| SSA Holdings LLC v Kaplan |
| 2014 NY Slip Op 06257 [120 AD3d 1111] |
| September 23, 2014 |
| Appellate Division, First Department |
[*1]
| SSA Holdings LLC, Appellant, v HowardKaplan et al., Respondents. |
Kasowitz, Benson, Torres & Friedman LLP, New York (Michael J. Bowe ofcounsel), for appellant.
Kaplan Rice LLP, New York (Michelle A. Rice of counsel), for respondents.
Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered May 15,2013, which granted defendants' motion to dismiss the fraudulent concealment cause ofaction and to stay the declaratory judgment cause of action pending resolution of anotheraction (the AKR action), unanimously affirmed, with costs.
The complaint failed to state a cause of action for fraudulent concealment, asdefendants had no duty to disclose the alleged material information (see e.g. Mandarin Trading Ltd. vWildenstein, 16 NY3d 173, 179 [2011]). Defendants—nonmanagingminority members of plaintiff, a Delaware limited liability company—owed nofiduciary duties to plaintiff or its manager, Stanley S. Arkin, a nonparty to this action (see Coventry Real Estate Advisors,L.L.C. v Developers Diversified Realty Corp., 84 AD3d 583, 584 [1st Dept2011]). Nor did the duty to disclose arise under the special facts doctrine, as thecomplaint does not allege that defendants had superior knowledge of essential facts (see Jana L. v West 129th St. RealtyCorp., 22 AD3d 274, 277 [1st Dept 2005]). Indeed, defendants allegedly failedto disclose that they "considered themselves to have stopped practicing law with[Mr. Arkin] on a full-time basis as his partners as of January 6, 2012" (emphasis added)."While there may have been concealment of opinions, there was no concealment of thefacts upon which those opinions were based" and defendants "were not bound tovolunteer their opinions" (Amherst Coll. v Ritch, 151 NY 282, 322 [1897]).Moreover, there was no allegation of superior knowledge, as defendants' belief that AKRhad been dissolved as of January 6, 2012 was based on Mr. Arkin's own email of thatdate.
The motion court providently exercised its discretion by staying the declaratoryjudgment cause of action (seee.g. Uptown Healthcare Mgt., Inc. v Rivkin Radler LLP, 116 AD3d 631 [1stDept 2014]). A stay is proper, since the determination of the AKR action may dispose ofor limit issues involved in this action (see Belopolsky v Renew Data Corp., 41 AD3d 322, 323[1st Dept 2007]). Indeed, plaintiff requested, among other things, a declaration thatdefendants were not entitled to any distributions from plaintiff after the date ofdissolution of Arkin Kaplan Rice LLP—a nonparty to this action. The dissolutiondate will be determined in the AKR action. If, after [*2]that determination, the parties in this case disagree whetherthe dissolution date was the date as of which defendants were no longer entitled todistributions from plaintiff, this issue may be raised when the stay in this action is lifted.Concur—Friedman, J.P., Acosta, Saxe, Gische and Kapnick, JJ.