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 interference with prospective economic advantage, respectively, are also without merit. Defendants have failed to show that PDL owed a fiduciary duty to Defendants. To state a claim for breach of fiduciary duty, plaintiffs must allege that (1) defendant owed them a fiduciary duty, (2) defendant committed misconduct, and (3) they suffered damages caused by that misconduct. An arm’s length borrower-lender relationship is not of a confidential or fiduciary nature. Defendants have not submitted evidence sufficient to state a viable claim that PDL was their fiduciary.
(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. We both bring and defend breach of fiduciary duty and professional malpractice claims and other claims relating to the duties of trustees and professionals such as lawyers, accountants and architects to their clients. Contact Schlam Stone & Dolan partner John Lundin at email@example.com if you or a client have questions regarding such claims or appeals of such claims.
Click here to subscribe to this or another of Schlam Stone & Dolan’s blogs.