Gibbons Law Alert

Gibbons Law Alert

Tagged: Contracts

No Specific Waiver, No Arbitration: Enforceability of Arbitration Provisions in New Jersey Real Estate Contracts in Doubt Following Dispenziere v. Kushner Cos.

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Posted in Development/Redevelopment / Real Estate / Transactional Real Estate and Leasing

On January 5, 2015

Companies doing business in New Jersey and accustomed to settling contract disputes through binding arbitration should carefully review their contracts – and carefully draft all future contracts – to ensure that each arbitration provision contains clear and unambiguous language that the parties are waiving their rights to sue in court. An arbitration clause stating that all disputes will be determined through binding arbitration, but failing to contain this explicit waiver, may not be enforceable in accordance with the recent holding by the Appellate Division in Dispenziere v. Kushner Cos.

Delaware Enacts Legislation Authorizing 20-Year Statute of Limitations for Certain Breach of Contract Actions

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Posted in General Litigation

On September 22, 2014

Delaware has recently enacted legislation authorizing parties to a written contract involving at least $100,000 to agree to a statute of limitations of up to 20 years for actions based on that contract. The amendment to 10 Del. C. § 8106, embodied in new subsection (c), gives parties to a written contract the freedom to agree to a limitations period longer than the typical three or four years from accrual of the cause of action, without the need to resort to Delaware’s technical requirements for a contract under seal. The synopsis to the legislation explains that examples of the limitations period to be stated in the contract include, without limitation, (i) a specific period of time, (ii) a period of time defined by reference to the occurrence of another event, another document or agreement or another statutory period, and (iii) an indefinite period of time.

Pennsylvania Superior Court Upholds Pennsylvania Choice-of-Law Provision in Restrictive Covenant Dispute Involving California Employee

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Posted in General Litigation

On January 23, 2014

In Synthes USA Sales, LLC v. Peter Harrison and Globus Medical, Inc., No. 12 EDA 2013, the Superior Court of Pennsylvania applied a Pennsylvania choice-of-law provision in an employment agreement containing confidentiality and non-solicitation provisions in a dispute over an employee who worked in California. In Pennsylvania, so-called “restrictive covenants” and “non-competes” are enforceable if they are incident to an employment relationship, reasonably necessary to protect the employer’s legitimate interests, reasonably limited in duration and geographical scope, and supported by adequate consideration. California law, in contrast, is notoriously hostile to restrictive covenants, with a statute rendering most employment restrictive covenants unenforceable.

Pennsylvania Superior Court Defines Standard for Determining Insurer’s Control of Litigation and Settlement When Seeking to Defend Insured Subject to a Reservation of Rights

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Posted in Insurance

On July 24, 2013

The Pennsylvania Superior Court recently set forth a new standard for determining when an insured must seek the insurer’s consent to settle underlying third-party claims where the insurer had previously offered to defend the insured under a reservation of its right to decline coverage for any adverse judgment that might be entered against the insured later.

Delaware Supreme Court Holds Valid International Forum Selection Clause Dispositive in Determining Jurisdiction

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Posted in General Litigation

On June 11, 2013

In National Industries Group (Holding) v. Carlyle Investment Management LLC, Delaware’s Supreme Court unanimously held that a valid forum selection clause is dispositive in determining which court has jurisdiction over disputes arising under the contract. Even if a foreign corporation is party to the contract, Carlyle holds that any considerations weighing in favor of applying the doctrine of international comity do not override an otherwise valid forum selection clause.

New Jersey Appellate Division Takes “Hands-Off” Approach to Contractual Breaches of the Duty of Good Faith and Fair Dealing

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Posted in General Litigation

On May 21, 2013

In Sun Pharmaceutical Industries v. Core Tech Solutions, New Jersey’s Appellate Division affirmed a Trial Court order dismissing plaintiff’s claims that defendants had breached their contractual duty of good faith and fair dealing. The decision is notable because it sheds light on the definition of “good faith” in the context of a preliminary agreement, an area where there is little New Jersey precedent.

Insurers Doing Business in New Jersey are Being Increasingly Precluded from Arbitrating Out-of-State

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Posted in Insurance

On April 19, 2013

In Allied Professionals Insurance Co. v. Jodar, New Jersey’s Appellate Division affirmed a trial court order denying enforcement of an arbitration choice-of-forum provision in a medical malpractice insurance contract. The decision is notable because it broadly interprets prior Appellate Division case law, reaches a contrary result to a recent Law Division case where the issue went unchallenged, and paves the way for further extension of the result.

Federal Computer Fraud and Abuse Act Claim Asserted in Complaint Tethers Lawsuit to Federal Court

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Posted in Restrictive Covenants

On April 9, 2013

A Federal District Court recently refused to dismiss a complaint for lack of subject matter jurisdiction because, among several state law claims, the plaintiff – the individual defendant’s former employer – also asserted a claim under the Federal Computer Fraud and Abuse Act (CFAA). In NouvEON Tech. Partners, Inc. v. McClure, No. 3:12-CV-633-FDW-DCK, 2013 U.S. Dist. LEXIS 29208 (March 5, 2013), a North Carolina Federal District Court denied defendants’ Rule 12(b)(1) motion to dismiss, for lack of subject matter jurisdiction, a myriad of state law claims filed by NouvEON against its former employee (McClure) and her new employer (Smarter Systems).

Third Circuit: Challenges to Contract’s Validity Must Be Arbitrated, But Challenges to Contract’s Formation May Proceed in Court

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Posted in General Litigation

On March 1, 2013

In its recent decision in SBRMCOA, LLC v. Bayside Resort, Inc., the Third Circuit clarified when challenges to a contract containing an arbitration clause must be arbitrated and when they must be decided by a court. Emphasizing that the relevant distinction is between challenges to a contract’s validity, which are subject to arbitration, and challenges to a contract’s formation, which generally are not, the Court concluded that a claim that a contract was coerced must be arbitrated, but a claim that a contract was beyond a signatory’s authority or ultra vires requires judicial determination.

Broader Coverage May Still Be No Coverage At All: The First Department’s Application of the Prior Pending Claim Exclusion

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Posted in Insurance

On October 23, 2012

The recent decision by New York’s Appellate Division, First Department in Executive Risk Indemnity, Inc. v Starwood Hotels & Resorts Worldwide, Inc., serves as a grim reminder to insureds to pay careful attention at the time of policy renewal to existing demands from third parties, applicable terms and conditions of expiring and renewal policies, differences in the scope of coverage, and appropriate disclosures. Those who do not run the risk of foregoing the insurance they thought they had without even realizing it.

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