Saturday, February 28, 2009

Learned Brother, where art thou?

The other day ABL referred to opposing counsel in court as "my learned brother." The presiding judge remarked that he had never heard that phrase before. Although uncommon, ABL wondered why (and when) the practice of so referring to one's adversary fell out of mainstream parlance. Although the practice remains prevalent in other common law jurisdictions, it has declined in the United States (perhaps in correlation with the purported decrease in collegiality and civility the bar has experienced over the last several generations). The practice was common in the U.S. at the turn of the last century. It appeared in a New York Times article from 1895 discussing the entry of learned sisters into the profession. (
ABL's quick perusal of case law shows that the practice continues to breathe in some parts of the country (especially Louisiana), although it appears most frequently (not surprisingly) where judges refer to other judges. A Google search also unearthed recent usage in a February 2009 review of Third Department decisions here in New York (

Thursday, February 12, 2009

4th Dep't addresses course of performance

In Westfield Family Physicians, P.C. v. Healthnow New York, Inc., 2009 WL 281296 (4th Dep't 2009), the 4th Department held that an ambiguous contract provision (i.e., not drafted by ABL) was best interpreted through the lens of the parties' course of performance. The case involved a risk-sharing provision in an agreement governing the compensation between a health insurer and a medical group. The group claimed entitlement to X and the insurer contended that the group was entitled to X-Y. The distributions were settled annually. In the first contract year with a supplement, the group was paid X-Y. They did not object. The next year there was no surplus (and thus no payment). That year, the individual physicians were also presented with provider contracts (in case they left the group). Due to a clerical error that caused a missing page, the provider agreements appeared to suggest that the physicians would get X. The following year, there was a surplus, and the group was paid X-Y. This time they objected. The Group's president also testified that the provider agreements (which he believed replaced the group agreement) were a "welcome change" because they clarified that the physicians would get X rather than X-Y.

The 4th Dep't. held that the group's failure to timely object when they were paid X (i.e., $90K less than what they claimed) rather than X-Y -- as well as deposition testimony elicited by ABL -- showed that the parties intended the contract to provide compensation under the X-Y formula.

Wednesday, February 04, 2009

NY WARN Act took effect on 2/1/09

The NY WARN Act will require employers with 50 or more employees to give 90 days advance written notification to employees for mass layoffs, plant shutdowns, or relocation. The Act includes a $500 per day penalty for each day notice is not given. It also includes exceptions such as the big three (i.e. war, terrorism, and natural disaster, oh my), if the layoff/closing was the result of the end of a contract/project that the employee knew to be of limited duration, if the need for the notice was not "reasonably foreseeable" (ABL sees litigation over this one), if the notice would have adversely affected the employer's active attempts to secure capital that would have staved off the job losses/closing, or, where the triggering event is caused by an "industrial action" (whatever that is).

This law applies to more companies than does the federal WARN Act, which applies to companies employing 100 or more workers and only requires 60 days notification.

The Act also appears to have been hastily drafted (i.e. legislators trying to look like they are doing something in response to the recession). For example, it is not clear what amounts to a relocation (i.e., does the termination of an employee who works from home and the hiring of another employee a "relocation"? What about consolidation of several offices?).

Although their heart may be in the right place, this measure makes it more onerous for companies (and thus less likely) to do business in NY. Although the same can be said of any regulation -- the benefits of the NY WARN Act outweigh its benefits. Borrowing from Lord Byron, it is better to have worked and lost than never to have worked at all.

Sunday, February 01, 2009

Subs contractually indemnifying GC's

In Brooks v. Judlau Contracting, Inc., 11 N.Y.3d 204 (2008) the Court of Appeals held that a subcontractor may contractually indemnify a general contractor, but that it may only indemnify the GC to the extent of the subcontractor's negligence. In other words, a sub cannot indemnify a GC for the GC's negligence. As noted by Prof. Siegel, the importance of contractual indemnification is especially important in cases such as this one -- where there was no "grave injury" and thus no common law indemnification (despite injuries sufficient to command a $3M settlement).