Justia New York Court of Appeals Opinion Summaries

Articles Posted in Commercial Law

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The underlying federal action involved a dispute between General Motors LLC (GM), a franchisor and Chevrolet car manufacturer, and Beck Chevrolet Co., Inc., an automobile dealership with a Chevrolet franchise. Beck sued GM alleging violations of the Dealer Act. The district court ruled against Beck on its claims. On appeal, the United States Court of Appeals for the Second Circuit determined that resolution depended on unsettled New York law and certified two questions requiring the Court of Appeals’ interpretation of two provisions of New York’s Franchised Motor Vehicle Dealer Act. The Court of Appeals answered as follows: (1) the use of a franchisor sales performance standard that relies on statewide data and some local variances but fails to account for local brand popularity to determine compliance with a franchise agreement is unlawful under the Dealer Act; and (2) a franchisor’s unilateral change of a dealer’s geographic sales area does not constitute a prohibited modification to the franchise. View "Beck Chevrolet Co., Inc. v. General Motors LLC" on Justia Law

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In 2004, Plaintiff, a manufacturer and distributor of medical devices, and Defendant, the developer and manufacturer of CoStar, a coronary stent, entered into an agreement designating Plaintiff as the exclusive distributor of CoStar for a worldwide market territory. In 2007, Defendant notified Plaintiff that it was recalling CoStar and removing it from the worldwide market. Plaintiff subsequently sued Defendant for breach of contract, seeking damages for lost profits related to its resale of the stents. Supreme Court granted summary judgment in favor of Defendant on the issue of damages, concluding that the lost profits sought by Plaintiff were consequential damages and subject to the agreement’s damages limitation provision. The court subsequently dismissed the complaint because, by denying Plaintiff lost profits as a remedy, the court effectively ended the lawsuit. The Appellate Division affirmed, concluding that Plaintiff’s claim was barred by the agreement’s limitation on consequential damages. The Court of Appeals reversed, holding that, under the parties’ exclusive distribution agreement, the lost profits constituted general damages, which fell outside the scope of the agreement’s limitation on recovery.View "Biotronik A.G. v. Conor Medsystems Ireland, Ltd." on Justia Law

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Corporation, which owned corporate operating accounts at Bank, took out a loan and line of credit. Corporation passed a corporate resolution providing that unless it notified Bank within fourteen days of an improperly paid item in order to recover the payment, Bank would not be held liable for any error in Corporation’s account. Corporation later discovered that its bookkeeper had been forging signatures on certain Bank documents and had embezzled approximately $386,000 over the course of two years. Corporation sued Bank to prevent Bank from forcing repayment on the loans. Bank counterclaimed to recover amounts due under the loans. Supreme Court granted summary judgment for Bank, concluding that a bank and its customer may agree to shorten from one year to fourteen days the statutory time period under N.Y. U.C.C. Law 4-406(4) within which the customer must notify its bank of an improperly paid item in order to recover the payment thereon. The Court of Appeals affirmed as modified, holding (1) a customer and bank can contractually reduce section 4-406(4)’s one-year limitations period; and (2) shortening the one-year period to fourteen days was not manifestly unreasonable under the facts of this case. View "Clemente Bros. Contracting Corp. v Hafner-Milazzo" on Justia Law

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In this dispute between a law firm and two banks, the issues presented were (1) the scope of the duty a payor bank owed to a non-customer depositor of a counterfeit check and (2) the scope of the duty a depository bank owed its customer when it acted as a collecting bank during the check collection process. The court held that neither the depository/collecting bank nor the payor bank violated any duty owed to the depositor and that summary judgment dismissing the complaint was properly granted. View "Greenberg, Trager & Herbst, LLP v. HSBC Bank USA, et al." on Justia Law