Under CPLR 7502(c), a court in “the county in which an arbitration is pending…[is permitted to] entertain an application…for a preliminary injunction in connection with an arbitration that is pending or that is to be commenced inside or outside this state.”
A recent decision from Justice Anar R. Patel of the Manhattan Commercial Division
Most litigants associate injunctions as a remedy granted by a court to prevent a party from taking specific action. This is no surprise – as in most cases injunctions function to accomplish exactly that. However, in rare cases, courts will issue mandatory injunctions to force a party into taking specific action. Even though seldomly used, a mandatory injunction acts as an important judicial remedy to prevent irreparable harm by allowing courts to change the status quo.
The Dispute
The case of James Riv. Group Holdings, Ltd. v. Fleming Intermediate Holdings LLC illustrates a rare example of a court issuing a mandatory injunction. The case centers around the failed closing of the sale of Plaintiff’s reinsurance subsidiary to Defendant. In November 2023, the parties executed a Stock Purchase Agreement (“SPA”) concerning the sale of Plaintiff’s reinsurance subsidiary. As the closing approached, Plaintiff worked to fulfill its SPA obligations and complete all requisite pre-closing events. However, at the time of closing, Defendant failed to appear and instead sent a letter demanding further concessions to close – claiming that Plaintiff did not comply with its SPA obligations. Based on the failed closing, Plaintiff sought specific performance, seeking the Court’s intervention in forcing the Defendant to fulfill its obligations under the SPA and close on the transaction.Continue Reading Changing the Status Quo: Commercial Division Issues Rare Mandatory Injunction
Commercial litigants often seek the provisional and equitable remedy of a preliminary injunction under Article 63 of the CPLR to protect the client’s rights that are difficult to monetize and quantify. The relief sought typically involves a party restraining from certain conduct and maintaining the status quo where it “appears that the defendant threatens or
As mortgage loan transactions continue to become increasingly complex, lenders often worry about the remedies they have if borrowers fail to live up to their obligations. In the event of a default, lenders have the choice under New York’s election of remedies statute (RPAPL § 1301 (1)) to either (i) enforce the note
Several weeks back, we reported on an apparent uptick in commercial lease disputes over the last 18 months in this new COVID era. It only follows that there would be a corresponding uptick in Yellowstone applications from commercial tenants embroiled in such disputes.
As most readers know, injunctive relief under Yellowstone preserves the “status quo”
In one of my first posts, entitled Restrictive Covenants: The Importance of Understanding Their Contractual Limits, I wrote about a First Department decision upholding a portion of Justice Andrea Masley’s Order enjoining a defendant modeling agent and agency from unfairly competing, disclosing, or misappropriating the plaintiff’s confidential information and interfering with the plaintiff’s contractual
In Setter Capital, Inc. (“Setter”) against Maria Chateauvert (“Chateauvert”), No. 651992/2020, 2020 NY Slip Op 20199 (N.Y. Sup. Ct., New York County July 15, 2020), Setter moved the court for a preliminary injunction “enjoining its former employee [Chateauvert] from directly or indirectly soliciting, inducing or recruiting or attempting to interfere with the relationship between [Setter] and any customer, client supplier, licensee or other business relation of [Setter’s] or otherwise disrupt, damage, impair or interfere in any manner with the business of [Setter] until February 3, 2022.” Id. at *1-2 (internal quotations omitted).
It is well settled that in order to obtain a preliminary injunction pursuant to CPLR 6301, a plaintiff has the burden to establish “(1) a likelihood of success on the merits of the action; (2) the danger of irreparable injury in the absence of preliminary injunctive relief; and (3) a balance of equities in favor of the moving party.” Id. at *2 citing Nobu Next Door, LLC v. Fine Arts Housing, Inc., 4 N.Y.3d 839 (N.Y. Ct. App. 2005).
At the outset, the court addressed the issue of whether the court had jurisdiction over Chateauvert, a Canadian resident. Id. at *2. In September 2013 and two years after graduation from college, Chateauvert signed a Confidentiality and Non-Compete Agreement (“Agreement”) related to Chateauvert’s employment with Setter. Id. The Agreement contains a choice of law and forum selection clause selecting New York law as governing law and New York courts as the exclusive venue and jurisdiction for disputes. Id. at *2.
In its analysis, the court addressed the question of the enforceability of the choice of law and forum selection clause of the Agreement (as an employment agreement) under Sections 5-1401 and 5-1402 of New York’s General Obligation Law (“GOL”). Id. at *2-3. “GOL § 5-1401 provides for the enforcement of choice of law provisions in contracts over $250,000 and GOL § 5-1402 provides for the enforcement of forum selection provisions in contracts over $1,000,000. Id. The court explained that that GOL § 5-1401 is inapplicable to contracts for “labor or personal services,” and although GOL § 5-1402 allows for actions based on contracts against non-residents to be maintained in New York “where: (1) the contract contains a choice of law clause pursuant to GOL § 5-1401,” that neither section was applicable in the case. Id. at 3 (citation omitted). Reading into the legislative intent behind these GOL provisions, the court also questioned whether Chateauvert, just two years out of college, was the “sophisticated business person the legislature envisioned in 1985 when GOL § 5-1401 and § 5-1402 were enacted.” Id. at *3.
The court determined that “if the court cannot exercise jurisdiction pursuant to the Agreement, then plaintiff must establish jurisdiction.” Setter, supra, at *3. The court found that the jurisdictional issue was “an issue of fact that undermines plaintiff’s likelihood of success.” Id.Continue Reading Preliminary Injunctions: Jurisdictional Issue Undermines Likelihood of Success on the Merits
If supermodel Tyra Banks has taught us anything about the modeling industry, it’s that the competition is fierce. Unfortunately, one Manhattan-based modeling agency and former agent aren’t learning this lesson on the runway—they’re learning it in a courtroom.
In a recent decision, the First Department upheld a portion of Justice Andrea Masley’s Order
Looks like the United States Tennis Association (“USTA”) met its match, but this time not on its own court, but rather in another, the Appellate Division, Second Department. The court in Matter of Bravado Intl. Group Merchandising Servs., Inc. v United States Tennis Assn. Inc., recently affirmed the judgment of Westchester Commercial Division Justice
Most litigators know that a preliminary injunction is a “drastic remedy” which is not “routinely granted.” Reading these words on paper, however, does not adequately convey the high threshold that a party must meet when seeking this extraordinary relief. Seeking an injunction – especially in the Commercial Division – is usually an uphill battle for