Category: Business Divorce
Commercial Division Reiterates Broad Scope of ERISA Preemption and Difficulty of Pleading Breach of Fiduciary Duty and Conversion Claims Alongside Breach of Contract Claims
The Commercial Division’s decision in Rockmore v. Plastic Surgery Associates, LLP[i] demonstrates the broad scope of ERISA preemption and the difficulty of pleading breach of fiduciary duty and conversion claims alongside breach of contract claims. In Rockmore, Albany County Supreme Court Justice Richard M. Platkin dismissed several claims brought by the departing member of a partnership of physicians. The core claims—which concerned the funding of the partnership’s defined benefit plan—were preempted by ERISA. Separately, Justice Platkin also dismissed breach of fiduciary duty and conversion claims as duplicative of a claim alleging a breach of the operative Partnership Agreement.
[i] Rockmore v. Plastic Surgery Assocs., LLP, 2020 BL 478175, 69 Misc. 3d 1222(A), 135 N.Y.S.3d 259 (Sup. Ct. Albany Cnty. Dec. 2, 2020).
Can the purchasers of promissory notes containing non-New York forum-selection clauses enforce the notes in the Commercial Division? Not without an extraordinary showing as to why the clauses should be set aside, according to Commercial Division Justice Elizabeth Emerson’s recent decision in Stein v. United Wind, Inc. In Stein, Justice Emerson granted a motion to dismiss an action to enforce promissory notes where the notes designated Delaware as the exclusive forum for any disputes arising in connection with the notes.
Commercial Division Holds Corporate Directors May Be Individually Liable When Informally Dissolved Company Forgoes Notice to Creditors
In Morse v. LoveLive TV US, Inc., a recent decision by Justice Robert R. Reed of the New York County Commercial Division, the Court denied a defendant’s motion to dismiss, holding that where it is impossible or futile to obtain a judgment against a defunct corporation that has defaulted on debts by “informal dissolution,” creditors can maintain an action directly against the directors of that company.