By Sean Cornely and Rena Andoh

In Oddo Asset Management v. Barclays Bank PLC, et al., No. 126 (Jul. 27, 2012), Chief Judge Lippman, in a unanimous decision, affirmed the holdings of the Commercial Division of Supreme Court (Kapnick, J.), as upheld by the Appellate Division, 1st Department, by dismissing a lawsuit where a creditor alleged both a breach of fiduciary duty by the collateral managers of the debtor and a claim of tortious interference with contract against the seller of the debt.Continue Reading Court of Appeals Affirms Commercial Division Ruling Stating Creditors of SIV-Lites Have No Cause of Action for Breach of Fiduciary Duty and Tortious Interference Without a Contract

By Thomas Michael and Rena Andoh

The New York Court of Appeals recently clarified the standards required for a party to succeed on an unjust enrichment claim. The term unjust enrichment, also known as a quasi-contract or an implied contract, is meant to apply where there is no contract between parties, but one party is unfairly benefiting from the efforts of the other without providing compensation. A point of contention in recent New York case law has been the degree of contact necessary between two parties in order for unjust enrichment to apply.Continue Reading Court of Appeals Clarifies Standard for Unjust Enrichment

By Tyler Baker

In Wells Fargo Bank Northwest v. US Airways, Inc., 2011 NY Slip Op 52188(U) (Sup. Ct. N.Y. County Dec. 1, 2011), Justice Bernard J. Fried held that a liquidated damages provision requiring payment of a holdover fee equal to twice the monthly rent was reasonable and did not function as a penalty under New York contract law. The case arose from three aircraft sale and leaseback transactions, pursuant to which Defendant US Airways, Inc. (“US Airways”), sold to Plaintiff Wells Fargo Bank Northwest (“Wells Fargo”), and Wells Fargo leased back to US Airways, three Boeing 737 aircraft. The original lessee was America West, which merged into US Airways, and all of the agreements at issue were assigned to and assumed by US Airways.Continue Reading Commercial Division Rules on Enforceability of Liquidated Damages Clauses

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.Continue Reading Commercial Division Clarifies Limits of Choice of Law Provision in Indentures

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.Continue Reading Wax This! NY Court Finds Restrictive Covenant In Hair Removal Specialist’s Agreement Unenforceable

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.Continue Reading Defraud A Court? Compensatory Damages Are Okay But Not Punitive Damages

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.Continue Reading A New Weapon Against Debtors! Attachment In Aid Of International Arbitration Is Permitted Even Where The Court Lacks Personal Jurisdiction Over The Debtor

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.
 Continue Reading NYC Condo Refinance Collapses Because There Was No “Meeting of the Minds”

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.
 Continue Reading Partnership Pitfalls — Things to Keep in Mind When Filing a Notice of Pendency Involving Partnership Assets

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.
 Continue Reading Employers Cannot Bring Unjust Enrichment Claim For Unearned Pay Where Payments Are Governed By An Employment Contract