Rachmani Corp. v. 19th Street Associates

Appellate Division of the Supreme Court of New York

Rachmani Corp. v. 19th Street Associates

214 A.D.2d 358, 625 N.Y.S.2d 151, 1995 N.Y. App. Div. LEXIS 4154

CourtAppellate Division of the Supreme Court of the State of New York

DecidedApril 11, 1995

StatusPublished

Cited by1 cases

This text of 214 A.D.2d 358 (Rachmani Corp. v. 19th Street Associates) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Rachmani Corp. v. 19th Street Associates, 214 A.D.2d 358, 625 N.Y.S.2d 151, 1995 N.Y. App. Div. LEXIS 4154 (N.Y. Ct. App. 1995).

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Opinion

Order, Supreme Court, New York County (Kristin Booth Glen, J.), entered September 20, 1993, which, insofar as appealed from, granted defendants’ motion to dismiss the plaintiffs’ fourth cause of action for breach of contract and fiduciary duty, and denied plaintiffs’ cross motion to amend the complaint, unanimously affirmed, without costs.

The IAS Court correctly held that nothing in the agreement between defendants sponsor of the cooperative conversion and plaintiffs selling agent expressly or impliedly required defendants to settle on plaintiffs’ behalf any claims brought against them by third parties, or otherwise put defendants in a fiduciary relationship with plaintiffs. The parties’ relationship, as defined by their unambiguous contract, was rather that of principal and agent, and did not, as the IAS Court aptly put it, require defendants, as the principal, to "subordinate [their] interest for that of [their] agent by compromising [their] own chances for an optimal settlement” in the Martin Act proceeding that was brought by the Attorney-General. Nor does the Martin Act itself make the sponsor a fiduciary of the selling agent, and, as the IAS Court held, neither is such a relationship shown by plaintiffs’ allegations concerning the parties’ past business dealings. Concerning plaintiffs’ motion to amend their complaint, their argument on appeal is limited to the denial of the proposed amendment of the fourth cause of action, no argument being offered with respect to the addition of the proposed fifth and sixth causes of action for fraud. Notwithstanding the policy liberally favoring the granting of permission to amend pleadings, it was a proper exercise of discretion to refuse the proposed amendment to the fourth cause of action in view of the lack of any substance to a claim for breach of contract and fiduciary duty. Concur—Sullivan, J. P., Rosenberger, Ellerin and Williams, JJ.

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Order, Supreme Court, New York County (Kristin Booth Glen, J.), entered September 20, 1993, which, insofar as appealed from, granted defendants’ motion to dismiss the plaintiffs’ fourth cause of action for breach of contract and fiduciary duty, and denied plaintiffs’ cross motion to amend the complaint, unanimously affirmed, without costs.

The IAS Court correctly held that nothing in the agreement between defendants sponsor of the cooperative conversion and plaintiffs selling agent expressly or impliedly required defendants to settle on plaintiffs’ behalf any claims brought against them by third parties, or otherwise put defendants in a fiduciary relationship with plaintiffs. The parties’ relationship, as defined by their unambiguous contract, was rather that of principal and agent, and did not, as the IAS Court aptly put it, require defendants, as the principal, to "subordinate [their] interest for that of [their] agent by compromising [their] own chances for an optimal settlement” in the Martin Act proceeding that was brought by the Attorney-General. Nor does the Martin Act itself make the sponsor a fiduciary of the selling agent, and, as the IAS Court held, neither is such a relationship shown by plaintiffs’ allegations concerning the parties’ past business dealings. Concerning plaintiffs’ motion to amend their complaint, their argument on appeal is limited to the denial of the proposed amendment of the fourth cause of action, no argument being offered with respect to the addition of the proposed fifth and sixth causes of action for fraud. Notwithstanding the policy liberally favoring the granting of permission to amend pleadings, it was a proper exercise of discretion to refuse the proposed amendment to the fourth cause of action in view of the lack of any substance to a claim for breach of contract and fiduciary duty. Concur—Sullivan, J. P., Rosenberger, Ellerin and Williams, JJ.

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Bluebook (online)

214 A.D.2d 358, 625 N.Y.S.2d 151, 1995 N.Y. App. Div. LEXIS 4154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rachmani-corp-v-19th-street-associates-nyappdiv-1995.

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