MARK WELLS PLAINTIFF APPELLANT v. OF THE MANLIUS KLEIN CHILDREN TRUST DEFENDANTS RESPONDENTS (2016)

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying the motion and reinstating the second cause of action, and as modified the order is affirmed without costs.

Memorandum:  Plaintiff commenced this action seeking, among other things, equitable relief pursuant to his second cause of action alleging a breach of trust or fiduciary duty on the part of Richard W. Cook (defendant) in his capacity as trustee of the Manlius–Klein Children's Trust (trust), in which plaintiff has a 25% beneficial interest.  Plaintiff appeals from an order that, inter alia, granted defendants' CPLR 3211(a)(7) motion to dismiss the second cause of action and denied that part of plaintiff's cross motion seeking to alter the priority in conducting depositions.

We agree with plaintiff that Supreme Court erred in granting defendants' motion.  In considering a motion to dismiss pursuant to CPLR 3211, the court must accept the facts as alleged in the complaint as true, accord plaintiff the benefit of every favorable inference, and determine only whether the facts alleged fit within a cognizable legal theory (see Leon v. Martinez, 84 N.Y.2d 83, 87–88).  Here, we conclude that plaintiff's second cause of action sufficiently stated a claim against defendant for breach of fiduciary duty, namely, the duty to treat all beneficiaries of the trust impartially (see Redfield v. Critchley, 252 App.Div. 568, 573, affd 277 N.Y. 336, rearg. denied 278 N.Y. 483;  Matter of George Goldberg Irrevocable Trust, 159 Misc.2d 1107, 1108;  see also Zim Israel Nav. Co. v. 3–D Imports, Inc., 29 F Supp 2d 186, 192).  Plaintiff has adequately alleged the elements of a cause of action for breach of fiduciary duty, including the existence of a fiduciary relationship, misconduct by defendant, and damages directly caused by that misconduct (see Matter of Lorie DeHimer Irrevocable Trust, 122 AD3d 1352, 1352–1353;  Rut v. Young Adult Inst., Inc., 74 AD3d 776, 777), and it cannot be determined as a matter of law that the loan transaction engaged in by defendant treated all of the beneficiaries equally (see generally Leon, 84 N.Y.2d at 87–88).  We modify the order accordingly.

Contrary to plaintiff's contention, the court did not abuse its discretion in denying that part of his cross motion seeking to alter the usual priority of depositions.  There are no “ ‘special circumstances' “ or other grounds in the record warranting such an alteration (Serio v. Rhulen, 29 AD3d 1195, 1196–1197;  see generally Kenna v New York Mut. Underwriters, 188 A.D.2d 586, 588).

Frances E. Cafarell

Clerk of the Court