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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: February 12, 2019

Conspiracy to Breach Fiduciary Duty Claim Properly Dismissed for Failure to Allege Facts Relating to Acts in Support of Conspiracy

On February 1, 2019, the Fourth Department issued a decision in Cohen & Lombardo, P.C. v. Connors, 2019 NY Slip Op. 00755, dismissing a conspiracy to breach a fiduciary duty claim for failure to allege facts relating to acts in support of the conspiracy, explaining:

[T]he court properly granted that part of the motion dismissing each of the causes of action for conspiracy to violate fiduciary duties. First, those causes of action against defendants-appellants are duplicative of the breach of fiduciary duty causes of action asserted against them. Next, with respect to the associate defendants, while it is true that New York does not recognize civil conspiracy to commit a tort as an independent cause of action, allegations of conspiracy are permitted to connect the actions of separate defendants with an otherwise actionable tort. Such a conspiracy claim may be asserted where there are allegations of a primary tort, plus the following four elements: (1) an agreement between two or more parties; (2) an overt act in furtherance of the agreement; (3) the parties’ intentional participation in the furtherance of a plan or purpose; and (4) resulting damage or injury. Here, however, the complaint merely recites those elements and fails to assert any supporting factual allegations with respect to the associate defendants’ overt acts in furtherance of the agreement and intentional participation in the furtherance of a plan or purpose. Thus, even applying the requisite liberal construction to the complaint, we conclude that the court properly dismissed the conspiracy causes of action against each of the associate defendants.

(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. 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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