Hearst Mags. v. Greenstone/Fontana Corp. ( 2016 )

Hearst Mags. v Greenstone/Fontana Corp. (2016 NY Slip Op 04132)

Hearst Mags. v Greenstone/Fontana Corp.

2016 NY Slip Op 04132

Decided on May 31, 2016

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on May 31, 2016
Tom, J.P., Mazzarelli, Andrias, Manzanet-Daniels, Gesmer, JJ.

1306 101809/10

[*1]Hearst Magazines, etc., Plaintiff-Respondent,

v

Greenstone/Fontana Corp., et al., Defendants, Jeanne Fontana, Defendant-Appellant.

Peter C. Kaiteris, P.C., Bayport (Peter C. Kaiteris of counsel), for appellant.

Law Offices of Bernard D'Orazio & Associates, P.C., New York (Bernard D'Orazio of counsel), for respondent.

Judgment, Supreme Court, New York County (Saliann Scarpulla, J.), entered March 4, 2015, after a bench trial, in favor of plaintiff and against, inter alia, defendant Jeanne Fontana in the aggregate amount of $88,353.81, unanimously affirmed, with costs.

As a general matter, the unasserted claim by plaintiff magazine against its frequent advertiser would not constitute a cognizable claim for damages (see Phillips-Smith Specialty Retail Group II v Parker Chapin Flattau & Klimpl, 265 AD2d 208, 210 [1st Dept 1999], lv denied 94 NY2d 759 [2000]). Moreover, where the funds were converted by defendant advertising agency, but the ad for which it received the funds nevertheless ran, there is no claim for conversion of the funds (see generally Hillsley v State Bank of Albany, 24 AD2d 28, 30 [1st Dept 1965]).

However, where, as here, a fiduciary profits from a breach of loyalty, those profits must be paid over to the principal (see Tsutsui v Barasch, 67 AD3d 896, 898-899 [2d Dept 2009]). Accordingly, the trial court properly entered judgment in

plaintiff's favor in the amount of the ill-gotten proceeds.

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MAY 31, 2016

CLERK