| Stortini v Pollis |
| 2016 NY Slip Op 02984 [138 AD3d 977] |
| April 20, 2016 |
| Appellate Division, Second Department |
[*1]
| Frank Stortini, Appellant, v John Pollis et al.,Respondents. |
O'Neal & Burke, LLP, Poughkeepsie, NY (William T. Burke of counsel), forappellant.
Doyle & Broumand, LLP, Bronx, NY (Michael B. Doyle of counsel), forrespondents.
In an action, inter alia, to recover damages for fraud and breach of fiduciary duty, theplaintiff appeals from an order of the Supreme Court, Dutchess County (Pagones, J.),dated January 16, 2015, which granted that branch of the defendants' motion which waspursuant to CPLR 3211 (a) (7) to dismiss the complaint.
Ordered that the order is affirmed, with costs.
The plaintiff alleged, among other things, that he and the defendant John Pollis wereequal members in the defendant Knollwood Commons at Red Hook, LLC (hereinafterKnollwood Commons), which was in the business of purchasing and developingcommercial and residential projects. The plaintiff contributed construction managementexpertise, and Pollis contributed financing expertise. The plaintiff and Pollis also wereequal members in two other LLCs, Knollwood Properties, LLC, and KnollwoodProperties II, LLC, in which they shared ownership interests, profits, anddecision-making responsibilities. From 2010 to 2013, Knollwood Properties, LLC, andKnollwood Properties II, LLC, experienced financial difficulties, which resulted in aforeclosure on a mortgage securing a residential project owned by Knollwood Commons.On May 15, 2012, the plaintiff went to Pollis's office to sign documents needed to obtainnecessary financing. The documents included an operating agreement and a firstamendment to operating agreement. The operating agreement provided that it waseffective "as of March 15, 2005." These documents were identified by an employee ofPollis as "common, basic documents in order for the financing to proceed."
The plaintiff commenced this action against Pollis and Knollwood Commons torecover damages for fraud and breach of fiduciary duty, and for an accounting. Thecomplaint alleged, among other things, that, unbeknownst to him, the operatingagreement gave Pollis complete control over all business matters of KnollwoodCommons. The defendants moved, inter alia, pursuant to CPLR 3211 (a) (7) to dismissthe complaint. The Supreme Court granted that branch of the defendants' motion, and theplaintiff appeals.
[*2] " 'On a motion todismiss pursuant to CPLR 3211 (a) (7) for failure to state a cause of action, the complaintmust be construed liberally, the factual allegations deemed to be true, and the nonmovingparty must be given the benefit of all favorable inferences' " (Hampshire Props. v BTA Bldg.& Developing, Inc., 122 AD3d 573, 573 [2014], quoting Carillo v Stony Brook Univ.,119 AD3d 508, 508-509 [2014]). " 'In assessing a motion under CPLR 3211(a) (7) . . . a court may freely consider affidavits submitted by the plaintiff toremedy any defects in the complaint' " (Hampshire Props. v BTA Bldg.& Developing, Inc., 122 AD3d at 573, quoting Leon v Martinez, 84NY2d 83, 88 [1994]).
"The elements of a cause of action sounding in fraud are a material misrepresentationof an existing fact, made with knowledge of the falsity, an intent to induce reliancethereon, justifiable reliance upon the misrepresentation, and damages" (Introna v Huntington LearningCtrs., Inc., 78 AD3d 896, 898 [2010]; see Eurycleia Partners, LP v Seward & Kissel, LLP, 12NY3d 553, 559 [2009]). Each of the foregoing elements must be supported byfactual allegations containing the details constituting the wrong sufficient to satisfyCPLR 3016 (b) (see JP MorganChase Bank, N.A. v Hall, 122 AD3d 576, 579 [2014]; Cohen vHouseconnect Realty Corp., 289 AD2d 277, 278 [2001]). Here, the complaint, assupplemented by the plaintiff's affidavit in opposition, does not contain any allegationssetting forth any material misrepresentations the defendants made to the plaintiff.Moreover, the plaintiff's averment that he did not read the documents before signingthem prevents him from establishing justifiable reliance, an essential element of fraud (see Sorenson v Bridge CapitalCorp., 52 AD3d 265, 266 [2008]). "A party who signs a document without anyvalid excuse for not having read it is 'conclusively bound' by its terms" (Ferrarella v Godt, 131 AD3d563, 567-568 [2015], quoting Gillman v Chase Manhattan Bank, 73 NY2d1, 11 [1988]; see Sorenson v Bridge Capital Corp., 52 AD3d at 266; Sofio vHughes, 162 AD2d 518, 519 [1990]). Accordingly, the Supreme Court properlygranted that branch of the defendants' motion which was to dismiss the cause of actionalleging fraud.
"The elements of a cause of action to recover damages for breach of fiduciary dutyare (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3)damages directly caused by the defendant's misconduct" (Deblinger v Sani-Pine Prods. Co.,Inc., 107 AD3d 659, 660 [2013]; Rut v Young Adult Inst., Inc., 74 AD3d 776, 777 [2010])." 'A cause of action sounding in breach of fiduciary duty must be pleaded withthe particularity required by CPLR 3016 (b)' " (Deblinger v Sani-Pine Prods.Co., Inc., 107 AD3d at 660, quoting Palmetto Partners, L.P. v AJW Qualified Partners, LLC, 83AD3d 804, 808 [2011]). Here, even accepting that Pollis had a fiduciary duty to theplaintiff as a co-member of Knollwood Commons (see Jones v Voskresenskaya, 125 AD3d 532 [2015]; Chiu v Man Choi Chiu, 71AD3d 621 [2010]; Salm vFeldstein, 20 AD3d 469, 470 [2005]; see also Palmetto Partners, L.P. v AJWQualified Partners, LLC, 83 AD3d at 808), the Supreme Court properly determinedthat the complaint failed to allege factual details and circumstances of the defendants'alleged misconduct, and how such misconduct induced the plaintiff to sign thedocuments (see CPLR 3016 [b]; see also Colello v Colello, 9 AD3d 855, 859 [2004]).Accordingly, the Supreme Court properly granted that branch of the defendants' motionwhich was to dismiss the cause of action alleging breach of fiduciary duty.
Since the Supreme Court properly granted that branch of the defendants' motionwhich was to dismiss the cause of action alleging breach of fiduciary duty, it alsoproperly granted that branch of their motion which was to dismiss the cause of actionseeking an accounting (see Deev Rakower, 112 AD3d 204, 214 [2013]; Sutton Park Dev. Corp. Trading Co.v Guerin & Guerin Agency, 297 AD2d 430, 432 [2002]; cf. Lawrence v Kennedy, 95AD3d 955, 958 [2012]). Hall, J.P., Roman, LaSalle and Barros, JJ., concur.[Prior Case History: 46 Misc 3d 1212(A), 2015 NY Slip Op 50043(U).]