You are here: / / THE COMPLAINT STATED CAUSES OF ACTION FOR BREACH OF FIDUCIARY DUTY, FRAUD,...
, , , , ,

THE COMPLAINT STATED CAUSES OF ACTION FOR BREACH OF FIDUCIARY DUTY, FRAUD, CONSTRUCTIVE FRAUD AND MUTUAL MISTAKE; PLAINTIFFS-PHYSICIANS ALLEGED THE FORMS THE EMPLOYER REQUIRED THEM TO SIGN CONSENTING TO THE DISTRIBUTION (TO THE EMPLOYER) OF THE PROCEEDS OF THE DEMUTUALIZATION OF THE MEDICAL MALPRACTICE INSURER WERE INVALID (FIRST DEPT).

The Frist Department, reversing (modifying) Supreme Court, determined the complaint by physicians against their employer/malpractice-insurance-policy-administrator stated causes of action for breach of fiduciary duty, fraud and mutual mistake. The dispute centers on whether the physicians or the employer which paid the malpractice insurance premiums are/is entitled to the proceeds when the insurer (MLMIC) demutualized. The employer had the physicians sign forms consenting to distributing the proceeds to the employer. The physicians allege the consent forms are invalid:

Plaintiffs allege that the forms by which they authorized MLMIC to distribute their demutualization proceeds to defendant are invalid because defendant obtained them in breach of its fiduciary duty, by fraud, or due to mutual mistake. If these forms are invalid, then the demutualization proceeds belong to plaintiffs … .

Transactions between a fiduciary and beneficiary are voidable if the fiduciary acts in its own interest and does not fully disclose all material facts … . Defendant is alleged not only to have withheld the policyholder information statement from plaintiffs, but to have significantly misrepresented their contents for its own gain. These allegations, which are not conclusively refuted by the documentary evidence, are sufficient to survive a motion to dismiss.

Fraud is another basis for rescinding the consent forms … . Plaintiffs also properly allege constructive fraud, because they were owed a fiduciary duty by defendant and so were “warranted to . . . relax the care and vigilance they would ordinarily exercise in the circumstances” … . …

Mutual mistake “may not be invoked by a party to avoid the consequences of its own negligence” … . For the purposes of this motion to dismiss, however, it cannot be said as a matter of law that plaintiffs were negligent … . Cordaro v AdvantageCare Physicians, P.C., 2022 NY Slip Op 05267, First Dept 9-27-22

Practice Point: The complaint adequately alleged the employer, which also served at the medical malpractice insurance policy administrator, breached a fiduciary duty owed to the plaintiffs-physicians by requiring them to consent to the distribution (to the employer) of the proceeds of the demutualization of the medical malpractice insurance carrier. The complaint also sufficiently alleged fraud, constructive fraud and mutual-mistake causes of action.

 

You might also like
HERE DISCLAIMERS WERE UNNECESSARY BECAUSE THE ACTIVITY WHICH LED TO INJURY WAS NOT WITHIN THE OVERALL SCOPE OF THE POLICY-COVERAGE; HAD THE DISCLAIMERS BEEN BASED UPON AN EXCLUSION FROM COVERAGE, AS OPPOSED TO THE OVERALL SCOPE OF THE COVERAGE, THEY WOULD HAVE BEEN INVALID AS UNTIMELY.
DEFENDANT’S MOTION TO DISMISS THE COMPLAINT FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED, DEFENDANT’S ONLY CONNECTION TO THE CORPORATION WHICH HAD CONTACTS WITH NEW YORK WAS HIS SALARY; THEREFORE THE CORPORATION’S NEW YORK CONTACTS COULD NOT BE IMPUTED TO DEFENDANT (FIRST DEPT).
No Liability for Third Party Attack Inside Apartment Building; No Evidence Defendant Aware of Alleged Door-Lock Defect
DEFENDANTS DID NOT DEMONSTRATE AS A MATTER OF LAW THAT THERE WAS PROBABLE CAUSE FOR PLAINTIFF’S ARREST FOR THE CHARGED CRIMES OR FOR ANY UNCHARGED CRIMES; DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).
CERTAIN CAUSES OF ACTION IN COMPLAINTS ALLEGING THE STATE HAS FAILED TO ADEQUATELY FUND NEW YORK CITY PUBLIC SCHOOLS ADEQUATELY PLED; MUNICIPALITY (CITY OF YONKERS), HOWEVER, DID NOT HAVE STANDING TO SUE.
WHEN THE CONTRACTOR’S EMPLOYEE ARRIVED TO CLEAN THE TANK, THE OPENING WAS COVERED ONLY BY CARDBOARD; AFTER FINISHING THE WORK, THE EMPLOYEE REPLACED THE CARDBOARD COVER; PLAINTIFF SUBSEQUENTLY STEPPED ON THE CARDBOARD AND FELL INTO THE TANK; THE CONTRACTOR’S EMPLOYEE DID NOT LAUNCH AN INSTRUMENT OF HARM WITHIN THE MEANING OF ESPINAL, 98 NY2D 140 (FIRST DEPT).
CHILD ABUSE ALLEGATIONS SUPPORTED BY A PREPONDERANCE OF THE EVIDENCE, NO NEED TO DEMONSTRATE WHICH OF THE TWO RESPONDENTS ABUSED THE CHILD (FIRST DEPT).
THE RECENT US SUPREME COURT CASE HOLDING THAT A STATE MUST CONSENT TO SUIT AGAINST IT IN A SISTER STATE DID NOT AFFECT THE DOCTRINE OF “WAIVER OF SOVEREIGN IMMUNITY;” HERE NEW JERSEY WAIVED THE DOCTRINE BY PARTICIPATING IN THE FIRST TRIAL OF THIS TRAFFIC ACCIDENT CASE (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

THE INSURED MISREPRESENTED HER HOME ADDRESS AND THE INSURERS DISCLAIMED COVERAGE;... THE CERTIFICATES OF ACKNOWLEDGMENT FOR THE DEED AND OTHER DOCUMENTS DEMONSTRATING...