In a tangled commercial dispute, a law firm and its principal owner, without counsel, sued a well-respected New York City business equipment and technology services company for breach of contract. Problem was, the law firm targeted the wrong party in a grudge match over a faulty printer. The machine had been acquired and leased through a third-party dealer, now defunct. The dealer shut its doors after filing for chapter 7 bankruptcy.
Neither the law firm, nor its principal attorney, had contracted with any of the named defendants for sales or service. Undeterred, the law firm pursued damages for breach of contract and breach of warranty on a novel—but misguided—assumption of liability theory.
Our client, neither an assignee nor a successor, had merely stepped up after the original dealer folded. It offered to service the printer free of charge to build goodwill and a possible future relationship with the law firm. No one disputed that defendants had no contractual ties to plaintiffs. The primary question was one of legal duty.
Weltman & Moskowitz successfully moved for early termination of the lawsuit, arguing that dismissal was required for at least four separate reasons. First, dismissal was mandated based on the plain language of the agreements and other documentary evidence (CPLR §3211(a)(1)). Second, because plaintiffs had named an improper party plaintiff (CPLR §3211(a)(3)). Third, due to release and plaintiffs’ noncompliance with the statute of frauds (CPLR §3211(a)(5)). Finally, because of plaintiffs’ lack of contractual privity with defendants, and plaintiffs’ failure to state a claim upon which relief could be granted (CPLR §3211(a)(7)).
Finding that prima facie defenses had been properly pleaded, the Supreme Court Commercial Division agreed with defendants and dismissed the law firm’s contract action in its entirety.
Plaintiffs’ fatal error in bringing the action and then opposing the motion was their failure to follow legal precedent and New York procedural rules. For one thing, in contesting the motion plaintiffs submitted an unsworn statement of facts. As provided in CPLR §2106, lawyers who are otherwise statutorily permitted to file unsworn fact affidavits may not do so when their personal integrity has been questioned and are representing themselves.
Accordingly, the Supreme Court rejected plaintiffs’ opposition and granted early relief to defendants. Just a hunch, but we suspect the lawyer plaintiff may have been too close to the conflict and lacked objectivity. Because of this they failed to pay attention to the critical fine print of the original sales contract and lease.
The lessons learned? Even lawyers should hire lawyers and not represent themselves to deal with their own business conflicts. As a result of the dismissal, our client will need not endure the time and distraction of prolonged pretrial discovery preparation, and can look forward to sidestepping the cost and risk of trial.
Contact the lawyers of Weltman & Moskowitz for assistance with breach of contract, business divorce, or shareholder conflict, or when dealing with commercial claims in New York or New Jersey courts. The firm’s lawyers are business people, and know how important it is to develop winning strategies from the beginning when everything is on the line. In many cases mediation or arbitration programs can be employed to save time and money. It is a matter of knowing when to settle and when to battle on.
For a no-obligation consultation to review the legal alternatives available to resolve your business problem or commercial dispute, contact Michael L. Moskowitz at mlm@weltmosk.com or Richard E. Weltman at rew@weltmosk.com.
