84 A.D.2d 796 | N.Y. App. Div. | 1981
In an action, inter alia, to compel the defendants to convey a certain steel tank vessel, named the “V. L. Keegan, II” to plaintiff, on the theory of diversion of corporate opportunity, plaintiff appeals from an order of the Supreme Court, Richmond County (Sacks, J.), dated October li? 1981, which denied its motion for a preliminary injunction, pendente lite, enjoining the defendants from selling or transferring the vessel. Order reversed, without costs or disbursements, and plaintiff’s motion granted to the extent that the defendants, their agents, servants and employees, and all persons acting on their behalf, are enjoined from selling or transferring the vessel V.L. Keegan, II to any person or entity other than the plaintiff, on condition that (1) plaintiff consents to sever the first three causes of action of its complaint for an immediate trial, no later than December 1, 1981 and (2) plaintiff, within 10 days after the entry of the order to be made hereon, gives and files an undertaking with corporate surety in the amount of $250,000 on terms that if it is finally determined that plaintiff was not entitled to an injunction it will pay to defendants all damages and costs which may be sustained by reason of the preliminary injunction. In the event that either of the conditions are not met, defendants, if so advised, may move for an order vacating the preliminary injunction. Plaintiff, Poling Transportation Corporation (Poling), owns, operates and charters barges and steel tank motor vessels for the transportation of petroleum products and by-products. In the first three causes of action in its complaint plaintiff seeks to compel the defendants to convey to it a certain steel tank vessel, the V.L. Keegan, II (Keegan). The individual defendants, two of whom were employees and one an officer of Poling, purchased the Keegan through the A & P Tanker Corporation, which they formed. It is Poling’s position that the individual defendants breached their fiduciary duties to it by usurping a corporate opportunity. Poling alleges that defendant Alban, a corporate officer, was requested by its senior management to inspect certain vessels in the fleet of the Amerada Hess Corporation which were available for purchase. Among these vessels was the Keegan. According to Poling, Alban advised it that the Keegan was not suitable and discouraged the acquisition. Soon afterwards Alban and the other defendants purchased the Keegan and offered to lease it to Poling. Plaintiff then commenced suit and moved for an order enjoining defendants, pendente lite, from selling or otherwise transferring the Keegan, to anyone other than Poling. Special Term denied the motion, holding that monetary damages would be an adequate remedy should plaintiff prevail on the merits. We reverse. Pursuant to CPLR 6301, “A preliminary injunction may be granted *** where it appears that the defendant threatens or is about to do * * * an act in violation of the plaintiff’s rights respecting the subject of the action, and tending to render the judgment ineffectual”. Sale of the Keegan during the pendency of this action would threaten the effectiveness of any judgment obtained by Poling. Furthermore, the plaintiff has sufficiently demonstrated (1) a likelihood of ultimate success on the merits, (2) irreparable injury absent granting the preliminary injunction, and (3) that a balancing of equities favors its position (see Grant Co. v Srogi, 52 NY2d 496, 517; Albini v Solork Assoc., 37 AD2d 835). If an officer of a corporation acquires property for himself in which the corporation had a “tangible expectancy” (see Blaustein v Pan Amer. Petroleum & Transp. Co., 293 NY 281), then the corporation may insist that his title was acquired for its benefit, and may require the officer to transfer the