A New York appellate court has reinstated a fraud claim in the case of Homapour v. 3M Properties, LLC, which involves a dispute among family members over the management of family-owned limited liability companies (LLCs). The court's decision, made on July 9, 2026, affects not only the parties involved but also sets a significant precedent for similar cases concerning fiduciary duties and family businesses.
The case centers around Mehrnaz Nancy Homapour, who brought the lawsuit against her brother Mark Harounian and their father, Jacob Harounian, along with several LLCs they manage. The dispute arose when Mehrnaz alleged that Mark fraudulently induced her and their father to sign amended operating agreements for the Family LLCs without providing the full documents for review. This situation highlights the complexities of family dynamics in business and the legal obligations that come with fiduciary relationships.
The case reached the Appellate Division of the Supreme Court of the State of New York after a lower court ruling dismissed several of Mehrnaz's claims. The court's decision to reinstate the fraud claim is particularly important as it underscores the responsibilities of individuals in positions of trust, especially within family businesses.
In its ruling, the court addressed the actions of Mark Harounian, stating that he had fiduciary obligations to both Mehrnaz and Jacob as the managing member of the Family LLCs. The court noted, "Whether this principle applies to bar plaintiff's fraud claim against Mark cannot be determined as a matter of law because Mark had fiduciary obligations to Mehrnaz and Jacob." This statement emphasizes the court's recognition of the unique circumstances that arise in family business disputes.
The court also dismissed several other claims made by Mehrnaz, including those for breach of fiduciary duty and constructive trust against Mark and various LLCs. The ruling stated that the claims were either time-barred or not supported by sufficient evidence of a fiduciary relationship. For instance, the court found that the Harounian LLCs were not in a confidential or fiduciary relationship with Mehrnaz, which led to the dismissal of those claims.
Furthermore, the court ruled that the jury demand made by Mehrnaz was properly struck, as the operating agreements included a waiver of the right to a jury trial. The court stated, "The right to a jury trial may be waived in an instrument other than that representing the agreement upon which the action is founded." This aspect of the ruling reinforces the importance of carefully reviewing legal documents before signing.
The impact of this ruling extends beyond the parties involved in this case. It serves as a reminder to individuals in fiduciary roles, especially within family businesses, of their legal responsibilities and the potential consequences of failing to uphold those duties. The reinstatement of the fraud claim may also encourage other individuals in similar situations to pursue legal action if they believe they have been wronged by a family member or business partner.
Going forward, this ruling may influence how courts handle similar disputes involving family-owned businesses and fiduciary relationships. It highlights the need for transparency and accountability in business dealings, particularly when family members are involved. The decision could also prompt a reevaluation of operating agreements and the importance of clear communication among family members in business.
As for what’s next, it remains unclear whether the defendants will seek to appeal this decision. Details were not available in the court filing regarding any potential further legal actions. However, the reinstatement of the fraud claim suggests that the case will continue to unfold in the lower courts, potentially leading to further developments in the ongoing family dispute.