Blogs

Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: December 23, 2014

Intra-Law Firm Emails Relevant To Conflict Of Interest Not Protected From Disclosure In Malpractice Action

On December 5, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in Stock v. Schnader Harrison Segal & Lewis LLP, 2014 NY Slip Op. 33171(U), holding that certain intra-law firm emails were not privileged. In Stock, the plaintiff sued the defendant law firm for malpractice and breach of fiduciary duty. The plaintiff alleged that the

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Posted: December 22, 2014

No Fault Insurance Arbitration Award Vacated As Arbitrary and Capricious

On December 4, 2014, Justice Bransten of the New York County Commercial Division issued a decision in New York Central Mutual Fire Insurance Co. v. Bronx Chiropractic Services, P.C., 2014 NY Slip Op. 33210(U), vacating a no-fault arbitration award as arbitrary and capricious because it did not follow clear legal precedent. In New York Central Mutual Fire Insurance, the court granted the petitioner's motion to vacate a no-fault arbitration award, explaining:

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Posted in Commercial, Insurance
Posted: December 21, 2014

Plaintiff Cannot Bring Veil Piercing Claim Without Claim Against Entity Whose Veil is Being Pierced

On December 4, 2014, Justice Whelan of the Suffolk County Commercial Division issued a decision in Intelligent Product Solutions, Inc. v. Morstan General Agency, Inc., 2014 NY Slip Op. 51708(U), holding that a plaintiff could not bring a veil piercing claim without also bringing a claim against the entity whose veil was being pierced. In Intelligent Product Solutions, the plaintiff brought claims against "the defendant with being the alter ego of a company known as Single Entry Systems, Inc., [hereinafter SES] with whom the plaintiff contractually agreed to work with in the development, testing and upgrading of certain computer software applications known as Expert Insure and Expert Inspect and to retain the plaintiff to provide program management services to SES." Among the grounds on which the defendant moved to dismiss was "that the plaintiff failed to join a necessary party." The court agreed, explaining:

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Posted: December 20, 2014

Complaint Struck for Failure to Comply With Discovery Obligations

On December 11, 2014, the Third Department issued a decision in BDS Copy Inks, Inc. v. International Paper, 2014 NY Slip Op. 08692, affirming the striking of a plaintiff's complaint as a sanction for failing to provide discovery. In BDS Copy Inks, the plaintiffs sued the defendants in connection with a contract to "perform certain printing and copying services for the state." However, the plaintiffs did not fully respond to the defendants' discovery demands. The Third Department affirmed the trial court's decision to sanction the plaintiffs by striking their complaint, explaining:

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Posted: December 19, 2014

Lease Acceleration Clause Not Per Se Unenforceable as Penalty

On December 18, 2014, the Court of Appeals issued a decision in 172 Van Duzer Realty Corp. v. Globe Alumni Student Assistance Association, Inc., 2014 NY Slip Op. 08872, holding that a lease's acceleration clause was not per se unenforceable as a penalty. The issue before the Court of Appeals in 172 Van Duzer Realty Corp. involved "a dispute over future rental payments sought under an acceleration clause from an out-of-possession tenant after termination of the leasehold agreement." The Court of Appeals rejected the argument that a lease provision that required a tenant that was ejected from the premises for breaching the lease nonetheless to pay all unpaid rent to the end of the lease term was not per se invalid. The court explained:

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Posted: December 18, 2014

Court May not Review Arbitrator’s Interim Discovery Orders

On December 11, 2014, the First Department issued a decision in Kramer v. Geldwert, 2014 NY Slip Op. 08732, holding that a trial court could not review discovery rulings made by arbitrators. In Kramer, the plaintiff sought a discovery order from a court in connection with an arbitration. The First Department affirmed the trial court's refusal to provide the requested relief, explaining:

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Posted: December 17, 2014

Court of Appeals Grants Leave To Appeal In Case Involving Guarantor’s Liability When Amount Due Under a Note Is Modified By Agreement

On December 16, 2014, the Court of Appeals granted leave to appeal in PAF-PAR LLC v. Silberberg, 2014 NY Slip Op. 04049. In PAF-PAR LLC, the First Department, affirming the decision of New York County Commercial Division Justice Jeffrey K. Oing, held that a guarantor is not liable to guarantee the full amount of a note when the parties to

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Posted: December 16, 2014

Notice of Claim Sent To Insured’s Broker Does Not Constitute Notice To Insurance Carrier

On November 24, 2014, the Court of Appeals issued a decision in Strauss Painting, Inc. v. Mt. Hawley Ins. Co., 2014 NY Slip Op. 08214, ruling that "a policyholder's timely notice to a broker does not constitute the notice contemplated by [an] insurance policy." Strauss Painting arose from an injury suffered by an employee of a subcontractor hired by Strauss

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Posted in Commercial, Insurance
Posted: December 15, 2014

Party Sanctioned for Harassing Opponent

On December 8, 2014, Justice Ramos of the New York County Commercial Division issued a decision in Morningside Translations, Inc. v. Tsaidi, 2014 NY Slip Op. 51710(U), sanctioning a plaintiff and one of its officers for harassing defendants. In Morningside Translations, the plaintiff sued the defendants for allegedly explointing the plaintiff's "confidential and proprietary information, improper use of resources to develop Defendants' own competitive venture, and breach of duties of loyalty to the Plaintiffs and the express terms of employment agreements." Eisen, an officer and shareholder of the plaintiff, repeatedly sent "inappropriate emails" to certain defendants and their counsel. The court sanctioned Eisen and the plaintiff for this conduct, explaining:

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