New York Law Posts
All New York law posts from Tollefsen Law
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by John J. Tollefsen | Apr 8, 2014 | Blog, Civil Litigation NY, International
Mashreqbank PSC v Ahmed Hamad Al Gosaibi & Bros. Co., 101 AD3d 1, Decision: 2014_02381-NY-Mashrequbank-v-Gosaigi April 8, 2014 The court had held in VSL Corp. v Dunes Hotels & Casinos (70 NY2d 948 [1988]) that it was error for the Appellate Division to dismiss a complaint sua sponte on forum non conveniens grounds, adding that such a dismissal may occur “only upon the motion of a party” (id. at 949). This case represents an apparent change of heart made with a wave to VSL Corp. “The case arises out of a transaction between Mashreqbank PSC (Mashreq), a bank located in Dubai, United Arab Emirates, and Ahmed Hamad Al Gosaibi & BrothersCompany (AHAB), a partnership with its headquarters in Khobar, Saudi Arabia. According to Mashreq’s complaint, Mashreq and AHAB agreed to a “foreign exchange swap transaction of US Dollars for Saudi Arabian riyals.” Mashreq agreed to, and did, transfer $150 million to AHAB on April 28, 2009, wiring the money to AHAB’s account at Bank of America in New York. AHAB, according to Mashreq, agreed to pay Mashreq an equivalent value in riyals on May 5, 2009, but the riyals were not paid. Mashreq sued AHAB to collect the alleged debt. It chose to do so in New York Supreme Court, believing (mistakenly, as it turned out) that it would be able to reach AHAB assets here. AHAB filed an answer (including a counterclaim) and a third-party complaint, naming as third-party defendants a citizen of Saudi Arabia, Maan Abdul Waheed Al-Sanea (Al-Sanea), and Awal Bank BSC (Awal), a bank, headquartered in the Kingdom of Bahrain, that Al-Sanea controlled. AHAB’s pleading alleged that...
by John J. Tollefsen | Apr 3, 2014 | Blog, Insurance NY
Voss v Netherlands Ins. Co., 22 NY3d 728, 96 AD3d 1543 (February 25, 2014) Decision: 2014_01259-voss-v-netherlands If there is a loss and the insurance does not cover it, many people tend to blame the insurance broker. In New York, the broker is protected by the “special relationship” rule. What makes this case standout is the four to three decision in what should have been an easy win for the broker. The case was sent back for trial. The property damage and the consequent business interruption was sustained as a result of water damage that occurred following three separate roof breaches in 2007 and 2008. “Following discovery, CHI moved for summary judgment dismissing the complaint. CHI advanced three arguments in favor of dismissal. First, CHI asserted that no special relationship was created and, in the absence of a specific request by the insureds for coverage that went unfulfilled, CHI could not be held liable for failing to recommend or obtain higher limits. Second, it contended that the negligence claim failed based on Voss’s admission that she had received the policies and was fully aware of the $75,000 policy limit that applied to the first two losses and the $30,000 policy limit in effect at the time of the third loss. Third, CHI claimed that, even if a special relationship existed, any breach of its duty to plaintiffs was not the proximate cause of their injuries. Instead, plaintiffs’ damages occurred because Netherlands failed to timely pay the policy limits. Supreme Court granted CHI’s motion and dismissed the complaint, agreeing with each of CHI’s contentions. The Appellate Division, with one Justice dissenting,...
by John J. Tollefsen | Apr 3, 2014 | Blog, Contracts NY
Biotronik A.G. v Conor Medsystems Ireland, Ltd., 95 AD3d 724 (March 27, 2014) Decision: 2014_02101-Biotronik-v-Conor In a four to three decision, the court held that lost profits from an exclusive distribution agreement were general damages because they were “the direct and probable result of a breach of the parties’ agreement and thus constitute general damages.” “The agreement included a damages limitation provision restricting the parties to general damages: ‘NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGE WITH RESPECT TO ANY CLAIM ARISING OUT OF THIS AGREEMENT (INCLUDING WITHOUT LIMITATION ITS PERFORMANCE OR BREACH OF THIS AGREEMENT) FOR ANY REASON.’ The agreement was to be governed by New York law. Its term was through December 31, 2007, and it provided for an automatic one year renewal, absent a timely termination notice from either party.” “The limitations provision does not specifically preclude recovery for lost profits, nor does it explicitly define lost profits as consequential damages. We thus turn to our precedent for guiding principles to assist in determining whether, under this agreement, plaintiff’s lost profits are general damages and therefore recoverable.” “Lost profits may be either general or consequential damages, depending on whether the non-breaching party bargained for such profits and they are “the direct and immediate fruits of the contract” (see Tractebel, 487 F3d at 109 n 20, citing Masterton & Smith v Mayor of Brooklyn, 7 Hill 61, 68-69 [1845]). Otherwise, where the damages reflect a “loss of profits on collateral business arrangements,” they are only recoverable when “(1) it is demonstrated with certainty that the damages have been caused...
