Articles Posted in Contracts

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Under New York law, a plaintiff asserting claims of misappropriation of a trade secret, unfair competition, and unjust enrichment may not recover damages that are measured by the costs the defendant avoided due to its unlawful activity because, under the common law, compensatory damages must return the plaintiff, as nearly as possible, to the position it would have been in had the wrongdoing not occurred, but no more. This case was tried in federal court on three theories of trade secret theft, unfair competition and unjust enrichment. The jury returned a verdict for Plaintiff. The United States Court of Appeals for the Second Circuit asked the Court of Appeals to resolve three questions of New York’s law relating to damages, specifically, whether, as a matter of law, any plaintiff may recover a defendant’s avoided costs on one or another of these three theories of liability. The Court of Appeals held that, in any of these three actions, a plaintiff may not elect to measure its damages by the defendant’s avoided costs in lieu of its own losses. View "E.J. Brooks Co. v. Cambridge Security Seals" on Justia Law

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The documentary evidence proffered by Defendant on its motion to dismiss pursuant to N.Y. C.P.L.R. 3211(a)(1) did not conclusively refute Plaintiff’s breach of contract claims. In 2009, Plaintiff and Defendant entered into a three-year employment agreement, under which Plaintiff was an “at will” employee. In 2012, Defendant notified Plaintiff that his employment had ceased upon the expiration of the agreement. Plaintiff brought this breach of contract action against Defendant, alleging that the parties had entered into a valid and binding contract setting forth the terms of his continued employment with Defendant. Defendant moved for an order dismissing Plaintiff’s breach of contract claims. Supreme Court denied the motion. The Appellate Division modified Supreme Court’s order by dismissing so much of the breach of contract cause of action that sought to recover a special non-compete payment under the 2009 agreement and otherwise affirmed. The Court of Appeals affirmed, holding that Defendant did not meet its burden of demonstrating that the proffered evidence conclusively refuted Plaintiff’s factual allegations. View "Kolchins v. Evolution Markets, Inc." on Justia Law

Posted in: Contracts

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The terms of the insurance policy at issue in this coverage dispute required a written contract between the named insured and an additional insured if coverage was to be extended to an additional insured, and therefore, Liberty Insurance Underwriters was entitled to summary judgment. Gilbane Building Co. and TDX Construction Corporation (collectively, Gilbane JV) was the construction manager for a new forensic laboratory, and Samson Construction Co. was the general contractor. Samson obtained general liability insurance coverage from Liberty Insurance Underwriters. When disputes arose over the construction, Gilbane JV commerced this lawsuit arguing that it qualified for coverage under the Liberty policy as an additional insured. Gilbane JV had no written contract with Samson denominating it as an additional insured but argued that no such contract was necessary. Supreme Court denied Liberty’s motion for summary judgment, determining that Gilbane JV was an additional insured under the policy. The Appellate Division reversed and granted Liberty’s motion. The Court of Appeals affirmed based on the terms of the policy at issue. View "Gilbane Building Co./TDX Construction Corp. v St. Paul Fire & Marine Insurance Co." on Justia Law

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The terms of the insurance policy at issue in this coverage dispute required a written contract between the named insured and an additional insured if coverage was to be extended to an additional insured, and therefore, Liberty Insurance Underwriters was entitled to summary judgment. Gilbane Building Co. and TDX Construction Corporation (collectively, Gilbane JV) was the construction manager for a new forensic laboratory, and Samson Construction Co. was the general contractor. Samson obtained general liability insurance coverage from Liberty Insurance Underwriters. When disputes arose over the construction, Gilbane JV commerced this lawsuit arguing that it qualified for coverage under the Liberty policy as an additional insured. Gilbane JV had no written contract with Samson denominating it as an additional insured but argued that no such contract was necessary. Supreme Court denied Liberty’s motion for summary judgment, determining that Gilbane JV was an additional insured under the policy. The Appellate Division reversed and granted Liberty’s motion. The Court of Appeals affirmed based on the terms of the policy at issue. View "Gilbane Building Co./TDX Construction Corp. v St. Paul Fire & Marine Insurance Co." on Justia Law

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The agreement establishing a partnership in this case dictated that Defendant, a partner, wrongfully dissolved the partnership, but it was error to include the legal fees incurred by the remaining partners in the damages owed to them by Defendant. In 1985, Defendant and seven others entered into a written agreement to form a general partnership. In the mid-2000s, Defendant withdrew from the partnership. Plaintiffs, as the partnership’s executive committee and on behalf of the partnership, brought this breach of contract action seeking a declaratory ruling that Defendant had wrongfully dissolved the partnership, as well as damages. Supreme Court granted summary judgment to Plaintiffs, determining that the partnership was not an “at-will” partnership and therefore could not be dissolved without violation of the partnership agreement. The Appellate Division upheld Supreme Court’s ruling, concluding that Defendant wrongfully dissolved the partnership. On remand for the second time, Supreme Court awarded attorneys’ fees and experts’ fees. The Court of Appeals held (1) the lower courts erred in applying N.Y. P'ship Law 62(1)(b) to decide that Defendant violated the agreement, but they correctly concluded that Defendant’s dissolution was wrongful; but (2) Supreme Court erred in awarding fees to Plaintiffs as part of the statutory damages. View "Congel v. Malfitano" on Justia Law

Posted in: Business Law, Contracts

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The agreement establishing a partnership in this case dictated that Defendant, a partner, wrongfully dissolved the partnership, but it was error to include the legal fees incurred by the remaining partners in the damages owed to them by Defendant. In 1985, Defendant and seven others entered into a written agreement to form a general partnership. In the mid-2000s, Defendant withdrew from the partnership. Plaintiffs, as the partnership’s executive committee and on behalf of the partnership, brought this breach of contract action seeking a declaratory ruling that Defendant had wrongfully dissolved the partnership, as well as damages. Supreme Court granted summary judgment to Plaintiffs, determining that the partnership was not an “at-will” partnership and therefore could not be dissolved without violation of the partnership agreement. The Appellate Division upheld Supreme Court’s ruling, concluding that Defendant wrongfully dissolved the partnership. On remand for the second time, Supreme Court awarded attorneys’ fees and experts’ fees. The Court of Appeals held (1) the lower courts erred in applying N.Y. P'ship Law 62(1)(b) to decide that Defendant violated the agreement, but they correctly concluded that Defendant’s dissolution was wrongful; but (2) Supreme Court erred in awarding fees to Plaintiffs as part of the statutory damages. View "Congel v. Malfitano" on Justia Law

Posted in: Business Law, Contracts

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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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In this breach of contract and negligence action, the Court of Appeals held that the City of New York was an intended third-party beneficiary of an architectural services contract between Dormitory Authority of the State of New York (DASNY) and Perkins Eastman Architects, P.C. (Perkins) and that DASNY’s negligence claim against Perkins was duplicative of its breach of contract claim. The Appellate Division denied Perkins’ motion for summary judgment on the City’s breach of contract claim, holding that the City had raised an issue of fact whether it was an intended third-party beneficiary of the parties’ contract and denied Perkins’ motion for summary judgment to dismiss DASNY’s negligence claim as duplicative of its breach of contract claim, holding that there was an issue of fact whether Perkins assumed a duty of care to reform in accordance with professional standards that was independent of its contractual obligations. The Court of Appeals reversed, holding (1) the City failed to raise an issue of fact concerning its status as a third-party beneficiary, and Perkins’ motion for summary judgment on this issue should have been granted; and (2) under the circumstances, the negligence claim was duplicative of the breach of contract cause of action. View "Dormitory Authority of State of N.Y. v. Samson Construction Co." on Justia Law

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The Court of Appeals answered a question certified to it by the United States Court of Appeals in the negative, answering that under New York law generally, and particularly in light of the New York Court of Appeals’ decision in Excess Insurance Co. Ltd. v. Factor Mutual Insurance Co., 3 NY3d 577 (N.Y. 2004), there is neither a rule of construction nor a presumption that a per occurrence liability limitation in a reinsurance contract caps all obligations of the reinsurer, such as payments made to reimburse the reinsured’s defense costs. The court held definitively that Excess did not supersede the “standard rules of contract interpretation” otherwise applicable to facultative reinsurance contracts. Therefore, New York law does not impose either a rule or a presumption that a limitation on liability clause necessarily caps all obligations owed by a reinsurer, such as defense costs, without regard for the specific language employed therein. View "Global Reinsurance Corp. of America v. Century Indemnity Co." on Justia Law

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In these appeals stemming from four residential mortgage-backed securities transactions, the Court of Appeals held that claims for general contract damages based on alleged breaches of a “no untrue statement” provision in mortgage loan purchase agreements cannot withstand a motion to dismiss based on a contract provision mandating cure of the breaches or repurchase of the loans as the sole remedy for breaches of mortgage loan-specific representations and warranties. Specifically, the court held that, inasmuch as the claims for general contract damages at issue were grounded in alleged breaches of the mortgage loan-specific representations and warranties to which the limited remedy fashioned by the sophisticated parties applies, Plaintiffs’ claims for general contract damages should be dismissed. View "Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit & Capital, Inc." on Justia Law

Posted in: Contracts