New York Court of Appeals Decisions Updates
- No Private Right of Action under GBL §395-a In Schlessinger v. Valspar Corporation, 21 NY3d 166 (2013), the Second Circuit Court of Appeals asked the New York Court of Appeals “to resolve two questions regarding General Business Law § 395-a, which (with certain exceptions) forbids the termination before expiration of any ‘maintenance agreement covering parts and/or service’.”
- Enforceability of Restraining Notice In Verizon New England, Inc. v. Transcom Enhanced Services, Inc., 21 NY3d 66 (2013), the Court of Appeals considered whether “an at-will, prepayment service agreement, which lack[ed] any obligation to continue services or a commitment to engage in future dealings, constitute[d] a property interest or debt subject to a CPLR 5222(b) restraining notice”. The Court of Appeals held such a restraining notice was unenforceable.
- Judgment Creditor’s Rights in Turnover Proceeding In Commonwealth of the Northern Mariana Islands v. Canadian Imperial Bank of Commerce, 21 NY3d 55 (2013), the Court of Appeals addressed questions certified from the Second Circuit “as to whether a judgment creditor can obtain a CPLR article 52 turnover order against a bank to garnish assets held by the bank’s foreign subsidiary.”
- Retroactive Application of Amendment to Statute Not Allowed In James Square Associates LP v. Dennis Mullen, Commissioner New York State Department of Economic Development, 21 NY3d 233 (2013), the question presented to the Court of Appeals was “whether the retroactive application of the 2009 Amendments to the Empire Zones Program complie[d] with the Due Process Clause of the Fifth Amendment.” The Court of Appeals concluded that the retroactive application of the 2009 Amendments violated plaintiffs’ due process rights.
- Formalities of Acknowledgment in Prenup Enforced In Galetta v. Galetta, 21 NY3d 186 (2013), a matrimonial action, plaintiff Michelle Galetta sought a determination that a prenuptial agreement that she and defendant Gary Galetta signed was invalid due to a defective acknowledgment. The Court of Appeals determined that the parties’ prenuptial agreement was indeed invalid.
- Constitutionality of Amendment to Wicks Law At the outset of its decision in Empire State Chapter of Associated Builders and Contractors, Inc. v. Smith, 21 NY3d 309 (2013), the Court of Appeals held that “where the Legislature has enacted a law of state-wide impact on a matter of substantial State concern but has not treated all areas of the State alike, the Home Rule section of the State Constitution does not require an examination of the reasonableness of the distinctions the Legislature has made”.
- New York Cabs and the Constitutionality of the HAIL Act In Greater New York Taxi Association v. State of New York, 21 NY3d 289 (2013), the issue on appeal was the constitutionality of the so-called “HAIL Act,” which regulates “medallion taxi cabs (or “yellow cabs”) and livery vehicles, vital parts of New York City’s transportation system.”
- Starbucks at Center of Application of Tip-Pooling Statute In Baremboim v. Starbucks Corporation, 2013 NY Slip Op 04754 (June 26, 2013), the Court of Appeals answered questions posed by the United States Court of Appeals for the Second Circuit on the legality of Starbucks Corporation’s tip-splitting policy under Labor Law § 196-d.
- Defect in Default Judgment – Not Jurisdictional In order to obtain a judgment by default, CPLR § 3215(f) requires an applicant to file “proof of the facts constituting the claim.” In Manhattan Telecommunications Corporation v. H&A Locksmith, Inc. 21 NY3d 200 (2013), the Court of Appeals was faced with the question of whether non-compliance with the “proof of facts requirement” is a jurisdictional defect that nullifies a default judgment. The Court of Appeals held that the defect was not jurisdictional.
- Priority of Liens Resolved Altschuler Shaham Provident Funds, Ltd. v. GML Tower, LLC, 2013 NY Slip OP 04273 (June 11, 2013) was a mortgage foreclosure action that arose from a failed redevelopment of the Hotel Syracuse, complex in downtown Syracuse New York. The Court of Appeals addressed a dispute about conflicting claims of priority between “a building loan mortgage made pursuant to an unfiled building loan contract [and] subsequently-filed mechanic’s liens.”
- Consequences of Insurers Breach of Duty to Defend Malpractice In K2 Investment Group, LLC v. American Guarantee & Liability Insurance Company, 2013 NY Slip Op. 04270 (June 11, 2013), the Court of Appeals held that “when a liability insurer has breached its duty to defend its insured, the insurer may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against him.”
- Examination of “Against Public Policy” Disclaimers of Coverage J.P. Morgan Securities Inc. v. Vigilant Insurance Company, 21 NY3d 324 (2013), involved an “insurance dispute arising from the insured’s monetary settlement of a Securities and Exchange Commission (SEC) proceeding and related private litigation predicated on the insured’s violations of Federal securities laws.” The Supreme Court denied the carrier’s motion to dismiss. The Appellate Division reversed and dismissed the complaint. And the Court of Appeals granted leave to appeal, reversed and reinstated the complaint of the insured.