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”).
Continue Reading First Department Sustains Connecticut Unfair Trade Practices Act and Other Claims Against Subsidiaries and Officers of Lehman Brothers Based Upon An Allegedly Improper Asset Substitution on the Eve of the Lehman Brothers Collapse

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.
Continue Reading Additional Price of a Judicial Reaction: Waiver of One’s Contractual Right to Arbitration

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”).
Continue Reading Unrealized Gains: Integrated Employment Agreement Bars Employee’s Recovery of Additional Compensation

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.
Continue Reading All Residential Mortgage Backed Securities Cases To Be Assigned To Justice Friedman of the Commercial Division

In Henkel v. Masiero, Index No. 650425/2012 (N.Y. Sup. Ct., N.Y. Cnty. Mar. 18, 2013) (the “Opinion”), the Supreme Court (J. Bransten) granted the defendants’ motion to dismiss for lack of personal jurisdiction on the grounds that one telephone call with a bank was not sufficient to establish jurisdiction under Section 302(a)(1) of the CPLR, even though almost all of the assets of a corporation were transferred as a result of that call.
Continue Reading Transfer $8 Million Out Of Accounts In New York? That Action Alone Is Not Sufficient To Establish Personal Jurisdiction

In Suffolk P.E.T. Mgt., LLC v. Anand, 2013 NY Slip Op 02335 (First Dep’t April 4, 2013), the Appellate Division, First Department affirmed an Order by the Supreme Court, New York County Commercial Division (Bernard J. Fried, J.) to strike defendants’ answer for noncompliance with discovery orders and directives, enter default judgment against defendants on liability, and refer the matter to a special referee for damages.
Continue Reading First Department Upholds Commercial Division Decision Striking Parties’ Answer And Entering Default Judgment As A Sanction For Discovery Violations

In Schron v. Troutman Saunders LLP, 2013 NY Slip Op 00952 (N.Y. Feb 24, 2013), the New York Court of Appeals held that the phrase “other good and valuable consideration” within a contract was not ambiguous, and therefore extrinsic evidence (evidence other than the contract itself) could not be introduced to explain the meaning of the phrase and demonstrate whether such consideration was actually provided. In so doing, the Court of Appeals illustrated that the common recital that consideration includes “other good and valuable consideration” does not free a court to look beyond the four corners of a contract, because there is a presumption that such consideration is supplied by the mutual promises contained within that contract.
Continue Reading Court of Appeals Finds The Phrase “Other Good And Valuable Consideration” In A Contract To Be A Clear And Unambiguous Statement

In Daou v. Huffington, No. 651997/2010 (N.Y. Sup. Ct., N.Y. Cnty. Feb. 14, 2013), the Supreme Court (J. Ramos) granted nonparty Timothy Armstrong’s (“Armstrong”) motion to quash a subpoena served on him by political consultants Peter Daou and James Boyce (collectively “Plaintiffs”). Plaintiffs sought a deposition of Armstrong regarding his knowledge of the valuation of the Huffington Post. In quashing Plaintiffs’ subpoena, and therefore finding that Armstrong did not need to be deposed, the court upheld the basic tenets of the common law apex deposition rule (the “Apex Rule”), which limits a party’s access to deposing nonparty senior executives.
Continue Reading Subpoena of AOL Senior Executive Under the “Apex Rule” Disallowed Absent Special Knowledge

In Daou v. Huffington, No. 651997/2010 (N.Y. Sup. Ct., N.Y. Cnty. Feb. 14, 2013)—a case strikingly similar to the Facebook lawsuit popularized in The Social Network—the Supreme Court (J. Ramos) ruled that political consultants Peter Daou and James Boyce (collectively “Plaintiffs”) could proceed on the majority of their claims asserting that Arianna Huffington (“Huffington”), Kenneth Lerer (“Lerer”), and TheHuffingtonPost.com (the “Huffington Post,” and collectively “Defendants”) stole Plaintiffs’ idea regarding the creation of the Huffington Post. The decision revives Plaintiffs’ suit, which seemed all but dead a year ago.
Continue Reading Claims by Alleged Developers of the Huffington Post Permitted to Proceed

In IRB-Brasil Resseguros, S.A. v. Inepar Investments, S.A., No. 191, 2012 WL 6571286 (N.Y. Dec. 18, 2012), the Court of Appeals of the State of New York held that a broad choice of law provision in a contract precludes any need for conflict of law analysis. This decision increases the predictability of corporate contracts containing a New York choice of law provision: New York law will apply irrespective of whether any other jurisdiction’s law could apply.
Continue Reading New York Court of Appeals Upholds Broad Choice of New York Law Provision in Contract Even in Absence of Contacts With New York