Best Civil Lawyers in NYC Corporate Litigation Defense Case

The client was the chief executive officer of a mid-sized New York corporation engaged in real estate development and property leasing.

During the construction of a multi-unit residential project, the company operated under a managed land trust arrangement, in which all project funds were controlled through a trustee account rather than the developer’s direct accounts.

Under this structure, construction costs and core project expenses were contractually prioritized, while professional service fees were designated as subordinate payments subject to remaining funds after final settlement.

As the project approached completion, a cooperating service provider asserted that all contracted services had been fully performed and demanded immediate payment of approximately USD 5.3 million, regardless of whether remaining trust funds existed.

The service provider initiated a civil lawsuit in New York, alleging breach of contract and characterizing the payment sequence as a mere administrative order rather than a binding condition.

The defendant corporation, facing potential exposure due to the project’s complex contractual history, sought representation from the best civil lawyers in NYC with experience in trust-related commercial litigation.

The central legal question was whether the professional fee obligation had legally arisen under the contracts governing the project.

The defense argued that the payment clause constituted a condition precedent, meaning no enforceable claim existed unless priority construction and project costs were fully disbursed.

Under New York contract doctrine, where a condition precedent is not satisfied, the corresponding payment obligation does not mature, regardless of service performance assertions.

Because the fee obligation was conditional, the plaintiff bore the burden of proving that all prerequisite payments had been completed.

However, the plaintiff failed to present comprehensive trustee settlement statements or conclusive evidence demonstrating full disbursement of senior project expenses.

The defense emphasized that without proof of condition fulfillment, the claim could not survive judicial scrutiny under New York civil procedure standards.

The defense team presented the payment sequence not as a flexible timeline but as a legally binding suspensive condition embedded within the trust-based project framework.

They demonstrated that the intent of the parties, the economic structure of the project, and the trustee-controlled fund flow all supported conditional interpretation.

This framing aligned with established New York jurisprudence, which recognizes that contractual payment sequencing may operate as a condition rather than a mere timing mechanism.

In parallel, the defense scrutinized whether the alleged service agreements were validly executed through the corporation’s internal approval process.

Evidence showed irregularities in authorization, including the absence of required board-level approval for transactions of this magnitude.

Under New York corporate governance principles, material contracts lacking proper internal authorization may be unenforceable, further undermining the plaintiff’s position.

The New York court accepted the defense’s arguments in their entirety and held that the plaintiff failed to establish satisfaction of the contractual condition precedent.

The court found that the evidence did not support the existence of a matured payment obligation and that no alternative legal basis justified recovery.

Accordingly, the court dismissed the professional fee claim in full, rejecting the approximately USD 5.3 million demand without reservation.