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General Obligations Law Prohibition of Indemnification Agreements Which Exempt a Lessor from Its Own Negligence Does Not Apply to a Commercial Lease Negotiated at Arm’s Length Between Sophisticated Parties With an Insurance Procurement Requirement

The Second Department determined the lessor of a shopping center, Montauk Properties, under the terms of its lease with a supermarket, Gambar Food, was entitled to indemnification re: plaintiff’s slip and fall on a sidewalk in front of the supermarket.  Although the terms of the lease exempted the lessor from liability for its own negligence, which is a violation of General Obligations Law (GOL) 5-321, GOL 5-231 does not apply to a commercial lease negotiated at arm’s length between sophisticated parties with an insurance procurement requirement:

The lease between Montauk Properties and Gambar Food requires Gambar Food to indemnify Montauk Properties “for any matter or thing growing out of the occupation of the demised premises or of the streets, sidewalks or vaults adjacent thereto.” The plaintiff’s accident falls within the scope of this indemnification provision …, which, under its broadly drawn language, obligates Gambar Food to indemnify Montauk Properties for its own negligence. Although General Obligations Law § 5-321 provides that an agreement that purports to exempt a lessor from its own negligence is void and unenforceable, the subject indemnification provision is not rendered unenforceable by this statute. “[W]here, as here, the liability is to a third party, General Obligations Law § 5-321 does not preclude enforcement of an indemnification provision in a commercial lease negotiated at arm’s length between two sophisticated parties when coupled with an insurance procurement requirement” … . Campisi v Gambar Food Corp., 2015 NY Slip Op 06205, 2nd Dept 7-22-15

 

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“Voluntary Payment Doctrine” Explained and Applied to Preclude Recovery

The Second Department determined the “voluntary payment doctrine” precluded recovery against the defendant. Plaintiff had an agreement with a consignee that plaintiff’s liability associated with the export of fine art would be limited to $40,000. Plaintiff hired defendant to transport the fine art to the consignee, but the art was seized by customs because the documentation was incomplete. The plaintiff, despite the $40,000 liability cap, voluntarily compensated the consignee for its loss (around $240,000). Then plaintiff sued defendant for the $240,000. Because the plaintiff made that payment voluntarily, the “voluntary payment doctrine” required dismissal of the complaint:

“[T]he voluntary payment doctrine . . . bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law” … . Here, the defendant established its prima facie entitlement to judgment as a matter of law through the submission of, among other things, a copy of the contract between the plaintiff and the consignee, which included the limitation of liability provision that capped the plaintiff’s liability to the consignee at $40,000. This demonstrated, prima facie, that the plaintiff’s payment to the consignee of anything more than $40,000 was voluntary … . Further, the defendant demonstrated, prima face, that the plaintiff recovered the full $40,000 for which it was liable to the consignee from its insurance company. Hedley’s, Inc. v Airwaves Global Logistics, LLC, 2015 NY Slip Op 06215, 2nd Dept 7-22-15

 

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Where the Parties’ Intent Can Be Determined from the Four Corners of the Contract, the Interpretation of the Contract is a Purely Legal Question Which Can Be Raised for the First Time on Appeal and Which Can Be Finally Determined by the Appellate Court (No Need for a Trial)

The First Department, reversing Supreme Court, determined defendants were entitled to summary judgment dismissing the breach of contract complaint. Defendants owned an improved parcel of land next to a parcel owned by plaintiff. Plaintiff purchased a portion of defendants’ parcel and the parties entered an agreement which included a promise by the defendants that they would not object to any construction on plaintiff’s parcel, which was interpreted by the court to mean defendants agreed to provide their consent if it was necessary to the construction. Upon an examination of the facts, the court concluded plaintiff did not demonstrate he needed the defendants’ consent to anything related to the construction, and therefore the contract provision requiring defendants to consent was never triggered. The aspect of the case which is worth noting is the court’s determination that a purely legal question of contract interpretation was involved and that the purely legal question could be raised for the first time on appeal. The court explained that “where the intention of the parties may be gathered from the four corners of the instrument, interpretation of the contract is a question of law and no trial is necessary to determine the legal effect of the contract…”:

Initially, although defendants’ arguments on appeal differ from those made in support of their motion, they may be considered by this Court because they present a pure legal issue of contract interpretation, which appears on the face of the record and could not have been avoided if raised below … .

“On appeal, the standard of review is for this Court to examine the contract’s language de novo” … . “Our function is to apply the meaning intended by the parties, as derived from the language of the contract in question” … . In interpreting a contract, words should be accorded their “fair and reasonable meaning,” and “the aim is a practical interpretation of the expressions of the parties to the end that there be a realization of [their] reasonable expectations” … . Moreover, “a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” … . Although the parties offer conflicting interpretations of a contract, that does not render it ambiguous … . Moreover, “where the intention of the parties may be gathered from the four corners of the instrument, interpretation of the contract is a question of law and no trial is necessary to determine the legal effect of the contract” … . Dreisinger v Teglasi, 2015 NY Slip Op 06197, 1st Dept 7-21-15

 

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There Is No Legal or Constitutional Authority for a Pre-Execution Challenge to a Search Warrant—Facebook’s Attempt to Quash Search Warrants Seeking All the Information in 381 Subscribers’ Facebook Accounts Was Rejected

The First Department, in an extensive, full-fledged opinion by Justice Renwick, determined there was no statutory or constitutional authority for Facebook’s motion to quash 381 search warrants which sought all the data from the targets’ Facebook accounts and prohibited disclosure of the warrants to the targets. There is no authority allowing a pre-execution challenge to a search warrant. Facebook’s argument that their motion was analogous to a motion to quash a subpoena, the denial of which can be appealed, was rejected. Facebook’s argument that the bulk warrants were akin to subpoenas issued to Internet Service Providers, which can be challenged under the Federal Stored Communications Act (SCA), was rejected (after a full analysis):

We agree with Facebook that the bulk warrants at issue here are analogous to SCA section 2703(a) warrants to the extent they authorized the federal and state government to procure a warrant requiring a provider of electronic communication service to disclose electronic content in the provider’s electronic storage. However, contrary to Facebook’s allegations, 2703 subsection (d), which gives the ISP the right to object, applies only to court orders or subpoenas issued under subsections (b) or (c). The SCA specifically distinguishes these disclosure devices from warrants, which are governed by its subsection (a). While an order or subpoena obtained pursuant to (b) or (c) requires only that the government show “specific and articulable facts” that there are “reasonable grounds to believe” the information sought will be “relevant and material,” a warrant under subsection (a) requires the government to make the traditional and more stringent showing of “probable cause.” Here, a finding of probable cause was made by the reviewing judge, and thus the warrants are akin to SCA warrants, not SCA subpoenas or orders. Thus, Facebook’s argument that it has the right to contest the warrants based upon the SCA is contradicted by the express terms of the SCA. * * *

Our holding today does not mean that we do not appreciate Facebook’s concerns about the scope of the bulk warrants issued here or about the District Attorney’s alleged right to indefinitely retain the seized accounts of the uncharged Facebook users. Facebook users share more intimate personal information through their Facebook accounts than may be revealed through rummaging about one’s home. These bulk warrants demanded “all” communications in 24 broad categories from the 381 targeted accounts. Yet, of the 381 targeted Facebook user accounts only 62 were actually charged with any crime.

Judges, as guardians of our Constitution, play an indispensable role in protecting the rights and liberties of individuals entrenched in the Constitution. Charged with the indispensable responsibility of reviewing warrant applications, they protect the rights and interests of individuals by remaining mindful of the reasonableness embedded in the Fourth Amendment’s delicate balance. The procedural rules attendant to the Fourth Amendment’s warrant requirement both reasonably protect the innocent and permit investigation of suspected criminal conduct. A judge reviewing a warrant request must always balance the nature and quality of the intrusion on an individual’s Fourth Amendment interests against the importance of the governmental interests alleged to justify the intrusion. Further, this balance invokes carefully weighing the extent to which each level of intrusion in the execution of the warrant is needed. Each level of intrusion involves an implicit assertion by the government that the intrusion is “reasonable” to recover the evidence described in the warrant despite the compromise of the individual’s interests in privacy. Ultimately, to be fair and effective, the overall assessment of reasonableness requires the judge reviewing the warrant to carefully evaluate the need for each additional level of intrusion in the process of seizing evidence. 381 Search Warrants Directed to Facebook, Inc. v New York County Dist. Attorney’s Off., 2015 NY Slip Op 06201, 1st Dept 7-21-15

 

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In Responding to Defendant’s Criticisms of Defense Counsel’s Actions, Defense Counsel Merely Explained His Actions and Did Not Take a Position Adverse to His Client’s—Therefore the Defendant Was Not Entitled to Withdraw His Plea on the Ground that He Was Denied Effective Assistance of Counsel

In affirming defendant’s conviction by guilty plea, the First Department determined that defense counsel, in responding to allegations about his performance made by the defendant, did not take a position adverse to his client’s. Rather, counsel merely explained the reasons for his actions and did not voice any opinion about the validity of defendant’s pro se motions. Therefore the defendant was not entitled to withdraw his plea on that ground:

“It is well settled that a defendant has a right to the effective assistance of counsel on his or her motion to withdraw a guilty plea” … . “When certain actions or inaction on the part of defense counsel is challenged on the motion, it may very well be necessary for defense counsel to address the matter when asked to by the court. When doing so, defense counsel should be afforded the opportunity to explain his performance with respect to the plea, but may not take a position on the motion that is adverse to the defendant. At that point, a conflict of interest arises, and the court must assign a new attorney to represent the defendant on the motion.” … . * * *

Counsel’s statement that defendant might not understand that he still retained certain residual rights to appeal despite the waiver, and that his concerns might be mitigated if the court explained that to him, was not adverse to defendant’s position. It merely conveyed that if defendant was informed that his waiver did not bar an appeal of all issues, including the voluntariness of the plea, it might affect his view of the waiver. Counsel’s factual statement that the waiver was a condition of the People’s plea offer, which reduced defendant’s sentence and made him eligible for parole at an earlier date, and that he did not believe that there was a basis for a CPL 30.30 motion because all but one of the adjournments since he had taken over the case had been on consent due to plea negotiations, did not go beyond a mere explanation of his performance … . Counsel did not deny that he advised defendant to agree to the waiver or that he refused to make a CPL 30.30 motion. Nor did he refute any specific factual allegation raised by defendant with respect thereto or affirmatively state his belief that defendant had no legal basis for withdrawing his plea. People v Maxwell, 2015 NY Slip Op 06199, 1st Dept 7-21-15

 

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New York City Was Unable to Demonstrate Amendments to the Adult Use Zoning Regulations Were Necessary to Reduce the Negative Effects of Such Businesses on the Surrounding Areas–Therefore the Amendments Constituted an Unjustified Restriction on Speech

In a lengthy, full-fledged opinion by Justice Kapnick, over a two-justice dissenting opinion, the First Department upheld Supreme Court’s determination that the 2001 amendments to New York City’s adult use zoning regulations, re: adult eating and drinking establishments and adult video and book stores, constituted a violation of the First Amendment precluding enforcement of the amendments. In an attempt to change the character of the adult businesses the city had enacted a “60-40” rule requiring that 60% of each business be devoted to “non-adult” products and/or activities. The City later amended the regulations, removing the “60-40” rule, and re-writing the criteria so that a business could be deemed to focus on sexually explicit entertainment irrespective of the amount of space or inventory devoted to “adult” activities and materials. It was those amendments which were challenged. The controversy boiled down to a factual one: Is the City able to demonstrate that the adult-businesses’ response to the “60-40” rule was a “sham response” such that the character of the businesses, and the consequent negative effects on the surrounding community, had not been altered? If the City could so demonstrate, the recent amendments would constitute a justified restriction of speech, if not, the amendments result in an unjustified restriction of speech. The First Department determined the City failed to demonstrate the response to the “60-40” rule was a “sham response” and that the businesses remained unaltered in character by the rule. For The People Theaters of N.Y. Inc. v City of New York, 2015 NY Slip Op 06200, 1st Dept 7-21-15

 

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Concurrent Inclusory Counts Dismissed and Sentences Vacated—Defense Counsel’s Failure to Request that the Greater and Lesser Counts Be Submitted to the Jury in the Alternative, Although a Clear-Cut Error, Did Not Deprive the Defendant of Meaningful Representation

The Third Department determined defendant was entitled to dismissal of the inclusory concurrent counts and the vacation of the sentences imposed thereon, but was not entitled to reversal based upon defense counsel’s failure to request the that the inclusory concurrent counts be presented to the jury in the alternative (conviction on the greater count is deemed a dismissal of every lesser count).  Although the omission was clear-cut error on defense counsel’s part, the error did not deprive defendant of effective assistance:

…. [T]he two counts of criminal possession of a controlled substance in the seventh degree are inclusory concurrent counts of criminal possession of a controlled substance in the third degree … . “When inclusory counts are submitted for consideration, they must be submitted in the alternative since a conviction on the greater count is deemed a dismissal of every lesser count” … . Therefore, defendant’s misdemeanor convictions of criminal possession of a controlled substance in the seventh degree must be reversed and the concurrent, one-year sentences vacated … .

We are not persuaded, however, that defense counsel’s failure to request an alternative charge on these counts “elevates this case to the level of one of those rare cases where a single lapse can constitute ineffective assistance of counsel” … . Although counsel erred on a clear-cut issue …, such an error must be viewed in the context of the entire representation, particularly in light of the other charges that defendant faced. Most importantly here, counsel’s error appears to arise from his failure to properly consider the misdemeanor charges of criminal possession of a controlled substance in the seventh degree. While defendant was certainly entitled to representation on those charges, defendant had previously been convicted of a felony drug offense and faced felony charges of criminal sale of a controlled substance in the third degree and criminal possession of a controlled substance in the third degree. Given the vastly disparate potential outcomes related to the felony and misdemeanor offenses with which defendant was charged, particularly in light of his prior felony drug conviction …, and absent any proof that counsel’s failure was greater than that of failing to properly attend to the misdemeanor charges, we do not find that defendant was deprived of meaningful representation … . People v Vanguilder, 2015 NY Slip Op 06175, 3rd Dept 7-16-15

 

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Landlord With Notice of a Tenant’s Dog’s Vicious Propensities May Be Liable to the Injured Plaintiff

In finding that there were questions of fact precluding summary judgment in a dog-bite case, the Third Department noted that a landlord with notice of a dog’s vicious propensities can be liable to the injured plaintiff:

“A landlord may be liable for the attack by a dog kept by a tenant if the landlord has actual or constructive knowledge of the animal’s vicious propensities and maintains sufficient control over the premises to require the animal to be removed or confined” … . Defendant was empowered to require the [tenants] to remove the animal and, indeed, its site manager testified that he took steps to do so once he learned of the dog’s existence in September 2012. Rodgers v Horizons At Monticello, LLP, 2015 NY Slip Op 06189, 3rd Dept 7-16-15

 

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Ruling that Subject Child Could Not Visit Father in the Presence of Father’s Other Children Is Against Established Policy and Was Not Supported by an Adequate Record—Matter Sent Back for Development of Evidence

Although the custody modification awarding sole custody to mother was upheld by the Third Department, the court was troubled by the requirement that father’s other children could not be present during father’s parenting time with the subject child.  The restriction goes against the general policy that bonds with siblings should be strengthened and the record was not sufficient to warrant the ruling.  The matter was sent back for further development of the evidence:

… [T]here is a dearth of record evidence supporting the provision limiting all parenting time with the father to periods when the child’s older half siblings are not present. Considering the father’s testimony upon cross-examination admitting to some prior unspecified incidents apparently involving the corporal punishment of his older children, meaningful support was not wholly lacking. These prior incidents had resulted in the imposition of supervised visitation with the older children. However, there was no evidence produced to clarify or explain any detail or establish any of the circumstances underlying these admissions. No documents or other proof or testimony was offered or entered. The father testified that the restrictions that had previously been imposed had expired at the time of the hearing. Nothing more was revealed, and the underlying facts were left wholly undeveloped.

Despite the argument by the attorney for the child that limiting the father’s time with this child to periods when the half siblings are not present will protect the child by allowing the father to focus on the child exclusively, the provision is troubling. The law strongly favors the development and encouragement of sibling bonds … . The father’s apparent history of inappropriate corporal punishment certainly raises issues of significant concern. Nonetheless, the issue is too poorly developed in the record to support the argument advanced by the attorney for the child.  Matter of Demers v McLear, 2015 NY Slip Op 06178, 3rd Dept 7-16-15

 

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Criteria for Common Law or Implied Indemnification Explained

In affirming Supreme Court’s denial of summary judgment to the defendants in a construction-accident case, the Third Department clearly explained the criteria for common law or implied indemnification.  In a nutshell, any negligence by the party seeking indemnification for payments made to the injured party on behalf of a negligent tortfeasor will preclude recovery. Common law or implied indemnification applies only to parties who are liable vicariously without fault:

“The principle of common-law, or implied indemnification, permits one who has been compelled to pay for the wrong of another to recover from the wrongdoer the damages it paid to the injured party. Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee, it follows that a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine” … . Accordingly, in order “[t]o establish a claim for common-law indemnification, the party seeking indemnity must prove not only that it was not guilty of any negligence beyond the statutory liability, but must also prove that the proposed indemnitor was guilty of some negligence that contributed to the cause of the accident” … . Hackert v Emmanuel Cong. United Church of Christ, 2015 NY Slip Op 06192, 3rd Dept 7-16-15

 

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