Pawling Lake Prop. Owners Ass'n, Inc. v. Greiner

• Decision Date: 06 April 2010
• Parties: PAWLING LAKE PROPERTY OWNERS ASSOCIATION, INC., etc., appellant, v. William GREINER, etc., et al., respondents.
• Court: New York Supreme Court — Appellate Division

897 N.Y.S.2d 729
72 A.D.3d 665

PAWLING LAKE PROPERTY OWNERS ASSOCIATION, INC., etc., appellant,
v.
William GREINER, etc., et al., respondents.

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

April 6, 2010.

897 N.Y.S.2d 730

Philip Douglas Marin, Carmel, N.Y., for appellant.

Miranda, Sambursky, Slone, Sklarin Verveniotis, LLP, Elmsford, N.Y. (Richard S. Sklarin of counsel), for respondents.

WILLIAM F. MASTRO, J.P., PETER B. SKELOS, RANDALL T. ENG, and SHERI S. ROMAN, JJ.

72 A.D.3d 665

In an action, inter alia, pursuant to

72 A.D.3d 666

Not-For-Profit Corporation Law § 720 to compel the defendants to account for certain alleged misconduct, the plaintiffs appeal from an order of the Supreme Court, Dutchess County (Sproat, J.), dated October 10, 2008, which granted the defendants' motion for summary judgment dismissing the complaint on the ground of res judicata.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the motion which was for summary judgment dismissing the second cause of action and substituting therefor a provision granting that

897 N.Y.S.2d 731

branch of the motion only to the extent that it seeks to recover damages allegedly incurred by the plaintiff, Pawling Lake Property Owners Association, Inc., on or before September 25, 2005, and otherwise denying that branch of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

In 2000 a members' derivative action (hereinafter the 2000 action) was commenced pursuant to N-PCL 623 and 720(b)(3), on behalf of the plaintiff Pawling Lake Property Owners Association, Inc. (hereinafter the corporation), by members of the corporation against the corporation's directors and officers. The amended complaint in that action alleged, among other things, that the corporation sustained financial loss as a result of the improper transfer of certain real property, and because membership dues had been improperly assessed.

The parties to the 2000 action agreed to a stipulation of settlement in open court, pursuant to which the defendants in that action undertook to pay the sum of $90,000 to the plaintiffs in that action "in full settlement of all claims against the individual defendants arising in and out of the lawsuit." In return, the plaintiffs in the 2000 action agreed to "allow the case to be dismissed with prejudice," and promised "to no longer pursue any of the causes of action in any other lawsuits that [were] spelled out in the amend[ed] complaint." The Supreme Court "so-ordered" the stipulation on September 25, 2005.

The instant action was commenced, on behalf of the corporation, by Debra Colabatistto (hereinafter the trustee), in her capacity as one of the corporation's directors or officers ( see N-PCL 720[b][1]; see also N-PCL 102[a][6] ). The complaint asserted two causes of action against certain other named officers and directors of the corporation. The trustee alleged that the corporation sustained financial loss due to the improper transfer of the same real property at issue in the 2000 action. The trustee also alleged that the corporation incurred damages every year because the membership dues were improperly assessed.

The defendants moved for summary judgment dismissing the

72 A.D.3d 667

complaint on the ground that the causes of action asserted therein were barred by the doctrine of res judicata. The Supreme Court granted the motion. We modify.

"Under res judicata, or claim preclusion, a valid final judgment bars future actions between the...