Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP

Posts Categorized: Commercial

Posted: November 15, 2013

Condition Precedent Strictly Interpreted

On November 1, 2013, Justice Kornreich of the New York County Commercial Division issued a decision in Kay Investments Series A, LLC v. Nordica Investments, LLC, 2013 NY Slip Op. 32834(U), reiterating the rule that when there is a doubt about the effect of contractual language, there is a presumption in New York against conditions... Read more »

Posted: November 14, 2013

Lease Clause Requiring Commercially Reasonable Efforts Strictly Construed Against Plaintiffs

On November 14, 2013, the Court of Appeals issued a decision in JFK Holding Company LLC v. City of New York, Docket No. 196, declining to apply a broad interpretation to a commercially reasonable efforts clause. In JFK Holding,¬†plaintiff building owners sued the Salvation Army, “which operated” a building leased from plaintiffs “as a homeless... Read more »

Posted: November 14, 2013

First Department Addresses Scope of the Judicial Proceedings Privilege

On November 12, 2013, the First Department issued a decision in Hadar v. Pierce, 2013 NY Slip Op. 07414, dismissing claims based on, among things, the judicial proceedings privilege. The First Department noted that “[t]he judicial proceedings privilege applies to causes of action other than defamation. However, it does not apply to” allegations of “malpractice,... Read more »

Posted: November 13, 2013

New York Shareholder Derivative Plaintiffs Must Plead With Particularity Why Board’s Failure to Comply With Pre-Suit Demand Was Improper

On November 8, 2013, Justice Bransten of the New York County Commercial Division issued a decision in Kenney v. Immelt, 2013 NY Slip Op. 51831(U), dismissing with leave to replead a shareholder derivative claim filed by shareholders of General Electric Company against GE’s officers and directors alleging that they breached their fiduciary duties by, among... Read more »

Posted: November 12, 2013

Delaware Supreme Court Certifies Questions to New York Court of Appeals on “No Action” Clauses in Trust Indentures

On November 7, 2013, the Delaware Supreme Court issued a decision in Quadrant Structured Products Co., Ltd. v. Vertin, in which it certified the following questions of law to the New York Court of Appeals: (1) A trust indenture no-action clause expressly precludes a security holder who fails to comply with that clause’s preconditions, from... Read more »

Posted: November 11, 2013

Statute of Frauds Does Not Bar Multi-Year Oral Agreement That Could Be Performed in One Year

On November 8, 2013, the Fourth Department issued a decision in DeJohn v. Speech, Language & Communication Assoc., SLP, OT, PT, PLLC,¬†2013 NY Slip Op. 07331, showing the narrow scope of the Statute of Frauds. In DeJohn, the parties allegedly entered into an oral agreement providing that “defendants would purchase plaintiff’s business for $480,000 and... Read more »

Posted: November 10, 2013

Extrinsic Evidence of Meaning of Contract Term Not Considered

On October 30, 2013, the Second Department issued a decision in Outstanding Transport, Inc. v. Interagency Council of Mental Retardation and Developmental Disabilities, Inc., 2013 N.Y. Slip Op. 07020, illustrating the broad scope of New York’s parol evidence rule. In Outstanding Transport, the Second Department affirmed the trial court’s refusal to consider extrinsic evidence of... Read more »

Posted: November 9, 2013

Foreign Derivative Claims Face Hurdles in NY Courts

On October 22, 2013, Justice Schweitzer of the New York County Commercial Division issued a decision in Gutstadt v. National Financial Partners Corp., 2013 NY Slip Op. 32733(U), illustrating the many hurdles that shareholders of foreign corporations face when they try to bring shareholder derivative suits against New York residents. Gutstadt was brought by two... Read more »

Posted: November 8, 2013

Default Judgment Should Be Entered Absent Specific Evidence of Lack of Service or Excuse for the Failure to Answer

On November 6, 2013, the Second Department issued a decision in Loaiza v. Guzman, 2013 NY Slip Op. 07159, illustrating that a failure to answer will not be excused without good reason. The trial court in Loaiza refused to enter a default judgment against defendants who failed timely to answer and instead granted their motion... Read more »