Ivchenko v. Clean Air Technologies International, Inc.

Appeal from that part of an order and judgment (one document) of Supreme Court, Erie County (O’Donnell, J.), entered September 27, 2001, that determined that section 1 (b) of article IV of the bylaws of respondent Clean Air Technologies International, Inc. is invalid. It is hereby ordered that the order and judgment so appealed [911] from be and the same hereby is unanimously affirmed without costs. Memorandum: Petitioner, who was not reelected as a member of the board of directors of respondent Clean Air Technologies International, Inc. (Corporation), appeals from that part of an order and judgment determining that section 1 (b) of article IV of the Corporation’s bylaws is invalid. Pursuant to section 1 (b), petitioner and respondent David W. Miller shall be permanent members of the board of directors. That section further provides that it shall not be modified in any manner without the express written approval of petitioner and Miller. We reject petitioner’s contention that Supreme Court erred in invalidating that section. The gravamen of petitioner’s contention is that section 1 (b) constitutes a shareholders’ agreement between Miller and petitioner. We disagree. Even assuming, arguendo, that the original corporate bylaws are as petitioner alleges, we conclude that section 1 (b) does not constitute a valid and enforceable shareholders’ agreement, nor does it constitute a valid contract between Miller and petitioner. The permanent director provision at issue does not appear in any shareholders’ agreement, it is not referred to in any of the Corporation’s share certificates, and it is not contained in the Corporation’s certificate of incorporation or amendment thereto (cf. Garson v Garson, 105 AD2d 726, affd sub nom. Garson v Rapping, 66 NY2d 928). Present — Pigott, Jr., P.J., Wisner, Hurlbutt, Scudder and Lawton, JJ.