Search Results

By: Jonathan H. Freiberger This BLOG has written extensively on a wide variety of issues in the area of mortgage foreclosure. One particular area that has been the subject of numerous articles is RPAPL 1304 . By way of brief background, and as addressed in numerous prior BLOG articles, the Second Department has stated that an “RPAPL 1304 notice is a notice pursuant to the Home Equity Theft Prevention Act ( Real Property Law § 265-a ), the underlying purpose of which is to afford greater protections to homeowners confronted with foreclosure.” Wells Fargo Bank, N.A. v. Yapkowitz , 199 A.D.3d 126, 131 (2 nd Dep’t 2021) (some citations and internal quotation marks omitted; hyperlink added). The Yapkowitz Court continued, noting that “RPAPL 1304 requires that at least 90 days before a lender, an assignee, or a mortgage loan servicer commences an action to foreclose the mortgage on a home loan as defined in the statute, such lender, assignee, or mortgage loan servicer must give notice to the borrower.” Id . (citations and internal quotation marks omitted, emphasis added). The failure of the “lender, assignee or mortgage loan servicer” to comply with RPAPL § 1304 will result in the dismissal of a foreclosure complaint ( see, e.g., U.S. Bank N.A. v. Beymer , 161 A.D.3d 543, 544 (1 st Dep’t 2018)) when the issue is raised by the borrower ( see, e.g., One West Bank, FSB v. Rosenberg , 189 A.D.3d 1600, 1602-3 (2 nd Dep’t 2020) (citation omitted)). A foreclosing lender must be in “strict compliance” with the requirements of RPAPL 1304 . U.S. Bank Nat. Ass’n v. 22-23 Brookhaven, Inc. , 219 A.D.3d 657, 664 (2 nd Dep’t 2023). Indeed, “proper service of the notice containing the statutorily mandated content is a condition precedent to the commencement of a foreclosure action.” U.S. Bank N.A. v. Taormina , 187 A.D.3d 1095, 1096 (2 nd7 Dep’t 2020) (citations omitted). A sister provision of RPAPL 1304 is RPAPL 1306 , which provides, inter alia , that: Each lender, assignee or mortgage loan servicer shall file with the superintendent of financial services (superintendent) within three business days of the mailing of the notice required by … the information required by subdivision two of this section. Notwithstanding any other provision of the laws of this state, this filing shall be made electronically as provided for in subdivision three of this section. Any complaint served in a proceeding initiated pursuant to this article shall contain, as a condition precedent to such proceeding, an affirmative allegation that at the time the proceeding is commenced, the plaintiff has complied with the provisions of this section. RPAPL 1306(1). “Compliance with RPAPL 1306 is a condition precedent to commencing a foreclosure action.” Tri-State III, LLC v. Litkowski , 2025 WL 1699648 (2 nd Dep’t June 18, 2025) (citation omitted). “A proof of filing statement from the New York State Department of Financial Services is sufficient to establish, prima facie, that the plaintiff complied with RPAPL 1306.” Id . (citation omitted). On June 25, 2025, the Appellate Division, Second Department , dismissed two cases for failure to comply with CPLR 1306. Bank of New York Mellon v. Peralta In 2015, the Lender commenced a foreclosure action against the borrower to foreclose a mortgage. The borrower moved, inter alia , for summary judgment dismissing the complaint due to the lender’s failure to comply with RPAPL 1306. The Borrower appealed the motion court’s denial of the motion. In “modifying” the motion court’s order and dismissing the action, the Second Department stated: “Compliance with RPAPL 1306 is a condition precedent to the commencement of a foreclosure action” ( Deutsche Bank Natl. Trust Co. v Spanos , 180 AD3d 997, 999; see Hudson City Sav. Bank v Seminario , 149 AD3d 706, 707). “RPAPL 1306 requires that within three business days of the mailing of the foreclosure notice pursuant to RPAPL 1304(1), each lender or assignee ‘shall file’ certain information with the superintendent of financial services” ( PROF-2013-S3 Legal Title Trust V v Johnson , 214 AD3d 745, 747, quoting RPAPL 1306<1> ). “ trict compliance” with the statutory requirement of making the appropriate filing within three business days of the mailing of the RPAPL 1304 notice is required ( TD Bank, N.A. v Leroy , 121 AD3d 1256, 1259). Here, it is undisputed that the plaintiff did not make the requisite filing pursuant to RPAPL 1306 until November 4, 2014, eight business days after the purported mailing of the RPAPL 1304 notice on October 23, 2014. Since the plaintiff failed to strictly comply with the statutory requirement of making the appropriate filing within three business days of the mailing of the RPAPL 1304 notice, the Supreme Court should have granted that branch of the defendant’s motion which was for summary judgment dismissing the complaint insofar as asserted against him ( see Deutsche Bank National Trust Company v Goetz , _____AD3d_____ ; TD Bank, N.A. v Leroy , 121 AD3d at 1258-1260). Deutsche Bank Nat. Trust Co. v. Goetz The lender commenced a foreclosure action against the borrower in 2012. In 2021, the lender renewed its motion for summary judgment and the borrower cross-moved for summary judgment dismissing the complaint for failure to comply with RPAPL 1304 and 1306. The motion court granted the lender’s motion and denied the borrower’s cross motion. Subsequently, the lender moved to confirm the referee’s report of amounts due and for a judgment of foreclosure and sale . The motion was granted and, on the borrower’s appeal, the Second Department reversed. As to RPAPL 1304 , the Court found that the lender’s evidentiary submissions failed to demonstrate compliance with the statutory requirements. As to RPAPL 1306, and as relevant to today’s article, the Court found that the lender failed to demonstrate the requisite compliance and stated: Here, it is undisputed that the plaintiff did not make the requisite filing pursuant to RPAPL 1306 until 17 days after the purported mailing of the RPAPL 1304 notice ( see id. § 1306<1> ). As the plaintiff failed to comply with a condition precedent , the Supreme Court should have granted the defendant's cross-motion, in effect, for summary judgment dismissing the complaint insofar as asserted against him. Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. This BLOG has written dozens of articles addressing numerous aspects of residential mortgage foreclosure. To find such articles, please see the BLOG tile on our website and search for any foreclosure, or other commercial litigation, issue that may be of interest you. This BLOG has written numerous articles addressing RPAPL 1304. To find such articles, please see the BLOG tile on our website and type “1304” into the “search” bar.

By:  Jeffrey M. Haber In Lopez v. O’Sullivan , 2025 N.Y. Slip Op. 32178(U) (Sup. Ct., Suffolk County) ( here ), the court declined to dismiss fraud claims, among others, finding that plaintiff sufficiently stated a claim for such relief against the defendants. The court determined that plaintiff provided detailed allegations of misrepresentations made by defendants, which induced him to enter into transactions that ultimately deprived him of ownership of his property. In doing so, the court emphasized that plaintiff’s allegations gave fair and reasonable notice of the facts and circumstances surrounding the alleged fraud . The court also noted that the fraud claims were distinct from any breach of contract claims asserted by plaintiff, as they involved misrepresentations of material facts that spanned multiple transactions over several years. ​ Factual Background In January 2014, plaintiff purchased property in East Hampton, New York (the “property”) from Hampton Dream Properties LLC (“Hampton”) for $250,000.00. Plaintiff gave a down payment of $60,000.00 and entered into a mortgage loan agreement with Hampton for the balance of the purchase price. The mortgage secured plaintiff’s indebtedness to Hampton and was payable for eight years in monthly installments. Notably, at the closing, plaintiff signed a document in which plaintiff agreed that he was “purchasing the property … subject to all liens, mortgages and judgments.” In 2016, Bank of New York Mellon commenced a foreclosure action against the property in connection with an outstanding loan taken by the former owners of the property when they purchased the property (the “foreclosure action”).  Plaintiff asked defendants about the foreclosure action and was allegedly advised that it was not a concern. According to plaintiff, beginning in or about August 2022, certain defendants advised plaintiff that he needed to provide them with hundreds of thousands of dollars to resolve the foreclosure action – money that plaintiff contends he paid to those defendants. Thereafter, certain defendants allegedly coerced plaintiff into signing a deed transferring the subject property back to one of the defendants for no consideration. Plaintiff was allegedly advised that to negotiate with the bank and resolve the foreclosure action, Hampton had to become the owner of the property again. According to plaintiff, defendants resolved the foreclosure action resulting in Hampton becoming the new owner of the property. Plaintiff maintained that one of the defendants demanded that plaintiff pay an additional $500,000.00 to repurchase the property.  On June 27, 2023 defendant South Fork Realty Management Corp. notified plaintiff that it was the new owner of the property and that it was seeking to evict plaintiff from the premises. Defendants moved to dismiss, inter alia , the fraud claims asserted against them. Plaintiff claimed that defendants gave him false assurances that the existing liens were a mere technicality, the house was his and would be free and clear of all liens in a short period of time. Plaintiff also claimed that defendants made other misrepresentations to him in 2022 to induce him to pay over money and sign over his deed to Hampton. The moving defendants sought dismissal of, inter alia , the fraud claim , claiming that there were no misrepresentations, that plaintiff entered into the transaction to purchase the property with full knowledge of the outstanding liens, and that Hampton and its principal were obligated to clear these liens. The moving defendants also contended that plaintiff failed to meet the pleading requirements of CPLR 3016(b), which requires the plaintiff to plead fraud with particularity . Defendants further claimed that plaintiff failed to satisfy the reliance element of his fraud claims. Finally, defendants claimed that to the extent plaintiff was alleging fraudulent concealment, that claim should be dismissed because there was no duty to disclose the information claimed to be concealed. The Motion Court’s Ruling The court denied the motions to dismiss the fraud claims. The court found that plaintiff gave defendants “fair and reasonable notice … of the facts and circumstances upon which a fraud was allegedly perpetrated against the plaintiff by the defendants individually and in concert with one and other.” [Eds. Note: Under CPLR 3016 (b), the circumstances constituting fraud must be stated with sufficient detail “to permit a reasonable inference of the alleged conduct.”   To satisfy the particularity requirement, the plaintiff must allege such facts as the time, place, and content of the defendant’s false representations, as well as the details of the defendant’s fraudulent acts, including when the acts occurred, who engaged in them, and what was obtained as a result. Put another way, the complaint must identify the “who, what, where, when and how” of the alleged fraud. Notwithstanding, in Pludeman v.Northern Leasing Systems, Inc. , the Court of Appeals held that CPLR 3016(b) “should not be so strictly interpreted as to prevent an otherwise valid cause of action in situations where it may be impossible to state in detail the circumstances constituting a fraud.” Therefore, at the pleading stage, a complaint need only “allege the basic facts to establish the elements of the cause of action.” Thus, as noted, a plaintiff will satisfy CPLR 3016(b) when the facts permit a “reasonable inference” of the alleged misconduct. ] The court also held that plaintiff had “a claim for fraud which exist separate and apart from any breach of contract claim.” [Eds. Note: “A cause of action to recover damages for fraud will not lie where the only fraud claimed arises from the breach of a contract.” “Mere unfulfilled promissory statements as to what will be done in the future are not actionable as fraud and the injured party’s remedy is to sue for breach of contract.” However, if the plaintiff alleges a misrepresentation of “present facts that collateral to the contract and served as an inducement to enter into the contract, a cause of action alleging fraudulent inducement is not duplicative of a breach of contract cause of action.” ]  In addition to defendants’ motions, plaintiff moved to dismiss, inter alia , an affirmative defense asserted by one set of defendants. In that defense, defendants claimed that the fraud claim asserted against them should be dismissed because it duplicated plaintiff’s breach of contract claims. In addressing plaintiff’s motion to dismiss, the court acknowledged its earlier finding that the fraud claim did not duplicate plaintiff’s contract claims. As noted, the court found that plaintiff adequately alleged misrepresentations of present facts that were collateral to the contract claims which served as an inducement to enter into the purchase contract. In so doing, the court accepted plaintiff’s allegations that his fraud claim went “beyond the reach of the breach of contract cause of action.” Nevertheless, given the number of transactions at issue and the years during which they occurred, the court found it difficult to determine the applicability of defendants’ affirmative defense without discovery. Consequently, the court denied plaintiff’s motion to dismiss the affirmative defense. website and=">website and" enter="enter" “fraud”,="“fraud”," “CPLR="“CPLR" 3016(b)”,="3016(b)”," “pleading="“pleading" fraud="fraud" with="with" particularity”,="particularity”," or="or" “duplication”,="“duplication”," any="any" other="other" search="search" term="term" in="in" “search”="“search”" box.="box."> ______________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. A duty to disclose arises when (1) the defendant speaks on the subject, in which case he/she must speak truthfully and completely about the matter ( see Bank of Am., N.A. v. Bear Stearns Asset Mgmt. , 969 F. Supp. 2d 339, 351 (S.D.N.Y. 2013)); (2) there is a fiduciary relationship between the plaintiff and defendant ( see Balanced Return Fund Ltd. v. Royal Bank of Canada , 138 A.D.3d 542, 542 (1st Dept. 2016)); or (3) the defendant possesses “special facts” about the matter not known by the plaintiff ( Pramer S.C.A. v. Abaplus Int’l Corp. , 76 A.D.3d 89, 99 (1st Dept. 2010)). Slip Op. at *7. Pludeman v. Northern Leasing Sys., Inc. , 10 N.Y.3d 486, 491 (2008) (citation omitted). Id. at 491 (internal quotation marks and citation omitted). Id. at 492. Id. Id. Gorman v. Fowkes , 97 A.D.3d 726, 727 (2d Dept. 2012);  see also Selinger Enters., Inc. v. Cassuto , 50 A.D.3d 766, 768 (2d Dept. 2008);  Tiffany at Westbury Condominium v. Marelli Dev. Corp. , 40 A.D.3d 1073, 1076 (2d Dept. 2007). Brown v. Lockwood , 76 A.D.2d 721, 731 (2d Dept. 1980) (citation omitted). Did-it.com, LLC v. Halo Group, Inc. , 174 A.D.3d 682, 683 (2d Dept. 2019). Id. at *11.

By:  Jeffrey M. Haber In Bardy v. Bonnem , 2025 N.Y. Slip Op. 03698 (2d Dept. June 18, 2025) ( here ), plaintiff claimed an oral agreement entitled him to purchase a 25% ownership interest in a drive-thru coffee business in exchange for developing it. The agreement was allegedly based on a November 13, 2016 email offer, orally accepted three days later. Plaintiff allegedly performed substantial work without compensation, relying on the agreement. When the business succeeded, defendant denied the existence of any deal. Defendant moved to dismiss. The trial court denied the motion, finding the email satisfied the Statute of Frauds and that the agreement could be performed within one year. On appeal, the Appellate Division, Second Department modified the order, holding the email lacked essential terms and thus did not satisfy the Statute of Frauds (GOL § 5-701). The Court also found the agreement could not be completed within one year and rejected the plaintiff’s reliance on partial performance, reaffirming that such an exception does not apply under GOL § 5-701. As discussed below, the breach of contract claim was dismissed. The Law Governing Oral Agreements It is well settled that “ n determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look … to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds.” “The manifestation or expression of assent necessary to form a contract may be by word, act, or conduct which evinces the intention of the parties to contract.” Where the agreement is not in writing, the agreement must satisfy the Statute of Frauds. In New York, the Statute of Frauds is found in General Obligations Law (“GOL”) § 5-701 through 5-705. “General Obligations Law § 5–701(a)(1) provides that an agreement is void if, by its terms, it ‘is not to be performed within one year from the making thereof’ unless it ‘or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith.’” The statute, therefore, “encompasses only those agreements which, by their terms, ‘have absolutely no possibility in fact and law of full performance within one year.’”   As long as the agreement may be “‘fairly and reasonably interpreted’ such that it may be performed within a year, the Statute of Frauds will not act as a bar however unexpected, unlikely, or even improbable that such performance will occur during that time frame.” “In order to remove an agreement from the application of the statute of frauds, both parties must be able to complete their performance of the contract within one year.”   A contract that specifically calls for performance after a one year has elapsed cannot be fully performed until that time passes. The Statute of Frauds is “intended to prevent fraud in the proving of certain legal transactions particularly susceptible to deception, mistake and perjury.” In the context of agreements that cannot be performed within one year, the statute eliminates the need to “trust … the memory of witnesses for a longer time than one year.” By so doing, the Statute of Frauds “preserve the integrity of contracts,” thereby assuring the parties’ confidence in their ability to make and enforce agreements without “being held responsible, by oral, and perhaps false, testimony for a contract that the party claims never to have made.” Moreover, the Statute of Frauds guards against the situation where the party seeking to enforce an alleged oral agreement is also the sole witness to its formation. One way for parties to avoid the reach of the Statute of Frauds is to identify a writing sent in the course of negotiations that confirms the oral agreement . Under New York law, “a binding contract is formed by an oral acceptance of a written offer.” Thus, a document “which sets forth all of the essential terms of the proposed ,” such as an email, is “sufficient to satisfy the requirements of the statute of frauds” and acceptance may be “made orally without the agreement running afoul of the statute of frauds.” The fly in the ointment, however, is the requirement that the writing contain all the material terms of the agreement. Courts reject efforts to circumvent the Statute of Frauds by litigants who rely on emails and other writings that do not contain all the material terms of the parties’ agreement. Notably, the partial performance doctrine does not save an oral agreement from the application of the Statute of Frauds . The partial performance doctrine provides that an oral agreement that violates the writing requirement of the Statute of Frauds “may nonetheless be enforceable where there has been part performance unequivocally referable to the contract by the party seeking to enforce the agreement.” Under New York law, the partial performance doctrine “has not been extended to General Obligations Law § 5-701.” Indeed, “ ince the nineteenth century, the Court of Appeals has unequivocally rejected a part performance exception to the statute of frauds for contracts that cannot be performed within one year.” With the foregoing principles in mind, we examine Bardy v. Bonnem . Bardy v. Bonnem Bardy involved an effort by plaintiff to enforce an oral agreement with defendant in which plaintiff was allegedly given an option to purchase a percentage of a drive-thru coffee business that the two had worked on creating and developing. In October 2016, the parties were introduced to each other by a mutual friend. At the time, Bonnem was attempting to develop and launch a chain of drive-thru coffee establishments modeled on highly successful and rapidly expanding businesses that were operating in the western United States. Plaintiff and Bonnem entered into a series of negotiations in October and November of 2016 regarding the creation of a joint venture that would use Ready Coffee, an entity owned by Bonnem and Parkway Coffee, LLC, for this drive-thru coffee business. Plaintiff alleged that on November 13, 2016, Bonnem made a written proposal (in an email) that reflected his discussions with plaintiff, which the parties orally accepted on November 16, 2016 (the “Agreement”). The Agreement allegedly provided that in exchange for plaintiff working to develop Ready Coffee as a drive-thru coffee business, plaintiff would be given an option to purchase a 25% ownership interest in Ready Coffee, which plaintiff could acquire in two steps: (1) payment of $180,000.00 for an 18% ownership interest therein after the first drive-thru coffee location had opened; and (2) payment for an additional 7% ownership interest in Ready Coffee after the third year of Ready Coffee’s drive- thru coffee business, with Ready Coffee to be valued at $5 million for purposes thereof. The Agreement also included other terms, including that Ready Coffee would reimburse plaintiff for travel expenses. Plaintiff maintained that after Ready Coffee opened its first drive-thru coffee location in February 2019, which was immediately successful, plaintiff advised Bonnem that, pursuant to the Agreement, plaintiff was ready to purchase his initial 18 percent ownership interest in Ready Coffee. Plaintiff alleged that Bonnem claimed the parties never made a deal and that plaintiff’s efforts to develop Ready Coffee were done solely on a volunteer basis. In his amended complaint, plaintiff asserted: (1) a first cause of action for breach of contract against Bonnem; (2) a second cause of action for unjust enrichment against all defendants; (3) a third cause of action for quantum meruit against all defendants; (4) a fourth cause of action for breach of fiduciary duty against Bonnem; (5) a fifth cause of action for constructive trust against all defendants; and (6) a sixth cause of action for accounting against all defendants. Defendants moved to dismiss the amended complaint pursuant to CPLR 3211(a)(5) and (a)(7).  Defendants argued (1) the breach of contract claim was barred by the Statute of Frauds and, in any event, failed because the alleged oral agreement lacked definite terms; (2) the equitable claims failed because they impermissibly sought to enforce an unenforceable oral agreement; (3) the breach of fiduciary duty claim was defective because plaintiff did not allege the essential elements of a partnership; and (4) without a well-pled unjust enrichment or breach of fiduciary duty claim, the constructive trust and accounting claims necessarily failed. The motion court denied defendants’ motion in its entirety. Relevant to today’s article, the motion court found that dismissal based on the Statute of Frauds was “unwarranted,” because the relevant agreement was not the November 16 oral agreement, but rather the November 13 email, which plaintiff “orally accepted” on November 16.  The motion court found that the November 13 email proposal satisfied the Statute of Frauds because it “set[] forth all of the essential terms” of the Agreement. The motion court also found that the Agreement was outside the Statute of Frauds , because it could have been performed within one year. In this regard, the motion court noted that the first step of the purported agreement—plaintiff’s “acquisition of the 18 percent interest in Ready ”—“could have been performed within one year of the Agreement.” Defendants appealed. On appeal, the Second Department modified the motion court’s order, holding that, inter alia , plaintiff’s breach of contract cause of action should have been dismissed. The Court found that the November 13, 2016 email failed to satisfy the Statute of Frauds. The Court explained that the November 13, 2016 email failed to set forth the full scope of the alleged agreement between plaintiff and Bonnem. “In order to satisfy the statute of frauds,” said the Court, “‘a memorandum, subscribed by the party to be charged, must designate the parties, identify and describe the subject matter, and state all the essential terms of a complete agreement.’” The Court concluded that the November 13, 2016 email failed to include such information without resort to parol evidence. The Court also held that the Agreement could not be performed within one year: “While the plaintiff alleges that he provided services to Ready Coffee in order to leave open the option to purchase, the terms of the contract as alleged by the plaintiff can only be completed after three years.” Finally, the Court rejected plaintiff’s reliance on the partial performance doctrine to escape dismissal under the Statute of Frauds . The Court explained that “the exception to the Statute of Frauds for part performance has not been extended to General Obligations Law § 5-701, and so any evidence tending to show partial performance would not obviate the requirement of a written agreement.” Takeaway Bardy is notable because it reinforces several contract law principles. For example, Bardy reaffirms that oral agreements not performable within one year are unenforceable unless memorialized in a writing that includes all essential terms. Courts will not infer or supplement missing terms with parol evidence . Bardy also underscores that the partial performance doctrine does not apply to contracts governed by GOL § 5-701. Even substantial efforts to perform by one party will not validate an oral agreement if it falls under this statute. Finally, Bardy makes clear that email communications must be complete. While emails can satisfy the Statute of Frauds, they must contain all material terms of the agreement. Incomplete emails, even if orally accepted, are insufficient. ____________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. LaGuardia v. Brennan Beer Gorman/Architects, LLP , 175 A.D.3d 1280, 1281 (2d Dept. 2019). Id. ; see also Gator Hillside Village, LLC v. Schuckman Realty, Inc. , 158 A.D.3d 742, 743 (2d Dept. 2018); Daimon v. Fridman , 5 A.D.3d 426, 428 (2d Dept. 2004). Stillman v. Kalikow , 22 A.D.3d 660, 661 (2d Dept. 2005) (citation omitted). Id. (citations omitted). Id. at 662 (citations omitted); see also Moon v. Moon , 6 A.D.3d 796, 798 (3d Dept. 2004) (if “there might be any possible means of performance within one year … the one-year provision does not apply”). Hamburg v. Westchester Hills Golf Club, Inc. , 96 A.D.3d 802, 802 (2d Dept. 2012) (citations omitted); Freedman v. Chem. Constr. Corp. , 43 N.Y.2d 260, 265 (1977); Durante Bros. Constr. Corp. v. Coll. Points Sports Ass’n , 207 A.D.2d 379, 380 (2d Dept.1994) (duration of the alleged agreement as a whole—not a single provision—is the dispositive factor). See , e.g. , Sheehy v. Clifford Chance Rogers & Wells LLP , 3 N.Y.3d 554, 559-62 (2004) (oral agreement under which partner was to receive supplemental annual payments “begin … five years after his retirement” was subject to § 5-701(a)(1)); Klein v. James Purveyors, Inc. , 108 A.D.2d 344, 347-48 (2d Dept. 1985) ( alleged oral agreement requiring performance “‘upon the death of’ shareholders y its terms … could be fully performed only after a shareholder’s death” for Statute of Frauds purposes). D & N Boening, Inc. v. Kirsch Beverages, Inc. , 63 N.Y.2d 449, 453-54 (1984). Id. (citation omitted). Dorfman v. Reffkin , 144 A.D.3d 10, 15 (1st Dept. 2016) William J. Jenack Estate Appraisers & Auctioneers, Inc. v. Rabizadeh , 22 N.Y.3d 470, 476 (2013) (citation omitted). See , e.g. , D & N Boening , 63 N.Y.2d at 452, 458 (alleged indefinite oral franchise agreement asserted by exclusive franchisee void under Statute of Frauds); Dorfman , 144 A.D.3d at 19 (alleged oral agreement for plaintiff to “provid business know-how” to defendants invalid). Morton’s of Chicago/Great Neck LLC v. Crab House, Inc. , 297 A.D.2d 335, 337 (2d Dept. 2002). Mor v. Fastow , 32 A.D.3d 419, 420 (2d Dept. 2006); s ee also Atai v. Dogwood Realty of N.Y., Inc. , 24 A.D.3d 695, 698 (2d Dept. 2005) (“a writing may satisfy the statute of frauds and be enforced as a contract where it identifies the parties, describes the subject matter, states all of the essential terms of an agreement, and is signed by the party to be charged”). See , e.g. , Naldi v. Grunberg , 80 A.D.3d 1, 3 (1st Dept. 2010); Dahan v. Weiss , 120 A.D.3d 540, 542 (2d Dept. 2014); Levinson v. 77 Perry Realty Corp. , 212 A.D.3d 464, 465 (1st Dept. 2023); Birnbaum v. Goldenberg Consulting Grp., Inc. , 201 A.D.3d 432, 432-33 (1st Dept. 2022); Streit v. Bombart , 187 A.D.3d 529, 530 (1st Dept. 2020). Matter of Zelouf , 183 A.D.3d 900, 902 (2d Dept. 2020) (citation omitted). Zelouf , 183 A.D.3d at 902 (citation omitted). Gural v. Drasner , 114 A.D.3d 25, 30 (1st Dept. 2013) (collecting cases); see also Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc. v. Aegis Grp. plc , 93 N.Y.2d 229, 234 n.1 (1999). Slip Op. at *1 Id. Id. (quoting, Hopwood v. Infinity Contr. Servs. Corp. , 230 A.D.3d 570, 571 (2d Dept. 2024) (quoting Best Global Alternative, Ltd. v. FCIC Constr. Servs., Inc. , 170 A.D.3d 1101, 1103 (2d Dept. 2019)). Id. (citations omitted). Id. Id. (internal quotation marks and citations omitted). To find articles related to the Statute of Frauds, emails as enforceable contracts, and partial performance, visit the “ Blog ” tile on our  website  and enter the search terms “oral agreement” “Statute of Frauds,” “emails” and “partial performance” or any other related search term in the “search” box.

By: Jonathan H. Freiberger This BLOG frequently writes about mortgage foreclosure, generally, and RPAPL 1304 , specifically. By way of brief background, and as addressed in numerous prior BLOG articles, the Second Department has stated that an “RPAPL 1304 notice is a notice pursuant to the Home Equity Theft Prevention Act ( Real Property Law § 265-a ), the underlying purpose of which is to afford greater protections to homeowners confronted with foreclosure.” Wells Fargo Bank, N.A. v. Yapkowitz , 199 A.D.3d 126, 131 (2 nd Dep’t 2021) (some citations and internal quotation marks omitted; hyperlink added). The Yapkowitz Court continued, noting that “RPAPL 1304 requires that at least 90 days before a lender, an assignee, or a mortgage loan servicer commences an action to foreclose the mortgage on a home loan as defined in the statute, such lender, assignee, or mortgage loan servicer must give notice to the borrower.” Id . (citations and internal quotation marks omitted, emphasis added). “Further, the legislative history noted a typical lack of communication between distressed homeowners and their lenders prior to the commencement of litigation and the bill sponsor sought ‘to bridge that communication gap in order to facilitate a resolution that avoids foreclosure’ by providing preforeclosure notice ... and an ‘additional period of time ... to work on a resolution.’” Id . (some citations, internal quotation marks and brackets omitted) (quoting Senate Introducer's Mem in Support, Bill Jacket, L 2008, ch 472 at 10). The failure of the “lender, assignee or mortgage loan servicer” to comply with RPAPL § 1304 will result in the dismissal of a foreclosure complaint ( see, e.g., U.S. Bank N.A. v. Beymer , 161 A.D.3d 543, 544 (1 st Dep’t 2018)) when the issue is raised by the borrower ( see, e.g., One West Bank, FSB v. Rosenberg , 189 A.D.3d 1600, 1602-3 (2 nd Dep’t 2020) (citation omitted)). A foreclosing lender must be in “strict compliance” with the requirements of RPAPL 1304 . U.S. Bank Nat. Ass’n v. 22-23 Brookhaven, Inc. , 219 A.D.3d 657, 664 (2 nd Dep’t 2023). Indeed, “proper service of the notice containing the statutorily mandated content is a condition precedent to the commencement of a foreclosure action.” U.S. Bank N.A. v. Taormina , 187 A.D.3d 1095, 1096 (2 nd Dep’t 2020) (citations omitted). To establish entitlement to judgment as a matter of law in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the unpaid note, and evidence of default. Deutsche Bank Nat. Trust Co. v. Crosby , 201 A.D.3d 878, 880 (2 nd Dep’t 2022) (citations omitted). When failure to comply with RPAPL § 1304 is raised, the plaintiff must demonstrate its “strict compliance” with the statute as part of its prima facie case. Pennymac Corp. v. Levy , 207 A.D.3d 735, 736 (2 nd Dep’t 2022); see also Bank of America, Nat. Ass’n v. Wheatly , 158 A.D.3d 736 (2 nd Dep’t 2018); Yapkowitz , 199 A.D.3d at 131. Thus, the proper service of a notice under RPAPL 1304 “on the borrower or borrowers is a condition precedent to the commencement of a foreclosure action, and the plaintiff has the burden of establishing satisfaction of this condition.” Wilmington Savings Fund Society, FSB v. Kutch , 202 A.D.3d 1030, 1032 (2 nd Dep’t 2022) (citations and internal quotation marks omitted). On June 18, 2025, the Appellate Division, Second Department , decided Bank of America, N.A. v. Reed , a mortgage foreclosure action addressing RPAPL 1304 and other interesting issues. The facts of Reed , as relevant to this article, are as follows. In 2003, the borrower obtained a $200,000 home equity line of credit and secured his repayment obligation with a mortgage on real property in Queens, New York. Despite his alleged payment default in January of 2014, in April of 2014, the lender recorded a “satisfaction of mortgage in favor of indicating that the mortgage had been satisfied and discharged.” In 2016, the lender commenced an action against the borrower to foreclosure the mortgage and to expunge the satisfaction of mortgage. The Motion court denied the parties’ motions for summary judgment and appeals followed. RPAPL 1304 After discussing case law along the lines discussed herein, the Second Department noted that the lender can overcome an RPAPL 1304 defense by demonstrating “strict compliance” with the statute or, alternatively, the Court stated, the lender “bears the burden of establishing, prima facie, that RPAPL 1304 is inapplicable and, therefore, that the loan is not subject to the notice requirements set forth in the statute.” (Citations, internal quotation marks and brackets omitted.) The Court found that the lender failed to demonstrate RPAPL 1304 was inapplicable and that the borrower failed to demonstrate that RPAPL 1304 was applicable. As to the lender, the Court stated: The failed to establish, prima facie, that the subject loan was not a “home loan” and, thus, was not subject to the notice requirements of RPAPL 1304. In support of its motion, the plaintiff submitted, inter alia, a copy of the agreement executed by in 2003, which listed the premises as his address. The otherwise failed to submit evidence demonstrating that did not use the premises as his principal dwelling at the time signed the agreement or thereafter. Contrary to the ’s contention, its submissions failed to demonstrate that the premises were not ’s principal dwelling at the time this action was commenced. Even if its submissions had so established, the would not have been relieved of the obligation to serve with the RPAPL 1304 notice prior to commencing this. As to the borrower’s argument on the applicability of RPAPL 1304 (and the lender’s counterargument), the Court stated: In support of that branch of cross-motion, the asserted that RPAPL 1304 was applicable and that dismissal was warranted due to the ’s failure to serve with the statutory notice prior to commencing this action. The established prima facie entitlement to judgment as a matter of law on this ground, among other things, by submitting the agreement and an affidavit … wherein he averred that “the remises home and primary residence from 1971 until 2021”. In opposition, however, the raised a triable issue of fact as to whether RPAPL 1304 was inapplicable by submitting, inter alia, documents from 2013 through 2019 listing a property in Harlem as ’s address and an affidavit from executed in 2013 in an unrelated action wherein he averred that he had “been a member of the Harlem community for over sixty-five (65) years.” Expungement of the Satisfaction The Court also found that the lender failed to demonstrate its entitlement to have the satisfaction of mortgage expunged and, in so doing, stated: In the complaint, the alleged that its filing of the satisfaction of mortgage “was erroneous and inadvertent.” In support of its motion, the submitted, among other things, an affidavit from its authorized representative that failed to address the satisfaction of mortgage and to demonstrate that the filing thereof was erroneous and inadvertent. Contrary to the ’s contention, the fact “that the mortgage had not been paid,” standing alone, was insufficient to satisfy the ’s prima facie burden. Since a cannot foreclose on a satisfied mortgage, the also failed to meet its prima facie burden on those branches of its motion which were for summary judgment on the complaint insofar as asserted against and for an order of reference. Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. This BLOG has written numerous articles addressing various issues related to RPAPL 1304. To find articles related to RPAPL 1304, please see the BLOG tile on our website and type “RPAPL 1304” into the “search” box. If you are interested in BLOG articles related to other mortgage foreclosure issues, see the BLOG tile on our website and search for any other topics of interest.

By:  Jeffrey M. Haber In One River Run Acquisition, LLC v. Milde , 2025 N.Y. Slip Op. 03653 (1st Dept. June 17, 2025) ( here ), the Appellate Division, First Department reinstated counterclaims for fraud and fraudulent transfers after they had been dismissed at the motion court level. The case arose from a failed joint venture between One River Run Acquisition, LLC (“ORRA”) and Greenwich Group International LLC (“GGI”) to develop a luxury resort in Colorado. In its counterclaims, GGI alleged that ORRA and certain individuals misrepresented ORRA’s financial contributions and later fraudulently transferred the project property to insiders, rendering ORRA judgment proof. The trial court dismissed the counterclaims against the individuals. On appeal, the Court reversed, holding that GGI adequately alleged that ORRA’s transfer lacked reasonably equivalent value and left it with insufficient assets, satisfying elements of a fraudulent transfer under both New York and Colorado law. The Court also reinstated the fraud claim against ORRA’s principal, finding sufficient allegations of misrepresentation and reliance to survive a motion to dismiss. Factual Background One River Run was a dispute that arose out of a letter agreement, dated December 7, 2020, by and between ORRA and GGI. Pursuant to terms of the Agreement, ORRA and GGI agreed that they would, through a joint venture, develop a luxury condominium, hotel, and ski resort (the “Project”). The Agreement set out in detail each party’s roles, as well as their shared roles, in the Project. Under the Agreement, GGI served as the financier and ORRA served as the manager of the Property. The Agreement contemplated that both GGI and ORRA would invest in the Project as co-owners but anticipated additional financing via first-lien construction debt, mezzanine, or CPACE debt, and/or additional equity infusions. GGI undertook to “make best efforts to secure the most efficient capital structure for the Project” and to “use best efforts to maximize the most efficient sources of capital.” GGI had “the exclusive right to arrange for any capital needs associated with the Venture.” Ultimately, the joint venture did not work out as planned. Plaintiffs commenced the action by filing a summons with notice. In plaintiffs’ amended complaint, plaintiffs alleged that ORRA was fraudulently induced into signing the Agreement and that, among other things, defendants never intended to deliver on their promises. In particular, plaintiffs alleged that prior to executing the Agreement, defendants lied about, among other things, GGI’s competency, ability to deliver financing, and their experience. Plaintiffs also alleged that GGI was a sham business that shared office space and phone numbers with another business, Richbell, which was a corporate affiliate of GGI. According to plaintiffs, Richbell end up providing ancillary services to GGI in its performance under the Agreement. GGI moved to dismiss all claims in the amended complaint, except for ORRA’s breach of contract claim. The motion court granted the motion in its entirety, leaving only ORRA’s claim for breach of the Agreement. GGI answered the amended complaint and filed its counterclaims.  Relevant to the appeal, GGI asserted: (i) a breach of contract claim against ORRA and its successor-in-interest, ORRA Keystone, arising from ORRA’s breaches of the Agreement; (ii) fraud claims against ORRA’s principal arising from his alleged misrepresentations to GGI about the amount of cash and cash equity ORRA invested into the Project; (iii) a fraudulent transfer claim against each of the ORRA Individuals ; and (iv) a tortious interference claim against each of the ORRA Individuals, arising from their alleged interference with the Agreement between GGI and ORRA.  Plaintiffs moved to dismiss the counterclaims. The motion court sustained GGI’s fraud claim against ORRA. However, the motion court declined to dismiss the fraudulent transfer claim against ORRA and ORRA Keystone, noting that at the pleading stage, a plaintiff may rely on “badges of fraud” to allege “intent to hinder, delay, or defraud creditors.” The motion court concluded, “giving GGI every favorable inference<,> that ORRA ‘transferred the Property to insiders making ORRA judgment proof by divesting ORRA of its primary asset, which was the Property on which the Project was to be built and developed’ …, dismissal of this claim simply is not appropriate at this stage of the litigation.” Despite sustaining the fraudulent transfer claim against ORRA, the motion court dismissed the breach of contract claim against ORRA Keystone on grounds that it could not be liable as ORRA’s successor. The motion court found that ORRA Keystone did not expressly assume contractual liability under the Agreement, or impliedly assume contractual liability, “because there was no consolidation or merger, there are insufficient allegations of continuation of ORRA (which still exists) and there are insufficient independent allegations that a transaction was entered into to fraudulently escape obligations other than those supporting the fraudulent conveyance claim.”  The motion court further held that the Agreement “contemplate the creation of NewCo and the transfer which took place.”  At the conclusion of oral argument, the motion court reserved decision on whether the ORRA Individuals could face personal liability for the alleged fraud and fraudulent transfers. Thereafter, the motion court issued a supplemental order, dismissing all counterclaims against the ORRA Individuals. GGI appealed. The Appellate Division , First Department unanimously reversed. The Court held that the motion court “should not have dismissed the fraudulent conveyance counterclaim against the ORRA Individuals.” The Court explained that “ espite the letter agreement, which GGI reasonably reads to contemplate that the venture would hold the property, ORRA transferred the property to insiders, divesting the project of its principal asset and allegedly making ORRA judgment proof.” Since “ORRA not claim to have received reasonably equivalent value for the transfer,” said the Court, GCI “sufficiently alleged that, after the transfer, ORRA’s assets were unreasonably small in relation to the business of developing the project and honoring ORRA’s obligations to GGI under the letter agreement.” Accordingly, concluded the Court, “the actual and constructive fraudulent conveyance counterclaims should not have been dismissed.” The Court rejected ORRA’s argument that its supplemental filings utterly refuted the fraudulent conveyance allegations. The Court noted that “ hile suggest that ORRA transferred the property to the ORRA Individuals as a first step in a simultaneous set of transfers that led to Keystone owning the property, that not refute that ORRA gave the property for no consideration, effecting a fraudulent conveyance.” “Indeed,” said the Court, ORRA not respond to GGI’s argument that the ORRA Individuals may be liable for fraudulent conveyance even absent any direct personal benefit because they were ‘first transferees’ within the meaning of the Colorado Uniform Fraudulent Transfer Act § 38-8-109(2) and the New York Debtor and Creditor Law § 277(b)(1)(i).” Finally, the Court held that the motion court “should not have dismissed the fraud counterclaim against Russell.” In the amended complaint, GGI alleged that ORRA and Russell misrepresented how much cash equity ORRA had invested in the project and that GGI relied on that stated amount when signing the letter agreement.” That was sufficient, held the Court. “In actions for fraud, corporate officers and directors may be held individually liable if they participated in or had knowledge of the fraud,” observed the Court. Moreover, the Court held that “ hether GGI justifiably relied on the cash equity statement be resolved on motion to dismiss.” Takeaway One River Run is notable because it makes clear that corporate officers may face personal liability for fraudulent conveyance and fraudulent inducement claims, even if they did not directly benefit from the alleged fraud or transfer, as long as they participated in or orchestrated the fraudulent conduct. One River Run also affirms the principle that creditors can rely on “badges of fraud” and asset-stripping behavior to survive dismissal and pursue recovery from insiders who render entities judgment proof. _______________________________________  Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.  ORRA is a developer based in Aspen, Colorado.  GGI is a New York City real estate investment banking firm.  Scott Russell (“Russell”), Shervin Rashidi, and Ryan Geller are collectively defined in the case as the ORRA Individuals. The ORRA Individuals operated ORRA. Slip Op. at *1. Id. Id. Id. (citations omitted). Id. Id. at *1-*2. Defendants argued that Colorado law applied , though the result would be the same under New York law. Id. at *2. Id. Id. (quoting Polonetsky v. Better Homes Depot , 97 N.Y.2d 46, 55 (2001)). Id. (quoting DirecTV, LLC v. Nexstar Broadcasting, Inc. , 230 A.D.3d 439, 441 (1st Dept. 2024)).

By: Jeffrey M. Haber New York “favors and encourages arbitration as a means of conserving the time and resources of the courts and the contracting parties”. Under the Federal Arbitration Act (“FAA”), “‘questions of arbitrability must be addressed with a healthy regard for the federal policy ... any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.’” Thus, “where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute”. Although the intention of the parties is controlling, “those intentions are generously construed as to issues of arbitrability”. “ n a motion to compel or stay arbitration, a court must determine, ‘in the first instance … whether parties have agreed to submit their disputes to arbitration and, if so, whether the disputes generally come within the scope of their arbitration agreement.’” “The burden of proof is on the party seeking arbitration.” “A party to an agreement will not be compelled to arbitrate, and thereby, to surrender the right to resort to courts, in the absence of evidence affirmatively establishing that the parties expressly agreed to arbitrate the dispute at hand.” “The agreement must be clear, explicit and unequivocal<,> and must not depend upon implication or subtlety.” In Marinos v. Brahaj, 2025 N.Y. Slip Op. 03561 (2d Dept. June 11, 2025) ( here ), the Appellate Division, Second Department was asked to consider the following question, “as a matter of first impression”: whether a wrongful death cause of action asserted by a decedent’s administrator individually, and which arose from the same facts as a negligence cause of action was subject to an arbitration clause the decedent entered into. As discussed below, the Court held that the wrongful death cause of action did not have to be arbitrated. Overview Marinos involved a negligence and wrongful death action. The plaintiffs, George Marinos and Josephine Belli-Marinos, as administrators of the estate of Andreas N. Belli-Marinos (the “decedent”) and individually, moved to stay arbitration of negligence causes of action the plaintiffs asserted on behalf of the decedent’s estate against the defendants Revel Transit, Inc. (“Revel”), Frank Reig, and Paul Shuey (collectively, the “Revel defendants”), and a wrongful death cause of action plaintiffs asserted on behalf of themselves individually against the Revel defendants. The Revel defendants opposed the motion and cross-moved to compel arbitration of all causes of action asserted against them. The motion court denied the motion to stay arbitration and granted the Revel defendants’ cross-motion to compel arbitration. Plaintiffs argued that the wrongful death cause of action against the Revel defendants should not be subject to arbitration. Relevant Facts On September 19, 2021, the decedent was operating a rented electric moped in Manhattan. He had rented the moped from Revel using an app. To rent a moped from Revel, Revel required that a user download its app and become a member of Revel. The decedent had become a member of Revel on April 8, 2021, and had rented a moped from Revel 74 times prior to the date of the accident. As alleged in the complaint, the decedent was ejected from the moped he had rented and fell into the street. He was then hit by a vehicle operated and owned by defendant Astrit Brahaj. Plaintiffs alleged that being hit by the vehicle caused the injuries that resulted in the decedent’s death. Plaintiffs commenced the action, among other things, to recover damages for personal injuries and wrongful death against defendants. When a user downloads Revel’s app for the purpose of renting a moped, they are presented with a series of pages that they must acknowledge through “clicks.” One page that users must acknowledge is an agreement that contains an arbitration clause. For the purpose of the appeal, the parties conceded that the negligence causes of action asserted on behalf of the decedent’s estate against the Revel defendants were subject to the arbitration clause and must proceed to arbitration. The Appeal Plaintiffs commenced the action on March 2, 2022. The Revel defendants served an answer and a demand for arbitration on April 4, 2022. Plaintiffs then moved to stay arbitration of the causes of action against the Revel defendants. In support of their motion, plaintiffs argued, inter alia , that they were not bound by the arbitration clause because they did not sign the agreement and were not the decedent’s successors or assigns but were court-appointed administrators of the decedent’s estate. The Revel defendants opposed the motion and cross-moved to compel arbitration of the causes of action asserted against them. In support of their cross-motion, the Revel defendants argued, among other things, that the “successors and assigns” language in the arbitration clause bound plaintiffs because they stood in the decedent’s shoes, who entered into the agreement containing the arbitration clause, and therefore, the causes of action asserted against them must be determined by arbitration. In an order dated April 20, 2023, the motion court, inter alia , denied plaintiffs’ motion and granted the Revel defendants’ cross-motion, finding that plaintiffs, as the court-appointed administrators of the decedent’s estate, were bound by the decedent’s agreement to arbitrate . Plaintiffs appealed. On appeal, plaintiffs argued that the wrongful death cause of action was not derivative of the negligence causes of action and that EPTL 5-4.1 conferred upon them the individual, independent right to pursue a wrongful death cause of action on their own behalf against the Revel defendants. The Revel defendants argued that the arbitration clause applied to plaintiffs as administrators of the decedent’s estate and individually based upon the language in the arbitration clause stating that it applied to the user’s “successors and assigns.” The Revel defendants further argued that the FAA applied to this case and, therefore, arbitration of the wrongful death cause of action against them was mandatory. In reply, plaintiffs argued that the wrongful death cause of action was based upon their own pecuniary loss and was not based upon their roles as administrators of the decedent’s estate. Plaintiffs further argued that the FAA did not apply and did not mandate that plaintiffs arbitrate the wrongful death cause of action against the Revel defendants. Whether the Wrongful Death Cause of Action Against the Revel Defendants Was Subject to the Arbitration Clause The Court noted that plaintiffs did not enter into an agreement with Revel to arbitrate. Notwithstanding, said the Court, plaintiffs are the administrators of the decedent’s estate, and the causes of action arose from the same incident that caused the decedent’s death. The issue, explained the Court, turned on the nature of wrongful death causes of action and whether they were derivative of negligence causes of action or independent of negligence causes of action. Looking at the EPTL (Estates, Powers & Trusts Law), the Court explained that “ he law of this State is clear that a wrongful death cause of action is a separate and distinct cause of action to redress the injuries suffered by a decedent’s distributees as a result of the decedent's death.” The Court reasoned that since a wrongful death claim is an individual one, an arbitration agreement entered into by the decedent could not bind the decedent’s administrator or personal representative. The Court noted that “ ther states follow reasoning.” In  Lucia v. Bridge Senior Living, LLC  (2024 WL 688521, 2024 Del. Super. LEXIS 113), the Delaware Superior Court addressed the same issue and determined that a wrongful death cause of action asserted by the personal representative of an estate in his individual capacity was not subject to an arbitration clause that bound the decedent and the estate. Similarly, in  Pisano v. Extendicare Homes, Inc . (2013 PA Super 232, 77 A.3d 651), the Superior Court of Pennsylvania also determined that a wrongful death claim was not derivative of a decedent’s rights, but belonged to the individual who alleged it. The United States Court of Appeals for the Sixth Circuit affirmed an interpretation of Kentucky’s law that a decedent had no legal rights in a wrongful death claim asserted by the personal representative of the estate, and thus, the personal representative was not bound by contracts entered into by the decedent. The Court noted that there were courts in other jurisdictions that reached different results, determining that wrongful death claims are derivative of a decedent’s injuries, and the parties asserting wrongful death claims are subject to the arbitration agreements that bound the decedent. After considering the EPTL and the authorities from other jurisdictions, the Court held that “the wrongful death cause of action independent of the negligence causes of action asserted on behalf of the decedent’s estate.” Accordingly, “plaintiffs, individually, never agreed to arbitrate any claims with Revel and be forced to do so.” Whether the FAA Mandates that the Plaintiffs Arbitrate the Wrongful Death Cause of Action Insofar as Asserted Against the Revel Defendants The Court held that “the FAA ha no application” to the action. The Court explained that the “initial inquiry remain whether there a valid agreement to arbitrate.” “Whether or not the decedent was taking part in interstate commerce when entering into the agreement with Revel,” was not relevant as “there no valid, much less any, agreement to arbitrate between Revel and the plaintiffs.” Accordingly, the Court reversed the motion court’s order denying “that branch of the plaintiffs’ motion which was to stay arbitration of the cause of action alleging wrongful death” against the Revel defendants and denied “that branch of the Revel defendants’ cross-motion which was to compel arbitration of the cause of action alleging wrongful death” asserted against them is denied. Takeaway Although we do not often write about cases involving negligence or wrongful death causes of action, we believe that the Court’s ruling in Marinos is notable and has implications that may extend beyond the facts and circumstances before the Court. Arbitration is a “creature of contract.” As a general matter, only signatories to a contract containing an arbitration agreement can be compelled to arbitrate. Consequently, “a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Marinos underscores these general propositions. As discussed, the Court in Marinos held that a wrongful death claim brought by a decedent’s distributees is independent of any claims the decedent could have brought and is not subject to arbitration agreements signed by the decedent. The decision distinguishes between derivative claims belonging to the estate (which may be subject to arbitration agreements ) and independent claims belonging to distributees. In our view, the rationale of Marinos would apply to situations in the commercial context. For example, in a shareholder action in which the plaintiff asserts direct and derivative claims, under Marinos , the direct claims would not have to be arbitrated , while the derivative claims would have to be if the business entity is subject to an arbitration agreement. To be sure, we may be reading more into the reasoning of the decision, but it seems to be a logical extension of the ruling. In any event, Marinos is notable in the wrongful death context as it makes clear that wrongful death claims under New York law are independent causes of action belonging to distributees and are not automatically bound by agreements signed by the decedent. _____________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. Smith Barney Shearson Inc. v. Sacharow , 91 N.Y.2d 39, 49-50 (1997) (citations omitted). Singer v. Jefferies & Co., Inc. , 78 N.Y.2d 76, 81-82 (1991) (quoting Cone Mem. Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24-25 (1983)). AT&T Techs. v. Communs. Workers of Am. , 475 U.S. 643, 650 (1986) (citations omitted); see also Wilson v. PBM, LLC , 193 A.D.3d 22 (2d Dept. 2021). Singer , 78 N.Y.2d at 82 (citation omitted). Degraw Constr. Group, Inc. v. McGowan Bldrs., Inc. , 152 A.D.3d 567, 569 (2d Dept. 2017) (quoting Sisters of St. John the Baptist, Providence Rest Convent v. Geraghty Constructor , 67 N.Y.2d 997, 998 (1986), and citing Revis v. Schwartz , 192 A.D.3d 127, 134 (2d Dept. 2020), aff’d , 38 N.Y.3d 939 (2022)). Matter of Cusimano v. Berita Realty, LLC , 103 A.D.3d 720, 721 (2d Dept. 2013); Wolf v. Hollis Operating Co., LLC , 211 A.D.3d 769, 770 (2d Dept. 2022). Glauber v. G & G Quality Clothing, Inc. , 134 A.D.3d 898, 898 (2d Dept. 2015); Revis , 192 A.D.3d at 142. Sutphin Retail One, LLC v. Sutphin Airtrain Realty, LLC , 143 A.D.3d 972, 973 (2d Dept. 2016) (internal quotation marks omitted); Glauber , 134 A.D.3d at 898. Slip Op. at *1. Plaintiffs are the decedent’s parents. Slip Op. at *2. Id. Id. at *2-*3. Id. at *3. Id. (citing Richmond Health Facilities v. Nichols , 811 F.3d 192 (6th Cir. 2016)). Id. (citing cases). Id. Id. Id. Id. Id. Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading Inc. , 252 F.3d 218, 224 (2d Cir. 2001). TBA Global, LLC v. Fidus Partners, LLC , 132 A.D.3d 195, 202 (1st Dept. 2015). AT&T Techs. , 475 U.S. at 648 (quoting Steelworkers v. Warrior & Gulf Nav. Co. , 363 U.S. 574, 582 (1960)).

By: Jonathan H. Freiberger Generally speaking, a party is bound by the terms of a contract to which it is a party. Wu v. Uber Technologies, Inc. , 2024 WL 4874383 at *5 (Ct. Appeals of New York November 25, 2024). Thus, contracts should be enforced according to their terms when they are “clear and unambiguous”. Rocar Realty Northeast, Inc. v. Jefferson Valley Mall Ltd. Partnership , 38 A.D.3d 744, 746 (2 nd Dep’t 2007) (citations omitted). This is so even when a party fails to read the contract prior to executing same ( Id . at *5,*7 and *11) or if the signer does not understand the English language ( Meerovich v. Big Apple Institute Inc. , 22-cv-7625(DLI)(LB), 2024 WL 1308603 at *5 (E.D.N.Y March 27, 2024) ( applying New York law ). Thus, a “party who executes a contract is presumed to know its contents and to assent to them n inability to understand the English language, without more, is insufficient to avoid this general rule.” Holcomb v. TWR Express, Inc . , 11 A.D.3d 513, 514 (2 nd Dep’t 2004) (citations and internal quotation marks omitted). See also Nerey v. Greenpoint Mortg. Funding, Inc. , 144 A.D.3d 646, 648 (2 nd Dep’t 2016). Moreover, the ability to enforce contracts according to their terms is particularly important in many situations such as “real property transactions, where commercial certainty is a paramount concern, and where the instrument was negotiated between sophisticated, counseled business people negotiating at arm's length.” Rocar, 38 A.D.3d at 746 (citations, internal quotation marks and ellipses omitted). Nonetheless, a party to a contract may waive a provision thereof. “A valid waiver requires no more than the voluntary and intentional abandonment of a known right which, but for the waiver would have been enforceable.” Mercado v. Schwartz , 209 A.D.3d 30, 40 (2 nd Dep’t 2022) (citation and internal quotation marks omitted). Indeed, even a “no waiver” clause may be waived, although “such a waiver will not be lightly presumed….” Todd English Enterprises LLC v. Hudson Home Group, LLC , 206 A.D.3d 585, 587 (1 st Dep’t 2022) (citations and internal quotation marks omitted). Whether a party waived a contractual right was an issue decided on June 11, 2025, by the Appellate Division, Second Department, in Glopak USA Corp. v. Translink Shipping, Inc. The parties in Glopak entered into a line of credit agreement pursuant to which the defendant would loan the plaintiff money for the shipment of goods from China to the USA. When it failed to timely pay the defendant’s invoices, the plaintiff's credit was revoked by the defendant, which also withheld (and continued to possess) the plaintiff’s shipments until all past-due balances were paid in full. As a result of the defendant’s actions, “the plaintiff commenced this action to recover damages for conversion and for specific performance , directing the defendant to accept payment for, and to release, certain shipments.” After the defendant’s motion for summary judgment was denied by the motion court, it moved for reargument claiming that “the court misapprehended the law and the facts by determining that the plaintiff had raised a triable issue of fact in opposition by submitting evidence that the defendant had waived its right to revoke the plaintiff’s credit and demand payment in full.” The motion court granted reargument and, upon reargument, granted the defendant’s motion for summary judgment . On the plaintiff’s appeal, the second department affirmed. In reaching its determination, the Court, relying on caselaw along the lines set forth supra , stated: Contractual rights may be waived if they are knowingly, voluntarily, and intentionally abandoned. Accordingly, a waiver requires no more than the voluntary and intentional abandonment of a known right which, but for the waiver, would have been enforceable. Such abandonment may be established by affirmative conduct or by failure to act so as to evince an intent not to claim a purported advantage. Generally, the existence of an intent to forgo such a right is a question of fact. However, waiver should not be lightly presumed and must be based on a clear manifestation of intent to relinquish a contractual protection. (Citations and internal quotation marks omitted.) The Court noted that the parties’ credit agreement permitted the defendant to “revoke the credit ‘at any time’ upon breach by the plaintiff.” Further, despite the plaintiff’s argument to the contrary, the Court found that “the defendant’s decision not to enforce that right until January 2020 did not constitute a clear manifestation of intent to relinquish a contractual right.” (Citations omitted.) The Court further found that the plaintiff failed to prove that its evidence “establish that the defendant waived its right to withhold shipments in the event of nonpayment.” (Citations omitted.) Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. This BLOG has written numerous articles addressing various issues related to breach of contract, contract formation and contract interpretation. To find such articles, please see the BLOG tile on our website and type your search terms into the “search” box. This BLOG has written about the waiver of contract rights. See, e.g., < here =">here"> , < here =">here"> , and < here =">here"> .

By:  Jeffrey M. Haber This Blog has written about the process known as “summary judgment in lieu of a complaint” on several occasions. The process, codified in CPLR 3213, is a procedure that is unique to New York practice. CPLR 3213 allows a plaintiff to move for summary judgment before the complaint is filed, directly challenging the defendant’s ability to contest the underlying claim. It bypasses traditional pleading and discovery and is available when the action is based on an instrument for the payment of money only. The purpose of CPLR 3213 “is to provide an accelerated procedure where liability for a certain sum is clearly established by the instrument itself.” Under CPLR 3213, a promissory note may qualify as an instrument for the payment of money only, so long as the plaintiff submits proof of the existence of the note and of the defendant’s failure to make payment. However, “ here the instrument requires something in addition to defendant’s explicit promise to pay a sum of money, CPLR 3213 is unavailable.” A plaintiff’s prima facie proof “cannot be drawn from sources outside the agreement itself.” In other words, summary judgment in lieu of complaint is not available to a plaintiff where “the right to payment not be ascertained solely from the face of the debt instrument[]” and the instrument “refer to other documents with regard to events of default.” As discussed below, that was the case in YA II PN, Ltd. v. Triller Group Inc. , 2025 N.Y. Slip Op. 31974(U) (Sup. Ct., N.Y. County May 19, 2025) ( here ). In 2024, plaintiff advanced millions of dollars in financing to fund defendant’s operations while it sought to consummate a merger pursuant to an agreement and plan of merger (the “Merger”). The financing was memorialized by a promissory note , executed by defendant, which was subsequently amended and restated (the “Note”). Relevant to the motion court’s decision, the Note permitted plaintiff to accelerate the debt “if any Event of Default ha occurred.” Accompanying the Note were guarantees. Under the guarantees, the guarantors not only guaranteed defendant’s payment obligations under the Note but also guaranteed defendant’s performance obligations under the transaction documents. Under Section 2(a)(i) of the Note, an event of default would occur if defendant failed to pay plaintiff any amounts due under the Note or “any other Transaction Document.” Under Section 2(a)(xv), an event of default would occur if, essentially, defendant failed to consummate the planned merger by a particular date. Under Section 2(a)(xvi), a default would occur if any defendant failed “to observe or perform any material covenant or agreement contained in … any other Transaction Document.” The “Transaction Documents” referenced in the Note included the Note itself and a registration rights agreement (“Registration Rights Agreement”), among others. The Registration Rights Agreement imposed a filing deadline as “the of (i) the 15th calendar day following the date upon which the Company … cleared substantially all of the comments from the SEC on the preliminary proxy statement on Form 14A relating to the approval of the Merger and (ii) the 30th calendar day following the consummation of the Merger.” Plaintiff maintained that the Merger was consummated in October 2024, months after the date set forth in the Note. On November 14, 2024, plaintiff issued a notice of default and acceleration to defendants, demanding immediate repayment in cash of the full, unpaid principal amount of the Note. The notice of default was premised on six separate events of default arising under the three aforementioned provisions. According to plaintiff, defendants allegedly failed to: (1) timely file the registration statement within 15 days of clearing the SEC’s comments to the preliminary proxy statement, as required by the Registration Rights Agreement; (2) make payment triggered by the aforementioned breach of the Registration Rights Agreement; (3) timely issue commitment shares to plaintiff after closing the merger; (4) provide plaintiff with notice after defendant undertook a stock split; (5) obtain plaintiff’s written consent prior to undertaking two stock splits; and (6) consummate the merger by August 12, 2024. There was no dispute that the Note would not have matured if not accelerated by the events of default. Plaintiff moved pursuant to CPLR 3213 for summary judgment in lieu of complaint to recover $35,347,996.44 under the Note and two guaranty agreements. Defendants—the borrower, Triller Group Inc. (formerly AGBA Group Holding Limited), and three guarantors, Triller Corp., Triller Hold Co LLC, and Convoy Global Holdings Limited—opposed the motion. As discussed below, the motion court denied the motion and converted the matter to a plenary action. The motion court held that summary judgment under CPLR 3213 was not appropriate because the “right to payment require an analysis of the parties’ obligations under multiple documents to determine performance and defaults.” The motion court said that “ his particularly true” because “some default events non-monetary, or not simply based on failure to pay.” The motion court noted that “ he acceleration … predicated on several events of default which tied to separate agreements.” In particular, the motion court explained that “plaintiff’s recovery based on the first and second events of default would require it to demonstrate that the filing of the Registration Statement in November 2024 was not timely. Such a showing would require a determination of when the defendants cleared ‘substantially all’ of the SEC’s comments to the preliminary proxy statement.” To the extent plaintiff’s motion was based on “the delayed merger closing” ( i.e. , the sixth event of default), the motion court held that relief under CPLR 3213 was unavailable as the non-monetary default was disputed. With regard to the third, fourth, and fifth events of default, which related to the issuance of shares and defendants’ compliance with notice and consent requirements associated with the undertaking of stock split transactions, “also nonmonetary defaults,” the motion court held that relief was similarly unavailable. This was especially so, noted the motion court, since plaintiff failed to submit any evidence of default. The motion court rejected plaintiff’s contention that the outside evidence necessary to prove the default was a “de minimus deviation from the face of the document or a simple, readily verified fact, confirmed by documentary evidence in the record” such as a party’s resignation date. In doing so, the motion court relied on a recent decision by the Appellate Division, First Department, in which the Court held that a deviation is not de minimus where the subject “guaranty permit the guarantor to raise payment and performance as a defense and there is a colorable dispute as to whether the amount due has been satisfied.” The motion court found that the “facts here are even more compelling against the availability of CPLR 3213.” Finally, in denying the motion, the motion court deemed the plaintiff’s motion papers to be its complaint and the answering papers as defendants’ answer. Takeaway A plaintiff may seek relief under CPLR 3213 when the action is based upon an instrument for the payment of money only. YA II PN reinforces the rule that CPLR 3213 is not available when the instrument references other documents for determining default and/or the default is non-monetary or disputed. _____________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. To find articles related to the CPLR 3213 or summary judgment in lieu of complaint, visit the “Blog” tile on our website and enter the search terms “CPLR 3213” and “summary judgment in lieu of complaint” or any other related search term in the “search” box. See HSBC Bank USA v. Community Parking Inc. , 108 A.D.3d 487 (1st Dept. 2013); Allied Irish Banks, P.L.C. v. Young Men’s Christian Assn. of Greenwich , 105 A.D.3d 516 (1st Dept. 2013); German Am. Capital Corp. v. Oxley Dev. Co., LLC , 102 A.D.3d 408 (1st Dept. 2013). G.O.V. Jewelry, Inc. v United Parcel Serv. , 181 A.D.2d 517, 517 (1st Dept. 1992). See Bonds Fin., Inc. v Kestrel Techs., LLC , 48 A.D.3d 230 (1st Dept. 2008). Weissman v. Sinorm Deli , 88 N.Y.2d 437, 444 (1996). Rhee v. Meyers , 162 A.D.2d 397, 398 (1st Dept. 1990); Ian Woodner Family Collection, Inc. v Abaris Brooks, Ltd ., 284 A.D.2d 163 (1st Dept. 2001). Matter of Estate of Peck , 191 A.D.3d 537, 537 (1st Dept. 2021). Slip Op. at *3. Id. (citation omitted). Id. Id. at *3-*4. Id. at *4 (citing Bonds Fin., Inc. v. Kestrel Techs., LLC , 48 A.D.3d 230 (1st Dept. 2008) (closing of a transaction constitutes a non-monetary default)). Id. Id. Id. (internal quotation marks and citations omitted). Id. (quoting Kaplan, Inc. v. WebMD Health Corp. , 236 A.D.3d at 435 (1st Dept. 2025)). It should be noted that an agreement that guarantees both payment and performance does not qualify for CPLR 3213 treatment. Punch Fashion, LLC v. Merch. Factors Corp. , 180 A.D.3d 520 (1st Dept. 2020) (citation omitted). Id.

By:  Jeffrey M. Haber In New York, litigants often grapple with the appropriate limitation period to apply to breach of fiduciary claims. There is no single statute of limitations that the courts and the parties can look to. “Rather, the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks.” “Where the remedy sought is purely monetary in nature, courts construe the suit as alleging ‘injury to property’ within the meaning of CPLR 214 (4), which has a three-year limitations period.” “Where, however, the relief sought is equitable in nature, the six-year limitations period of CPLR 213 (1) applies.” Moreover, “where an allegation of fraud is essential to a breach of fiduciary duty claim, courts have applied a six-year statute of limitations under CPLR 213 (8).” In considering the appropriate limitations period, the courts are careful not to elevate form over substance. Thus, for example, where a plaintiff uses “the term ‘disgorgement’ instead of other equally applicable terms such as repayment, recoupment, refund, or reimbursement,” it “should not be permitted to distort the nature of the claim so as to expand the applicable limitations period from three years to six.” The initial burden of establishing that the limitations period bars the challenged claim is on the movant. “To meet its burden, the defendant must establish, inter alia , when the plaintiff’s cause of action accrued.” “A breach of fiduciary duty claim accrues where the fiduciary openly repudiates his or her obligation – i.e. , once damages are sustained.” This is so because, “absent either repudiation or removal, the aggrieved part entitled to assume that the fiduciary would perform his or her fiduciary responsibilities.” “Open repudiation requires proof of a repudiation by the fiduciary which is clear and made known to the beneficiaries.” “Where there is any doubt on the record as to the conclusive applicability of a tatute of imitations defense, the motion to dismiss the proceeding should be denied, and the proceeding should go forward.” As readers might expect, the determination of when a claim accrues is not always easy. Not surprisingly, the reporters are brimming with cases in which the courts have to decide when a claim accrues for statute of limitations purposes. One such case was recently decided by the Appellate Division , Third Department in Lambos v. Karabinis , 2025 N.Y. Slip Op. 03367 (3d Dept. June 5, 2025) ( here ). Lambos was shareholder derivative action, brought both individually and as a shareholder of B.K. Associates International, Inc. (“BK”), in connection with certain loan transactions for which plaintiff claimed defendants breached their fiduciary duties and engaged in corporate waste. BK was formed in 1989 for the purpose of, among other things, engaging in the business of importing and exporting coffee and coffee products. In September 2008, plaintiff merged his own coffee distribution business into BK in exchange for 33⅓% of BK’s shares. Defendants retained the remaining 66⅔% of the shares. Plaintiff was designated as vice president and elected to the board of directors. It was also agreed that plaintiff would receive a $1,500 weekly distribution for managing BK’s warehouse. Between 2008 and 2015, BK engaged in a series of interest-bearing loan and repayment transactions with PK & FV Restaurant Corp. and BAK Realty, LLC, businesses in which one of the defendants had a financial interest. The extent of plaintiff’s knowledge of these transactions was controverted by the parties. In November 2019, BK sold its assets to a third-party purchaser for $1.5 million in an arm’s-length transaction signed by all shareholders of BK, including plaintiff. Defendants informed plaintiff that, after repayment of corporate debts, he would receive approximately $65,000. In July 2020, plaintiff, in writing, demanded to inspect, among other things, BK’s financial records. Through various correspondence with BK’s counsel in August and September 2020, BK informed plaintiff that it would allow him to inspect, among other things, minutes of shareholder meetings, records of shareholders, a select promissory note and tax return, but would not allow him to inspect BK’s financial records. Shortly thereafter, plaintiff commenced a CPLR article 78 proceeding against defendants seeking to compel BK to allow him to inspect the company’s financial records (the “discovery proceeding”). In March 2023, the parties to the discovery proceeding stipulated that defendants would search for relevant bank statements and contact BK’s accountant for relevant financial statements beginning in 2008 and deliver any recovered records to plaintiff. On July 19, 2023, plaintiff commenced the action, asserting causes of action for breach of fiduciary duty and corporate waste. Plaintiff requested both monetary and injunctive relief. Defendants moved pre-answer to dismiss the complaint pursuant to CPLR 3211 (a) (1), (5) and/or (7), which plaintiff opposed. Supreme Court granted the motion and dismissed the complaint with prejudice, finding that the applicable statute of limitations was three years and, as such, the action was untimely. Plaintiff appealed. The Appellate Division, Third Department reversed. The Court held that “defendants did not proffer, or even assert, that they openly repudiated their obligations as fiduciaries or that the relationship otherwise terminated.” The Court noted that “at oral argument, defendants’ attorney conceded that all fiduciary duties still exist as the corporation ha not yet been dissolved.” “As such,” said the Court, “plaintiff’s breach of fiduciary duty claims ha not yet begun to accrue.” The Court rejected defendants’ assertion “that a co-fiduciary cannot rely on open repudiation to toll the statute of limitations.” Such an argument, said the Court, “is not supported by our case law.” The Court also rejected the notion that the open repudiation rule placed an affirmative duty on the plaintiff  “to exercise due diligence in order to benefit from this toll.” In doing so, the Court made the distinction between the open repudiation rule and “the discovery accrual rule in fraud cases.” “Therefore,” concluded the Court, “the Supreme Court erred in granting that aspect of defendants’ motion.” The Court also held that the motion court “erred in determining that plaintiff failed to state a cause of action.”  That ruling was based on sworn testimony that was supported by documentary evidence, e.g. , annual statements and tax returns, and plaintiff’s concession that “that he did not review” such evidence. However, the Court noted that “in his sworn deposition from the discovery proceeding, testified that he did not receive the relevant documents and, other than their own self-serving statements, defendants did not provide documentary proof that these documents were actually sent to plaintiff.” The Court found that the documents did not “‘unequivocally disprove the allegations … set forth in the complaint,” and therefore held that there was “no basis for dismissal pursuant to CPLR 3211 (a) (7).” Takeaway In New York, the statute of limitations for breach of fiduciary duty claims depends on the remedy sought: three years for monetary relief, six years for equitable relief or fraud-based claims. As discussed, the claim accrues when the fiduciary openly repudiates their duty or when damages occur. In Lambos , the Court ruled that defendants’ fiduciary duties had not been openly repudiated, so the statute of limitations had not begun to run. The Court therefore reversed the motion court’s dismissal of the complaint, emphasizing that defendants failed to prove the claim was time-barred and that factual disputes precluded dismissal for failure to state a claim. In many ways, Lambos underscores the nuanced accrual determinations that courts must make. ___________________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. IDT Corp. v. Morgan Stanley Dean Witter & Co. , 12 N.Y.3d 132, 139 (2009) (citations omitted). Id. ; see also VA Mgt., LP v. Estate of Valvani , 192 A.D.3d 615, 615 (1st Dept. 2021). Id. Id. Access Point Med., LLC v. Mandell , 106 A.D.3d 40, 44 (1st Dept. 2013); see also VA Mgt. , 192 A.D.3d at 615 (stating that “ laintiff’s characterization of that relief as ‘disgorgement’ of compensation does not convert it into a claim for equitable relief to which the six-year statute of limitations would apply”) (citations omitted)). Lebedev v. Blavatnik , 144 A.D.3d 24, 28 (1st Dept. 2016) (internal quotation marks and citations omitted). Id. Id. Importantly, “ o determine timeliness, consider whether plaintiff’s complaint must, as a matter of law, be read to allege damages suffered so early as to render the claim time-barred.” IDT , 12 N.Y.3d at 140. Matter of George , 194 A.D.3d 1290, 1293 (3d Dept. 2021) (internal quotation marks, brackets and citation omitted). Matter of Steinberg , 183 A.D.3d 1067, 1071 (3d Dept. 2020) (internal quotation marks and citations omitted). Matter of Behr , 191 A.D.2d 431, 431 (2d Dept. 1993) (internal citations omitted); see Matter of Steinberg , 183 A.D.3d at 1071. Slip Op. at *2. Id. Id. (citations omitted). Id. Id. (citing Matter of Twin Bay Vil., Inc. , 153 A.D.3d 998, 1001 (3d Dept. 2017), lv. denied , 31 N.Y.3d 902 (2018)). Id. Id. at *2-*3 ( comparing Matter of Twin Bay Vil. , 153 A.D.3d at 1001 and Matter of Therm, Inc. , 132 A.D.3d 1137, 1138 (3d Dept. 2015) with Kaufman v. Cohen, 307 A.D.2d 113, 122-123 (1st Dept. 2003), and Ghandour v. Shearson Lehman Bros. , 213 A.D.2d 304, 305-306 (1st Dept. 1995), lv. denied , 86 N.Y.2d 710 (1995)). Slip Op. at *3. Id. Id. Id. Id. (quoting Lopes v. Bain , 82 A.D.3d 1553, 1555 (3d Dept. 2011); and citing State Farm Fire & Cas. Co. v. Main Bros. Oil Co. , 101 A.D.3d 1575, 1579 (3d Dept. 2012)). To find articles related to the statute of limitations for breach of fiduciary duty claims and when that claim accrues, visit the “ Blog ” tile on our  website  and enter the search terms “breach of fiduciary duty,” “accrual,” and “statute of limitations” or any other related search term in the “search” box.

By: Jonathan H. Freiberger Discovery, an important part of the litigation process, enables litigants to collect information to assist in the prosecution and defense of a case. Section 3101 of the CPLR provides that, in general, “there should be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof” by, inter alia , a party and its representatives. “The words material and necessary, are to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial.” Ayres v. Bloomberg, L.P. , 235 A.D.3d 709, 713 (2 nd Dep’t 2025) (citations, internal quotation marks and ellipses omitted). Because full disclosure is important, there are penalties for abusing the disclosure process. Today’s BLOG article focusses on spoliation of evidence. “Under the common-law doctrine of spoliation, when a party negligently loses or intentionally destroys key evidence, the responsible party may be sanctioned under CPLR 3126 .” Washington v. Church & Nostrand Apparel Corp. , 2025 WL 1450331 at *1 (2 nd Dep’t May 21, 2025) (citation and internal quotation marks omitted; hyperlink added). Such sanctions can include, inter alia , striking pleadings, prohibiting a party from supporting or opposing claims or defenses , and resolving issues in a manner consistent with the claims of the aggrieved party. CPLR 3216. Sanctions for spoliation of evidence require a showing: “(1) that the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a ‘culpable state of mind’, and finally, (3) that the destroyed evidence was relevant to the party's claim or defense such that the trier of fact could find that the evidence would support that claim or defense.” Voom HD Holdings LLC v. EchoStar Satellite L.L.C. , 93 A.D.3d 33, 45 (1 st Dep’t 2012) (citation omitted); see also Washington , 2025 WL 1450331 at *1. “A ‘culpable state of mind’ for purposes of a spoliation sanction includes ordinary negligence.” Id . (citation omitted); see also Harry Winston, Inc. v. Eclipse Jewelry, Corp. , 215 A.D.3d 421 (1 st Dep’t 2023).) “The intentional or willful destruction of evidence is sufficient to presume relevance, as is destruction that is the result of gross negligence.” Parauda v. Encompass Ins. Co. of America , 188 A.D.3d 1083, 1086 (2 nd Dep’t 2020). However, in situations where evidence is negligently destroyed, spoliation sanctions will be assessed when accompanied by a demonstration that the destroyed documents were relevant. Gulledge v. Jefferson County , 229 A.D.3d 991, 993 (3 rd Dep’t 2024) (citation omitted). Spoliation of evidence was the issue addressed in Blinbaum v. Chan , a case decided by the Appellate Division, First Department, on June 3, 2025. The parties in Blinbaum were adjoining townhouse owners who entered into a license agreement pursuant to RPAPL 881 so that renovations to the defendants’ property could be made. Pursuant to the license agreement, the plaintiff, in his sole discretion, could determine “when and how repairs to his property would be made should any damage be caused by defendants’ renovation.” The plaintiff commenced his action in 2020, claiming that his townhouse was damaged in 2018 by water infiltration from his roof. The plaintiff repaired his roof in 2021 after further water infiltration. The defendants sought spoliation sanctions in 2022, claiming that the roof repairs violated a court order permitting the defendants’ expert to inspect the roof. The Motion Court denied the motion without prejudice and directed a new inspection to take place in 2023. After the 2023 inspection, the defendants supported their renewed spoliation motion with an affidavit from an architect opining that the roof repairs prosecuted in 2021 prevented a meaningful inspection. The plaintiff opposed the motion by, inter alia , submitting evidence that the defendants’ counsel and insurer inspected the roof in 2018 and “again in 2021 and 2023, when repairs were removed at the request of defendants’ expert, providing full access to the roof.” The First Department unanimously affirmed the motion court’s denial of the renewed spoliation motion, finding that the defendants “failed to establish that the missing evidence was their sole means of defending against plaintiff’s claims or that the repairs plaintiff made to his roof in July 2021 prejudiced their ability to defend against plaintiff’s claims that defendants’ construction work damaged his property.” (Citations omitted.) The Court noted that the defendants failed to deny that their insurance carrier and counsel took photographs at a 2018 roof inspection and that the defendants’ expert stated he was able to distinguish the repairs made in 2021 from pre-existing repairs. In addition, the Court noted that the license agreement permitted the Plaintiff “to repair his roof, which he had delayed undertaking for years during the litigation.” Because the water infiltration had been ongoing since 2018, “the repairs plaintiff made to his roof do not constitute spoliation, as the record shows that those repairs were done for the purpose of mitigating the damage to plaintiff’s home and not in bad faith to harm defendants’ litigation posture.” (Citation omitted.) Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. This BLOG has written numerous articles addressing spoliation. To find such articles, please see the BLOG tile on our website and type “spoliation” into the “search” box. RPAPL 881 permits a homeowner to commence a special proceeding for a license to enter the neighboring property of the respondent for the purpose of making repairs to the petitioner’s property that cannot be made without such access and where such access is denied by the respondent. [This BLOG has numerous articles addressing RPAPL 881 . To find such articles, please see the BLOG tile on our website and type “RPAPL 881” in the search box.

By:  Jeffrey M. Haber In Skyview Capital, LLC v. Conduent Business Servs., LLC , 2025 N.Y. Slip Op. 03291 (1st Dept. June 03, 2025) ( here ), the Appellate Division, First Department addressed various issues concerning fraud causes of action with which readers of this Blog are familiar: the duplication doctrine, justifiable reliance and disclaimer clauses. As discussed below, Skyview Capital arose from defendant’s sale to plaintiff of certain assets, namely, customer care call centers and customer care contracts, called “Liberty.” In April 2018, Conduent Business Services, LLC (“Conduent”) announced that it intended to divest its “Liberty Business,” a business handling contracts for delivering customer support services through call centers (the “Business”). On July 21, 2018, Conduent and its financial advisor, UBS, gave Skyview Capital, LLC (“Skyview”), an investment firm specializing in acquiring, or “carv out,” “underperforming businesses” from large corporations, a management presentation (“July MP”) containing an overview of the Business, including its operations, clients, and financial projections. Among other things, and relevant to the Court’s decision, the July MP disclaimed Conduent’s “obligation to provide the recipient with access to additional information, to update th Presentation or such additional information or to correct any inaccuracies herein or therein.”  According to Skyview, Conduent told Skyview during the presentation that one of its clients—Sprint—planned to “repatriate” 150 jobs to the U.S. and, specifically, to Liberty. On August 3, 2018, Skyview issued a letter of interest valuing the business at $60 million, only to withdraw from the process two weeks later because it lacked sufficient time to undertake appropriate due diligence. In September 2018, Conduent shared a management presentation (“September MP”) with Skyview that contained, inter alia , an updated forecast. Conduent also gave Skyview access to a Virtual Data Room (“VDR”) containing thousands of documents detailing material operational, financial, and legal aspects of the Business. Among the documents were monthly rosters tallying “in-scope” Liberty employees, including recruiters (“Rosters”). The Rosters included information about employee positions and assignments and reflected reductions in headcount. In addition, Conduent’s 2017 and 2018 SEC filings publicly disclosed that it routinely implemented reductions in force (“RIF”) across its workforce. From September 24 to 26, 2018, Skyview met with Conduent and UBS, after which the parties executed an Equity Securities and Asset Purchase Agreement (“Initial APA”) for Skyview to purchase the Business. The Initial APA provided for a deferred closing, and the parties ultimately executed an amended APA and closed four months later, on February 1, 2019 (“Closing”). On February 1, the parties executed an Amended and Restated Equity Securities and Asset Purchase Agreement (“APA”) and closed the transaction.  Skyview agreed to pay $7.5 million at Closing and issued three promissory notes for (1) $5 million due in February 2020 (plus interest), (2) $12.5 million due in August 2020 (plus interest), and (3) $3,125,142—the amount of cash transferred to Skyview at Closing—due in August 2020 (plus interest) (collectively, the “Notes”). After certain working capital-related adjustments, Conduent paid Skyview $6,239,403 at Closing. The final APA contained extensive business-related representations and warranties, all of which were carried forward from the Initial APA. Among others, Skyview represented and warranted that “other than the representations and warranties specifically contained in or any Ancillary Document, there are no representations or warranties of Seller … with respect to the Business, ... Buyer ... specifically disclaims that it is relying upon or has relied upon any such other representations or warranties that may have been made ….”  Skyview also “acknowledge that it ... ha conducted own independent review and analysis of and, based thereon, ha formed an independent judgment concerning, the Business ….” According to Conduent, post-closing, Skyview struggled to finance the business. The $5 million Note came due in February 2020. Skyview defaulted, triggering cross-defaults under the other Notes. Conduent alleged that Skyview had not made any payment under the Notes, resulting in an outstanding principal balance of $20,625,142, with interest accruing at 8.5% under the Note’s late-payment rate. Skyview filed the action on February 3, 2020, alleging that Conduent breached the APA and misrepresented and omitted material information about Liberty during the diligence process, including (a) internal forecasts, (b) Sprint’s repatriation reversal, and (c) the RIF.  Conduent filed a motion to dismiss the complaint on March 19, 2020, which was denied on May 25, 2021. On August 20, 2020, Conduent answered the complaint and asserted counterclaims against Skyview for failing to meet its payment obligations under certain transaction-related agreements. Thereafter, the parties engaged in extensive discovery. On July 24, 2023, Conduent moved for summary judgment on Skyview’s claims and in favor of Conduent’s counterclaims. That same day, Skyview moved for partial summary judgment on its “ordinary course contract” claim. The motion court heard oral argument on December 5, 2023.  Two days later, the motion court issued a decision and order (1) dismissing Skyview’s advertising-based fraud theory, (2) denying Conduent’s motion as to Skyview’s claims in all other respects, (3) granting Skyview summary judgment as to its ordinary course contract claim, and (4) granting Conduent summary judgment as to its counterclaims for monies due for Conduent’s post-Closing transition services. Conduent filed notices of appeal on January 5, 2024. Skyview filed a notice of appeal on January 23, 2024 and cross-appealed on January 25, 2024. The Appellate Division, First Department unanimously modified the motion court’s order, on the law, to grant Conduent’s motion for summary judgment dismissing Skyview’s fraud claim and request for punitive damages and declaring that the setoff limit under the promissory notes was $5 million, deny Conduent’s motion as to its third counterclaim and remand for a hearing on that claim, deny Skyview’s motion for partial summary judgment, and otherwise affirmed. The Court held that Skyview’s “fraud claims based on Conduent’s failure to disclose reductions in force (RIFs) of recruiters and nonparty Sprint’s change of plan concerning repatriating 150 jobs duplicative of its contract claims. Under New York law, a fraud claim will be deemed duplicative of a contract claim when the fraud claim arises from the same facts, seeks the same damages and does not allege a breach of any duty collateral to or independent of the parties’ agreements. The Court also held that “Skyview’s fraud claim asserting that Conduent should have disclosed the Q3 reforecast, while not duplicative of the contract claims, should have been dismissed.” The Q3 2018 reforecast was an internal forecast that Conduent prepared internally. Conduent allegedly did not disclose the Q3 reforecast, which included estimated revenue that was materially lower for 2018, 2019, and 2020, compared to the figures disclosed in the July MP. The Court noted that the July MP that was sent to Skyview from Conduent’s investment banker, “said that Conduent had no duty to update it.” “In addition,” said the Court, “both the initial asset purchase agreement (initial APA) and amended asset purchase agreement (APA) state Skyview ‘ha made its own evaluation of the adequacy and accuracy of all estimates, projections, forecasts furnished’ to it.” The Court concluded that those “disclaimers specific enough to bar Skyview’s fraud claim.” In New York, a party’s disclaimer of reliance cannot 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. “Accordingly, only where a written contract contains a specific disclaimer of responsibility for extraneous representations, that is, a provision that the parties are not bound by or relying upon representations or omissions as to the specific matter, is a plaintiff precluded from later claiming fraud on the ground of a prior misrepresentation as to the specific matter.” The Court further held that because Skyview is a sophisticated party, it could not show justifiable reliance on misrepresentations. One of the more “nettlesome” elements of a fraud claim is justifiable reliance. Whether a plaintiff justifiably relied on a misrepresentation or omission is a fact-intensive inquiry. For this reason, the courts look to whether the plaintiff had the “means available to him for discovering, ‘by the exercise of ordinary intelligence,’ the true nature of a transaction he is about to enter into” and whether he made “use of those means”. If the plaintiff does not do so, “he will not be heard to complain that he was induced to enter into the transaction by misrepresentations.” After all, a plaintiff cannot claim justifiable reliance on a misrepresentation when he or she could have discovered the truth with reasonable diligence. Sophisticated parties have a heightened duty to use the means available to them to verify the truth of the information upon which they rely and to use their sophistication to conduct due diligence. A sophisticated plaintiff cannot establish justifiable reliance on an alleged misrepresentation if the plaintiff failed to make use of the means of verification that were available to him. Thus, to sustain a claim of fraud, sophisticated parties must have discharged their own affirmative duty to exercise ordinary intelligence and conduct an independent appraisal of the risks they are assuming. The Court found that Skyview “failed to make use of the means of verification that were available to it.” The Court noted that “ nder the initial APA, Skyview had access to Conduent’s books and records from September 28, 2018 until February 1, 2019.” The Court explained that with such access, “ t could have tested the prediction of $461 million in revenue for 2018 against such books and records,” but did not. “Furthermore,” said the Court, “on October 16, 2018, Conduent sent Skyview a forecast of $439.4 million for 2018, which much lower than the $461 million forecast (and also lower than the Q3 reforecast of $446 million).” “In light of the dismissal of Skyview’s fraud claim,” the Court held that Conduent was “entitled to partial summary judgment on its first and second counterclaims to the extent of declaring that the maximum Skyview set off against its liability on the promissory notes $5 million (the limit set forth in the APA).” ________________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. To find articles related to the duplication doctrine, justifiable reliance and disclaimer clauses, visit the “ Blog ” tile on our  website  and enter the search terms desired ( e.g. , justifiable reliance , disclaimer clauses, duplication) or any other related search term in the “search” box Slip Op. at *1 (citation omitted). Havell Capital Enhanced Mun. Income Fund, L.P. v. Citibank, N.A. , 84 A.D.3d 588, 589 (1st Dept. 2011). Slip Op. at *1. Id. Id. Id. (citing HSH Nordbank AG v. UBS AG , 95 A.D.3d 185, 201 (1st Dept. 2012), and Permasteelisa, S.p.A. v. Lincolnshire Mgt., Inc. , 16 A.D.3d 352, 352 (1st Dept. 2005)). Basis Yield Alpha Fund v. Goldman Sachs Group, Inc. , 115 A.D.3d 128, 137 (1st Dept. 2014). See also Danann Realty Corp. v. Harris , 5 N.Y.2d 317, 323 (1959); MBIA Ins. Corp. v. Merrill Lynch , 81 A.D.3d 419 (1st Dept. 2011). Basis Yield , 115 A.D.3d at 137. Slip Op. at *1 (quoting Ventur Group, LLC v. Finnerty , 68 A.D.3d 638, 639 (1st Dept. 2009) (internal quotation marks omitted), and citing Global Mins. & Metals Corp. v. Holme , 35 A.D.3d 93, 100 (1st Dept. 2006), lv. denied 8 N.Y.3d 804 (2007)). DDJ Mgt., LLC v. Rhone Group L.L.C. , 15 N.Y.3d 147, 155 (2010) (internal quotation marks omitted). Id. 88 Blue Corp. v. Reiss Plaza Assoc. , 183 A.D.2d 662, 664 (1st Dept. 1992) (internal citations omitted). Id. (internal quotation marks omitted). KNK Enters. Inc. v. Harriman Enters., Inc. , 33 A.D.3d 872 (2d Dept. 2006). McGuire Children, LLC v. Huntress , 24 Misc. 3d 1202 , at *12 (Sup. Ct., Erie County), aff’d , 83A.D.3d 1418 (4th Dept. 2011). Id. Id. Slip Op. at *1. Id. Id. Id. Id. at *2.

By:  Jeffrey M. Haber In today’s Fraud Notes, we examine Yudkin v. Evergreen Terrace 888 Corp. , 2025 NY Slip Op 03223 (2d Dept. May 28, 2025) ( here ), and Lapin v. Verner , 2025 NY Slip Op 03184 (2d Dept. May 28, 2025) ( here ). Yudkin involved the statute of limitations for fraud and the continuing wrong doctrine. Lapin involved the failure to plead the elements of a fraud claim. Yudkin v. Evergree Terrace 888 Corp. “A defendant who moves to dismiss a complaint pursuant to CPLR 3211(a)(5) on the ground that it is barred by the statute of limitations bears the initial burden of proving, prima facie, that the time in which to sue has expired.” “The burden then shifts to the nonmoving party to raise a question of fact as to the applicability of an exception to the statute of limitations, as to whether the statute of limitations was tolled, or as to whether the action was actually commenced within the applicable limitations period.” A cause of action sounding in breach of contract is governed by a six-year statute of limitations, which “begins at the time of the breach, even when no damage occurs until later, and even though the injured party may be ignorant of the existence of the wrong or injury.” A cause of action based upon fraud must be commenced within six years from the time of the fraud or within two years from the time the fraud was discovered, or with reasonable diligence could have been discovered, whichever is longer. The cause of action accrues when “every element of the claim, including injury, can truthfully be alleged,” “even though the injured party may be ignorant of the existence of the wrong or injury.” Determining when accrual occurs is not easy and often contested. So too is the determination of when the plaintiff discovered or could have discovered the fraud. In New York, “plaintiffs will be held to have discovered the fraud when it is established that they were possessed of knowledge of facts from which it could be reasonably inferred, that is, inferred from facts which indicate the alleged fraud.” “ ere suspicion will not constitute a sufficient substitute” for knowledge of the fraud. “Where it does not conclusively appear that a plaintiff had knowledge of facts from which the fraud could reasonably be inferred, a complaint should not be dismissed on motion and the question should be left to the trier of the facts.” Moreover, where the circumstances suggest to a person of ordinary intelligence the probability that s/he has been defrauded, a duty of inquiry arises, and if s/he fails to undertake that inquiry when it would have developed the truth and shuts his/her eyes to the facts which call for investigation, knowledge of the fraud will be imputed to him/her. The test as to when fraud should with reasonable diligence have been discovered is an objective one. Thus, while it is true that New York courts will not grant a motion to dismiss a fraud claim where the plaintiff’s knowledge is disputed, courts will dismiss a fraud claim when the alleged facts establish that a duty of inquiry existed and that an inquiry was not pursued. “The burden of establishing that the fraud could not have been discovered before the two-year period prior to the commencement of the action rests on the plaintiff, who seeks the benefit of the exception.” The foregoing principles were at issue in Yudkin . Yudkin was an action to recover damages for breach of contract and fraud. As alleged in the amended complaint , in January 2012, plaintiff entered into a contract with defendant Evergreen Terrace 888 Corp., the sponsor of an offering plan to convert a rental building in Brooklyn, N.Y. to a condominium building, to purchase a unit in the building. Plaintiff tendered a down payment of $11,000 in connection with the contract. On April 15, 2013, the sponsor’s broker informed plaintiff that the building was going to remain a rental building and agreed to return plaintiff’s down payment. In an email dated April 22, 2013, the sponsor informed plaintiff that the sponsor decided to keep the building as a rental building due to “sign off issues and appraisal issues.” In June 2014, the sponsor sold the building to defendant 888 Oscar & August, LLC, and another entity. On August 11, 2014, the sponsor officially abandoned its offering plan for the condominium conversion. In November 2020, plaintiff commenced the action to recover damages for breach of contract and fraud against, among others, defendants. Defendants moved pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against each of them on the ground, among others, that it was barred by the statute of limitations . Plaintiff opposed the motions and cross-moved pursuant to CPLR 306-b to extend the time to serve one of the defendants with the summons with notice. In an order dated October 7, 2022, the motion court granted the defendants’ motions and denied, as moot, plaintiff’s cross-motion. Plaintiff appealed. The Appellate Division, Second Department affirmed. The Court found that defendants established that plaintiff’s breach of contract cause of action was time-barred, since plaintiff commenced the action more than six years after the alleged breach occurred in April 2013. The Court held that plaintiff failed to raise a question of fact as to when the claim accrued. Regarding the fraud claim, the Court found that defendants established that plaintiff’s fraud cause of action was time-barred. The Court explained that “plaintiff did not commence action until November 2020, more than six years after the alleged fraud and more than two years after the plaintiff possessed knowledge of facts from which the alleged fraud could have been discovered with reasonable diligence.” The Court held that plaintiff failed to raise a question of fact as to when the fraud claim accrued. The Court also rejected plaintiff’s contention that the continuing wrong doctrine tolled the statute of limitations. Under New York law, the doctrine “may only be predicated on continuing unlawful acts and not on the continuing effects of earlier unlawful conduct. The distinction is between a single wrong that has continuing effects and a series of independent, distinct wrongs.” The Court found that the sponsor’s official abandonment on August 11, 2014, of its offering plan for the condominium conversion was predicated entirely on the alleged wrong of the earlier misrepresentations made to the plaintiff, and therefore, the continuing wrong doctrine did not apply. Lapin v. Verner It is well settled that “ cause of action alleging fraud requires the plaintiff to plead: (1) a material misrepresentation of a fact, (2) knowledge of its falsity, (3) an intent to induce reliance, (4) justifiable reliance, and (5) damages.” Under CPLR 3016(b), each of the foregoing elements must be pleaded “in detail.” Conclusory allegations will not suffice. Neither will allegations based on information and belief. If “sufficient factual allegations of even a single element are lacking,” then the claim must be dismissed. Claims of “ raud and fraudulent inducement are not pleaded with the requisite particularity under CPLR 3016(b)” unless “the words used by defendants” are set forth. This means that general descriptions of what was said will not suffice. The plaintiff must identify the “who, what, where, when and how” of the alleged fraud. The plaintiff also must allege a misrepresentation of present or existing fact. “ llegations of fraudulent misrepresentations which amount to no more than ‘ ague expressions of hope and future expectation’, or ‘mere opinion and puffery’ . . . provide an insufficient basis upon which to predicate a claim of fraud.” Thus, for example, representations related to the expected return on an investment are not actionable because “a prediction of something which is expected to occur in the future will not sustain an action for fraud.” As this Blog has noted in several articles, many cases involving an alleged fraud often rise and fall on the scienter element of the cause of action. To allege scienter, a plaintiff must allege with particularity that the defendant had an “actual intent to deceive, manipulate, or defraud.” Scienter must be pleaded with “sufficient detail[]”; “conclusory statement of intent” are insufficient. To succeed, therefore, the plaintiff must allege facts from which there is some “rational basis for inferring that the alleged misrepresentations were knowingly made.” Scienter is a very difficult element to plead. In fact, the scienter element is the hardest to plead because the evidence of intent most often rests solely with the defendant. Because of this difficulty, intent is often inferred from circumstantial evidence. Another element of a fraud claim that is difficult to plead is “justifiable reliance.” The New York Court of Appeals has emphasized the importance of the justifiable reliance element, noting that it is a “fundamental precept” of a fraud claim and is critical to the success of such a claim. Determining whether a plaintiff justifiably relied on a misrepresentation or omission, however, is “always nettlesome” because it is so fact intensive. Recognizing this difficulty, the courts look to whether the plaintiff exercised “ordinary intelligence” in ascertaining “the truth or the real quality of the subject of the representation.” Where the falsity of a representation could have been ascertained by reviewing “publicly available information,” courts have not hesitated to dismiss a fraud claim because of the failure to satisfy the justifiable reliance element. The same is true with regard to documents that a party signs , such as contracts, offering plans, and private placement memoranda. “A party who signs a document without any valid excuse for not having read it is ‘conclusively bound’ by its terms.” When that happens, the plaintiff’s failure to read the document prevents him/her from establishing justifiable reliance. It is important to remember that fraud does not always involve an affirmative statement. Sometimes a person can perpetrate a fraud through the omission of a material fact . Where fraud by omission is claimed, the plaintiff must allege that the defendant had a duty to disclose the omitted fact . A duty to disclose arises when (1) the defendant speaks on the subject, in which case he/she must speak truthfully and completely about the matter ; (2) there is a fiduciary relationship between the plaintiff and defendant ; or (3) the defendant possesses “special facts” about the matter not known by the plaintiff. A fraud by omission claim is not sustainable where information allegedly withheld is ascertainable through publicly available sources.  Nor is an omission case sustainable where the omitted information could have been discovered by the plaintiff through the exercise of ordinary intelligence. Both of the foregoing circumstances will negate application of the special facts doctrine. Finally, as in a fraud by misrepresentation case, the plaintiff must satisfy the other elements of the claim – namely, intent to defraud, justifiable reliance , and injury. And the plaintiff must do so with particularity. All of the foregoing principles were at issue in Lapin . In Lapin , plaintiff commenced the action against defendants to recover damages for breach of fiduciary duty and fraud in relation to a failed real estate investment. Plaintiff alleged, inter alia , that an agent of defendants deceived plaintiff into investing in a real estate project being overseen by the individual defendant. Plaintiff alleged that the agent misrepresented that the individual defendant, who is the chief executive officer of defendant Springhouse Partners, Inc., was a “real estate mogul,” and that the investment was “conservative” and would generate an annual 5% return with distributions within 18 to 24 months. Plaintiff further alleged that defendants made material omissions of fact by failing to disclose their involvement in certain other concomitant investments, and by failing to disclose that “the project was overleveraged” and “susceptible to interest rate changes.” Prior to interposing an answer, defendants moved, inter alia , pursuant to CPLR 3211(a) to dismiss the cause of action alleging fraud on the ground, among others, that plaintiff failed to state a cause of action. In an order dated August 3, 2023, the motion court, inter alia , granted that branch of defendants’ motion. Plaintiff appealed. The Appellate Division , Second Department affirmed. The Court held that “plaintiff failed to state a cause of action for fraud.” The Court found that the “allegations of fraudulent misrepresentations amount to ‘no more than vague expressions of hope and future expectation’ or ‘mere opinion and puffery,’ and nonactionable.” Moreover, said the Court, plaintiff failed to allege facts to support an inference of scienter or that plaintiff reasonably relied on the representations alleged to have been made by defendants. Further, the Court found that “the allegations of material omissions of fact … fail to support a cause of action for fraud.” The Court explained that plaintiff failed to plead “facts … which might give rise to a reasonable inference that the alleged omissions were material or that the defendants otherwise had a duty to disclose the alleged omissions to the plaintiff, or that the plaintiff justifiably relied on the alleged omissions.” Accordingly, the Court concluded that the motion court “properly granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the cause of action alleging fraud.” Takeaway Yudkin highlights the need for litigants to act on the facts and circumstances from which it can be reasonably inferred that they were the victims of fraud. The failure to bring suit when the facts suggest fraud will result in dismissal. Thus, even though the discovery rule allows the victim of fraud to bring suit when the very nature of the fraud prevents him/her from knowing that he or she was defrauded, the courthouse doors will, nevertheless, close on the litigant who sits on his/her rights when the facts indicate that a wrong has been done. Lapin highlights the need to satisfy each element of a fraud claim . As made clear by the Court, the failure to allege each element of the claim with particularity will result in the dismissal of cause of action . _________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice. To find articles related to the elements of a fraud claim and the statute of limitations related to a fraud claim, visit the “ Blog ” tile on our  website  and enter the search terms desired ( e.g. , misrepresentation or omission, scienter, justifiable reliance, statute of limitations ) or any other related search term in the “search” box Lautman v. 2800 Coyle St. Owners Corp. , 223 A.D.3d 658, 659-660 (2d Dept. 2024) (internal quotation marks omitted); Kaul v. Brooklyn Friends Sch. , 220 A.D.3d 939, 940-941 (2d Dept. 2023). Lautman , 223 A.D.3d at 660; Plaza Invs. v. Capital One Fin. Corp. , 165 A.D.3d 853, 854 (2d Dept. 2018). CPLR 213(2). Houtenbos v. Fordune Assn., Inc. , 200 A.D.3d 662, 666 (2d Dept. 2021); Ely-Cruikshank Co. v. Bank of Montreal , 81 N.Y.2d 399, 402 (1993). CPLR 213(8); Seidenfeld v. Zaltz , 162 A.D.3d 929, 934 (2d Dept. 2018). Carbon Capital Mgmt., LLC v. Am. Express Co. , 88 A.D.3d 933, 939 (2d Dept. 2011) (citation and alterations omitted). Schmidt v. Merchants Despatch Transp. Co. , 270 N.Y. 287, 300 (1936). Erbe v. Lincoln Rochester Trust Co. , 3 N.Y.2d 321, 326 (1957). Id. Trepuk v. Frank , 44 N.Y.2d 723, 725 (1978). Gutkin v. Siegal , 85 A.D.3d 687, 688 (1st Dept. 2011).  Id. (citation and internal quotation marks omitted). See Shalik v. Hewlett Assocs., L.P. , 93 A.D.3d 777, 778 (2d Dept. 2012). Celestin v. Simpson , 153 A.D. 3d 656, 657 (2d Dept. 2017). Yudkin , Slip Op. at *2 (citing CPLR 213(2) and Kaul , 220 A.D.3d at 941. Id. Id. Id. (citing Kotlyarsky v. Abrazi , 188 A.D.3d 853, 855 (2d Dept. 2020); Coleman v. Wells Fargo & Co. , 125 A.D.3d 716, 716-717 (2d Dept. 2015)). Id. Blaize v. New York City Dept. of Educ. , 205 A.D.3d 871, 874 (2d Dept.2022) (citations and internal quotation marks omitted). Yudkin , Slip Op. at *2 (citing Fricke v. Beauchamp Gardens Owners Corp. , 222 A.D.3d 718, 720 (2d Dept. 2022)). Benjamin v. Yeroushalmi , 178 A.D.3d 650, 654 (2d Dept. 2019) (citing Eurycleia Partners, LP v. Seward & Kissel, LLP , 12 N.Y.3d 553, 559 (2009)). Stortini v. Pollis , 138 A.D.3d 977, 978–79 (2d Dept. 2016). Id. See Facebook, Inc. v. DLA Piper LLP (US) , 134 A.D.3d 610, 615 (1st Dept. 2015) (“Statements made in pleadings upon information and belief are not sufficient to establish the necessary quantum of proof to sustain allegations of fraud.”). RKA Film Fin., LLC v. Kavanaugh , 2018 WL 3973391, at *3 (Sup. Ct., N.Y. County 2018) (quoting Shea v. Hambros PLC , 244 A.D.2d 39, 46 (1st Dept. 1998)). See also Gregor v. Rossi , 120 A.D.3d 447 (1st Dept. 2014). Gregor , 120 A.D.3d at 447; Orchid Constr. Corp. v. Gottbetter , 89 A.D.3d 708, 710–11 (2d Dept. 2011) (dismissing complaint where plaintiff failed to allege, among other things, “the time or place” of alleged misrepresentations); Saul v. Cahan , 153 A.D.3d 947, 950 (2d Dept. 2017) (citations omitted) (dismissing fraud claim because plaintiff failed to alleged “specific dates and items” relative to the “circumstances underlying” the cause of action for fraud). INTL FCStone Mkts., LLC v. Corrib Oil Co. Ltd. , 172 A.D.3d 492, 493 (1st Dept. 2019). International Oil Field Supply Servs. Corp. v. Fadeyi , 35 A.D.3d 372, 375 (2d Dept. 2006). DH Cattle Holdings Co. v. Smith , 195 A.D.2d 202, 208 (1st Dept. 1994). High Tides, LLC v. DeMichele , 88 A.D.3d 954, 958 (2d Dept. 2011). Dragon Inv. Co. II LLC v. Shanahan , 49 A.D.3d 403, 403 (1st Dept. 2008) (internal quotation marks and citation omitted); Lipman v. Shapiro , 150 A.D.3d 517 (1st Dept. 2017) (citations omitted) (dismissing plaintiff’s fraud claim because the alleged representations were based on a future event, not an existing fact). Zutty v. Rye (NOR) , 33 Misc. 3d1226(A), 2011 WL 5962804 at *11 (Sup. Ct., N.Y. Co. Apr. 15, 2011). Zanett Lombardier, Ltd. v. Maslow , 29 A.D.3d 495 (1st Dept. 2006) (citation omitted); Fried v. Lehman Bros. Real Estate Assoc. III, L.P. , 156 A.D.3d 464, 464–65 (1st Dept. 2017) (citation omitted) (dismissing complaint because “conclusory” allegations of scienter were “not pleaded with the requisite particularity”); Giant Group v. Arthur Andersen LLP , 2 A.D.3d 189, 190 (1st Dept. 2003). Houbigant, Inc. v. Deloitte & Touche LLP , 303 A.D.2d 92, 93 (1st Dept. 2003). Pludeman v. N. Leasing Sys., Inc. , 10 N.Y.3d 486, 488 (2008). Ambac Assurance Corp. v. Countrywide Home Loans, Inc. , 31 N.Y.3d 569 (2018). DDJ Mgt., LLC v. Rhone Group L.L.C. , 15 N.Y.3d 147, 155 (2010) (internal quotation marks omitted). Curran, Cooney, Penney v. Young & Koomans , 183 A.D.2d 742, 743) (2d Dept. 1992). See also Danann Realty Corp. v. Harris , 5 N.Y.2d 317, 322 (1959). E.g. , HSH Nordbank AG v. UBS AG , 95 A.D.3d 185, 195 (1st Dept. 2012); see also Churchill Fin. Cayman, Ltd. v. BNP Paribas , 95 A.D.3d 614 (1st Dept. 2012). Ferrarella v. Godt , 131 A.D.3d 563, 567-568 (2d Dept. 2015) (quoting Gillman v. Chase Manhattan Bank , 73 N.Y.2d 1, 11 (1988)); see also Sorenson v. Bridge Capital Corp. , 52 A.D.3d 265, 266 (1st Dept. 2008). Stortini , 138 A.D.3d at 978; Sorenson , 52 A.D.3d at 266. Bank of Am., N.A. v. Bear Stearns Asset Mgmt. , 969 F. Supp. 2d 339, 351 (S.D.N.Y. 2013). Balanced Return Fund Ltd. v. Royal Bank of Canada , 138 A.D.3d 542, 542 (1st Dept. 2016). Pramer S.C.A. v. Abaplus Int’l Corp. , 76 A.D.3d 89, 99 (1st Dept. 2010). “The ‘special facts’ doctrine holds that ‘absent a fiduciary relationship between parties, there is nonetheless a duty to disclose when one party’s superior knowledge of essential facts renders a transaction without disclosure inherently unfair.’” Greenman-Pedersen, Inc. v. Berryman & Henigar, Inc. , 130 A.D.3d 514, 516 (1st Dept. 2015), lv. denied , 29 N.Y.3d 913 (2017) (quoting, Pramer , 76 A.D.3d at 99). Northern Group Inc. v. Merrill Lynch, Pierce, Fenner & Smith Inc. , 135 A.D.3d 414 (1st Dept. 2016). Black v. Chittenden , 69 N.Y.2d 665, 669 (1986); Schumaker v. Mather , 133 N.Y. 590, 596 (1892). CPLR 3016(b). Lapin , Slip Op. at *2. Id. (citations omitted). Id. (citations omitted). Id. Id. (citations omitted). Id.