You are here: / / SUPREME COURT SHOULD NOT HAVE, SUA SPONTE, DETERMINED THE PROVISION OF...
,

SUPREME COURT SHOULD NOT HAVE, SUA SPONTE, DETERMINED THE PROVISION OF AN “AGREEMENT OF PURCHASE AND SALE OF STOCK” WHICH CALLED FOR RECOVERY OF DOUBLE ATTORNEYS FEES BY THE PREVAILING PARTY IN LITIGATION WAS AN UNENFORCEABLE PENALTY (SECOND DEPT).

The Second Department determined Supreme Court should not have, sua sponte, held that the provision of the “Agreement of Purchase and Sale of Stock” (PSA) which awarded double attorney’s fees if litigation resulted from a breach was an unenforceable penalty. The decision, which includes legal analysis well worth reading, is a complex discussion of the covenant not to compete and the nonsolicitation agreement which is too detailed and fact-specific to summarize here. There is an extensive dissent. With respect to the “double attorney’s fees” provision, the court wrote:

We disagree with the Supreme Court’s sua sponte determination that the provision of the PSA, which, in the event of litigation, allows for a recovery of double the amount of attorneys’ fees expended by the substantially prevailing party, is an unenforceable penalty. When parties set down their agreement in a clear, complete document, their writing should be enforced according to its terms … . Paragraph 10.11 of the PSA clearly sets forth the intent of the parties, two sophisticated businesspeople with the benefit of counsel, that, should litigation arise out of the PSA, the “substantially prevailing party” is entitled to two times reasonable attorneys’ fees. Where, as here, “there is no deception or overreaching” in the making of such agreement, the agreement should be enforced as written … . Moreover, while each party asserted in the Supreme Court, and asserts on appeal, that he should prevail and be treated as the prevailing party for the purpose of paragraph 10.11, neither party contended in the Supreme Court that the double attorneys’ fees provision of paragraph 10.11 should not be enforced. Loughlin v Meghji, 2020 NY Slip Op 05196, Second Dept 9-30-20

 

You might also like
THE DEFENDANT SCHOOL DID NOT ELIMINATE TRIABLE QUESTIONS OF FACT ABOUT WHETHER IT HAD CONSTRUCTIVE NOTICE OF THE TEACHER’S ABUSIVE PROPENSITIES; THE NEGLIGENT HIRING AND NEGLIGENT SUPERVISION CAUSES OF ACTION IN THIS CHILD VICTIMS ACT CASE SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).
DEFENSE COUNSEL WAS INEFFECTIVE FOR NOT MOVING TO SUPPRESS CREDIT CARDS SEIZED DURING THE EXECUTION OF A SEARCH WARRANT WHICH WERE NOT WITHIN THE SCOPE OF THE WARRANT; THE INCRIMINATING NATURE OF THE CREDIT CARDS WAS NOT IMMEDIATELEY APPARENT (SECOND DEPT). ​
CLOSURE OF TERRACE BREACHED THE IMPLIED WARRANTY OF HABITABILITY.
SECOND PURCHASER OF REAL PROPERTY DEMONSTRATED HE WAS A BONA FIDE PURCHASER WITHOUT NOTICE OF THE PLAINTIFF’S PRIOR PURCHASE CONTRACT, PLAINTIFF’S FILING OF A NOTICE OF PENDENCY DID NOT SERVE AS A SUBSTITUTE FOR RECORDING OF THE CONTRACT (SECOND DEPT).
Abuse Finding, Based Upon an Unsatisfactory Explanation for the Child’s Injury, Reversed Based Upon the Testimony of Petitioner’s Medical Witness Who Stated the Injury Could Have Been Caused by a Fall and Described the Child as Basically Asymptomatic and Happy at the Hospital
Denial of “Defective” No-Fault Claim (on Form UB-40) Was of No Effect—Failure to Respond Within 30 Days to a Subsequent “Correct” Claim (on Form NF-5) Precluded Insurer from Raising Defenses to the Claim
Testimony Insufficient to Overcome Presumption Photo Arrays, Which Were Not Preserved, Were Unduly Suggestive—Subsequent Line-Up, Which Included Persons Much Older than Defendant, Was Unduly Suggestive—New Trial Ordered
THE BANK’S EVIDENCE OF DEFENDANT’S DEFAULT AND COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 AND THE MORTGAGE WAS INSUFFICIENT (SECOND DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

NASSAU COUNTY SUPREME COURT CANNOT VACATE A DEFAULT ORDER ISSUED BY NEW YORK... THE CHILD SUPPORT PROVISIONS OF THE STIPULATION OF SETTLEMENT IN THE DIVORCE...