Wiener v. Lazard Freres & Co.
Supreme Court of New York, Appellate Division
672 N.Y.S.2d 8 (1998)
Wiener and others (plaintiffs) are partners in a realty company that owned an office building on which Crossland Federal Savings Bank (Crossland) held a mortgage. After defaulting, the partnership filed for bankruptcy. The plaintiffs ensured the property was transferred to Crossland in exchange for the discharge of personal guaranties. The plaintiffs contacted Lazard Freres & Co. (Lazard) (defendant) about financing a settlement offer with Crossland that would allow them to keep the building. Lazard agreed to provide $45 million in a commitment letter in exchange for a $300,000 application fee “deemed fully earned by [Lazard].” Lazard requested information about the property that the plaintiffs considered confidential and refused to disclose until after the letter was issued. Crossland refused the offer, and a Lazard executive took over negotiations for the plaintiffs. The plaintiffs claim that instead, Lazard negotiated a deal with Crossland for another company using the plaintiff’s confidential information. The plaintiffs sued Lazard for unjust enrichment and breach of fiduciary duty. Lazard moved for dismissal because (1) its defense was rooted in documentary evidence, (2) the complaint did not state a cause of action, and (3) the complaint did not adequately set out the breach of fiduciary claim. The plaintiffs amended the complaint with additional facts and an unfair competition claim. The court granted the motions to dismiss as against the amended complaint. The plaintiffs appealed to the Supreme Court of New York, Appellate Division.
Rule of Law
Holding and Reasoning (Milonas, J.)
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