Commercial and Business Litigation Lawyers in NYC

Commercial litigation covers disputes between a business and the companies and people it deals with: unpaid invoices, broken contracts, leases, construction work, guaranties and business torts. Corporate litigation covers disputes inside a company, among its shareholders, members, partners, directors and officers.

Corporate litigation includes oppression and deadlock claims, breach of fiduciary duty, derivative actions brought for the company and petitions to dissolve it. Both are generally heard in the same courts, and one dispute can involve both, as when a co-owner who diverted company money also caused the company to breach its contracts.

A corporation must appear in a New York civil action through an attorney under CPLR 321(a). The statute’s exceptions cover the small claims and commercial claims parts of the city, district and justice courts.

The requirement applies from the first response, so an answer that an owner who is not a lawyer signs for the corporation in Supreme Court does not satisfy it. A corporation served with a summons needs counsel in place before the response deadline runs.

Six years for breach of contract under CPLR 213(2), generally measured from the date of the breach rather than the date it was discovered. Four years where the contract is for the sale of goods under UCC 2-725. Fraud runs six years from the date the claim accrued or two years from when the fraud was discovered or could with reasonable diligence have been discovered, whichever is later, under CPLR 213(8).

Breach of fiduciary duty has no single period, and the answer turns on the remedy sought: three years where the claim is for money alone, six years where the relief is equitable or where fraud is essential to the claim. A written agreement can shorten these periods under CPLR 201, and for a sale of goods the original agreement can reduce the four years to no less than one year but cannot extend it. Because the contract period runs from the breach, a defect found years after the work was done can already be time-barred.

Many oral agreements are enforceable, but some must be in writing and signed by the party against whom they are enforced. Under General Obligations Law § 5-701, these include an agreement that by its terms is not to be performed within one year and a promise to answer for the debt of another, such as a personal guaranty of a company’s debt.

Under UCC 2-201, a contract for the sale of goods for $500 or more is generally not enforceable without a signed record showing that a contract was made, and it cannot be enforced beyond the quantity of goods the record shows. An oral agreement outside these categories can be enforced, with its terms proved through testimony, the parties’ conduct and the documents that followed.

The company’s debts generally remain the company’s own. New York courts hold an owner personally liable by piercing the corporate veil only where the owner exercised complete domination of the company in the transaction at issue and used that domination to commit a fraud or wrong that injured the plaintiff.

Both parts are required, so control of the company without a resulting fraud or wrong does not support personal liability. An owner who personally takes part in a fraud or conversion committed through the company can also be sued for that conduct directly, without piercing the veil.

A shareholder can bring a derivative action in the corporation’s name to recover for a wrong done to the company, such as a director diverting its assets, under Business Corporation Law § 626. The judgment is entered in the corporation’s favor.

The shareholder must hold shares when the action is brought and must have held them when the transaction complained of took place, unless the shares passed by operation of law. The complaint must state with particularity the efforts made to have the board bring the action, or the reasons no such effort was made, and the action cannot be settled or discontinued without the court’s approval. New York courts allow members of a limited liability company to bring derivative claims as well.

Papers filed in a New York civil action are generally open to the public. A court can seal them, in whole or in part, only on a written finding of good cause that states the grounds, under 22 NYCRR 216.1(a).

In deciding whether good cause exists, the court weighs the interests of the public as well as those of the parties. Because the rule requires the court’s own finding, the parties cannot make a filing confidential by agreement alone.

Mediation fits when the governing agreement requires it, or when the situation is stable and the other side can participate in good faith. Where a partner is moving assets or has locked out a co-owner, mediation delays relief and benefits the party causing the harm.

Many agreements make mediation a precondition to filing, and disregarding that clause can expose the filing party to dismissal or a fee award. Where it is optional, mediation can resolve valuation disputes that would otherwise require competing experts.

Compensatory damages restore the position the injured party would have held had the wrong not occurred. Disgorgement strips gains from the party who benefited. Punitive damages require misconduct that meets a heightened standard, and attorney fees are recoverable only where a contract or statute provides for them.

Breach of fiduciary duty damages are generally measured by the amount diverted plus interest from the date of the wrong. A sum awarded for breach of contract carries interest as of right under CPLR 5001, computed from the earliest date the claim existed, at nine percent a year under CPLR 5004 unless another statute provides otherwise.

The contract and any amendments, the correspondence that shows how the dispute developed, invoices and payment records, and any summons, complaint, demand letter or notice the business received, with the date and manner it arrived.

In an ownership dispute, the shareholders’ agreement or operating agreement, the formation documents and recent financial statements show who holds what and who controls the money. A list of the people and companies involved lets the firm check for conflicts before the details are discussed.