| Staffenberg v Fairfield Pagma Assoc., L.P. |
| 2012 NY Slip Op 03436 [95 AD3d 873] |
| May 1, 2012 |
| Appellate Division, Second Department |
| Eugene Staffenberg, Appellant, v Fairfield PagmaAssociates, L.P., et al., Respondents. |
—[*1] Shapiro Forman Allen & Sava, LLP, New York, N.Y. (Yoram J. Miller of counsel), forrespondents Fairfield Pagma Associates, L.P., Seyfair, LLC, Fairfox, LLC, and SeymourKleinman. Babchik & Young, LLP, White Plains, N.Y. (Jack Babchik of counsel), for respondentsBonnie J. Kansler and Sejour & Associates, P.C.
In an action, inter alia, to recover damages for breach of fiduciary duty, the plaintiff appeals,as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Driscoll,J.), entered March 7, 2011, as granted those branches of the motion of the defendants FairfieldPagma Associates, L.P., Seyfair LLC, Fairfox LLC, and Seymour Kleinman which were forsummary judgment dismissing the fifth and eighth causes of action and the fourth cause of actioninsofar as asserted against those defendants, and granted that branch of the separate motion of thedefendants Bonnie J. Kansler and Sejour & Associates, P.C., which was for summary judgmentdismissing the third cause of action and the fourth cause of action insofar as asserted against thedefendant Bonnie J. Kansler.
Ordered that the order is affirmed insofar as appealed from, with one bill of costs torespondents appearing separately and filing separate briefs.
On the advice of his accountant, Bonnie Kansler, the plaintiff invested the sum of $500,000with Fairfield Pagma Associates, L.P. (hereinafter Fairfield Pagma), a limited partnershiporganized for the purpose of pooling funds to invest in Bernard L. Madoff Investment Securities(hereinafter BLMIS). After the discovery of Madoff's Ponzi scheme and the loss of the majorityof his investment, the plaintiff commenced this action against Kansler and her accounting firm(hereinafter together the Sejour defendants) and Fairfield Pagma, its general partners, and itsmanager (hereinafter collectively the Fairfield Pagma defendants), alleging causes of actionsounding in professional malpractice, breach of fiduciary duties, breach of contract, breach of theimplied covenant of good faith and fair dealing, and fraud.
The Fairfield Pagma defendants moved, and the Sejour defendants separately moved, forsummary judgment dismissing the amended complaint insofar as asserted against each of them.[*2]The Supreme Court granted both motions. The plaintiffappeals from those portions of the order which awarded summary judgment dismissing thebreach of fiduciary duty causes of action, and the causes of action sounding in breach of contractand breach of the covenant of good faith and fair dealing that were asserted against the FairfieldPagma defendants. We affirm the order insofar as appealed from.
The Supreme Court properly granted that branch of the Sejour defendants' motion which wasfor summary judgment dismissing the breach of fiduciary duty causes of action asserted againstthem. The Sejour defendants established their prima facie entitlement to judgment as a matter oflaw by demonstrating that there was no fiduciary relationship between them and the plaintiff (see Caprer v Nussbaum, 36 AD3d176, 194 [2006]; Friedman vAnderson, 23 AD3d 163, 166 [2005]; DG Liquidation v Anchin, Block &Anchin, 300 AD2d 70 [2002]). In opposition, the plaintiff failed to raise a triable issue offact. The plaintiff sought investment advice from Kansler, at most, only once per decade. Theseintermittent communications did not transform their conventional business relationship into afiduciary relationship (see Friedman v Anderson, 23 AD3d at 166; cf. Lavin vKaufman, Greenhut, Lebowitz & Forman, 226 AD2d 107 [1996]).
The Supreme Court properly granted that branch of the Fairfield Pagma defendants' motionwhich was for summary judgment dismissing the fourth cause of action, which alleged breach offiduciary duty, insofar as asserted against them. While the general partners of Fairfield Pagmahad fiduciary duties to the plaintiff since the plaintiff was a limited partner of Fairfield Pagma(see Appleton Acquisition, LLC vNational Hous. Partnership, 10 NY3d 250, 258 [2008]), the Fairfield Pagma defendantsestablished their entitlement to judgment as a matter of law dismissing the cause of actionalleging breach of fiduciary duty by demonstrating that there was no misconduct on their part thatcaused the plaintiff to sustain damages (see Rut v Young Adult Inst., Inc., 74 AD3d 776 [2010]). Inopposition, the plaintiff failed to raise a triable issue of fact.
The Supreme Court also properly granted those branches of the Fairfield Pagma defendants'motion which were for summary judgment dismissing the fifth and eighth causes of action,which alleged breach of contract and breach of the covenant of good faith and fair dealing againstthem, respectively. The Fairfield Pagma defendants established their entitlement to judgment as amatter of law dismissing the breach of contract cause of action by demonstrating that there wasno oral agreement with the plaintiff, that the underlying limited partnership agreement permittedthe withholding from BLMIS of funds deemed required for partnership purposes, and that, in anyevent, the failure to transfer the entirety of the plaintiff's investment to BLMIS did not cause theplaintiff to sustain damages. In opposition, the plaintiff failed to raise a triable issue of fact.
Implicit in every contract is a covenant of good faith and fair dealing which encompasses anypromises that a reasonable promisee would understand to be included (see New York Univ. vContinental Ins. Co., 87 NY2d 308, 318 [1995]). "The duty of good faith and fair dealing,however, is not without limits, and no obligation can be implied that 'would be inconsistent withother terms of the contractual relationship' " (Dalton v Educational Testing Serv., 87NY2d 384, 389 [1995], quoting Murphy v American Home Prods. Corp., 58 NY2d 293,304 [1983]). The Fairfield Pagma defendants established their entitlement to judgment as amatter of law dismissing the cause of action alleging a breach of the implied covenant and goodfaith and fair dealing by demonstrating that the limited partnership agreement required that fundsinvested in Fairfield Pagma be forwarded to an account at BLMIS under the discretionarymanagement of Madoff. Accordingly, no other obligation to invest can be implied from thelimited partnership agreement. In response, the plaintiff failed to raise a triable issue of fact.
In light of these determinations, we need not address the plaintiff's remaining contention.Skelos, J.P., Florio, Eng and Roman, JJ., concur. [Prior Case History: 2011 NY Slip Op30557(U).]