The 2016-17 Appellate Division Leave Grants: January, February, and March

This is round three in my four part series previewing the cases that the Court of Appeals will hear during the 2017-18 term by leave of the Appellate Division. After 19 Appellate Division leave grants from September through December 2016, the grant pace slowed considerably during the first three months of 2017.

Only 7 cases made the cut for the Appellate Division Justices to decide that the Court of Appeals should hear them. Again the First Department led the way with 6 of the 7 leave grants, and the Third Department finally granted its first case of the 2016-17 term. Here’s a quick look at those cases.

January Grants

Cortlandt Street Recovery Corp. v Bonderman, 142 AD3d 833 (1st Dept 2016)

Question presented: Whether indenture trustee had standing to assert causes of action for breach of contract, fraudulent conveyance, unlawful corporate distribution, unjust enrichment, and based on an alter ego theory, and whether the complaint sufficiently stated a cause of action under a veil-piercing theory.

Supreme Court, New York County, granted defendants’ motions to dismiss the complaint in three separate actions for lack of standing. The Appellate Division modified the Supreme Court order by denying the motion to dismiss the complaint insofar as asserted by plaintiff Wilmington Trust Company, as indenture trustee, and, as so modified, affirmed.

February Grants

Matter of FMC Corp. v New York State Dept. of Envtl. Conservation, 143 AD3d 1128 (3d Dept 2016)

Question presented: Whether four-month statute of limitations began to run when respondent advised petitioner that administrative order on consent was closed or when respondent issued final statement of basis selecting a remedy to address environmental contamination, and whether NYSDEC’s selection of a remedial plan to address environmental contamination and decision to use the hazardous waste remedial fund to pay for the remediation was arbitrary and capricious.

Supreme Court, Albany County, granted NYSDEC’s motion to dismiss the CPLR article 78 petition. The Appellate Division reversed, denied the motion, granted the petition, and remitted the matter to Supreme Court, Albany County, for proceedings not inconsistent with the decision.

Herman v Herman, 144 AD3d 433 (1st Dept 2016)

Question presented: Whether the trial court properly precluded defendant from participating in an inquest into plaintiffs’ damages where defendant failed to comply with court orders directing the disclosure of certain documents.

Supreme Court, New York County, granted plaintiffs’ motion to preclude defendant J. Maurice Herman from participating in an inquest to assess plaintiffs’ damages against him, and denied defendant’s cross motion to preclude plaintiffs from offering certain evidence at the inquest, and the Appellate Division affirmed.

Guidance Enhanced Green Terrain, LLC, v Bank of America Merrill Lynch, 146 AD3d 431 (1st Dept 2017)

Question presented: Whether plaintiff assignor had a contractual right to compel defendant assignee to reassign bankruptcy claims to a third party as a condition of settlement, and whether plaintiff stated a claim that defendant assignee breached the covenant of good faith and fair dealing in withholding its consent to the proposed settlement.

Supreme Court, New York County, granted defendants’ motion to dismiss the first cause of action for breach and repudiation of contract. The Appellate Division reversed and denied the motion.

Valente v Lend Lease (US) Construction LMB, Inc., 143 AD3d 625 (1st Dept 2016)

Question presented: Whether defendants raised an issue of fact as to whether plaintiff was the sole proximate cause of the accident where he slipped and fell on grease on planks used as makeshift ramp to descend from top of building to a scaffold because he chose to use the planks instead of using or constructing a proper ramp.

Supreme Court, New York County, among other things, granted plaintiffs’ motion for partial summary judgment on the Labor Law § 240(1) claim, and the Appellate Division affirmed.

March Grants

Shanksa USA Building, Inc. v Atlantic Yards B2 Owner, LLC, 146 AD3d 1 (1st Dept 2016)

Question presented: Whether the Appellate Division erred in its interpretation of Lien Law § 5 as it applied to the security provided for contractor payment in maintenance contract for construction of high-rise residential tower in the Atlantic Yards project, and whether the Appellate Division erred in finding that plaintiff failed to plead a veil-piercing claim and in declining to disqualify one of defendants’ law firms based on a conflict of interest.

Supreme Court, New York County, among other things, granted the motion of defendants Atlantic Yards and Forest City Ratner Companies to dismiss a claim that defendants breached the parties’ agreement by failing to post a bond required under Lien Law § 5, and by providing inadequate factory and inadequate labor. Supreme Court denied the motion insofar as against the first cause of action alleging breach of contract due to design defects and improperly changing the scope of work. and as to the third cause of action seeking to pierce the corporate veil. Supreme Court also denied plaintiff’s motion to disqualify the law firm of Troutman Sanders LLP as defendants’ attorneys.

The Appellate Division modified the Supreme Court order to reinstate the failure to provide adequate factor and labor claim and to dismiss the veil piercing cause of action, and otherwise affirmed.

People of the State of New York v Credit Suisse Securities (USA), LLC, 145 AD3d 533 (1st Dept 2016)

Question presented: Whether an action brought by the Attorney General under the Martin Act and Executive Law § 63(12) for alleged investor fraud is subject to the three-year statute of limitations under CPLR 214 or the six-year statute of limitations under CPLR 213.

Supreme Court, New York County, denied the motion of defendants Credit Suisse Securities (USA), LLC, et al. to dismiss the complaint pursuant to CPLR 3211(a)(5), and the Appellate Division affirmed.

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