Epstein Eng'g P.C. v Cataldo
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on December 20, 2012
Mazzarelli, J.P., Friedman, Catterson, Richter, Manzanet-Daniels, JJ.
Orders, Supreme Court, New York County (Judith J. Gische, J.), entered February 28, June 1, and June 14, 2011, which, to the extent appealed from as limited by the briefs, decided defendants Thomas Cataldo and Cataldo Engineering, P.C.'s motion for a protective order upon a determination that plaintiff is entitled to damages incurred after the date of Thomas Cataldo's resignation from it arising from defendants' work for clients obtained before Cataldo's resignation, unanimously affirmed, without costs.
Defendants are alleged to have incorporated a business which directly competed with plaintiff, engaging in a "double life" for a period of 17 months prior to resigning from the company. A faithless servant must account not only for profits attributable to clients poached from the principal, but for all profits ascribable to the wrongful diversion of business (see Maritime Fish Prods. v World-Wide Fish Prods., 100 AD2d 81, 89 [1st Dept 1984], appeal dismissed 63 NY2d 675  [noting that even if a faithless servant had first offered a diverted opportunity to the principal, he would not be free to take the business for himself or direct it to a competitor for his profit without the express consent and approval of his employer]).
It is entirely possible, given the breadth and duration of the alleged deception, that defendants diverted corporate opportunities belonging to plaintiff principal, and that any lost profits ascribable thereto accrued after the date of Cataldo's resignation. Thus, it would be inappropriate to use the date of Cataldo's resignation as a cut-off date.
We have considered and rejected the parties' remaining contentions. The Decision and Order of this Court entered herein on May 22, 2012 is hereby recalled and vacated (see M--2931 decided simultaneously herewith).
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: DECEMBER 20, 2012
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