Posts Categorized: Fiduciary Duties

Posted: March 10, 2020

Fiduciary With Unfettered Discretion Cannot Exercise That Discretion in Bad Faith

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 »

Posted: February 19, 2020

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 »

Posted: November 21, 2019

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 »

Posted: October 26, 2019

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 »

Posted: October 23, 2019

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 »

Posted: October 14, 2019

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 »

Posted: September 26, 2019

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 »

Posted: July 20, 2019

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 »

Posted: April 27, 2019

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 »