Blog Posts
Commercial Litigation
Five Common Pitfalls Hard Money Lenders Must Avoid to Reduce Risk and Protect Their Deals
This article details five pitfalls hard money lenders’ teams face when working on potential deals. Detailing these pitfalls is intended to be a useful guide for those new to the industry (and want to avoid costly mistakes) and, for more experienced people in the industry, a helpful reminder of the biggest red flags everyone must be vigilant about when working on deals. The business of hard money lending carries enormous risk. Starting out requires raising sufficient capital to lend and navigating the thicket of licensing requirements and regulations that apply to hard money lenders (an endless process due to ever-changing regulations in the industry). Once established, however, hard money lenders, and their teams, have to maintain the standards they set for each deal that gets onboarded. From the sales stage through underwriting to closing, mistakes, indiscretions, and oversights may occur, and some of those errors have very costly consequences. If there is one thread tying together each of these five pitfalls, it is: know your borrower—and especially so if it’s an entity. Here are the five pitfalls. For borrowing entities, failing to properly evaluate and research individual members. When the borrower is an entity, the individual owners of that entity must be evaluated thoroughly. Hard money lenders, although they are not financial institutions in the same vein as major banks, are subject to the same requirements that the Bank Secrecy Act imposes. Those requirements include an obligation to file a suspicious activity report (SAR) with the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) for transactions that are suspicious and raise questions as to whether the transaction is an attempt at money laundering. Similarly, FinCEN requires that hard money lenders maintain an anti-money laundering program with written procedures, personnel responsible for day-to-day operations, employee training to detect suspicious activity, and testing and review of the program. For each owner of the business entity, it is crucial to run a background search on that individual. Vetting individual owners of the borrower entity is not only important for understanding who is effectively the borrower; it is also essential for the lender to comply with the Bank Secrecy Act’s requirements. Sometimes, an individual working for the lender does not realize the consequences of missing a detail like this. The most common consequence in this type of situation is an audit. If the lender faces an audit—whether from FinCEN or a state licensing authority—and that audit reveals the lender missed a red flag related to a borrower and its individual owners, the consequences can be significant. Although an audit can result in a timeframe for the lender to take corrective action, regulators also may impose fines and civil penalties, issue cease-and-desist orders requiring the lender to stop its lending activities, require loan rescissions or restitution, or pursue more frequent audits. That range of consequences coming from an audit may be daunting, but regardless of the result, it means taking resources and time away from deals and instead diverting those into managing audit responses and working with counsel to mitigate the negative consequences. For borrowing entities, not confirming the signatory has the authority to bind the entity. For any type of business entity, whether a corporation, limited liability company, or another type, it is crucial to ensure that the lender knows the signatory has the authority to sign documents on behalf of the entity. Typically, during the onboarding phase, the entity will have provided an operating agreement and a resolution authorizing the person to sign on behalf of the entity. Reviewing that operating agreement’s terms to verify the process it sets out for passing a resolution is a step that too often gets overlooked. Connecting each dot, from the company’s formation to its operating agreement setting out how a resolution may be passed, to having a resolution appointing the signatory, is necessary for any deal involving a borrower entity. If there is no follow-through on this step, the lender’s position becomes perilous for clawing back the funds it lent. In short, if the signatory did not have authority to sign, the loan documents are essentially meaningless, and the lender has virtually no recourse. A signatory lacking authority does not just arise where there is fraud. For example, if there is a dispute among the owners of the business entity regarding the operations of that entity, and there is a potential buyout or sale of an owner’s interest in the entity, that may end up affecting the lender’s loan. To avoid being caught in the middle of such a dispute, the lender, at the time of the loan, must clearly establish that the person signing on behalf of the borrowing entity had authority to do so and then maintain copies of those documents. If there is any dispute about the signatory’s authority to sign, then it may lead to a court deeming the loan documents and any guaranties invalid and unenforceable. The debt would thus not be collectible, and foreclosure on the property—the most effective way for the lender to pursue collection, if not the only way—becomes impossible. In many cases, the lender will be able to conclude that the debt is not collectible only after commencing a lawsuit seeking to enforce the loan documents and pursue a foreclosure of the property. It is only after incurring legal fees, expenses, costs, and time that a court would then potentially declare the documents to be unenforceable and leaving the lender with a loss on the loan and then the fees, expenses, and costs incurred. For borrowing entities, not confirming the structure of sub-entities. When the entity is a borrower with sub-entities, it is necessary to understand the owners of the sub-entities, as well as the layout of those sub-entities. Often, when there are sub-entities, there are specific, easily identifiable reasons, such as being a family business that incorporates family members’ interests. Other times, a web of sub-entities can be used to hide the true ownership of the borrowing entity, conceal financial problems with that entity, shield individuals known to be bad actors, or launder money. Those same requirements coming from the Bank Secrecy Act, the anti-money laundering programs and suspicious activity reports come when analyzing the sub-entities for a borrower. Every individual owner associated with the sub-entities should have a background check performed, and there should be clarity about the structure and all the individuals involved with the business. As with other failures to comply with the Bank Secrecy Act and other such regulations, one of the most common consequences is an audit. As detailed above, that audit may be very disruptive to the lender’s operations. Overlooking open judgments and liens. Thoroughly reviewing active litigation, unpaid judgments, and open liens is critical to evaluating the viability of the loan. If there is active litigation, reviewing the documents filed in that litigation is necessary to understand how it might impact the deal. That litigation may impact the real estate or the borrower’s business. As to the real estate, neighbors could have filed lawsuits that are seeking access to portions of the property or restrictions related to the property. Lawsuits like that could not only affect the salability of the property; they could also affect the lender’s rights to the property even if it foreclosed on the property and sought to sell it afterward. But, most often, it will affect the lender’s priority of lien on the property. When there are multiple liens on the same property, the priority of lien dictates who gets paid first when the property is sold, either at foreclosure or just on the market. Many times, the value of the property may only pay off the first loan, or even part of the second loan. If the lender’s lien is second, third, or fourth priority, then the lender may end up totally empty-handed when attempting to collect the loan. Failing to verify the legitimacy and contents of bank statements or other documents submitted by borrowers. Lenders’ guidelines for loans require the borrower to submit bank statements and other documents to verify the borrower’s qualifications for the loan. These are helpful mechanics for ensuring the borrower is capable of repaying the loan. Sometimes, however, borrowers engage in fraud or other unlawful activity leading them to submit documents that are either entirely fabricated or partially doctored and tailored to meet the lender’s requirements. Reviewing those documents through the lens of common sense can go a long way in revealing that they are false. When documents are suspicious or simply do not add up, it becomes important to make additional requests for documents that corroborate those already submitted and come from third parties over which the borrower has no control. Ideally, the lender maintaining these standards roots out fraudulent documents prior to the closing. For most hard money lenders, an overwhelming majority of the closed loans are then sold to private capital providers/secondary market buyers or to institutional private credit funds, such as private equity funds or hedge funds. When each loan is sold, there are representations and warranties about the loan that the lender makes to the purchaser. Those representations and warranties virtually always require the lender to buy the loan back if there is any fraud, regardless of whether the lender knows of the fraud. If, for example, the bank statements were fake and the borrower defrauded the lender, the lender would be obligated to buy back that loan. Then, if a loan is bought back, the lender would have to service the loan and take steps to collect it. This would be a highly burdensome process for a lender to undergo and would divert resources away from new deals. Conclusion Although these are not the only pitfalls that hard money lenders face, they are the most common and guarantee outsized consequences. Every member of the lender’s team needs to be aware of not only these pitfalls but others as well, to ensure that the deals being closed are the right ones.
March 24, 2026
Business
Starting a Business Made Simple: A Practical Toolkit
Starting a business is exciting — but it can also feel overwhelming when you’re faced with critical decisions and don’t know where to begin. This toolkit is a practical, step-by-step guide designed specifically for new entrepreneurs. From choosing the right business structure and securing permits to drafting essential agreements, this toolkit gives you the clarity and confidence to build a strong foundation for success. Ready to turn your vision into reality? Decide on the Best Business Structure Figure out which business structure is the best fit. Common choices are sole proprietorship, partnership, limited liability company (LLC), and corporation. This may mean consulting with an attorney and with an accountant about the different options, but each business structure has its pros and cons. It’s essential to understand the pros and cons, then weigh them before deciding how to structure the business. Make Sure the Business Entity is Set Up Correctly Be aware of the requirements for forming corporate entities to ensure the business is properly set up. In some states, there may be publication requirements. For instance, in New York, a limited liability company must publish a notice within 120 days of the initial articles of organization becoming effective, as follows: “published once in each week for six successive weeks, in two newspapers of the county in which the office of the limited liability company is located, one newspaper to be printed weekly and one newspaper to be printed daily.” These requirements may be burdensome, but it’s important to follow them. In New York, a court may pause a case if the company is not properly formed and therefore cannot bring its claims against the defendant. Research the Licenses or Permits Needed for the Business Licensing and permitting can be tricky. Fortunately, many cities and states have set up portals or guides to help you determine whether your business requires a permit or a license to operate in the city or state. If you are operating a business in a niche area, however, it may take additional research to find concrete answers to whether your business needs a license or permit. Research the Tax Obligations for the Business There may be federal, state, and local taxes that apply to the business. The United States Small Business Administration is an excellent resource for starting that process, but conferring with an accountant and tax attorney may help to provide a more comprehensive understanding of those tax requirements. Be Thoughtful When Anyone Else Begins Working for the Business If that person is an employee, there are wage and hour laws, anti-discrimination laws, and other laws that apply. If you don’t want that person to be an employee, you should have an agreement in place that clarifies the relationship (and make sure you know any other legal requirements such as whether the person is an independent contractor). Particularly when a small business is just getting started and the first people working there are friends or family members, having written agreements with them seems too formal and unnecessary. In the early stages, everyone may have a clear understanding of how they fit into the business, and there isn’t room for disagreements. But as the business grows, those understandings may change, and conflicts may arise. When there’s a conflict like that, the business may be vulnerable without a written agreement clarifying the terms of the person’s involvement. Put Written Contracts in Place with Everyone You Do Business With Many businesses initially rely on phone calls or face-to-face conversations to get things done. That informal way of doing business may seem acceptable since the business is just beginning, but such discussions can lead to problems, misunderstandings, and leave the business without any legal remedies. Whenever there is a relationship between your business and others, it is essential to have an agreement in writing—even if it’s just an email or text message exchange. Conclusion By laying a solid foundation — choosing the right structure, meeting legal requirements, understanding obligations, and putting clear agreements in place — new entrepreneurs can avoid early pitfalls and focus on building a strong, sustainable business.
January 22, 2026
Commercial Litigation
Enforcing Guaranties Quickly in New York Courts
New York law provides creditors with a powerful tool to pursue collection on a written guaranty on an expedited track. CPLR 3213 allows a creditor to serve a summons along with a motion for summary judgment — bypassing the requirement for a written complaint and asking the court to enter a judgment against the debtor. The creditor must be seeking to enforce an instrument that is “based upon an instrument for the payment of money only.” CPLR 3213. Courts have varied in interpreting that phrase in that a written guaranty may contain monetary and nonmonetary obligations. Still, if the instrument imposes nonmonetary obligations on the guarantor, a court may conclude that the instrument is not “for the payment of money only” and deny the motion on that basis. Therefore, it is important that creditors carefully craft their written guaranties. New York courts have held that a prototypical guaranty is “an unconditional promise to pay a sum certain, signed by the maker and due on demand or at a definite time.” Weissman v. Sinorm Deli, Inc., 88 N.Y.2d 437, 444 (1996). In 2021, the First Department Appellate Division held that a guaranty including “an unconditional obligation to pay all rent and additional rent owed under the sublease” qualified as “an instrument for the payment of money only” because “it required no additional performance” of an obligation other than the promise to pay. iPayment Inc. v. Silverman, 192 A.D.3d 586, 587 (1st Dept. 2021). In the creditor’s motion for summary judgment, it must show “the existence of the guaranty, the underlying debt, and the guarantor’s failure to perform under the guaranty.” Pearl River Campus, LLC v. Readyscrip, LLC, 240 A.D.3d 610, 611 (2d Dept. 2025). In that case, the Appellate Division held that the lower court properly denied the creditor’s motion for summary judgment because there was insufficient proof. Specifically, because the Supreme Court “would have been required to examine material outside the lease agreement and make calculations that were not shown by the [creditor]” in its supporting documents, the proof was insufficient to grant summary judgment. Id. In situations like that, when the creditor’s motion is denied, CPLR 3213 states that the papers filed in support of the motion and opposing the motion become the complaint and answer for the case. However, a court could order otherwise — such as requiring the parties to file a separate complaint and answer. Regardless, when the court denies the motion for summary judgment in lieu of a complaint, the creditor then can only proceed with the case and seek its judgment against the guarantor at a later stage of litigation. Creditors seeking to maximize collection in New York courts stand to benefit from reviewing and revising their guaranties to conform with the standard that CPLR 3213 imposes and to pursue motions for summary judgment in lieu of complaints when filing collection actions.
November 19, 2025
Commercial Litigation
From Onboarding to Offboarding: Building a Turnover Plan That Works
Generally, employees are free to resign at any time. This is the core of “at-will” employment: just as an employer can decide the employment relationship can come to an end, an employee can also make that decision. However, some employees have agreements in place that set the rules for their departure and the associated process. Often, those agreements also set the rules for after the employee has departed. Those rules can include barring the employee from: disclosing confidential information obtained during their employment soliciting the former employer’s clients or customers competing with the former employer If there is no employment agreement, then an employee can leave at any time, and with or without notice. In that situation, it is crucial for an employer to plan what the transition period would look like if an employee chooses to depart. It is a best practice for employers to plan out the offboarding process when the employee is being onboarded. Employers should also prepare for the risk of litigation brought by the former employee. A former employee may choose to file claims against the employer for allegedly violating wage and hour laws, the Americans with Disabilities Act, or federal, state, or local discrimination laws. The statutes of limitations periods for those claims vary, and it becomes crucial that employers focus on keeping records related to each employee. In the event that a former employee commences a lawsuit against a former employer, it becomes crucial to look to documents and records related to the employment relationship. It is a best practice for employers to have an active system for maintaining records related to employees beyond the statutes of limitations periods. Those records may include: Emails Formal reports or complaints Work product Performance reviews Management/operations notes Payroll documents (paystubs, W-2s, 1099s) In New York, courts have strict standards for admitting these types of records into evidence at a trial. The employer’s process for creating and maintaining records is critically important for increasing the chances for success, when faced with these types of claims. One approach that many employers implement is to have an agreement ready for when an employee departs. Often, those agreements include a waiver of claims which can also be customized to the employer’s business, including terms protecting proprietary materials, such as client or customer lists, barring the soon-to-be-former employee from disclosing confidential information obtained during the employment, soliciting the former employer’s clients or customers, or competing with the former employer.
October 16, 2025
Commercial Litigation
Three Key Tips for Drafting Strong Discovery Requests
The discovery phase of a case is critically important. Navigating a case appropriately through the discovery stage can lead to achieving favorable settlement terms, disposing of the case by summary judgment, or prevailing at trial. Thoughtfully crafting discovery requests is one of many tactics that maximize the chances for success. Keep these three points in mind when preparing discovery requests. Tailor the requests to the claims and defenses. Consider the elements for each claim and then the elements for each defense when drafting the requests. If the requests cover each element in an individualized manner, the door opens to potentially disposing of the case at the summary judgment stage. This approach leads to the parties exchanging relevant documents and information and allows them to digest each other’s theory of the case, minimizing the chances for a surprise at trial. Further, when both sides disclose documents and information, they also end up revealing the strengths and weaknesses of their respective claims or defenses. By identifying those strengths and weaknesses, the parties can more readily identify the components of the case, where they have leverage, and become more likely to come to a settlement (which saves the parties valuable time and resources). Pursue potential evidence to use to impeach witnesses’ credibility and to flesh out the theory of the case. Once you have your theory of the case, discovery is the time to further develop that theory by bringing out the context of the case. No case should take place in a vacuum. Typically, parties have ample evidence the other side can use (e.g., at trial) to illustrate the theory of the case. In a breach of contract case, for instance, it may be helpful to request documents or information about other contracts the party held at the time or the benefits that a party obtained when it breached the contract. In response to the request, you may receive a document that shows why the party breached the contract — a helpful piece of context that you can use at trial to better tell your client’s story and diminish the other party’s credibility. Although each case is factually distinct, there are always pieces of evidence that can be used for these purposes, which may make the difference in persuading a judge or jury. Include requests for information and documents where the adversary’s lack of a response is useful. Requesting documents and information from the other side that directly relate to the claims and defenses in the case is a great starting point. Adding requests with an eye toward the adversary not providing a response can also be very useful at trial. The lack of a response narrows the universe of evidence that the parties can present at trial, providing you with a more predictable trial and an ability to identify the weak points of your adversary’s case. It also provides the opportunity to flesh out the testimony you wish to elicit from the other side as to the lack of evidence. This can be particularly powerful when you cross-examine the other side’s witness and have that witness testify — in response to a string of questions from you — that they do not have evidence touching on a number of aspects pertaining to the case. Those moments during trial are not only good theater but also highly persuasive.
August 18, 2025
Commercial Litigation
Three Things to Know About Notices to Admit in New York
In New York litigation, a well-timed notice to admit can sharpen the issues, trim trial time, and lock in key facts. But it’s a tool that must be used strategically. When used correctly, it can streamline document authentication, conclusively establish undisputed facts, and even support dispositive motions. Misused, however, it risks time-consuming objections or outright rejection. Below are three things every litigator should know about how (and how not) to use a notice to admit. A notice to admit can streamline the facts to be proven at trial. The notice to admit can serve as a device for proving a fact that would be readily admittable at trial. For instance, if the case centers on a vehicle, a notice to admit may be preferable for establishing the owner of the vehicle rather than requiring a party to present documents and facts at trial to establish that “readily admittable” fact. However, the notice to admit cannot serve as a device to require the other party to admit anything that resembles a legal conclusion. For instance, a notice to admit cannot ask a party to admit negligence, breach of a contract, or fraud. New York law prohibits a notice to admit being used “to cover ultimate conclusion, which can only be made after a full and complete trial.” Similarly, it cannot seek admission of facts that require an expert witness. A notice to admit can also be used to establish facts that are public knowledge or facts which the requesting party reasonably believes are not in dispute. Accordingly, a requesting party will overstep the bounds of a notice to admit when seeking admission of a fact that is in dispute. A notice to admit is effective for preparing documents to be admitted into evidence at trial. In a notice to admit, a party may seek another party to admit that a specific document is authentic, that a copy of a document is accurate to the original, establish that a document is a business record (and thus potentially admissible as an exception to the hearsay rule under CPLR 4518), and authenticate a signature on a document. These admissions can result in saving a substantial amount of resources at trial, as it obviates the need for a witness to testify as to each of those elements. Depending on the volume of documents that will be presented at trial, using a notice to admit rather than testimony could save numerous hours of trial testimony, making it a more economical approach but also keeping the trial concise and to the point. A well-considered notice to admit can also ask for admission of facts that serve as the foundation for establishing a chain of custody for evidence, that a document is a business record, or potentially authenticate a document altogether. From this standpoint, for documents where the provenance is established, the notice to admit should be a straightforward and uncontroversial component of the case. Admitted facts can be used not only at trial but at the motion to dismiss or motion for summary judgment stage of litigation. Facts admitted in response to a notice to admit (or admitted because no response was timely submitted to the notice to admit) can be used at several phases of litigation: trial, summary judgment, or motion to dismiss. This reinforces the fact that a notice to admit should be considered at every stage of litigation. Although the facts admitted may not, on their own, be enough to dispose of the case, the facts admitted may serve as a foundation for other arguments that support disposing of the case and should therefore be thoroughly considered. Furthermore, a fact admitted in the context of a notice to admit has a stronger effect than statements made during a deposition or in response to an interrogatory, as the admission is conclusive and precludes denial unless a court allows the admission to be amended or withdrawn. By contrast, deposition testimony or a response to an interrogatory may be rebutted with contrary proof at trial. Therefore, even if the admitted facts do not dispose of the case at the motion stage, the admitted facts still may have a significant impact on the trial. Conclusion Notices to admit are a powerful but often underutilized tool in New York litigation. When drafted thoughtfully and within proper bounds, they can simplify trials, reduce costs, and strengthen pretrial motions. By focusing on undisputed facts and avoiding legal conclusions, attorneys can use notices to admit to gain strategic advantages at every stage of a case.
July 7, 2025
Commercial Litigation
Serving Hard-to-Find Defendants – Motions for Alternate Service
Filing a complaint in a New York court can be easy. But after a plaintiff files that complaint, the plaintiff must serve the defendant with the summons and complaint. Failing to serve the defendant properly may lead the case to be dismissed. For many plaintiffs, attempting to serve the complaint on the defendant is as far as they get. Often, defendants know that if they can make it difficult for the plaintiff to serve the complaint, they have a chance to make the lawsuit go away. However, when plaintiffs have difficulty serving the defendant, they can take advantage of New York’s laws and creatively serve the complaint and move their case forward. In New York, CPLR 308 is the law that identifies the methods a plaintiff must use for completing personal service on a defendant. Ideally, a plaintiff can serve a defendant by personally delivering the summons to him or her. CPLR 308(1). But if not, a plaintiff may deliver the summons to a person “of suitable age and discretion” at the defendant’s “actual place of business” or “dwelling place or usual place of abode.” CPLR 308(2). Suppose plaintiff cannot serve the defendant by personal delivery or to a person of suitable age and discretion despite the plaintiff’s due diligence. In that case, the plaintiff may affix the summons to the door of the defendant’s “actual place of business, dwelling place or usual place of abode” and then mail a copy of the summons to the defendant’s “last known residence” or “actual place of business” in the specific manner called for in CPLR 308(4). For many plaintiffs, one of those three service methods will do the trick. But what if a plaintiff cannot track down the defendant’s actual place of business? Or does the defendant’s place of business have security that won’t permit access to the defendant’s office? Or the plaintiff cannot access the defendant’s home because it’s in a gated community? This is where CPLR 308(5) comes in: when serving a defendant is “impracticable,” a plaintiff may ask the court for permission to serve the defendant in any “such manner as the court . . . directs.” To request this from the court, a plaintiff can file a motion. Sometimes, these motions are called motions for substitute service or for alternate service. In that motion, the plaintiff must show the efforts undertaken and that serving the defendant is “impracticable”—not impossible. Then, the plaintiff may request the court to allow it to serve the defendant by some method other than CPLR 308 prescribes. In considering these types of motions, courts require that the defendant receive due process and that the service on the defendant is “reasonably calculated, under all circumstances, to apprise the defendant” of the lawsuit. Courts have wide latitude in fashioning the method of service and adapting that method to the particular facts of the case. In deciding these motions, some courts have prescribed plaintiffs to serve the summons and complaint on a defendant’s attorney, insurance company, or family member, and some have even allowed service by email. The circumstances for each situation are different. However, if a plaintiff is having difficulty serving a defendant—perhaps because the defendant is evading service—then that plaintiff might consider pursuing a motion under CPLR 308(5). This is particularly important because serving the summons and complaint must be completed within 120 days after commencing the lawsuit. CPLR 306-b. When a plaintiff prepares a motion under CPLR 308(5), it is crucial to include documentation of the plaintiff's efforts. Those efforts will not only tend to show that service on the defendant is “impracticable” but also that the proposed method of service that the plaintiff seeks to use is fair and will give the defendant due process.
May 8, 2025
Commercial Litigation
Creative Ways to Avoid Litigation
When disputes arise, parties very often go straight to filing a lawsuit. Sometimes, that tactic can be effective. However, it may not be so effective for those individuals or small businesses seeking to minimize costs. Costs can quickly pile up in litigation, and many of those costs can’t be avoided. There are creative—and effective—ways to avoid litigation, however. Many lawsuits center on contracts being breached and money being owed. When a party to a contract considering filing such a lawsuit, it is important to put in perspective how far away that party may be from getting repaid after winning the lawsuit. It may be months or, more likely, years of work by attorneys before getting paid back anything, assuming the breaching party will still be in operation by then. An often-overlooked option is to approach the party who breached and start a conversation about resolving it without a lawsuit. Lawsuits are public records; avoiding being named in a lawsuit may be valuable and add leverage to negotiate an agreement. This may be enough for some individuals and small businesses to bring them to the bargaining table. Many people opt to hire an attorney to send a letter to the breaching party to see if that starts a dialogue for resolving the dispute. Often, an informal email can have the same effect and elicit a more amiable response from the breaching party—which may be a segue into cooperating to resolve the dispute or even entering into a new agreement to resolve that dispute. If the other party is open to entering into a new agreement, that agreement becomes critically important. It’s an opportunity to add more favorable terms than were in the underlying contract. Those new terms may include that the other party starts making monthly payments, has to pay attorneys’ fees and costs of any lawsuit that comes from the contract, and agrees to a particular court or arbitration forum—all of which may be favorable to the other party. Additionally, this juncture might be the time for the non-breaching party to demand that someone associated with the breaching party sign a personal and unconditional guaranty. That type of guaranty helps reassure the non-breaching party that can be repaid—whether from the breaching party itself or the guarantor. Pursuing these options to avoid litigation may be helpful for individuals or small businesses who don’t want to wait to start being repaid or even would like to give a second chance to the breaching party while strengthening their own hand. It is a cost-effective tactic, and in some situations, it may be just as effective as filing a lawsuit, but without all the associated expenses from taking that more drastic step.
March 18, 2025
Commercial Litigation
Lenders Must Act Fast to Recover Funds in Fraudulent Loan Schemes
Lenders get into a groove with originating loans with existing and new borrowers. So often, the closing comes and goes, and the monthly payments commence without any trouble. But then a borrower comes along who seeks to defraud the lender. If the closing goes through, with the lender transferring out the funds and the funds making their way into the borrower’s account, the lender then faces significant challenges in getting that money back. The timing of the lender’s discovery of the fraud usually determines the odds of the lender clawing back the funds. With any luck, the lender will discover the fraud when it goes to record the documents with the local property records office and finds that the borrower had misrepresented that they would provide the lender with the first priority lien on the property and, in fact, had already obtained mortgages securing the property. Regardless of how quickly the lender learns of the fraud, it is crucial that the lender take immediate action. In New York and New Jersey, the lender may consider filing a complaint and order to show cause seeking to stop the borrower from transferring the funds out of their possession. These types of lawsuits require moving fast and detailing the fraud to the extent that the lender can. Keeping complete and accurate records for each loan is crucial. For instance, when it comes time to go before a judge and show where the fraud occurred, central to that are the loan documents in which the borrower made the misrepresentations to the lender. Without proof of those misrepresentations, it becomes very difficult to convince a court that fraud has occurred and unlikely that a court would effectively freeze the borrower’s assets. Occasionally, the title insurance company may extend coverage to these types of incidents, but there is no guarantee of coverage. Also, the title insurance company’s decision on whether coverage exists may take some time. That time can be very valuable for the lender to go after the borrower and may be the difference between recovering the funds or the borrower moving the funds out of the lender’s reach. A lender acting quickly in these situations is also important because if the borrower has defrauded this lender, the borrower has probably defrauded other lenders—and those other lenders may already be chasing down their funds. That borrower may have already transferred the funds out to hard-to-reach accounts, spent the money, or even thrown a wrench in the process by filing bankruptcy. Lenders that learn of the fraud hire counsel and act within hours, rather than days or weeks, maximize their chances for success.
February 13, 2025
Commercial Litigation
Five Things to Take into Consideration When Negotiating and Settling a Case
Settling a case is hard. Negotiating the terms and coming to an agreement can take weeks or months. But once the parties agree to the general terms of a settlement (e.g., the amount of money changing hands and the timing of the settlement payment), there are a number of other considerations for putting the settlement agreement in writing. Here are five things to know when you are negotiating to settle your case: You Can Protect Your Privacy Even though the documents filed in the lawsuit will remain public, the settlement details don’t have to be public. One effective tactic is to separate the settlement agreement from the “stipulation of discontinuance.” This allows the terms in the settlement agreement to remain private, with the only document being filed with the court simply stating that the parties have agreed to discontinue the case. You Can Set the Rules for After the Lawsuit A settlement agreement can also be useful for clarifying what the parties can and cannot do after the lawsuit. Often, parties agree to include a provision in the settlement agreement requiring the parties to keep the settlement terms confidential and not to disclose those terms to anyone. Some parties may even agree to a non-disparagement provision, requiring them to refrain from saying anything negative about each other. Although these are provisions that often can be overlooked when negotiating a settlement, they can help to permanently put the dispute to rest and assist the parties with moving past the lawsuit. Plan for What Happens if Someone Breaches the Agreement You may be feeling optimistic that you are finally settling your case. Not so fast. Contemplate what may happen if something still goes wrong: what if the settlement payment doesn’t come through? Or what if someone breaches some other part of the agreement? The settlement agreement should provide a roadmap for what happens next. You may want to include whether the breach of the agreement goes back to the court you were in or whether the dispute goes to arbitration. You also may want to have a provision stating that if the other side breaches the agreement, you are entitled to additional damages and that the other side has to compensate you for your attorneys’ fees. Including these terms in the agreement can save you resources and avoid the frustration of going back to court if the other side breaches. Don’t Overcomplicate It Lawsuits are stressful. Don’t add to that stress by making the settlement more complicated than it needs to be. Include the terms you need to wrap up the case and exclude those other terms that often don’t apply to your case or that you don’t need. Prioritize being clear with the terms you include, as sometimes a settlement agreement can go on for dozens of pages when just a fraction of that can suffice. Once You Sign, the Settlement is Final Before you sign a settlement agreement, make sure you understand each piece of the agreement. If you don’t understand some portion of the agreement, you may be taking on obligations you don’t know about or waiving rights that leave you worse off. Settling a case requires careful attention to detail, and drafting a settlement agreement that clearly reflects the parties’ intentions is critical to avoiding future disputes. By addressing these key considerations in your negotiations, you can ensure the settlement process is effective and that your interests are protected.
January 22, 2025
Commercial Litigation
Facing the Scam: What to Do If You've Fallen Victim to a NYC Apartment Rental Scheme
There is a horrific scam that preys on the vulnerability of renters in New York City, and it happens more often than you might think. The process of securing an apartment in the city is already difficult enough. It involves gathering numerous documents and endless days and nights of searching. When you find a place you like, you have to move quickly. It’s in the midst of this stressful process that the scam happens. The scam takes many different deceptive forms, but the elements remain the same: someone pretends to be a broker or an agent; that person shows you an apartment, either in person, maybe virtually; acceptance of your security deposit, and perhaps even the first month’s rent and broker’s fee. Then, this person vanishes, leaving you without an apartment and out a lot of money. It turned out that the person wasn’t an agent or broker at all. Maybe they were able to obtain a set of keys to a vacant apartment and show you the place. Or perhaps they assured you they had arranged for the keys to be delivered to you after you paid. There are even some horror stories of the person giving the would-be renters the keys to an apartment, the would-be renters moving in with belongings, and then an actual broker with prospective tenants walking in to find the occupants getting settled. There are many ways to prevent this from happening, and the New York Police Department has given its tips for avoiding the scam. As has StreetEasy. But what do you do if it’s already happened to you? Of course, you can go to the police and see if the scammer can be apprehended and prosecuted, but you also want to get your money back. That’s when having an attorney at your side can make all the difference. Going after the “broker” or “agent” is one strategy. There are some pieces of information that you and your attorney can use to help go after them. Ideally, this is bank account information or actual names and phone numbers. Doing that investigative work with your attorney will go a long way in identifying the individual who scammed you. If you can identify them, you can file a lawsuit against them. Another strategy, depending on the circumstances, is to go after the actual landlord or whoever has the right to be in the apartment. Sometimes, it’s the tenant who is behind on rent and pretending to sublet the apartment. Other times, the landlord has made it just a bit too easy to get the keys to the apartment, and someone saw the opportunity to hatch their scheme. Regardless, going after them for their fault in causing you to get scammed gives you a chance to get your money back.
May 15, 2024
Commercial Litigation
Suing Someone? Five Crucial Factors to Consider Before Proceeding
So, you think you can sue. Maybe you had a contract, and the other side breached it. Or maybe someone owes you money, and you’re ready to go after them. Not so fast. Starting a lawsuit is a big step, and there are many considerations you and your attorney should discuss before you proceed. Here are five crucial things to know and understand before suing someone. Sketch Out a Cost-Benefit Analysis: Lawsuits are expensive. If you’re looking to go after someone for a few thousand dollars, you might want to reconsider it. Attorneys’ fees, court costs, and other expenses quickly add up, and there are no guarantees of success. While the desire for restitution may be strong, avoid rushing into litigation that could potentially worsen your financial position. Assess The Likelihood of Collecting (If You Win): Sometimes, your case is only as good as your adversary’s financial resources. If the other side is going to file for bankruptcy, then it’s likely that even if you win your case, you wouldn’t be able to collect. If bankruptcy is not a possibility and you find yourself among numerous creditors seeking repayment, the probability of receiving the full amount owed to you is notably diminished. Evaluate Your Opponent: If you’re going against a small company or individual, that’s one thing. But if you’re taking on a large corporation, you should assume that they will hire lawyers, pay them well, and make the case a battle of resources. If the amount you’re owed is high enough, this may not be a deterrent, but be prepared to devote a substantial number of resources to the fight. Distinguish Principle from Damages: Many of the most contentious lawsuits are not even that valuable in terms of their outcome. Often, they stem from disputes over what the parties see as right versus wrong or a desire to “send a message” to the other side rather than a clear goal of obtaining damages. There are better ways to achieve these goals than going through the court system. Most lawsuits end in money changing hands rather than the court ordering parties to abide by principles. Although it may be difficult, take a step back from the dispute. Analyze whether there was actual harm for which you can pursue damages. If the dispute primarily revolves around principle, it’s important to reconsider whether a lawsuit will accomplish what you want. Act Quickly: One thing is certain: regardless of the validity of your claims against the opposing party, the clock is ticking. The statute of limitations governing the time frame for filing such claims is running. Once you are out of time to file your claim, you forfeit your opportunity to file your claim. Courts do not make exceptions for late claims, regardless of the circumstances. In conclusion, the decision to pursue legal action through a lawsuit should not be taken lightly. Numerous critical factors must be carefully considered before proceeding, from the financial implications to the likelihood of a successful outcome and collection. As an experienced litigation attorney, I’ve seen firsthand how lawsuits can have significant and far-reaching consequences for the parties involved and their relationships. That’s why it’s essential to approach this decision thoughtfully and in close consultation with legal counsel. Remember, the goal is not to discourage you from seeking justice or the rightful resolution of a dispute. Rather, it's to ensure you make an informed decision that aligns with your best interests and doesn't leave you in a worse position than when you started.
April 17, 2024
Commercial Litigation
Five Things to Know About Hiring a Litigator
Did you get sued for the first time? Then you’ve got litigation on your hands. Litigation is just another word for a court case. Choosing an attorney to represent you in that litigation is tricky — and very important. Here are five things to know about hiring a litigator: 1. Hire Within Your Budget Most attorneys in the New York City area have higher billable rates. This is common across the country — legal services cost more in larger cities. But just because most attorneys have higher billable rates doesn’t mean you can’t afford high-quality representation. Make sure you know your attorney’s billable rate and ask about budgeting for your case. For example: What is your estimated budget for each stage of the case? What can we do to keep costs low in the case? Who will work on my case, and what is each person’s billable rate? 2. Experience vs. Titles Titles vary from firm to firm. What ultimately matters is the experience. An associate at a midsize firm might have more experience than someone who opened their own practice straight out of law school. On top of that, a midsize firm gives you the best of both worlds with experienced associates and significant resources at their disposal — but not at big law firm rates. 3. Seek a Clear Communicator Make sure your attorney tells you what the options are for your case — in detail and in language that you understand. Litigation is stressful, emotional, and expensive. If communication isn’t clear from the outset, it is likely to only add more stress, confusion, and frustration to your case — which may last for months or even years. Many attorneys have poor bedside manners. The term “legalese” exists for a reason. The law can be complex and dense — it’s your lawyer’s role to communicate to you clearly what’s happening. You shouldn’t feel talked down to. If your attorney is an effective communicator, you will receive updates about your case in clear and understandable language, confidently discuss each component of your case, and strategize together about how best to move forward. 4. Hire a Litigator, Not an Attorney Even though all attorneys are admitted to practice law, they’re not all the same. Litigation is a specialty. It requires being familiar with the court rules. More than that, it means having expertise in using the tools available to give you an edge in the case. Find a litigator who knows how to practice in the court your case is in. Even then, litigation is a wide-ranging area with many specialties. Make sure you ask about that attorney’s experience in your case’s area. For example: Have they worked on a case in this area before? What are some of the strategies that work well for this type of case? Do other attorneys in their firm have experience in this area? 5. Act Quickly As soon as a case starts, so do the deadlines. If you delay taking action for too long, the deadlines will pass, and your attorney will have to try to undo the damage by asking the court to give you another chance to make things right. All of this work is likely to result in additional costs and time. It is imperative to move quickly. Reach out to schedule a consultation right away so that you can best protect yourself.
April 2, 2024
Commercial Litigation
Protecting Your Business: Understanding ADA Website Accessibility Lawsuits in New York
Did you receive a complaint alleging that your company’s website violates New York’s equivalent of the Americans with Disabilities Act? Does the complaint allege the website violates New York State Human Rights Law and New York City Human Rights Law? By an individual claiming they tried to purchase goods on your website but could not do so due to accessibility issues? You are far from alone. Court dockets are ballooning in New York with these cases. With the right strategy, you can maximize your chances of greatly reducing the exposure you face and potentially securing the dismissal of the case without paying the other side a dime. Here are five things to know about your case: 1. Your Website Actually May Have Accessibility Issues There are many technical requirements for making your website accessible. It is important to work with a trusted vendor to bring your website into compliance, but that alone won’t cause the lawsuit to be dismissed. 2. Still, the Plaintiff Must Be Able to Prove the Impairment or Disability Even though your website may have been inaccessible to those with an impairment or disability, the plaintiff who sued you still must be able to prove that they are impaired or disabled. The phase of the lawsuit where you can dig into that proof is the discovery phase, and with the right strategy, you may be able to resolve the case during that phase and not have to proceed to trial. 3. A Fast-Paced, Active Approach Tends to Work Best The law firms that file these cases file a lot of them. Managing such a high volume of cases takes time and effort. With so many cases, their attorneys prefer to attack those cases where the other side is asleep at the wheel. Don’t show complacency. Instead, bring the fight to them and put them on their heels. 4. Don’t Expect Immediate Results Depending on which court your case is in, you may be facing a court with a lengthy process to bring your case to its close. The court may take its time to move your case along, and there are ways to nudge it to the next step. Maintaining that proactive approach is best, but be ready for the case to likely last a minimum of several months. 5. Be Ready to Negotiate Settlement talks can happen at any stage of the case. Don’t assume that the first offer you receive will be one you’re ready to take. Often, the attorneys for the other side are anxious to settle the case and will be open to significant negotiation. If you just received a complaint about your website, it is imperative that you act quickly. As soon as a lawsuit starts, so do the deadlines. You don’t want to miss a deadline—especially in this type of case where the other side is waiting for you to slip up.
March 15, 2024
