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 (

Proper service of process is necessary before the court can acquire personal jurisdiction over the defendant to a lawsuit. If service of process is not properly effectuated the court is “…without personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void.” Citimortgage, Inc. v. Twersky , 153 A.D.3d 1230 (2 nd Dep’t 2017) (citations and internal quotation marks omitted). CPLR 308 sets forth several methods by which servic

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

The Second Department has held that “ o state a cause of action to recover damages for legal malpractice, a plaintiff must allege that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages.” Board of Managers of Bay Club v. Borah, Goldstein, Schwartz, Altschuller & Nahins, P.C. , 97 A.D.3d

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

In Deutsche Bank National Trust Co. v. Flagstar Capital Markets , the New York Court of Appeals held that an agreement to “delay the commencement” of the statute of limitations “was inconsistent with New York law and public policy.” ( Here .) Thus, although parties may agree after a cause of action has accrued to extend the statute of limitations, they may not do so before their agreement. John J. Kassner & Co. v City of New York , 46 N.Y.2d 544, 550, 551 (1979). Since the pa

On April 10, 2019, the Appellate Division, Second Department, reversed the denial of motions to dismiss fraud claims alleged in connection with the purchase and sale of a $6.2 million home in Harrison, New York. Comora v. Franklin , 2019 N.Y. Slip Op. 02671 (2d Dept. Apr. 10, 2019) ( here ). The decision addresses whether contractual disclaimers can preclude a fraudulent concealment claim. As readers of this Blog know, we recently addressed this issue here and here . Under Ne

In 1970, the New York Legislature enacted General Business Law (“GBL”) § 349, New York’s deceptive trade practices act. As enacted, Section 349 empowered the Attorney General to bring an action to enjoin “ eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in th state.” In 1980, the Legislature amended the statute to add Section 349(h), which provides a private right action to consumers seeking to recover damages

As a general rule, a corporation that acquires the assets of another company is not liable for the liabilities of its predecessor. Schumacher v. Richards Shear Co. , 59 N.Y.2d 239, 245(1983). As with many rules, there is an exception. In this instance, the de facto merger doctrine. Under the doctrine, “ corporation may be held liable for the torts of its predecessor if (1) it expressly or impliedly assumed the predecessor’s tort liability, (2) there was a consolidation or m

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

This Blog has featured numerous treatments of the procedural, substantive and evidentiary law in residential mortgage foreclosure actions. < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , and < HERE =">HERE</a>"> . The Supreme Court of the State of New York, Appellate Divisi

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