Opinion
No. 2023-142 S C
08-12-2024
AA Medical, P.C., Doing Business as Complete Orthopedics, Appellant, v. Rebecca Keane, Respondent.
Milman Labuda Law Group, PLLC (Emmanuel Kataev of counsel), for appellant. Lewis & Lin, LLC (Michael D. Cilento of counsel), for respondent.
Unpublished Opinion
Milman Labuda Law Group, PLLC (Emmanuel Kataev of counsel), for appellant.
Lewis & Lin, LLC (Michael D. Cilento of counsel), for respondent.
PRESENT:: TIMOTHY S. DRISCOLL, J.P., JAMES P. McCORMACK, ELENA GOLDBERG-VELAZQUEZ, JJ
Appeal from an order of the Suffolk County Court (David A. Morris, J.) dated October 24, 2022. The order, insofar as appealed from as limited by the brief, granted the branches of defendant's motion seeking to dismiss the first, second, third, and fifth causes of action and to recover attorney's fees, and denied plaintiff's cross-motion for leave to amend the complaint.
ORDERED that the order, insofar as appealed from, is modified by providing that the branches of defendant's motion seeking to dismiss the fifth cause of action and to recover attorney's fees are denied; as so modified, the order, insofar as appealed from, is affirmed, without costs.
Plaintiff commenced this action by summons and verified complaint dated January 19, 2022, alleging "business disparagement" as the first cause of action, "faithless servant doctrine" as the second cause of action, "theft of personal property" as the third cause of action, "fraudulent unemployment insurance claim" as the fourth cause of action, and "breach of loan agreement" as the fifth cause of action. Defendant moved to dismiss the complaint pursuant to CPLR 3211 (a) (7) or 3211 (g) and to recover attorney's fees pursuant to Civil Rights Law § 70-a (1) (a). Plaintiff opposed and cross-moved to amend the complaint by adding allegations to the first cause of action. By order dated October 24, 2022, the County Court granted defendant's motion and denied plaintiff's cross-motion. On appeal, plaintiff's brief does not challenge the dismissal of the fourth cause of action.
Initially, we hold that this action is not a strategic lawsuit against public participation (SLAPP). Defendant's alleged statements, concerning the conduct of plaintiff's president and principal physician, were "directed only to a limited, private audience" (Huggins v Moore, 94 N.Y.2d 296, 303 [1999]) and, thus, their content was not within the sphere of public interest (see Miller v Appadurai, 214 A.D.3d 455, 456 [2023]; Tsamasiros v Jones, 78 Misc.3d 1225 [A], 2023 NY Slip Op 50349[U], *4-5 [Sup Ct, Richmond County 2023]; see also Civil Rights Law § 76-a [1] [a], [d]; Huggins v Moore, 94 N.Y.2d at 302). Consequently, the branch of defendant's motion seeking to recover attorney's fees pursuant to Civil Rights Law § 70-a (1) (a) should have been denied.
On a motion to dismiss for failure to state a cause of action under CPLR 3211 (a) (7), a court must "accept the facts as alleged in [a] complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 N.Y.2d 83, 87-88 [1994]; see Connaughton v Chipotle Mexican Grill, Inc., 29 N.Y.3d 137, 141 [2017]). "[A]ny deficiencies in the complaint may be amplified by supplemental pleadings and other evidence" (AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 N.Y.3d 582, 591 [2005]; see Rovello v Orofino Realty Co., 40 N.Y.2d 633, 635-636 [1976]).
The first cause of action, which alleges harm to plaintiff's "reputation and integrity," sounds in defamation (see Ruder & Finn v Seaboard Sur. Co., 52 N.Y.2d 663, 670-671 [1981]; Drug Research Corp. v Curtis Publ. Co., 7 N.Y.2d 435, 440 [1960]; Cambridge Assoc. v Inland Vale Farm Co., 116 A.D.2d 684, 685 [1986]; 44 NY Jur 2d, Defamation and Privacy § 281). "The elements of a cause of action for defamation are a 'false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and it must either cause special harm or constitute defamation per se'" (Salvatore v Kumar, 45 A.D.3d 560, 563 [2007], quoting Dillon v City of New York, 261 A.D.2d 34, 38 [1999]). "The complaint must set forth the particular words allegedly constituting defamation (see CPLR 3016 [a]), and it must also allege the time, place, and manner of the false statement and specify to whom it was made" (Tsatskin v Kordonsky, 189 A.D.3d 1296, 1299 [2020]; see Dillon v City of New York, 261 A.D.2d at 38). Here, the complaint fails to specify the particular words allegedly constituting defamation, the time, place, or manner of the statements, or to whom the statements were made. Thus, the County Court correctly dismissed the first cause of action (see Cohen v Cohen, 210 A.D.3d 633, 634-635 [2022]; Tsatskin v Kordonsky, 189 A.D.3d at 1299; Kimso Apts., LLC v Rivera, 180 A.D.3d 1033, 1034-1035 [2020]; Arvanitakis v Lester, 145 A.D.3d 650, 652 [2016]; Horbul v Mercury Ins. Group, 64 A.D.3d 682, 683 [2009]).
Under the faithless servant doctrine," '[o]ne who owes a duty of fidelity to a principal and who is faithless in the performance of his [or her] services is generally disentitled to recover his [or her] compensation, whether commissions or salary'" (Parker Waichman, LLP v Mauro, 215 A.D.3d 869, 871-872 [2023], quoting Feiger v Iral Jewelry, 41 N.Y.2d 928, 928 [1977]). "[F]orfeiture [of compensation under the faithless servant doctrine] arises upon 'misconduct and disloyalty which substantially affect the contract of employment' (Sundland v Korfund Co., Inc., 260 A.D. 80, 81-82 [1940]) and is required only upon a 'persistent pattern of disloyalty' (Bon Temps Agency v Greenfield, 212 A.D.2d 427, 428 [1995]; see Schwartz v Leonard, 138 A.D.2d 692, 693 [1988])" (G.K. Alan Assoc., Inc. v Lazzari, 44 A.D.3d 95, 104 [2007], affd 10 N.Y.3d 941 [2008]). "[T]he mere failure of an employee to perform assigned tasks does not give rise to a cause of action alleging breach of [the employee's duty of loyalty and good faith to the employer]. Rather, the employee's misuse of the employer's resources to compete with the employer is generally required" (Cerciello v Admiral Ins. Brokerage Corp., 90 A.D.3d 967, 968 [2011]; see Island Sports Physical Therapy v Burns, 84 A.D.3d 878, 879 [2011]). Here, the complaint does not allege the type of misconduct necessary to invoke the faithless servant doctrine and, therefore, the County Court correctly dismissed the second cause of action (see Bluebanana Group v Sargent, 176 A.D.3d 408, 409 [2019]; Cerciello v Admiral Ins. Brokerage Corp., 90 A.D.3d at 968).
"Conversion occurs when funds designated for a particular purpose are used for an unauthorized purpose" (Petrone v Davidoff Hutcher & Citron, LLP, 150 A.D.3d 776, 777 [2017] [internal brackets and quotation marks omitted]). "A cause of action alleging conversion should be dismissed when the plaintiff does not allege 'legal ownership or an immediate right of possession to specifically identifiable funds and that the defendant exercised an unauthorized dominion over such funds to the exclusion of the plaintiff's rights'" (CSI Group, LLP v Harper, 153 A.D.3d 1314, 1320 [2017], quoting Whitman Realty Group, Inc. v Galano, 41 A.D.3d 590, 592 [2007]). Here, the complaint fails to allege a specifically identifiable sum of money converted by defendant and, thus, the County Court correctly dismissed the third cause of action (see Abraham v Torati, 219 A.D.3d 1275, 1282 [2023]; Scifo v Taibi, 198 A.D.3d 704, 706 [2021]; Barker v Amorini, 121 A.D.3d 823, 825 [2014]; 9310 Third Ave. Assoc. v Schaffer Food Serv. Co., 210 A.D.2d 207, 208 [1994]; cf. Petrone v Davidoff Hutcher & Citron, LLP, 150 A.D.3d at 777-778).
"To successfully plead a cause of action for breach of contract, the complaint must allege the existence of a contract, the plaintiff's performance under the contract, the defendant's failure to perform under the contract, and resulting damages" (Lewis & Murphy Realty, Inc. v Colletti, 187 A.D.3d 731, 732-733 [2020]). Here, the complaint, as amplified by the material that plaintiff submitted in opposition to defendant's motion (see AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 N.Y.3d at 591), adequately alleges the existence of an oral loan agreement, performance by plaintiff through the issuance of checks to defendant, defendant's failure to repay the loan, and resulting damages (see Lewis & Murphy Realty, Inc. v Colletti, 187 A.D.3d at 733; A. Servidone, Inc./B. Anthony Constr. Corp., J.V. v State of New York, 168 A.D.3d 648, 650 [2019]; McKesson Med.-Surgical Minn. Supply, Inc. v Caremed Supplies, Inc., 164 A.D.3d 1441, 1442-1443 [2018]; Hampshire Props. v BTA Bldg. & Developing, Inc., 122 A.D.3d 573, 573 [2014]; Chun v Sook-Cha Kim, 52 Misc.3d 126 [A], 2016 NY Slip Op 50903[U], *1 [App Term, 1st Dept 2016]). Consequently, the County Court should not have dismissed the fifth cause of action.
" 'Applications for leave to amend pleadings under CPLR 3025 (b) should be freely granted unless the proposed amendment (1) would unfairly prejudice or surprise the opposing party, or (2) is palpably insufficient or patently devoid of merit'" (Apple A.C. & Appliance Serv., Inc. v Apple Home Heating Corp., 164 A.D.3d 461, 462 [2018], quoting Favia v Harley-Davidson Motor Co., Inc., 119 A.D.3d 836, 836 [2014])." 'A determination whether to grant such leave is within the [trial court's] broad discretion, and the exercise of that discretion will not be lightly disturbed'" (Beharrie v MRAG Dev., LLC, 210 A.D.3d 945, 946 [2022], quoting Krigsman v Cyngiel, 130 A.D.3d 786, 786 [2015]). Here, the proposed amendments concern only the first cause of action and do not provide any more information than the original complaint with respect to the particular words allegedly constituting defamation or the time, place, and manner of the alleged statements. Thus, the proposed amendments are palpably insufficient, and the County Court did not improvidently exercise its discretion in denying plaintiff's cross-motion for leave to amend the complaint (see Beharrie v MRAG Dev., LLC, 210 A.D.3d at 946; HSBC Bank USA, N.A. v Cross, 205 A.D.3d 779, 782-783 [2022]; Melis v Van Wickler, 185 A.D.3d 917, 918-919 [2020]; Apple A.C. & Appliance Serv., Inc. v Apple Home Heating Corp., 164 A.D.3d at 463; Nachbar v Cornwall Yacht Club, 160 A.D.3d 972, 974 [2018]).
Accordingly, the order, insofar as appealed from, is modified by providing that the branches of defendant's motion seeking to dismiss the fifth cause of action and to recover attorney's fees are denied.
DRISCOLL, J.P., McCORMACK and GOLDBERG-VELAZQUEZ, JJ., concur.