New York Business Litigation Lawyer Blog
A New York City Commercial Division judge refused to dismiss a host of claims, including unfair competition, alleged by a potential property buyer against a broker. The court held that the broker’s “longstanding business and personal relationship with FCC’s [buyer] principals, during which FCC provided use of its office space, internet, phones, real estate software to Mr. Schwartz [broker] in exchange for his consultation and brokering of various deals which extended up until 2021. Under these facts, it is clear that a special, continuous fiduciary relationship existed between Mr. Schwartz and FFC at the time the information including the price they were negotiating a contract for about the Property was conveyed to him. Instead of keeping this critically sensitive proprietary information private, Mr. Schwartz breached his fiduciary duty to FFC by giving this information to a competitor and encouraging them to purchase the Property for a few hundred thousand dollars more so that he would get paid a substantial commission.”
This case is a bit unusual in that fiduciary relationships are typically found in a special relationship based at least in part on one party’s superior knowledge and the other party’s reliance. Fiduciary duties are not found in run-of-the-mill relationships, including those concerning brokers (not always as we see here). Based on how this decision was written makes clear that the judge was offended by the broker’s conduct.
Four Five Capital LLC v. Schwartz