Kutsak v. Slivko

Full title: MAKS KUTSAK, derivatively on behalf of nominal Defendant Global Health…

Court: Supreme Court, Kings County

Date published: Nov 1, 2022

2022 N.Y. Slip Op. 33848 (N.Y. Sup. Ct. 2022)

Opinion

Index No. 510886/2022

11-01-2022

MAKS KUTSAK, derivatively on behalf of nominal Defendant Global Health Pharmacy Corp., and directly, Plaintiff, v. IRINA SLIVKO, Defendant, and GLOBAL HEALTH PHARMACY CORP., Nominal Defendant,

HON. LEON RUCHELSMAN J.S.C.

Unpublished Opinion

PRESENT: HON. LEON RUCHELSMAN

HON. LEON RUCHELSMAN J.S.C.

The defendant has moved pursuant to CPLR §3211 seeking to dismiss the second, fourth and seventh causes; of action. The plaintiff opposes the motion. Papers were submitted by all parties and arguments held. After reviewing the arguments of all parties this court now makes the following determination.

According to the Amended. Verified Complaint the parties are each half owners of a pharmacy located in staten island. During 2021- the defendant, insisted the .plaintiff could not prove he was an owner of the pharmacy and eventually removed the plaintiff as a signatory Of the pharmacy's bank account and Ceased paying the plaintiff his monthly distributions. This lawsuit was filed wherein the plaintiff asserts, causes of action for declaratory relief he is. an owner, a breach of a fiduciary duty, an accounting, oppression, claims pursuant to BCL §70 6 and §716,. conversion and alternative claims for breach of contract, constructive trust and unjust, enrichment.

The defendant has now moved seeking to. dismiss the fourth cause of action of shareholder oppression which seeks, the appointment of a receiver, the removal of the defendant as an officer and director of the pharmacy and that, the defendant sell her share to. the plaintiff and enter into a non-compete ..and a non-disclosure, agreement. Without any opposition filed the motion is granted.

The defendant has also moved seeking to dismiss the. second and seventh causes of action as- they relate to' the faithless. servant doctrine. The plaintiff has opposed that relief.

Conclusions of Law

It is well settled that upon a motion to dismiss the court must determine, -accepting the allegations- of the complaint as true, whether the party can succeed upon any reasonable view of those facts (strujan. v. Kaufman & Kahn. IXP, 16.8 .AD.3d 1114, '93' NY.S-3.d 334 [2d .Dept., 2019])', Further, all the allegations in the Complaint are deemed true and all reasonable Inferences may be drawn in favor of the .plaintiff (Weiss v. Lowenberg, 95 A.D.3d 405, 94.4 NYS2.d 27 [1^st Dept., 2012]) . Whether the. complaint will .later survive, a motion for summary judgment, Or whether .the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a pre-discovery CPLR §3211 motion to. dismiss- (see, Moskowitz v.- Masliansky, 198 A.D.3d' 63.7, 155 N.Y.S.3d 414 [2021]).

The faithless servant doctrine; was first coined in Herman v. Branch Motor Express. Co.., 67 Misc.2d 444, 323 N.Y.S.2d 7 9:4 [Civil Court of the City of New York, 1971] where the court stated -a servant who is faithless to his master on Tuesday thereby forfeits the wages he earned on Monday" (id). . The doctrine states that an agent who Owes a duty of fidelity to a principal and is faithless in that duty thereby forfeits compensation due (see, Phansalkar v, Anderson Welnroth & Company L.P., 344 F.3d 184 [2d Cir.. 2003]). Further, pursuant to^: the doctrine the employer is entitled to a return of any compensation paid to an employee during the period of her disloyalty (CARCO GROUP, Inc., v. Maconachy, 718 F.3d72 [2d Cir. 2013], see, also, Torres v. Gristede's Operating Corp., 628: F.Supp.2d 447 [S.D.N.Y. 2008]).

The defendant argues the Amended Verified Complaint fails to adequately plead a claim under the faithless servant doctrine. The defendant argues that "Plaintiff's Verified Amended Complaint fails to allege in what context Defendant has acted as a faithless servant-, how Defendant's alleged .disloyal activity was related to the performance- of Defendant's duties, how Defendant benefitted from., such actions., and that said alleged disloyalty permeated Defendant's' service- in its most .material and. substantial part" (see. Memorandum of Law, page 11 [NYSCEF Doc. No. 35]). However, the Amended Verified Complaint contains: sufficient allegations the defendant forfeited her compensation by acting in a faithless, manner. Thus-, the Amended Verified Complaint asserts the defendant Improperly took negative actions against the plaintiff (see. Verified Amended Complaint, ¶ 31, ¶ 60. [NYSCEF Doc. No. .29.]). While those, allegations. Will be the subject of discovery, at this stage, of the litigation they adequately allege the elements of the faithless servant doctrine. Further, these allegations harm not just the. plaintiff but the pharmacy as a whole since they necessarily undermine the efficient and smooth operation of the business. The: mere fact the allegations of faithlessness all relate to harms against the plaintiff does not mean the pharmacy was. not harmed as well. As noted, at this juncture the Amended Verified Complaint adequately alleges a violation of the faithless servant doctrine. Further discovery will surely narrow ans sharpen these issues, Therefore, the motion seeking to dismiss, that cause of action is denied.

So ordered.