On January 31, 2018, the Second Department decided 159 MP Corp. v. Redbridge Bedford, LLC. The Court in 159 MP , recognized that the “appeal raises an issue of first impression in the appellate courts of New York…” to the extent that it “address the question of whether written leases negotiated at arm’s length by commercial tenants may include a waiver of the right to declarative relief that is enforceable at law or, alternatively, whether such a waiver is void and unenfor

Like many things in life, operating a business with another person, or many persons, is a risk. There is always the possibility that your business associates may act for their own benefit, rather than for the benefit of the business. The law recognizes this risk and assigns special obligations of fidelity to business partners. These obligations are commonly known as fiduciary duties, which require business partners (including officers, directors and managing shareholders of c

In P. Zaccaro, Co., Inc., et al. v. DHA Capital, LLC, et al. (1st Dep’t January 25, 2018) , the First Department affirmed the dismissal of plaintiffs’ action seeking a significant brokerage commission on the sale of real property in lower Manhattan (the “Premises”) for in excess of $50,000,000.00 because the plaintiff brokers failed to disclose that they represented both the buyer and the seller. According to decisions in the underlying action, the facts as alleged in the co

Under Section 702 of New York’s Limited Liability Company Law (“LLCL”), a court sitting in the judicial district in which the office of the company is located may dissolve the company “whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.” LLCL § 702. (This Blog addressed Section 702 here and here .) To successfully petition for the dissolution of a limited liability company under LLCL § 70

In very general terms, fraudulent conveyance statutes are designed to protect creditors from situations where a debtor transfers its assets to a creditor’s detriment. Sometimes such transfers are made with actual intent to defraud. Other times, transfers may be deemed to be constructively fraudulent regardless of the actual intent of the debtor/transferor. Presently, Article 10 of New York’s Debtor and Creditor Law (the “DCL”) governs fraudulent transfers. For example, s

What word that comes to mind when you hear the term “professional malpractice”? Medical? Legal? To be sure, doctors and lawyers are the more common professionals subject to malpractice claims. But, there are other professionals who can commit malpractice. These include accountants, architects, and engineers. Yet, not all professionals are subject to malpractice claims. In Gutterman v. Stark , 2017 NY Slip Op. 32618(U) (Sup.Ct. N.Y. County, Dec. 18, 2017) ( here ), a financia

On December 12, 2017, the New York Court of Appeals resolved an ambiguity in Rule 908 of the Civil Practice Law and Rules, concerning whether the parties to a putative class action must give notice of a dismissal, discontinuance, or compromise to members of the class before the lower court certifies the action as a class action. In Desrosiers v. Perry Ellis Menswear, LLC , 2017 NY Slip Op 08620 ( here ), a divided court held that, where a complaint containing class allegatio

There is an old idiom that says: “the devil is in the details.” It generally means that although something may seem simple, the details are complicated and likely to cause problems. This aptly describes pleading a fraud claim under New York law. To state a claim for fraud, a plaintiff must allege a material misrepresentation of fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages. Eurycleia Partners, LP v. Seward & K

Certain issues regarding Labor Law §240 were discussed in “Be Helpful at Your Own Peril” , an article posted on this Blog on October 20, 2017. Again, Labor Law § 240 was enacted, inter alia , to protect construction workers from height related injuries. In discussing the purpose behind Labor Law § 240, the New York Court of Appeals stated: The legislative purpose behind this enactment is to protect workers by placing ultimate responsibility for safety practices at buildin

Yellowstone injunctions got their name from First National Stores, Inc. v. Yellowstone Shopping Center, Inc., 21 N.Y.2d 630, 290 N.Y.S.2d 721 (1968) . A commercial tenant that is faced with the threat of the termination of its commercial lease as a result of a lease default, must follow the procedures set forth in Yellowstone or it runs the risk of losing its lease. While Yellowstone was decided almost fifty years ago, commercial tenants continue to lose their valuable le

Many leases provide for a tenant’s option to purchase the subject real property. The recent case of Blackburn Food Corp., et. al. v. Ardi, Inc., et. al ., (Sup. Ct. Suffolk Co. October 25, 2107), illustrates the importance of, inter alia , careful drafting when dealing with real property purchase option agreements. The plaintiffs in Blackburn entered into a ten-year lease for real property. The lease contained an option, which, if exercised within the first three years of

If a contracting party intends for the obligations under a contract to be executed by a business entity, it is critical that the person executing the contract on behalf of the entity clearly indicate that the contract is being signed in a representative capacity. This point was recently reiterated in James E. Cayne v. Alexandra Lebenthal , (Sup. Ct. New York Co. October 30, 2017) (the “Action”). The Defendant in Cayne is Alexandra Lebenthal, CEO of Lebenthal Holdings, LLC

Preliminary injunctions can be an important and potent weapon in business and commercial litigation. In New York, “ preliminary injunction may be granted … where it appears that the defendant threatens or is about to do … an act in violation of the plaintiff’s rights” with regard to the subject matter of the action, and which “render the judgment ineffectual ….” CPLR 6301. Whether to grant a preliminary injunction lies within the sound discretion of the court. Doe v. Axe

Parties to commercial and business disputes frequently encounter and litigate the threshold question whether their dispute must be arbitrated rather than litigated in court. But, before this question can be answered, there is an even more fundamental question that must be resolved: who decides whether a dispute is subject to arbitration – the court or the arbitrator? Courts have struggled with this question for years and continue to do so today. Generally, whether a claim is

Mortgages on real property are typically delivered to a lender to secure loans evidenced by promissory notes. When a default occurs under the note and/or mortgage litigation frequently follows. If the borrower and/or guarantor are solvent, the lender may choose to sue on the note for monetary damages in an action at law. If the property is valuable, but the borrower has insufficient funds to satisfy a money judgment the lender might decide to sue to foreclose the mortgage

The Basics A contract is an agreement between two or more parties to do something ( e.g. , provide goods or services) in exchange for a benefit. When one or more parties to a contract fails to perform a term in their agreement, they are in breach of that agreement. Most breaches fall into one of two categories: actual or anticipatory. In the former, a party to the contract fails or refuses to perform his/her obligations under the agreement or performs his/her obligations i

CPLR § 306-b provides: Service of the summons and complaint, summons with notice, third-party summons and complaint, or petition with a notice of petition or order to show cause shall be made within one hundred twenty days after the commencement of the action or proceeding, provided that in an action or proceeding, except a proceeding commenced under the election law, where the applicable statute of limitations is four months or less, service shall be made not later than fif

Article 3-A of New York’s Lien Law establishes a system of trusts to ensure that certain individuals or entities that contributed services, labor and/or materials to a construction project for the improvement of real property are paid for their efforts.

Contracts are often at the heart of business and commercial disputes. Not all contract disputes result in litigation. A well-drafted contract can often prevent or resolve a dispute before the parties run to court. But, when the parties cannot resolve their differences, and resort to litigation, it is important to understand the rules governing the breach of contract claim. As a general matter, to allege a breach of contract, a plaintiff must plead (and prove) the following:

Many contracts require that a party procure an “Additional Insured” endorsement to their commercial general liability (and similar) insurance policies. Generally, the purpose of an “Additional Insured” endorsement is to provide insurance coverage to individuals or entities other than the purchaser of the policy. For example, many commercial lease agreements require not only that a tenant procure insurance to cover a variety of risks, but that the landlord be named as an add