Plaintiffs claiming that they have been the victims of fraud must satisfy heightened pleading standards to enter the courthouse. Under the New York Civil Practice Law and Rules, CPLR 3016(b), and the Federal Rules of Civil Procedure, Rule 9(b), the circumstances constituting the alleged fraud must be stated in detail. here).=">here</a>)."> Proving fraud in New York becomes even more difficult for plaintiffs – they must prove fraud by “clear and convincing evidence,” a high

In March of this year, this Blog wrote about the voluntary payment doctrine ( here ) and how it is alive and well in New York. On November 15, 2018, the Appellate Division, First Department, addressed the doctrine and the defense of economic duress in affirming the dismissal of a complaint under the doctrine. Beltway 7 & Props., Ltd. v. Blackrock Realty Advisers, Inc. , 2018 NY Slip Op. 07844 (1st Dept. Nov. 15, 2018) ( here ). The “voluntary payment doctrine … bars recovery

On November 2, 2018, the U.S. Securities and Exchange Commission (the “SEC” or “Commission”), Division of Enforcement (the “Division”), released its annual report for the fiscal year ended September 30, 2018 (“FY 2018”) (the “Report”) ( here ). The Report highlights the Division’s enforcement-related actions and key initiatives for the fiscal year and reveals an agency focused on pursuing cases affecting retail investors, such as investment adviser fraud, as well as actions d

In business divorce cases, it is often necessary for the parties’ experts to prepare valuation reports – that is, reports that value an owner’s interest in a business or venture. Sometimes, however, valuation reports are prepared by non-testifying consultants. When valuation reports are prepared by consultants, disputes often arise over whether those reports are discoverable. The answer depends on when they are prepared ( i.e. , in the ordinary course or in anticipation of li

If there is one thing people like less than attorneys, it is paying attorneys’ fees. Accordingly, great effort is made in contracts to shift to another party, the obligation for the payment of attorneys’ fees in the event of dispute. “Under the general rule attorneys’ fees and disbursements are incidents of litigation and the prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties or by statute or court rule.” A.

Dismissal of Securities Fraud Claim in Federal Court Has No Preclusive Effect on Common Law Fraud Claims Brought in State Court Securities fraud and common law fraud have much in common. The core elements required to prevail on both claims are similar. Yet, dismissal of a federal securities fraud claim is not necessarily the death knell of a common law fraud claim. Recently, Justice O. Peter Sherwood of the Supreme Court, New York County, Commercial Division, reached this co

< editor's note: this article has been edited. > editor's note: this article has been edited.> As discussed in previous Blog posts ( here and here ), business owners and entrepreneurs wishing to insulate themselves from personal liability for the acts taken in the name of their business can generally do so by forming a corporation ( e.g. , C-Corp. or an S-Corp.) or limited liability company (“LLC”). Such protection, however, is not absolute; there are exceptions to the rule

Practitioners and their clients involved in bond offerings or other credit instruments are no strangers to trust indentures. These agreements typically contain a no-action clause, the primary purpose of which is to deter minority securityholders from filing duplicative, economically inefficient, or otherwise meritless lawsuits against the issuer, servicer, or other third party at the expense of the majority’s interest. No-action clauses generally achieve these purposes by fu

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. In recent years, arbitration has increased in popularity and is part of most business and commercial contracts and employment agreements. This increase in popularity reflects the state (and federal) policy that arbitration is a favored means of resolving dispute

It is a good idea for homeowners to make sure that hired home improvement contractors are licensed. Licensure, however, is just as important from the perspective of the home improvement contractors because their rights and remedies could be impacted if they are not. New York case law and statutory law address this issue. In Millington v. Rapoport , 98 A.D.2d 765 (2 nd Dep’t 1983), in reversing the court below and dismissing plaintiff’s complaint which sought to foreclose

Recently, this Blog wrote about the success of the Commodity Futures Trading Commission’s (“CFTC”) Whistleblower Program ( here ). As noted in that post, over the course of a few weeks, the CFTC had paid whistleblowers more than $45 million in awards. (The CFTC press release announcing the award can be found here .) Despite the positive direction in which the CFTC Whistleblower Program has been moving, many believe the whistleblower programs run by the CFTC and the Securiti

Last month, former Dewey & LeBoeuf, LLP (“Dewey”) executives agreed to a settlement with the U.S. Securities and Exchange Commission (“SEC” or the “Commission”) to pay civil penalties in connection with their roles in a $150 million fraudulent bond offering by the now defunct international law firm. The SEC claimed that the executives used accounting tricks when the firm needed money to weather the economic recession and steep costs resulting from the merger between the pred

In the prior Blog article GET RID OF A STALE MORTGAGE BY BRINGING AN ACTION UNDER RPAPL 1501(4) , we discussed provisions of New York’s Real Property Actions and Proceedings Law that permit a mortgagor to remove, of record, the lien of a stale mortgage on real property. New York’s Real Property Law contain a similar provision that permits the court to cancel certain recorded instruments that are clouds on title but were not recordable or were not required to be recorded. Th

In today’s business environment, it is not uncommon for departing employees to sign a separation or severance agreement that includes a bar from bringing “any and all” claims related to their employment. The enforceability of such pre-filing releases has frequently been the basis for motions to dismiss by defendant companies in actions arising under the False Claims Act (“FCA”). The FCA is silent on the issue. Last month, a district court judge sitting in the United States D

In March, this Blog wrote ( here ) about Hyuncheol Hwang v. Mirae Asset Sec. (USA) Inc. , 2018 N.Y. Slip Op. 30368(U) ( here ). Hwang involved an employment dispute in which Hyuncheol Hwang (“Hwang”) sought to stay the arbitration of his claims on the grounds that his employment agreement with Mirae Asset Securities (USA) Inc. (“Mirae”), a broker-dealer firm registered with FINRA, contained a forum selection clause directing the parties to litigate their disputes under the a

Sir Walter Scott’s original line is infinitely better (“O, what a tangled web we weave when first we practise to deceive!”) than this Blog title, which, nonetheless helps to illustrate the instant topic – Courts will not assist litigants in enforcing illegal contracts. Stone v. Freeman , 298 N.Y. 268 (1948), is a case involving commissions for the sale of clothing. The Stone plaintiff was a broker who sued for “his commissions earned in arranging a sale by defendant, who

The distinction between common-law indemnification and contribution is important, though its application is often difficult to navigate. Glaser v. Fortunoff , 71 N.Y.2d 643, 646 (1988) (noting, “the distinction is … critical,” although “the proper characterization of third-party claims … often cause confusion.”). Generally speaking, indemnity and contribution sort out the degree of culpability of multiple defendants and their responsibility for the payment of damages to th

Courts do not hesitate to dismiss fraud claims when they are merely contract claims “dressed in the garb of a fraud count.” Songbird Jet Ltd., Inc. v. Amax Inc. , 581 F. Supp. 912, 924 (S.D.N.Y. 1984). “It is well settled that a cause of action for fraud does not arise, where the only fraud alleged relates to a contracting party’s alleged intent to breach a contractual obligation.” ( Caniglia v. Chicago Tribune-New York News Syndicate Inc., 204 A.D.2d 233, 34 (1 st Dep’t