In Torricelli v. VB Asset Management, LLC, 23-CV-9176 (VEC), 2024 WL 1718820 (S.D.N.Y. Apr. 22, 2024), the court applied two seemingly contradictory doctrines when dismissing an alter-ego based breach of contract claim under Delaware law and a claim for tortious interference with contract under New York law, each brought against an investment company concerning a contract with its wholly-owned subsidiary. The court’s decision highlights the fact that courts will respect the twin realities of corporate separateness and a parent company’s role in overseeing its subsidiary… Read more
Michael C. Rakower
Alter Ego Liability Requires More than Dominion or Control
In Aaron Richard Golub, Esquire, P.C. v. Blum, 23-cv-10102 (S.D.N.Y. Apr. 1, 2024), the court dismissed a claim for quantum meruit asserted against an owner of the co-defendant corporation because the complaint failed to plead sufficiently that the owner’s alleged dominion over the defendant corporation caused the plaintiff’s alleged injury… Read more
Fiduciary Duty Established by Contract May Be Released by Contract, Too
In Stephanie Clegg v. Sotheby’s, 23-cv-01995, 2003 WL 8281487 (S.D.N.Y. Nov. 30, 2023), the Southern District of New York held that the fiduciary duties of a consignee could be defined by a written consignment agreement and further modified by subsequent written agreements between the parties… Read more
Federal Court Declines to Exercise Jurisdiction Over New York Plaintiffs’ Class Action Against Foreign Corporation Where NY Subsidiary Was Principally Liable for Plaintiffs’ Alleged Injuries
In St. John v. Adesa, Inc., 22-CV-1257 (E.D.N.Y. Sept. 21, 2023), the court dismissed plaintiff’s nascent class action under the Local Controversy Exception to CAFA jurisdiction, after joining defendant’s local subsidiary as a defendant… Read more
Court Grants Preliminary Injunction to Preserve Status Quo in Business Dispute
In Yee v. Chen, Index No. 704057/23 (N.Y. Sup. Ct., Queens Cnty. Sep. 27, 2023), the court granted a preliminary injunction to preserve the status quo of the parties’ business pending resolution of claims concerning misconduct by the managing member… Read more
Statute of Frauds Did Not Preclude Enforcement of Oral Agreement for the Payment of Money Over Period of Years
In Robinson v. Synergy Alternative Capital, LLC, 652043/2020 (N.Y. Sup. Ct., N.Y. County), the court held that the statute of frauds did not preclude enforcement of an alleged oral agreement to pay a discretionary bonus over a period of several years, where the company could have paid the bonus within one year… Read more
Electronic Service on Defendants Governed by Hague Convention Permissible when Physical Addresses Are Not Reasonably Ascertainable
In The Kyjen Company, LLC v. The Individuals, Corporations, Limited Liability Companies, Partnerships, and Unincorporated Associations Identified on Schedule A to the Complaint, 1:23-cv-00612-JHP (S.D.N.Y.), the Court permitted electronic service of process on certain foreign defendants, even though such service generally would have been prohibited under international law… Read more
Declaratory Judgment Claim Dismissed on Ripeness Grounds Where Too Many Contingent Events Exist for Plaintiff to Show Actual or Threatened Imminent Harm
The parties in Berardi v. Berardi, Case No. 22-CV-00159, are the owners of certain companies that provide public transportation services throughout New York State and other surrounding areas under various trade names including Trailways and Coach. The parties entered into a post-nuptial agreement providing that upon dissolution of their marriage, plaintiff would own 49% of the companies and defendant would own 51%. The parties were divorced in 2009… Read more
Turkey’s Conversion and Replevin Action to Recover 6,000-Year-Old Statute Denied for Failure to Show Ownership and for Sleeping on Rights
After a dispute arose over the ownership of the “Stargazer,” a six-thousand-year-old marble statuette, the Republic of Turkey commenced an action in the Southern District of New York seeking the return of Stargazer, alleging claims for conversion and replevin against auction house Christie’s, Inc., as the possessor, and Michael Steinhardt, as the owner. According to Turkey, the figurine was unlawfully excavated and smuggled out of its borders. Following an eight-day bench trial, the district court held that Turkey failed to establish by a preponderance of the evidence that it owned Stargazer, and that, in any event, the defendants established the equitable defense of laches. Turkey appealed… Read more
Arbitration Clause Does Not Apply When Consideration of Agreement Is Not Necessary to Determine the Merits of Claims
The Federal Arbitration Act (the “FAA”) embodies a strong federal policy in favor of arbitration. When the existence of an arbitration agreement is undisputed, any doubts as to whether a claim falls within the scope of that agreement should be resolved in favor of arbitrability. Despite the broad reach of the FAA, a recent decision issued in Salgado v. NYC Medical Practice P.C. d/b/a Goals Aesthetics & Plastic Surgery, 22-CV-06910(LAK)(SN), 2022 WL 17974915 (S.D.N.Y. Dec. 28, 2022) illustrates that claims may bypass arbitration if the agreement providing for arbitration need not be considered to determine if such claims are meritorious… Read more
Rescission of Contract Inappropriate Where Breach Did Not Defeat the Purpose of the Parties’ Agreement
In Argutto v. J.P. Hunter Co., Inc., Case No. 623638/2018 (Sup. Ct. Suffolk County, Sep. 22, 2022), the court denied a motion for summary judgment seeking rescission of a contract where the defendant’s breach, though consequential, was not so fundamental as to defeat the purpose of the contract… Read more
New York Choice of Law Provision, Standing Alone, Does Not Confer Personal Jurisdiction
As illustrated in a decision by the New York Supreme Court in Five Star Logistics LLC v. Innovasian Cuisine Enters. Inc., Index No. 653357/2022 (N.Y. Sup. Ct. Nov. 22, 2022), a New York choice of law provision, standing alone, will not confer personal jurisdiction over a defendant… Read more