On July 15, 2019, New York Surrogate Nora Anderson denied, in part, a motion to dismiss the petition filed by Radio Drama Network, Inc. (“Radio Drama” or “Petitioner”), in which Radio Drama sought to invalidate testamentary instruments that deprived it of a $100 million bequest from Himan Brown (“Brown”), the creator of “Dick Tracy” and “Inner Sanctum Mysteries,” and founder of the Himan Brown Revocable Trust (the “Revocable Trust”). Radio Drama Network, Inc. v. Kay , File No

In New York, Section 3211(a) of the Civil Practice Law and Rules (“CPLR”) provides the primary mechanism by which a party can make a motion, before a responsive pleading, to dismiss one or more causes of action alleged against that party. A “cause of action” subject to dismissal under CPLR § 3211(a), includes counterclaims, cross-claims, and third-party claims. There are several grounds under CPLR § 3211(a) on which a party may move to dismiss. These include (but are not lim

On August 6, 2017, Justice Andrew Borrok of the Supreme Court, New York County, Commercial Division, decided In re Everquote, Inc. Securities Litigation , 2019 N.Y. Slip Op. 29242 (Sup. Ct., N.Y. County Aug. 6, 2019) ( here ), in which he held that the automatic stay of discovery required by the Private Securities Litigation Reform Act of 1995 (the “Reform Act” or “PSLRA”), 15 U.S.C. § 77z-1(b)(1), applies in state court as well as in federal court. In doing so, Justice Borro

Forum non conveniens is a common law doctrine in which a court may dismiss an action where another forum would be better suited to adjudicate the matter. In New York, the doctrine is codified in CPLR §327(a). Under this section, a court may stay or dismiss an action if it finds “that in the interest of substantial justice the action should be heard in another forum.” CPLR § 327(a). The party seeking dismissal bears a heavy burden of establishing that New York is not the pro

There is almost nothing more frustrating, or potentially costlier, to a business than a dispute over the meaning of a contract. Such disputes can take many forms. It may be that the language used is ambiguous; or the language is reasonably clear but is susceptible to different meanings; or although the language is clear, taken literally, it might not reflect the parties’ intent; or, as is often the case, an event has occurred that was not contemplated by the parties at the ti

Insurance policies typically provide that the insurer will “defend” its insured in the event of a lawsuit and “indemnify” its insured against liability resulting therefrom. The insurer’s duty to defend, however, is broader than its duty to indemnify. Seaboard Surety Co. v. Gillette Co. , 64 N.Y.2d 304 (1984). Simply stated, an insurer may be obligated to provide a defense to a lawsuit even though it may be relieved of the obligation to indemnify its insured from any judgme

Distinguishing between direct and derivative claims is not easy. Sometimes, the difficulty arises because of the entity involved. For example, in the LLC context, there are fiduciary relationships ( e.g. , managing member and non-managing member) that will support a direct action in circumstances that might otherwise require a derivative action. E.g. , Pokoik v. Pokoik , 115 A.D.3d 428 (1st Dept. 2014); Salm v. Feldstein , 20 A.D.3d 469, 470 (2d Dept. 2005). Other times, the

Last week was a rough one for Facebook, Inc. (FB-NASDAQ). On July 24, 2019, the social network giant, agreed to pay a $100 million fine to the Securities and Exchange Commission (“SEC”) ( here ) to settle claims related to the Cambridge Analytica scandal and a $5 billion penalty to the Federal Trade Commission (“FTC”) to settle claims concerning misleading disclosures related to the company’s privacy practices ( here ). The settlements are the culmination of investigations by

On July 18, 2019, Justice Joel M. Cohen of the Supreme Court, New York County, Commercial Division, decided Shyer v. Shyer , 2019 N.Y. Slip Op. 32138(U) (Sup. Ct., N.Y. County July 18, 2019) ( here ), a third-party action involving allegations of fraudulent concealment relating to the failure to disclose material information about the deteriorating health of a company executive for the purpose of securing about $150,000 in annual benefits. The company, Zyloware Corp. (“Zylowa

Following the stock market crash in 1929, Congress enacted the Securities Act of 1933 (the “1933 Act”) and the Securities and Exchange Act of 1934 (the “1934 Act”). Cyan, Inc. v. Beaver Cty. Emps. Ret. Fund , 138 S. Ct. 1061, 1066 (2018). The 1933 Act has two primary objectives: (1) to provide transparency in financial statements so investors can make informed decisions about securities being offered for public sale; and (2) to address misstatements and omissions in the secur

Derivative actions are brought by current shareholders of a company to redress the harm (monetary or equitable) incurred by the company as the result of officer/director self-dealing, breaches of fiduciary duty, and/or other wrongdoing; to restore shareholder value caused by mismanagement and the waste of corporate assets; and to enhance and strengthen internal controls and the company’s governance policies and procedures. Very often, shareholder derivative actions are filed

McGuckin v. Privilege Underwriters Reciprocal Exch. was decided by the Appellate Division, Second Department, on July 17, 2019. The facts of McGuckin , at least from the Second Department’s decision, seem rather straight forward. The plaintiff, who was a passenger in a vehicle owned by Carol Giambrone and driven by Douglas Giambrone, was injured when the vehicle was in an accident. The vehicle was insured by defendant Privilege under a policy that provided at the time of

Readers of this Blog know that, as a general matter, New York 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 382 (1

The disclosure of material information is the foundation of the Securities and Exchange Commission’s (“SEC”) mission. For this reason, the SEC considers itself to be “a disclosure agency.” See “The Importance of the SEC Disclosure Regime” by Daniel M. Gallagher, Commissioner, U.S. Securities and Exchange Commission (July 16, 2013) (here). One need only look at the SEC’s website to confirm this point: “he laws and rules that govern the securities industry in the United States

Working with friends can be both rewarding and challenging. The comfort that brings friends together often is replaced by the stress and rigors of running a business. Because friends have a history together, professional disagreements often become heated, especially when there are pent up issues or grudges that one holds about the other. Similarly, the character traits that created the friendship are often replaced by a professional (and, some would say, ugly) demeanor that w

Frequently, important terms of a contract are intended to be incorporated by reference into other documents. Litigation frequently arises when one party disputes whether the terms of extrinsic documents were indeed made part of the executed agreement. The parties in Movado Group, Inc. v. Mozaffarian , 92 A.D.3d 431 (1 st Dep’t 2012), entered into a credit agreement in which defendants “expressly acknowledged receipt of, and agreed to be bound by, terms and conditions conta

On July 9, 2019, the Appellate Division, First Department, issued three decisions involving claims of fraud and/or fraudulent inducement that piqued this Blog’s interest. One case involved whether a fraudulent inducement claim duplicated a contract claim ( Man Advisors, Inc. v. Selkoe , 2019 N.Y. Slip Op. 05483 (1st Dept. July 9, 2019) ( here ), while the other two involved the justifiable reliance element of a fraud cause of action ( Mann v. Thomas-Senior , 2019 N.Y. Slip O

Sometimes state appellate courts affirm or modify lower court decisions without providing much in the way of analysis. With overburdened dockets and substantially similar issues being decided, it is no surprise these courts issue short decisions that have more value to the parties than to the bar. Such is the case in BML Properties Ltd. v. China Construction America Inc. , 2019 N.Y. Slip Op. 05339 (1st Dept. July 2, 2019) ( here ). Overview and the First Department’s Decisi