- February 2, 2017
Burstein P.C., New York, NY (Anne-Marie Mitchell of counsel),
& Associates, P.C., New York, NY (Lauren B. Lepore,
Jennifer L. Zaluski, Christopher B. Spuches, and Jason A.
Martorella of counsel), for respondent.
REINALDO E. RIVERA, J.P. RUTH C. BALKIN CHERYL E. CHAMBERS
JEFFREY A. COHEN, JJ.
DECISION & ORDER
from an order of the Supreme Court, Kings County (Carolyn E.
Demarest, J.), dated November 7, 2014. The order, insofar as
appealed from, granted those branches of the motion of the
defendant Eric Cahan which were to dismiss the causes of
action alleging breach of fiduciary duty, breach of contract,
and fraud insofar as asserted against him.
that the order is affirmed insofar as appealed from, with
2013, the plaintiff allegedly entered into an oral agreement
with the defendant Eric Cahan, pursuant to which Cahan agreed
to act as the plaintiffs art advisor regarding the
acquisition of contemporary artworks in exchange for a
consulting fee in the amount of 10% of the cost of the
artworks purchased. Additionally, the alleged oral agreement
required Cahan to give the plaintiff the right of first
opportunity to purchase all artworks offered to Cahan by art
galleries or dealers before Cahan could purchase them for
himself or offer them to a third party.
terminating the alleged agreement, the plaintiff commenced
this action, alleging, inter alia, that Cahan fraudulently
induced him to enter into the alleged oral agreement, and
that Cahan breached his contractual and fiduciary duties. The
plaintiff asserted causes of action alleging breach of
fiduciary duty, breach of contract, and fraud, among others.
Cahan moved, inter alia, pursuant to CPLR 3211(a)(7) to
dismiss the amended complaint insofar as asserted against
him. The Supreme Court granted Cahan's motion. The
plaintiff appeals from so much of the order as granted
dismissal of the causes of action alleging breach of
fiduciary duty, breach of contract, and fraud insofar as
asserted against Cahan.
considering a motion to dismiss a complaint pursuant to CPLR
3211(a)(7), the court must"' accept the facts as
alleged in the complaint as true, accord plaintiffs the
benefit of every possible favorable inference, and determine
only whether the facts as alleged fit within any cognizable
legal theory'" (Nonnon v City of New York,
9 N.Y.3d 825, 827, quoting Leon v Martinez, 84
N.Y.2d 83, 87-88).
Supreme Court properly granted that branch of Cahan's
motion which was to dismiss the cause of action to recover
damages for breach of fiduciary duty for failure to state a
cause of action. "The elements of a cause of action to
recover damages for breach of fiduciary duty are (1) the
existence of a fiduciary relationship, (2) misconduct by the
defendant, and (3) damages directly caused by the
defendant's misconduct" (Rut v Young Adult
Inst., Inc., 74 A.D.3d 776, 777; see Litvinoff v
Wright, 150 A.D.3d 714; Stortini v Pollis, 138
A.D.3d 977, 978-979; Deblinger v Sani-Pine Prods. Co.,
Inc., 107 A.D.3d 659, 660). "A cause of action
sounding in breach of fiduciary duty must be pleaded with
particularity under CPLR 3016(b)" (Swartz v
Swartz, 145 A.D.3d 818, 823; see Deblinger v
Sani-Pine Prods. Co., Inc., 107 A.D.3d at 660).
fiduciary relationship arises when one is "'under a
duty to act for or to give advice for the benefit of another
upon matters within the scope of the relation'"
(Oddo Asset Mgt. v Barclays Bank PLC, 19 N.Y.3d 584,
592-593, quoting Roni LLC v Arfa, 18 N.Y.3d 846,
848; see DiTolla v Doral Dental IPA of N.Y., LLC,
100 A.D.3d 586, 587). It is "grounded in a higher level
of trust than normally present in the marketplace between
those involved in arm's length business
transactions" (EBC I, Inc. v Goldman, Sachs &
Co., 5 N.Y.3d 11, 19). "[A] conventional business
relationship, without more, is insufficient to create a
fiduciary relationship" (AHA Sales, Inc. v Creative
Bath Prods., Inc., 58 A.D.3d 6, 21). Rather, a plaintiff
must make a "showing of 'special circumstances'
that could have transformed the parties' business
relationship to a fiduciary one, such as control by one party
of the other for the good of the other" (L. Magarian
& Co. v Timberland Co., 245 A.D.2d 69, 70 [citation
omitted]; see AHA Sales, Inc. v Creative Bath Prods.,
Inc., 58 A.D.3d at 21-22). "'A fiduciary
relationship may exist when one party reposes confidence in
another and reasonably relies on the other's superior
expertise or knowledge, but not in an arm's-length
business transaction involving sophisticated business
people'" (Guarino v North Country Mtge. Banking
Corp., 79 A.D.3d 805, 807, quoting Barrett v
Freifeld, 64 A.D.3d 736, 739).
affording the complaint a liberal construction, accepting the
facts alleged therein to be true, and granting the plaintiff
the benefit of every possible favorable inference, the
amended complaint failed to adequately plead the existence of
a fiduciary relationship between the plaintiff and Cahan
(see Litvinoff v Wright, 150 A.D.3d at 714;
Mueller v Michael Janssen Gallery PTE, Ltd., 225
F.Supp 3d 201 [US Dist Ct, S.D. NY]). The complaint fails to
allege "special circumstances" that transformed the
alleged business relationship of the plaintiff and Cahan into
a fiduciary one, such as "control by one party of the
other for the good of the other" (L. Magarian &
Co. v Timberland Co., 245 A.D.2d at 70). The plaintiff,
an attorney and sophisticated business owner, was not under
the control of Cahan. Indeed, he asserted in the amended
complaint that he made purchases of art works independent of
Cahan's advice and counseling.
contrary to the plaintiff s contentions, the Supreme Court
properly granted dismissal of the cause of action alleging
breach of contract for failure to state a cause of action.
"[A] party alleging a breach of contract must
'demonstrate the existence of a . . . contract reflecting
the terms and conditions of their . . . purported
agreement'" (Mandarin Trading Ltd. v
Wildenstein,16 N.Y.3d 173, 181-182, quoting
American-European Art Assoc. v Trend Galleries, 227
A.D.2d 170, 171). "To create a binding contract, there
must be a manifestation of mutual assent sufficiently
definite to assure that the parties are truly in agreement
with respect to all material terms" (Matter of
Express Indus. & Term. Corp. v New York State Dept. of
Transp.,93 N.Y.2d 584, 589; see 2004 McDonald Ave.
Realty, LLC v 2004 McDonald Ave. Corp,50 A.D.3d 1021,
1021-1022; Mainline Elec. Corp. v Pav-Lak Indus.,
Inc.,40 A.D.3d 939, 939; Miranco Contr., Inc. v
Perel,29 A.D.3d 873, 873). The amended complaint
alleged that the oral agreement required Cahan to give the
plaintiff the right of first opportunity to purchase all
artworks offered to Cahan and that Cahan breached the oral
agreement by, inter alia, depriving the plaintiff of the
right of ...