This matter comes before the Court on a motion by Defendants seeking summary judgment dismissing the Complaint. Plaintiff has opposed the motion. The Complaint includes claims sounding in conversion, tortious interference with contract, tortious interference with economic advantage, unfair competition, breach of fiduciary duty, injurious falsehood, and declaratory judgment/injunction. This matter arises from actions taken by Defendants following the termination of defendant Zahdan's employment with Plaintiff.

In response to the defense motion, Plaintiff has withdrawn its claims for tortious interference with contract and economic advantage, injurious falsehood, and declaratory judgment/injunction. The analysis here will therefore concern only the claims of conversion, unfair competition, and breach of fiduciary duty.

The basic standard to be applied by a court addressing a summary judgment motion is well established. The proponent of a summary judgment motion carries the initial burden to make a prima facie showing of entitlement to judgment as a matter of law by presenting sufficient evidence to eliminate any material issues of fact (Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851 [1985]). If the requisite showing is made, the burden of proof then shifts to the responding party or parties to show the presence of questions of fact requiring trial (Alvarez v. Prospect Hosp., 68 NY2d 320 [1986]). The facts must be construed in a light most favorable to the non-moving party (see e.g. Hanna v. St. Lawrence County, 34 AD3d 1146 [3d Dept 2006]).

Conversion. A conversion occurs when a person intentionally and without authority assumes control over personal property belonging to someone else, to the exclusion of the owner's rights (State of New York v. Seventh Regiment Fund (98 NY2d 249, 259 [2002]). The claim of conversion here involves two categories of personal property: (1) paper files containing [*2]various documents pertaining to Annur students and (2) a portable computer hard drive containing school administration files and documents. Although not specified in the Complaint or discovery responses, Plaintiff also refers to Zahdan deleting files from the computer located in her office at Annur.

Defendants argue no conversion occurred here. With regard to the paper files, Defendants note that the files contained confidential information about students' families that had been entrusted to Zahdan in her role as vice principal and that the files were returned to Plaintiff. Defendant also argue that Plaintiff cannot specifically identify what property belonging to Plaintiff was in the files. With regard to the hard drive, Defendants point out that the drive itself belonged to Zahdan. Zahdan also testified in deposition that she did not delete files from her office computer, and indeed, that it was impossible for her to delete files completely from the Annur computer system. She testified that she deleted only school files from her portable drive because they were no longer useful to her.

If a defendant's initial possession of property is lawful, conversion occurs when there is a refusal to return the property (Ciprich v. Atwood, 163 AD3d 1332 [3d Dept 2018]) (Id. at 1334). Plaintiff argues that Zahdan's possession of the files was not lawful, because she took the paper files "immediately after she was notified that her contract was not going to be renewed." The letter from the school informing Zahdan that her contract would not be renewed states she can collect her final paycheck after June 30, subject to her returning all Annur property in her possession. The parties agree that Zahdan took the files on her last day in the employ of Annur, so her initial possession was, at least technically, lawful. The parties further agree that the files were kept locked in an automobile belonging to Hawana for approximately ten days while he and Zahdan were out of town, and that they were returned to Plaintiff upon request. Plaintiff's office manager, Khadiza Hossain testified in deposition that she knew of only one file that was missing after Zahdan left. She further testified that when it was returned, she had no way of knowing if any contents were missing from the file.

As to the flash drive, and indeed, the allegation that Zahdan deleted files from her office computer, the Court notes that Plaintiff's witnesses in deposition could only vaguely identify what computer files were missing. Perhaps more importantly, both witnesses testified that whatever documents were missing were recreated from other sources belonging to Plaintiff. It is thus apparent that Zahdan did not assume control over Plaintiff's property to the exclusion of Plaintiff's rights since Plaintiff still possessed the information Zahdan is accused of taking. On this record, Defendants are correct that no conversion of school property occurred.

Unfair Competition. A claim of unfair competition asserts the misappropriation by the defendant of a commercial advantage belonging to the plaintiff through exploiting the plaintiff's proprietary information, labor, skill, and money to the defendant's advantage (see Macy's, Inc. v, Martha Stuart Living Omnimedia, Inc., 127 AD3d 48 [1st Dept 2015]; Anesthesia Assoc. of Mount Kisco, LLP v. Northern Westchester Hosp. Ctr., 59 AD3d 473 [2d Dept 2009]). In this case, Plaintiff alleges that Defendants misappropriated Plaintiff's confidential school records, that they used that information to reach out to families of Annur students to solicit them to attend Bright Hope Center, the new school established by Zahdan and Hawana, and that they spread harmful misinformation about Annur. Defendants argue on this motion that there is no evidence in the record to support Plaintiff's claims.

In his deposition testimony, Plaintiff's board president Mohamed Osman shows a nearly complete lack of direct knowledge as to any of the conduct alleged. Instead, his testimony is [*3]replete with self-admitted speculation. When office manager Khadiza Hossain asked if any parents had told her that Zahdan was maligning Annur or attempting to convince them to send their children to defendant Bright Hope, she consistently testified that she could not recall. The documents submitted by Plaintiff in discovery include copies of email communications referenced by Plaintiff. A full reading of these, however, shows that they contain only speculation that amounts to gossip from unnamed third-party sources. The arguments of Plaintiff's counsel notwithstanding, Defendants are correct; the record here lacks admissible evidence to support a claim of unfair competition.

Breach of Fiduciary Duty. Plaintiff's claim for breach of fiduciary duty is based on the alleged theft of confidential and proprietary information by Zahdan and Hawana, and their use of that information to promote Bright Hope and to harm Annur. Based on the discussion above, none of these allegations find evidentiary support in the record, so that this claim cannot survive the defense motion.

The parties' remaining contentions have been considered, but do not alter the outcome of this motion. Therefore, in consideration of the foregoing, it is hereby

ORDERED, that Defendants' motion for summary judgment is granted, and the Complaint in this action is hereby dismissed.

Notice of Motion; Affirmation of Ronald G. Dunn, Esq., with annexed exhibits; Affidavit of Elizabeth Zahdan; Affidavit of Walid Hawana; Affidavit of Durresameen Kahn-Malik; Affidavit of Tariq Malik; Memorandum of Law; Affirmation of Ryan Finn, Esq.; Reply Memorandum of Law.