Summary
affirming dismissal of derivative claim where "the complaint provide[d] no indication as to who made the demands, when they were made, which Board members they were made to, the content of the demands or why the Board refused to take action"
Summary of this case from Musey v. 425 E. 86 Apartments Corp.Opinion
May 10, 2001.
Order, Supreme Court, New York County (Alice Schlesinger, J.), entered February 18, 1997, which granted defendant Edward W. Mallen's motion to dismiss and denied plaintiffs' cross motion for leave to amend the complaint, unanimously affirmed, without costs.
Wolodymyr M. Starosolsky, for plaintiffs-appellants.
Andres J. Valdespino, Joseph Z. Epstein, for defendants-respondents.
Before: Nardelli, J.P., Mazzarelli, Ellerin, Saxe, Buckley, JJ.
This derivative action, seeking to nullify the sale of the headquarters of the Polish Democratic Club of the Greater New York Inc., was properly dismissed since the allegations in plaintiffs' amended verified complaint failed to "set forth with particularity the efforts of . . . plaintiffs to secure the initiation of such action by the board [or] the reason for not making such effort" (Not-For-Profit Corporation Law § 623[c]). While plaintiffs allege that unsuccessful demands were made on the Club's Board of Directors to initiate legal action, the complaint provides no indication as to who made the demands, when they were made, which Board members they were made to, the content of the demands or why the Board refused to take action. Although plaintiffs allege wrongdoing on the part of defendant Mallen, he was only one member of the Board. There is no allegation of wrongdoing against the other Board members, who are not named as defendants.
Nor did the IAS court err in denying plaintiffs' motion to amend the complaint to allege the contradictory claim that no demand was made upon the Board because a demand would have been futile (see, Bogoni v. Friedlander, 197 A.D.2d 281, 292). Plaintiffs' conclusory allegations that Mallen was not a director and that the Board consisted of only two members and, thus, was not functionally constituted, was plainly without merit in light of documentary evidence in the record (see, Sharon Ava Co. v. Olympic Towers Assocs., 259 A.D.2d 315).
We have considered plaintiffs' remaining arguments to the extent that they are preserved and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.