Opinion
12-01-2016
NATIONAL FINANCIAL PARTNERS CORP., et al., Plaintiffs–Respondents, v. USA TAX AND INSURANCE SERVICES, INC., Defendant–Appellant, Does 1–50, Defendants.
Law Offices of Kenneth L. Kutner, New York (Kenneth L. Kutner of counsel), for appellant. Winget, Spadafora & Schwartzberg, LLP, New York (William G. Winget of counsel), for respondents.
Law Offices of Kenneth L. Kutner, New York (Kenneth L. Kutner of counsel), for appellant.
Winget, Spadafora & Schwartzberg, LLP, New York (William G. Winget of counsel), for respondents.
Order, Supreme Court, New York County (Anil C. Singh, J.), entered April 15, 2015, which, to the extent appealed from as limited by the briefs, denied defendant USA Tax and Insurance Services, Inc.'s motion for summary judgment dismissing the causes of action asserted in the amended complaint for aiding and abetting breach of fiduciary duty and tortious interference with contractual relations, unanimously affirmed, with costs.
Issues of fact preclude dismissal of the claim for tortious interference with contractual relations. Plaintiffs have established the existence of the nonsolicitation and noncompete provisions in the Management and Merger Agreements between them and Stephen Delott, as well as USA Tax's knowledge of the restrictive covenants (Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 424, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996] ). However, while the record shows that Delott and USA Tax were in contact regarding plaintiff Delott & Associates, Inc.'s (D&A) recruited agents at a time when Delott was still working as D&A's president, there are issues of fact as to whether Delott actually breached the noncompete and nonsolicitation provisions, whether USA Tax intentionally procured any such breach without justification (id. ), and whether the alleged breach of contract would not have occurred but for the activities of USA Tax (Twin City Fire Ins. Co. v. Arch Ins. Group, Inc., 143 A.D.3d 533, 39 N.Y.S.3d 144 [1st Dept.2016] ; Cantor Fitzgerald Assoc. v. Tradition N. Am., 299 A.D.2d 204, 749 N.Y.S.2d 249 [1st Dept.2002], lv. denied 99 N.Y.2d 508, 757 N.Y.S.2d 819, 787 N.E.2d 1165 [2003] ). Issues of fact also exist as to plaintiffs' damages. USA Tax's argument that it was not the sole proximate cause of D&A's damages is unavailing, as it need not be the sole proximate cause to sustain a claim for tortious interference with contract (Kronish Lieb Weiner & Hellman LLP v. Tahari, Ltd., 35 A.D.3d 317, 318, 829 N.Y.S.2d 7 [1st Dept.2006] ).
In addition, issues of fact as to whether Delott breached his fiduciary duties, and whether USA Tax knowingly induced or participated in any such breach, preclude summary judgment dismissing the claim for aiding and abetting breach of fiduciary duty (Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 231, 413 N.Y.S.2d 141, 385 N.E.2d 1068 [1978] ; see also Smallberg v. Raich Ende Malter & Co., LLP, 140 A.D.3d 942, 944, 35 N.Y.S.3d 134 [1st Dept.2016] ).USA Tax's collateral estoppel argument is not properly before this Court as it was raised for the first time in its reply brief (Matter of Erdey v. City of New York, 129 A.D.3d 546, 546–547, 11 N.Y.S.3d 592 [1st Dept.2015] ).
TOM, J.P., ACOSTA, ANDRIAS, MOSKOWITZ, KAHN, JJ., concur.