Although discretionary, it is well-known among commercial practitioners that the Commercial Division justices generally like a Rule 19-a statement of material facts included with the submission of a summary judgment motion. When responding to a Rule 19-a statement, the responding party should be thinking a couple moves ahead. The ultimate goal should be to make things easier for the judge to accept clearly stated facts that cannot be contested before the commencement of a trial. The last thing that you want to happen is to be caught in a Steve Urkel “did i do that ” moment in failing to dispute a contested fact. A recent decision issued by Manhattan Commercial Division Justice Robert R. Reed sheds light on the consequences of that very scenario.

Background and Analysis:

Perella Weinberg Partners LLC et al. v Michael A. Kramer et al., involved a breach-of-contract dispute related to the defendants’ departure from the plaintiffs’ financial-advisory firm. During the course of the litigation, both parties moved for summary judgment on their respective claims and counterclaims. As part of their submissions, the parties submitted and responded to their respective Rule 19-a statements.

On April 2, 2024, following the court’s denial of summary judgment for both parties, and several meet-and-confer sessions to discuss the parties’ joint statement of stipulated facts and procedural history for their upcoming trial, the plaintiffs served a Notice to Admit under CPLR 3123 (“the Notice”) on the defendants. Defendants moved for a protective order under CPLR 3103 to strike the plaintiffs’ Notice, arguing that the court should strike the Notice on grounds that (i) the Notice was untimely by almost seven years based on the parties’ original scheduling order, which required notices to admit to be served by August 14, 2017; and that (ii) the requests to admit in the Notice were improper.

In opposition, Plaintiffs argued that their Notice was (i) timely based on the most recent pre-trial scheduling order, which required the parties to provide the court with all “notices to admit with responses” by April 22, 2024; and (ii) was proper because the requests were focused on facts that the defendants previously admitted as undisputed in their response to the plaintiffs’ Rule 19-a statement. On reply, the defendants argued that Rule 19-a expressly provides that responses to a Rule 19-a statement are admissions only “for the purposes of the motion” (as opposed to the trial). Justice Reed rejected the defendants’ arguments.

First, the court noted that a Notice to Admit may be served “at any time after service of the answer…and not later than twenty days before trial (CPLR 3123 [a]), acknowledging that the plaintiffs served their Notice more than 20 days prior to both the original trial date (April 29, 2024), as well as the adjourned trial date (January 24, 2025).

Second, the court rejected the defendants’ argument and/or interpretation of the Commercial Division Rules that admissions in a Rule 19-a statement are only for the purposes of a summary judgment motion. The Court found that the defendants “opened the door” by failing to admit certain facts for trial purposes that were previously identified as “uncontested” or “uncontroverted” in their response to plaintiffs’ Rule 19-a statement. Moreover, the Court held that plaintiffs’ service of the notice to admit was not used to obtain information in lieu of other devices or raise new issues that were left unresolved in discovery, but rather, to clarify previously admitted facts in defendants’ response to plaintiffs’ Rule 19-a statement. As a result, the Court denied the defendants’ motion for a protective order.

Upshot:

The Perella Weinberg Partners LLC decision emphasizes the strategic benefits of carefully drafting and responding to a Rule 19-a statement. Any facts left undisputed will survive the entirety of the case, including trial, and serve as a “cheat sheet” for judges when making future rulings. Failing to adhere to the rules or getting caught stretching the record regarding previously admitted facts, is the quickest path to losing the court’s trust and your motion.

As recently highlighted by my colleagues, the Commercial Division Advisory Council (“Advisory Council”) has been hard at work striving to implement and amend certain rules and regulations to enhance practice in the Commercial Division.  One recent proposal that may catch practitioners’ eyes is the potential addition of Commercial Division Rule 23:  a rule designed to govern the filing of amicus curiae briefs.

Amicus curiae or “friend of the court” briefs are used by non-parties, usually in federal appellate cases, who want to assist a court on issues in which they may have an interest.  Typically, amicus curiae briefs are allowed if they assist a court in analyzing an issue or argument that a party to the action is not able to fully and adequately present (see 22 NYCRR § 500.23 [a] [4]).

But amicus curiae brief filings in a state trial court, you say?  Yes, you read that right.  Despite the scarcity of such filings, the Advisory Council’s proposal attempts to introduce Rule 23 “given [the ComDiv’s] docket of sophisticated and often far-reaching commercial and business litigation.”

Continue Reading You Got a Friend in Me: Commercial Division Seeks to Adopt New Rule Governing the Filing of Amicus Curiae Briefs

Amid the hustle and bustle of the holiday season, and gearing up for the new year, the Commercial Division Advisory Council (the “Advisory Council”) was hard at work in proposing new rule changes. On December 26, 2024, the New York State Office of Court Administration issued a request seeking public commentary on a proposal, recommended by the Advisory Council, to amend Commercial Division Rules Section 22 NYCRR §202.70 (c) concerning non-commercial cases.

Section 22 NYCRR §202.70 (c)(5), in particular, provides that courts within the Commercial Division are not permitted to hear proceedings to enforce judgments, even where the required monetary threshold is met. Some Commercial Division judges have interpreted this rule as a bar to the enforcement of judgments, even if such judgments were obtained in the Commercial Division (see e.g., Gibson, Dunn & Crutcher LLP v World Class Capital Group LLC, Index No. 650318/2020 [Sup Ct, NY County Nov. 20, 2020]; J. Remora Maintenance LLC v Efromovich, 2018 WL 4963419, at *2 [Sup Ct, NY County Oct. 15, 2018]).

Continue Reading New Year, New (Proposed) Rules: Updates in the Commercial Division

One of the ongoing goals of the New York State Office of Court Administration (“OCA”) is to periodically update and refine the jurisdictional criteria for the Commercial Division to ensure that it exclusively handles complex commercial matters. As part of this effort, OCA has proposed an important change aimed at establishing a monetary threshold for cases seeking equitable or declaratory relief.

Currently, a case that is presumptively considered “commercial” and seeks equitable or declaratory relief is not required to meet any monetary threshold. However, on September 20, 2024, the OCA issued a Request for Public Comment on a proposal to amend 22 NYCRR § 202.70 (a) and (b), based on recommendations from the Commercial Division Advisory Council (“CDAC”). These proposed amendments would introduce a monetary threshold specifically for cases seeking equitable or declaratory relief within the Commercial Division. While the change may seem small, its implications for practitioners and litigants would be substantial.

Continue Reading The Commercial Division Proposes a Monetary Threshold for Equitable and Declaratory Relief: Implications and Insights

The Executive Committee of the Commercial and Federal Litigation Section of the New York State Bar Association hosted a very special guest speaker at its final meeting of 2024: The Honorable Timothy S. Driscoll from the Commercial Division of Nassau County. Justice Driscoll opened the meeting with some general points about how he runs his courtroom; discussed his preference for in-person appearances and hearings; and shared his views on how AI is affecting the practice of law.

However, the highlight of Justice Driscoll’s discussion detailed how to effectively utilize his new technologically-advanced courtroom. Justice Driscoll recently decked out his courtroom with a few large monitors and with smaller monitors at each counsel table, the witness stand, and the bench. The litigators connect their personal computers to the monitor at the counsel table, and each monitor throughout the courtroom mirrors the exhibits that the litigators display from their computers.

Continue Reading Litigating in the Digital Age: How to Succeed in Justice Driscoll’s Electronic Courtroom

Here at New York Commercial Division Practice, we make a point of highlighting the advantages of practicing in the Commercial Division.  For example, in Have Commercial Dispute, Will Travel (to New York) | New York Commercial Division Practice, we discussed the reasons why practitioners and their clients are (or should be) willing to travel to New York from out of state (or even internationally) to have their commercial disputes resolved.  Similarly, in Commercial Litigation in New York State Courts, 5th Edition, Chapter 39, “Practice Before the Commercial Division”:  A Review | New York Commercial Division Practice, we provided a detailed analysis of the practices and procedures of the Commercial Division as a choice-worthy venue for litigation.  Among other things, the Commercial Division’s status as one of the premier venues for complex business litigation also has the welcome consequence of being a major driver of New York’s economic growth.

That’s the message of a recent article titled “NYSBA Works To Bring Hundreds of Millions of Dollars in Legal Fees to N.Y.,” in which NYSBA President Domenick Napoletano discusses the collaborative efforts of the NYSBA and the Commercial Division Advisory Council to attract commercial litigation to New York.  

Continue Reading The NYSBA’s Efforts to Boost Legal Revenue and Business in New York

As many practitioners are aware, the litigation process in New York often feels like a tortoise race, with many cases taking years to resolve. Section 3213 of the CPLR (“Summary Judgment in Lieu of Complaint”) is a bit of an outlier in New York practice, as it provides a mechanism to streamline cases without bearing the delay of protracted litigation. However, because a  CPLR 3213  motion provides for a remedy which precludes a litigant from presenting his evidence to a judge or jury, courts heavily scrutinize this type of motion.

For example, courts tend to dismiss CPLR 3213  motions where the instrument for payment (e.g., a promissory note) requires “outside proof … other than simple proof of nonpayment or a similar de minimis deviation from the face of the document” (Kitchen Winners NY, Inc. v Triptow, 226 AD3d 989, 991 [2d Dept 2024]). But what happens when an additional document (e.g., a Heter Iska) is required to be executed under religious law in connection with a promissory note? This question was recently addressed by Kings County Commercial Division Justice Leon Ruchelsman  in Junik v 61 N. 11 LLC.  

Continue Reading The Proof Is in the Note: Commercial Division Holds a Heter Iska Is Not Outside Proof for Purposes of Summary Judgment in Lieu of Complaint

As my colleague, Matt Donovan, recently blogged, it is essential for litigants to “play[] nice in the litigation sandbox” or risk facing the ire of the Justices in the Commercial Division. Many litigants might think they are playing “nicely” by asserting “good cause” in their arguments. But what does it actually mean to have “good cause”? As illustrated by some recent decisions by Manhattan ComDiv Justice Robert Reed, a finding of good cause will depend on the circumstances, evidence, and respective law.

Case Spotlight #1: Designs by F.M.C. v. Unique First Ltd.  

In Designs, Justice Reed dealt with two motions seeking withdrawal as counsel. In assessing both motions, Justice Reed reiterated that an “attorney must demonstrate that good cause exists to end the relationship with the client.” Without showing good cause, a motion to withdraw will be denied.

Continue Reading Good Cause or Gamesmanship: A Review of “Good Cause” in the Commercial Division

Having recently set our clocks back at the end of this year’s Daylight Savings Time, we here at New York Commercial Division Practice wanted to alert our readers to an upcoming, decidedly forward-looking NY Bar event.  On Wednesday, November 13, 2024, from 5:30 to 8:30 pm, the Commercial and Federal Litigation Section of the New York Bar Association will host an interactive event – Taking the Lead 2024: Empowering Women Lawyers in Commercial Cases; Winning Strategies and Techniques for Trial. The event will showcase women commercial litigators and will feature a mock trial presentation with opening and closing statements and direct and cross-examinations of witnesses, followed by a critique of the presentation by distinguished members of a judiciary panel.

Continue Reading When the Clocks Are Turned Back, Women Litigators Step Forward: NYSBA ComFed Fall Event, “Taking the Lead 2024”

Under CPLR §§ 3111 and 3122(d), “[t]he reasonable production expenses of a non-party witness shall be defrayed by the party seeking discovery.” The Commercial Division Rules at Appendix A (“Guidelines for the Discovery of ESI”) define “reasonable production expenses” to include:

  1. Reasonable fees charged by outside counsel and e-discovery consultants;
  2. Reasonable costs incurred in connection with the identification, preservation, collection, processing, hosting, use of advanced analytical software applications and other technologies, review for relevance and privilege, preparation of a privilege log (to the extent one is requested), and production;
  3. Reasonable costs associated with disruption to the non-party’s normal business operations, provided such costs are quantifiable and warranted by the facts and circumstances; and
  4. Other costs reasonably identified by the non-party.
Continue Reading The Cost of Withholding ESI: First Department Sets Limits on Non-Party Recovery of ESI Production Costs