CPLR 4401 and Attorney Fiduciary-Duty Claims: When Disputed Conflict, Knowledge, and Reliance Require a Jury Trial

Introduction

In Brennan v Vasquez (2026 NY Slip Op 00115), the Appellate Division, Second Department reversed a Queens County judgment that had imposed liability on an attorney, Jorge A. Vasquez, for breach of fiduciary duty as a matter of law under CPLR 4401. The plaintiff, James Brennan, alleged that Vasquez—initially retained to handle the sale of Brennan’s home—breached fiduciary obligations in connection with a $300,000 promissory note/loan transaction involving Brennan’s corporation and Brennan’s real estate agent, Ariel A. Del Gobbo (and Delgobbo & Associates, Inc.).

The central issues on appeal were procedural and substantive: whether the trial court could properly remove the fiduciary-duty liability question from the jury under CPLR 4401, and whether the record contained factual disputes (including credibility issues) concerning conflict of interest, Vasquez’s knowledge of licensing facts, the timing/termination of the attorney-client relationship, and the plaintiff’s reliance on any allegedly deficient legal advice about the investment/loan risk.

Summary of the Opinion

The Second Department held that judgment as a matter of law under CPLR 4401 was improperly granted because a rational jury could have found for Vasquez on breach of fiduciary duty. Key factual questions remained disputed, including:

whether Vasquez knew Del Gobbo was not a licensed broker during the promissory note transaction;
whether any conflict of interest arose while Vasquez still represented the plaintiff (or only after representation ended);
whether the plaintiff relied on Vasquez’s alleged characterization of the loan as a “safe investment”; and
whether Vasquez’s conduct directly caused the plaintiff’s damages.

The court reversed the judgment insofar as appealed from, denied the plaintiff’s CPLR 4401 motion on fiduciary-duty liability, and remitted for a new trial on that cause of action.

Analysis

Precedents Cited

A. CPLR 4401 (Judgment as a Matter of Law) Standards

The decision is grounded in a consistent Second Department and Court of Appeals line limiting CPLR 4401 relief to cases where the nonmovant has no legally sufficient evidentiary path to victory.

Whitehall v Andrade, 231 AD3d 1094, 1095: The court cited Whitehall for the procedural proposition that CPLR 4401 permits a motion for judgment as a matter of law after the close of the opponent’s evidence, framing the vehicle the plaintiff used at trial.
Countrywide Home Loans, Inc. v Gibson, 157 AD3d 853, 855: Quoted for the governing test: JMOL is appropriate only where “there is no rational process” by which a factfinder could find for the nonmoving party—an intentionally demanding threshold.
Szczerbiak v Pilat, 90 NY2d 553, 556: The Court of Appeals’ articulation reinforces that the “no rational process” standard is not a mere Second Department gloss but a statewide rule; it underscores the appellate court’s insistence on deference to the jury function.
Chicoine v Mendola, 233 AD3d 841, 843: Cited for the rule that, on a CPLR 4401 motion, evidence must be viewed in the light most favorable to the nonmoving party. This principle was pivotal because the record contained testimony that could support Vasquez’s version of events.
Cioffi v Klein, 131 AD3d 914, 915-916: The court relied on Cioffi for a core limitation: JMOL should not be granted where facts are disputed, different inferences may be drawn, or witness credibility is at issue—conditions the appellate court found present here.
Caccese v Liebherr Container Cranes, Ltd., 149 AD3d 688, 689: Reinforces the same idea—when competing inferences exist, the case belongs to the jury. The citation supports the remittal for a new trial rather than affirmance of a liability finding imposed by the court.
C.K. Rehner, Inc. v Arnell Constr. Corp., 303 AD2d 439, 440: Used as the concluding anchor for reversal: where issues of fact exist, liability should be left to the jury, making CPLR 4401 relief improper.

B. Breach of Fiduciary Duty and the Attorney’s Fiduciary Role

374-76 Prospect Place Tenants Assn., Inc. v City of New York, 231 AD3d 911, 914: Cited for the elements of breach of fiduciary duty: (1) fiduciary relationship, (2) misconduct, and (3) damages directly caused by the misconduct. The “directly caused” element mattered because the court questioned whether the plaintiff proved reliance and causation as a matter of law.
Stinner v Epstein, 162 AD3d 819, 820, and Village of Kiryas Joel v County of Orange, 144 AD3d 895, 898: Both reinforce the same elements framework and place the claim in settled doctrine rather than an expanded or novel standard.
Matter of Cooperman, 83 NY2d 465, 472: The court cited Cooperman for the broad description of the attorney’s fiduciary obligations: fairness, honesty, undivided loyalty, confidentiality, avoidance of conflicts, competent operation, safeguarding client property, and prioritizing client interests. Importantly, the Second Department did not dispute these duties—it held only that whether Vasquez breached them on this record was for a jury, not the court on a CPLR 4401 motion.
Saint Annes Dev. Co. v Batista, 165 AD3d 997, 997-998, and Jay Deitz & Assoc. of Nassau County, Ltd. v Breslow & Walker, LLP, 153 AD3d 503, 505: These cases supported the proposition that attorneys owe fiduciary duties encompassing conflict avoidance and loyalty—again, framing the duty, while leaving breach/causation to factfinding where disputed.

Legal Reasoning

The Second Department’s reasoning proceeds in two steps: (1) identify the stringent CPLR 4401 standard and (2) locate genuine factual disputes that allow a rational jury to find no breach of fiduciary duty.

1. Conflicts, timing, and termination of representation were fact questions

The plaintiff argued Vasquez had a conflict because Vasquez later used the $300,000 (returned to him by Del Gobbo) to open the real estate office (Exit Realty Direct) where Vasquez served as broker, allegedly without plaintiff’s knowledge or consent. However, the record permitted a competing inference: Vasquez testified his representation ceased after the October 24, 2016 transfer of the loan proceeds from his IOLTA account to Del Gobbo, and Del Gobbo testified he approached Vasquez about being broker of record only after receiving the loan money. If the jury credited that sequence, it could rationally find the complained-of “arrangement” occurred after the fiduciary relationship ended, defeating liability (or at least preventing JMOL).

2. Vasquez’s knowledge of Del Gobbo’s licensing status was disputed

The trial court concluded Vasquez knew Del Gobbo lacked a broker’s license when drafting the promissory note. The Second Department held the jury could rationally find otherwise based on Del Gobbo’s testimony about when the broker-of-record issue arose. Because that dispute turned on witness credibility and competing narratives, CPLR 4401 relief was improper.

3. Reliance/causation regarding “safe investment” advice was not established as a matter of law

The plaintiff contended Vasquez incompetently characterized the loan as a “safe investment” despite it being unsecured. The appellate court found the record did not clearly establish the plaintiff relied on Vasquez’s characterization. Instead, testimony suggested the plaintiff decided to make the loan based on friendship and on favorable terms he demanded (including reducing interest from 7% to 6%), and the money was used for the intended purpose (opening a real estate office). That evidentiary posture prevents a court from concluding—without a jury—that Vasquez’s advice (even if flawed) directly caused the loss.

4. The remedy matched the procedural error

Because the liability finding against Vasquez resulted from the court’s removal of the issue from the jury, the proper remedy was reversal of the judgment insofar as appealed from and a remittal for a new trial on the fiduciary-duty cause of action.

Impact

Tighter discipline on CPLR 4401 in professional-fiduciary cases: Trial courts are reminded that even where an attorney-client relationship is undisputed, breach and causation often hinge on credibility, sequence of events, and inferences (e.g., when representation ended; what was disclosed; what was known), making JMOL risky.
Conflict-of-interest theories may turn on timing and knowledge: The opinion signals that alleged conflicts connected to post-representation business arrangements will not automatically establish breach; plaintiffs must still prove a conflict existed during the fiduciary relationship (or that post-representation conduct is still tethered to confidential information, continuing duties, or other recognized bases)—and must do so with evidence that can survive credibility contests.
Reliance and “direct causation” remain practical hurdles: Where a client independently chooses a transaction for personal reasons (friendship, negotiated terms) and the transaction initially performs as intended, proving that the attorney’s advice caused the loss may require clear proof of reliance and a causal chain not broken by intervening choices.
Trial structure and verdict integrity: The case illustrates how an erroneous CPLR 4401 ruling can distort final judgments (including joint and several allocations) and force a retrial limited to the improperly decided cause of action.

Complex Concepts Simplified

CPLR 4401 (Judgment as a Matter of Law): A trial motion asking the judge to decide an issue without letting the jury decide it. It is granted only when no reasonable jury could find for the opposing party based on the evidence.
Fiduciary Duty (Attorney-Client): A heightened duty of loyalty, honesty, and care. Attorneys must avoid conflicts, protect client property, keep confidences, and prioritize the client’s interests during the representation.
Conflict of Interest: A situation where a lawyer’s personal interests (or duties to others) may materially interfere with loyalty to the client. Whether a conflict exists can depend on timing (during representation vs. after it ends) and what the lawyer knew or disclosed.
IOLTA Account: A special attorney escrow account used to hold client funds. Transfers from an IOLTA account are closely regulated because the lawyer is handling client property.
Unsecured Loan: A loan without collateral. If the borrower defaults, the lender cannot seize pledged property automatically and may have to sue to collect, increasing risk.

Conclusion

Brennan v Vasquez reinforces a practical and consequential rule: even in attorney fiduciary-duty litigation, CPLR 4401 cannot be used to impose liability where the evidence permits competing inferences on conflict, knowledge, disclosure, reliance, and causation. By reversing and ordering a new trial, the Second Department reaffirmed that disputed facts and credibility determinations—especially about when representation ended and what the lawyer knew—are for the jury, not the court, to resolve.