Lowman v. Consolidated Edison Co. of N.Y., Inc.

Summary

The Appellate Division, First Department, unanimously affirmed an order denying Nelson Services Systems, Inc.'s motion to strike or dismiss a third-party complaint, impose sanctions, or void a confidential letter agreement with Consolidated Edison Company of New York, Inc. The court held that the agreement did not contain privileged information warranting dismissal and that a challenge based on duress or unconscionability required a plenary action because of sharply contested factual issues. The court also found that Con Edison's indemnification claim was not frivolous at that stage, citing an earlier ruling that Nelson had breached its obligation to procure insurance.

Holdings

1. The agreement did not contain privileged information justifying dismissal or striking of the third-party complaint under CPLR 3103(c). References to the direct action, Lowman's personal-injury claim, and Consolidated Edison's indemnification claim were not privileged.
2. Nelson's request to void the confidential letter agreement based on duress and unconscionability had to be pursued in a plenary action rather than by motion because sharply contested issues of fact existed.
3. Consolidated Edison's indemnification claim could not be deemed frivolous at that stage, so sanctions under CPLR 8303-a(a) were unwarranted.

Questions Presented

1. Whether the confidential letter agreement contained privileged information warranting dismissal or striking of the third-party complaint under CPLR 3103(c).
2. Whether Nelson's claims that the agreement was executed under duress and was unconscionable could be adjudicated by motion or had to be pursued in a plenary action.
3. Whether Consolidated Edison's indemnification claim was frivolous so as to warrant sanctions under CPLR 8303-a(a).

Disposition

affirmed