New York Business Litigation Lawyer Blog

Plaintiff dropped off shipments at a UPS outlet store. UPS was allegedly instructed to ship the items COD and to accept money orders only. UPS accepted checks, some of which misspelled plaintiff’s name and some of which bounced. The court held that UPS could not avoid liability simply because plaintiff delivered his packages to an agent and not UPS directly. The court found further that because plaintiff accepted the checks tendered by the customers and delivered to plaintiff by UPS, plaintiff had waived his claims. (April 2008)

Plaintiff, a family-owned meat market, purchased an insurance policy which provided for replacement coverage on the business’ building and property. The policy also provided for one year of business interruption coverage. A fire destroyed the business’ inventory and badly damaged the building. When plaintiff submitted a claim, defendant, the insurance company, disputed the actual damages and paid slightly more than $163,000, and refused to pay more than seven months of business interruption losses. Following arbitration, plaintiff was awarded more than $407,000. Thereafter, plaintiff sued the insurance company for, among other things, consequential damages for the insurance company’s refusal to promptly pay under the policy, claiming that such refusal to pay under the policy, caused plaintiff’s business to collapse. The insurance company responded by pointing to the policy’s exclusion for consequential damages. Reversing the lower courts, the Court of Appeals held that the insurance company’s unreasonable refusal to pay under the policy caused plaintiff’s business to fail. Consequential damages are normally recoverable where they are reasonably contemplated between the parties. In this case, the Court held that business interruption coverage was in place to allow plaintiff’s business to continue in the face of a disaster. When defendant refused to promptly and properly investigate and pay for this loss, it knew the effect it would have on plaintiff. As such, the insurance company played a role in the ultimate loss and is liable, and the consequential damages that plaintiff sought was foreseeable and recoverable. The policy bar on consequential loss was inapplicable because such loss contemplated action by third-parties, not the insurance company.

Eight years after bidding successfully on a foreclosed property, the bidder sought to close. The delay in closing was due, in part, to environmental cleanup demanded by the bidder (as opposed to a refund of his winning bid). The bidder refused to pay accrued taxes and interest on the bid amount, claiming that the taxes are to be paid out the sale proceeds. The court held that because the winning bidder at an auction is the equitable owner, and because the term “sale” means bid date and not the closing date, the bidder was liable. As far as interest, because the bidder opted for the environmental cleanup, reaping those benefits which caused the delay, interest would accrue.

Plaintiff sued to enforce a note. Defendant claimed that the Note included an amount of interest which was usurious, thus rendering the Note unenforceable. Plaintiff claimed that defendant, who in the past had been his attorney, knew or should have known that the interest was usurious and could not raise that as a defense. The court found that although plaintiff was a sophisticated businessman and should have known if the loan was usurious, it was not completely certain how much of the repayment amount was interest and therefore denied summary judgment.

A Mediterranean-style restaurant sought to enjoin its landlord from leasing space to a pizzeria, claiming that doing so violated its lease. The lease provided that the owner would not rent space to another store for use as a substantially same restaurant. The restaurant claimed that when the pizzeria expanded, it became such a competing business, especially because the two eateries shared menu items. The court denied the injunction finding that the lease’s prohibition was not conclusive as the lease prohibited only a Mid-Eastern restaurant, which meaning was vague. Additionally, the court found that the pizzeria’s knowledge of the restriction was not determined, further supporting the denial.

Plaintiff owns the CANDYLAND mark in connection with candy. Defendant owns the mark in connection with games. When defendant licensed the mark to a third-party to use for selling candy, plaintiff sued. In response, defendant claimed that the mark was generic and not entitled to trademark protection as it simply added the word “land” to a generic term and used it connection with its store, and because others had used the mark to sell candy, thereby weakening the mark. Defendant also claimed that there was no confusion between the marks. The court denied both arguments. As far as the mark being generic, the court found that plaintiff used the mark in connection with the sale of candy and not for a candy store. Thus, the mark, as used in connection with candy goods, was not generic. Additionally, the defendant failed to convince the court that others’ use of the mark rendered it generic. Finally, the court found that given the information it had, it could not state for certain that the use of the marks by the parties was not confusing.

Adverse possession is a legal theory that allows one to assert a claim to property that is not his by taking, using and maintaining that property as if it were his. An adverse possession claim is typically asserted where one property owner makes use of part of a neighbor’s property, for example a portion of a driveway, for an extended period and then claims ownership to that part of the driveway when challenged by the true owner. To make out a claim for adverse possession, the adverse possessor must establish that he has been using that property, exclusively and openly, as if it were his, for a period of 10 years. In addition, in most situations, the adverse possessor must also improve or enclose the property. The idea is for the possessor to act as if he owns the property, ostensibly putting the true owner on notice that his property is being used by another.

Until recently, there was a question as to whether the possessor had to know that the property that he was using was not his to satisfy the requirement that it be used openly, as if he owned it. One appellate court held that a possessor’s knowledge that the property belonged to someone else would defeat an adverse possession claim because the possessor’s use could never be considered use as an owner. A different appellate court, however, held that the possessor’s knowledge is irrelevant to the determination of adverse possession. So long as the possessor used the property as if he owned it, his knowledge, intent, and good faith, are immaterial. This theory allows an adverse possession claim even if the possessor knew that the property which he used and now claims to own by adverse possession belonged to his neighbor during the time that he used it. Essentially, this allows one to use his neighbor’s backyard, in an open and notorious manner and years later claim ownership to that backyard, notwithstanding that the true owner was known to the possessor the entire time.

Recently, the question of the possessor’s knowledge reached New York’s highest court, the Court of Appeals. In Walling v. Przybylo, the court decided that so long as the possessor used the property as if it were his, to the exclusion of the true owner and without the owner’s objection, the possessor’s knowledge that the property was never his would not defeat the adverse possession claim. This decision surprised many as it seems to condone ownership by trespass.

Due to defendant’s failure to comply with certain court orders, the court entered a judgement for liability against defendant in plaintiff’s lawsuit after she fell on defendant’s steps. At inquest, plaintiff was awarded $150,000 for future pain and suffering. Plaintiff died the next day. Defendant argued that the $150,000 awarded for what was one day of pain and suffering was unfair and contrary to the legislature’s attempt to reform tort awards. The Court found that the legislature’s efforts were directed at awards above $250,000 and allowed the $150,000 award to stand, particularly where defendant caused plaintiff’s case to be significantly delayed.

Plaintiff underwent an abortion at defendant’s facility. Plaintiff specifically told defendant not to contact her at home, as she knew that her parents would not approve of the procedure. Nevertheless, not only did defendant call plaintiff at home, but the nurse provided enough information to plaintiff’s mother so that her mother understood that plaintiff had undergone an abortion. Although the court did not find that defendant conducted itself in bad faith or that defendant’s conduct was intentional, it found that punitive damages were permitted, as neither bad faith nor intentional conduct was required for such a finding. So long as the conduct complained of was negligent or reckless and sufficiently blameworthy, and advances a strong public policy to deter future conduct, punitive damages may be awarded. In this case, the court found that defendant’s failure to have a formal, written plan to protect its patient’s privacy, particularly given the sensitive nature of the procedures, and the failure by the Center to be sufficiently organized to prevent the kind of disclosure complaint of, together with the careless disclosure by the nurse of private information to one she knew to be plaintiff’s mother was sufficient to allow punitive damages.

Plaintiff, a luxury ship owned and used by its residents, sought to expel defendant, a resident, for improper conduct. Because the court found that the resident compromised the safety and comfort of other residents, in violation of the ship’s rules, the ship’s board acted in its discretion. Nonetheless, the court directed that defendant was entitled to compensation for his unit as the rental income was insufficient to cover his costs and resale was not likely to be achieved.