DEVLIN v. GREENBERG TRAURIG LLP (2019)

The court dismissed the fiduciary duty claim on the ground that there was no fiduciary relationship between the parties.  However, plaintiff alleges that he—as well as Fiore Films LLC—was defendant's client.  He does not base his claim of an attorney-client relationship solely on the fact that he paid the bills that defendant sent to Fiore Films (see Matter of Priest v. Hennessy, 51 N.Y.2d 62, 69–70, 431 N.Y.S.2d 511, 409 N.E.2d 983 [1980]) and was a part owner of that entity (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 562, 883 N.Y.S.2d 147, 910 N.E.2d 976 [2009];  Mendoza v. Akerman Senterfitt LLP, 128 A.D.3d 480, 482, 10 N.Y.S.3d 18 [1st Dept. 2015]).  The amended complaint alleges that defendant “knew that [plaintiff] was dependent and was relying on [it] ․ to provide honest and diligent advice with respect to escrow funds.”  In addition, the affirmation by plaintiff's lawyer Gerard Keogh, which plaintiff submitted in opposition to defendant's motion, says, “As early as 2011, Steven Beer [the partner at defendant responsible for the engagement] knew that he had to advise and counsel ․ Plaintiff individually.”

Defendant suggests that it could not have represented plaintiff because he was already represented by Keogh.  However, Keogh said, “Since I did not have experience in the Entertainment Sector, I advised [plaintiff] to secure the representation of an experienced Entertainment lawyer.”  It is certainly possible for a client to have more than one lawyer.

The fraud claim should not have been dismissed as this stage as the amended complaint adequately pleads the elements of fraud, including scienter (see Houbigant, Inc. v. Deloitte & Touche LLP, 303 A.D.2d 92, 753 N.Y.S.2d 493 [1st Dept. 2003])

Although the fiduciary duty and fraud claims should be reinstated, plaintiff's damages should not include the $ 10 million in alleged damage to the film project, as opposed to the $ 1.3 million that he lost via the escrow account.¹  The amended complaint alleges that Fiore Film's credibility was damaged.  However, plaintiff has no individual cause of action against defendant for injuring Fiore Films (see Serino v. Lipper, 123 A.D.3d 34, 39, 994 N.Y.S.2d 64 [1st Dept. 2014]).

We have considered the remaining arguments and find them unavailing.

FOOTNOTES

1.   Defendant submitted a July 28, 2011 letter that says that Junior ‘G’ Motion Picture, LLC, rather than plaintiff, deposited the money into the escrow account.  However, as plaintiff alleges that it was procured by fraud, the letter does not conclusively refute his allegation that he deposited money into the escrow account.