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Posted: November 29, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Denies Motion for Discharge from Interpleader Action Where Stakeholder Failed to Address Details of Payment, Possible Other Claimants, and Future Distributions of Funds
In a Decision, dated October 27, 2023, in Broadstreet New York, Inc. v. L3 Capital Income Fund, LLC and Alternative Global Management, LLC, Index No. 650218/2023, Justice Margaret Chan denied interpleader Broadstreet New York, Inc.’s motion to deposit funds into the court in exchange for a discharge of liability from the defendants pursuant to CPLR 1006. The Court found Broadstreet’s motion deficient for failure to address certain details, such as where the funds came from and how much Broadstreet proposed to initially deposit. The Court also held that the ultimate beneficiaries receiving the fund (certain investors in the defendants) had not been joined to the case and Broadstreet had not addressed future distributions of funds owed to claimants. The Court explained: Read More
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Posted: November 27, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Dismisses Claims Against Public Utility Company ConEd under Primary Jurisdiction Doctrine, Deferring to State Agency
In an Amended Decision and Order, dated October 24, 2023, in Riverdale Jewish Center v. Consolidated Edison Company of New York, Inc., Index No. 651032/2022, Justice Margaret A. Chan granted Defendant ConEd’s motion to dismiss claims against it for deceptive business practices and affirmative misrepresentation based on allegedly misleading billing inserts. Public utility company ConEd provides gas and electric services to many areas of New York State. The Court ruled that New York’s Public Service Commission had direct regulatory jurisdiction over ConEd’s billing inserts and, therefore, the Court should defer to the agency, rejecting the Plaintiff’s arguments that the question of whether an insert was deceptive fell within the Court’s, not the agency’s, expertise. The Court explained: Read More
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Posted: November 22, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Denies Motion for Default Judgment Seeking Rescission
On October 24, 2023, Justice Andrea Masley, of the New York County Commercial Division issued a decision in Abad v. Iaero Group Holdco 2 LLC, Index No. 652510/2022, denying plaintiff’s request for issuance of a default judgment awarding plaintiff rescission as an award on her cause of action for fraud. The Court explained the motion must be denied because plaintiff failed to allege a claim for rescission in her complaint, because rescission cannot be awarded absent notice and the appearance of all parties to the underlying agreement, and because the affidavit relied upon for default was inadequate to support a default judgment. The court explained: Read More
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Posted: November 20, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerGovernor Hochul Signs Bill Permitting Use of Unsworn Affirmations for All Individuals in Civil Cases
At the end of October, Governor Kathy Hochul signed two bills, A5772/S5162, which together amend CPLR 2106 to permit any individual to file an affirmation under the penalty of perjury, rather than sworn and notarized affirmations, in civil actions in New York State Court governed by the CPLR. The new CPLR 2016 is effective January 1, 2024. Read More
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Posted: No Equitable Accounting When All Relevant Information Produced In Discovery
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerNo Equitable Accounting When All Relevant Information Produced in Discovery
On September 30, 2023, Justice Andrea Masley of the New York County Commercial Division issued a decision in Fruhling v. Westreich, et al., Index No. 161487/2017, dismissing a plaintiff LLC member's claim for an accounting when plaintiff failed to show a need for additional documents not already produced in discovery, explaining: Read More
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Posted: November 14, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerNo Reverse Veil Piercing When Plaintiff Fails to Show Injury Caused To It
On October 24, 2023, Justice Andrea Masley of the New York County Commercial Division issued a decision in Citibank, N.A. v. East 65th Street Owners LLC, et al., Index No. 651089/2019, rejecting a reverse alter-ego theory of liability because of plaintiff's failure to show injury caused to it, explaining: Read More
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Posted: November 10, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerRes Judicata and Collateral Estoppel Do Not Apply To Claims Over Which An Arbitrator Lacked Jurisdiction
In a Decision and Order, dated October 11, 2023, in BT Supplies West, Inc. v. Brookline, LLC., Index No. 651364/2023, Justice Margaret A. Chan denied defendant’s motion to dismiss plaintiff’s breach of contract and account stated claims. (Schlam Stone & Dolan LLP represents the plaintiff in this action). Defendant argued that plaintiff’s claims should be dismissed because they were previously decided in an arbitration and thus res judicata or collateral estoppel applied. The court rejected defendant’s position, explaining: Read More
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Posted: November 8, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Sets Hearing For Determination of Attorney Charging Lien
In a Decision and Order, dated October 3, 2023, in Seymour v. Hovnanian., Index No. 154579/2016, Justice Melissa Crane set a hearing on plaintiff’s former counsel’s motion to enforce its statutory charging lien. The Court explained: Read More
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Posted: November 6, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Dismisses Complaint For Reformation Based On Claimed Mutual Mistake
In a Decision and Order, dated October 5, 2023, in ACP Housing Associates, L.P. v. ABJ Milano, LLC, Index No. 156320/2019, Justice Joel M. Cohen granted defendant’s motion for summary judgment dismissing plaintiff’s complaint for reformation. The plaintiff alleged a mutual mistake in a commercial real estate transaction, in that the contract mistakenly conveyed a vacant lot that was not intended to be included in the sale of an adjacent developed property. Plaintiff sought reformation of the contract to exclude the vacant lot from the transaction or, in the alternative, recovery for unjust enrichment. The Court granted defendant’s motion for summary judgment, explaining: Read More
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Posted: November 3, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerFirst Department Finds the Sale of 100 percent of Membership Interest in an LLC is Not a “Dissolution” Under the Operating Agreement
In an Opinion, dated September 21, 2023, in Southern Advanced Materials, LLC v. Robert S. Abrams, et al., No. 2022-04949 (1st Dep’t), the First Department found that a corporate transaction involving the sale by a limited liability company of a company it owned, structured as a sale of 100 percent of the LLC’s membership interests in the target company, did not constitute a “dissolution” under the LLC’s operating agreement and Delaware law. The dispute arose when a former stakeholder in the LLC and company sought to recover a preferred return that it was entitled to upon “dissolution” of the LLC. Under the terms of the LLC’s operating agreement, a dissolution would occur upon “the disposition by the [LLC] of substantially all of its assets.” The shareholder therefore argued that the sale met this definition because the acquisition resulted in the disposition of the LLC’s assets (i.e., the target company). Read More
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Posted: November 1, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Dismisses Claims Against Corporate Owner after Dismissal of Claims against Corporation
In an Decision, dated September 29, 2023, in NW Media Holdings Corp, Newsweek LLC, et al. v. IBT Media Inc., Index No. 652344/2022, Justice Melissa A. Crane granted individual defendant David Jang’s motion to dismiss in their entirety claims made against him under a theory of “alter ego” liability. The Court held that the earlier dismissal of claims against the corporate entity made it impossible to maintain such claims against the entity’s owner. The Court explained: Read More
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Posted: October 30, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Grants Motion to Seal Interrogatory Responses Revealing Costs of Pharmaceutical Products
In a Decision, dated September 30, 2023, in Zydus Worldwide DMCC v. Teva Pharmaceuticals Industries Ltd., 654824/2019, Justice Andrea Masley granted Plaintiff Zydus Worldwide DMMC’s motion to redact portions of interrogatory responses that revealed various costs related to the pharmaceutical products at issue in the action. The Court had previously denied a motion to seal certain other information brought by Defendant Teva Pharmaceuticals. However, the Court found that Zydus had demonstrated the requisite “good cause” to support sealing. The Court explained: Read More
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Posted: October 27, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Reaffirms Insurance Policies for Direct Physical Loss or Damage Cannot Apply to COVID-19 Absent Any Physical Damage to the Property
On October 5, 2023, Justice Joel M. Cohen of the New York County Commercial Division issued a decision in Westport Insurance Corporation v. Aubergene Resorts LLC, Index No. 651396/2022, granting the plaintiff insurer’s motion to dismiss the defendants’ counterclaims, crossclaims and defenses in its entirety. The action was based on a COVID-19 related claim on an insurance policy providing coverage for “direct physical loss or damage.” The court dismissed the defendants’ counterclaims, crossclaims and defenses, finding that no coverage applied as a matter of law based on the First Department’s 2022 decision in Consolidated Rest. Operations, Inc. v. Westport Ins. Corp., 205 AD3d 76 [1st Dept 2022] lv to appeal granted in part, dismissed in part, 39 NY3d 943 [2022]. The Court explained: Read More
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Posted: October 25, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerLiquidated Damages Provision Not an Unenforceable Penalty Where the Damage Bears a Reasonable Proportion to the Probable Loss
On September 28, 2023, Justice Andrew Borrok of the New York County Commercial Division issued a decision in Curia Global, Inc. v. Eagle Pharmaceuticals, Inc., Index No. 651064/2023, denying defendant’s motion to dismiss in its entirety. In relevant part, the Court rejected the defendant’s argument that a the contract’s liquidated damages provision was an unenforceable penalty where the contract required the defendant to pay, as liquidated damages, a set amount per batch of product that defendant firmly forecasted they would purchase from plaintiff, but did not ultimately purchase. The Court explained: Read More
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Posted: October 23, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Awards Reduced Attorneys’ Fees Where Fee Submission is Not Reasonable
On October 3, 2023, Justice Melissa A. Crane, of the New York County Commercial Division issued a decision in Fuks v. Rakia––– Associates, Index No. 122768/1998, granting defendant’s request for attorneys’ fees, but reducing the amount of fees requested by 50%. In a prior order, the court had permitted the defendant to seek reasonable attorneys’ fees incurred solely in prosecuting a prior claim for a constructive trust, as permitted by the partnership agreement. However, the defendant’s motion for attorneys’ fees failed to distinguish between fees incurred prosecuting that claim and the instant action, and also improperly included block billing and other issues. The Court thus reduced the fee award, explaining: Read More
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Posted: October 20, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerContract Sufficiently Definite Despite Requiring Fees To Be “Mutually-Agreed Upon”
On September 6, 2023, Justice Joel M. Cohen of the New York County Commercial Division issued a decision in Daiwa Corporate Advisory LLC v. Katapult Group, Inc., Index No. 652164/2021, holding that a right of first refusal giving plaintiff the right to act as exclusive financial advisor to defendant was sufficiently definite so as to be enforceable, because even though the fees to be paid were to be “mutually-agreed upon,” these fees were also to be “customary and based upon similar transacrions and practices in the investment banking industry,” explaining: Read More
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Posted: October 18, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerRecoupment Defense Fails When Basis for Defense is Plaintiff’s Breach of Separate Contracts With Nonparties
On September 26, 2023, the First Department issued a decision in AOG, LLC v. KIND Operations Inc., Case No. 2022-05296, reversing Justice Margaret Chan’s order and dismissing defendants’ recoupment defense, because the basis for the recoupment defense was plaintiff’s breach of separate contracts with nonparties, rather than the contract at issue with defendants, explaining: Read More
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Posted: October 13, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerCourt Denies Motion For Summary Judgment In Dispute Concerning MLB
In a Decision and Order, dated September 6, 2023, in Oneonta Athletic Corporation d/b/a Norwich Sea Unicorns v. Detroit Tigers, Inc. et ano., Index No. 651080/2022, Justice Barry Ostrager denied Defendants’ motion for summary judgment on plaintiff’s sole remaining claim, for tortious interference with contract, arising out of the decision by Major League Baseball to reduce the number of minor league terms from 160 to 120. The Court explained: Read More
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Posted: October 11, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerFirst Department Reverses Grant Of Summary Judgment Concerning Successor Liability
In a Decision and Order, dated September 21, 2023, in 47 East 34th Street (NY) L.P. v. BridgeStreet Worldwide, Inc. et al, Case No. 2022-01819, the First Department reversed orders of Justice Andrew Borrok which granted plaintiff’s motion for summary judgment on its claim to recover on a guaranty against defendants-appellants Versa Capital Management, LLC (Versa) and Domus BWW Funding, LLC (Domus Funding) as successors to and alter egos of guarantor defendant BridgeStreet Worldwide. The Court explained: Read More
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Posted: October 6, 2023
Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. TurnerDefendant Must Personally File Jackson Affidavit Where Defendant Claims to Have No Documents Responsive to Certain Categories
On September 6, 2023, Justice Jennifer G. Schechter of the New York County Commercial Division issued a decision in PJSC Natl. Bank Trust v Pirogova, Index No. 160130/2020, 2023 NY Slip Op 33050(U) on plaintiff’s motion to compel responses to certain interrogatories and document requests. The Court held in part that, where the defendant claimed to have no documents responsive to certain categories of document requests, that defendant herself must provide a “Jackson Affidavit” attesting to the lack of documents. Specifically, the Court explained: Read More
