Commercial Division Blog
Accounting Denied For Lack of Fiduciary or Confidential Relationship
On July 25, 2018, the Second Department issued a decision in Lake Overlook Partners, LLC v. Sosa, 2018 NY Slip Op. 05459, holding that a plaintiff was not entitled to an accounting where there was no fiduciary or confidential relationship, explaining:
We also agree with the Supreme Court's determination granting those branches of the defendant's motion which were pursuant to CPLR 3211(a)(7) to dismiss the second and fifth causes of action, which were for an accounting. The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest. Here, the plaintiff failed to allege any facts from which a confidential or fiduciary relationship between Assoumou and the defendant might be inferred. Indeed, there is no valid contract upon which the alleged fiduciary relationship could be based, and the complaint does not allege any close friendship or prior business dealings between Assoumou and the defendant. To the contrary, the plaintiff alleges only that Assoumou and the defendant were acquaintances from business school, and that this was to be their first business investment together.
(Internal quotations and 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 firstname.lastname@example.org if you or a client have questions regarding such claims or appeals of such claims.