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Rubin v. Mangan

Fiduciary Duty Breach Claim Dismissed as Redundant to Malpractice Claim Against Attorney

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MEMORANDUM & ORDER This is a diversity action arising out of intrafamilial and legal disputes over a failed investment. Plaintiff Dr. Rene Rothstein Rubin brings legal malpractice and breach of fiduciary duty claims against attorney Michael P. Mangan and the law firm Mangan & Ginsberg LLP (together, the “Mangan Defendants”) and a breach of fiduciary duty claim against her brother, Michael Rothstein. (Second Am. Compl. (“SAC”) (Dkt. 63).) Pending before the court is the Mangan Defendants’ joint motion to dismiss the Second Amended Complaint for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) and failure to state a claim under Fed. R. Civ. P. 12(b)(6). (Mangan Defs.’ Mot. to Dismiss (Dkt. 70); Mangan Defs.’ Mem. in Supp. of Mot. to Dismiss (“Mot. to Dismiss”) (Dkt. 70-2); Pl.’s Opp. to Mot. to Dismiss (“Opp.”) (Dkt. 70-9); Mangan Defs.’ Reply in Supp. of Mot. to Dismiss (“Reply”) (Dkt. 70-11).) For the reasons explained below, the Mangan Defendants’ motion to dismiss is DENIED in part and GRANTED in part. I. BACKGROUND At this procedural posture, the court credits Rubin’s factual allegations as true and draws all reasonable inferences in her favor. See Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir. 2000).1 A. Factual History In 2014, Defendant Rothstein and others invested $3 million in a purported hedge fund, Bright Lake L.P. (“Bright Lake”). (SAC 10.) Their investment included between $80,000 to $100,000 of Plaintiff Rubin’s personal funds, withdrawn from a bank account that Rubin and certain of her family members jointly maintained at Stifel, Nicolaus & Company, Inc. (“Stifel”).2 (Id. 11.) The withdrawal, which was made without her knowledge or consent, was effectuated using Rubin’s forged signature. (Id.

10-11.) By 2015, the $3 million investment had plummeted to several thousand dollars in value. (Id. 12.) Rothstein and other investors then filed a lawsuit against Bright Lake in New York Supreme Court (the “Bright Lake Action”). (Id.

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