Whether in employment agreements or business transactions, drafters often include certain clauses within these documents to protect their client if litigation arises (e.g., arbitration clauses, forum- selection clauses). However, when not clearly drafted, these clauses can lead to a battle over where the case may proceed. Recently, Manhattan Commercial Division Justice Joel M. Cohen handed
A confession of judgment has often been viewed as an important tool in settling a litigation or finalizing a transaction. In 2019, the New York State Legislature made some significant amendments to the Confession of Judgment law (CPLR § 3218), particularly eliminating the ability of creditors to file confessions of judgment against non-New York residents. As a result, the amended CPLR § 3218 provides that the confession must state the county in which “the defendant resided when it was executed,” and that the confession may only be filed in that county or, if the defendant moved to a different county within New York after signing the confession, “where the defendant resided at the time of filing.” In a recent decision, Kings County Commercial Division Justice Leon Ruchelsman addressed the damaging consequences of altering a confession of judgment to meet the “residency” requirements of CPLR § 3218.
Background
In Porges v Kleinman, plaintiff commenced an action stemming from a real estate investment opportunity in New Jersey. Specifically, plaintiff alleged that defendant pressured plaintiff to obtain a high cost loan to finance the purchase of the property while not allowing plaintiff to conduct any due diligence. Following the closing, plaintiff alleged that defendant pressured him into signing a promissory note and confession of judgment for $675,000.00. Approximately a year after the closing, defendant commenced a separate action, which was later consolidated with the present action, to enforce the confession of judgment due to plaintiff’s alleged failure to make any payments towards the promissory note.
During the course of the litigation, plaintiff brought a motion to vacate the confession of judgment, arguing that the confession of judgment (i) did not specify the county in which plaintiff resided; and (ii) was altered by striking out “County of New York” and writing in “County of Kings” in the caption. In opposition, defendant argued that the alteration of the caption was made at the express instruction of the Kings County Clerk’s office to allow for the confession of judgment to be filed in the appropriate venue.Continue Reading Altering a Confession of Judgment? Think Again!
As many practitioners know, it is common to dismiss a complaint for pleading defects that are readily apparent. However, another type of complaint has recently caused a significant amount of confusion in the Commercial Division – the third-party complaint. A recent decision from Bronx Commercial Division Justice Fidel E. Gomez confirms as much, dismissing a third-party complaint where the third-party plaintiffs failed to plead any claims against the third-party defendant that were “rooted in indemnity or contribution.”Continue Reading What’s Your Contribution? A Cautionary Tale Surrounding Third-Party Complaints
The old game of “hide-and-seek” brings many of us back to our childhood as one of our favorite ways to pass time during the summer. As commercial practitioners know, the concept of serving a summons and complaint in a case can be similar to playing an adult version of “hide-and-seek.” However, the days in which service of a summons and complaint can only be accomplished by physical delivery to a defendant seem outdated in our ever-growing technology reliant society. A recent decision from Manhattan Commercial Division Justice Robert R. Reed confirms as much, finding that service of process by email will suffice when dealing with an elusive litigant.Continue Reading Ready or Not, Here I Come: The Expansion of Substitute Service by Email
Commercial Division Rule 11-f establishes that a party may serve a notice or subpoena on any legal or commercial entity. Upon receiving this notice, the responding party must then designate and produce a corporate representative for the deposition, who is prepared to testify about information known or reasonably available to the entity concerning topics listed in the deposition notice. While a corporate representative deposition may serve as a great discovery tool, it may also serve as a dangerous trap. In a recent decision from the Manhattan Commercial Division, Justice Andrea Masley reminds us that parties who attempt to depose an additional corporate representative of the same entity are fighting a losing battle.Continue Reading Commercial Division Says “No Chance” on “Second Chance” Deposition of a Corporate Representative
It is no secret that employees are often the most likely people to misappropriate an employer’s confidential information or valuable trade secrets. In this particular situation, employers have many options at their disposal, including asserting a claim under the faithless-servant doctrine. In a recent decision from the Manhattan Commercial Division, Justice Melissa A. Crane
For commercial practitioners who happen to be fans of the TV series “The Office,” Dwight Schrute’s “Learn Your Rules, You Better Learn Your Rules” jingle perfectly describes the constant theme of practicing before the New York Commercial Division. Since its inception in 1993, the Commercial Division has garnered the reputation of placing a
As mortgage loan transactions continue to become increasingly complex, lenders often worry about the remedies they have if borrowers fail to live up to their obligations. In the event of a default, lenders have the choice under New York’s election of remedies statute (RPAPL § 1301 (1)) to either (i) enforce the note
Commercial transactions often involve parties from different states. When a dispute arises between diverse parties, the question of whether a party can obtain personal jurisdiction over a defendant becomes critical. This issue becomes even more apparent when the defendant is a foreign corporation that conducts business across the world. In a recent decision from the
In expensive lawsuits involving fraud claims, the temptation of a defendant to play hide and seek with its assets can be high. To prevent this result, 
CPLR § 6201 provides a mechanism (i.e., prejudgment attachment order) to preserve such assets. However, in a recent decision from the Suffolk County Commercial Division, Justice Elizabeth H.
