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					STATE OF NEW YORK
SUPREME COURT                        COUNTY OF ALBANY
DR. CHARLES MAYRON,
                                     Plaintiff,

                                                                    DECISION AND ORDER
                -against-
                                                                    Index No. 3028-03
                                                                    RJI No. 01-03-073853
PAUL M. BEER, M.D. and RETINA
CONSULTANTS, PLLC.,

                                     Defendants.

(Supreme Court, Albany County, All Purpose Term)


APPEARANCES:                                 LAW OFFICES OF CAROLA, BAGNOLI &
                                             TOLLISEN, PLLC
                                             Attorneys for Plaintiff
                                             (Jeffrey N. Bagnoli, Esq., of counsel)
                                             215 Park Avenue
                                             Mechanicville, NY 12118

                                             WHITEMAN OSTERMAN & HANNA LLP
                                             Attorneys for Defendant
                                             (Philip H. Gitlen, Esq.; Andrew M. Johnson, Esq,
                                             and; William S. Nolan, Esq., of counsel)
                                             One Commerce Plaza
                                             Albany, NY 12260

McCarthy, J.:

       Pursuant to CPLR 3211 (a), defendants Paul M. Beer, M.D. and Retina Consultants move

to dismiss the complaint. Plaintiff Dr. Charles Mayron opposes defendant’s motion and, pursuant

to CPLR 3025, cross-moves to amend his complaint and, pursuant to CPLR 3126, to strike

defendants’ answer. Defendants oppose the cross motion.

       On April 15, 2000, plaintiff and defendant Beer entered into a Membership Unit Purchase

Agreement, in which plaintiff acquired a fifty percent interest in Paul Marius Beer, M.D., PLLC.
That interest excluded “[a]ll income realized by Beer through the practice of medicine [and]

consulting work” (Membership Unit Purchase Agreement at 2, Beer Affidavit, Exhibit A). On

October 11, 2000, plaintiff and defendant Beer entered into the Operating Agreement, which

essentially merged Paul Marius Beer, M.D., PLLC into the Retina Office, PLLC (hereinafter, “Retina

Office”), with plaintiff and defendant Beer as the only two members of Retina Office. On the same

date, plaintiff and defendant Beer entered into the Member’s Agreement. That agreement listed

defendant Beer as the President and plaintiff as the Secretary/Treasurer of the company (Member’s

Agreement at ¶ 1.2, id., Exhibit C). Further, the Member’s Agreement established that each Member

would bill separately for clinical services performed but that a company account would be

established to pay common expenses, into which plaintiff and defendant Beers were to contribute

(see id. at ¶¶ 2.1, 2.2).

        In 2002, the Department of Ophthalmology at the Albany Medical College Lions Eye

Institute and the VA Hospital (hereinafter, “eye institute”) approached defendant Beers to resume

a position that he had previously held as the head of the Retina Division at the eye institute. In an

effort to afford defendant Beers the opportunity to take this position, plaintiff and defendant Beers

entered into the Memorandum of Agreement (hereinafter, “MOA”) in April 2002 to supplement and

amend the Operating and Member’s Agreements (see Memorandum of Agreement at ¶ 1, id., Exhibit

D).

        The MOA noted that the opportunity to head the Retina Division was “as a sole result of

[defendant Beer’s] personal effort with no contribution from Dr. Mayron” (id.). Further, the

agreement provided:

        Dr. Mayron gives Dr. Beer unrestricted permission to form, manage and control a
        new business entity, Retina Consultant, PLLC (“RetCons”), needed for fulfilling his
        new responsibilities in connection with the opportunity described above in paragraph

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        1. By so agreeing, however, Dr. Mayron does not agree to, or otherwise, authorize,
        Dr. Beer to set up other business entities that could compete with the Retina Office.
        The RetCons will be administered through the RetCons employees” (id. at ¶ 3
        [emphasis in original]).

        In addition, the MOA allowed defendant Beer to set up a fellowship training program “for

as long as Dr. Beer finds it necessary to fulfill his obligations in connection with” heading the Retina

Division at the eye institute (id. at ¶ 4). The agreement further specified the arrangements regarding

the fellows at Retina Office, including an agreement where “a fellow or any physicians associated

with the RetCons may see Dr. Beer’s patients at The Retina Office under Dr. Beer’s ½ share of the

Retina Office resources at Dr. Beer’s direction and under existing terms, conditions, rules and

obligations governing office resource sharing between Dr. Beer and Dr. Mayron , as provided for in

the parties’ prior agreements” (id. at ¶ 4G).

        Under the MOA, defendant Beer agreed “to allow Dr. Mayron to participate at the

AMC/Lions Institute under the same terms, conditions, rules and obligations as the other physicians

of the RetCons. Such participation by Dr. Mayron will be conducted on a schedule that meets with

Dr. Mayron’s approval” (id. at ¶ 5). Defendant Beer further agreed to allow plaintiff to become a

sub-investigator in a drug study under certain conditions and have plaintiff’s name on the RetCons

letterhead (id. at ¶¶ 6-7).

        The MOA further provided:

        Dr. Beer and Dr. Mayron agree to continue as Members of The Retina Office up to
        and including the date of the expiration of The Retina Office’s lease, at which time
        the assets of The Retina Office will be divided on a pro-rata share based on
        independently assessed FMV at least six (6) months prior to said expiration date.
        After the expiration of The Retina Office’s lease, both Dr. Beer and Dr. Mayron
        agree they will not use The Retina Office name (id. at ¶ 9B).




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        According to plaintiff’s complaint, defendant Beer breached the MOA and the parties’ other

two agreements. On May 16, 2003, plaintiff commenced this action by filing a summons and

complaint. Plaintiff asserts five causes of action in his complaint. On June 27, 2003, defendants

answered, asserting counterclaims. Plaintiff replied to the counterclaims. This Court (Cannizzaro,

J.) issued a Preliminary Conference Stipulation and Order on May 13, 2005.1 Defendants now move

to dismiss the complaint pursuant to CPLR 3211 (a) (7). As noted above, plaintiff opposes this

motion and cross moves to amend his complaint and to strike defendants’ answer. Defendants

oppose the cross motion.

        CPLR 3211 (a) (7) provides: “A party may move for judgment dismissing one or more

causes of action asserted against him on the ground that the pleading fails to state a cause of action.”

In determining a motion to dismiss premised on CPLR 3211 (a) (7), this Court “‘must afford

[plaintiff’s] complaint a liberal construction, accept as true the allegations contained therein, accord

. . . plaintiff the benefit of every favorable inference and determine only whether the facts alleged

fit within any cognizable legal theory’” (Skibinsky v State Farm Fire & Cas. Co., 6 AD3d 975, 976

[3d Dept 2004] [quoted case omitted]; see Frank v DaimierChrysler Corp., 292 AD2d 118, 120-121

[1st Dept 2002]). “Stated another way, the court’s role in a motion to dismiss is limited to

determining whether a cause of action is stated within the four corners of the complaint, and not,



        1
          Meanwhile, on January 9, 2004, defendant Beer initiated a dissolution proceeding with
regard to Retina Office. This proceeding resulted in the Court approving the proposed Final Plan
of Dissolution (Cannizzaro, J.) and approving the receiver’s final accounting (McNamara, J.). At
this time, the affairs of Retina Office have been wound down. Plaintiff also commenced a
separate defamation action against defendant and others. Any issues regarding the alleged breach
of the parties’ three agreements were not resolved in the dissolution proceeding but have been
awaiting resolution in this action.


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whether there is evidentiary support for the complaint” (Frank, 292 AD2d at 121). “‘However, even

with this broad standard, a court need not accept as true legal conclusions or factual allegations that

are either inherently incredible or flatly contradicted by documentary evidence’” (Fericola v New

York State Ins. Fund, 293 AD2d 844, 844 [3d Dept 2002] [quoted case omitted]).

        Defendants first contend the second cause of action in the complaint alleging fraud should

be dismissed because it duplicates plaintiff’s claims based on breach of contract. “To make out a

prima facie case of fraud, the complaint must contain allegations of a representation of material fact,

falsity, scienter, reliance and injury” (Small v Lorillard Tobacco Co., 94 NY2d 43, 57 [1999]; see

Gaidon v Guardian Life Ins. Co., 94 NY2d 330, 348-349 [1999]). Moreover, “[a] cause of action

alleging fraud does not lie where the only fraud claim relates to a breach of contract. A present intent

to deceive must be alleged and a mere misrepresentation of an intention to perform under the

contract is insufficient to allege fraud” (WIT Holding Corp. v Klein, 282 AD2d 527, 528 [2d Dept

2001]; see Reiser, Inc. v Robert’s Real Estate, 292 AD2d 726, 728 [3d Dept 2002]; see also New

York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]).                 On the other hand, “a

misrepresentation of material fact, which is collateral to the contract and serves as an inducement

for the contract, is sufficient to sustain a cause of action alleging fraud” (WIT Holding Corp., 282

AD2d at 528; see Todd v Grandoe Corp., 302 AD2d 789, 791 [3d Dept 2003]).

        Here, the complaint alleges:

        To induce the plaintiff to execute the Memorandum of Agreement dated April 26,
        2002, the defendant represented to the plaintiff that the defendant was assuming a
        new position at Albany Medical Center and starting Retina Consultants, PLLC to
        promote The Retina Office, PLLC and that it would be of great value for defendant
        to start Retina Consultants, PLLC, and that the defendant would assure the operations
        of Retina Consultants, PLLC would not compete with or interrupt the business of The
        Retina Office, PLLC. Defendant further represented that the plaintiff would partake
        in financial, educational and promotional activities of Retina Consultants, PLLC and

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        that plaintiff would be included on the letterhead of Retina Consultants, PLLC and
        participate in studies done at Retina Consultants, PLLC (Complaint, ¶ 25, Gitlen
        Affidavit, Exhibit A).

The complaint goes on to allege that, at the time defendant Beer made the representations, defendant

knew them to be false and made them to defraud plaintiff (id. at ¶ 26).

        Plaintiff contends that the second cause of action premised on fraud should survive dismissal

because it relates to the MOA while his breach of contract claims are based on the Operating

Agreement and the Member’s Agreement. This argument, however, is belied by the complaint. A

reading of plaintiff’s first cause of action based on breach of contract clearly relates to all three

agreements and specifically references the MOA (see Complaint at ¶¶ 16, 19, 21, Gitlen Affidavit,

Exhibit A).

        This Court agrees that this cause of action should be dismissed as it is duplicative of the

breach of contract causes of action. The alleged misrepresentations contained in the second cause

of action relate to defendant Beer’s performance under the terms of the MOA and are not

misrepresentations of a present fact that are collateral to the MOA (see Todd., 302 AD2d at 791;

Reiser, Inc., 292 AD2d at 728; WIT Holding Corp., 282 AD2d at 528; see also New York Univ., 87

NY2d at 318). Moreover, plaintiff’s cause of action for fraud fails to allege damages that would not

be otherwise “recoverable under a contract measure of damages” (J.E. Morgan Knitting Mills v

Reeves Brothers, Inc., 243 AD2d 422, 423 [1st Dept 1997]). For the reasons discussed above, this

Court grants that branch of defendant’s motion to dismiss the second cause of action in the complaint

that is premised on fraud and dismisses that cause of action.

        As to the fourth cause of action, defendants contend that this cause of action sounding in

interference with contract should be dismissed as it fails to state a cause of action. Plaintiff fails to


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offer any response to this branch of defendants’ motion to dismiss. “A claim for tortious interference

with contract requires a valid contract between the plaintiff and a third party, defendant’s knowledge

of the contract, and an intentional procurement of the third party’s breach of the contract without

justification, actual breach and resultant damages” (Williams Oil Co. v Randy Luce E-Z Mart One,

LLC, 302 AD2d 736, 738 [3d Dept 2003]; see Bradbury v Cope-Schwarz, 20 AD3d 657, 659 [3d

Dept 2005]). Here, this Court agrees with defendants that plaintiff’s interference with contract claim

must fail. The complaint alleges that “defendant, Retina Consultants, PLLC, acting individually or

in consort with others, wrongfully, knowingly, intentionally, maliciously, and without reasonable

justification or excuse induced the defendant, Dr. Paul Beer to breach its agreement with the plaintiff

and to cease and refrain from conducting business as and with The Retina Office, PLLC”

(Complaint, ¶ 40, Gitlen Affidavit, Exhibit A). However, defendant Beer is the sole member of

defendant Retina Consultants, PLLC. Thus, this cause of action fails because it lacks a credible

allegation that the contract between plaintiff and defendant Beers was interfered with by defendant

Retina Consultants (see Fericola, 293 AD2d at 844; cf Dobies v Bredkai, 273 AD2d 776, 778 [3d

Dept 2000]). Accordingly, this Court grants that branch of defendants’ motion to dismiss the fourth

cause of action and dismisses that cause of action.

       Defendants also contend that the fifth cause of action should be dismissed as it fails to state

a cognizable claim for which relief may be granted. Defendants argue that, under New York law,

no such cause of action exists for a conspiracy to commit a tort. In response, plaintiff contends that

a conspiracy claim may lie where a cause of action for fraud has been plead. The fifth cause of

action alleges: “All of the defendants have knowingly, intentionally, and willfully entered into an

agreement while acting in concert with one another to damage and harm the plaintiff, and dissipate


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and dilute the business of The Retina Office, PLLC” (Complaint, ¶ 43, Gitlen Affidavit, Exhibit A).

        Case law holds that “conspiracy to commit a tort such as fraud is not an independent cause

of action in this State but, rather, ‘allegations of conspiracy are permitted only to connect the actions

of separate defendants with an otherwise actionable tort’” (Snyder v Puente De Brooklyn Realty

Corp., 297 AD2d 432, 435 [3d Dept 2002], lv denied 99 NY2d 586 [2003] [quoting Alexander &

Alexander of New York v Fritzen, 68 NY2d 968 (1986)]; see Elghanian v Harvey, 249 AD2d 206,

207 [1st Dept 1998]; see also Farey-Jones v Buckingham, 132 F Supp2d 92, 104 [EDNY 2001]).

Here, plaintiff’s cause of action for conspiracy to defraud must fail because, as noted above, this

Court has already determined that the cause of action for fraud is not viable. Accordingly, the

conspiracy claim cannot stand alone (see Truong v AT&T, 243 AD2d 278, 278 [1st Dept 1997];

McGahey v Topping, 255 AD2d 562, 563 [2d Dept 1998]). Therefore, this Court grants that branch

of defendants’ motion to dismiss the fifth cause of action and dismisses the fifth cause of action in

plaintiff’s complaint.

        Defendants contend that the first and third causes of action sounding in breach of contract

should be dismissed. Defendants argue that the first cause of action is barred by the express terms

of the parties agreement while the third cause of action should be dismissed as duplicative.

Defendants maintain that the essence of plaintiff’s first breach of contract claim is that defendant

Beer breached the parties agreements by competing with the Retina Office and diverting business

away from the Retina Office to Retina Consultants. Defendants argue that the MOA allows Dr. Beer

to compete with plaintiff and, thus, plaintiff’s claims fail.

        “To plead a breach of contract cause of action, a complaint must allege the provisions of the

contract upon which the claim is based” (Atkinson v Mobil Oil Corp., 205 AD2d 719, 720 [2d Dept


                                                   8
1994]). Further, the complaint must allege “performance by plaintiff[] and the basis of the alleged

breach of the agreement by defendant” (Furia v Furia, 116 AD2d 694, 695 [2d Dept 1986]). This

Court disagrees that the first cause of action should be dismissed as defendants are too narrowly

construing the first cause of action (see id.). The complaint asserts facts regarding the parties’ three

agreements, alleges that plaintiff has performed under the agreements, and sets forth the basis of the

alleged breach of the three agreements by defendant Beer. For instance, the complaint alleges that

defendant Beer “refused to compensate the plaintiff for work done through Retina Consultants,

PLLC and refused to allow plaintiff to participate in Retina Consultants, PLLC in violation of the

agreements with plaintiff” (Complaint, ¶ 19, Gitlen Affidavit, Exhibit A). The complaint also

alleges that defendant Beer hired another doctor to see patients of Retina Office without plaintiff’s

permission and failed to compensate plaintiff in violation of the parties’ agreements (see id. at ¶ 20).

Thus, affording plaintiff’s complaint a liberal construction and accepting as true the allegations

contained in the complaint (Skibinsky, 6 AD3d at 976; Frank , 292 AD2d at 120-121), at this

juncture, this Court denies that branch of defendants’ motion to dismiss the first cause of action (see

Atkinson, 205 AD2d at 720; Furia, 116 AD2d at 695).

        As to the third cause of action, while this Court agrees this claim also sounds in breach of

contract – albeit, different allegations than the first cause of action – this Court will not dismiss this

cause of action. Rather, this Court will partially grant plaintiff’s motion for leave to serve an

amended complaint that combines the first and third causes of action into a single cause of action

(see CPLR 3025; New York State Health Facilities Ass’n v Axelrod, 229 AD2d 864, 866 [3d Dept

1996]). Moreover, defendants are not prejudiced by such an amendment since the original pleading

contains similar allegations as the proposed amended pleading.



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          Finally, this Court denies plaintiff’s motion pursuant to CPLR 3126 to strike defendants’

answer for alleged noncompliance with outstanding discovery demands. A trial court has “broad

discretion in determining the nature and degree of the penalty to be imposed where a party has

refused to comply with discovery demands” (Rankin v Miller, 252 AD2d 863, 864 [3d Dept 1998]).

Striking a pleading, however, “is a drastic remedy which should be invoked only where a party’s

noncompliance with discovery demands is willful and contumacious” (id.). Here, plaintiff has not

made the requisite showing to warrant such relief. Further, this Court directs the parties to attend

a Court conference, as noticed by the Court, to further discuss any discovery issues and set new

deadlines for the same. This Court has considered the parties other arguments and finds them

unavailing.

          Accordingly, it is

          ORDERED the branch of defendants’ motion to dismiss the first cause of action in

plaintiff’s complaint is denied; and it is further

          ORDERED the branch of defendants’ motion to dismiss the second cause of action in

plaintiff’s complaint is granted; and it is further

          ORDERED that the second cause of action in plaintiff’s complaint is dismissed; and it is

further

          ORDERED that the branch of defendants’ motion to dismiss the third cause of action in

plaintiff’s complaint is denied; and it is further

          ORDERED the branch of defendants’ motion to dismiss the fourth cause of action in

plaintiff’s complaint is granted; and it is further

          ORDERED that the fourth cause of action in plaintiff’s complaint is dismissed; and it is

further

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          ORDERED the branch of defendants’ motion to dismiss the fifth cause of action in

plaintiff’s complaint is granted; and it is further

          ORDERED that the fifth cause of action in plaintiff’s complaint is dismissed; and it is

further

          ORDERED that the branch of plaintiff’s cross motion to amend the complaint is partially

granted to the extent that plaintiff is allowed to amend his pleading to combine the first and third

causes of action into a single claim; otherwise, the motion is denied as academic; and it is further

          ORDERED that plaintiff is to serve the amended complaint within twenty days of receiving

this Court’s decision and order with notice of entry of the same; and it is further

          ORDERED that the branch of plaintiff’s cross motion to strike defendants’ answer pursuant

to CPLR 3126 is denied.

          This shall constitute both the decision and order of the Court. All papers, including this

decision and order, are being returned to defendants. The signing of this decision and order shall not

constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions

of that section relating to filing, entry and notice of entry.



          SO ORDERED!

          ENTER.

Dated:
Albany, New York
                                                            William E. McCarthy, J.S.C.




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Papers Considered:

1.    Notice of Motion dated December 21, 2005;
2.    Affidavit of Paul M. Beer, M.D. sworn to December 21, 2005, with accompanying
      Exhibits A-D;
3.    Affidavit of Philip H. Gitlen, Esq., sworn to December 21, 2005, with accompanying
      Exhibits A-L;
4.    Notice of Cross Motion dated February 13, 2006;
5.    Affirmation of Jeffrey N. Bagnoli, Esq., affirmed February 13, 2006, with
      accompanying Exhibits A-N;
6.    Copy of Affidavit of Charles Mayron, M.D. sworn to February 15, 2006;
7.    Reply Affidavit of Andrew M. Johnson, Esq., sworn to March 7, 2006, with
      accompanying Exhibit A;
8.    Reply Affirmation of Jeffrey N. Bagnoli, Esq., affirmed March 15, 2006.




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