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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: May 24, 2020

To State a Conspiracy to Breach Fiduciary Duty Claim, All Alleged Conspirators Must Owe Fiduciary Duties

On May 8, 2020, Justice Borrok of the New York County Commercial Division issued a decision in Sands Bros. Venture Capital II, LLC v. Metropolitan Paper Recycling, Inc., 2020 NY Slip Op. 50568(U), dismissing a claim for conspiracy to breach a fiduciary duty because not all the conspirators were alleged to have such duties, explaining:

Plaintiffs’ claim for conspiracy to breach a fiduciary duty must be dismissed because to sustain a claim of conspiracy, each defendant must independently owe a fiduciary duty to the plaintiffs and there is no independent fiduciary duty owed by Mr. Zizza to the Plaintiffs. Accordingly, the branch of Mr. Zizza’s motion for summary judgment to dismiss the fourth cause of action for aiding and abetting breach of fiduciary duty is denied, and that branch of Mr. Zizza’s motion for summary judgment to dismiss the fifth cause of action for conspiracy to breach a fiduciary duty is granted.

(Internal citations omitted).

Fiduciaries have special duties and complex commercial litigation often involves allegations of a breach of those duties. 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 jlundin@schlamstone.com if you or a client have questions regarding such claims or appeals of such claims.

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