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Posted: August 23, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerReliance on Advice of Counsel Not a Defense to Contempt Motion for Failure to Comply With Court Order
On July 12, 2024, Justice Andrea Masley of the New York County Commercial Division issued a decision… Read More
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Posted: August 21, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerLeave to Amend to Add Failure-to-Notify Claim Denied When Sole-Remedy Repurchase Protocol Did Not Require Defendant to Give Notice
On July 8, 2024, Justice Joel M. Cohen of the New York County Commercial Division issued a decision in U.S. Bank, N.A. v. DLJ Mortgage Capital, Inc., Index No. 653140/2015, denying the plaintiff's motion for leave to amend to add a claim for failure to notify upon discovery of a breach of a mortgage, holding that the sole-remedy repurchase protocol in the underlying contract did not impose a duty to notify on this particular defendant, explaining: Read More
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Posted: August 19, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerGuaranty Is Instrument for Payment of Money Only Despite Reference to "Performance"
On August 2, 2024, Justice Anar Rathod Patel of the New York County Commercial Division issued a decision in Acquiom Agencies Services LLC v. Fox Capital LLC, 2024 WL 3643594, granting a motion for summary judgment in lieu of complaint on a guaranty and rejecting the guarantors' argument that the guaranty was not an instrument for the payment of money only because it included the word "performance," explaining: Read More
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Posted: August 16, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCPLR 3213 Unavailable Where Guaranty Concerns Not Only Payment But Also Performance
On June 11, 2024, Justice Joel M. Cohen denied plaintiff’s motion for summary judgment in lieu of complaint based on a guaranty. In Manhattan Real Estate Fund, LP v. Paz, Index No. 655592/2023, plaintiff sought summary judgment in lieu of complaint based on a guaranty executed by defendant. In denying the motion, the Court explained: Read More
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Posted: August 14, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner Court Denies Motion To Dismiss Pursuant To Single Motion Rule
On July 8, 2024, Justice Joel M. Cohen denied plaintiffs’ motion to dismiss defendant’s counterclaims based on, inter alia, CPLR § 3211(e)’s single motion rule. McGuigan v. Gendell, Index No. 650294/2021, was a hotly contested dispute between former business partners. Defendants had filed original counterclaims, which plaintiffs moved to dismiss, and which motion the Court granted in part. Subsequently, defendants filed their Second Amended Counterclaims, and plaintiffs again moved to dismiss. In denying the motion, the Court explained: Read More
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Posted: August 12, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Rejects Claim That Party’s Interest In Companies Was Reduced To 20%
On July 5, 2024, Justice Jennifer G. Schecter issued a Decision After Trial in Meyerson v. Minzer, Index No. 653730/2019. Defendant claimed, inter alia, that plaintiff’s interest in the several companies at issue (the “Companies”) had been reduced to 20% from 50%. In rejecting this claim, the Court explained: Read More
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Posted: August 9, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerFraudulent Conveyance Action Permitted To Proceed Against Litigation Funding Recipients Who Sold Interests In A Venture To Profit From Qui Tam Claims
On July 11, 2024, Justice Andrea Masley sustained a fraudulent conveyance action brought against the alleged “alter egos” of litigation funding recipients who breached a funding agreement. In GNHC 1703-518, LLC, v. Venari Partners, LLC, et al., Index No. 651347/2022, the defendants comprised a complex group of corporate entities and partnerships formed primarily by John Mininno and his company, Venari Partners, LLC. The entities were created to facilitate an investment scheme to profit from the investigation and litigation of qui tam claims brought against pharmaceutical companies under the False Claims Act. The plaintiff had previously obtained an arbitration award against some of the entities based on breach of a litigation funding agreement. However, because those entities had no substantial assets—beyond an interest in pending litigation—they could not satisfy the arbitral award. The plaintiff sued the remaining entities in the scheme to satisfy its award and claw back amounts that were allegedly fraudulently conveyed to them. The Court rejected a motion to dismiss and held that the plaintiff could maintain its action against the alter egos. It explained: Read More
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Posted: August 7, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Rejects Plaintiffs’ Reliance On A Security Agreement’s Contractual Venue Provision Allowing Actions In The Jurisdiction Of The Loan’s Collateral
On July 10, 2024, Justice Joel M. Cohen dismissed a lawsuit that two borrowers had filed in New York in an attempt to restrain a UCC sale of collateral located in the state, writing that only the secured party could avail itself of the relevant venue provision. In Zoey Paint Corp., et al. v. Commercial Credit Group, Inc., et al., Index No. 651989/2024, the loan and security agreements executed by the parties contained a provision designating North Carolina as the exclusive venue for any actions relating to the agreements. However, the venue provision contained an exception clause allowing “an action to recover possession of all or part of the collateral” in the state having jurisdiction over such collateral “in the sole discretion of the holder/secured party.” The Court interpreted this language to mean that only the secured party could bring a lawsuit outside North Carolina. It explained: Read More
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Posted: August 5, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerPutative Class Action Against Defined-Benefit Pension Plan Dismissed For Lack Of Standing
On July 2, 2024, Justice Andrea Masley dismissed claims brought by putative class action plaintiffs against New York City’s employee pension system because the plaintiffs could not show they suffered an injury from any alleged mismanagement of the system’s investments. In Wayne Wong, et al. v. New York City Employees’ Retirement System, et al., Index No. 652297/2023, the plaintiffs asserted claims under the Federal Employee Retirement Income Security Act (“ERISA”) based on allegedly poor management of investments in their pension plans. The Court concluded, however, that the plaintiffs could not show an actual injury sufficient to support their standing to sue because their fixed pension payments would remain the same regardless of any alleged mismanagement. The Court explained: Read More
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Posted: August 2, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerSummary Judgment Granted In Part, Denied In Part In Action Between Limited Partners
In an order dated June 4, 2024, Justice Andrew Borrok resolved various claims among limited partners in a real estate entity, granting summary judgment to each side on some claims. Melrose Associates Limited Partnership v. Floral Associates Limited Partnership, Index No. 651323/2020. Read More
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Posted: July 31, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerMotion To Compel Arbitration Granted, Action Stayed As To Non-Signatory To Agreement to Arbitrate
On July 5, 2024, Justice Margaret A. Chan granted a motion to compel arbitration and elected to stay, rather than dismiss, claims brought by a non-signatory to the arbitration agreement. Berley v. Walter & Samuels, Index No. 653205/2023. Read More
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Posted: July 29, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerSummary Judgment Granted To Insurer That Had Satisfied Its Policy Obligations
On July 9, 2024, Justice Melissa A. Crane granted summary judgment dismissing an insurer from liability to another insurer. Lexington Ins. Co. v New York Mar. & Gen. Ins. Co., Index No. 651214/2022. Read More
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Posted: July 26, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerPrincipal Whose Signature Is Forged on Guaranty May Nonetheless Be Held Liable If Principal Ratifies Guaranty By Retaining Loan Proceeds With Knowledge of Relevant Facts
On July 2, 2024, Justice Andrea Masley of the New York County Commercial Division issued a decision in Abrahami v. Feldman, et al., Index No. 652641/2021, holding that a principal whose signature was forged on a guaranty can nonetheless be liable under that guaranty if the principal ratifies the guaranty by retaining the loan proceeds with full knowledge of the material facts, but concluding that there were triable issues of fact precluding entry of summary judgment here because the purported guarantor denied initial knowledge of the underlying loan transaction, explaining: Read More
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Posted: July 24, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerClaim for Breach of Noncompetition Covenant Dismissed Because Former Employee Was Not Unique and Because Covenant Was Overbroad
On July 5, 2024, Justice Andrea Masley of the New York County Commercial Division issued a decision in Multiplier Inc. v. Morena, et al., Index No. 653428/2022, granting a former employee's motion to dismiss a cause of action for breach of a noncompetition covenant on the ground that the former employee was not unique or irreplaceable, and also on the ground that the covenant was overbroad, explaining: Read More
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Posted: July 22, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerBankruptcy Order Benefiting Borrower Does Not Affect Guarantor's Obligations
On May 30, 2024, Justice Andrew Borrok of the New York County Commercial Division issued a decision in Harlem Multifamily LLC v. Reifer, Index No. 850009/2020, holding that a bankruptcy-court order that inured to the borrower's benefit did not relieve the non-debtor guarantor of his separate obligations under two guaranties, explaining: Read More
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Posted: July 19, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Denies Motion To Compel Production Of Emails Based On Spousal Privilege
On June 10, 2024, Justice Melissa A. Crane denied defendant’s motion to compel production of emails plaintiff had inadvertently produced and then clawed back, asserting spousal privilege. In Gnann v. Morgan Stanley Smith Barney LLC, Index No. 650104/2023, plaintiff made a production that included the disputed emails between plaintiff and nonparty Robert Oldaker. At plaintiff’s EBT, spousal privilege was asserted as to these emails and plaintiff’s counsel then sought to claw back those emails. Defendant Mannato moved to compel. The Court denied the motion, explaining: Read More
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Posted: July 17, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Grants Motion To Amend Complaint Where Amendments Were Based On Documents Produced By Defendants In Discovery
On May 26, 2024, Justice Joel M. Cohen granted plaintiffs’ motion to amend. The plaintiffs in Behar v. 5 Star Legal Funding, LLC, Index No. 657390/2020, who invested in certain litigation funds and advances as limited partners, asserted multiple claims against defendants alleging that defendants engaged in a pattern and practice of mismanagement, misuse, misappropriation, and diversion of plaintiffs’ funds. After discovery, plaintiffs moved to file their Second Amended Complaint. The Court granted the motion, explaining: Read More
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Posted: July 15, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Holds That Signing Filings In New York County Irrelevant For The Issue Of Venue And Grants Motion To Transfer Venue
On May 26, 2024, Justice Andrea Masley granted a motion to change venue to Nassau County. Defendants in Burman v. Burman, Index No. 655281/2023, moved to change venue in a case arising from plaintiff’s alleged exclusion from the Engel Burman (“EB”) enterprise. After rejecting defendants’ argument that venue in New York County was improper because none of the parties reside in New York County because plaintiff alleged a “substantial amount of the acts and transactions in issue took place in this county and various real estate developments in issue in this case are located in this county” pursuant to CPLR 503(a), the Court nevertheless granted the motion for other reasons. The Court explained: Read More
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Posted: July 12, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Grants Motion To Seal Confidential Contracts Or Agreements With Non-Parties To The Litigation
On June 7, 2024, Justice Joel M. Cohen granted a motion to seal certain documents filed on the Court’s public docket that contained sensitive business and financial information. In Tremor Video, Inc. v. Alphonso Inc. n/k/a LG ADS, et al., Index No. 653266/2021, the Court noted that there is “a broad presumption that the public is entitled to access to judicial proceedings and court records” and that, because this right “is of constitutional dimension, any order denying access must be narrowly tailored to serve compelling objectives, such as a need for secrecy that outweighs the public’s right to access.” Nevertheless, certain records did deserve sealing. The Court explained: Read More
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Posted: July 10, 2024
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Sustains Petition to Vacate Part of Arbitration Award That “Punted” Determination of Certain Issues To A Corporation’s Board of Trustees
On May 31, 2024, Justice Melissa A. Crane declined to dismiss part of a petition to vacate an arbitration award where that award “punted” certain disputes between the parties to a corporate board of trustees. In Naftali Rotenstreich, Chabad of Gramercy Park v. Shaya Lesches, YJP Foundation, Inc., Index No. 655503/2023, the Court granted a motion to dismiss only to the extent the petition challenged the arbitral panel’s rulings on the merits of the dispute. However, the Court found that the part of the award that referred “[a]ll disputed issues regarding salaries, conflicts of interest(s), involving the employees and creditors of [the corporate respondent]” had “defeated most of the reason for the arbitration in the first place.” The Court explained: Read More
