Shapolsky v. Shapolsky

• Decision Date: 20 December 1966
• Citation: 279 N.Y.S.2d 747,53 Misc.2d 830
• Parties: Sam SHAPOLSKY, Plaintiff, v. Harry SHAPOLSKY et al., Defendants.
• Court: New York Supreme Court

Page 747

279 N.Y.S.2d 747

53 Misc.2d 830

Sam SHAPOLSKY, Plaintiff, v. Harry SHAPOLSKY et al., Defendants.

Supreme Court, Special Term, New York County, Part I.

Dec. 20, 1966.

Goldstein & Goldstein, New York City, for plaintiff.

Jay Leo Rothschild, New York City, for defendants.

THOMAS C. CHIMERA, Justice.

This is a motion by defendants pursuant to CPLR 3211(a), 5 and 7 and (c) to dismiss each of the 24 causes of action of this third amended complaint on the grounds that each fails to state a cause of action, among other reasons, (1) that the plaintiff has no individual right which he may assert but at most a derivative stockholder's right in behalf of the several corporation defendants; (2) that the applicable statute of limitations has run against each cause of action; and (3) that plaintiff's allegations asserting an alleged partnership agreement with defendant Harry Shapolsky (Harry), allegedly made as long ago as 1939, pursuant to which he contributed funds to each of the defendant corporations, are without substance and without factual support and that accordingly, as a matter of law, there is no issue to be tried.

This third amended complaint contains 24 causes of action. These causes of action, with the exception of the 13th cause of action, are substantially similar in form and seek recovery by plaintiff of shares of stock and certificates evidencing the same, of the defendant corporations (with the exception of the 299 Third Corp., named in the 13th cause of action). The 13th cause of action is for money only and is asserted against the individual defendant Harry Shapolsky alone. It recites a series of interlocked transactions in continuous sequence from 1939 to and including 1960. Plaintiff alleges that during that period he and the individual defendants (brothers in a closely knit family group) participated in various business transactions involving substantial sums of money and that a confidential relationship existed between plaintiff and defendant Harry. In August, 1939 plaintiff and defendant Harry are alleged to have entered into an oral agreement whereby they

'were to become equal partners in the future purchase, development and sale of improved and unimproved real estate for speculation, each to furnish equal capital and to share equally in the profits and losses resulting from such dealings in real estate, and that such partnership business should be conducted by taking title to such real estate in the name of corporations to be formed, the partners plaintiff and the defendant Harry acquiring the shares of stock of such corporations'. (Para. 3)

That pursuant to said partnership agreement, between August 1939 and July 1960, plaintiff and defendant Harry 'purchased, developed and sold upwards of 100 parcels of real property in the City of New York through corporations which they caused to be formed and which are named as defendants herein (Para. 4). That in said period:

'in connection with the financing of many of such parcels of real property, the defendant Harry duly executed written instruments as an officer and stockholder of the defendant corporations, authorizing mortgage financing and certifying that plaintiff and the defendant Harry were equal stockholders and officers in the corporations above named as defendants herein.' (Para. 5)

That in said period, i.e., 'between August 1939 and in or about July 1960, plaintiff, having full confidence, faith and trust in the defendant Harry, did not concern himself with the details of the organization of any of the defendant corporations or with the stock and transfer ledgers of said corporations, or the manner in which the stock certificates of said corporations were issued.' (Para. 13) Plaintiff further alleges that on or about July 10, 1960, Harry refused to grant plaintiff's demand 'to furnish plaintiff' with 'stock certificates, contending that plaintiff had no interest in any of the defendant corporations.' (Para. 14) That said stock certificates were 'issued or transferred, without consideration, in the names of the defendants Harry or Martin Shapolsky, or their designee.' (Para. 15)

Plaintiff states that he is not attempting by his third amended complaint to control the internal management or affairs of the respective defendant corporations on the theory of a partnership or joint venture agreement. Plaintiff does not seek recovery for any damages that are common to all of the stockholders of defendant corporations or for any injury to the corporations themselves. Nor does he seek accounting of the corporations' affairs on any theory, joint venture, partnership, or otherwise. He contends that the right to recover his individual stock certificates is his individual right predicated upon facts applicable solely to plaintiff and not common to any other stockholders.

Defendant Harry denies any association, partnership, joint venture or other proprietary relationship between plaintiff and himself; denies that plaintiff ever contributed any funds whatsoever to any of the said corporations or their ventures and insists that each and all of said corporations were his own ventures, financed in all respects by him alone or in collaboration with individuals (other than plaintiff). Harry further avers that if plaintiff acted as an officer and director of any said corporations, it was only as Harry's salaried employee-designee; that none of the corporate defendants ever issued any stock to plaintiff; none of them set up any capital accounts for him on their books; none of them recognized any status in him as stockholder; that plaintiff as employee and only as such, signed checks and had access to the corporate minute books, ledgers, stock certificate books, and books of account.

Obviously, on this posture of the litigation, Harry can do no more than rest on his denials.

Plaintiff submits a number of written documents, apparently signed and acknowledged by...