Summary
holding that information obtained from medical records was intangible and therefore could not be the subject of a conversion claim
Summary of this case from Dickerson v. TLC Lasik CentersOpinion
December 18, 1995
Appeal from the Supreme Court, Richmond County (Sangiorgio, J.).
Ordered that the order is modified by deleting the provisions thereof which granted the branches of the defendants' motions which were to dismiss the fourth, fifth, and sixth causes of action for unfair use of trade secrets, unfair competition, and fraud, and substituting therefor a provision denying those branches of the defendants' motions; as so modified, the order is affirmed insofar as appealed from, with one bill of costs to the plaintiff payable by the defendants appearing separately and filing separate briefs.
The Supreme Court properly determined that the documentary evidence consisting of the agreement to "negotiate in good faith to arrange a more formal agreement" for the sale of the plaintiff's decedent's orthopedic practice constituted a complete defense as a matter of law to the first cause of action alleging breach of contract and seeking compensatory damages ( see, Leon v Martinez, 84 N.Y.2d 83; Goodstein Constr. Corp. v City of New York, 80 N.Y.2d 366; Martin Delicatessen v Schumacher, 52 N.Y.2d 105, 109-110; Willmott v Giarraputo, 5 N.Y.2d 250, 253; Lo Cascio v James V. Aquavella, M.D., P.C., 206 A.D.2d 96, 99; McGee Gelman v Park View Equities, 187 A.D.2d 1012, 1013; see also, General Obligations Law § 5-701 [a] [10]).
In addition, the Supreme Court properly determined, based on the documentary evidence, that the complaint failed to state a cause of action for conversion, inasmuch as the defendants agreed to and arranged for the return of all medical records and patient lists and vacated the premises upon the plaintiff's demand ( see, Sporn v MCA Records, 58 N.Y.2d 482, 487; Mauro v Andrews, 200 A.D.2d 392). While the plaintiff claims that the conversion cause of action remains viable because the defendants continued to use information that they learned from such documents, this amounts to a claim for conversion of intangible property which is not actionable under New York law ( see, MBF Clearing Corp. v Shine, 212 A.D.2d 478). Therefore, the second cause of action was properly dismissed.
Nonetheless, in light of the allegations that the defendants have continued to use information, inter alia, from patient lists to solicit the decedent's former patients, the Supreme Court erred in dismissing the fourth and fifth causes of action for unfair use of trade secrets and unfair competition ( see, Ashland Mgt. v Janien, 82 N.Y.2d 395, 407; Leo Silfen, Inc. v Cream, 29 N.Y.2d 387, 392-393; Montrallo v Fritz, 176 A.D.2d 1215; Capitaland Heating Cooling v Capitol Refrig. Co., 134 A.D.2d 721, 722; Allan Dampf, P.C. v Bloom, 127 A.D.2d 719, 720; see also, Matter of American Preferred Prescription v Health Mgt., 186 B.R. 350; compare, Brian E. Weiss, D.D.S., P.C. v Miller, 166 A.D.2d 283, affd 78 N.Y.2d 979).
The allegations in the sixth cause of action that the defendants promised to pay fair market value for the practice which induced the plaintiff to enter into the agreement to negotiate a more formal agreement, and to allow the defendants to utilize the decedent's office and equipment and service the decedent's former patients, adequately state a cause of action for fraud ( see, Urban Holding Corp. v Haberman, 162 A.D.2d 230, 231; Rogal v Wechsler, 135 A.D.2d 384; Brown v Lockwood, 76 A.D.2d 721, 730).
We have considered the plaintiff's remaining contention and find it to be without merit ( see, CPLR 3211 [e]; Bardere v Zafir, 63 N.Y.2d 850, 851-852). Mangano, P.J., Bracken, Rosenblatt and Hart, JJ., concur.