On May 23, 2022, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Greenwich St. Equities v. Federman, 2022 NY Slip Op. 31780(U), rejecting a duress defense, explaining:
Thus, to void a contract on the grounds of coercion or duress, or to raise questions of fact, the complaining party must demonstrate there was an unlawful threat made which required the involuntary acceptance of contract terms where the circumstances allowed for no other alternative. The requirement of an unlawful or wrongful threat is vital. Thus, economic duress exists where a party is compelled to agree to terms set by another patty because of a wrongful threat by the other party that prevents it from exercising its free will. Therefore, to establish economic duress the court must engage in two inquiries. First, whether the defendants engaged in any wrongful threats. Second, did the defendants place the plaintiff Shtromandel in a position where he had no choice but to agree. Stated another way to find that a payment was made under duress, the payment, or any provision of any agreement, must have been motivated by some actual or threatened exercise of power possessed’ by the defendants such that the plaintiff is forced to choose the lesser of two evils.
The plaintiffs cannot satisfy the allegation they were the victims of any duress. Indeed, the proposed amended complaint
does not allege any specfic conduct engaged in by the defendants that can constitute duress. According to the proposed amended complaint the Defendants also knew full well of Mr. Shtromaridel’s diminished economic capacity. The Attorney Defendants, Mr. Federman particularly, were responsible for creating that economic pressure on Mr. Shtromandel. Mr. Federman repeatedly advantaged himself and his law partners in all of the parties transactions, and his favored client — Mr.
Gerut in the GIY project. Then left between a rock and a hard place, the Attorney Defendants used to that economic pressure
coerce Mr. Shtromandel to sign the Release. However, even if all that is true, there is no allegation the defendants acted in any threatening or unlawful manner. Thus, while the plaintiff may have felt pressured or forced to sign the agreement, that is not economic duress sufficient to raise questions of fact voiding the agreement. Indeed, financial pressure or unequal bargaining
power, standing alone, does not constitute economic duress.Moreover, to allege a claim of physical duress the plaintiff must demonstrate a threat, which was unlawfully made, which caused involuntary acceptance of contract terms and the circumstances permitted no alternative. The proposed amended complaint merely alleges that the Defendants all knew Mr. Shtrornandel’s capacity was diminished when he signed the Release, that he had been suffering from severely troubling emotional and psychological issues, for which he had been previously hospitalized. That
(Internal quotations and citations omitted) (emphasis added).
allegation does not allege any physical duress at 11.