Opinion
March 28, 1989
Appeal from the Supreme Court, New York County (Edith Miller, J.).
On December 16, 1985, by summons and verified complaint, Mr. Jayant Gandhi (plaintiff) commenced a declaratory judgment action against Mr. Vasudev Nayak and Rainbow Realty, Inc. (Rainbow) which sought declarations that, since defendant Rainbow's inception, plaintiff has been a 50% stockholder and, as a stockholder, plaintiff is entitled to examine the corporate and financial records of defendant Rainbow.
The complaint alleges, in substance, as follows: On or about October 12, 1979, plaintiff and defendant Mr. Nayak entered into a written sales contract (sales contract) with J.H. Associates to purchase from it a number of apartment houses (premises) located in Jackson Heights, New York. Thereafter, plaintiff and defendant Mr. Nayak caused defendant Rainbow to be incorporated, and plaintiff and Mr. Nayak were designated president and secretary, respectively. Following defendant Rainbow's incorporation, plaintiff and defendant Mr. Nayak each assigned all of their rights, under the sales contract, to defendant Rainbow. Subsequently, on December 26, 1979, defendant Rainbow sold the premises to Medical Investors Associates, for $3,600,000, including a $3,100,000 wrap-around purchase-money mortgage, which is the only asset possessed by defendant Rainbow. Furthermore, plaintiff contends that, pursuant to an agreement with defendant Mr. Nayak, he is entitled to 50% of the stock of defendant Rainbow, and defendants have refused his demand for it.
Following the joinder of issue, defendants, Mr. Nayak and Rainbow (defendants), moved, pursuant to CPLR 3212, for summary judgment to dismiss the complaint, on the ground of the Statute of Limitations. In his affidavit in support of that motion, defendant Mr. Nayak states, assuming arguendo he breached the agreement with plaintiff, mentioned supra, that breach occurred on November 28, 1979, when Mr. Nayak caused defendant Rainbow to issue all of its stock to him, and, since plaintiff did not commence this action until December 16, 1985, which was more than six years after the alleged breach, the complaint is time barred. Plaintiff opposed. The IAS court granted defendants' motion.
Since this is a declaratory judgment action, we find that the six-year Statute of Limitations (CPLR 213), applicable to the plaintiff's breach of contract claim, which underlies the instant action, controls the time in which this action must be commenced (Solnick v. Whalen, 49 N.Y.2d 224, 229-230). The Court of Appeals held that "[i]n contract cases, the cause of action accrues and the Statute of Limitations begins to run from the time of the breach" (Kassner Co. v. City of New York, 46 N.Y.2d 544, 550).
In opposition to defendants' motion, plaintiff submitted to the IAS court, inter alia, two documents, discussed in detail infra, which indicate that on December 26, 1979, at the closing, mentioned supra, when defendant Rainbow sold the premises to Medical Investors Associates, there was more than one stockholder of Rainbow.
The first document, dated December 26, 1979, is entitled:"UNANIMOUS CONSENT OF STOCKHOLDERS TO CONVEY". Our examination of this two-page document indicates it contains the notarized signatures of plaintiff and defendant Mr. Nayak, as the stockholders of defendant Rainbow, and the notarized certificate of defendant Mr. Nayak, as secretary of defendant Rainbow, which states, in substance, that plaintiff and defendant Mr. Nayak were stockholders of defendant Rainbow on December 26, 1979.
The second document, also dated December 26, 1979, is a copy of a deed between defendant Rainbow and Medical Investors Associates, and it bears the signature of defendant Mr. Nayak, as secretary of defendant Rainbow. Our examination of the deed indicates that, on its face, it contains the following handwritten insert, with apparently defendant Mr. Nayak's initials next to it: "This deed is being given with the unanimous consent of all of the stockholders of Rainbow Realty, Inc" (emphasis added).
Based upon the documents, described supra, which indicate that defendant Mr. Nayak, as secretary of defendant Rainbow, stated that, as of December 26, 1979, plaintiff was a stockholder of defendant Rainbow, and that there was more than one stockholder of defendant Rainbow, we find there is a material triable issue of fact concerning whether the breach occurred on November 28, 1979, when defendant Mr. Nayak claims he caused defendant Rainbow to issue all of its stock to him, or sometime after December 26, 1979, when the defendants rejected plaintiff's demands to be issued 50% of defendant Rainbow's stock, and to be afforded an opportunity to examine the corporate and financial records of defendant Rainbow. Obviously, if the breach occurred after December 26, 1979, the six-year Statute of Limitations would not bar this action, since plaintiff commenced it on December 16, 1985.
It is hornbook law that "[t]he function of summary judgment is issue finding, not issue determination (Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395; Allied Control Co. v. C.F.A. Graphics, 43 A.D.2d 678; 175 Check Cashing Corp. v. Chubb Pac. Indem. Group, 95 A.D.2d 701). On such a motion the court should draw all reasonable inferences in favor of the nonmoving party (Robinson v. Strong Mem. Hosp., 98 A.D.2d 976) and should not pass on issues of credibility (Capelin Assoc. v. Globe Mfg. Corp., 34 N.Y.2d 338)" (Pantote Big Alpha Foods v. Schefman, 121 A.D.2d 295, 296-297 [1st Dept 1986]).
We stated in Gibson v. American Export Isbrandtsen Lines ( 125 A.D.2d 65, 74 [1st Dept 1987]) that "[a]s repeatedly held, the remedy of summary judgment is a drastic one, which should not be granted where there is any doubt as to the existence of a triable issue (Moskowitz v. Garlock, 23 A.D.2d 943, 944) or where the issue is even arguable (Barrett v Jacobs, 255 N.Y. 520, 522), since it serves to deprive a party of his day in court. Relief should be granted only where no genuine, triable issue of fact exists (see, Werfel v. Zivnostenska Banka, 287 N.Y. 91)".
In view of our analysis, supra, we find the IAS court erred in granting defendants' motion.
Accordingly, we reverse, deny the motion, and reinstate the complaint.
Concur — Ross, J.P., Asch, Rosenberger, Wallach and Smith, JJ.