SYRACUSE ORTHOPEDIC SPECIALISTS v. HOOTNICK (2005)

David R. Hootnick, M.D. (defendant) appeals from an order that granted the motion of Michael Vella, the president of plaintiff Syracuse Orthopedic Specialists, P.C. (Syracuse Orthopedics), to dismiss defendant's counterclaim against him personally for breach of fiduciary duty.   On May 14, 2002, Syracuse Orthopedics merged with University Orthopedics & Sports Medicine, P.C. (University), and Syracuse Orthopedics became the successor by merger.   Defendant, who was an employee and shareholder of University, opposed the merger and refused to sign a Syracuse Orthopedics employment agreement.   Defendant continued to work at Syracuse Orthopedics' offices for approximately one year after the effective date of the merger, then terminated his employment.   Thereafter, Syracuse Orthopedics commenced this action against defendant.   Defendant counterclaimed against Syracuse Orthopedics, alleging that it breached its employment agreement with defendant.   Defendant also counterclaimed against Syracuse Orthopedics and Vella, alleging that defendant is a shareholder of Syracuse Orthopedics and that Vella breached his fiduciary obligations to Syracuse Orthopedics.

 Contrary to the contention of defendant, Supreme Court properly dismissed defendant's counterclaim against Vella prior to service of responses to outstanding discovery demands on the ground that defendant lacks standing.   Although the factual allegations in a pleading are presumed to be true on a motion to dismiss, bare legal conclusions and factual claims that are flatly contradicted by the evidence are not presumed to be true (see Tal v. Malekan, 305 A.D.2d 281, 760 N.Y.S.2d 36, lv. denied 100 N.Y.2d 513, 767 N.Y.S.2d 394, 799 N.E.2d 617;  Olszewski v. Waters of Orchard Park, 303 A.D.2d 995, 758 N.Y.S.2d 716;  see generally 6A Carmody-Wait 2d, N.Y. Prac. § 38:113).   Here, the assertion by defendant that he is a shareholder of Syracuse Orthopedics “is such a bare legal conclusion” (Tal, 305 A.D.2d at 281, 760 N.Y.S.2d 36).   By his own admission, defendant did not vote for the merger, sign a Syracuse Orthopedics' employment agreement or sign confirmation and adherence agreements, nor did he sign a Syracuse Orthopedics' shareholder agreement.   Because defendant failed to allege facts sufficient to establish that he was a shareholder of Syracuse Orthopedics, his counterclaim against Vella was properly dismissed for lack of standing.

Although the order appealed denied defendant's cross motion to compel discovery, we note that the cross motion is moot insofar as it relates to the counterclaim against Vella.   We have considered defendant's remaining contentions and conclude that they are without merit.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously affirmed without costs.

MEMORANDUM: