Opinion
December 22, 1998
Appeal from the Supreme Court, New York County (Beatrice Shainswit, J.).
Although the record in this matter, including defendant Rothman's admissions and the previous findings in this case as stated by the Court of Appeals ( Matter of Estate of Purnell v. LH Radiologists, 90 N.Y.2d 524), demonstrates beyond question that defendant Rothman engaged in self-dealing without obtaining the consent of the other shareholders, only the issue of his liability to LH Radiologists, P. C. (LH) for reimbursement of legal fees can be decided as a matter of law. In that regard, the record demonstrates his bad faith in contesting the plaintiffs/shareholders' entitlement to inspect the corporate books of LH, since he admittedly knew that they were bona fide shareholders. His contention that he was justified in incurring legal fees to oppose plaintiffs' inspection of LH's books because they were shareholders of alleged competitor Lenox Hill Radiology and Medical Imaging Associates and would take advantage of the fruits of such inspection, is improperly raised for the first time on appeal ( 440 E. 62nd St. Owners Corp. v. 440 E. 62nd St. Assocs., 217 A.D.2d 426, 427; City of New York v. Stack, 178 A.D.2d 355, lv denied 80 N.Y.2d 753), and ignores the fact that there were more preferable alternatives to prevent the improper use of such information. Also, we note that when this matter was previously before us, we enjoined the expenditure of corporate funds in Rothman's defense, noting that he "may have pursued his position in bad faith" ( Matter of Estate of Purnell v. LH Radiologists, 228 A.D.2d 360, 361, affd 90 N.Y.2d 524, supra).
Concur — Rosenberger, J. P., Ellerin, Wallach and Williams, JJ.