The fourth cause of action in the original complaint has become the third cause of action. Defendants move for dismissal of the amended complaint, claiming that plaintiffs have failed to state a cause of action and failed to allege fraud and breach of fiduciary duty with specificity. Defendants argue that in the amended complaint, plaintiffs have still not substantiated their allegations in a sufficient manner to make out a claim for either fraud or breach of fiduciary duty. Plaintiffs allegedly have failed to specify the meetings between defendants or the clients that are meant to be the source of plaintiffs' belief and information. Plaintiffs have failed to allege damages for the fraud and breach of fiduciary duty causes of action as well.
Defendants seek a stay of discovery pending the outcome of their motion.
In opposition to the motion, plaintiffs claim that they have stated sufficient causes of action in fraud, breach of fiduciary duty and conversion. Plaintiffs assert that damages suffered by Berkowitz upon his exclusion from the new corporation were obvious, not to mention the damages resulting from alleged acts of conversion, and could be assessed by a trier of fact. However, the claim in conversion is sufficiently stated. The tort of conversion is established when one who owns and has a right to possession of personal property proves that property is in the unauthorized possession of another who has tried to exclude the rights of the owner. In the amended complaint, plaintiffs have alleged that defendants have used their property exclusively for defendants' benefit at plaintiffs' expense.