Joseph Weiner and Michael Fox Represent Client in Successful Dismissal of Claims Filed by Samsung
On March 1, 2022, the Commercial Division of the Supreme Court of the State of New York, County of New York (Reed, J.) granted the motion by Olshan client, Elliot Tawil (“Tawil”), to dismiss claims against him by Samsung C&T America, Inc (“Samsung”). Samsung asserted that Tawil should be liable for breaching an alleged personal guaranty of a contract between Samsung and Tawil’s co-defendant, Longstreet Holdings LLC (“Longstreet”), pursuant to which Samsung appointed Longstreet as its sales representative for its apparel and clothing business. Samsung, however, conceded that Tawil never signed any personal guaranty. What made the case interesting was Samsung’s allegation that Tawil had sent a personal check for $600,000 to pay some of the debt owed by Longstreet. Rather than accept the payment from Tawil as is, Samsung made the decision to counter and ask for a personal guaranty from Tawil. Tawil refused to sign any personal guaranty and then stopped payment on the check. Samsung also asserted that Tawil should be liable on the contract as Longstreet’s “alter ego,” as well as claims for fraud, unjust enrichment, quantum meruit, and account stated.
Justice Reed ruled that Samsung’s personal guaranty claim violated New York’s Statute of Frauds (GOL 5-701), which requires that personal guaranties be in writing. He also determined that Samsung had failed to plead the requisite “particularlized” allegations for an alter ego claim. As to the fraud claim, Justice Reed ruled that all of Samsung’s allegations – which were in actuality targeted to Longstreet – cannot be used as a basis for a fraud claim against an individual. The Court dismissed Samsung’s remaining claims.