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Freiberger Today’s BLOG deals with the “Relation-Back Doctrine” (the “Doctrine”)[1], which, inter alia The Doctrine was codified by the CPLR. See, e.g., CPLR 203(b), (c), (e) and (f). As explained by the Court of Appeals, the Doctrine “enables a plaintiff to correct a pleading error by Under the Doctrine, claims against a later added party would relate back to the commencement date of A “more relaxed” standard is recognized in the application of the Doctrine when a party seeks to add

By:  Jeffrey M. Haber Last April, this Blog wrote about Sodhi v. IAC/InterActiveCorp , 2021 N.Y. Slip Op. 31220(U) (Sup. Ct., N.Y. County Apr. 8, 2021) ( here ), an action to recover money claimed to be improperly withheld by IAC/Interacticecorp (“IAC”). The primary issue in the Sodhi was whether the releases in a settlement letter covered the claims asserted in the action. The motion court held that the releases were broad and covered plaintiffs’ claim to the money alleged to be wrongfully withheld by IAC. Plaintiff appealed. The Appellate Division, First Department, unanimously affirmed. Background: A Refresher    Plaintiffs are former employees of Hatch Labs, Inc. (“Hatch”), a subsidiary of IAC. Hatch was a startup incubator company that developed applications for mobile phones. Among other applications, Hatch launched Tinder, the popular mobile dating application, in 2012. At the time they were hired, plaintiffs were granted so-called phantom equity units in Hatch (the “Units”). The Units represented the right to participate in Hatch’s “upside” through the financial equivalent of a non-ownership stock grant. In 2014, Plaintiffs cashed their Units, with each receiving $166,566.42. In accepting their payout, each plaintiff signed a settlement letter agreeing to the value of the Units, the number of vested Units to be settled, and the aggregate purchase price that IAC was to pay as consideration for settling their vested Units. The settlement letter contained a broad release in favor of IAC (the “Releases”), in which Plaintiffs “release and forever discharge IAC . . . from any and all causes of actions, suits, claims, charges, complaints, promises and contracts which may now have, or hereafter can, shall or may have against IAC … with respect to interest in the Units.…” Approximately six years after receiving the payouts for their Units, plaintiffs commenced an action against IAC, claiming that IAC grossly misrepresented the value of the Units they held in defendant’s subsidiary. The motion court dismissed plaintiffs’ claims because they were “covered by the expansive language of the subject releases they signed.” In doing so, the Court rejected plaintiff’s “narrow interpretation of the scope of releases”.  The motion court also rejected, as a matter of law, plaintiffs’ alternative argument that the Releases should be set aside as fraudulently induced . The Court found that plaintiffs failed to allege a fraud “separate from that which was the subject of the releases they signed, whether known or unknown to the plaintiffs at the time.”  The First Department’s Decision As noted, the First Department unanimously affirmed. The Court found, like the motion court, that the Releases were broad and covered the claims plaintiffs asserted in the action. As such, the Court held that the Releases “bar plaintiffs’ claims for breach of contract, breach of the implied covenant, and fraud arising from the alleged misrepresentation of the value of the units.” 1 The Court also rejected plaintiffs’ argument that the Releases should be invalidated because plaintiffs “were fraudulently induced to enter into them”. 2 The Court found that “the alleged misrepresentations made to the senior participant regarding the units’ value did not constitute a ‘separate fraud’ from the subject of the release.” 3 4> 4>  Takeaway A “release is … a species of contract” that “is governed by the same principles of law applicable to other contracts.” 5 Therefore, in the absence of duress, illegality, fraud, or mutual mistake, a release will not be set aside. 6 In Sodhi , plaintiffs broadly released all claims they had against defendant. The release language was expansive and released “any and all claims” whether “known or unknown” “against IAC and and their respective directors, officers and employees with respect to interest in the Units….” Such language was broad enough to cover their claims for non-payment. In addition to the broad release language, plaintiffs could not demonstrate a fraud separate from the claim for breach of the Equity Incentive Plan. As noted by the Court, Plaintiffs could not allege a breach of any duty collateral to or independent of the parties’ agreement. 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. Footnotes Slip Op. at *1 (citation omitted). Id. Id. (citing Centro Empresarial Cempresa S.A. v América Móvil, S.A.B. de C.V. , 17 N.Y.3d 269, 277, 280 (2011). Dormitory Auth. v. Samson Constr. Co. , 30 N.Y.3d 704 (2018) (citation omitted). Schuman v. Gallet, Dreyer & Berkey, L.L.P. , 180 Misc. 2d 485, 487 (N.Y. Co. 1999), aff’d , 280 A.D.2d 310 (1st Dept. 2001). Toledo v. W. Farms Neighborhood Hous. Dev. Fund Co., Inc. , 34 A.D.3d 228, 229 (1st Dept. 2006).

Haber In April 2021, this Blog examined the doctrines of frustration of purpose and impossibility of “As an initial matter,” the Court held that the “doctrine of frustration of purpose inapplicable” to the case at hand. 1 Under the doctrine, the purpose of the contract must be so completely frustrated of the contract must be completely thwarted. 3 The Court concluded that the frustration of purpose doctrine undermining its argument that the purpose of the lease had been frustrated. 5 The Court also held that the doctrine

Haber Previously, this Blog examined the doctrines of frustration of purpose and impossibility of performance The doctrine of frustration of purpose is narrowly applied. 1 “In order to invoke the doctrine of frustration parties understood, without it, the transaction would have made little sense.” 2 In other words, the doctrine the frustration is substantial”. 3 There are many examples of situations in which one or both of the doctrines prevented performance was foreseeable and provision could have been made for its occurrence”. 6 The doctrine

Haber The doctrine of successor jurisdiction provides that when two entities merge, the successor entity Does the successor jurisdiction doctrine still apply? In Lelchook v. jurisdictional status,” but finding no such jurisdiction on “the facts of the subject case” (internal quotation marks

Haber The voluntary payment doctrine bars recovery of payments voluntarily made with full knowledge of and must communicate as much to the party receiving the payment. 5 Moreover, “the voluntary payment doctrine The first affirmative defense alleged that “the doctrine of accord and satisfaction bar plaintiffs’ Regarding the voluntary payment doctrine, the Court found that “the record present issues of fact as In Pinnacle , the record did not support application of the doctrine.

If, however, defendant used part of the space, it was required to “pay Rent pro rata for the usable part “In order to invoke the doctrine of frustration of purpose, the frustrated purpose must be so completely s business operations were insufficient to invoke the defense.” 9 The Court reasoned that the “ he doctrine plaintiff’s decision to seek the unpaid rent that defendant was contractually obligated to pay”. 11 “The doctrine relied on is directly related to the subject matter in litigation and the party seeking to invoke the doctrine

Haber The voluntary payment doctrine bars recovery of payments voluntarily made with full knowledge of must be in writing and (with some exceptions, as discussed below) made at the time of payment. 3 The doctrine From that discussion, the Court established the rule that forms the basis for the doctrine: “ f a party Agreeing with “both lower courts that the voluntary payment doctrine bar plaintiff’s complaint,” the Seward Park Hous. Corp. , 79 A.D.3d 425, 426 (1st Dept. 2010)). Id. Id. at *1-*2. Id.

Haber The faithless servant doctrine 1 provides that an employee who is faithless in the performance rule relatively narrowly. 3 Courts will usually hold an employee liable under the faithless servant doctrine The court held that “ egardless of whether the faithless servant doctrine applie with equal force to Any act that can give rise to a claim for breach of fiduciary duty will trigger the doctrine.  Footnotes This Blog examined the faithless servant doctrine  here ,  here  and  here .

numerous occasions, this Blog has examined the attorney-client privilege and the attorney work product doctrine confidential information to such persons does not defeat the privilege. 19 The Attorney Work Product Doctrine The attorney work product doctrine protects those materials prepared by an attorney, acting as an attorney As with the attorney client privilege, the burden of showing that material is protected under the doctrine The motion court held that these documents were privileged under the common interest doctrine. 26 Pursuant

Mar. 16, 2021) ( here ), a case involving breach of contract and the faithless servant doctrine.  The Faithless Servant Doctrine The faithless servant doctrine provides that an employee who is faithless Courts will usually hold an employee liable under the faithless servant doctrine only if the employee The motion court explained that “ he faithless-servant doctrine cannot be raised to recoup money that held that the doctrine did not apply to defendant.

Appellate Division, First Department affirmed the dismissal of a fraud claim because it was “duplicative of part The Court held that the “fraud claim duplicative of part of contract claim.”