Opinion ID: 803951
Heading Depth: 3
Heading Rank: 2

Heading: Fiduciary Duty Claims

Text: The Brainson Plaintiffs’ claims against KPMG LLP and E&Y for breach of fiduciary duty and aiding and abetting Tremont’s breach of fiduciary duty were also properly dismissed. “[A] conventional business relationship, without more, is insufficient to create a fiduciary relationship. Rather, a plaintiff must make a showing of special circumstances that could have transformed the parties’ business relationship to a fiduciary one . . . .” AHA Sales, Inc. v. Creative Bath Products, Inc., 867 N.Y.S.2d 169, 181 (App. Div. 2d Dep’t 2008) (citation and quotation marks omitted). As a threshold matter, the Brainson Plaintiffs did not have a “conventional business relationship” with KPMG LLP and E&Y. These auditors’ business relationship was with Tremont; the Brainson Plaintiffs were simply recipients of reports drafted by 11 them at Tremont’s request. To the extent that the Brainson Plaintiffs’ contacts with KPMG LLP and E&Y could be characterized as a “relationship,” the Brainson Complaint still fails sufficiently to allege any special circumstances that would transform the relationship into a fiduciary one. A plaintiff alleging a claim for aiding and abetting a breach of fiduciary duty must show “(1) a breach by a fiduciary of obligations to another, (2) that the defendant knowingly induced or participated in the breach, and (3) that plaintiff suffered damage as a result of the breach.” Kaufman v. Cohen, 760 N.Y.S.2d 157, 169 (App. Div. 1st Dep’t 2003). “Although a plaintiff is not required to allege that the aider and abettor had an intent to harm, there must be an allegation that such defendant had actual knowledge of the breach of duty.” Id. To satisfy the “knowing participation” element, a plaintiff must show that the defendant provided “substantial assistance” to the primary violator, id. at 170, which “means more than just performing routine business services for the alleged fraudster,” CRT Invs., Ltd., 925 N.Y.S.2d at 441. For the reasons described supra Section B, the Brainson Plaintiffs fail to plead sufficient factual matter to show that KPMG LLP and E&Y knowingly participated in Tremont’s alleged breach of fiduciary duty. We have considered plaintiffs’ remaining arguments and find them to be unavailing. Accordingly, the judgments of the district court hereby are AFFIRMED. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk 12