In today’s post, this Blog looks at two cases decided by the Appellate Division, Second Department, involving the first element of a common law fraud and insurance fraud cause of action: the making of a misrepresentation of material fact. In Tsinias Enters. Ltd. v. Taza Grocery, Inc. , 2019 N.Y. Slip Op. 04020 (2d Dept. May 22, 2019) ( here ), the Court affirmed the dismissal of a fraud and fraudulent inducement action because the plaintiff failed to plead a misrepresentation

This Blog has written about the justifiable reliance element of a fraud cause of action on many occasions. We have noted that whether a plaintiff justifiably relied on the misrepresentations and omissions of a defendant is a fact-intensive inquiry. DDJ Mgt., LLC v. Rhone Group L.L.C. , 15 NY3d 147, 155 (2010). In today’s post, we look at Buechel v. Sovereignty, LLC , 2019 N.Y. Slip Op. 31372(U) (Sup. Ct. Tompkins County May 16, 2019) ( here ), a case in which the issue was de

Obtaining jurisdiction over a corporation that is incorporated and headquartered outside of the state can be difficult. A plaintiff must plead and prove that the corporation purposefully availed itself of the resources of the state for a court to exercise personal jurisdiction over the defendants. The failure to do so, as in Poms v. Dominion Diamond Corp. , Index No. 655733/2017, 2019 NY Slip Op 31364(U) (Sup. Ct. N.Y. County May 15, 2019) ( here ), will result in dismissal o

In today’s post, this Blog takes a look at fraud allegations in foreclosure action involving two commercial mortgages that secured more than $24 million in indebtedness. Orchard Hotel LLC v. D.A.B. Group LLC , 2019 N.Y. Slip Op. 03893 (1st Dept. May 16, 2019) ( here ). Relevant to today’s article is the motion court’s denial of a motion to dismiss fraud-based cross-claims and the First Department’s affirmance of that decision. Orchard Hotel LLC v. D.A.B. Group LLC Background

On April 25, 2018, this Blog wrote about INTL FCStone Mkts., LLC v. Corrib Oil Co. Ltd. , 2018 N.Y. Slip Op. 30646(U) (Sup. Ct., N.Y. County, Apr. 9, 2018) ( here .) The case involved a motion for summary judgment involving claims that Defendant, Corrib Oil Co. Ltd. (“Corrib”), owed the plaintiff, INTL FCStone Markets, LLC (“FCStone”), nearly $3.5 million in connection with investment in more than 800 derivatives transactions over a four-year period. In granting the motion, J

Arbitration is an alternative form of dispute resolution. Most often, parties will voluntarily agree to arbitrate their disputes, instead of allowing a judge or jury in a court of law to do so. 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 the State. Matter of

On May 7, 2019, the Securities and Exchange Commission (“SEC” or “Commission”) announced (here) that it had settled an insider trading action against Brian Fettner (“Fettner”), a Nevada resident who obtained confidential, inside information about a potential corporate merger from a lifelong friend and used it to generate more than $250,000 in illicit trading profits. The action involved unlawful trading in the securities of G&K Services, Inc. (“G&K”) prior to an August 16, 20

FOLLOW-UP – THE NEW YORK COURT OF APPEALS AFFIRMS THE APPELLATE DIVISION, SECOND DEPARTMENT’S, ENFORCEMENT OF WAIVER OF DECLARATORY RELIEF IN COMMERCIAL LEASE RESULTING IN THE DENIAL OF TENANT’S YELLOWSTONE INJUNCTION APPLICATION Our February 9, 2018, Blog post, entitled: “ APPELLATE DIVISION, SECOND DEPARTMENT, ENFORCES WAIVER OF DECLARATORY RELIEF IN COMMERCIAL LEASE RESULTING IN THE DENIAL OF TENANT’S YELLOWSTONE INJUNCTION ,” addressed the decision in 159 MP Corp. v. R

This Blog has previously written about the equitable estoppel doctrine in the context of the statute of limitations ( here ). See General Stencils v. Chiappa , 18 N.Y.2d 125, 128 (1966); Zumpano v. Quinn , 6 N.Y.3d 666, 674 (2006); Matter of Steyer , 70 N.Y.2d 990, 993 (1988). The doctrine has also been used as a basis to reject a jurisdictional defense. Matre v. Erie County Pub. Adm’r. , 283 A.D.2d 1025, 1026 (4th Dept. 2001) (applied to personal jurisdiction and statute of

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