Justia Contracts Opinion Summaries

This action arose from practices employed in connection with the handling of claims made under retrocessional reinsurance treaties providing what was known as "non-life" coverage. At issue was the sufficiency and extra-territorial reach of plaintiff's claim under New York State's antitrust statute (Donnelly Act), General Business Law 340 et seq. Plaintiff, a New York branch of a German reinsurance corporation, sued defendants, English based entities engaged in the business of providing retrocessionary reinsurance. The Appellate Division found that the complaint adequately pled a worldwide market. And, while acknowledging that the crucial allegations contained in paragraph 36 of the amended pleading did not separately allege market power, the allegations read together and liberally construed were adequate to that purpose. The Appellate Division granted plaintiff leave to appeal, certifying to the court the question of whether its order reversing the order of Supreme Court was properly made. The court answered in the negative and reversed. Even if the pleading deficiency at issue could be cured and the court perceived no reason to suppose that the formidable hurdle of alleging market power could be surmounted by plaintiff there would remain as an immovable obstacle to the action's maintenance, the circumstance that the Donnelly Act could not be understood to extend to the foreign conspiracy plaintiff purported to described.

Abacus commenced this action against ADT and Diebold to recover damages under tort and contract theories for losses incurred during a burglary of the bank. The court affirmed the dismissal of the complaint with one exception. The court concluded that Abacus had adequately stated a cause of action for breach of contract against ADT for its alleged losses other than losses allegedly sustained by its safe deposit box customers.

Insurer commenced the instant suit against insureds, alleging eight causes of action and requesting a declaration that the insurer's policy provided no coverage or duty to indemnify any amount paid or payable by insured and the plan in an underlying class action suit. At issue was whether the disputed language in an insurance policy extended coverage to alleged violations of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., by insureds. The court reaffirmed fundamental principles of insurance contract interpretation and held that the plain language of the policy did not cover such acts and, therefore, the Appellate Division correctly held that insurer was entitled to summary judgment and a declaration that was not required to indemnify insured in the manner requested.

Plaintiff, a nontenured teacher, commenced this action against defendants asserting causes of action for prima facie tort and tortious interference with prospective contractual relations. The complaint alleged, inter alia, that plaintiff was not granted tenure because of the continuous pressure and influence exerted upon school officials by defendants. At issue was whether defendants' course of conduct in instigating complaints to school authorities against plaintiff was entitled to an absolute privilege under Brandt v. Winchell that would warrant dismissal of plaintiff's cause of actions with prospective contractual rights. Assuming the truth of the allegations in the complaint, the court must at this early stage of the litigation, conclude that defendants' conduct was not immunized by Brandt.

This case arose when defendant agreed in three separate contracts to sell three properties to plaintiffs. At issue was whether a buyer in a damages suit like this one must show that it was ready, willing, and able to close the transaction i.e., that but for the seller's repudiation, the transaction could and would have closed. The court held that in a case alleging that a seller has repudiated a contract to sell real property, the buyers must prove that they were ready, willing, and able to close the transaction. Here, the buyers did submit evidence of their financial condition, but that evidence was not conclusive of the issue. Therefore, whether the buyers were ready, willing, and able to close presented an issue of fact and the buyers' motion for summary judgment should have been denied. The court also held that the courts below erred in deciding as a matter of law that the seller repudiated the contracts by transferring the properties in question. The court held, however, that the courts below were correct in denying the seller's cross-motion for summary judgment.

Plaintiff sued defendant asserting causes of action for breach of fiduciary duty, gross negligence, and breach of contract where the gravamen of the complaint was that defendant mismanaged the portfolio of an entity whose obligations plaintiff guaranteed. At issue was whether the Martin Act, General Business Law art 23-A, preempted plaintiff's common-law causes of action for breach of fiduciary duty and gross negligence. The court agreed with plaintiff that the Martin Act did not preclude a private litigant from bringing a nonfraud common-law cause of action where the Martin Act did not expressly mention or otherwise contemplate the elimination of common-law claims.

This case stemmed from a dispute over the status of a negotiated settlement agreement pertaining to New York City's duty to provide mental health services to certain inmates in its jails. At issue was whether the terms of the agreement expired before plaintiffs filed a motion in Supreme Court seeking to extend the City's obligations. Applying the state's traditional principles of contract interpretation, the court held that plaintiffs sought relief prior to termination of the settlement agreement and their motion was therefore timely filed.

Plaintiffs sued the former spouse of Stephen Walsh, who was a defendant in related actions brought by plaintiffs, alleging that the property derived from Walsh's illegal securities activities went into the former spouse's possession under the parties' separation agreement and divorce decree. At issue, in certified questions to the court, was whether the former spouse had a legitimate claim to those funds, which would prevent plaintiffs from obtaining disgorgement from her. The court held that an innocent spouse who received possession of tainted property in good faith and gave fair consideration for it should prevail over the claims of the original owner or owners consistent with the state's strong public policy of ensuring finality in divorce proceedings.

This case stemmed from Reliance Group Holdings, Inc.'s ("RGH") and Reliance Financial Services Corporation's ("RFS") voluntary petitions in Bankruptcy Court seeking Chapter 11 bankruptcy protection and the trust that was established as a result. The trust subsequently filed an amended complaint alleging actuarial fraud and accounting fraud against respondents. At issue was whether the trust qualified for the so-called single-entity exemption that the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), 15 U.S.C. 77p(f)(2)(C); 78bb(f)(5)(D), afforded certain entities. The court held that the trust, established under the bankruptcy reorganization plan of RGH as the debtor's successor, was "one person" within the meaning of the single-entity exemption in SLUSA. As a result, SLUSA did not preclude the Supreme Court from adjudicating the state common law fraud claims that the trust had brought against respondents for the benefit of RGH's and RFS's bondholders. Accordingly, the court reversed and reinstated the order of the Supreme Court.

Plaintiffs claimed they were fraudulently induced to sell their ownership interests in a company they co-owned with one of the defendants, and fraudulently induced to release defendants from claims arising out of that ownership. At issue was whether the appellate court erred in finding that plaintiffs' claims were barred by the general release they granted defendants in connection with the sale of their interest. The court held that the release was intended to bar the very claims that plaintiffs have brought and that plaintiffs failed to allege that the release was induced by any fraud beyond that contemplated in the release. The court also held that the fraudulent statements plaintiffs point to could not support a conclusion that the release was fraudulently induced, since plaintiffs alleged that they released defendants from claims relating to the sale of their Telmex Wireless Ecuador LLC units without conducting minimal diligence to determine the true value of what they were selling. The court further held that the appellate division majority was therefore correct in concluding that, fully crediting plaintiffs' allegations, they would not be able to prevail as a matter of law. Accordingly, the order of the appellate division was affirmed.