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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 22, 2019

Judicial Estoppel Bars Defendant From Taking Factual Position Different From That Taken in Earlier Actions or Proceedings

On February 28, 2019, Justice Platkin of the Albany County Commercial Division issued a decision inĀ Whiteman Osterman & Hanna, LLP v. Preserve Assoc., LLC, 2019 NY Slip Op. 29056, holding that judicial estoppel barred a defendant from taking factual position different from that taken in earlier actions or proceedings, explaining:

An estoppel rests upon the word or deed of one party upon which another rightfully relies and so relying changes his or her position to his or her injury. In other words, a party will not be permitted to assume a contrary position in another proceeding simply because the party’s interests have changed. These principles apply with equal force where the earlier position successfully was taken before an administrative agency.

Further, a party’s affidavit that contradicts his or her prior sworn testimony creates only a feigned issue of fact, and is insufficient to defeat a properly supported motion for summary judgment.

Here, plaintiffs have established that Lawson did, at pertinent times, bind defendants in relation to matters critical to the development of the Project. This is in stark contrast to Lawson’s current testimony that he lacked such authority, as well as Lawson and Foxman’s testimony that Lawson’s only authority to bind defendants arose from formal actions of the type taken in connection with the OWDT transaction.

Plaintiffs’ proof further demonstrates that defendants, through Lawson, submitted sworn statements to OAG that were relied upon by the administrative agency in taking favorable action on the proposed Martin Act amendments. Lawson also prepared affidavits on behalf of defendants for submission to Supreme Court, Franklin County in connection with the successful continuation of a mechanic’s lien asserted against Project lands.

Having consistently obtained substantial benefits on the basis of Lawson’s representations that he was authorized to act on defendants’ behalf, defendants are estopped as a matter of law from denying Lawson’s authority to execute the Agreements and Amendments. To hold otherwise would accord defendants an unfair advantage and impose an unfair detriment on plaintiffs.

(Internal quotations and citations omitted).

As this decision shows, courts have little patience with litigants who appear to take inconsistent factual positions.

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