Opinion
Index No. 651986/2010
04-17-2015
BRUGES REALTY, CORP. CHARITABLE REMAINDER UNITRUST, 3111 BROADWAY REALTY CORP. CHARITABLE REMAINDER UNITRUST, 3111 BROADWAY REALTY CORP., DR. SAMUEL CASSELL as trustee of Bruges Realty, Corp. Charitable Remainder Unitrust and LYNN DIAMOND in her individual capacity and as trustee of Bruges Realty, Corp. Charitable Remainder Unitrust and 3111 Broadway Realty Corp. Charitable Remainder Unitrust, Plaintiffs, v. STEVEN A. HOROWITZ, ESQ. and MORITT HOCK HAMROFF & HOROWITZ LLP, Defendants.
For Plaintiffs: Sadowski Fischer PLLC 39 Broadway New York, NY 10006 For Defendant Moritt Hock Hamroff & Horowitz LLP: L'Abbate, Balkan, Colavita & Contini, L.L.P. 1001 Franklin Avenue, 3rd Floor Garden City, NY 11530
DECISION and ORDER For Plaintiffs:
Sadowski Fischer PLLC
39 Broadway
New York, NY 10006
For Defendant Moritt Hock Hamroff & Horowitz LLP:
L'Abbate, Balkan, Colavita & Contini, L.L.P.
1001 Franklin Avenue, 3rd Floor
Garden City, NY 11530
HON. SALIANN SCARPULLA, J.:
Plaintiffs Bruges Realty Corp. Charitable Remainder Unitrust ("Bruges Trust"), 3111 Broadway Realty Corp. Charitable Remainder Unitrust ("3111 Trust," together with Bruges Trust, the "Trusts"), 3111 Broadway Realty Corp. ("3111 Corp."), Lynn Diamond ("Diamond") and Dr. Samuel Cassell ("Cassell") (collectively "plaintiffs") bring this action against the Trusts' former attorneys, defendants Steven A. Horowitz ("Horowitz") and Moritt Hock Hamroff & Horowitz, LLP ("Moritt Hock") (collectively "defendants"). The complaint asserts causes of action for: (1) breach of fiduciary duty; (2) negligence or gross negligence; (3) fraudulent concealment, fraudulent misrepresentations or negligent misrepresentation; (4) conversion or misappropriation of assets; (5) legal malpractice; (6) breach of contract; (7) unjust enrichment; and (8) breach of trust. Both defendants assert a number of affirmative defenses. In addition, Horowitz asserts two counterclaims for legal fees and statutory commissions, pursuant to Surrogate's Court Procedures Act (SCPA) § 2309, for his services as a trustee of 3111 Trust.
By decision and order dated July 23, 2013, this court (J. Kapnick) granted plaintiffs' motion for partial summary judgment on the sixth cause of action for breach of contract against Horowitz (motion sequence number 003), and awarded plaintiffs $2,529,122, plus interest, and reasonable attorneys' fees.
Plaintiffs now move for partial summary judgment on the first, fifth and eighth causes of action, and for dismissal of Horowitz's counterclaims. Plaintiffs also seek an award of attorney's fees incurred in connection with this motion. Moritt Hock cross-moves for partial summary judgment on its fourth affirmative defense for contribution. Horowitz does not oppose plaintiffs' motion.
There is no dispute that Horowitz provided Diamond, her family and their companies with legal services since 1991. In 2000, Horowitz merged his prior firm with Moritt Hock & Hamroff, forming Moritt Hock Hamroff & Horowitz LLP. Horowitz became partner and head of the firm's trusts and estates practice. Starting in 2001, Diamond retained Horowitz and Moritt Hock to create and provide legal services for Bruges Trust, a charitable remainder unitrust created by Bruges Realty, Corp., a company controlled by Diamond's family. Under the trust agreement forming Bruges Trust, dated May 31, 2001, Diamond and Cassell were named trustees and Diamond was named the lifetime beneficiary.
At some point in 2003 or 2004, Horowitz ceased to be a partner and became senior tax counsel at the firm. On November 17, 2004, Horowitz entered into an agreement with Diamond and Bruges Trust (the "2004 Agreement"), which gave Horowitz the discretion to invest three million dollars of Bruges Trust's assets in investments "which may or may not be deemed suitable for fiduciary investments." Starting in late 2004, and continuing through 2006, Horowitz invested over two million dollars of Bruges Trust's assets in companies in which he held personal investments or other interests. He continued to manage these investment through 2007. In addition, Horowitz allegedly made a number of investments in Web2 Corp., a Moritt Hock client and in which Moritt Hock invested.
Marc Hamroff ("Hamroff"), the managing partner of Moritt Hock, testified at his examination before trial that, on July 1, 2004, Horowitz went from being a partner to become senior tax counsel, because he wanted to pursue endeavors outside the practice of law, including investing. Horowitz testified at his deposition that he ceased being a partner in September 2003, due to personal disagreements with other partners.
By agreement dated February 28, 2005, Horowitz and Moritt Hock created 3111 Trust, another charitable unitrust, for 3111 Corp., which Diamond controlled. Under the trust agreement, 3111 Corp. was to receive an annual distribution and Diamond and Daphne Schwartz ("Schwartz") were named trustees. On March 11, 2005, Horowitz replaced Schwartz as a trustee. Defendants drafted the instruments effecting the change. From late 2005 through 2007, Horowitz invested and managed over four million dollars on behalf of the 3111 Trust. The investments were made in companies in which Horowitz held personal investments or other interests.
Diamond asserts that Horowitz never advised her of his various conflicts of interest, never advised her to seek separate legal counsel after becoming an investment advisor for Bruges Trust and co-trustee for 3111 Trust, and never obtained written waivers for any of the conflicts. Horowitz testified that he informed Diamond of his personal interests in the companies he was investing in for the Trusts, but that he did not believe there was a conflict and so did not advise her as such or seek a written waiver. Horowitz and Moritt Hock acted as the Trusts' legal counsel from their inception, and continued to do so during the period when Horowitz invested the Trusts' assets.
Plaintiffs allege that Horowitz's investments caused losses of at least $2,197,000 for Bruges Trust and $954,570 for 3111 Trust. On October 17, 2007, Horowitz entered into an agreement with Diamond and Cassell to repay the losses incurred by Bruges Trust ("2007 Agreement"). Henry E. Klosowski ("Klosowski"), a partner at Moritt Hock who did work for the Trusts, reviewed the 2007 Agreement. Klosowski testified that he did so as a friend and that he did not inform Moritt Hock of the 2007 Agreement, because it concerned Horowitz's independent investment advice and was unrelated to Horowitz's legal services for the Trusts. It is undisputed that Horowitz failed to comply with the 2007 Agreement. He remained a trustee of 3111 Trust until plaintiffs commenced this action. Moritt Hock remained plaintiffs' attorneys through 2009.
Plaintiffs argue that they are entitled to summary judgment on their fifth cause of action for legal malpractice because of conflicts which arose by virtue of Horowitz (1) entering into business arrangements with Diamond where he would make investments on behalf of the Bruges Trust; (2) entering into a business arrangement with Diamond, where he was appointed trustee of the 3111 Trust and also made investments on its behalf; (3) attempting to raise money and/or serve as an officer or director for the companies in which he as investing plaintiffs' funds; and (4) making personal investment on behalf of the companies in which he as investing plaintiffs' funds.
Plaintiffs also argue that they should be granted summary judgement on the first cause of action for breach of fiduciary duty and the eight cause of action for breach of trust. Plaintiffs assert that Horowitz's actions and investments, made in spite of his and his firm's many conflicts of interest, violated the fiduciary duties owed to plaintiffs, resulting in their losses. Plaintiffs also assert that defendants' acts of self-dealing violated the prudent investor act. In addition, plaintiffs argue that Morrit Hock is liable for Horowitz's unlawful investments, as the conflicts of interest of one lawyer at a firm are imputed to the entire firm. Further, plaintiffs argue that Horowitz's counterclaims seeking commissions for acting as trustee for the 3111 Trust, and for attorneys's fees in defending this action should be dismissed.
Horowitz does not oppose plaintiffs' motion.
Defendants argue that summary judgment is inappropriate as there exist material issues of fact. Defendants assert that Diamond was aware of the investments Horowitz was making as early as 2002, and that she was satisfied with the investments Horowitz was making on behalf of the Trusts. Further, defendants argue that Diamond and Cassell had their own fiduciary obligations to the Trusts and their charitable beneficiaries to investigate the investments. Defendants also maintain there exists material issues of fact as to Moritt Hock's knowledge of Horowitz's role as investment advisor to the Trusts and his investments in risky companies in which he had personal interests.
Moritt Hock also cross moves for summary judgment on its affirmative defense of contribution, arguing that Diamond and Cassel had fiduciary duties as trustees to the Trust, which they breached, therefore making them liable for damages sustained by the Trusts. Discussion
Pursuant to CPLR 3212 (b), "[t]o obtain summary judgment, the movant 'must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact.'" Madeline D'Anthony Enters., Inc. v Sokolowsky, 101 A.D.3d 606, 607 (1st Dept 2012), quoting Alvarez v Prospect Hosp., 68 N.Y.2d 320, 324 (1986). "Failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers." JMD Holding Corp. v Congress Fin. Corp., 4 N.Y.3d 373, 384 (2005), quoting Alvarez, 68 N.Y.2d at 32. If the movant makes the necessary showing, the burden shifts to the opposing party "'to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action.'" Madeline D'Anthony Enters., Inc., 101 A.D.3d at 607, quoting Alvarez, 68 NY2d at 324. Plaintiff's Motion for Summary Judgment on the First , Fifth and Eights Causes of Action for Breach of Fiduciary Duty, Legal Malpractice and Breach of Trust
The parties dispute whether Horowitz's multiple conflicts of interests may be imputed to Moritt Hock to sustain the malpractice claim against the firm. In addition, Moritt Hock contends that the breach of fiduciary duty claim is redundant of the legal malpractice claim and should be dismissed.
To establish a breach of fiduciary duty claim, a plaintiff must show: (1) the existence of a fiduciary relationship; (2) misconduct by the defendant; and (3) damages. Burry v Madison Park Owner LLC, 84 A.D.3d 699, 700 (1st Dept 2011). "An action for legal malpractice requires proof of the attorney's negligence, a showing that the negligence was the proximate cause of the plaintiff's loss or injury, and evidence of actual damages." Pellegrino v File, 291 A.D.2d 60, 63 (1st Dept 2002). "It requires the plaintiff to establish that counsel failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that 'but for' the attorney's negligence the plaintiff would have prevailed in the matter or would have avoided damages." Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 10 (1st Dept 2008) (internal quotation marks and citations omitted).
Generally, a claim for breach of fiduciary duty "requires only that the plaintiff identify a conflict of interest which amounted merely to a substantial factor in [the plaintiff's] loss." Id. (internal quotation marks and citations omitted). "However, [the First Department] has noted that, in the context of an action asserting attorney liability, the claims of malpractice and breach of fiduciary duty are governed by the same standard of recovery" (id.), and "the plaintiff must establish the 'but for' element of malpractice, irrespective of how the claim is denominated in the complaint." Id. at 11.
Here, the record is replete with evidence of Horowitz's self-dealing as a trustee of 3111 Trust and investment advisor for Bruges Trust. During his deposition, Horowitz admitted to investing the Trusts' assets in companies in which he had personal investments or other interest. Moreover, 3111 Trust prohibits trustees from engaging in "any act of self-dealing, as defined in Section 4941 (d) of the [Internal Revenue Code]."
However, plaintiffs fail to demonstrate how Horowitz's conflicts of interest proximately caused their losses. Ulico Cas. Co., 56 AD3d at 11; see also Laub v Faessel, 297 AD2d 28, 31 (1st Dept 2002) ("[a]n essential element of the plaintiff's cause of action for negligence, or for . . . any . . . tort, is that there be some reasonable connection between the act or omission of the defendant and the damage which the plaintiff has suffered" [internal quotation marks and citation omitted]). Plaintiffs argue that, but for the investments made by Horowitz while he was conflicted, "plaintiffs would not have suffered the losses resulting from those investments." But they do not submit sufficient evidence to show that the prohibited investments caused their losses, as opposed to independent financial conditions. Cf Tabner v Drake, 9 AD3d 606, 609 (3d Dept 2004) (denying summary judgment on malpractice claim where parties disputed the substance of legal advice provided and whether it or independent financial conditions caused client's loss).
Moreover, plaintiffs fail to articulate any distinction between their causes of action for breach of trust and breach of fiduciary, nor do they allege whether the two causes of action arise out of common law, contract or both. Therefore, summary judgment is denied with respect to the breach of fiduciary duty and breach of trust causes of action.
Horowitz's failure to oppose plaintiffs' motion does not alter this result. Voss v. Netherlands Ins. Co., 22 N.Y.3d 728, 985 N.Y.S.2d 448, 8 N.E.3d 823 (2014) ("If the moving party fails to meet this initial burden, summary judgment must be denied 'regardless of the sufficiency of the opposing papers'" ) (citation omitted).
Plaintiffs also fail to demonstrate their prima facie entitlement to summary judgment with respect to the legal malpractice claim. Plaintiffs' evidence of Horowitz's conflicts of interest, for which Horowitz never obtained a written waiver, merely demonstrates a breach of the disciplinary rules. "A conflict of interest, even if a violation of the Code of Professional Responsibility, does not by itself support a legal malpractice cause of action." Schafrann v N.V. Famka, Inc., 14 A.D.3d 363, 364 (1st Dept 2005). See also Sumo Container Sta. v Evans, Orr, Pacelli, Norton & Laffan, 278 A.D.2d 169, 170-171 (1st Dept 2000) (affirming summary judgment dismissal of legal malpractice claim premised on defendant-attorney's undisclosed conflict of interest as the plaintiff's insurer-appointed attorney, where notice of the conflict of interest was implicit and no issues of fact existed as to whether attorneys breached their duty of care or proximately caused the plaintiff harm); Mergler v Crystal Props. Assoc., 179 A.D.2d 177, 183 (1st Dept 1992) ("the Code of Professional Responsibility was promulgated to establish an ethical standard and to vindicate society's rights with respect to the conduct of licensed attorneys, not to delineate substantive rules for the adjudication of the private rights, inter se, of parties").
In addition, plaintiffs fail to demonstrate the absence of any material issues of fact with respect to Horowitz's disclosure of his conflicts of interest. Plaintiffs contend that Horowitz never obtained written conflicts waivers. Horowitz testified at his deposition that, while he never obtained a written waiver, he had numerous discussions with Diamond in which he disclosed his personal interests in the companies in which he wished to invest the Trusts' assets. Moreover, Diamond executed the 2004 Agreement, which authorized Horowitz to make investments "which may or may not be deemed suitable for fiduciary investments" on behalf of Bruges Trust. Accordingly, plaintiffs fail to demonstrate the absence of any material issues of fact with respect to whether Horowitz departed from "the standards of professional care and skill which [Horowitz] may have owed to [plaintiffs]." Tabner, 9 A.D.3d at 610 (finding that "a question of fact exist[ed] regarding whether plaintiffs breached the standards regarding conflicts of interest caused by simultaneous representation as set forth in Code of Professional Responsibility DR 5-105 [c] [22 NYCRR 1200.24 ©] in that the parties dispute[d] whether plaintiffs ever expressly disclosed their representation of [the lender] to [the borrower] and obtained his consent"); cf Edwards v Haas, Greenstein, Samson, Cohen & Gerstein, P.C., 17 A.D.3d 517, 518 (2d Dept 2005) (jury denied award of damages in malpractice action based on conflict of interest where it found that the plaintiff was informed of attorney's conflict of interest in representing all the parties at a stock redemption and mortgage loan closing); Sumo Container Sta., 278 A.D.2d at 171 ("[t]he record discloses that notice of defendants' conflict of interest was implicit in the correspondence among the parties").
Finally, as set forth above, plaintiffs fail to show how Horowitz's conflict of interest proximately caused their losses. Unger v Paul Weiss Rifkind Wharton & Garrison, 265 A.D.2d 156, 157 (1st Dept 1999) ("an attorney's failure to disclose a conflict of interest is not actionable absent allegations that such failure proximately caused actual damages").
Plaintiffs raise three additional arguments solely against Moritt Hock. First, plaintiffs argue that Horowitz's conflicts of interest are imputed to the firm and all other considerations are irrelevant. However, plaintiffs do not identify any case law in support of this proposition and instead rely on inapposite authority. See Code of Professions Responsibility DR 5-105, substantially embodied in the Rules of Professional Conduct, 22 NYCRR 1200.0, Rule 1.10 (providing for imputation of an attorney's conflict of interest to the entire firm for purposes of disqualification); Kirschner v KPMG LLP, 15 N.Y.3d 446, 468 (2010) (stating that an officer's conduct, when in any way benefitting a corporation, is imputed to the corporation); Holloway v Sacks & Sacks, 275 A.D.2d 625, 626 (1 st Dept 2000) (affirming grant of partial summary judgment to client on malpractice action against law firm, without addressing whether the firm disputed its liability based on former associate's misconduct); Matter of McGuinness, 69 A.D. 606, 608 (1st Dept 1902) (finding that attorneys "failed to discharge the legal obligation imposed upon them [by the retainer agreement] of paying over the full amount, less the sum agreed upon for counsel fees," rather than imputing the misappropriation of settlement funds by the attorneys' clerk to the attorneys).
Second, plaintiffs seek to hold Moritt Hock liable for its failure to obtain a written waiver when it prepared the documents appointing Horowitz as a trustee of 3111 Trust. However, as explained above, plaintiffs fail to demonstrate entitlement to summary judgment based on the violation of this ethical rule.
Third, plaintiffs seek to impose vicarious liability. However, they fail to demonstrate the absence of material issues of fact with respect to whether Horowitz acted "in furtherance of the employer's business and within the scope of employment." Bowman v State of New York, 10 A.D.3d 315, 316 (1st Dept 2004). Plaintiffs point to various invoices for services rendered by Horowitz and Klosowski in connection with the Trusts but none of the entries indicate, on their face, that Moritt Hock billed plaintiffs for Horowitz's investment activities. For example, one invoice, dated November 29, 2004, is for Horowitz's "[w]ork on coordinating and remedying issues of investment performance for trustees" and Klosowski's discussion with Horowitz regarding "language and powers of trust vis a vis investments." In addition, Klosowski testified that entries regarding "trust administration or estate planning" did not involve discussion about any specific investments made on behalf of the Trusts. While the record contains conflicting testimony as to when Horowitz ceased to be a partner of Moritt Hock, Hamroff testified that Horowitz ceased to be a partner on July 1, 2004, before the 2004 Agreement was executed, because Horowitz wished to allocate more time to investing rather than the practice of law. Likewise, to the extent plaintiffs contend that Moritt Hock billed them for the accounting prepared in connection with the 2007 Agreement, Klosowski testified that he billed plaintiffs for creating the package that was sent to Joseph Lehr, who prepared the accounting, but that he believed the accounting was requested in connection with general trust administration and not the 2007 Agreement. For these reasons, whether Horowitz provided services on behalf of Moritt Hock, rendering Moritt Hock vicarious liable, is a disputed material issue of fact.
In opposition to plaintiff's motion, Moritt Hock argues that the breach of fiduciary duty claim is duplicative of the legal malpractice claim. Where the claim for breach of fiduciary duty is "premised on the same facts and seek[s] the identical relief sought in the legal malpractice cause of action, [it] is redundant and should be dismissed." Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271 (1 st Dept 2004). Here, the allegation in the complaint for the two causes of action are premised on the same facts and seek the same relief, therefore the cause of action for breach of fiduciary duty as to Morrit Hock will be dismissed as redundant. Estate of Nevelson v. Carro, Spanbock, Kaster & Cuiffo, 290 A.D.2d 399, 400 (1st Dep't 2002).
Although Morrit Hock raises this argument in its opposition brief and does not seek dismissal of the cause of action in its cross motion, I am empowered to search the record, and grant summary judgment to the nonmoving party. New Hampshire Ins. Co. v MF Global, Inc., 108 A.D.3d 463, 467 (1st Dep't 2013).
For the foregoing reasons, plaintiffs' motion for summary judgment on the first, fifth and eighth causes of action is denied. Plaintiffs' Motion for Summary Judgment Dismissing Horowitz's Counterclaims
Plaintiffs also seek dismissal of both of Horowitz's counterclaims, in which Horowitz seeks attorney's fees incurred in connection with this action and statutory commissions for his services as a trustee of 3111 Trust. Plaintiffs argue that Horowitz's counterclaim for attorney's fees is unsupported. They also argue he is not entitled to statutory commissions because he: (1) waived them by failing to present a single statement of commissions owed to him; and (2) forfeited them through self-dealing.
SCPA § 2309 (1) provides for payment of a trustee's "reasonable and necessary expenses actually paid by him" in connection with the administration of a trust and, "if he be an attorney of this state and shall have rendered legal services in connection with his official duties, such compensation for his legal services as shall appear to the court to be just and reasonable . . . ." In addition, SCPA § 2309 (2) provides that a trustee is entitled to an annual commission. "Trustees can be denied commission 'where their acts involve bad faith, a complete indifference to their fiduciary obligations or some other act that constitutes malfeasance or significant misfeasance.'" Matter of Gregory Stewart Trust, 109 A.D.3d 755, 757 (1st Dept 2013), quoting Matter of Tydings (Ricki Singer Grantor Trust), 32 Misc 3d 1204 (A), 2011 NY Slip Op 51177 (U), *10 (Sur Ct, Bronx County 2011). In addition, while SCPA § 2309 (1) provides that a "trustee of a lifetime trust is entitled to have reasonable and necessary legal expenses incurred on behalf of the trust charged to the trust," a trustee is liable for all expenses incurred as a result of his self-dealing. Matter of Tydings, 32 Misc 3d 1204 (A), 2011 NY Slip Op 51177 at *11; see also Matter of Birnbaum v Birnbaum, 157 AD2d 177, 191 (4th Dept 1990) ("an estate should not bear any expense as the result of a fiduciary's misconduct").
While plaintiffs' submit evidence of Horowitz's self-dealing and malfeasance, as discussed above, there are also numerous issues of fact. Therefore, the motion for summary judgment to dismiss the counterclaims, while unopposed by Horowitz, is denied. Moritt Hock's Cross Motion for Partial Summary Judgment
Moritt Hock cross-moves for partial summary judgment on its affirmative defense of contribution. It argues that Diamond and Cassell breached their fiduciary obligations by abdicating their duties as trustees and allowing Horowitz free reign over the Trusts' investments. Diamond and Cassell oppose the motion, arguing that they had no duty to discover their attorney's malpractice and that they acted diligently once their suspicions were raised.
A trustee may delegate the exercise of a trust power to a fellow trustee, especially where the latter has an expertise in some particular aspect of the trust management; but that does not give a trustee the right to abdicate his duty to be personally active in the administration of the trust with regard to those functions which call for consistency with usually prudent business practice.Matter of Goldstick, 177 A.D.2d at 238 (internal quotation marks and citations omitted). "Alleged good faith on the part of a fiduciary forgetful of his duty is not enough. He [cannot] close his eyes, remain passive or move with unconcern in the face of the obvious loss . . . and then shelter himself behind the claimed counsel of an attorney." Matter of Rothko, 43 N.Y.2d 305, 320 (1977) (internal citations omitted).
Here, Moritt Hock points to wire authorizations of the Trusts' funds into an IOLA account of Horowitz's previous law firm, rather than Moritt Hock's account, and argues that this should have been a "red flag" for plaintiffs. Moritt Hock also alleges that Cassel and Diamond had misgivings about Horowitz's management of the Trusts' assets. In support, Morrit Hock submits deposition testimony by Cassel that, in 2004 or 2005, he felt it inappropriate for Horowitz, a lawyer, to act as investment advisor. Moritt Hock also relies on Diamond's deposition testimony that she was aware that Horowitz violated the 2004 Agreement shortly after it was executed, because Horowitz withdrew more than the agreed amount for investing; she knew of the nonfiduciary investments and attempted to discuss these investments with Horowitz in 2004; and she was prepared to risk up to two million dollars in nonfiduciary investments and was primarily concerned that Horowitz exceeded that cap, a fact she was aware of in 2003.
The issue of what Cassell and Diamond knew or should have known is a fact issue not amenable to resolution on a motion for summary judgment. See Berardi v W. T. Lane, Inc., 39 A.D.2d 936, 938 (2d Dept 1972) (finding that "there were issues of fact raised regarding [cotrustee's] consent to or actual knowledge of his cotrustees' acts of self-dealing," and that "the question of [cotrustee's] negligence in failing to prevent a breach of trust or in improperly delegating his responsibilities [could not] be determined without a trial"); see also Parker v Rogerson, 33 A.D.2d 284, 289 (4th Dept 1970) ("the question of [co-trustee's] negligence in failing to prevent a breach of trust or in improperly delegating its responsibilities [could not] be determined without a trial" where movant had not shown that trustee consented to, or knew of, the self-dealing). Therefore, Moritt Hock's cross motion is denied.
In accordance with the foregoing it is
ORDERED that the first cause of action asserting breach of fiduciary duty is dismissed as duplicative of the case of action for legal malpractice; and it is further
ORDERED that the motion by plaintiffs Bruges Realty Corp. Charitable Remainder Unitrust, 3111 Broadway Realty Corp. Charitable Remainder Unitrust, 3111 Broadway Realty Corp., Lynn Diamond and Dr. Samuel Cassell for partial summary judgment is denied, and the second, third, fourth, fifth, seventh and eighth causes of action shall be tried; and it is further
ORDERED that the plaintiffs' motion for summary judgment dismissing Horowitz's counterclaims, and for damages and attorneys' fees, is denied; and it is further
ORDERED that defendant Moritt Hock Hamroff & Horowitz, LLP's cross motion for partial summary judgment is denied; and it is further
ORDERED that judgment on the dismissed first cause of be entered at the conclusion of the action.
This constitutes the decision and order of this Court. Date: New York, New York
April 17, 2015
ENTER:
/s/_________
Saliann Scarpulla, J.S.C.