On March 10, 2022, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Lengyel- Fushimi v Bellis, 2022 NY Slip Op 30809(U), dismissing a breach of fiduciary duty claim as duplicative of a breach of contract claim, explaining:
The derivative breach of fiduciary claim asserts the defendants issued themselves treasury shares and salaries which were not in the best interests of the corporation and that they amended the operating agreement in violation of the operating agreement. The breach of contract claim asserts the defendants breached the operating agreement by issuing themselves treasury shares and salaries in violation of the operating agreement. In arguing these claims are not duplicative the intervenors assert that the activities which comprise the breaches of duty are wholly independent of their obligations under the Operating Agreement. They further argue the defendants maintain a duty of loyalty irrespective of any obligations pursuant to the operating agreement. The intervenors insist that since the activities of the defendants are predicated on fiduciary duties that exist separate and apart from
(Internal quotations and citations omitted).
the more technical obligations established in the Operating Agreement, the claims are not duplicative and should not be dismissed. However, both claims are really premised upon the same facts and seek the same damages. Thus, a breach of fiduciary duty claim is duplicative when it is based on allegations of fiduciary wrongdoing that are expressly raised in plaintiff’s breach of contract claim. Further, in Uni-World Capital L.P., Preferred Fragrance Inc., 43 F. Supp. 3d 236 [S.D.N. Y. 2014] the court explained that even if the breach of duty is alleged against corporate officers who maintain duties beyond those of any contract the claim is still duplicative. The court held that regardless of the source of existence of an officer’s duties the critical issue is that the proposed breach of fiduciary duty claim is identical in substance to the breach of contract claim and is therefore duplicative. Both claims are premised upon the same facts and seek the same damages for the alleged conduct. Therefore, in this case the breach of fiduciary duty claim is based upon the same facts as the breach 0£ contract claim. Consequently, it is duplicative and the motion seeking to dismiss the first count is granted.