Opinion
April 11, 1995
Appeal from the Supreme Court, New York County (Kristin Booth Glen, J.).
The IAS Court correctly held that nothing in the agreement between defendants sponsor of the cooperative conversion and plaintiffs selling agent expressly or impliedly required defendants to settle on plaintiffs' behalf any claims brought against them by third parties, or otherwise put defendants in a fiduciary relationship with plaintiffs. The parties' relationship, as defined by their unambiguous contract, was rather that of principal and agent, and did not, as the IAS Court aptly put it, require defendants, as the principal, to "subordinate [their] interest for that of [their] agent by compromising [their] own chances for an optimal settlement" in the Martin Act proceeding that was brought by the Attorney-General. Nor does the Martin Act itself make the sponsor a fiduciary of the selling agent, and, as the IAS Court held, neither is such a relationship shown by plaintiffs' allegations concerning the parties' past business dealings. Concerning plaintiffs' motion to amend their complaint, their argument on appeal is limited to the denial of the proposed amendment of the fourth cause of action, no argument being offered with respect to the addition of the proposed fifth and sixth causes of action for fraud. Notwithstanding the policy liberally favoring the granting of permission to amend pleadings, it was a proper exercise of discretion to refuse the proposed amendment to the fourth cause of action in view of the lack of any substance to a claim for breach of contract and fiduciary duty.
Concur — Sullivan, J.P., Rosenberger, Ellerin and Williams, JJ.