MacCartney, Jr. v. O'Dell et al

Filing 57

OPINION AND ORDER re: 51 FIRST MOTION to Dismiss Amended Complaint filed by Kevin D. O'Dell, P.C. For the foregoing reasons, Defendants' motion to dismiss is GRANTED in part and DENIED in part. Plaintiff's claims are resolved as follows: Breach of fiduciary duty claim is DISMISSED as against O'Dell and the O'Dell Law Office; Breach of contract claim is DISMISSED as against Kerrigan, O'Dell, and the O'Dell Law Office; Accounting claim is DIS MISSED as against O'Dell and the O'Dell Law Office; Breach of New York Partnership Law claim is DISMISSED as against O'Dell and the O'Dell Law Office; and Aiding and abetting breach of fiduciary duty claim is DISMISSED as agains t the O'Dell Law Office. The Court DENIES Defendants' motion to dismiss Plaintiff's unjust enrichment claim. Consequently, the remaining claims against Kerrigan are for breach of fiduciary duty, accounting, breach of New York Partnersh ip Law, and unjust enrichment. The remaining claim against O'Dell and the O'Dell Law Office is for unjust enrichment. Defendants are directed to file answers to their respective remaining claim(s) within 30 days hereof. Defendant Walsh, hav ing not moved to dismiss any claims in the Amended Complaint, is directed to file an answer to the Amended Complaint within 30 days hereof. The parties are directed to contact the chambers of Magistrate Judge Paul E. Davison to schedule a conference. Parties shall bring an amended case management plan to that conference. The Court respectfully directs the Clerk to terminate the motion at ECF No. 51. SO ORDERED. (Signed by Judge Nelson Stephen Roman on 2/29/2016) (mml)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

USDCSDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:
.
.
D \TE FILED: 2..f? '1 h.""r(p

l.!:_:::_"'_··=-""-==:::.==-·---=--------~-.----·-----

HAROLD Y. MacCARTNEY, JR.,
Plaintiff,
-againstKEVIN D. O'DELL and CHRISTOPHER J. WALSH,
individually and doing business as MacCARTNEY,
MacCARTNEY, KERRIGAN & MacCARTNEY, LAW
OFFICE OF KEVIN D. O'DELL, P.C., and WILLIAM
K. KERRIGAN, individually and doing business as
MacCARTNEY, MacCARTNEY, KERRIGAN &
MacCARTNEY,

No. 14-cv-3925 (NSR)
OPINION & ORDER

Defendants.

NELSON S. ROMAN, United States District Judge
Plaintiff Harold Y. MacCaitney, Jr. brings this action alleging breach of fiduciary duty
and aiding and abetting breach of fiduciary duty, breach of contract, breach of New York
partnership law, unjust emichment, and an accounting claim arising out of the dissolution of a
former law practice partnership. Defendants Kevin D. O'Dell, William K. Kerrigan, and the
Law Offices of Kevin D. O'Dell ("O'Dell Law Office") collectively move to dismiss Plaintiffs
amended complaint (ECF No. 38, or the "Amended Complaint") pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure. 1 (ECF No. 51.) For the following reasons, Defendants'
motion is GRANTED in part and DENIED in part.

BACKGROUND
The following facts are taken from the Amended Complaint unless otherwise noted and
are accepted as true for the purposes of this motion.

1

The Amended Complaint also names Christopher J. Walsh as a defendant; however, Defendant Walsh does not
join in the motion to dismiss. References herein to Defendants exclude Defendant Walsh.

Plaintiff and Defendant Kerrigan were partners in an at-will partnership—MacCartney,
MacCartney, Kerrigan & MacCartney—engaged in the practice of law (the “Old Firm”). (Am.
Compl. ¶ 5.) The Old Firm was formed pursuant to a verbal agreement, and no written
partnership contract exists. (Id. ¶ 10.) Defendant Walsh was employed as an associate at the Old
Firm pursuant to an oral, at-will employment agreement. (Id. ¶ 11.) In 2008, Defendant O’Dell
was hired as an associate by the Old Firm, also pursuant to an oral, at-will employment
agreement. (Id. ¶ 13.) Under the terms of his employment agreement, in the event O’Dell
secured personal injury cases for the Old Firm, the legal fees generated from those cases were to
be divided equally between O’Dell and the Old Firm. (Id.)
In the spring of 2012, Plaintiff advised Kerrigan that he intended to withdraw as a partner
from the Old Firm. (Id. ¶ 14.) Therefore, Plaintiff and Kerrigan set about winding up the affairs
of the Old Firm, which included planning the formation of a successor partnership that would
finish up the affairs of the Old Firm and continue the law practice. (Id.) As a result of
negotiations that took place during the summer of 2012, it was agreed that O’Dell and Walsh
would become partners with Kerrigan and would continue the partnership under the firm’s old
name at the same location without interruption (the “New Firm”). (Id. ¶ 15.) Defendants further
agreed that following their collection of the assets, fees, and debts due the Old Firm; payment of
the debts owed by the Old Firm; and completion of all unfinished business of the Old Firm, the
Old Firm would account and pay to Plaintiff the following:
•

50% of the cash in the Old Firm’s checking and money market accounts as of
September 13, 2013;

•

50% of the fees on hourly fees cases billed, but not yet paid by clients prior to
September 13, 2012, and 50% of the disbursements on those cases;

•

50% of the fees on hourly fee cases billed, but not yet paid by clients prior to
September 13, 2012, and 50% of the disbursements on those cases;
2

•

100% of the fees on hourly fees cases for services performed by Plaintiff prior to
September 13, 2012, but which had not been billed to client, and 50% of the
disbursements on those cases incurred prior to September 13, 2012;

•

25% of contingency fees in personal injury cases originated by O’Dell during
O’Dell’s tenure with the firm from September 2008 to September 13, 2012;

•

50% of contingency fees in personal injury cases originated by Plaintiff or
Kerrigan prior to September 13, 2012; and

•

75% of fees on hourly fee cases for services performed by Plaintiff using Old
Firm’s staff and resources after September 13, 2012 (hereinafter “Plaintiff’s
Payout”). (Id. ¶ 16.)

It was further agreed that Defendants would periodically render to Plaintiff, at Plaintiff’s request,
full statements of amounts still owed pursuant to Plaintiff’s Payout. (Id. ¶ 17.) On or about
September 13, 2012, Plaintiff withdrew from the Old Firm and the New Firm began its
operation. (Id. ¶ 19.) Defendants have continued to carry out the business of the New Firm but
have failed to pay Plaintiff the full amount owed pursuant to Plaintiff’s Payout. (Id. ¶ 21.)
STANDARD ON A MOTION TO DISMISS
“A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1)
when the district court lacks the statutory or constitutional power to adjudicate it.” Nike, Inc. v.
Already, LLC, 663 F.3d 89, 94 (2d Cir. 2011) (internal quotation omitted). “A plaintiff asserting
subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it
exists.” Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008). In assessing
whether there is subject matter jurisdiction, the Court must accept as true all material facts
alleged in the complaint, Conyers v. Rossides, 558 F.3d 137, 143 (2d Cir. 2009), but “the court
may resolve [any] disputed jurisdictional fact issues by referring to evidence outside the
pleadings such as affidavits . . . .” Zappia Middle E. Contr. Co. v. Emirate of Abu Dhabi, 215
F.3d 247, 253 (2d Cir. 2000).

3

Under Rule 12(b)(6), “[t]o survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 566 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
554, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 566 U.S. at 678. Although “a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds
of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation
of the elements of a cause of action will not do.” Starr v. Sony BMG Music Entm’t, 592 F.3d
314, 321 (2d Cir. 2010). A court should accept non-conclusory allegations in the complaint as
true and draw all reasonable inferences in the plaintiff’s favor. Ruotolo v. City of N.Y., 514 F.3d
184, 188 (2d Cir. 2008). “[T]he duty of a court ‘is merely to assess the legal feasibility of the
complaint, not to assay the weight of the evidence which might be offered in support thereof.’”
DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 113 (2d Cir. 2010) (quoting Cooper v. Parsky,
140 F.3d 433, 440 (2d Cir. 1998)). While courts generally review pro se pleadings liberally,
“licensed attorneys proceeding pro se need not be afforded the same” liberal standard. Smith v.
New York Presbyterian Hops., 254 Fed. App’x 68, 70 (2d Cir. 2007).
When ruling on a motion to dismiss for failure to state a claim under Rule 12(b)(6), a
“court may consider the facts as asserted within the four corners of the complaint together with
the documents attached to the complaint as exhibits, and any documents incorporated in the
complaint by reference.” Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57,
64 (2d Cir. 2010) (internal quotation marks and citation omitted). Courts also may consider
“matters of which judicial notice may be taken” and “documents either in plaintiffs' possession

4

or of which plaintiffs had knowledge and relied on in bringing suit.” Brass v. Am. Film Techs.,
Inc., 987 F.2d 142, 150 (2d Cir. 1993). One way a document may be deemed incorporated by
reference is where the complaint “refers to” the document. EQT Infrastructure Ltd. v. Smith, 861
F. Supp. 2d 220, 224 n.2 (S.D.N.Y. 2012). However, factual assertions raised for the first time
in a plaintiff’s opposition papers, including supporting affidavits and exhibits, are not properly
considered by the Court on a motion to dismiss “as that would constitute ‘improper[] reli[ance]
on matters outside the pleadings.’” Universal Trading & Inv. Co. v. Tymoshenko, No. 11-cv7877 (PAC), 2012 WL 6186471, at *1 (S.D.N.Y. Dec. 12, 2012) (quoting Friedl v. City of New
York, 210 F.3d 79, 83-84 (2d Cir. 2000) (internal quotations omitted)).
DISCUSSION
I.

Breach of Fiduciary Duty
Plaintiff’s first cause of action alleges that Defendants breached their fiduciary duties to

him by, among other things, misappropriating fees and property of the Old Firm; failing to
collect fees due the Old Firm; failing to complete the unfinished business of the Old Firm;
withdrawing fees from the bank accounts of the Old Firm for personal use instead of paying out
Plaintiff; and failing to render accountings to Plaintiff. (Am. Compl. ¶ 23.) Defendants contend
that (i) Plaintiff lacks standing to assert claims for breach of fiduciary duty as against Defendant
O’Dell and (ii) the Amended Complaint fails to state a claim for breach of fiduciary duty as
against Kerrigan.
A. Standing—Claim Against O’Dell
The Court must assess whether Plaintiff, a former partner in the Old Firm, has standing to
assert a breach of fiduciary duty claim against O’Dell, a former employee of the Old Firm. With
respect to O’Dell, Plaintiff asserts that an employee owes a fiduciary duty of loyalty to his

5

employer. (Pl.’s Opp. at 18.) Defendants contend, on the other hand, that any breach of
fiduciary duty claim as against O’Dell necessarily belongs to the partnership—the actual
employer—not individual partners, since O’Dell was merely an employee of, not a partner in, the
Old Firm. (Memorandum of Law in Support of Defendants’ Motion to Dismiss the Amended
Complaint (“Defs.’ Mot.”) at 16.) The Amended Complaint alleges that O’Dell was hired as an
associate in the Old Firm in 2008. (Am. Compl. ¶ 13.) O’Dell received a salary from the Old
Firm, as well as a percentage of legal fees obtained from any personal injury cases O’Dell
brought to the Old Firm. (Id.) Plaintiff contends that a fiduciary obligation of O’Dell to Plaintiff
was born out of this “longstanding relationship . . . as friends and business associates who had
practiced law together for many years” in the Old Firm, (id. ¶ 18) and O’Dell breached that
fiduciary obligation by misappropriating fees from the Old Firm and diverting resources and
business opportunities of the Old Firm for personal use and use by the O’Dell Law Office. (Id. ¶
23; Pl.’s Opp. at 18.)
These allegations do not support Plaintiff’s claim that O’Dell breached any sort of duty to
him personally. See Northern Shipping Funds I, LLC v. Icon Capital Corp., 921 F. Supp. 2d 94,
105–06 (S.D.N.Y. 2013) (“a conclusory allegation that the parties developed a relationship of
trust and confidence apart from their contractual relationship is insufficient to plead a fiduciary
relationship and survive a motion to dismiss”) (internal quotation and citation omitted). If
anything, the allegations substantiate a claim that O’Dell breached his duty to the Old Firm.
However, Plaintiff, as a former partner of the Old Firm, cannot maintain a cause of action that
belongs to the partnership. See Handelsman v. Bedford Vill. Assocs. Ltd’ P’ship, 213 F.3d 48, 54
(2d Cir. 2000) (“Under New York law, a partnership cause of action belongs only to the
partnership itself or the partners jointly, and [ ] an individual member of the partnership may

6

only sue and recover on a partnership obligation on the partnership's behalf.”) (internal quotation
and citations omitted). Plaintiff lacks standing to pursue a breach of fiduciary duty claim against
O’Dell, since O’Dell’s alleged wrongs “give rise only to a derivate suit on behalf of the
partnership, and not a private cause of action . . . .” Sterling v. Minskoff, 226 A.D.2d 125, 639
N.Y.S.2d 822, 823 (N.Y. 1996) (citing Strain v. Seven Hills Assocs., 75 A.D.2d 360, 371, 429
N.Y.S.2d 424 (1st Dep’t 1980)). The Court therefore dismisses the breach of fiduciary duty
claim against O’Dell.
B. Merits of Claim Against Kerrigan
During the lifetime of a partnership and prior to any dissolution, “[l]aw partners ‘are
bound by a fiduciary duty requiring “the punctilio of an honor the most sensitive.”’” Gibbs v.
Breed, Abbott & Morgan, 271 A.D.2d 180, 193, 710 N.Y.S.2d 578, 587 (N.Y. 2000) (quoting
Graubard Mollen Dannett & Horowitz v. Moskovitz, 86 N.Y.2d 112, 118, 629 N.Y.S.2d 1009,
653 N.E.2d 1179 (N.Y. 1995) (quoting Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545
(N.Y. 1928))). However, it is well settled that upon notice of dissolution of a partnership,
fiduciary obligations between the partners cease, even though the partnership itself does not
terminate until the affairs are wound up. See Matter of Silverberg, 81 A.D.2d 640, 641, 438
N.Y.S.2d 143 (N.Y. 1981); Morris v. Crawford, 304 A.D.2d 1018, 1021, 757 N.Y.S.2d 383
(N.Y. 2003); Ebker v. Tan Jay Int’l Ltd., 741 F. Supp. 448, 468-89 (S.D.N.Y. 1990) aff’d sub
nom. Ebker v. Tan Jay, 930 F.2d 909 (2d Cir. 1991); Gilmore v. Ham, 142 N.Y. 1, 7, 36 N.E.
826, 828 (N.Y. 1894); Ben Dashan v. Plitt, 58 A.D.2d 244, 249, 396 N.Y.S.2d 542, 546 (4th
Dep’t 1997). “But there is an important exception: they have a continuing duty to each other as
they wind up the partnership’s affairs, including winding up the partnership’s unfinished
business.” Dev. Specialists, Inc. v. Akin Gump Strauss Hauer & Feld LLP, 477 B.R. 318, 327

7

(S.D.N.Y.) opinion amended and superseded, 480 B.R. 145 (S.D.N.Y. 2012) rev’d in part,
vacated in part sub nom. In re Coudert Bros. LLP, 574 F. App’x 15 (2d Cir. 2014) (citing Ajettix
Inc. v. Raub, 9 Misc. 3d 908, 912, 804 N.Y.S.2d 580 (N.Y. Sup. Ct. 2005) (“[O]n dissolution,
partners owe a continuing fiduciary duty to one another with respect to dealings effecting the
winding up of the partnership and the preservation of partnership assets.”); King v. Leighton, 100
N.Y. 386, 3. N.E. 594 (1885)). See also Matter of Silverberg, 81 A.D.2d at 641 (“The partner
charged with winding up the affairs of the partnership still retains a fiduciary duty as an agent of
the remaining partners with respect to the liquidation of the firm.”)
Here, Plaintiff alleges that Kerrigan breached his fiduciary duty to Plaintiff by, among
other things, failing to collect all fees and debts owed to the Old Firm; borrowing money against
a line of credit guaranteed by Plaintiff for the Old Firm; and funding the operations of the New
Firm with funds that should have been distributed to Plaintiff in Plaintiff’s Payout. (Am. Compl.
¶ 23.) These allegations are all directed towards purported wrongdoing by Kerrigan postdissolution, during which time Kerrigan continued to owe Plaintiff a fiduciary duty as he wound
up the affairs of the Old Firm. Further, Plaintiff contends that as a result of Kerrigan’s actions,
Plaintiff suffered damages—in particular, he has yet to receive the funds owed to him from the
dissolution of the Old Firm. The Court therefore finds that the Amended Complaint sufficiently
states a claim for breach of fiduciary duty as against Kerrigan to withstand the motion to dismiss.
II.

Breach of Contract
The Court next turns to Plaintiff’s second cause of action—breach of contract. While the

Amended Complaint is devoid of any reference to a written contract, Plaintiff nevertheless
appears to assert in his opposition brief that a contract was formed during the August 6 Meeting
and that his wife acted as his agent when entering into the contract. (Pl.’s Opp. at 26.) “An

8

agency relationship may be established by conduct, or by written or oral contract.” Pyramid
Champlain Co. v. R.P. Brosseau & Co., 267 A.D.2d 539, 544, 699 N.Y.S.2d 516 (3d Dep’t
1999) (citation omitted). Conduct evidences an agency relationship when it “gives rise to an
appearance and reasonable belief that an agency has been created and the agent possesses the
authority to enter into a transaction.” Id. (internal quotation and citation omitted).
The Amended Complaint is devoid of any factual assertions or evidence from which this
Court could conclude that an agency relationship existed between Plaintiff and his wife. There is
no evidence of a written or oral agreement between Plaintiff and his wife regarding an agency
relationship, nor does the Amended Complaint allege facts substantiating the claim that an
agency relationship arose out of conduct. In fact, as Defendants point out, Plaintiff’s wife’s
presence at the August 6 Meeting is mentioned for the first time in Plaintiff’s opposition brief.
As mentioned supra, facts raised for the first time in a party’s opposition papers are not properly
considered by the Court on a motion to dismiss. Given the absence of factual assertions or
evidence indicating that Plaintiff’s wife acted as his agent, the Court concludes that the Amended
Complaint fails to establish the existence of a contract entered into by Plaintiff and dismisses
Plaintiff’s breach of contract claim.
III.

Accounting
In New York, an at-will partnership “may be terminated by any partner at any time.”

Clapp v. LeBoeuf, Lamb, Leiby & MacRae, 862 F. Supp. 1050, 1057–58 (S.D.N.Y. 1994) aff’d
54 F.3d 765 (2d Cir. 1995) (citing Shandell v. Katz, 95 A.D.2d 742, 464 N.Y.S.2d 177 (1st Dep’t
1983); Malmeth v. Schneider, 18 A.D.2d 1030, 238 N.Y.S.2d 986 (2d Dep’t 1963)). “A
partnership is dissolved when a partner manifests an unequivocal election to dissolve the
partnership.” Kitty Walk Sys., Inc. v. Midnight Pass Inc., 431 F. Supp. 2d 306, 311 (E.D.N.Y.

9

2006) (internal quotation and citation omitted). Post-dissolution, the “sole method for winding
up a partnership or a joint venture is through an accounting to determine the parties’ rights.” Id.
(citing Ebker, 741 F. Supp. at 470).
To successfully allege a claim for accounting, a litigant must establish that he or she is
entitled to an accounting. Sriraman v. Patel, 761 F. Supp. 2d 7, 17 (E.D.N.Y.) amended, 761 F.
Supp. 2d 23 (E.D.N.Y. 2011) (citing Wood v. Cross Properties, Inc., 5 A.D.2d 853, 171
N.Y.S.2d 338 (2d Dep’t 1958)). Such an entitlement stems from the existence of a fiduciary
relationship between a plaintiff and a defendant and a corresponding breach of that duty. See
Sriraman, 761 F. Supp. 2d at 17 (citing Village of Hoosick Falls v. Allard, 249 A.D.2d 876, 879,
672 N.Y.S.2d 447, 449 (3d Dep’t 1998)); Faulkner v. Arista Records LLC, 602 F. Supp. 2d 470,
484 (S.D.N.Y. 2009) (“Proof of a fiduciary relationship is a mandatory element of an accounting
claim under New York law.”); Soley v. Wasserman, 832 F. Supp. 2d 221, 237 (S.D.N.Y. 2011)
(“Under New York law, a plaintiff seeking an accounting, which is an equitable remedy, must
allege both a fiduciary relationship between the plaintiff and defendant and a breach of that
fiduciary duty by the defendant.”) (internal quotation and citation omitted).
Here, the parties do not dispute that the Old Firm was an at-will partnership given that
Plaintiff and Kerrigan operated as law partners absent any written partnership agreement.
Furthermore, the parties do not dispute that Plaintiff’s withdrawal as a partner from the Old Firm
on or about September 13, 2012 operated to dissolve the Old Firm. Therefore, an accounting is
necessary to wind up the affairs of the Old Firm. Plaintiff contends, however, that Defendants
have failed to render a full accounting to Plaintiff and consequently asserts a claim for
accounting in the present action. Defendants advance several grounds for dismissal of Plaintiff’s
accounting claim. First, with respect to O’Dell and the O’Dell Law Office, Defendants contend

10

that no fiduciary relationship exists between Plaintiff and those Defendants entitling Plaintiff to
an accounting. Second, Kerrigan asserts that he has already provided Plaintiff with a full
accounting as it relates to the Old Firm, thereby rendering Plaintiff’s accounting claim moot.
A. Claim Against O’Dell and the O’Dell Law Office
“Where a party bringing an action for an accounting has ‘failed to allege the existence of
a fiduciary or otherwise confidential relationship . . . the accounting claim merits dismissal.’”
Sarafianos v. Shandong Tada Auto-Parking Co., No. 13-cv-3895 (SAS), 2015 WL 2198499, at
*3 (S.D.N.Y. May 8, 2015) (quoting Ellington Credit Fund, Ltd. v. Select Portfolio Servicing,
Inc., 837 F. Supp. 2d 162, 207 (S.D.N.Y. 2011) (citing Stadt v. Fox News Network LLC, 719 F.
Supp. 2d 312, 323 (S.D.N.Y. 2010))). For the reasons discussed in Section I.A supra, neither
O’Dell nor the O’Dell Law Office owes a fiduciary duty to Plaintiff in his personal capacity.
Therefore, the Court dismisses Plaintiff’s accounting claim as against those Defendants.
B. Claim Against Kerrigan
While no fiduciary relationship ever existed between Plaintiff and O’Dell or Plaintiff and
the O’Dell Law Office, it is undeniable that Plaintiff and Kerrigan owed one another fiduciary
duties as partners in the Old Firm. See Sriraman, 761 F. Supp. 2d at 17 (“It is axiomatic that
partners maintain a fiduciary relationship with regard to the affairs of the partnership.”) (citing
Tucker Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 972-73 (2d Cir. 1989)). Plaintiff is
therefore entitled to an accounting from Kerrigan with respect to the Old Firm.
“Once a plaintiff establishes that he has a right to an accounting, the second step is for the
Court to ‘true-up’ the partners’ individual accounts to make sure that each has been allocated his
fair share of partnership distributions . . . .” Sriraman, 761 F. Supp. 2d at 17. “In making this
determination, the Court can consider clerical errors in allocations to the individual accounts;

11

breaches of any partnership agreement or of fiduciary duty or fraud committed by one partner
against another; diversion or non-contribution of assets that should be within the partnership; or
any other matters necessary to restore the individual accounts to the level established by the
partners’ agreement or the law.” Id. (citing Wilde v. Wilde, 576 F. Supp. 2d 595, 607–08
(S.D.N.Y. 2008); Vinlis Constr. Co. v. Roreck, 30 A.D.2d 668, 668, 291 N.Y.S.2d 924 (2d Dep't
1968)). The Court may also evaluate whether certain contested assets should be subject to
distribution. Id.
While Defendants contend that Plaintiff’s claim for an accounting is moot based upon
Kerrigan’s December 10, 2014 accounting (see Defs.’ Mot., Exhibit E, ¶ 4), Plaintiff contends
that Defendants have failed to pay him money owed pursuant to Plaintiff’s Payout. (Pl.’s Opp. at
11–12.) Moreover, there appears to be a disagreement between the parties as to the distribution
of certain assets of the Old Firm, such as fees generated in contingency cases. (See Pl.’s Opp. at
13.) Finally, Plaintiff contends that the accounting provided by Kerrigan is “incomplete”
because it does not reflect certain funds used to operate the New Firm. (Pl.’s Opp. at 15.) The
Court is not in a position to “true-up” the partnership assets of the Old Firm at this stage of the
litigation prior to discovery and declines to rely solely upon Kerrigan’s self-serving statement in
an affidavit, which the Court notes does not even outline the details of the accounting but merely
states in conclusory fashion that an accounting was provided to Plaintiff. Therefore, the Court
denies Defendants’ motion to dismiss Plaintiff’s accounting claim against Kerrigan.
IV.

Breach of New York Partnership Law
At the third cause of action, Plaintiff asserts a breach of New York Partnership Law,

though the Amended Complaint does not cite any particular provision. (Am. Compl. ¶¶ 27-28.)
Based upon this Court’s review of Plaintiff’s opposition papers, it appears that this claim is

12

intended to be an alternative grounds for Plaintiff’s claim to an accounting right, albeit a
statutory one, pursuant to New York Partnership Law §§ 43, 44, and 74. Section 74 of New York
Partnership Law provides for a statutory right to accounting upon dissolution of a partnership.
See Soley v. Wasserman, No. 08-cv-9262 (KMW) (FM), 2013 WL 5780814, at *2 (S.D.N.Y.
Oct. 24, 2013) aff'd, No. 14-cv-2820, 2016 WL 321176 (2d Cir. Jan. 27, 2016) (citing N.Y.
P'ship. Law § 74). Additionally, “sections 43 and 44 of the partnership statute allow for an
accounting—even absent dissolution—where a partner alleges a breach of fiduciary duty or a
wrongful exclusion, when such is provided for by agreement, or where otherwise ‘just and
reasonable.’” Scholastic, Inc. v. Harris, 259 F.3d 73, 91 (2d Cir. 2001) (citing N.Y. Partnership
Law §§ 43, 44). For the reasons stated in Section III.B supra, Plaintiff has a valid accounting
claim pursuant to New York Partnership Law as against Kerrigan.
V.

Aiding and Abetting Breach of Fiduciary Duty
Plaintiff’s fifth cause of action states that the O’Dell Law Office aided and abetted

O’Dell’s breach of fiduciary duty. “A claim for aiding and abetting a breach of fiduciary duty
requires: (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, 307 A.D.2d 113, 125, 760 N.Y.S.2d 157 (1st Dep’t 2003) (citations
omitted). In light of the fact that this Court previously concluded that O’Dell does not owe a
fiduciary duty to Plaintiff, the Court accordingly dismisses Plaintiff’s claim that the O’Dell Law
Office aided and abetted O’Dell’s breach of fiduciary duty.
VI.

Unjust Enrichment
Finally, Plaintiff’s sixth cause of action sets forth a claim for unjust enrichment. Unjust

enrichment is a quasi-contract claim and operates as “‘an obligation imposed by equity to

13

prevent injustice, in the absence of an actual agreement between the parties.’” Georgia Malone
& Co. v. Rieder, 19 N.Y.3d 511, 516, 973 N.E.2d 743, 746 (N.Y. 2012) (quoting IDT Corp. v.
Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 142, 879 N.Y.S.2d 355, 907 N.E.2d 268
(N.Y. 2009)). To successfully assert a claim for unjust enrichment, a party must allege the
following: “(1) the other party was enriched, (2) at that party’s expense, and (3) that it is against
equity and good conscience to permit the other party to retain what is sought to be recovered.”
Georgia Malone, 19 N.Y.3d at 516. While “a plaintiff need not be in privity with the defendant
to state a claim for unjust enrichment,” the relationship between the parties must not be “too
attenuated.” Sperry v. Crompton Corp., 8 N.Y.3d 204, 215–16, 863 N.E.2d 1012, 1018 (N.Y.
2007). See also Laydon v. Mizuho Bank, Ltd., No. 12-cv-3419 (GBD), 2014 WL 1280464, at
*13 (S.D.N.Y. Mar. 28, 2014) (quoting Reading Int’l, Inc. v. Oaktree Capital Mgmt., 317 F.
Supp. 2d 301, 334 (S.D.N.Y. 2003) (“An unjust enrichment claim, however ‘requires some type
of direct dealing or actual, substantive relationship with a Defendant.’”).
Defendants argue that Plaintiff’s unjust enrichment claim fails because Plaintiff has failed
to allege a sufficiently close relationship between Plaintiff and the Defendants. (Defs.’ Mot. at
28.) Though the Court previously concluded that no fiduciary relationship existed between
Plaintiff and O’Dell, there nevertheless exists a sufficiently close relationship between the parties
as alleged in the Amended Complaint at this stage of the litigation. O’Dell was an employee in
the Old Firm, in which Plaintiff and Kerrigan were partners. O’Dell and Kerrigan intended to
continue the practice of the Old Firm upon Plaintiff’s resignation, and as part of the winding up
of the Old Firm, Plaintiff was to be compensated for services previously rendered. Plaintiff
relied upon that representation in delivering to O’Dell files, assets, bank accounts, receivables,
business and financial records, furniture, fixtures and equipment of the Old Firm. Consequently,

14

Defendants cannot disclaim the existence of a sufficiently close relationship—“this is not a case
in which the parties are simply to[o] far removed from one another for an unjust enrichment
claim to stand.” Amusement Indus., Inc. v. Midland Ave. Assocs., LLC, 820 F. Supp. 2d 510, 537
(S.D.N.Y. 2011) (internal quotation and citation omitted). Moreover, Plaintiff alleges a
sufficiently close relationship between Plaintiff and Kerrigan given that they were partners in the
Old Firm.
Defendants additionally assert that Plaintiff’s unjust enrichment claim is duplicative of
Plaintiff’s contract claim. (Defs.’ Mot at 26.) The Court finds this argument unavailing.
Defendants cannot simultaneously claim the benefit of asserting no contract existed with respect
to Plaintiff’s breach of contract claim and assert that Plaintiff’s unjust enrichment claim is
duplicative of the breach of contract claim. Either a contract exists entitling Plaintiff to proceed
on a breach of contract theory or no contract exists (or there is a dispute as to whether one
exists), which may permit recovery under an unjust enrichment theory. See Barbagallo v.
Marcum LLP, 820 F. Supp. 2d 429, 447 (E.D.N.Y. 2011) (holding that plaintiff’s “unjust
enrichment claim is not categorically barred” as “there is no valid contract”).
The Court finds that Plaintiff has sufficiently alleged the elements of an unjust
enrichment claim at this stage of the litigation. Construing the allegations in the Amended
Complaint in the light most favorable to Plaintiff, it appears that Defendants misappropriated
fees, assets, and funds from the Old Firm; failed to pay out Plaintiff from the funds of the Old
Firm following its dissolution; and instead utilized the assets and funds of the Old Firm to
operate the New Firm. (Am. Compl. ¶¶ 38–39.) In sum, Defendants were enriched at Plaintiff’s
expense. Accordingly, the Court denies Defendants’ motion to dismiss the unjust enrichment
claim.

15

VII.

Amending the Complaint
In his opposition brief, Plaintiff requests that this Court grant him leave to amend the

Amended Complaint. (Pl.’s Opp. at 34-35.) As Defendants point out, Plaintiff has already twice
amended the complaint and the opposition brief contains no description of the amendments
Plaintiff proposes to make. (Reply at 27-28.) Plaintiff has provided this Court with nothing to
evaluate the futility of the proposed amendments, and the Court accordingly denies this request.
CONCLUSION
For the foregoing reasons, Defendants’ motion to dismiss is GRANTED in part and
DENIED in part. Plaintiff’s claims are resolved as follows:
•

Breach of fiduciary duty claim is DISMISSED as against O’Dell and the O’Dell Law
Office;

•

Breach of contract claim is DISMISSED as against Kerrigan, O’Dell, and the O’Dell
Law Office;

•

Accounting claim is DISMISSED as against O’Dell and the O’Dell Law Office;

•

Breach of New York Partnership Law claim is DISMISSED as against O’Dell and the
O’Dell Law Office; and

•

Aiding and abetting breach of fiduciary duty claim is DISMISSED as against the
O’Dell Law Office.

The Court DENIES Defendants’ motion to dismiss Plaintiff’s unjust enrichment claim.
Consequently, the remaining claims against Kerrigan are for breach of fiduciary duty,
accounting, breach of New York Partnership Law, and unjust enrichment. The remaining claim
against O’Dell and the O’Dell Law Office is for unjust enrichment. Defendants are directed to
file answers to their respective remaining claim(s) within 30 days hereof. Defendant Walsh,
having not moved to dismiss any claims in the Amended Complaint, is directed to file an answer
to the Amended Complaint within 30 days hereof. The parties are directed to contact the

16

chambers of Magistrate Judge Paul E. Davison to schedule a conference. Parties shall bring an
amended case management plan to that conference. The Comt respectfully directs the Clerk to
terminate the motion at ECF No. 51.

Dated:

SO ORDERED:

FebruaryL'.7,' 2016
White Plains, New York

United States District Judge

17