Mangiardi v. Mangiardi

Mangiardi v Mangiardi 2024 NY Slip Op 31857(U) May 17, 2024 Supreme Court, New York County Docket Number: Index No. 655292/2023 Judge: Lyle E. Frank Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

INDEX NO. 655292/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/17/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LYLE E. FRANK PART 11M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 655292/2023 JOHN R MANGIARDI MOTION DATE 01/18/2024 Plaintiff, MOTION SEQ. NO. 002 - V -

MAUREEN G MANGIARDI, DECISION + ORDER ON MOTION Defendant. ------------------------------------------------------------------- --------------X

The following e-filed documents, listed by NYSCEF document number (Motion 002) 60, 61, 62, 63, 64, 65, 66, 67 were read on this motion to/for DISMISS

The action arises out of allegations that defendant mismanaged trust assets to plaintiff's

detriment. Defendant now moves for partial dismissal of the complaint pursuant to CPLR §§

321 l(a)(l), 321 l(a)(7), and 3016(b) dismissing the first, second and third causes of action,

respectively, breach of fiduciary duty, breach of the duty of good faith and fair dealing, and

unjust enrichment.

Plaintiff opposes the motion and cross moves for directing the Defendant to provide the

Plaintiff with an Interim Accounting of the Defendant's administration of the Declaration of

Trust of Dr. Joseph L. Mangiardi (the "Trust"), and (b) restraining the Defendant from

disbursing any Trust monies or assets pending the Defendant's production of annual Trust

accounting for each year as of 2001 to the present. For the reasons set forth below, defendant's

motion to dismiss is granted and plaintiff's cross-motion is granted in part.

Background

655292/2023 Motion No. 002 Page 1 of4 [* 1] 1 of 4

INDEX NO. 655292/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/17/2024

It is well-settled that on a motion to dismiss for failure to state a cause of action pursuant

to CPLR § 321 l(a)(7), the pleading is to be liberally construed, accepting all the facts as alleged

in the pleading to be true and giving the plaintiff the benefit of every possible inference. See

Avgush v Town of Yorktown, 303 AD2d 340 [2d Dept 2003]; Bernberg v Health Mgmt. Sys., 303

AD2d 348 [2d Dept 2003]. Moreover, the Court must determine whether a cognizable cause of

action can be discerned from the complaint rather than properly stated. Matlin Patterson ATA

Holdings LLC v Fed. Express Corp., 87 AD3d 836, 839 [1st Dept 2011]. The complaint must

contain allegations concerning each of the material elements of a viable legal theory. Id (internal

quotations omitted).

Breach ofFiduciary Duty

In order to adequately plead a cause of action for breach of fiduciary duty, plaintiffs must

allege the existence of a fiduciary relationship, misconduct by the defendant and damages caused

by the misconduct. See Pokoik v Pokoik, 115 AD3d 428, 429 [1st Dept 2014]. Pursuant to CPLR

§ 3016(b ), where a cause of action alleges breach of trust, "the circumstances constituting the

wrong shall be stated in detail".

Here, contrary to defendant's contention the Court finds that at this point based on the

complaint, plaintiff sufficiently alleges a cause of action for breach of fiduciary duty. The

complaint alleges that defendant failed to administer the trust responsibly, namely failing to pay

taxes and causing a lien to be issued against the trust as well as the failure to distribute to make

the requisite distributions to plaintiff, a beneficiary, as required by the trust.

Defendant contends that because the trust is insolvent, this cause of action cannot be

sustained. The Court disagrees. The solvency or insolvency of the trust will be determined

through discovery and an accounting; relying on defendant's assertion is inappropriate in a

655292/2023 Motion No. 002 Page 2 of 4 [* 2] 2 of 4

INDEX NO. 655292/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/17/2024

motion to dismiss. As such the portion of defendant's motion that seeks dismissal of this cause

of action is denied.

Breach o{Duty of Good Faith and Fair Dealing

Under New York Law, all contracts imply a covenant of good faith and fair dealing

during performance, meaning neither party shall do anything which will have the effect of

destroying or injuring the right of the other party to receive the fruits of the contract. 511 W

232nd Owners Corp. v Jennifer Realty Co. 98 NY2d 144 [2002] (internal citations omitted).

For a complaint to state a cause of action alleging breach of an implied covenant of good

faith and fair dealing, the plaintiff must allege facts which tend to show that the defendants sought

to prevent performance of the contract or to withhold its benefits from the plaintiff. See Aventine

Inv. Mgmt., Inc. v. Canadian Imperial Bank of Commerce, 265 A.D.2d 513, 514 [2d Dep't 1999]

citing Dvoskin v Prinz, 205 AD2d 661, 662. [2d Dept 1994].

This cause of action must fail because, as a threshold matter, plaintiff has not proffered

any facts that infer a contractual relationship with the defendant which would have imposed a

duty to act with good faith and fair dealings toward him.

Un;ust Enrichment

To state a claim for unjust enrichment, a plaintiff must allege "that (1) the other party was

enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to

permit the other party to retain what is sought to be recovered." Mandarin Trading Ltd. v.

Wildenstein, 16 NY3d 173, 182 [2011].

The Court finds that the complaint fails to state a claim with respect to this cause of

action. The complaint does not contain any additional factual allegation to sustain this cause of

action, as such the Court finds it duplicative of the breach of fiduciary duty cause of action.

655292/2023 Motion No. 002 Page 3 of 4 [* 3] 3 of 4

INDEX NO. 655292/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/17/2024

Plaintiff's Cross-Motion

Plaintiff seeks an accounting as well as a preliminary injunction with respect to moneys

allegedly held by the trust for distribution. The Court declines to issue a preliminary injunction

as plaintiff has failed to establish irreparable harm.

As to the claim for an accounting, defendant concedes that it is required to provide an

accounting and is in the process of producing the same. Accordingly, it is hereby

ORDERED that defendant's motion to dismiss the first cause of action is denied; and

ORDERED that defendant's motion to dismiss the second and third causes of action is

granted; and it is further

ORDERED that plaintiffs cross-motion is granted in part in that defendant will provide

an accounting for the period of January 2023 to present within 75 days and the entirety of the

remaining time period from 2000, within 180 days of the date of this Order with Notice of Entry.

5/17/2024 DATE LYLE E. FRANK, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

655292/2023 Motion No. 002 Page4 of 4 [* 4] 4 of 4