SCHWARTZ v. GOLDSTEIN (2026)

DECISION & ORDER

In an action to recover damages for conversion and breach of fiduciary duty, the plaintiffs appeal from an order of the Supreme Court, Kings County (Rupert V. Barry, J.), dated May 17, 2023.  The order granted the defendant's motion for summary judgment dismissing the complaint and denied the plaintiffs' cross-motion pursuant to CPLR 3025(b) for leave to amend the complaint to add Clara Schwartz as a plaintiff.

ORDERED that the order is affirmed, without costs or disbursements.

The plaintiffs are the sons of Clara Schwartz (hereinafter Clara).  In November 2004, Clara conveyed a one-half undivided interest in real property she owned in Brooklyn to her daughter Sarah Kiwak and son-in-law Yacov Kiwak.  In April 2012, Clara established an irrevocable trust, the MCS 4–12 Trust (hereinafter the trust), naming herself as the grantor and naming her children and their lineal descendants, with the exception of Sarah Kiwak, as beneficiaries.  On or about November 28, 2012, Clara conveyed her one-half ownership interest in the subject property to the trust.

A dispute eventually arose regarding ownership of the subject property, and an arbitration agreement was executed that provided that the dispute would be decided by a Beth Din. The Beth Din directed that the subject property be sold.  The defendant, who represented Clara during the Beth Din proceeding and was appointed successor trustee to the trust, determined that the sale proceeds should be equally divided between Yacov Kiwak and the trust.

The plaintiffs commenced the instant action to recover damages for conversion and breach of fiduciary duty, alleging that they were parties to the Beth Din proceeding and were represented by the defendant.  The plaintiffs also asserted that the defendant converted $346,000 of the sale proceeds to which they were entitled.  The defendant moved for summary judgment dismissing the complaint.  The plaintiffs opposed the motion and cross-moved pursuant to CPLR 3025(b) for leave to amend the complaint to add Clara as a plaintiff.  By order dated May 17, 2023, the Supreme Court granted the defendant's motion and denied the plaintiffs' cross-motion.  The plaintiffs appeal.

Contrary to the plaintiffs' contention, the Supreme Court properly granted that branch of the defendant's motion which was for summary judgment dismissing the first cause of action, to recover damages for conversion.  “[T]o establish a cause of action in conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question, to the alteration of its condition or to the exclusion of the plaintiff's rights” (Magomedov v Self Stor. Mgt., LLC, 221 AD3d 682, 683 [internal quotation marks omitted];  see Sammy v First Am. Tit. Ins. Co., 205 AD3d 949, 956).  Here, the defendant demonstrated, prima facie, that he rightfully possessed the sale proceeds as successor trustee and that, pursuant to the terms of the trust, the plaintiffs did not possess a legal right or superior ownership interest in the proceeds (see Matter of Sinzheimer v Bank of Am., N.A., 161 AD3d 414, 415;  see also Colavito v New York Organ Donor Network, Inc., 8 NY3d 43, 53;  Seidenfeld v Zaltz, 162 AD3d 929, 935–936).  Among other things, the plaintiffs were not the sole beneficiaries of the trust, and as successor trustee, the defendant had authority to withhold the trust's assets from any beneficiary.  In opposition, the plaintiffs failed to raise a triable issue of fact.

“ ‘The elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant's misconduct’ ” (Wallkill Med. Dev., LLC v Catskill Orange Orthopaedics, P.C., 178 AD3d 987, 988, quoting Rut v Young Adult Inst., Inc., 74 AD3d 776, 777).  The defendant demonstrated, prima facie, that there was no misconduct on his part that caused the plaintiffs to sustain damages (see Woodmere Rehabilitation & Health Care Ctr., Inc. v Zafrin, 197 AD3d 1268, 1271;  Chipetine v Neu, 182 AD3d 571, 572).  In opposition, the plaintiffs failed to raise a triable issue of fact.

“Motions for leave to amend pleadings should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit” (Sinistaj v Maier, 82 AD3d 868, 869;  see CPLR 3025[b]).  The Supreme Court properly denied the plaintiffs' cross-motion for leave to amend the complaint to add Clara as a plaintiff because the proposed amendment was patently devoid of merit.

IANNACCI, J.P., FORD, LANDICINO and QUIRK, JJ., concur.