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NY Commercial Case Compendium A Searchable Database of Court Decisions Issued by New York’s Commercial Division

Category Archives: Failure to State a Claim

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DHL’s Fraudulent Inducement Counterclaim against Worldwide Express Operations, LLC Franchisees Dismissed for Failure to State a Cause of Action

Posted in CPLR 3211, Failure to State a Claim, Fraud, Industry: Transportation, Justice Ramos, Charles E., Motion to Compel Discovery, Motion to Dismiss, New York

In a July 1, 2014 Commercial Division decision by Justice Ramos, the court granted the plaintiffs’ motion to dismiss the defendant DHL’s counterclaim for fraudulent inducement. The plaintiffs, all franchisees of Worldwide Express Operations, LLC (“Worldwide”), a former reseller of DHL’s shipping services, argued that DHL failed to state a cause of action. The plaintiffs… Continue Reading

Court Allows County Water Authority to Proceed on Theory of “Market Share Liability” in Products Case

Posted in CPLR 3211, Failure to State a Claim, Industry: manufacturing, Industry: real estate, Justice Pines, Emily, Motion to Dismiss, Negligence, Product Liability, Suffolk

In a June 16, 2014, Suffolk County Commercial Division decision by Justice Pines, the court denied defendants’ motion to dismiss plaintiff’s complaint for failure to state a cause of action. Plaintiff-county water authority brought a products-liability action against the defendant-manufacturers of a chemical used primarily in dry-cleaning machines, alleging groundwater contamination caused by the seepage… Continue Reading

Replacement Buyers of Distressed Property Unable to Demonstrate Good Faith Purchase for Value to Defeat Lender’s Action to Recover Loan

Posted in Breach of Contract, CPLR 3211, Failure to State a Claim, Fraud, Industry: real estate, Justice Demarest, Carolyn E., Kings, Motion to Dismiss, Tortious Interference with Business Relations

In a June 3, 2014, Kings County Commercial Division decision by Justice Demarest, the court denied defendant-replacement buyers’ motion to dismiss plaintiff-lender’s action to recover on a loan made in connection with the renovation and sale of a multi-family apartment building.  The court denied the subsequent buyers’ motion, finding that they failed to demonstrate that… Continue Reading

Forum Non Conveniens is Basis for Dismissal of Korean Company’s Suit against UBS Related to Lost Investment in Credit-Linked Notes

Posted in CPLR 3211, Failure to State a Claim, Forum non Conveniens, Industry: financial services, Justice Ramos, Charles E., Motion to Dismiss, New York, Statute of Limitations

In a May 16, 2014 Commercial Division decision by Justice Ramos, the court granted the defendant’s motion to dismiss.The plaintiff, a Korean company, brought the action to recover $30 million in losses it suffered through its investment in credit-linked notes that the defendant created, arranged, marketed and sold. After it suffered the loss, the plaintiff… Continue Reading

Contractual “Best-Efforts” Obligation Enforceable in Absence of Contractual Standards Where External Circumstances Provide Meaning to Phrase

Posted in Breach of Contract, Breach of Fiduciary Duty, CPLR 3211, Documentary Evidence, Failure to State a Claim, Industry: real estate, Justice Demarest, Carolyn E., Kings, Release

In a May 13, 2014, Kings County Commercial Division decision by Justice Demarest, the court granted in part and denied in part defendant-sponsor’s motion to dismiss plaintiff-condominium board’s action for breach of contract, fraud, and fraudulent conveyance under New York’s Debit and Creditor Law (“DCL”). Factual Background Defendant purchased a Brooklyn industrial building with plans… Continue Reading

Release Provision in Separation Agreement Does Not Insulate Directors from Claims Concerning a Related LLC with Identical Board

Posted in Breach of Contract, Breach of Fiduciary Duty, CPLR 3211, Documentary Evidence, Failure to State a Claim, Industry: real estate, Justice Demarest, Carolyn E., Kings, Release

In an February 24, 2014, Kings County Commercial Division decision by Justice Demarest, the court denied defendant-majority owners’ motion to dismiss plaintiff-minority owner’s action for fiduciary breach and self-dealing in connection with the nominal defendant, a real estate holding LLC.  Defendants’ moved on the basis of a release provision contained in plaintiff’s separation agreement from… Continue Reading

Fall-out from Madoff Ponzi Scheme: Gross Negligence and Breach of Fiduciary Duty Claims against Bank of New York Mellon Dismissed

Posted in Breach of Fiduciary Duty, Documentary Evidence, Failure to State a Claim, Gross Negligence, Industry: financial services, Justice Friedman, Motion to Dismiss, New York, Uncategorized

In an April 15, 2014 Commercial Division decision by Justice Friedman, the court granted the defendant’s (“BNYM’s”) motion to dismiss the complaint. The plaintiffs, three law firms (the “Firms”), were assigned the voluntarily dismissed claims of three related investment funds (the “Rye Funds”), whose limited partners comprised two subclasses in a consolidated federal class action… Continue Reading

Motion to Restore Denied, Despite Reasonable Excuse Being Shown, Where Plaintiff Failed to Demonstrate a Meritorious Cause of Action

Posted in Failure to State a Claim, Industry: real estate, Justice Demarest, Carolyn E., Kings

In an April 7, 2014 Commercial Division decision by Justice Demarest, the court denied the plaintiff’s motion to restore the action to the calendar pursuant to CPLR 3404. The action was brought to enforce a contract for the sale of commercial real estate by the defendant to a non-party purchaser, who allegedly assigned his right… Continue Reading

Court Converts Special Proceeding for Judicial Accounting under CPLR Article 4 to Plenary Action and Denies Application as Premature Summary Judgment Motion

Posted in Accounting, CPLR 3211, CPLR Article 4, Documentary Evidence, Failure to State a Claim, Industry: construction, Justice Demarest, Carolyn E., Kings, Motion to Dismiss, Necessary Joinder of Parties, Partnership, Personal Jurisdiction, Special Proceeding, Uncategorized, Unclean Hands

In a January 17, 2014, decision by Justice Demarest, the court converted an improperly-commenced special proceeding into a plenary action, dismissed defendants’ motion to dismiss, and dismissed as premature plaintiff’s motion for an order directing a judicial accounting. In his petition for an order directing a judicial accounting of certain payments and receipts of partnership… Continue Reading

In Pari Delicto Bars Saudi Arabian Parnterhsip’s Counterclaim for Aiding and Abetting Fraud: Mashreqbank PSC v Ahmad Hamad Algosaibi & Bros. Co.

Posted in Aiding and Abetting, Collateral Estoppel, Comity, CPLR 3211, Failure to State a Claim, Fraud, In pari delicto, Industry: banking, Justice Schweitzer, Melvin L., Motion to Dismiss, New York, Res Judicata

In a July 18, 2013 decision by Justice Schweitzer, the court granted the plaintiff’s (“Mashreqbank”) motion to dismiss the counterclaim. The counterclaim alleged that Mashreqbank aided and abetted fraud of the defendant’s (“AHG”) former manager.  Mashreqbank, a United Arab Emirates (“UAE”) bank, provided a credit facility to AHG, a Saudi Arabian general partnership. AHG’s counterclaim… Continue Reading

On Motion to Dismiss for Failure to State a Cause of Action, Plaintiff’s Assertion of a Defense to Counterclaim Not Determinative of Legal Insufficiency of Claim: Island Tennis, LP v Varilease Fin., Inc.

Posted in Breach of Contract, CPLR 3211, Documentary Evidence, Failure to State a Claim, General Obligations Law 5-901, Justice Whelan, Thomas, Motion to Dismiss, Suffolk

In a January 29, 2013, decision by Justice Whelan, the court denied plaintiff and counterclaim-defendants’ motion to dismiss defendant’s counterclaims.  Plaintiff-tennis club sued defendant-financing company for breach of contract in connection with an equipment lease and purchase agreement.  Defendant countersued, asserting its own breach of contract claims against both plaintiff and additional counterclaim-defendants who served… Continue Reading

Judicial-Proceedings Privilege Inapplicable in the Face of Allegations that Prior Litigation Was Commenced to Harrass and Disparage: Hadar v Pierce

Posted in Aiding and Abetting, Breach of Fiduciary Duty, Civil Conspiracy, CPLR 3211, Defamation, Failure to State a Claim, Industry: real estate, Judicial Proceedings Privilege, Justice Bransten, Eileen, Legal Malpractice, Motion to Dismiss, New York, Res Judicata, Tortious Interference with Business Relations

In a January 4, 2013, decision by Justice Bransten, the court denied defendants’ motion to dismiss under CPLR 3211 [a] [7] plaintiff’s causes of action for defamation, legal malpractice, breach of fiduciary duty, malicious prosecution, civil conspiracy, and other business torts.  Plaintiff-real estate developer sued his father and his father’s lawyers, alleging that they undertook… Continue Reading

RICO Claims Dismissed for Failure to Establish a Racketeering Enterprise: Daskal v Tyrnauer

Posted in Debtor-Creditor, Failure to State a Claim, Fraud, Industry: real estate, Justice Demarest, Carolyn E., Kings, RICO

In an October 22nd decision by Justice Demarest, the court granted the defendants’ motions to dismiss the complaint. Daskal brought the action individually and on behalf of three corporate entities, including Greene LLC, alleging that he was defrauded by the defendants in the diversion of Green LLC’s assets. Daskal formed Greene LLC as vehicle through… Continue Reading

Court Upholds Fraud Claims Based on Allegations of Opinions Expressed by Bank to Induce Plaintiff to Purchase Toxic Securities in Order to Avoid Losses: Basis Yield Alpha Fund (Master) v Goldman Sachs Group, Inc.

Posted in Arbitration, Breach of Contract, Breach of Implied Covenant of Good Faith and Fair dealing, CPLR 301, CPLR 3211, Failure to State a Claim, Forum non Conveniens, Fraud, Good faith and fair dealing, Industry: banking, Industry: financial services, Justice Kornreich, Shirley Werner, Motion to Compel Arbitration, Motion to Dismiss, Motion to Stay Discovery, Negligent Misrepresentation, New York, Personal Jurisdiction, Rescission, Unjust Enrichment

In an October 18, 2012, decision by Justice Kornreich, the court granted in part and denied in part defendant’s motions to compel arbitration and to dismiss the complaint.  Plaintiff-mutual fund sued defendant-investment bank in connection with the purchase of a certain mortgage-backed securities.  Plaintiff alleged that it was induced to purchase the products through false… Continue Reading

Plain Language of Excess D&O Policy Required Underlying Insurers to Pay Limits on Their Own Policies Before Attachment: Forest Labs., Inc. v Arch Ins. Co.

Posted in Ambiguity, Breach of Contract, Contract Interpretation, CPLR 3211, Documentary Evidence, Failure to State a Claim, Fraud, Industry: insurance, Justice Schweitzer, Melvin L., New York

In a September 12, 2012, decision by Justice Schweitzer, the court granted defendant’s motion to dismiss plaintiff’s complaint.  Plaintiff-insured, after settling a securities fraud case for $65 million, sought to recover “unpaid extra claims and defense costs” from defendant-excess insurer, which provided the last $10 million layer of a $70 million tower of directors and… Continue Reading

Investment Advisor’s Desire to Earn Additional Fees Does Not Constitute an Intent to Defraud: SSL II, LLC v John Hancock Life Ins. Co.

Posted in Aiding and Abetting, Breach of Fiduciary Duty, CPLR 3016, CPLR 3211, Failure to Plead with Particularity, Failure to State a Claim, Fraud, General Business Law 349, Industry: financial services, Justice Kornreich, Shirley Werner, Motion to Dismiss, Negligent Misrepresentation, New York, Scienter, Standing, Unjust Enrichment

In a September 28, 2012, decision by Justice Kornreich, the court granted defendants’ motions to dismiss plaintiff’s complaint in its entirety.  Plaintiff, owner of several variable life insurance policies ultimately invested with Bernard Madoff, sued the insurance companies, the investment advisor, and the funds in which the premiums were invested.  Plaintiff asserted a number of… Continue Reading

Complaint for Antitrust Violations related to Airline Special Facility Bonds Dismissed for Failure to State a Cause of Action: Williams v Citigroup, Inc.

Posted in CPLR 3211, Failure to State a Claim, Industry: legal, Justice Fried, Bernard J., Motion to Dismiss, New York, The Donnelly Act, Tortious Interference With Contract, Tortious Interference with Economic Relations

In a June 19, 2012 decision by Justice Fried, the court granted the defendants’ motion to dismiss the complaint for failure to state a cause of action. The plaintiff, an attorney specializing in structured finance, developed and patented a structure for issuing airline special facility municipal bonds, which she marketed to the defendant-underwriters and which… Continue Reading

Failure to Serve Notice of Default Not a Proper Ground for Dismissal under CPLR 3211: Old Rock Assoc. v BDG Yapshank, LLC

Posted in Commercial Real Property, Condition Precedent, CPLR 3211, CPLR 3215, Deficiency Judgment, Documentary Evidence, Failure to State a Claim, Industry: real estate, Justice Whelan, Thomas, Mortgages, Suffolk

In a September 16, 2011, decision by Justice Whelan, the court denied in part and granted in part defendant’s motion to dismiss plaintiff’s mortgage-foreclosure action and demand for a deficiency judgment in connection with the purchase of certain commercial real property. Defendant argued that plaintiff failed to comply with the default provisions of the mortgage, which… Continue Reading

Purchase Price for Interests in Company Subject to Valuation Is Sufficiently Certain to Form Enforceable Contract: Nigro v Owen Logistics LLC

Posted in Agreement to Agree, Breach of Contract, Conversion, CPLR 3016, CPLR 3211, Documentary Evidence, Duplicative Cause of Action, Failure to State a Claim, Fraud, Industry: Transportation, Justice Bucaria, Stephen A., Misrepresentation, Motion to Dismiss, Nassau, Specific Performance, Unjust Enrichment

In a February 14, 2011, decision by Justice Bucaria, the court granted in part and denied in part defendants’ motion to dismiss. Plaintiff-buyer sued defendant-LLC members for breach of contract and specific performance in connection with the purchase of their interests in two logistics companies. Defendants moved to dismiss based on documentary evidence and failure to state… Continue Reading

Evidence of Corporate Informalities and Fraudulent Transfer Bars Summary Judgment on Shareholder’s Entitlement to Stock Certificate and Transferability of Shares: Tulino v Tulino

Posted in BCL 508, Breach of Fiduciary Duty, Corporate Formalities, CPLR 3025, CPLR 3124, CPLR 3211, CPLR 3212, Derivative Actions, Discovery, Failure to State a Claim, Industry: real estate, Justice Bucaria, Stephen A., Lack of Capacity, Motion for Leave to Amend Pleadings, Motion to Compel Discovery, Motion to Dismiss, Nassau, Restraint on Alienation, Shareholder Dispute, Summary Judgment

In a December 2, 2010, decision by Justice Bucaria, the court denied defendant-50% shareholder’s motion to dismiss but granted his motion to compel discovery. The court also denied plaintiff-50% shareholder’s motion for summary judgment but granted him leave to amend the complaint. Plaintiff entered into an agreement with a third party to sell his interest in defendant-corporation,… Continue Reading

Action Against Competitor Dismissed for Failure to Adequately Plead Business Tort Elements: Wayne Thomas Salon, Inc. v Moser

Posted in Business tort, CPLR 3211, Failure to Plead with Particularity, Failure to State a Claim, Industry: beauty, Interference with Prospective Advantage, Justice Kapnick, Barbara R., Motion to Dismiss, New York, Non-compete, Non-solicitation, Tortious Interference with Business Relations, Unfair Competition, Unjust Enrichment

In an October 12, 2010, decision by Justice Kapnick in connection with an action between two hair salons in which plaintiff alleged various business torts relative to the resignation of a stylist from plaintiff’s salon and the subsequent hiring of that same stylist by defendant’s salon, and on defendant’s motion to dismiss for failure to… Continue Reading