CPLR 3126.

The motion court  is afforded broad discretion in supervising disclosure, and, on review, its determinations will not be disturbed unless that discretion clearly has been abused. Here, defendants do not point to any flaw or error in the lower court's reasoning, and so they fail to satisfy the abuse of discretion standard. In addition, the Appellate Division determined that the motion court correctly found that defendants failed to demonstrate that an order of dismissal or preclusion was warranted by the record. It is well settled that the drastic remedy of striking a party's pleading, pursuant to CPLR 3126, for failure to comply with a discovery order is appropriate only where the moving party conclusively demonstrates that the non-disclosure was willful, contumacious or due to bad faith. Even if the proffered excuse is less than compelling, there is a strong preference that matters be decided on their merits. 

Youwanes v. Steinbrech, NY Slip Op 02232 (1st Dep't April 6, 2021)

Here is the decision.

Attorney affirmations and summary judgment.

The Appellate Division unanimously affirmed the Order which denied plaintiffs' motion for summary judgment on their claims against defendants and granted defendants' cross motion for summary judgment dismissing the complaint. Defendants demonstrated by admissible evidence that plaintiffs received payments for services performed on a construction project in excess of the total amount they had invoiced, thereby shifting the burden to plaintiffs to present opposing evidence in admissible form sufficient to demonstrate the existence of a triable issue of fact. Plaintiffs' assertion that some of the payments they received were for services provided on a different project was supported only by an attorney's affirmation, which was insufficient to establish an issue of fact. Addordigly, the motion court properly concluded that defendants established their entitlement to summary judgment dismissing the complaint.

G Bldrs. LLC v. Bondex Ins. Co., NY Slip Op 02101

Here is the decision.

CPLR 3213.

In order to establish prima facie entitlement to summary judgment in lieu of a complaint, a plaintiff must show that the defendant executed a promissory note that contained an unequivocal and unconditional obligation to repay, and that the defendant failed to repay in accordance with the note's terms. Here, the note stated that defendant unconditionally promised to pay plaintiff by the maturity date in exchange for the loan, and it is undisputed that defendant defaulted. Even if the note and the parties' investment were part of the same general transaction, the fact that the investment was not profitable is not a defense to the note, nor were the note and the investment so intertwined as to warrant a stay of judgment on the note. The note was part of an arms-length investment transaction between sophisticated, counseled parties, and the language obligated the defendant in his personal capacity. The fact that the note was secured by a membership interest in a business owned by defendant does not alter its essential character as an instrument for the payment of money only, and, accordingly, is immaterial to plaintiff's right to relief pursuant to CPLR 3213.

Jimmel Yang v. Shang Dai, NY Slip Op 02125 (1st Dep't April 6, 2021)

Here is the decision.

Indemnification.

A contract assuming the duty to indemnify will be strictly construed. Here, the indemnification agreements provided for liability arising out of renovation work to be performed at the premises. The liability asserted in the main action arose prior to the start of the renovation work, and, therefore, was outside the scope of the indemnification agreements. Furthermore, a third-party claim for indemnification is insufficient where the allegations, if proven, would preclude liability on the part of the one asserting the claim for indemnification. 

GFE Jerome Ave. LLC v. Steph-Leigh Assoc., LLC, NY Slip Op 02086 (1st Dep't April 1, 2021)

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Judicial review of a private university's actions.

Courts retain a restricted role in reviewing the determinations that are made by private universities. A determination to impose discipline will be disturbed only when the university acts arbitrarily and not in the exercise of its honest discretion, when it fails to abide by its own rules, or when the penalty is so excessive that one's sense of fairness is shocked. Students at private universities are not afforded the full range of due process rights unless a threshold showing of State involvement is made, a contention that was not argued by petitioners here. This restricted judicial review applies no matter what stage of the disciplinary process is being challenged. 

Matter of Storino v. New York Univ., NY Slip Op 02087 (1st Dep't April 1, 2021)

Here is the decision.

A parent corporation's liability for a subsidiary.

The Appellate Division unanimously reversed the Order which granted plaintiff's cross motion for leave to amend its complaint to assert a claim of alter ego liability against defendant TPR Holdings, LLC, and denied the cross motion. In New York, a parent corporation generally cannot be held liable for the debts of its wholly owned subsidiary, nor can it be bound by the contract of that subsidiary. There are two circumstances under which a parent will be held liable as a party to its subsidiary's contract: (1) if the parent manifests an intent to be bound by the contract; or (2) if there are the elements of a claim for piercing the corporate veil. Here, the Appellate Division found neither. An intent to be bound can be inferred from the parent's participation in the negotiations of the contract, but the amended complaint is silent on how the business relationship between plaintiff and the subsidiary defendants had evolved. It appears that TPR Holdings initially approached plaintiff about three separate credit accounts for its three subsidiaries. However, there is no allegation about who negotiated the pricing or the general terms of each transaction. Plaintiff acknowledged that the purchase orders were issued separately by the subsidiary defendants. While it appears that TPR Holdings' employees were frequently, but not always, involved in the transactions' creative aspect by approving the order designs, there is no allegation that TPR Holdings directly participated or micro-managed each transaction underlying the purchase orders or acknowledged that it was the actual party in interest. In addition, the complaint is silent on who paid for plaintiff's services. The Appellate Division also found the claim for piercing corporate veils insufficient. Even if TPR Holdings exercised complete domination of the subsidiary defendants, plaintiff failed to allege that the abuse of the corporate form was for the purpose of defrauding plaintiff and causing it an injury. Specifically, plaintiff did not allege that the subsidiary defendants were not legitimate businesses or that they were created for an improper purpose of cutting off plaintiff's ability to collect on the contract, or that corporate funds were purposefully diverted to make any of the three companies judgment proof. The allegation that TPR Holdings caused the subsidiary defendants to breach a contract is not enough to show the requisite wrongdoing.

World Wide Packaging, LLC v. Cargo Cosmetics, LLC, NY Slip Op 02088 (1st Dep't April 1, 2021)

Here is the decision.

Expert disclosures.

The court providently struck plaintiffs' expert disclosure, which failed to disclose the substance of the facts and opinions on which the expert was expected to testify, pursuant to CPLR 3101[d][1] and Rules of the Commercial Division of the Supreme Court, 13[c].

30-32 W. 31st St. LLC v. Heena Hotel, NY Slip Op 02055 (1st Dep't April 1, 2021)

Here is the decision.

Dies irae.

"Quid est veritas?"

The common interest privilege.

The privilege applies where the communication is otherwise protected under the attorney-client privilege and is in furtherance of a legal interest or strategy common to the parties asserting the privilege. The proponent bears the burden of establishing that the information sought is immune from disclosure.

Stafford v. A&E Real Estate Holdings, LLC, NY Slip Op 01956 (1st Dep't March 30, 2021)

Here is the decision.