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In the Absence of Allegations in the Pleadings Supporting an “Espinal” Exception to the Rule that Tort Liability to Third Persons Does Not Arise from a Contract, No Question of Fact Was Raised About a Duty Owed by the Defendant to the Plaintiff

The Second Department determined the complaint in a slip and fall case was properly dismissed.  There apparently was a contract between the defendant cleaning services company, One-A, and plaintiff’s employer.  Plaintiff slipped and fell on a wet floor. The court explained the Espinal criteria for tort liability to third parties arising from a contract and then found that, because plaintiff was not a party to the cleaning-services contract, the cleaning-services company did not owe her a duty of care:

Generally, a contractual obligation, standing alone, will not give rise to tort liability in favor of a third party … . Nonetheless, the Court of Appeals has recognized three exceptions to this general rule: (1) where the contracting party, in failing to exercise reasonable care in the performance of his or her duties, launches a force or instrument of harm; (2) where the plaintiff detrimentally relies on the continued performance of the contracting party’s duties; and (3) where the contracting party has entirely displaced another party’s duty to maintain the premises safely … . As part of its prima facie showing, a contracting defendant is only required to negate the applicability of those Espinal exceptions that were expressly pleaded by the plaintiff or expressly set forth in the plaintiff’s bill of particulars … . Here, given the allegations in the complaint and the plaintiff’s bill of particulars, One-A established its prima facie entitlement to judgment as a matter of law simply by offering sufficient proof that the plaintiff was not a party to its contract to clean the floor of the premises, and that it thus owed her no duty of care … . In opposition, the plaintiff failed to raise a triable issue of fact … . Glover v John Tyler Eters Inc, 2014 NY Slip Op 08809, 2nd Dept 12-17-14

 

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Criteria for Accelerated Relief Re: a Promissory Note Explained–Conclusory Allegations of Fraud in the Inducement Insufficient to Defeat Summary Judgment

Reversing Supreme Court, the Second Department determined plaintiff was entitled to accelerated summary judgment on a promissory note because the defendant’s conclusory allegations of fraud in the inducement were not sufficient to defeat the motion.  The court explained the availability of accelerated relief:

“Pursuant to CPLR 3213, a party may obtain accelerated relief by moving for summary judgment in lieu of complaint, provided that the action is based upon an instrument for the payment of money only or upon any judgment'” … . ” A promissory note is an instrument for the payment of money only, provided that it contains an unconditional promise by the borrower to pay the lender over a stated period of time'” … . “An instrument does not qualify for accelerated relief under CPLR 3213 if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document'” … . “Therefore, a plaintiff makes a prima facie showing of entitlement to judgment as a matter of law pursuant to CPLR 3213 by showing that the defendant executed the subject instrument, the instrument contains an unconditional promise to repay the plaintiff upon demand or at a definite time, and the defendant failed to pay in accordance with the instrument’s terms” … . Once the plaintiff establishes its prima facie entitlement to judgment as a matter of law, the burden shifts to the defendant to submit admissible evidence to establish the existence of a triable issue of fact with respect to a bona fide defense … .

Here, the plaintiff established its prima facie entitlement to judgment as a matter of law by showing that the defendant executed the subject instruments, which contained unconditional promises to repay the plaintiff upon demand or at a definite time, and the defendant failed to pay in accordance with the terms of the instruments … . Contrary to the Supreme Court’s determination, in opposition, the defendant failed to establish the existence of a triable issue of fact with respect to a bona fide defense. The defendant claimed that the plaintiff fraudulently induced it to execute the promissory notes. However, the evidence submitted by the defendant failed to raise a triable issue of fact in this regard. Moreover, the defendant’s conclusory allegations of fraud were insufficient to defeat the plaintiff’s entitlement to summary judgment … . Sun Convenient Inc v Sarasamir Corp, 2014 NY Slip Op 08827, 2nd Dept 12-17-14

 

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Although Plaintiff Could Not Identify the Cause of Her Fall, A Question of Fact Was Raised Re: the Cause by Circumstantial Evidence

The Second Department determined that, although the plaintiff was unable to identify the cause of her fall, she was able to raise a question of fact about the cause from circumstantial evidence:

In a trip-and-fall case, a defendant may establish its prima facie entitlement to judgment as a matter of law by submitting evidence that the plaintiff cannot identify the cause of his or her fall … . However, that a defective or dangerous condition was the proximate cause of an accident can be established in the absence of direct evidence of causation and may be inferred from the facts and circumstances underlying the injury … .

Here, the defendants met their burden of establishing their prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff was unable to identify the cause of her accident without engaging in speculation … . However, in opposition, the plaintiff raised a triable issue of fact, inter alia, through circumstantial evidence, as to whether the cause of her fall was a cracked and/or unlevel condition on the defendants’ driveway … . Buglione v Spagnoletti, 2014 NY Slip Op 08801, 2nd Dept 12-17-14

 

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Bank Properly Sanctioned for Not Negotiating in Good Faith in Mandatory Foreclosure Settlement Conferences

The Second Department determined plaintiff bank had not negotiated in good faith in the mandatory foreclosure settlement conferences (required by CPLR 3408(f)).  The bank was sanctioned by precluding it from collecting interest on the mortgage for a period of several months:

Pursuant to CPLR 3408(f), the parties at a mandatory foreclosure settlement conference are required to negotiate in good faith to reach a mutually agreeable resolution (see CPLR 3408[f]; Wells Fargo Bank, N.A. v Meyers, 108 AD3d 9, 11). ” The purpose of the good faith requirement in [CPLR 3408] is to ensure that both plaintiff and defendant are prepared to participate in a meaningful effort at the settlement conference to reach resolution'” (US Bank N.A. v Sarmiento, 121 AD3d 187, 200, quoting 2009 Mem of Governor’s Program Bill, Bill Jacket, L 2009, ch 507, at 11). To conclude that a party failed to negotiate in good faith pursuant to CPLR 3408(f), a court must determine that “the totality of the circumstances demonstrates that the party’s conduct did not constitute a meaningful effort at reaching a resolution” … .

Here, the totality of the circumstances supports the referee’s finding that the plaintiff failed to negotiate in good faith. The referee’s finding was based, in part, upon the plaintiff’s failure to follow guidelines pursuant to the federal Home Affordable Mortgage Program (hereinafter HAMP). The applicable guidelines required the plaintiff, as a lender participating in HAMP, to attempt to obtain a waiver of an investor prohibition or restriction in lowering the interest rate and to keep such evidence in the loan file (see Making Home Affordable Program, Handbook for Servicers of Non-GSE Mortgages, version 4.0, ch 2, § 6.5 at 99 [August 17, 2012]). However, despite repeated requests by the referee to produce evidence that the plaintiff attempted to obtain a waiver of the investor’s restrictions in the PSA, the plaintiff failed to do so for more than one year. Therefore, the plaintiff failed to demonstrate that it followed HAMP regulations and guidelines, which, as several trial courts have concluded, constitutes a failure to negotiate in good faith pursuant to CPLR 3408(f)… . US Bank NA v Smith, 2014 NY Slip Op 08832, 2nd Dept 12-17-14

 

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Reassessment of Improved Property Was Not an Unconstitutional Selective Assessment

Reversing Supreme Court, the Second Department determined the reassessment of petitioner’s property after the construction of improvements on the property was not an unconstitutional selective assessment:

Contrary to the determination of the Supreme Court, the petitioner failed to establish that there was an unconstitutional selective reassessment of the subject property. “It is well settled that a system of selective reassessment that has no rational basis in law violates the equal protection provisions of the Constitutions of the United States and the State of New York. Nevertheless, reassessment upon improvement is not illegal in and of itself . . . [n]or is the use of the purchase price or the current market value to reach a tax assessment in and of itself unconstitutional so long as the implicit policy is applied even-handedly to all similarly situated property” (Matter of Leone Props., LLC v Board of Assessors for Town of Cornwall, 81 AD3d 649, 650-651 [internal quotation marks omitted]). Here, the assessor testified at trial that whenever a new house is constructed on property, she visits the property and estimates the market value of the property, while considering comparable sales of improved property, land sales, and the construction costs of typical homes. The petitioner failed to submit any evidence demonstrating that the City assessed newly constructed property at a higher percentage of market value than existing property … . Matter of Carroll v Assessor of City of Rye NY, 2014 NY Slip Op 08837, 2nd Dept 12-17-14

 

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Officer of Corporation Dissolved Pursuant to the Tax Law Is Personally Liable for Corporation’s Lease Obligations

The Second Department determined that defendant, an officer of the defendant dissolved corporation, was personally liable for the dissolved corporation’s lease obligations:

Pursuant to Tax Law § 203-a, the Secretary of State may dissolve a corporation by proclamation for the nonpayment of franchise taxes. Upon dissolution, the corporation’s legal existence terminates and it is prohibited from carrying on new business (see … Business Corporation Law § 1005[a][1]). It retains a limited de jure existence solely for the purpose of winding up its affairs (see … Business Corporation Law §§ 1005[a][1], 1006). A person who purports to act on behalf of a dissolved corporation is personally responsible for the obligations incurred … . Personal liability is not limited to the person who executes a contract on behalf of a dissolved corporation, but extends to the officers of the dissolved corporation … . 80-02 Leasehold LLC v CM Realty Holdings Corp, 2014 NY Slip Op 08805, 2nd Dept 12-17-14

 

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Out-of-Court Statement Leading to Discovery of the Weapon Did Not Violate Defendant’s Right of Confrontation Because There Was No “Direct Implication” the Statement Involved the Defendant’s Possession of the Weapon

The Second Department determined that the right of confrontation issue was preserved for appeal because, although not raised directly, the issue was specifically determined by Supreme Court.  The court further determined that the testimony which alluded to an out-of-court statement leading to the discovery of a blood-covered knife did not violate defendant’s right of confrontation:

Contrary to the People’s contention, the Confrontation Clause (see US Const, 6th amend) issue is preserved for appellate review. While the issue was not “plainly present[ed]” to the Supreme Court …, the court’s ruling on the defendant’s objection demonstrates that the court specifically considered and resolved this issue … .

The defendant’s constitutional right to be confronted with the witnesses against him prohibits the “admission of testimonial statements of a witness who did not appear at trial unless he [or she] was unavailable to testify and the defendant ha[s] had a prior opportunity for cross-examination” … . Here, however, Sergeant Tribble’s testimony and the subsequent testimony relating to the discovery of the weapon did not violate the Confrontation Clause, since there was no direct implication that the nontestifying witness told the police that the defendant possessed the knife, disposed of it, or tried to conceal it … . People v Richberg, 2014 NY Slip Op 08863, 2nd Dept 12-17-14

 

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Attempted Murder and Attempted Robbery Convictions, Under the Facts, Required Concurrent, Not Consecutive, Sentences—Applicable Law Described in Some Depth

The Second Department determined defendant, who was convicted of attempted murder and attempted robbery, must be sentenced to concurrent, not consecutive, terms of imprisonment for those two offenses.  The defendant displayed a handgun and demanded money from the victim.  When the victim refused, the defendant struck and shot the victim:

Penal Law § 70.25(2) provides that concurrent sentences must be imposed “for two or more offenses committed through a single act or omission, or through an act or omission which in itself constituted one of the offenses and also was a material element of the other.” “Thus, sentences of imprisonment imposed for two or more offenses may not run consecutively (1) where a single act constitutes two offenses, or (2) where a single act constitutes one of the offenses and a material element of the other” … . However, “trial courts retain consecutive sentence discretion when separate offenses are committed through separate acts, though they are part of a single transaction” … .

Here, consecutive sentences may not be imposed because the act which constituted the offense of attempted murder in the second degree was a material element of the offense of attempted robbery in the first degree. A person is guilty of attempted murder in the second degree when, with intent to commit murder, he or she engages in conduct which tends to cause the death of another person (see Penal Law §§ 110.00, 125.25[1]). A person is guilty of attempted robbery in the first degree, under the Penal Law section charged here, when he or she attempts to forcibly steal property and is armed with a deadly weapon (see Penal Law § 160.15[2]). A person forcibly steals when he or she, in the course of committing a larceny, uses or threatens the immediate use of physical force to prevent or overcome resistance to the taking of the property or to compel the owner to deliver the property (see Penal Law § 160.00[1], [2]). Here, the actus reus of the attempted murder charge was the firing of three shots at Moore, and the actus reus of the attempted robbery charge was the use or threatened use of physical force to attempt to steal property while armed with a deadly weapon. The act which constitutes attempted murder in the second degree is subsumed within the element of using force. Thus, the act constituting attempted murder in the second degree can be a material element of attempted robbery in the first degree … .

In addition, the People have failed to establish that the acts constituting the attempted robbery in the first degree were separate and distinct from the acts constituting the attempted murder in the second degree … . Here, consecutive sentences could not be imposed because it is impossible to determine whether the firing of three gun shots at Moore, which formed the basis of the verdict of guilt on the attempted murder charge, was also the use of force which formed the basis of the jury’s verdict of guilt on the attempted robbery charge … . Therefore, the People have failed to establish that the acts constituting attempted robbery in the first degree were separate and distinct from those constituting attempted murder in the second degree. People v Grant, 2014 NY Slip Op 08859, 2nd Dept 12-17-14

 

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Only Parties “Aggrieved Within the Meaning of CPLR 5511” May Appeal

In finding that the appeal must be dismissed because the appellant was not “aggrieved within the meaning of CPLR 5511,” the Second Department explained the meaning of “aggrieved” in this context:

“A person is aggrieved within the meaning of CPLR 5511 when he or she asks for relief but that relief is denied in whole or in part,’ or, when someone asks for relief against him or her, which the person opposes, and the relief is granted in whole or in part'” … . Saccheri v Cathedral Props Corp, 2014 NY Slip OP 08821, 2nd Dept 12-17-14

 

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Contract Giving Plaintiff Option to Sell the Property Back to the Defendants If Rezoning Not Obtained Was Ambiguous About When the Option Must Be Exercised Raising a Question of Fact About the Timeliness of Plaintiff’s Exercise of the Option

The Second Department determined the contract rider which allowed plaintiff-purchaser to sell the property back to the defendants-sellers if rezoning and subdivision approvals were not obtained within 15 months was an option contract.  The defendants argued that the option must be exercised within a reasonable time and the plaintiff’s failure to do so entitled defendants to summary judgment.  Supreme Court disagreed and granted plaintiff summary judgment (specific performance). The Second Department found that the contract was ambiguous concerning the time within which the option must be exercised, raising a triable question of fact:

An option contract is an agreement to hold an offer open; it confers upon the optionee, for consideration paid, the right to purchase–—or, less commonly, to sell –at a later date … . Whether an agreement is an option contract or a bilateral contract is determined by reference to its various terms … .

Here, as the defendants correctly contend, section 8(a) of the rider to the subject contract giving the plaintiff the right to sell the property back to [the defendants if plaintiff] failed to obtain certain rezoning and subdivision approvals was an option contract, as it conferred upon the plaintiff the right to sell the property back to Fairview at a later date.

However, in order for there to be an enforceable contract for the sale of land upon which an action for specific performance can be based, an optionee must exercise an option in accordance with its terms, within the time and the manner specified in the option … .

Here, the plaintiff interprets the option contained in section 8(a) of the rider as providing it with an open-ended right to exercise same, and the Supreme Court agreed. The defendants, however, interpret the same provision as limiting the plaintiff’s time to exercise the option to “a reasonable time” after the expiration of the aforementioned 15-month period in which to obtain the specified rezoning and subdivision approvals, and contend that the plaintiff failed to timely exercise its rights.

“Contract language which is clear and unambiguous must be enforced according to its terms” … . However, ambiguity in a written agreement exists if there is more than one reasonable interpretation of the language at issue … . The test for determining whether contract language is ambiguous is “whether the agreement on its face is reasonably susceptible of more than one interpretation” … . Whether an agreement is ambiguous is a question of law to be resolved by the court … . Here, we conclude that section 8(a) of the rider is ambiguous and subject to more than one interpretation regarding the time within which the plaintiff had to exercise the option. Since a triable issue of fact exists as to the intention of the parties, the Supreme Court erred in granting the plaintiff’s motion for summary judgment on the cause of action for specific performance … . IPE Asset Mgt LLC v Fairview Block & Supply Corp, 2014 NY Slip Op 08811, 2nd Dept 12-17-14

 

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