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THE COMMERCIAL LEASE GUARANTEE MET THE DEFINITION OF AN INSTRUMENT FOR THE PAYMENT OF MONEY; THE COVID-19 RESTRICTIONS ON ENFORCEMENT OF COMMERCIAL LEASE GUARANTEES DO NOT APPLY; THE WARRANTY OF HABITABILITY DEFENSE IS NOT AVAILABLE (FIRST DEPT).

The First Department, reversing Supreme Court, determined: (1) although guarantees generally are not instruments for the payment of money within the meaning of CPLR 3213, the language of the guarantee was unconditional and therefore met the criteria of such an instrument; (2) the COVID-19-related provision of the NYC Administrative Code and executive orders, prohibiting enforcement of commercial lease guarantees, do not apply where the business were not required to cease operations; (3) the warranty of habitability was not available as a defense because of the language of the guarantee; and (4) a commercial tenant cannot assert the warranty of habitability:

While a guarantee of both payment and performance does not qualify as an instrument for the payment of money only under CPLR 3213 … , paragraph 1 of the guaranty signed by defendants includes an unconditional obligation to pay all rent and additional rent owed under the sublease, and therefore does so qualify … ; “it required no additional performance by plaintiff[] as a condition precedent to payment or otherwise made defendant[s’] promise to pay something other than unconditional” … .

While the prohibition on the enforcement of commercial lease guaranties against natural persons under Administrative Code of City of NY § 22-1005 applies to businesses that were required to “cease operation” or “close to members of the public” under executive orders 202.3, 202.6, or 202.7, issued in connection with the COVID-19 pandemic, defendants never asserted that the nonparty subtenant ceased operations or closed to the public as a result of those orders.

Defendants’ claim that they properly raised warranty of habitability defenses under the sublease is without merit. Such defenses are not available to defendants because all defenses under the guaranty, with the exception of prior payment, were waived. Moreover, a commercial tenant cannot avail itself of the statutory warranty of habitability (see Real Property Law § 235-b …). iPayment, Inc. v Silverman, 2021 NY Slip Op 01846, First Dept 3-25-21

 

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EVEN THOUGH PLAINTIFF MAY HAVE ACCEPTED DEFECTIVE GOODS WITHIN THE MEANING OF THE UCC, THE UCC PROVIDES REMEDIES, INCLUDING THE RIGHT TO BE MADE WHOLE AND THE RIGHT TO REVOKE THE ACCEPTANCE; PLAINTIFF’S VERDICT SHOULD NOT HAVE BEEN SET ASIDE (SECOND DEPT). ​

The Second Department, in a full-fledged opinion by Justice Christopher, reversing Supreme Court, determined the verdict should not have been set aside in this consumer law case. Plaintiff ordered kitchen cabinets. When they arrived one box was opened by defendant-seller’s representative to confirm the color. Plaintiff then signed a “Completion Certificate” which indicated the cabinets had been found satisfactory. In fact the cabinets were not satisfactory as revealed when they were installed. The Second Department noted that, although under the UCC plaintiff, based on the “Completion Certificate,” could not reject the goods, the UCC provides that she could be made whole, and, in fact, could revoke her acceptance, in addition to other available remedies. Therefore plaintiff’s verdict awarding $30,000 should not have been set aside:

“Acceptance of goods by the buyer precludes rejection of the goods accepted” (UCC 2-607[2]; see Comment 2). However, “acceptance does not of itself impair any other remedy provided by [article 2 of the UCC] for non-conformity” (UCC 2-607[2] …). “Thus, ‘acceptance leaves unimpaired the buyer’s right to be made whole, and that right can be exercised by the buyer not only by way of cross-claim for damages, but also by way of recoupment in diminution or extinction of the [purchase] price'” … . …

Moreover, after the buyer has accepted allegedly non-conforming goods, the buyer may revoke acceptance of the goods under certain limited circumstances and “obtain the same remedies as are available upon rejection” … . …

… [E]ven if the jury found that the plaintiff did not properly revoke her acceptance of the cabinets, the jury could have found that the plaintiff was entitled to other remedies pursuant to UCC 2-607 … .

… [T]he jury’s verdict that … the defendant breached their contract with the plaintiff, breached the implied warranty of fitness, and that the plaintiff was entitled to damages in the amount of $30,000 was supported by a valid line of reasoning and permissible inferences from the evidence at trial … . Campbell v Bradco Supply Co., 2021 NY Slip Op 01745, Second Dept 3-24-21

 

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THE NYPD IS A DEPARTMENT OF THE CITY AND CANNOT BE SEPARATELY SUED; THE 42 USC 1983 CIVIL RIGHTS VIOLATION CAUSE OF ACTION WAS NOT SUPPORTED BY SUFFICIENT ALLEGATIONS OF AN UNCONSTITUTIONAL CITY CUSTOM OR POLICY; THE OTHER CAUSES OF ACTION AGAINST THE CITY FALL BECAUSE THERE WAS PROBABLE CAUSE FOR PLAINTIFF’S ARREST AND THE FORCE USED BY THE POLICE WAS NOT EXCESSIVE UNDER THE CIRCUMSTANCES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the 42 USC 1983 violation-of-civil rights, negligence, assault and battery, excessive force, false arrest and false imprisonment causes of action against the New York Police Department (NYPD) and New York City (City) should have been dismissed. Plaintiff was shot when, in the midst of a psychotic episode, she approached the police with a knife. She was indicted, tried and found not responsible by reason of mental disease or defect. The court noted that the NYPD is a department of the City and cannot be sued separately. The court also noted the 1983 action against the City failed to state a cause action because no city policy or custom was identified as violating plaintiff’s constitutional rights:

To hold a municipality liable under 42 USC § 1983 for the conduct of employees below the policymaking level, a plaintiff must show that the violation of his or her constitutional rights resulted from a municipal custom or policy … . Here, “[a]lthough the complaint alleged as a legal conclusion that the defendants engaged in conduct pursuant to a policy or custom which deprived the plaintiff of certain constitutional rights, it was wholly unsupported by any allegations of fact identifying the nature of that conduct or the policy or custom which the conduct purportedly advanced” … . * * *

The Supreme Court also should have granted that branch of the defendants’ motion which was for summary judgment dismissing the false arrest and false imprisonment causes of action insofar as asserted against the City. The existence of probable cause constitutes a complete defense to a cause of action alleging false arrest and false imprisonment … , including causes of action asserted pursuant to 42 USC § 1983 to recover damages for the deprivation of Fourth Amendment rights under color of state law … . Brown v City of New York, 2021 NY Slip Op 01743, Second Dept 3-24-21

 

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FAILURE TO TIMELY FILE THE OBJECTIONS TO THE SUPPORT MAGISTRATE’S DETERMINATION DID NOT WARRANT DISMISSAL OF THE OBJECTIONS (FOURTH DEPT).

The Fourth Department, reversing Family Court, determined that the failure to time file proof of service of respondent’s objections to the determination of the Support Magistrate did not warrant dismissal of the objections:

Family Court Act § 439 (e) provides that a party filing objections to the determination of the Support Magistrate must serve those objections upon the opposing party, and that proof of service “shall be filed with the court at the time of filing of objections.” Here, the record indicates that respondent timely filed his objections and served a copy of those objections upon petitioner on the same day, but respondent failed to file proof of service with Family Court until two days later.

Under the particular circumstances of this case, we substitute our discretion for that of Family Court and conclude that dismissal of respondent’s objections is not warranted … . Although respondent failed to comply with the statutory deadline for filing proof of service, ” ‘[s]trict adherence to this deadline is not required,’ ” and courts have ” ‘discretion to overlook a minor failure to comply with the statutory requirement’ ” … . Here, there is no dispute that petitioner was not prejudiced by the late filing inasmuch as she was served with a copy of respondent’s objections within the statutory time period (see Family Ct Act § 439 [e]). Indeed, the record shows that petitioner filed a rebuttal to respondent’s objections. Matter of Sigourney v Santaro, 2021 NY Slip Op 01591, Fourth Dept 3-19-21

 

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PETITIONER DID NOT DEMONSTRATE THE NEGLECT PETITION WAS PROPERLY MAILED TO MOTHER AND MOTHER PRESENTED EVIDENCE REBUTTING THE PROCESS SERVER’S AFFIDAVIT; A HEARING ON WHETHER MOTHER WAS PROPERLY SERVED IS REQUIRED (FOURTH DEPT).

The Fourth Department, reversing Family Court, determined a hearing on whether mother was properly served with the neglect petition was necessary:

… [P]etitioner failed in the first instance to establish that the documents were mailed to the mother’s ” ‘last known address’ ” inasmuch as “[t]he affidavit of service says that the [papers] were mailed [by prepaid, first class mail] . . . , without identifying th[e] address” to which they were mailed … . In any event, even assuming, arguendo, that the process server’s affidavit was sufficient to create the presumption of valid service, we conclude that the mother’s submissions were sufficient to rebut that presumption.

The mother’s attorney submitted an affidavit from his legal assistant establishing that the person who accepted service mistakenly thought the papers were for his daughter, who shared the same first name as the mother. That person also informed the legal assistant that the mother had never resided at that address and that the mother’s father, with whom petitioner believed the mother was residing, “had moved out of the home months earlier.” We thus conclude that the mother rebutted any presumption that she was properly served at her “actual place of business, dwelling place or usual place of abode so as to satisfy the requirements of CPLR 308 (2) [or (4)]” … . Additionally, we note that petitioner’s own submissions in the application for an order of substituted service raise a question whether the mother ever resided at the address listed in the affidavit of service inasmuch as that address was not among the numerous identified addresses for her. Matter of William A. (Jessica F.), 2021 NY Slip Op 01580, Fourth Dept 3-19-21

 

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FATHER’S PETITION FOR CUSTODY SHOULD NOT HAVE BEEN DISMISSED WITHOUT MAKING A DETERMINATION ON THE MERITS, MATTER REMITTED; THE USUAL PROOF REQUIREMENTS FOR AWARDING CUSTODY TO A NONPARENT DO NOT APPLY TO A TEMPORARY PLACEMENT WITH A NONPARENT (FOURTH DEPT).

The Fourth Department, remitting the matter for a hearing, determined father’s petition for modification of custody should not have been dismissed as moot without making a determination of the merits. The court noted that the usual requirements for awarding custody to a nonparent did not apply to the maternal aunt in this case because she did not petition for custody and the children were merely placed with her temporarily:

The father initially filed a petition for modification of custody and visitation against the mother, seeking primary residential custody of their three children. Petitioner Genesee County Department of Social Services then commenced a neglect proceeding against the mother, and the mother consented to the entry of orders finding the subject children to be neglected children. Family Court held a joint hearing regarding the neglect petition and the father’s custody petition … , after which the court placed the children with their maternal aunt with the mother’s consent but over the father’s objection, and dismissed the father’s custody petition as moot.

… [W]e agree with the father that the court erred in dismissing his petition for modification of custody and visitation as moot without making a determination on the merits of his petition pursuant to Family Court Act article 6 … . We further agree with the father that, ” ‘[a]s between a parent and a nonparent, the parent has a superior right to custody that cannot be denied unless the nonparent establishes that the parent has relinquished that right because of surrender, abandonment, persisting neglect, unfitness or other like extraordinary circumstances’ ” … . Nevertheless, on the facts of this case, we conclude that the maternal aunt did not have the burden of making a showing of extraordinary circumstances inasmuch as she did not file a petition in this matter and was not awarded custody of the children, but rather the children were placed with her for the pendency of the article 10 proceeding pursuant to Family Court Act § 1017 … . Matter of Michael J.M. v Lisa M.H., 2021 NY Slip Op 01573, Fourth Dept 3-19-21

 

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THE COURT OF CLAIMS, NOT SUPREME COURT, IS THE PROPER FORUM FOR THIS DECLARATORY JUDGMENT ACTION AGAINST THE STATE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the proper forum for the declaratory judgment cause of action against the state was the Court of Claims. The plaintiffs had filed a breach of contract action in the Court of Claims and this declaratory judgment action is incidental to the alleged breach of contract. Therefore the Court of Claims should handle it:

The Court of Claims has subject matter jurisdiction over claims for breach of contract against the State … . As long as the primary claim is for money damages, the Court of Claims “may [also] apply equitable considerations” and grant incidental equitable relief … . Here, because the relief sought in the complaint arises out of an alleged breach of contract, the proper forum for this action is the Court of Claims … . Rice v New York State Workers’ Compensation Bd., 2021 NY Slip Op 01669, Fourth Dept 3-19-21

 

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ALTHOUGH DEFENDANT’S MOTION TO VACATE THE DEFAULT JUDGMENT SHOULD NOT HAVE BEEN GRANTED, DEFENDANT DID RAISE A QUESTION OF FACT ON THE VALIDITY OF THE SERVICE OF PROCESS WHICH REQUIRES A HEARING (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined defendant’s motion to vacate the default judgment on the ground defendant had not been properly served with the complaint should not have been granted. The matter was remitted for a hearing to determine the validity of the service of process:

” ‘Ordinarily, the affidavit of a process server constitutes prima facie evidence that the defendant was validly served’ ” … . Although ” ‘bare and unsubstantiated denials are insufficient to rebut the presumption of service . . . , a sworn denial of service containing specific facts generally rebuts the presumption of proper service established by the process server’s affidavit and necessitates an evidentiary hearing’ ” … . Here, the presumption of service was created by the affidavit of plaintiff’s process server, but defendant rebutted that presumption by submitting, inter alia, his sworn affidavit in which he averred that he had never been personally served, that since at least 2013 he had rented out the dwelling at the address reflected on the affidavit of the process server, that it had been rented to the individual reflected on the affidavit of service, that defendant “did not live or otherwise reside [at the address] in any form,” and instead that he had been living at another address at the time of the purported service. Contrary to plaintiff’s contention, defendant’s submissions raised ” ‘a genuine question’ ” on the issue whether service was properly effected in accordance with CPLR 308 (2) … . Garvey v Global Asset Mgt. Solutions, Inc., 2021 NY Slip Op 01664, Fourth Dept 3-19-21

 

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DEFENDANTS WERE NOT ENTITLED TO A DIRECTED VERDICT ON THE EMPLOYMENT DISCRIMINATION CAUSE OF ACTION; DEFENSE COUNSEL’S REMARK ABOUT THE FINANCIAL CONSEQUENCES OF A PLAINTIFF’S VERDICT DEPRIVED PLAINTIFF OF A FAIR TRIAL; THE COURT OF CLAIMS HAS EXCLUSIVE JURISDICTION OVER ACTIONS SEEKING MONEY DAMAGES FROM THE STATE, RELEVANT CAUSES OF ACTION PROPERLY DISMISSED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, over a dissent, determined defendants’ motion for a directed verdict should not have been granted and the defense attorney’s remark in summation warranted a new trial. Plaintiff alleged he was denied promotion at the Central New York Psychiatric Center (CNYPC) because the defendants deemed him mentally unstable due to his status as a veteran of the Iraq war.  The directed verdict awarded defendants on that issue was reversed. The defense counsel’s remark in summation that one of the individual defendants would have to “open up her checkbook and write somebody a check” if plaintiff wins deprived plaintiff of a fair trial (the state is required to indemnify defendants as state officers and employees). This case was brought in Supreme Court. The Fourth Department noted that the Court of Claims has exclusive jurisdiction over actions against the state for money damages (apparently the relevant causes of action were properly dismissed for that reason):

Plaintiff … contends that the court erred in granting defendants’ motion for a directed verdict with respect to plaintiff’s cause of action under the New York Human Rights Law alleging discrimination based on military status … . We agree. * * * Based upon the … testimony that plaintiff was not promoted because “[t]here was a question after [plaintiff’s] military service about his [mental] stability,” the jury could have rationally inferred that defendants refused to promote plaintiff in part because they perceived that combat veterans, such as plaintiff, develop dangerous and disqualifying mental health issues as a result of their military service. Thus, “it cannot be said that ‘it would . . . be utterly irrational for a jury to reach [a verdict in favor of plaintiff]’ ” … . * * *

… [R]emarks about a party’s financial status “have been universally condemned by the courts of this State” … . The defense attorney’s argument that his clients should not be “forced to open [their] checkbook” likely conveyed that the individual defendants would be required to pay any damages out-of-pocket. That remark was “grossly improper” … . Moreover, it misrepresented the law to the jury. The State has a duty to indemnify its employees for judgments that arise out of actions within the scope of their public duties, although that duty does not arise from injury or damage resulting from intentional wrongdoing on the part of the employee (see Public Officers Law § 17 [3] [a]). Hubbard v New York State Off. of Mental Health, Cent. N.Y. Psychiatric Ctr., 2021 NY Slip Op 01661, Fourth Dept 3-19-21

 

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THE REQUEST TO POLL THE JURY SHOULD NOT HAVE BEEN DENIED; THE JUDGE SHOULD NOT HAVE DISCHARGED THE JURY FOREMAN FOR ARGUING WITH ONE OR MORE JURORS WITHOUT INTERVIEWING ALL INVOLVED (FIRST DEPT).

The First Department, ordering a new trial in this personal injury action, determined the trial judge should not have denied plaintiff’s request to poll the jury and the jury foreman should not have been discharged for arguing with one or more jurors without interviewing all involved:

It is fundamental error to deny a party’s request to poll the jury … . Defendants’ argument that the issue was not preserved for appeal is unavailing, as plaintiff’s counsel clearly requested that the jury be fully polled … . …

It was also reversible error for the court to discharge the jury foreman, who was alleged to have been in a verbal altercations with another juror during deliberations, without interviewing the jury foreman and the other involved juror or jurors to determine the nature and extent of the disagreement … . That jurors have heated exchanges, does not, without more, form a valid basis for substitution of a juror without the consent of the parties … . Garcia v Rosario, 2021 NY Slip Op 01555, First Dept 3-18-21

 

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