Articles Posted in Civil Procedure

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The Court of Appeals affirmed the order of the Appellate Division affirming Supreme Court’s dismissal of the complaint filed by the trustee (Trustee) of the ABSHE 2006 residential mortgage-backed securities (RMBS) trust, without prejudice to refiling, holding that N.Y. C.P.L.R. 205(a) applies to an RMBS trustee’s second action when its timely first action is dismissed for failure to comply with a contractual condition precedent. The Trustee first filed an action against Defendant, the sponsor and seller of the trust securitization, and the action was dismissed for failure to comply with a contractual condition precedent, without prejudice to refiling. The Trustee then filed this action against Defendant claiming violations of representations and warranties regarding the quality of the loans contained in the trust. On appeal, Defendant argued that the first action should have been dismissed with prejudice. The Court of Appeals disagreed, holding that the Trustee’s failure to comply with a contractual condition precedent did not foreclose refiling of its action for alleged breach of RMBS representations and warranties pursuant to N.Y. C.P.L.R. 205(a). View "U.S. Bank National Ass’n v DLJ Mortgage Capital, Inc." on Justia Law

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The Court of Appeals affirmed the order of the Appellate Court affirming the judgment of Supreme Court dismissing this action filed by the trustee (Trustee) of three residential mortgage-backed securities (RMBS) alleging violations of representations and warranties regarding the quality of loans contained in the respective securitization trust instruments, holding that the Trustee’s untimely-filed complaint cannot relate back under N.Y. C.P.L.R. 203(f) to a certificate holder’s previously filed action. Defendant served as seller and sponsor of three RMBS securitization trusts, each governed by a separate pooling and servicing agreement. A certificate holder later filed a notice claiming violations of the representations and warranties for each of the trusts. After the limitations period elapsed, the Trustee filed this complaint. Supreme Court dismissed the action with prejudice. The Appellate Division affirmed, concluding that the complaint was time-barred and that the Trustee could not rely on the prior action because the certificate holder lacked standing to sues. The Court of Appeals affirmed, holding that the certificate holder’s action was subject to dismissal, and there was no valid pre-existing action to which a claim in a subsequent amended pleading may relate back. View "U.S. Bank National Ass’n v. DLJ Mortgage Capital, Inc." on Justia Law

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The Court of Appeals reversed the decision of the Appellate Division affirming Supreme Court’s dismissal of the claims in this case, holding that failure by a nonresident attorney admitted in New York to comply with the requirement to maintain a physical office in the state in order to practice law in New York at the time a complaint is filed does not render that filing a nullity. In dismissing the remaining claims against Defendants without prejudice, Supreme Court found that Plaintiff’s counsel resided in Pennsylvania and there was no evidence that counsel maintained an office of phone in New York when the action was filed. The Appellate Division affirmed. The Court of Appeals reversed, holding (1) a violation of N.Y. Jud. Law 470 does not render the actions taken by the attorney involved a nullity; and (2) instead, the party may cure the section 470 violation with the appearance of a compliant counsel or an application for admission pro hac vice by appropriate counsel. View "Arrowhead Capital Finance, Ltd. v Cheyne Specialty Fin. Fund L.P." on Justia Law

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The Court of Appeals reversed the order of the Appellate Division and dismissed this petition and proceeding, holding that Mental Hygiene Legal Service (MHLS) did not have standing to bring this proceeding in its own name to vindicate its clients’ rights under N.Y. Mental Hyg. Law 9.31(b). MHLS, a government entity charged with providing legal services to patients of mental health facilities and hospitals, brought this proceeding in its own name seeking a writ of mandamus to compel a hospital to comply with section 9.31(b), which sets forth the procedure to be followed after a patient requests an admission or retention hearing. The hospital moved to dismiss the petition on the ground the MHLS lacked standing to bring the claim in its own name. Supreme Court denied the hospital’s motion to dismiss and granted the petition, concluding that MHLS had demonstrated a right to mandamus relief. The Appellate Division affirmed. The Court of Appeals reversed and dismissing both the petition and the proceeding, holding that MHLS did not have standing to bring this petition. View "Mental Hygiene Legal Service v. Daniels" on Justia Law

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New York’s borrowing statute, N.Y. C.P.L.R. 202, applies when contracting parties have agreed that their contract would be “enforced” according to New York law. Plaintiff brought this action for breach of contract and unjust enrichment in state court in New York. SkyPower Corp., an Ontario renewable energy developer, had assigned its claims against Defendants to Plaintiff, also an Ontario corporation. Defendants moved to dismiss the complaint, arguing that the action was time-barred pursuant to Ontario’s two-year statute of limitations, which applied pursuant to section 202. Plaintiff contended that the choice-of-law provision in the non-disclosure agreement (NDA) entered into by SkyPower and Defendants required the conclusion that the parties intended to preclude application of section 202 and instead apply the six-year limitations period provided by N.Y. C.P.L.R. 213(2). Supreme Court dismissed Plaintiff’s claims asserted on SkyPower’s behalf as time-barred. The Appellate Division affirmed. The Court of Appeals affirmed, holding that because the contracting parties chose New York’s procedural law, and section 202 is part of that procedural law, the borrowing statute applied. View "2138747 Ontario, Inc. v. Samsung C&T Corp." on Justia Law

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The claim brought by Paramount Pictures Corporation, the plaintiff in this suit, was barred by res judicata because it should have been asserted as a counterclaim in an action involving the same parties brought in federal court nearly ten years. Paramount was the defendant in a federal action brought in 2008 by investors following an unsuccessful investment venture. The district court entered judgment in favor of Paramount, and the judgment was affirmed on appeal. While the investors’ appeal was pending, Paramount commenced this action in Supreme Court, alleging breach of contract. The investors moved to dismiss on the basis of res judicata. Supreme Court denied the motion, but the Appellate Division reversed. The Court of Appeals affirmed, holding (1) pursuant to federal principles of claim preclusion - the applicable rules of decision in this case - Paramount’s breach of contract claim was transactionally related to the investor’s claims in the federal case, amount to the same claim for purposes of res judicata; and (2) because Paramount’s claim was not asserted in the parties’ prior federal action, it was now barred. View "Paramount Pictures Corp. v. Allianz Risk Transfer AG" on Justia Law

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The Court of Appeals answered two certified questions by holding (1) under the capacity rule, public benefit corporations have no greater stature to challenge the constitutionality of state statutes than do municipal corporations or other local government entities; and (2) a claim-revival statute will satisfy the Due Process Clause of the state Constitution if it was enacted as a reasonable response in order to remedy an injustice. Plaintiffs, workers who participated in cleanup operations following the 9/11 terrorist attacks, brought claims against BatteryPark City Authority (BPCA), a public benefit corporation, alleging that they developed illness as a result of their exposure to harmful toxins at BPCA-owned properties in the course of their cleanup duties. The district court dismissed the claims on the grounds that Plaintiffs did not serve BPCA with timely notices of claim. The legislature responded by enacting Jimmy Nolan’s law, which revived Plaintiffs’ time-barred causes of action for one year after the law’s enactment. Plaintiffs subsequently served new notices of claim on BPCA within the one-year revival period. The district court granted summary judgment for BPCA, concluding that Jimmy Nolan’s Law was unconstitutional as applied. On appeal, the Second Circuit Court of Appeal certified questions to the Court of Appeals. The court answered as set forth above. View "In re World Trade Center Lower Manhattan Disaster Site Litigation" on Justia Law

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Rule 12A, contained in Order 15 of the Cayman Islands Grand Court Rules 1995, is procedural and therefore does not apply where, as here, a plaintiff seeks to litigate his derivative claims in New York. Plaintiff owned ordinary shares in Scottish Re Group, Limited, a Cayman Islands company formerly engaged in the business of reinsurance. Plaintiff asserted both direct and derivative causes of action against Scottish Re and others. The only claims relevant to this appeal were Plaintiff’s derivative claims. Supreme Court dismissed Plaintiff’s derivative causes of action, ruling that, under Cayman Islands law, Plaintiff had not established standing because he did not seek leave of court to commence a derivative action under Rule 12A of the Rules of the Grand Court of the Cayman Islands. The Appellate Division affirmed based on Plaintiff’s noncompliance with Rule 12A, concluding that the rule applied because it was substantive rather than procedural. The Court of Appeals reversed, holding that Plaintiff’s derivative claims should not have been dismissed on the ground that he failed to comply with Rule 12A where Rule 12A is a procedural rule that does not apply in New York courts. View "Davis v. Scottish Re Group Ltd." on Justia Law

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There was personal jurisdiction over Defendant - a winery located in Pontevedra, Spain - under New York’s long-arm jurisdiction statute and, consequently, subject matter jurisdiction over the parties’ dispute under N.Y. Bus. Corp. Law 1314(b)(4). Supreme Court denied Defendant’s motion for summary judgment based on lack of personal and subject matter jurisdiction. The Appellate Division reversed, concluding that Defendant was not subject to personal jurisdiction under N.Y. C.P.L.R. 302(a)(1) of New York’s long-arm jurisdiction statute. The Court of Appeals reversed, holding that the exercise of long-arm jurisdiction over Defendant comported with federal due process because Defendant availed itself of the privilege of conducting business in New York by promoting its wine in the state, soliciting a distributor in the state, and selling wine to that New York-based distributor. View "D&R Global Selections, S.L. v Bodega Olegario Falcon Pineiro" on Justia Law

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Petitioner’s son was hit by a car while attempting to cross an intersection. Petitioner timely served notices of claim on the State, town, and county. Five months after the statutory period for serving a notice of claim had expired, Petitioner served a notice of claim on the School District, alleging that the School District’s sign at the corner of the intersection where Petitioner’s son was struck obstructed the view of pedestrians and drivers and created a dangerous and hazardous condition. Petitioner simultaneously filed an order to show cause for leave to serve a late notice of claim, arguing that he had a reasonable excuse for the late notice. Supreme Court determined that Petitioner should not be permitted to serve the late notice of claim. The Appellate Division affirmed. The Court of Appeals reversed, holding (1) the lower courts abused their discretion as a matter of law when, in the absence of any record evidence to support such determination, the courts determined that the School District would be substantially prejudiced in its defense by a late notice of claim; and (2) the lower court improperly placed the burden of proving substantial prejudice solely on Petitioner. View "Newcomb v. Middle Country Central School District" on Justia Law