Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Wallkill Medical Development, LLC v. Catskill Orange Orthopaedics, P.C.

Supreme Court of New York, Second Department

December 18, 2019

Wallkill Medical Development, LLC, appellant,
v.
Catskill Orange Orthopaedics, P.C., et al., respondents, et al., defendant. Index No. 2300/13

          Argued - September 17, 2019

         D61495 M/htr

          Bartels & Feureisen, LLP, White Plains, NY (Michael Fahey of counsel), for appellant.

          Elman Freiberg PLLC, New York, NY (Howard I. Elman, Yosef Rothstein, Jeremy C. Bates, and Benjamin S. Litman of counsel), for respondents.

          MARK C. DILLON, J.P. JOSEPH J. MALTESE COLLEEN D. DUFFY BETSY BARROS, JJ.

          DECISION & ORDER

         In an action, inter alia, to recover damages for breach of a lease, breach of fiduciary duty, and fraudulent and negligent misrepresentation, the plaintiff appeals from an order of the Supreme Court, Orange County (Sandra B. Sciortino, J.), dated January 30, 2017. The order, insofar as appealed from, granted the motion of the defendants Catskill Orange Orthopaedics, P.C., Bonehead, Inc. South, Bradley Wiener, Ronald Israelski, Charles Episalla, and Eric Martin for summary judgment dismissing the causes of action alleging breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraudulent misrepresentation, negligent misrepresentation, and fraudulent concealment insofar as asserted against them.

         ORDERED that the order is affirmed insofar as appealed from, with costs.

         This action involves, inter alia, a business relationship between the plaintiff, Wallkill Medical Development, LLC (hereinafter Wallkill Medical), and two entities owned by the physicians who are named as defendants in this action. Wallkill Medical was formed in 2004. Nonparty Westage Medical Development VII, LLC, was the majority and managing member of Wallkill Medical. The defendant Bonehead, Inc. South (hereinafter Bonehead, Inc.), owned a 15% membership interest in Wallkill Medical. Bonehead, Inc., was owned by the individual defendants, Bradley Wiener, Ronald Israelski, Charles Episalla, Charles Peralo, and Eric Martin (hereinafter collectively the individual defendants). The Wallkill Medical operating agreement provided that "Member Affiliates," which included Bonehead, Inc., and/or its affiliate, were to lease space in a medical office building to be constructed by Wallkill Medical. The operating agreement also provided, as relevant, that the owners of Bonehead, Inc., would provide personal guarantees for the purpose of Wallkill Medical obtaining construction financing and permanent mortgage financing, if necessary.

         After Wallkill Medical completed construction of the medical office building (hereinafter the medical building), in late 2006, a medical practice, the defendant Catskill Orange Orthopaedics, P.C. (hereinafter Catskill Orange), which was owned by the individual defendants, began occupying space in the medical building pursuant to a 10-year lease with Wallkill Medical.

         In 2011, Catskill Orange allegedly began experiencing financial difficulties. The members of the practice attributed those difficulties, in part, to the departure from the practice of Peralo, who was subsequently suspended from practicing medicine for a period of time. In February 2013, Catskill Orange notified Wallkill Medical of its intent to vacate the leased premises, and it vacated the premises in March 2013.

         Wallkill Medical commenced this action, inter alia, to recover damages for breach of the lease, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraudulent misrepresentation, negligent misrepresentation, and fraudulent concealment. Thereafter, as relevant to this appeal, Catskill Orange, Bonehead, Inc., Weiner, Israelski, Episalla, and Martin (hereinafter collectively the Catskill Orange defendants) moved for summary judgment dismissing the causes of action alleging breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraudulent misrepresentation, negligent misrepresentation, and fraudulent concealment insofar as asserted against them. The Supreme Court granted the Catskill Orange defendants' motion, and the plaintiff appeals.

         We agree with the Supreme Court's determination granting those branches of the Catskill Orange defendants' motion which were for summary judgment dismissing the breach of fiduciary duty and aiding and abetting a breach of fiduciary duty causes of action insofar as asserted against them. "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 Faith Assembly v Titledge of N.Y. Abstract, LLC, 106 A.D.3d 47, 61). "'A claim for aiding and abetting a breach of fiduciary duty requires: (1) a breach by a fiduciary of obligations to another, (2) that the defendant knowingly induced or participated in the breach, and (3) that plaintiff suffered damage as a result of the breach'" (AHA Sales, Inc. v Creative Bath Prods., Inc., 58 A.D.3d 6, 23, quoting Kaufman v Cohen, 307 A.D.2d 113, 125).

         The Catskill Orange defendants demonstrated, prima facie, that they did not breach any fiduciary duty and did not aid or abet a breach of fiduciary duty owed to Wallkill Medical, and Wallkill Medical failed to raise a triable issue of fact in opposition to that showing (see Slocum Realty Corp. v Schlesinger, 162 A.D.3d 939, 944-945; Zuckerbrod v 355 Co., LLC, 113 A.D.3d 675, 676). While Wallkill Medical contends that the Catskill Orange defendants breached a fiduciary duty owed to it by failing to disclose the financial difficulties experienced by the Catskill Orange medical practice beginning in 2011, that contention is contradicted by the record, which shows that Wallkill Medical was made aware of that circumstance in early 2011. Although Wallkill Medical also contends that Catskill Orange failed to disclose certain facts as to its financial condition, including the existence of a certain debt owed by it to Chase Bank, the record demonstrates that Catskill Orange included that information in a financial disclosure that was timely submitted to Wallkill Medical. The Catskill Orange defendants also submitted evidence that Weiner, Israelski, Episalla, and Martin ultimately repaid that loan, placing Catskill Orange in no worse a position than it had been in prior to the draw down of that line of credit. Accordingly, we agree with the Supreme Court's determination granting those branches of the Catskill Orange defendants' motion which were for summary judgment dismissing the breach of fiduciary duty and aiding and abetting breach of fiduciary duty causes of action insofar as asserted against them (see Baldeo v Majeed, 150 A.D.3d 942, 945-946; North Fork Preserve, Inc. v Kaplan, 68 A.D.3d 732, 733; Beverage Mktg. USA, Inc. v South Beach Beverage Co., Inc., 58 A.D.3d 657, 658; see also Canzona v Atanasio, 118 A.D.3d 841, 843).

         We also agree with the Supreme Court's determination granting that branch of the Catskill Orange defendants' motion which was for summary judgment dismissing the fraudulent concealment cause of action insofar as asserted against them. "A cause of action to recover damages for fraudulent concealment requires, in addition to scienter, reliance, and damages, a showing that there was a fiduciary or confidential relationship between the parties which would impose a duty upon the defendant to disclose material information and that the defendant failed to do so" (Consolidated Bus Tr., Inc. v Treiber Group, LLC, 97 A.D.3d 778, 779; see High Tides, LLC v DeMichele, 88 A.D.3d 954, 957). Even if it were shown that the Catskill Orange defendants owed a fiduciary duty to Wallkill Medical, they established, prima facie, that they did not fail to disclose any material ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.