Earlier this week, Westchester small business lawyer and New York City commercial litigation lawyer Michael Joseph won a major appellate decision from the New York Supreme Court Second Appellate Department.
Our client operated an Indian restaurant named Orissa in Dobbs Ferry. In December 2007 our client considered expanding his business and sought out investors. The defendants orally agreed with the plaintiff that they would all form a joint venture to open an Indian restaurant and boutique in Dobbs Ferry. The plaintiff’s interest in the restaurant would start at only one percent, but as he paid off a business loan using the restaurant’s profits, his ownership interest would increase until it reached 49 percent. The plaintiff did most of the work to establish the restaurant, and closed his existing restaurant in August 2008.
The plaintiff was a member and manager of Orissa DF and after Plaintiff did all of the work to open the restaurant, the defendants who only supplied the seed capital breached the oral agreement and locked our client out of the business in January 2010. After White Plains commercial litigation lawyer Michael Joseph filed the lawsuit, the defendants fabricated and backdated an operating agreement and claimed that our client was never an owner of the business. The trial court dismissed the complaint based upon the fabricated “documentary evidence”.
After over a year of fighting, our Westchester small business lawyers successfully convinced the Appellate Court that the trial Court committed reversible error. In a landmark decision, the Court held that the Westchester Supreme Court was wrong because our Westchester business lawyers established that there was an issue as to the authenticity of the operating agreement through evidence of e-mails from the defendants which were sent months after the purported operating agreement was signed, and which indicated that no agreement had yet been signed, and that Defendants intended our client to be a partner in the business. The Court stated dismissal “is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law…here, there are disputed issues relating to the authenticity of the operating agreement… accordingly, dismissal of these causes of action was not warranted”.
Sometimes through hard work and resolve our White Plains commercial litigation lawyers can keep an entrepreneur from being taken advantage of even when they do not protect themselves by observing the formality requirements involved in forming a business.
