Deceased clients, deceased attorneys, and a disputed real estate transaction lead to Gourary v Green 2017 NY Slip Op 32158(U) October 13, 2017 Supreme Court, New York County Docket Number: 651932/10 Judge: Saliann Scarpulla. At this point in the case, the attorneys have obtained dismissal of the legal malpractice claim, which has been affirmed by the AD1. How might this affect the claims between two former partners in a real estate transaction?
“Gourary’s breach of fiduciary cause of action is based on Laster’s alleged failure to disclose information about the value of the property, the Corporation, and other details about the transaction underlying this dispute. Regardless of Laster’s duty as a fiduciary to disclose information that could bear on Gourary’ s consideration of the transaction, the breach of fiduciary duty claim fails because the complaint alleges that each of the nondisclosed facts was known to Green. See Complaint iii! 114, 115, 143-146. “The general rule is that knowledge acquired by an agent acting within the scope of his agency is imputed to his principal and the latter is bound by such knowledge although the information is never actually ~communicated to [him].” Seward Park Haus. Corp. v Cohen, 287 A.D.2d 157, 167 (1st Dep’t 2001). Unless Green had an adverse interest or acquired his knowledge in a confidential setting, Gourary cannot avoid imputation. See Farr v. Newman, 14 N.Y.2d 186, 188 (1964); see also Skiff-Murray v Murray, 17 A.D.3d 807, 810 (3d Dep’t 2005) (finding that attorney’s knowledge could be imputed to a client, “regardless of when or how it was obtained unless it was acquired confidentially”). Here, the law of the case is determinative. The First Department has already found that: “[t]he Green defendants established prima facie … that the sale was consistent with Gourary’s objectives”; “[t]here [was] no evidence that Green represented Macomber and Gourary dually in connection with the negotiations for the sale of Gourary’s share of the corporation”; and “Green’s structuring of the transaction favored Gourary’s interests· over those of Macomber.” Gourary, 143 A.D.3d at 580, 581. As the First Department’s decision makes clear, Green did not totally abandon Gourary’s interest and Gourary cannot avoid imputation by claiming the adverse interest exception. See Center v·Hampton Affiliates, 66 N.Y.2d 782, 785 (1985) (stating that adverse interest exception requires a total abandonment of the principal’s interests and “cannot be invoked merely because [the agent] ha[d] a conflict of interest or because he [was] not acting primarily for his principal.”). Nor can Gourary avoid imputation by speculating, as he does in his opposition papers, that Green may have acquired the information confidentially, as Laster’s attorney. Nowhere in the complaint does Gourary allege such dual representation. Gourary’s . . dismissed malpractice claim against Green was premised entirely on Green’s alleged dual representation of Paul Gourary and Oliver Macomber. Having had a full and adequate opportvnity to litigate the issue, Gourary may not now attempt to relitigate an issue “which [was] raised and determined against [him] or which could have been raised on a prior appeal.” Moran Enters., Inc., 96 A.D.3d at 916. Therefore, accepting the complaint’s factual allegations as true, Green’s knowledge concerning the transaction, ‘ . including that the offer allegedly was substantially below market value, must be imputed to Gourary. The imputation of Green’s knowledge t.o Gourary renders plaintiffs allegations, that Laster’s concealment of material facts proximately caused an injury to Gourary, “inherently incredible.” Skillgames, LLC, 1 A.D.3d at 250. Therefore, to the extent that the breach of fiduciary duty claim is premised on Laster’s alleged failure to make material disclosures, the complaint fails to state a cause of action. See, e:g., Laub v Faessel, 297 A.D.2d 28, 31 (1st Dep’t 2002) (stating that for breach of fiduciary, “plaintiff must establish that the alleged misrepresentations or other misconduct were the direct and proximate cause of the losses claim”); Pokoik v. Pokoik, 115 A.D.3d 428, 429 ‘· (1st Dep’t 2014).”