Second Department Affirms Summary Judgment Dismissing Breach of Fiduciary Duty Claim Concerning Severance Package

On October 6, 2021, in Glaubach v. Slifkin, 2021 NY Slip Op 05322, Second Department Case Nos. 2018-12718, 2018-12720, and 2019-04182, the Second Department affirmed a Decision and Order of Justice Marguerite Grays, which granted summary judgment to defendants dismissing a breach of fiduciary duty claim concerning a severance package offered to one of the defendants. The Court explained:

The Supreme Court properly granted that branch of the motion of Slifkin and Balk which was for summary judgment dismissing the tenth cause of action in the amended complaint. In order to establish a breach of fiduciary duty, a plaintiff must prove the existence of a fiduciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant's misconduct (see Stortini v Pollis, 138 AD3d 977, 978-979; Deblinger v Sani-Pine Prods. Co., Inc., 107 AD3d 659, 660). On this branch of their motion, Slifkin and Balk met their prima facie burden of demonstrating that there was no breach of fiduciary duty by them (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324). They demonstrated that the severance package was agreed to by a special committee of the corporation's board of directors. While employees of the corporation made allegations of sexual harassment against the plaintiff following the package's approval, Slifkin and Balk demonstrated that none of those individuals made allegations of sexual harassment in order to stop the plaintiff from objecting to the severance package offered to Balk. In opposition, the plaintiff failed to raise a triable issue of fact.

The attorneys at Schlam Stone & Dolan frequently litigate disputes concerning breaches of fiduciary duty.

Contact our attorneys at commercialdivisionblog@schlamstone.com if you or a client have questions regarding fiduciary duties.