Kahana Feld Obtains Complete Dismissal in New York County Supreme Court

Kahana Feld Partner Leslie McMillan and Senior Counsel Alice Trueman recently secured a dismissal of all claims against the client in the New York County Supreme Court.  

During oral argument, the plaintiff’s counsel focused primarily on the argument that the litigation funding agreements created an equitable lien in the settlement proceeds. The plaintiff’s counsel repeatedly argued that, based on notice to the client and counsel, they had an obligation to protect the alleged interest and should have withheld or otherwise addressed the plaintiff’s claimed share prior to disbursing settlement funds. 

In response, KF attorneys argued that the funding agreements did not create a legally enforceable lien; rather, they constituted a private contractual agreement between the plaintiff and the plaintiff in the underlying action and was not enforceable against the client. Further, KF attorneys argued that there was no statutory or perfected security interest, no privity, and no legal duty owed by the client to the Plaintiff. Lastly, under New York law, insurers are not required to protect or enforce private contractual interests, such as litigation funding agreements, in the absence of a legally recognized lien or other enforceable property right. 

The Court agreed and granted the motion to dismiss all claims against the client in their entirety.