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FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kapnick, determined further jurisdictional discovery was required before certain causes of action could be dismissed on jurisdictional grounds. If the relationship with signatories of a contract with a forum selection clause is close enough, non-signatories will be covered by the clause. Discovery was necessary to determine how close the relationship was. The opinion is too detailed and complex to fully summarize here. The crux of the action is the alleged failure of the corporations to pay interest due on notes held by shareholders:

“Under New York law, a signatory to a contract may invoke a forum selection clause against a non-signatory if the non-signatory is closely related’ to one of the signatories such that enforcement of the forum selection clause is foreseeable by virtue of the relationship between the signatory and the party sought to be bound'” … . If the nonsignatory party has an ownership interest or a direct or indirect controlling interest in the signing party … , or, the entities or individuals consulted with each other regarding decisions and were intimately involved in the decision-making process… , then, a finding of personal jurisdiction based on a forum selection clause may be proper, as it achieves the “rationale behind binding closely related entities to the forum selection clause [which] is to promote stable and dependable trade relations.'” … .

Here, plaintiffs allege that the individual defendants, by virtue of their senior management positions, power and decision-making authority, and B & B, as the parent company of BTEL and as a principal shareholder of 39.6% of BTEL’s stock, had actual knowledge at the time of the offering that BTEL was insolvent and would be incapable of meeting its obligations under the notes; that they authorized, participated in, and promoted the offering; and that they caused the offering memoranda to be distributed into the marketplace. This is enough, at this stage, to permit jurisdictional discovery as to the nature of B & B’s and the individual defendants’ actual knowledge and role in the offering of the notes, and their responsibilities connected thereto, because this information, which may result in a determination that the nonsignatories are indeed “closely related” to the signing parties, is a fact that cannot be presently known to plaintiffs, but rather, is within the exclusive control of defendants …. . Universal Inv. Advisory SA v Bakrie Telecom PTE, Ltd., 2017 NY Slip Op 06344, First Dept 8-29-17

 

CIVIL PROCEDURE (JURISDICTION, DISCOVERY, FORUM SELECTION CLAUSE,  FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT))/JURISDICTION (DISCOVERY, FORUM SELECTION CLAUSE,  FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT))/DISCOVERY (CIVIL PROCEDURE, JURISDICTION,  FORUM SELECTION CLAUSE,  FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT))/CONTRACT LAW (FORUM SELECTION CLAUSE,  FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT))/FORUM SELECTION CLAUSE (CONTRACT LAW, (JURISDICTION, DISCOVERY, FORUM SELECTION CLAUSE,  FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT))/CORPORATION LAW (FORUM SELECTION CLAUSE, JURISDICTION, DISCOVERY, FORUM SELECTION CLAUSE,  FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT))

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MISTAKEN COMMENCEMENT DATE IN A LEASE IS A SUFFICIENT GROUND FOR RESCISSION (SECOND DEPT).

The Second Department determined a mistaken start-date in the lease was a sufficient ground for rescission:

Rescission “rests upon the equitable principle that a person shall not be allowed to enrich himself [or herself] unjustly at the expense of another” … , and is invoked “where the parties can be substantially restored to their status quo ante positions” … . The remedy of rescission may be granted where, as here, a mistake existed at the time the contract was entered into if “the mistake is so material that . . . it goes to the foundation of the agreement”… .

Here, the landlord’s principal admitted at trial that a mistake was made regarding the commencement date of the parties’ lease. Contrary to the landlord’s contention, however, the mistake as to the commencement date related to a material term of the lease … , and substantially defeated the purpose of the lease. K.A.M.M. Group, LLC v 161 Lafayette Realty, Inc., 2017 NY Slip Op 06260, Second Dept 8-23-17

 

LANDLORD-TENANT (LEASE, MISTAKEN COMMENCEMENT DATE IN A LEASE IS A SUFFICIENT GROUND FOR RESCISSION (SECOND DEPT))/LEASE (MISTAKEN COMMENCEMENT DATE IN A LEASE IS A SUFFICIENT GROUND FOR RESCISSION (SECOND DEPT))/RESCISSION (LEASE, MISTAKEN COMMENCEMENT DATE IN A LEASE IS A SUFFICIENT GROUND FOR RESCISSION (SECOND DEPT))

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HEALTH SERVICES PROVIDERS’ COMPLAINT AGAINST HEALTH PLAN STATED CAUSES OF ACTION FOR BREACH OF AN IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING AND VIOLATION OF PUBLIC HEALTH LAW 4406-D (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the cause of action alleging breach of an implied covenant of good faith and fair dealing should not have been dismissed.  Plaintiffs (heath services providers, hereinafter “the PC”) sued defendant health plan (Fidelis) alleging the health plan did not have grounds for terminating the PC’s contract. The court held the complaint stated a cause of action for breach of the implied covenant of fair dealing, as well as a cause of action alleging a violation of Public Health Law 4406-d:

Even if a party is not in breach of its express contractual obligations, it may be in breach of the implied covenant of good faith and fair dealing when it exercises a contractual right as part of a scheme to deprive the other party of the benefit of its bargain … . Technically complying with the terms of a contract while depriving the plaintiff of the benefit of the bargain may constitute a breach of the covenant of good faith and fair dealing … . Further, “[w]here the contract contemplates the exercise of discretion, this pledge includes a promise not to act arbitrarily or irrationally in exercising that discretion”… .

… The allegations in the complaint that the defendants acted in bad faith by terminating the agreement without justification and by fabricating information to try to justify the termination because the plaintiffs “were determined to be outliers’ with regard to the number and cost of those medical services provided by Plaintiffs to Defendants’ members” were sufficient to state a cause of action to recover damages for breach of contract based upon the alleged breach of the implied covenant of good faith and fair dealing. * * *

… [T]he PC stated a cause of action to recover damages for violation of Public Health Law § 4406-d. The PC is a health care professional that contracted with a health care plan and, therefore, falls within the purview of Public Health Law § 4406-d(2)(a). In addition, the PC is a member of the class for whose particular benefit the statute was enacted. The statute provides for enhanced health care provider protections … . Moreover, a private right of action would be consistent with the legislative scheme, since the statute offers no other practical means of enforcement such that a private right of action is necessary to trigger the protections intended to be afforded to health care providers … . Ahmed Elkoulily, M.D., P.C. v New York State Catholic Healthplan, Inc., 2017 NY Slip Op 06242, Second Dept 8-23-17

CONTRACT LAW (HEALTH SERVICES PROVIDERS’ COMPLAINT AGAINST HEALTH PLAN STATED CAUSES OF ACTION FOR BREACH OF AN IMPLIED COVENANT OF FAIR DEALING AND VIOLATION OF PUBLIC HEALTH LAW 4406-D (SECOND DEPT))/COVENANT OF GOOD FAITH AND FAIR DEALING (CONTRACT LAW, HEALTH SERVICES PROVIDERS’ COMPLAINT AGAINST HEALTH PLAN STATED CAUSES OF ACTION FOR BREACH OF AN IMPLIED COVENANT OF FAIR DEALING AND VIOLATION OF PUBLIC HEALTH LAW 4406-D (SECOND DEPT))/PUBLIC HEALTH LAW (HEALTH SERVICES PROVIDERS’ COMPLAINT AGAINST HEALTH PLAN STATED CAUSES OF ACTION FOR BREACH OF AN IMPLIED COVENANT OF FAIR DEALING AND VIOLATION OF PUBLIC HEALTH LAW 4406-D (SECOND DEPT))

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APPOINTMENT OF AN OUTSIDE ATTORNEY TO DETERMINE MERITS OF A DERIVATIVE SUIT NOT ALLOWED BY THE LIMITED LIABILITY COMPANY OPERATING AGREEMENTS (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Manzanet-Daniels, reversing Supreme Court, determined the appointment of an outside attorney [Mr. Zauderer] to serve as the sole member of a Special Litigation Committee (SLC) to determine the merits of claims asserted in this LLC derivative suit was not allowed by the operating agreements:

Neither operating agreement provides for the delegation of decision-making authority to other than a member, or to an outsider like Mr. Zauderer to serve as SLC. The agreements are explicit that while day-to-day management is vested in the manager, “major decisions” need the consent of the other members. We reject the argument that the appointment of the SLC (as opposed to the ultimate decision as to whether to proceed with the derivative litigation) was not a “Major Decision” within the meaning of the agreements. The SLC was specifically granted the authority to “determine the positions and actions that the Companies should take with respect to the claims, considering, among other things, whether the claims have merit, whether they are likely to prevail, and whether it is in the Companies’ best interests to pursue them.”

That is not to say that the appointment of an SLC would in all cases be improper in the LLC context. Indeed, the members may so provide in the operating agreement, and such provision will be enforced in accordance with those same principles concerning the parties’ freedom to contract … . LNYC Loft, LLC v Hudson Opportunity Fund I, LLC, 2017 NY Slip Op 06147, First Dept 8-15-17

LIMITED LIABILITY COMPANY (DERIVATIVE ACTIONS, APPOINTMENT OF AN OUTSIDE ATTORNEY TO DETERMINE MERITS OF A DERIVATIVE SUIT NOT ALLOWED BY THE LIMITED LIABILITY COMPANY OPERATING AGREEMENTS (FIRST DEPT))/DERIVATIVE ACTIONS (LIMITED LIABILITY COMPANY, APPOINTMENT OF AN OUTSIDE ATTORNEY TO DETERMINE MERITS OF A DERIVATIVE SUIT NOT ALLOWED BY THE LIMITED LIABILITY COMPANY OPERATING AGREEMENTS (FIRST DEPT))/CONTRACT LAW (LIMITED LIABILITY COMPANY, DERIVATIVE ACTIONS,  APPOINTMENT OF AN OUTSIDE ATTORNEY TO DETERMINE MERITS OF A DERIVATIVE SUIT NOT ALLOWED BY THE LIMITED LIABILITY COMPANY OPERATING AGREEMENTS (FIRST DEPT))OPERATING AGREEMENTS (LIMITED LIABILITY COMPANY,  APPOINTMENT OF AN OUTSIDE ATTORNEY TO DETERMINE MERITS OF A DERIVATIVE SUIT NOT ALLOWED BY THE LIMITED LIABILITY COMPANY OPERATING AGREEMENTS (FIRST DEPT))

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IN THE FACE OF A COMPLETE WRITTEN AGREEMENT, EVIDENCE OF A RELATED ORAL AGREEMENT SHOULD NOT HAVE BEEN CONSIDERED, DEFENDANT’S MOTION TO DISMISS FOUNDED UPON DOCUMENTARY EVIDENCE (THE WRITTEN AGREEMENT) SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the written consulting (retainer) agreement was complete and evidence of an oral agreement to form a joint venture should not have been considered. Defendant’s motion to dismiss founded on documentary evidence (the written retainer agreement), therefore, should have been granted. Plaintiff had alleged defendant breached the oral agreement:

“To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff’s claim”… . A written agreement that is complete, clear, and unambiguous on its face must be enforced to give effect to the meaning of its terms and the reasonable expectations of the parties, and the court should determine the intent of the parties from within the four corners of the contract without looking to extrinsic evidence to create ambiguities … . The parol evidence rule generally operates to preclude evidence of a prior or contemporaneous communication during negotiations of an agreement that contradicts, varies, or explains a written agreement which is clear and unambiguous in its terms and expresses the parties’ entire agreement and intentions … . Where, as here, there is no merger clause, the court must examine the surrounding circumstances and the writing itself to determine whether the agreement constitutes a complete, integrated instrument … .

Here, both a reading of the written retainer agreement and a consideration of the surrounding circumstances lead to the conclusion that the written retainer agreement is a complete written instrument, and, thus, evidence of what may have been agreed orally between the parties prior to the execution of this integrated written instrument cannot be received to vary the terms of the writing … . Hoeg Corp. v Peebles Corp., 2017 NY Slip Op 06066, Second Dept 8-9-17

 

CONTRACT LAW (PAROL EVIDENCE RULE, IN THE FACE OF A COMPLETE WRITTEN AGREEMENT, EVIDENCE OF A RELATED ORAL AGREEMENT SHOULD NOT HAVE BEEN CONSIDERED, DEFENDANT’S MOTION TO DISMISS FOUNDED UPON DOCUMENTARY EVIDENCE (THE WRITTEN AGREEMENT) SHOULD HAVE BEEN GRANTED (SECOND DEPT))/CIVIL PROCEDURE (DISMISSAL FOUNDED ON DOCUMENTARY EVIDENCE,  IN THE FACE OF A COMPLETE WRITTEN AGREEMENT, EVIDENCE OF A RELATED ORAL AGREEMENT SHOULD NOT HAVE BEEN CONSIDERED, DEFENDANT’S MOTION TO DISMISS FOUNDED UPON DOCUMENTARY EVIDENCE (THE WRITTEN AGREEMENT) SHOULD HAVE BEEN GRANTED (SECOND DEPT))/EVIDENCE (PAROL EVIDENCE RULE, IN THE FACE OF A COMPLETE WRITTEN AGREEMENT, EVIDENCE OF A RELATED ORAL AGREEMENT SHOULD NOT HAVE BEEN CONSIDERED, DEFENDANT’S MOTION TO DISMISS FOUNDED UPON DOCUMENTARY EVIDENCE (THE WRITTEN AGREEMENT) SHOULD HAVE BEEN GRANTED (SECOND DEPT))/PAROL EVIDENCE RULE (IN THE FACE OF A COMPLETE WRITTEN AGREEMENT, EVIDENCE OF A RELATED ORAL AGREEMENT SHOULD NOT HAVE BEEN CONSIDERED, DEFENDANT’S MOTION TO DISMISS FOUNDED UPON DOCUMENTARY EVIDENCE (THE WRITTEN AGREEMENT) SHOULD HAVE BEEN GRANTED (SECOND DEPT))

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ALTHOUGH THE DEFENDANT INDENTURE TRUSTEE DID NOT OWE PLAINTIFFS A FIDUCIARY DUTY, THE TRUSTEE DID OWE PLAINTIFFS A DUTY OF CARE AS DESCRIBED IN THE TRUST AGREEMENT, THE BREACH OF CONTRACT CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, in a full-fledged opinion by Justice Gische, determined that defendant’-trustee’s motion to dismiss the breach of contract cause of action should not have been granted. Although the defendant indenture trustee did not owe the plaintiffs a fiduciary duty with regard to the sale of securities, the trustee still owed plaintiffs a duty of care as described in the trust agreement, including a duty to avoid conflicts of interest. Here the plaintiffs alleged the trustee sold the securities below market price and then sold them for a profit, thereby depriving plaintiffs of the equity in the securities:

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This appeal concerns the rights and obligations of the parties with respect to the termination of certain REMIC (real estate mortgage investment conduit) trusts. The assets held by the trusts were mortgage loans. The trusts originally sold securities to outside investors, representing two classes of holders, i.e., regular security holders and residual security holders. Plaintiffs … are holders of the residual security interests in those trusts. While the holders of regular securities were entitled to receive regular payments on distribution dates, the residual security holders had no such right. Instead, they were entitled to receive the proceeds of the disposition of any asset remaining in the trust REMICs upon their termination, but only after each class of regular security holder had been paid. Plaintiffs’ interest is referred to as the trust “equity.” The residual holder interest was the riskiest tranche of ownership and any right to payment was subordinate to payment in full of amounts due to the regular interest holders.

… The trustee argues that under the trust documents, it had the right to purchase trust assets at below market, even though it could resell them within days of acquiring them, allowing the trustee to realize millions of dollars in personal profit. The trustee is alleged to have kept for itself the profit it realized on the forward sale, which was in excess of $3,000,000.

… Even if the sale of assets to the trustee had been conclusively established by documentary evidence, there is still a valid claim that the trustee’s actions create a conflict of interest prohibited under the operative trust agreements and in violation of the trustee’s contractual obligations. The trust documents do not give the trustee the express right to purchase the trust assets for its own financial benefit at less than market value and to thereby diminish, let alone extinguish, plaintiffs’ interest as residual security holders. NMC Residual Ownership L.L.C. v U.S. Bank N.A., 2017 NY Slip Op 05923, First Dept 8-1-17

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Similar issues and result in Cece & Co. Ltd. v U.S. Bank N.A., 2017 NY Slip Op 05924, First Dept 8-1-17 (Gische, J)

 

SECURITIES (ALTHOUGH THE DEFENDANT INDENTURE TRUSTEE DID NOT OWE PLAINTIFFS A FIDUCIARY DUTY, THE TRUSTEE DID OWE PLAINTIFFS A DUTY OF CARE AS DESCRIBED IN THE TRUST AGREEMENT, THE BREACH OF CONTRACT CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT))/TRUSTS AND ESTATES (REAL ESTATE MORTGAGE INVESTMENT CONDUIT TRUSTS, ALTHOUGH THE DEFENDANT INDENTURE TRUSTEE DID NOT OWE PLAINTIFFS A FIDUCIARY DUTY, THE TRUSTEE DID OWE PLAINTIFFS A DUTY OF CARE AS DESCRIBED IN THE TRUST AGREEMENT, THE BREACH OF CONTRACT CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT))/REAL ESTATE MORTGAGE INVESTMENT CONDUIT TRUSTS (ALTHOUGH THE DEFENDANT INDENTURE TRUSTEE DID NOT OWE PLAINTIFFS A FIDUCIARY DUTY, THE TRUSTEE DID OWE PLAINTIFFS A DUTY OF CARE AS DESCRIBED IN THE TRUST AGREEMENT, THE BREACH OF CONTRACT CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT))/CONTRACT LAW (REAL ESTATE MORTGAGE INVESTMENT CONDUIT TRUSTS, ALTHOUGH THE DEFENDANT INDENTURE TRUSTEE DID NOT OWE PLAINTIFFS A FIDUCIARY DUTY, THE TRUSTEE DID OWE PLAINTIFFS A DUTY OF CARE AS DESCRIBED IN THE TRUST AGREEMENT, THE BREACH OF CONTRACT CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT))

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AN AGREEMENT TO PAY COMMISSIONS CAN BE PERFORMED IN ONE YEAR AND THEREFORE IS NOT SUBJECT TO THE STATUTE OF FRAUDS 3RD DEPT.

The Third Department noted that an agreement to pay commissions is an agreement that can be performed in one year, so an oral agreement to pay commissions is not subject to the statute of frauds:

“An agreement to pay an at-will employee commissions earned during the period of his or her employment is capable of performance within one year and does not violate the [s]tatute of [f]rauds” … . Here, the gravamen of plaintiff’s complaint is not about renewal commissions that accrued after his resignation from WorldClaim … . Rather, plaintiff seeks the payment of commissions that he claims were earned while he was still employed by WorldClaim … . Indeed, the complaint alleged that plaintiff, “[d]uring the period from approximately April 2011 to January 2012, . . . earned $104,525 in commissions from sales, [and] $25,000 in monthly bonuses.” Given that plaintiff was still employed by WorldClaim during this alleged time period, the statute of frauds does not bar plaintiff’s claim for unpaid commissions … . Kieper v The Fusco Group Partners Inc., 2017 NY Slip Op 05782, 3rd Dept 7-20-17

EMPLOYMENT LAW (STATUTE OF FRAUDS, COMMISSIONS, AN AGREEMENT TO PAY COMMISSIONS CAN BE PERFORMED IN ONE YEAR AND THEREFORE IS NOT SUBJECT TO THE STATUTE OF FRAUDS 3RD DEPT)/CONTRACT LAW (EMPLOYMENT LAW, COMMISSIONS, STATUTE OF FRAUDS,  AN AGREEMENT TO PAY COMMISSIONS CAN BE PERFORMED IN ONE YEAR AND THEREFORE IS NOT SUBJECT TO THE STATUTE OF FRAUDS 3RD DEPT)/STATUTE OF FRAUDS (EMPLOYMENT LAW, COMMISSIONS, AN AGREEMENT TO PAY COMMISSIONS CAN BE PERFORMED IN ONE YEAR AND THEREFORE IS NOT SUBJECT TO THE STATUTE OF FRAUDS 3RD DEPT)

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QUESTION OF FACT WHETHER PLAINTIFF WAS A RESIDENT OF THE HOME WHICH WAS DAMAGED BY FIRE WITHIN THE MEANING OF THE POLICY LANGUAGE, DESPITE PLAINTIFF’S ADMISSION SHE PRIMARILY RESIDED IN ANOTHER HOME TEN MINUTES AWAY 3RD DEPT.

The Third Department, reversing Supreme Court, determined there were questions of fact whether plaintiff was a resident of the home where the fire occurred within the meaning of the policy language. Although plaintiff had moved to a house 10 minutes away and plaintiff’s daughter lived in the damaged house, there was evidence that plaintiff never completely moved and frequented the house to care for her grandchildren:

The policy at issue defines the “insured location” as the “resident premises.” Relevant here, the term “resident premises” is defined as “[t]he one family dwelling where [the insured] reside[s].” As the party seeking to disclaim coverage, defendant bore the burden of “establishing that the exclusions or exemptions apply . . . and that they are subject to no other reasonable interpretation”… . If a term is ambiguous, it should be construed against the insurer … . * * *

In our view, it is “arguable that the reasonable expectation of the average insured” is that plaintiff’s occupancy of the premises, coupled with her claim that she never fully left the premises, was enough to permit coverage pursuant to the terms of the policy … . We do not agree that plaintiff’s evidence constituted a feigned attempt to create a question of fact … . We are mindful that she signed a statement prepared by the adjuster on the morning of the fire that destroyed the home she had built with her husband for their family. That statement confirmed that she resided [in another home], but did not deny that she also resided at the premises for purposes of insurance coverage. Craft v New York Cent. Mut. Fire Ins. Co., 2017 NY Slip Op 05655, 3rd Dept 7-13-17

INSURANCE LAW (QUESTION OF FACT WHETHER PLAINTIFF WAS A RESIDENT OF THE HOME WHICH WAS DAMAGED BY FIRE WITHIN THE MEANING OF THE POLICY LANGUAGE, DESPITE PLAINTIFF’S ADMISSION SHE PRIMARILY RESIDED IN ANOTHER HOME TEN MINUTES AWAY 3RD DEPT)/CONTRACT LAW (INSURANCE POLICY, QUESTION OF FACT WHETHER PLAINTIFF WAS A RESIDENT OF THE HOME WHICH WAS DAMAGED BY FIRE WITHIN THE MEANING OF THE POLICY LANGUAGE, DESPITE PLAINTIFF’S ADMISSION SHE PRIMARILY RESIDED IN ANOTHER HOME TEN MINUTES AWAY 3RD DEPT)

EMAIL FROM ATTORNEY CONSTITUTED A BINDING SETTLEMENT AGREEMENT, SUPREME COURT REVERSED 1ST DEPT.

The First Department, reversing Supreme Court, determined an email from an attorney constituted a binding settlement agreement:

The email communications between plaintiffs’ counsel and defendants’ counsel sufficiently set forth an enforceable agreement to settle plaintiffs’ personal injury claims, including that of plaintiff Morales … . Plaintiffs’ counsel, who had authority to bind Morales, accepted defendants’ offer … . Furthermore, counsel typed his name at the end of the email accepting defendants’ offer, which satisfied CPLR 2104’s requirement that settlement agreements be in a “writing subscribed by him or his attorney” in order to be enforceable … , thus creating a binding settlement agreement. Jimenez v Yanne, 2017 NY Slip Op 05677, 1st Dept 7-13-17

CONTRACT LAW (SETTLEMENT AGREEMENT, EMAIL FROM ATTORNEY CONSTITUTED A BINDING SETTLEMENT AGREEMENT, SUPREME COURT REVERSED 1ST DEPT)/ATTORNEYS (SETTLEMENT AGREEMENT, EMAIL FROM ATTORNEY CONSTITUTED A BINDING SETTLEMENT AGREEMENT, SUPREME COURT REVERSED 1ST DEPT)/EMAILS (ATTORNEYS, SETTLEMENT AGREEMENT, EMAIL FROM ATTORNEY CONSTITUTED A BINDING SETTLEMENT AGREEMENT, SUPREME COURT REVERSED 1ST DEPT)/ATTORNEY (SETTLEMENT AGREEMENT, EMAIL FROM ATTORNEY CONSTITUTED A BINDING SETTLEMENT AGREEMENT, SUPREME COURT REVERSED 1ST DEPT)/SETTLEMENT AGREEMENT (ATTORNEYS, EMAILS,  EMAIL FROM ATTORNEY CONSTITUTED A BINDING SETTLEMENT AGREEMENT, SUPREME COURT REVERSED 1ST DEPT)

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ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT.

The First Department, in an opinion consisting of a two-justice concurrence, a separate one-justice concurrence and a two-justice partial dissent, determined that the arbitration of a dispute concerning the television broadcast fees for major league baseball was tainted by counsel’s conflicts of interest (and the award was properly vacated on that ground). The bulk of the opinions dealt with whether the court should order that the second arbitration be held in a different forum. The majority concluded it should not:

Pursuant to the negotiated terms of the parties’ written agreement, the subject arbitration, governed by the Federal Arbitration Act (FAA) (9 USC § 1 et seq.), was initiated before the Revenue Sharing Definitions Committee (RSDC) of Major League Baseball (MLB), to resolve a contractual dispute over telecast rights fees between TCR Sports Broadcasting Holding, LLP d/b/a the Mid-Atlantic Sports Network (MASN) and the Baltimore Orioles, and the Washington Nationals. For the reasons stated herein, we find that the arbitration award issued by the RSDC on June 30, 2014 was correctly vacated based on “evident partiality” (9 USC § 10[a][2]) arising out of the Nationals’ counsel’s unrelated representations at various times of virtually every participant in the arbitration except for MASN and the Orioles, and the failure of MLB and the RSDC, despite repeated protests, to provide MASN and the Orioles with full disclosure or to remedy the conflict before the arbitration hearing was held. However, even if this Court has the inherent power to disqualify an arbitration forum in an exceptional case, on the record before us there is no basis, in law or in fact, to direct that the second arbitration be heard in a forum other than the industry-insider committee that the parties selected in their agreement to resolve this particular dispute, fully aware of the role MLB would play in the arbitration process.

Contrary to the view of the dissent, there has been no showing of bias or corruption on the part of the members of the reconstituted RSDC, and the Nationals will use new counsel at the second arbitration. Speculation that MLB will dictate the outcome of the second arbitration by exerting pressure on the new members of the RSDC does not suffice to establish that they will not exercise their independent judgment or carry out their duties impartially, or that the proceedings will be fundamentally unfair. Matter of TCR Sports Broadcasting Holding, LLP v WN Partner, LLC, 2017 NY Slip Op 05689, 1st Dept 7-13-17

ARBITRATION (ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/CONTRACT LAW (ARBITRATION, ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/ATTORNEYS (CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/CONFLICT OF INTEREST (ATTORNEYS, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)/BASEBALL (ARBITRATION, ATTORNEYS, CONFLICTS OF INTEREST, MAJOR LEAGUE BASEBALL, ARBITRATION AWARD IN DISPUTE OVER TELEVISION BROADCAST FEES FOR MAJOR LEAGUE BASEBALL PROPERLY VACATED BASED UPON COUNSEL’S CONFLICTS OF INTEREST, SECOND ARBITRATION SHOULD NOT BE MOVED TO A DIFFERENT FORUM 1ST DEPT)

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