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 plaintiff's 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
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 first opportunity. The amended complaint, however,
did not sufficiently allege a meeting of the minds with
respect to the material terms of the plaintiff's right of
first opportunity to purchase artworks. Therefore, the
amended complaint failed to state a cause of action alleging
breach of contract.
the Supreme Court properly granted dismissal of the cause of
action alleging fraud. A cause of action alleging fraud
requires the plaintiff to plead: (1) a material
misrepresentation of a fact, (2) knowledge of its falsity,
(3) an intent to induce reliance, (4) justifiable reliance,
and (5) damages (see Eurycleia Partners, LP v Seward
& Kissel, LLP, 12 N.Y.3d 553, 559; Stein v
Doukas, 98 A.D.3d 1024, 1025). CPLR 3016(b) requires
that the circumstances underlying a cause of action based on
fraud be stated "in detail" including specific
dates and items (CPLR 3016[b]; see IndyMac Bank, F.S.B. v
Vincoli, 105 A.D.3d 704, 707; Moore v Liberty Power
Corp., LLC, 72 A.D.3d 660, 661). Here, as the cause of
action alleging fraud contained only bare and conclusory
allegations, without any supporting detail, it failed to
satisfy the requirements of CPLR 3016(b).
the Supreme Court properly granted those branches of
Cahan's motion which were to dismiss the causes of action
alleging breach of fiduciary duty, breach of ...