Justia Contracts Opinion Summaries

Articles Posted in New York Court of Appeals
by
The case involves Consolidated Restaurant Operations (CRO), a company that owns and operates dozens of restaurants, and Westport Insurance Corporation (Westport). CRO had an "all-risk" commercial property insurance policy with Westport, which covered "all risks of direct physical loss or damage to insured property." When the COVID-19 pandemic hit, causing CRO to suspend or substantially curtail its operations due to the presence of the virus in its restaurants and government restrictions on nonessential businesses, CRO sought coverage for the ensuing loss of revenue. Westport denied coverage, stating that the coronavirus did not cause "direct physical loss or damage" to CRO's properties. CRO filed a lawsuit seeking a declaration of Westport's obligations under the policy and damages for breach of contract.The Supreme Court of New York dismissed the complaint, declaring that the policy did not cover CRO's alleged losses. The Appellate Division affirmed this decision, interpreting "direct physical loss or damage" to require a tangible alteration of the property, which CRO had not demonstrated.The case was then brought to the New York Court of Appeals. The court held that "direct physical loss or damage" requires a material alteration or a complete and persistent dispossession of insured property. The presence of the virus in the restaurants and the resulting cessation of in-person dining services did not meet this requirement. The court thus affirmed the lower courts’ dismissal of the complaint. View "Consolidated Rest. Operations, Inc. v Westport Insurance Corp." on Justia Law

by
The Court of Appeals answered in the affirmative a certified question asked by the United States Court of Appeals for the Second Circuit asked the Court of Appeals in this case centering around a life insurance policy providing that "assignment will be effective upon Notice" in writing to the insurer.Specifically, the Court of Appeals answered that, when a life insurance policy provides that "assignment will be effective upon Notice" in writing to the insurer, the insured's failure to provide to the insurer written notice of the policy's assignment voids the assignment so that the purported assignee does not have contractual standing to bring a claim under the policy. Accordingly, the Court held that the insured in this case lacked authority under the contract at issue to sue the insurer. View "Brettler v. Allianz Life Insurance Co. of North America" on Justia Law

by
The Court of Appeals answered in the negative the question of whether Insurance Law 3203(a)(2), which requires insurers to refund a portion of a life insurance premium "if the death of the insured occurs during a period for which the premium has been paid," holding that the plain language of section 3203(a)(2) does not apply to discretionary payments like those at issue in this case.In this action concerning a contract for a life insurance policy entered into between a family trust with Defendant, Plaintiff, as trustee of the trust, filed this putative class action against Defendant for breach of contract, alleging that its refusal to refund a prorated portion of the final year's planned premium violated section 3203(a)(2). The federal district court granted Defendant's motion to dismiss, concluding that section 3203(a)(2) did not require the refund. The federal court of appeals certified to the Court of Appeals a question of law. The Court of Appeals answered that section 3203(a)(2) did not apply to discretionary payments like those at issue in this case. View "Nitkewicz v. Lincoln Life & Annuity Co. of N.Y." on Justia Law

by
The Court of Appeals modified the decision of the appellate division in this case challenging the devaluation of certain securities, holding that the relevant language in the governing agreements did not impose an affirmative duty on the part of the trustee to enforce repurchase obligations.Plaintiffs were commercial banks incorporated in Germany that invested in residential mortgage-backed securities issued by securitization trusts. Defendants served as trustees for the trusts. When the securities lost significant value in 2008, Plaintiffs sued, alleging that Defendants breached multiple statutory, contractual, and fiduciary duties. Supreme Court rejected Defendants' argument that the action was barred because Plaintiffs did not comply with the requirements of the no-action clause. The appellate division affirmed. The Court of Appeals affirmed as modified, holding (1) failure to comply with the no-action clause did not bar this suit; and (2) this Court declines to recognize an implied contractual duty on Trustees' part to enforce the repurchase protocol obligations of other parties. View "IKB Int'l S.A. v Wells Fargo Bank, N.A." on Justia Law

by
The Court of Appeals affirmed the judgment of the Appellate Division dismissing Plaintiffs' claims that Taxi and Limousine Commission and New York City breached the implied covenant of good faith and fair dealing and engaged in deceptive business practices under N.Y. Gen. Bus. Law 349, holding that Plaintiffs failed to state a claim.Plaintiffs, entities that purchased government licenses to operate taxis at an auction, brought this action alleging that Defendants (1) breached the implied covenant of good faith and fair dealing by failing to enforce certain licensing requirements against smartphone applicate-based competitors such as Uber Technologies, Inc. and Lyft, Inc.; and (2) engaged in deceptive business practices in their promotion of the auction. Supreme Court granted in part Defendants' motion to dismiss. The Appellate Division reversed in part and concluded that both claims should be dismissed. The Court of Appeals affirmed, holding (1) Plaintiffs did not adequately plead a claim for breach of the implied covenant of good faith and fair dealing; and (2) Plaintiffs failed to plead the type of conduct covered by N.Y. Gen. Bus. Law 349. View "Singh v. City of New York" on Justia Law

by
The Court of Appeals reformulated a question certified to it by the United States Court of Appeals for the Eleventh Circuit and concluded that Plaintiff's allegations did not state a cognizable cause of action for breach of the implied contract of good faith and fair dealing.At issue was whether Plaintiff sufficiently pled a cause of action for breach of the implied contract under New York law by alleging that, during a Structured Settlement Protection Act proceeding, the structured settlement obligor and the issuer of an annuity funding the settlement failed to enforce the anti-assignment provisions contained in structured settlement and qualified assignment agreements. The Court of Appeals answered the question, as reformulated, in the negative, holding that Plaintiff failed to meet its burden of proving an implied promise in this case. View "Cordero v. Transamerica Annuity Service Corp." on Justia Law

by
In this dispute between two Major League Baseball (MLB) teams and their co-owned regional sports network the Court of Appeals affirmed as modified the judgment of the court of appeals affirming the confirmation of a second arbitration award and directed that a money judgment be vacated, holding that the highly sophisticated parties were bound to the terms of their agreement.In this dispute regarding the fair market value of certain telecast rights Plaintiffs sought to vacate an arbitration award granted by the MLB's Revenue Sharing Definitions Committee (RSDC). Supreme Court vacated the arbitration award based on the RSDC's evident partiality, and the appellate division affirmed. After a second hearing, the RSDC entered a second award. Supreme Court affirmed, and the appellate division affirmed. The Court of Appeals affirmed as modified, holding (1) the courts below correctly confirmed the second arbitration award; and (2) the order must be modified because Supreme Court erred by awarding prejudgment interest and rendering a money judgment. View "TCR Sports Broadcasting Holding, LLP v. WN Partner, LLC" on Justia Law

by
The Court of Appeals reversed the judgment of the appellate division affirming the judgment of Supreme Court granting Defendant's motion to dismiss this breach of contract action for lack of personal jurisdiction, holding that jurisdiction was proper under New York's long-arm statute, N.Y. C.P.L.R. 302(a)(1).Defendant, a Delaware corporation headquartered in Michigan, designed and manufactured unmanned aerial vehicles (UAV). Defendant sold two UAVs to the State University of New York at Stony Brook for delivery in Madagascar. The State commenced this action on behalf of the university following a dispute regarding the operability of the UAVs, alleging breach of contract and other claims. Supreme Court granted the motion, and the appellate division affirmed. The Court of Appeals reversed, holding that there was personal jurisdiction over Defendant pursuant to the "transacts any business" clause of New York's long-arm statute. View "State v. Vayu, Inc." on Justia Law

by
The Court of Appeals held that Plaintiffs' original complaint alleging that Defendant breached the parties' written insurance policy and that Plaintiffs had fully complied with the requirements contained in the policy failed to give Defendant the requisite notice of the "transactions, occurrences, or series of transactions or occurrences, to be proved" in support of Plaintiff's reformation claim, as required under N.Y. C.P.L.R. 203(f).Defendant, an insurance company, issued Plaintiffs, two limited liability companies, a multi-million dollar, written insurance policy covering many of Plaintiffs' vacant commercial properties. Plaintiffs later brought this action for breach of contract seeking damages based on Defendant's failure to cover damages incurred after a fire on the premises. A jury returned a verdict in favor of Plaintiffs on the reformation claim, and the appellate division affirmed. The Court of Appeals reversed, holding that Plaintiffs' complaint failed to give notice to Defendant of the transactions or occurrences on which Plaintiffs based their reformation claim. View "34-06 73, LLC v. Seneca Insurance Co." on Justia Law

by
The Court of Appeals reversed the order of the appellate division in this case, holding that an indemnification provision in the partnership agreement between Plaintiff and Defendant lacked express language or indicia of the parties' "unmistakably clear" intent to indemnify each other for attorney's fees in an action between them concerning the contract.After Defendant unsuccessfully brought a partnership dissolution action Plaintiff commenced this action seeking attorney's fees and costs incurred defending the dissolution action, claiming that Defendant waived the benefit of the American Rule, under which a prevailing party in litigation generally may not recover attorney's fees from the losing party, by agreeing to the indemnification provision in the parties' partnership agreement. Supreme Court granted summary judgment for Defendant, and appellate division affirmed. The Court of Appeals affirmed, holding that nothing in the agreement made "unmistakably clear" that the partners intended to permit recovery for attorney's fees in an action between them on the contract. View "Sage Systems, Inc. v. Liss" on Justia Law