The opinion of the court was delivered by: CANNELLA
Defendant Nissan Motor Corporation's ["Nissan"] motion to dismiss the amended complaint is granted in part and denied in part. Fed R. Civ. P. 12(b)(6).
Plaintiff commenced this action in New York Supreme Court seeking damages from defendants Nissan and Peter J. Ng for breach of fiduciary duties, damages from all other defendants for fraud, and damages from Murray Glick Datsun ["Glick"] for conversation. Plaintiff added a claim for negligence against Nissan in the amended complaint. Upon motion, the Court determined that the claims against Nissan were separate and independent from the claims against the nondiverse defendants and were properly removable to federal court. 28 U.S.C. § 1441(c). The Court then removed the entire action noting that there was no opposition and finding that it would further judicial economy to retain the claims against the nondiverse defendants. Memorandum and Order, 83 Civ. 3141 (JMC) (S.D.N.Y. Dec. 20, 1983). This action was dismissed against defendant Ng by stipulation and order on July 23, 1984. Nissan now moves to dismiss the amended complaint.
On August 20, 1982, plaintiff and Glick entered into a "dealer floor plan loan and security agreement" under which plaintiff purchased Nissan motor vehicles for Glick, an independent franchise dealer of Nissan. The agreement provided that plaintiff would receive title for the vehicles; thereafter, Glick would sell the automobiles, pay plaintiff, and in return plaintiff would release title to Glick, who would then transfer it to the purchaser. This financing agreement secured plaintiff's right to repossess any cars it had purchased if Glick defaulted. On September 17, 1982, plaintiff and Nissan entered into a letter agreement whereby Nissan agreed to repurchase vehicles from plaintiff if Glick's dealership was terminated or liquidated.
Glick allegedly went "out of trust" by selling 20 automobiles and 4 small trucks and failing to pay plaintiff from the proceeds of these sales. On December 13, 1982, plaintiff suspended it financing of Glick. There is no dispute that Nissan complied with its agreement to repurchase unsold vehicles from plaintiff after Glick's dealership was terminated.
Plaintiff alleges, however, that Nissan allowed conditions to exist which left plaintiff with few cars to repossess. Plaintiff contends that at some time after agreements were signed, Nissan learned that Glick was going to terminate by selling his franchise to another Nissan dealer and that Glick had gone "out of trust" on a prior occasion. The amended complaint alleges that Nissan had a fiduciary duty to inform plaintiff that Glick was planning to terminate his dealership franchise and that Nissan is liable for failing to control Glick and disclose relevant information.
In moving to dismiss the amended complaint, Nissan asserts that as a matter of law it had no fiduciary duty to warn plaintiff of Glick's proposed termination and that plaintiff did not recover under any tort theory. Plaintiff argues in response that there are questions of fact concerning Nissan's relationship with Glick which might impose a duty to warn.
Plaintiff maintains that Nissan owed it a fiduciary duty because Nissan (1) "protected" the floor plan financing arrangement between plaintiff; and Glick: (2) had access to certain information about Glick; and (3) knew of Glick's proposed plans. Notwithstanding plaintiff's allegations, New York law is clear that a fiduciary relationship exists from the assumption of control and responsibility, see Gordon v. Bialystoker Center & Bikur Cholim, Inc., 45 N.Y.2d 692, 698, 385 N.E.2d 285, 288, 412 N.Y.S.2d 593, 596 (1978), and is founded upon trust reposed by one party in the integrity and fidelity of another, see Penato v. George, 52 A.D.2d 939, 942, 383 N.Y.S.2d 900, 904 (2d Dep't 1976), appeal dismissed, 42 N.Y.2d 908, 366 N.E.2d 1358, 397 N.Y.S.2d 1004 (1977). No fiduciary relationship exists under the facts alleged in the pleading which show that the two parties were acting and contracting at arm's length. Moreover, courts have rejected the proposition that a fiduciary relationship can arise between parties to a business transaction. See Grumman Allied Indus., Inc. v. Rohr Indus., Inc., 748 F.2d 729, slip op. at 195-96 (2d Cir. 1984); Wilson-Rich v. Don Aux Assocs., Inc., 524 F. Supp. 1226, 1234 (S.D.N.Y. 1981); see also duPont v. Perot, 59 F.R.D. 404, 409 (S.D.N.Y. 1973) ("no precedent for the proposition that a fiduciary relationship is created between a creditor and a third party merely be reason of a contract between the third party and the creditor's debtor").
Although a "confidential" relationship may conceivably arise where confidence is based upon prior business dealings, see Levine v. Chussid, 31 Misc.2d 412, 415, 221 N.Y.S.2d 311, 313 (N.Y. Sup. Ct. 1961), there is no allegation of a previous relationship between plaintiff and Nissan. See also Wilson-Rich v. Don Aux Assocs., Inc., supra, 524 F. Supp. at 1234 ("fiduciary relation is to be distinguished from a merely confidential relation . . . a confidential relation is simply one of the elements to be considered in determining whether there is fraud or undue influence or overreaching") (quoting I Scott on Trusts § 2.5, at 40 (3d ed. 1967)). Accordingly, count three of the amended complaint is dismissed.