On September 30, 2024, Justice Cohen of the New York County Commercial Division issued a decision in Ramirez v. Issa, 2024 NY Slip Op. 33488(U), staying a proceeding to dissolve a corporation in favor of an earlier filed action even though the earlier action did not seek dissolution, explaining:
CPLR 2201 provides that except where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just. Factors to consider include avoiding the risk of inconsistent adjudications, application of proof and potential waste of judicial resources. Courts have exercised their discretion to stay actions “pending resolution of the previously commenced related action. A stay may be appropriate even where there is not a complete identity of parties, but there are overlapping issues and common questions of law and fact, and the determination of the prior action may dispose of or limit issues which are involved in the subsequent action.
Here, the parties in the Kings County Action are the same as the parties in this action. Further, while the issues are not identical, they are overlapping. In the King’s County Action, petitioners seek damages for breach of the parties’ Stockholders Agreement, related torts, and equitable relief concerning control of the Company. Thus, in both this action and the prior pending Kings County Action depend on whether Ramirez was stealing Company property in breach of his fiduciary duties and contractual obligations of good faith and fair dealing, warranting suspension of lssa’s contract performance and Ramirez’ termination and exclusion from the business.
Furthermore, the King’s County Action has been actively litigated, with over 350 docket entries and twenty motions filed. According to Respondents, some of the issues raised in this action were already ruled on or are currently pending in the Kings County Action, including Petitioners’ claim for an injunction limiting Company payments to ordinary course business expenses, Petitioners’ demand for additional Company business records, and Petitioners’ claim for a receiver. Petitioners do dispute Respondents’ showing that these two actions involve identical parties and identical facts and legal issues. Rather, Petitioners claim this action is different because the Kings County Action seeks relief against Issa individually, while this one seeks relief against the Company in the form of dissolution. But that does not refute Respondent’s argument that the underlying alleged basis for dissolution turns on the same fact and legal issues raised in the Kings County Action. . . . Accordingly, Respondents’ motion to stay this action pending the resolution of the King’s County Action is granted.
(Internal quotations and citations omitted).