Court Opinion

ID: 9965018
Source: CourtListenerOpinion
Date Created: 2024-05-01 15:10:03.892537+00
Date Added: 2024-06-11T08:25:54.628145
License: Public Domain

Jackson v Wang
               2024 NY Slip Op 31481(U)
                     April 26, 2024
           Supreme Court, New York County
        Docket Number: Index No. 100585/2022
                Judge: Arthur F. Engoron
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                 INDEX NO. 100585/2022
  NYSCEF DOC. NO. 184                                                                     RECEIVED NYSCEF: 04/26/2024

                             SUPREME COURT OF THE STATE OF NEW YORK
                                       NEW YORK COUNTY
            PRESENT:       HON. ARTHUR F. ENGORON                             PART                            37
                                                                    Justice
            -------------------X                                              INDEX NO.         100585/2022
             TAMARA JACKSON, EVA ZBONAKOVA, TAMARA
                                                                              MOTION DATE        01/19/2024
             JACKSON, EVA ZBONAKOVA, LATOYA JACKSON,
             VERONICA JOSEPH, NEIL POWELL, SHIRLEY WRIGHT,
                                                                              MOTION SEQ. NO.        010
                                                 Plaintiff,

                                          - V-

             EVELYN WANG, KAITLIN STRICKLAND, MADISON
             AVENUE HOUSING DEVELOPMENT FUND
             CORPORATION, GREG COHEN, STUART HALPER,                            DECISION + ORDER ON
             ELIZABETH RIVERA, IMPACT REAL ESTATE                                     MOTION
             MANAGEMENT, INC., VIOLET BUTLER, APOLLONIA
             HOLZER, ZAIRA ZAFRA, KRYSTOF BOBER, REMI
             COUSIN, TRICIA DAWSON, FRIEDERIKE WILLIAMS,

                                                 Defendants.
            -------------------.X

            The following e-filed documents, listed by NYSCEF document number (Motion 010) 165, 166, 167, 168,
            169,170,179,180,181,182,183
            were read on this motion to                                         DISMISS

            Upon the foregoing documents, and for the reasons stated hereinbelow, defendants' motion,
            pursuant to CPLR 321 l(a)(l) and (7), to dismiss is granted.

            Background
            In December 2022, pro se plaintiffs commenced this action against defendants, including
            Madison Avenue Housing Development Fund Corporation ("MAHDFC"), alleging, inter alia,
            denial of access to voting records, election fraud, and breach of fiduciary duty.

            Much motion practice, the reader's familiarity with which the Court will presume, ensued,
            eventually leading to the instant Fourth Amended Complaint, asserting four remaining causes of
            action: (2) derivative breach of fiduciary duty to MAHDFC; (3) individual breach of fiduciary
            duty; (4) breach of contract/breach of Article X, Section 5 of the MAHDFC by-laws; and (5)
            violation ofNon-for-Profit Corporation Law§ 621. NYSCEF Doc. No. 167. Plaintiffs seek,
            inter alia, a Court-appointed monitor to oversee MAHDFC elections, and compensatory and
            punitive damages. Id.

            Defendants now move, pursuant to CPLR 3211 (a)(l) and (7), to dismiss the complaint, with
            prejudice, asserting that what began as an election dispute has morphed into a complex challenge
            to board decisions spanning years and multiple board elections. NYSCEF Doc. No. 165.

             100585/2022 JACKSON, TAMARA vs. EVELYN WANG;                                        Page 1 of4
             Motion No. 010

[* 1]                                                          1 of 4
                                                                                                   INDEX NO. 100585/2022
  NYSCEF DOC. NO. 184                                                                      RECEIVED NYSCEF: 04/26/2024

            Defendants argue that plaintiffs' third through fifth causes of action should be dismissed, as they
            essentially seek to invalidate a 2022 election already mooted by a 2023 election. Defendants
            also argue plaintiffs' second cause of action, for derivative breach of fiduciary duty to
            MAHDFC, is time-barred, as it falls outside Article 78's four-month statute oflimitations.
            Defendants note that alleged failures by the Board, such as not implementing certain measures
            and addressing violations, occurred in 2021 and 2022. Furthermore, defendants also assert that
            the second cause of action is barred by the business judgment rule and stress that shareholders
            cannot challenge decisions simply because they disagree with them.

            Finally, defendants argue that the entire complaint should be dismissed, as it improperly mixes
            derivative and individual claims, for example, blending allegations of general mismanagement,
            which are derivative, with personal grievances about access to records.

            In opposition, plaintiffs argue that the instant motion is barred by CPLR 321 l(e)'s single motion
            rule, which, essentially, prohibits the filing of multiple motions to dismiss. They argue that this
            rule conserves judicial resources, prevents unnecessary delay and protects them from being
            harassed by repeated CPLR 321 l(a) motions.

            Plaintiffs also challenge defendants' assertion that their third through fifth causes of action are
            moot, highlighting broader grievances, such as alleged improper removal of votes and the failure
            to provide prior meeting minutes. Plaintiffs also deny defendants' claim that plaintiffs have
            inspected all 2022 and 2023 board minutes and dispute defendants' assertion that plaintiffs must
            provide an affidavit to inspect the board's minutes, pursuant to NPC § 62l(c).

            Without conceding that Article 78 applies to their second cause of action, for derivative breach
            of fiduciary duty, plaintiffs argue it is not time-barred because the Board's alleged failures were
            not final determinations against plaintiffs, and there has been no outright refusal by defendants to
            fulfil their duties. Plaintiffs acknowledge that paragraphs 218 and 224 of their Fourth Amended
            Complaint are non-derivative claims and seek leave to further amend the complaint to fix them.

            In reply, defendants argue that plaintiffs are misinterpreting the single motion rule to try to evade
            dismissal and as the rule does not prevent successive motions to dismiss complaints repeatedly
            amended in response to prior motions. Defendants also contend that dismissing the claims of the
            original plaintiffs while keeping the claims of newly added plaintiffs would be wasteful.

            Defendants also argue that Article 78's four-month statute of limitations applies to plaintiffs'
            breach of fiduciary duty claim, as plaintiffs' own allegations contradict their argument that the
            limitations period had not started running. For instance, the complaint asserts that the Board
            breached its fiduciary duty by refusing to address the issue of a flip tax in September 2021;
            institute a sublet fee in January 2022; institute a maintenance increase in March 2022; correct
            fire code violations in January 2022; and fix a sidewalk crack that had existed since at least
            January 2022. Defendants assert that the commencement of the instant action, in December
            2022, is therefore outside Article 78's statute of limitations.

            Defendants argue that, despite the Court having afforded plaintiffs multiple amended complaints,
            plaintiffs' claims still lack merit. Finally, defendants reject plaintiffs' attempt to shift the burden

             10058512022 JACKSON, TAMARA vs. EVELYN WANG;                                            Page 2 of4
             Motion No. 010

[* 2]                                                     2 of 4
                                                                                                   INDEX NO. 100585/2022
  NYSCEF DOC. NO. 184                                                                      RECEIVED NYSCEF: 04/26/2024

            onto them to prove diligence in decision-making, emphasizing that it is plaintiffs' responsibility
            to overcome the presumption that the Board acted in MAHDFC's best interests.

            Discussion
            Dismissal pursuant to CPLR 321 l(a)(l) is warranted where "documentary evidence submitted
            conclusively establishes a defense to the asserted claims as a matter of law." Leon v Martinez,
            84 NY2d 83, 87-88 (1994). Dismissal pursuant to CPLR 321 l(a)(7) is warranted when,
            "afford[ing] the pleadings a liberal construction, tak[ing] the allegations of the complaint as true
            and provid[ing] plaintiff the benefit of every possible inference," the complaint fails to assert
            facts that would make out a cause of action. EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11,
            19 (2005).

            Here, despite plaintiffs' arguments to the contrary, the third, fourth, and fifth causes of action all
            should be dismissed due to mootness, as they arise out of an election made academic by changed
            circumstances. It is well-established that an election challenge is moot with the occurrence of a
            subsequent election. See Sahid v 1065 Park Ave. Corp., 140 AD3d 521 (1st Dept 2016); Matter
            of Paraskevopoulos v Stavropoulos 65 AD3d 1153 (2d Dept 2009). Allegations that would
            overcome that mootness doctrine, do not apply here. Hearst Corp. v Clyne, 50 NY2d 707, 714-
            15 (1980) ("(1) a likelihood ofrepetition, either between the parties or among other members of
            the public; (2) a phenomenon typically evading review; and (3) a showing of significant or
            important questions not previously passed on, i.e., substantial and novel issues.").

            Plaintiffs' contention that the instant motion is barred by the single motion rule does not hold.
            Plaintiffs have continually modified their claims in response to defendants' successive motions,
            demonstrating an adaptive approach aimed at fortifying their allegations and making themselves
            impervious to dismissal. CPLR 321 l(e) provides, in pertinent part, that "At any time before
            service of the responsive pleading is required, a party may move on one or more of the grounds
            set forth in subdivision (a), and no more than one such motion shall be permitted." Exceptions
            exist, however, such as when a prior motion was not decided on its merits. Successive motions
            are allowed when new claims are alleged later, as here. Barbarito v Zahavi, 107 AD3d 416, 420
            (1st Dept 2013) ("Because [defendants] did not have the opportunity to address the merits of the
            original cause of action, the single motion rule does not apply.").

            Further, plaintiffs' second cause of action, for derivative breach of fiduciary duty, should be
            dismissed pursuant to the business judgment rule, as plaintiffs have failed sufficiently to allege
            bad faith, self-dealing or fraud. Auerbach v Bennett, 4 7 NY2d 619, 629 (1979) (The business
            judgment "doctrine bars judicial inquiry into actions of corporate directors taken in good faith
            and in the exercise of honest judgment in the lawful and legitimate furtherance of corporate
            purposes."); 40 W. 67th St. Corp. v Pullman, 100 NY2d 147, 153 (2003) ("In the context of
            cooperative dwellings, the business judgment rule provides that a court should defer to a
            cooperative board's determination '[s]o long as the board acts for the purposes of the
            cooperative, within the scope of its authority and in good faith."').

             100585/2022 JACKSON, TAMARA vs. EVELYN WANG;                                           Page3of4
             Motion No. 010

[* 3]                                                     3 of 4
                                                                                                     INDEX NO. 100585/2022
  NYSCEF DOC. NO. 184                                                                         RECEIVED NYSCEF: 04/26/2024

             In the final analysis, while the Court respects pro se plaintiffs' tenacity in fighting for their
             homes, the election which began this action has been made moot, and the MAHDFC board is
             entitled to the protections of the business judgment rule.

             This Court has considered plaintiffs' other arguments and finds them to be unavailing and/or
             non-dispositive.

             Conclusion
             Thus, defendants' motion to dismiss is granted, and accordingly the Clerk is hereby directed to
             dismiss this action with prejudice.

                                                                                                      GORO"(J,~.C.
                                            APR 28 2024
                     4/26/2024
                       DATE                                                      ARTHUR F. ENGORON, J.S.C.

                                                                        ~
              CHECK ONE:                   CASE DISPOSED                    NON-FINAL DISPOSITION
                                           GRANTED         □ DENIED         GRANTED IN PART          □ OTHER
              APPLICATION:                 SETTLE ORDER                     SUBMIT ORDER
              CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN       FIDUCIARY APPOINTMENT    □ REFERENCE

             100585/2022 JACKSON, TAMARA vs. EVELYN WANG;
             Motion No. 010                                                                           Page4of4

[* 4]                                                      4 of 4