Glaubach v. Slifkin

198 A.D.3d 618

155 N.Y.S.3d 182

Felix GLAUBACH, etc., respondent-appellant,

v.David SLIFKIN, et al., appellants-respondents, et al., defendants.

2018–12718, 2018–12720, 2019–04182

Index No. 702987/15

Supreme Court, Appellate Division, Second Department, New York.

Argued—May 27, 2021

October 6, 2021

Morrison Cohen LLP, New York, N.Y. (Y. David Scharf, Howard S. Wolfson, and Terence K. McLaughlin of counsel), for appellants-respondents.

Tashlik Goldwyn Levy LLP, Great Neck, N.Y. (Jeffrey N. Levy of counsel), for respondent-appellant.

REINALDO E. RIVERA, J.P., LEONARD B. AUSTIN, COLLEEN D. DUFFY, BETSY BARROS, JJ.

DECISION & ORDER

In a shareholder's derivative action, (1) the defendant David Slifkin appeals from an order of the Supreme Court, Queens County (Marguerite A. Grays, J.), entered July 20, 2018, (2) the defendants David Slifkin and Trudy Balk appeal, and the plaintiff cross-appeals, from an order of the same court entered August 22, 2018, and (3) the defendant David Slifkin appeals from an order of the same court entered February 15, 2019. The order entered July 20, 2018, granted the plaintiff's motion for summary judgment on the first and second causes of action in the amended complaint. The order entered August 22, 2018, insofar as appealed from, denied those branches of the motion of the defendants David Slifkin and Trudy Balk which were for summary judgment dismissing the first through fourth causes of action in the amended complaint. The order entered August 22, 2018, insofar as cross-appealed from, granted that branch of the motion of the defendants David Slifkin and Trudy Balk which was for summary judgment dismissing the tenth cause of action in the amended complaint. The order entered February 15, 2019, denied the motion of the defendants David Slifkin and Trudy Balk for leave to reargue and renew those branches of their prior motion which were for summary judgment dismissing the first through fourth causes of action in the amended complaint and their opposition to the plaintiff's prior motion for summary judgment on the first and second causes of action in the amended complaint.

ORDERED that the appeal from the order entered July 20, 2018, is dismissed as academic; and it is further,

ORDERED that the appeal from the order entered August 22, 2018, is dismissed as academic; and it is further,

ORDERED that the order entered August 22, 2018, is affirmed insofar as cross-appealed from; and it is further,

ORDERED that the appeal from so much of the order entered February 15, 2019, as denied that branch of the motion of the defendants David Slifkin and Trudy Balk which was for leave to reargue is dismissed, as no appeal lies from the denial of reargument; and it is further,

ORDERED that the appeal from so much of the order entered February 15, 2019, as denied that branch of the motion of the defendants David Slifkin and Trudy Balk which was for leave to renew those branches of their prior motion which were for summary judgment dismissing the first through fourth causes of action in the amended complaint and their opposition to the plaintiff's prior motion for summary judgment on the first and second causes of action in the amended complaint is dismissed as academic; and it is further,

ORDERED that one bill of costs is awarded to the defendants David Slifkin and Trudy Balk.

Felix Glaubach (hereinafter the plaintiff) and Robert Marx co-founded Personal Touch Holding Corp. (hereinafter the corporation), a Delaware corporation and provider of home health care services. The plaintiff served as the president and chief executive officer of the corporation until 2011, when the defendant David Slifkin became chief executive officer. After 2011, the plaintiff continued to serve as a special director. The defendant Trudy Balk served as the corporation's vice president of operations.

On March 30, 2015, the plaintiff commenced this shareholder's derivative action on behalf of the corporation against, among others, Slifkin and Balk. The first four causes of action alleged that Slifkin and Balk received "unauthorized" compensation hidden as reimbursement of educational expenses that they did not actually incur. The tenth cause of action alleged that Slifkin and Balk "breached their fiduciary duty to the [corporation] by getting employees to make sexual harassment complaints against" the plaintiff in order to stop him from objecting to a severance package offered to Balk.

In June 2015, Slifkin and Balk moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them. In an order dated December 7, 2015, the Supreme Court, upon considering the motion of Slifkin and Balk as seeking dismissal of the amended complaint insofar as asserted against them,...