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Current Developments in the Commercial Divisions of the
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Posted: December 13, 2013

Dispute Over Authentiticy Precludes Dismissal Based on Documentary Evidence

On December 12, 2013, the First Department issued a decision in Laurel Hill Advisory Group, LLC v. American Stock Transfer & Trust Co., LLC, 2013 NY Slip Op. 08351, illustrating one limit to a motion to dismiss based on documentary evidence: a dispute about the authenticity of the documents relied upon in the motion.

In Laurel Hill, the plaintiff moved to dismiss the counterclaims against it based on documentary evidence–a written operating agreement. The First Department reversed the trial court’s decision to the extent it dismissed the breach of contract counterclaim, writing:

According counterclaim plaintiff . . . the benefit of every favorable inference on the allegations, we find that he has not conceded that the written operating agreement establishing that he is not a member of Laurel Hill was executed before the alleged oral agreement pursuant to which he maintains he is entitled to a 10% membership interest in the company. Rather, he contests the validity of the document, argues that the counterclaim defendants failed to produce it despite his numerous requests for a written agreement, both prior to the commencement of this litigation as well as in his discovery requests in the main action, and only produced it in support of their motion to dismiss his counterclaims. The dispute over the validity of the written agreement and the inconsistent terms between that agreement and the alleged oral agreement raise factual issues that cannot be resolved at this juncture.

(Internal quotations and citations omitted) (emphasis added).

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