| Country Club Partners, LLC v Goldman |
| 2010 NY Slip Op 09309 [79 AD3d 1389] |
| December 16, 2010 |
| Appellate Division, Third Department |
| Country Club Partners, LLC, Appellant, v Paul J. Goldman et al.,Respondents. |
—[*1] Smith, Sovik, Kendrick & Sugnet, P.C., Syracuse (Laurence F. Sovik of counsel), forrespondents.
Egan Jr., J. Appeals (1) from an order of the Supreme Court (Platkin, J.), entered October 30,2009 in Albany County, which, among other things, granted defendants' motion for summary judgmentdismissing the amended complaint, and (2) from the judgment entered thereon.
In November 2004, plaintiff retained defendant Segel, Goldman, Mazzotta & Siegel, P.C.(hereinafter SGMS), a law firm, to represent it in the acquisition of the assets and indebtedness ofColonie Country Club, Inc. (hereinafter the club), a golf club located in the Town of New Scotland,Albany County. SGMS handled the formation of plaintiff's limited liability corporation and the draftingof its operating agreement, which referenced plaintiff's intention to sell 55 acres of excess real propertyalso owned by the club. The closing occurred on plaintiff's acquisition of the club's assets and mortgagein February 2005. By June 2005, the operating agreement was signed by all of plaintiff's members.Thereafter, in July 2006, plaintiff entered into negotiations to obtain an option to purchase a portion ofreal property owned by Marilyn Kime, which abutted the club's property, but these efforts provedunsuccessful. Thereafter, defendant Paul J. Goldman, an officer and shareholder at SGMS who workedthere while it represented plaintiff, and other parties, entered into negotiations to acquire the entire Kimeproperty, resulting in Goldman's purchase of the property for $435,000 in October 2006.
Plaintiff commenced this action against defendants seeking damages for, among other things,breaching their fiduciary duty to plaintiff by allegedly using confidential information [*2]obtained during their representation of plaintiff to acquire the Kimeproperty. Supreme Court granted defendants' motion for summary judgment dismissing the complainton, among other grounds, the lack of proximate cause between defendants' alleged misconduct and thedamages claimed by plaintiff. Plaintiff now appeals.[FN*]
Initially, contrary to defendants' contention, since plaintiff's breach of fiduciary duty claim relates, inpart, to Goldman's allegedly improper actions occurring after SGMS's representation of plaintiffceased, and plaintiff's malpractice claim relates, in part, to defendants' allegedly improper actionsoccurring during SGMS's representation of plaintiff, the two claims are not duplicative (see Kurman v Schnapp, 73 AD3d 435,435-436 [2010]; Ulico Cas. Co. v Wilson,Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9 [2008]; Weil, Gotshal & Manges, LLP v FashionBoutique of Short Hills, Inc., 10 AD3d 267, 271 [2004]). Accordingly, Supreme Courtproperly addressed the breach of fiduciary duty claim on the merits.
Turning to the merits of plaintiff's argument, the attorney-client relationship "imposes on the attorney[t]he duty to deal fairly, honestly and with undivided loyalty . . . including maintainingconfidentiality, avoiding conflicts of interest, operating competently, safeguarding client property andhonoring the clients' interests over the lawyer's" (Ulico Cas. Co. v Wilson, Elser, Moskowitz,Edelman & Dicker, 56 AD3d at 9 [internal quotation marks and citations omitted]; seeKrouner v Koplovitz, 175 AD2d 531, 532 [1991]). To recover on its claim, plaintiff is required to"prove both the breach of a duty owed to it and damages sustained as a result" (Ulico Cas. Co. vWilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d at 10 [citation omitted]). That is, a clientmust establish "actual and ascertainable damages" (Boone v Bender, 74 AD3d 1111, 1112 [2010] [internal quotation marksand citations omitted]; see Ehlinger v Ruberti, Girvin & Ferlazzo, 304 AD2d 925, 926 [2003])that would not have occurred "but for" the attorney's conduct (Boone v Bender, 74 AD3d at1113; see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d at 10;Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d at 271-272)."For defendants to succeed on their motion for summary judgment here, they were required to presentevidence in admissible form establishing that plaintiff is unable to prove at least one of these elements"(Ehlinger v Ruberti, Girvin & Ferlazzo, 304 AD2d at 926 [citations omitted]; see Boone vBender, 74 AD3d at 1112-1113).
Here, summary judgment dismissing plaintiff's cause of action alleging a breach of fiduciary dutywas properly granted since defendants met their burden on their motion and, in opposition, plaintifffailed to raise a question of fact that defendants' breach proximately caused it any ascertainabledamages (see Boone v Bender, 74 AD3d at 1113; Brodeur v Hayes, 18 AD3d 979, 980-981 [2005], lv dismissed anddenied 5 NY3d 871 [2005]). In support of their motion, defendants presented Kime's affidavit, inwhich she stated that Michael Gordon, a member of [*3]plaintiff,contacted her about acquiring an option to purchase a portion of her property. Kime stated that sheadvised Gordon that she was not interested in selling an option to only a portion of her property, butinstead desired to sell outright the entire parcel, including its residence. According to Kime, neitherGordon nor any other member of plaintiff made subsequent offers to purchase the entire parcel andnegotiations with plaintiff ceased. Kime was thereafter approached by several people interested inpurchasing the property and, in August 2006, she received two offers to purchase the entire parcel, onefrom Goldman and another from Todd Britton and Mary Britton, both for $435,000. Kime stated thatshe decided to accept Goldman's offer over the Brittons' offer because it included a higher downpayment ($100,000 compared to $5,000) and was, in the opinion of her attorney, the stronger offer. Inopposition to defendants' motion, Gordon submitted an affidavit in which he stated that negotiationswith Kime progressed to the point where an offer in the amount of $400,000 was made and an optionagreement was drafted.
Plaintiff failed to establish that "but for" Goldman's actions, it would have successfully negotiated forthe purchase of the Kime property, especially in light of the purchase offer submitted by the Brittons(see Barbara King Family Trust v VolutoVentures LLC, 46 AD3d 423, 424-425 [2007]). Equally fatal to plaintiff's claim is its inabilityto establish "actual and ascertainable damages" (Ressis v Wojick, 105 AD2d 565, 567 [1984],lv denied 64 NY2d 609 [1985]; seeMiszko v Leeds & Morelli, 3 AD3d 726, 727 [2004]). While plaintiff claimed damages in theamount of $400,000, it provided no evidence that it actually expended any moneys in its unsuccessfuleffort to acquire an interest in the Kime property and, while plaintiff claims that Goldman's actionsinterfered with its ability to negotiate with Kime, the outcome of these negotiations—that neveroccurred—is entirely speculative (seeGUS Consulting GmbH v Chadbourne & Parke LLP, 74 AD3d 677, 679 [2010];Brodeur v Hayes, 18 AD3d at 981; Zarin v Reid & Priest, 184 AD2d 385, 388[1992]). Accordingly, Supreme Court properly granted summary judgment to defendants.
Finally, because plaintiff's argument that it requires further discovery is being raised for the first timeon appeal, it is unpreserved for appellate review (see General Elec. Capital Corp. v Highgate Manor Group, LLC, 69 AD3d992, 993-994 [2010]).
Spain, J.P., Malone Jr. and Kavanagh, JJ., concur. Ordered that the order and judgment areaffirmed, with costs.
Footnote *: That part of Supreme Court's ordergranting defendants summary judgment on plaintiff's causes of action against SGMS for aiding andabetting Goldman's breach of fiduciary duty, as well as claims against both defendants for legalmalpractice, fraudulent concealment and constructive fraud, is not addressed in plaintiff's brief and anyissues with respect thereto are deemed abandoned (see Rochester Linoleum & Carpet Ctr., Inc. v Cassin, 61 AD3d 1201,1202 n 1 [2009]).