Herman v. Herman

• Decision Date: 20 November 2014
• Docket Number: 13539, 650205/11
• Citation: Herman v. Herman, 2014 NY Slip Op 8111, 998 N.Y.S.2d 319, 122 A.D.3d 506 (N.Y. App. Div. 2014)
• Parties: Rosemarie A. HERMAN, etc., et al., Plaintiffs–Appellants, v. Julian Maurice HERMAN, et al., Defendants–Respondents, Mayfair York LLC, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

122 A.D.3d 506

998 N.Y.S.2d 319

2014 N.Y. Slip Op. 08111

Rosemarie A. HERMAN, etc., et al., Plaintiffs–Appellants

v. Julian Maurice HERMAN, et al., Defendants–RespondentsMayfair York LLC, et al., Defendants.

13539, 650205/11

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

Nov. 20, 2014.

Law Offices of Craig Avedidian, P.C., New York (Craig Avedidian of counsel), and Jaspan Schlesinger LLP, Garden City (Steven R. Schlesinger of counsel), for appellants.

Akerman LLP, New York (M. Darren Traub of counsel), for respondents.

TOM, J.P., FRIEDMAN, ANDRIAS, FEINMAN, KAPNICK, JJ.

Opinion

Order, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered on or about February 8, 2013, which, to the extent appealed from as limited by the briefs, upon granting plaintiffs' motion to renew and granting in part their motion to reargue an order, same court and Justice, entered June 15, 2012, dismissing certain causes of action, adhered to its prior decision, unanimously affirmed, without costs. Appeal from so much of the order as denied reargument on the issue of the applicability of the infancy toll, unanimously dismissed, without costs.

Plaintiff Rosemarie A. Herman brings certain claims in her individual capacity, as beneficiary of two trusts (the trusts) which held her interest in six properties, and as natural guardian for her two sons who are remainder beneficiaries and contingent remainder beneficiaries of the trusts. The underlying properties were eventually transferred into six limited liability companies (LLCs) in which the trusts were 50% owners, and defendant J. Maurice Herman, Rosemarie's brother, the other 50% owner and sole managing member. Plaintiffs' claims arise from Maurice's purchase of Rosemarie's trust interests in 1998 allegedly at far below market value, without her knowledge, and with the alleged cooperation or collusion of defendant Michael Offit, trustee of both trusts.

The court, upon granting renewal, properly dismissed the second cause of action alleging conspiracy to breach fiduciary duty against Maurice as duplicative, as an alternative ground, since a separate tort is pleaded connecting Maurice to plaintiffs' alleged injury. The first cause of action alleges breach of fiduciary duty against Maurice and Offit based, in part, on allegations that Maurice colluded with Offit in connection with Offit's breaches of his fiduciary duties and participated in that misconduct, largely in connection with the 1998 transaction and its concealment from Rosemarie (see e.g. American Baptist Churches of Metro. N.Y. v. Galloway, 271 A.D.2d 92, 101, 710 N.Y.S.2d 12 [1st Dept.2000] ; Alexander & Alexander of N.Y. v. Fritzen, 68 N.Y.2d 968, 969, 510 N.Y.S.2d 546, 503 N.E.2d 102 [1986] ; Danahy v. Meese, 84 A.D.2d 670, 672, 446 N.Y.S.2d 611 [4th Dept.1981] ).

The court also properly adhered to its ruling dismissing the 13th cause of action against Maurice alleging breach of the limited liability agreements relating to the LLCs, and the 14th cause of action alleging breach of fiduciary duty by Maurice in connection with his management of the LLCs, to the extent that these claims were brought derivatively on behalf of the LLCs. As Maurice purchased the trusts' interests in 1998, neither the trusts nor Rosemarie were members of the LLCs in 2011 when the lawsuit commenced, and they thus lacked standing to bring the...