Krackeler Scientific, Inc. v. Ordway Research Institute, Inc.

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Krackeler Scientific, Inc. v. Ordway Research Institute, Inc.

Citations: 97 A.D.3d 1083; 949 N.Y.2d 286

Court: Appellate Division of the Supreme Court of the State of New York; July 26, 2012; New York; State Appellate Court

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In March 2011, the plaintiff initiated a breach of contract lawsuit against the defendant, Ordway Research Institute, Inc., for nearly $97,000 worth of products delivered under an oral contract. In April 2011, the plaintiff amended the complaint to include Richard C. Liebich, the chair of Ordway's board, and added allegations of fraud. Ordway filed for bankruptcy that same month. Liebich subsequently moved to dismiss the claims against him, citing his status as an uncompensated director protected under N-PCL 720-a, which grants immunity to directors of not-for-profit organizations. The court evaluated whether Liebich qualified for this immunity and whether the plaintiff had sufficient evidence to suggest that Liebich’s actions were grossly negligent or intentional.

The court outlined that for a motion under CPLR 3211 (a)(11), the plaintiff must provide strong evidentiary proof of gross negligence or intent to cause harm, as mere speculation is insufficient. The plaintiff's amended verified complaint claimed that Liebich falsely assured that Ordway could pay for the products but failed to provide identifying details about the representatives who met with Liebich or any supporting affidavits. Consequently, the court found that the plaintiff did not meet the burden required to overcome Liebich's immunity under the statute.

The Supreme Court granted Liebich's motion to dismiss, and the appellate court affirmed this decision, concluding that the complaint against Liebich was properly dismissed due to insufficient evidence. Costs were awarded to Liebich.