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ALTHOUGH PLAINTIFF WAS ENTITLED TO ATTORNEY’S FEES IN THE ORIGINAL SUIT ON THE NOTE, PLAINTIFF WAS NOT ENTITLED TO “FEES ON FEES” INCURRED DEFENDING DEFENDANTS’ APPEAL OF THE ORIGINAL JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff (Davidoff) was not entitled to an award of “fees on fees.” Defendants (the Hershfields) had appealed a judgment on a note which included an award of attorney’s fees to Davidoff. Davidoff then sued the Hershfields for the attorney’s fees incurred in defending the appeal, so-called “fees on fees.” The Second Department held that the language of the note did not support a “fees on fees” award:​

Davidoff commenced the instant action against the Hershfields, alleging that under the terms of the note, he was entitled to recover attorneys’ fees and costs in connection with the prior appeal and in bringing this action. …

… Supreme Court granted Davidoff’s cross-motion for summary judgment on the issue of liability … . The court determined that Davidoff was entitled to recover his attorneys’ fees in connection with the prior appeal and the instant action under the clear terms of the note. …

… Supreme Court should have denied Davidoff’s cross-motion for summary judgment on the issue of liability and should have granted the Hershfields’ motion pursuant to CPLR 3211(a) to dismiss the complaint. “The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court, as is the inquiry of whether the writing is ambiguous in the first instance. If the language is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence” … . “[A]n award of attorneys’ fees for the costs incurred in prosecuting a claim for an award of attorneys’ fees, so called ‘fees on fees,’ must be based upon a specific contractual provision or statute” … . “Consequently, where a party is under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed” … .

… Davidoff failed to establish his prima facie entitlement to judgment as a matter of law on the issue of liability for breach of contract. The note did not contain clear language expressly providing for the prevailing party to recover fees on fees or any reference to fees incurred to recover attorneys’ fees … . “Given the absence of unmistakably clear intent regarding the recovery of fees on fees, a right to recover those fees should not be implied” … . Davidoff v Hershfield, 2026 NY Slip Op 05931, Second Dept 10-14-26

Practice Point: To recover “fees on fees” the relevant contract must explicitly refer to fees incurred to recover attorney’s fees.

 

DEFENDANTS REPUDIATED THE HOME-RENOVATION CONTRACT WHEN THEY SUBMITTED A PROPOSED CHANGE ORDER REQUESTING ADDITIONAL PAYMENTS AND THREATENED TO STOP WORK IF PLAINTIFFS DID NOT AGREE; THE REPUDIATION ENTITLED PLAINTIFFS TO DAMAGES FOR TOTAL BREACH (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendants (Star) repudiated the home-renovation contract when they submitted a proposed change order and threatened to stop work unless paid in accordance with the change order. The repudiation entitled plaintiffs to damages for a total breach:

On January 14, 2022, Star sent plaintiffs a proposed “Change Order 11,” which sought payment of $117,200 for overhead allegedly incurred between September and December 2021 and additional monthly payments of $29,300 starting in January 2022 through the project’s conclusion. Plaintiffs refused to approve Change Order 11 and, by January 24, 2022, Star substantially ceased performing on the project. * * *

Plaintiffs are entitled to summary judgment on their breach of contract claim because they proved as a matter of law that defendants repudiated the contract. “[W]hen a party repudiates contractual duties prior to the time designated for performance and before all of the consideration has been fulfilled, the repudiation entitles the nonrepudiating party to claim damages for total breach” … . Here, the record establishes that defendants repudiated the contract by issuing a change order requesting additional payments followed by a threat to not return to the job unless plaintiffs agreed to pay the initial amount demanded, which threat was fulfilled when they abandoned the project … . Ho v Star Contrs., Inc., 2026 NY Slip Op 05908, First Dept 10-13-26

Practice Point: Here the defendants, by demanding more payments and threatening to stop work if their demands were not met, repudiated the home-renovation contract entitling plaintiffs to damages for total breach.

 

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THERE WAS NO PROOF PLAINTIFFS HAD NOTICE DEFENDANT WAS ACTING AS AN AGENT FOR A LIMITED LIABILITY COMPANY WHEN HE SIGNED THE CONSTRUCTION-LOAN CONTRACT; THE BREACH OF CONTRACT ACTION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that defendant, the principal in a limited liability company (LLC), told plaintiffs he was the “owner of the property” at the time the construction-loan contract was signed and did not disclose the loan was for the company (the LLC). Therefore defendant’s argument he was acting as an agent for the LLPC when the contract was signed was rejected:

“An agent who enters into a contract on behalf of a disclosed principal is not personally liable unless there is clear and explicit evidence of the agent’s intention to be personally bound” … . However, “[t]he party claiming, as an affirmative defense to liability for breach of contract, that an agency relationship existed must demonstrate that the agency relationship and the identity of the principal were disclosed” … . “A principal is considered to be ‘disclosed’ if, at the time of a transaction conducted by an agent, the other party to the contract had notice that the agent was acting for the principal and of the principal’s identity” … .

… [T]here was no evidence that the existence of 1719 Hylan, LLC, was disclosed to the plaintiffs at the time of the loan. The plaintiffs’ principal testified that the defendant told her that he was the owner of the property, that there was no discussion that the construction project was on behalf of a company, and that the defendant never told her that the loan was for a company. The defendant presented no evidence to the contrary. Therefore, the defendant failed to meet his burden of demonstrating that the plaintiffs knew that he was acting on behalf of 1719 Hylan, LLC. 710 E Elizabeth Ave, LLC v Jhong Kim, 2026 NY Slip Op 05756, Second Department 10-7-26

Practice Point: In this breach of contract action, defendant argued he signed the contract as an agent for a limited liability company and was not personally liable. But defendant did not submit any proof the plaintiff was given notice he was signing as an agent for a company. Therefore the agency defense was rejected.

 

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GENERAL BUSINESS LAW 349 RENDERS UNFAIR, DECEPTIVE OR ABUSIVE BUSINESS PRACTICES UNLAWFUL; THE STATUTE APPLIES ONLY TO CONSUMER ORIENTED CONDUCT; HERE THE DISPUTE OVER A PRIVATE INSURANCE CONTRACT FOR A RACING YACHT WAS NOT WITHIN THE AMBIT OF THE STATUTE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the dispute about insurance coverage for a racing yacht was not the type of consumer-related activity to which General Business Law 349 applies:

General Business Law § 349(a) declares unlawful all “[u]nfair, deceptive, or abusive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state” … . “To successfully assert a claim under General Business Law § 349(h), ‘a plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice'” … . “‘[P]arties claiming the benefit of [General Business Law § 349(h)] must, at the threshold, charge conduct that is consumer oriented'” … . “The conduct need not be repetitive or recurring but defendant’s acts or practices must have a broad impact on consumers at large” … . “Private contract disputes, unique to the parties, . . . [do] not fall within the ambit of the statute” … .

The plaintiff failed to allege that the defendant’s acts or practices had a broad impact on consumers at large, and the plaintiff did not assert any facts that would support such an allegation. The allegations in the complaint merely refer to a private contract dispute over the procurement of insurance coverage and the processing of a claim that is unique to these parties … . USMMA Sailing Found., Inc. v Hilb Group of N.Y., LLC, 2026 NY Slip Op 05824, Second Dept 10-7-26

Practice Point: Consult this decision for insight into the nature of “consumer oriented conduct” which is within the ambit of General Business Law 349.​

 

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IT WAS NOT CLEAR WHICH EMBRYOS, CREATED BY IN VITRO FERTILIZATION DURING THE PARTIES’ MARRIAGE, WERE ENCOMPASSED BY THE PARTIES’ STIPULATION THAT PLAINTIFF SHOULD HAVE EXCLUSIVE POSSESSION AND CONTROL OF THEM; THEREFORE, PLANTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED; THERE WAS A COMPREHENSIVE DISSENT (SECOND DEPT). ​

The Second Department, reversing Supreme Court’s grant of summary judgment to plantiiff, over an extensive and comprehensive dissent, determined there were questions of about which frozen embryos were the subject of a stipulation in which the parties agreed plaintiff should have exclusive possession and control of the embryos created by in vitro fertilization (IVF). The parties were married at the time of the in vitro fertilization and subsequently divorced:

Here, the parties’ failure to establish from which IVF cycle the disputed embryos derived and to submit an agreement that provides for the cryopreservation and disposition of the embryos formed in the November 2021 IVF cycle precludes the award of judgment as a matter of law. Significantly, while the parties have relied upon the March 2023 agreement in fashioning their arguments, they did not stipulate that the March 2023 agreement controlled the dispute. Further, by its terms, the March 2023 agreement did not pertain to previously cryopreserved embryos, and the parties have stipulated that the embryos in dispute were formed in 2021. Thus, the evidence submitted on the defendant’s motion and the plaintiff’s cross-motion established that the March 2023 agreement did not control the disposition of the embryos in dispute. “On this record, we must decline the parties’ invitation to award judgment as a matter of law” … .Millender-Rubin v Rubin, 2026 NY Slip Op 05780, Second Dept 10-7-26

Practice Point: Consult this decision for insight into the issues raised in a divorce proceeding by embryos created by in vitro fertilization during the marriage.

 

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THE “DOCTRINE OF PRIMARY JURISDICTION” APPLIED TO THIS BREACH OF CONTRACT ACTION BETWEEN UTILITY PROVIDERS; THE UNDERLYING ACTION SHOULD HAVE BEEN STAYED, NOT DISMISSED, PENDING A RULING BY THE PUBLIC SERVICE COMMISSION (PSC) (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, applying the “doctrine of primary jurisdiction,” determined the underlying breach of contract action between the utility providers should have been stayed (not dismissed without prejudice) pending a ruling by the Public Service Commission (PSC):

Although “[t]here is no fixed formula governing the application of the doctrine to the facts of a particular case . . . [,] the court must determine in each case whether the reasons for the doctrine are present and whether the purposes of the doctrine will be served by its application” … . Factors considered by courts in determining whether the doctrine applies include, “(1) whether the question at issue is within the conventional experience of judges or whether it involves technical or policy considerations within the agency’s particular field of expertise; (2) whether the question at issue is particularly within the agency’s discretion; (3) whether there exists a substantial danger of inconsistent rulings; and (4) whether a prior application to the agency has been made” … . * * *

… [W]e conclude that the PSC has primary jurisdiction over plaintiff’s claims because “the determination of the issues involved, under a regulatory scheme, depends upon the specialized knowledge and experience of th[at] agency” … . * * *

… [T]he court abused its discretion to the extent that it dismissed the complaint without prejudice instead of staying the action pending the PSC’s determination in the proceedings pending before it. In determining the appropriate disposition where the primary jurisdiction doctrine applies, “[a] court in its discretion may choose to dismiss the case without prejudice—but only if the parties would not be unfairly disadvantaged” … .  * * * … [B]y dismissing the complaint without prejudice instead of staying the action, the court would unfairly disadvantage plaintiff because, if plaintiff were to commence another action after the PSC issued its determination, the court might dismiss some of its claims on statute of limitations grounds … . Agway Energy Servs., LLC v Central Hudson Gas & Elec. Corp., 2026 NY Slip Op 05621, Fourth Dept 10-2-26

Practice Point: Consult this decision for an in-depth discussion of the applicability of the “primary jurisdiction doctrine” which allows an agency (here the Public Service Commission) to rule before court liligation proceeds.

Practice Point: Whether to stay the court proceedings or dismiss the proceedings without prejudice pending the agency ruling is a matter of discretion. Here the action should have been stayed, not dismissed, because the statute of limitations might preclude plaintiff from alleging certain causes of action in a new complaint.

 

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THE $1 BILLION SETTLEMENT REACHED BY FORMER NFL FOOTBALL PLAYERS AND THE NFL FOR CONCUSSION-RELATED INJURIES WAS DEEMED REASONABLE BY THE FIRST DEPARTMENT (FIRST DEPT). ​

The First Department, modifying Supreme Court, in a full-fledged opinion by Justice Pitt-Burke, determined the class action settlement in the federal multidistrict litigation (MDL) brought by former football players against the National Football League (NFL) for concussion-related injuries was reasonable. The opinion lays out the lengthy history of this litigation and addresses several insurance-contract-interpretation issues which are too complex to fairly summarize here:

While this Court is not bound by the findings of the federal courts on this issue, their determinations provide guidance as to the question of reasonableness before us. Although the MDL settlement was projected to cost $1 billion over its lifetime, given the claims asserted, the extensive publicity and media coverage of the case, and the defense costs, we cannot say the settlement was objectionably unreasonable. In fact, a main contention of the objectors to the settlement in the federal action was that the settlement amount was too lenient (id. at 440). Thus, taking into account the complexity of the claims, “it cannot be said . . . that there was no possibility that litigating the case to the end would result in a judgment . . . in an amount greater than the settlement” … . Discover Prop. & Cas. Co. v National Football League, 2026 NY Slip Op 05595, First Dept 10-1-26

 

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PETITIONER OBTAINED JUDGMENTS EXCEEDING $1 BILLION AGAINST RESPONDENTS STEMMING FROM THE 2008 FINANCIAL CRISES WHICH HAVE YET TO BE SATISFIED; PETITIONER BROUGHT THIS TURNOVER PROCEEDING IN 2023; THE CORPORATE VEIL-PIERCING CLAIM AND THE FRAUDULENT CONVEYANCE AND VOIDABLE TRANSACTIONS CAUSES OF ACTION PROPERLY SURVIVED THE MOTION TO DISMISS (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Higgitt, affirmed the denial of the motion to dismiss the corporate veil-piercing claim and the fraudulent conveyance and voidable transactions causes of action: The respondents have not satisfied a pair of judgments totaling more than $1 billion stemming from the 2008 financial crisis. The petitioner, UBS, commenced this turnover proceeding pursuant to CPLR 5225 in 2023:

… UBS alleged that, after it secured the first judgment, it discovered that [respodents] had conspired to frustrate UBS’s ability to recover against the judgment debtors. UBS alleged that [respondents], exercising complete domination over the judgment debtors and other related entities, transferred the debtors’ assets to themselves or other entities that they controlled in an effort to avoid paying UBS any of the obligations stemming from … the judgments. * * *

For pleading purposes, a party seeking to pierce the corporate veil does not have to satisfy the heightened pleading requirement imposed on one interposing a cause of action for fraud (see CPLR 3016); rather, the party must plead facts that would establish that the individual defendant’s domination of the corporation was used to perpetrate a wrong or injustice against the party, and the allegations of domination must be adorned with particularized allegations of consequent wrongs … .  Matter of UBS Sec. LLC v Dondero, 2026 NY Slip Op 05460, First Dept 9-24-26

Practice Point: Consult this opinion for insight into the pleading requirements for piercing the corporate veil and fraudulent conveyance and voidable transactions causes of action in the context of a (post-judgment) turnover proceeding pursuant to CPLR 5225.

 

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THE FEDERAL “ENDING FORCED ARBITRATION OF SEXUAL ASSAULT AND SEXUAL HARASSMENT ACT (EFAA)” PRECLUDED THE ENFORCEMENT OF A MANDATORY ARBITRATION CLAUSE IN A CONTRACT BETWEEN PLAINTIFF COLLEGE STUDENT AND HER SORORITY; THEREFORE PLAINTIFF COULD SUE THE SORORITY IN NEGLIGENCE FOR COMPELLING HER TO ATTEND A MIXER WHERE SHE WAS SEXUALLY ASSAULTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court in a matter of first impression, in a full-fledged opinion by Justice Landicino, determined that the federal “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act” (EFAA) precluded arbitration in a negligence suit by a college student against her sorority. Plaintiff-student alleged she was compelled by her sorority to attend a mixer with a fraternity where she was sexually assaulted. The contract between plaintiff and the sorority included a mandatory arbitration clause:

This case presents an issue of first impression for this Court: whether the …. EFAA … can serve to prevent arbitration, notwithstanding an arbitration clause in a contract between the parties, of an action sounding in negligence against a party that did not commit the alleged sexual assault. We hold that it can, under the circumstances presented here.

… According to the complaint, the plaintiff attended SUNY Cortland and was a member of the [defendant] sorority … .. … [A] fraternity chapter, Pi Kappa Phi … , allegedly held a mixer event off campus … . According to the complaint, the plaintiff, as a member of the sorority, was “expected and obligated by [the] sorority to attend the mandatory mixer event to be hosted by the fraternity.” The fraternity purportedly provided alcohol and other intoxicating substances to the attendees at the mixer event, which caused the plaintiff to become impaired. Allegedly, while attending the mixer event, the plaintiff met a member of the fraternity (hereinafter the alleged abuser) who took the plaintiff to a nearby premises where he sexually assaulted her. * * *

The issue raised on this appeal is whether the plaintiff may invoke the EFAA to prevent arbitration of her claims where the sorority did not commit the alleged sexual assault. The plaintiff’s cause of action in this matter does not sound in sexual assault. Rather, the cause of action sounds in negligence based on the alleged failure of the sorority to supervise and protect its members at a function that the members were required to attend, which exposed the plaintiff to the sexual assault. The question is whether the EFAA can bar arbitration of a complaint sounding in negligence only. * * *

… [A]lthough the sorority contends that the plaintiff’s cause of action sounds in negligence as opposed to sexual assault, that distinction is immaterial here. The negligence cause of action is “related” to the sexual assault dispute alleged in the complaint, which is all that is required under the EFAA … . While the sorority is a third party that was not directly involved in the sexual assault, the negligence claim is nonetheless “related” to the sexual assault dispute inasmuch as the plaintiff contends that the sorority placed her in a dangerous circumstance that led to the sexual assault. There is a clear logical nexus between the cause of action alleged in the complaint and the alleged sexual assault, which places this matter squarely within the ambit of the EFAA. C.N. v Sigma Delta Tau Socy., 2026 NY Slip Op 05405, Second Dept 9-23-26

Practice Point: Here plaintiff student sued her sorority in negligence for compelling her to attend a mixer with a fraternity where she was sexually assaulted. Plaintiff’s contract with the sorority included a mandatory arbitration clause. The federal “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act” (EFAA) applied to these facts to preclude enforcement of the arbitration clause.

 

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THIS OPINION DEMONSTRATES HOW COURTS DEAL WITH INTERPRETING THE LANGUAGE OF A CONTRACT WHERE DICTIONARY DEFINITIONS OF A KEY WORD, HERE THE WORD “COMMIT,” SUPPORT THE OPPOSING POSITIONS OF THE PARTIES (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Renwick, over a detailed dissent, affirmed the lower court’s interpretation of the contract language and the related denial of plaintiff’s demand for prevailing-party attorney’s fees. The opinion turned on the definition of “commit” and is too detailed to fairly summarize here. The opinion should be consulted for insight into the interpretation of contract language where dictionary definitions support the opposing positions of the parties. Aurelius Capital Master Ltd. v Hertz Intl. Ltd., 2026 NY Slip Op 05369, First Dept 9-22-26

 

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