Opinion
October 27, 1970
Order of the Supreme Court, New York County, entered on July 20, 1970, granting defendants-respondents' motion to dismiss the complaint and requiring plaintiff to separately state and number, reversed on the law, and the motion denied. Appellant shall recover of respondents $50 costs and disbursements of this appeal. The complaint, stripped of excess verbiage and purple prose, sets forth a single cause of action for equitable dissolution of defendant-respondent corporation, and meets the standards set forth in Leibert v. Clapp ( 13 N.Y.2d 313). The fact that the complaint is overladen with verbosity should not unduly burden the trial, for the Justice there presiding should be able to keep matters on the track of relevance. That remedies other than that here pursued may be available against corporate directors does not vitiate this complaint ( Leibert v. Clapp, supra). Special Term's observation that items of relief are sought in behalf of or against nonparties is not borne out by a careful reading of the pleading; the alleged misdeeds of which plaintiff's husband is said to have been the victim are cited only as items of mismanagement, and the mention in the prayer for relief of moneys to be recovered from the accountant and others is made only as descriptive of part of the duty to be carried out by the receiver sought to be appointed. Nor was Special Term correct in holding that "this action cannot be maintained * * * as a class action * * * where, at most, the plaintiff class consists of five persons" for the class described in the complaint is typically one of "the closely associated relationships growing out of * * * ownership of corporate stock" ( Hall v. Coburn Corp. of Amer., 26 N.Y.2d 396, 402). See, also, as to number of persons in such a class, Hilton Bridge Const. Co. v. Foster ( 26 Misc. 338, 341, affd. 42 App. Div. 630). By this disposition, Special Term's direction to separately state and number has been rendered academic and we need not consider whether that part of the appeal is properly before us.
While I am in accord with much that appears in the majority opinion, I believe the order should be affirmed, though I agree that the reason advanced for dismissal was unsound. In my opinion no cause of action is stated. I further agree that the complaint seeks to set out a single cause of action for the dissolution of the corporation. The trouble is, it fails to do that. Plaintiff, a stockholder, alleges that the two moving defendants have voting control and are in active management of the corporate affairs. It is alleged that the corporation, following a difference between those defendants and plaintiff's husband, has been losing money. Several instances of business activity which it is alleged have resulted in losses are set out. Giving these the broadest intendment, the most that can be said is that the plaintiff differs with the defendants as to whether these activities are financially sound and show the exercise of good business judgment. So far, neither Leibert v. Clapp ( 13 N.Y.2d 313) relied on by the majority, nor any other case holds that these facts state a cause of action for dissolution. Concededly, however, the complaint does contain something more — the naked allegation that the corporation is being carried on for the sole purpose of benefiting these defendants and to the detriment of the minority stockholders. If any facts were alleged to support this contention, a cause of action would be stated. But the distinguishing allegations which differentiate this complaint from Leibert ( supra), are all missing. There is no allegation that these defendants are in any way looting the corporation for their own gain, nor that the unfortunate losing operations are a ploy to enable the defendants to freeze out the minority. For all that appears the chief sufferers from what the plaintiff complains about are these defendants. Sustaining this complaint is in my opinion a most unfortunate example of that judicial activity described as a liberal approach. The very prolixity of the complaint with its excess of unrelated facts (noted in the majority opinion) presages a long and windy trial confused by the introduction of irrelevant issues, either by design or ineptitude. If the plaintiff can prove a cause of action, she certainly should be able to state one. It would be a salutary saving of the court's time to require her to do so now rather than to discover the deficiency some years and several appellate reviews hence.