KELLER v. Susan Becker, Defendant.

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Supreme Court, Appellate Division, First Department, New York.

Elan KELLER, Plaintiff-Respondent, v. LOEWS CORPORATION, Defendant-Appellant, Susan Becker, Defendant.

Decided: January 12, 2010

SAXE, J.P., CATTERSON, MOSKOWITZ, DeGRASSE, ABDUS-SALAAM, JJ. Proskauer Rose LLP, New York (Elise M. Bloom of counsel), for appellant. Queller, Fisher, Dienst, Serrins, Washor & Kool, LLP, New York (Alan Serrins of counsel), for respondent.

Order, Supreme Court, New York County (Debra A. James, J.), entered March 23, 2009, which, insofar as appealed from, denied defendant Loews Corporation's motion for summary judgment on its counterclaim for breach of fiduciary duty, and, upon a search of the record, granted summary judgment in plaintiff's favor dismissing the counterclaim, unanimously modified, the counterclaim reinstated, and otherwise affirmed, without costs.

Plaintiff alleges religious discrimination in the termination of his employment as in-house attorney with defendant Loews Corporation. Defendant's counterclaim alleges that plaintiff breached his fiduciary duty to Loews by disclosing confidential information in his complaint.   The motion court dismissed the counterclaim on the ground that there is no fiduciary relationship between an employer and an at-will employee.   That was error.

 “[A] lawyer, as one in a confidential relationship and as any fiduciary, is charged with a high degree of undivided loyalty to his client” (Matter of Kelly, 23 N.Y.2d 368, 375-376, 296 N.Y.S.2d 937, 244 N.E.2d 456 [1968] ).   Indeed, the duty to preserve client confidences and secrets continues even after representation ends (see Nesenoff v. Dinerstein & Lesser, P.C., 12 A.D.3d 427, 428, 786 N.Y.S.2d 185 [2004];  Matter of Sage Realty Corp. v. Proskauer Rose Goetz & Mendelsohn, 91 N.Y.2d 30, 37, 666 N.Y.S.2d 985, 689 N.E.2d 879 [1997] ).   Thus, we conclude that an in-house attorney, his status as an at-will employee notwithstanding, owes his employer-client a fiduciary duty.   We note that plaintiff also had a contractual duty pursuant to his employment agreement to maintain the confidentiality of confidential materials.

 Plaintiff failed to establish prima facie that he did not disclose confidential information or communications with Loews.   The complaint alleges that plaintiff gave tax advice that was relied on by Loews in deciding not to spin off a subsidiary.   However, plaintiff's testimony creates an issue of fact as to whether the information contained in the complaint was based on plaintiff's legal advice to Loews.