Bruno and Isaacson Obtain Summary Judgment Dismissal of Complaint

Jonathan Bruno and Deborah Isaacson secured summary judgment dismissal from the Supreme Court, New York County Commercial Division, of a complaint asserting claims for breach of fiduciary duty, tortious interference with a contract, breach of contract and seeking punitive damages against an attorney client.

The non-party owner of a Manhattan townhouse entered into a contract with the plaintiff general contractor to renovate her home. During the course of the renovation, litigation was necessary to gain access to the owner’s adjacent property, and the owner retained the client to represent her in that matter. The adjacent property owner initiated a trespass action against plaintiff, and the client represented plaintiff in that action pursuant to an indemnity agreement between plaintiff and the owner. The client also represented plaintiff and the owner in an action against the adjacent property owner for tortious interference.

During the course of these litigations, the owner decided to terminate the contract with plaintiff “for cause.” The owner later commenced an arbitration proceeding against plaintiff, and plaintiff commenced its own arbitration proceeding against the owner. The arbitrations were consolidated and the arbitrator ultimately determined that the termination for cause was improper and issued an award in favor of plaintiff. Plaintiff then sued the client for the owner’s termination of the contract for cause, alleging that the client facilitated the termination of the contract for cause, caused the owner to withhold payment owed to plaintiff and failed to disclose a purported conflict of interest to plaintiff, resulting in damages.

The court evaluated the breach of fiduciary duty claim under a legal malpractice standard and held that plaintiff failed to demonstrate that but for the client’s conduct, the owner would not have terminated the contract for cause. The court relied on the client’s deposition testimony and emails regarding his legal advice and rejected an affidavit from the owner, submitted by plaintiff, that contradicted her deposition testimony regarding advice provided by the client about terminating the contract.

The court rejected plaintiff’s breach of fiduciary duty claim based on a conflict of interest, finding that there was no evidence that plaintiff was damaged by the failure to disclose the conflict, as plaintiff engaged another lawyer to protect its interests when the conflict arose. The court further held that plaintiff could not establish damages, as plaintiff was successful at arbitration and could not recover twice. The court also dismissed the tortious interference claims, finding that the client’s conduct in providing advice regarding termination was immune from liability as it was advice to his client, the owner. Finally, the court dismissed the contract claims, finding that plaintiff did not make any allegations that the client breached a promise to achieve a specific result in the trespass and tortious interference actions.