Hearst Mags. v. Greenstone/Fontana Corp.

139 A.D.3d 623, 30 N.Y.S.3d 859

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: May 31, 2016
• Docket: 1306 101809/10
• Status: Published

Opinion

Judgment, Supreme Court, New York County (Saliann Scarpulla, J.), entered March 4, 2015, after a bench trial, in favor of plaintiff and against, inter alia, defendant Jeanne Fontana in the aggregate amount of $88,353.81, unanimously affirmed, with costs.

As a general matter, the unasserted claim by plaintiff magazine against its frequent advertiser would not constitute a cognizable claim for damages (see Phillips-Smith Specialty Retail Group II v Parker Chapin Flattau & Klimpl, 265 AD2d 208, 210 [1st Dept 1999], lv denied 94 NY2d 759 [2000]). Moreover, where the funds were converted by defendant advertising agency, but the ad for which it received the funds nevertheless ran, there is no claim for conversion of the funds (see generally Hillsley v State Bank of Albany, 24 AD2d 28, 30 [1st Dept 1965]).

However, where, as here, a fiduciary profits from a breach of loyalty, those profits must be paid over to the principal (see Tsutsui v Barasch, 67 AD3d 896, 898-899 [2d Dept 2009]). Accordingly, the trial court properly entered judgment in plaintiff’s favor in the amount of the ill-gotten proceeds.

Concur — Tom, J.P., Mazzarelli, Andrias, Manzanet-Daniels and Gesmer, JJ.