If anyone is wondering why seemingly high-cost “loans” by litigation funding companies are not considered usurious, the Appellate Division, First Department, explained why in Cash4Cases, Inc. v. Brunetti (December 6, 2018). First, however, a bit about usury. Section 5-501 (1) of New York’s General Obligations Law , which addresses civil usury, provides that, with some exceptions, “ he rate of interest, as computed pursuant to this title, upon the loan or forbearance of any

“Law of the case” is a phrase that litigators use all of the time, often without thought or explanation. But what is the law of the case doctrine? And, when does it apply? The law of the case doctrine is part of a larger group of related concepts – i.e. , res judicata (claim preclusion) and collateral estoppel (issue preclusion) – that are designed to limit the relitigation of issues. Like res judicata and collateral estoppel, the law of the case doctrine contemplates that t

In litigation, the prevailing party is frequently entitled to the reimbursement of statutory costs. See, e.g., CPLR § 8101 . What happens if a defendant is awarded costs, but the plaintiff refuses to pay? Certainly, if the defendant is within the jurisdiction, the plaintiff can decide if it is cost effective to pursue the defendant to collect the costs. If, however, the plaintiff is in a different jurisdiction, efforts to collect awarded costs could be more difficult. Th

Plaintiffs claiming that they have been the victims of fraud must satisfy heightened pleading standards to enter the courthouse. Under the New York Civil Practice Law and Rules, CPLR 3016(b), and the Federal Rules of Civil Procedure, Rule 9(b), the circumstances constituting the alleged fraud must be stated in detail. here).=">here</a>)."> Proving fraud in New York becomes even more difficult for plaintiffs – they must prove fraud by “clear and convincing evidence,” a high

In March of this year, this Blog wrote about the voluntary payment doctrine ( here ) and how it is alive and well in New York. On November 15, 2018, the Appellate Division, First Department, addressed the doctrine and the defense of economic duress in affirming the dismissal of a complaint under the doctrine. Beltway 7 & Props., Ltd. v. Blackrock Realty Advisers, Inc. , 2018 NY Slip Op. 07844 (1st Dept. Nov. 15, 2018) ( here ). The “voluntary payment doctrine … bars recovery

In business divorce cases, it is often necessary for the parties’ experts to prepare valuation reports – that is, reports that value an owner’s interest in a business or venture. Sometimes, however, valuation reports are prepared by non-testifying consultants. When valuation reports are prepared by consultants, disputes often arise over whether those reports are discoverable. The answer depends on when they are prepared ( i.e. , in the ordinary course or in anticipation of li

If there is one thing people like less than attorneys, it is paying attorneys’ fees. Accordingly, great effort is made in contracts to shift to another party, the obligation for the payment of attorneys’ fees in the event of dispute. “Under the general rule attorneys’ fees and disbursements are incidents of litigation and the prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties or by statute or court rule.” A.

Dismissal of Securities Fraud Claim in Federal Court Has No Preclusive Effect on Common Law Fraud Claims Brought in State Court Securities fraud and common law fraud have much in common. The core elements required to prevail on both claims are similar. Yet, dismissal of a federal securities fraud claim is not necessarily the death knell of a common law fraud claim. Recently, Justice O. Peter Sherwood of the Supreme Court, New York County, Commercial Division, reached this co

< editor's note: this article has been edited. > editor's note: this article has been edited.> As discussed in previous Blog posts ( here and here ), business owners and entrepreneurs wishing to insulate themselves from personal liability for the acts taken in the name of their business can generally do so by forming a corporation ( e.g. , C-Corp. or an S-Corp.) or limited liability company (“LLC”). Such protection, however, is not absolute; there are exceptions to the rule

Practitioners and their clients involved in bond offerings or other credit instruments are no strangers to trust indentures. These agreements typically contain a no-action clause, the primary purpose of which is to deter minority securityholders from filing duplicative, economically inefficient, or otherwise meritless lawsuits against the issuer, servicer, or other third party at the expense of the majority’s interest. No-action clauses generally achieve these purposes by fu

It is a good idea for homeowners to make sure that hired home improvement contractors are licensed. Licensure, however, is just as important from the perspective of the home improvement contractors because their rights and remedies could be impacted if they are not. New York case law and statutory law address this issue. In Millington v. Rapoport , 98 A.D.2d 765 (2 nd Dep’t 1983), in reversing the court below and dismissing plaintiff’s complaint which sought to foreclose

In the prior Blog article GET RID OF A STALE MORTGAGE BY BRINGING AN ACTION UNDER RPAPL 1501(4) , we discussed provisions of New York’s Real Property Actions and Proceedings Law that permit a mortgagor to remove, of record, the lien of a stale mortgage on real property. New York’s Real Property Law contain a similar provision that permits the court to cancel certain recorded instruments that are clouds on title but were not recordable or were not required to be recorded. Th

In March, this Blog wrote ( here ) about Hyuncheol Hwang v. Mirae Asset Sec. (USA) Inc. , 2018 N.Y. Slip Op. 30368(U) ( here ). Hwang involved an employment dispute in which Hyuncheol Hwang (“Hwang”) sought to stay the arbitration of his claims on the grounds that his employment agreement with Mirae Asset Securities (USA) Inc. (“Mirae”), a broker-dealer firm registered with FINRA, contained a forum selection clause directing the parties to litigate their disputes under the a

Sir Walter Scott’s original line is infinitely better (“O, what a tangled web we weave when first we practise to deceive!”) than this Blog title, which, nonetheless helps to illustrate the instant topic – Courts will not assist litigants in enforcing illegal contracts. Stone v. Freeman , 298 N.Y. 268 (1948), is a case involving commissions for the sale of clothing. The Stone plaintiff was a broker who sued for “his commissions earned in arranging a sale by defendant, who

The distinction between common-law indemnification and contribution is important, though its application is often difficult to navigate. Glaser v. Fortunoff , 71 N.Y.2d 643, 646 (1988) (noting, “the distinction is … critical,” although “the proper characterization of third-party claims … often cause confusion.”). Generally speaking, indemnity and contribution sort out the degree of culpability of multiple defendants and their responsibility for the payment of damages to th

Courts do not hesitate to dismiss fraud claims when they are merely contract claims “dressed in the garb of a fraud count.” Songbird Jet Ltd., Inc. v. Amax Inc. , 581 F. Supp. 912, 924 (S.D.N.Y. 1984). “It is well settled that a cause of action for fraud does not arise, where the only fraud alleged relates to a contracting party’s alleged intent to breach a contractual obligation.” ( Caniglia v. Chicago Tribune-New York News Syndicate Inc., 204 A.D.2d 233, 34 (1 st Dep’t

Typically, a mortgage on real property is delivered to stand as security for the repayment of an obligation evidenced by a promissory note. A mortgage is an encumbrance on real property. If there is an opportunity to remove such an encumbrance, it makes sense to do so.

The date on which parties to a real estate contract must close is frequently subject to litigation. Sometimes real estate contracts provide for a closing date that is “time of the essence” and, in such cases, the parties must close on that date or risk default. In the event that a buyer fails to close on a “time of the essence” closing date, he risks being declared in default by the seller and losing his down payment (and being a party to any related litigation that may res

This Blog has addressed numerous issues relating to mortgage foreclosure actions. < HERE =">HERE</a>"> < HERE =">HERE</a>"> < HERE =">HERE</a>"> < HERE =">HERE</a>"> < HERE =">HERE</a>"> < HERE =">HERE</a>"> . “ The Second Department Denies Summary Judgment To Another Foreclosing Mortgagee Due To The Insufficiency Of Evidence Presented On The Motion ” addressed the sufficiency of evidence necessary for a lender to demonstrate that it is the holder of the underlying note and

Last month, this Blog examined the common interest exception to the attorney-client privilege. ( Here .) As discussed in that post, the presence of a third party will not destroy a claim of privilege where two or more clients separately retain counsel to advise them on matters of common legal interest. In New York, the “common interest” exception will apply to such communications when they are shared in connection with “pending or anticipated litigation.” Ambac Assur. Corp.