News Defendant Breached Partnership Agreement, Corporate Veil Pierced (PA) September 22, 2017 < Back Share to: A plaintiff in Philadelphia recently prevailed in a business dispute with his former real estate partner. In Bravo v. 2536-38 North Broad Street Associates, C.P. Philadelphia No. 141101464, the defendant was ordered to pay his former business partner over $782,000 as a result of a breach of their partnership agreement by failing to pay the plaintiff money owed under the terms of the limited liability partnership. According to the judge’s opinion following a bench trial, the parties formed a real estate partnership in 2010. The plaintiff initially joined as a limited partner and purchased a 10% ownership stake in the business, for which he was to receive a 10% cash flow payment from the partnership. A few months later, the plaintiff invested additional funds in exchange for a 51% ownership stake of the business. However, subsequently, the plaintiff did not receive his proportion of cash flow payments from the partnership, and the defendant also failed to inform him that there was a lien on one of the partnership’s properties, and that the property was listed for foreclosure sale. During the time period in which the plaintiff did not receive his proportional disbursements, the judge also found that the defendant had transferred hundreds of thousands of dollars from the partnership to other business entities under the defendant’s control; and that the defendant had paid himself a salary from the partnership. The defendant claimed that the money was diverted from the partnership in order to maintain his ability to secure a mortgage loan for the partnership, however the judge determined that such diversion of partnership funds was not contained in the partnership agreement between the plaintiff and the defendant. The judge was similarly un-receptive to the defendant’s claim the plaintiff was not issued cash flow payments because the partnership was unable to obtain a mortgage loan. Ultimately, the judge determined that the corporate veil should be pierced, since the defendant essentially ignored corporate formalities. Morover, by failing to pay the plaintiff his proportional share of the partnership’s cash flow, the defendant had breached the partnership agreement. We surmise that the judge's findings relied heavily on financial data supporting the plaintiff's claims of, essentially, theft, which supported the plaintiff's version of events. Thanks to Greg Herrold for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News NJ Federal Court Rejects E&O Insured’s Claim for Spoofing Loss November 25, 2020 < Back Share to: In Authentic Title Services, Inc. v. Greenwich Insurance Company, et. al, the District Court of New Jersey held that coverage was barred under an E&O Policy for a loss resulting from a spoofing scam based on an exclusion for claims resulting from “misappropriation” of funds. The insured, Authentic Title Services, obtained a Title Professional Liability Errors and Omissions policy from Greenwich Insurance Company, which incepted in 2015. While the policy was active, Authentic acted as a title and settlement agent for a real estate transaction in South Orange, New Jersey. Authentic deposited the loan proceeds in its settlement account, although they remained the property of the lender. The closing was later postponed, and Authentic’s president received an email from a person purporting to be the lender seeking a return of the funds. After receiving additional spoofed emails from other parties allegedly working with the lender, Authentic’s president deposited $480,750 in an account that belonged to a fraudster. The funds were never recovered. When Authentic sought coverage from Greenwich, Greenwich denied coverage, in part, based on a policy exclusion for claims “based on or arising out of … a. the commingling, improper use, theft, stealing, conversion, embezzlement or misappropriation of funds or accounts.” In the ensuing declaratory judgment action in New Jersey federal court, the Court agreed that the exclusion barred coverage. Citing New Jersey courts’ expansive definition of the phrase “arising out of,” the court held that the claim “undeniably originated from, grew out of, or had a substantial nexus to funds belonging to [the lender] that were transferred into the Fraudulent Account and then were withdrawn by a person or entity other than [the lender] and were never recovered.” As the Court noted, the main dispute was whether a “theft,” “stealing,” “commingling,” “embezzlement,” or “misappropriation” occurred. Specifically, Authentic argued that because some of the terms applied to only first party conduct (as opposed to third party conduct) the terms were ambiguous and did not apply to this loss. However, the Court held that Authentic’s interpretation would “introduce confusion” and held that the plain terms of the exclusion barred coverage in this case. In so doing, the Court pointed to a District of Connecticut case applying the exclusion based on similar facts. See Accounting Resources, Inc. v. Hiscox, Inc., 2016 WL 5844465 (D. Conn. Sept. 30, 2016). The case law involving claims related to spoofing scams remains relatively sparse. As Authentic demonstrates, however, the rules of policy construction apply with equal force even though the underlying fact patterns may be novel. Thanks to Doug Giombarrese for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News Layoffs At Hooters Creates Federal Class Action Lawsuit April 22, 2020 < Back Share to: On March 25, 2020, Hooters laid off 679 employees due to the COVID-19 pandemic’s impact on its business. In a March 26, 2020 statement Hooters explained: “With our dining rooms closed and revenues more than halved, we and our franchisees have had no alternative but to dramatically reduce the size of our work force in response.” These layoffs resulted in a April 16, 2020, class action lawsuit filed in the U.S. District Court for the Middle District of Florida, alleging that Hooters violated the federal Worker Adjustment and Retraining Notification Act (WARN) by not giving employees any advance notice before executing layoffs last month due to the COVID-19 pandemic. The WARN Act typically applies to workers at companies with at least 100 employees. The law aims to protect qualified workers by requiring their employers to provide at least 60 calendar days' advance written notice of a plant closing or mass layoff at a single site of employment, according to a description of the law on the U.S Department of Labor’s website. However, the WARN Act “makes certain exceptions to the requirements when layoffs occur due to unforeseeable business circumstances, faltering companies, and natural disasters,” the description also says. On behalf of the class, two former employees allege that Hooters could have evaluated the impact of COVID-19 on its workers prior to the date that they were terminated in “mass layoffs” and that Hooters violated the federal WARN act by not giving employees any advance notice before executing layoffs last month due to the COVID-19 pandemic. The suit seeks damages equal to 60 days’ compensation and benefits for a class covering all Hooters employees in Florida who were not given at least 60 days advance written notice before the mass layoffs. The Complaint claims that “the fact that Congress recently made available to defendant and many other businesses nationwide millions of dollars in forgivable loans through the ‘Paycheck Protection Program,’ but defendant still opted to instead engage in a mass layoff — and do so without any advance written notice to its employees — only further underscores the severity of the WARN Act violations committed by Hooters.” Hooters has not yet responded to the Complaint, but in a March 26, 2020 statement, Hooters writes “With our dining rooms closed and revenues more than halved, we and our franchisees have had no alternative but to dramatically reduce the size of our work force in response.” Thanks to George Parpas for his contribution to this post. Please email Georgia Coats with any questions.   Previous Next Contact

News If You’re Practicing Being Arrested, You Just Might Get Hurt. July 5, 2013 < Back Share to: In the case of Sarasky v. Law Enforcement Training and Consulting Service, the plaintiff, an ASPCA “special agent” (and the quotations are ours), was injured during a recertification class that the defendant was conducting. Specifically, the plaintiff was hurt when she was pretending to be the “arrestee” who was being subdued by an arresting officer. Rather than correctly subdue the plaintiff, however, the defendant’s employee fell on top of her. The instant negligence lawsuit resulted. The trial court dismissed the complaint on the basis that the plaintiff did not establish a prima facie case of negligence and an appeal resulted. The First Department affirmed the dismissal. It held that the plaintiff’s reliance on an unqualified expert failed to raise a triable issue of fact. If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Defective Sidewalk – Do not look at Con Ed (NY) September 10, 2020 < Back Share to: In Curiel v. City of New York, the Supreme Court, New York County addressed whether the defendants – Con Edison, 1) owned the location where plaintiff allegedly fell, 2) cause or create the subject location and 3) that it was under a legal duty to repair the subject condition. The Supreme Court granted Con Edison’s motion for summary judgment to dismiss the complaint and all cross claims asserted against it. Plaintiff allegedly tripped and fell on a public sidewalk on Hillside Avenue near its intersection with Nagle Avenue directly adjacent to the curb line in the crosswalk at the corner in front of 1 Nagle Avenue approximately two (2) feet from the pedestrian traffic signal pole. The Supreme Court stated that “Generally, a duty must be predicated upon ownership, occupancy, control or special use of the property. Further, “A defendant who moves for summary judgment in a slip-and-fall action has the initial burden of making a prima facie demonstration that it neither created the hazardous condition, nor had actual or constructive notice of its existence. Upon such showing, the burden shifts to the party opposing the motion “to raise a triable issue of fact as to the creation of the defect or notice thereof.” (citations omitted) Through plaintiff’s 50-h hearing transcript, and the deposition transcript of their own records searcher, Con Edison was able to establish that they 1) do not own the land where the accident occurred; 2) did not create the subject condition and 3) that it was not under a legal duty to repair such condition. As such, the Con Edison was granted summary judgment dismissing the plaintiff’s complaint. This decision serves as a reminder that when sued for a defective sidewalk to first consider: do you owe the plaintiff a duty of care? If no, summary judgment may be a viable option. Thanks to Corey Morgenstern for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News Experienced Partner Scott A. Lazar Joins Wade Clark Mulcahy LLP’s New Jersey Office February 24, 2026 < Back Share to: Springfield, New Jersey (February 18, 2026) : Wade Clark Mulcahy LLP (WCM), a boutique firm representing insurance and corporate clients in defense and coverage matters nationwide, proudly announces the addition of Scott A. Lazar as a Partner in our New Jersey office. Scott will handle insurance coverage, general liability, products liability, and construction litigation matters throughout New Jersey and New York. His arrival further strengthens WCM’s long-standing presence in the Northeast and enhances our ability to serve clients across state lines. “I look forward to practicing alongside Scott, as we continue to expand and deliver exceptional legal services to clients,” stated Michael Bono, Executive Partner leading from the New York office. Bono remains confident in Scott’s legal expertise, leadership, and strong client relationships, noting that Scott will further support his long-term clients at WCM. Scott added, “I am excited to join WCM and continue serving my clients within a collaborative culture that prioritizes strategy, efficiency, and excellence.” Scott contributes extensive experience representing clients in transportation, construction, and consumer products industries for complex litigation matters. His legal services include coverage analysis and disputes, first-party property claims, indemnification agreements, wrongful death matters, and catastrophic injury matters. Known for delivering practical, cost-effective solutions, Scott focuses on achieving strong results tailored to his clients’ needs. Prior to joining WCM, Scott was a partner in a regional litigation firm handling complex matters in insurance defense and general liability. He graduated in Political Science from the University of Pennsylvania and earned his Juris Doctor from Boston University School of Law. About Wade Clark Mulcahy LLP Wade Clark Mulcahy serves clients across multiple jurisdictions throughout eight offices located in New York, New Jersey, Pennsylvania, Long Island, Florida, Louisiana, and Texas, with one administrative office in England. Our firm consists of trial attorneys that represent insurance and corporate clients, developing strategic solutions that effectively manage risk and bring resolution to complex matters. When we represent our clients, we establish lasting partnerships built on trust, legal excellence, and cost-effective results. Previous Next Scott A. Lazar Scott A. Lazar Partner 862 294 3647 Slazar@wcmlaw.com Contact

News Court Orders Gallery to Return Art, Defense of Lack of Recent Appraisal Rejected (NY) December 15, 2011 < Back Share to: In 2003, Artist Ken Feingold entered into an “Artists Agreement” with the Ace Art Gallery that provided the gallery with exclusive international representation of Feingold's work for twelve months. The parties agreed that, if either party then wanted to cancel, they could do so with 90 days notice. Any unsold inventory at the end of the ninety days would then be returned to the artist. Notably, they also agreed that if Feingold owed money to the gallery, “If the artist cannot reimburse Ace Art Gallery at that time, Ace Art Gallery has the right to hold the inventory for another ninety days until it has produced enough sales or decided to acquire the work(s) at the prices established just prior to the cancellation of the agreement to equal the outstanding debt to Ace Gallery. Then all remaining unsold works would be returned to the artist and all the above terms of the contract become null and void.” In 2009, the gallery decided to cancel the contract, and claimed that Feingold owed the gallery $85,780.13. However, the parties had not agreed on any prices for the art since 2005, and apparently, the gallery felt those values were no longer representative and wanted to be paid in money rather than art. So, the gallery did not attempt to sell the art and instead placed it in storage, leading to a lawsuit in the Southern District of New York, Feingold v. Chrismas. Feingold moved for summary judgment, and the gallery opposed on the basis that, because there were no prices established for the art “just prior” to the cancellation, Feingold was in breach of the contract. But the Court held that when reading that clause in the proper context, “just prior” meant the most recent agreement prior to cancellation. Indeed, the presence of that clause precluded the gallery from seeking monetary damages, and instead provided the gallery with an extra ninety-day window to avail itself of its only contractual remedies: either selling or purchasing the art. The Court found that, because that window had long since closed, the gallery was required to return the art. If you would like further information about this case, please contact Mike Bono at mbono@wcmlaw.com Previous Next Contact

News Rising COVID Numbers Affecting Judiciary (NY) May 19, 2022 < Back Share to: In recent weeks, many of us have seen COVID numbers begin to rise again, at least with regard to positive tests. New York City has yet to see any increase in safety protocols in the Courts since those measures were relaxed earlier this year. But that could change. Just last week, a 3-day retreat for state judges -- involving over seventy attendees - was held in the Hamptons, and apparently, 20 NYC judges who attended the event have since tested positive for COVID. Will an outbreak among judges prompt any changes for in-person Court practice? Who knows. (We note that the linked article indicates a "score" of judges tested positive, which marks and the first time I've seen "score" used in this context since 1863...) We have posted in the past about how various Court protocols have adjusted to COVID, and how COVID in the Courts generally affects claims. The impact of COVID has ebbed and flowed, and seems to be on the uptick in recent weeks. I wrote a recent article for the Nassau Lawyer about how masked, distanced trial practice looks in greater New York City in the coming months. Let's hope this is a last wave of high % positives, and apologies in advance if this post jinxes anything. If you'd like any more information about these topics, please email me at Brian Gibbons Previous Next Contact

News Manufacturer Avoids Products Liability Where Third Party Altered Products (NY) April 22, 2022 < Back Share to: In a products liability action, merely claiming failure to warn does not amount to the standard necessary to prove proximate cause. The New York Appellate Division, Second Department, recently addressed this issue in John Kosta v. WDF, Inc. In that case, defendant Serpentix Conveyor Corporation manufactured three conveyor machines to be placed in a New York City Department of Environmental Protection facility, which was undergoing renovations by defendant WDF, Inc. After the conveyors were delivered, WDF added caster wheels to them so that they could be moved. It was during this move that plaintiff suffered fatal injuries. In New York, a manufacturer who places a defective product into the stream of commerce may be liable for the injuries caused thereby. However, a manufacturer who has designed a safe product is not liable for substantial modifications or alterations made by a third party which renders the product defective or unsafe. In moving for summary judgment, Serpentix established that when the conveyors were delivered, they were required to be affixed to the ground. Serpentix also established that upon learning of the alterations, it informed WDF and the DEP of the need for the conveyors to be affixed to the ground. Under these circumstances, the Second Department affirmed the Supreme Court’s dismissal of plaintiff’s product liability claims against Serpentix based on design defect and failure to warn. The court held that “for there to be recovery for damages stemming from a product defective because of the inadequacy or absence of warnings, the failure to warn must be a substantial cause of the events producing injury.” The Kosta case reaffirms the general rule that a product manufacturer may avoid strict product liability where substantial modifications or alterations are made to its otherwise safe product by a third party. Thank you to Gabriella Scarmato for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Code Red: Second Department Deciphers the Reckless Disregard Standard in Ambulance Accident Cases April 5, 2024 < Back Share to: In Adolfo Chino Alonso v Crest Transportation Service, Inc., et al. , the Second Department clarified the reckless disregard standard of care under the Vehicle and Traffic Law § 1104(e). The incident in question involved an ambulance owned by the defendant Crest Transportation Service, Inc., and operated by a non-party driver, which collided with the plaintiff’s vehicle in Brooklyn while transporting a patient with activated emergency signals and straddling the road's double-yellow line at 20 miles per hour. Defendants contended that the "reckless disregard" standard of care should apply, arguing that the non-party driver did not operate the ambulance with reckless disregard for others' safety. The court clarified that this standard applies only when an emergency vehicle driver engaged in an emergency operation engages in conduct specifically exempted from regular traffic rules by Vehicle and Traffic Law § 1104(b). Any other conduct causing injury is judged by ordinary negligence principles. The Defendant demonstrated that the non-party driver was operating the ambulance as an authorized emergency vehicle in an emergency operation, thus her actions were under the "reckless disregard" standard. Despite conflicting testimonies about the accident's circumstances, the defendant showed that the non-party driver’s actions did not constitute reckless disregard for others' safety. Therefore, the appellate court reversed the previous order and granted Defendant’s motion for summary judgment, dismissing the complaint against them. Alonso v. Crest Transp. Serv., Inc. .pdf Download PDF • 1.00MB Previous Next Contact

News Dram Shop Liability Expanded in New York September 28, 2009 < Back Share to: New York's Dram Shop Act provides that a tavern owner who unlawfully serves alcohol to an intoxicated person is liable to any third party injured by the intoxicated person. However, the intoxicated person himself/herself has no right to sue the tavern owner for his/her own injuries. In O'Gara v. Alicca, the intoxicated plaintiff, a pedestrian, was injured in an automobile accident. She sued the automobile driver, who then impleaded the tavern owner who allegedly unlawfully contributed to the plaintiff's intoxication. The tavern owner moved to dismiss, arguing that the tavern owner could not be compelled to pay damages in a case brought by the intoxicated person. Plaintiff Kathleen O'Gara began the evening of October 28, 2006 with a Percocet. She then went off to the Katonah Bar & Grill, where she allegedly consumed "copious amounts of alcohol." Kath left the tavern at 5:00 a.m. and then, for reasons she can no longer recall, chose to walk across the Saw Mill River Parkway. Defendant Matthew Alacci was driving on the Parkway and his car struck the plaintiff. The plaintiff filed suit against Alacci, claiming he was at fault for the accident. Alacci impleaded the tavern on a cause of action for contribution on the theory that the tavern wrongfully caused the plaintiff's intoxication. In a case of first impression, an appellate court in NY ruled that the claim for contribution is valid and can go forward. The court ruled that while an intoxicated person cannot sue a tavern for damages under the Dram Shop Act, there is no reason to prohibit a defendant from seeking compensation from the tavern on the Act. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_06668.htm Previous Next Contact

News Estate of Family Who Fled Nazi Germany Sues Met For Return of Picasso Allegedly Sold Under Duress November 18, 2016 < Back Share to: The estate of a family who fled Nazi Germany recently sued the Met Museum in the U.S. District Court, Southern District of New York, claiming that it was the rightful owner of a work by Pablo Picasso titled “The Actor.” According to the complaint in Zuckerman v. The Metropolitan Museum of Art, Paul Friedrich Leffmann, a successful and wealthy businessman from Cologne, Germany, purchased the work in 1912. After Germany’s Nazi regime implemented the Nuremberg Laws, the Leffmanns were forced to emigrate to Italy in 1937. There, according to the complaint, they faced the same kind of persecution they suffered in Germany. The plaintiffs further alleged that, due to the discriminatory and confiscatory laws in Italy, and the regulatory barriers associated with fleeing to countries such as Switzerland and Brazil, Lefmann, sold the Work under duress at a deep discount in 1938. After the Work changed hands at least two more times, the Work was donated to the Met in 1952. According to the complaint, the Met either knew and failed to disclose; or should have known that the Work had been owned by a Jewish refugee who only disposed the Work under duress because of Nazi and Fascist persecution. In support of this allegation, the plaintiff cited, among other things, State Department efforts to warn museums, libraries, art dealers, and others to use vigilance in identifying “cultural objects with provenances tainted by World War II.” The plaintiff also alleges that the Met published an inaccurate provenance for the Work, which indicated that Leffmann sold the Work much earlier than 1938. According to news reports on the case, the Met is expected to argue that Leffmann actually sold the Work at market value in 1938 and was therefore, not a sale under duress. The Met is also expected to argue that inaccuracies in the Work’s provenance were based on a former buyer’s inaccurate recollection rather than anything nefarious. It will be interesting to see how Zuckerman unfolds. There is no denying that the Nazi regime looted art and that many sales were made under duress. One question is whether a valuation analysis can shed light on the issue of whether this Work was sold at the then value or under duress. Watch this space. Thanks to Mike Gauvin for his contribution to this post. For more information, please email Dennis Wade at dwade@wcmlaw.com . Previous Next Contact