GRENVILLE OWNER CORP v. Dennis C. Vacco, etc., Defendant. (1997)

Supreme Court, Appellate Division, First Department, New York.

GRENVILLE OWNER'S CORP., Plaintiff-Appellant, v. John HANGLOW, et al., Defendants-Respondents, Dennis C. Vacco, etc., Defendant.

Decided: June 24, 1997

Before SULLIVAN, J.P., and MILONAS, WILLIAMS and TOM, JJ.

Edward L. Schiff, for Plaintiff-Appellant. Eric B. Levine, for Defendants-Respondents.

Judgment, Supreme Court, New York County (Stuart Cohen, J.), entered October 21, 1996, dismissing the complaint, and bringing up for review an order, entered October 10, 1996, which granted defendants' motion for summary judgment dismissing the complaint and for summary judgment as to liability on their claims for indemnification, unanimously affirmed, with costs.

This action by a cooperative housing corporation against its former directors for misappropriation of corporate funds was properly dismissed on the ground that plaintiff cannot repudiate the releases it gave its former directors in connection with the settlement of the mortgage foreclosure action that plaintiff's present principal had brought against it, having accepted all the benefits given to it under the settlement even after discovery of the alleged fraud that it claims vitiates the releases (see, Clearview Concrete Prods. Corp. v. S. Charles Gherardi Inc., 88 A.D.2d 461, 466, 453 N.Y.S.2d 750), and even now continuing to reaffirm the settlement. Having prevailed in the action, defendants are entitled to indemnification for their reasonable expenses under plaintiff's by-laws (Business Corporation Law § 723[a] ).

MEMORANDUM DECISION.

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