MacKay v. Pierce

Decision Date29 January 1982
Citation446 N.Y.S.2d 403,86 A.D.2d 655
PartiesDouglas S. MacKAY, etc., Respondent, v. Charles R. PIERCE et al., Appellants.
CourtNew York Supreme Court — Appellate Division

Cadwalader, Wickersham & Taft, New York City (Richard J. Wiener, New York City, of counsel), for appellants.

Lowey, Dannenberg & Knapp, P. C., New York City (Henry A. Brachtl, Richard B. Dannenberg and Neil L. Selinger, New York City, of counsel), for respondent.



In a shareholder's derivative suit, defendants appeal from so much of an order of the Supreme Court, Nassau County, entered October 16, 1981, as (1) denied the branch of their motion which sought to dismiss the amended complaint for failure to state a cause of action and (2) granted the branch of plaintiff's cross motion which sought to disqualify defendants' attorneys from representing the corporate defendant.

Order affirmed insofar as appealed from, with $50 costs and disbursements.

On a motion to dismiss for failure to state a cause of action, the facts alleged in the complaint must be assumed to be true and the complaint liberally construed in plaintiff's favor (Barr v. Wackman, 36 N.Y.2d 371, 368 N.Y.S.2d 497, 329 N.E.2d 180). The complaint charges, inter alia, that the individual defendants, as officers and directors of the corporate defendant, Long Island Lighting Company (LILCO), were negligent and breached their fiduciary duties in approving certain transactions between LILCO and Bokum Resources Corporation, in connection with agreements under which Bokum was to supply LILCO with uranium concentrates. The complaint charges waste of corporate assets in an amount in excess of $77 million.

Defendants assert that plaintiff's demand upon the Board of Directors of LILCO, pursuant to section 626 (subd. ) of the Business Corporation Law, was unsatisfactory in that the board was not afforded a reasonable time within which to evaluate the charges and consider what course to take. In response to the demand, defendant Pierce, on behalf of the Board of Directors, informed plaintiff that the matter would be taken up at the next regular meeting of the board, two weeks hence. Plaintiff rejected this response as inadequate, and immediately commenced suit.

Special Term found that plaintiff had satisfactorily complied with the requirements of the aforesaid statute.

While under certain circumstances such a precipitate...

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13 cases
  • Schmidt v. Magnetic Head Corp.
    • United States
    • New York Supreme Court — Appellate Division
    • April 30, 1984
    ...charges against Gleason and that by not doing so, they did not have the corporations' interests at heart (see MacKay v. Pierce, 86 A.D.2d 655, 446 N.Y.S.2d 403; see, also, Lewis v. Shaffer Co., 218 F.Supp. 238; Messing v. FDI, Inc., 439 F.Supp. 776, We find that Special Term also erred in n......
  • Marx v. Akers
    • United States
    • New York Court of Appeals Court of Appeals
    • April 25, 1996
    ...(see, Miller v. Schreyer, 200 A.D.2d 492, 606 N.Y.S.2d 642; Curreri v. Verni, 156 A.D.2d 420, 548 N.Y.S.2d 540; MacKay v. Pierce, 86 A.D.2d 655, 446 N.Y.S.2d 403; Joseph v. Amrep Corp., 59 A.D.2d 841, 399 N.Y.S.2d 3; see also, Allison Publs. v. Mutual Benefit Life Ins. Co., 197 A.D.2d 463, ......
  • Dukas v. Davis Aircraft Products Co., Inc.
    • United States
    • New York Supreme Court
    • September 30, 1985
    ...not be represented by the same law firm as the corporation. (E.g., Haenel v. Epstein, 88 A.D.2d 652, 450 N.Y.S.2d 536; Mackay v. Pierce, 86 A.D.2d 655, 446 N.Y.S.2d 403; Nelson v. Nationwide Measuring Service, Inc., 64 A.D.2d 606, 406 N.Y.S.2d As observed by the Appellate Division, Second D......
  • Rafiy v. Javaheri
    • United States
    • New York Supreme Court
    • June 22, 2011
    ...N.Y.S.2d 175, 801 N.E.2d 395 [2003], reargument denied 1 N.Y.3d 593, 776 N.Y.S.2d 224, 808 N.E.2d 360 [2004]; MacKay v. Pierce, 86 A.D.2d 655, 446 N.Y.S.2d 403 [2nd Dept.1982] ). In this case, the evidence is clear and uncontroverted. In his affidavit, plaintiff explicitly details how this ......
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