Case ID: ad2d_286/html/0673-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Pangia & Company, CPAs, P. C., et al., Appellants, v Larry Diker, Respondent.
    [729 NYS2d 784]
   —In an action, inter alia, to recover damages for breach of fiduciary duty and usurpation of corporate opportunity, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Dutchess County (Beisner, J.), dated July 6, 2000, as denied those branches of their motion which were for partial summary judgment on the third and sixth causes of action.

Ordered that the order is affirmed insofar as appealed from, with costs.

Vincent Pangia and Larry Diker formed an accounting firm in 1984, as equal partners, directors, and officers of the company. In April 1998, Diker ceased his day-to-day activities with the company and returned his keys. That same month, Pangia removed Diker’s name from company stationery and as a signatory on the firm’s bank account, and represented to third parties that Diker was no longer affiliated with the firm. In July 1998, Pangia removed Diker as a trustee of the firm’s pension.

Diker then attempted, inter alia, to solicit clients of the firm. Pangia commenced this action asserting, among other things, that, by soliciting clients of the firm, Diker breached his fiduciary duty as an officer and director of the firm who never resigned and retained shares of the corporation’s stock.

While an officer or director of a corporation may not deprive the corporation of a business opportunity (see, H.W. Collections v Kolber, 256 AD2d 240; 7th Sense v Liu, 220 AD2d 215), the parties’ conduct in this case established that the defendant was no longer an officer or director of the corporation (see, Management Technologies v Morris, 961 F Supp 640). Accordingly, in the absence of a covenant not to compete, the defendant owed no fiduciary duty to the plaintiff corporation and the Supreme Court properly denied those branches of the plaintiffs’ motion which were for partial summary judgment on the third and sixth causes of action to recover damages for breach of fiduciary duty and usurpation of corporate opportunity. O’Brien, J. P., Altman, Feuerstein and Cozier, JJ., concur.