A buyer of real property that sued the seller before the parties’ closing date seeking to cancel the contract, but without a valid reason, was deemed to have breached that contract.

The buyer entered into a contract to buy two parcels of land in Staten Island. The contract was to close 30 days after the seller obtained certain regulatory approvals, but not later than 18 months from the contract date. If the approvals could not be obtained either party could terminate the contract or seek to renegotiate the purchase price, without obligation to close.

Because the approvals were delayed, the seller opted to terminate the contract and return the downpayment unless the buyer agreed to modify the contract. The contract was modified to extend the deadline to close, increase the price, and have the buyer reimburse the seller for certain costs incurred in doing the work that would release the regulatory approvals. The parties also agreed that the buyer would not sue the seller if the approvals could not be timely delivered. Believing that the approvals were forthcoming, the parties extended the closing deadline. Before that newly extended closing deadline, the buyer sued the seller seeking to cancel, or rescind, the contract. The seller counterclaimed claiming that the buyer’s lawsuit, by which it announced that it would not close and sought to cancel the contract, was itself a default entitling the seller to keep the buyer’s substantial downpayment. After the buyer’s lawsuit for rescission was dismissed, the seller pursued its counterclaim for the downpayment.

While we don’t have a criminal practice, this recently decided case is interesting in how science can change, impacting prior court decisions.  This same concept was found regarding fire science, in a prior posts found here and here.

From the New York State Bar Association:

The Fourth Department affirmed the grant of defendant’s motion to vacate her conviction based on newly discovered evidence. Defendant, a daycare provider, was convicted in the death of a toddler. Medical testimony at trial attributed the death to shaken baby syndrome. In the motion to vacate her conviction, defendant argued that advances in medicine and science have called into question the prior opinions about shaken baby syndrome, and indicate a short-distance fall can mimic shaken baby symptom.

A supplier was found liable for selling counterfeit Fendi handbags, and after two separate lawsuits was obligated to Fendi and a retailer to whom those fake bags were sold for substantial damages. In an attempt to avoid paying those damages, the supplier turned to its insurance carrier for indemnification, based on a policy that insured the supplier against “advertising injury.”

In affirming the lower court in finding that there was no coverage for the Fendi infringement, the Second Circuit went through an instructive discussion of what advertising injury means, and what that coverage was intended to address. The court explained that New York law was clear that where policy language was ambiguous, it would be construed in favor of the insured. At the same time, the “plain language” of the policy is read in “common speech” and as reasonably expected or understood in the business community. For coverage to be found for advertising injury, the injury must have taken place as part of advertising activities and address items covered by the policy. Therefore, no coverage would be found where liability arose out of the importation, distribution or sale of infringing goods. On the other hand, a policy that covered injury from goods that were “‘marketed, distributed and sold,’” could provide coverage, at least to defend the infringement lawsuit.

In this case, the policy covered an injury arising out of (i) “oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services; (ii) oral or written publication of material that violates a person’s right of privacy; (iii) the use of another’s advertising idea in your ‘advertising;’ and (iv) infringement of another’s copyright, trade dress or slogan in your ‘advertising.’” Items (i) and (ii) were not alleged to apply, but (iii) and (iv) were. In denying coverage, the court held that the requirement that the action take place “in your advertising” required that the infringement be part of the advertisement. Here, the supplier did not advertise at all and Fendi made no claim of infringement or injury that arose out of any advertising. Injury was alleged out of sales. Thus, the supplier could not avail itself of coverage.

Plaintiff as tenant entered into a five year commercial lease, commencing March 1, 2006. The lease provided that the space would be used as an office for a recruiting firm and nothing else, and would not be used in a manner that would violate the certificate of occupancy (the “CO”), which would result in the tenant’s breach of the lease. In December 2007, the tenant learned that the CO required that the building be used only as residential space. The tenant asked the landlord to correct this, but the landlord refused. The tenant vacated on May 8, 2009. Thereafter, the tenant sued claiming that the lease was invalid and illegal. The landlord claimed that it was an innocent mistake and counterclaimed for breach of contract, claiming that the lease provided that it was the tenant’s obligation to provide for all permits and licenses in connection with the leased space and that the landlord did not make representations as to the legality of the space.

In reversing the lower court, the First Department held that the landlord could not hide behind that lease provision while also representing that commercial use was permitted in the building, specifically as an office. Allowing the landlord’s argument would mean that the tenant was in breach of the lease on the day it moved in. Even if the landlord’s mistake was innocent, the tenant did not get what it bargained for, and may thus be entitled to rescind the lease. The court clearly saw the landlord as the offending party and seemed skeptical of its arguments in refusing to correct or update the CO, to the extent that was even possible.

Notably, the court did not address the tenant’s ability to check public records for the building’s permitted use, which would have informed the tenant of the building’s limited use. It seems that the court was not going to allow the landlord to hide its conduct behind the lease terms, no matter what.

The mark “Dickman’s” could not be registered as it was deemed a surname and ineligible for registration, despite the fact that the applicant’s last name was not Dickman.  This write up provides the details, and illustrates why blindly filing a trademark registration application is not always as straightforward as it seems.

During or after a divorce, the plaintiff alleged that the defendant had terminated a joint annuity account and withdrawn the money, leaving him with a $37,000 tax liability.

The defendant moved for summary judgment dismissing the case, claiming that when the plaintiff agreed to enter into joint annuity contract, he “necessarily assumed the risk of pecuniary injury.”

The Second Department rejected that argument, finding that the assumption of risk argument was limited to claims involving “athletic or recreational activities.”

Parties fighting about the proceeds of a life insurance policy agreed to proceed before a beth din. Although the Second Department’s decision which reversed the lower court does not provide details, it seems that the losing party before the beth din was unhappy with that decision and sued the beth din and one of the rabbis involved. Because the lower court had earlier found that the beth din had exceeded its authority and vacated its decision, that court denied the beth din’s motion for summary judgment dismissing the case.

The Second Department held that unless the rabbinical beth din arbitrators “acted in the clear absence of all jurisdiction,” they were immune from being sued in their roles as arbitrators. The fact that the lower court had previously found that the rabbinical court acted in excess of its authority did not alter their arbitral immunity.

This outcome is unsurprising which leaves the question as to the real motivation behind this lawsuit.

In preparing to purchase a condo unit, the buyer informed the condo board that she was not going to conduct any business in that unit. After she closed, the buyer sought board approval to renovate the unit to accommodate a children’s play group. The condo board filed an action seeking to rescind the contract based on fraud and breach of contract.

The buyer claimed that because State law allows a day care facility in a condo unit, which was to be the actual use of the unit, the board could not point to damages as a result of the buyer’s fraud which was required to recover the unit. The First Department rejected that argument, finding that equitable rescission based on fraud requires no damages, only a misrepresentation that induces the other party to enter into a contract “resulting in some detriment.” Even intent to defraud is unnecessary for rescission.

With that, the Court granted the board’s request to rescind the contract.

Following our last article about “use” and its relationship with the trademark application process, another case we came across further illustrates this concept, albeit in a more limited manner.

Weld-Tech and Aquasol Corp. both sell a plumbing apparatus called “EZ-Purge.” After Aquasol filed for and received trademark registration for the EZ-PURGE mark, Weld-Tech sued claiming that it was the first to use that mark, although without trademark protection, and that Aquasol’s use infringed on Weld-Tech’s common-law trademark, obtained through Weld-Tech’s use. Weld-Tech argued that even if Aquasol had obtained a trademark registration, Weld-Tech’s prior use entitled it to some protection so long as the mark was eligible for registration.

The timing was as follows: Weld-Tech began marketing its product in late 2003 or early 2004 and made its first sale in late 2004. It filed a patent application in March 2004. On April 30, 2004, Aquasol filed a trademark application, based on Aquasol’s intent to use the mark in commerce. The question before the court was which party had priority over the mark, Weld-Tech’s common-law use or Aquasol’s intent to use application.

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