2018 NY Slip Op 51958

Citation: 2018 NY Slip Op 51958
Jurisdiction: New York (state)
Source verification: cross_accepted_sealed
Original Source: https://www.nycourts.gov/reporter/3dseries/2018/2018_51958.htm ↗

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right in one or more instances would not constitute a waiver of Stable's right to do so in the
future; all of the lease's provisions remain in full force and effect in the future). Dogwood LLC
has not alleged any actionable disparate treatment that it has suffered as a consequence of the
Board's claimed inaction regarding the nonconforming cellar units.

Moreover, claims pertaining to the Board's failure to act on the nonconforming cellar units
would arise, if anywhere, in a derivative cause of action and/or be addressed at a special
shareholders' meeting, either through the Board's initiative or at the request of shareholders
having at least 25% of the outstanding shares. Id., exhibit 3, Stable's by-laws, Art. II,
§ 2. In addition, plaintiffs' counsel's newly-raised position that the Board further breached
its fiduciary duty when it did not ignore the cellar unit issue and hired consultants to see if it was
feasible to legalize the cellar units and cure the DOB violation (Rosenberg affirmation in
opposition to motion to dismiss amended 2017 complaint, ¶ 10; id., exhibit D),
contradicts plaintiffs' allegation in the complaint that the Board breached its fiduciary duty by
ignoring the cellar unit issue and, for the reasons stated in addressing the derivative breach of
fiduciary duty cause of action (eleventh cause of action), is factually inadequate to demonstrate a
breach of fiduciary duty cause [*21]of action.

In any event, given that this fifth cause of action constitutes a conglomeration of individual
and derivative claims, it must be dismissed. Barbour v Knecht, 296 AD2d at 227-228.
This Court further notes that the plaintiffs have also failed to adequately allege what damages