Stuto v. Kerber (Motion for leave granted on Feb. 15, 2011) 77 A.D.3d 1233 (3d Dep’t 2010)
This appeal will not only offer an analysis of Business Corporation Law § 630, it will likely also provide practitioners with a good explanation of legislative history and the interpretation of statutes. In Stuto, the plaintiff worked for the defendant, which was a defunct closely-held foreign corporation incorporated in Delaware. The plaintiff obtained a judge in Supreme Court, Albany County against the defendant based on a claim for unpaid wages. Thereafter, the plaintiff commenced the action at hand against three of the 10 largest shareholders of the defendant corporation. Supreme Court granted the defendants’ motion to dismiss the plaintiff’s complaint, holding that Business Corporation Law § 630 did not apply to foreign corporations.
The Third Department upheld Supreme Court’s dismissal, observing that section 630 “is essentially the reenactment of former Stock Corporation Law § 71 and provides that ‘[t]he  largest shareholders’ of a nonpublicly traded company ‘shall jointly and severally be personally liable for all debts, wages or salaries due and owing to any of its laborers, servants or employees other than contractors, for services performed by them for such corporation.” Notably, the Third Department pointed out that the former Stock Corporation Law § 71 did not apply to foreign corporations. As such, the Third Department noted that the legislative history of a particular enactment must be reviewed in light of the existing decision law which the Legislature is presumed to be familiar with and to the extent it left it unchanged, that it accepted.
The Court of Appeals will determine whether Business Corporation Law § 630 applies to foreign corporations.