Among the causes of action available to a plaintiff seeking compensation for misconduct that arose during the course of a business relationship is the tort of aiding and abetting breach of fiduciary duty. Claims are often brought against non-fiduciaries who, despite owing no duty to the plaintiff themselves, can be held liable if they knowingly participated in a breach of fiduciary duty. New York courts consistently require that three baseline elements must be alleged to state a claim: “(1) a breach by a fiduciary of obligations to another, (2) that the defendant knowingly induced or participated in the breach, and (3) that plaintiff suffered damages as a result of the breach.”1
The first element, an underlying breach of fiduciary duty, is manifest in the cause of action. Thus, courts quickly dispose of aiding and abetting claims upon finding that the underlying breach of fiduciary duty never occurred,2 was insufficiently pleaded,3 or was withdrawn in an amended complaint.4 The third element, damages, is also directly tethered to the pleading and adjudication of the underlying breach of fiduciary duty. The second element, however, whether a defendant “knowingly induced or participated in the breach,” often requires pleading both the mental state and the actions of the alleged aider and abettor. The detail required to satisfy this element has been the subject of recent variations in Commercial Division decisions, making proper pleading standards difficult to ascertain.
