August 21, 2017 News

Morrison Cohen Successfully Obtains Dismissal of Federal Case

August 21, 2017 – Morrison Cohen successfully obtained a complete dismissal of a case against several of its corporate and individual clients in federal district court in the Southern District of New York.  The plaintiff alleged breach of contract, breach of fiduciary duty, fraud, and violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) relating to the sale of interests in various New York apartment buildings held by a corporation formed by plaintiff.  Plaintiff alleged that in the mid-1990s, after his criminal conviction and concomitant loss of control of his company (and its interest in the New York apartment buildings), defendants promised him 75% of all management fees, sale proceeds, and investment returns associated with these buildings.  Plaintiff alleged over $2 billion in damages.

Morrison Cohen argued from documents in the public record that, even if plaintiff’s claims had any validity at all, he knew about them all since the mid-1990s, and thus the claims were barred by the relevant California statutes of limitations.  The Court (Koeltl, J.) agreed with Morrison Cohen’s arguments that plaintiff’s claims were barred, and that no tolling arguments could save the plaintiff’s case.

The Southern District of New York’s decision is an important reminder that a thorough examination of the parties’ interactions is crucial to determine the date upon which a cause of action accrues for statute of limitations purposes. 

The case is Lefkowitz v. Westreich, 1:16-cv-06845-JGK (S.D.N.Y.).  For a copy of the decision, please click here.

The Morrison Cohen team included Y. David Scharf, Mary E. Flynn, Jason P. Gottlieb and Allison Khaskelis.