NY Business & Real Estate Litigator http://nybusinesslitigator.com the martial art of commercial litigation - for clients, lawyers & professionals Sun, 11 Dec 2016 06:07:38 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 A Thank You To Emil Onolfi http://nybusinesslitigator.com/?p=498 Wed, 11 Nov 2015 00:20:47 +0000 http://nybusinesslitigator.com/?p=498 Continue reading ]]>

I want to make a special mention here to thank Emil (EJ) Onolfi for his invaluable assistance with legal research and writing for some of my blog posts on commercial litigation issues.  EJ is a 2d year law student at Brooklyn Law School and is currently interning with my law firm this semester.  My paralegal Diana and I wish him the best of luck in his future career as an attorney.

Scott

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Thanks to Nicholas Ribaudo http://nybusinesslitigator.com/?p=496 Mon, 09 Nov 2015 21:34:04 +0000 http://nybusinesslitigator.com/?p=496 Continue reading ]]> I want to make a special mention here to thank Nicholas Ribaudo for his assistance with helping to get many of my blog posts online and with writing and editing.  Nick is a 2d year law student at Brooklyn Law School and is currently interning with my law firm this semester.  He has done a fantastic job helping me and my paralegal Diana and we wish him the best of luck in his future career as an attorney.

Scott

 

 

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Statute of Limitations for Commercial Claims http://nybusinesslitigator.com/?p=452 Mon, 09 Nov 2015 19:42:52 +0000 http://nybusinesslitigator.com/?p=452 Continue reading ]]> The law makes sure that no one needs to fear the threat of lawsuit for the rest of their lives over one incident. Statute of limitations provide set time limits for different causes of action, and once that time has passed, that claim can no longer be brought in front of a court. Here are the standards for some of the more common commercial claims in New York. 

“…[u]nder CPLR §213(2), a claim for breach of contract is governed by a six-year statute of limitations.” Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co., 18 N.Y.3d 765, 770 (2012).

“The statute of limitations for a cause of action for an account stated is also six years [under CPLR §213(2)], . . . and it accrues on the date of the last transaction in the account.” Elie Intern., Inc. v. Macy’s West Inc., 106 A.D.3d 442, 443 (1st Dept. 2013).

Recovery under quantum meruit is also governed by CPLR §213(2), providing a six-year period during which a claim may be brought. Eisen v. Feder, 307 A.D.2d 817, 818 (1st Dept. 2003).

 

go here If you have any legal questions or need help with a statute of limitations, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

 

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New York IRA and 401(k) exempt from alimony arrears? http://nybusinesslitigator.com/?p=439 Mon, 09 Nov 2015 18:13:33 +0000 http://nybusinesslitigator.com/?p=439 Continue reading ]]> A former spouse does have a legal basis to try to enforce the judgment for alimony against an IRA and 401(k) in New York. The accounts would fall within this exception in CPLR 5205(c)(4) and would not be exempt under these circumstances. See a comprehensive analysis of the law below…

Section 5205(c) makes an IRA and a 401(k) exempt from satisfaction of a money judgment:

“(c) Trust exemption. 1. Except as provided in paragraphs four and five of this subdivision, all property while held in trust for a judgment debtor, where the trust has been created by, or the fund so held in trust has proceeded from, a person other than the judgment debtor, is exempt from application to the satisfaction of a money judgment.

2. For purposes of this subdivision, all trusts, custodial accounts, annuities, insurance contracts, monies, assets or interests established as part of, and all payments from, either any trust or plan, which is qualified as an follow individual retirement account under section four hundred eight or section four hundred eight A of the United States Internal Revenue Code of 1986,1 as amended, a Keogh (HR-10), retirement or other plan established by a corporation, which is qualified under section 401 of the United States Internal Revenue Code of 1986, as amended, or created as a result of rollovers from such plans pursuant to sections 402 (a) (5), 403 (a) (4), 408 (d) (3) or 408A of the Internal Revenue Code of 1986, as amended, or a plan that satisfies the requirements of section 457 of the Internal Revenue Code of 1986, as amended, shall be considered a trust which has been created by or which has proceeded from a person other than the judgment debtor, even though such judgment debtor is (i) in the case of an individual retirement account plan, an individual who is the settlor of and depositor to such account plan, or (ii) a self-employed individual, or (iii) a partner of the entity sponsoring the Keogh (HR-10) plan, or (iv) a shareholder of the corporation sponsoring the retirement or other plan or (v) a participant in a section 457 plan

3. All trusts, custodial accounts, annuities, insurance contracts, monies, assets, or interests described in paragraph two of this subdivision shall be conclusively presumed to be spendthrift trusts under this section and the common law of the state of New York for all purposes, including, but not limited to, all cases arising under or related to a case arising under sections one hundred one to thirteen hundred thirty of title eleven of the United States Bankruptcy Code, as amended.”

 

However, CPLR § 5205(c)(4) contains an exception for alimony arrears:

4. This subdivision shall not impair any rights an individual has under a qualified domestic relations order as that term is defined in section 414(p) of the United States Internal Revenue Code of 1986, as amended or under any order of support, alimony or maintenance of any court of competent jurisdiction to enforce arrears/past due support whether or not such arrears/past due support have been reduced to a money judgment. (emphasis added). See also, New York Practice, Enforcing Judgments and Collections, § 7:243 “Mandates for trust to be and remain exempt” (Westlaw 2015).

 

In addition, CPLR § 5205(c)(5) states that additions to an IRA are not exempt if they are made 90 days before the claim.

5. Additions to an asset described in paragraph two of this subdivision shall not be exempt from application to the satisfaction of a money judgment if (i) made after the date that is ninety days before the interposition of the claim on which such judgment was entered, or (ii) deemed to be fraudulent conveyances under article ten of the debtor and creditor law.

New York courts have considered these issues. For example, in Bayerische Hypo-Und Vereinsbankk AG v. DeGiorgio, 74 A.D. 3d 492 (1st Dept. 2010), the Appellate Division held that a rollover IRA was exempt from attachment by an employer; see also, J.K.C. v. T.W.C., 39 Misc. 3d 899 (Sup. Ct. Monroe Co. 2013)(attorney’s charging lien cannot be asserted against IRA). In Breslin Realty Dev. Corp. v. Morgan Stanley, 48 Misc. 3d 424 (Sup. Ct. Nassau Co. 2015), the court held that additional deposits into retirement accounts made after 90 days before commencement of the action on which judgment is entered were subject to turnover.

The courts that have applied the statute to alimony arrears have ruled that alimony falls within an exception and the trust exception does not prevent collection.

In Smith v. ABC Co., Inc, 2005 N.Y. Misc. LEXIS 3467 (Fam. Ct. Nassau Co. 2005), the court ruled that a trust was not exempt from enforcement of a support order and fell within the exception in CPLR § 5205(c)(4):

“Section 5205(c)(1) provides that with limited exceptions, “all property while held in trust for a judgment debtor, where the trust has been created by *** a person other than the judgment debtor, is exempt from application to the satisfaction of a money judgment.” Section 5205(c)(4), which establishes one of the exceptions to this rule, provides that subdivision (c) “shall not impair any rights an individual has under *** any order of support *** of any court of competent jurisdiction to enforce arrears/past due support whether or not such arrears/past due support have been reduced to a money judgment” (CPLR 5205 [c][4]. Because CPLR 5205(c) expressly does not exempt the principal of the subject trust from enforcement of a support order, neither does the 90 percent income limitation of CPLR 5205(d) apply, and there is no need pursuant to that statute for the court to render a determination of the “reasonable needs” of the father and his dependents.”

An ex-spouse can reach her former spouse’s 401(k) plan to collect a judgment for arrears and support pursuant to CPLR 5205 (c).  Mayer v. Mayer, 12 Misc3d 1151(A)(Fam. Ct., Orange Co. 2006).

In Berger-Carniol v. Carniol, 273 A.D.2d 427 (2d Dept. 2000), the court cited CPLR 5205(c)(4) and held that it was not error to direct the payment of support arrears from an IRA.  Even counsel fees that are in the nature of support are coverd by CPLR 5202(c )(4) which prevents a husband from claiming an exemption for pension funds.  AB v. GH, 31 Misc.3d 945 (Sup. Ct. N.Y. Co. 2011).

In Carr v. Jonbil, Inc., 245 A.D.2d 369 (2d Dept. 1997), the court held that funds in a husband’s profit sharing plan were exempt under CPLR 5205(c ) from satisfying his wife’s judgment because there was no qualified domestic relations order entered.  While this case may appear favorable to your position, since it upheld an exemption where there was no QDRO, the case did not appear to involve alimony and therefore is factually distinguishable from our situation.

In an older decision, the court explained that exemptions were not designed “to help one member of the family avoid his obligation to support the others” and that exemptions “have yielded to claims for alimony and child support. “ Fordyce v. Fordyce, 80 Misc.2d 909 (Sup. Ct., Nassau Co 1974). “The authorities amply provide precedent that the pension or trust fund is not immune from the responsibility of a husband or former husband to provide support for his wife or former wife.” Wanamaker v. Wanamaker, 93 Misc.2s 784 (Fam. Ct., Rockland Co. 1978); see also, Monck v Monck, 184 A.D. 656 (1st Dept. 1918)(exemption not intended to deprive wife of right to support from husband); Gramet v N.Y. State Teacher’s Retirement System, 102 Misc.2d 731 (Sup. Ct., Albany Co. 1979)(“wide-ranging judicial acceptance that alimony and support are exceptions to the statutory exemptions . . . granting of such an exemption would be a subversion of the purpose for exemptions to protect and foster support of the family.); Michel v. Michel, 86 Misc.2d 774 (Fam. Ct., Rensselaer Co. 1976)(exemption does not apply to support “on the theory that an adjudication of alimony or support is not a debt within the meaning of the exemption statutes.”); Jackson v. Jackson, 194 Misc. 134 (Sup. Ct., Queens Co. 1948)(“there is no question that alimony is an exception to the provisions of any statute of exemption.”)

 A former spouse does have a legal basis to try to enforce the judgment for alimony against an IRA and 401(k) in New York. The accounts would fall within this exception in CPLR 5205(c)(4) and would not be exempt under these circumstances.

If you have any legal questions or need help with enforcement of a judgment, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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Mechanic’s Lien for Equipment Rentals http://nybusinesslitigator.com/?p=357 Mon, 09 Nov 2015 16:23:30 +0000 http://nybusinesslitigator.com/?p=357 Continue reading ]]> Suppliers of labor and materials may run into a problem when a customer does not pay for the services or materials provided. It is only fair that owners of a project that benefited from these contractors and suppliers should pay for these services and materials. New York Lien Law permits contractors and supplies to file a Mechanic’s Lien against the owner of project whose real estate was improved. But, can equipment lessors use the same legal process?

Today, suppliers may rent expensive equipment to customers. While it was not always accepted that rentals of equipment were lienable items, the New York Lien Law was amended to protect the interest of rental items as well.

Older cases had held that a mechanic’s lien on an equipment rental was not permitted. Troy Public Works Company v. City of Yonkers, 207 N.Y. 81 (1912); John H Black Co. v. Surdam Holding Corp., 140 Misc. 113 (Sup. Court, Erie Co. 1931).

However, the lien law was amended in 1937 to add to the existing law the provision that the rental value of equipment, machinery and tools to a contractor is a lienable item. P.J. Carlin Construction Co. v. A to Z Equipment Corp., 31 A.D.2d 546 (2d Dept. 1968).

In a 1993 case in Federal Court, called Harsco Corp. v. The New York City Department of Gen. Services, 1993 WL 138829 (S.D.N.Y. 1993), the Court stated:

“There is no question that the rental value of the scaffolding is a lienable item. Lien Law § 5 provides that one “furnishing materials” to a subcontractor on a public improvement project “shall have a lien for the principal and interest of the value or agreed price of such … materials” on the money due to the prime contractor for the project from the state. Under Lien Law § 2(12) “furnishing materials” is “deemed to mean and include the reasonable rental value for the period of actual use of machinery, tools or equipment….” See Halli International Construction Ltd. v. Albany Ladder Company, Inc., NYLJ, October 12, 1973 at 22, col. 1M (Sup.Ct. Suffolk Cnty 1973) (rental value for use of scaffolding is a proper item for a mechanics lien); P.J. Carlin Constr. Co. v. A to Z Equipment Corp., 31 A.D.2d 546, 295 N.Y.S.2d 239, 240 (2d Dept.1968) (rental value of mobile trailers used by subcontractor as offices and for storage at construction site is a lienable item).”

The current definition of “materialman” in Section 1:2 of the Lien Law is defined to include “any person who furnishes material or the use of machinery, tools, or equipment … either to an owner, contractor, or subcontractor for, or in the prosecution of an improvement. The expression “furnishes material” means and includes the reasonable rental value for the period of actual use of machinery, tools or equipment. However, the definition of materialman has been held to exclude a person who furnishes materials to a materialman. N.Y. Prac., Mechanics’ Liens in New York, 1:2 (Westlaw 2014 Ed.).

A non-public works commercial project, the equipment lessor generally has 8 months to file the lien from completion of the work or final performance under NY Lien Law Section 10.  Public works projects, however, have different rules governed by NY Lien Law Section 5.

If you have any legal questions or need help with a mechanics lien, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

 

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Barred by Dirty Hands http://nybusinesslitigator.com/?p=353 Wed, 21 Oct 2015 17:29:22 +0000 http://nybusinesslitigator.com/?p=353 Continue reading ]]> A plaintiff’s case may be barred from litigation if the plaintiff’s conduct constitutes unclean hands, meaning that the plaintiff acted inequitably. If a plaintiff is found to have unclean hands then he is not allowed to look to the court system to help his action. Here is an excerpt from a brief of mine dealing with a claim of unclean hands: 

“The doctrine of unclean hands is only available where plaintiff is guilty of immoral or unconscionable conduct directly related to the subject matter and the party seeking to invoke the doctrine is injured by such conduct.” Frymer v. Bell, 99 A.D.2d 91, 96 (1st Dept. 1984). “[R]elief to the plaintiff cannot be denied unless the immoral or unconscionable act alleged by the defendant was done to the defendant himself.” Id.

There is an expression: “One who seeks equality must do equality.”

If you have any legal questions or need help with the unclean hands defense, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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Proving Service and Jurisdiction http://nybusinesslitigator.com/?p=350 Wed, 14 Oct 2015 17:21:45 +0000 http://nybusinesslitigator.com/?p=350 Continue reading ]]> In many disputes over personal jurisdiction, the issue of proper service is raised by a defendant. Here is an excerpt from my brief dealing with such a defense: 

An affidavit of service is prima facie evidence that process was properly served. Reem Contracting v. Altschul & Altschul, 117 A.D.3d 583, 584 (1st Dept. 2014). Absent affidavits from a defendant that he was improperly served, personal jurisdiction will stand. EBC Amro Asset Management Ltd. v. Kaiser, 256 A.D.2d 161, 162 (1st Dept. 1998).

 

If you have any legal questions or need help with service of process and jurisdiction, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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Defenses to Breach of Contract http://nybusinesslitigator.com/?p=348 Mon, 12 Oct 2015 17:15:43 +0000 http://nybusinesslitigator.com/?p=348 Continue reading ]]> I just dealt with these defenses in a recent case: accord and release and waiver. Here are the legal standards:  

“An accord is an agreement that a stipulated performance will be accepted, in the future, in lieu of an existing claim . . . [e]xecution of the agreement is a satisfaction.” Denburg v. Parker Chapin Flattau & Klimpl, 82 N.Y.2d 375, 383 (1993).

“In the absence of fraud, duress, illegality or mistake, a general release bars an action on any cause of action arising prior to its execution.” Mergler v. Crystal Properties Associates, Ltd., 179 A.D.2d 177, 178 (1st Dept. 1992). “Waiver is an intentional relinquishment of a known right and should not be lightly presumed.” Gilbert Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966, 968 (1988).

 

If you have any legal questions or need help with a breach of contract claim or defense, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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You Have a Cause of Action … Now What? http://nybusinesslitigator.com/?p=343 Sat, 10 Oct 2015 17:06:52 +0000 http://nybusinesslitigator.com/?p=343 Continue reading ]]> So you have a case to file but the question is, where and in what court do I file? In New York State, there is a Supreme Court in each of the counties. Each one is a court of general jurisdiction. 

In Thrasher v. United States Liability Ins. Co., 19 N.Y.2d 159, 166 (1967), the Court of Appeals, citing the State Constitution, Article VI, said “[t]he Supreme Court is a court of general jurisdiction and it is competent to entertain all causes of action unless its jurisdiction has been specifically proscribed . . . .”

 

If you have any legal questions or need help with a case, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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How Do You Actually Breach a Contract? http://nybusinesslitigator.com/?p=341 Thu, 08 Oct 2015 17:03:41 +0000 http://nybusinesslitigator.com/?p=341 Continue reading ]]> While many business litigation cases commonly include a breach of contract claim, what does it actually entail? Here is a quick excerpt from one of my briefs explaining what a breach actually is: 

The essential elements for a breach of contract action are “the existence of a contract, the plaintiff’s performance under the contract, the defendant’s breach of that contract, and resulting damages.” US Bank N.A. v. Lieberman, 98 A.D.3d 422, 423 (1st Dept. 2012).

 

If you have any legal questions or need help with a breach of contract claim, please contact Attorney Scott Lanin at (212) 764-7250 x 201 or use the contact form in the right sidebar.

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