Feldman v. Byrne

• Decision Date: 02 November 2022
• Docket Number: 2021-05942,Index No. 614106/20
• Citation: 210 A.D.3d 646,178 N.Y.S.3d 525
• Parties: Eric FELDMAN, etc., et al., appellants, v. Jeffrey BYRNE, et al., respondents.
• Court: New York Supreme Court — Appellate Division

210 A.D.3d 646
178 N.Y.S.3d 525

Eric FELDMAN, etc., et al., appellants,
v.
Jeffrey BYRNE, et al., respondents.

2021-05942
Index No. 614106/20

Supreme Court, Appellate Division, Second Department, New York.

Argued—September 16, 2022
November 2, 2022

178 N.Y.S.3d 527

Cyruli Shanks & Zizmor, LLP, New York, NY (James E. Schwartz of counsel), for appellants.

Chiesa Shahinian & Giantomasi, P.C., New York, NY (A. Ross Pearlman and Melissa F. Wernick of counsel), for respondents.

FRANCESCA E. CONNOLLY, J.P., REINALDO E. RIVERA, JOSEPH A. ZAYAS, WILLIAM G. FORD, JJ.

DECISION & ORDER

210 A.D.3d 646

In an action, inter alia, to recover damages for fraudulent

210 A.D.3d 647

inducement, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Vito M. DeStefano, J.), entered July 23, 2021. The order, insofar as appealed from, granted those branches of the defendants’ motion which were pursuant to CPLR 3211(a)(7) to dismiss the causes of action alleging fraudulent inducement and negligent misrepresentation.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging fraudulent inducement, and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed from, with costs to the plaintiffs.

According to the complaint, in October 2018, the plaintiff Eric Feldman, a licensed radiologist, began employment as a remote radiologist interpreting films and studies via teleradiology for a practice operating under nonparty radiologist Jeffrey Lyons, and then known as Lyons Medical (hereinafter the Lyons practice) at a location in Valley Stream (hereinafter the Valley Stream location). Approximately one month into his employment, the defendant Jeffrey Byrne, a layman who individually or through his corporation JAVS Ventures, Inc., ostensibly owned the Lyons practice, approached Feldman with a business proposition,

178 N.Y.S.3d 528

advising Feldman that the Lyons practice would soon cease operations and that Feldman would have an opportunity to open his own practice under his name.

In furtherance of Byrne's offer, Feldman and Byrne met on November 18, 2018. Feldman alleges that, at that meeting, Byrne made several misrepresentations on which the complaint rests. As relevant here, in particular, Feldman alleges that, at their meeting, Byrne stated that the Lyons practice had a stable source of patients and otherwise benefitted from referrals from local practicing physicians, and that the Lyons practice was a "clean practice" and that the referrals it received "were not based on payoffs." Feldman alleges that, in reliance on these representations, amongst others, he opened a radiological practice the plaintiff, Instar Medical, P.C. (hereinafter Instar), at the Valley Stream location, retaining all of the support staff previously employed by the Lyons practice.

Feldman alleges that, shortly after opening Instar, Byrne advised him that he would have to give certain people "thousands of pineapples" if he wanted the practice's patient referral stream to continue unabated. Feldman claims that, in response, he refused and ceased seeing patients at the Valley Stream location and, as a result, he terminated Instar's lease and eventually

210 A.D.3d 648

ceased operations. Measuring their damages based on four months’ operation, the plaintiffs commenced this action seeking recovery of the sum of $300,000 in damages premised on causes of action alleging fraudulent inducement, negligent misrepresentation, and breach of fiduciary duty. The plaintiffs alleged that "[b]ut for" Byrne's misrepresentations of material facts, Feldman would not have opened Instar at the Valley Stream location.

In lieu of answering, the defendants moved pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action. The plaintiffs opposed the motion. In an order entered July 23, 2021, the Supreme Court, inter alia, granted those branches of the defendants’ motion which were pursuant to CPLR 3211(a)(7) to dismiss the causes of action alleging fraudulent inducement and negligent misrepresentation. The plaintiffs appeal.

"Upon a motion to dismiss [pursuant to CPLR 3211(a)(7) ], the sole criterion is whether the subject pleading states a cause of action, and if, from the four corners of the complaint, factual allegations are discerned which, taken together, manifest any cause of action cognizable at law, then the motion will fail" ( Ruggiero v. DePalo, 153 A.D.3d 870, 871, 61 N.Y.S.3d 253 [internal quotation marks omitted]; see Bank of N.Y. Mellon Trust Co., N.A. v. Universal Dev., LLC, 136 A.D.3d 850, 850, 25 N.Y.S.3d 327 ). In assessing the adequacy of a complaint under CPLR 3211(a)(7), the court must afford the pleading a liberal construction, accept the facts alleged in the complaint to be true, and accord the plaintiff the benefit of...