Order and judgment (one paper), Supreme Court, New York County (Karla Moskowitz, J.), entered on or about April 20, 1992, which, inter alia, granted the defendant’s cross motion to dismiss the complaint, unanimously reversed, on the law and the facts, the cross motion is denied and the complaint is reinstated, without costs.
Apartment 3-0 at 305 East 40th Street became available when the record owner filed for bankruptcy and the bank, which held liens on the apartment, decided not to cure the owner’s maintenance default and take over the apartment. The plaintiff, Murray Ackerman, a resident shareholder and director of the cooperative, decided to submit a bid for the apartment, which was to be sold at auction. According to Ackerman, at a meeting conducted prior to the auction, he informed the board of directors of the cooperative that he intended to bid on the apartment. Although he contends that none of the board members objected, the defendant, by way of affidavits from some of the directors of the cooperative, maintains that they were never informed of Ackerman’s intentions.
After this meeting, Ackerman received permission from the president of the cooperative to post notices of the auction in the building. A notice also appeared in The New York Times. The plaintiffs, counsel for the cooperative, and nine other individuals attended the auction. The plaintiffs’ bid of $18,000 was higher than the $17,000 bid submitted by the defendant and was accepted and sealed. The plaintiffs signed a "Memorandum of Sale”, the terms of which provided that the successful bid was subject to approval by the board of directors of
The defendant cross moved to dismiss the complaint on the ground, inter alia, that it failed to state a cause of action. The Supreme Court denied the plaintiffs’ motion for a preliminary injunction and granted the defendant’s cross motion to dismiss the complaint based on its conclusions that Ackerman’s bidding was inconsistent with his duties as a director, and that the vote of the board was a proper exercise of its business judgment. As limited by their brief, the plaintiffs contend that it was error to dismiss their complaint for failure to state a cause of action. We agree.
"The standards in determining a CPLR 3211 (a) (7) motion for dismissal for failure to state a cause of action are well known. (See, e.g., 219 Broadway Corp. v Alexander’s, Inc.,
The defendant contends that Mr. Ackerman violated his obligations as a director by usurping a corporate opportunity. Pursuant to the corporate opportunity doctrine, a corporate fiduciary "may not, without consent, divert and exploit for his own benefit any opportunity that should be deemed an asset of the corporation” (Commodities Research Unit v Chemical Week Assocs.,
Accepting the plaintiffs’ allegations as true, Mr. Ackerman fully disclosed his intention to bid on the subject apartment to the board which consented by voicing no objection. The board
While the terms of the sale indicated that it was contingent on board approval, the withholding of such approval must be in good faith and consistent with the board’s obligation to further the legitimate purpose of the cooperative (Matter of Levandusky v One Fifth Ave. Apt. Corp.,
The directors of a cooperative owe a fiduciary duty to act solely in the best interest of all shareholders (Bryan v West 81 St. Owners Corp., supra). It is not necessary to plead that the directors acted in self-interest; pleading unequal treatment of shareholders is sufficient (supra; Aronson v Crane,
Accordingly, the order of the Supreme Court is reversed, the defendant’s cross motion is denied and the complaint is reinstated. Concur—Murphy, P. J., Carro, Rosenberger, Asch and Kassal, JJ.