On Oct. 9, 2018, the New York Appellate Division, First Department decided Cyprus Grp. Holdings v. Onex, — N.Y.S.3d —-, 2018 WL 4867012, wherein the First Department vacated the trial court’s opinion with respect to the scope of a release provision in a stock purchase agreement and sua sponte denied defendant’s motion to dismiss plaintiff’s claim for breach of a third-party software license on grounds of collateral estoppel and/or res judicata. The opinion dealt with a variety of issues in contract law, including the construction of a release provision in the context of a stock acquisition, the interpretation of forward-looking and ambiguous software license provisions, and whether two breach of contract and indemnity claims are sufficiently similar that if one is precluded by a release, so too is necessarily the other. This column discusses in detail these issues and the two opinions issued to date.

Facts and Procedural History

On March 18, 2014, defendant Onex Corporation sold Cyprus Insurance Group and its subsidiaries to plaintiff Cypress Group Holdings for roughly $63 million. Pursuant to the Stock Purchase Agreement (the SPA), Onex agreed to provide Cyprus Group with a “Closing Date Statement” setting forth Cypress Insurance’s book value as of the day prior to execution of the SPA. Cyprus Group could object to the “Closing Date Statement” within 90 days of receipt by submitting a “Buyer’s Objection.” If a “Closing Date Statement” statement could not be resolved within 14 days, the dispute was to be resolved by a “Neutral Accounting Firm.”