Blogs

Commercial Division Blog

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

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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:

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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:

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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

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Posted: March 21, 2014

Statute of Frauds and At-Will Employment Doctrine Bar Claim for Unpaid Commissions

On March 7, 2014, Justice Kornreich of the New York County Commercial Division issued a decision in Niyazov v. Park Fragrance, LLC, 2014 NY Slip Op. 30610(U), holding that a combination of the statute of frauds and the at-will employee doctrine resulted in an employee having no claim based on a unilateral change to his right to earn commissions. In

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Posted: March 20, 2014

Failure to Provide Client With Engagement Letter or Notice of Right to Arbitrate Dooms Suit for Fees

On March 19, 2014, the Second Department issued a decision in Gary Friedman, P.C. v. O'Neill, 2014 NY Slip Op. 01711, affirming the dismissal of a law firm's action for its fees. Gary Friedman, P.C. was not an appeal from a commercial case. However, the issues it addresses--the failure to provide a client with an engagement letter or to provide notice of a client's right to arbitrate--affect commercial litigators as much as anyone else. The Second Department's decision says it all:

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Posted: March 19, 2014

Quantum Meruit Claim Survives Even When Contract Claim Dismissed on Statute of Frauds Grounds

On March 18, 2014, the First Department issued a decision in Chapman, Spira & Carson, LLC v. Helix BioPharma Corp., 2014 NY Slip Op. 01685, finding that a breach of contract claim should have been dismissed on statute of frauds grounds but that a related quantum meruit claim survived. In Chapman, there was no signed writing, but there where e-mails that "evidenced the fact of plaintiff's employment by defendant." As the First Department explained:

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Posted: March 18, 2014

Defaulting Defendant’s Insurer Has Standing To Intervene

On March 6, 2014, Justice Friedman of the New York County Commercial Division issued a decision in CMS Life Insurance Opportunity Fund, L.P. v. Progressive Capital Solutions, LLC, 2014 NY Slip Op. 30592(U), granting a defendant’s insurer’s motion to intervene. In CMS Life Insurance Opportunity Fund, the plaintiffs filed their second amended complaint against Progressive Capital Solutions, LLC ("Progressive") and

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