Justia New York Court of Appeals Opinion Summaries

Plaintiffs here were related entities that leased a building to The Salvation Army. The Salvation Army operated the building as a homeless shelter under an agreement with the City of New York. After the City terminated its agreement with The Salvation Army, The Salvation Army terminated the lease. Plaintiffs brought this action to collect damages from The Salvation Army, claiming that the leased premises were returned in bad condition in violation of the lease. The appellate division concluded that Plaintiffs had adequately pleaded a breach of the lease. The Court of Appeals reversed, holding that Plaintiffs' claim was barred by the plain language of the lease. View "JFK Holding Co. LLC v. City of New York" on Justia Law

Plaintiff, the owner of an apartment building, complained when Armory Plaza, the owner of the lot next to Plaintiff's building, began excavating the lot to make way for a new building. The excavation purportedly caused cracks in the walls and foundations of Plaintiff's building. After Plaintiff's insurer (Defendant) rejected Plaintiff's claims under its policy, Plaintiff brought suit. The U.S. district court granted summary judgment for Defendant, holding that the alleged conduct of Armory and its contractors was not "vandalism" within the meaning of the policy. On appeal, the Second Circuit Court of Appeals certified two questions of law to the New York Court of Appeals, which answered by holding (1) for purposes of construing a property insurance policy covering acts of vandalism, malicious damage may be found to result from an act not directed specifically at the covered property; and (2) the state of mind required to find malicious damage is a conscious and deliberate disregard of the interests of others that the conduct in question may be called willful or wanton. View "Georgitsi Realty, LLC v. Penn-Star Ins. Co." on Justia Law

Petitioner and Ajmal Khan, principal of Verus Investment Holdings, purchased securities in a company to arbitrage a merger between that company and another company (the trade). Petitioner and Khal used Verus' account at Jefferies & Co. and Winton Capital Holding to complete the purchase. After the merger, Jefferies wired to Verus the original investment and profits attributable to the Winton funds. Verus wired the investment money to Winton and the profits to Doris Lindbergh, a friend of Petitioner. Tax authorities later informed Jefferies it owed withholding tax on the trade. Pursuant to an arbitration clause in an agreement between Jefferies and Verus, Jefferies commenced an arbitration against Verus for the unpaid taxes. Verus, in turn, asserted thirty-party arbitration claims against Petitioner, Lindbergh, and others for their share of the taxes. After a hearing, Supreme Court determined that nonsignatories Petitioner and Lindbergh could not be compelled to arbitrate. The Appellate Division reversed, concluding that Petitioner should be estopped from avoiding arbitration because he knowingly exploited and received direct benefits from the agreement between Jefferies and Verus. The Court of Appeals reversed, holding that Petitioner did not receive a direct benefit from the arbitration agreement and could not be compelled to arbitrate. View "Belzberg v. Verus Invs. Holdings Inc." on Justia Law

The Attorney General (AG) sued two of the former officers of American International Group, Inc. (AIG), alleging that Defendants violated the Martin Act and committed common law fraud. Specifically, the AG claimed that Defendants helped cause AIG to enter into a sham transaction with General Reinsurance Corporation (GenRe) in which AIG purported to reinsure GenRe on certain insurance contracts. The AG withdrew his claims for damages and now sought only equitable relief. The Appellate Division denied Defendants' motion for summary judgment. The Court of Appeals affirmed, holding (1) the evidence of Defendants' knowledge of the fraudulent nature of the transaction was sufficient to raise a triable issue of fact; and (2) the AG was not barred as a matter of law from obtaining equitable relief. View "People v. Greenberg" on Justia Law

Plaintiffs were two limited liability companies that made loans to Goldan, LLC. Goldan failed to repay the loans. Plaintiffs later discovered that their mortgages had not been recorded as agreed upon. Plaintiffs sued Goldan and its two principals, Mark Goldman and Jeffrey Daniels, alleging a number of claims. One claim was asserted against Daniels, a lawyer, for legal malpractice for failing to record the mortgages. Daniels' malpractice carrier, American Guarantee and Liability Insurance Company (American) refused to provide defense or indemnity coverage. Daniels defaulted in Plaintiffs' action against him. Daniels assigned to Plaintiffs his rights against American. Plaintiffs subsequently brought an action against American for breach of contract and bad faith failure to settle the underlying lawsuit. Supreme Court granted Plaintiffs' motions as to the breach of contract claims and dismissed the bad faith claims. The Appellate Division affirmed. The Court of Appeals affirmed, holding (1) by breaching its duty to defend Daniels, American lost its right to rely on policy exclusions to escape its duty to indemnify; and (2) the lower courts properly dismissed Plaintiffs' bad faith claims. View "K2 Inv. Group, LLC v. Am. Guar. & Liab. Ins. Co." on Justia Law

In 2003, the Securities and Exchange Commission (SEC) notified Bear Stearns & Co. and Bear Stearns Securities Corp. of its intention to charge Bear Stearns with violations of federal securities laws. Bear Stearns agreed to pay $160 million as a disgorgement and $90 million as a civil penalty. Bear Stearns then sought indemnification from its insurers (Insurers), requesting indemnity for the $160 million SEC disgorgement payment. Insurers denied coverage. Bear Stearns subsequently brought this breach of contract and declaratory judgment action against Insurers. Insurers unsuccessfully moved to dismiss the complaint. The Appellate Division reversed and dismissed the complaint, holding that, as a matter of public policy, Bear Stearns could not seek coverage under its policies for any of the SEC disgorgement payment. Bear Stearns appealed, arguing that, while it was reasonable to preclude an insured from obtaining indemnity for the disgorgement of its own illegal gains, Bear Stearns was not unjustly enriched by at least $140 million of the disgorgement payment, the sum attributable to the profits of its customers. The Court of Appeals reversed, holding that Insurers did not meet their burden of establishing, as a matter of law, that Bear Stearns was barred from pursuing insurance coverage under its policies. View "J.P. Morgan Sec. Inc. v. Vigilant Ins. Co." on Justia Law

The Wicks Law requires public entities seeking bids on construction contracts to obtain separate specifications for three subdivisions of the work to be performed. Until 2008 when the law was amended to raise the threshold, the Wicks Law applied to contracts whose cost exceeded $50,000. The new, higher thresholds, unlike the old one, were not uniform throughout the State. Plaintiffs claimed, inter alia, that the amendments violated the Home Rule section of the State Constitution by unjustifiably favoring the eight counties with higher thresholds. Supreme Court dismissed the complaint, holding that Plaintiffs lacked standing to assert the Home Rule cause of action and that, in any event, the challenged amendments did not violate the Home Rule section because they "were enacted in furtherance of and bear a reasonable relationship to a substantial State-wide concern." The Appellate Division affirmed. The Court of Appeals affirmed as modified, holding (1) at least one plaintiff had standing to assert the Home Rule claim, but that claim failed on the merits; and (2) most of Plaintiffs' other claims failed, but four causes of action challenging the apprenticeship requirements as applied to out-of-state contracts should be reinstated. View "Empire State Chapter of Associated Builders & Contractors v. Smith" on Justia Law

Plaintiffs purchased furniture from the Fortunoff Department Store. Along with the furniture, Plaintiffs purchased a protection plan. The plan was a contract in which Valspar Corporation agreed to provide service for damages to the furniture during the contract period. The plan contained a store closure provision providing that if the store location where customers purchased furniture closed, the purchase price of the plan would be refunded. Fortunoff subsequently closed, and Valspar tendered Plaintiffs a refund of their payment made to the plan. Plaintiffs brought a diversity action against Valspar for breach of contract under N.Y. Gen. Bus. Law 395, which forbids the termination before expiration of any "maintenance agreement covering parts and/or service" and for damages under N.Y. Gen. Bus. Law 349, claiming that section 395 rendered the store closure provision ineffective and that, by denying claims based on this provision, Valspar breached its contracts with Plaintiffs. The district court dismissed the case. The Court of Appeals accepted certification to answer questions of law and held (1) section 395(a) does not make contract clauses that contradict its terms null and void; and (2) a violation of section 395(a) alone does not give rise to a cause of action under section 349. View "Schlessinger v. Valspar Corp." on Justia Law

Plaintiff sued a number of corporations and an individual, Ariq Vanunu, alleging that he had provided telephone service to Defendants pursuant to a written agreement and had not been paid. The complaint alleged that Vanunu was a "principal officer in all the corporate defendant entities." A default judgment was later entered against all Defendants. Vanunu moved to vacate the judgment, asserting that his default was excusable and that he had meritorious defenses to the action. Supreme Court denied the motion. The Appellate Division reversed, holding that because Plaintiff failed to provide evidence that Vanunu was personally liable for the stated claims, the default judgment was a nullity. The Court of Appeals reversed, holding that the defect in this case was not jurisdictional. View "Manhattan Telecomms. Corp. v. H & A Locksmith, Inc." on Justia Law

Wife and Husband were married in 1997. A week before the wedding, they each separately signed a prenuptial agreement. Neither party was present when the other executed the document, and the signatures were witnessed by different notaries public. In the acknowledgment relating to Husband's signature, a key phrase was omitted. As a result, the certificate failed to indicate that the notary public confirmed the identity of the person executing the document. In 2010, Husband filed for divorce. Wife commenced a separate action seeking a divorce and a declaration that the prenuptial agreement was unenforceable. Supreme Court denied Wife's motion for summary judgment. The Appellate Division affirmed, holding (1) the certificate of acknowledgment was defective, but (2) the deficiency could be cured after the fact, and the notary public affidavit raised a triable question of fact as to whether the prenuptial agreement had been properly acknowledged when it was signed. The Court of Appeals reversed, holding that the prenuptial agreement was invalid where, even assuming a defect in a certificate of acknowledgment could be cured, the notary public's affidavit was insufficient to raise a triable question of fact as to the propriety of the original acknowledgment procedure. View "Galetta v. Galetta" on Justia Law