Court of Appeals of New York - Case Study Example

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CASE COMPARISON Name and name CASE COMPARISON Tzolis v. Wolff Court Of Appeals Of New York Decided February 14, 2008 Facts of the case The shareholders of the Pennington Property Company LLC which owned the a Manhattan apartment building brought an action on behalf of the company against their management regarding the lease and consequential sale of the organization property at price considered to be below the market value…
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CASE COMPARISON and CASE COMPARISON Tzolis v. Wolff Court Of Appeals Of New York DecidedFebruary 14, 2008 Facts of the case The shareholders of the Pennington Property Company LLC which owned the a Manhattan apartment building brought an action on behalf of the company against their management regarding the lease and consequential sale of the organization property at price considered to be below the market value. Those in charge of the company decided to lease one of the crucial assets of the company and later sell at amount considered to be below the property’s market value. The plaintiffs who owned 25% of the company’s felt aggrieved by this move of the company directors and as such they decided to bring an action individual in the New York low court-Supreme Court seeking declaration by the judge that the sale as well as the lease to be void and unauthorized and therefore terminate the lease (Smith, 2008). The property in question was the company’s principal asset and as such the shareholders expected the directors to act with due diligence and care when handling the issues related to the property. According to the shareholders their cause of action was motivated by the fact the company directors did not seek their ratification for the second leasing of the property and above all consequent sale of the property below the market price was illegal and unconscionable. When the matter was brought into the New York lower court (the New York Supreme Court) the judges dismissed the claim by the plaintiffs claiming that members of the LLC have no right to remedy the wrongs suffered by the company. The judges claimed that members of the Limited Liability Company had no right to launch a derivative action against the company. The matter was later appealed in the New York Appellate Court. The issue of the case The imminent issue in the case of Tzolis v. Wolff is whether the judges in the lower courts were right to deny the plaintiffs right to derivative suit; a right that would see them defend the right of the company which the that those in control of the Pennington Property Co. LLC failed to do. Outcome The New York Appellate Court reversed the decision of the lower court. In a majority opinion the judges decided that the members of the Limited Liability Company do not lose their right to derivative action on behalf of the company despite the fact that such a right is not expressly contained in the Company’s Act (Smith, 2008). In other words the New York Appellate Court decided the members of the limited liability company can bring legal action on behalf of the company when the faithless directors refuse to act as it is required. According to the majority judges the legislative history in relation to derivative was too ambiguous to an extent that they would infer that the Legislature was aimed at eliminating or limiting the derivative suit by the members of LLC on behalf of the company. Reasoning New York Court of Appeal majority judges issued their opinion based on case law that is rulings made by judges previously. Using the remedy in Robinson vs Smith (1832) the majority judges claimed that the issue of derivative action on behalf of the company has been a significant component of the general corporate law as early as 1832. This means that the right to bring derivative suits on behalf of the company was created by case law rather than statute. As such the lower court erred when they dismissed the case on the basis that it was not recognized in the legislation that created Limited Liability Company. Dissent Judge Read dissented the ruling by the majority judges claiming breach of separation of power which a key component of the constitution. According to the dissenter the majority judges’ decision is tantamount to rewriting the law by adding a right which the legislators-senate had decided to ignore when restructuring the company Act. Comment It is important that the individuals charged with the responsibility of controlling and managing Limited Liability Companies ensure that they act in the best interest of the company. The act of directors of Pennington Property Company LLC did not act in the best interest of the company when the leased the property of the company and consequently planning to sell the property at a price lower than the prevailing market value notwithstanding that the property was the principal asset of the company. The case of Lawrence et al v. Texas (2003) The facts While on alert for weaponry disturbance in a private residence in Houston, police entered the house of Lawrence and founds him engaged in a consensual sexual act with Garner, an adult and arrested them for engaging in a wayward and indecent act in contravention of the state laws against sodomy between same sex couples. The district court duly convicted them of violating the Homosexual Conduct Statute which prohibited from engaging in deviate sexual intercourse with another individual of the same sex. The petitioners appealed against the ruling and initially managed to convince the three judge panel seated at the Court of Appeals of the Fourteenth district held that the petitioners’ conviction had indeed violated the Equal Rights Amendment to the Texas Constitution. This Fourteenth court however upheld the statute after it reheard the case and effectively retained ban on homosexual relationships (Haider-Markel, 2003). The case was filed before the Supreme Court to determine the constitutionality of the statute that restricted consensual sexual conduct between two consenting adults of the same sex. Held: The US Supreme court overruled the decision of the district court and the Texas Statute were a violation of the Due Process Clause. Rationale for the decision While the act of the petitioners was obviously indecent and deviate and totally against the public policy, the petitioners had their fundamental rights to privacy and rights guaranteed in the Due Process clause of the 14th Amendment. The issues at hand greatly touched on infringement of the plaintiff’s privacy given that they engaged in the sexual act in the privacy of their house and therefore arresting those under these circumstances put their privacy at stake. The Federal Constitution confers fundamental rights upon people of same sex such as homosexuals to engage in sodomy in their own privacy (Tribe, 2003). In summary, the Texas Statute carried with it no legitimate state interest which could sustain its intrusion into the personal and very private affairs of an individual such as his/her sexual orientations. My opinion If I was the judge in this case, my decision would have definitely concurred with the decision reached by the Supreme Court because I believe the law exists to protect the rights of all individuals regardless of race, gender or sexual preferences. In addition, the Texas statute outlawing private same sex intercourse between two consenting adults was inconsistent to the Due Process Clause enshrined in the constitution and in such maters the Constitution should always take precedence (Tushnet, 2008). I would further been guided by the fact that the plaintiffs were court engaging in the act in their private r residence hence the need to uphold their personal rights to privacy. As a judge, I would be persuaded more by the constitutionality and legality of the issues raised rather than the moral standing of the issues. Significance of the Case Lawrence v. Texas is a very important case on matters touching on privacy rights especially to the thirteen states which still uphold laws that prohibit private and consensual homosexual acts between adults of full mental capacity. The decision taken by the Supreme Court will most certainly cause a rethink of these laws given that they are now known to be unconstitutional. The proponents of gay and lesbian sexual relationships will gain more rights to their private sexual conduct. Reference Smith, J. (2008). Tzolis v. Wolff. Retrieved November 25, 2011 from: Haider-Markel, D. P. (2003). Media Coverage of Lawrence v. Texas: An Analysis of Content, Tone, and Frames in National and Local News Reporting. Retrieved from  Tribe, Laurence H. (2003). "Lawrence v. Texas: The Fundamental Right That Dare Not Speak Its Name". Harvard Law Review 117: 1893–1955.  Tushnet, M. (2008). I dissent: Great Opposing Opinions in Landmark Supreme Court Cases. Boston: Beacon Press. pp. 211–220. Read More
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