By: Jeffrey M. Haber In Yunjie Yang v. Knights Genesis Group , 2022 N.Y. Slip Op. 32126(U) (Sup. Ct., N.Y. County July 6, 2022) ( here ), the court was asked to consider various matters associated with the particularity requirement for pleading fraud. In this regard, by the court examined the group pleading doctrine and the specificity needed to maintain a fraud claim. The motion court was also asked to consider alter ego liability and the factual bases for piercing the corpo

By: Jeffrey M. Haber It has been more than two years since the start of the global pandemic. In the early days of the pandemic, many states imposed emergency measures to address the health crisis – measures that had the effect of reducing business operations or shutting down the business. New York was no different. Among the measures implemented were government-mandated closures. For retailers this meant the loss of business. With business shutdown, or substantially curtailed

By: Jeffrey M. Haber The Duplication Doctrine is well-known to readers of this Blog. In a nutshell, the doctrine holds that “ cause of action for fraud does not arise when the only fraud charged relates to a breach of contract.” 1 “To plead a viable cause of action for fraud arising out of a contractual relationship, the plaintiff must allege a breach of duty which is collateral or extraneous to the contract between the parties.” 2 A plaintiff must also allege that the reco

By: Jeffrey M. Haber Previously, this Blog examined the doctrines of frustration of purpose and impossibility of performance in the context of Covid-19 ( here and here ). The doctrine of frustration of purpose is narrowly applied. 1 “In order to invoke the doctrine of frustration of purpose, the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense.” 2 In other words, t

By: Jeffrey M. Haber Obtaining jurisdiction over a corporation that is incorporated and headquartered outside of the state can be difficult. A plaintiff must plead and prove that the corporation purposefully availed itself of the resources of the state for a court to exercise personal jurisdiction over the defendant. The failure to do so will result in dismissal of the action. Under CPLR § 302(a)(1), a court can exercise specific personal jurisdiction over a non-domiciliary w

By: Jeffrey M. Haber It is common in commercial and business contracts for the parties to agree upon the law to be applied in the event a dispute arises between them. Typically, these choice of law provisions only apply to the substantive law of the chosen state. 1 They do not apply to the procedural laws of the jurisdiction. For application of the procedural laws, the parties must look to the forum state. In Baker v. Greentech Capital Advisors, L.P. , 2022 NY Slip Op. 0367

By: Jeffrey M. Haber It goes without saying that lawyers do not win every motion they make. When that happens, a lawyer can appeal the order or avail himself/herself of the two options afforded by CPLR § 2221: he/she can make: (1) a motion to reargue, or (2) a motion to renew. 1 In either case, the lawyer is asking the judge who ruled against him or her to change the outcome of the original motion. A motion to reargue is addressed to the discretion of the court. It must be

By: Jeffrey Haber Under New York’s Business Corporation Law (“BCL”), the Secretary of State is designated as the “agent of every domestic corporation and every authorized foreign corporation upon whom process against the corporation may be served.” 1 “In addition to such designation of the Secretary of State, every domestic corporation or authorized foreign corporation may designate a registered agent in this state upon whom process against such corporation may be served.” 2

By: Jeffrey M. Haber In New York, as in other jurisdictions, settlement agreements “are judicially favored, will not lightly be set aside,” and will be enforced “with rigor and without a searching examination into their substance.” 1 A court called upon to enforce a settlement must be satisfied that the agreement is “clear, final and the product of mutual accord.” 2 Thus, an out-of-court agreement settling an action is binding on each party to the agreement only if “it is i

By: Jeffrey M. Haber In prior articles, we have examined the rules governing the bringing of shareholder derivative litigations ( e.g. , here and here ). Among other things, we discussed the rule requiring the plaintiff to be a shareholder of the company at the time of the wrongdoing to have standing to sue. The same principle applies to plaintiffs bringing direct claims against the corporation for wrongs allegedly inflicted on the plaintiff as a shareholder of the company.

By: Jeffrey M. Haber In today’s Fraud Notes, we examine three decisions issued by the Appellate Division, First Department in which themes familiar to readers of this Blog are at issue: pleading fraud with particularity ( e.g. , here and here ), making a material misstatement of present fact ( e.g. , here and here ) duplication of a breach of contract claim ( e.g. , here , here and here ), pleading justifiable reliance ( e.g. , here , here and here ), and no reliance and

By: Jeffrey M. Haber As readers of this Blog know, pleading and proving fraud is not easy. The law reporters (not to mention the pages of this Blog) are bursting with cases in which the courts have dismissed fraud actions due to pleading and proof deficiencies. Moskowitz v. Fischer , 2022 N.Y. Slip Op. 50385(U) (Sup. Ct., Suffolk County May 3, 2022) ( here ), is a recent example of this occurrence. To plead a viable cause of action for fraud, a plaintiff must allege that the

By: Jeffrey M. Haber Commercial transactions very often involve parties from different states and/or different countries. One party can be domiciled in New York, for example, while the other can be incorporated or headquartered in Delaware or London. When a dispute arises between such geographically diverse parties, questions concerning the jurisdiction of a court over the parties often get litigated. This was the situation in Kingstown Capital Management L.P. v. CPI Property

By: Jeffrey M. Haber As a general matter, a fraud claim is not duplicative of a contract claim where the plaintiff alleges misrepresentations of fact, as opposed to misrepresentations of a future intent to perform. In IS Chrystie Mgt. LLC v. ADP, LLC , 2022 N.Y. Slip Op. 02950 (1st Dept. May 3, 2022) ( here ), this general principle of law was one of the issues before the Court. In particular, the First Department was asked to determine whether post-contractual misrepresentat

By: Jeffrey M. Haber In Wilsey v. 7203 Rawson Rd., LLC , 2022 N.Y. Slip Op. 02905 (4th Dept. Apr. 29, 2022) ( here ), the Appellate Division, Fourth Department considered principles of law familiar to readers of this Blog; namely, breach of contract and fraudulent misrepresentation. As we have noted in prior articles ( e.g. , here ), “ he essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff’s perfor

By: Jeffrey M. Haber New York courts favor the enforcement of forum selection clauses. They do so because they provide certainty and predictability in the resolution of disputes. here=">here</a>" and="and" >here.=">here</a>."> A forum selection clause is “prima facie valid and enforceable unless it is shown by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching.” Because a forum selection clause is “prima

By: Jeffrey M. Haber Family business disputes tend to be ugly, destructive, and protracted. For a case in point, we examine Max v. ALP, Inc. , 2022 N.Y. Slip Op. 01969 (1st Dept. Mar 22, 2022) ( here ), a heated and contentious dispute among members of the Max family regarding control of ALP, Inc., a corporation formed by the iconic artist Peter Max to, among other things, market, license and commercialize his artwork. ALP was formed in 2000. Adam and Libra, Peter’s children,

By: Jeffrey M. Haber Under New York law, an action based upon fraud must be commenced within six years of the date the cause of action accrued, or within two years of the time the plaintiff discovered or could have discovered the fraud with reasonable diligence, whichever is greater. 1 The cause of action accrues when “every element of the claim, including injury, can truthfully be alleged”, 2 “even though the injured party may be ignorant of the existence of the wrong or i

By: Jeffrey M. Haber A recurring theme in fraud jurisprudence is the dismissal of fraud claims that duplicate breach of contract claims. As we have noted, a fraud claim will not survive a dismissal motion when there is “a valid and enforceable written contract govern a particular subject matter” and the recovery sought arises out of the same facts and circumstances. 1 There are exceptions to this rule, such as where “a legal duty independent of the contract itself has been

By: Jeffrey M. Haber A common theme in commercial litigation is the assertion of a breach of contract claim and a fraudulent inducement claim. As readers of this Blog know, where both claims are asserted, more times than not, the fraud claim is dismissed under the duplication of claims doctrine. Stated simply, the doctrine provides that a fraud claim cannot stand side-by-side with a breach of contract claim when there is “a valid and enforceable written contract govern a pa