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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: July 25, 2015

Action Dismissed for Lack of Standing

On June 26, 2015, Justice Bransten of the New York County Commercial Division issued a decision in DJZV Holdings LLC v. Citibank, N.A., 2015 NY Slip Op. 31125(U), dismissing an action for lack of standing.

In DJZV Holdings, the plaintiffs brought an action relating to an agreement with the defendant bank regarding an account held in the name of an entity in which the plaintiffs previously had an interest. The defendants moved to dismiss, arguing, among other things, that the plaintiffs lacked standing to allege a breach of an agreement to which they were not a party or third-party beneficiary. The trial court agreed, explaining:

Standing is a threshold determination as to whether a party has a sufficiently cognizable stake in the outcome in order to present a court with a dispute capable of judicial resolution. Whether a person seeking relief is a proper party to request an adjudication is an aspect of justiciability which, when challenged, must be considered at the outset of any litigation. When a defendant challenges standing with documentary evidence, the plaintiff bears the burden of establishing standing.

The threshold standing question is whether plaintiff has demonstrated an injury in fact, defined as an actual legal stake in the matter being adjudicated – which ensures that the party seeking review has some concrete interest in prosecuting the action which casts the dispute ‘in a form traditionally capable of judicial resolution.

(Internal quotations and citations omitted) (emphasis added). Because plaintiffs were neither parties nor signatories to the agreement, they lacked standing to bring an action for its breach.

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