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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: October 16, 2013

Court Orders Disclosure of Work Product When Counsel Creates the Appearance of Manipulating Witness Testimony

On October 3, 2013, Justice Kornreich of the New York County Commercial Division issued a decision in MBIA Ins. Corp. v Credit Suisse Sec.(USA) LLC, 2013 NY Slip Op 32404(U), addressing whether to order disclosure to defendant of "all communications between" certain key witnesses and plaintiff's counsel, including "all versions, drafts, or iterations of the affidavits that formed the basis for the" complaint "and the witnesses' deposition testimony." The court's recitation of the relevant facts shows the key issue—the apparent close involvement of plaintiff's counsel in the witnesses' testimony:

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Posted in Commercial, Discovery/Disclosure, Privilege/Work Product
Posted: October 14, 2013

Court of Appeals Affirms The Use of Default Judgment as a Discovery Sanction

On October 7, 2013, we noted that on September 10, 2013, the Court of Appeals heard argument in Merrill Lynch, Pierce, Fenner & Smith Inc., v. Global Strat, Inc., Docket No. 160, a case examining the extent to which a sanction of default can be imposed for discovery violations. On October 10, 2013, the Court of Appeals issued its decision

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Posted in Commercial, Discovery/Disclosure
Posted: October 11, 2013

Failure to Comply With Statute of Frauds Bars Any Kind of Action Based On The Alleged Promise

On October 4, 2013, Justice Emerson of the Suffolk County Commercial Division issued a decision in Saldano v. Precision CNC Corp., 2013 NY Slip Op. 51633(U), addressing whether parties which allegedly promised a co-tenant in the same commercial building (which was in default of its lease) that they would take over the lease and permit the co-tenant to continue its business in the same premises as a sub-tenant could be liable not only for breaching the promise but also fraud, for taking over the space and then using that as an opportunity to allegedly steal the co-tenant’s customer. In partially granting defendants motion to dismiss, Justice Emerson held that because the alleged promise concerning real property was unenforceable under the statute of frauds, it could not be the basis for either a breach of contract or fraud action:

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Posted in Commercial, Contracts
Posted: October 8, 2013

A Borrower’s Subsequent Bankruptcy Frees Lender from its Election of Remedies

On October 7, 2013, Justice Kornreich of the New York County Commercial Division issued a decision in 172 Madison (NY) LLC v. NMP-Group, LLC, 2013 NY Slip Op. 51618(U), addressing whether a lender is bound by its election to foreclose on a mortgage rather than sue on the debt when the right to sue on the debt did not arise until after the election was made.  Justice Kornreich held that it was not, writing:

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Posted in Commercial, Remedies/Damages
Posted: October 7, 2013

A Cautionary Tale on Attorneys’ Fees

Fee shifting provisions requiring one party to a commercial agreement to pay the other side's attorneys' fees in the event of litigation over a breach of the agreement have become ubiquitous in New York commercial practice. Suffolk County Commercial Division Justice Thomas F. Whelan’s September 11, 2013, decision in RMP Capital, Corp. v. Victory Jet, LLC, 2013 NY Slip Op.

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Posted in Commercial, Remedies/Damages