Commercial Division Blog: Current Developments in the Commercial Divisions of the New York State Courts

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January 20, 2023 Plaintiff Cannot Bring Claim for Rescission Where There was a Meeting of The Minds
On December 20, 2023, Justice Andrew Borrok of the New York County Commercial Division issued a case in Ametek, Inc. v. Goldfarb, 2022 N.Y. Misc. LEXIS 7917, dismissing the defendants’ counterclaim for rescission but denying the motion to dismiss the counterclaim for reformation where the defendants did not dispute that there was a meeting of the minds as to the relevant contract provision but disputed whether the provision in the written contract reflected the agreement of the parties, explaining: Read More
January 18, 2023 Company President Cannot Bring Litigation in Company’s Name Absent Board or Shareholder Approval
On December 28, 2023, Justice Melissa A. Crane of the New York County Commercial Division issued a case in NW Media Holdings Corp. v. IBT Media Inc., 2022 N.Y. Misc. LEXIS 8386, holding that where a closely held company’s by-laws require approval by a majority of the board or shareholders to bring litigation, the president of that corporation does not have the authority to bring litigation in the name of the corporation absent such a vote, explaining: Read More
January 6, 2023 Plaintiff Stated Claim For Breach Of The Implied Covenant Of Good Faith And Fair Dealing
In an Amended Decision and Order, dated December 3, 2022, in EarthLink, LLC v. Charter Commc’ns Operating, LLC., Index No. 654332/2020, Justice Andrea Masley granted in part and denied in part Defendant’s motion to dismiss Plaintiff’s claim for breach of the implied covenant of good faith and fair dealing based on Defendant’s making false representations to EarthLink’s subscribers and by wrongfully increasing the price of EarthLink’s service to its subscribers.  The Court explained: Read More
November 30, 2022 Court Resolved Contractual Ambiguity and Awarded Damages to Give Plaintiff Benefit of the Bargain
In a Decision and Order, dated August 22, 2022, in 57th & 60th St. Lender LLC v. State Bank of Tex., Index No. 654007/2018, Justice Jennifer Schecter of the New York County Commercial Division found the phrase “repaid in full” in a mortgage loan sale agreement to be ambiguous and, after holding a bench trial, resolved that ambiguity in favor of plaintiff and awarded damages in the amount plaintiff would have recovered on the loans had the agreement not been breached plus interest and attorneys’ fees. The Court explained: Read More
November 28, 2022 Court Abused Discretion by Going Beyond Four Corners of Complaint to Permit Amendment with Time-Barred Claim
In a Decision, dated October 27, 2022, in 34-06 73, LLC v. Seneca Ins. Co. (2022 NY Slip Op 06029), the Court of Appeals held that the lower court abused its discretion as a matter of law when it granted plaintiffs’ motion to amend to include a time-barred claim. The Court explained: Read More
August 8, 2022 Court Puts Substance Over Form to Deny Pre-Answer Motion to Dismiss Breach of Contract Claim
On April 8, 2022, in AFL Constr. Co., Inc. v. Roosevelt Is. Operating Corp., Index No. 656072/2021, Justice Ostrager of the New York County Commercial Division denied defendant’s pre-answer motion to dismiss plaintiff’s breach of contract claim rejecting defendant’s argument that dismissal was proper where plaintiff did not provide its “notice of claims” in accordance with the literal language of the contract.  The Court held that it was premature to dismiss the breach of contract claim at the pre-answer motion to dismiss stage because a dispute exists as to whether plaintiff’s notices were sufficient to comply with the meaning, purpose, and intent of the contract. Read More
July 22, 2022 Fraud Claim Dismissed as Duplicative of Breach of Contract Claim
In a Decision and Order dated May 5, 2022, in Coulter v. Sorenson, 2022 NY Slip. Op. 31480(U), Justice Barry R. Ostrager granted defendants’ motion to dismiss plaintiff’s fraud claim as duplicative of plaintiff’s surviving breach of contract claim. Read More
July 20, 2022 Plaintiff Not Entitled to Exercise Stock Option Because Request Was Untimely
In a Decision and Order dated May 11, 2022, in MacDonald v. GuarantR, Inc.., 2022 NY Slip. Op. 31525(U), Justice Joel M. Cohen granted defendant’s motion for summary judgment on Plaintiff’s claim for breach of contract stemming from defendant’s refusal to issue shares to plaintiff pursuant to a stock option provision in a consulting agreement between plaintiff and defendant.  To be entitled to the shares, plaintiff had to exercise the option within three months of the termination of his service relationship with defendant.  Service relationship was defined, in turn, as “the continuous period during which” plaintiff was “engaged as a consultant by and/or [is] engaged in another service relationship with, the Company”. Read More
July 18, 2022 Allegations that Defendant Encumbered Its Interests in Development Project to Obtain Financing States Breach of Contract Claim
On May 9, 2022, in a decision and order in AmBase Corp. v. 111 W. 57th Sponsor LLC, 2022 NY Slip. Op. 31503(U), Justice Joel M. Cohen denied Defendant’s motion to dismiss a breach of contract cause of action premised on Defendant’s obtaining financing for a development project to fund capital calls that allegedly encumbered Defendant’s interest in the project. Read More
June 17, 2022 Contractual Obligation to Maintain Insurance and Indemnify Party Demonstrates It Was Intended Beneficiary of Contract
On March 29, 2022, in Board of Mgrs. of the St. Tropez Condominium v. JMA Consultants, Inc., INDEX NO. 656079/2018, Third-Party Index No. 596075/2019, Justice Andrew Borrok of the New York County Commercial Division denied those portions of third party defendant contractor’s motion to dismiss the amended third party complaint alleging breach of contract and contractual indemnification because the contractual language is clear that the third party plaintiff architect/engineer was an intended beneficiary of the contract. Read More
May 23, 2022 Auctioning of Artwork Did Not Place Plaintiff Under Duress
On March 3, 2022, in Zhang Chang v. Phillips Auctioneers LLC, 2022 NY Slip. Op. 01383, the First Department affirmed an Order of Justice Jennifer G. Schecter, which granted defendant’s motion to dismiss causes of action for breach of contract and unjust enrichment.  In affirming, the First Department rejected the plaintiff’s argument that an acknowledgement of the debt was voidable because it had been signed under duress.  Read More
May 17, 2022 New York Recognizes Breach of Implied Duty of Good Faith and Fair Dealing and Breach of Contract as Independent Causes of Action
On April 21, 2022, in Anexia, Inc. v. Horizon Data Solutions Ctr., LLC, Index No. 657444/2019, Justice Robert R. Reed of the New York County Commercial Division, among other things, granted plaintiff’s motion to dismiss defendant’s counterclaim for tortious interference but denied its motion to dismiss the counterclaim for breach of the implied duty of good faith and fair dealing. The Court explained that while a tortious interference claim grounded on the same conduct as a breach of contract claim are duplicative, under certain circumstances New York recognizes the implied duty of good faith and fair dealing as an independent cause of action. Read More
March 23, 2022 Dismissal of Breach of Contract Claim Decisive of Motion to Dismiss Complaint
In a Decision and Order dated January 11, 2022, in Misamore v Godfrey, 2022 NY Slip Op 00131, the First Department unanimously and summarily affirmed that where there was no breach of contract, the other claims for breach of implied covenant of good faith and fair dealing, tortious interference, and unjust enrichment had to be dismissed. Read More