Alexander A. Truitt and Anthony S. Pellegrino of Winget, Spadafora & Schwartzberg LLP’s New York office won a CPLR 3211(a) Motion to Dismiss, on behalf of the Executive Director of a Not-For-Profit Corporation. The Plaintiff, a Quasi-Public Authority, filed an eleven-count, 400-plus paragraph Complaint containing extreme and provocative allegations of gross mismanagement and disloyalty by the Executive Director. The claims stem from a prior contractual relationship between the Quasi-Public Authority and the Not-For-Profit Corporation, which broke down during the Executive Director’s tenure. As against the Executive Director, the Amended Complaint alleged causes of action for (1) breach of contract, (2) negligence, (3) tortious interference with contract and (4) conversion. The Plaintiff sought damages in an amount not less than $500,000, including punitive damages.
In opposition to the Executive Director’s Motion to Dismiss, the Plaintiff submitted reports from its third-party consultants that allegedly confirmed Plaintiff’s incendiary allegations of mismanagement. The Supreme Court of the State of New York, Rockland County, rejected Plaintiff’s arguments and dismissed the Amended Complaint against the Executive Director. The Court found Plaintiff’s attempt to bind the Executive Director to its alleged contract with the Not-For-Profit Corporation was “wholly unsupported and entirely without merit,” as the Executive Director was a non-signatory to the contract. The Court further found Plaintiff’s tort claims were “conclusory” and “utterly insufficient” to establish the Executive Director owed Plaintiff a legal duty, or that the Executive Director’s alleged misconduct could sustain a tortious interference with contract cause of action.
A copy of the Court’s decision may be found here.
Winget, Spadafora & Schwartzberg, LLP and its Directors & Officers Liability practice group are constantly focused on achieving positive results that minimize distractions and allow our clients to focus on their business goals. Our attorneys have a deep understanding of our officer and director client’s legal and regulatory obligations. We employ this experience to craft aggressive legal strategies and resolve disputes at the early stages of litigation, when appropriate. Should you have any questions concerning defenses to breach of contract, negligence, breach of fiduciary duty, tortious interference, and conversion claims arising from a business divorce or similar dispute, please contact a member of our firm’s Directors & Officers Liability practice group.
