You are here: / / IN THIS CPLR ARTICLE 4 PROCEEDING BROUGHT BY THE ATTORNEY GENERAL, THERE...
, ,

IN THIS CPLR ARTICLE 4 PROCEEDING BROUGHT BY THE ATTORNEY GENERAL, THERE WERE QUESTIONS OF FACT ABOUT WHETHER THE RESPONDENT NOT-FOR-PROFIT CORPORATION VIOLATED ITS FIDUCIARY DUTY AND THE NOT-FOR-PROFIT-CORPORATION LAW WITH RESPECT TO ITS AFFILIATE NOT-FOR-PROFIT CORPORATIONS AND WHETHER THE BUSINESS JUDGMENT RULE APPLIED (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, in a decision too fact-specific to be fairly summarized here, determined issues of fact were presented about whether certain actions taken by respondent not-for-profit corporation (TLCN) breached its fiduciary duty to its not-for-profit corporation affiliate (Coburn) and violated the Not-for-Profit Corporation Law. The action was brought by the Attorney General in a special proceeding pursuant to CPLR article 4 which is similar to a summary judgment motion. The Third Department further held there were questions of fact whether the business judgment rule could properly be applied:

… Supreme Court acted properly in ordering TLCN to adopt a conflict of interest policy … .

… [I]nasmuch as Coburg is an independent corporation, TLCN may not operate Coburg in a manner inconsistent with Coburg’s purpose, nor engage in related party transactions without complying with the relevant provisions of the Not-For-Profit Corporation Law. * * *

Genuine issues of material fact exist as to whether respondents violated their duty to Coburg by improperly utilizing its surplus to benefit TLCN and its other affiliates and by engaging in related party transactions that were not in Coburg’s best interest. …

… [T]he business judgment rule has no place where corporate officers or directors take actions that exceed their authority under the relevant corporate bylaws … , or where they make decisions affected by an inherent conflict of interest… . There are issues of fact in the present record that preclude application of the business judgment rule, specifically regarding whether respondents exceeded their authority by improperly utilizing Coburg’s surplus to benefit TLCN and its other affiliates and by engaging in related party transactions that were not in Coburg’s best interest. Matter of The People of The State of New York v The Lutheran Care Network, Inc., 2018 NY Slip Op 08727, Third Dept 12-20-18

 

You might also like
THE JUDGE PRESIDING OVER THIS TRAFFIC ACCIDENT CASE SHOULD HAVE GRANTED PLAINTIFFS’ RECUSAL MOTION; DEFENSE COUNSEL WAS ACTIVE IN THE JUDGE’S ELECTION CAMPAIGN (THIRD DEPT).
“Prompt Outcry” Exception to Hearsay Rule Applied to Complaint Made After Several Days
DEFENDANT’S AGGRAVATED CRUELTY TO ANIMALS CONVICTION AFFIRMED; JUSTIFICATION DEFENSE APPLIES ONLY TO PERSONS, NOT ANIMALS; THE PRESENTENCE INTERVIEW AT THE PROBATION DEPARTMENT IS NOT A CRITICAL STAGE OF THE PROCEEDING REQUIRING THE PRESENCE OF DEFENDANT’S ATTORNEY (THIRD DEPT).
THE MAJORITY HELD THE RECORD WAS SILENT ON WHETHER THE POLICE, WHO DID NOT APPLY FOR A NO-KNOCK WARRANT, ENTERED THE APARTMENT WITHOUT PROPER NOTICE TO THE OCCUPANTS AND THE ISSUE WAS NOT PRESERVED FOR APPEAL; THE DISSENT ARGUED THE ISSUE CAN BE ADDRESSED ON APPEAL UNDER INEFFECTIVE ASSISTANCE (FAILURE TO MOVE TO SUPPRESS), THE RECORD SUPPORTED AN UNAUTHORIZED NO-KNOCK ENTRY AND THE SEIZED EVIDENCE SHOULD HAVE BEEN SUPPRESSED (THIRD DEPT).
TENDER AGE PT (TAPT), WHICH PROVIDED SUPPLEMENTAL EDUCATION SERVICES TO THE DEPARTMENT OF EDUCATION, WAS NOT THE EMPLOYER OF CLAIMANT, A BEHAVIORAL ANALYST THERAPIST WHO RECEIVED WORK ASSIGNMENTS FROM TAPT (THIRD DEPT).
PARENTS HAD STANDING TO BRING A MANDAMUS ACTION SEEKING A SOUND BASIC EDUCATION FOR THEIR CHILDREN, HOWEVER MANDAMUS LIES ONLY FOR GOVERNMENT ACTIONS WHICH ARE MANDATORY, NOT THE DISCRETIONARY ACTIONS SOUGHT BY THE PETITION HERE (THIRD DEPT).
Defendant’s “Agency” Defense to a Drug Sale Addressed Under a “Weight of the Evidence” Review (Defense Was Disproved Beyond a Reasonable Doubt)
Residential Health Care Facility’s Medicaid Reimbursement Disallowed with Respect to Certain Operating Costs

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

FAMILY COURT, IN THE WIFE’S ABSENCE, SUA SPONTE, RAISED ALLEGATIONS NOT... DEFENDANT’S ALLEGATION THAT SHE DOES NOT LIVE AT THE ADDRESS WHERE HER...