Declaratory Judgment Claim Dismissed on Ripeness Grounds Where Too Many Contingent Events Exist for Plaintiff to Show Actual or Threatened Imminent Harm

The parties in Berardi v. Berardi, Case No. 22-CV-00159, are the owners of certain companies that provide public transportation services throughout New York State and other surrounding areas under various trade names including Trailways and Coach.  The parties entered into a post-nuptial agreement providing that upon dissolution of their marriage, plaintiff would own 49% of the companies and defendant would own 51%.  The parties were divorced in 2009.

The shareholder agreements for the companies include provisions that preclude a shareholder from selling, disposing, bequeathing, or otherwise transferring shares without first providing the companies with the right of first refusal and then offering the shares to the other shareholders.  After defendant advised of his intent to bequeath his shares to the parties’ son, Alex, plaintiff commenced this action seeking, among other things, declaratory relief that the right of first refusal provisions preclude defendant’s testamentary transfer.  Defendant argued that the parties’ post-nuptial agreement permits the parties to bequeath shares to their heirs.

The Northern District of New York dismissed the declaratory judgment claim as not ripe.  Berardi v. Berardi, 2023 WL 1795797 (N.D.N.Y. Feb. 7, 2023).  A declaratory judgment claim is justiciable if “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of declaratory judgment.”  Id. at *7 (internal citations and quotation marks omitted).  Even though the Court recognized that the parties’ disagreement as to the posthumous enforceability of the shareholder agreements may constitute “an authentic difference of legal opinion[,]” it found that plaintiff has not shown any actual or threatened harm because any injury turns on “nebulous future events so contingent in nature that there is no certainty they will ever occur.”  Id. at *8.  Specifically, it is possible for plaintiff or her son Alex to predecease defendant, the company could be sold, or defendant could change his will.  Id.  Finding the claim not to be ripe, the Court stated that if plaintiff does not predecease defendant and defendant’s will provides a bequest of shares to Alex, then plaintiff will have a right to challenge defendant’s will under the shareholder agreements.  Id. at **8–9.

If you have any questions about whether a claim is justiciable, please contact Michael C. Rakower or Melissa Yang.


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