Blogs

Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: November 18, 2013

Gross Negligence Claim Dismissed Based on Business Judgment Rule and Lack of Damages

On November 12, 2013, Justice Bransten of the New York County Commercial Division issued a decision in Phillips v. Hoffman, 2013 NY Slip Op. 51836(U), granting summary judgment and dismissing a gross negligence claim filed by a pro se plaintiff against a hedge fund manager who she claimed had mismanaged her money. Justice Bransten dismissed the claim on two independent grounds. 

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Posted: November 18, 2013

First Department Affirms Enforcement of Contractual Obligations to Advance Litigation Expenses

On November 14, 2013, the First Department issued a decision in TMR Bayhead Securities, LLC v. Aegis Texas Venture Fund II, LP, 2013 NY Slip Op. 07578, affirming New York County Commercial Division Justice Bransten's order compelling defendant venture capital funds to reimburse and advance legal fees and costs incurred by plaintiffs (who had run the funds) in defending an earlier lawsuit brought by

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Posted: November 17, 2013

Contract-Related Claims Dismissed Despite Allegation that Provisions Were Added Surreptitiously or by Mistake

On November 14, 2013, the First Department issued a decision in VFS Fin. v. Insurance Servs. Corp., 2013 NY Slip Op. 07576, illustrating the bedrock principle of contract interpretation that a party is presumed to have read and understood the contract it signed. In VFS Fin., the defendant asserted "counterclaims and third-party claims of fraud in the inducement, breach of contract,

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Posted: November 16, 2013

Claim for Breach of NDA Allowed to Proceed While All Tort Claims Relating to the Alleged Breach Are Dismissed on the Pleadings

On November 7, 2013, Justice Schweitzer of the New York County Commercial Division issued a decision in Affinity LLP v. GfK Mediamark Research & Intelligence, LLC, 2013 NY Slip Op. 32873(U), in which he denied a pre-Answer motion to dismiss a claim alleging the breach of a non-disclosure agreement ("NDA") but granted the motion insofar as it sought dismissal of all

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Posted: November 16, 2013

Decision Illustrates the Danger of Overreaching in Pleading

On November 7, 2013, Justice Schweitzer of the New York County Commercial Division issued a decision in U.S. Bank Natl. Assoc. v. Lightstone Holdings LLC, 2013 NY Slip Op. 32874(U), illustrating the dangers of overreaching in pleading. In U.S. Bank, the plaintiff amended its complaint in what had been a breach of contract action to "add[] two 'alternative' causes of action" for "fraudulent concealment" and "negligent omission and misrepresentation." We quote below several paragraphs of Justice Schweitzer's opinion, to show the court's reaction to the added claims:

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Posted: November 15, 2013

Shareholder Expulsion Provision Applied

On October 29, 2013, Justice Kornreich of the New York County Commercial Division issued a decision in Christou v. Koureli Rest. Group, Inc., 2013 NY Slip Op. 32743(U), denying a motion for a preliminary injunction by plaintiffs to enjoin the other shareholders of a private company from reducing their shares to zero pursuant to the shareholder agreement which enumerated certain

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Posted: November 15, 2013

Condition Precedent Strictly Interpreted

On November 1, 2013, Justice Kornreich of the New York County Commercial Division issued a decision in Kay Investments Series A, LLC v. Nordica Investments, LLC, 2013 NY Slip Op. 32834(U), reiterating the rule that when there is a doubt about the effect of contractual language, there is a presumption in New York against conditions precedent. In Kay Investments, Justice Kornreich denied a motion for a preliminary injunction by several members of an LLC moving to, inter alia, remove the managing member for alleged breaches of fiduciary duty. Justice Kornreich held that the underlying action was barred by a settlement agreement by the same parties. The plaintiffs argued that a condition precedent for the settlement, the closing of a certain loan, had not occurred. In rejecting this argument, Justice Kornreich held:

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Posted in Commercial, Contracts
Posted: November 14, 2013

Lease Clause Requiring Commercially Reasonable Efforts Strictly Construed Against Plaintiffs

On November 14, 2013, the Court of Appeals issued a decision in JFK Holding Company LLC v. City of New York, Docket No. 196, declining to apply a broad interpretation to a commercially reasonable efforts clause. In JFK Holding, plaintiff building owners sued the Salvation Army, "which operated" a building leased from plaintiffs "as a homeless shelter under an agreement with the

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Posted: November 14, 2013

First Department Addresses Scope of the Judicial Proceedings Privilege

On November 12, 2013, the First Department issued a decision in Hadar v. Pierce, 2013 NY Slip Op. 07414, dismissing claims based on, among things, the judicial proceedings privilege. The First Department noted that "[t]he judicial proceedings privilege applies to causes of action other than defamation. However, it does not apply to" allegations of "malpractice, because the gravamen of the

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Posted in Commercial, Defamation