WEINSTEIN ENTERPRISES INC v. ORLOFF (2006)

Order, Supreme Court, New York County (Karla Moskowitz, J.), entered September 15, 2005, which, to the extent appealed from, conditionally granted defendants' motion to dismiss the complaint, unanimously affirmed, with costs.

The gravamen of the complaint in this action is that a sale of plaintiff Weinstein's stock to defendant JW Acquisitions (JWA) from the former minority shareholders should be rescinded because the purchase was based on confidential information allegedly wrongfully provided to JWA.   That information, however, was provided pursuant to a final order and judgment entered upon plaintiffs' consent in the Delaware Court of Chancery and that judgment stands as a bar to the litigation of most of plaintiffs' present claims.   Plaintiffs' allegations that the Delaware judgment was fraudulently obtained would be appropriately asserted in the Delaware court that issued the judgment, where two related actions are pending.   To the extent that the complaint alleges claims whose litigation does not depend upon the removal of the Delaware judgment, as the motion court observed, those claims, as presently asserted, are so intertwined with the precluded claims as to be practically unseverable.   The motion court's conditional dismissal, affording plaintiffs the opportunity to segregate and reassert these claims was appropriate in the interests of fairness and judicial economy.