LIEB BLOG

Legal Analysts

Showing posts with label tortious interference. Show all posts
Showing posts with label tortious interference. Show all posts

Monday, November 28, 2022

Court - Attorneys Can Advise Clients to Breach Contracts

People are often shocked to learn that their attorney can and, sometimes, should advise them to breach a contract. This shock is probably because of the known fact that if anyone else advises their client to breach a contract, even if it would be in their best interest, such advice could constitute an actionable wrong by the advising party that would get them sued for tortious interference with a contract.


However, that is not the case for attorneys. 


As the Appellate Division, Second Department, recently reminded us in Asamblea De Iglesias Christianas, Inc. v DeVito

"Absent a showing of fraud or collusion, or of a malicious or tortious act, an attorney is not liable to third parties for purported injuries caused by services performed on behalf of a client or advice offered to that client" (id.; see Doo v Berger, 227 AD2d 435, 436).

This is really important case law because sometimes the exposure (a/k/a, cost) of the breach is less than the cost of honoring the contract and therefore, businesses and individuals alike can be better off by not being bound by their word and a breach might be advisable. So, before you act on a contract that is giving you second thoughts, don't see your best friend, see your attorney.






 

Monday, January 20, 2020

Eye on Real Estate Q&A: Co-op Disapproval of Sale and Suing the Board

On this week's episode of Eye on Real Estate, January 18, 2020, we were asked about suing a cooperative board for refusing a sale by creating an absolute floor price, which unit owners had to obtain in order to sell units to third-party purchasers.

Initially, we discussed the business judgment rule, which generally protects boards from lawsuits as long as the board acted in good faith and in accordance with it's power. 

However, there can be a case against the board where the board created an absolute floor price in bad faith or if the board created the absolute floor price beyond its powers as set forth in the bylaws. 

As the courts explain, the test is whether the board's floor is "a provision merely postponing sale during the option period," which is permissible or, if it is, instead, "an effective prohibition against transferability itself," which is impermissible. 

So, if you are being blocked on price, consider a lawsuit after you obtain and review the bylaws. 

For a great explanation of this issue, see Oakley v. Longview Owners, Inc.