Court Opinion

ID: 4086190
Source: CourtListenerOpinion
Date Created: 2016-10-08 00:05:53.304817+00
Date Added: 2024-06-11T14:33:27.046031
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

521
CA 11-01304
PRESENT: SCUDDER, P.J., SMITH, FAHEY, AND SCONIERS, JJ.

IN THE MATTER OF THE APPLICATION OF RODNEY J.
MCKEOWN, HOLDER OF FIFTY PERCENT OF ALL
OUTSTANDING SHARES OF IMAGE COLLISION, LTD.,
PETITIONER-RESPONDENT-APPELLANT, FOR THE
DISSOLUTION OF IMAGE COLLISION, LTD., A
DOMESTIC BUSINESS CORPORATION,
RESPONDENT-APPELLANT-RESPONDENT.
(PROCEEDING NO. 1.)
---------------------------------------------     MEMORANDUM AND ORDER
PAUL TRINKWALDER, INDIVIDUALLY AND AS A
SHAREHOLDER OF IMAGE COLLISION, LTD., AND
SUING IN THE RIGHT OF IMAGE COLLISION, LTD.,
PLAINTIFF-APPELLANT-RESPONDENT,

                    V

RODNEY J. MCKEOWN, INDIVIDUALLY AND AS A
SHAREHOLDER OF IMAGE COLLISION, LTD., AND
RODNEY J. MCKEOWN, DOING BUSINESS AS RJM
AUTOMOTIVE,
DEFENDANT-RESPONDENT-APPELLANT.
(ACTION NO. 1.)

FEUERSTEIN & SMITH, LLP, BUFFALO (MARK E. GUGLIELMI OF COUNSEL), FOR
RESPONDENT-APPELLANT-RESPONDENT AND PLAINTIFF-APPELLANT-RESPONDENT.

LAW OFFICES OF JON LOUIS WILSON, LOCKPORT (JON ROSS WILSON OF
COUNSEL), FOR PETITIONER-RESPONDENT-APPELLANT AND DEFENDANT-
RESPONDENT-APPELLANT.

     Appeal and cross appeal from an order of the Supreme Court,
Niagara County (Ralph A. Boniello, III, J.), dated March 17, 2011.
The order, inter alia, granted the application of Rodney J. McKeown
for dissolution.

     It is hereby ORDERED that said cross appeal is unanimously
dismissed insofar as it concerns the disqualification of an attorney
from representing respondent-plaintiff in the future and the order is
modified on the law by providing that the interest shall run from the
date of the filing of the dissolution petition, and as modified the
order is affirmed without costs in accordance with the following
Memorandum: Petitioner-defendant Rodney J. McKeown, the petitioner in
proceeding No. 1 and the defendant in action No. 1 (petitioner),
commenced proceeding No. 1 pursuant to Business Corporation Law §
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                                                         CA 11-01304

1104-a, seeking the dissolution of Image Collision, Ltd. (ICL), a
closely held corporation owned 50% by petitioner and 50% by Paul
Trinkwalder, the respondent in proceeding No. 1 and the plaintiff in
action No. 1 (respondent). Respondent commenced action No. 1 against
petitioner, seeking, inter alia, damages for money allegedly taken
from ICL by petitioner and business opportunities of ICL allegedly
converted by petitioner. The proceeding and action were consolidated
for trial. Respondent appeals and petitioner cross-appeals from an
order that, inter alia, granted petitioner’s application for
dissolution, awarded respondent the continued use of ICL’s business,
awarded petitioner 70% of the value of the corporation, and dismissed
the complaint in respondent’s action.

     Contrary to respondent’s contention on his appeal, “Supreme
Court’s valuation of [the] Corporation and of petitioner’s shares is
supported by the evidence in the record, and respondent’s contrary
interpretations of fact and credibility do not warrant disturbing the
court’s determinations . . . ‘The determination of a fact-finder as to
the value of a business, if it is within the range of testimony
presented, will not be disturbed on appeal where valuation of the
business rested primarily on the credibility of expert witnesses and
their valuation techniques’ ” (Matter of Penepent Corp. [appeal No.
11], 198 AD2d 782, 783, lv denied 83 NY2d 797; see Matter of F.P.D.
Realty Corp., 267 AD2d 111, 112; Matter of North Star Elec. Contr.-
N.Y.C. Corp., 174 AD2d 373, 373-374, lv denied 79 NY2d 752). Also
contrary to respondent’s contention, he failed to establish that
petitioner engaged in oppressive behavior within the meaning of
Business Corporation Law § 1104-a before respondent denied petitioner
access to ICL’s equipment and accounts by locking petitioner out of
the corporation’s premises and changing all the locks and passwords
(see generally Matter of Kemp & Beatley, Inc. [Gardstein], 64 NY2d 63,
72-73). Although respondent established that petitioner set up
another business in 1998, the evidence also supports the court’s
conclusion that petitioner did so in response to respondent’s
oppressive acts, including buying the premises upon which ICL
conducted business and then raising the rent to siphon away corporate
profits, thereby depriving petitioner of his reasonable expectation
that he would receive one half of ICL’s earnings. The evidence also
supports the court’s further conclusion that, in 2002, respondent
completely locked petitioner out of the business without compensation
for his part of the corporation’s value. Conversely, the evidence
fails to support respondent’s contention that petitioner’s other
business resulted in any diminution in the value of ICL.

      Respondent did not object at trial to the qualifications of
petitioner’s financial expert, a certified public accountant with more
than 50 years of experience that included valuing businesses, and he
therefore failed to preserve for our review his contention that the
expert is not qualified to valuate the business (see generally Matter
of Alexis Marie P., 45 AD3d 458, 459, lv denied 10 NY3d 705; Koffler v
Biller, 262 AD2d 150, 151; Smith v City of New York, 238 AD2d 500,
500).

     With respect to the cross appeal, we agree with petitioner that
                                 -3-                           521
                                                         CA 11-01304

the court, in directing that interest accrue on the award, should have
directed that the interest run from the date of the filing of the
petition (see Matter of Whalen v Whalen’s Moving & Stor. Co., 234 AD2d
552, 554; see generally Matter of Pace Photographers [Rosen], 71 NY2d
737, 748). We therefore modify the order accordingly. Petitioner
further contends that the attorney who previously represented ICL
should be disqualified from representing respondent in the future.
“Where, as here, ‘the rights of the parties cannot be affected by the
determination of [the] appeal,’ the appeal must be dismissed as moot”
(Matter of Mattar v Heckl, 77 AD3d 1390, 1391, quoting Matter of
Hearst Corp. v Clyne, 50 NY2d 707, 714). Thus, even assuming,
arguendo, that petitioner preserved that contention for our review, we
nevertheless dismiss the cross appeal insofar as it seeks that relief.

     We have considered the remaining contentions of the parties and
conclude that they are without merit.

Entered:   April 20, 2012                       Frances E. Cafarell
                                                Clerk of the Court