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By Jonathan H. Freiberger Mechanics’ liens are powerful tools available to, inter alia, contractors, laborers and materialmen when they are not paid for their work in improving real property. As the Court of Appeals noted long ago: The object and purpose of the mechanics' lien law was to protect a person who, with the consent of the owner of real property, enhanced its value by furnishing materials or performing labor in its improvement, by giving him an interest therein to the extent of the value of such material or labor. The filing of the notice of lien is the statutory method prescribed by which the party entitled thereto perfects his inchoate right to that interest. John P. Kane Co. v. Kinney, 174 N.Y. 69, 73 (1903). Section 3 of the Lien Law provides that a “contractor, subcontractor, laborer, materialman … who performs labor or furnishes materials for the improvement of real property with the consent or at the request of the owner thereof …, shall have a lien for the principal and interest, of the value, or the agreed price, of such labor ... due or payable for the benefit of any laborer, or materials upon the real property improved or to be improved and upon such improvement, from the time of filing a notice of such lien as prescribed in this chapter….” Lien Law § 3 “should be liberally construed to secure the purposes for which it was intended, namely the protection of that class of people who perform services or supply the material for the improvement of realty….” Claudio Perfetto, Inc. v. Waste Management of New York, 274 A.D.2d 389, 390 (2d Dept. 2000) (citations omitted). Once filed, a mechanics’ lien is valid for one year “unless within that time an action is commenced to foreclose the lien, and a notice of the pendency of such action … is filed with the county clerk of the county in which the notice of lien is filed” or unless an extension is filed by the lienor. Lien Law § 17 (emphasis added); see also Thomas Bros. Pile Corp. v. Rosenblum, 134 A.D.3d 1020, 1021 (2d Dept. 2015). A lienor only gets one extension by filing. If an action to foreclose the lien is not commenced within the extension period, the lien can only be extended by an order of the court. Aztec Window & Door Mfg., Inc. v. 71 Village Road, LLC, 60 A.D.3d 795, 796 (2d Dept. 2009). Absent an extension, “the lien automatically expires by operation of law, becoming a nullity and requiring its discharge.” Id. (citation omitted). A mechanics’ lien is an encumbrance on real property. Edward Joy Co., Inc. v. McGuire & Bennett, Inc., 199 A.D.2d 1015 (4th Dept. 1993). Thus, the placing of a mechanics’ lien on real property can adversely impact the owner’s rights. For example, the filing of a mechanic s’ lien could be an event of default under a mortgage loan. Similarly, the existence of a mechanic s’ lien could negatively impact the ability of an owner to mortgage or sell the liened property. Thus, the ability to discharge a lien is critical to an owner. Section 19 of the Lien Law offers several ways to discharge a lien.[1] Thus, a lien will be discharged: when the lienor files a satisfaction or release of the lien (Lien Law § 19(1)); if the lienor fails to commence an action to foreclose the lien or extend the lien within a year of filing (Lien Law § 19(2)); by court order vacating the lien for failure to prosecute the lien (Lien Law § 19(3)); by filing with the county clerk a copy of a transcript of a judgment “showing a final determination of the action in favor of the owner of the property against which the lien was claimed (Lien Law § 19(5)); by obtaining a court order summarily discharging the lien because, inter alia, the “character of the labor or materials furnished and for which the lien is claimed” do not support a lien or the lienor failed to comply with section 9[2] of the Lien Law (Lien Law § 19(6)); or, as is relevant to today’s article, by the posting of a bond discharging the lien(Lien Law § 19(4)). Section 19(4) of the lien law provides that “[e]ither before or after the beginning of an action by the owner or contractor executing a bond or undertaking in an amount equal to one hundred ten percent of such lien conditioned for the payment of any judgment which may be rendered against the property for the enforcement of the lien….” The lien attaches to the posted bond in place and instead of the real property. The lienor remains protected and the owner is not constrained by the encumbrance of the lien. Against this backdrop, we discuss Hewitt Builder and Renovations, Inc. v. Farmingville Assoc. Phase 1, LLC, a case decided by the Appellate Division, Second Department, on May 6, 2026.[3] The defendant property owner in Hewitt (“Owner”) entered into a construction contract with the defendant general contractor (the “GC”). The plaintiff subcontractor (the “Sub”) entered into a subcontract with the GC. The Sub alleged that it completed its work under the subcontract but only received partial payment for its work. As a result, on November 29, 2021, the Sub filed a mechanics’ lien against the property. Four months later, in March of 2022, the Sub commenced an action to foreclose its lien, but failed to file a notice of pendency. On December 21, 2022, over a year after the commencement of the action, the Owner obtained a surety bond discharging the lien. The Sub appeals from the motion court’s grant of the defendants’ motion to dismiss the complaint because the lien subject to the foreclosure action lapsed. The Second Department affirmed and stated: Pursuant to Lien Law § 17, a mechanic's lien expires one year after filing unless an extension is filed with the County Clerk or an action is commenced to foreclose the lien and a notice of pendency is filed within that time period. Here, since it is undisputed that the plaintiff failed to file a notice of pendency or move to extend the time to do so within one year after the mechanic's lien was filed, and no extensions of the mechanic's lien were obtained from the court, the mechanic's lien automatically expired by operation of law one year after it was filed. Contrary to the plaintiff's contention, the bond obtained by the defendants did not permit the plaintiff to continue the foreclosure action against the bond rather than the property as the bond was obtained after the lien had automatically expired by operation of law. (Citations and internal quotation marks 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. [1] Section 20 of the Lien Law permits the discharge of a mechanics’ lien by depositing with the “county clerk, in whose office the notice of lien is filed, a sum of money equal to the amount claimed in such notice, with interest to the time of such deposit.” [2] Section 9 of the Lien law sets forth the required contents of a mechanics’ lien. [3] Some of the facts recited herein were obtained from the motion court filings available on the court’s NYSCEF system.

By: Jeffrey M. Haber Under New York’s Limited Liability Company Law (“LLCL”) § 702, a court “may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.” The claim must be brought “[o]n application by or for a member” of the company.[1] In Matter of Bodenchak v. 5178 Holdings LLC, 2025 N.Y. Slip Op. 05875 (1st Dept. Oct. 23, 2025) (here), the Appellate Division, First Department, examined the “by or for” language of LLCL § 702 in affirming the grant of a motion to substitute the estate of a deceased member for the decedent in the proceeding.[2] Bodenchak was brought as a special proceeding in which the original petitioner, Frank Bodenchak (“Frank”), a minority investor in 5178 Holdings LLC (“5178”), sought both direct monetary damages and the judicial dissolution of 5178, a New York Limited Liability Company (“LLC”), pursuant to LLCL § 702. Frank died shortly after commencing suit. His widow, Dawn Bodenchak (“Dawn”), was appointed executor of his estate and moved to substitute as petitioner. Respondents opposed the motion, contending the estate could not maintain the dissolution portion of the proceeding under LLCL § 702. The motion court granted the motion. Respondents appealed. The First Department “unanimously affirmed”. The issue on appeal concerned the request for judicial dissolution of 5178. As to the monetary damages claims, there was no dispute. Under Section 11-3.2(b) of New York’s Estates, Powers & Trusts Law, the personal representative of a decedent’s estate may bring or continue an action “[f]or any injury,” and “[n]o cause of action for injury to person or property is lost because of the death of the person in whose favor the cause of action existed.”[3] Thus, causes of action seeking monetary damages survive a decedent’s death, and the proper party to maintain an action to recover monetary damages is the decedent’s representative. In Bodenchak, the proper party to pursue Frank’s monetary damages claims was Dawn. In addressing the request for dissolution of 5178, the Court looked to the LLCL. Under LLCL § 702, a dissolution action may be brought “[o]n application by or for a member.” The Court held that Dawn satisfied Section 702, stating “Petitioner’s application was made for decedent, a member of respondent 5178 Holdings, as executor of his estate.” Therefore, said the Court, defendants’ attempt to limit the scope of Section 702 to only members was “unavailing”.[4] Under LLCL § 608, the estate of a deceased member “may exercise all of the member’s rights for the purpose of settling his or her estate or administering his or her property,”[5] regardless of whether the estate assumes “member” status.[6] Appellate and trial court cases interpreting LLCL § 608 have consistently made it clear that the statute means what it says.[7] In Bodenchak, the Court held that “Decedent’s right to pursue dissolution passed to his estate upon his death.”[8] This was especially so, since “the dissolution proceeding [was] necessary to settle [Frank’s] estate and distribute the proceeds from the sale of the apartment owned by 5178 Holdings.”[9] Thus, contrary to the respondents’ contention, which the Court held was “also unavailing”, petitioner, as executor of Frank’s estate, had the authority to exercise Frank’s rights in the LLC for the purpose of settling the estate.[10] Takeaway In Bodenchak, the First Department reaffirmed an important point under the LLCL: the right to seek judicial dissolution of an LLC does not vanish upon a member’s death, when the dissolution proceeding is necessary to settle the deceased member’s estate. LLCL § 702 allows dissolution “on application by or for a member,” which the Court made clear includes actions brought by the estate of a deceased member. The Court relied on LLCL § 608, which grants an estate the ability to exercise all of a deceased member’s rights for purposes of settling the estate, even if the estate (or its representative) does not become a member of the LLC. Thus, under LLCL § 608, Frank’s right to seek dissolution passed to his estate upon his death, particularly because the dissolution proceeding was necessary to settle the estate and distribute assets. In short, the Bodenchak confirms that: (a) monetary damage claims survive a member’s death and can be pursued by the estate’s representative; (b) the estate of a deceased LLC member may seek judicial dissolution under LLCL § 702, when dissolution is necessary to settle the deceased member’s estate; and (c) LLCL § 608 empowers estates to exercise a deceased member’s rights for estate administration, regardless of membership status. ______________________________ 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. [1] LLCL § 702. [2] In prior articles, we examined substitution upon the death of a named party. See Death and Litigation, CPLR 1015(a) and the Death of a Party, and Death of a Litigant. We have also examined judicial dissolution of an LLC under LLCL § 702. See LLC Breakups And Judicial Dissolution: The Hurdles Are High, Issues Of Fact Preclude Dismissal Of Claim For Judicial Dissolution Of LLC, Breaking Up Is Hard To Do: Court Denies Motion To Dismiss Action For Dissolution of an LLC, Court Finds that Allegedly Ousted Member of LLC Has Standing to Seek Dissolution, and Court Reinforces the Fact that Judicial Dissolution of an LLC is Not Easy. This Blog has not, however, addressed the issue in Matter of Bodenchak v. 5178 Holdings LLC. [3] Under New York law, “individual beneficiaries . . . ha[ve] no independent right to maintain an independent cause of action for the recovery of estate property, as such a right belong[s] to the personal representative of the decedent’s estate.” See Stallsworth v. Stallsworth, 138 A.D.3d 1102, 1103 (2d Dept. 2016) (citations omitted). [4] Slip Op. at *1. [5] LLCL § 608. [6] Under New York law, the death of a member of a limited liability company does not trigger dissolution of that limited liability company. See LLCL § 701(b). [7] Crabapple Corp. v. Elberg, 53 A.D.3d 434 (1st Dept. 2017); In Matter of Andris v. 1387 Forest Realty, LLC, 213 A.D.3d 923 (2d Dept 2023); see also Pachter v. Winiarski, 2021 WL 1794565 (Sup. Ct., Kings County May 5, 2021); Estate of Judith Lindenberg v. Winiarsky; 2021 WL 1794560 (Sup. Ct., Kings County May 5, 2021). [8] Slip Op. at *1 (citing Crabapple, 53 A.D.3d at 435). [9] Id. (citing Matter of Andris, 213 A.D.3d at 924). [10] Id.

By: Jeffrey M. Haber In New York, when interpreting a contract, the words of the writing must be accorded their fair and reasonable meaning, aiming for a practical interpretation that realizes the reasonable expectations of the parties.[1] The court is required to enforce a written agreement according to the plain meaning of its terms when it is complete, clear, and unambiguous on its face.[2] Although the parties may offer conflicting interpretations of their contract, that does not mean that the contract is ambiguous.[3] In that circumstance, and in general, the court is to apply the meaning intended by the parties, as derived from the language of the contract in question.[4] Thus, “where the intention of the parties may be gathered from the four corners of the instrument, interpretation of the contract is a question of law [i.e., it can be determined by the court] and no trial is necessary to determine the legal effect of the contract.”[5] In Harris v. Dream Volunteers, 2025 N.Y. Slip Op. 33963(U) (Sup. Ct., N.Y. County Oct. 14, 2025), the motion court granted defendant’s motion to dismiss plaintiff’s breach of contract claims on the grounds that the plain meaning of the contract at issue utterly refuted plaintiff’s allegations. Plaintiff commenced the action alleging breach of contract based on two theories: (1) breach of an original agreement dated April 10, 2023, asserting that plaintiff was prematurely terminated in violation of that agreement because the termination took place prior to a deadline to complete certain tasks; and (2) breach of a subsequent implied-in-fact contract, allegedly formed on December 21, 2023, which established a new deadline of October 31, 2024, for completing certain tasks. The original agreement designated plaintiff as an independent contractor providing sales and marketing strategy services to defendant. The agreement specified that “the only consideration due [plaintiff] regarding the subject matter of [the] Agreement” was payment of compensation in the amount of $6,667 per month. Section 8 of the agreement, titled “Termination,” granted defendant the right to “terminate [the] Agreement at any time, with or without cause, upon thirty (30) days’ notice except within the first ninety (90) days of [the] Agreement.” Defendant terminated the agreement on January 17, 2024, effective February 16, 2024. The termination, therefore, occurred well after the initial ninety (90) day period, making defendant’s 30-day notice within the period set forth in Section 8 of the agreement. Based upon the foregoing facts, the motion court found plaintiff’s claims to be “fatally undermined by the clear and unambiguous language contained in the agreement.”[6] Plaintiff’s claim for breach of the original agreement rested on the premise that because the agreement outlined key objectives or tasks with deadlines (e.g., June 30, 2024), defendant was obligated to keep the agreement in effect until those deadlines passed.[7] Pointing to Section 1 and Exhibit A of the agreement, the motion court noted that those sections primarily described plaintiff’s obligations under the agreement, which required her to undertake and complete services on the specified schedule. However, that section, said the motion court, “limit[ed] the defendant’s obligation by explicitly stating that the only consideration due from [defendant] was the monthly payment of $6,667.”[8] Further, explained the motion court, “Section 8 of the Agreement clearly and expressly grant[ed] the defendant the unconditional right to terminate the agreement ‘at any time, with or without cause, upon thirty (30) days’ notice except within the first ninety (90) days.’”[9] “This language,” explained the motion court, “directly contravene[d] the plaintiff’s interpretation of the agreement that setting deadlines for an independent contractor to complete certain tasks somehow create[d] an implied right that the contractor remain[ ] engaged through those dates.”[10] “Given that the contract provide[d] for termination at will after the initial 90-day period,” concluded the motion court, “irrespective of any task or objective deadlines, the claim that the plaintiff’s termination prior to June 30, 2024 was impermissible [was] utterly refuted by the plain and unambiguous language of the agreement.”[11] Finally, the motion court held that “plaintiff’s claim that the deadline to complete the tasks was extended to October 31, 2024 [was] … unavailing.”[12] First, the motion court found that “even if it could be established that the deadline was extended, the plaintiff still could have been terminated at will for the reasons stated” in the decision.[13] Second, explained the motion court, “any claim that the deadline was extended by either an oral or implied-in-fact agreement [was] foreclosed by the clear language of the agreement.”[14] The motion court noted that the amendment clause and integration clause of the agreement foreclosed any argument that an implied-in-fact contract existed: Section 13 of the agreement explicitly states that “[n]o changes or modifications or waivers to this Agreement will be effective unless in writing and signed by both parties.” The agreement also contains an integration clause, which dictates that the Agreement “constitutes the complete and exclusive agreement between the parties concerning its subject matter and supersedes all prior or contemporaneous agreements or understandings, written or oral, concerning the subject matter described herein.” Because the alleged new implied-in-fact contract derived from oral discussions and email communications concerning the existing subject matter (Consultant’s key objectives/deadlines), it violate[d] the plain language of Section 13.[15] Accordingly, the motion court granted defendant’s motion and dismissed the complaint in its entirety. Takeaway Harris underscores the fundamental principle of contract interpretation – i.e., contracts are to be construed pursuant to the parties’ intention.[16] As the Court of Appeals explained a little over three decades ago, “[t]he best evidence of what the parties … intend is what they say in their writing.”[17] When the parties’ writing is clear and unambiguous on its face – that is, the terms are reasonably susceptible to only one meaning – it should be enforced according to the plain meaning of those words. _____________________________ 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. [1] Dreisinger v. Teglasi, 130 A.D.3d 524, 527 (1st Dept. 2015). [2] Greenfield v. Philles Records, 98 N.Y.2d 562, 569 (2002). [3] Bethlehem Steel Co. v. Turner Constr. Co., 2 N.Y.2d 456, 460 (1957). [4] Duane Reade, Inc. v. Cardtronics, LP, 54 A.D.3d 137, 140 (1st Dept. 2008). [5] Bethlehem Steel, 2 N.Y.2d at 460. [6] Slip Op. at *2. [7] Id. [8] Id. [9] Id. [10] Id. [11] Id. [12] Id. [13] Id. [14] Id. [15] Id. at 2-3. [16] This Blog has written about the issues in this case – namely, words have meaning – on numerous occasions. Some of the articles that we have written include: Contract Interpretation: Words Have Meaning; The New York Court of Appeals Reminds Litigants That Words in Contracts Have Meaning; Words Have Meaning; A Contract That Means What It Says; Contracts That Say What They Mean, Mean What They Say Redux; and Contracts that Say What They Mean, Mean What They Say. [17] Slamow v. Del Col, 79 N.Y.2d 1016, 1018 (1992).

By: Jeffrey M. Haber In 2019, New York enacted the Uniform Voidable Transactions Act, which repealed and replaced certain provisions of the Debtor and Creditor Law (“DCL”) relating to fraudulent conveyances,[1] which became effective April 4, 2020.[2]Transfers made after April 4, 2020 are governed by the current version of the DCL.[3] The DCL, as amended, permits creditors to void actual and constructive fraudulent transfers.[4] A creditor may void a debtor’s constructive fraudulent transfers in three situations: first, if the transfers were made without receiving reasonably equivalent value and while the debtor either (i) was engaged in a transaction for which the debtor’s remaining assets were unreasonably small in relation to the transaction or (ii) intended to incur debts beyond its ability to pay;[5] second, if they were made without receiving reasonably equivalent value, and the debtor was insolvent at the time or became so as a result of the transfer,[6] or third, if they were made to an “insider” for an antecedent debt while the debtor was, and the insider had reason to believe the debtor was, insolvent.[7] If the debtor is a corporation, “insider” for purposes of section 274(b) includes: “a person in control of the debtor,” “a relative of a … person in control of the debtor,” and “an affiliate, or an insider of an affiliate as if the affiliate were the debtor.”[8] Voidability of constructive fraudulent transactions “is unrelated to the proof of the debtor’s intent, but turns on objective facts concerning the debtor’s distressed financial condition and the inadequate consideration received.”[9] Constructive fraudulent transfer claims are not subject to heightened pleading rules.[10] A creditor may also void a debtor’s actual fraudulent transfers. DCL § 273(a), as amended, provides, in part, that a transfer made by a debtor is “voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made … if the debtor made the transfer … (1) with actual intent to hinder, delay or defraud any creditor of the debtor; or (2) without receiving a reasonably equivalent value in exchange for the transfer … and the debtor … (i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (ii) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due.” In determining actual intent under DCL § 273(a)(1), courts may consider the common law “badges of fraud,” which have been codified to include, among other factors, whether “(1) the transfer or obligation was to an insider; (2) the debtor retained possession or control of the property transferred after the transfer; (3) the transfer or obligation was disclosed or concealed; (4) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit; (5) the transfer was of substantially all the debtor's assets; (6) the debtor absconded; (7) the debtor removed or concealed assets; (8) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred; (9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred; (10) the transfer occurred shortly before or shortly after a substantial debt was incurred; and (11) the debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor.”[11] Although causes of action under Section 273 of the former DCL were not required to be pleaded with heightened particularity pursuant to CPLR 3016(b),[12] such particularity was required for “actual intent” causes of action arising out of Section 276 of the former DCL.[13] Since the “actual intent” provision of the former DCL was incorporated into the amended DCL (i.e., section 273 (a)(1)), causes of action arising under this subdivision must satisfy the heightened pleading requirements.[14] Thus, allegations of the transfer and badges of fraud made “upon information and belief” are generally insufficient to plead the claim with the requisite particularly of CPLR 3016(b).[15] However, where material facts are within the exclusive knowledge of the party charged with such fraud, the specificity requirement is not to be so strictly interpreted “to dismiss a case at an early stage where any pleading deficiency might be cured later in the proceedings.”[16] Therefore, a pleading based “upon information and belief” can satisfy the CPLR 3016(b) heightened pleading requirement when it is accompanied by a statement of facts “sufficient to permit a reasonable inference of the alleged conduct.”[17] In Neptune Issue Inc. Profit Sharing Plan v. Eliopoulos, 2025 N.Y. Slip Op. 06001 (3d Dept. Oct. 30, 2025 (here), the Appellate Division, Third Department, addressed the foregoing principles. In April 2016, plaintiff commenced an action against defendant Mary Ellen Eliopoulos (“Eliopoulos”) and defendant Estates of Glenburnie LLC (“Glenburnie LLC”), a domestic limited liability company owned by Eliopoulos, seeking to foreclose on a note and mortgage secured by real property located in Essex County, New York. Plaintiff commenced a second mortgage foreclosure action against Eliopoulos and Glenburnie LLC in May 2016, this time relating to real property located in Washington County, New York. While these actions were pending, Eliopoulos and Glenburnie LLC obtained two mortgages with nonparty Mako International, LLC (“Mako”), encumbering several parcels of real property located in the Town of Putnam, Washington County (“Putnam parcels”). In late 2018, plaintiff obtained judgments of foreclosure and sale in both actions and, following the referee sales, moved in each action for a deficiency judgment against Eliopoulos. In February 2019, Eliopoulos and Glenburnie LLC further encumbered the Putnam parcels with a third mortgage from Mako. Before either deficiency judgment could be rendered in plaintiff’s favor, in June 2020, Eliopoulos and Glenburnie LLC conveyed their interests in the Putnam parcels and two parcels commonly known as Lake George Way (collectively, the “subject properties”) to defendant Glenburnie Estates LLC (“GEL”) for $529,000. Eliopoulos’ son is the sole member of GEL. Plaintiff then commenced the action against Eliopoulos, Glenburnie LLC and GEL (collectively, “defendants”) seeking to set aside the conveyance of the subject properties to GEL as a voidable transaction pursuant to DCL §§ 273, 274, and 275. GEL moved, pre-answer, to dismiss the complaint for failure to state a cause of action and based on the documentary evidence. GEL contended that the allegations against defendants based “upon information and belief” were insufficient to state a cause of action with the particularity required under the DCL. GEL further contended that a subsequent proposed sale of the subject properties demonstrated that Eliopoulos and Glenburnie LLC received reasonably equivalent value from GEL in exchange for the transfer. Plaintiff opposed the motion. The motion court entered an order without any written or oral findings, denying the motion to dismiss. GEL appealed. The Court held that the complaint alleged sufficient facts to state causes of action alleging violations of DCL § 273(a)(1) and (a)(2).[18] “Although several key allegations in both causes of action were based ‘upon information and belief,’” noted the Court, it was “satisfied that the accompanying factual statements [were] sufficient to place defendants on notice of the allegations asserted against them.”[19] “Specifically,” said the Court, “each cause of action alleged that Eliopoulos and Glenburnie LLC conveyed the subject properties to her son’s entity, GEL, an insider, at a time when defendants knew they were likely to incur additional debts as a result of plaintiff’s pending actions seeking a deficiency judgment against Eliopoulos.”[20] “These factual statements,” concluded the Court, were “supported by the record, including that defendants [did] not dispute the son’s status as an insider.”[21] The Court also held that these statements satisfied “multiple factors considered to be badges of fraud,” and, therefore, were “sufficiently pleaded.”[22] The Court noted that “[a]lthough … plaintiff’s allegations relating to Eliopoulos and Glenburnie LLC’s ability to repay additional debts likely to be incurred and further that Eliopoulos was insolvent after the transfer to GEL were not supported by factual statements, insolvency [was] presumed” under DCL § 271(b) “where a debtor is ‘generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute.’”[23] “At the time of the conveyance to GEL,” explained the Court, “plaintiff had already been awarded two judgments of foreclosure and sale against Eliopoulos for her failure to make payments under two separate mortgage notes.”[24] “Further,” said the Court, “considering that the record reveal[ed] Eliopoulos may have ignored an information subpoena relating to her finances as to at least one of the deficiency judgments,” it was “satisfied that such financial information [was] within the knowledge of the parties alleged to have engaged in a fraud and which could be explored during disclosure.”[25] The Court rejected defendants’ contention plaintiff’s allegations were speculative because they were asserted “upon information and belief” and otherwise contrary to the documentary evidence:[26] Eliopoulos and Glenburnie LLC encumbered the Putnam parcels with $475,000 in mortgages from Mako, and then sold the Putnam parcels plus two other parcels — including at least one parcel not subject to a Mako mortgage that had deeded water access to Lake George — to GEL for $529,000. As highlighted by plaintiff, this means two parcels on Lake George — one with deeded lake access — were conveyed for approximately $27,000 each. Then approximately three years later, all four subject properties were sold to a third party for $1,250,000. Although GEL contends that the actual consideration for the June 2020 transaction was above $529,000 and that the subject properties were “unmarketable and worthless” because other potential buyers “would not pay anything, let alone fair market value,” for real property that was subject to multiple lawsuits, this is information within the knowledge of defendants and a “plaintiff may allege upon information and belief that defendants transferred assets for inadequate or no consideration.”[27] “When … recognizing that we are to afford the complaint a liberal construction, presume the alleged facts to be true, and afford plaintiff the benefit of every favorable inference when considering a motion to dismiss for failure to state a cause of action,” said the Court, “we are satisfied that the allegations contained in the complaint set forth a cognizable legal claim under the Debtor and Creditor Law.”[28] Takeaway The Legislature’s adoption of the Uniform Voidable Transactions Act modernized the State’s prior Debtor and Creditor Law, thereby enhancing creditor protections against fraudulent transfers. The revised law distinguishes between actual and constructive fraud, with the latter based on objective financial distress rather than intent. Actual fraud requires heightened pleading standards and is evaluated using codified “badges of fraud.” Neptune illustrates the law’s practical application: a property transfer to an insider during pending foreclosure actions was challenged as voidable. The Court found that even allegations made “upon information and belief” were sufficient when supported by factual context, such as insider status and undervalued consideration. Neptune also affirmed that insolvency can be presumed from missed payments and ignored subpoenas. Neptune reinforces the DCL’s focus on economic realities over formalities, thereby making it a powerful tool for creditors seeking redress for fraudulent transfers. ___________________________ 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. [1] This Blog examined the new DCL in an article titled, N.Y. Supreme Court Rules on Alleged Fraudulent Conveyance and the Attempt to Evade Creditors. [2] Uniform Voidable Transactions Act, L 2019, ch. 580, § 2 (eff. Apr. 4, 2020); L&M 353 Franklyn Ave. LLC v. Steinman, 202 A.D.3d 440, 440 (1st Dept. 2022); Van de Walle v Van de Walle, 68 Misc. 3d 1224(A), 2020 N.Y. Slip Op. 051064(U) (Sup. Ct., Nassau County 2020), aff’d, 200 A.D.3d 1095 (2d Dept. 2021). [3] Van de Walle, 68 Misc. 3d 1224(A). [4] DCL §§ 273(a)(1)-(2), 274(a)-(b), 276; see also Tian v. Top Food Trading Inc., No. 22-CV-0345 (EK) (VMS), 2024 WL 1051172, at *9 (E.D.N.Y. Feb. 26, 2024), adopted by 2024 WL 1908910 (May 1, 2024). [5] DCL § 273(a)(2). [6] Id. § 274(a). [7] Id. § 274(b). [8] Id. §§ 270(h)(2)(iii), (vi), (4). [9] 245 E. 19 Realty LLC v. 245 E. 19th St. Parking LLC, 80 Misc. 3d 1206(A), at *6 (Sup. Ct., N.Y. County 2023) (citing James Gadsden & Alan Kolod, Supplementary Practice Commentaries, McKinney’s Debtor and Creditor Law § 273 (2020)), affirmed as modified, 223 A.D.3d 604 (1st Dept. 2024). [10] In re Tops Holding II Corp., 646 B.R. 617, 649 (Bankr. S.D.N.Y. 2022). [11] DCL § 273(b); see also Matter of Schiffman v. Affordable Shoes, 238 A.D.3d 770, 773 (2d Dept. 2025); 245 E. 19 Realty LLC, 223 A.D.3d at 606. [12] See Louis Monteleone Fibres, Ltd. v. Hudson Baylor Brookhaven, LLC, 228 A.D.3d 641, 646 (2d Dept. 2024). [13] See Old Republic Natl. Title Ins. Co. v. 1152 53 Mgt., LLC, 227 A.D. 3d 824, 828 (2d Dept. 2024); Avilon Automotive Group v. Leontiev, 194 A.D.3d 537, 539 (1st Dept. 2021). [14] See generally Drip Capital, Inc. v. JY Imports of NY Inc., ___ F. Supp. 3d ___, ___, 348 F.R.D 536, 547 (E.D.N.Y. 2025). [15] See Avilon Automotive, 194 A.D.3d at 539; Carlyle, LLC v. Quik Park 1633 Garage LLC, 160 A.D.3d 476, 477 (1st Dept. 2018). [16] Pludeman v. Northern Leasing Sys., Inc., 10 N.Y.3d 486, 491-492 (2008); see Paolucci v. Mauro, 74 A.D.3d 1517, 1520-1521 (3d Dept. 2010); see generally CPLR 3211(d). [17] Pludeman, 10 N.Y.3d at 492; see Louis Monteleone Fibres, 228 A.D.3d at 647; Phone Admin. Servs. Inc. v. Verizon N.Y., Inc., 211 A.D.3d 493, 494 (1st Dept. 2022); cf. Carlyle, 160 A.D.3d at 477. [18] Slip Op. at *3. [19] Id. [20] Id. [21] Id. (citing DCL § 270(h)(1)(i); (2)(vi)). [22] Id. (citing 245 E. 19 Realty, 223 A.D.3d at 606; JDI Display Am., Inc. v. Jaco Elecs, Inc., 188 A.D.3d 844, 846 (2d Dept. 2020); DCL § 273(b)). [23] Id. at *4. [24] Id. [25] Id. (citation omitted). [26] Id. [27] Id. (quoting 477 Realty, L.L.C. v. Wing Soho, LLC, 234 A.D.3d 469, 471 (1st Dept. 2025)). [28] Id. (citing Pludeman, 10 N.Y.3d at 493; Paolucci,74 A.D.3d at 1521).

By: Jeffrey M. Haber Today, we examine familiar principles of contract interpretation, as well as the requirements for judicial dissolution of a partnership. The Rules of Contract Interpretation It is well-settled in New York that the “‘fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties’ intent[,]’ and ‘[t]he best evidence of what parties to a written agreement intend is what they say in their writing.’”[1] “‘The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court, as is the inquiry of whether the writing is ambiguous in the first instance. If the language is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence.’”[2] “A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion.”[3] “Ambiguity in a contract arises when the contract, read as a whole, fails to disclose its purpose and the parties’ intent, or where its terms are subject to more than one reasonable interpretation.”[4] “‘[W]here a contract was negotiated between sophisticated, counseled business people negotiating at arm’s length, courts [are] … reluctant to interpret an agreement as impliedly stating something which the parties’ specifically did not include.”[5] The Rules of Judicial Dissolution Involving a Partnership Section 63 of the Partnership Law gives a partner the statutory right to seek court dissolution of a partnership, and provides that a court shall decree the dissolution, on a partner’s application, in various situations. Among the situations set forth in the statute are: the “partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business,” and the “partner wilfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him.”[6] “[J]udicial dissolution of a partnership [is a] rarely invoked remed[y].”[7] The party seeking judicial dissolution of a partnership bears the burden of presenting facts demonstrating that grounds exist under Section 63 of the Partnership Law and that such equitable relief is warranted.[8] If the statutory prerequisites are not met, a claim for judicial dissolution will be denied.[9] With the foregoing rules in mind, we examine Waldorf Invs., L.P. v. Waldorf, 2025 N.Y. Slip Op. 06096 (2d Dept. Nov. 5, 2025). Waldorf centered around an alleged breach of contract involving a life insurance policy. The plaintiff Christopher V. Waldorf, Jr. (“Christopher”) and the defendants Kathleen Waldorf (“Kathleen”), William Waldorf (“William”), and Stephen Waldorf (“Stephen”) are partners in Waldorf Investments, L.P. (the “partnership”). The partnership owns a parcel of real property located in Huntington, New York (the “property”). In 2017, Christopher, in the name of the partnership, and Christopher, individually and derivatively on behalf of the partnership (together, the “plaintiffs”), commenced the action to, inter alia, recover damages for breach of contract and for judicial dissolution of the partnership. Kathleen, William, Stephen, and defendant Waldorf Risk Solutions, LLC (collectively, the “defendants”), subsequently moved for summary judgment dismissing the sixteenth cause of action for breach of contract against William and Stephen and the twenty-first and twenty-second causes of action for judicial dissolution of the partnership. In an order dated March 29, 2022, the Supreme Court granted the motion. Plaintiffs appealed. The Appellate Division, Second Department, affirmed. The Court held that “defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the sixteenth cause of action, alleging breach of contract, insofar as asserted against William and Stephen.”[10] The breach of contract cause of action alleged, inter alia, that “William and Stephen breached the certificate of limited partnership by failing to distribute to Christopher his pro rata share of the partnership’s profits in the form of certain fire insurance proceeds and rent payments allegedly owed to the partnership.”[11] In support of their motion, defendants submitted evidence demonstrating, among other things, that the fire insurance proceeds were retained by the partnership to redevelop the property, as permitted under the terms of the certificate of limited partnership.[12] “Additionally,” said the Court, “defendants established, prima facie, that there were no rent payments owed to the partnership that William and Stephen failed to distribute.”[13] The Court also held that defendants “demonstrated their prima facie entitlement to judgment as a matter of law dismissing the twenty-first cause of action, seeking judicial dissolution of the partnership.”[14] The Court found that plaintiffs failed to demonstrate that “it [was] not reasonably practicable to carry on the business [of the partnership] in conformity with the partnership agreement.”[15] The Court explained that the evidence submitted by defendants satisfied “their prima facie burden” of demonstrating that Kathleen, William, and Stephen ha[d] worked to, among other things, redevelop the property, thereby carrying on the partnership’s business.[16] “In opposition,” said the Court, “plaintiffs failed to raise a triable issue of fact.”[17] Takeaway Waldorf explores two foundational legal concepts in New York law: how courts interpret contracts and the circumstances under which a partnership may be judicially dissolved. As to the former, Walforf reaffirms the principle that courts prioritize the written intent of the parties when interpreting contracts, avoiding extrinsic evidence unless the language is ambiguous. Ambiguity arises only when a contract’s terms can reasonably be interpreted in more than one way. As to the latter, Waldorf provides insight into judicial dissolution under Partnership Law § 63, which, among other things, allows a partner to seek dissolution if another partner’s conduct makes continuing the business impractical. In Waldorf, plaintiff alleged breach of contract and sought dissolution. The Court affirmed the dismissal of both claims, finding that defendants acted within the partnership agreement and that the business was being carried out effectively. As discussed, plaintiff failed to present sufficient evidence to justify either claim, reinforcing the high bar for judicial dissolution and the importance of clear contractual language. ________________________________ 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. [1] Donohue v. Cuomo, 38 N.Y.3d 1, 12 (2022), quoting Greenfield v. Philles Records, 98 N.Y.2d 562, 569 (2002). [2] Palombo Group v. Poughkeepsie City Sch. Dist., 125 A.D.3d 620, 621 (2d Dept. 2015), quoting Law Offs. of J. Stewart Moore, P.C. v. Trent, 124 A.D.3d 603, 603 (2d Dept. 2015). [3] Greenfield, 98 N.Y.2d at 569 (alteration and internal quotation marks omitted); see also Donohue, 38 N.Y.3d at 13. [4] Universal Am. Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa, 25 N.Y.3d 675, 680 (2015) (citation and internal quotation marks omitted). [5] Donohue, 38 N.Y.3d at 12, quoting 2138747 Ontario, Inc. v. Samsung C&T Corp., 31 N.Y.3d 372, 381 (2018). [6] Partnership Law §§ 63(c) and (d). [7] Drucker v. Mige Associates II, 225 A.D.2d 427, 429 (1st Dept. 1996). [8] See Jones v. Jones, 15 Misc. 2d 960, 962 (Sup. Ct., Kings County 1958). [9] See Couch v. Langan, 63 N.Y.2d 987, 989 (1984). [10] Slip Op. at *1. [11] Id. [12] Id. at 1-2, citing Countrywide Home Loans, Inc. v. United Gen. Tit. Ins. Co., 109 A.D.3d 953, 954 (2d Dept. 2013). [13] Id. at *2. [14] Id. [15] Id. (citations omitted). [16] Id. [17] Id.

By: Jonathan H. Freiberger William Cowper, in his Eighteenth-Century poem “The Task,” coined the phrase “Variety’s the very spice of life.” Today, this phrase is used in many contexts; albeit not so frequently when discussing service of process under CPLR 308(4) – the subject of today’s BLOG. In our recent BLOG article: “Primer – Personal Jurisdiction and Service of Process” we explored various process service issues. As discussed therein, obtaining personal jurisdiction[1] over a defendant is a critical aspect of litigation. There are two components of personal jurisdiction, which the New York Court of Appeals has succinctly described as follows: One component involves service of process, which implicates due process requirements of notice and opportunity to be heard. Typically, a defendant who is otherwise subject to a court's jurisdiction, may seek dismissal based on the claim that service was not properly effectuated. The other component of personal jurisdiction involves the power, or reach, of a court over a party, so as to enforce judicial decrees. This consideration—the jurisdictional basis—is independent of service of process. Service of process cannot by itself vest a court with jurisdiction over a non-domiciliary served outside New York State, however flawless that service may be. To satisfy the jurisdictional basis there must be a constitutionally adequate connection between the defendant, the State and the action. Keane v. Kamin, 94 N.Y.2d 263, 265 (1999) (citations omitted). The law is clear that a “court lacks personal jurisdiction over a defendant who is not properly served with process.” Everbank v. Kelly, 203 A.D.3d 138, 142 (2nd Dep’t 2022) (citations omitted); see also Castillo-Florez v. Charlecius, 220 A.D.3d 1, 2 (2nd Dep’t 2023); Flatow v. Goddess Sanctuary & Spa Corp., 233 A.D.3d 656, 657 (2nd Dep’t 2024). Proper service of process is important because it implicates an individual’s constitutional rights and, accordingly, “[w]hen it is determined that process was ineffective, all subsequent proceedings are rendered null and void as to that party.” Everbank, 203 A.D.3d at 143 (citations omitted); see also Federal Nat. Mort. Ass’n v. Smith, 219 A.D.3d 938, 940, 941-42 (2nd Dep’t 2023); Flatow, 233 A.D.3d at 257. “A defendant's eventual awareness of pending litigation will not affect the absence of jurisdiction over him or her where service of process is not effectuated in compliance with CPLR 308.” Nationstar Mort. LLC v. Molyaev, 235 A.D.3d 648, 649 (2nd Dep’t 2025) (citations and internal quotation marks omitted); see also Raschel v. Rish, 69 N.Y.2d 694, 697 (1986). “Service of process upon a natural person must be made in strict compliance with the methods of service set forth in CPLR 308.” Federal Nat. Mort. Ass’n, 219 A.D.3d at 941-42 (citations, internal quotation marks and brackets omitted); see also Castillo-Florez, 220 A.D.3d at 2; Flatow, 233 A.D.3d at 257. “Typically, a defendant who is otherwise subject to a court’s jurisdiction, may seek dismissal based on the claim that service was not properly effectuated.” Keane, 94 N.Y.2d at 265 (citations omitted). CPLR 308 describes several methods that may be employed to effectuate service of process on a natural person. CPLR 308(1) permits the delivery of a summons directly to the defendant. CPLR 308(2) permits service on a person of “suitable age and discretion” at the defendant’s “actual place of business, dwelling place or usual place of abode.” CPLR 308(3) permits service on an agent within the state designated under CPLR 318. When service under CPLR 308(1), (2) and (4) is “impractical,” CPLR 308(5) provides that service of process may be made as directed by the court. As relates to today’s BLOG, pursuant to CPLR 308(4), when “service under paragraphs one and two cannot be made with due diligence, a defendant can be served by “affixing the summons to the door of either the actual place of business, dwelling place or usual place of abode” of the defendant.[2] The due diligence requirements of CPLR 308(4) must be “‘strictly observed because there is a reduced likelihood that a defendant will actually receive the summons when it is served pursuant to CPLR 308(4).’” Ramirez v. Escobar, 228 A.D.3d 791, 792 (2nd Dep’t 2024) (quoting Serraro v. Staropoli, 94 A.D.3d 1083, 1084 (2nd Dep’t 2012)) (citations omitted); see also Coley v. Gonzalez, 170 A.D.3d 1107, 1108 (2nd Dep’t 2019); Niebling v. Pioreck, 222 A.D.3d 873, 875 (2nd Dep’t 2023). “What constitutes due diligence is determined on a case-by-case basis, focusing not on the quantity of the attempts at personal delivery, but on their quality.” McSorley v. Spear, 50 A.D.3d 652, 653 (2nd Dep’t 2008) (citation omitted); see also Faruk v. Dawn, 162 A.D.3d 744, 745 (2nd Dep’t 2018) (same); Ramirez, 228 A.D.3d at 792; PNMAC Mortgage Opportunity Fund Investors, LLC v. Noushad, 240 A.D.3d 720, 722 (2nd Dep’t 2025). As part of the diligence process, a process server must make “genuine inquiries about the defendant’s whereabouts and places of employment.” Faruk, 162 A.D.3d at 745-46; see also Serraro, 94 A.D.3d at 1085. Thus, courts have found lack of diligence where a process server failed to make “inquiries about the defendant’s whereabouts and place of employment.” McSorely, 50 A.D.3d at 654 (citations omitted); see also Niebling, 222 A.D.3d at 875; Sams Distributions, LLC v. Friedman, 235 A.D.3d 1021, 1023 (2nd Dep’t 2025) (quoting Niebling, supra). Finally, service will not be sustained when all attempts are made at times when the defendant will not likely be home or when working or commuting to work. See Serraro, 94 A.D.3d at 1085; McSorely, 50 A.D.3d at 653-54. Conversely, “[t]he due diligence requirement may be met with a few visits on different occasions and at different times to the defendant's residence or place of business when the defendant could reasonably be expected to be found at such location at those times.” Ramirez, 228 A.D.3d at 792 (citations omitted); see also PNMAC, 240 A.D.3d at 772. In Bank of America, N.A. v. Fischer, 220 A.D.3d 722 (2nd Dep’t 2023), the Court found that service of process was not properly effectuated despite numerous attempts at the defendant’s home between December 21 and December 29, notwithstanding a Saturday attempt, because: (1) “the attempts at service occurred at the height of the holiday season, when the defendant may have had reasons not to be home”; (2) the process server was “‘unable to speak to a neighbor regarding the defendant’s whereabouts”; and, (3) defendant disclosed his employer as part of a loan modification process and no attempt was made to serve the defendant at his place of employment. Bank of America, 220 A.D.3d at 724-25 (citation omitted). The Court found that the “totality of the circumstances” compelled the conclusion that service of process was never properly effectuated. Id. at 725. Finding diligence on the process server’s part in PNMAC, the Court stated: Here, the plaintiff submitted an affidavit of due diligence demonstrating that it conducted approximately 50 searches to ascertain the defendant's address and place of employment, one of which, a request to the United States Postal Service for a Change of Address or Boxholder Information Needed for Service of Legal Process for the defendant, resulted in 559 Bristol Street, Brooklyn. Additionally, the process server made three attempts to serve the defendant at that address on different days and different times from September 16, 2020, through September 22, 2020. The Supreme Court properly concluded that, based on these few visits on different occasions and at different times to the defendant's residence or place of business when the defendant could reasonably be expected to be found at such location at those times, in addition to the Internet searches, the due diligence requirement was met. [Citations and internal quotation marks omitted.] These issues were addressed by the Appellate Division, Second Department, on October 29, 2025, in Bank of New York Mellon v. DeFilippo. Bank of New York was a mortgage foreclosure action.[3] The borrower in Bank of New York delivered a promissory note to lender and secured his repayment obligations with a mortgage on real property. In 2008, lender commenced a foreclosure action in which borrower was purportedly served with process pursuant to CPLR 308(4). Borrower failed to appear or answer the complaint. An order of reference was entered in 2010, and a motion to confirm the referee’s report was made in 2019. Later in 2019, lender moved to confirm the report and for a judgment of foreclosure and sale, which motion was granted in 2020. In 2023, borrower moved to vacate the order of reference and the judgment of foreclosure and sale based on lack of service of process. Borrower appeals from the denial of his motion. In reversing the motion court, the Second Department, analyzed the existing case law along the lines set forth herein and concluded that service was improper. In so doing, the Court stated: Here, the process server's prior attempts at service did not demonstrate due diligence. Two out of three of the process server's prior attempts at personal delivery at the defendant's residence occurred during weekday hours when it could reasonably have been expected that the defendant was either working or in transit to or from work. The prior attempts were made on Thursday, April 17, 2008, at 6:15 p.m.; on Saturday, April 19, 2008, at 1:30 p.m.; and on Monday, April 21, 2008, at 8:20 a.m. The Saturday attempt occurred at a time when the defendant may have had reasons not to be home. The process server averred that a neighbor confirmed that the defendant resided at that address, but gave a negative reply when asked if the neighbor was aware of the defendant's normal routine and place of business. Attached to the affidavit of service were the results of a "people at work" search, which revealed a company address for the defendant. Yet the process server made no inquiries about the defendant at that address before resorting to affix and mail service. Under the circumstances, the plaintiff failed to act with due diligence before relying on affix and mail service pursuant to CPLR 308(4). [Citation omitted.] TAKEAWAY When it comes to service pursuant to CPLR 308(4), courts look at, inter alia, the number and temporal variety of attempts to make sure that the defendant was likely home during at least one such attempt. Attempts made at different times of the day, during different weeks, coupled with evidence of inquiries about the defendant’s whereabouts, helps to sustain proper service. 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. [1] This BLOG has written dozens of articles addressing numerous aspects of personal jurisdiction and service of process. To find such articles, please see the BLOG tile on our website and search for “jurisdiction” or “service of process” or any other commercial litigation issue that may be of interest to you. [2] CPLR 308(2) and (4) have some additional requirements before service will be deemed complete. [3] 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.

By: Jeffrey M. Haber In today’s article, we examine Hofman v. Braun, 2025 N.Y. Slip Op. 34102(U) (Sup. Ct., N.Y. County Oct. 24, 2025) (here), a case addressing the statute of limitations for a breach of fiduciary duty claim and the continuous wrong doctrine.[1] In Hofman, plaintiffs alleged that defendant, Seymour Braun, their attorney, initially represented them in forming limited liability companies and negotiating a loan, then engaged in actions adverse to their interests—such as foreclosing on escrowed membership interests and transferring property—spanning from 2017 through 2022. Defendants sought dismissal, arguing the claims were time-barred and lacked causation. The motion court held that factual disputes about ongoing representation and adverse acts precluded dismissal, as the continuous wrong doctrine could toll the statute of limitations. Also, the motion court found that plaintiffs stated a claim for fiduciary breach. Plaintiff, Rafael Hofman (“Hofman”), was the former business partner of non-party Yakov Kleiner (“Kleiner”). Beginning in 2000, Hofman and Kleiner received legal services from defendant, Seymour Braun (“Seymour”), through his firm, defendant Braun & Goldberg. In 2013, Seymour helped Hofman and Kleiner purchase seven properties and form seven limited liability companies to own each of the purchased properties. Defendant BCD USA LLC (“BCD USA”) was formed as a holding company for the seven limited liability companies. One of the seven limited liability companies is Defendant, BCD Edgewater LLC (“BCD Edgewater”), which owned a property in Florida. Non-party Moshe Goldshmidt (“Goldshmidt”) was Hofman and Kleiner’s nominee to own the companies because Hoffman and Kleiner lived abroad in Israel. The funds for the property purchases came from Hofman, Kleiner, Israeli investors, and a loan from defendant Lexington Holdings LLC (“Lexington”) (the “Lexington Loan”). Braun & Goldberg allegedly represented Hofman and Kleiner with respect to, among other things, negotiating the Lexington Loan and negotiating a 2015 amendment to the loan. The Lexington Loan required 100% of the membership interests in the limited liability companies to be put in an escrow account managed by Seymour, and upon default, the membership interests would be transferred to Lexington. In 2017, Seymour’s son sued Hofman, Kleiner, and Goldschmidt, claiming he was the true owner of the limited liability companies. Litigation continued through 2019. In 2019, Lexington, through Seymour, foreclosed on the escrow and transferred the membership interests in BCD Edgewater to Lexington. On October 27, 2021, Lexington transferred BCD Edgewater’s property to non-party EL2 Development LLC (“EL2”). In 2021, EL2 started a quiet title action against plaintiffs. In 2022, in connection with the quiet title action, Seymour allegedly admitted in an affidavit that he is Lexington’s manager. Plaintiffs commenced the lawsuit by filing a summons on October 22, 2024, followed by a complaint on December 25, 2024. Plaintiffs alleged breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, fraud, aiding and abetting fraud, and conspiracy to commit fraud and breach of fiduciary duty. Defendants responded with a pre-answer motion to dismiss. The motion court granted in part and denied in part the motion. We examine the court’s decision with respect to the breach of fiduciary duty claim.[2] Defendants proffered two arguments in support of dismissing these claims. First, defendants argued the claims were time-barred, and second, plaintiffs failed to allege proximate cause. As to the first argument, the issue for the motion court turned on the application of the continuing wrong doctrine. Defendants argued that the doctrine was inapplicable because the three-year statute of limitations had run. The motion court found that there were issues of fact as to the application of the continuing wrong doctrine.[3] The motion court explained that “[a]lthough Defendants dispute[d that] Seymour and Braun & Goldberg … represented Plaintiffs,” resolution of that issue could not “be resolved on a pre-answer motion to dismiss.”[4] The motion court noted that there were numerous allegations of continuous wrongs that spanned the period 2017 through 2022, which, if true, would extend the statute of limitations: Defendants allege Seymour and Braun & Goldberg represented them in 2013 to arrange a loan and to structure multiple limited liability companies and represented them again in 2015 to negotiate an amendment to the loan agreement. There are legal invoices sent to Plaintiffs from Seymour and Braun & Goldberg substantiating these allegations …. Moreover, Seymour and Braun & Goldberg continued to serve as escrow agent, and allegedly, his son sued Plaintiffs in 2017 regarding ownership of the limited liability companies formed. Then, allegedly in 2018, Seymour, through Guillermo, sent a demand letter for payment on the loan to Goldschmidt, even though Seymour allegedly knew that Goldschmidt was not speaking with [Plaintiff] and thus [Plaintiff] would not be able to respond. One year later, in 2019, Seymour allegedly transferred the membership interests in escrow to Lexington, and then in 2021, Lexington transferred property held by BCD Edgewater to EL2, a limited liability company allegedly managed by a close associate of Seymour. EL2 then initiated a quiet title action against Plaintiffs based on that transfer, where, in 2022, Seymour allegedly submitted an affidavit in support of EL2 where he purportedly stated he is the manager of Lexington.[5] “Because the Complaint allege[d] acts from 2017 through 2022 perpetrated by Seymour or his alleged agents that were directly adverse to or intended to deceive Plaintiffs,” said the motion court, “there remain issues of fact as to whether the continuous wrong doctrine extends the statute of limitations.”[6] Having found issues of fact as to whether the statute of limitations was tolled, the motion court addressed whether plaintiffs stated a claim for breach of fiduciary duty. The motion court concluded that plaintiffs had done so: “[a]ccepting as true the allegation that Seymour represented Plaintiffs in the negotiation over the loan and in forming the limited liability companies, Seymour’s later alleged actions, which were directly adverse to Plaintiffs and allegedly in furtherance of a goal to obtain ultimately the various purchased properties, give rise to a breach of fiduciary duty claim.”[7] Takeaway In New York, there is no single statute of limitations governing breach of fiduciary duty claims. “Rather, the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks.”[8] “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.”[9] “Where, however, the relief sought is equitable in nature, the six-year limitations period of CPLR 213 (1) applies.”[10] 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).”[11] The initial burden of establishing that the limitations period bars the challenged claim is on the movant.[12] “To meet its burden, the defendant must establish, inter alia, when the plaintiff’s cause of action accrued.”[13] “A breach of fiduciary duty claim accrues where the fiduciary openly repudiates his or her obligation – i.e., once damages are sustained.”[14] This is so because, “absent either repudiation or removal, the aggrieved part[y] [is] entitled to assume that the fiduciary would perform his or her fiduciary responsibilities.”[15] “Open repudiation requires proof of a repudiation by the fiduciary which is clear and made known to the beneficiaries.”[16] “Where there is any doubt on the record as to the conclusive applicability of a [s]tatute of [l]imitations defense, the motion to dismiss the proceeding should be denied, and the proceeding should go forward.”[17] As with many rules, there is an exception – the continuing wrong doctrine. Under the doctrine, the statute of limitations is tolled “where there is a series of independent, distinct wrongs rather than a single wrong that has continuing effects.”[18] In Hofman, the motion court found issues of fact regarding whether acts from 2017 through 2022—such as litigation, property transfers, and affidavits—were part of a continuing wrong. As such, the motion court declined to dismiss the breach of fiduciary duty claim at the motion stage. ______________________________ 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. [1] We examined this issue in numerous articles, including: Breach of Fiduciary Duty: Time Bars, Tolling and the Continuing Wrong Doctrine. To find additional articles related to the statute of limitations for breach of fiduciary duty claims, when that claim accrues, and the application of the continuous wrong doctrine, visit the “Blog” tile on our website and enter the search terms “breach of fiduciary duty,” “accrual,” “statute of limitations”, “continuing wrong”, or any other related search term in the “search” box. [2] The motion court dismissed the fraud claim because plaintiffs did not oppose the motion with respect to that claim. Slip Op. at *3, citing Saidin v Negron, 136 A.D.3d 458 (1st Dept. 2016). [3] Slip Op. at *4. [4] Id. [5] Id. (citation to record omitted). [6] Id. at *5, citing CWCapital Cobalt VR Ltd. v. CWCapital Investments LLC, 195 A.D.3d 12, 18 (1st Dept. 2021) (citing Matter of Yin Shin Leung Charitable Found. v. Seng, 177 A.D.3d 463 (1st Dept. 2019)); Ganzi v. Ganzi, 183 A.D.3d 433, 434-35 (1st Dept. 2020). [7] Id., citing Palmeri v. Wilkie Farr & Gallagher LLP, 156 A.D.3d 564, 568 (1st Dept. 2017). [8] IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 139 (2009) (citations omitted). [9] Id.; see also VA Mgt., LP v. Estate of Valvani, 192 A.D.3d 615, 615 (1st Dept. 2021). [10] Id. [11] Id. [12] Lebedev v. Blavatnik, 144 A.D.3d 24, 28 (1st Dept. 2016) (internal quotation marks and citations omitted). [13] Id. [14] Id. Importantly, “[t]o determine timeliness, [the court] consider[s] whether [the] 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. [15] Matter of George, 194 A.D.3d 1290, 1293 (3d Dept. 2021) (internal quotation marks, brackets, and citation omitted). [16] Matter of Steinberg, 183 A.D.3d 1067, 1071 (3d Dept. 2020) (internal quotation marks and citations omitted). [17] 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. [18] Ganzi, supra.

By: Jeffrey M. Haber In Cortlandt St. Recovery Corp. v. TPG Capital Mgt., L.P., 2026 N.Y. Slip Op. 02775 (1st Dept. May 5, 2026), the Appellate Division, First Department, examined the limits of fraud claims arising from complex private‑equity financing transactions. Cortlandt alleged that two private equity firms used dividend recapitalizations and misleading offering materials to extract value from an acquisition through debt‑funded equity redemptions, ultimately rendering the issuer insolvent. Although the claims centered on alleged misrepresentations in an offering memorandum governing subordinated notes, the First Department dismissed the action in its entirety, holding that the written disclosures, read as a whole, negated any claim of actionable misrepresentation. Cortlandt St. Recovery Corp. v. TPG Capital Mgt., L.P.[1] Cortlandt alleged that in 2005, private equity firms TPG Capital Mgt., L.P (“TPG”) and Apax Partners, L.P. (“Apax”) formed a consortium to acquire TIM Hellas, a Greek telecommunications company that was profitable and nearly debt‑free at the time. To accomplish this acquisition, the consortium created a complex structure of interrelated Luxembourg entities collectively referred to as the Hellas entities, including Hellas II. These entities served as acquisition vehicles and issued preferred equity certificates (“PECs”) and convertible preferred equity certificates (“CPECs”) to their shareholders, including the defendants. Following the acquisition, Cortlandt asserted that the consortium pursued a strategy designed to extract value from the Hellas entities through aggressive leverage, independent of the company’s financial performance. According to Cortlandt, defendants employed dividend recapitalizations – transactions in which new debt is issued not to fund operations or repay existing obligations, but to generate cash distributions to equity holders. By 2006, this approach allegedly left TIM Hellas and the affiliated entities burdened with substantial debt and no longer profitable. In April 2006, Hellas Finance issued €500 million in notes, which Cortlandt described as an initial recapitalization. The proceeds were used to redeem outstanding PECs and CPECs, resulting in approximately €376 million being paid directly to defendants. Afterward, the consortium allegedly sought to sell TIM Hellas but was unable to find a buyer. Faced with these failed efforts, defendants allegedly pursued a second and more extensive recapitalization. On December 21, 2006, Hellas II issued €960 million in euro‑denominated subordinated notes and $275 million in U.S. dollar‑denominated subordinated notes pursuant to an indenture and offering memorandum (“OM”) governed by New York law. On the same day, Hellas I issued more than €200 million in payment‑in‑kind (“PIK”) notes. Collectively, the Hellas entities borrowed approximately €1.5 billion. Clearstream International S.A. (“Clearstream”) and Euroclear Bank SA/NV (“Euroclear”) were the registered holders of the subordinated notes. Cortlandt alleged that the OM contained materially false and misleading statements intended to deceive purchasers of the subordinated notes. Specifically, the OM allegedly represented that the proceeds would be used to repay subordinated shareholder loans and that the subordinated notes would be secured by PECs and CPECs issued by Hellas II. According to Cortlandt, defendants knew these statements were false because they allegedly intended from the outset to use the proceeds to redeem CPECs – equity instruments rather than debt – and to do so immediately after the notes were issued. Cortlandt further contended that the OM stated that CPECs would not be redeemed until more senior debt, including the subordinated notes, had been paid, and that the CPEC terms themselves prohibited redemption if doing so would render Hellas II insolvent. Despite these restrictions, Cortlandt claimed the proceeds of the subordinated and PIK notes were used to redeem CPECs held largely by defendants. Approximately €1.185 billion was allegedly paid to the consortium, of which roughly €946 million was characterized as a dividend. Cortlandt alleged that internal consortium communications demonstrated the transaction was structured to distribute impermissible dividends and that no independent valuation of the CPECs was conducted. According to Cortlandt, the dividend recapitalization effectively caused Hellas II’s insolvency, leaving it unable to service its debt obligations. Hellas II allegedly defaulted on the subordinated notes on October 15, 2009. Cortlandt brought the action as assignee of the beneficial owners of interests in the subordinated notes. Although Cortlandt did not itself own the notes, it claimed valid assignments transferring all rights to pursue related claims. Cortlandt further alleged that its assignors were authorized by registered holders such as Clearstream and Euroclear to bring suit, relying on Euroclear’s operating rules and documentation, including Statements of Account and Certificates of Holding. The action, originally filed in 2011 and recommenced in 2017, asserted claims for fraud and breach of contract arising from alleged misrepresentations and violations of the indenture and offering documents. Defendants moved to dismiss. The motion court granted defendants’ motions to dismiss the amended complaint in its entirety as against defendants David Bonderman and James Coulter and as against all defendants to the extent plaintiff’s claims for fraud and breach of contract sought to recover damages related to the sub notes registered to Clearstream, but denied the motions as to all defendants except Bonderman and Coulter insofar as the claims related to the sub notes registered to Euroclear.[2] On appeal, the Appellate Division, First Department modified the motion court’s order to grant defendants’ motions to dismiss in their entirety. The Court held that “[p]laintiff failed to state a valid fraud claim because it did not allege any actionable misrepresentations.[3] The Court noted that plaintiff alleged that the OM misrepresented that the proceeds of the sub notes would be used to “redeem deeply subordinated shareholder loans from the Sponsors” when defendants always intended to use them to redeem the CPECs.[4] However, the Court found that the terms of the OM addressed the very misrepresentation of which plaintiff complained.[5] In this regard, said the Court, the OM “use[d] the terms ‘deeply subordinated shareholder loans’ and ‘CPECs’ interchangeably — referring to ‘deeply subordinated shareholder loans in the form of convertible preferred equity certificates (‘CPECs’), which are treated as equity in [the] financial statements’ and explain[ed] that ‘[t]o facilitate the redemption of the deeply subordinated shareholder loans from the Sponsors as described in ‘Use of proceeds,’ certain CPECs [would] be valued in a certain way and then redeemed.”[6] The Court also found that plaintiff’s allegation that the OM misrepresented that “the Sub Notes would be secured by the CPECs and [the PECs] issued by [Hellas Telecommunications (Luxembourg) II, S.C.A.]” because defendants “always intended to redeem the CPECs and PECs in order to pay the proceeds of the Sub Notes to themselves” was not supported by the terms of the OM.[7] The Court explained that “the OM did not suggest that the Sub Notes would be secured by all of the CPECs and PECs then in existence — only by a certain percentage of the total CPECs and PECs ‘outstanding at any time.’”[8] Instead, said the Court, “[t]he OM also made clear that at least some CPECs would be redeemed in connection with the subject transaction.”[9] The Court rejected plaintiff’s argument that the OM was misleading because it provided only one option for redemption: “Once the Company does not have any other debt liability to pay or to provide for, with priority to the CPECs, it has the option to redeem CPECs at the greater of par value and market value reduced by 0.5%.”[10] In doing so, the Court reasoned that “[t]his language did not, however, suggest that this was the only circumstance in which CPECs could be redeemed but rather described the redemption parameters in such circumstance.”[11] Takeaway Cortlandt reinforces that fraud claims based on written offering materials rise or fall on the text of those documents as a whole, not on isolated phrases taken out of context. Where an offering memorandum expressly discloses the economic substance of a transaction, a plaintiff cannot plausibly plead misrepresentations by recharacterizing disclosed information as something else or by ignoring explanatory cross‑references within the document. The Court emphasized that sophisticated investors are charged with reading offering documents carefully and holistically. When, as in Cortlandt, an offering memorandum expressly explains that “deeply subordinated shareholder loans” take the form of convertible preferred equity treated as equity in financial statements, allegations that the issuer misrepresented its intended use of proceeds are undermined by the very document on which the plaintiff relies. The ruling also highlights that allegations that a defendant secretly intended to act inconsistently with the offering documents are insufficient where the documents themselves anticipate, describe, or permit the challenged conduct. In Cortlandt, disclosure that some equity would be redeemed, even if substantial, defeated claims premised on the notion that any redemption was concealed or prohibited. Finally, the Court underscored that security representations must be read precisely. Statements that debt will be secured by a percentage of equity outstanding “at any time” do not guarantee that all existing equity will remain in place. A plaintiff cannot transform partial, conditional security disclosures into absolute promises of collateral maintenance. __________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice. Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions and not on matters handled by the firm. ___________________________________ [1] The facts of the case come from the motion court’s decision. [2] The sub notes refer to the Subordinated Floating Rate Notes due 2015. [3] Slip Op. at *1, citing Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559 (2009). [4] Id. [5] Id. [6] Id. [7] Id. [8] Id. [9] Id. [10] Id. [11] Id.

By: Jeffrey M. Haber In Wimbish v. Crema-Samalya, 2026 N.Y. Slip Op. 02691 (2d Dept. Apr. 29, 2026), the Appellate Division, Second Department, underscored the limits of fraud and consumer protection claims. Reversing a Kings County Supreme Court order, the Court granted dismissal of claims against an insurance adjuster accused of steering a property owner toward a restoration contractor whose work later proved deficient. As discussed below, the ruling serves as a reminder that conclusory allegations, even when bolstered by informal communications, such as text messages, will not substitute for well-pleaded facts showing materially misleading conduct or a specific misrepresentation. Wimbish v. Crema-Samalya[1] Plaintiff alleged that on or about December 29, 2017, a fire occurred on his property in Brooklyn, New York (the “Premises”). Several days later, Plaintiff spoke to defendant, Joan Crema-Samalya (“Crema-Samalya”), an adjuster employed by the insurance company, Mountain Valley Indemnity Company (“Mountain Valley”). Crema-Samalya allegedly recommended defendant Five Boro Fire Restoration, Inc.(“FBFR”) to Plaintiff. Thereafter, plaintiff entered into a contractual agreement with FBFR to restore the Premises. Mountain Valley made several payments to FBFR in order to complete the restoration at the Premises. Plaintiff alleged that “after inspecting the work performed by [FBFR] with a licensed contractor, it was determined that all the work was performed in an inferior manner with inferior material, requiring removal and replacement of all defects” and that “the work was not performed to New York City building Codes.”[2] Plaintiff maintained that “[b]ut for the inducement of the insurance adjuster Joan Crema-Samalya, [FBFR] would not have been retained by Plaintiff.” As a result, Plaintiff alleged he suffered damages exceeding $530,971.46 as a result of defendants’ acts. Plaintiff commenced the action against Crema-Samalya, among others, alleging causes of action against her to recover damages for violation of General Business Law § 349 and fraud. Prior to serving an answer, Crema-Samalya moved pursuant to CPLR 3211(a)(7) to dismiss the complaint as against her for failure to state a cause of action. In opposition, plaintiff submitted a sworn affirmation and text messages between himself and Crema-Samalya. By order dated April 11, 2024, the motion court denied the motion without explanation. Defendant appealed. The Second Department reversed. To state a claim under General Business Law (“GBL”) § 349, a plaintiff must establish that the defendant engaged in (1) consumer-oriented conduct; (2) that is misleading in a material way; and (3) the plaintiff suffered injury as a result of the allegedly deceptive act.[3] For purposes of GBL § 349, “deceptive acts and practices, whether representations or omissions, [are] limited to those likely to mislead a reasonable consumer acting reasonably under the circumstances.”[4] “[T]he statute is limited in its application to those acts or practices which undermine a consumer’s ability to evaluate his or her market options and to make a free and intelligent choice.”[5] The Court held that “plaintiff failed to identify and allege any conduct by Crema-Samalya that was materially misleading.”[6] The Court explained that “plaintiff merely alleged in conclusory fashion that Crema-Samalya provided ‘misleading information’ so as to induce the plaintiff (and other insureds) to hire FBFR.”[7] The Court rejected plaintiff’s contention that a reasonable consumer acting reasonably under the circumstances would have interpreted Crema-Samalya’s text message regarding expenses to be submitted for payment by the insurance company as indicating that Crema-Samalya had verified that FBFR applied for and received the proper permits for the job or that she was acting as a manager of FBFR’s performance.[8] Under New York law, to plead a cause of action for fraud, a plaintiff must allege that the defendant made a material misrepresentation of fact, knew it was false, intended to induce reliance, and that the plaintiff justifiably relied on it to their detriment.[9] Furthermore, CPLR 3016(b) imposes a heightened pleading standard, requiring that fraud claims be stated with particularity.[10] The Court held that Plaintiff failed to state a claim for fraud.[11] The Court explained that “the complaint [did] not provide any detail, but merely state[d] the elements of a cause of action sounding in fraud in conclusory fashion.”[12] The Court noted that the text messages in plaintiff’s affirmation, on which plaintiff relied, “[did] not identify any particular statement therein that would constitute a misrepresentation of fact.”[13] Takeaway Wimbish reinforces the proposition that not every act gives rise to fraud or consumer‑protection liability. Where the defendant’s role is limited, such as making a referral or facilitating communications with another party, liability will not attach absent well‑pleaded facts showing materially misleading conduct or a specific misrepresentation of fact. Generalized assertions that a defendant “induced” another to hire a co-defendant, without identifying what was said, why it was misleading, and how a reasonable consumer would have been deceived, are insufficient to state a claim under GBL § 349. Wimbish also highlights the importance of pleading fraud with particularity. Courts will not allow plaintiffs to rely on conclusory recitations of the elements of fraud or to transform informal communications, such as text messages addressing payment logistics, into actionable misrepresentations. CPLR 3016(b) requires particularity, and where a plaintiff cannot point to a concrete false statement or omission, dismissal is appropriate at the pleading stage. __________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice. Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions and not on matters handled by the firm. ___________________________________ [1] The factual discussion is based on the decision of the Second Department and the briefing on appeal. [2] The contract provided that “permits will be obtained, workmen’s compensation insurance maintained and any housing and all building violations will be dismissed.” FBFR also signed a Contractor’s Waiver of Lien, which provided “I am duly licensed under applicable laws and regulations” and “…will comply with applicable codes…” [3] City of New York v. Smokes-Spirits.Com, Inc., 12 N.Y.3d 616, 621 (2009); Koch v. Acker, Merrall & Condit Co., 18 N.Y.3d 940, 941 (2012); MVB Collision, Inc. v. Allstate Ins. Co., 129 A.D. 3d 1041, 1042 (2d Dept. 2015); Andre Strishak & Assoc. v. Hewlett Packard Co., 300 A.D.2d 608, 609 (2d Dept. 2002). [4] Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 26 (1995). [5] North State Autobahn, Inc. v. Progressive Ins. Group Co., 102 A.D.3d 5, 13 (2d Dept. 2012). [6] Slip Op. at *1. [7] Id., citing Keshin v. Montauk Homes, LLC, 162 A.D.3d 758, 760 (2d Dept. 2018). [8] Id. [9] See, e.g., Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 558 (2009). [10] Atlasman v. Korol, 238 A.D.3d 826, 829 (2d Dept. May 14, 2025). [11] Slip Op. at *1. [12] Id., citing Pare v. Aalbue, 222 A.D.3d 769, 775 (2d Dept. 2023). [13] Id., citing K. M. v. Ursuline Sch. of New Rochelle, 241 A.D.3d 673, 676 (2d Dept. 2023); Ikezi v. 82nd St. Acads., 221 A.D.3d 986, 988 (2d Dept. 2023).

By: Jonathan H. Freiberger Regular readers of this BLOG know that we frequently write about issues affecting title to real property -- such as mortgage foreclosure, specific performance of real estate transactions and quiet title actions. However, until today, we have never written about CPLR 322(a), which provides that: Where the defendant in an action affecting real property has not been served with evidence of the authority of the plaintiff's attorney to begin the action, he may move at any time before answering for an order directing the production of such evidence. Any writing by the plaintiff or his agent requesting the attorney to begin the action or ratifying his conduct of the action on behalf of the plaintiff is prima facie evidence of the attorney's authority. Thus, CPLR 322(a) permits a defendant in an action affecting title to real property to demand proof that the plaintiff’s counsel was authorized to commence the action. In Bank of New York Mellon Trust Co., N.A. v. Berokhim, 231 A.D.3d 916 (2d Dep’t 2024), the plaintiff commenced an action to quiet title to real property and the defendant moved, pursuant to CPLR 322(a), to compel the production of written evidence of counsel’s authority to prosecute the action. The defendant appealed from the denial of the motion. The Second Department affirmed, holding that “plaintiff's counsel sufficiently established that his law firm was authorized to prosecute this action by submitting a copy of a letter from the plaintiff's servicing agent indicating that the law firm had such authority.” Bank of New York, 231 A.D.3d at 917 (citation omitted). The Second Department came to the same conclusion on similar evidence in Chase Manhattan Bank v. Beckerman, 271 A.D.2d 392 (2000). In Wilmington Trust, N.A. v. Hilton, 81 Misc. 3d 1225(A) (Sup. Ct. Suffolk Co. October 31, 2023), the court granted the defendant’s motion under CPLR 3211(a) and directed the plaintiff to produce certain information. Wilmington was a mortgage foreclosure action. After being served with process, the defendant, informally, demanded proof of the authority of plaintiff’s counsel to commence the action. According to the court: Plaintiff's response [to the defendant’s request] was an affidavit to which Planet Home Lending, LLC (Planet) swore by having a Planet senior vice president sign the affidavit. According to the signature block, Planet's execution and acknowledgement of the affidavit was in the capacity of agent for the named plaintiff in this action. The affidavit includes a limited power of attorney that empowers Planet, as attorney-in-fact for plaintiff, to cause the commencement of foreclosure litigation and to execute documents like the affidavit which is an integral component of the expressly delegated power from plaintiff as principal to Planet as agent to pursue, prosecute, and defend foreclosure actions. The affidavit contains proof that plaintiff directly or indirectly engaged plaintiff's counsel to bring this specific foreclosure action. Wilmington, 81 Misc. 3d at 1-2 (record references omitted). Not satisfied with the response of the plaintiff’s counsel, the defendant moved pursuant to CPLR 322(a) for an “order dismissing the action or directing the production of such evidence,” “claiming that because the affidavit was not accompanied by the agreement to which certain provisions of the power of attorney refer, the affidavit is, in effect, worthless”. Id. The Wilmington court noted that while CPLR 322(a) does not expressly authorize dismissal, it need not reach that issue because “in this action, if plaintiff did not comply with defendant's CPLR 322 demand, the proper remedy would be an order to compel compliance with the prospect of a contempt remedy looming for failure to comply with the order compelling compliance.” Id. at *2. In granting the defendant’s motion, the Wilmington court stated: The issue is how much proof is enough? Here, because the limited power of attorney is subject to the provisions of an agreement that plaintiff did not disclose, plaintiff has not furnished adequate proof. Had the principal itself signed a letter setting forth that the relevant trust "authorized [such and so counsel] to commence a mortgage foreclosure action against [defendants], and the attorneys did commence such an action under index number ######-#### (Suffolk County Supreme Court)" then plaintiff would not need to make further disclosure because the writing came from the principal. Here, the writing is from the agent, so more is required. * * * Therefore, here, defendant is entitled to have produced to it the entire pooling and servicing agreement to which the limited power of attorney refers, thereby curing the problem with the already disclosed writing, namely that nothing from a source other than agents exists. Id. Against this backdrop, we discuss Deutsche Bank Nat. Trust Co. v. McElroy, decided by the Second Department on April 22, 2026. Deutsche Bank is a mortgage foreclosure action that the defendant moved to dismiss pursuant to, inter alia, CPLR 322(a). In opposing the motion, the plaintiff: submitted an affidavit of … an assistant vice president [the “AVP’] of Specialized Loan Servicing, LLC (hereinafter SLS), its servicer and attorney-in-fact, along with a limited power of attorney appointing SLS its attorney-in-fact with respect to certain "enumerated transactions," including "[t]he full enforcement and preservation of the [plaintiff's] interests in [mortgage loans for which the plaintiff was acting as Trustee] . . . by way of . . . foreclosure . . . or the completion of judicial or non-judicial foreclosure." [The AVP] averred in his affidavit, among other things, that SLS retained [the plaintiff’s law firm] as counsel "for the purpose of commencing and representing [the plaintiff] throughout this action" and that [the plaintiff’s law firm] "had the authority to begin this action on behalf of Plaintiff." On the defendant’s appeal from the denial of his motion, the Second Department affirmed and stated: Here, the plaintiff sufficiently established that [the plaintiff’s law firm] was authorized to commence this action by submitting [the AVP]'s affidavit indicating that [the plaintiff’s law firm] had such authority, accompanied by a power of attorney authorizing the plaintiff's servicing agent to act on the plaintiff's behalf. [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.

By: Jeffrey M. Haber Letters of credit are designed to reduce risk in international trade by reallocating who bears the risk of nonpayment, and when. Instead of relying solely on a buyer’s willingness or ability to pay, the seller relies on the issuing bank’s independent obligation. Once a bank issues a letter of credit, it commits to pay the seller so long as the seller presents documents that comply with the credit’s terms, regardless of disputes in the underlying sales contract. This structure is critical in cross‑border transactions, where sellers may have limited visibility into a buyer’s financial condition and limited practical recourse if payment fails. Different legal systems, currency controls, political risks, and enforcement challenges can make post‑delivery collection slow, expensive, or uncertain. A letter of credit addresses those risks by inserting into a regulated financial institution, typically subject to international banking rules and reputational constraints, between the buyer and the seller. Functionally, the letter of credit converts commercial risk into documentary risk. The seller does not need to prove that goods were accepted or that the buyer is solvent; it needs only to prove, through specified documents, that it performed as agreed. Once conforming documents are presented, the bank’s duty to pay is meant to be automatic. For sellers, this provides confidence to ship goods across oceans and borders before payment is received. For buyers, it allows them to source goods internationally without prepaying, while assuring the seller that payment is backed by a bank’s balance sheet. For banks, the system works because the obligation is documentary and limited; banks do not guarantee performance of the underlying transaction, only compliance with the credit’s terms. The reliability of this system depends on a core principle: independence. The letter of credit is independent of the underlying sales contract. If banks could routinely withhold payment based on disputes between buyers and sellers, letters of credit would lose their value as risk‑reducing instruments. Trade finance relies on the expectation that a compliant presentation will lead to payment. Ultimately, letters of credit are meant to remove uncertainty from cross‑border trade. They operate almost unnoticed when honored, but when payment fails, the resulting disputes underscore the central role certainty plays in global commerce. The dispute between Olam Global Agri Pte. Ltd. (“Olam”), a Singapore‑based global agribusiness involved in trading food, ingredients, feed, and fiber worldwide, and Social Islami Bank Limited (“SIB”), a commercial bank incorporated in Bangladesh,[1] shows how that system can break down, and how difficult enforcement can become when banking systems are in transition. Olam Global Agri Pte. Ltd. v. Social Islami Bank Ltd., 2026 N.Y. Slip Op. 31674(U) (Sup. Ct., N.Y. County Apr. 17, 2026).[2] Olam Global Agri Pte. Ltd. v. Social Islami Bank Ltd. In June 2024, SIB issued an irrevocable letter of credit in Olam’s favor for approximately $1.06 million. The letter of credit was issued to secure payment for two shipments of cotton sold by Olam to a Bangladeshi buyer. According to Olam, it performed as contemplated under the letter of credit. The cotton was shipped, delivered, and cleared through Bangladeshi customs. Olam presented all required documents under the letter of credit. No discrepancies were raised. No objections were made. Under the terms of the letter of credit, payment became due in mid‑July 2024. Olam maintained that payment was not made. As a result, from July 2024 forward, Olam demanded payment, sending reminders and formal demands via SWIFT messages and written correspondence. According to Olam, SIB did not claim the documents were deficient, did not assert any contractual defense, and did not explain why payment had not been made. By December 2025, Olam’s U.S. counsel issued formal demand letters to SIB’s principal office. Olam’s Bangladeshi counsel also sent demands to SIB, to the bank’s court‑appointed administrator, and to the Bangladesh central bank. More than $1.06 million remained unpaid. At or about the same time, Bangladesh’s banking sector entered a period of regulatory restructuring. In May 2025, the government enacted the Bank Resolution Ordinance, 2025, authorizing the central bank to oversee asset and liability transfers involving several banks, including SIB. The restructuring was not a bankruptcy. There was no stay of claims, no moratorium on lawsuits, and no bar to creditors seeking judgments. Instead, the process was administrative and supervisory, designed to stabilize the financial system while transferring assets and liabilities into newly formed banking entities. Although SIB is a Bangladeshi bank, it maintains correspondent (“Nostro”) accounts at international banks with branches in New York, including Standard Chartered Bank and Mashreqbank psc. These accounts are used for U.S.‑dollar settlements and, according to Olam, are SIB’s only known assets in the United States. Concerned that any judgment might be difficult to collect, especially in light of the restructuring of the banking system in Bangladesh, Olam filed suit in New York state court. The company alleged breach of the letter of credit and sought a pre‑judgment attachment, asking the motion court to freeze funds in SIB’s New York correspondent accounts while the case proceeded. Governing Standards To obtain or confirm a pre‑judgment order of attachment under New York law, a plaintiff must meet several statutory requirements. Under CPLR 6212(a), the plaintiff must submit affidavits or other written evidence showing that: a valid cause of action exists, the plaintiff is likely to succeed on the merits, at least one statutory ground for attachment under CPLR 6201 applies, and the amount sought exceeds any counterclaims known to the plaintiff. Relevant to the motion before the motion court are CPLR 6201(1) and CPLR 6201(3). CPLR 6201(1) permits attachment when “the defendant is a non-domiciliary residing without the state, or is a foreign corporation not qualified to do business in the state.” CPLR 6201(1) “serves two independent purposes: (1) obtaining jurisdiction over a nonresident; and (2) providing adequate security for a potential judgment against a nonresident where there is an identifiable risk that the defendant will not be able to satisfy any such judgment.”[3] Notably, “ ‘the mere fact that [the] defendant is a non-domiciliary residing without the State of New York is not sufficient ground for granting an attachment.’ ”[4] A plaintiff seeking a pre-judgment attachment under 6201(1) must “present evidence that the[] defendants would conceal or convert any of their assets were it not for an attachment order, or that they would be unlikely to satisfy the potential judgment.”[5] CPLR 6201(3) provides for an attachment where “the defendant, with intent to defraud his creditors or frustrate the enforcement of a judgment that might be rendered in plaintiff’s favor, has assigned, disposed of, encumbered or secreted property, or removed it from the state or is about to do any of these acts.” To satisfy CPLR 6201(3), the plaintiff must show that the defendant intended to defraud or frustrate the enforcement of any judgment against it.”[6] Factual allegations “raising a suspicion of an intent to defraud [are] not enough.”[7] “ ‘[F]raud is never presumed by a mere showing of the liquidation or disposal by a debtor of its business assets.’ ”[8] As discussed below, Olam sought a pre-judgment attachment order under CPLR 6201(1) and CPLR 6201(3). The motion court denied Olam’s application. The Motion Court’s Decision Addressing CPLR 6201(1), the motion court accepted that both parties were foreign entities and that neither entity was licensed to do business in New York.[9] But it found that Olam had not shown a concrete, identifiable risk that SIB would be unable or unwilling to satisfy a judgment. The motion court viewed the Bangladeshi restructuring as a government‑directed process, not evidence that SIB was hiding assets or acting with fraudulent intent.[10] The motion court found that plaintiff’s showing amounted to little more than speculation that defendant may “lack sufficient assets” to satisfy a potential judgment.[11] The motion court explained that “[t]here [was] no evidence that defendant [would] ‘choose to hide or otherwise dispose of [its] assets.’”[12] At most, concluded the motion court, plaintiff’s affidavits suggested that recovering assets may involve administrative or bureaucratic hurdles associated with “obtaining the assets as” converted funds, an insufficiency the First Department has squarely rejected.[13] As the motion court explained, attachment requires more than a showing that it would merely be “helpful.”[14] With respect to CPLR 6201(3), the motion court declined to issue a pre-judgment attachment, holding that plaintiff failed to “ ‘to show that defendant intended to defraud or frustrate the enforcement of any judgment against it.’ ”[15] The motion court found that “[p]laintiff’s submissions … [did] not raise even the suspicion of an intent to defraud.”[16] “Defendant’s failure to remit payment despite numerous demands and reminders [was] insufficient to show fraudulent intent,” explained the motion court.[17] Finally, the motion court had “concerns about whether plaintiff [could] establish quasi in rem jurisdiction over the defendant solely based on the ‘Nostro’ (correspondent) bank account(s) located in New York” – an issue that plaintiff did not address in its affidavits or memorandum of law.[18] The motion court found that plaintiff did not establish personal jurisdiction, finding that plaintiff contend only that “‘[j]urisdiction [was] proper . . . because Defendant [had] assets in Nostro [correspondent] bank accounts held by banks with branches in New York City.’”[19] The mere presence of correspondent bank accounts in New York, without a meaningful connection between those accounts and the underlying transaction, was not enough to justify freezing them, said the motion court.[20] As the motion court observed, New York was mentioned in the letter of credit only in a provision naming a branch of Standard Chartered Bank as the “Reimbursing Bank.”[21] Takeaway The motion court’s decision underscores a recurring principle of New York law: pre‑judgment attachment is an extraordinary remedy, not a collection shortcut, even when the defendant is a foreign bank and even when payment has not been made. At first glance, CPLR 6201(1) appears to offer a powerful tool. It permits attachment when a defendant is a non‑domiciliary or a foreign corporation not qualified to do business in New York. But Olam makes clear that foreign status alone is not enough. New York courts treat that statutory ground as necessary but not sufficient by itself. Attachment is justified only where there is a real, identifiable risk that the defendant will be unable or unwilling to satisfy a judgment absent court intervention. In practice, that means plaintiffs must do more than point to geography. The motion court emphasized that speculation does not meet the standard. Even where a defendant is undergoing a government‑supervised restructuring abroad, attachment will not issue unless there is evidence that the defendant is concealing assets, dissipating funds, or deliberately frustrating enforcement. Administrative complexity, bureaucratic delays, or uncertainty about how assets may ultimately be held do not substitute for proof of risk. As the Olam court observed, attachment cannot issue merely because it would be “helpful” or make eventual collection easier. Olam also reinforces the high bar under CPLR 6201(3). Allegations that a defendant failed to pay despite repeated demands may indicate a breach of contract, but, without more, do not demonstrate intent to defraud creditors or frustrate enforcement. Fraud is not presumed. Nor is intent inferred from silence, delay, or regulatory restructuring. Plaintiffs must show concrete conduct, demonstrating that the defendant is acting with the purpose of placing assets beyond the plaintiff’s reach. Absent such evidence, attachment is unavailable. Perhaps most significantly, the motion court highlighted a recurring personal jurisdiction pitfall in cross‑border finance cases: New York correspondent accounts are not a jurisdictional hook where the underlying dispute lacks meaningful New York contacts. Indeed, maintaining Nostro accounts in New York, even when they hold substantial funds, does not, by itself, create sufficient minimum contacts. Where those accounts bear no meaningful relationship to the underlying dispute, and where the transaction itself is foreign in all material respects, quasi in rem jurisdiction may fail altogether. In short, Olam reaffirms that pre‑judgment attachment is designed to prevent abusive asset flight, not to mitigate ordinary litigation risk. Plaintiffs seeking attachment must come with evidence, not assumptions; with facts, not suspicions. Where they cannot show intentional misconduct or a concrete enforcement risk, New York courts will decline to freeze assets. __________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice. Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions and not on matters handled by the firm. ___________________________________ [1] SIB is not licensed to do business in New York and has no physical presence in the state, but, like many foreign banks, it maintains U.S.‑dollar correspondent accounts at international banks with New York branches. [2] The discussion of the facts is taken from the motion court’s decision and Olam’s papers in support of its motion for pre-judgment attachment. [3] Sylmark Holdings Ltd. v Silicone Zone Intern. Ltd., 5 Misc 3d 285, 301 (Sup. Ct., N.Y. County 2004), citing Elton Leather Corp. v. First Gen. Resources Co., 138 A.D.2d 132 (1st Dept. 1988); Cargill, Inc. v. Sabine Trading & Shipping Co., 756 F.2d 224 (2d Cir. 1985); General Textile Print. & Processing Corp. v. Expromtorg Intl. Corp., 862 F. Supp. 1070, 1073 (S.D.N.Y. 1994) (plaintiffs must show that defendants’ financial position, or past or present conduct, poses a real risk to the enforcement of a future judgment). [4] VisionChina Media Inc. v. Shareholder Representative Services, LLC, 109 A.D.3d 49, 61-62 (1st Dept. 2013) (internal citations omitted). [5] Id. at 301; see also Johnson v. Papagianni, 2026 WL 588705 at *7 (S.D.N.Y. Mar. 3, 2026) (“where, as here, an attachment is sought pursuant to § 6201(1), plaintiffs also ‘must show that the attachment is needed for jurisdictional or security purposes.’”). [6] Mitchell v. Fid. Borrowing LLC, 34 A.D.3d 366, 366-67 (1st Dept. 2006). [7] Id., citing Rosenthal v. Rochester Button Co., Inc., 148 A.D.2d 375, 376 (1st Dept. 1989). [8] Mitchell, 34 A.D.3d at 367, quoting Rosenthal, 148 A.D.2d at 376. [9] Slip Op. at *2. [10] Slip Op. at *3. [11] Id., citing VisionChina Media, 109 A.D.3d at 61–62. [12] Id., quoting id. [13] Id., quoting id. [14] Id. at *4, quoting id. at 61, quoting Founders Ins. Co. Ltd. v. Everest Natl. Ins. Co., 41 A.D.3d 350, 351 (1st Dept. 2007). [15] Id., quoting Mitchell, 34 A.D.3d at 366-67. [16] Id. [17] Id. [18] Id. at *5. “Quasi in rem jurisdiction requires an analysis of whether the ‘minimum contacts’ are present. When assessing ‘minimum contacts,’ the Court must consider ‘the nature and quality of the defendants’ contacts with the State,’ which must be such as to ‘make it reasonable and just ... to require the defendant to litigate the claim in the particular forum.’ Further, ‘when the property serving as the jurisdictional basis [here, the corresponding bank accounts located in New York] have no relationship to the cause of action and there are no other ties among the defendant, the forum and the litigation, quasi-in-rem jurisdiction will be lacking.’ ” Chaar v. Arab Bank P.L.C., 220 A.D.3d 479, 480 (1st Dept. 2023], quoting Banco Ambrosiano v. Artoc Bank & Trust, 62 N.Y.2d 65, 72 (1984) (citations omitted)). [19] Id. [20] Id., quoting Chaar, 220 A.D.3d at 480, quoting Licci v. Lebanese Canadian Bank, 673 F.3d 50, 65 (2d Cir. 2012). [21] Id.

By: Jeffrey M. Haber Contracts are intended to bring certainty and clarity to commercial relationships, yet disputes often arise when written terms leave room for more than one reasonable interpretation. Under New York law, the question of ambiguity can determine whether a case is resolved on the face of the agreement or proceeds into litigation over extrinsic evidence and party intent. What one party views as a carefully drafted provision may, in hindsight, become the battleground for competing interpretations of the same words. New York courts take a text‑first approach to contracts, enforcing unambiguous language as written and declining to rewrite agreements under the guise of interpretation. But when contractual language is susceptible to multiple reasonable interpretations, the analysis shifts. Courts must decide whether ambiguity exists as a matter of law, and if so, whether outside evidence may be considered to determine the parties’ intent. In today’s article, we examine how New York courts apply these principles through two contrasting cases – one in which the court found contractual language to be ambiguous and permitted consideration of extrinsic evidence (Derkovitz v. Up State Tower Co., LLC, 2026 N.Y. Slip Op. 02562 (4th Dept. Apr. 24, 2026), and a second in which the court rejected claims of ambiguity and enforced the agreement as written (Cass v. Newell, 2026 N.Y. Slip Op. 02542 (4th Dept. Apr. 24, 2026). Together, these decisions illustrate how distinctions in wording, structure, and context can determine whether a dispute is resolved at the pleading stage or proceeds into discovery, underscoring why careful drafting remains the strongest defense against unintended interpretations. A Primer on Contract Interpretation “The elements of a cause of action for breach of contract are the existence of a contract, the plaintiff’s performance under the contract, the defendant's breach of that contract, and resulting damages.”[1] “It is well settled that ‘[t]he fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent.’”[2] Because the “best evidence of what the parties intend is what they say in their writing, . . . a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms.”[3] A contract is unambiguous if the language it uses has “a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion.”[4] “Thus, if the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract to reflect its personal notions of fairness and equity.”[5] The moving party has the burden of establishing that the contract is ambiguous, i.e., that “its construction of the [contract] is the only construction [that] can fairly be placed thereon.”[6] Derkovitz v. Up State Tower Co., LLC Plaintiffs entered into a lease agreement (“lease”) with defendant to permit defendant to place a cell tower (“Communications Facility”) on a designated portion of plaintiffs’ property (“Premises”). As relevant to the action, the lease provided that plaintiffs would pay “all real estate taxes and assessments on the Property on time” and that defendant would pay “all personal property taxes on the Communications Facility on time.” The lease defined “Property” by the metes and bounds of the real property owned by plaintiffs, while “Communications Facility” is defined as “a pole or tower, and . . . related equipment, cables, antennas, equipment shelters or cabinets and fencing and any other items [defendant] need[s] to successfully and securely use the Premises.” The lease provided that title to the Communications Facility would remain “personal to and be vested in [defendant]” and was described in the lease as defendant’s “personal property.” However, neither “real estate taxes and assessments” nor “personal property taxes” is defined in the lease. New York State does not impose personal property taxes. The central dispute in Derkovitz was whether, in agreeing to “pay all personal property taxes on the Communications Facility,” defendant agreed to pay the additional tax attributable to the Communications Facility or whether, in agreeing to pay “all real estate taxes and assessments on the Property,” plaintiffs agreed to pay that additional tax. The motion court denied plaintiffs’ motion for summary judgment on the complaint and granted defendant’s cross-motion for, inter alia, summary judgment dismissing the complaint. Plaintiffs appealed. The Appellate Division, Fourth Department, modified the order on the law by denying the cross-motion and reinstated the complaint. The Court held “that the lease provisions regarding the parties’ respective tax obligations [were] ambiguous as to which party [was] responsible for paying the additional tax attributable to the Communications Facility.”[7] The Court rejected defendant’s argument “that the only reasonable interpretation of the lease [was] that it impose[d] upon plaintiffs the responsibility for paying the additional tax related to the Communications Facility inasmuch as the plain language require[d] plaintiffs to pay real estate taxes and assessments, that defendant [was] obligated to pay only personal property taxes, and that there are no personal property taxes imposed in New York State.”[8] The Court concluded that plaintiffs “effectively contend[ed] that the only reasonable interpretation of the provision requiring defendant to pay personal property taxes [was] that defendant agreed to pay the additional tax attributable to the Communications Facility and that any other interpretation would render that requirement ‘meaningless or without force or effect.’”[9] Cass v. Newell Plaintiff commenced the action alleging, inter alia, the breach of an option agreement between him and one of the defendants (“defendant”). Defendants moved pursuant to CPLR 3211 (a) (1), (5), and (7) to dismiss the complaint and pursuant to CPLR 3212 for summary judgment dismissing the complaint. The motion court denied the motion to the extent that it sought dismissal of the first, second, and fourth causes of action. Defendants appealed from the order to the extent that it denied their motion. The Appellate Division, Fourth Department, reversed. Plaintiff and defendant each held a 50% interest in defendants, Chautauqua Lakeview, LLC and Lakeview Hotel, LLC (collectively, “LLCs”), which owned and operated a hotel. In January 2015, plaintiff assigned his interests in the LLCs to defendant. In February 2015, plaintiff and defendant entered into an option agreement. Pursuant to the agreement, plaintiff had “the exclusive right and option to purchase the” 50% interests in the LLCs that he had transferred to defendant. The agreement provided that the “option shall expire at midnight on December 31, 2020, or so long as [defendant] shall continue to own 100% of the interests in” the LLCs. The agreement further provided that, at the termination of the option, plaintiff “shall have the right to extend the option period for an additional period of five . . . years.” In November 2023, plaintiff notified defendant of his intent to exercise the option, and defendant responded through his counsel that the agreement was not enforceable. The Court “agree[d] with defendants that the fourth cause of action, alleging breach of contract, as well as the first and second causes of action, which the parties agree[d] depend[ed] on the breach of contract cause of action, must be dismissed pursuant to CPLR 3211 (a) (1).”[10] The Court found that the “the option agreement [was] not ambiguous,” and that defendants “did not breach it.”[11] The Court explained that plaintiff’s attempt to extend the agreement was untimely: “When plaintiff attempted to exercise the option in November 2023, it had already expired inasmuch as the December 31, 2020 deadline had passed, plaintiff never exercised his right to extend the option period, and defendant no longer owned 100% of the interests in the LLCs.”[12] The Court noted that since “plaintiff never sought to exercise the option before it expired at the end of 2020, it [was] immaterial that defendant had already transferred the assets of the LLCs and dissolved the LLCs prior to that time,” which “the option agreement did not prohibit defendant from” doing.[13] In fact, said the Court, “selling his interests in the LLCs …[was] specifically contemplated” by the agreement “inasmuch as it provided that the option would expire at the end of 2020 ‘or so long as’ defendant continued to own 100% of the interests in the LLCs.”[14] The Court “reject[ed] plaintiff’s contention—raised as an alternative ground for affirmance—that the option agreement was ambiguous and may be interpreted as giving him, in addition to the option, the ‘exclusive right’ to purchase back his interests in the LLCs, i.e., that he was the only person who could buy those interests.”[15] The Court explained that “[p]laintiff’s interpretation ‘rest[ed] on an impermissibly strain[ed reading] to find an ambiguity which otherwise might not be thought to exist.’”[16] Notably, the Court found that “under plaintiff’s interpretation [of the agreement], the option term and extension of term provisions would be meaningless.”[17] In fact, said the Court, “under plaintiff’s interpretation, the option agreement never expires, which would be absurd and commercially unreasonable.”[18] Takeaway Derkovitz and Cass reinforce the principle that contract ambiguity is not triggered by disagreement between the parties, but by the language of the agreement itself. Courts begin, and often end, with the text of the agreement. Where contract provisions, read in context, are reasonably susceptible to more than one interpretation, ambiguity exists, and extrinsic evidence may be considered to ascertain the parties’ intent. But where the language has a definite and precise meaning, courts will enforce the contract as written, even if one party later comes to regret the bargain it struck. The contrast between Derkovitz and Cass illustrates how even seemingly careful drafting can nevertheless result in disputes over the meaning of a contract. In Derkovitz, the lease attempted to allocate tax responsibility by distinguishing between “real estate taxes” and “personal property taxes,” yet failed to define either term, and did so in an environment where one category of tax did not exist. That disconnect created a genuine interpretive problem, making summary resolution inappropriate and opening the door to extrinsic evidence. Derkovitz underscores that an undefined term can introduce ambiguity even when the overall structure of the contract appears clear and unambiguous. By contrast, Cass demonstrates that not every disagreement over meaning gives rise to ambiguity. In Cass, plaintiff sought to convert an option agreement with clear temporal limits into an open‑ended exclusive purchase right. The Court rejected that effort, emphasizing that courts will not strain contractual language to create ambiguity, particularly where doing so would render other provisions meaningless or lead to commercially unreasonable results. Taken together, Derkovitz and Cass highlight two practical lessons. First, precision in drafting matters – the contract should say what the parties mean and mean what it says. Second, New York’s text‑first approach is both a sword and a shield: it protects parties from after‑the‑fact reinterpretation, but only if the drafting leaves no reasonable room for doubt. Careful attention to definitions, internal consistency, and real‑world application remains the most reliable way to ensure that a contract means what the parties intend. __________________________________ Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice. Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions and not on matters handled by the firm. ___________________________________ [1] Pearl St. Parking Assoc. LLC v. County of Erie, 207 A.D.3d 1029, 1031 (4th Dept. 2022) (internal quotation marks omitted). [2] Colella v. Colella, 129 A.D.3d 1650, 1651 (4th Dept. 2015), quoting Greenfield v. Philles Records, 98 N.Y.2d 562, 569 (2002). [3] Greenfield, 98 N.Y.2d at 569; see also MHR Capital Partners LP v. Presstek, Inc., 12 N.Y.3d 640, 645 (2009) (internal quotation marks omitted); Brad H. v. City of New York, 17 N.Y.3d 180, 185 (2011); W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162-163 (1990). [4] Breed v. Insurance Co. of N. Am., 46 N.Y.2d 351, 355 (1978), rearg. Denied, 46 N.Y.2d 940 (1979); see Selective Ins. Co. of Am. v. County of Rensselaer, 26 N.Y.3d 649, 655 (2016). [5] Greenfield v. Philles Records, 98 N.Y.2d 562, 569-570 (2002); see Selective Ins. Co. of Am., 26 N.Y.3d at 655. [6] Kowalak v. Keystone Med. Servs. of N.Y., P.C., 197 A.D.3d 893, 894 (4th Dept. 2021) (internal quotation marks omitted). [7] Derkovitz, Slip Op. at *1. [8] Id. [9] Id., citing Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit & Capital, Inc., 30 N.Y.3d 572, 581 (2017). [10] Cass, Slip Op. at *1. [11] Id. [12] Id., citing Olden Group, LLC v. 2890 Review Equity, LLC, 209 A.D.3d 748, 751-752 (2d Dept. 2022). [13] Id. [14] Id. [15] Id. [16] Id., quoting Uribe v. Merchants Bank of N.Y., 91 N.Y.2d 336, 341 (1998) (internal quotation marks omitted), and citing Albert Frassetto Enters. V. Hartford Fire Ins. Co., 144 A.D.3d 1556, 1558 (4th Dept. 2016). [17] Id., citing Two Guys from Harrison-N.Y. v. S.F.R. Realty Assoc., 63 N.Y.2d 396, 403 (1984). [18] Id., citing NCCMI, Inc. v. Bersin Props., LLC, 226 A.D.3d 88, 96 (1st Dept. 2024); Matter of El-Roh Realty Corp., 74 A.D.3d 1796, 1800 (4th Dept. 2010).