SHAWE v. CUSHMAN WAKEFIELD (2018)

Judgments, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered July 25, 2017, dismissing the actions with prejudice, unanimously affirmed, with costs.

As a result of extensive shareholder litigation in Delaware in which the identical issues were finally resolved, these actions are barred by the doctrine of collateral estoppel (see Betts v. Townsends, Inc., 765 A.2d 531, 535 [Del. 2000];  see also Messick v. Star Enter., 655 A.2d 1209, 1211 [Del. 1995] ).

Plaintiff's claims in these actions depend on alleged breaches of fiduciary duty by Elizabeth Elting, co-founder and 50% owner of nominal party Transperfect Global, Inc. As the precise issue of Elting's alleged breaches of fiduciary duty was addressed and resolved in the Delaware proceedings, the dismissal with prejudice of claims against her in the course of those proceedings bars re-litigation of the issue here (see e.g. Troy Corp. v. Schoon, 959 A.2d 1130, 1137 [Del. Ch. 2008] ).

Contrary to plaintiff's contention, the resolution of the Delaware proceedings, i.e., the involuntary dismissal of the fiduciary duty claims with prejudice, constitutes an adjudication on the merits (see Del Ct Ch R 41[b];  RBC Capital Mkts. LLC v. Education Loan Trust IV, 87 A.3d 632, 643–644 [Del. 2014] ).  Plaintiff presents no authority to controvert the conclusion that, having presided over years of pretrial proceedings and a six-day trial and issued an exhaustive 104–page posttrial decision and a lengthy affirmance of that decision, the Delaware courts “passe[d] directly on the substance” of the fiduciary duty claims (Sellan v. Kuhlman, 261 F.3d 303, 311 [2d Cir.2001] [internal quotation marks omitted] ).

The remaining requirements for applying the doctrine of collateral estoppel are readily met.  It was established in the course of the Delaware proceedings that plaintiff was in privity with her son, and, as the Delaware courts determined, she had a full and fair opportunity to litigate the issues in those proceedings.

Plaintiff contends that Supreme Court erred in finding, as an alternative ground for dismissal, that she failed to adequately plead demand futility.  However, her arguments based on the scope of the custodian's powers are unsupported by either the statute pursuant to which the custodian was appointed (see 8 Del C § 226) or the court order appointing him.

We have considered plaintiff's remaining arguments and find them unavailing.