Sometimes state appellate courts affirm or modify lower court decisions without providing much in the way of analysis. With overburdened dockets and substantially similar issues being decided, it is no surprise these courts issue short decisions that have more value to the parties than to the bar. Such is the case in BML Properties Ltd. v. China Construction America Inc. , 2019 N.Y. Slip Op. 05339 (1st Dept. July 2, 2019) ( here ). Overview and the First Department’s Decisi

On July 1, 2019, this Blog wrote about Hoffman v. AT&T Inc. , 2019 N.Y. Slip Op. 31811(U) (Sup. Ct. N.Y. County, June 21, 2019) ( here ). Hoffman involved a motion, under CPLR § 2201, to stay an action filed in state court, alleging claims under the Securities Act of 1933 (the “1933 Act”), in favor of a parallel action filed in federal court, alleging claims under the 1933 Act and the Securities Exchange Act of 1934 (the “Exchange Act”). As discussed in the article, the Hoff

On March 20, 2018, the United States Supreme Court decided Cyan, Inc. v. Beaver County Employees Retirement Fund , 138 S. Ct. 1061, 1069 (2018), in which it unanimously held that the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”) does not strip state courts of subject-matter jurisdiction over class actions involving claims exclusively brought under the Securities Act of 1933 (the “1933 Act”), and does not allow for the removal of those cases to federal court.

Since the early 20th century, a plaintiff alleging fraud in New York can recover only the actual pecuniary loss sustained as a result of the misrepresentation or omission, i.e. , the plaintiff’s out-of-pocket damages. Reno v. Bull , 226 N.Y. 546 (1919); see also Continental Cas. Co. v. PricewaterhouseCoopers, LLP , 15 N.Y.3d 264 (2010). The damages recoverable under the out-of-pocket rule are intended to compensate plaintiffs for what they lost because of the fraud, not for w

On November 18, 2018, this Blog wrote about Brown v. Cerebus Capital Management, LP , 2018 N.Y. Slip Op. 32782 (Sup. Ct., N.Y. County Oct. 30, 2018) ( here ). Brown involved the grant of employment compensation that plaintiffs claimed, among other things, was part of a fraudulent scheme to deprive them of their benefits. The gravamen of the article pertained to the difference between the standards for pleading fraud with particularity under the Civil Practice Law and Rules (

Litigations often get settled before trial. When parties decide to settle their disputes, they typically agree to exchange mutual releases – i.e. , they agree to give up any claims they have, and may have, against each other. By exchanging releases, the parties to a settlement are, therefore, securing for themselves, and those bound by the release, complete peace from future litigation involving the same subject matter in their dispute. Generally, a “release constitutes a c

Sometimes a decision goes in a direction that the reader does not expect. Bashian & Farber, LLP v. Syms , 2019 N.Y. Slip Op. 04348 (2d Dept. June 5, 2019) ( here ), is such a case. Bashian involved what appeared to be a straightforward case concerning an alleged fraud and fraudulent conveyance in the context of a fee dispute between a law firm and its former client. While the case involved the elements of those claims, its holding focused on the concept of scheme liability –

A forum selection clause is contractual provision that sets forth the location designated by the parties for dispute resolution. Such clauses can be found in virtually every type of contract imaginable, e.g. , employment agreements, commercial contracts, and purchase and sale agreements. Parties require forum selection clauses to reduce litigation expenses, avoid adverse laws, and mitigate the risks associated with unknown foreign judges and/or juries. Under New York law, “a

It has long been the law in New York that a party’s disclaimer of reliance on extra-contractual representations and omissions will not preclude a fraudulent inducement claim unless: (1) the disclaimer is specific to the fact alleged to be misrepresented or omitted; and (2) the alleged misrepresentation or omission does not concern facts peculiarly within the knowledge of the non-moving party. Basis Yield Alpha Fund v. Goldman Sachs Group, Inc. , 115 A.D.3d 128, 137 (1st Dept

In today’s post, this Blog looks at two cases decided by the Appellate Division, Second Department, involving the first element of a common law fraud and insurance fraud cause of action: the making of a misrepresentation of material fact. In Tsinias Enters. Ltd. v. Taza Grocery, Inc. , 2019 N.Y. Slip Op. 04020 (2d Dept. May 22, 2019) ( here ), the Court affirmed the dismissal of a fraud and fraudulent inducement action because the plaintiff failed to plead a misrepresentation

This Blog has written about the justifiable reliance element of a fraud cause of action on many occasions. We have noted that whether a plaintiff justifiably relied on the misrepresentations and omissions of a defendant is a fact-intensive inquiry. DDJ Mgt., LLC v. Rhone Group L.L.C. , 15 NY3d 147, 155 (2010). In today’s post, we look at Buechel v. Sovereignty, LLC , 2019 N.Y. Slip Op. 31372(U) (Sup. Ct. Tompkins County May 16, 2019) ( here ), a case in which the issue was de

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 defendants. The failure to do so, as in Poms v. Dominion Diamond Corp. , Index No. 655733/2017, 2019 NY Slip Op 31364(U) (Sup. Ct. N.Y. County May 15, 2019) ( here ), will result in dismissal o

In today’s post, this Blog takes a look at fraud allegations in foreclosure action involving two commercial mortgages that secured more than $24 million in indebtedness. Orchard Hotel LLC v. D.A.B. Group LLC , 2019 N.Y. Slip Op. 03893 (1st Dept. May 16, 2019) ( here ). Relevant to today’s article is the motion court’s denial of a motion to dismiss fraud-based cross-claims and the First Department’s affirmance of that decision. Orchard Hotel LLC v. D.A.B. Group LLC Background

On April 25, 2018, this Blog wrote about INTL FCStone Mkts., LLC v. Corrib Oil Co. Ltd. , 2018 N.Y. Slip Op. 30646(U) (Sup. Ct., N.Y. County, Apr. 9, 2018) ( here .) The case involved a motion for summary judgment involving claims that Defendant, Corrib Oil Co. Ltd. (“Corrib”), owed the plaintiff, INTL FCStone Markets, LLC (“FCStone”), nearly $3.5 million in connection with investment in more than 800 derivatives transactions over a four-year period. In granting the motion, J

This Blog has previously written about the equitable estoppel doctrine in the context of the statute of limitations ( here ). See General Stencils v. Chiappa , 18 N.Y.2d 125, 128 (1966); Zumpano v. Quinn , 6 N.Y.3d 666, 674 (2006); Matter of Steyer , 70 N.Y.2d 990, 993 (1988). The doctrine has also been used as a basis to reject a jurisdictional defense. Matre v. Erie County Pub. Adm’r. , 283 A.D.2d 1025, 1026 (4th Dept. 2001) (applied to personal jurisdiction and statute of

In Siwiec v. United Rest. Group Inc. , 2019 N.Y. Slip Op. 31152(U) (Sup. Ct. Kings County Apr. 11, 2019) ( here ), the Court reminds litigants that if they want to bring a fraud claim along with a contract claim, they must allege misrepresentations that are collateral or extraneous to the contract. Siwiec involved a dispute over the management of a restaurant. According to the complaint, the parties met in May 2016, when Defendant, Christian Vega (“Vega”), the Chairman and C

This Blog has strived to highlight cases and issues that may be of interest to our readers. Sometimes, however, a case involves so many issues it is hard to isolate one or two for discussion purposes. Such is the case with RKA Film Fin., LLC v. Kavanaugh , 2019 N.Y. Slip Op. 03302 (1st Dept. Apr. 30, 2019) ( here ). RKA Film involved allegations of fraud, fraudulent inducement and negligent misrepresentation in connection with a series of loans that RKA Film Financing, LLC (

This Blog has written about cases in which the plaintiff claims to have been defrauded but fails to allege with particularity the elements of the claim. As readers of this Blog know, the element that most often spells failure for the plaintiff is reasonable reliance – that is, reliance on the alleged misrepresentation or omission. Today’s article looks at another case in which the plaintiff alleged reliance on alleged misrepresentations but failed to assert facts showing that

In Sotheby’s, Inc. v. Chowaiki , 2019 N.Y. Slip Op. 30970(U) (Sup. Ct. N.Y. County Apr. 4, 2019) ( here ), Justice Andrea Masley of the New York Supreme Court, Commercial Division, issued an opinion addressing the question “whether a guarantor remains bound by a guarantee whose underlying contract has since been modified without notice to the guarantor.” As discussed below, the Court held that a guarantor is bound by his/her guaranty notwithstanding modifications to the under

As every lawyer knows, the practice of law requires compliance with various deadlines. Some are court ordered, while others are statutory. To be sure, there are many practitioners who do not sweat the time constraints imposed by a deadline. Indeed, “ oo many pages of the Reports, and hours of the courts, are taken up with deadlines that are simply ignored.” Miceli v. State Farm Mut. Auto Ins. Co. , 3 N.Y.3d 725, 727 (2014). However, most lawyers likely wake up in the middle o