In a September 29, 2010 decision by Justice Demarest, the Court granted a number of motions to dismiss, with leave to replead. The actions stem from a number of closely held corporations owned by two sisters and their mother. One of the sisters alleged that the other sister and her mother were improperly controlling the corporations and entering into “sweet heart” deals with other family owned entities which plaintiff did not own. Plaintiff also brought claims for adding and abetting breach of fiduciary duties against the accountants who were working of the entities and plaintiff individually
The Court granted the motions to dismiss (with leave to replead) the individual and derivative breach of fiduciary duties claims against plaintiff’s sister, mother and accountant, because these claims were intermingled. In dismissing these claims the Court stated that plaintiff could seek punitive damages on her breach of fiduciary duty claims if she was able to demonstrate that the breach involved a “high degree of moral turpitude” or “wanton or reckless disregard of” plaintiff’s rights. The Court also stated that in pari dilecto would not bar the claims against the accountant.
The Court also dismissed plaintiff’s inspection claim under BCL 624 because it was not brought by order to show cause.