On April 29, 2019, the Securities and Exchange Commission (“SEC”) announced (here) that it filed charges against a New York City man for continuing a previously charged ticket resale scheme, in which investors were falsely promised that their funds would be used for the purchase and resale of tickets to Broadway shows and a sporting event. According to the SEC, at least 12 investors were defrauded out of approximately $2.7 million as a result of the scam. According to the SEC

In Siwiec v. United Rest. Group Inc. , 2019 N.Y. Slip Op. 31152(U) (Sup. Ct. Kings County Apr. 11, 2019) ( here ), the Court reminds litigants that if they want to bring a fraud claim along with a contract claim, they must allege misrepresentations that are collateral or extraneous to the contract. Siwiec involved a dispute over the management of a restaurant. According to the complaint, the parties met in May 2016, when Defendant, Christian Vega (“Vega”), the Chairman and C

This Blog has strived to highlight cases and issues that may be of interest to our readers. Sometimes, however, a case involves so many issues it is hard to isolate one or two for discussion purposes. Such is the case with RKA Film Fin., LLC v. Kavanaugh , 2019 N.Y. Slip Op. 03302 (1st Dept. Apr. 30, 2019) ( here ). RKA Film involved allegations of fraud, fraudulent inducement and negligent misrepresentation in connection with a series of loans that RKA Film Financing, LLC (

On April 25, 2019, the Securities and Exchange Commission (“SEC”) announced (here) that it had charged Indianapolis-based Celadon Group Inc. (“Celadon”), a truckload freight transportation provider, with an accounting fraud that allowed it to avoid disclosing substantial losses and misrepresent its financial condition. The SEC alleged (here) that, between mid-2016 and April 2017, Celadon avoided recognizing at least $20 million in impairment charges and losses – almost two-th

Proper service of process is necessary before the court can acquire personal jurisdiction over the defendant to a lawsuit. If service of process is not properly effectuated the court is “…without personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void.” Citimortgage, Inc. v. Twersky , 153 A.D.3d 1230 (2 nd Dep’t 2017) (citations and internal quotation marks omitted). CPLR 308 sets forth several methods by which servic

This Blog has written about cases in which the plaintiff claims to have been defrauded but fails to allege with particularity the elements of the claim. As readers of this Blog know, the element that most often spells failure for the plaintiff is reasonable reliance – that is, reliance on the alleged misrepresentation or omission. Today’s article looks at another case in which the plaintiff alleged reliance on alleged misrepresentations but failed to assert facts showing that

In Sotheby’s, Inc. v. Chowaiki , 2019 N.Y. Slip Op. 30970(U) (Sup. Ct. N.Y. County Apr. 4, 2019) ( here ), Justice Andrea Masley of the New York Supreme Court, Commercial Division, issued an opinion addressing the question “whether a guarantor remains bound by a guarantee whose underlying contract has since been modified without notice to the guarantor.” As discussed below, the Court held that a guarantor is bound by his/her guaranty notwithstanding modifications to the under

The Second Department has held that “ o state a cause of action to recover damages for legal malpractice, a plaintiff must allege that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession, and that the breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages.” Board of Managers of Bay Club v. Borah, Goldstein, Schwartz, Altschuller & Nahins, P.C. , 97 A.D.3d

As every lawyer knows, the practice of law requires compliance with various deadlines. Some are court ordered, while others are statutory. To be sure, there are many practitioners who do not sweat the time constraints imposed by a deadline. Indeed, “ oo many pages of the Reports, and hours of the courts, are taken up with deadlines that are simply ignored.” Miceli v. State Farm Mut. Auto Ins. Co. , 3 N.Y.3d 725, 727 (2014). However, most lawyers likely wake up in the middle o

In Deutsche Bank National Trust Co. v. Flagstar Capital Markets , the New York Court of Appeals held that an agreement to “delay the commencement” of the statute of limitations “was inconsistent with New York law and public policy.” ( Here .) Thus, although parties may agree after a cause of action has accrued to extend the statute of limitations, they may not do so before their agreement. John J. Kassner & Co. v City of New York , 46 N.Y.2d 544, 550, 551 (1979). Since the pa

There are numerous ways in which a defendant can respond to a summons and complaint. Among other options, a defendant can interpose an answer or move to dismiss some or all of the complaint. The time to respond to the complaint depends on, among other things, the manner of service of process ( see, e.g. , CPLR 308 ; CPLR 320 ). CPLR 3211(f) , which grants an automatic extension of time to interpose an answer to a complaint in the event that a motion to dismiss is made, pro

On April 10, 2019, the Appellate Division, Second Department, reversed the denial of motions to dismiss fraud claims alleged in connection with the purchase and sale of a $6.2 million home in Harrison, New York. Comora v. Franklin , 2019 N.Y. Slip Op. 02671 (2d Dept. Apr. 10, 2019) ( here ). The decision addresses whether contractual disclaimers can preclude a fraudulent concealment claim. As readers of this Blog know, we recently addressed this issue here and here . Under Ne

In 1970, the New York Legislature enacted General Business Law (“GBL”) § 349, New York’s deceptive trade practices act. As enacted, Section 349 empowered the Attorney General to bring an action to enjoin “ eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in th state.” In 1980, the Legislature amended the statute to add Section 349(h), which provides a private right action to consumers seeking to recover damages

As a general rule, a corporation that acquires the assets of another company is not liable for the liabilities of its predecessor. Schumacher v. Richards Shear Co. , 59 N.Y.2d 239, 245(1983). As with many rules, there is an exception. In this instance, the de facto merger doctrine. Under the doctrine, “ corporation may be held liable for the torts of its predecessor if (1) it expressly or impliedly assumed the predecessor’s tort liability, (2) there was a consolidation or m

One of the issues that courts have to address when deciding fraud claims is whether a statement contains hyperbole or concrete facts. The former, which are not actionable, includes puffery, optimism, future expectations, and opinion, while the latter, which are actionable, includes statements of present or historical fact. Sometimes, the line between these types of statements is blurred or non-existent. Other times, the line is easy to discern. While determining the differen

This Blog has featured numerous treatments of the procedural, substantive and evidentiary law in residential mortgage foreclosure actions. < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , < HERE =">HERE</a>"> , and < HERE =">HERE</a>"> . The Supreme Court of the State of New York, Appellate Divisi

In June of 2018, this Blog wrote about the United States Supreme Court’s decision to grant certiorari in a case concerning the scope of investor protection laws. ( Here .) In Lorenzo v. SEC , No. 17-1077 (certiorari granted on June 18, 2018), the Court agreed to consider whether an individual who passed along false statements about a company’s financial condition could be found liable for engaging in securities fraud under the scheme liability provisions of the Securities and

On March 27, 2019, the Appellate Division, Second Department, issued a decision involving charges of fraud and fraud on the court. In Sammy v. Haupel , 2019 N.Y. Slip Op. 02372 (2d Dept. Mar. 27, 2019) ( here ), the Court was asked to consider the dismissal of claims arising under, inter alia , Judiciary Law § 487 and common law fraud. As discussed below, the Court affirmed the dismissal of both claims. Sammy arose from a transaction to purchase real property located in Que