One of the issues that courts have to address when deciding fraud claims is whether a statement contains hyperbole or concrete facts. The former, which are not actionable, includes puffery, optimism, future expectations, and opinion, while the latter, which are actionable, includes statements of present or historical fact. Sometimes, the line between these types of statements is blurred or non-existent. Other times, the line is easy to discern. While determining the differen

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On March 27, 2019, the Appellate Division, Second Department, issued a decision involving charges of fraud and fraud on the court. In Sammy v. Haupel , 2019 N.Y. Slip Op. 02372 (2d Dept. Mar. 27, 2019) ( here ), the Court was asked to consider the dismissal of claims arising under, inter alia , Judiciary Law § 487 and common law fraud. As discussed below, the Court affirmed the dismissal of both claims. Sammy arose from a transaction to purchase real property located in Que

In McKissack Group, Inc. v. MacFarland , 2019 N.Y. Slip Op. 30694(U) (Sup. Ct. N.Y. County Mar. 18, 2019) ( here ), Justice Kathryn E. Freed of the Supreme Court, New York County, recently upheld a challenge to a claim for fraudulent inducement, finding that the plaintiff satisfied the elements of the claim and did so with the particularity required under CPLR § 3016(b). A Quick Primer on Pleading A Fraudulent Inducement Claim To state a claim for fraudulent inducement, “th

A common issue for litigators concerns the computation of time for statute of limitations purposes, answers to pleadings, and responses to motions and discovery requests. In particular, what to do when the last day for filing falls on a weekend or holiday. Under Rule 6(a)(1)(C) of the Federal Rules of Civil Procedure, when the last day to file falls on a weekend or holiday, the filing date is carried over to the next business day. See also Rule 26(a)(1)(C). Under the New

Statute of limitations issues frequently arise in residential mortgage foreclosure actions. Mortgage foreclosure actions are governed by a six-year statute of limitations. See CPLR 213(4) . Generally, the statute of limitations for each missed payment runs from the date of the missed payment. Bank of New York Mellon v. Celestin , 164 A.D.3d 733 (2 nd Dep’t 2018). In order to avoid having to sue on each missed payment or groups of missed payments, mortgages usually conta

On March 19, 2019, the Appellate Division, First Department, issued two decisions involving a number of issues related to the assertion of a fraudulent inducement claim – i.e. , whether (a) the claim was duplicative of a contract claim, (b) the plaintiff justifiably relied on the alleged misrepresentations, and (c) disclaimer and merger clauses operated to render reliance on the alleged misstatements unreasonable – and a fraud claim – i.e. , whether there was falsity. Ohm NYC

Stephen King is quoted as saying that “the truth is in the details. No matter how you see the world …, the truth is in the details.” This quote fairly sums up the pleading requirement that all plaintiffs must satisfy when alleging a fraud. They must provide sufficient details of the alleged misconduct to support a reasonable inference that the allegations of fraud are true. In Q Semiconductor Inc. v. GlobalFoundries U.S. 2 LLC , 2019 N.Y. Slip Op. 30603(U) (Sup. Ct., N.Y. Co

On March 14, 2019, the Appellate Division, First Department, unanimously affirmed the denial of a summary judgment motion seeking to dismiss a fraudulent inducement claim alleged in connection with the purchase of a mixed-use property on Union Avenue in the Bronx, New York (the “Subject Property”). Union Ave. Estates, LLC v. Garsan Realty Inc. , 2019 N.Y. Slip Op. 01827 (1st Dept. Mar. 14, 2019) ( here ). The decision, though short and concise, addresses a couple of principle

In Ambac Assur. v. Countrywide , 31 N.Y.3d 569, 579 (2018) ( here ), the Court of Appeals described the justifiable reliance requirement of a fraud claim as a “fundamental precept” of the cause of action. As such, the justifiable reliance requirement is considered to be a necessary tool to weed out fraud claims by plaintiffs who “are lax in protecting themselves”. See ACA Fin. Guar. Corp. v. Goldman, Sachs & Co. , 25 N.Y.3d 1043, 1051 (2015) (Read, J., dissenting on other gro

The title of a today’s post sums up the difficulties a plaintiff encounters when trying to pierce the corporate veil to hold a corporate officer, director or shareholder responsible for the wrongs alleged to have been perpetrated on the plaintiff. This is not to say that a plaintiff can never prevail. Rather, it is a reflection of the fact that the plaintiff bears a heavy burden to do so. ABN AMRO Bank, N.V. v. MBIA Inc. , 17 N.Y.3d 208, 235 (2011). In Town-Line Car Wash, In

It is not uncommon for the owners of a business wishing to remove or buy-out one of their own, or who wish to dissolve the entity, to retain a valuation expert to perform an appraisal of the entity or the ownership interest at stake. When the parties cannot reach an agreement and choose to litigate their dispute, the question arises whether the valuation report is discoverable? Like many questions under the law, the answer depends upon the circumstances under which report was

There are five elements to a fraud claim: “(1) a material misrepresentation of a fact, (2) knowledge of its falsity, (3) an intent to induce reliance, (4) justifiable reliance by the plaintiff, and (5) damages.” Eurycleia Partners, LP v. Seward & Kissel, LLP , 12 N.Y.3d 553, 559 (2009). A plaintiff alleging fraud must meet each element in order to prevail, whether it be on a motion or at trial. Menaco v. New York Univ. Med. Ctr. , 213 A.D.2d 167 (1st Dept. 1995). The failure

As readers of this Blog know, we cover a broad range of issues that fall under the umbrella of commercial and business litigation. Two issues that often receive treatment from this Blog are the application of the statute of limitations to fraud-based claims, and the court’s ability to exercise jurisdiction over a defendant. Recently, Justice Saliann Scarpulla of the Supreme Court, New York County, Commercial Division, issued an opinion that involves both of these issues. Mago

In today’s world of e-commerce, a person cannot buy something online, subscribe to a service, or join a club or organization without agreeing to the provider’s “terms of service”. These terms are often lengthy and difficult to read ( i.e. , they are not written in plain English). For these reasons, among others, most consumers simply click the “I agree” button or link without reading the text or thinking about what they agreed to. To many consumer advocates, such electronic

Section 470 of New York’s Judiciary Law , provides: A person, regularly admitted to practice as an attorney and counsellor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counsellor, although he resides in an adjoining state. Section 470 requires that “non-resident attorneys must maintain an office within New York to practice in .” ( Schoenefeld v. State , 25 N.Y.3d 22 (2015).) O

It is well settled that New York has a “long and strong public policy favoring arbitration,” such that the “courts interfere as little as possible with the freedom of consenting parties to submit disputes to arbitration.” Smith Barney Shearson v. Sacharow , 91 N.Y.2d 39, 49-50 (1997) (internal quotation marks omitted). In light of this public policy, arbitration is encouraged “as a means of conserving the time and resources of the courts and the contracting parties” to a dis

Like the iconic scene when a cruise ship is leaving the dock, the New York Supreme Court, Appellate Division, Second Department, in BAC Home Loans Servicing, LP v. Alvarado (January 30, 2019), has everyone waiving. CPLR 3018(b) requires that “ party plead all matters which if not pleaded would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading….” Generally, affirmative defenses are waived by the def

Commercial litigation practitioners know that, as a general matter, 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

Statutes of limitations encourage plaintiffs to pursue the prosecution of their claims as soon as they are known. As the term implies, they are statutory mechanisms that limit the duration of a defendant’s liability for all types of alleged wrongdoing, e.g. , fraud, breach of fiduciary and negligence. These statutes “promote justice by preventing surprises through revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witne