Richard Klass in the news: Read at “Tinder, in $50M Class Action Crosshairs”

Richard Klass in the news:
Published on July 13, 2021, the story reports that…”A South Florida litigator filed a class action seeking over $50 million in damages in New York federal court against the company behind several of the top online dating services.”

It continues:

“Marcus Corwin, the lead attorney and partner at Corwin Law in Boca Raton, represents Neal D’Alessio, a class representative….
“…The class action complaint alleges the defendant, Match Group LLC, which owns and other dating services, including Tinder, committed fraud, breach of contract, and breach of the implied covenant of good faith and fair dealing….”
The article reports that D’Alessio’s counsel includes Richard Klass, Your Court Street Lawyer:
“D’Alessio’s counsel, which also includes Richard Klass, a New York solo practitioner, stated in the complaint, that…”
Read the article at

Richard A. Klass, Esq.
Your Court Street Lawyer

#CourtStreetLawyer #classaction

Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

Prior results do not guarantee a similar outcome.

© 2021 Richard A. Klass

Scales of justice

Plaintiff claimed attorney malpracticed with regard to a settlement

In Freeman v Brecher, 2017 NY Slip Op 07949 [1st Dept Nov. 14, 2017], the plaintiff claimed that the attorney malpracticed with regard to a settlement. In affirming the dismissal of the case, the appellate court held that,

“ Plaintiff’s claim for legal malpractice in connection with an underlying settlement fails to state a cause of action in the absence of allegations that the “settlement … was effectively compelled by the mistakes of [defendant] counsel” (Bernstein v. Oppenheim & Co., 160 A.D.2d 428, 430, 554 N.Y.S.2d 487 [1st Dept.1990] ) or the result of fraud or coercion (see Beattie v. Brown & Wood, 243 A.D.2d 395, 663 N.Y.S.2d 199 [1st Dept.1997] ). Plaintiff’s equivocal denial of knowledge of the terms of the settlement is flatly contradicted by the clear terms of the settlement agreement (see Bishop v. Maurer, 33 A.D.3d 497, 499, 823 N.Y.S.2d 366 [1st Dept.2006], affd. 9 N.Y.3d 910, 844 N.Y.S.2d 165, 875 N.E.2d 883 [2007] ). Additionally, plaintiff’s speculative and conclusory allegations of proximately caused damages cannot serve as a basis for a legal malpractice claim (see Pellegrino v. File, 291 A.D.2d 60, 63, 738 N.Y.S.2d 320 [1st Dept.2002], lv. denied 98 N.Y.2d 606, 746 N.Y.S.2d 456, 774 N.E.2d 221 [2002] ). Plaintiff’s cause of action for breach of fiduciary duty arising from the same conduct was correctly dismissed as duplicative of the legal malpractice claim (see Garnett v. Fox, Horan & Camerini, LLP, 82 A.D.3d 435, 436, 918 N.Y.S.2d 79 [1st Dept.2011]; InKine Pharm. Co. v. Coleman, 305 A.D.2d 151, 152, 759 N.Y.S.2d 62 [1st Dept.2003] ). ”


– R. A. Klass
Your Court Street Lawyer

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Fraud: Elements of a Cause of Action for Fraud

Illustration from "The Russian Story Book" by Richard Wilson, illustrated by Frank C. Papé, 1916, here illustrating a blog entry by Richard Klass about fraud.

In order to sustain an action for actual fraud the plaintiff must prove…

“In order to sustain an action for actual fraud the plaintiff must prove: (1) that the defendant made a representation, (2) as to a material fact, (3) which was false, (4) and known to be false by the defendant, (5) that the representation was made for the purpose of inducing the other party to rely upon it, (6) that the other party rightfully did so rely, (7) in ignorance of its falsity (8) to his injury (24 N.Y.Jur., Fraud and Deceit, s 14; 37 C.J.S. Fraud s 3).” Brown v. Lockwood, 76 AD2d 721, 730 [2d Dept 1980].

In order to recover damages for fraud…

“In order to recover damages for fraud, a plaintiff is required to prove, by clear and convincing evidence, a misrepresentation, which was false and known by the defendant to be false, made for the purpose of inducing the plaintiff to rely upon it, justifiable reliance and injury (see Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996]; Gizzi v. Hall, 300 A.D.2d 879, 880, 754 N.Y.S.2d 373 [2002]; McGovern v. Best Bldg. & Remodeling, 245 A.D.2d 925, 926, 666 N.Y.S.2d 854 [1997] ). As to the element of reliance, “[w]here a party has the means to discover the true nature of the transaction by the exercise of ordinary intelligence, and fails to make use of those means, he [or she] cannot claim justifiable reliance on [the] defendant’s misrepresentations” (Stuart Silver Assoc. v. Baco Dev. Corp., 245 A.D.2d 96, 98–99, 665 N.Y.S.2d 415 [1997]; see Cohen v. Colistra, 233 A.D.2d 542, 542–543, 649 N.Y.S.2d 540 [1996]; Pinney v. Beckwith, 202 A.D.2d 767, 768, 608 N.Y.S.2d 738 [1994] ).” Tanzman v. La Pietra, 8 AD3d 706, 707 [3d Dept 2004].

“A present expression of the intent to perform a future act is actionable as fraud only if “actually made with a preconceived and undisclosed intention of not performing it” (Sabo v. Delman, 3 N.Y.2d 155, 160, 164 N.Y.S.2d 714, 143 N.E.2d 906 [1957]; see Rudman v. Cowles Communications, 30 N.Y.2d 1, 9, 330 N.Y.S.2d 33, 280 N.E.2d 867 [1972]; Hewlett v. Staff, 235 A.D.2d 696, 697, 652 N.Y.S.2d 350 [1997] ). Absent a showing of a present intent to deceive, such a statement is insufficient to establish a cause of action for fraud (see Cornock v. Murnighan, 285 A.D.2d 874, 874, 727 N.Y.S.2d 803 [2001]). “Stated another way, ‘[t]he mere fact that the expected performance was not realized is insufficient to demonstrate that [the] defendant falsely stated its intentions’” (McGovern v. Best Bldg. & Remodeling, supra at 927, 666 N.Y.S.2d 854, quoting Laing Logging v. International Paper Co., 228 A.D.2d 843, 845, 644 N.Y.S.2d 91 [1996]).” Tanzman v. La Pietra, 8 AD3d 706, 708 [3d Dept 2004].

In order to prevail at a claim of fraud in the inducement, the claimant must allege a representation of a present fact rather than a future intent collateral thereto. Section 29:237. Fraud in inducement, 5 Carmody-Wait 2d Section 29:237

CPLR 3016(b) provides, in pertinent part, “Where a cause of action or defense is based upon misrepresentation, fraud, mistake, willful default, breach of trust or undue influence, the circumstances constituting the wrong shall be stated in detail.” Mere “conclusory” allegations of fraud will not satisfy CPLR 3016(b). The party pleading fraud must at least state all of the elements of the claim, even if specificity might not be attainable. Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 883 N.Y.S.2d 147 (2009).

R. A. Klass
Your Court Street Lawyer

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The Producer: overselling available interests

Cropped version of the painting named " Rehearsal Onstage " by Edgar Degas. Shows dancers in white ballet costumes, directed by a man in dark suit with two other men in suits, in chairs, in very relaxed poses, observing.
Mel Brooks’ movie and musical The Producers may have been a fictional story of fraudsters selling more shares in the production of their Broadway show “Springtime for Hitler” than actually existed, but such fraudsters exist in real life, overselling available interests not only in Broadway productions, but in every type of investment, including real estate.
In this modern day The Producers story, a particular real estate broker (we’ll give him the name “Bob”) had a plan. The idea behind this particular investment was simple: purchase a house in Passaic, New Jersey; fix it up; and then resell it for a profit—the classic real estate “flip.” This broker solicited a number of investors. Each investor would purchase a membership interest in a limited liability company [LLC]. With the funds provided by the members, the LLC would buy the house. A contractor-partner would be hired to renovate the house. Each investor was promised a certain percentage of the net proceeds from the ultimate sale of the house. Unfortunately, the real estate market tanked, construction costs soared and the investment became a huge loss before construction was ever completed.

New Jersey state court action

One of the investors (we’ll call him “John”) brought a lawsuit in the Superior Court in New Jersey for breach of contract, misappropriation of funds, and fraud. In that case, the judge appointed a special fiscal agent (similar to a court-appointed receiver) to manage the operations of the house, list the house for sale, and take all steps necessary to sell the house and distribute the net proceeds to the LLC’s investors.

Real estate broker files for bankruptcy

Bob filed for personal bankruptcy in the New Jersey Bankruptcy Court to avoid his liability to the investors. John filed a lawsuit (known as an adversary proceeding) against Bob in the New Jersey bankruptcy case to have Bob’s liability in this house-investment-gone-wrong declared “nondischargeable.” (The adversary proceeding here was a mini-lawsuit inside of the bankruptcy case, intended to have the effect that Bob would remain liable to John for the collapse of the real estate deal.) In the adversary proceeding, John alleged that Bob brought too many investors into the deal without telling the other investors. A settlement was reached between John and Bob in the “adversary proceeding” and John negotiated with the bankruptcy trustee to purchase the house directly from the trustee to recoup some of his (John’s) losses. Another investor (we’ll call her “Sally”) who lost money in the same Passaic real estate deal then sued John (now the owner of the Passaic real estate) in New York City’s Civil Court, claiming that John defrauded Sally by not including her in the buy-out of the house. This is when John sought help from Richard A. Klass, Your Court Street Lawyer. The aim was to have Sally’s lawsuit, brought in New York, dismissed.

Lack of jurisdiction in the New York Civil Court

There is a basic concept involving any court system that a particular court maintains the authority (“jurisdiction”) to make decisions and orders over a particular controversy. According to New York’s Civil Practice Law and Rules [CPLR] Section 302, New York State courts may exercise jurisdiction over nonresidents under certain circumstances, when the defendant:
1. Transacts any business within the state or contracts anywhere to supply goods or services in the state; or 2. Commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or 3. Commits a tortious act without the state causing injury to person or property within the state.
There is a separate rule as to when New York City’s Civil Court may exercise jurisdiction over cases because it is considered a court of “limited” jurisdiction (See Civil Court Act Section 202). In asking the judge to dismiss the New York Civil Court case, Richard A. Klass argued that any action that could be brought by Sally must be brought in the State of New Jersey, and not in New York. The project-house was located in New Jersey; the LLC was a New Jersey entity; both the New Jersey Superior Court and New Jersey Bankruptcy Court had pending cases involving the house and the LLC; and all of the events transpired in New Jersey. It was urged that New York was the wrong forum for Sally to bring this dispute, citing to Epstein v. Sirivejkul, 48 NY2d 728 [1979]; Irrigation and Industrial Development Corp. v. Indag S.A., 37 NY2d 522 [1975]. The Civil Court judge agreed with the arguments of Richard A. Klass and determined that the New York Civil Court lacked jurisdiction over the case. The judge specifically found that the transaction in dispute occurred in New Jersey and the plaintiff presented no allegations that there was tortious conduct within New York State; also, the fact that there were existing proceedings in New Jersey courts confirmed the conclusion that New Jersey was the proper forum for any dispute. The court then dismissed the plaintiff’s case.
by Richard A. Klass, Esq.
———– copyr. 2013 Richard A. Klass, Esq. The firm’s website: Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn Heights, New York. He may be reached at (718) COURT-ST or e-ml to with any questions. Prior results do not guarantee a similar outcome.

R. A. Klass Your Court Street Lawyer

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Constructive Fraud

When property is transferred to a stranger for no consideration, there is a presumption that the transaction was unfair. Rosevear v. Sullivan, 47 AD 421, 62 NYS 447 (2d Dept. 1900), “and where one party has the advantage of the other, then the burden is on the other party to furnish satisfactory proof that the transaction was in all respects fair.”  Id at 423; Arakjinjian v. Arakian, 268 AD 41, 48 NYS2d 501 (1st Dept. 1944); Greenfield v. Greenfield, 123 NYS2d 19 (Sup. Ct., Kings Co. 1953).

An explanation of the reason for the shifting of the burden of proof is provided in Greenfield, infra at page 21, quoting Green v. Roworth, 113 NY 462:

“As was said by Judge Hand in Cowee v. Cornell, 75 NY [91] 99: ‘We return, then, to the question whether this case was one for constructive fraud.  It may be stated as universally true that fraud vitiates all contracts, but as a general thing it is not presumed, but must be proved by the party seeking to relieve himself of an obligation on that ground.  Whenever, however, the relations between the contracting parties appear to be of such a character as to render it certain that they do not deal on terms of equality, but that, either on the one side from superior knowledge of the matter derived from a fiduciary relation, or from overmastering influence, or, on the other, from weakness, dependence, or trust justifiably reposed, unfair advantage in a transaction is rendered probable, there the burden is shifted, the transaction presumed void, and it is incumbent upon the stronger party to show affirmatively that no deception was practiced, no undue influence was used, and that all was fair, open, voluntary, and well understood.’ “

The holding of the cases requires that the burden of proof should be shifted to the defendant/transferee of property to prove at the onset of trial, “that no deception was practiced, no undue influence was used, and that all was fair, open, voluntary and well understood.”

by Richard A. Klass

copyr. 2012 Richard A. Klass, Esq.
The firm’s website:
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.comcreate new email with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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