INTERNATIONAL INC v. NY (2009)

Order, Supreme Court, New York County (Herman Cahn, J.), entered September 10, 2008, which, after a non-jury trial, awarded plaintiffs damages in the amount of $468,152 plus interest as against defendant-appellant, dismissed plaintiffs' claims against defendant D & K NY Fashion Resources, Inc. (D & K), and dismissed defendants' counterclaims, unanimously affirmed, with costs.

Upon plaintiffs' demonstration that defendant Kim breached his fiduciary duty as an employee by secretly diverting purchase orders from his employer, plaintiff NK, to himself and a newly-formed corporation (D & K), plaintiffs were entitled to recover damages calculated on the basis of what the employer would have made of the diverted corporate opportunity (Harry R. Defler Corp. v. Kleeman, 19 A.D.2d 396, 403-404, 243 N.Y.S.2d 930 [1963], affd. 19 N.Y.2d 694, 278 N.Y.S.2d 883, 225 N.E.2d 569 [1967]; see Duane Jones Co. v. Burke, 306 N.Y. 172, 192, 117 N.E.2d 237 [1954] ). Plaintiffs met their burden of establishing with reasonable certainty the net amount of profit NK would have earned on the diverted orders through the testimony of NK's owner and his expert, whose calculations were supported by voluminous documentary evidence (see E.W. Bruno Co. v. Friedberg, 28 A.D.2d 91, 92-95, 281 N.Y.S.2d 504 [1967], affd. 23 N.Y.2d 798, 297 N.Y.S.2d 302, 244 N.E.2d 872 [1968] ). In opposition, defendant failed to substantiate his claims that some purchase orders were cancelled through no fault of D & K, or the amount or relevance of a claimed loss suffered as a result of one customer's bankruptcy. The decision of the fact-finder, supported by a fair interpretation of the evidence, will not be disturbed upon appeal (Reichman v. Warehouse One, 173 A.D.2d 250, 252, 569 N.Y.S.2d 452 [1991], lv. denied 78 N.Y.2d 1058, 576 N.Y.S.2d 213, 582 N.E.2d 596 [1991] ).

We further find that the trial court's conclusion that plaintiffs failed to establish any claim against the corporate defendant, D & K, which realized little if any profit on the orders diverted to it, is supported by the record (see Duane Jones Co. v. Burke at 188-189, 117 N.E.2d 237).