A recent decision from Justice Fidel Gomez of the Bronx County Commercial Division, 1125 Morris Ave. Realty LLC v Title Issues Agency LLC, reminds us to closely review the language of general releases as New York courts continue to enforce such releases however broad in scope absent any fraud or wrongful conduct. Failure to do so may not only result in the waiver of certain future claims but also the imposition of sanctions.

Background

Plaintiff 1125 Morris Ave. Realty LLC (“Plaintiff”) obtained a mortgage loan (“2014 Mortgage”) on a property located at 1125 Morris Avenue, Bronx, New York (the “Property”). Defendants Kofman and Lowenthal represented the lender in the transaction. Kofman and Lowenthal transferred the loan proceeds to Defendant Title Company (the “Title Company”) to hold such proceeds in escrow until certain taxes and water/sewer charges for the Property had been settled with the City. Plaintiff thereafter obtained additional mortgages in order to pay off the 2014 Mortgage.

Following the payoff and satisfaction of the 2014 Mortgage, in July 2016 Plaintiff executed a broad general release discharging Defendants Kofman and Lowenthal as well as the Title Company (collectively the “Defendants”) from all “claims and demands whatsoever from the beginning of the world to the day of the date of this RELEASE.”

Plaintiff commenced an action against Defendants alleging, among other things, that Defendants committed fraud by failing to pay Plaintiff’s outstanding tax, water, and sewer charges for the Property, despite assuring Plaintiff that the loan proceeds would be used to satisfy the liens on the Property. Plaintiff further alleged that the Title Company only partially paid out the liens, and that only a portion of the loan proceeds were returned to Plaintiff.Continue Reading No Deceit, No Defeat: Commercial Division Enforces Broad General Release

Commercial Division Rule 11-b governs a party’s obligation to produce a log of documents withheld on the basis of privilege.  Enacted in 2014, Rule 11-b substantially streamlines the privilege log process by encouraging parties, “where appropriate,” to exchange categorical privilege logs, rather than document-by-document logs.  Rule 11-b instructs the parties to meet-and-confer over the issue

When the Court orders you to attend a Continuing Legal Education (CLE) class on civility “for the harm [you’ve] done to the [legal] profession”– not to mention issues you five-figures in sanctions – you know you’ve done something very, very wrong.  And that’s exactly what happened last month when Manhattan Commercial Division Justice Andrea Masley

Our parents taught us to think before we speak.  That lesson is especially important when words or conduct could cost you hundreds of thousands of dollars beyond what was previously agreed upon in a subcontract agreement.

In a recent case before Justice Andrea Masley, Corporate Electrical Technologies, Inc. v. Structure Tone, Inc. et al.