Several recent decisions by Commercial Division Justices, two of them affirmed by the First Department, have clarified the limitations and standards applied in actions brought pursuant to Article 75 of the CPLR. Article 75 permits participants in binding arbitration, irrespective of what arbitral forum they are in, to seek assistance from New York State Supreme Court judges under certain circumstances.
New York court officials have approved an amendment to Section 202.70(a) of the Commercial Division Rules, which will increase in the minimum monetary threshold of $150,000 to $500,000 for the commencement of lawsuits to be adjudicated in Manhattan’s Commercial Division. The Commercial Division handles complicated commercial cases as part of the Supreme Court of New York State. The new rule is effective February 17, 2014.
Effective Monday, February 3rd, Justice Saliann Scarpulla of the New York Supreme Court was appointed to the New York County Commercial Division. Justice Scarpulla succeeds Justice Barbara Kapnick, who was appointed to the Appellate Division, First Department, by Governor Andrew Cuomo on January 17, 2014. According to her judicial biography, Justice Scarpulla is a 1986 graduate of Brooklyn Law School. After law school, Justice Scarpulla was a Court Attorney for Justice Alvin F. Klein (1986-1987), a Litigation Associate at Proskauer Rose LLP (1988-1993), Counsel/Senior Litigator at the FDIC New York Legal Services Office (1993‑1997), and Senior Vice President and Bank Counsel at Hudson Bank (1997-1999). From 1999 to 2001, Justice Scarpulla was a Court Attorney for her now colleague in the New York County Commercial Division, Justice Eileen Bransten.
The Commercial Division Advisory Council has proposed that the court adopt a pilot program for New York County’s Commercial Division that would send every fifth newly assigned case to mediation unless the parties stipulate otherwise or one party makes a good cause showing that mediation would be ineffective or unjust. A copy of the proposal is available here.
In Khalife v. Audi Saradar Private Bank SAL, 2013 NY Slip Op 05971 (1st Dep’t Sept. 24, 2013), the First Department declined to broaden CPLR § 303, holding that the statute does not authorize personal jurisdiction over a foreign person or entity when the non-domiciliary seeks some form of affirmative relief in a New York court, as opposed to commencing an action. CPLR § 303 provides that “[t]he commencement of an action in the state by a person not subject to personal jurisdiction” designates the non-domiciliary’s attorney as agent for service of process. Khalife makes it clear that an application for affirmative relief is not enough to subject a non-domiciliary to jurisdiction in New York under CPLR § 303. Only the commencement of an action, through the filing of a complaint, will suffice.
In Burlington Coat Factory of N.Y., LLC v. Majestic Rayon Corp., No. 652511/2012, the Supreme Court (J. Kornreich) granted plaintiff Burlington Coat Factory’s (“Burlington”) motion for an injunction to stay and toll the expiration of a thirty-day default cure period and enjoin the defendant landlords Majestic Rayon Corp. and Cudge Realty, LLC (“Landlords”) from terminating Burlington’s lease or tenancy, despite uncertainty over Burlington’s ability to cure the default. Specifically, the Court found that Burlington’s professed “willingness to do whatever is necessary to cure [the] lease default,” coupled with a potential means to cure, was sufficient to grant the injunctive relief.
In Aetna Life Insurance Company v. Appalachian Asset Management Corp, et al., 2013 Slip Op 05506 (1st Dep’t July 30, 2013) the Appellate Division affirmed the April 13, 2012 decision of the New York County Supreme Court, Commercial Division (Ramos, J.), which sustained claims by Aetna Life Insurance Company (“Aetna”) for beach of the Connecticut Unfair Trade Practices Act (“CUTPA”), breach of fiduciary duty, negligence, and recklessness against certain wholly-owned subsidiaries of Lehman Brothers Holding, Inc. (“LBHI”) and individuals acting on behalf of those companies (collectively, the “Defendants”).
In Volpe v. Interpublic Group of Companies, Inc., No. 652308/2012, Judge Eileen Bransten denied plaintiff Ray Volpe’s (“Volpe”) motion to compel arbitration and granted defendant The Interpublic Group of Companies, Inc.’s (“IPG”) cross-motion to stay arbitration. Citing New York common law, the Court held that Volpe waived his contractual right to arbitration by manifesting an “affirmative acceptance of the judicial process” when he opposed IPG’s separately filed motion to dismiss.
In Volpe v. Interpublic Group of Companies, Inc., No. 652308/2012, Judge Eileen Bransten granted defendant The Interpublic Group of Companies, Inc.’s (“IPG”) motion to dismiss plaintiff Ray Volpe’s (“Volpe”) complaint, finding that Volpe’s employment agreement with IPG barred him from recovering revenue generated from an agreement he allegedly facilitated between IPG and Facebook, Inc. (“Facebook”). Volpe, who served as the CEO of two wholly-owned IPG subsidiaries, entered into his initial employment agreement with IPG on March 1, 2000 (the “Employment Agreement”).
As reported yesterday in the New York Law Journal, Justice Marcy Friedman of the Commercial Division in Manhattan will now be assigned any new case filed in New York Supreme Court that alleges fraud or misrepresentation arising out of the creation or sale of residential mortgage backed securities (“RMBS”) pursuant to a May 23 Order signed by Administrative Justice Sherry Klein Heitler. Justice Heitler had previously reassigned three cases with RMBS as their subject matter to Justice Friedman. According to Justice Heitler, this May 23 order merely codified this pre-existing practice. Justice Heitler stated that she believed that this practice would promote consistency in rulings and efficiency. Going forward, pursuant to Justice Heitler’s order, any party filing a request for judicial intervention (“RJI”) in New York Supreme Court, Manhattan, in an RMBS matter must attach a copy of the May 23 Order to the RJI.