Ali v. Chaudhry

197 A.D.3d 1084

150 N.Y.S.3d 613 (Mem)

Pir Wajid ALI, appellant,

v.Shafquat CHAUDHRY, respondent.

(Action No. 1)

Pir Wajid Ali, et al., appellants,

v.Shafquat Chaudhry, respondent, et al., defendants.

(Action No. 2)

2017–05837

Index Nos. 3948/09, 14421/09

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

Argued—June 21, 2021

September 1, 2021

Bhatia & Associates, PLLC (Robert R. Viducich, New York, NY, of counsel), for appellant in Action No. 1 and appellants in Action No. 2.

Harfenist Kraut & Perlstein, LLP, Lake Success, N.Y. (Steven J. Harfenist and Andrew C. Lang of counsel), for respondent.

LEONARD B. AUSTIN, J.P., SYLVIA O. HINDS–RADIX, FRANCESCA E. CONNOLLY, PAUL WOOTEN, JJ.

DECISION & ORDER

In related actions, inter alia, to recover damages for breach of fiduciary duty, which were joined for trial, the plaintiff in Action No. 1 and the plaintiffs in Action No. 2 appeal from a judgment of the Supreme Court, Queens County (Allan B. Weiss, J.), entered January 18, 2017. The judgment, upon a jury verdict in each action, is in favor of Shafquat Chaudhry, the defendant in Action No. 1 and a defendant in Action No. 2, and against the plaintiff in Action No. 1 and the plaintiffs in Action No. 2 dismissing the complaint in each action.

ORDERED that the judgment is affirmed, with costs.

In 2001, Pir Wajid Ali incorporated T.V. East, Inc. (hereinafter TV East), and in 2003, Ali and Shafquat Chaudhry entered into agreements whereby Chaudhry became a shareholder and officer of T.V. East. In 2005, Ali incorporated Ravi Punjabi Television Network, Inc. (hereinafter Ravi TV), and in 2006, Ali and Chaudhry entered into agreements whereby Chaudhry became a shareholder and officer of Ravi TV. In 2009, Ali commenced an action against Chaudhry, inter alia, to recover damages for breach of fiduciary duty (hereinafter Action No. 1), alleging that Chaudhry breached his fiduciary duty to Ali by competing with TV East for his own benefit and for the benefit of other companies he owned. Also in 2009, Ali and Rohana Deo, another shareholder and officer of Ravi TV, commenced an action against, among others, Chaudhry, among other things, to recover damages for breach of fiduciary duty (hereinafter Action No. 2), alleging that Chaudhry breached his fiduciary duty to Ali and Deo by operating Ravi TV for his own benefit and for the benefit of other companies he owned. The related actions were joined for trial. Following a jury trial, the jury returned a verdict in Action No. 1 finding that Chaudhry breached his fiduciary duty to Ali, but that such breach was not a substantial factor in causing Ali to sustain any damages. The jury also returned a verdict in Action No. 2 finding that Chaudhry did not breach his fiduciary duty to Ali and Deo. In a judgment entered January 18, 2017, upon the jury verdicts, the Supreme Court dismissed the complaint in each action. Ali and Deo (hereinafter together the plaintiffs) appeal.

Contrary to the plaintiffs’ contention, the verdict sheet for Action No. 1 properly included a question as to whether Chaudhry's breach of fiduciary duty was a substantial factor in causing Ali to suffer any damages. "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 " ( Rut v. Young Adult Inst., Inc., 74 A.D.3d 776, 777, 901 N.Y.S.2d 715 [emphasis added]). "[T]he proponent of a claim for a breach of fiduciary duty must, at a minimum, establish that the offending parties’ actions were a substantial factor in causing an identifiable loss" ( Greenberg v. Joffee, 34 A.D.3d 426, 427, 824 N.Y.S.2d 355 [internal quotation marks omitted]; see Northbay Constr. Co., Inc. v. Bauco Constr. Corp., 38 A.D.3d 737, 738, 832 N.Y.S.2d 280 ). Thus, the Supreme Court properly directed the jury to, upon making a finding that Chaudhry breached his fiduciary duty to Ali, consider whether such breach was a substantial factor in causing Ali to suffer any damages.

A jury verdict should not be set aside as contrary to...