| 30 FPS Prods., Inc. v Livolsi |
| 2009 NY Slip Op 09649 [68 AD3d 1101] |
| December 22, 2009 |
| Appellate Division, Second Department |
| 30 FPS Productions, Inc., Respondent, v Joseph G.Livolsi, Appellant. |
—[*1] Mohen & Treacy LLP, Locust Valley, N.Y. (Thomas P. Mohen of counsel), forrespondent.
In an action to recover damages for breach of fiduciary duty and conversion, the defendantappeals from an order of the Supreme Court, Nassau County (Bucaria, J.), entered December 22,2008, which granted the plaintiff's motion to strike the answer, for summary judgment on theissue of liability, and to set the matter down for an inquest on the issue of damages.
Ordered that the order is reversed, on the law, with costs, and the plaintiff's motion to strikethe answer, for summary judgment on the issue of liability, and to set the matter down for aninquest on the issue of damages is denied.
From 1995 until September 2006 the defendant was employed by the plaintiff, a film andvideo production company, as a director of photography. In early 2006, while still employed bythe plaintiff, the defendant incorporated his own "lighting and grip" company. The defendantalso incorporated a separate company, through which he billed other companies for his work as adirector of photography. Neither company earned income while the defendant was still employedby the plaintiff. On September 8, 2006 the defendant resigned from the plaintiff's employ.Subsequently, the plaintiff commenced this action against the defendant, asserting causes ofaction to recover damages for breach of fiduciary duty—specifically the duty of loyaltyand fidelity—and for conversion. The plaintiff moved, inter alia, to strike the answer andfor summary judgment on the issue of liability. The Supreme Court granted the motion. Wereverse.
"It is well settled that an employee owes a duty of good faith and loyalty to an employer inthe performance of the employee's duties" (Wallack Frgt. Lines v Next Day Express, 273AD2d 462, 463 [2000]; see Lamdin v Broadway Surface Adv. Corp., 272 NY 133[1936]; CBS Corp. v Dumsday, 268 AD2d 350, 353 [2000]; American Map Corp. vStone, 264 AD2d 492, 492-493 [1999]; Maritime Fish Prods. v World-Wide FishProds., 100 AD2d 81, 88 [1984]). "However, an employee may incorporate a business priorto leaving his employer without breaching any fiduciary duty unless the employee makesimproper use of the employer's time, facilities, or proprietary secrets in doing so" (WallackFrgt. Lines v Next Day Express, 273 AD2d at 463; see CBS Corp. v Dumsday, 268AD2d at 353; Chemfab Corp. v Integrated Liner Tech., 263 AD2d 788, 790 [1999];Schneider Leasing Plus v Stallone, 172 AD2d 739 [1991]; [*2]Maritime Fish Prods. v World-Wide Fish Prods., 100 AD2d at88).
Here, the plaintiff demonstrated its prima facie entitlement to judgment as a matter of law onthe cause of action to recover damages for breach of the duty of loyalty and fidelity bypresenting evidence that the defendant, its former employee, utilized the plaintiff's time andfacilities to organize competing businesses while still in its employ. The plaintiff also presentedevidence that the defendant, by soliciting a job from one of its prospective clients while he wasstill employed by it, and later performing the job after his resignation,"secretly pursued andprofited from [an] opportunit[y] properly belonging to his employer" (Maritime Fish Prods. vWorld-Wide Fish Prods., 100 AD2d at 88). However, in opposition, the defendant raisedtriable issues of fact as to whether or not he made improper use of the plaintiff's time, facilities,or proprietary secrets (cf. Wallack Frgt. Lines v Next Day Express, 273 AD2d at 463).
The plaintiff further demonstrated its prima facie entitlement to judgment as a matter of lawon the cause of action to recover damages for conversion by presenting evidence that thedefendant converted certain of its personal property designated as the "2002 demo reel." Inopposition, the defendant also raised a triable issue of fact as to whether or not his possessionand use of the 2002 demo reel was a misappropriation of the plaintiff's material (see Alvarezv Prospect Hosp., 68 NY2d 320, 324 [1986]).
Finally, the Supreme Court erred in granting that branch of the plaintiff's motion which wasto strike the answer, as the plaintiff failed to establish that such relief was warranted. Mastro,J.P., Florio, Balkin and Leventhal, JJ., concur.