| Commander Terms. Holdings, LLC v Poznanski |
| 2011 NY Slip Op 04192 [84 AD3d 1005] |
| May 17, 2011 |
| Appellate Division, Second Department |
| Commander Terminals Holdings, LLC, et al.,Respondents, v Abraham Poznanski et al., Appellants. (Action No. 1.) AbrahamPoznanski et al., Appellants, v Charles B. Wang et al., Respondents. (Action No.2.) |
—[*1] Farrell Fritz, P.C., Uniondale, N.Y. (John P. McEntee and Kathryn C. Cole of counsel), forrespondents.
In an action, inter alia, to recover damages for breach of fiduciary duty and a related action,among other things, to recover damages for breach of an oral joint venture agreement, (1) thedefendants in action No. 1 appeal from an order of the Supreme Court, Nassau County (Bucaria,J.), entered August 27, 2009, which granted the motion of the plaintiffs in action No. 1 forsummary judgment on the 6th, 7th, and 13th causes of action, and (2) the plaintiffs in action No.2 appeal, as limited by their brief, from so much of an order of the same court, also enteredAugust 27, 2009, as granted those branches of the motion of the defendants Charles B. Wang,Plainview Properties, LLC, Island Properties, LLC, Commander Terminals Holdings, LLC,Mariners Walk, LLC, Lighthouse Development Group, LLC, Central Island Properties, LLC,Buckingham Variety, LLC, South Street Enterprises, LLC, Old Country Properties, LLC,Maxwell Avenue Properties, LLC, Arkalion, Ltd., Walter Imperatore, and Theodore P. Sasso inaction No. 2 which were for summary judgment dismissing the 1st, 2nd, 5th, 6th, and 7th causesof action insofar as asserted against them, and declaring that certain written agreements betweenthe plaintiffs Northern Bay Management Group, LLC, or Affinity Realty Consultants, LLC, andseveral of the defendants are voidable and unenforceable.
Ordered that the order entered in action No. 1 is affirmed, and the matter is remitted to theSupreme Court, Nassau County, for the entry of a judgment, inter alia, declaring that all writtenagreements between Northern Bay Management Group, LLC, and/or Affinity Realty Consultants,LLC, on the one hand, and Charles B. Wang, and/or Plainview Properties, LLC, and/or IslandProperties, LLC, and/or Commander Terminals Holdings, LLC, and/or Mariners Walk, LLC,and/or Lighthouse Development Group, LLC, and/or Central Island Properties, LLC, and/orBuckingham Variety, LLC, and/or South Street Enterprises, LLC, and/or Old Country Properties,LLC, and/or Maxwell Avenue Properties, LLC, and/or Arkalion, Ltd., on the other hand, arevoidable and unenforceable; and it is further,[*2]
Ordered that the order entered in action No. 2, is affirmedinsofar as appealed from, and the matter is remitted to the Supreme Court, Nassau County, forthe entry of a judgment, inter alia, declaring that all written agreements between Northern BayManagement Group, LLC, and/or Affinity Realty Consultants, LLC, on the one hand, andCharles B. Wang, and/or Plainview Properties, LLC, and/or Island Properties, LLC, and/orCommander Terminals Holdings, LLC, and/or Mariners Walk, LLC, and/or LighthouseDevelopment Group, LLC, and/or Central Island Properties, LLC, and/or Buckingham Variety,LLC, and/or South Street Enterprises, LLC, and/or Old Country Properties, LLC, and/or MaxwellAvenue Properties, LLC, and/or Arkalion, Ltd., on the other hand, are voidable andunenforceable; and it is further,
Ordered that one bill of costs is awarded to the respondents.
The principal parties, Charles B. Wang and Abraham Poznanski, had a personal and businessrelationship for more than 30 years. In 1976 Poznanski began working for Wang's company,which later became known as Computer Associates (hereinafter CA). Poznanski eventually helda number of positions with CA. In or about 1998, Wang began to acquire real properties locatedon Long Island. In early 1999 Poznanski formed Northern Bay Management Group, LLC(hereinafter Northern Bay), to acquire properties for, and to manage, Wang's real estateinvestment portfolio. Additionally, Northern Bay provided similar services to several companiesaffiliated with Wang (hereinafter the Wang entities). Poznanski also served as an officer of theWang entities. Northern Bay received brokerage commissions for acquisitions and fees formanaging the acquired properties. Initially, Northern Bay provided these services to the Wangentities without written agreements. In or about 2004, Poznanski, in his capacity as an officer ofthe Wang entities, executed written agreements with Northern Bay (hereinafter the managementagreements) on behalf of certain of the Wang entities. On January 24, 2005, Poznanski alsoformed Affinity Realty Consultants, LLC (hereinafter Affinity), which also provided real estateservices to the Wang entities.
In October 2005 the relationship between Poznanski and Wang became strained, and theyterminated their business relationship. Subsequently, Wang and the Wang entities (hereinaftercollectively the Wang plaintiffs) commenced action No. 1 seeking, inter alia, to recover damagesfor Poznanski's alleged breach of fiduciary duty and a judgment declaring that the managementagreements with Northern Bay and Affinity that were executed by Poznanski on behalf of theWang entities were void and unenforceable. Shortly thereafter, Poznanski, Northern Bay,Affinity, and another company controlled by Poznanski (hereinafter collectively the Poznanskiparties) commenced action No. 2 seeking, inter alia, to recover damages for breach of an oraljoint venture agreement, tortious interference with contract, and unfair competition, and ajudgment declaring that the management agreements were enforceable.
Thereafter, in action No. 1, the Wang plaintiffs moved for summary judgment on the 6thcause of action, alleging that Poznanski breached his fiduciary duty, and the 7th and 13th causesof action, seeking declarations that the management agreements and all agreements betweenNorthern Bay or Affinity and the Wang plaintiffs that were executed by Poznanski on behalf ofthe Wang plaintiffs were voidable and unenforceable. At the same time, in action No. 2, thedefendants Charles B. Wang, Plainview Properties, LLC, Island Properties, LLC, CommanderTerminals Holdings, LLC, Mariners Walk, LLC, Lighthouse Development Group, LLC, CentralIsland Properties, LLC, Buckingham Variety, LLC, South Street Enterprises, LLC, Old CountryProperties, LLC, Maxwell Avenue Properties, LLC, Arkalion, Ltd., Walter Imperatore, andTheodore P. Sasso (hereinafter collectively the Wang defendants) moved, inter alia, for summaryjudgment declaring that the management agreements were voidable and unenforceable, anddismissing the first cause of action in action No. 2, alleging breach of a joint venture agreementto amass a portfolio of real property holdings on behalf of the Wang entities, the second cause ofaction, alleging an anticipatory breach of the management agreements, the fifth cause of actionalleging tortious interference with contractual relations and unfair competition, based on theWang entities' purported attempts to induce Walter Imperatore and Theodore P. Sasso to leavetheir employment with the Poznanski parties and perform identical functions for the Wangentities, the sixth cause of action alleging unlawful disclosure of proprietary information byImperatore and Sasso to the Wang entities, and the seventh cause of action alleging breach ofrestrictive employment covenants, pursuant to which Imperatore and Sasso were allegedlyobligated to a predecessor of Affinity and Northern Bay.
The Wang plaintiffs established their prima facie entitlement to judgment as a matter of law[*3]in both action Nos. 1 and 2 by demonstrating that Poznanski,as an officer of the Wang entities, owed a fiduciary duty to them and to their principal, Wang.They further demonstrated that Poznanski breached his duty by executing the managementagreements on behalf of the Wang entities, thus benefitting his own company, Northern Bay,without fully disclosing all material facts about these agreements (see Birnbaum vBirnbaum, 73 NY2d 461, 466 [1989]; Alpert v 28 Williams St. Corp., 63 NY2d 557,568 [1984]; A.G. Homes, LLC vGerstein, 52 AD3d 546, 548 [2008]; Global Mins. & Metals Corp. v Holme, 35 AD3d 93, 98 [2006]; Salm v Feldstein, 20 AD3d 469,470 [2005]; Blue Chip Emerald v Allied Partners, 299 AD2d 278, 279-280 [2002]). Inopposition, the Poznanski parties failed to raise a triable issue of fact. Since there was a lack offull disclosure, the management agreements were rendered voidable and unenforceable (seeBlue Chip Emerald v Allied Partners, 299 AD2d at 279-280; Alizio v Perpignano,176 AD2d 279, 281 [1991]). Consequently, in action No. 1, the Supreme Court properly grantedthe Wang plaintiffs' motion for summary judgment on their causes of action alleging breach offiduciary duty and declaring that the management agreements and all agreements executed byPoznanski on behalf of both Northern Bay or Affinity, on the one hand, and the Wang plaintiffs,on the other, were voidable and unenforceable, and in action No. 2, the Supreme Court properlygranted those branches of the Wang defendants' motion which were for summary judgmentdismissing the second cause of action alleging an anticipatory breach of the managementagreements and declaring that the management agreements were voidable and unenforceable.
The Supreme Court also properly awarded summary judgment in action No. 2 dismissing thefirst cause of action alleging a breach of a joint venture agreement. " 'The essential elements of ajoint venture are an agreement manifesting the intent of the parties to be associated as jointventurers, a contribution by the coventurers to the joint undertaking (i.e., a combination ofproperty, financial resources, effort, skill or knowledge), some degree of joint proprietorship andcontrol over the enterprise; and a provision for the sharing of profits and losses' " (Kaufman v Torkan, 51 AD3d 977,979 [2008], quoting Tilden of N.J. v Regency Leasing Sys., 230 AD2d 784, 785-786[1996] [internal quotation marks and citation omitted]). Here, the Wang defendants made a primafacie showing that Wang and Poznanski were not joint venturers and, in opposition, thePoznanski parties failed to raise a triable issue of fact (see Matter of Steinbeck v Gerosa,4 NY2d 302, 317 [1958]; Schnur v Marin, 285 AD2d 639, 640 [2001]; GoodsteinProps. v Rego, 266 AD2d 506, 507 [1999]; De Vito v Pokoik, 150 AD2d 331, 331[1989]).
Moreover, the Wang defendants established their prima facie entitlement to judgment as amatter of law dismissing the fifth cause of action in action No. 2, alleging that Wang tortiouslyinterfered with Northern Bay's and Affinity's contractual relations with their employees andengaged in unfair competition. Here, Northen Bay's and Affinity's agreements with their formeremployees Imperatore and Sasso were contracts terminable at will (see Sabetay v SterlingDrug, 69 NY2d 329, 333 [1987]). Consequently, in order to sustain a cause of action basedupon tortious interference with a contract terminable at will, there must be a showing of maliceor wrongful conduct (see NBT Bancorp v Fleet/Norstar Fin. Group, 87 NY2d 614, 621[1996]; Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183, 194 [1980];Waste Servs. v Jamaica Ash & Rubbish Removal Co., 262 AD2d 401, 402 [1999]).Additionally, the Wang defendants made a prima facie showing that Wang did not engage inunfair competition by misappropriating the business or business opportunities of Northern Bayand Affinity. In opposition, the Poznanski parties failed to raise a triable issue of fact as towhether Wang acted with the purpose of harming them or engaged in any wrongful conduct (see Baron Assoc., P.C. v RSKCO, 16AD3d 362, 362-363 [2005]; Waste Servs. v Jamaica Ash & Rubbish Removal Co.,262 AD2d at 402). The Poznanski parties' repeated allegations, without any evidence, that Wangacted wrongfully and unlawfully are merely speculation, and insufficient to defeat summaryjudgment with respect to these causes of action (see generally Alvarez v Prospect Hosp.,68 NY2d 320, 324 [1986]; LoPresti vMassachusetts Mut. Life Ins. Co., 30 AD3d 474, 476 [2006]).
The Wang defendants also demonstrated their prima facie entitlement to judgment as amatter of law dismissing the Poznanski parties' sixth cause of action in action No. 2, alleging thatImperatore and Sasso misappropriated confidential information belonging to Northern Bay. Inopposition, the Poznanski parties failed to raise a triable issue of fact (see Chemfab Corp. vIntegrated Liner Tech., 263 AD2d 788, 790-791 [1999]; Amana Express Intl. v Pier-AirIntl., 211 AD2d 606, 607 [1995]). Lastly, the Supreme Court properly awarded summaryjudgment dismissing the Poznanski parties' seventh cause of action in action No. 2, alleging thatImperatore and Sasso breached restrictive covenants in their employment agreements withNorthern Bay and/or Affinity, as neither Northern Bay nor Affinity were parties to theemployment agreements allegedly breached by Imperatore and Sasso. In opposition, the [*4]Poznanski parties failed to raise a triable issue of fact, as theysubmitted no evidence that Affinity and Northern Bay were "successors in interest" to thecompany which entered into the employment contracts with Imperatore and Sasso (see WolffSelective Bus. Brokers v Ginsberg, 226 AD2d 161, 162 [1996]; Kahn v Biernbaum,55 AD2d 589 [1976]). Rivera, J.P., Angiolillo, Eng and Sgroi, JJ., concur.