On July 1, 2019, this Blog wrote about Hoffman v. AT&T Inc. , 2019 N.Y. Slip Op. 31811(U) (Sup. Ct. N.Y. County, June 21, 2019) ( here ). Hoffman involved a motion, under CPLR § 2201, to stay an action filed in state court, alleging claims under the Securities Act of 1933 (the “1933 Act”), in favor of a parallel action filed in federal court, alleging claims under the 1933 Act and the Securities Exchange Act of 1934 (the “Exchange Act”). As discussed in the article, the Hoff

In mortgage foreclosure actions, and other actions in which a party is suing on a promissory note (or other negotiable instruments) ( a “Note”), a plaintiff must allege that it is in possession of the underlying Note in order to establish that it has standing to prosecute the action. As this Blog has previously noted in the Blog < The=">The" Second="Second" Department="Department" Denies="Denies" Summary="Summary" Judgment="Judgment" to="to" Another="Another" Foreclosing="Fo

On March 20, 2018, the United States Supreme Court decided Cyan, Inc. v. Beaver County Employees Retirement Fund , 138 S. Ct. 1061, 1069 (2018), in which it unanimously held that the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”) does not strip state courts of subject-matter jurisdiction over class actions involving claims exclusively brought under the Securities Act of 1933 (the “1933 Act”), and does not allow for the removal of those cases to federal court.

Since the early 20th century, a plaintiff alleging fraud in New York can recover only the actual pecuniary loss sustained as a result of the misrepresentation or omission, i.e. , the plaintiff’s out-of-pocket damages. Reno v. Bull , 226 N.Y. 546 (1919); see also Continental Cas. Co. v. PricewaterhouseCoopers, LLP , 15 N.Y.3d 264 (2010). The damages recoverable under the out-of-pocket rule are intended to compensate plaintiffs for what they lost because of the fraud, not for w

Arbitration is an alternative form of dispute resolution where the parties voluntarily agree that a neutral, private person will resolve any legal disputes between them, instead of a judge or jury in a court of law. Rent-A-Ctr., W, Inc. v. Jackson , 561 U.S. 63, 67 (2010) (noting that “arbitration is a matter of contract”). In business and commercial transactions, arbitration is the preferred means of resolving disputes. It is encouraged and recognized as the public policy of

On June 17, 2019, the Securities and Exchange Commission (“SEC” or the “Commission”) announced (here) that KPMG LLP (“KPMG”) agreed to settle charges that it altered prior audit work after receiving information about inspections of the firm by the Public Company Accounting Oversight Board (“PCAOB”). In connection with the settlement, KPMG agreed to pay a $50 million penalty and comply with a set of remedial measures to prevent the conduct at issue, including retaining an ind

Rule 3213 of the CPLR – which permits a litigant to move for summary judgment in lieu of filing a complaint to streamline litigation in situations where the statute is applicable – provides: When an action is based upon an instrument for the payment of money only or upon any judgment, the plaintiff may serve with the summons a notice of motion for summary judgment and the supporting papers in lieu of a complaint. The summons served with such motion papers shall require the d

Lawyers should be mindful that the signed writing aspect of CPLR 2104 can be satisfied by e-mails exchanged between counsel. CPLR 2104 provides, in relevant part that: An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered. One of the first cases in New York to t

On November 18, 2018, this Blog wrote about Brown v. Cerebus Capital Management, LP , 2018 N.Y. Slip Op. 32782 (Sup. Ct., N.Y. County Oct. 30, 2018) ( here ). Brown involved the grant of employment compensation that plaintiffs claimed, among other things, was part of a fraudulent scheme to deprive them of their benefits. The gravamen of the article pertained to the difference between the standards for pleading fraud with particularity under the Civil Practice Law and Rules (

Litigations often get settled before trial. When parties decide to settle their disputes, they typically agree to exchange mutual releases – i.e. , they agree to give up any claims they have, and may have, against each other. By exchanging releases, the parties to a settlement are, therefore, securing for themselves, and those bound by the release, complete peace from future litigation involving the same subject matter in their dispute. Generally, a “release constitutes a c

Investing in the market or starting a business is hard. There are risks, of varying degrees, involved with such activities. Indeed, investors and entrepreneurs knowingly accept these risks in the hope of generating a high return on their investment. They do not, however, accept the risk that they are the victims of fraud. Unfortunately, anyone is susceptible to falling victim to a Ponzi scheme or a pyramid scheme. Ponzi schemes and pyramid schemes ensnare people of all ages a

In Henry VI , William Shakespeare wrote, “ efer no time, delays have dangerous ends” - a quote apropos to a discussion of laches. “The doctrine of laches is an equitable doctrine which bars the enforcement of a right where there has been an unreasonable and inexcusable delay that results in prejudice to a party.” Skrodelis v. Norbergs , 272 A.D.2d 316 (2 nd Dep’t 2000). In Kverel v. Silverman (2 nd Dep’t May 29, 2019), the Appellate Division, Second Department, applied

Sometimes a decision goes in a direction that the reader does not expect. Bashian & Farber, LLP v. Syms , 2019 N.Y. Slip Op. 04348 (2d Dept. June 5, 2019) ( here ), is such a case. Bashian involved what appeared to be a straightforward case concerning an alleged fraud and fraudulent conveyance in the context of a fee dispute between a law firm and its former client. While the case involved the elements of those claims, its holding focused on the concept of scheme liability –

A forum selection clause is contractual provision that sets forth the location designated by the parties for dispute resolution. Such clauses can be found in virtually every type of contract imaginable, e.g. , employment agreements, commercial contracts, and purchase and sale agreements. Parties require forum selection clauses to reduce litigation expenses, avoid adverse laws, and mitigate the risks associated with unknown foreign judges and/or juries. Under New York law, “a

It has been a little over one year since President Trump signed into law the Senior Safe Act of 2018 (“Act”) ( here ). Enacted as part of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the Act is designed to “enlist[] financial institutions as allies in the fight against financial abuse of older adults by allowing banks, credit unions, investment advisers and brokers to report suspected fraud to law enforcement without fear of being sued, as long as they

In 1975, the New York Legislature adopted Article 9 of the Civil Practice Law and Rules (“CPLR”) to replace the State’s prior class action mechanism. City of New York v. Maul , 14 N.Y.3d 499, 508 (2010). The Legislature did so because Section 1005, which remained virtually unchanged for more than a century, “had been judicially restricted over the years and was subject to inconsistent results.” Id . at 508-509, citing Sperry v. Crompton Corp. , 8 N.Y.3d 204, 210 (2007). By a

It has long been the law in New York that a party’s disclaimer of reliance on extra-contractual representations and omissions will not preclude a fraudulent inducement claim unless: (1) the disclaimer is specific to the fact alleged to be misrepresented or omitted; and (2) the alleged misrepresentation or omission does not concern facts peculiarly within the knowledge of the non-moving party. Basis Yield Alpha Fund v. Goldman Sachs Group, Inc. , 115 A.D.3d 128, 137 (1st Dept

Financial exploitation of seniors and vulnerable adults is all too common in today’s day and age. According to a MetLife study, titled “ Broken Trust: Elders, Family & Finances ,” about one million seniors lose an estimated $2.6 billion annually from financial exploitation. In 2011, MetLife updated its estimate to at least $2.9 billion. Other, more recent studies estimate the losses to exceed $36 billion a year, 12 times the MetLife estimate. Financial exploitation occurs whe