Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 30, 2014

Appellant Sanctioned for Submitting Deficient Record on Appeal

On March 27, 2014, the First Department issued a decision in Getty Properties Corp. v. Getty Petroleum Marketing Inc., 2014 NY Slip Op. 02139, sanctioning a defendant that submitted a deficient record on appeal. In Getty Properties, the First Department both denied the defendants' appeal and sanctioned them for submitting a "deficient" record on appeal, writing:


Posted: March 29, 2014

Judiciary Law Section 487 Claims Must Be Brought in Forum in Which Misconduct Occurred

On March 20, 2014, Justice Bransten of the New York County Commercial Division issued a decision in Alliance Network, LLC v. Sidley Austin LLP, 2014 NY Slip Op. 50430(U), dismissing Judiciary Law Section 487 claims because they were not brought in the action in which the alleged misconduct occurred. In Alliance Network, the plaintiffs brought a number of claims relating to a failed real estate development, including claims against several lawyers and law firms alleging that they had violated Judiciary Law § 487 in an earlier, related litigation. The court dismissed those claims, explaining:


Posted: March 28, 2014

Defendant Whose CPLR 3220 Offer Was Rejected is Entitled to Her Attorneys’ Fees Related to Proving Damages From Time of Offer

On March 27, 2014, the First Department issued a decision in Abreu v. Barkin & Associates Realty, Inc., 2014 NY Slip Op. 02146, clarifying that an offer of judgment under CPLR 3220 entitles the offering party not just to costs but also to its attorneys' fees related to proving damages. (more…)


Posted: March 27, 2014

LLC Member Not Permitted to Withdraw From LLC

On March 12, 2014, Justice Kitzes of the Queens County Commercial Division issued a decision in In the Matter of Kassab, Index No. 14428/2013, ruling on two pending motions in a special proceeding involving claims for judicial dissolution of two closely-held entities and related relief. This post focuses on the resolution of the respondent's motion to dismiss the petitioner's third cause of action to withdraw as a member of an LLC. Section 606(a) of the LLC Law provides that member of an LLC may only withdraw if the right of withdrawal is provided for in the operating agreement "unless an operating agreement provides otherwise, a member may not withdraw from a limited liability company prior to the dissolution and winding up of the limited liability company." In Kassab, Justice Kitzes dismissed the petitioner's claim to withdraw, writing:


Posted: March 26, 2014

Default Judgment Not Vacated When No Reasonable Excuse is Offered for the Default

On March 25, 2014, the First Department issued a decision in Sunrise Capital Partners Management LLC v. Glattstein, 2014 NY Slip Op. 01994, affirming a default judgment. In Sunrise Capital Partners, the trial court granted the plaintiff judgment by default when the defendants failed to answer and later denied the defendants' motion to vacate the default judgment. The First Department affirmed, explaining:


Posted: March 25, 2014

Party Bound By Discovery Stipulation Signed by His Counsel

On March 19, 2014, the Second Department issued a decision in Born to Build, LLC v. Saleh, 2014 NY Slip Op. 01703, discussing the binding nature of stipulations between counsel concerning discovery. In Born to Build, "[t]he appellant agreed, as part of a so-ordered preliminary conference stipulation and order signed by his attorney . . . to be deposed in New York at the office of the plaintiff's counsel." Later, the appellant moved for a protective order, asking that he be deposed "by remote electronic means." The trial court denied the motion and the Second Department affirmed, explaining that:


Posted: March 24, 2014

Claim For Legal Malpractice Accrues When Client Receives Negligent Work Product

On March 6, 2014, Justice Bransten of the New York County Commercial Division issued a decision in XE Partners, LLC v. Skadden Arps Slate Meagher & Flom LLP, 2014 NY Slip Op. 30668(U), dismissing an action for attorney malpractice under the applicable three-year statute of limitations. XE Partners arose from legal advice the defendant law firm provided to the plaintiff LLC, in 2008, regarding the withdrawal of certain members from the LLC. The withdrawing members brought an arbitration against the LLC claiming that "Plaintiff failed to follow a key provision of the LLC Agreement and used an inappropriate business valuation." In 2010, the arbitration panel ruled in favor of the withdrawing members. In 2013, the LLC brought a legal malpractice action against the law firm that had advised it in 2008, alleging that "the work performed by [the law firm] was at the heart of the [ ] Members' action against [the LLC]." Justice Bransten granted the law firm's motion to dismiss, concluding that the claim accrued when the allegedly negligent advice was provided in 2008 and was therefore time-barred because the claim was not brought within the 3-year limitations period:


Posted: March 23, 2014

Denying Petitioner is Shareholder Can Constitute Oppressive Conduct Justifying Corporate Dissolution

On March 11, 2014, Justice Friedman of the New York County Commercial Division issued a decision in Quazzo v. 9 Charlton St. Corp., 2014 NY Slip Op. 30625(U), discussing the standard for corporate dissolution based on oppression. In Quazzo, the petitioner sought, among other things, to dissolve a New York corporation of which she claimed to be a shareholder. The