Graczykowski v. Ramppen
| Decision Date | 24 May 1984 |
| Citation | 101 A.D.2d 978,477 N.Y.S.2d 454 |
| Parties | Julian GRACZYKOWSKI et al., Respondents, v. Frank E. RAMPPEN, Appellant, et al., Defendant. |
| Court | New York Supreme Court — Appellate Division |
Hinman, Howard & Kattell, Binghamton (James M. Hayes, Binghamton, of counsel), for appellant.
James N. Cahill, Endicott (Thomas F. Cannavino, Endicott, of counsel), for respondents.
Before MAHONEY, P.J., and KANE, WEISS, MIKOLL and YESAWICH, JJ.
Appeal from that part of an order of the Supreme Court at Special Term, entered March 31, 1983 in Broome County, which held that plaintiff Julian Graczykowski had standing to sue in his capacity as a shareholder and required defendant Frank E. Ramppen to post a bond of $150,000 pending the outcome of plaintiffs' shareholder's derivative suit.
In 1978, plaintiff Julian Graczykowski and defendant Frank E. Ramppen entered into a business venture known as Fadco-Endicott. This business venture was engaged in the marketing of design and drafting services. In October, 1978, the business venture was incorporated under Delaware Law as Fadco-Endicott, Inc. and became authorized to do business in New York State pursuant to section 1304 of the Business Corporation Law. The certificate of incorporation listed Graczykowski and Ramppen as managing stockholders, as permitted under section 351 of the Delaware General Corporation Law. No stock certificates were ever issued and there is no evidence of any subscriptions of stock in the record. Nevertheless, Graczykowski contends that he is a 50% shareholder in Fadco-Endicott, Inc. Additionally, Graczykowski maintains that he and Ramppen agreed that they would share the administrative duties and profits of the corporation equally, and that Ramppen would be president and secretary of the corporation and that Graczykowski would be vice-president. Ramppen disagrees with Graczykowski's description of the corporate structure by asserting that:
Although a certificate of incorporation was issued, the business was conducted with no corporate formalities. The corporation never issued any stock, no directors or officers were elected and no capital contributions were made to the business. Graczykowski and Ramppen agreed to share profits in proportion to the services rendered by each of them in the business.
According to Graczykowski, he and Ramppen agreed in May of 1979 to form a second corporation to do business in California. Thereafter, Fadco-West, Inc. was started in California. By August of 1979, Graczykowski was in California running Fadco-West. It is asserted by Graczykowski that Ramppen had agreed that Graczykowski would retain his 50% interest in Fadco-Endicott. Contrastingly, Ramppen claims that Graczykowski voluntarily withdrew from Fadco-Endicott against Ramppen's objections and that Ramppen later agreed to help Fadco-West only when promised a share of the profits. Furthermore, Ramppen claims that only he produced work for Fadco-Endicott and that Graczykowski has played no part in the operation of the corporation since his departure to California.
In May of 1982, Graczykowski returned to the east coast and on May 17, 1982 made a demand to inspect the corporate books and records of Fadco-Endicott. Initially, it was agreed that Graczykowski could do so, but on May 18, 1982, this permission was revoked. At this time, according to Graczykowski, it was learned that a new corporation, Fadco-East, Inc., had filed a certificate of incorporation with the State of New York on February 22, 1982. Following Graczykowski's initial attempt to inspect the books and records of Fadco-Endicott, Graczykowski served a written demand for inspection on Ramppen. This demand was refused in a letter by counsel for Fadco-Endicott dated May 28, 1982.
On June 18, 1982, Graczykowski and Fadco-Endicott, Inc., as plaintiffs, served a verified complaint and notice of motion on defendants Ramppen and Fadco-East. The complaint is a shareholder's derivative action in which Graczykowski alleges that defendants were responsible for a conspiracy to transfer the assets of Fadco-Endicott to...
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Adkins v. Lipner, Gordon & Co., 2004 NY Slip Op 50878(U) (NY 8/6/2004)
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