Preview
FILED: SUFFOLK COUNTY CLERK 02/04/2019 02:17 PM INDEX NO. 609710/2018
NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/04/2019
S}IORT FOTI.]\I oRI)LR
H-&#TLE TNDEX NO. l8/6097 t 0
SUPREME COURT - STATE OF NEW YORK
COMMERCIAL DIVISION IAS PART 48 - SUFFOLK COUNTY
PRESENT:
HON. JERRY GAR GI]ILO
SUPREME COURT JUSTICE
ORIG. Rf,TURN DATE: 8/30/18
SUBMISSION DATE: l2l12ll 8
32 WESTWAY LLC, TWO POINT O LLC, GLD MOTTON SEQ#001
CORNERSTONE GROUP, LLC MOTION: 001-MGCASEDISPD
Plaintiffs,
ATTORNEY FOB PLAIITTIFFS
-against- KRIEGSMAN PC
279 MAIN STREET
SHARLEEN QUARTARARO, SAG HARBOR, NY I 1963
Def'endant F R DEFEND
LONG TUMINELLO, LLP
I20 FOURTH AVENUE
BAY SHORE, NY I 1706
Upon the following efiled papers numbered l3 to 45 read on this motion lqjj$d$-; Notice
of Motion/ Order to Show Cause and supporting papers t3 -25 ; Notice of Cross Motion and supporting
papers_; Answering Affidavits and supporting papers 21 -36 ; Replying Affidavits and
supporting papers 31 -43 Other 44 - 45 ; (anffitcarhg-cotmef
rn-uppo@ffiffiion) it is,
ORDERED that defendant's motion (001) to dismiss pursuant to CPLR 3211 (a) (7) is
granted.
In this action, plaintiffs allege that defendant Sharon Quartararo, as an employee ofnon-party
Peter Mangiameli, misrepresented facts which induced them into entering into a building contract
and an operating agreement, causing damages. The record reveals that defendant was the Executive
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Director of Operations for non-party Mangiameli, a real estate developer who owned non-party
Priceless Custom Homes ("PCH'), a construction company, and non-party PAM, an entity which
became a member of 32 Westway. Some time in February 2015, the parties met Mangiameli and
discussed an investment in a residential real estate project. Defendant sent PCH's budget estimates
and financial projections to plaintiffs. On March 12,2015, plaintiffs and PAM entered into an
operating agreement for 32 Westway LLC. PAM became the managing member. 32 Westway
purchased the property located at 32 Westway Drive, Southampton. NY. 32 Westway hired PCH
as the builder and entered into a Standard Builder Agreement. Over time, plaintiffs learned that
PAM was not keeping to the budgetary limitations and keeping the members infbrmed on the
Project's progress. PAM also allegedly failed to lbllow the bookkeeping and accounting provisions
ofthe operating agreement. Mangiameli allegedly failed to maintain an accurate record ofall costs
and expenses incurred. Defendant allegedly assisted in PAM's breach ol fiduciary duty by
reassuring 32 Westway that all was well. A related action was commenced on April 4, 2017.1 The
instant action was commenced by the filing of the summons and complaint on May 21, 2018.
The complaint in this action contains four causes of action: l) fraudulent inducement as
alleged by Two Point 0 LLC and Old Comerstone Group, LLC; 2) fraudulent inducement as alleged
by 32 Westway LLC; 3) aiding and abetting fraud, and 4) aiding and abetting breach of fiduciary
duty.
Defendant now moves to dismiss the complaint pursuant to CPLR 3211 (a) (7).
On a motion to dismiss a complaint pursuant to CPLR 321l(a)(7). a court must atford the
pleading a liberal construction, accept all the facts alleged in the complaint as true, accord the
plaintiflthe benefit ofevery possible inference, and determine only whether the facts as alleged fit
within any cognizable legal theory (Leon v Martinez, 34 NY2d 83, 87-88, 614 NYS2d 972 [994];
Hynes v Griebel, 300 AD2d 628,754 NYS2d 293 120021; Glassman v Zoref, 291 AD2d 430,737
NYS2d 537 [2002]). The criterion is r.r,hether the plaintiffhas a cause ofaction, not whether he or
she has stated one (Vorel v NBA Props., 285 AD2d 641 , 728 NYS2d 397 [2001]). "Moreover, a
court may freely consider evidentiary material submitted on the motion to remedy any defects in the
complaint" (.1d.).
The complaint alleges in the first cause ofaction that defendant made false representations
to plaintifls Two Point O and GLD Comerstone Group ("GLD") that Mangiameli was a real estate
developer with deep experience in the fleld and a great reputation in the industry, and the Project's
financial fbrecast was as set forlh in the projections she senttothe plaintilfs in February20l5. The
complaint further alleges that defendant's statements were made to induce the reliance ol these
l. The first action is captioned 32 Westv,ay LLC, Two Point O LLC, Peter Brooke, and GLD
Cornerstone Group, LLC v Priceless Cuslom Homes, lnc., Petr Mangiameli, and PAM 32
Westway LLC, Index No. 606025/2017.
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plaintiffs to enter into the Operating Agreement ol 32 Westway LLC with PAM, Mangiameli's
corporation. The complaint alleges in the second cause ofaction that defendant made the same
misrepresentations to plaintiff 32 Westway in order to induce 32 Westway to enter into the Standard
Builder Agreement with PCH, Mangiameli's construction company. In addition, the complaint
alleges that defendant falsely reported that financial statements were accurate and the project was
progressing well. Included in these causes of action are allegations against non-party Peter
Mangiameli, defendant's employer, that he overcharged plaintiffs for materials and kept the
difference between the actual cost and amount charged to either enrich himself or pay for materials
and labor on other construction projects.
To state a cause ofaction for fraudulent inducement, it is sufficient that the claim alleges a
material representation, known to be false, made with the intention ofinducing reliance, upon which
the victim actually relies, consequentially sustaining a detriment (Channel Master Corp. v
Aluminum Ltd. Sales, /2c,4 NY2d 403,406-408,17 6 NYS2d 259 [958]; Megoris Furs, Inc. v
Gimbel Bros., Inc., 172 AD2d 209,213, 568 NYS2d 581 [991]). Accordingly, one "who
fraudulentlymakesamisrepresentationof***intention***forthepurposeofinducinganother
to act or refrain from action in reliance thereon in a business transaction" is liable for the harm
caused by the other's justifiable reliance upon the misrepresentation (3 Restatement, Torts, $ 525,
p. 59.). Here, accepting all the facts alleged in the complaint as true, and according the plaintiffthe
benefit ofevery possible inference, the court finds that there are no allegations that defendant herself
stated an intention to do something which induced plaintiffs to enter into the operating agreement
or the building agreement. Therefore, the first and second causes of action are DISMISSED.
In the third cause ol action, the complaint alleges tiaud, and that defendant falsely
represented to ptaintiff32 Westway that its financial statements were accurate and that the Project
was progressing wel[. Under New York law, a party pleads a prima facie case of fraud by alleging
misrepresentation of a material existing fact, falsity, scienter, deception and injury (Mandarin
Trading Ltd. v. Ilildenstein,l6 NY3d 173,919 NYS2d465 [20] l]). Furthermore, where a cause
ofaction is based in fraud, "the circumstances constituting the wrong shall be stated in detail" (see
CPLR 3016 [b]). At the very threshold, then, plaintiff must allege a misrepresentation or material
omission by defendant, on which it relied, that induced plaintiifto enter into the contract with PCH
and Mangiameli. Plaintifl must also demonstrate reliance on the fraud a1 the time of the
representation or contract. In New York, a duty to communicate undisclosed information to the other
contracting party may arise when one party to a contract has superior knowledge which is not
available to both parties (Nadal v Otto Gerdau Co., 1992 U.S. Dist. LEXIS 292, 1992 WL 8346
[SDNY 1992]). Here, defendant cannot be held liable for fraud inasmuch as she was not one ofthe
contracting parties and had no duty to disclose. In addition, the allegations lack specificity and fail
to establish that defendant, as an employee of PAM and Mangiameli, compiled and authored the
documents which are alleged to have induced plaintiffs to enter into a contract with Mangiameli.
The complaint alleges in the fourth cause of action that defendant aided and abetted
Mangiameli's alleged fraud. The complaint alleges that Mangiameli falsely reported that the project
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was going well and that the financial reports were accurate, and defendant aided and abetted
Mangiameli's fraud byher awareness of Mangiameli's misrepresentations. Plaintiffs also allege that
defendant substantially assisted Mangiameli's fraud by also reporting that the project was going well
and that the financial reports were accurate. in order to plead properly a claim for aiding and
abetting fraud, the complaint must allege: "(1) the existence ofan underlying fraud; (2) knowledge
of this fraud on the part of the aider and abettor; and (3) substantial assistance by the aider and
abettor in achievement ofthe fraud" (Unicredito Italiano SPA v JPMorgan Chase Bank,288 F
Supp 2d 485, 502 [SD NY 2003] [intemal quotation marks omitted], quoting Gabriel Capitnl, L.P.
v Natll/est Fin., Inc,,94F Supp 2d 491, 511 [SD NY 2000]). Substantial assistance exists "where
( I ) a defendant affirmatively assists, helps conceal, or by virtue offailing to act when required to do
so enables the fraud to proceed, and (2) the actions ofthe aider/abettor proximately caused the harm
on which the primary liability is predicated" (Unicredito ltaliano,288 F Supp 2d a|502 [intemal
quotation marks omittedl, quoting McDoniel v Bear Stearns & Co.,196 F Supp 2d 343, 352 [SD
NY 20021).
Here, plaintiffs have failed to plead an essential element ofthe claim--substantial assistance.
Plaintifls maintain that defendant substantially assisted the fraud by parroting Mangiameli's reports
that the project was going well and the financial reports were accurate. This allegation is insulficient
to suppofi a claim ofaiding and abetting iraud absent a fiduciary duty or some other independent
duty owed by delendant to the plaintiffs (.see Eurycleia Partners, LP v Seward & Kissel, LLP, 12
NY3d 553, 883 NYS2d 147 [2009); King v George Schonberg & Co.,233 AD2d242,650 NYS2d
107 [1st Dept 1996]). Here, defendant's silence did not amount to the substantial assistance that
is a required element of aider or abettor liability inasmuch as there was no duty on her part to
disclose that information to plaintiffs (see, National Vl/estminster Bank USA v lleksel, 124 AD2d
144, 148-149, 5 l l NYS2d 626 |st Dept l987l, lv denied 70 NY2d 604). Accordingly, the fourth
cause of action is DISMISSED.
The complaint alleges in the fifth cause ofaction that defendant aided and abetted PAM's
alleged breach of fiduciary duty. The complaint alleges that Mangiameli and PAM breached their
fiduciary duty by, among other things, failing to maintain adequate records ofthe construction costs,
failing to inform the members of 32 Westway of the progress, and making decisions regarding the
budget without consulting the members. The complaint also alleges that defendant substantially
aided and abetted PAM and Mangiamelo's breach of fiduciary duty by continuing to reassure 32
Westway that all was well, and keeping up a facade with her affirmative representations that the
project was on track. In addition, the complaint alleges that defendant acknowledged that she was
aware of Mangiameli's fraudulent misrepresentations and breaches of fiduciary duty.
A claim for aiding and abetting a breach of fiduciary duty requires: ( 1) a breach by a fiduciary
ofobligations to another, (2) that the defendant knowingly induced or participated in the breach, and
(3) that ptaintiff sulfered damage as a result of the breach (see S & K S es Co. v Nike, Inc.,816
F.2d 843, 847-848 [2d Cir 1987]; ,vhitney v Citibank, N.A.,782 F.2d 1106, I I l5 [2d Cir 1986],
citing ll/echsler v Bowman,285 NY 284,291, 1941 N.Y. LEXIS 1497 [1941]). A person
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knowingly participates in a breach of fiduciary duty only when he or she provides "substantial
assistance" to the primary violator (see King v George Schonberg & Co., supra al 243; National
Westminster Bank USA v lleksel, supro at 148-149). Substantial assistance occurs when a
defendant affirmatively assists, helps conceal or fails to act when required to do so, thereby enabling
the breach to occur (see Kolbeck v LIT Am.,939 F. Supp. 240,246 [SD NY 19961, affd 152 F.3d
918 [2d Cir 1998]). However, the mere inaction of an alleged aider and abettor constitutes
substantial assistance only ifa fiduciary duty is owed directly by him/her to the plaintiff(see Siarp
Int'|. Corp. V State Street Bank & Trust Co. l,In re Sharp Intl. Corp.J,28l BR 506, 516,2002
Bankr. LEXIS 797,39 Bankr. Ct. Dec. (LRP) 253 [Bankr. EDNY July 30,2002]). Here, defendant
owed no fiduciary duty directly to plaintiffs, and therefore, has not aided and abetted Mangiameli's
alleged breach of fiduciary duty. Accordingly, the fifih cause of action is DISMISSED.
Accordingly, the defendant's motion to dismiss is GRANTED in its entirety.
DATED: February I o, 2019
H . JERR GAR UILO C]
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Preview
FILED: SUFFOLK COUNTY CLERK 02/04/2019 02:17 PM INDEX NO. 609710/2018 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/04/2019 S}IORT FOTI.]\I oRI)LR H-&#TLE TNDEX NO. l8/6097 t 0 SUPREME COURT - STATE OF NEW YORK COMMERCIAL DIVISION IAS PART 48 - SUFFOLK COUNTY PRESENT: HON. JERRY GAR GI]ILO SUPREME COURT JUSTICE ORIG. Rf,TURN DATE: 8/30/18 SUBMISSION DATE: l2l12ll 8 32 WESTWAY LLC, TWO POINT O LLC, GLD MOTTON SEQ#001 CORNERSTONE GROUP, LLC MOTION: 001-MGCASEDISPD Plaintiffs, ATTORNEY FOB PLAIITTIFFS -against- KRIEGSMAN PC 279 MAIN STREET SHARLEEN QUARTARARO, SAG HARBOR, NY I 1963 Def'endant F R DEFEND LONG TUMINELLO, LLP I20 FOURTH AVENUE BAY SHORE, NY I 1706 Upon the following efiled papers numbered l3 to 45 read on this motion lqjj$d$-; Notice of Motion/ Order to Show Cause and supporting papers t3 -25 ; Notice of Cross Motion and supporting papers_; Answering Affidavits and supporting papers 21 -36 ; Replying Affidavits and supporting papers 31 -43 Other 44 - 45 ; (anffitcarhg-cotmef rn-uppo@ffiffiion) it is, ORDERED that defendant's motion (001) to dismiss pursuant to CPLR 3211 (a) (7) is granted. In this action, plaintiffs allege that defendant Sharon Quartararo, as an employee ofnon-party Peter Mangiameli, misrepresented facts which induced them into entering into a building contract and an operating agreement, causing damages. The record reveals that defendant was the Executive 1 of 5 FILED: SUFFOLK COUNTY CLERK 02/04/2019 02:17 PM INDEX NO. 609710/2018 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/04/2019 32 WESTWAY v QUARTARARO INDEX NO. 181609710 PAGE NO. 2 Director of Operations for non-party Mangiameli, a real estate developer who owned non-party Priceless Custom Homes ("PCH'), a construction company, and non-party PAM, an entity which became a member of 32 Westway. Some time in February 2015, the parties met Mangiameli and discussed an investment in a residential real estate project. Defendant sent PCH's budget estimates and financial projections to plaintiffs. On March 12,2015, plaintiffs and PAM entered into an operating agreement for 32 Westway LLC. PAM became the managing member. 32 Westway purchased the property located at 32 Westway Drive, Southampton. NY. 32 Westway hired PCH as the builder and entered into a Standard Builder Agreement. Over time, plaintiffs learned that PAM was not keeping to the budgetary limitations and keeping the members infbrmed on the Project's progress. PAM also allegedly failed to lbllow the bookkeeping and accounting provisions ofthe operating agreement. Mangiameli allegedly failed to maintain an accurate record ofall costs and expenses incurred. Defendant allegedly assisted in PAM's breach ol fiduciary duty by reassuring 32 Westway that all was well. A related action was commenced on April 4, 2017.1 The instant action was commenced by the filing of the summons and complaint on May 21, 2018. The complaint in this action contains four causes of action: l) fraudulent inducement as alleged by Two Point 0 LLC and Old Comerstone Group, LLC; 2) fraudulent inducement as alleged by 32 Westway LLC; 3) aiding and abetting fraud, and 4) aiding and abetting breach of fiduciary duty. Defendant now moves to dismiss the complaint pursuant to CPLR 3211 (a) (7). On a motion to dismiss a complaint pursuant to CPLR 321l(a)(7). a court must atford the pleading a liberal construction, accept all the facts alleged in the complaint as true, accord the plaintiflthe benefit ofevery possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory (Leon v Martinez, 34 NY2d 83, 87-88, 614 NYS2d 972 [994]; Hynes v Griebel, 300 AD2d 628,754 NYS2d 293 120021; Glassman v Zoref, 291 AD2d 430,737 NYS2d 537 [2002]). The criterion is r.r,hether the plaintiffhas a cause ofaction, not whether he or she has stated one (Vorel v NBA Props., 285 AD2d 641 , 728 NYS2d 397 [2001]). "Moreover, a court may freely consider evidentiary material submitted on the motion to remedy any defects in the complaint" (.1d.). The complaint alleges in the first cause ofaction that defendant made false representations to plaintifls Two Point O and GLD Comerstone Group ("GLD") that Mangiameli was a real estate developer with deep experience in the fleld and a great reputation in the industry, and the Project's financial fbrecast was as set forlh in the projections she senttothe plaintilfs in February20l5. The complaint further alleges that defendant's statements were made to induce the reliance ol these l. The first action is captioned 32 Westv,ay LLC, Two Point O LLC, Peter Brooke, and GLD Cornerstone Group, LLC v Priceless Cuslom Homes, lnc., Petr Mangiameli, and PAM 32 Westway LLC, Index No. 606025/2017. 2 of 5 FILED: SUFFOLK COUNTY CLERK 02/04/2019 02:17 PM INDEX NO. 609710/2018 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/04/2019 32 WESTWAY v QUARTARARO TNDEX NO. l8/6097 l 0 PAGE NO. 3 plaintiffs to enter into the Operating Agreement ol 32 Westway LLC with PAM, Mangiameli's corporation. The complaint alleges in the second cause ofaction that defendant made the same misrepresentations to plaintiff 32 Westway in order to induce 32 Westway to enter into the Standard Builder Agreement with PCH, Mangiameli's construction company. In addition, the complaint alleges that defendant falsely reported that financial statements were accurate and the project was progressing well. Included in these causes of action are allegations against non-party Peter Mangiameli, defendant's employer, that he overcharged plaintiffs for materials and kept the difference between the actual cost and amount charged to either enrich himself or pay for materials and labor on other construction projects. To state a cause ofaction for fraudulent inducement, it is sufficient that the claim alleges a material representation, known to be false, made with the intention ofinducing reliance, upon which the victim actually relies, consequentially sustaining a detriment (Channel Master Corp. v Aluminum Ltd. Sales, /2c,4 NY2d 403,406-408,17 6 NYS2d 259 [958]; Megoris Furs, Inc. v Gimbel Bros., Inc., 172 AD2d 209,213, 568 NYS2d 581 [991]). Accordingly, one "who fraudulentlymakesamisrepresentationof***intention***forthepurposeofinducinganother to act or refrain from action in reliance thereon in a business transaction" is liable for the harm caused by the other's justifiable reliance upon the misrepresentation (3 Restatement, Torts, $ 525, p. 59.). Here, accepting all the facts alleged in the complaint as true, and according the plaintiffthe benefit ofevery possible inference, the court finds that there are no allegations that defendant herself stated an intention to do something which induced plaintiffs to enter into the operating agreement or the building agreement. Therefore, the first and second causes of action are DISMISSED. In the third cause ol action, the complaint alleges tiaud, and that defendant falsely represented to ptaintiff32 Westway that its financial statements were accurate and that the Project was progressing wel[. Under New York law, a party pleads a prima facie case of fraud by alleging misrepresentation of a material existing fact, falsity, scienter, deception and injury (Mandarin Trading Ltd. v. Ilildenstein,l6 NY3d 173,919 NYS2d465 [20] l]). Furthermore, where a cause ofaction is based in fraud, "the circumstances constituting the wrong shall be stated in detail" (see CPLR 3016 [b]). At the very threshold, then, plaintiff must allege a misrepresentation or material omission by defendant, on which it relied, that induced plaintiifto enter into the contract with PCH and Mangiameli. Plaintifl must also demonstrate reliance on the fraud a1 the time of the representation or contract. In New York, a duty to communicate undisclosed information to the other contracting party may arise when one party to a contract has superior knowledge which is not available to both parties (Nadal v Otto Gerdau Co., 1992 U.S. Dist. LEXIS 292, 1992 WL 8346 [SDNY 1992]). Here, defendant cannot be held liable for fraud inasmuch as she was not one ofthe contracting parties and had no duty to disclose. In addition, the allegations lack specificity and fail to establish that defendant, as an employee of PAM and Mangiameli, compiled and authored the documents which are alleged to have induced plaintiffs to enter into a contract with Mangiameli. The complaint alleges in the fourth cause of action that defendant aided and abetted Mangiameli's alleged fraud. The complaint alleges that Mangiameli falsely reported that the project 3 of 5 FILED: SUFFOLK COUNTY CLERK 02/04/2019 02:17 PM INDEX NO. 609710/2018 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/04/2019 32 WESTWAY V QUARTARARO INDEX NO. l8/609710 PAGE NO. 4 was going well and that the financial reports were accurate, and defendant aided and abetted Mangiameli's fraud byher awareness of Mangiameli's misrepresentations. Plaintiffs also allege that defendant substantially assisted Mangiameli's fraud by also reporting that the project was going well and that the financial reports were accurate. in order to plead properly a claim for aiding and abetting fraud, the complaint must allege: "(1) the existence ofan underlying fraud; (2) knowledge of this fraud on the part of the aider and abettor; and (3) substantial assistance by the aider and abettor in achievement ofthe fraud" (Unicredito Italiano SPA v JPMorgan Chase Bank,288 F Supp 2d 485, 502 [SD NY 2003] [intemal quotation marks omitted], quoting Gabriel Capitnl, L.P. v Natll/est Fin., Inc,,94F Supp 2d 491, 511 [SD NY 2000]). Substantial assistance exists "where ( I ) a defendant affirmatively assists, helps conceal, or by virtue offailing to act when required to do so enables the fraud to proceed, and (2) the actions ofthe aider/abettor proximately caused the harm on which the primary liability is predicated" (Unicredito ltaliano,288 F Supp 2d a|502 [intemal quotation marks omittedl, quoting McDoniel v Bear Stearns & Co.,196 F Supp 2d 343, 352 [SD NY 20021). Here, plaintiffs have failed to plead an essential element ofthe claim--substantial assistance. Plaintifls maintain that defendant substantially assisted the fraud by parroting Mangiameli's reports that the project was going well and the financial reports were accurate. This allegation is insulficient to suppofi a claim ofaiding and abetting iraud absent a fiduciary duty or some other independent duty owed by delendant to the plaintiffs (.see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 883 NYS2d 147 [2009); King v George Schonberg & Co.,233 AD2d242,650 NYS2d 107 [1st Dept 1996]). Here, defendant's silence did not amount to the substantial assistance that is a required element of aider or abettor liability inasmuch as there was no duty on her part to disclose that information to plaintiffs (see, National Vl/estminster Bank USA v lleksel, 124 AD2d 144, 148-149, 5 l l NYS2d 626 |st Dept l987l, lv denied 70 NY2d 604). Accordingly, the fourth cause of action is DISMISSED. The complaint alleges in the fifth cause ofaction that defendant aided and abetted PAM's alleged breach of fiduciary duty. The complaint alleges that Mangiameli and PAM breached their fiduciary duty by, among other things, failing to maintain adequate records ofthe construction costs, failing to inform the members of 32 Westway of the progress, and making decisions regarding the budget without consulting the members. The complaint also alleges that defendant substantially aided and abetted PAM and Mangiamelo's breach of fiduciary duty by continuing to reassure 32 Westway that all was well, and keeping up a facade with her affirmative representations that the project was on track. In addition, the complaint alleges that defendant acknowledged that she was aware of Mangiameli's fraudulent misrepresentations and breaches of fiduciary duty. A claim for aiding and abetting a breach of fiduciary duty requires: ( 1) a breach by a fiduciary ofobligations to another, (2) that the defendant knowingly induced or participated in the breach, and (3) that ptaintiff sulfered damage as a result of the breach (see S & K S es Co. v Nike, Inc.,816 F.2d 843, 847-848 [2d Cir 1987]; ,vhitney v Citibank, N.A.,782 F.2d 1106, I I l5 [2d Cir 1986], citing ll/echsler v Bowman,285 NY 284,291, 1941 N.Y. LEXIS 1497 [1941]). A person 4 of 5 FILED: SUFFOLK COUNTY CLERK 02/04/2019 02:17 PM INDEX NO. 609710/2018 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/04/2019 32 wESTWAY v QUARTARARO INDEX NO. l 8/6097 r 0 PAGE NO. 5 knowingly participates in a breach of fiduciary duty only when he or she provides "substantial assistance" to the primary violator (see King v George Schonberg & Co., supra al 243; National Westminster Bank USA v lleksel, supro at 148-149). Substantial assistance occurs when a defendant affirmatively assists, helps conceal or fails to act when required to do so, thereby enabling the breach to occur (see Kolbeck v LIT Am.,939 F. Supp. 240,246 [SD NY 19961, affd 152 F.3d 918 [2d Cir 1998]). However, the mere inaction of an alleged aider and abettor constitutes substantial assistance only ifa fiduciary duty is owed directly by him/her to the plaintiff(see Siarp Int'|. Corp. V State Street Bank & Trust Co. l,In re Sharp Intl. Corp.J,28l BR 506, 516,2002 Bankr. LEXIS 797,39 Bankr. Ct. Dec. (LRP) 253 [Bankr. EDNY July 30,2002]). Here, defendant owed no fiduciary duty directly to plaintiffs, and therefore, has not aided and abetted Mangiameli's alleged breach of fiduciary duty. Accordingly, the fifih cause of action is DISMISSED. Accordingly, the defendant's motion to dismiss is GRANTED in its entirety. DATED: February I o, 2019 H . JERR GAR UILO C] 5 of 5