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Recent Developments
The Firm Victory for GLOBAL Re: Sompo Ordered To Post $7.5 Million LOC
The firm obtained a decision from the U.S. District Court for the Southern District of New York requiring Sompo Japan Insurance Inc., as successor to Yasuda Fire and Marine Insurance Company, to post a $7.5 million letter of credit in favor of GLOBAL Reinsurance Corporation, U.S. Branch. The amount of the LOC represents the amount of Sompo's share of GLOBAL's reserves and IBNR as set forth in GLOBAL's 2004 annual statement. The court's decision confirmed a decision of an arbitration panel that required Sompo to post the LOC. Sompo had refused to comply with the arbitration panel's award; GLOBAL accordingly sought enforcement of the award in court.
Sompo opposed confirmation of the award, arguing that the arbitration panel did not grant it a fair hearing because it rendered its decision based upon the parties' written submissions, without a full hearing. The court rejected Sompo's argument that it did not receive a fair hearing. After the court issued its decision, Sompo posted the LOC.
The Firm Attorney Becomes A Judge
The firm is delighted to announce that Melvin L. Schweitzer, who was of counsel to us since shortly after our founding in 2001, has become a Judge of the New York State Court of Claims. Governor Pataki nominated him for the position on March 11, 2005, the New York State Senate confirmed him on March 22nd, and he was sworn in on April 13th.
Judge Schweitzer’s elevation to the bench caps an illustrious career. Before joining the firm in 2001, Judge Schweitzer had practiced law in New York City for thirty years with the law firm of Rogers & Wells. During that time, he served as a Commissioner of the Port Authority of New York and New Jersey, as counsel to the liquidator of Union Indemnity Insurance Company of New York, and as Counsel and Chairman of the Law Committee of the New York State Democratic Committee. He graduated from Fordham University School of Law in 1969.
We congratulate our friend and colleague, Judge Schweitzer. Our loss is the people’s gain!
U.S. District Court Enjoins Former Employee Under Connecticut Law Without Proof Of "Irreparable Harm"
In a decision dated August 24, 2004, the United States District Court for the Southern District of New York enjoined Herbert W. Dailey, a former employee of the Health Consultants Group, LLC ("HCG"), a Connecticut-based insurance broker with offices in New York City, from doing business with any person or entity in violation of the employment agreement he signed when he joined HCG.
The Court decided that, as a matter of Connecticut law, which applied per the employment agreement Dailey signed, it was not necessary for HCG to prove that it would suffer irreparable harm unless the injunction was entered. Instead, the Court held that "[u]nder Connecticut law it is assumed that breach of a restrictive covenant in an employment agreement will result in irreparable injury to the employer." Accordingly, HCG was required to prove only a likelihood of success on the merits, which it did because the restrictive covenant that Dailey signed met the standard of reasonableness required by Connecticut law.
With respect to the choice of law issue, the Court held that Connecticut law applied because the employment agreement required its application and the State of Connecticut had a reasonable relationship to the parties and the dispute because HCG is based in Connecticut. The Court rejected Dailey's contention that New York law applied because Dailey worked in the New York City office of HCG and the clients with which he dealt were all based in New York. The firm represented HCG.
Intertec Favorably Settles Its Claim in Mediation After It Wins Appeal
Denmark-based Intertec Contracting received a significant settlement of its multi-million dollar claim against New York-based Turner Construction arising from delays in the construction of two high-rise office towers in Colombo, Sri Lanka. After the firm's victory before New York State's Appellate Division, First Department, which reversed the decision of the New York State Supreme Court, New York County, that had dismissed Intertec's case on the basis of forum non conveniens (see Intertec Contracting A/S, et al. v. Turner Steiner International, S.A., et al., 6 A.D.3d 1, 774 N.Y.S.2d 14 (1st Dept. 2004), reargument denied, 2004 N.Y. App. Div. Lexis 7755 (1st Dept. June 3, 2004)), Turner agreed to mediation of the dispute.
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