Justia New York Court of Appeals Opinion Summaries

East Midtown Plaza Housing Company, a limited-profit housing company organized under the Mitchell-Lama Law, sought to withdraw from the Mitchell-Lama program and become a private cooperative apartment complex. A vote was taken on a revised privatization plan, and the proposal would have been approved if the votes were tallied using a one-vote-per-share rule, but not if counted under a one-vote-per-household formula as directed by the certificate of incorporation and City Department of Housing Preservation and Development (HPD). Following the vote, East Midtown filed a proposed second amendment stating that the plan had been adopted by the affirmative vote of at least two thirds of the outstanding shares of East Midtown. The Attorney General refused to accept the amendment. East Midtown responded by commencing this N.Y. C.P.L.R. 78 proceeding seeking to compel the Attorney General to accept the second amendment declaring the plan effective and to direct HPD to recognize that the plan achieved the necessary two-thirds shareholder vote. Supreme Court denied the petition. The Appellate Division affirmed. The Court of Appeal affirmed, holding that the courts below correctly held that the vote should be calculated using the one-vote-per-apartment formula, and therefore, the necessary two-thirds approval was not met. View "E. Midtown Plaza Hous. Co. v. Cuomo " on Justia Law

Shareholders commenced this action against Corporation seeking a declaration that Corporation must repurchase their shares of preferred stock after Corporation merged with two other corporations. Shareholders owned preferred stock by Corporation by way of an agreement that conferred special benefits requiring that Corporation repurchase the preferred stock in the event that a "fundamental change" occurred. Shareholders argued that a fundamental change took place when the merger occurred. Supreme court denied Corporation's motion to dismiss. The appellate division reversed and dismissed the complaint, finding that details of the merger triggered an exception of the fundamental change provision. The Court of Appeals reversed, holding that, under the facts presented, there was ambiguity in the interpretation and effect of the preferred stock agreement and, as such, Corporation was not entitled to dismissal of Shareholders' complaint. View "Whitebox Concentrated Convertible Arbitrage Partners, L.P. v. Superior Well Servs., Inc." on Justia Law

Nicole Tausend, the beneficiary of a trust together with her father, Ronald, commenced a N.Y.C.P.L.R. 78 proceeding against Ronald and the partnership (NJR) formed by Ronald for the purpose of acquiring and selling property. Nicole commenced the proceeding in order to obtain access to the partnership documents and an accounting of its finances. In response, NJR issued a demand for arbitration. Supreme Court ordered the parties to arbitration, and the appellate division affirmed. Nicole appeared in the arbitration and asserted several counterclaims, which lead to NJR's commencement of this court proceeding seeking to stay arbitration of the counterclaims on the basis of the expiration of the statute of limitations. Supreme Court granted the petition and stayed arbitration of the counterclaims. The appellate division modified by dismissing NJR's petition to stay arbitration of the counterclaims, reasoning that the partnership was precluded from obtaining a stay because it had initiated and participated in the arbitration. The Court of Appeals affirmed, holding that because NJR initiated and participated in the arbitration of issues stemming from the dispute, its timeliness challenge to the counterclaims must be decided by an arbitrator. View "N.J.R. Assocs. v. Tausend" on Justia Law

This appeal arose out of an action commenced by the New York State Attorney General against defendants, seeking injunctive and monetary relief as well as civil penalties for violations of New York's Executive Law and Consumer Protection Act, Executive Law 63(12) and General Business Law 349, as well as the common law. The primary issue on appeal was whether federal law preempted these claims alleging fraud and violations of real estate appraisal independence rules. The court held that the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) governed the regulation of appraisal management companies and explicitly envisioned a cooperative effort between federal and state authorities to ensure that real estate appraisal reports comport with the Uniform Standards of Professional Appraisal Practice (USPAP). The court perceived no basis to conclude that the Home Owners' Loan Act (HOLA) itself or federal regulations promulgated under HOLA preempted the Attorney General from asserting both common law and statutory state law claims against defendants pursuant to its authority under Executive Law 63(12)and General Business Law 349. Thus, defendants' motion to dismiss on the grounds of federal preemption was properly denied. The court also agreed with the Appellate Division that the Attorney General had adequately pleaded a cause of action under General Business Law 349 and that the statute provided him with standing. Accordingly, the order of the Appellate Division was affirmed. View "People v First Am. Corp." on Justia Law

This case stemmed from a dispute between MBIA Insurance Corporation (MBIA) and certain of its policyholders who hold financial guarantee insurance policies. The principal question presented was whether the 2009 restructuring of MBIA and its related subsidiaries and affiliates authorized by the Superintendent of the New York State Insurance Department precluded these policyholders from asserting claims against MBIA under the Debtor and Creditor Law and the common law. The court held that the Superintendent's approval of such restructuring pursuant to its authority under the Insurance Law did not bar the policyholders from bringing such claims. Accordingly, the court held that the order of the Appellate Division should be modified, without costs, in accordance with the opinion. View "ABN AMRO Bank, N.V., et al. v. MBIA Inc., et al." on Justia Law

This case stemmed from Reliance Group Holdings, Inc.'s ("RGH") and Reliance Financial Services Corporation's ("RFS") voluntary petitions in Bankruptcy Court seeking Chapter 11 bankruptcy protection and the trust that was established as a result. The trust subsequently filed an amended complaint alleging actuarial fraud and accounting fraud against respondents. At issue was whether the trust qualified for the so-called single-entity exemption that the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), 15 U.S.C. 77p(f)(2)(C); 78bb(f)(5)(D), afforded certain entities. The court held that the trust, established under the bankruptcy reorganization plan of RGH as the debtor's successor, was "one person" within the meaning of the single-entity exemption in SLUSA. As a result, SLUSA did not preclude the Supreme Court from adjudicating the state common law fraud claims that the trust had brought against respondents for the benefit of RGH's and RFS's bondholders. Accordingly, the court reversed and reinstated the order of the Supreme Court. View "The RGH Liquidating Trust v. Deloitte & Touche LLP, et al." on Justia Law

Plaintiffs claimed they were fraudulently induced to sell their ownership interests in a company they co-owned with one of the defendants, and fraudulently induced to release defendants from claims arising out of that ownership. At issue was whether the appellate court erred in finding that plaintiffs' claims were barred by the general release they granted defendants in connection with the sale of their interest. The court held that the release was intended to bar the very claims that plaintiffs have brought and that plaintiffs failed to allege that the release was induced by any fraud beyond that contemplated in the release. The court also held that the fraudulent statements plaintiffs point to could not support a conclusion that the release was fraudulently induced, since plaintiffs alleged that they released defendants from claims relating to the sale of their Telmex Wireless Ecuador LLC units without conducting minimal diligence to determine the true value of what they were selling. The court further held that the appellate division majority was therefore correct in concluding that, fully crediting plaintiffs' allegations, they would not be able to prevail as a matter of law. Accordingly, the order of the appellate division was affirmed. View "Centro Empresarial Cempresa S.A. v. America Movil, S.A.B. de C.V." on Justia Law

Plaintiff sued a former employee after a number of the former employee's clients left plaintiff's wealth management and investment advisory firm for the firm that the former employee currently works at. The United States Court of Appeals for the Second Circuit certified the following question for the court: "What degree of participation in a new employer's solicitation of a former employer's client by a voluntary seller of that client's good will constitutes improper solicitation?" In answering the certified question, the court continued to apply its precedents in Von Breman v. MacMonnies and Mohawk Maintenance Co. v. Kessler and held that the "implied covenant" barred a seller of "good will" from improperly soliciting his former clients. The court also held that, while a seller may not contact his former clients directly, he may, "in response to inquiries" made on a former client's own initiative, answer factual questions. The court further held that the circumstances where a client exercising due diligence requested further information, a seller may assist his new employer in the "active development... of a plan" to respond to that client's inquires. Should that plan result in meeting with a client, a seller's "largely passive" role at such a meeting did not constitute improper solicitation in violation of the "implied covenant." As such, a seller or his new employer may then accept the trade of a former client.