A “recurring question” courts in New York grapple with is whether the facts alleged in a complaint give rise to sustainable claims for both breach of contract and fraudulent inducement. Cronos Grp. v. XComIP, LLC , 156 A.D.3d 54, 56 (1st Dept. 2017). Readers of this Blog know that a fraud claim, which “ar from the same facts , s identical damages and d not allege a breach of any duty collateral to or independent of the parties’ agreements<,> is subject to dismissal as red

When parties to a contract delegate the question of arbitrability to an arbitrator, the courts will enforce the agreement as written. They may not, without more, decide the arbitrability issue. This “is true even if the court thinks that the argument that the arbitration agreement applies to a particular dispute is wholly groundless.” Henry Schein, Inc. v Archer & White Sales, Inc. , _____ U.S. at _____, 139 S.Ct. 524, 529 (2019). Thus, “if a valid agreement exists, and if th

If a plaintiff fails to prosecute an action dismissal for “want of prosecution” may be obtained pursuant to CPLR 3216 , which provides, in pertinent part: (a) Where a party unreasonably neglects to proceed generally in an action or otherwise delays in the prosecution thereof against any party who may be liable to a separate judgment, or unreasonably fails to serve and file a note of issue, the court, on its own initiative or upon motion, with notice to the parties, may dismis

Arbitration is a preferred means of dispute resolution. In fact, arbitration is the policy under the Federal Arbitration Act (“FAA”) and the Civil Practice Law and Rules (“CPLR”). For this reason, (1) when parties to a contract have clearly and unambiguously agreed to arbitrate their disputes, the courts will enforce that agreement, as they would any other agreement, to give effect to the parties’ intention; (2) the courts will not substitute their judgment for that of the ar

Affinity fraud is a type of securities fraud. In this form of fraud, the person committing the fraud preys upon members of an identifiable group, such as a religious or ethnic community, the elderly, or a professional group. The promoter of an affinity fraud frequently is – or pretends to be – a member or a good friend of the group. The fraudster often enlists respected members of the community or religious leaders from within the group to disseminate information about the sc

In prior posts, we examined enforcement actions brought by the Securities and Exchange Commission (“SEC” or “Commission”) against those who seek to benefit from the COVID-19 pandemic ( e.g. , here , here and here ). Earlier this month, we wrote about an enforcement proceeding that the SEC brought against The Cheesecake Factory ( here ). As noted in that article, that proceeding was the first time the SEC had charged a large public company for misleading investors about the

Venue in litigation is where the trial of an action will take place. Venue, which is governed by Article 5 of the CPLR , is initially chosen by the plaintiff at the commencement of the action. Sometimes an improper venue is chosen by the plaintiff and other times, while correct, a more convenient venue is available. This BLOG has previously addressed “ Change of Venue Procedures .” Today’s article will focus on some issues related to the discretionary change of venue purs

To plead a claim for fraud in the inducement or fraudulent concealment, a plaintiff must allege facts to support the claim that it justifiably relied on the alleged misrepresentations. A sophisticated party, like the plaintiff in MBF Clearing Corp. v. JPMorgan Chase Bank, N.A. , 2020 N.Y. Slip Op. 07504 (1st Dept. Dec. 15, 2020) ( here ), must allege that it exercised due diligence and took affirmative steps “to protect itself against deception.” DDJ Mgt., LLC v. Rhone Group

In New York, foreign entities – that is, corporations, limited liability companies and partnerships authorized to do business in another jurisdiction or country – are required to register to business with the Secretary of State. See BCL § 1312(a). The failure to receive such authority deprives the foreign entity of the ability to affirmatively access the courts of New York and subjects any action commenced by the foreign entity to dismissal. See United Envtl. Techniques, Inc

The New York Court of Appeals has described as “familiar and eminently sensible,” the proposition of law “that, when parties set down their agreements in a clear, complete document, their writing should be enforced according to its terms.” 159 MP Corp. v. Redbridge Bedford, LLC , 33 N.Y.3d 353, 358 (2019) (citation, internal quotation marks and ellipses omitted). The same Court has also explained the particular importance of such a rule in the context of real property trans

It goes without saying that the spread of the coronavirus is accelerating across the country. As noted in the lead paragraph of an article posted in yesterday’s online version of the Washington Post, titled “U.S. Surpasses 15 million Coronavirus Cases as Spread Accelerates” ( here ): It took about 100 days for the United States to record its first 1 million coronavirus cases, and 44 more passed before the country topped 2 million. But now, in the middle of the most severe su

In prior articles, we have examined enforcement actions (and settlements thereof) brought by the Securities and Exchange Commission (“SEC” or “Commission”) involving false statements about the subject companies and COVID-19. (E.g., here.) Those actions involved micro-cap companies and the products they claimed to offer to address the pandemic. As we noted in those articles, there was a common thread between the actions – they involved pump and dump schemes in which the compan

Sometimes the Court renders a decision on a motion instead of issuing an order or judgment. In such cases it is often up to the prevailing litigant to take an additional step to effectuate the decision. In cases where Rule 202.48 of the Uniform Civil Rules for the Supreme Court and the County Court is applicable the prevailing party must move quickly or run the risk of losing the benefit of a coveted victory.

“A cause of action for fraud does not arise when the only fraud charged relates to a breach of contract.” Krantz v. Chateau Stores of Can. Ltd. , 256 A.D.2d 186, 187 (1st Dept. 1998) (citations omitted). “To plead a viable cause of action for fraud arising out of a contractual relationship, the plaintiff must allege a breach of duty which is collateral or extraneous to the contract between the parties.” Id. (citations and quotation marks omitted). One way to satisfy this re

In Trustees of Columbia Univ. in the City of N.Y. v. D’Agostino Supermarkets, Inc. , 2020 N.Y. Slip Op. 06937 (Nov. 24, 2020) ( here ), the New York Court of Appeals was asked to “consider the propriety of a liquidated damages provision in a Surrender Agreement between two New York City icons: Columbia University, one of the City’s premier universities, and D’Agostino Supermarkets, a family-owned food market chain founded in 1932.” Slip Op. at *1. D’Agostino had leased proper

Hang on Sloopy was a hit song in the mid-1960s. Years later, the band that performed and recorded the song – the McCoys – claimed that they were cheated out of substantial sums of money due to fraud. That claim, however, was time-barred, held the Court in Derringer v F.G.G. Prods. Inc. , 2020 N.Y. Slip Op. 33854(U) (Sup. Ct., N.Y. County Nov. 18, 2020) ( here ). Fraud claims must be commenced within “the greater of six years from the date the cause of action accrued or two ye

Sometimes, a case involves facts and circumstances that, on their face, lead a court to determine that a fraud was committed. Such was the case in First Franklin Fin. Corp. v. Merchant , 2020 N.Y. Slip Op. 06852 (1st Dept. Nov. 19, 2020) ( here ). In First Franklin , a judgment debtor transferred property subject to a foreclosure sale to a company that he had formed all on the same day. Such facts and circumstances, said the lower court, represented “badges of fraud” under f

On November 4, 2020, this Blog (the “November 4 Blog”) provided an update on the New York State Court system’s preparation for the anticipated surge in COVID-19 cases. On November 18, 2020, Andrew A. Crecca, the District Administrative Judge for the 10 th Judicial District (Suffolk County), circulated a memorandum on “Suffolk County Updated Operating Protocols <“the plan”> Effective November 23, 2020” (the “Memorandum”). As noted in the November 4 Blog, “the country has