Did Supreme Court Properly Dismiss Complaint as Failing to State a Cause of Action?
Plymouth Capital, LLC and Christian J. Woodcock commenced an action against Montage Financial Group, Inc. and Brett M. Smith, former vice president of Plymouth, seeking to recover damages for breach of contract, tortious interference with contract, tortious interference with prospective business relations, aiding and abetting breach of fiduciary duty, and unjust enrichment, and to recover in quantum meruit.
Plymouth alleged that, in August 2015, Plymouth entered into an exclusive agency agreement with Melton Mullinix, Jr., the owner of a life insurance policy and Melton Mullinix, Sr., the insured under the policy for Plymouth to serve as the exclusive agent of record with respect to the sale of the policy. Plymouth also alleged that, in September 2015, Montage presented an offer to purchase the policy for the sum of $1,500,000 to Smith, who was operating on behalf of Plymouth. In September 2015, Plymouth, by Woodcock, a life insurance settlement broker, executed and returned a contract request form for the sale of the policy to Montage. According to Plymouth, Smith then formed Sterling Settlements, LLC and procured an agreement signed by the Mullinix family naming Sterling, instead of Plymouth, as the exclusive agent of record for the sale of the policy. Plymouth and Woodcock further alleged that Montage wrongfully compensated Smith for the sale of the policy and that they were not compensated for the transaction.
Montage moved to dismiss the complaint. Supreme Court granted the motion. Plymouth and Woodcock appealed.
Supreme Court properly granted that branch of Montage’s motion which was to dismiss the cause of action alleging tortious interference with contract. The elements of a cause of action for tortious interference with a contract are : (1) the existence of a valid contract between the plaintiff and a third party; (2) defendant’s knowledge of that contract; (3) defendant’s intentional procurement of a third-party’s breach of that contract without justification; and (4) damages. And the plaintiff must further allege facts sufficient to show that the contract would not have been breached but for the defendant’s conduct. Here, Plymouth and Woodcock failed to sufficiently allege specific conduct by Montage intended to procure a breach of the exclusive agency agreement between Plymouth and the Mullinix family, or that the contract would not have been breached but for Montage’s conduct.
Further, Supreme Court properly granted that branch of Montage’s motion which was to dismiss the cause of action alleging tortious interference with prospective business relations. To establish a cause of action for tortious interference with prospective business relations, the plaintiff must allege that: (1) plaintiff] had a business relationship with a third party; (2) defendant knew of that relationship and intentionally interfered with it; (3) defendant acted solely out of malice or used improper or illegal means that amounted to a crime or independent tort; and (4) defendant’s interference caused injury to the relationship with the third party. The plaintiff must also meet a more culpable conduct standard, which is met where the interference with prospective business relations was accomplished by wrongful means or where the offending party acted for the sole purpose of harming the other party. Conduct which is motivated by economic self-interest cannot be characterized as solely malicious. Here, Plymouth and Woodcock failed to sufficiently allege that Montage acted with the requisite conduct needed to sustain a cause of action alleging tortious interference with prospective business relations.
Supreme Court also properly granted that branch of Montage’s motion which was to dismiss the cause of action alleging aiding and abetting breach of fiduciary duty. To assert a cause of action for aiding and abetting breach of fiduciary duty, the plaintiff must allege, with particularity, knowledge of the alleged tortious conduct by the aider and abettor, and substantial assistance by the aider and abettor in the achievement of the tortious conduct. Substantial assistance requires an affirmative act on the defendant’s part; mere inaction can constitute substantial assistance only if the defendant owes a fiduciary duty directly to the plaintiff. Here, Plymouth and Woodcock failed to sufficiently allege that Montage provided substantial assistance to Smith with respect to Smith’s alleged breach of his fiduciary duty to Plymouth .
Supreme Court also properly granted those branches of Montage’s motion which were to dismiss the causes of action alleging breach of contract, quantum meruit, and unjust enrichment, as Plymouth and Woodcock failed to allege the existence of a written agreement between Plymouth and Montage,