SCHULHOF v. [And A Third–Party Action] (2018)

Judgment, Supreme Court, New York County (Charles E. Ramos, J.), entered March 17, 2017, against defendant and in plaintiff's favor in the amount of $1,555,185.21, unanimously affirmed, without costs.  Appeals from order, same court and Justice, entered March 1, 2017, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

CPLR 4519 does not preclude, on summary judgment, defendant's testimony about her conversations with decedent Hannelore Schulhof (see Phillips v. Kantor & Co., 31 N.Y.2d 307, 338 N.Y.S.2d 882, 291 N.E.2d 129 [1972] ).  However, the parol evidence rule, coupled with the October 25, 2011 written agreement between the parties, bars defendant's testimony that she reached an oral agreement with decedent that precedes and varies from the written agreement (see SAA–A, Inc. v. Morgan Stanley Dean Witter & Co., 281 A.D.2d 201, 203, 721 N.Y.S.2d 640 [1st Dept. 2001];  see also Laskey v. Rubel Corp., 303 N.Y. 69, 71, 100 N.E.2d 140 [1951] ).

The motion court correctly found, as a matter of law, that defendant had a fiduciary relationship with decedent.  The contract between defendant and the eventual purchaser of the artwork at issue states that defendant is acting as agent for an undisclosed principal—i.e., for decedent.  The relationship between principal and agent is a fiduciary one (see TPL Assoc. v. Helmsley–Spear, Inc., 146 A.D.2d 468, 470, 536 N.Y.S.2d 754 [1st Dept. 1989];  see also Murray v. Beard, 102 N.Y. 505, 508, 7 N.E. 553 [1886] ).

The motion court also correctly granted summary judgment to plaintiff on his fraud claim.  The issue of reasonable reliance can be resolved on a summary judgment motion (see Global Mins. & Metals Corp. v. Holme, 35 A.D.3d 93, 99, 824 N.Y.S.2d 210 [1st Dept. 2006], lv denied 8 N.Y.3d 804, 831 N.Y.S.2d 106, 863 N.E.2d 111 [2007] ).  Further, plaintiff's success as a businessman does not preclude a finding of reliance (see Whittemore v. Yeo, 117 A.D.3d 544, 545, 986 N.Y.S.2d 69 [1st Dept. 2014];  see also Frame v. Maynard, 83 A.D.3d 599, 603, 922 N.Y.S.2d 48 [1st Dept. 2011] ).  Defendant told plaintiff that the buyer of the art wished to remain anonymous, which prevented plaintiff from conducting due diligence by, for example, contacting the buyer (see SS & J Morris v. Mahoney Cohen & Co., 264 A.D.2d 343, 343, 694 N.Y.S.2d 60 [1st Dept. 1999] ).  Since defendant had a fiduciary relationship with decedent, plaintiff was not required to obtain the kinds of representations and warranties that defendant suggests in her reply brief (see TPL, 146 A.D.2d at 470–471, 536 N.Y.S.2d 754).

Given the existence of a fiduciary relationship, the faithless servant doctrine applies, and the motion court correctly granted plaintiff summary judgment on that claim (see e.g. Feiger v. Iral Jewelry, 41 N.Y.2d 928, 394 N.Y.S.2d 626, 363 N.E.2d 350 [1977] ).

Given the foregoing, the issue of whether the motion court should have dismissed plaintiff's contract claim is academic.

The motion court providently exercised its discretion in declining to award plaintiff punitive damages and sanctions (see Matter of Birnbaum v. Birnbaum, 157 A.D.2d 177, 192–193 [4th Dept. 1990][punitive damages]; Matter of Flanigan v. Smyth, 148 A.D.3d 1249, 1251 [3d Dept. 2017] [sanctions], lv dismissed in part and denied in part 29 N.Y.3d 1046, 78 N.E.3d 1192 [2017] ).

Plaintiff is not entitled to attorneys' fees (see Schneidman v. Tollman, 261 A.D.2d 289, 290, 691 N.Y.S.2d 58 [1st Dept. 1999], lv denied 94 N.Y.2d 756, 703 N.Y.S.2d 73, 724 N.E.2d 769 [1999] ).