Court of Appeals Arguments of Interest for the Week of November 17, 2014

Arguments the week of November 17, 2014, in the Court of Appeals that may be of interest to commercial litigators.

  • No. 223: Rigano v. Vibar Construction, Inc. (Proceeding No. 1) and Vibar Construction Corp. v. Fawn Builders, Inc. (Proceeding No. 2) (To be argued Tuesday, November 18, 2014) (considering whether misidentification of the true owner on a mechanics lien is a jurisdictional defect which cannot be cured by an amendment). The Second Department decision is available here.
  • No. 228: 172 Van Duzer Realty Corp. v. Globe Alumni Student Assistance Association, Inc. (To be argued Wednesday, November 19, 2014) (considering whether a lease’s acceleration clause constituted an unenforceable penalty). The First Department decision is available here.

Appellant’s Arguments Rejected Based on Judicial Estoppel

On October 21, 2014, the First Department issued a decision in Bank Hapoalim B.M. v. Westlb AG, 2014 NY Slip Op. 07092, rejecting arguments made on appeal when the appellants had taken contrary positions at trial.

In Bank Hapoalim, the plaintiffs were “investors in a structured investment vehicle” who sued the defendant financial institutions regarding the investment. In reviewing the trial court’s decision the First Department noted as an initial matter that:

[O]n this appeal, plaintiffs are judicially estopped from asserting their position on choice of law, as they consistently argued to the motion court that New York law governed the case and that their arguments relied on New York law. A party may not adopt a position on appeal at odds with its arguments to the trial court, and plaintiffs cite no law to the contrary.

Similarly, plaintiffs are judicially estopped from arguing that the Income Notes should be treated as debt, since they argued repeatedly to the motion court that the Income Notes should be treated as equity. Indeed, plaintiffs concede that they previously argued in favor of the proposition that the notes were equity, but now assert that they may argue that the Income Notes are equity for some purposes and debt for others.

(Internal citations omitted).

Enforcement of Judgment Not Stayed Pending Appeal When Undertaking Not Filed With County Clerk

On September 4, 2014, Justice Demarest of the Kings County Commercial Division issued a decision in Vintage Flooring & Tile, Inc. v DCM of NY LLC, 2014 NY Slip Op 51376(U), declining to recognize a stay of enforcement of a judgment under CPLR 5519(a)(2) where the defendant failed to comply with the formal requirements for an undertaking under Article 25 of the CPLR.

In Vintage Flooring, the defendant (the general contractor on a construction project at the Kings Plaza Mall in Brooklyn) brought an order to show cause seeking an automatic stay of a judgment pending appeal, under CPLR 5519(a)(2), based on a undertaking that was served on the plaintiff but never filed with the Clerk of the Court. Justice Demarest denied the motion, explaining:

Pursuant to CPLR 5519(a)(2), service upon the adverse party of a notice of appeal [for a money judgment] stays all proceedings to enforce the judgment or order appealed from where an undertaking for that sum is given. Pursuant to CPLR 2505, an undertaking together with any affidavit required by [Article 25 of the CPLR] shall be filed with the clerk of the court in which the action is triable, or, upon an appeal, in the office where the judgment or order of the court of original instance is entered, and a copy shall be served upon the adverse party. The undertaking is effective when so served and filed.

In opposition to the Order to Show Cause, petitioner argues that the respondent has not shown proof that it ever filed the Undertaking with the Kings County Clerk. The court takes judicial notice that the Undertaking was not filed with the Kings County Clerk under the present index number. As respondent has not demonstrated any proof that the Undertaking was ever filed with the clerk of the court pursuant to CPLR 2505, the Undertaking was never effective and, therefore, there was no automatic stay pursuant to CPLR 5519(a)(2).

(Internal quotations and citations omitted).

An appeal bond can buy a defendant a reprieve from enforcement of a judgment. However, as this case shows, to be effective, all the requirements of the CPLR must be satisfied.

Appeal Dismissed Due to Deficiencies in Record

On September 17, 2014, the Second Department entered a decision in Green Tree Credit, LLC v. Jelks, 2014 NY Slip Op. 06174, dismissing an action for failure to assemble a proper record on appeal.

In Green Tree Credit, the Second Department dismissed the appeal, writing:

It is the appellant’s obligation to assemble a proper record on appeal. Here, the record is inadequate because it does not include all of the relevant papers and documents that were before the Supreme Court. Since the record is inadequate to enable this Court to render an informed decision on the merits, the appeal must be dismissed.

(Internal citations omitted).

Getting a record printed can be expensive in a complicated commercial case. However, as this decision shows, if you do not prepare the record properly (Appellate Division rules offer alternatives ways of doing this), you may as well not appeal at all.

Court of Appeals Arguments of Interest for the Weeks of September 8, 2014 and September 15, 2014

Arguments the weeks of September 8, 2014 and September 15, 2014, in the Court of Appeals that may be of interest to commercial litigators.

  • No. 156Ellington v. EMI Music Inc. (To be argued Thursday, September 11, 2014) (regarding the interpretation of the provisions of a royalty agreement between the family of Duke Ellington and music publishers concerning the allocation of revenues from foreign publication of Ellington’s music). See First Department decision here.
  • No. 162: Motorola Credit Corporation v. Standard Chartered Bank (To be argued Tuesday, September 16, 2014) (considering certified questions from the Second Circuit on the application of the “separate entity rule” to post-judgment enforcement proceedings under CPLR Article 52). See Second Circuit decision here. See our previous posts about the Second Circuit decision and the Court of Appeals decision accepting the certified questions here and here.
  • No. 165: Grace v. Law (To be argued Wednesday, September 17, 2014) (regarding whether a party who voluntarily discontinues an underlying action and forgoes an appeal thereby abandons his or her right to pursue a claim for legal malpractice). See Fourth Department decision here.

Transcripts and Videos of Arguments in the Court of Appeals for the Week of June 2, 2014, Now Available

On May 29, 2014, we noted two cases of interest from the oral arguments for the week of June 2, 2014:

  • Docket No. 129: People v. John F. Haggerty, Jr. (a criminal case addressing an evidentiary issue also relevant to commercial litigators—the best evidence rule: specifically, whether the testimony of the attorney who drafted a trust is admissible to prove the ownership of the trust assets when the trust agreement was available)). See the transcript and the video.
  • Docket No. 136: In re: Thelen LLP (Geron v Seyfarth Shaw LLP) and No. 137: In re: Coudert Brothers, LLP (Development Specialists, Inc. v K&L Gates LLP) (addressing certified questions from the Second Circuit: “Under New York law, is a client matter that is billed on an hourly basis the property of a law firm, such that, upon dissolution and in related bankruptcy proceedings, the law firm is entitled to the profit earned on such matters as the “unfinished business” of the firm?” and “If so, how does New York law define a ‘client matter’ for purposes of the unfinished business doctrine and what proportion of the profit derived from an ongoing hourly matter may the new law firm retain?). See the transcript and the video.

Court of Appeals Arguments of Interest for the Week of June 2, 2014

Arguments the week of June 2, 2014, in the Court of Appeals that may be of interest to commercial litigators.

  • No. 129: People v. John F. Haggerty, Jr. (To be argued Tuesday, June 3, 2014) (this is a criminal case addressing an evidentiary issue also relevant to commercial litigators—the best evidence rule: specifically, whether the testimony of the attorney who drafted a trust is admissible to prove the ownership of the trust assets when the trust agreement was available). See First Department decision here.
  • No. 136: In re: Thelen LLP (Geron v Seyfarth Shaw LLP) and No. 137: In re: Coudert Brothers, LLP (Development Specialists, Inc. v K&L Gates LLP) (To be argued Wednesday, June 4, 2014) (addressing certified questions from the Second Circuit: “Under New York law, is a client matter that is billed on an hourly basis the property of a law firm, such that, upon dissolution and in related bankruptcy proceedings, the law firm is entitled to the profit earned on such matters as the “unfinished business” of the firm?” and “If so, how does New York law define a ‘client matter’ for purposes of the unfinished business doctrine and what proportion of the profit derived from an ongoing hourly matter may the new law firm retain?). See Second Circuit decisions in In re: Thelen LLP here and In re: Coudert Bros. LLP here .

Transcripts and Videos of Arguments in the Court of Appeals for the Week of May 5, 2014, Now Available

On May 1, 2014, we noted four cases of interest from the oral arguments for the week of May 5, 2014:

  • Docket No. 121: Norex Petroleum Limited v. Blavatnik (addressing whether “CPLR 202, New York’s borrowing statute, which requires a nonresident plaintiff to satisfy the statute of limitations of New York and of the foreign jurisdiction where the claims accrued” trumps 28 USC § 1367(d) and CPLR 205(a), which toll the statute of limitations to allow plaintiffs to re-file dismissed federal suits in state court, in situations where the foreign jurisdiction has no analogous tolling statute). See the transcript and the video.
  • Docket No. 109: Morpheus Capital Advisors LLC v. UBS AG (considering the effect of an exclusive agency agreement where the buyer was procured by the seller, not a third-party). See the transcript and the video.
  • Docket No. 112: Quadrant Structured Products Co., Ltd. v. Vertin (addressing the following question certified from the Delaware Supreme Court: whether, under New York law, the absence of any reference in the no-action clause to the Securities precludes enforcement only of contractual claims arising under the Indenture, or whether the clause also precludes enforcement of all common law and statutory claims that security holders as a group may have). See the transcript and the video.
  • Docket No. 110: KeySpan Gas East Corporation v. Munich Reinsurance America, Inc. (considering whether insurers have a common law duty to make a coverage determination as soon as reasonably possible or forfeit their right to deny coverage). The transcript and video  are not available due to technical difficulties.

Transcripts and Videos of Arguments in the Court of Appeals for the Week of April 28, 2014, Now Available

Transcripts and audio/video recordings of arguments in the Court of Appeals for the week of April 28, 2014, are now available on the Court of Appeals website.

On April 28, 2014, we noted one case of interest from the oral arguments for the week of April 28, 2014:

  • Docket No. 96: IDT Corp. v. Tyco Group, S.A.R.L. (addressing the duration of a party’s obligation to negotiate final terms of an agreement when they have contractually obligated themselves to negotiate such terms). See the transcript and listen to the recording of oral the argument.

Order is Not Appealable Merely Because it Contains Language or Reasoning that a Party Deems Adverse to its Interests

On April 30, 2014, the Second Department issued a decision in George Tsunis Real Estate, Inc. v. Benedict, 2014 NY Slip Op. 02899, discussing types of orders that are not interlocutorily appealable.

In George Tsunis Real Estate, the plaintiff and defendant both appealed the trial court’s denial of the plaintiff’s motion for summary judgment. The Second Department dismissed the defendant’s appeal, explaining:

The appeal from so much of the order as, in effect, denied the plaintiff’s motion for summary judgment on the issue of liability must be dismissed, as the defendants are not aggrieved by that portion of the order (see CPLR 5511). Contrary to the defendants’ contention, the order did not grant the plaintiff’s motion for summary judgment on the issue of liability, but determined that, although the plaintiff made a prima facie showing of its entitlement to judgment as a matter of law, the defendants raised a triable issue of fact as to whether the action is barred by the applicable statute of limitations. To the extent the defendants seek to appeal from the finding that the plaintiff made a prima facie showing of entitlement to judgment as a matter of law, merely because the order appealed from contains language or reasoning that a party deems adverse to its interests does not furnish a basis for standing to take an appeal.

The appeal from so much of the order as denied that branch of the defendants’ cross motion which was to preclude the plaintiff from offering certain evidence at the time of trial must be dismissed because it concerns an evidentiary ruling, which, even when made in advance of a hearing or trial on motion papers, is not appealable as of right or by permission.

(Internal quotations and citations omitted) (emphasis added).

This decision shows that, as broad as the right to take an interlocutory appeal is in New York, it is not unlimited.