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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts
Posted: April 4, 2018

Close Friendship Insufficient to Create Fiduciary Relationship

On March 29, 2018, the First Department issued a decision in Benzies v. Take-Two Interactive Software, Inc., 2018 NY Slip Op. 02242, holding that a close friendship was insufficient to create a fiduciary relationship, explaining:

The breach of fiduciary duty claim is not viable because the complaint alleges only arm’s length business transactions and no special circumstances that might give rise to a fiduciary relationship between plaintiff and Sam Houser. The emails in the record, although showing a close friendship, are not sufficient to establish the necessary requirement of trust and confidence. In the absence of a fiduciary relationship, the claims for aiding and abetting breach of fiduciary duty, constructive fraud and negligent misrepresentation cannot stand.

(Internal citations omitted).

Fiduciaries have special duties, but the question of whether a defendant is a fiduciary, and thus can be liable for a breach of fiduciary duty, is sometimes a complicated one. We both bring and defend breach of fiduciary duty and professional malpractice claims and other claims relating to the duties of trustees and professionals such as lawyers, accountants and architects to their clients. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding such claims or appeals of such claims.

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