On December 2, 2021, the First Department issued a decision in Glaubach v. Miller, 2021 NY Slip Op. 06758, holding that a board member lacked standing to assert a malpractice claim on behalf of the corporation even though he paid the corporation’s legal fees, explaining:
Plaintiff, who sues individually and in his capacity as a board member of Personal Touch Holding Corp., lacks standing to commence this action. The complaint, which asserts a single cause of action for legal malpractice, is premised on defendants’ allegedly deficient pleading of causes of action under Business Corporation Law § 720. Any BCL 720 causes of action, however, belonged to the corporation, not to plaintiff as an individual. Thus, only the corporation has standing to sue for legal malpractice arising from those causes of action, and plaintiff does not dispute that he has failed to plead the pre-suit requirements necessary to sue derivatively on behalf of the corporation under Business Corporation Law § 626. Furthermore, plaintiff’s payment of legal fees does not confer standing on him.
(Internal citations omitted).