It is well settled that when an agreement is clear and unambiguous, the parties’ rights are to be governed exclusively by that agreement and the courts are to give the words of that agreement their plain, ordinary, and usual meaning. It is equally well-settled law that parties engaged in an arm's-length business transaction are not fiduciaries, especially when the parties are sophisticated businesspeople. Despite the clarity of these principles, they are, nevertheless, tested

Attorneys are often asked whether an oral agreement is enforceable. Most will say that the answer depends on the law and the facts surrounding the agreement. As an initial matter, to be enforceable, an oral agreement must contain the elements of a binding contract, e.g. , an offer, acceptance, consideration, mutual assent, an intent to be bound, and agreement on all essential terms. Even if these elements are present, the agreement must still satisfy the Statute of Frauds.

New York’s Business Corporation Law (“BCL”) provides shareholders owning 50% or more of a corporation two paths to judicial dissolution: a) BCL § 1104 – deadlock at the board or shareholder level such that the corporation “cannot continue to function effectively, and no alternative exists but dissolution”; or b) BCL § 1104-a – where directors or those in control of the corporation have been guilty of illegal, fraudulent or oppressive actions toward the complaining shareholder

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 brimming with cases in which the courts have dismissed fraud actions due to pleading and proof deficiencies. Norddeutsche Landesbank Girozentrale v. Tilton , 2019 N.Y. Slip Op. 32470(U) (Sup. Ct., N.Y. County Aug. 20, 2019) ( here ), is a recent example of this phenomenon. In Norddeutsche , Plaintiffs contended that they were defrauded into inves

The location of the place of trial ( or venue) of a legal proceeding in New York State is the location where the action is brought. The plaintiff, as the party bringing the proceeding, generally gets to choose, in the first instance, venue. Plaintiffs, however, do not always choose a proper venue (“Improper Venue Selection”). In such instances, a defendant has an opportunity to change the Improper Venue Selection to a proper one. See CPLR 510 (1) . Other times, although

There is a broad presumption that the public is entitled to access to judicial proceedings and court records. Mosallem v. Berenson , 76 A.D.3d 345, 348 (1st Dept. 2010); Mancheski v. Gabelli Grp. Capital Partners , 39 A.D.3d 499, 501 (2d Dept. 2007); Gryphon Dom. VI, LLC v. APP Intl. Fin. Co., B.V. , 28 A.D.3d 322, 324 (1st Dept. 2006); Danco Labs. v. Chemical Works of Gedeon Richter , 274 A.D.2d 1, 6 (1st Dept. 2000). New York has “long recognized that civil actions and proc

Statutes of limitations are statutory mechanisms that limit the duration of a defendant’s liability for all types of alleged wrongdoing. Depending upon the circumstances, the statute of limitations can be an important topic of discussion between lawyer and client. As many practitioners know, there are exceptions to the general rule that the statute of limitations runs from the time of the tort or breach though no damage occurs until a later time. One exception that practition

In New York, Section 3211(a) of the Civil Practice Law and Rules (“CPLR”) provides the primary mechanism by which a party can make a motion, before a responsive pleading, to dismiss one or more causes of action alleged against that party. A “cause of action” subject to dismissal under CPLR § 3211(a), includes counterclaims, cross-claims, and third-party claims. There are several grounds under CPLR § 3211(a) on which a party may move to dismiss. These include (but are not lim

On August 6, 2017, Justice Andrew Borrok of the Supreme Court, New York County, Commercial Division, decided In re Everquote, Inc. Securities Litigation , 2019 N.Y. Slip Op. 29242 (Sup. Ct., N.Y. County Aug. 6, 2019) ( here ), in which he held that the automatic stay of discovery required by the Private Securities Litigation Reform Act of 1995 (the “Reform Act” or “PSLRA”), 15 U.S.C. § 77z-1(b)(1), applies in state court as well as in federal court. In doing so, Justice Borro

Forum non conveniens is a common law doctrine in which a court may dismiss an action where another forum would be better suited to adjudicate the matter. In New York, the doctrine is codified in CPLR §327(a). Under this section, a court may stay or dismiss an action if it finds “that in the interest of substantial justice the action should be heard in another forum.” CPLR § 327(a). The party seeking dismissal bears a heavy burden of establishing that New York is not the pro

There is almost nothing more frustrating, or potentially costlier, to a business than a dispute over the meaning of a contract. Such disputes can take many forms. It may be that the language used is ambiguous; or the language is reasonably clear but is susceptible to different meanings; or although the language is clear, taken literally, it might not reflect the parties’ intent; or, as is often the case, an event has occurred that was not contemplated by the parties at the ti

Insurance policies typically provide that the insurer will “defend” its insured in the event of a lawsuit and “indemnify” its insured against liability resulting therefrom. The insurer’s duty to defend, however, is broader than its duty to indemnify. Seaboard Surety Co. v. Gillette Co. , 64 N.Y.2d 304 (1984). Simply stated, an insurer may be obligated to provide a defense to a lawsuit even though it may be relieved of the obligation to indemnify its insured from any judgme

Distinguishing between direct and derivative claims is not easy. Sometimes, the difficulty arises because of the entity involved. For example, in the LLC context, there are fiduciary relationships ( e.g. , managing member and non-managing member) that will support a direct action in circumstances that might otherwise require a derivative action. E.g. , Pokoik v. Pokoik , 115 A.D.3d 428 (1st Dept. 2014); Salm v. Feldstein , 20 A.D.3d 469, 470 (2d Dept. 2005). Other times, the

On July 18, 2019, Justice Joel M. Cohen of the Supreme Court, New York County, Commercial Division, decided Shyer v. Shyer , 2019 N.Y. Slip Op. 32138(U) (Sup. Ct., N.Y. County July 18, 2019) ( here ), a third-party action involving allegations of fraudulent concealment relating to the failure to disclose material information about the deteriorating health of a company executive for the purpose of securing about $150,000 in annual benefits. The company, Zyloware Corp. (“Zylowa

Derivative actions are brought by current shareholders of a company to redress the harm (monetary or equitable) incurred by the company as the result of officer/director self-dealing, breaches of fiduciary duty, and/or other wrongdoing; to restore shareholder value caused by mismanagement and the waste of corporate assets; and to enhance and strengthen internal controls and the company’s governance policies and procedures. Very often, shareholder derivative actions are filed

McGuckin v. Privilege Underwriters Reciprocal Exch. was decided by the Appellate Division, Second Department, on July 17, 2019. The facts of McGuckin , at least from the Second Department’s decision, seem rather straight forward. The plaintiff, who was a passenger in a vehicle owned by Carol Giambrone and driven by Douglas Giambrone, was injured when the vehicle was in an accident. The vehicle was insured by defendant Privilege under a policy that provided at the time of

Readers of this Blog know that, as a general matter, New York courts will not permit a fraudulent inducement claim to survive a motion to dismiss when the claim arises from a breach of contract. Indeed, courts routinely dismiss a fraudulent inducement 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 382 (1

Working with friends can be both rewarding and challenging. The comfort that brings friends together often is replaced by the stress and rigors of running a business. Because friends have a history together, professional disagreements often become heated, especially when there are pent up issues or grudges that one holds about the other. Similarly, the character traits that created the friendship are often replaced by a professional (and, some would say, ugly) demeanor that w

Frequently, important terms of a contract are intended to be incorporated by reference into other documents. Litigation frequently arises when one party disputes whether the terms of extrinsic documents were indeed made part of the executed agreement. The parties in Movado Group, Inc. v. Mozaffarian , 92 A.D.3d 431 (1 st Dep’t 2012), entered into a credit agreement in which defendants “expressly acknowledged receipt of, and agreed to be bound by, terms and conditions conta

On July 9, 2019, the Appellate Division, First Department, issued three decisions involving claims of fraud and/or fraudulent inducement that piqued this Blog’s interest. One case involved whether a fraudulent inducement claim duplicated a contract claim ( Man Advisors, Inc. v. Selkoe , 2019 N.Y. Slip Op. 05483 (1st Dept. July 9, 2019) ( here ), while the other two involved the justifiable reliance element of a fraud cause of action ( Mann v. Thomas-Senior , 2019 N.Y. Slip O