federal Electrical Supply Corporation (hereinafter the corporation), is a third-generation family-owned business engaged in the wholesale distribution of electrical parts. The corporation has always been solely owned and principally managed by members of the plaintiff's family. The two named individual defendants, Ira M. Friedman and Jodi B. Ehren (hereinafter together the individual defendants), are the plaintiff's siblings. The three siblings entered into a shareholder agreement in 1993, providing that each of the siblings had an equal third of the shares of the corporation. As is relevant to this appeal, the shareholder agreement provided for specific situations in which the shareholders would be required to sell their shares back to the corporation and the corporation would be obligated to purchase those shares.

According to the complaint, the individual defendants, by their actions, attempted to trigger the forced sale of the plaintiff's shares by firing her husband from his position with the corporation, and refusing to permit her to return to the corporation as a full-time employee, two actions the plaintiff contends were improper and violated the shareholder agreement. The plaintiff commenced this action seeking common-law dissolution of the corporation, a declaration that she was not obligated to sell her shares and,...