Therapy v. Burns

• Decision Date: 10 May 2011
• Citation: 84 A.D.3d 878,923 N.Y.S.2d 156,2011 N.Y. Slip Op. 04002
• Parties: ISLAND SPORTS PHYSICAL THERAPY, appellant,v.William BURNS, et al., respondents.
• Court: New York Supreme Court — Appellate Division

84 A.D.3d 878

923 N.Y.S.2d 156

2011 N.Y. Slip Op. 04002

ISLAND SPORTS PHYSICAL THERAPY, appellant,

v.William BURNS, et al., respondents.

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

May 10, 2011.

Zabell & Associates, P.C., Bohemia, N.Y. (Saul D. Zabell of counsel), for appellant.Fallon and Fallon, LLP, Sayville, N.Y. (David P. Fallon of counsel), for respondents.ANITA R. FLORIO, J.P., THOMAS A. DICKERSON, JOHN M. LEVENTHAL, and ARIEL E. BELEN, JJ.

In an action, inter alia, to recover damages for fraud and breach of the duty of loyalty, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Whelan, J.), dated November 20, 2009, which granted the defendants' motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, with costs.

“ ‘[A]n employee owes a duty of good faith and loyalty to an employer in the performance of the employee's duties' ” ( 30 FPS Prods., Inc. v. Livolsi, 68 A.D.3d 1101, 1102, 891 N.Y.S.2d 162, quoting Wallack Frgt. Lines v. Next Day Express, 273 A.D.2d 462, 463, 711 N.Y.S.2d 891; see Lamdin v. Broadway Surface Adv. Corp., 272 N.Y. 133, 5 N.E.2d 66; CBS Corp. v. Dumsday, 268 A.D.2d 350, 353, 702 N.Y.S.2d 248). “An employee may create a competing business prior to leaving [her or] his employer without breaching any fiduciary duty unless [she or] he makes improper use of the employer's time, facilities or proprietary secrets in doing so” ( Schneider Leasing Plus v. Stallone, 172 A.D.2d 739, 741, 569 N.Y.S.2d 126; see 30 FPS Prods., Inc. v. Livolsi, 68 A.D.3d at 1102, 891 N.Y.S.2d 162; Beverage Mktg. USA, Inc. v. South Beach Beverage Co., Inc., 58 A.D.3d 657, 658, 873 N.Y.S.2d 84; Wallack Frgt. Lines v. Next Day Express, 273 A.D.2d at 463, 711 N.Y.S.2d 891; CBS Corp. v. Dumsday, 268 A.D.2d at 353, 702 N.Y.S.2d 248). In general, an employee may solicit an employer's customers only when the employment relationship has been terminated ( see A & L Scientific Corp. v. Latmore, 265 A.D.2d 355, 356, 696 N.Y.S.2d 495; Catalogue Serv. of Westchester v. Wise, 63 A.D.2d 895, 405 N.Y.S.2d 723).

“Further, [s]olicitation of an entity's customers by a former employee or independent contractor is not actionable unless the customer list could be considered a trade secret, or there was wrongful conduct by the employee or independent contractor, such as physically taking or copying files or using confidential information” ( Starlight Limousine Serv. v. Cucinella, 275 A.D.2d 704, 705, 713 N.Y.S.2d 195; see Walter Karl, Inc. v. Wood, 137 A.D.2d 22, 27, 528 N.Y.S.2d 94; see also Leo Silfen, Inc. v. Cream, 29 N.Y.2d 387, 391–392, 328 N.Y.S.2d 423, 278 N.E.2d 636). “The use of information about an employer's customers which is based on casual memory is not actionable” ( Levine v. Bochner, 132 A.D.2d 532, 533, 517 N.Y.S.2d 270; see Anchor Alloys v. Non–Ferrous Processing Corp., 39 A.D.2d 504, 507, 336 N.Y.S.2d 944; see also Leo Silfen, Inc. v. Cream, 29 N.Y.2d 387, 328 N.Y.S.2d 423, 278 N.E.2d 636).

Here, the defendants established their prima facie entitlement to judgment as a matter of law on the cause of action alleging breach of the duty of loyalty by demonstrating that the defendant William Burns did not, while in the employ of the plaintiff, Island Sports Physical Therapy (hereinafter ISPT), use ISPT's time or facilities to form a competing entity, the defendant Village Physical Therapy, P.C. (hereinafter VPT) ( see Beverage Mktg. USA, Inc. v. South Beach Beverage Co., Inc., 58 A.D.3d at 658, 873 N.Y.S.2d 84), or solicit ISPT's patients to patronize that competing entity ( see Mal Dunn Assoc. v. Kranjac, 145 A.D.2d 472, 535 N.Y.S.2d 430). Moreover, the defendants established, prima facie, that ISPT's patient lists did not constitute trade secrets ( see Starlight Limousine Serv. v. Cucinella, 275 A.D.2d at 705, 713 N.Y.S.2d 195; see generally Ashland Mgt. v. Janien, 82 N.Y.2d 395, 407, 604 N.Y.S.2d 912, 624 N.E.2d 1007). In opposition, the plaintiff failed to raise a triable issue of fact, including as to whether the defendants or someone acting on their...