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

Readers of this Blog know that we have addressed fiduciary duty claims in the past ( here ), most often in the context of a claim against a financial advisor, a corporate officer, or an LLC member ( e.g. , here , here , here ). There are, of course, other relationships that involve fiduciary duties, e.g. , lawyers, bankers, business partners, corporate officers and directors, managing shareholders, personal representatives (executors and administrators), and trustees. Fiducia

The desired result of litigation is a judgment fully and finally resolving the matter. In many instances, the resolution of a lawsuit involves a money judgment. Article 52 of the CPLR governs the enforcement of money judgments. There are several mechanisms by which a judgment creditor can enforce a money judgment against a judgment debtor. For example, CPLR 5018 permits a judgment to be docketed against real property of the judgment creditor. Once a judgment is dockete

Insurance. It is an important part of life. People buy insurance for many reasons, such as for the protection of their health, auto, business and home. The expectation is that one’s insurance policy will cover enough risks to protect against financial loss. As explained by Investopedia, an online resource “dedicated to financial education and empowerment” ( here ), “ nsurance policies are used to hedge against the risk of financial losses, both big and small, that may resul

Arbitration is an alternative form of dispute resolution where the parties voluntarily agree that a neutral, private person will resolve any legal disputes between them, instead of a judge or jury in a court of law. Rent-A-Ctr., W, Inc. v. Jackson , 561 U.S. 63, 67 (2010) (noting that “arbitration is a matter of contract”). In business and commercial transactions, arbitration is the preferred means of resolving disputes. It is encouraged and recognized as the public policy of

To plead a fraud or fraudulent inducement claim, a plaintiff must allege the following: “a misrepresentation or a material omission of fact which was false and known to be false by the defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury.” Pasternack v. Laboratory Corp. of Am. Holdings , 27 N.Y.3d 817, 827 (2016) (internal citations and quotation marks omi

Commercial transactions very often involve parties from different states. One party can be domiciled in New York, for example, while the other can be incorporated or headquartered in Delaware. When a dispute arises between such geographically diverse parties, questions concerning the jurisdiction of a court over the parties often gets litigated. This becomes even more pronounced when the corporation is a multinational company, which conducts business across the county and th

On January 15, 2019, the New York State Supreme Court, Appellate Division, First Department rendered a decision in In re: New York State Land Title Association, Inc. v. New York State Department of Financial Services , in which the Court, inter alia , upheld certain provisions of the Insurance Law and related regulations promulgated by the Department of Financial Services (“DFS”) designed to “explicitly prohibit the practice of kickbacks from insurers to title closers, attor

Laches is an equitable bar to a claim that is based on a lengthy failure to assert one’s rights that prejudices an adverse party. The doctrine is “designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.” Order of R.R. Tels. v. Ry Express Agency, Inc. , 321 U.S. 342, 348-49 (1944). As explained in Law.Com’s online dictionary, the doctri

The elements of a common law fraud claim are well known to readers of this Blog: to wit, a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff, and damages. Eurycleia Partners, LP v. Seward & Kissel, LLP , 12 N.Y.3d 553 (2009). While the justifiable reliance and intent to deceive elements are frequently the focus of a defendant’s challenge, the falsity element can be front and center too, especial

In commercial and business litigation, it is common for plaintiffs to assert claims against a corporation ( e.g. , C-Corp. or an S-Corp.) or limited liability company (“LLC”) for wrongs committed by the entity. Often, plaintiffs will try to “pierce the corporate veil,” or get behind the corporate form, to hold the entity’s officers or members liable for the alleged wrongdoing. Since a plaintiff must show that an officer or member used his/her control over the entity to commi