Petitioner, Leanora Skorr ("Leanora"), moves for reargument from so much of the Order of this Court dated April 1, 2005 that granted Respondents' motion dismissing Counts III and IV of Leanora's petition with regard to claims which accrued prior to May 17, 1999 on the ground that they are barred by the applicable Statute of Limitations.

Skorr Steel Co., Inc. ("Skorr Steel") is a domestic corporation that is in the business of selling and distributing cut or shaped stainless steel.

At all relevant times, Petitioner, Helen Skorr ("Helen"), and Respondent, Carol Skorr Piela ("Carol"), were shareholders and officers of Skorr Steel. Respondent, Joseph Piela ("Joseph"), was an officer of Skorr Steel.

Skorr Steel is authorized to issue up to 100 shares of Class A voting stock with a par value of $.01 and 10,000 shares of Class B not-voting stock with a par value of $.01.

Leanora became a shareholder in Steel upon the death of her husband, James Skorr, on July 22, 1999. Her late husband's will bequeathed his shares of Skorr Steel to her. Leanora inherited 20 Class A shares and 2,000 Class B of shares of Skorr Steel. She presently owns those shares.

Counts I and II of the petition seek the judicial dissolution of Skorr Steel pursuant to Business Corporation Law § 1104-a. Respondents have elected to purchase Leanora's interest in Skorr Steel pursuant to Business Corporation Law §1118. The valuation date has been set as May 16, 2002, the day before the filing of the petition. Counts I and II of the petition are not at issue in this motion.

Counts III and IV of the petition contain allegations sounding in shareholder derivative causes of action which allege that Helen, Carol and Joseph diverted corporate opportunity, misappropriated of corporate assets and breached their of fiduciary duty.

Part of the cause of action for diversion of corporate opportunity and misappropriation of corporate assets involves the purchase of property on Gardner Avenue, Brooklyn by Industrial Specialty Metals, Inc. ("Industrial") and a loan made to Joseph and Industrial by Skorr Steel.

On October 26, 1995, Skorr Steel made a loan to Joseph and Industrial. This loan was to be repaid with interest at the rate of 8% per annum.

Industrial used this loan to purchase real property on Gardner Avenue, Brooklyn which is adjacent to real property owned by Skorr Steel.

Industrial is a corporation which is owned by Helen, Carol and Joseph. Leanora has no interest in Industrial.

Leanora alleges that this transaction constitutes a usurpation of corporate opportunity; that the loan was a sham; and that the loan has not been repaid. Leanora further alleged that Skorr Steel gave money to Joseph which he then used to repay the loan. Accordingly, Leanora claims that Joseph, Helen and Carol have breached their fiduciary duty to Skorr Steel by diverting Skorr Steel assets to themselves and/or Industrial.

More specifically, Leanora alleges that in November 1997, Helen, Carol and Joseph diverted to themselves $100,000 in Skorr Steel funds; and that, during the time period 1995 through December 31, 2001, Skorr Steel paid Industrial rent on the Gardner Street property in the sum of $429,330.71, even though Steel did not occupy or use the premises.

Leanora claims that these actions constitute a misappropriation of a corporate opportunity, a diversion of the assets of Steel, and a breach of Respondents' fiduciary duty to Steel.

On January 7, 2005, Motion Seq. 2, 3, and 4 were submitted to the Court. These motions were consolidated for decision. In Motion Seq. 3, Respondents sought partial summary judgment dismissing Counts III and IV of the petition on the ground that they are barred by the Statute of Limitations.

By order dated February 22, 2005, this Court granted Respondents' motion to the extent that the causes of action for misappropriation of corporate opportunity, diversion of corporate assets and breach of fiduciary duty were subject to the three year Statute of Limitations as provided in CPLR 214(4). See, Dignelli v. Berman, 293 AD2d 565 (2nd Dept. 2002); and Yatter v. William Morris Agency, Inc., 256 AD2d 260 (1st Dept. 1998). This Court held that since this special proceeding/action was commenced by the filing of the summons and petition with the County Clerk, Nassau County on May 17,

2002, any claims pled in Count III and/or Count IV of the petition which accrued prior to May 17, 1999 were barred by the Statute of Limitations.

CPLR 2221(d) provides that a motion to reargue be designated as such, shall be based upon matters of fact or law alleged to have been overlooked or misapprehended by the Court in deciding the initial motion and shall be made with thirty days of service of a copy of the order with notice of entry from which reargument is sought.

A motion to reargue is addressed to the discretion of the court and may be granted upon a showing that the court overlooked or misapprehended the facts or law or for some other reason improperly decided the prior motion. Hoey-Kennedy v. Kennedy, 294 AD2d 573 (2nd Dept. 2002); Long v. Long, 251 AD2d 631 (2nd Dept. 1998); and Foley v. Roche, 68 AD2d 558 (1st Dept. 1979). A motion to reargue is not a means by which the unsuccessful party can obtain a second opportunity to argue issues previously decided or to present new or different arguments relating to the previously decided issues. Gellert & Rodner v. Gem Community Mgt., Inc., -A.D.3d-, 797 NYS2d 316 (2nd Dept. 2005); and McGill v. Goldman, 261 AD2d 593 (2nd Dept. 1999).

In this case, Leanora's motion is properly designated as a motion to reargue. She asserts that the Court in misapprehended the law when it held that her shareholder derivative causes of action alleging misappropriation of corporate opportunity, diversion [*2]

of corporate assets and breach of fiduciary duty were governed by the three year Statute of Limitations as provided in CPLR 214(4) and not the six year limitations period set forth in CPLR 213(7). This Court agrees.

A shareholder derivative action, regardless of the theory underlying the claim, is governed by the six year statute of limitations provided in CPLR 213(7). See, Toscano v. Toscano, 285 AD2d 590 (2nd Dept. 2001), where the Second Department held that a shareholder derivative action alleging diversion of corporate assets, misappropriation of corporate assets and breach of fiduciary duty was subject to a six year statute of limitations under CPLR 213(7). See also, 1 New York Civil Practice : CPLR P 213.19. Counts III and IV of the petition are pled as shareholder derivative claims whereby they seek recovery on behalf of Skorr Steel. See, Business Corporation Law §626.

Leanora correctly relies on Toscano in her opposition to Respondents' motion to dismiss. Since the shareholder derivative counts of the petition are subject to the six year and not the three year statute of limitations, the Court misapprehended the applicable law. Therefore, reargument must be granted.

This Court is bound to follow the controlling decisions of the Appellate Division, Second Department. 28 NY Jur Courts and Judges §221. To the extent that Tatko v. Sheldon Slate Products Co., Inc., 2 AD3d 1030 (3rd Dept. 2003), upon which this Court originally relied in holding that the shareholder derivative causes of action were subject

to a three year Statute of Limitations and Toscano conflict, the Court must follow Toscano which is the controlling precedent in this Department.

Applying the appropriate Statute of Limitations would bar Leanora from proving any claims of misappropriation of corporate opportunity, diversion of corporate assets

and breach of fiduciary duty which occurred prior to May 17, 1996, which is six years prior to the commencement of this action.

Leanora is, therefore, barred from establishing that the purchase of the Gardner Avenue property by Industrial was a diversion of corporate opportunity. This property was purchased in October 1995; more than six years prior to the commencement of this action.

Leanora may not attack the loan made by Steel to Industrial Metals and Joseph in October 1995 as a diversion of corporate funds since this is a transaction which took place more than six years prior to the commencement of this action. However, to the extent that Leanora alleges that Skorr assets have been, or are being, misappropriated to the loan and those transactions took place within the six year period prior to the commencement of this action, such claims may be proven at the trial of this action.

Accordingly, it is,

ORDERED, that Petitioner's motion for reargument is granted; and it is further,

ORDERED, that, upon reargument, Respondents' motion for summary judgment [*3]dismissing the Counts III and IV of the verified petition is granted to the extent that all claims for diversion of corporate opportunity, waste and diversion of corporate assets and breach of fiduciary duty which occurred prior to May 17, 1996 are dismissed and the motion is otherwise denied.

This constitutes the decision and order of this Court.

Dated: July 25, 2005 _____________________________

Mineola, NY Hon. LEONARD B. AUSTIN, J.S.C.