Justia Contracts Opinion Summaries

Plaintiffs (collectively, “Pegasus”) sued one defendant (“VarigLog”) for breach of contract and conversion and sought to hold other defendants (“MP defendants”) liable for VarigLog’s conduct on an alter ego theory. Pegasus served a notice to produce documents seeking electronically stores information (ESI) concerning Pegasus’s claims and VarigLog’s relationship with the MP defendants. VarigLog’s production was unsatisfactory to Pegasus. Supreme Court appointed a discovery referee to assist Pegasus and VarigLog in resolving the dispute. During the conferences it was established that computer crashes resulted in the loss of much of the ESI, and that data recovery efforts had proven unsuccessful. Pegasus moved for the imposition of spoliation sanctions against VarigLog and the MP defendants. Supreme Court granted the motion, concluding that the evidence was negligently destroyed. The Appellate Division reversed. The Court of Appeals reversed, holding that the Appellate Division erred in determining that Pegasus had not attempted to make a showing that the destroyed documents were relevant to its claim. Remanded to the trial court for a determination as to whether the evidence was relevant to the claims asserted against Defendants and for the imposition of an appropriate sanction should the trial court decide that a sanction is warranted. View "Pegasus Aviation I, Inc. v Varig Logistica S.A." on Justia Law

In IRB-Brasil Resseguros, S.A. v. Inepar Invs., S.A., the Court of Appeals held that, where parties include a New York choice-of-law clause in a contract, such a provision demonstrates the parties’ intent that courts not conduct a conflict-of-laws analysis. In the instant case, Plaintiff was a New York not-for-profit corporation that administered a retirement plan and a death benefit plan. Decedent was enrolled in both plans. Decedent named Appellants as beneficiaries. Both plans stated that they shall be governed by and construed in accordance with New York law. After Decedent died, a Colorado court admitted his will to probate. Plaintiff was unsure to whom the plan benefits should be paid after Decedent’s death and commenced a federal interpleader action against Decedent’s Estate, the personal representative (PR) of the Estate, and Appellants. A federal district court directed Plaintiff to pay the disputed funds to the PR, concluding that Colorado’s revocation law terminated any claims to the plans by Appellants. On appeal, the Second Circuit Court of Appeals certified questions to the Court of Appeals. The Court of Appeals answered by extending the holding in IRB to contracts that do not fall under Gen. Oblig. Law 5-1401 and clarifying that this rule obviates the application and both common-law and conflict-of-laws principles and statutory choice-of-law directives, unless the parties expressly indicate otherwise. View "Ministers & Missionaries Benefit Bd. v. Snow" on Justia Law

James Pyne, who died during these proceedings, was the founder and sole stockholder of Remet Corporation. Pyne sold Remet’s stock and facilities, along with real property he had been leasing to Remet, to Burmah Castro Holding, Inc. The sales agreement contained an indemnification provision obligating Pyne to indemnify, defendant, and holder the buyer harmless for certain environmental losses. Remet later received a letter from the Department of Environmental Conservation (DEC) notifying Remet that it was a potentially responsible party for environmental contamination at the Erie Canal Site adjacent to Remet’s real property. Remet filed notices of claim against Pyne’s estate seeking indemnification for environmental liabilities under the sales agreement. Remet then brought this action against the Estate asserting claims for contractual and common-law indemnification. Supreme Court granted Remet summary judgment on liability. The Appellate Division reversed, concluding that DEC’s letter did not require Remet to take action. The Court of Appeals reversed, holding (1) the letter was sufficiently coercive and adversarial as to require action in connection with any environmental law pursuant to the sales agreement; and (2) Remet was entitled to contractual indemnification for past and future environmental losses arising out of DEC’s investigation and remediation of the Erie Canal Site. View "Remet Corp. v. Estate of Pyne" on Justia Law

Plaintiff sued several defendants in the Delaware Court of Chancery for alleged wrongdoing related to notes purchased by Plaintiff and issued by one of the defendants. Defendants moved to dismiss, claiming that Plaintiff’s claims were barred by a no-action clause contained in the indenture agreement governing Plaintiff’s notes. The Delaware Supreme Court remanded the case for the Court of Chancery for consideration of the issues under New York law. On remand, the Court of Chancery concluded that the majority of Plaintiff’s claims were not barred under the no-action clause and that dismissal and partial dismissal were warranted with respect to the remaining claims because only those claims arose under the indenture. In response to certified questions from the Delaware Supreme Court, the Court of Appeals concluded (1) a trust indenture’s no-action clause that specifically precludes enforcement of contractual claims arising under the indenture, but omits reference to “the Securities,” does not bar a securityholder’s independent common law or statutory claims; and (2) the Court of Chancery correctly found that the no-action clause in this case, which referred only to “this Indenture,” precluded enforcement only of contractual claims arising under the Indenture. View "Quadrant Structured Prods. Co., Ltd. v. Vertin" on Justia Law

Plaintiff entered into a financial brokerage agreement with Defendant providing that Plaintiff would serve as financial advisor and investment banker in the proposed sale of certain student loan assets owned by Defendant. After Defendant transferred certain distressed assets to a fund created by the Swiss National Bank as part of a 2008 bailout, Plaintiff demanded a commission pursuant to the agreement. Defendant refused to pay. Plaintiff subsequently commenced this action for breach of contract and breach of the covenant of good faith and fair dealing. Supreme Court granted Defendant’s motion to dismiss, concluding that the financial crises and the bailout constituted an unforeseeable event that undermined the purpose of the agreement, which was “the introduction of [Defendant] by [Plaintiff] to a third party buyer.” The Appellate Division reversed. The Court of Appeals reversed, holding that Plaintiffs’ causes of action were conclusively contradicted by the language of the parties’ contract, mandating dismissal of the complaint. View "Morpheus Capital Advisors, LLC v. UBS AG" on Justia Law

IDT Corp. and Tyco International Ltd. litigated and negotiated for fifteen years over the development and use of a telecommunications system. In 2004, IDT claimed that Tyco breached its obligation under a 2000 settlement agreement to negotiate additional agreements in good faith. The Supreme Court dismissed the complaint, concluding that IDT’s claim was unsupported by the record. After the Court’s decision, more negotiations took place. In 2010, IDT again sued Tyco for breach of contract and breach of the duty to negotiate in good faith. The Court of Appeals rejected IDT’s claim, holding that the parties’ obligation to negotiate in good faith came to an end without a breach by either party because the parties had reached a “good faith impasse.” View "IDT Corp. v Tyco Group, S.A.R.L." on Justia Law

At issue in this case was N.Y. C.P.L.R. 3101(a)(4), which allows a party to obtain discovery from a nonparty. John Kapon was the CEO of Acker, Merrall & Condit Company (AMC), a retailer and auctioneer of fine and rare wines, and the employer of Justin Christoph. In 2008, William Koch commenced an action against AMC in Supreme Court concerning alleged counterfeit wine that Rudy Kurniawan had consigned to AMC and that AMC had sold to Koch. In 2009, Koch commenced a fraud action in California against Kurniawan, alleging that Kurniawan had sold Respondent counterfeit wine through AMC’s auctions and sales. In 2012, Koch, seeking disclosure in the California action, served subpoenas on Kapon and Christoph (together, Petitioners). Petitioners filed motions to quash the subpoena, which Supreme Court denied. The Appellate Division affirmed, concluding that Petitioners failed to show that the requested deposition testimony was irrelevant to the prosecution of the California action. The Court of Appeals affirmed, holding (1) the subpoenas satisfied the notice requirement of section 3101(a)(4); and (2) in moving to quash the subpoena, Petitioners failed to meet their burden of establishing that their deposition testimonies were irrelevant to the California action. View "Kapon v. Koch" on Justia Law

Appellants retained Mary Dorman to represent them in a lawsuit. During the litigation, Dorman and Appellants entered into three separate retainer agreements pertaining to Dorman’s work on the trial, on the appeal to the Appellate Division, and on the appeal to the Court of Appeals. A jury ruled in Appellants’ favor, awarding them $986,671 in damages. Dorman was awarded $296,826 for her trial work. The verdict and trial fee awards were upheld on appeal. Dorman subsequently requested fees for her appellate work, and Supreme Court awarded Dorman $233,966. After a monetary dispute arose between Dorman and Appellants, Dorman sought a declaratory judgment to enforce the three retainer agreements. Supreme Court granted Dorman’s motion, and the Appellate Division affirmed, concluding that Dorman correctly interpreted the fee calculation. The Court of Appeals modified the Appellate Division order with regard to the trial agreement and otherwise affirmed, holding (1) the trial agreement entitled Dorman to one third of the jury award; and (2) because the trial agreement did not address the treatment of statutory counsel fees, Dorman was entitled to the more generous alternative of either one third of the jury verdict or the statutory award for her trial work. View "Albunio v. City of New York" on Justia Law

In 2004, Plaintiff, a manufacturer and distributor of medical devices, and Defendant, the developer and manufacturer of CoStar, a coronary stent, entered into an agreement designating Plaintiff as the exclusive distributor of CoStar for a worldwide market territory. In 2007, Defendant notified Plaintiff that it was recalling CoStar and removing it from the worldwide market. Plaintiff subsequently sued Defendant for breach of contract, seeking damages for lost profits related to its resale of the stents. Supreme Court granted summary judgment in favor of Defendant on the issue of damages, concluding that the lost profits sought by Plaintiff were consequential damages and subject to the agreement’s damages limitation provision. The court subsequently dismissed the complaint because, by denying Plaintiff lost profits as a remedy, the court effectively ended the lawsuit. The Appellate Division affirmed, concluding that Plaintiff’s claim was barred by the agreement’s limitation on consequential damages. The Court of Appeals reversed, holding that, under the parties’ exclusive distribution agreement, the lost profits constituted general damages, which fell outside the scope of the agreement’s limitation on recovery. View "Biotronik A.G. v. Conor Medsystems Ireland, Ltd." on Justia Law

Plaintiffs brought legal malpractice claims against Jeffrey Daniels, American Guarantee & Liability Insurance Company’s insured. American Guarantee wrongly refused to defend the claims. A default judgment was entered against Daniels, who assigned his rights against American Guarantee to Plaintiffs. Plaintiffs then brought the present action seeking to enforce American Guarantee’s duty to indemnify Daniels for the judgment. Summary judgment was awarded in favor of Plaintiffs. The Appellate Division affirmed. The Court of Appeals affirmed, concluding that American Guarantee’s breach of its duty to defend barred it from relying on policy exclusions as a defense to the present lawsuit. The Court later granted reargument, vacated its prior decision, and reversed the Appellate Division’s order, holding (1) under controlling precedent, American Guarantee was not barred from relying on policy exclusions as a defense; and (2) the applicability of the exclusions American Guarantee relied on presented an issue of fact sufficient to defeat summary judgment. View "K2 Inv. Group, LLC v. Am. Guar. & Liab. Ins. Co." on Justia Law