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Current Developments in the Commercial Divisions of the
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Posted: October 13, 2017

Clear and Convincing Standard of Proof Not Applied at Summary Judgment

On September 28, 2017, Justice Friedman of the New York County Commercial Division issued a decision in Ostad v. Nehmadi, 2017 NY Slip Op. 32050(U), holding that even though a plaintiff would be required to prove its claim for a constructive trust at trial by clear and convincing evidence, on summary judgment, the court’s role was still to identify whether there were questions of fact, explaining:

Finally, Nehmadi argues that even if there is some facial merit to Ostad’s allegations, the action must be dismissed because, with.out documentary evidence or credible witnesses, Ostad cannot establish his claim for a constructive trust by the clear and convincing evidence standard applicable at trial. Relying on United States Supreme Court precedent in libel cases brought by a public figure, Nehmadi argues that a ruling on a motion for summary judgment or for a directed verdict necessarily implicates the substantive evidentiary standard of proof that would apply at the trial on the merits.

New York courts have applied the clear and convincing evidence standard to the assessment of a libel defendant’s motion for summary judgment. Defendants have not, however, cited any case in which the clear and convincing evidence standard of proof has been applied to summary judgment motions in other contexts, notwithstanding that a party would have the burden of proof at trial. Moreover, defendants have cited no authority for the proposition that witness testimony is insufficient to meet the clear and convincing standard or that a witness’s alleged past history of untrustworthiness can be the basis for dispensing with a trial. The court accordingly rejects defendants’ contention that. a trial in this action is rendered futile by questions as to the credibility of the witnesses Ostad relies on to corroborate the agreement.

(Internal quotations and citations omitted).

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