On February 27, 2020, the First Department issued a decision in Shatz v. Chertok, 2020 NY Slip Op. 01383, holding that even a fiduciary with unfettered contractual discretion cannot exercise that discretion in bad faith, explaining: The motion court correctly declined to dismiss the breach of fiduciary duty cause of action. In Richbell Info. Servs.... Read more »
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Posts Categorized: Fiduciary Duties
LLC’s Managing Members Owed Fiduciary Duties to Non-Managing Member
On January 3, 2020, Justice Scarpulla of the New York County Commercial Division issued a decision in Zunzurovski v. Bukefal LLC, 2020 NY Slip Op. 30264(U), holding that an LLC’s managing members had fiduciary duties to its non-managing member, explaining: To assert a claim for breach of fiduciary duty, a plaintiff must allege that (1)... Read more »
Open Repudiation Toll Doctrine Inapplicable to Claim for Money Damages for a Breach of Fiduciary Duty
On November 14, 2019, the First Department issued a decision in Matter of Yin Shin Leung Charitable Found. v. Seng, 2019 NY Slip Op. 08261, holding that the open repudiation toll doctrine was inapplicable to a claim for money damages for a breach of fiduciary duty, explaining: The breach of fiduciary duty claims are barred... Read more »
Singling Out Employee to Receive a Share of Profits Created a Fiduciary Relationship
On March 13, 2019, Judge Costello of the Hudson County Superior Court (Law Division) issued a decision in RCS Logistics, Inc. v. Expolanka USA LLC, Docket NO.: HUD-L-2668-17, holding that singling out one employee to receive a share of profits created a special relationship creating a fiduciary duty, explaining: Shareholders cannot sue for injuries arising... Read more »
Homeowners’ Association’s Decisions Protected by Business Judgment Rule
On March 5, 2019, Judge Wilson of the Bergen County Superior Court (Law Division) issued a decision in Bennett v. Malone, Docket No. BER-L-3443-17, holding that the decisions of a homeowners’ association were protected by the business judgment rule, explaining: A homeowners’ association has a fiduciary relationship with each of its unit owners that requires... Read more »
Faithless Servant Claim Requires Defendant to Have Acted Directly Against Employer’s Interests as in Embezzlement, Improperly Competing or Usurping Business Opportunities
On October 1, 2019, the First Department issued a decision in Bluebanana Group v. Sargent, 2019 NY Slip Op. 07014, holding that a faithless servant claim requires that the employee-defendant acted directly against the employer’s interests, explaining: Plaintiffs have failed to state a cognizable claim for breach of the duty of loyalty, which requires the... Read more »
Lender – Borrower Relationship Does Not Give Rise to Fiduciary Duty
On September 11, 2019, Justice Cohen of the New York County Commercial Division issued a decision in PDL Biopharma, Inc. v. Wohlstadter, 2019 NY Slip Op. 32693(U), holding that a lender – borrower relationship did not give rise to a fiduciary duty, explaining: Defendants’ third and fourth counterclaims for breach of fiduciary duty and tortious... Read more »
Shareholders Did Not Breach Duty to Company by Operating Competing Companies
On July 10, 2019, the Second Department issued a decision in Laffey v. Laffey, 2019 NY Slip Op. 05521, holding that shareholders did not breach a duty to their company by operating competing companies, explaining: Under the unusual circumstances presented, we agree with the Supreme Court’s determination dismissing Emmett’s counterclaim and cause of action alleging... Read more »
Non-Client Adequately Alleged Fiduciary Duty Claims Against Law Firm
On June 11, 2019, the First Department issued a decision in Devlin v. Greenberg Traurig, LLP, 2019 NY Slip Op. 04653, holding that a non-client had adequately alleged breach of fiduciary claims against a law firm, explaining: The court dismissed the fiduciary duty claim on the ground that there was no fiduciary relationship between the... Read more »
Conduct Amounting to Nothing More than Common Business Practice Cannot Be Basis for Aiding and Abetting Breach of Fiduciary Duty Claim
On April 4, 2019, Justice Scarpulla of the New York County Commercial Division issued a decision in Moyal v. Tripost Capital Partners, LLC, 2019 NY Slip Op. 30947(U), holding that conduct amounting to nothing more than a common business practice cannot serve as the basis for a claim of aiding and abetting a breach of fiduciary... Read more »