New York Commercial Division Round-Up

By Sarah Aberg

In the recent matter Wilmington Trust Natl. Assn. v. Vitro Automotriz, Index No. 652303/11 (N.Y. Sup. Dec. 5, 2011), Justice Bernard J. Fried of the Commercial Division addressed the obligations of guarantors of indentured notes. Regardless that the issuer of the notes had declared bankruptcy in Mexico, the guarantors, none of whom were co-debtors, were not relieved of their obligations under the notes. Moreover, Justice Fried found that, while the notes and guaranties were governed by New York law, whether they could be ultimately set-aside in a Mexican bankruptcy proceeding was a decision for the Mexican courts, and not one that he could address.

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By Eric Raphan and Jonathan Sokolowski

In a recent decision outside the Commercial Division, Eyes of the World v. Boci, No. CV 46549/09 (N.Y. Civ. Ct. Aug. 19, 2011), Judge Margaret A. Chan held that a former employee’s restrictive covenant, prohibiting her from providing salon services to any client of her former employer for whom she provided such services during the last 12 months of her employment, was overly broad and, thus, unenforceable.

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By Mark E. McGrath

In CDR Créances S.A.S. v. Cohen, Index Nos. 109565/2003 and 600448/2006 (Sup. Ct., NY County, Aug. 25, 2011) (the “August Decision”), the Honorable O. Peter Sherwood granted the motions of plaintiff CDR Créances S.A.S. (“CDR”) for an order directing entry of judgment on CDR’s compensatory damages but refused to award CDR punitive damages, despite a January 25, 2011 decision (the “January Decision”) by former Justice James A. Yates that the defendants had repeatedly committed fraud upon the court.

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By Sean J. Kirby

In the matter of In re Sojitz Corporation v. Prithvi Information Solutions, Ltd, Index No. 602511/2009 (1st Dept. 2011) (“Sojitz Corp.”), the First Department, in a case of first impression, affirmed the decision of former Justice James A. Yates, and held that a creditor can attach assets in New York, for security purposes, in anticipation of an award that will be rendered in an international arbitration proceeding, even though the debtor has no connection to New York by way of personal jurisdiction.

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By Eric OConnor

In Trief v. Wells Fargo Bank, N.A., Index No. 105280/09, — N.Y.S.2d — (Sup Ct, NY County, Apr. 4, 2011) (“Trief”), the plaintiffs sought damages arising out of their attempt to refinance a mortgage loan with the defendant bank (the “Bank”), for breach of contract and violation of New York’s Unfair and Deceptive Practices Act, N.Y. General Business Law (“NYGBL”) § 349. Justice Charles Edward Ramos granted the Bank’s motion for summary judgment on both counts. The parties actually proceeded to closing when plaintiff walked away from the refinancing of a luxury midtown condominium located at 15 West 53rd Street, New York, NY – seemingly over a $518.75 dispute.
 

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By Sarah E. Aberg

In Ostad v. Nehmadi, No. 650460/2010 (Sup. Ct., N.Y. Co., Apr. 11, 2011) (“Ostad”), Justice Bernard J. Fried reiterated the rule that a notice of pendency cannot be based on a claim asserting an interest in personal property, even where that personal property is an interest in a partnership whose sole asset is real property.  Ostad illustrates the less-than-straightforward procedures of filing a valid notice of pendency.
 

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By Lisa Lewis

On December 14, 2010, Justice James A. Yates of the New York Commercial Division issued a decision on a motion to dismiss in Mount Sinai School of Medicine v. Konstadinos A. Plestis, M.D., Index No. 601314/2010 (Sup. Ct., NY County, December 14, 2010). The decision addresses the issue of whether an employer can bring an unjust enrichment claim for unearned pay against a former employee where the payments at issued were governed by an employment contract.
 

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By Kathryn J. Hines

In Arbeeny v. Kennedy Executive Search, Index No. 105733/2007 (Sup. Ct., NY County, Jan. 14, 2011) ("Arbeeny"), Defendants Jason Kennedy ("Kennedy") and Kennedy Associates ("Kennedy Associates ") (collectively the "Moving Defendants") moved to dismiss on the basis of Plaintiff Daniel Arbeeny’s failure to serve the complaint in a timely manner pursuant to CPLR § 306-b. Justice Eileen Bransten, of the New York Commercial Division, granted the Moving Defendants’ motion to dismiss as to Kennedy but denied it as to Kennedy Associates. In so doing, she addressed issues that may be important to United States-based companies that have a relationship with foreign corporations.
 

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By: Eric Raphan and Jonathan Sokolowski*

Justice Melvin L. Schweitzer of the New York Commercial Division recently issued a decision in Greater Talent Network, Inc. v. Alec Melman, et. al., Index No. 650522/2010 (Sup. Ct., NY County, Dec. 22, 2010) that can have important ramifications for New York employers.
 

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