In a significant ruling, the Appellate Division of the Supreme Court of the State of New York reinstated a breach of contract claim in the case of Avail Holding LLC v. ICM Funding LLC. The court's decision, issued on July 2, 2026, affects the parties involved in the dispute and sets important precedents for future contract law cases. The ruling highlights the importance of contractual obligations and the legal standards for dismissing claims.
The dispute centers around Avail Holding LLC, the plaintiff, and ICM Funding LLC, along with other defendants. Avail Holding accused ICM Funding of failing to fulfill its contractual obligations related to mortgage loan assignments. The case reached the Appellate Division after the Supreme Court dismissed several of ICM Funding's counterclaims, including the breach of contract claim, which prompted the appeal.
The initial ruling from the Supreme Court, presided over by Judge Nancy M. Bannon, granted Avail Holding's motion to dismiss ICM Funding's counterclaims for breach of contract, unjust enrichment, and piercing the corporate veil. ICM Funding argued that it had fully performed its obligations under the contract, but the lower court found insufficient grounds to support this claim. This led ICM Funding to appeal the decision, seeking to reinstate its breach of contract counterclaim.
In its ruling, the Appellate Division modified the lower court's decision, specifically reinstating the breach of contract counterclaim. The court stated, "On a motion to dismiss we must deem the allegations to be true and afford plaintiff every favorable inference." The judges emphasized that the allegations made by ICM Funding were sufficient to state a cause of action for breach of contract. The ruling was unanimous, with judges including Moulton, Mendez, Gesmer, O'Neill Levy, and Michael participating in the decision.
While the court reinstated the breach of contract claim, it upheld the dismissal of the counterclaims for unjust enrichment and piercing the corporate veil. The judges noted that the unjust enrichment claim was properly dismissed because there was no genuine dispute regarding the existence of a valid contract. Furthermore, the court affirmed that piercing the corporate veil is not a standalone cause of action, which means ICM Funding could not pursue it independently.
This ruling is significant for several reasons. First, it clarifies the standards for evaluating breach of contract claims at the appellate level. The decision reinforces the idea that courts must take the allegations at face value when considering motions to dismiss. This could lead to more cases being allowed to proceed to trial, where the merits of the claims can be fully examined.
Moreover, the reinstatement of the breach of contract claim could impact how similar cases are handled in the future. Businesses involved in contractual disputes may find themselves under increased scrutiny regarding their performance and obligations. This ruling may encourage parties to carefully document their contractual dealings to avoid potential pitfalls in court.
Looking ahead, it remains unclear whether the case will be further appealed to a higher court. ICM Funding may choose to pursue additional legal avenues now that its breach of contract claim has been reinstated. Additionally, there may be related cases pending that could influence the outcome of this dispute. The court has indicated that it may reopen discovery related to the reinstated counterclaim, which could lead to further developments in the case.