| Qosina Corp. v C & N Packaging, Inc. |
| 2012 NY Slip Op 05158 [96 AD3d 1032] |
| June 27, 2012 |
| Appellate Division, Second Department |
| Qosina Corp., Plaintiff, v C & N Packaging, Inc.,Defendant/Third-Party Plaintiff-Appellant, et al., Defendant. Doug Tichy, Third-PartyDefendant-Respondent. |
—[*1] Ferber Chan Essner & Coller, LLP, New York, N.Y. (Robert N. Chan of counsel), forthird-party defendant-respondent.
In an action, inter alia, pursuant to CPLR article 71 for the recovery of chattel, thedefendant/third-party plaintiff appeals, as limited by its brief, from so much of an order of theSupreme Court, Suffolk County (Costello, J.), dated December 13, 2010, as granted thethird-party defendant's motion to dismiss the third-party complaint pursuant to CPLR 3211 (a)(7).
Ordered that the order is reversed insofar as appealed from, on the law and in the exercise ofdiscretion, with costs, the third-party defendant's motion to dismiss the third-party complaintpursuant to CPLR 3211 (a) (7) is denied, and the third-party action is severed.
Qosina Corp. (hereinafter Qosina) commenced this action, inter alia, to recover certainchattels allegedly held by C & N Packaging, Inc. (hereinafter C & N). C & N assertedcounterclaims against Qosina, alleging, among other things, that Qosina tortiously interfered withits relationship with one of its employees, Doug Tichy. C & N also commenced a third-partyaction pursuant to CPLR article 10 against Tichy, alleging that he breached his duty of loyaltyand his fiduciary obligations to C & N and that he tortiously interfered with the businessrelationship that C & N had established with Qosina.
Tichy moved to dismiss the third-party complaint pursuant to CPLR 3211 (a) (7). By orderdated December 13, 2010, the Supreme Court, inter alia, granted Tichy's motion to dismiss thethird-party complaint. The Supreme Court concluded, in effect, that the third-party complaintfailed to state a cause of action to recover damages for breach of a duty of loyalty or for tortiousinterference with a business relationship and that the third-party complaint was not permitted byCPLR 1007. C & N appeals from so much of the order as granted Tichy's motion to dismiss thethird-party complaint, and we reverse the order insofar as appealed from.
Contrary to the Supreme Court's conclusion, the complaint adequately alleges a cause ofaction to recover damages for breach of a duty of loyalty. "[A]n employee owes a duty of good[*2]faith and loyalty to an employer in the performance of theemployee's duties" (Wallack Frgt. Lines v Next Day Express, 273 AD2d 462, 463 [2000];see Lamdin v Broadway Surface Adv. Corp., 272 NY 133 [1936]; Island Sports Physical Therapy vBurns, 84 AD3d 878 [2011]; 30FPS Prods., Inc. v Livolsi, 68 AD3d 1101, 1102 [2009]). An employee owes his or heremployer "undivided and unqualified loyalty and may not act in any manner contrary to theinterests of the . . . employer" (PJI 3:59; see Restatement [Third] of Agency§§ 8.01, 8.03). An employee is also "required to make truthful and completedisclosures to those to whom a fiduciary duty is owed" (PJI 3:59; see Restatement[Third] of Agency § 8.11).
Here, the third-party complaint alleged that Tichy was employed by C & N and owed it aduty of good faith and loyalty. The third-party complaint further alleged that Tichy breached thisduty by, inter alia, failing to disclose his actual relationship with Qosina and by acting for and onbehalf of a competing business in a manner that was contrary to the interests of C & N. Thethird-party complaint also asserted that as a result of Tichy's breach of his duty of loyalty, C & Nsustained damages. Contrary to Tichy's contention, at this stage of the pleadings, C & N needonly plead allegations from which damages attributable to Tichy's alleged breach might bereasonably inferred (see Kempf vMagida, 37 AD3d 763, 764 [2007]; InKine Pharm. Co. v Coleman, 305 AD2d151, 152 [2003]). Accepting all the facts alleged as true and according C & N the benefit of everyfavorable inference, the third-party complaint adequately stated a cause of action for breach of aduty of loyalty (see Leon v Martinez, 84 NY2d 83, 87 [1994]).
Furthermore, the third-party complaint was adequate to state a cause of action sounding intortious interference with a business relationship. "To make out a claim [of] tortious interferencewith business relationships, a plaintiff must show that the defendant interfered with the plaintiff'sbusiness relationships either with the sole purpose of harming the plaintiff or by means that wereunlawful or improper" (Nassau Diagnostic Imaging & Radiation Oncology Assoc. vWinthrop-University Hosp., 197 AD2d 563, 563-564 [1993]; see Out of Box Promotions, LLC vKoschitzki, 55 AD3d 575, 577 [2008]). Here, C & N alleged that Tichy interfered withits business relationship with Qosina by means that were improper. Accordingly, the third-partycomplaint adequately alleges a cause of action based on tortious interference with a businessrelationship (see Leon v Martinez, 84 NY2d at 87).
In sum, we conclude that the Supreme Court should not have directed dismissal of thethird-party complaint for failure to state a cause of action to recover damages for breach of a dutyof loyalty or for tortious interference with a business relationship.
We further conclude, contrary to Tichy's contention, that CPLR 1007 does not provide aproper basis for dismissal of the third-party complaint, but rather, under the circumstances of thiscase, the Supreme Court should have exercised its discretion to sever the third-party action fromthe main action.
CPLR 1007 provides that "a defendant may proceed against a person not a party who is ormay be liable to that defendant for all or part of the plaintiff's claim against that defendant." TheCourt of Appeals has recognized that "[t]he language of CPLR 1007 serves only to identify thepersons against whom a third-party claim may be brought" (George Cohen Agency v DonaldS. Perlman Agency, 51 NY2d 358, 365 [1980]). "It places no limit upon the amount whichmay be recovered or upon the legal theories which may be asserted as a basis for the claim"(id.; see JP Morgan Chase Bank,N.A. v Strands Hair Studio, LLC, 84 AD3d 1173, 1174 [2011]).
Although the impleader language of CPLR 1007 has been liberally construed and "should notbe read as allowing recovery solely for claims sounding in strict indemnity" (George CohenAgency v Donald S. Perlman Agency, 51 NY2d at 365), the "third-party claim must besufficiently related to the main action to at least raise the question of whether the third-partydefendant may be liable to defendant-third-party plaintiff, for whatever reason, for the damagesfor which the latter may be liable to plaintiff" (Zurich Ins. Co. v White, 129 AD2d 388,390 [1987] [internal quotation marks omitted]; see Rausch v Garland, 88 AD2d 1021,1022 [1982]; Long Is. Women's Health Care Assoc., M.D., P.C. v Haselkorn-Lomasky,10 Misc 3d 1068[A], 2005 NY Slip Op 52186[U] [2005]). In other words, "[t]he liability to beimposed upon a third-party defendant in a third-party [*3]actioncommenced pursuant to CPLR 1007 should 'arise from or be conditioned upon the liabilityasserted against the third-party plaintiff in the main action' " (Lucci v Lucci, 150 AD2d649, 650 [1989], quoting BBIG Realty Corp. v Ginsberg, 111 AD2d 91, 93 [1985]; see Galasso, Langione & Botter, LLP vLiotti, 81 AD3d 880, 883 [2011]).
Here, the third-party complaint was not permitted by CPLR 1007 since it failed to state anycause of action arising from or conditioned upon the liability asserted against C & N in the mainaction (see Galasso, Langione & Botter, LLP v Liotti, 81 AD3d at 883; Sklar vGarrett, 195 AD2d 454, 454 [1993]; Lucci v Lucci, 150 AD2d at 650). However, thethird-party complaint nevertheless stated causes of action to recover damages for breach of dutyof loyalty and for tortious interference with contractual relations. Accordingly, although thesecauses of action were not sufficiently related to the allegations in the complaint to provide aproper basis for a third-party complaint under CPLR 1007, they nevertheless constituted propergrounds for an independent action. Under the circumstances of this case, rather than directdismissal of the third-party complaint on the ground that it was not permitted by CPLR 1007, theSupreme Court should have exercised its discretion to sever the third-party action from theplaintiff's complaint (see CPLR 603, 1010; Buttermark v Raymond F. Korber,Inc., 65 AD2d 587, 588 [1978]; see also 3-R1010 Weinstein-Korn-Miller, NY CivPrac CPLR ¶ 1010.06).
Accordingly, the third-party defendant's motion to dismiss the third-party complaint pursuantto CPLR 3211 (a) (7) should have been denied and the third-party action should have beensevered. In view of the foregoing, we need not reach the parties' remaining contentions.Angiolillo, J.P., Belen, Lott and Miller, JJ., concur.