Blogs

Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: July 17, 2014

Court Examines Elements of Claim for Misappropriation of Skills and Expenditures in Pinterest Lawsuit

On July 8, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in Schroeder v. Pinterest Inc., 2014 NY Slip Op. 31809(U), illustrating the elements of a claim for misappropriation of skills and expenditures. In Schroeder, the plaintiffs claimed that the defendants used their ideas and work in creating the website Pinterest. The defendants moved to dismiss. This post looks at the court's denial of the defendants' motion with respect to the plaintiffs' claim for misappropriation of skills and expenditures. The court explained:

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Posted: July 16, 2014

Court Lacks Power to Remove LLC Member

On July 9, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in Austin v. Gould, 2014 NY Slip Op. 31814(U), dismissing a cause of action seeking the removal of a member of a New York LLC. In Austin, the plaintiff asserted a host of direct and derivative claims relating to a series of real estate investments. The defendants moved to dismiss. This post focuses on the plaintiff's claim seeking to remove the individual defendant as a member of an LLC and to deny him indemnification, which the court dismissed. The court explained:

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Posted: July 15, 2014

Opportunity to Comment on Proposed New Uniform Civil Rules for Supreme Court and County Court

The Office of Court Administration has asked for public comment on a proposed new rule on the recognition of tribal court judgments. The proposed new rule (22 NYCRR § 202.71), would establish "a procedure for recognition of judgments rendered by tribunals or courts of tribes recognized by the State of New York or the United States." E-mail comments to rulecomments@nycourts.gov by September 12, 2014.

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Posted: July 15, 2014

Consequential Damages Not Available When Not Contemplated at the Time of Contracting

On July 2, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in Rampart Brokerage Corp. v. Ribs NY LLC, 2014 NY Slip Op. 31772(U), dismissing the plaintiff's damages claim to the extent it sought consequential damages. In Rampart Brokerage Corp., the defendants allegedly mislead the plaintiff and its clients "as to which insurance policies it had been issued, the nature of the policies, the premiums charged, and other terms." The defendants moved to dismiss. The court denied their motion with respect to the plaintiff's claims for gross negligence and consequential damages. Certain defendants moved for reargument, which the court granted with respect to consequential damages and, on reargument, dismissed the plaintiff's damages claims to the extent they sought consequential damages, explaining:

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Posted: July 14, 2014

Insurer Could Not Use Tort Theory to Transfer Back to Insured Risks the Insurer Had Assumed

On July 3, 2014, Justice Kornreich of the New York County Commercial Division issued a decision in Assured Guaranty Municipal Corp. v. DLJ Mortgage Capital, Inc., 2014 NY Slip Op. 51044(U), dismissing fraud claims that sought to hold an insured liable, on a tort theory, for risks the insurer had assumed. In Assured Guaranty, the plaintiff monoline insurer sued various defendants in connection with RMBS transactions. The court granted defendant Credit Suisse's motion to dismiss the plaintiff's fraud claims, explaining:

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Posted: July 13, 2014

Small Claims Decision Has Res Judicata Effect in Supreme Court

On July 10, 2014, the Third Department issued a decision in Tovar v. Tesoros Property Management, L.L.C., 2014 NY Slip Op. 05233, holding that UCCA 1808 does not deprive small claims judgments of res judicata effect. In Tovar, the plaintiff sued the defendant "in Schenectady City Court for unpaid wages for work from June 2008 through August 2008." The City Court dismissed the plaintiff's claims. Three years later, the plaintiff sued the defendant in Supreme Court for "unpaid wages for work that he allegedly performed between August 2007 and March 2008." The trial court dismissed the complaint, holding that it was barred by res judicata. The Third Department affirmed, explaining:

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Posted: July 12, 2014

Claims Dismissed for Failure to Present Evidence of Proximate Causation

On June 30, 2014, Justice Sherwood of the New York County Commercial Division issued a decision in Mizrahi v. Adler, 2014 NY Slip Op. 31701(U), granting defendants summary judgment dismissing the complaint because the plaintiff could not show that the defendants' misconduct caused his damages. In Mizrahi, the plaintiff asserted legal malpractice, fraud and other claims against the defendants in connection with a real estate investment into which the defendants allegedly induced the plaintiff to enter.  In granting the defendants' motion for summary judgment, the court held, among other things, that the claims against them failed because the plaintiff failed to show that his damages were proximately caused by the defendants, explaining:

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Posted: July 11, 2014

Commercial Division Rules Amended to Add Rules Regarding Case Assignment and Privilege Logs

The Chief Administrative Judge has signed orders (1) amending the rules regarding the assignment of cases to the Commercial Division and (2) adding a new rule regarding the preparation of privilege logs. The amended NYCRR § 202.70(d) - (e), which goes into effect on September 2, 2014, provides regarding assignment of cases to the Commercial Division:

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Posted: July 11, 2014

Trade Secrets Discoverable From Non-Party Only When Relevant, Indispensable and Not Otherwise Acquirable

On July 9, 2014, the Second Department issued a decision in Ferolito v. Arizona Beverages USA, LLC, 2014 NY Slip Op. 05153, quashing those parts of a non-party that sought the production of trade secrets. In Ferolito, the plaintiff moved to compel compliance with a subpoena it served on non-party Morgan Stanley & Co., LLC. The trial court ordered full compliance. The Second Department affirmed with respect to most of the demands, but reversed with respect to the demands that sought trade secrets, explaining:

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Posted: July 10, 2014

Opportunity to Comment on Proposed Change to Joint Rules of the Appellate Division

The Office of Court Administration has asked for public comment on a proposed change to the Joint Rules of the Appellate Division. The proposed new rule would require law firm engagement letters to inform clients about the ADR programs available on the Unified Court System's website. E-mail comments to rulecomments@nycourts.gov by September 8, 2014. NOTE: Schlam Stone & Dolan partner John

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