By: Jeffrey M. Haber Under the doctrine of res judicata, a final judgment on the merits of a claim precludes re-litigation of that claim by a party, and those in privity with that party. 1 This means that parties cannot relitigate the claim and all claims arising out of the same transaction, or series of transactions, even if based upon different theories or if seeking different remedies. It is a “transactional analysis” that the courts of New York apply to “preclude the lit

By: Jeffrey M. Haber In today’s article, we address the question: When is an attorney authorized to act on behalf of a party? As one would expect, when the client says so, a lesson learned by the parties in Gibson, Dunn & Crutcher LLP v. Koukis , 2023 N.Y. Slip Op. 01863 (1st Dept. Apr. 11, 2023) ( here ). The primary issue in Gibson Dunn was whether the default judgment entered against defendant George Koukis in July 2019 should be vacated, and the complaint dismissed as ag

By: Jeffrey M. Haber In Norman Realty & Constr. Corp. v. 151 E. 170th Lender LLC , 2023 N.Y. Slip Op. 01843 (1st Dept. April 6, 2023) ( here ), the Appellate Division, First Department addressed the affirmative defense of contract unconscionability, a topic that this Blog has not addressed in quite some time (here). 1 It also addressed plaintiff’s claims for breach of contract and fraudulent inducement. As discussed below, Norman Realty involved an action for unconscionabi

By Jonathan H. Freiberger This Blog has previously discussed informal appearances in an article aptly titled: “ Informal Appearances ,” from which the introductory information related to informal appearances is taken. Informal Appearances It makes sense that a “plaintiff appears in an action merely by bringing it.” Deutsche Bank Nat. Trust Co. v. Hall , 185 N.Y.S.3d 1006, 1007 (2 nd Dep’t 2020) (citation and internal quotation marks omitted). Once served with process, a de

By: Jeffrey M. Haber In today’s article, we examine South Shore D’Lites LLC v. First Class Prods. Grp., LLC , 2023 N.Y. Slip Op. 01769 (1st Dept. Apr. 4, 2023) ( here ), a case involving the special facts doctrine in the context of a fraud claim, in particular, the justifiable reliance element of a fraud claim. South Shore D’Lites concerned licenses to sell ice cream. The licenses were sold to plaintiffs, South Shore D’Lites, LLC, D’Lites of West Caldwell, LLC, and HGB D’Li

By: Jeffrey M. Haber In NW Media Holdings Corp. v. IBT Media Inc. , 2023 N.Y. Slip Op. 30875(U) (Sup. Ct., N.Y. County Mar. 22, 2023) ( here ), Justice Melissa A. Crane addressed the question whether the destruction of millions of pages of data on a Google Workspace (“Workspace”) states a claim for trespass to chattels or conversion. As discussed below, Justice Crane concluded that the allegations concerning the destruction of such data sufficed to state a claim for conversio

By Jonathan H. Freiberger This Blog has frequently addressed the interplay between document discovery in litigation and the repercussions resulting from the spoliation of evidence. [ See, e.g., < here =">here</a>"> , < here =">here</a>"> , < here =">here</a>"> , < here =">here</a>"> and < here =">here</a>"> .] “Spoliation” refers to evidence that is “destroyed” “substantially altered” or “lost”. See, e.g., Gilliam v. Uni Holdings , 201 A.D.3d 83, 86 (1 st Dep’t 2021); D

By: Jeffrey M. Haber To establish a cause of action for fraud, a plaintiff must plead a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance and damages. 1 In Pope Investments II LLC v. Belmont Partners, LLC , Case No. 2022-02632 (1st Dept. Mar. 14, 2023) ( here ), and RCM/CMG Portfolio Holding, LLC v. Giordano , Case No. 2021-03254 (1st Dept. Mar. 14, 2020) ( here ), the Appellate Division, First Department addre

By: Jeffrey M. Haber Section 1104 of the Business Corporation Law (“BCL”) grants a court the power to order the dissolution of a corporation “when the holders of shares representing one-half of the votes of all outstanding shares of a corporation entitled to vote in an election of directors,” 1 establish that “the directors are so divided respecting the management of the corporation’s affairs that the votes required for action by the board cannot be obtained”, 2 or that “th

By: Jeffrey M. Haber In Standlee Premium Prods, LLC v. WGST, Inc. , 2023 N.Y. Slip Op. 30625(U) (Sup. Ct., N.Y. County Mar. 2, 2023) ( here ), the court addressed three topics that we often write about: fraudulent inducement, fraudulent conveyance and GBL § 349. As to the former, the issue before the court was whether defendants made a material misstatement of present fact – i.e. , whether defendants misrepresented their present intention to perform under the agreements know

By: Jeffrey M. Haber It is not often that we examine a case involving a cause of action for champerty. The last time we did so was on April 23, 2021 ( here ). We also examined the champerty doctrine in 2020 ( here ) and 2016 ( here ). But what is champerty? Simply, champerty is the prohibited practice of purchasing claims for the purpose of commencing litigation. New York’s prohibition against champertous transactions is codified in Section 489 of the Judiciary Law, which pr

By: Jeffrey M. Haber In 228 W. 72 LLC v. 228A W. 72 LLC , 2023 N.Y. Slip Op. 01057 (1st Dept. Feb. 28, 2023) ( here ), the Appellate Division, First Department dismissed a fraudulent inducement claim because the facts allegedly concealed were publicly available. We examine 228 W. 72 LLC below. 228 W. 72 involved the purchase of real property (the “Premises”) by Plaintiff, 228 W. 72 LLC (“Plaintiff”), from Defendant, 228A W. 72 LLC (“Defendant”). Among other things, the con

By: Jeffrey M. Haber On February 14, 2023, the New York Court of Appeals decided State of New York v. Vayu, Inc. , 2023 N.Y. Slip Op. 00801 (Feb. 14, 2023) ( here ). Vayu addressed what it means to purposefully avail oneself of the privilege of conducting activities within New York by transacting business in the state. In a 5-1 decision, authored by Judge Michael J. Garcia, the Court held that Vayu, acting through its chief executive officer, repeatedly projected itself into

By: Jeffrey M. Haber As readers of this Blog know, to form a contract, the following elements must be present: an offer, acceptance of the offer, consideration, mutual assent (or a meeting of the minds) and an intent to be bound. Contracts are subject to the equitable remedy of rescission or reformation if entered under a mutual mistake. 1 To invoke the doctrine of mutual mistake, a party must present proof that the agreement, as expressed, does not represent a “meeting of t

By: Jeffrey M. Haber Previously, this Blog has examined the doctrine of res judicata ( here and here ). Under the doctrine, a party may not litigate a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter. The doctrine applies not only to claims actually litigated but also to claims that could have been raised in the prior litigation. The rationale underlying the doctrine is that a party who has been give

By Jeffrey M. Haber Under New York law, a party’s termination of a contract is ineffective when the contract provides for notice and an opportunity to cure, and notice was not provided. 1 As explained by the First Department: Our case law is clear that a party’s termination is ineffective where the relevant contract provides for a notice to cure and notice is not provided …This approach gives effect to the principle that, generally, where contracting parties agree on a term

By: Jeffrey M. Haber Parties to commercial transactions are no doubt familiar with “term sheets”, “letters of intent”, “memoranda of understanding” and “agreements in principle”. As the parties to these documents know, they outline the fundamental terms of the transaction being negotiated. “Term sheets”, “letters of intent”, “memoranda of understanding” and “agreements in principle” may constitute an enforceable agreement if the writing includes all the essential terms of an

By: Jeffrey M. Haber The faithless servant doctrine 1 provides that an employee who is faithless in the performance of their duties ( i.e. , breaches their duty of loyalty to the employer) is not entitled to recover either salary or commission. 2 While the language of the rule may imply a broad application, courts generally apply the rule relatively narrowly. 3 Courts will usually hold an employee liable under the faithless servant doctrine only if the employee has usurped

By: Jeffrey M. Haber Typically, when a plaintiff claims to have been defrauded, he/she typically argues that the defendant 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. Where fraud by omission is claimed, the plaintiff must allege that the defendant had a duty to disclose the omitted fact. A duty to disclose arises when (1) the

By: Jeffrey M. Haber We start the new year off examining Dragons 516 Ltd. v. Knights Genesis Inv. Ltd. , 2023 N.Y. Slip Op. 50020(U) (Sup. Ct., N.Y. County Jan. 6, 2023) ( here ), a case involving many of the themes we often consider in our discussion of fraud and fraudulent inducement claims. Dragons involved a dispute between a lender and a borrower. Plaintiff, Dragons 516 Limited (“Dragons”), alleged that defendants fraudulently conspired to misrepresent the ownership str