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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: June 9, 2018

Civil Conspiracy Claim Survives When it is Tied to an Alleged Tort

On May 30, 2018, Justice Ostrager of the New York County Commercial Division issued a decision in Pastreich v. Pastreich, 2018 NY Slip Op. 31062(U), upholding a civil conspiracy claim tied to a claim for breach of fiduciary duty, explaining:

Defendants also seek dismissal of the Tenth Cause of Action alleging a conspiracy by defendant Aronson and Pastreich to breach fiduciary duty. It cannot be disputed that Defendant Aronson as a Trustee owed a fiduciary duty to the beneficiaries of the Aronson Trust. Plaintiffs allege that Aronson breached that duty by entering into an agreement with defendant Pastreich to improperly funnel Trust funds from Poughkeepsie Property profits under the pretense that Aronson was being paid a salary when she in fact provided no services. Citing Oparaji v Yablon and other First Department cases, defendants assert that New York Law does not recognize a civil claim for conspiracy. However, civil conspiracy is a cognizable tort when coupled with an underlying claim, which here is the unchallenged Ninth Cause of Action against Aronson for breach of fiduciary duty. Therefore, the Tenth Cause of Action survives dismissal.

(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. And, as this decision shows, someone who is not a fiduciary can nonetheless be liable for conspiring with a fiduciary to facilitate the fiduciary’s breach of his or her duties. 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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