This matter comes before the Court on the motion of Defendant to dismiss the Complaint in this action pursuant to CPLR 3211(a)(1) & (a)(7). Plaintiff has opposed the motion. The case arises from events surrounding Plaintiff's exit from the business known as J&M Automotive, Inc. The Complaint contains nine causes of action, sounding in breach of contract, declaratory judgment, recission, breach of fiduciary duty, negligent misrepresentation, fraud, unjust enrichment, and breach of fiduciary obligations to the corporation. Both sides acknowledge the overarching principle on a CPLR 3211 motion that the Court must accept the facts as alleged in the Complaint as true, accord Plaintiff the benefit of every possible favorable inference and determine only whether the allegations fit within any cognizable legal theory (Leon v. Martinez, 84 NY2d 83, 88 [1993]).

Defendants' CPLR 3211(a)(1) motion. A motion to dismiss based on documentary evidence can be granted only where the documentary evidence submitted "utterly refutes plaintiff's factual allegations" (Goshen v. Mutual Life Ins. Co. of New York, 98 NY2d 314, 326 [2002]). Such a motion should not be granted where the validity of the subject documentary evidence is in dispute (see e.g. Parekh v. Cain, 96 AD3d 812 [2d Dept 2012]). In this case, Plaintiff calls into question the validity of the "Good will buyout agreement" that is offered by Defendant as the documentary evidence on this motion. Plaintiff asserts claims for recission, as well as a claim for declaratory judgment that the good will agreement did not encompass Plaintiff's claim for compensation for his shares in the business. The good will agreement does not utterly refute these allegations, which must be taken as true for purposes of this motion. This portion of Defendant's motion fails.

Defendants' CPLR 3211(a)(7) motion. Defendant asserts that each of Plaintiff's causes of action must be dismissed for failure to state a cause of action. Plaintiff's claims will be addressed in the order they appear in the Complaint.

Breach of Contract. Defendant argues that Plaintiff does not and cannot show all of the elements of a breach of contract claim. The contract alleged by Plaintiff is an oral agreement for [*2]the sale of Plaintiff's shares in J&M Automotive, Inc. What is abundantly clear, however, is that a price for the shares was never established. Plaintiff had an "expectation" that he would receive a "fair and reasonable" price for his shares, but despite his urging both Defendant and nonparty John Spina to establish fair compensation, no price was ever established. The agreement alleged thus omits a material term and amounts only to an "agreement to agree" which is not enforceable as a contract (See e.g. Wilson v. Ledger, 97 AD3d 1028 [3d Dept 2012]). This portion of Defendant's motion must be granted.

Declaratory Judgment. Defendant argues that Plaintiff's declaratory judgment claim should be dismissed because he has an adequate remedy available through his breach of contract claim. The dismissal of the breach of contract claim blunts this argument. Moreover, the focus of the declaratory judgment claim is the good will agreement, not the alleged oral agreement for the sale of Plaintiff's shares. This portion of Defendant's motion fails.

Recission. Defendant argues that the two claims for recission should be dismissed because Plaintiff does not plead a material breach of the good will agreement and because Plaintiff does not identify a threat that essentially forced him to sign that agreement. New York case law has identified at least five grounds for recission, which include failure of consideration and fraud, but that list is not exclusive, and the availability of recession depends on the circumstances of the particular case (16 NY Jur 2d, Cancellation of Instruments §13). The facts pled in the Complaint essentially allege that Plaintiff was cheated out of fair compensation for his shares by Defendant. Because the good will agreement provides that it concludes any past or present obligations (apparently on Defendant's part), Plaintiff's allegations are sufficient to state a claim for recission. This portion of Defendant's motion fails.

Breach of Fiduciary Duty/Negligent Misrepresentation. Shareholders in a close corporation owe a fiduciary duty to one another (Sager Spuck Statewide Supply Co., Inc. v. Meyer, 273 AD2d 745 [3d Dept 2000]). Defendant argues that Plaintiff fails to describe any misconduct or misleading on Defendant's part regarding the good will agreement. Again, a fair reading of the Complaint shows a course of conduct Plaintiff alleges as showing that Defendant forced him out of the business and failed to compensate him for turning over his shares of stock. These allegations state a claim for breach of fiduciary duty.

Defendant also argues that the claim for breach of fiduciary duty is duplicative of Plaintiff's claims for breach of contract, negligent misrepresentation, and fraud. The case cited in support of this argument, Joyce v. Thompson Wigdor & Gilly (2008 US Dist LEXIS 433210 [SD NY, June 3, 2008, No. 06 Civ. 15315 (RLC/GWG)])], holds that claims of negligence, breach of contract, breach of fiduciary duty, negligent misrepresentation or fraudulent misrepresentation are duplicative of a claim of legal malpractice where those claims are based on the same facts and seek identical relief. Nowhere does this opinion state that the breach of contract, negligent misrepresentation or fraud are necessarily duplicative of each other, but instead notes that all of the claims in that case rested on the same attorney-client relationship that underpinned the malpractice claim.

That being said, Plaintiff's claim for negligent misrepresentation is indeed based on the same facts and asserts the same conduct as his claim for breach of fiduciary duty. The fraud claim, however, asserts intentional conduct and is not duplicative. The sixth cause of action asserting negligent misrepresentation must be dismissed.

Fraud. In addition to arguing duplicative claims, Defendant asserts that Plaintiff's fraud claim is not pled with sufficient particularity, as required by CPLR 3016(b). The Complaint [*3]makes allegations as to particular misrepresentations made by Defendant at particular times and Plaintiff's reliance on those misrepresentations when turning over his shares of J&M, for which he was never compensated. The Complaint thus states a claim for fraud against Defendant and this portion of the defense motion fails.

Unjust Enrichment. Defendant asserts that an unjust enrichment claim is only viable in the absence of an agreement, so that the presence of the good will agreement negates this claim. What Plaintiff alleges, however, is that Defendant is reaping the benefits of sole ownership of J&M Automotive without having compensated Plaintiff for the transfer of his shares in the business. It is thus the absence of the alleged oral agreement for reasonable compensation for those shares that supports this claim. The good will agreement does not affect it. This portion of the defense motion fails.

Derivative Claim. Defendant argues that the Ninth Cause of Action asserting a derivative claim under BCL §626 must fail for the reason that Plaintiff is no longer a shareholder of J&M and has not been one since 2022. Plaintiff responds that he takes the position that his shares were never validly transferred, so that he remains a shareholder. Indeed, the Complaint alleges that Plaintiff and Defendant are each 50% shareholders in J&M Automotive, Inc. The Complaint further alleges self-dealing and embezzlement by Defendant that reduced the value of the corporation. This portion of the defense motion fails.

Therefore, in consideration of the foregoing, it is hereby

ORDERED, that Defendant's motion is granted in part and First Cause of Action sounding in breach of contract and the Sixth Cause of Action sounding in Negligent Misrepresentation are hereby dismissed; and it is further

ORDERED, that Defendant's motion is denied in all other respects.