No Breach of Fiduciary Duty in Ordinary Contract

A an ordinary contract, even between close friends, does not create a fiduciary relationship from which a court will find an equity interest.


Dominic Thomas Karipaparambil, Plaintiff-Appellant, v Robert Michael Polus et al., Defendants-Respondents. Judgment, Supreme Court, New York County (Jennifer G. Schecter, J.), entered March 10, 2021, dismissing the complaint, unanimously affirmed, without costs.
Appeal from order, same court and Justice, entered on or about March 2, 2021, which granted defendants’ motion to dismiss the complaint alleging causes of action for breach of fiduciary duty and aiding and abetting breach of fiduciary duty, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.
TCases-of-Note-Partnerships-1024x536he court correctly rejected plaintiff’s attempt to recast a breach of contract claim as one for breach of fiduciary duty. The gravamen of plaintiff’s allegations is that defendant Polus promised him a share in the profits and growth of nonparty Xcellence, Inc. despite plaintiff’s admission that he had no formal interest in that entity. Plaintiff does not identify the precise amount of equity interest he was allegedly owed in Xcellence or any other details of this purported understanding. The court properly determined that plaintiff was not permitted to reframe an unenforceable oral contract as a claim sounding in tort (see e.g. Castellotti v Free, 138 AD3d 198, 210 [1st Dept 2016]).
Plaintiff also failed to sufficiently allege that he and Polus had a fiduciary relationship (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 561 [2009]). The complaint’s allegations suggest a conventional business relationship between the CEO of a parent corporation and a minority shareholder in its subsidiary. Plaintiff’s conclusory allegations of personal friendship with Polus were also insufficient to rise to the level of a fiduciary duty, regardless of when the friendship was formed. […]

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