DCL § 273-a (conveyances by defendants) provides that a conveyance made without fair consideration by a defendant in an action for money damages is fraudulent as to the plaintiff in that action, regardless of intent, if the defendant fails to satisfy a resulting judgment in the action. Fair consideration encompasses two components: “whether the amount given for the transferred property was a ‘fair equivalent’ or not ‘disproportionately small’” and “whether the transaction ma

A client calls up an attorney and describes a situation in which two parties are litigating an issue that the client maintains she has interest in. She wants to be sure that her interests are not adversely affected by the outcome of that litigation. She asks the lawyer what she can do. The answer (for purposes of today’s article): intervene in the action. Intervention is a procedure by which a nonparty may join a pending litigation. In New York, intervention is governed by CP

On January 19, 2021, the Appellate Division, First Department issued three decisions involving claims of fraud. See United Natural Foods, Inc. v. Goldman Sachs Grp. , 2021 N.Y. Slip Op. 00276 (1st Dept. Jan. 19, 2021) ( here ); KS Trade LLC v. International Gemological Inst., Inc. , 2021 N.Y. Slip Op. 00259 (1st Dept. Jan. 19, 2021) ( here ); and Itria Ventures LLC v. Provident Bank , 2021 N.Y. Slip Op. 00257 (1st Dept. Jan. 19, 2021) ( here ). Although these cases involved d

It has long been held that “promissory statements as to what will be done in the future are not actionable.” Adams v. Clark , 239 N.Y. 403, 410 (1925). However, when the promissory statement is “made with a preconceived and undisclosed intention of not performing it,” it becomes an actionable misrepresentation of existing fact. Sabo v. Delman , 3 N.Y.2d 155 (1957). The foregoing principles have been examined by this Blog numerous times ( e.g. , here and here ). In today’s ar

When a person claims fraud, he/she typically claims that the alleged wrongdoer made an affirmative misrepresentation of fact. Fraud does not, however, always concern an affirmative statement. Sometimes a person can perpetrate a fraud through the omission of a material fact. For this reason, when alleging fraud, a plaintiff may allege that the defendant made “a misrepresentation or a material omission of fact which was false and known to be false.” Mandarin Trading Ltd. v. Wil

When a plaintiff initiates a lawsuit, he/she must file and serve a summons and complaint. Typically, the plaintiff will hire a process server to effect service. If the process server errs in making service (that is, service is deemed to be improper and defective), the defendant may object and assert an affirmative defense that the court lacks personal jurisdiction over him/her because service was defective. However, as discussed in today’s post, this defense can be waived if

A “recurring question” courts in New York grapple with is whether the facts alleged in a complaint give rise to sustainable claims for both breach of contract and fraudulent inducement. Cronos Grp. v. XComIP, LLC , 156 A.D.3d 54, 56 (1st Dept. 2017). Readers of this Blog know that a fraud claim, which “ar from the same facts , s identical damages and d not allege a breach of any duty collateral to or independent of the parties’ agreements<,> is subject to dismissal as red

To plead a claim for fraud in the inducement or fraudulent concealment, a plaintiff must allege facts to support the claim that it justifiably relied on the alleged misrepresentations. A sophisticated party, like the plaintiff in MBF Clearing Corp. v. JPMorgan Chase Bank, N.A. , 2020 N.Y. Slip Op. 07504 (1st Dept. Dec. 15, 2020) ( here ), must allege that it exercised due diligence and took affirmative steps “to protect itself against deception.” DDJ Mgt., LLC v. Rhone Group

In New York, foreign entities – that is, corporations, limited liability companies and partnerships authorized to do business in another jurisdiction or country – are required to register to business with the Secretary of State. See BCL § 1312(a). The failure to receive such authority deprives the foreign entity of the ability to affirmatively access the courts of New York and subjects any action commenced by the foreign entity to dismissal. See United Envtl. Techniques, Inc

“A cause of action for fraud does not arise when the only fraud charged relates to a breach of contract.” Krantz v. Chateau Stores of Can. Ltd. , 256 A.D.2d 186, 187 (1st Dept. 1998) (citations omitted). “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.” Id. (citations and quotation marks omitted). One way to satisfy this re

Hang on Sloopy was a hit song in the mid-1960s. Years later, the band that performed and recorded the song – the McCoys – claimed that they were cheated out of substantial sums of money due to fraud. That claim, however, was time-barred, held the Court in Derringer v F.G.G. Prods. Inc. , 2020 N.Y. Slip Op. 33854(U) (Sup. Ct., N.Y. County Nov. 18, 2020) ( here ). Fraud claims must be commenced within “the greater of six years from the date the cause of action accrued or two ye

A “recurring question” courts in New York grapple with is whether the facts alleged in a complaint give rise to sustainable claims for both breach of contract and fraudulent inducement. Cronos Grp. v. XComIP, LLC , 156 A.D.3d 54, 56 (1st Dept. 2017). Readers of this Blog know that a fraud claim, which “ar from the same facts , s identical damages and d not allege a breach of any duty collateral to or independent of the parties’ agreements<,> is subject to dismissal as red

Disputes between an insured and insurer occur all the time. These disputes often concern whether the policy covers a certain event. Sometimes, as in AB Oil Servs., Ltd. v. TCE Ins. Servs., Inc. , 2020 N.Y. Slip Op. 06232 (2d Dept. Nov. 4, 2020) ( here ), the dispute concerns the alleged failure to satisfy a specific request for coverage not already provided in one’s policy. Other times, the dispute concerns alleged fraud and negligent misrepresentation ( i.e. , breach of a du

Melville, NY (Law Firm Newswire) November 2, 2020 – Freiberger Haber LLP is pleased to announce that co-founding partners, Jonathan H. Freiberger and Jeffrey M. Haber, have been named by Super Lawyers magazine to be among the top lawyers in the New York metropolitan area. This is Mr. Freiberger’s first year and Mr. Haber’s ninth consecutive year of selection. Both Messrs. Freiberger and Haber were recognized for their work in business litigation. “I am honored to be named to

As readers of the Blog know, when it comes to fraud-based actions, we like to write about them. While many of the cases we examine fall into similar patterns, sometimes a case deviates from the norm. King Penguin Opportunity Fund III, LLC v. Spectrum Group Mgt. LLC , 2020 N.Y. Slip Op. 06230 (1st Dept. Oct. 29, 2020) ( here ), is such as case. King Penguin concerned, among other claims, a fraudulent inducement claim arising from the execution of a term sheet for a proposed l

Readers of this Blog know that, as a general matter, New York courts will not permit a fraud-based claim ( i.e. , fraudulent inducement) to survive a motion to dismiss when the claim arises from a breach of contract. Indeed, courts routinely dismiss a fraud claim where “ he existence of a valid and enforceable written contract govern a particular subject matter” and the recovery sought arises out of the same facts and circumstances. Clark-Fitzpatrick v. Long Is. , 70 N.Y.2d

A shareholder’s derivative action is a lawsuit “brought in the right of a … corporation to procure a judgment in its favor, by a holder of shares or of voting trust certificates of the corporation or of a beneficial interest in such shares or certificates.” Marx v. Akers , 88 N.Y.2d 189, 193 (1996) (quoting Business Corporation Law § 626 (a)). Derivative claims against corporate officers and directors belong to the corporation itself. Auerbach v. Bennett , 47 N.Y.2d 619, 631

Every now and then, we come across a legal principle that we do not frequently write about. One such principle is replevin. A plaintiff brings an action in replevin to recover personal property that was wrongfully taken or withheld. Pivar v. Graduate School of Figurative Art , 290 A.D.2d 212, 212 (1st Dept. 2002) (citations omitted). In a replevin action, the plaintiff seeks the return of property, not money damages. Genger v. Genger , 2016 N.Y. Slip Op. 30602 (Sup. Ct., N.Y.

Attorneys are often asked whether an agreement that is not formally reduced to writing or not in writing at all is enforceable. Most will say that the answer depends on the surrounding facts and circumstances. Since the question often arises in the context of a contract dispute, it is helpful to examine the legal principles that guide the determination of contract enforceability. The elements of a cause of action for breach of contract are (1) the formation of an agreement,

Under New York law, a party commences a civil action by filing a summons and complaint. Generally speaking, these documents set forth the claims that are being asserted against the defendant(s). Typically, though not required in all instances, the plaintiff will verify the complaint. “A verification is a statement under oath that the pleading is true to the knowledge of the deponent .…” CPLR § 3020 (a). The verification makes the pleading sworn and, therefore, is the equivale