AVRAMIDES v. 319 (2018)

Order, Supreme Court, New York County (Debra A. James, J.), entered on or about February 24, 2017, which, to the extent appealed from as limited by the briefs, granted defendants' motion to dismiss the amended complaint, unanimously affirmed, with costs.

Plaintiff did not sufficiently plead that a pre-suit demand on the director defendants would have been futile (Marx v. Akers, 88 N.Y.2d 189, 200–201, 644 N.Y.S.2d 121, 666 N.E.2d 1034 [1996] ). The amended complaint lacks the necessary particularity to support plaintiff's futility allegations (see Business Corporation Law § 626[c]; Barr v. Wackman, 36 N.Y.2d 371, 379, 368 N.Y.S.2d 497, 329 N.E.2d 180 [1975] ).

The motion court also correctly found that the amended complaint failed to state a claim against the individual directors, because there are no allegations that the directors committed any independent tortious acts (see Murtha v. Yonkers Child Care Assn., 45 N.Y.2d 913, 915, 411 N.Y.S.2d 219, 383 N.E.2d 865 [1978] ). In urging that this requirement now constitutes “abrogated law,” plaintiff relies on Fletcher v. Dakota, Inc. (99 A.D.3d 43, 948 N.Y.S.2d 263 [1st Dept. 2012] ), which held that there is no “safe harbor from judicial inquiry for directors who are alleged to have engaged in conduct not protected by the business judgment rule” (id. at 49, 948 N.Y.S.2d 263). In that case, the directors were alleged to have engaged in racially discriminatory conduct which is not protected by the business judgment rule (id at 50, 948 N.Y.S.2d 263). In contrast, the allegations in this case, however, fall squarely within the protections of the business judgment rule (Konrad v. 136 E. 64th St. Corp., 254 A.D.2d 110, 678 N.Y.S.2d 629 [1st Dept. 1998], lv dismissed in part and denied in part 92 N.Y.2d 1042, 685 N.Y.S.2d 417, 708 N.E.2d 173 [1999] ).

In the alternative, the motion court correctly held that the language of an earlier release between plaintiff and the defendant cooperative precluded plaintiff's claims related to the building's storm drainage system.