New York Univ. v International Brain Research  Fund., Inc.  2016 NY Slip Op   30434(U)  March 14, 2016  Supreme Court, New York County  Docket Number: 652954/2013
Judge: Jeffrey K. Oing  is a rare look into the medicine-research professional funding world.  IBRF suddenly cut off funding to NYU, and litigation ensued. Whether in the legal malpractice setting or here, the same rules concerning fiduciary relationships in both attorney-client and funder-fundee obtain.

In its counterclaim for breach of fiduciary duty, IBRF alleges that plaintiffs knew or should have known that “Dr. Hilz was not conducting his TBI research at plaintiff school of medicine and/or that he was being paid by others to conduct such research, and that there was no laboratory at plaintiff school of medicine for the conduct of Dr. Hilz’s TBI research” (Second Amended Counterclaims, ~ 55). This claim must be dismissed because it does ·not adequately allege the requisite fiduciary relationship (Baumann v Hanover Community Bank, 100 AD3d 814, 817 [2d Dept 2012] [one of the allegations of a cause of action for breach of fiduciary is the existence of fiduciary relationship]). In order to establish a fiduciary relationship, a party must “‘set forth allegations that, apart from the terms of the contract’ … the parties ‘created a relationship of higher trust than would arise from their contracts alone'” (Brooks v Key Trust Co. Natl. Assn., 26 AD3d 628, 630 [3d Dept 2006], quoting EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 20 [2005]). Here, the Second Amended Counterclaims do not allege any facts suggesting that the parties intended to create such a “relationship of higher trust” beyond their contractual grantor-grantee relationship. Instead, IBRF merely pleads, in a conclusory manner, that plaintiffs, “either jointly or severally, owe a fiduciary duty to defendant” (Second Amended Counterclaims, ¶ 49). Although IBRF also asserts that a “confidential relationship [was] established by the contract” (opposition memorandum at 7), this conclusory allegation fails to plead a “relationship of higher trust” existing “apart from the terms of the contract” and is thus insufficient under New York law (Brooks, 26 AD3d at 630, supra). In addition, the breach of fiduciary duty counterclaim must be dismissed because it “merely duplicate[s] the breach of contract claim” (RNK Capital LLC v Natsource LLC, 76 AD3d 840, 842 [1st Dept 2010]; Brooks, 26 AD3d. at 630 [breach of fiduciary duty claim is “properly dismissed as duplicative” where it “is based upon the same facts and theories as [a] breach of contract claim”] ) . Indeed, the Second Amended Counterclaims fail to plead any facts supporting a breach of fiduciary claim independent of the Grant Agreement (Second Amended Counterclaims, ¶¶55-56 [basing fiduciary duty counterclaim solely on plaintiffs’ alleged “disregard to the terms and conditions of  the grant”]). “