Decisions of Interest
You Win Some, You Lose Some
From time to time we will post decisions that make us look good. Lest we leave you with the impression that we have a perfect track record, we begrudgingly admit that every now and then, a Judge gets it wrong and rules against us. It is not likely that you will find those decisions below – unless we were successful on an appeal!
Slow Down, You Move Too Fast
A lawyer sues for unpaid legal fees. However, instead of suing the corporate client who hired him, he turns his attention to the family of companies (and some of its representatives) who were negotiating to buy the corporate client. Complicating matters, the lawyer relied on a procedure called “summary judgment in lieu of a complaint”, a mechanism whereby a plaintiff short circuits a traditional trial and obtains an accelerated judgment. This path is reserved for cases were the alleged debt is “an instrument for the payment of money only”, like a promissory note (an IOU) or a bounced check. The lawyer argued that the unpaid invoices fell into that category; the judge agreed, granting a judgment for the lawyer of almost $750,000.
The Appellate Division First Department reversed, sending the case back to the trial court for a conventional trial. The Appellate Division correctly held that “Plaintiff has failed to establish … that defendants, as are liable based on an account stated claim.”. The short decision is proof that good things can come in small packages: Ginsberg v. J&J et al
Ready, Willing and Able
A real estate broker sued our client, a corporation that owns a large warehouse, alleging that the broker earned a commission when it brought a buyer who was ‘ready, willing and able’ to purchase the property on terms that were acceptable to the owner, even though the parties never actually closed title (let alone signed a contract of sale). We moved to dismiss the complaint, arguing that the email exchanges between the lawyers for the buyer and seller – and the many proposed changes to the contract – constituted documentary evidence that there was never a meeting of the minds on the material terms. The trial court denied our motion, holding that whether the term sheet prepared by the broker constituted an agreement on the material contract terms was an open issue of fact to be resolved at trial. A unanimous Second Department reversed the trial court and dismissed the law suit. In its succinct decision, the Appellate Division noted that “the parties’ submissions, which included printouts of emails and drafts of contracts, established that the defendants and the prospective purchaser did not come to a meeting of the minds as to the essential terms of the sale and, thus, disproved the plaintiff’s allegation that it procured a buyer who was ready, willing, and able to purchase the property.”
This case was the subject of our inaugural Newsletter. Click on the link below to read the actual decision.
Making A Federal Case Out Of It
We are pleased to share a Federal Court decision dated September 26, 2014 which confirmed an arbitration victory for our clients. The members of a real estate development company couldn’t agree on how to divide the proceeds from the sale of the property it owned. Some of the members commenced a Federal law suit against our clients alleging all sorts of bad things. We settled the law suit by agreeing to arbitrate the disposition of the disputed funds. After five days of hearings, the arbitrator ruled in favor of our clients and awarded them nearly one million dollars. The other guys then brought a motion in the Federal District Court seeking to vacate the arbitration award; we filed a cross-motion seeking to confirm the award. In a twenty-five page decision, the Court thoroughly analyzed the factual and legal issues and held that there was no basis to vacate the arbitration award.
If I Had A Hammer
After a sixteen day bench trial, which included two site visits, the trial Judge ruled that our client – the contractor – was entitled to recover $243,350.96 against the homeowners on its claims for breach of contract and foreclosure of Mechanic’s Lien.
Trust Dies But Mistrust Blossoms
In this case, the plaintiff sued our clients, arguing that their purchase of her adult children’s house at a Sheriff’s sale to partially satisfy a money judgment was defective because she was the ‘equitable’ owner of the house by virtue of a “constructive trust”. The trial Judge denied our motion to dismiss, holding that plaintiff could indeed recover the house if she proved the allegations in the complaint. A unanimous Appellate Division disagreed with the Judge (and agreed with us), tossing out the complaint, thereby giving our clients clear title to the house. To read the decision, click on the link below:
You Got The Wrong Guy
Our client was sued because his business partner signed an agreement promising that our guy would pay a certain debt. We moved to dismiss the complaint, arguing that the partner lacked the authority to bind our client to pay the debt. The trial judge denied our motion and ordered discovery to proceed. Read how the Appellate Division reversed and agreed with us, holding that “[s]ince the moving defendants established that neither … were signatories to the letter agreement, [they] cannot be bound by it.”
Winning Isn’t Everything
On several occasions, we’ve won even though we may have technically lost. For example, in Jamaica Bay Riding Academy v Azulay, Civil Court, Kings County, the stable sued our client, seeking approximately $35,000 for four years of unpaid stable charges. Our defense: Our client was [only] liable for the missing the first month’s payment, after which the stable owner should have mitigated its damages by selling the horse at auction. Five days of trial later, the jury awarded the stable the sum of $1,710 (one month’s rent). We are very proud of that loss.
If I Could Turn Back Time
Our client obtained a money judgment of about $75,000 in 2002 against its tenants. Six years later, the tenants sought to set aside the judgment by arguing that (i) they hadn’t been properly served with the summons & complaint and (ii) didn’t owe the money in any event. The trial court vacated the judgment and ordered the case to proceed to trial; Miller Law Offices was retained to appeal the decision. A unanimous Appellate Division agreed with us that Defendants’ “bare and unsubstantiated denial of receipt of process was insufficient to rebut the presumption of proper service created by the affidavit of service”. Unfortunately, this win was a Pyrrhic victory since the judgment remains unpaid.
Shifting The Burden
After our clients’ house sustained significant damage from a burst pipe, they retained a public adjuster to negotiate the best possible settlement with their insurance company. Since the homeowners had already received an offer of $230,000 from the carrier, our clients agreed to pay the public adjuster 10% of any amount recovered above $230,000.
The adjuster obtained an additional settlement from the carrier of $6,359.50 (for a total of $236,359.50). Instead of sending my clients a bill for $635.95, he sued them to recover $23,635, which was 10% of the entire amount. We moved for summary judgment, arguing that the agreement was clear and unambiguous.
In granting our motion for summary judgment, the Judge noted that we made out a prima facie case for the relief; therefore, the burden shifted to the public adjuster to bring forth admissible facts to defeat our motion. The Judge then concluded that the public adjuster’s arguments were “self-serving”, “conclusory”, and “bald”. After the Judge dismissed the complaint, the parties settled our clients’ counterclaim for fraud.
More On Shifting The Burden
After our clients sold their home, they were sued by the (former) brokers. The brokers alleged that they were owed a commission since they introduced the buyer to the seller during the exclusive period of time covered in the broker’s agreement. After discovery was complete, we moved for summary judgment dismissing the complaint, arguing that there was no evidence to back up the brokers’ claim.
In his decision granting our motion, the Judge noted that once we made “an adequate prima facie show of entitlement to summary judgment”, the burden shifted to the brokers to present actual, admissible evidence to support their claims. Instead, the brokers made only “conclusory allegations” that were neither credible nor probative.
Lien On Me
Shilian v. All Sons Electric is the subject of our second Newsletter. Our client, an electrical contractor, retained us after it was served with legal papers by homeowners challenging the validity of its mechanic’s lien. We argued that the Judge had the inherent equitable power to back date the lien extension so that it was still enforceable. You can find the Judge’s wise opinion in the law books at Matter of Shilian v All Sons Elec. Corp., No. 601994/16, 51 Misc. 3d 1221(A), 41 N.Y.S.3d 452, 2016 N.Y. Slip Op. 50756(U), 2016 WL 2842752 (Sup Ct, May 09, 2016). For a quick peek, click on the link.
The American Rule
Many places in the world use the “English Rule”, where the prevailing party in a law suit is entitled to recover legal fees. America generally prefers the (aptly named) “American Rule”, wherein each party is responsible for his/her own legal fees unless there is a fee shifting statute or contract provision.
We represented the Plaintiff in Hildreth v Pirato, a case where each party sued the other for breach of an agreement that dissolved a business partnership. The agreement contained such a fee shifting provision that entitled the party who substantially prevailed to recover his attorneys’ fees. Pirato’s claims were dismissed by the court before the jury even deliberated. The jury then returned a verdict in favor of Hildreth, but in an amount far less than he sought. Hildreth claimed he won; Pirato claimed that he won by virtue of fact that the jury let him off easy. The court was left to decide which party, if any, substantially prevailed.
Judge Martha Left concluded that Hildreth indeed prevailed and was therefore entitled to recover much – but not all – of his legal fees. The decision is available in Westlaw’s official compendium at Hildreth v Pirato, No. 46072/2010, 2019 WL 830915, at *1, 2019 N.Y. Slip Op. 30359(U), 1 (N.Y. Sup Ct, Suffolk County Feb. 08, 2019). The non-lawyer reader can click on the link to read her well-reasoned opinion.
Pay No Attention To That Man Behind The Curtain
It is a bedrock principle of law that a corporation and the person who owns/operates it are not one and the same. This is true even for people like Bill Gates, Steve Jobs and Mark Zuckerberg, who are forever and inexorably tied to the companies they co-founded.
This legal concept that protects the owner of a corporation for the (alleged) wrongs done by and in the name of his business was on full display in Amador v. 854 Hermiker Street Corp. et al, Sup.Ct., Kings Co., 509663/2019.
The decision can be read HERE, and the our Newsletter on the decision can be viewed HERE. We are also pleased that the decision was also featured on the pages of New York Law Journal. Click on this link to open the page of the NYLJ.