SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

448 

CA 12-02120 

PRESENT: CENTRA, J.P., FAHEY, CARNI, WHALEN, AND MARTOCHE, JJ. 

 

SCOTT A. WENDT, PLAINTIFF-RESPONDENT, 

V MEMORANDUM AND ORDER

BENT PYRAMID PRODUCTIONS, LLC,

ET AL., DEFENDANTS, 

AND RIDGEWAY & CONGER, INC., 

DEFENDANT-APPELLANT. 

 

BOND, SCHOENECK & KING, PLLC, SYRACUSE (RYAN MCPARLAND OF COUNSEL),

FOR DEFENDANT-APPELLANT. 

THE PEARL LAW FIRM, P.A., PITTSFORD (JASON J. KANE OF COUNSEL), FOR

PLAINTIFF-RESPONDENT. 

 

Appeal from an order of the Supreme Court, Onondaga County

(Anthony J. Paris, J.), dated May 21, 2012. The order denied the

motion of defendant Ridgeway & Conger, Inc. for summary judgment

dismissing the complaint against it. 

It is hereby ORDERED that the order so appealed from is

unanimously reversed on the law without costs, the motion is granted

and the complaint against defendant Ridgeway & Conger, Inc. is

dismissed. 

Memorandum: Plaintiff commenced this action seeking damages for

losses that he sustained as a result of failed financial investments.

In the complaint, plaintiff advanced one cause of action against

defendant Ridgeway & Conger, Inc. (Ridgeway), which plaintiff concedes

sounds in common-law negligence, i.e., the negligent supervision of

defendant Ronald H. Sirota (Sirota). Ridgeway moved for summary

judgment dismissing the complaint against it, and Supreme Court denied

the motion. We reverse.

We note as background that plaintiff retained defendant Strategic

Financial Planning, Inc. (SFP) to provide him with investment advice. 

Sirota, who owned and operated SFP, was a registered representative of

Ridgeway, a broker-dealer that is a member of the Financial Industry

Regulatory Agency (FINRA), a self-regulatory industry organization. 

It is undisputed that, at all relevant times, Sirota’s relationship

with Ridgeway was that of an independent contractor. During the

course of Sirota’s association with Ridgeway, Sirota advised plaintiff

to invest in certain security and investment vehicles that were not

publicly traded. There is also no dispute that Ridgeway had no
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CA 12-02120 

knowledge of these outside business activities by Sirota, made no

recommendations to plaintiff with respect thereto and received no

compensation as a result thereof. 

To establish a cause of action for common-law negligence, “a

plaintiff must demonstrate the existence of a duty, a breach of that

duty, and that the breach of such duty was a proximate cause of his or

her injuries” (Schindler v Ahearn, 69 AD3d 837, 838 [internal

quotation marks omitted]). “If there is no duty of care owed by the

defendant to the plaintiff, there can be no breach and, consequently,

no liability can be imposed upon the defendant” (Mojica v Gannett Co.,

Inc., 71 AD3d 963, 965; see Pulka v Edelman, 40 NY2d 781, 782, rearg

denied 41 NY2d 901). The issue whether one person owes a duty of care

to “reasonably avoid injury” to another is a question of law for the

courts (Purdy v Public Adm’r of County of Westchester, 72 NY2d 1, 8,

rearg denied 72 NY2d 953). “In general, an entity has no duty to

control a third party’s conduct so as to prevent injury to another

unless special circumstances exist in which the entity has sufficient

authority and control over the conduct of that third party . . . Only

then can a duty be imposed” (Mojica, 71 AD3d at 965). 

Additionally, it is well settled that, “[o]rdinarily, a principal

is not liable for the acts of independent contractors in that, unlike

the master-servant relationship, principals cannot control the manner

in which the independent contractors’ work is performed” (Chainani v

Board of Educ. of City of N.Y., 87 NY2d 370, 380-381, rearg denied 87

NY2d 862). Although there are exceptions to that general rule (see

Rosenberg v Equitable Life Assur. Socy. of U.S., 79 NY2d 663, 668,

rearg dismissed 82 NY2d 825), we conclude that none apply to the

circumstances presented here. Although plaintiff’s claim sounds in

negligent supervision, one of the recognized exceptions (see Kleeman v

Rheingold, 81 NY2d 270, 274), it is well settled that “the mere

retention of general supervisory powers over an independent contractor

cannot form a basis for the imposition of liability against the

principal” (Goodwin v Comcast Corp., 42 AD3d 322, 323; see Melbourne v

New York Life, 271 AD2d 296, 297). Ridgeway established its prima

facie entitlement to judgment as a matter of law by demonstrating that

it owed no duty of care to plaintiff to supervise or control Sirota,

an independent contractor, and that it could not be vicariously liable

for the investment advice Sirota provided to plaintiff because it did

not direct or control the provision of such advice (see Mojica, 71

AD3d at 965). In opposition to Ridgeway’s prima facie showing,

plaintiff failed to raise a triable issue of fact (see Alvarez v

Prospect Hosp., 68 NY2d 320, 324). We reject plaintiff’s contention

that industry standards or the rules and regulations of FINRA imposed

a duty of care on Ridgeway sufficient to support a private cause of

action under New York common law for negligent supervision (see In re

Apple REITs Litigation, 2013 WL 1386202, * 15 n 12; Richman v Goldman

Sachs Group, Inc., 868 F Supp 2d 261, 275; Weinraub v Glen Rauch Sec.,

Inc., 399 F Supp 2d 454, 462, affd 180 Fed Appx 233; see also de

Kwiatkowski v Bear, Stearns & Co., Inc., 306 F3d 1293, 1311).

We note that, contrary to plaintiff’s contention advanced during
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CA 12-02120 

oral argument on appeal, our review of the record and the parties’

briefs reveals that the issue of duty was not raised for the first

time in defendant’s reply brief; rather, that issue was clearly raised

in the main brief of defendant. In light of our determination, we do

not address Ridgeway’s remaining contentions.

Entered: July 5, 2013 Frances E. Cafarell

Clerk of the Court