Danzy v. Nia Abstract Corporation
| Decision Date | 15 May 2007 |
| Docket Number | 2006-04000.,2006-06313. |
| Citation | 2007 NY Slip Op 04253,835 N.Y.S.2d 738,40 A.D.3d 804 |
| Parties | CARYN M. DANZY, Appellant, v. NIA ABSTRACT CORPORATION et al., Respondents, et al., Defendants. |
| Court | New York Supreme Court — Appellate Division |
Ordered that one bill of costs is awarded to the plaintiff third-party defendant Caryn M. Danzy.
Business Corporation Law § 626 (c) provides that the plaintiff in a shareholders' derivative action "shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board [of directors] or the reason for not making such effort." This demand requirement "is futile, and excused, when the directors are incapable of making an impartial decision as to whether to bring suit" on the specific claim (Bansbach v Zinn, 1 NY3d 1, 9 [2003]; see Marx v Akers, 88 NY2d 189, 200-201 [1996]).
In the matter at bar, the Supreme Court erred in failing to determine in the first instance whether the third-party complaint set forth with particularity that a demand would be futile (see Marx v Akers, supra at 198; Griffith v Medical Quadrangle, 5 AD3d 151, 152 [2004]), particularly since the defendant thi...
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