Decisions of Interest - July 2007-2008
Mass Factory, Inc. v. Walter C. Taylor Agency, Inc.
Index #2005-05807 (Sup. Ct. Monroe Co. September 28, 2007)
Broker’s common law duty to obtain requested coverage: elements of breach of contract claim and distinct negligence claim - summary judgment precluded by issue of fact concerning the parties’ prior practice and pattern of insurance procurement for her various commercial properties and the precise conversation had between the parties when she was told she was "all set," and that the insurance company had "picked her up." Prior relationship between the parties failed to support breach of fiduciary duty claim, which was dismissed. Third party action by broker/agent against insurance company seeking common law and contractual indemnification by reason of the failure of the insurance company to follow its internal procedures for processing requests for insurance was not available, warranting dismissal of third party complaint. Waiver of arbitration clause in agency agreement. Broker/agent’s motion to amend to add negligence claim to third party complaint granted.
Maronian v. Provenzano
Index #2007-07056 (Sup. Ct. Monroe Co., October 10, 2007)
Stay under CPLR 2201 pending resolution of Michigan and local federal actions granted notwithstanding lack of complete identity of parties and claims.
Matter of Kosakowski v. Pebble Beach Estates
Index #2007-11259 (Sup. Ct. October 10, 2007)
Arbitration clause does not authorize dismissal under CPLR 3211 (only arbitration and award will support dismissal). Court on motion to dismiss, and in the absence of a motion to compel arbitration may only order a conditional stay without a direction compelling arbitration.
DiMarco Contractors, Inc. v. MDR Electric, Inc.
Index #2007-02537 (Sup. Ct. Monroe Co. October 12, 2007)
Summary judgment motion may not be supported by answers to notice to admit when the notices to admit do not merely concern clear cut matters but largely involve material or fundamental issues and ultimate facts. Form selection clause enforced.
Conifer Realty, LLC v. Catholic Health Systems, Inc.
Index #2005-02265 (Sup. Ct. Monroe Co. November 1, 2007)
Reargument denied - Price term calling for payment "up to maximum 15%" of contract price as a developer’s fee held fatally indefinite. Reward context distinguished.
Woodcliff Associates, L.P. v. Widewaters Hotels LLC
Index #2007-00693 (Sup. Ct. Monroe Co. November 2, 2007)
Collection agreement resulting from arm’s length business transaction between commercial entities, under which defendant’s duties merely consisted of collecting accounts receivable and paying them over less a percentage fee, did not create an escrow or otherwise create a fiduciary obligation. No resulting trust created on facts. Summary judgment granted dismissing breach of fiduciary duty claim.
Thompson v. McQueeny
Index #2007-07194 (Sup. Ct. Monroe Co. November 6, 2007)
Summary judgment granting specific performance of a letter agreement calling for assignment of patents to plaintiff, which was executed as part of a broader asset purchase agreement extinguishing substantial corporate debt. Cross-motion for rescission/reformation denied. Mutual mistake not established merely because one party remained ignorant of legal effect of Terminal Disclaimer accompanying issuance of related patent when other party to agreement insisted on language protecting himself in the event that Terminal Disclaimer effectively prevented realization of the benefit of one part of the deal.
Mass v. National Indemnity Company
Index #2002-05602 (Sup. Ct. Monroe Co. November 15, 2007)
Motion to vacate note of issue denied because no formal discovery requests were pending when note of issue filed. No special, unusual or extraordinary circumstances supported post note of issue discovery.
Latona v. Donner
Index #2007-07014 (Sup. Ct. Monroe Co. November 16, 2007)
Motion under CPLR 6401 to appoint temporary receiver for LLC denied. No clear evidentiary showing of necessity to conserve endangered property and prevent irreparable loss. Insufficient demonstration of waste or mismanagement, or of dissipation. LLCL only authorizes appointment of receiver upon dissolution.
Flasher Flare South East, Inc. v. R.A.K. Industries
Index #2007-07928 (Sup. Ct. Monroe Co. November 20, 2007)
Motion to enforce settlement agreement reached between the lawyers in e-mail communications denied. E-mails are not signed writing within CPLR 2104. In any event, the exchange of e-mails did not result in a binding agreement.
Latour v. Valle
Index #2007-05166 (Sup. Ct. Monroe Co. November 20, 2007)
Breach of joint venture agreement to form a LLC justified return of plaintiff’s capital contribution subsequently converted by defendant for use in his existing construction business. Action at law may be maintained prior to accounting because there was nothing that might be the subject of an accounting and the joint venture or partnership had terminated. Offending partner personally liable.
Webster v. Total Identity Corporation
Index #2005-00211 (Sup. Ct. Monroe Co. December 6, 2007)
Summary judgment granted dismissing fraudulent inducement claim. No issue of fact that statements were known to be false when made. Legal malpractice claim also dismissed; mere direction by client to attorney to deposit funds given to him by third party maker of check, "pending further instructions" from the client, does not create an escrow for the benefit of check maker or establish a condition precedent to release of the funds. Attorney never agreed to hold funds for the benefit of anyone but his client. Transaction documents did not call for or imply a fiduciary obligation in respect to funds turned over to attorney. Expert affidavit of lawyer rejected as clearly contrary to applicable law.
Millner v. Rochester Lumber Company
Index #2007-06218 (Sup. Ct. Monroe Co. December 17, 2007)
Defense of setoff waived by failure to plead it as affirmative defense or counterclaim. No charging lien regarding statutory attorneys fees was created because petitioner only sought an order directing execution and delivery of a satisfaction of mortgage. Petitioner did not seek or obtain identifiable proceeds upon which the putative lien could affix. Setoff would otherwise be denied on equitable grounds by reason of proponent’s self-help measures amounting to unclean hands.
Navint Consulting, LLC v. Fecteau
Index #2007-11877 (Sup. Ct. Monroe Co. December 18, 2007)
Complaint against departing employees taking job with competitor dismissed because plaintiff’s complaint failed to make a "sufficient start" by pleading some facts constituting a claim. Complaint must be supported with more than speculation.
Skillsoft Corp. v. Element K Corp.,
Index #2007-13202 (Sup. Ct. Monroe Co. December 21, 2007)
Stay under CPLR 2201 denied. No complete identity of parties, causes of action and judgment sought and judicial economy did not otherwise warrant issuance of stay.
Thompson v. McQueeny
Index #2007-07194 (Sup. Ct. Monroe Co. January 2, 2008)
Motion under CPLR 5519(a)(4) to designate an officer of the court to take custody of two patents ordered to be transferred to plaintiff pursuant to the parties’ letter agreement pending determination of appeal. Automatic stay pending appeal under CPLR 5519(a)(4) held invoked inasmuch as patents ordered to be transferred to plaintiff were personal property under applicable law, but circumstances warranted exercise of discretion limiting or modifying the automatic stay created by directing the posting of an undertaking. Hearing on patent valuation ordered. Discretion guided in part by fact that automatic stay destroyed plaintiff’s right to exploit the patents during pendency of appeal and the court’s assessment of the likelihood of success on appeal.
Evolution Impressions, Inc. v. Lewandowski
Index #2005-06051 (Sup. Ct. Monroe Co. July 23, 2007)
Damages hearing after summary judgment granted upon default - facts deemed admitted on the motion are for a procedural determination of default and not for the purpose of determining the merits of the action; opposing party relegated to motion to vacate default but court nonetheless must on motion to vacate consider the sufficiency of the evidentiary showing made by the moving party on the defaulted summary judgment motion before determining whether the default judgment resulting therefrom is, ultimately, on the merits. Although plaintiff’s ability to prove lost profits hampered by faithless employees’ theft and subsequent litigation misconduct, resulting in a more relaxed standard of definiteness, plaintiff’s claim to lost gross profits denied where plaintiff’s testimony established that cost figures were relevant but not deducted, and no evidence of the same was produced by plaintiff. Nominal damages awarded despite relaxed damages rule.
Rochester Diagnostic Imaging Associates, RLLP v. Stephenson
Index #2005-07452 (Sup. Ct. Monroe Co. July 25, 2007)
Summary judgment declaring rights under Partnership Agreement entered into after purchase of MRI equipment providing for split of income arising out of technical component of the service and the professional component (i.e., reading the MRIs). Provision in agreement stating partners are "afforded opportunities to earn professional service income proportionate to their members’ aggregate pro rata shares" does not compel a partner to provide such professional services, whether at any particular level or at all. Because no ambiguity involved, extrinsic evidence excluded, a declaration issued that the provision of professional services is not required by the partnership agreement. Summary judgment also granted declaring payment of administrative fee unauthorized under the Agreement and not permitted under Partnership Law §40(6). Steinberg v. Goodman, 27 N.Y.2d 304 (1970) distinguished.
Fedder Industrial Park v. R.P. Fedder Corp.
Index #2005-03437 (Sup. Ct. Monroe Co. August 8, 2007)
Late charges under commercial lease agreement - existence of non-waiver clause does not by itself preclude a finding of waiver on facts showing acceptance of late rental payments without comment for entire duration of the tenancy period and where the lease provision for late payment fee precluded an interpretation that it contemplated payment as a cumulative lump sum payment after termination of the lease. Jefpaul Garage Corp. v. Presbyterian Hosp., 61 N.Y.2d 442 (1984) distinguished. Nevertheless, lease terms ambiguous on the point at which late payment fee would have been waived, if at all. Non-waiver may be determined on summary judgment, but waiver may not be so determined.
Conifer Realty, LLC v. Catholic Health Systems, Inc.
Index #2005-02265 (Sup. Ct. Monroe Co. August 14, 2007)
Type II preliminary agreement is established by collection of writings between parties, including defendant’s letter to plaintiff designating plaintiff as its "choice to develop this project," which obligated the parties to negotiate open issues in good faith. Accordingly, defendant’s summary judgment motion on the ground that only an agreement to agree existed denied. Plaintiff’s summary judgment motion denied, however, because final agreement cannot be established where there is indefiniteness of price term, and further because issue of fact presented as to whether plaintiff substantially performed. Plaintiff only entitled to out-of-pocket loss occasioned by breach of duty to negotiate in good faith.
Eldre Corp. v. SC Technologies, Inc.
Index #2007-10641 (Sup. Ct. Monroe Co. September 7, 2007)
Preliminary injunction denied: Non compete agreement preluded by Statute of Frauds and thus no likelihood of success on merits. No binding contract containing a non-compete found when material alterations of defendant’s counter-offer were made by plaintiff when he initialed some of defendant’s changes but not others, thereby becoming another counter-offer, which was not accepted by defendant. Plaintiff’s effort to cob together a contract by reference to other unsigned writings allegedly incorporated into the signed writings does not raise issue of fact because plaintiff relied almost entirely on unexecuted agreements prepared by plaintiff and they did not contain the essential terms. Claimed likelihood of success on claim that defendant had common law duty to assign invention to his former employer undermined by former employer’s admissions that defendant was not an employee at the relevant time.
The IDE Group, PC v. Fredrick Ferris Thompson Hospital
Index #2007-05597 (September 10, 2007)
Preliminary injunction denied on the ground that it would have the effect of granting specific performance of an Exclusivity Agreement, and otherwise would grant the ultimate relief demanded in complaint rendering further litigation futile. Plaintiff’s contention that the "ultimate relief" doctrine is only applicable in the context of mandatory preliminary injunctions rejected.
Amalfi v. Helmicki
Index #2007-05476 (Sup. Ct. Monroe Co. September 14, 2007)
Seller of salon business who thereafter left the area returned and contracted with the buyer of his business to work at the business site under an Independent Contract Agreement. The ICA conditioned former owner’s work at site, including serving his old customers, on certain preconditions, one of which was that if he decided to leave the site and open a competing business, he would have to pay the buyers 20% of his gross revenue fee earned at the new site. Against a claim by the former owner, who subsequently abandoned the ICA and set up a new competing business down the street, over 10 years after the original sale of the salon, that BDO Seidman governed the reasonableness of the 20% gross revenue provision of the ICA, on the theory that the former owner was then an employee of the business’ new owners, summary judgment was granted declaring that the 20% provision was only a modification of the terms of the original purchase and sale agreement that required application of the lessened reasonableness analysis applicable to the sale of business context. In other words, there was nothing unreasonable about that part of the ICA which served to retain the benefits of their purchase of good will once the former owner/independent contractor sought to free himself of the preconditions to serving clients at the business site contained in the ICA because, otherwise, the non-solicitation of good will covenant operates in perpetuity.
Shrink Packaging Systems Corp. v. Seoil Industrial, U.S.A, Inc.
Index #2007-06606 (Sup. Ct. Monroe Co. September 20, 2007)
Dismissal based on documentary evidence because defendant Seoil USA was not a party to the agreements in question but rather Seoil Korea was, and for failure to state a cause of action because the complaint was based on obligations contained in indisputably expired agreements. Plaintiff’s effort to invoke an implied-in-fact or oral agreement on the part of Seoil USA to take over Seoil Korea’s obligations under these contracts was no pled and so the dismissal was without prejudice.
1440 Empire Blvd. Dev. Corp. v. Lawyers Title Ins. Corp.
Index #2006-06967 (Sup. Ct. Monroe Co. September 25, 2007)
Survey exception in Title policy excluding "any state of facts an accurate survey would disclose" not demonstrated to be applicable by reference only to a survey of an adjoining parcel, not the subject parcel, which shows a competing property description in the adjoining parcel’s deeds. Plaintiff’s expert established that adjoining parcel’s deeds were in error and subject parcel’s deeds were accurate, thus entitling owner to summary judgment declaring the title company’s duty to defend.
Ajay Glass & Mirror Co., Inc. v. AASHA G.C., Inc.
Index #2005-02962
Summary judgment dismissing breach of contract action denied inasmuch as issue of fact raised whether plaintiff entered into enforceable contract with defendant. Documentary evidence shows novation occurred when owner interposed a 3 party compensation agreement between plaintiff and owner via a shell corporation. While extrinsic evidence that the arrangement was a sham would ordinarily be permitted, here the parties actively employed aspects of the sham agreement and plaintiff took advantage of its payment terms. Thus the parole evidence does not preclude summary judgment because inadmissible.
Decisions of Interest - September 2006 - June 2007
Nalge Nunc International Corp. v. Warren
Index #2006/11195 (Sup. Ct. Monroe Co. October 2, 2006)
Preliminary Injunction denied; restrictive covenant declared unreasonable; vocation not learned profession nor was employee unique or extraordinary; although trade secret CD disk misappropriated, undisputed that it was destroyed and not shared; severance and partial enforcement denied; misappropriation claim requires both possession and use or likely threatened use.
The Plastic Surgery Group of Rochester LLC v. Evangelisti
Index #2005/04911 (Sup. Ct. Monroe Co. September 5, 2006).
No common law accountant’s or taxpayer’s privilege; disclosure not limited by price fixing standard provided by stockholder’s agreement; price-fixing standard may be a legally enforceable determinant but does not preclude discovery when the accountant’s report is directly challenged; waiver of attorney-client privilege by reason of use of the privileged material offensively to obtain summary judgment.
Carroll v. Abaie
Index #2002/06732 (Sup. Ct. Monroe Co. October 11, 2006).
Partnership dissolution; partnership was formed, not employment contract, because express agreement to share in both profits and losses; written trial partnership for a term transformed into oral one at will; claimed oral dissolution agreement failed for want of proof; parties cannot revert to default dissolution provisions of prior written trial partnership agreement because those provisions now impossible of performance; repayment of capital contribution limited to proportion of partner’s contribution even if profits and losses are divided in equal shares under Partnership Law §40(1)(first clause).
Lippman v. Shaffer
Index #2003/10180 (Sup. Ct. Monroe Co. October 26, 2006).
Business Judgment Rule does not protect interested directors’ decision, taken outside their authority to make under by laws or existing corporate contracts, to approve disproportionate cash distributions, denominated severance payments, when the termination provisions of the director’s employment contracts were not triggered. Nor can the director’s tax avoidance objective bring such distributions within the ambit of the business judgment rule when no corresponding corporate obligation to make the payments exists; unequal treatment of stockholders by gift of corporate assets; director self-interested transaction does not by itself establish liability, but non-moving party raised no issue of fact on the “entire fairness” issue.
Birnbaum v. ROHM Services Corp., Inc.
Index #2001/12235 (Sup. Ct. Monroe Co. December 4, 2006).
Accounting action dismissed because plaintiff had full knowledge of challenged transactions, had received a comprehensive review of all fees challenged and knew of the formula involved, never demanded an accounting, never was denied one, himself signed the checks in question; and otherwise waived his claims by failing timely to object.
Amyell Dev . Corp. v. IKON Office Solutions, Inc.
Index #2005/01087 (Sup. Ct. Monroe Co. December 13, 2006).
Commercial lease; surrender or acceptance implied by operation of law from assignment of lease by tenant to third party and landlord’s subsequent and separate agreement between landlord and assignee; new agreement between landlord and assignee made without notice to original tenant and which materially altered and changed terms of original lease, by extending term for additional year, obligating assignee to lease 3,900 square feet of additional space and which called for $100,000 of additional improvements to the premises, all of which created substantial additional liabilities of the assignee that the original tenant did not consent to or have notice of; consent of landlord to original tenant’s assignment not necessary to imply surrender by operation of law.
Petereit v. Battaglia
Index #2006/09097 (Sup. Ct. Monroe Co. January 11, 2007).
Shareholder Agreement providing for remaining shareholders’ right of first refusal to purchase employee’s 10% stake upon termination by the corporation held not to entitle dismissed employee to compel purchase of his shares by unwilling owners; dismissed shareholder/employee’s suit against remaining owner/shareholder/director/officer insufficiently separate from alleged wrong that would otherwise be brought derivatively against the corporation to support a private cause of action for breach of fiduciary duty.
Commissioners of State Insurance Fund v. Cruz Constr. of Rochester, Inc., et al
Index #2003/10412 (Sup. Ct. Monroe Co. January 22, 2007).
Vacate default judgment under CPLR 5015(a)(1), 5015(a)(3) and inherent power of court under Woodson v. Mendon Leasing Corporation, 100 N.Y.2d 62 (2003) on ground of misconduct of third party not a party or co-party to the action, i.e., a lawyer jointly and concurrently representing adverse co-defendants controlled by one which obligated the moving party moving to joint and several liability on plaintiff’s claims for non-payment of premiums; controlling defendant sold the stock of the moving party while retaining its assets without disclosing to the new owner the joint and several liability imposed.
Evolution Impressions, Inc. v. Lewandowski
Index #2005/06051 (Sup. Ct. Monroe Co. January 25, 2007).
Motion to vacate order granting summary judgment denied on the ground of excusable default, but original motion was improperly granted summarily by reason of non-appearance, so determination must be made on motion to vacate whether initial showing on summary judgment motion was sufficient to entitle moving party to relief; accounting required on claim for damages under faithless servant doctrine.
Rochester Linoleum & Carpet Center, Inc. v. Homestead Development Corp.
Index #2006/01874 (Sup. Ct. Monroe Co. January 30, 2007).
Construction contract; owner not liable to subcontractor not in privity with owner, either in breach of contract or unjust enrichment, in the absence of an agreement by owner to pay or circumstances giving rise to such an obligation; events subsequent to performance of work by sub cannot overcome this presumptive rule because owner can become liable only when owner prompts sub to undertake or continue work upon promise to pay; sub’s invoices unilaterally listing owner as obligor cannot create liability for account stated where no liability was established before.
Five Star Equipment, Inc. v. M.P. Lones Companies
Index #2006/09043 (Sup. Ct. January 30, 2007).
Vacate default judgment on ground that affidavit by party of facts not provided on prior motion for default and nor was verified complaint provided, CPLR 3215(f); follows 4th Department precedent declaring such a judgment a “nullity” and declines to follow 2d Dept. authority holding that the omission is a “procedural failure” thus permitting the party moving to vacate to show excusable default and meritorious defense.
Cadlerock Joint Venture, L.P. v. Kleen Brite Laboratories
Index #2003/12091 (Sup. Ct. Monroe Co. January 31, 2007).
Reargument granted of order directing trial of damages following default and forced liquidation of secured collateral; secured creditor under Article 9 has no duty to mitigate independent of the standard of commercial reasonableness under Article 9; duty to mitigate coterminous with standard of commercial reasonableness, and in any event, under the UCC, duty to mitigate is generally a limitation on consequential damages, which were not claimed.
D’Angelo v. Leone
Index #2005/09815 (Sup. Ct. Monroe Co. February 13, 2007).
Buy-sell agreement of the Texas shoot-out or Russian-Roulette variety; summary judgment declaring such deadlock provision invoked not precluded by claim that moving party looted corporation and therefore had unclean hands; unclean hands doctrine only precludes equitable relief where the moving party has dealt unjustly in the very transaction of which he complains; the moving party here is not seeking to enforce a contractual duty (entered into long before defendant’s alleged wrongdoing) against which illegibility could be argued; claims between the parties may be dealt with as set-offs to the accounting.
Matter of Atkin v. Bd. of Assessors Town of Greece
Index #02/08757; 03/08677; 03/08659; 03/08678; 04/08407; 04/08404; 04/08405.
Tax Cert. valuation must take account of contamination clean-up costs of property that is the subject of a DEC voluntary clean-up agreement (VCA); DEC oversight of the three parcel site as a single economic unit permitted petitioner’s appraiser to value site as a whole because clean-up costs well exceeded the value as clean figure, a result that could not be sustained if there was any remaining value to the parcels which would have to be allocated to the individual parcels via a separate appraisal for each.
Pramco v. Partners Trust Bank
Index #2006/02318 (Sup. Ct. Monroe Co. February 23, 2007).
Summary judgment rescinding distress loan sale at auction, on the ground of failure to keep bid documents relating to collateral valuation up to date, denied; bid was not irrevocable for all purposes under governing bid procedures; questions of fact presented from a breach of warranty perspective whether the breach was so substantial and fundamental as to strongly tend to defeat the object of the parties, especially because the truth of the contents of the bid document review files was expressly not warranted; the non-disclosure of updated collateral valuation reduction must be considered in light of the other disclosures in the bid documents showing the same thing; viewed as a non-occurrence of a condition precedent, question of fact presented whether non-occurrence may be excused to avoid disproportionate forfeiture and whether, in the context, the particular non-occurrence of the condition was a material part of the agreed exchange.
Lee v. Tetra Tech, Inc.
Index #2006/07131 (Sup. Ct. Monroe Co. February 28, 2007)
Summary judgment declaring plaintiff-employees not subject to written employment agreement containing a restructure covenant granted; employer unilaterally changed employee’s status to at-will the following year and had employee sign new restrictive covenant geared from the date of signing, not the date of termination; elements of fraud, estoppel, and mistake do not create issue of fact whether the remedy of reformation should be ordered; alleged admissions of employee during negotiations are precluded by the parole evidence rule and raise no issue of fact - - contract documents unambiguous.
Frontier Telephone of Rochester v. City of Rochester Assessor
Index ## 2004/07127; 2005/05573; 2006/06008 (Sup. Ct. Monroe Co. March 16, 2007).
Tax Cert. - Intra Building Network Cable within customer buildings is not exempt “station connections” within the meaning of Real Property Tax Law §102(12)(d) and (i); such cable was never de-tariffed by the FCC during partial deregulation in the 1980's and remains the property of Frontier; distinguishes the concept of inside or customer premises wiring on the customer’s side of the demarcation point.
Security Mortgage Group LLC v. Oak Hill Family Park LLC
Index #2006/11718 (Sup. Ct. Monroe Co. March 22, 2007)
Question of fact whether entitlement to brokerage fee was conditioned upon closing or consummation of transaction; contract language ambiguous on the point; long-arm jurisdiction supported by two years worth of negotiations by Massachusetts firm, once lapsed and then resumed at the foreign firms’ initiative, and use of a New York bank for financing; individual defendant did not sign in personal capacity.
The Pike Co., Inc. v. Oneida Indian Nation
Index #2006/05958 (Sup. Ct. Monroe Co. March 28, 2007)
Breach of Notice of Termination Clause; summary ejectment of contractor from site in violation of 7 day notice of termination clause precludes owner’s post-termination completion cost claim; summary judgment on liability awarded contractor on its breach of the notice of termination clause because contractor established as a matter of law that it did not repudiate contract or otherwise abandon performance.
Decisions of Interest - 2005-2006
Ajettix Inc. v. Raub
Index No. 08653/2003. February 2005
Summary judgment granting recission of stock redemption; breach of fiduciary duty by corporate officer, director and 50% shareholder of close corporation software development company; failure to disclose release to competitor of confidential proprietary information under non-disclosure agreement for pricing purposes.
Allen Homes, Inc. v. Mitchell T. Williams
Index No. 13624/2005. April 25, 2006
Claimed appraiser malpractice; summary judgment denied despite unsettled law concerning whether a malpractice action against a real estate appraiser independent of the client's remedy for contractual breach should be upheld under N.Y. law.
Barnhart v. Nexstar Broadcasting of Rochester, LLC
Index No. 01718/2006. March 20, 2006
Arbitration under the FAA required of dispute between local TV anchor and her employer of the public policy objections the employee has concerning her non-compete clause. Although the public policy argument goes to unconscionability, the Supreme Court has eviscerated the distinction between void and voidable contracts in Buckeye Check Cashing, Inc. v. Cardegna, 126 S.Ct. 1204 (Feb. 21, 2006).
Burm v. Greece Pediatric Dentistry, LLP
Index No. 10193/2005. March 3, 2006
Rescission of negotiated withdrawal package on ground of failure to inform partners of his drug abuse and forgeries of partners' names on prescriptions during the negotiations; effect is payment under Voluntary Withdrawal provision, not the Retirement provision of partnership agreement.
Burrell Color, LLC v. Burrell
Index No. 01317/2005. February 2005
Prejudgment attachment of escrow funds scheduled for payment to non-resident/non-domicillary denied; no showing that "drastic action is required for security purposes" and jurisdiction was unquestioned.
Casco Security Systems, Inc. v. Davenport Machine, Inc.
Index No. 09484/2003. December 14, 2005 December 15, 2005
Fraud in the inducement: expert opinion regarding code compliance; unreasonable failure to investigate the truth of the representation.
Cator v. Bauman
Index No. 08851/2005. December 13, 2005
Statute of Limitations: breach of fiduciary duty claim against an investment broker seeking money damages only governed by a three-year period; breach of Contract claim not similarly dismissed because investment broker or specialist not considered a "professional" under CPLR 214(6); breach of NASD fules.
Concord Insurance Agency, LLC v. Coyle
Index No. 00665/2006. April 18, 2006
Clarion and Corning rule in New York regarding "book of business" or "expirations" is subject to agreement to the contrary; expulsion of LLC member relieves excluded member from paying withdrawal penalties under operating agreement; preliminary injunction granted.
Coopervision, Inc. v. Intek Integration Technologies, Inc.
Index No. 05389/2004. February 2, 2005
Forum selection clause; multiple agreements for purchase and installation of industrial warehouse software system; order of precedence clause in installation agreement does not incorporate forum selection clause in software license agreement.
Eber Brothers Wine & Liquor Corp. v. Sisto
Index No. 0135/2005. April 21, 2005
Preliminary injunction directed to former employees denied; would be tantamount to granting the ultimate relief sought in the complaint.
ESL Federal Credit Union v. Bovee
Index No. 11204/2004. May 9, 2005
Suretyship defense of impairment of collateral; Art. 9 context; failure to dispose of collateral in reasonable manner; consumer credit transaction.
Fashion Bug #2100 of Batavia, Inc. v. 425 West Main Associates (Batavia) LP
Index No. 3103/2004. June, 2005
Commercial lease; rent abatement by reason of failure to replace anchor tenant with a "single-user equivalent replacement tenant." Summary judgment not precluded by waiver or by the voluntary payment doctrine.
Fusion Telecommunications Int., Inc. v. Celtel Congo, SA
Index No. 02737/2005. November, 2005
Injunction to prevent enforcement of a Letter of Credit denied by reason, inter alia, of little likelihood of success on fraud claim
George Miller Brick Co., Inc. v. Stark Ceramics, Inc.
Index No. 01001/1995. February 2, 2005
Donnelly Act. Vertical restraint of trade. Per se rule. No mention of treble damages in bifurcated liability trial. Evidence of termination admissible.
George Miller Brick Co., Inc. v. Stark Ceramics, Inc.
Index No. 01001/1995. May 2005
Reargument of decision above; denial of motion seeking declaration that vertical resale price maintenance agreement does not violate the Donnely Act. Bid rigging.
Hayes v. Reynolds
Index No. 11956/2004. February 25, 2005
BCL sec. 1118 election; method of valuation provided by shareholder's agreement upheld; In re Pace Photographers distinguished.
Henrietta Piping, Inc. v. Antetomaso & Micca Group, LLC
Index No. 12042/2005. February 21, 2006
Notice of Pendency cancelled; restitution in specie of real property conveyed years ago impossible or inequitable because, even if right to rescission established by fraud in the inducement, because certainty of titles would be unduly interfered with and creditor rights would be impaired; New York still adheres to the inadequacy of legal remedies criterion for specific restitution, in part, despite the Second Restatement's abrogation of the criterion.
Hoffman v. Finger Lakes Instrumentation, LLC
Index No.13572/2004. January 26, 2005
Nonsignatory may compel signatory to arbitrate under LLC operating agreement's arbitration clause.
Klassen, Ingalls & Assoc., Inc. v. F.J.M. Enterprises
Index No. 07062/2005. December 2005
Commercial real estate listing agreement; summary judgment precluded by question of fact on whether "best efforts" were used; damages held limited by the contract to $17,500.
Knight v. Genesee Valley Cardiothoracic
Index No. 06610/2002. March 2005
Interpretation of shareholder agreements' complex termination provisions.
LaLoggia v. Document Security Systems, Inc.
Index No. 08307/2005. March 22, 2006
Time barred counterclaims asserted only defensively may be interposed only as shield for recoupment purposes, not to obtain affirmative relief, but must arise out of reciprocal contractual obligations on the same set of facts or transaction. Even if arising from same contract, where the contract itself provides the business to be transacted as discrete and independent units, recoupment is unavailable.
Lazer Incorporated v. Kesselring
Index No. 13445/2005. July 21, 2005
Restrictive Covenants: Reasonableness test of BDO Seidman applies to analysis of covenant not to solicit employees. Because nonrecruit provision did not serve any legitimate employer interest in the circumstances, summary judgment for defendant was appropriate.
Lenel Systems International, Inc. v. Smith
Index No. 11302/2004. July 5, 2005
Restrictive covenants: Employee choice doctrine not applicable in absence of a provision in employment agreement for forfeiture of sums otherwise promised, i.e., a "forfeiture for competition" clause which did not otherwise restrict employment mobility. The agreement here barred future employment only and thus BDO Seidman scrutiny was required.
Lumarc Computer Corp. v. McCabe
Index No. 9762/2004. February 9, 2005
Preliminary injunction denied; former employee; no studied copying; use of memory permitted.
Manitou Sand & Gravel Co, Inc. v Town of Ogden
Index No. 13181/2000. June 2005
Municipal agreements in derogation of the Mined Land Reclamation Law (ECL §§23-2701, et seq.) are unenforceable: The Town cannot by agreement exact conditions for the exercise of its zoning power in the form of restrictive covenants which exceed the zoning power of the Town to achieve by local law; res judicatia cannot be applied to thwart the public policy of the state as expressed in the MLRC.
Manufacturers & Traders Trust Co. v. Mertz
Index. No. 07867/2003. May 9, 2005
Action against executrix; denial of summary judgment against executrix on claim she made distributions with knowledge of valid claim in violation of SCPA 2002; failure to move in Surrogate's Court under SCPA 2004 for a reserve; statute of limitations for breach of fiduciary duty claim.
In the Matter of Horning
Index No. 00477/2006. March 21, 2006
Dissolution of LLC lacking an operating agreement denied on ground the business is thriving and that dissention not so pervasive that it can be said that it is not reasonably practicable to carry on the business within the meaning of LLCL 702. Distinguish corporate dissolution statutes.
In the Matter of SWETT for the Judicial Supervision of the Winding up of FACTORS WALK, LLC
Index No. 10260/2005. November 22, 2005
Arbitration waived by resort to the courts; LLC dissolution declared and LLC Law § 703(a) order entered granting judicial supervision of the winding up of Factors Walk LLC, appointing a receiver or liquidating trustee in furtherance of the same.
LaLoggia v. Document Security Systems, Inc.
Index No. 08307/2005. March 22, 2006
Time barred counterclaims asserted only defensively may be interposed only as shield for recoupment purposes, not to obtain affirmative relief, but must arise out of reciprocal contractual obligations on the same set of facts or transaction. Even if arising from same contract, where the contract itself provides the business to be transacted as discrete and independent units, recoupment is unavailable.
Lumarc Computer Corp. v. McCabe
Index No. 09762/2004. May 2006
Summary Judgment dismissing misappropriation of corporate opportunity claim: items up for bid involved expectancies which no reasonable trier of fact could find were tangible. Full disclosure otherwise made and reliance not shown; no civil cause of action grounded in harassment.
Maxon v. Mirror Show Management, Inc.
Index No.1489/2004. March 22, 2005
Dissolution proceeding; BCL 1118 buyout election made; discovery of corporate waste or diversion permitted on inextricably intertwined breach of fiduciary duty and shareholder derivative claims, as well as valuation.
The MBE GROUP, Inc. v. J. Paul Dhillon
Index No. 2746/2004. January 24, 2005
Corporation cannot raise criminal usury for the purpose of obtaining affirmative relief.
McCall Staffing Assoc., Ltd. v. Campbell
Index No. 01354/2006. February 21, 2006
Employee theft of trade secrets established; preliminary injunction granted on detailed showing of their use for unfair competition and in violation of restrictive covenant.
Mehta v. Hussain
Index No. 1362/2005. April 26, 2005
Arbitration; motion to renew confirmation of award on ground one of the letters said to constitute the award was, in reality, procured by a petitioner's counsel's ex parte conference with the arbitrators after the original award was made.
Nunan v. Midwest, Inc.
Index No. 00280/2004. January 10, 2006
Proper manner of interposition of attorney-client privilege claim when in camera review sought to sustain the privilege; rejection on facts of claimed joint defense exception to the attorney-client privilege; when a former officer or director is suing the company for his or her own personal gain, the privilege belongs to the corporation and if asserted is effective to prevent disclosure to the former officer or director. The decision also rejects the claimed fiduciary exception to the privilege articulated in the Fifth Circuit's decision in Garner v. Wolfinbarger.
Oak Orchard Community Health Center v. Blasco
Index No. 04658/2005. May 31, 2005
Noncompete agreement among doctors; BDO Seidman analysis required notwithstanding the nature of services required; Gelder Group and Kapinski distinguished.
Optic Plus Enterprises, Ltd. v. Bausch & Lomb, Inc.
Index No. 06749/2005. March 13, 2006
Breach of contract claim grounded in company's officers establishment of competing business cannot be avoided on a supposed theory that company's principals are not bound to the terms of the company's agreements when they do not individually sign them; principals are bound as fiduciaries to abide the company's contractual obligations and the business judgment rule constitutes no grant of authority in the directors to take actions in excess of the company's contractual authority.
Panetta v. Dana
Index No. 13714/2005. March 31, 2006
Pre-answer motion to dismiss veil piercing claim denied, even though papers opposing motion might not withstand a summary judgment motion post discovery.
The Pike Co., Inc. v. General Drywall Corporation
Index No. 4510/2005. May 2005
Subcontract agreement providing for arbitration did not expressly make mediation a condition precedent to arbitration.
Pittsford Family Dental Practice, P.C., v. Dr. Kenneth Tirone
Index 13443/2004. March 2005
Motion for preliminary injunction denied; no request for permanent injunction in complaint.
Portfolio Management Assoc., LLC v. Long Consulting and Management Group Inc.
Index No. 08132/2004. December 2, 2005
Disqualification of counsel: simultaneous representation of plaintiff and defendant; application of per se rule; continuous representation of PMA, during a period in which it is alleged that PMA acquired a 98% interest in LCMG, and during a time when plaintiff's counsel, in fact, represented LCMG in another matter involving one of LCMG's employees, precludes counsel from undertaking the prosecution of this matter against LCMG on behalf of PMA.
Potter v. Arrington
Index No. 13028/2005. February 6, 2006
Internal affairs of Deleware corporation are decided under the law of the state of incorporation despite BCL 1319; derivative action and claim for breach of fiduciary duty to be decided under Delaware law, precluding claims brought exclusively under BCL 715, 717; claims fail under Delaware law anyway; breach of fiduciary duty claims also precluded by Delaware three year Statute of Limitations, CPLR 202; time barred claim for appointment of receiver seeking application of exception under Delaware statute allowing Court of Chancery to appoint one at any time for good cause shown must be brought in the court of Chancery.
RCIPA v. Blue Cross
February 2, 2006
Summary Judgment precluding claim for further damages for 1997 billings on res judicata, law of the case, abandonment by failing to appeal, and improper claim splitting doctrines denied; plaintiff properly reserved claim in reply papers on prior summary judgment motion under CPLR 3212(e); rule that new arguments presented in reply papers should not be considered only applies to new arguments in support of summary judgment, not those intended to withdraw claim from consideration on motion.
RLI Insurance Co. v. Waters
Index No. 00781/2004. February 25, 2005
Indemnity agreement enforced; no issue of fact on defenses of bad faith and failure to investigate claim.
Rochester Drug Co-operative, Inc. v. Marcott Pharmacy North Corp.
Index No. 04817/2003. March 22, 2005
Dismissal of third party claim against law firm for contribution and indemnification; malpractice not alleged.
Rochester Gas & Electric Corp. v. Niagara Mohawk Power Corporation
Index No. 09621/2001. January 21, 2005
Filed rate doctrine.
Rochester Linoleum and Carpet Center, Inc. v. Springer
Index No. 11545/2005. January 30, 2006
Dismissal pre-answer of common law trespass claim and putative cause of action for "Computer Trespass" under Penal Law 156.10; no trespass or conversion alleged by reference only to employee's remote access of confidential information using unauthorized username and password; no trespass to land claim because no physical entry accomplished; no trespass to chattels claim because no interference with the employer's use and enjoyment of the information remotely accessed was alleged (i.e., no deletion of files or other interference with the owner's possession and use); no conversion claim because no allegation that employee did anything to exclude employer's exercise of rights over their property; no private right of action to enforce Penal Law 156.10.
Rockwood Automatic Machine, Inc. v. Lear Corp.
Index No. 11145/2005. February 6, 2006
Arbitration (FAA case); Nolde Bros presumption of arbitrability not rebutted concerning dispute over provision of expired agreement; the Nolde Bros presumption applies to ordinary commercial contracts, and applies to the question whether an arbitration agreement has expired or been terminated when the plaintiff seeks to enforce disputed contractual rights alleged (by reference to normal principals of contract interpretation) to survive expiration of the remainder of the agreement. Matter of Waldron (Goddess), distinguished.
SBA Network Services v. Fred A. Nudd Corp.
Index No. 51706. January 25, 2005
Forum non conveniens; multistate engineering project for installation of cell phone towers; laches preclude motion.
SBA Network Services v. Fred A. Nudd Corp.
Index No. 51706. June 23, 2005
Partial summary judgment on liability granted by reason of contractor's failure to supply (as agreed) cell phone towers meeting "design specs" specified in the purchase order; contractor's breach of express and implied warranty; dismissal of cross-claim for contribution and/or indemnification because CPLR 1401 may not be invoked to apportion a defendant's liability arising from breach of contract.
Thomas, Williams & Sherpherd, LLC v. Universal Building Services
Index No. 0094/2005. February, 2005
Confirm arbitration; bias of arbitrator waived by proceeding with arbitration.
University Plaza Tx. Limited Partnership v. Larry's Mexican Restaurant, Inc.
Index No. 08896/2005. February 21, 2006
Stay of Arbitration granted; waived by resort to courts on same issues conceded to be arbitrable; effort to compartmentalize issues in one form from issues in the other rejected; issues of fact presented on oral modification by reason of part performance referable to the alleged oral modification.