Cross Motion to Dismiss Dissolution Petition Cannot Be Based on Disputed Facts: Matter of Langella v Front Door Assoc. Inc.
In a January 13, 2012 decision by Justice Whelan, the court denied a motion to dismiss a dissolution proceeding brought under Business Corporation Law § 1104-a to dissolve two different businesses. Respondents moved to dismiss both proceedings, arguing that Petitioner did not own the requisite number of shares (20% of each entity) necessary to obtain dissolution. Respondents also raised issues of fact, disputing Petitioner’s claims of wrongful conduct. The court denied the motion, finding that a cross-motion to dismiss a special proceeding can only be based on “objections in points of law,” not disputed issues of fact. Also, the court found that there were disputed issues of fact whether Petitioner owned the requisite number of shares to bring a dissolution action, and while this was a threshold issue to bringing a dissolution proceeding, the court would determine petitioner’s percentage ownership in the corporation at the same time it determined the ultimate merits of the petition.
Matter of Langella v Front Door Assoc. Inc., Sup Ct, Suffolk County, January 13, 2012, Whelan, J, Index No. 27189-11.
Affirmative Defenses are Barred by Guaranty's Express Waiver Provision: J. Remora Maintenance LLC v Efromovich
In a January 4, 2012 decision by Justice Fried, the court granted the plaintiff’s motion for summary judgment to enforce a guaranty executed by the defendant in connection with the plaintiff’s sale of its interest in a company to a third party. The court found that because the two express conditions set forth in the guaranty for its enforcement were met, the plaintiff established entitlement to summary judgment as a matter of law. The court then determined that the defendant failed to raise an issue of fact through its affirmative defenses of fraudulent inducement and lack of consideration. Based on the Court of Appeal’s decision in Citibank v Plapinger, the court concluded that an express waiver contained in the guaranty barred the defendant from asserting the substantive defenses. The court rejected the defendant’s argument that the waiver did not apply to the two affirmative defenses at issue because it did not contain the words “absolutely and unconditional”, finding that such language was unnecessary under New York law for a waiver to effectively waive substantive defenses. The court also granted the plaintiff’s motion to dismiss the defendant’s fraudulent inducement counterclaim under CPLR § 3016(b) on the grounds that the circumstances surrounding the alleged fraudulent inducement were not alleged in sufficient detail.
J. Remora Maintenance LLC v Efromovich, Sup Ct New York County, January 4, 2012, Fried, J, Index No. 650943/11
Preference to Particular Bidders Did Not Require Acceptance of Bid At Any Cost: Outstanding Transp., Inc. v. Interagency Council of Mental Retardation & Dev. Disabilities, Inc.
In a January 13, 2012 decision by Justice Demarest, the court granted defendant’s motion for summary judgment dismissing the complaint – even though discovery was not complete. The dispute arose from a private bus transportation contract. In a prior contract, the parties agreed that the companies already providing transportation services would be given a “preference” in subsequent contract negotiations. Plaintiff alleged that defendant ignored that preference and awarded the new contract to another bus company. Plaintiff also alleged that it relied on defendant’s false and misleading statements in acquiring new equipment.
The court dismissed plaintiff’s cause of action based on the contract’s preference language because plaintiff’s bid was between 26% and 112% higher than the lowest bidder, negating the preference language because plaintiff’s reading of that language would have required defendant to award plaintiff the contract no matter the amount of plaintiff’s bid. The court also dismissed plaintiff’s implied covenant of good faith and fair dealing cause of action, finding that cause of action could not be used to resurrect a defective breach of contract claim. Also, the court found that there was no basis for plaintiff’s negligent misrepresentation and fraudulent inducement claims because plaintiff failed to, and couldn’t, prove any of the allegations of those claims.
Outstanding Transp., Inc. v. Interagency Council of Mental Retardation & Dev. Disabilities, Inc., Sup Ct, Kings County, January 13, 2012, Demarest, J, Index No. 8338/11.
