Sometimes a fraud is so undetectable that even an expert hired to assist in due diligence activities can be the victim of fraud. That’s what happened in VXI Lux Holdco, S.A.R.L. v. SIC Holdings, LLC , 2021 N.Y. Slip Op. 03294 (1st Dept. May 25, 2021) ( here ). VXI Lux arose from plaintiff’s $112 million purchase of Symbio S.A. (“Symbio”) from defendants. Plaintiff alleged that defendants, faced with a Chinese government audit, engaged in fraud to hide the fact that they had

As we have discussed in numerous posts, plaintiffs alleging breach of contract and fraud risk having the latter cause of action dismissed because it is duplicative of the former one. Plaintiffs can avoid this fate by alleging: a legal duty owed by the defendant that is separate and apart from the duty to perform under the contract or a duty that is collateral or extraneous to the contract; and damages that are different from the contract damages. In Principia Partners LLC v.

Frequently, individuals and entities (principals) act through agents to conduct business.  When litigation arises from such business, the third parties with whom the agent interacted, often seek to hold the agent liable for any damages that are suffered. The law is clear that “an agent for a disclosed principal will not be personally bound unless there is clear and explicit evidence of the agent’s intention to substitute or superadd his personal liability for, or to, that of

The proliferation of cyber-events and cyber-enabled crime represents a significant threat to consumers and the financial services system. See FinCEN, Advisory to Financial Institutions on Cyber-Events and Cyber-Enabled Crime (October 25, 2016) ( here) . With today’s technology, the accessibility of the U.S. financial system “make financial institutions attractive targets to traditional criminals, cybercriminals, terrorists, and state actors.” Id. These bad actors target th

Readers of this Blog know that to state a cause of action for fraudulent inducement, the complaint must allege “that the defendant intentionally made a material misrepresentation of fact in order to defraud or mislead the plaintiff, and that the plaintiff reasonably relied on the misrepresentation and suffered damages as a result.” Connaughton v. Chipotle Mexican Grill, Inc. , 135 A.D.3d 535, 537 (1st Dept. 2016), aff’d , 29 N.Y.3d 137 (2017) (citations omitted). Significantl

This Blog frequently highlights cases analyzing the viability of fraud claims when contract claims are also made.  See, e.g., < here =">here</a>"> , < here =">here</a>"> , < here =">here</a>"> , < here =">here</a>"> , < here =">here</a>"> , < here =">here</a>"> .  In Michael Davis Construction, Inc. v. 129 Parsonage Lane, LLC , decided on May 12, 2021, the Second Department dismissed defendant’s negligent construction counterclaim as duplicative of its breach of contract coun

Pursuant to CPLR § 3211(a)(5), “a party may move for judgment dismissing one or more causes of action asserted against him on the ground that the cause of action may not be maintained” because of collateral estoppel or res judicata.  Under the doctrine of res judicata , a party may not litigate a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter. The doctrine applies not only to claims actually litigated

Business relationships come in all forms. People can be shareholders of a corporation, joint venturers and partners.  Sometimes, as in Capizzi v. Brown Chiari LLP , 2021 N.Y. Slip Op. 02956 (4th Dept. May 7, 2021) ( here ), a dispute arises among the parties to a business relationship concerning the existence of the relationship itself. When that happens, courts will, as an initial matter, examine the writings between the parties to determine the existence of the relationship

Many disciplinary proceedings involving lawyers relate to the mishandling of escrow funds and/or escrow accounts.  Unfortunately, many disciplinary proceedings relating to escrow accounts result from intentional conduct on the lawyer’s part.  However, mere inadvertence or inattention to escrow accounts could be problematic for attorneys as well.   Therefore, it is important for lawyers to be familiar with all rules related to maintaining escrow accounts and holding escrow fun