LoGerfo v Trustees of Columbia Univ. in the City of New York
Annotate this CaseDecided on June 1, 2011
Supreme Court, Rockland County
Kristin Larkin LoGerfo, EXECUTOR OF THE ESTATE OF PAUL LoGERFO, Plaintiff,
against
The Trustees of Columbia University in the City of New York and ERIC ROSE, Defendant.
6674/04
Bull Morreale & Judelson, P.C.
Attorneys for Plaintiff
Proskauer Rose LLP
Attorneys for Defendant
Alfred J. Weiner, J.
In its complaint, the Plaintiff asserted four causes of action, all of which were premised upon the same underlying allegation, i.e., that Defendant Columbia University promised Dr. Paul LoGerfo more money than was actually paid to him from 1999 until his death in 2003.
The Plaintiff asserted two causes of action for breach of contract, one based upon terms contained in an exchange of letters between the parties in 1991 and 1992 and the other based upon an alleged promise by Columbia to pay Dr. LoGerfo the "goodwill practice value" associated with his practice prior to 1992. A third cause of action was for an accounting. A separate claim under General Business Law §349 was also made.
After this Court's May 6, 2005 dismissal of the action, Plaintiff appealed. The Appellate [*2]Division,([FN1]) by decision dated December 5, 2006 held that the third cause of action should survive "...to the extent it alleges that Columbia breached an oral agreement entered into in early 1999 concerning the terms governing determination of Dr. LoGerfo' compensation..." in the following years.
The Appellate Division also determined that "...the allegations that Dr LoGerfo agreed to assign all practice revenues to Columbia in reliance on an agreement, express or implied, concerning the sharing of those revenues may support a finding that Columbia owed Dr. LoGerfo a fiduciary obligation with respect to he assigned revenue..."
A bench trial was held on the remaining issues. Plaintiff's claim that there was an enforceable oral agreement between Columbia and Dr. LoGerfo regarding compensation was, however, withdrawn by the Plaintiff at the end of the trial.
Plaintiff alleges that Dr. LoGerfo, renowned for his research and work on the thyroid, was encouraged by the dean of the Columbia medical school to bring his practice as part of an overall program to move various private medical practices into Columbia. When he moved his private thyroid practice to Columbia there was an exchange of letters that contained certain express and implied agreements as to how the practice revenues would be shared and as to how other aspects of the practice would be treated. It is Plaintiff's contention that the essence of the relationship between Columbia and Dr. Logerfo was a joint venture to organize and operate a thyroid practice at Columbia; that the joint venture never terminated and continued until Dr. LoGerfo's death on September 16, 2003 and that Columbia breached that joint venture agreement starting in December 1998.
According to Plaintiff, Columbia and Dr. Eric Rose ("Rose"), Chairman of the Department of Surgery since 1994, as agent for Columbia, owed a fiduciary duty to Dr. LoGerfo as a partner or a joint venturer and that there was a breach of that fiduciary obligation because of the Defendant's failure to render a full disclosure and accounting of matters.
Defendant states there is no evidence to support Plaintiff's claim that a fiduciary relationship existed between the parties. Defendant contends that the relationship of the parties was that of employer and employee; that there is no evidence, that when Dr. LoGerfo assigned his revenues from the treatment of his patients to Columbia in the period in and after 1999, that he had any implicit or express understanding or agreement with Columbia that they would pay him in any form other than the annual compensation that he was paid each year. In fact, in the years 1999 through 2001, Dr. LoGerfo, as head of the division in which he was practicing, set his own compensation that was entirely consistent with the general practice in the Department of Surgery. Defendant also argues that for Columbia's fiscal year beginning July 1, 2002, the first year Dr. LoGerfo was not the head of the division, he knew and understood exactly what his compensation would be for the coming year and, although unhappy with the amount, the Plaintiff offered no evidence that [*3]Dr. LoGerfo had a different expectation and relied upon some other amount.
The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest. Palazzo v Palazzo,121 AD2d 261, 2nd Dept., 1986; Darlagiannis v. Darlagiannis, 48 A.D2d 875, 2nd Dept., 1975.
An employer-employee relationship providing for the division of profits will not give rise to a fiduciary obligation on the part of the employer absent an agreement to also share losses. Vitale v. Steinberg, 307 AD2d 107, 1st Dept., 2003; Michnick v Parkell Prods., 215 AD2d 462, 1995; Reichert v MacFarland Bldrs., 85 AD2d 767, 1981.
To succeed on a claim for breach of fiduciary duty in New York, a plaintiff must demonstrate the existence of a fiduciary duty between the parties and a breach of that duty by the defendant. Page Mill Asset Mgmt. v. Credit Suisse First Boston Corp., 2000 U.S. Dist. LEXIS 3941, at 31, No. 98 Civ. 6907 (MBM) (S.D.NY Mar. 29, 2000). Under New York law, a fiduciary relationship may be found "...when one [person] is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation." Flickinger v. Harold C. Brown & Co., 947 F.2d 595, 599 (2d Cir. 1991)(quoting Mandelblatt v. Devon Stores, Inc., 132 AD2d 162, 1st Dept., 1987. The existence of a fiduciary relationship cannot be determined "...by recourse to rigid formulas." Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb Inc., 767 F. Supp. 1220, 1231 (S.D.NY 1991), rev'd on other grounds, 967 F.2d 742, 2nd Cir. 1992. Rather, "New York courts typically focus on whether one person has reposed trust or confidence in another who thereby gains a resulting superiority or influence over the first." Id. Mere reposal of one's trust or confidence in a party, however, does not automatically create a fiduciary relationship; the trust or confidence must be accepted as well. Id. Since there is no hard-and-fast definition of when a fiduciary relationship exists, a fact-specific inquiry is always required. EBC I, Inc. v. Goldman Sachs & Co., 5 NY3d 11, 2005.
This Court has made a fact-specific inquiry' and has determined that the relationship between the parties was that of an employer and employee and not joint venturers. Additionally, the Court finds that Plaintiff failed to demonstrate that Columbia gained a superiority or influence over Dr. LoGerfo as a result of his having reposed his trust or confidence in Columbia or that there was a fiduciary relationship between the parties
The Court further finds that Plaintiff failed to establish there was an agreement (expressed or implied), in or after 1999, concerning the sharing of revenues that would have entitled Dr. LoGerfo to anything other than the compensation he actually received, and no showing that there was any agreement to share the losses, if any, from Dr. LoGerfo's thyroid practice. Those who would have been involved in and know if such an agreement existed, Drs. Rose and Chabot as well as Craig Evans and Theresa Larivee, all denied knowledge of any such agreement. In fact, except for the last year, it was Dr. LoGerfo who set his own compensation for the years in question and, as to the last year, he acquiesced in the amount set. [*4]
Accordingly, after a careful review of the evidence, this Court concludes that Plaintiff has failed to establish, by the preponderance of the credible evidence, that there was an agreement (expressed or implied), in or after 1999, concerning the sharing of revenues; and that a fiduciary relationship did not exist between the parties. Consequently, Plaintiff's last remaining cause of action for an accounting must be dismissed.
Settle judgment.
Dated: New City, New York
June 1, 2011
______________________
Hon. Alfred J. Weiner JSC
Footnotes
Footnote 1: 35 AD3d 395
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