ROZOF v. [And a Third–party Action] (2026)

Order, Supreme Court, New York (Margaret A. Chan, J.), entered April 9, 2025, which, to the extent appealed from as limited by the briefs, granted the motion of defendant D. Karnofsky, Inc. (DKI) for summary judgment dismissing the complaint, unanimously reversed, on the law, with costs, the motion denied, and the complaint reinstated.

The transaction at issue was entered into directly between plaintiff and DKI, and the other shareholders had no right to alter or object or agree to the transaction.  Accordingly, plaintiff's duty of candor was discharged by making full disclosure only to the corporation, which he did by transacting directly with his mother, who signed the notes in question in her capacity as DKI's vice president, and who was not herself self-interested (see Blue Chip Emerald v. Allied Partners, 299 AD2d 278, 279 [1st Dept 2002], abrogated on other grounds by Centro Empresarial Cempresa S.A. v América Móvil, S.A.B. de C.V., 17 NY3d 269, 278 [2011] ).

To the extent DKI argues that plaintiff was required to disclose that the recovery on the notes was time-barred, there is an issue of fact as to whether that was the case, making summary judgment in DKI's favor inappropriate.