“Reasonably anticipated litigation” is a necessary element you need to show to benefit from the common interest privilege in your attempt to withhold certain documents already shared with a third-party during a pending suit in New York – but, when does this privilege apply and what does “reasonably anticipated litigation” actually mean?
Recently, Justice Andrew
Proximate cause is a necessary element in tort law, but also applies to claims of breach of commercial contract. 
In a recent decision by Justice Barry R. Ostrager in MUFG Union Bank, N.A. v. Axos Bank et al., No. 652474/2019, 2020 N.Y. Slip Op. 51101(U) (Sup. Ct., New York County Sept. 25, 2020), the Commercial Division of the Supreme Court, New York County addressed, among other things, the issue of whether a defendant’s breach was a proximate cause of plaintiff’s damages in denying one defendant’s motion for summary judgment seeking to dismiss plaintiff’s breach of contract claim.
The parties to the action are MUFG Union Bank, N.A. (“Union”), Epiq Systems, Inc. (“Epiq”), and Axos Bank, Axos Fiduciary Services, Axos Nevada, LLC, and Seller Sub, LLC (collectively, “Axos”).
On or about September 27, 2012, Union and Epiq entered into a Joint Services Agreement (“JSA”), effective October 1, 2012, as amended. Pursuant to the JSA, Union and Epiq agreed, among other things, “to jointly promote their products and services to bankruptcy and insolvency professionals and also fiduciary types as may be agreed upon by the parties on a case-by-case basis,” which professional and fiduciary types were deemed “Joint Clients”. Specifically, Union provided deposit services to bankruptcy trustee customers and Epiq provided software services to bankruptcy trustee customers. The JSA expressly restricted Union and Epiq’s ability to assign the JSA or transfer Joint Client relationships or accounts without the other’s prior written consent. Notwithstanding this restriction, Epiq, without consent of Union, decided to sell its software business to Axos. In order to circumvent the anti-assignment provision in the JSA, Epiq established Seller Sub, LLC (“Seller Sub”), identified as “a special purpose entity wholly owned by Epiq and allegedly created for the sole purpose of effectuating the transfer of the JSA to Axos without Union’s consent.” Epiq formed Seller Sub one day before entering into a fifh amendment of the JSA with Union. Epiq then transferred the JSA to Seller Sub. Axos then acquired Seller Sub with the JSA. But Epiq directly transferred its software business to Axos. Thereafter, Axos terminated the JSA with Union and the action ensued.
Continue Reading Proximate Cause In Breach Of Contract Actions: Is Loss A Foreseeable Consequence Of Circumstances Created By The Breaching Party?
I
n 2015, our colleagues in the white-collar criminal defense bar braced for the impact of a memorandum penned by then Deputy Attorney General Sally Yates. The Yates Memo encouraged both federal prosecutors and civil enforcement attorneys to make increased efforts to hold culpable individuals accountable for corporate misconduct.
The Yates Memo embodied the precept
As
New York courts reopen and the mandatory stay-at-home order is lifted, what remains unclear is how the numerous Executive Orders issued by Governor Andrew M. Cuomo during the COVID-19 pandemic will affect individuals and businesses who, based on the economic effects of the crisis, may no longer be able to abide by previously issued
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
A familiar fact pattern: ParentCo is the owner and controlling shareholder of SubCo. ParentCo completely controls SubCo. The two companies have the same officers, issue consolidated financial returns, and the profits and losses of SubCo are passed through to ParentCo. ParentCo deliberately keeps SubCo in a cash-starved and undercapitalized state, so SubCo is entirely dependent
“Read before you sign”, is what we counsel our clients, since we all know that courts will bind one contractually to a signed agreement even if not read. But, what if you never signed the agreement? Can you still be bound by it? In earlier blogs — here and here — we addressed this very
A few weeks ago, my colleague Sonia Russo blogged about how shareholders seeking to bring successive derivative actions should be wary, since dismissal of a derivative action for failure to allege pre-suit demand or demand futility may have a preclusive effect on a subsequent derivative action based on the same issues. But what if a
Foreign cities, thieves, and millions of dollars’ worth of missing diamonds. This may sound like the trailer for this summer’s blockbuster action film, but this story of hustling and heisting comes straight from Swissgem S.A and Genevagem S.A. v M&B Limited, a New York case recently decided by Commercial Division Justice Peter O. 
Sherwood.
Many of us have previously heard the expression that there is a fine line between fact and fiction. In securities law that holds especially true where companies that risk walking the “fine line” in their registration statements and prospectuses could find themselves liable to their stockholders.
In a recent decision, Justice Barry R. Ostrager granted