Source: https://www.pbwt.com/ny-commercial-division-blog/
Timestamp: 2019-04-26 15:46:44+00:00

Document:
In considering a motion to dismiss related to a real estate development joint-venture gone bad, a recent decision by Justice Andrea Masley in 3P-733, LLC v Davis (No. 650800/2018 [N.Y. Sup. Ct., N.Y. Cty., April 2, 2019]) highlights several issues that frequently arise at the motion to dismiss stage in the Commercial Division.
On April 11, 2019, the First Department unanimously affirmed a decision issued by Justice Shirley Werner Kornreich, formerly of the Commercial Division, which denied the plaintiffs’ motion for final approval of a class action settlement in City Trading Fund v. Nye (2019 NY Slip Op 02789). This was the second time the Appellate Division had considered Justice Kornreich’s denial of approval of a settlement in this case, having reversed her prior denial of preliminary approval of the settlement in November 2016 and remanding the case for a fairness hearing in order to review the settlement terms.
In Mountain & Isles, LLC v. Gillz, LLC, Justice Masley of the Commercial Division provided a useful reminder of the continuing vitality of New York’s “automatic renewal doctrine” for contracts and its limitations.
At her annual State of the Judiciary speech held on February 26, 2019 at Bronx County Supreme Court, Chief Judge Janet DiFiore announced that the Commercial Division will be expanding to Bronx County, effective April 1, 2019. The Chief Judge explained that this expansion was in recognition of the Bronx’s ongoing economic resurgence and the growing number of commercial cases being filed there. There has not yet been any announcement as to the jurisdiction of this new part or which judges will be assigned to it.
In Magomedov et al. v. Lebedev et al., an opinion dated February 19, 2019, Justice Saliann Scarpulla of the Commercial Division dismissed most claims related to a Russian oil joint venture as time-barred under the statute of limitations. The case also raises the issue of waiver of personal jurisdiction by bringing related lawsuits within New York.
Following Justice Charles Ramos’s retirement from the Commercial Division at the end of last year, commercial practitioners have awaited an announcement reallocating responsibility for the Division’s international arbitration matters. Since 2013, all international arbitration cases filed in the Commercial Division—including those arising under CPLR Article 75 and the Federal Arbitration Act, 9 U.S.C. § 1 et seq.—had been assigned to Justice Ramos as part of an effort to establish a dedicated part specializing in the international arbitration field.
Arbitration is a matter of contract and, as such, non-parties generally cannot be compelled to arbitrate under agreements that they have not signed or agreed to. In IQVIA RDS Inc. v. Eisai Co. Ltd., the Commercial Division recently highlighted two exceptions to this general rule. Although the Court ultimately found neither exception to be applicable, the case raises important issues that merit attention.
On December 5, 2018, New York’s Chief Administrative Judge, Lawrence K. Marks, issued an administrative order amending Commercial Division Rule 3(a), which addresses alternative dispute resolution (“ADR”). This new amendment encourages opposing counsel to work together to select a mediator for commercial cases, including by consulting rosters of neutral mediators provided by Commercial Division courts.
Coast-to-Coast-Energy-Inc-v-Ga.pdfIn corporate fraud suits, it is common for plaintiffs to file claims against executives in their capacity as corporate officers. However, to succeed on a corporate-capacity claim, a plaintiff must be able to show that the corporate veil should be pierced so as to hold an officer personally liable for the corporation’s legal obligations. This issue is illustrated by the Commercial Division’s recent decision in Coast to Coast Energy, Inc. v. Gasarch.
The arrival of the new year is a bittersweet time for the Commercial Division as it bids farewell to two of its most senior judges: Justice Charles E. Ramos and Justice Eileen Bransten. Notably, both will be staying on to serve the Court as Judicial Hearing Officers.
Commercial Division practitioners have had their eye on upcoming vacancies on the Division’s bench for some time. As we have reported in the past, two new justices, Hon. Andrea Masley and Hon. Jennifer G. Schecter, joined the Division in the last year. The Bar has been eagerly awaiting word as to who would fill two additional vacancies that will open up at the end of this year.
Parties to arbitration proceedings at times decide to forego a written decision by the arbitration panel explaining the basis for their arbitration award. While doing so may reduce the costs of arbitration and can provide other strategic advantages, it also makes it more likely that the Commercial Division will find the award unreviewable. This point is exemplified by the recent decision by Justice Charles E. Ramos of the Commercial Division in NSB Advisors, LLC v. C.L. King & Associates, Inc.
On October 16, 2018, the Appellate Division, First Department lifted several injunctions granted by the Commercial Division that had restrained a proposed merger deal between Xerox and Fujifilm (“Fuji”), and dismissed the Xerox shareholders’ actions against Fuji.
On September 17, 2018, new statewide appellate practice rules took effect in an effort to harmonize the procedures governing appeals to New York’s four Appellate Divisions. Prior to the adoption of these new rules, the procedural aspects of appeals were governed by individual rules unique to each Appellate Division, which resulted in some significant differences in practice between these appeals courts.
In Rebecca Broadway LP v. Thibodeau, Justice Andrea Masley of the Commercial Division denied plaintiff Rebecca Broadway Limited Partnership’s (“RBLP”) motion to set aside a damages verdict after it prevailed at trial against Defendant Marc Thibodeau (“Thibodeau”) on claims for breach of contract and tortious interference with business relationships. The case raised issues of whether a jury’s damages verdict is supported by a rational interpretation of the trial evidence and the circumstances under which a retrial solely on the issue of damages is appropriate.
On April 27, 2018, Justice Barry Ostrager of the Commercial Division enjoined a no-cash transaction that would have granted Fujifilm (“Fuji”) a 50.1% controlling interest in Xerox. Just days after the Court’s decision an agreement was reached whereby the CEO of Xerox, Jeff Jacobson, and six other current Xerox board members would step down from their positions, ceding control of the company to representatives of investors Carl Icahn and Darwin Deason. Shortly thereafter, Xerox reversed course, indicating publically that Jacobson would stay on as CEO. However, ultimately Xerox entered into a settlement agreement with Icahn and Deason resulting in the resignation of Jacobson and the scuttling of the Fuji Deal.
In Royal Wine Corp. v. Cognac Ferrand SAS, Justice Andrea Masley of the Commercial Division denied Plaintiff Royal Wine Corporation’s (“Royal”) motion for a preliminary injunction to enjoin arbitration that defendant Cognac Ferrand SAS (“Cognac”) initiated against Royal’s alleged alter ego, Mystique Brands, LLC (“Mystique”).[i] The case raised the issue of whether a non-party to an arbitration agreement has standing to assert defenses on behalf of an alleged alter ego while nevertheless denying the alter ego relationship.
Please be sure to check out Muhammad U. Faridi and Benjamin F. Jackson’s post on the Commercial Division as an alternative to private arbitration over at Harneys’ Offshore Litigation Blog: http://harneysoffshorelitigation.com/10-minutes-with-pbwt/. We’ll be covering this topic as part of our upcoming March 26, 2018 CLE program on Cost-Effective Commercial Litigation in New York’s Commercial Division, which will be presented as a webinar on Bloomberg Next.

References: v. 
 v. 
 v. 
 § 1
 v. 
 v. 
 v. 
 v. 
 v.