You are here: / Civil Procedure
, , , ,

EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT.

The First Department, reversing Supreme Court, determined plaintiff had adequately pled that the defendant law firm was equitably estopped from arguing an assignment, which was drawn up by the law firm, did not assign to plaintiff the right to bring a malpractice action against the law firm. The law firm had missed a deadline. Although the assignment could not be interpreted to include the malpractice claim, the equitable estoppel doctrine could be applied to prohibit the law firm from arguing the issue:

The motion court correctly found that the subject assignment, which merely transferred the assignor’s “entire right, title and interest in and to the [call] option contained in Paragraph 8 of” another contract, did not explicitly assign tort claims … . The assignment is not ambiguous; even if it were (and if we therefore considered parol evidence), an unexpressed understanding does not suffice … .

However, accepting plaintiff’s affidavit in opposition to defendants’ motion as true, we find that plaintiff sufficiently pleaded that defendants should be equitably estopped from arguing that the assignment did not assign tort claims. Contrary to defendants’ contention, estoppel can be based on silence as well as conduct … . Under these circumstances, where defendants drafted the assignment at a time when it represented … plaintiff, and that interpreting the assignment to exclude tort claims would mean that neither the assignor nor plaintiff, the assignee, would be able to sue defendants for malpractice for failing to exercise the call option in a timely manner, we find that the “special circumstances” exception to the privity requirement applies … . Deep Woods Holdings LLC v Pryor Cashman LLP, 2016 NY Slip Op 08156, 1st Dept 12-6-16

NEGLIGENCE (LEGAL MALPRACTICE, EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT)/LEGAL MALPRACTICE EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT)/CONTRACT LAW (ASSIGNMENT, EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT)/ASSIGNMENT (LEGAL MALPRACTICE, EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT)/ATTORNEYS (MALPRACTICE, EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT)/EQUITABLE ESTOPPEL (LEGAL MALPRACTICE, EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT)/CIVIL PROCEDURE (EQUITABLE ESTOPPEL DOCTRINE ADEQUATELY PLED, LAW FIRM MAY BE PROHIBITED FROM ARGUING THE ASSIGNMENT IT DREW UP FOR PLAINTIFF DID NOT ASSIGN PLAINTIFF THE RIGHT TO BRING A MALPRACTICE ACTION AGAINST IT)

,

UNDER THE FACTS, NO ABUSE OF DISCRETION IN FAILING TO AWARD PREJUDGMENT INTEREST ON A DISTRIBUTIVE AWARD THE WIFE FAILED TO PAY.

The Third Department determined Supreme Court did not abuse its discretion when it did not award prejudgment interest on a distributive award the wife had failed to pay. The matter came before Supreme Court when the husband moved to enforce the separation agreement:

“There is no automatic entitlement to prejudgment interest, under CPLR 5001, in matrimonial litigation” … . Rather, the decision to award prejudgment interest in a matrimonial action, as well as the rate and date from which it shall be computed, are matters within the sound discretion of the trial court … . Here, the record reflects that, following the execution of the separation agreement, issues arose regarding the accuracy of certain deeds and transfer documents prepared by the husband relative to the parcels of real property that were to be conveyed pursuant to the agreement. Such issues had not been resolved at the time of the husband’s motion to enforce the agreement, the wife claiming that certain inaccuracies still remained within the relevant documents. Although the wife’s obligation to tender the distributive award by the date prescribed in the separation agreement was not contingent upon the execution of the deeds transferring the real property, the wife explained that she had been advised by her attorney to withhold payment of the distributive award — which she had placed in a separate interest-bearing bank account — until the deeds were finalized and signed so as to ensure a contemporaneous exchange … . Under these circumstances, we cannot conclude that Supreme Court improvidently exercised its discretion in choosing to award the husband all interest actually earned on the distributive award rather than prejudgment interest pursuant to CPLR 5001. Fori v Fori, 2016 NY Slip Op 08135, 3rd Dept 12-1-16

FAMILY LAW (UNDER THE FACTS, NO ABUSE OF DISCRETION IN FAILING TO AWARD PREJUDGMENT INTEREST ON A DISTRIBUTIVE AWARD THE WIFE FAILED TO PAY)/CIVIL PROCEDURE (FAMILY LAW, PREJUDGMENT INTEREST, UNDER THE FACTS, NO ABUSE OF DISCRETION IN FAILING TO AWARD PREJUDGMENT INTEREST ON A DISTRIBUTIVE AWARD THE WIFE FAILED TO PAY)/INTEREST (FAMILY LAW, PREJUDGMENT INTEREST, UNDER THE FACTS, NO ABUSE OF DISCRETION IN FAILING TO AWARD PREJUDGMENT INTEREST ON A DISTRIBUTIVE AWARD THE WIFE FAILED TO PAY)

,

MOTION TO COMPEL COMPLIANCE WITH NON-JUDICIAL SUBPOENAS PROPERLY GRANTED, ANY OBJECTIONS WOULD HAVE TO AWAIT THE ACTUAL QUESTIONING AT THE HEARING.

The Third Department, affirming Supreme Court, determined petitioner’s motion pursuant to CPLR 2308 (b) to compel respondents to comply with non-judicial subpoenas was properly granted. Petitioner was charged by the State Liquor Authority (SLA) with improper conduct, i.e., shipping wine to customers in states that prohibit residents from receiving such shipments. Petitioner subpoenaed the SLA’s general counsel and several others on the SLA staff. It was petitioner’s position that shipping wine out of state had never before been deemed improper by the SLA. The court found the objections to the subpoenas, including an objection based upon attorney-client privilege, premature. Because the subpoenas sought only testimony, any objections would have to await the actual questioning at the hearing:

According to petitioner, the challenged subpoenas are intended to obtain information pertaining to, among other things, SLA’s past and present policies regarding out-of-state shipping, the standards applicable to the charges of improper conduct against petitioner and evidence related to penalty mitigation. CPLR 2308 (b) provides that, upon a motion to compel a respondent to comply with a non-judicial subpoena, the court “shall order compliance” if it determines that the subpoena was authorized. Here, it is undisputed that petitioner was authorized by SLA’s regulations to issue the subpoenas (see 9 NYCRR 54.3 [h]; see also CPLR 2302 [a]). Respondents nevertheless contend that their motion to quash should have been granted based upon their claims that the information sought by the subpoenas is privileged, irrelevant, beyond the scope of the administrative hearing, cumulative and burdensome. We affirm, finding no abuse of Supreme Court’s discretion in the denial of respondents’ cross motion … . Matter of Empire Wine & Spirits LLC v Colon, 2016 NY Slip Op 08145, 3rd Dept 12-1-16

CIVIL PROCEDURE (MOTION TO COMPEL COMPLIANCE WITH NON-JUDICIAL SUBPOENAS PROPERLY GRANTED, ANY OBJECTIONS WOULD HAVE TO AWAIT THE ACTUAL QUESTIONING AT THE HEARING)/SUBPOENAS (NON-JUDICIAL, TESTIMONY ONLY, MOTION TO COMPEL COMPLIANCE WITH NON-JUDICIAL SUBPOENAS PROPERLY GRANTED, ANY OBJECTIONS WOULD HAVE TO AWAIT THE ACTUAL QUESTIONING AT THE HEARING)

, ,

CRITERIA FOR A MOTION TO DISMISS NOT MET, SUPREME COURT SHOULD NOT HAVE DISMISSED BY MAKING A FINDING IN A MATTER PENDING BEFORE THE COMPTROLLER.

In an action stemming from the withholding of payment to plaintiff subcontractor, the Second Department determined the breach of contract cause of action should not have been dismissed, but noted that a conversion action cannot be based upon a breach of contract, and an unjust enrichment cause of action cannot coexist with a breach of contract cause of action.  Supreme Court had dismissed the breach of contract cause of action, finding the defendant had a legal right to withhold payment under Labor Law 220 because complaints had been lodged for failure to pay the prevailing wage for this school construction project. But since the Comptroller had not yet ruled on the Labor Law 220 complaints, Supreme Court should not have based its dismissal on them by making its own finding:

On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the court must “accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” … . While a court is “permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7)” … , “where the motion is not converted to one for summary judgment, the criterion is whether the [third-party plaintiff] has a cause of action, not whether [it] has stated one, and, unless it has been shown that a material fact as claimed by the [third-party plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it . . . dismissal should not eventuate'” … . A motion to dismiss pursuant to CPLR 3211(a)(1) may appropriately be granted “only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” … . * * *

The Supreme Court erred in dismissing the third-party cause of action alleging breach of contract on the ground that the third-party defendants had a legal right to withhold payment pursuant to Labor Law §§ 220 and 220-b. Based upon the record before us, there is no indication that the Comptroller has rendered a final determination regarding the alleged Labor Law § 220 violation. As such, the court, in effect, determined the prevailing wage issue, which is within the exclusive province of the Comptroller, prior to a determination by the Comptroller … . Thus, the evidentiary material submitted by the third-party defendants, which demonstrated that payment to AGC under the subject contracts was withheld pending the Comptroller’s determination, failed to establish that any fact alleged in support of the third-party breach of contract cause of action was undisputedly not a fact, and failed to conclusively establish a defense as a matter of law to that cause of action. Gym Door Repairs, Inc. v Astoria Gen. Contr. Corp., 2016 NY Slip Op 08047, 2nd Dept 11-30-16

 

CIVIL PROCEDURE (CRITERIA FOR A MOTION TO DISMISS NOT MET, SUPREME COURT SHOULD NOT HAVE DISMISSED BY MAKING A FINDING IN A MATTER PENDING BEFORE THE COMPTROLLER)/DISMISS, MOTION TO (CRITERIA FOR A MOTION TO DISMISS NOT MET, SUPREME COURT SHOULD NOT HAVE DISMISSED BY MAKING A FINDING IN A MATTER PENDING BEFORE THE COMPTROLLER)

,

CIVIL MATTER PROPERLY STAYED UNTIL RELATED CRIMINAL MATTER RESOLVED, DISCRETIONARY CRITERIA EXPLAINED.

The Second Department determined Supreme Court properly stayed a civil matter after the defendant was indicted in a related criminal matter and indicated he would invoke his Fifth Amendment right to remain silent if the civil matter went forward:

A motion pursuant to CPLR 2201 to stay a civil action pending resolution of a related criminal action is directed to the sound discretion of the trial court … . “Factors to consider include avoiding the risk of inconsistent adjudications, [duplication] of proof and potential waste of judicial resources. A compelling factor is a situation where a defendant will invoke his or her constitutional right against self incrimination” … . “Although the pendency of a criminal proceeding does not give rise to an absolute right under the United States or New York State Constitutions to a stay of a related civil proceeding . . . there is no question but that the court may exercise its discretion to stay proceedings in a civil action until a related criminal dispute is resolved” … .

Here, this action and the criminal proceeding against Samuel arise from the same facts. While a stay may cause inconvenience and delay to the plaintiffs, the failure to grant the stay would cause Samuel to “suffer the severe prejudice of being deprived of a defense” … . Moreover, a prior determination in the criminal proceeding could have collateral estoppel effect in this action, thereby simplifying the issues … . Mook v Homesafe Am., Inc., 2016 NY Slip Op 08054, 2nd Dept 11-30-16

 

CIVIL PROCEDURE (CIVIL MATTER PROPERLY STAYED UNTIL RELATED CRIMINAL MATTER RESOLVED)/CRIMINAL LAW (CIVIL MATTER PROPERLY STAYED UNTIL RELATED CRIMINAL MATTER RESOLVED)

MOTION TO AMEND ANSWER TO ASSERT STATUTE OF LIMITATIONS DEFENSE, MADE SIX YEARS AFTER INITIAL ANSWER WAS SERVED, SHOULD HAVE BEEN DENIED.

The Second Department, reversing Supreme Court, determined the County’s motion to amend its answer to assert a statute of limitations defense, six years after the initial answer was served, should have been denied:

The County waived a defense based on the statute of limitations by not raising that defense in its answer … . Nevertheless, defenses waived under CPLR 3211(e) can be interposed in an answer amended by leave of the court pursuant to CPLR 3025(b) … . ” In the absence of prejudice or surprise resulting directly from the delay in seeking leave, such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit'” … . ” A determination whether to grant such leave is within the Supreme Court’s broad discretion, and the exercise of that discretion will not be lightly disturbed'” … . ” In exercising its discretion, the court should consider how long the party seeking the amendment was aware of the facts upon which the motion was predicated [and] whether a reasonable excuse for the delay was offered'” … . ” [W]here the application for leave to amend is made long after the action has been certified for trial, judicial discretion in allowing such amendments should be discrete, circumspect, prudent and cautious'” … .

We agree with the plaintiffs that the Supreme Court improvidently exercised its discretion in granting the County’s motion for leave to amend its answer to assert the statute of limitations as a defense and for summary judgment dismissing the complaint as time-barred … . The County’s motion was not made until approximately six years after service of its answer, after the parties had completed discovery, and after the note of issue had been filed. Under these circumstances, the plaintiffs have suffered significant prejudice from the County’s delay in asserting the statute of limitations as a defense … . Civil Serv. Empls. Assn. v County of Nassau, 2016 NY Slip Op 08038, 2nd Dept 11-30-16

 

CIVIL PROCEDURE (MOTION TO AMEND ANSWER TO ASSERT STATUTE OF LIMITATIONS DEFENSE, MADE SIX YEARS AFTER INITIAL ANSWER WAS SERVED, SHOULD HAVE BEEN DENIED)/ANSWER, MOTION TO AMEND MOTION TO AMEND ANSWER TO ASSERT STATUTE OF LIMITATIONS DEFENSE, MADE SIX YEARS AFTER INITIAL ANSWER WAS SERVED, SHOULD HAVE BEEN DENIED)/STATUTE OF LIMITATIONS (MOTION TO AMEND ANSWER TO ASSERT STATUTE OF LIMITATIONS DEFENSE, MADE SIX YEARS AFTER INITIAL ANSWER WAS SERVED, SHOULD HAVE BEEN DENIED)

, ,

FALL FROM SCAFFOLD WITH NO SIDE RAILS ENTITLED PLAINTIFF TO SUMMARY JUDGMENT, HEARSAY ALONE WILL NOT DEFEAT SUMMARY JUDGMENT MOTION, UNSIGNED DEPOSITION TRANSCRIPT PROPERLY CONSIDERED.

LABOR LAW-CONSTRUCTION LAW, CIVIL PROCEDURE, EVIDENCE.

The First Department determined plaintiff was entitled to summary judgment on his Labor Law 240 (1) cause of action. Plaintiff fell from a Baker’s scaffold that had no side rails. Although hearsay can be submitted in opposition to a summary judgment motion, the motion will not be defeated by hearsay alone (the case here). The court noted that the plaintiff’s unsigned deposition transcript was properly considered because it was certified by the reporter, its accuracy was not challenged by the defendant, and plaintiff adopted it as accurate by submitting it:

Plaintiff was entitled to summary judgment on his Labor Law § 240(1) claim where he fell from a six-foot-high Baker’s scaffold, which he was directed to use in order to plaster a ceiling. The record shows that the scaffold “had no side rails, and no other protective device was provided to protect him from falling off the sides” … . …

… [T]he statement in the affidavit of [defendant’s] owner that a subcontractor had assured him that the subcontractor had instructed all his employees to use the lifeline, belt and harness is insufficient raise a triable issue of fact as to whether plaintiff may be the sole proximate cause for disregarding such an instruction … . While hearsay may be considered in opposition to defeat a summary judgment motion if it is not the only evidence upon which opposition to the motion is predicated, because it was the only evidence establishing that plaintiff disregarded an instruction to use the safety devices, it is insufficient to defeat plaintiff’s motion … . Chong v 457 W. 22nd St. Tenants Corp., 2016 NY Slip Op 07997, 1st Dept 11-29-16

 

LABOR LAW-CONSTRUCTION LAW (FALL FROM SCAFFOLD WITH NO SIDE RAILS ENTITLED PLAINTIFF TO SUMMARY JUDGMENT, HEARSAY ALONE WILL NOT DEFEAT SUMMARY JUDGMENT MOTION, UNSIGNED DEPOSITION TRANSCRIPT PROPERLY CONSIDERED)/CIVIL PROCEDURE (HEARSAY ALONE WILL NOT DEFEAT SUMMARY JUDGMENT MOTION, UNSIGNED DEPOSITION TRANSCRIPT PROPERLY CONSIDERED)/EVIDENCE (HEARSAY ALONE WILL NOT DEFEAT SUMMARY JUDGMENT MOTION, UNSIGNED DEPOSITION TRANSCRIPT PROPERLY CONSIDERED)/SCAFFOLDS (FALL FROM SCAFFOLD WITH NO SIDE RAILS ENTITLED PLAINTIFF TO SUMMARY JUDGMENT, HEARSAY ALONE WILL NOT DEFEAT SUMMARY JUDGMENT MOTION, UNSIGNED DEPOSITION TRANSCRIPT PROPERLY CONSIDERED)/SUMMARY JUDGMENT (HEARSAY ALONE WILL NOT DEFEAT SUMMARY JUDGMENT MOTION, UNSIGNED DEPOSITION TRANSCRIPT PROPERLY CONSIDERED)

NEW YORK DID NOT HAVE JURISDICTION OVER DEFENDANT IN THIS SUIT SEEKING PAYMENT OF A PROMISSORY NOTE, DEFENDANT HAD NO CONNECTION WITH NEW YORK OTHER THAN A NEW YORK AGENT OVER WHICH DEFENDANT EXERCISED NO CONTROL AND A NEW YORK CHOICE OF LAW PROVISION IN THE SUBSCRIPTION AGREEMENT.

In a lengthy opinion by Justice Austin, too detailed to be fairly summarized here, the Second Department determined a New York agent (Kraft) which acted on the investors’, including defendant’s, behalf, but over which the defendant exercised no control, and a subscription agreement with a New York choice of law provision were insufficient, under the facts, to confer jurisdiction of New York courts over the lawsuit. The lawsuit sought payment on a note which was related to defendant’s investment in an oil and gas joint venture (AIV). Defendant resided in Illinois, the note was executed in Illinois, and defendant did not transact any business in New York:

Here, the defendant did not personally transact business in New York, and the complaint does not contain any allegations that he did so … . After the defendant executed the Subscription Agreement and the note in Illinois, the only acts connecting him to New York with respect to his investment in AIV were sending one letter in December 1997 to representatives of AIV and engaging in a telephone conversation with representatives of AIV … . Moreover, no meetings were held in New York between the defendant and the plaintiffs … . Even though CPLR 302(a) is a single-act statute, contrary to the plaintiffs’ contention, the defendant’s act of appointing Kraft, a corporation that maintains its principal office in New York, as his attorney-in-fact upon investing in the joint venture is not sufficient to invoke jurisdiction. * * *

Accepting the plaintiffs’ assertions that Kraft executed business orders and drilling and operating agreements and collected and distributed monies on the defendant’s behalf in New York State, and that knowledge of and consent to Kraft’s actions were established by the Subscription Agreement, which appointed Kraft as his attorney-in-fact with regard to these transactions, the defendant’s lack of control undermines a finding of an agency relationship. America/International 1994 Venture v Mau, 2016 NY Slip Op 07915, 2nd Dept 11-23-16

 

CIVIL PROCEDURE (NEW YORK DID NOT HAVE JURISDICTION OVER DEFENDANT IN THIS SUIT SEEKING PAYMENT OF A PROMISSORY NOTE, DEFENDANT HAD NO CONNECTION WITH NEW YORK OTHER THAN A NEW YORK AGENT OVER WHICH DEFENDANT EXERCISED NO CONTROL AND A NEW YORK CHOICE OF LAW PROVISION IN THE SUBSCRIPTION AGREEMENT)/JURISDICTION (LONG-ARM, NEW YORK DID NOT HAVE JURISDICTION OVER DEFENDANT IN THIS SUIT SEEKING PAYMENT OF A PROMISSORY NOTE, DEFENDANT HAD NO CONNECTION WITH NEW YORK OTHER THAN A NEW YORK AGENT OVER WHICH DEFENDANT EXERCISED NO CONTROL AND A NEW YORK CHOICE OF LAW PROVISION IN THE SUBSCRIPTION AGREEMENT)/LONG-ARM JURISDICTION (NEW YORK DID NOT HAVE JURISDICTION OVER DEFENDANT IN THIS SUIT SEEKING PAYMENT OF A PROMISSORY NOTE, DEFENDANT HAD NO CONNECTION WITH NEW YORK OTHER THAN A NEW YORK AGENT OVER WHICH DEFENDANT EXERCISED NO CONTROL AND A NEW YORK CHOICE OF LAW PROVISION IN THE SUBSCRIPTION AGREEMENT)

SUPREME COURT SHOULD NOT HAVE DISMISSED THE DECLARATORY JUDGMENT PORTION OF THIS HYBRID ARTICLE 78/SUMMARY JUDGMENT ACTION BECAUSE NO MOTION FOR SUMMARY DETERMINATION OF THAT PORTION OF THE PROCEEDING HAD BEEN MADE.

The Second Department reversed the dismissal of a petition because a question of fact had been raised about the adequacy of notice of a tax lien. The Second Department also reversed the dismissal of the declaratory judgment portion of this hybrid Article 78/declaratory judgment action because no motion had been made for summary determination of declaratory judgment request:

“In a hybrid proceeding and action, separate procedural rules apply to those causes of action which are asserted pursuant to CPLR article 78, on the one hand, and those which seek to recover damages and declaratory relief, on the other hand. The Supreme Court may not employ the summary procedure applicable to a CPLR article 78 cause of action to dispose of causes of action to recover damages or seeking a declaratory judgment” … . “Thus, where no party makes a request for a summary determination of the causes of action which seek to recover damages or declaratory relief, it is error for the Supreme Court to summarily dispose of those causes of action” … . Here, since no party made such a motion, the Supreme Court should not have summarily disposed of the cause of action that sought declaratory relief, and the matter must be remitted to the Supreme Court, Nassau County, for further proceedings on that cause of action … . Matter of East W. Bank v L & L Assoc. Holding Corp., 2016 NY Slip Op 07956, 2nd Dept 11-23-16

CIVIL PROCEDURE (SUPREME COURT SHOULD NOT HAVE DISMISSED THE DECLARATORY JUDGMENT PORTION OF THIS HYBRID ACTION BECAUSE NO MOTION FOR SUMMARY DETERMINATION OF THAT PORTION OF THE PROCEEDING HAD BEEN MADE)/DECLARATORY JUDGMENT (SUPREME COURT SHOULD NOT HAVE DISMISSED THE DECLARATORY JUDGMENT PORTION OF THIS HYBRID ACTION BECAUSE NO MOTION FOR SUMMARY DETERMINATION OF THAT PORTION OF THE PROCEEDING HAD BEEN MADE)/HYBRID ACTIONS (SUPREME COURT SHOULD NOT HAVE DISMISSED THE DECLARATORY JUDGMENT PORTION OF THIS HYBRID ACTION BECAUSE NO MOTION FOR SUMMARY DETERMINATION OF THAT PORTION OF THE PROCEEDING HAD BEEN MADE)/ARTICLE 78 (HYBRID ARTICLE 78-DECLARATORY JUDGMENT ACTION, (SUPREME COURT SHOULD NOT HAVE DISMISSED THE DECLARATORY JUDGMENT PORTION OF THIS HYBRID ACTION BECAUSE NO MOTION FOR SUMMARY DETERMINATION OF THAT PORTION OF THE PROCEEDING HAD BEEN MADE)

,

FOREIGN DEFENDANTS’ USE OF A NEW YORK CORRESPONDENT BANK ACCOUNT IN A SWISS BANK PROVIDED JURISDICTION OVER A LAWSUIT AGAINST THE BANK BY A SAUDI NATIONAL.

The Court of Appeals, in a full-fledged opinion by Judge Rivera, over a three-judge dissent and a concurrence, reversing Supreme Court, determined money-laundering transactions using a correspondent bank account in a New York branch of a Swiss bank provided jurisdiction over a lawsuit involving foreign parties. The individual plaintiff is a Saudi resident and co-owner of plaintiff corporation which builds oil rigs. Plaintiffs alleged three of its employees received bribes and kickbacks which were then deposited in defendant-bank (Pictet, based in Geneva) using a correspondent bank account in New York State:

We conclude that defendants’ use of the correspondent bank accounts was purposeful and that plaintiffs’ aiding and abetting and conspiracy claims arise from these transactions. … [T]he requirements of CPLR 302 (a)(1) are satisfied where the quantity and quality of contacts establish a “course of dealing” with New York, and the transaction and claim are not “merely coincidental” … . * * *

… [T]he defendants actively used a correspondent bank to further a scheme that caused harm. … [T]he defendants’ use of the New York account to transfer money provided the employees with the “laundered” profits from the bribery and kickback scheme. Also, … defendants used the correspondent account in New York “to move the necessary” money … . * * *

Here, the money laundering could not proceed without the use of the correspondent bank account, and, as plaintiffs argue, their claims require proof that the bribes and kickbacks were in fact paid. Rushaid v Pictet & Cie, 2016 NY Slip Op 07834, CtApp 11-22-16

 

CIVIL PROCEDURE (FOREIGN DEFENDANTS’ USE OF A NEW YORK CORRESPONDENT BANK ACCOUNT IN A SWISS BANK PROVIDED JURISDICTION OVER A LAWSUIT AGAINST THE BANK BY A SAUDI NATIONAL)/JURISDICTION (FOREIGN DEFENDANTS’ USE OF A NEW YORK CORRESPONDENT BANK ACCOUNT IN A SWISS BANK PROVIDED JURISDICTION OVER A LAWSUIT AGAINST THE BANK BY A SAUDI NATIONAL)/BANKING LAW (FOREIGN DEFENDANTS’ USE OF A NEW YORK CORRESPONDENT BANK ACCOUNT IN A SWISS BANK PROVIDED JURISDICTION OVER A LAWSUIT AGAINST THE BANK BY A SAUDI NATIONAL)

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