Fourth Department – Damages calculation: Village Green East Holdings LLC v. Blaakman

Listen to this article

New York State Supreme Court, Appellate Division, Fourth Judicial Department

Damages calculation

Breach of fiduciary duty – Faithless servant

Village Green East Holdings LLC v. Blaakman

CA 22-01941

Appealed from Supreme Court, Monroe County

Background: The defendant was employed by plaintiff, a commercial glass business that earned part of its gross revenue from its wholesale business. As the plaintiff’s operations manager, the defendant was responsible for contacting wholesale customers and ordering glass for their commercial jobs and determining pricing. When the defendant ended his employment with the plaintiff, he began working for the defendant glass wholesaler a former customer of the plaintiff. The plaintiff commenced an action for breach of fiduciary duty, aiding and abetting the breach, and faithless servant. The plaintiff appealed from an award that represented the lost profits on 61 orders and the amount of the defendant’s salary for a discreet period of time arguing that it was in error to preclude the plaintiff form introducing expert testimony regarding the diminution of value of its wholesale business.

Ruling: The Appellate Division affirmed. The court held that damages for breach of fiduciary duty are measured by calculating the employee’s improper gain or by calculating the employer’s lost profits arising from the employee’s wrong. The plaintiff elected to seek as damages the net loss of profits from the business diverted by the defendant and the plaintiff provided no authority. Similarly, the evidence presented for damages under the faithless servant doctrine were properly calculated because the additional emails relied upon by the plaintiff were sent for the purpose to promote the plaintiff’s relations with those clients and did not result in any monetary loss to the plaintiff.

David H. Tennant for the plaintiff-appellant; Claire G. Bopp, of Bond, Schoeneck & King, for the defendants-respondents.