Appeals (1) from an order of the Supreme Court (Ceresia, Jr., J.), entered January 22, 2002 in Albany County, which, inter alia, in action No. 1, partially denied defendant’s motion for summary judgment and, in action No. 2, partially granted defendants’ motion for summary judgment dismissing the complaint, and (2) from an order of said court, entered May 6, 2002, which, upon reargument, inter alia, in action No. 2, adhered to that portion of its prior order partially granting defendants’ motion for summary judgment dismissing the complaint.
In 1975, David R. White, John L. Bell, Le Roy J. Clark and
The four organizers became the sole shareholders of Norpco, each having a particular talent to lend to the venture. White, in particular, had extensive experience in the restaurant business and was to oversee restaurant operations. Of the 100 issued shares of Norpco stock, White received 40 and Bell, Clark and Everleth each received 20. After Norpco was incorporated, the shareholders amended the certificate of incorporation to provide that “[a] 11 of the powers of the Board of Directors and the conduct and management of the corporate affairs are assumed by the shareholders” and that the transaction of any business at shareholder meetings required unanimous shareholder approval. Over the course of the ensuing years, White, as president of Norpco, entered into written agreements with various closely held corporations he owned for the provision of administrative, payroll, advertising, insurance and other services to Norpco. Norpco appeared to be profitable and White purportedly represented that profit distributions were being made in accordance with each shareholder’s proportional interest in the corporation. Friction, however, began to develop among the shareholders, particularly between White and Bell.
In 1989, Clark and Everleth each sold their 20 shares of Norpco stock to White. At a special meeting of Norpco shareholders in August 1992, White proposed to merge Norpco into Albany-Plattsburgh United Corporation (hereinafter APUC), a closely held corporation in which he was the president and sole shareholder. By this time, White had already transferred his 80 shares of Norpco stock to APUC. Under the terms of the proposed merger agreement, Bell would be paid $6,870 per share for all of his Norpco stock. White, acting on behalf of APUC, voted in favor of the merger and Bell voted against. Bell then filed a notice of election to dissent pursuant to Business Corporation Law § 623, but was subsequently advised
After Supreme Court (Travers, J.) denied APUC’s motion for summary judgment in action No. 1., this Court modified Supreme Court’s order and declared that Bell had lost his appraisal rights with respect to his Norpco stock (
Following additional discovery, APUC again made a motion for summary judgment seeking a declaration in action No. 1 that Bell had waived his rights as a dissenting Norpco shareholder under Business Corporation Law § 623. Defendants also sought dismissal of Bell’s causes of action in action No. 2. Bell, in turn, made a motion for partial summary judgment seeking, among other things, a declaration in action No. 1 that the preincorporation agreement was valid and that the merger of Norpco into APUC was null and void. Supreme Court, inter alia, granted defendants’ motion to the extent of dismissing the first 15 causes of action alleged in the amended complaint in action No. 2, finding that Bell lacked standing in his individual capacity to maintain them. However, it also ruled in Bell’s favor in action No. 1 declaring that the merger of Norpco into APUC was null and void. Both Bell and defendants filed notices of appeal from Supreme Court’s order, although defendants’ appeal was later withdrawn.
Bell also moved for reargument or, alternatively, for leave to serve a second amended complaint in action No. 2. Supreme Court granted the motion to reargue and concluded that it had improperly dismissed the first 15 causes of action for lack of standing because that affirmative defense had not been raised in a preanswer motion. It nevertheless determined that dis
The main issue on appeal concerns the sufficiency of the allegations contained in Bell’s amended complaint in action No. 2 and whether Supreme Court properly dismissed his first 15 causes of action based upon its finding that Bell was not the real party in interest because the claims were essentially corporate claims more properly the subject of a shareholders derivative action. “It is axiomatic that a shareholder has no individual cause of action to recover damages for a wrong against a corporation * * *” (Elenson v Wax,
Here, a review of the amended complaint discloses that all of the claims dismissed by Supreme Court were essentially corporate in nature. For example, Bell’s first, second, third and seventh causes of action allege that White misappropriated, converted and diverted Norpco’s assets by entering into various agreements with other individuals and entities in breach of his fiduciary duties. Similarly, the fifth cause of action alleges that White failed to render an accounting for the assets . of Norpco that he purportedly misappropriated, converted and diverted. Other causes of action seek to impose a constructive trust upon the assets of White and certain of his closely held corporations concerning assets allegedly misappropriated from Norpco or allege that White illegally tunneled assets out of Norpco to one of his other corporations via certain service agreements and thereby engaged in racketeering activity in
Significantly, none of the stricken causes of action arise from an independent duty owed to Bell individually, unrelated to his status as a shareholder (see Abrams v Donati, supra at 953). The fact that some of his allegations include references to a violation of the preincorporation agreement or seek equitable relief does not, in our view, convert these claims into individual causes of action. Moreover, the cases relied upon by Bell in which the courts permitted individual claims to be pursued are factually inapposite to the situation at hand (compare Venizelos v Oceania Mar. Agency,
Likewise, Supreme Court did not abuse its discretion in denying Bell permission to serve a second amended complaint in action No. 2 asserting shareholder derivative claims on behalf of Norpco and a related corporation. “It is well settled that a motion to amend the complaint is addressed to the sound discretion of the court and, in the absence of a clear abuse of such discretion, the determination will not be disturbed on appeal” (Aiello v Manufacturers Life Ins. Co. of N.Y.,
This litigation had been pending for over nine years before Bell sought leave to serve a second amended complaint to assert shareholder derivative causes of action. He did so in connection with his motion for reargument only after Supreme Court dismissed his first 15 causes of action. At that time, a trial date had already been set in a related action. Moreover, Bell had already amended his complaint once. The proposed amendment adds two additional corporate plaintiffs and contains 29 separate causes of action. In view of the protracted delay, an impending trial and the clear prejudice to defendants from the additional discovery burden presented by the proposed amendment, Supreme Court did not abuse its discretion in denying Bell permission to serve a second amended complaint in action No. 2.
Crew III, J.P., Spain, Mugglin and Kane, JJ., concur. Ordered that the orders are affirmed, with costs.
Notes
Even Bell’s own brief on appeal contains the acknowledgment that his complaint “is replete with allegations of White [’s] fraud, misappropriation, and conversion of Norpco assets for personal gain” (emphasis added).