Justice Shirley Werner Kornreich
Mosionzhnik commenced an action against the defendants alleging substantial wrongdoing in connection with an art gallery in which she was a shareholder and employee. Mosionzhnik contended that she should be permitted to keep the $500,000 that she secretly transferred to a Swiss bank account because a Shareholders' Agreement allows her to engage in private art transactions for her own, personal benefit. The court held that she must pay the $500,000 in kickbacks to the gallery because "fiduciaries must disgorge all wrongful benefits obtained by their disloyalty." The court noted that she would be entitled to keep the money if the deals led to her procuring the money were her own, private deals. However, the record established that all of the money was, in fact, related to the gallery's transactions. The court further found that the gallery was precluded from suing Moslonzhnik for her losses arising from her bad acts, as her actions were imputed to the gallery. The court noted the fact that the gallery cannot reap the benefits of her bad acts when times are good and then later protest them when its relationship with her soured.
