Decided April 15, 1965 Appeal from (4th dept.: 22 A.D.2d 390) MOTIONS FOR STAY
Rather, the critical consideration is the fact that dissension exists and has resulted in a deadlock precluding the successful and profitable conduct of the corporation's affairs" ( Matter of Goodman v. Lovett, 200 A.D.2d 670, 670โ671, 607 N.Y.S.2d 52 ). Here, the record amply demonstrates sufficient dissension among the parties, resulting in a deadlock, so as to warrant dissolution (see Matter of Dream Weaver Realty, Inc. [PoritzkyโDeName], 70 A.D.3d at 942, 895 N.Y.S.2d 476 ; Matter of Neville v. Martin, 29 A.D.3d 444, 444โ445, 815 N.Y.S.2d 91 ; Matter of Goodman v. Lovett, 200 A.D.2d at 670โ671, 607 N.Y.S.2d 52 ; Matter of Sheridan Constr. Corp., 22 A.D.2d 390, 391โ392, 256 N.Y.S.2d 210, affd 16 N.Y.2d 680, 261 N.Y.S.2d 300, 209 N.E.2d 290 ). The Supreme Court providently exercised its discretion in not providing for the distribution of the property of ANO upon dissolution under the instant circumstances (see Business Corporation Law ยง 1111[c] ).
Rather, the critical consideration is the fact that dissension exists and has resulted in a deadlock precluding the successful and profitable conduct of the corporation's affairs" ( Matter of Goodman v Lovett, 200 AD2d 670, 670-671). Here, the record amply demonstrates sufficient dissension among the parties, resulting in a deadlock, so as to warrant dissolution ( see Matter of Neville v Martin, 29 AD3d 444, 444-445; Matter of Goodman v Lovett, 200 AD2d at 670-671; Matter of Sheridan Constr. Corp., 22 AD2d 390, 391-392). Moreover, "[a] hearing is only required where there is some contested issue determinative of the application" ( Matter of Goodman v Lovett, 200 AD2d at 670; see Matter of Kaufmann, 225 AD2d at 776).
In determining whether dissolution is in order, the issue is not who is at fault for a deadlock, but whether a deadlock exists ( see, Matter of Goodman v Lovett, 200 A.D.2d 670; Matter of Ronan Paint Corp., supra; Matter of Gordon Weiss, 32 A.D.2d 279, 280-281). Here, the petitioner did not show that the disagreements between him and the respondent posed an irreconcilable barrier to the continued functioning and prosperity of the corporation ( cf., Matter of Sheridan Constr. Corp., 22 A.D.2d 390, 391-392, affd 16 N.Y.2d 680; Matter of Ronan Paint Corp., supra, at 421; Matter of Pivot Punch Die Corp., 15 Misc.2d 713, 717, mod on other grounds 9 A.D.2d 861). Similarly, the court properly found, upon renewal, that dissolution was not warranted by the events alleged by the petitioner to have occurred after the petition was filed.
The record clearly demonstrates there are sufficient differences and animosity between the shareholders to prevent the continued efficient operation of the corporation. Therefore, under the circumstances, dissolution is the only viable alternative (see, Matter of Gordon Weiss, 32 A.D.2d 279; Matter of Sheridan Constr. Corp. [Buyers], 22 A.D.2d 390, affd 16 N.Y.2d 680). Mangano, P.J., Balletta, Santucci and Hart, JJ., concur.
Respondent's papers fail to refute the existence of this impasse, notwithstanding his call for a showing of the "details" of the division between the parties. Under the circumstances, dissolution is the only viable alternative (Matter of Gordon Weiss, 32 A.D.2d 279; Matter of Sheridan Constr. Corp., 22 A.D.2d 390, affd 16 N.Y.2d 680). The "details" of the division are subject to proof upon the accounting.
Significantly, the mere failure to attend shareholder meetings or that one shareholder exercises sole control over the corporation's daily management does not amount to dissension between shareholders sufficient to warrant dissolution (In re Parveen, 259 A.D.2d 389, 391 [1st Dept 1999]; Nelkin v H. J. R. Realty Corp., 25 N.Y.2d 543, 549 [1969]). Conversely, where "[t]he disagreements which developed [between directors] and the intensity of their discord becam[ome] so great that efficient management becam[omes] impossible," dissolution pursuant to BCL ยง 1104 is warranted (Application of Sheridan Const. Corp., 22 A.D.2d 390, 391 [4th Dept 1965], affd, 16 N.Y.2d 680 [1965]). BCL ยง 1104-a authorizes the judicial dissolution of a corporation on two grounds, when the directors representing "twenty percent or more of the votes of all outstanding shares of a corporation... present a petition of dissolution" (BCL ยง 1104-a[a]), and a court finds, inter alia, that
Unlike federal practice, New York has not adopted a compulsory counterclaim rule (see CPLR 3019 [a] ; Batavia Kill Watershed Dist. in County of Greene v. Charles O. Desch, Inc. , 83 AD2d 97, 100 [3d Dept 1981], affd 57 NY2d 796 [1982] ), and petitioner's application for judicial dissolution is not the type of "pre-existing claim for relief that would impair the rights or interests [to be] established in the [Queens County Action]" ( Classic Autos. v. Oxford Resources Corp. , 204 AD2d 209, 209 [1st Dept 1994] ; accordHenry Modell & Co. v. Minister, Elders & Deacons of the Reformed Protestant Dutch Church of City of NY, 68 NY2d 456, 462 n 2 [1986] ). Finally, the fact that certain of the temporary relief sought herein may be the same as temporary relief that was denied in the Queens County Action does not implicate principles of claim preclusion (seeMatter of Sheridan Constr. Corp. , 22 AD2d 390, 393 [4th Dept 1965], affd 16 NY2d 680 [1965] ). "[T]he grant or denial of a request for a preliminary injunction ... is not an adjudication on the merits and will not be given res judicata effect" ( Coinmach Corp. v. Fordham Hill Owners Corp ., 3 AD3d 312, 314 [1st Dept 2004] ).
Finally, the Court finds that issues of fact exist with respect to the remaining causes of action which seek dissolution pursuant to BCL ยง 1104[a]. In order to obtain judicial dissolution pursuant to Business Corporation Law 1104, the petitioner must establish, inter alia, that internal dissension has resulted in a management deadlock (see, Matter ofFazio Realty Corp., 10 AD3d 363, 364-465; Matter of Parveen, 259 AD2d 389, 391), as evidenced by conduct resulting in "an irreconcilable barrier to the continued functioning and prosperity of the corporation" ( Matter ofKaufmann, 225 AD2d 775 see, Application of Sheridan Const. Corp., 22 AD2d 390, affd, 16 NY2d 680). Notably, "[d]issolution is not to be denied merely because the dissension has not yet had an appreciable impact on the corporation's profitability" ( Patti v. Fusco, 10 Misc 3d 1058 A, S. Ct., Nassau County, 2000; see also, Neville v. Martin, 29 AD3d 444, 445).
As between Lefkowitz and the other applicants, he is collaterally estopped by the same Appellate Division ruling. ( Commissioners of State Ins. Fund v. Low, 3 N.Y.2d 590, 595; Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N.Y. 304, 306-307, supra; Matter of Sheridan Constr. Corp., 22 A.D.2d 390 [4th Dept., 1965], affd. 16 N.Y.2d 680.) "The attorney general may institute appropriate proceedings to secure compliance with this section and to secure the proper administration of any trust, corporation or other relationship to which this section applies."