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THE DEFENDANT HOTEL BOOKING SERVICE, AGODA, COULD NOT BE COMPELLED TO ARBITRATE IN PLAINTIFF’S SLIP AND FALL ACTION AGAINST THE HOTEL; AGODA’S TERMS OF USE LIMITED LIABILITY TO THE BOOKING SERVICES AND EXPRESSLY EXCLUDED LIABILITY FOR PERSONAL INJURY AT THE HOTEL (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the defendant hotel booking service, Agoda, could not be compelled to arbitrate in this slip and fall action against the hotel booked through Agoda. The terms of use confined Agoda’s potential liability to the booking services and expressly excluded liability for personal injury:

A “party cannot be compelled to submit to arbitration unless the agreement to arbitrate expressly and unequivocally encompasses the subject matter of the particular dispute” … . Where arbitration provisions do not clearly and unequivocally provide that questions about the scope of the arbitration provisions are for the arbitration panel to determine, the threshold question whether the dispute is encompassed within an agreement to arbitrate is for the courts (CPLR 7503[b] …).

The arbitration clause in the terms of use covers “all disputes or claims arising out of or relating to your relationship with Agoda.” The terms of use also define Agoda’s role as providing a platform for individuals to browse information about accommodations and make reservations at accommodations. Furthermore, the terms of use make clear that “Agoda does not in any way . . . own, manage, operate or control” the accommodations and that Agoda will not be liable in damages for any “(PERSONAL) INJURY . . ., OR OTHER DAMAGES, ATTRIBUTABLE TO THE ACCOMMODATION.” Because plaintiff’s claim is one to recover damages for a personal injury caused by the resort’s negligence, it does not arise from or relate to the relationship between plaintiff and Agoda, which was limited to plaintiff’s booking a reservation at the resort, and therefore is not arbitrable … .

As for Agoda’s motion to dismiss, the terms of use constitute documentary evidence under CPLR 3211(a)(1), and the limitation of liability clause in the terms of use definitively disposes of plaintiff’s claim to recover damages from Agoda for personal injury caused by the resort’s alleged negligence … . McWashington v Hyatt Corp., 2025 NY Slip Op 00050, First Dept 1-7-25

Practice Point: Here the hotel booking service’s terms of use expressly excluded liability for plaintiff’s personal injury at the hotel. Therefore the booking service could not be compelled to arbitrate in plaintiff’s slip and fall case.

 

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THE SIX-YEAR STATUTE OF LIMITATIONS BEGAN TO RUN WHEN THE LANDLORD COULD HAVE DEMANDED PAYMENT PURSUANT TO THE LEASE, NOT WHEN THE DEMAND WAS ACTUALLY MADE YEARS LATER (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the six-year statute of limitations for breach of contract (here, a lease) started running when a demand for payment could have been made, not when the demand was actually made:

… [A]lthough the motion court awarded the entirety of the amounts of unpaid additional rent going back to 2006, the landlord’s inexplicable delay in asserting these counterclaims until September 13, 2019 rendered the amounts that accrued before September 13, 2013 time-barred (CPLR 213[2]). The law is well settled that the statute of limitations on breach of contract claims begin to run “when the party that was owed money had the right to demand payment, not when it actually made the demand” … . Because the limitations period cannot be extended “by simply failing to make a demand” … , the judgment must be reduced to include only those amounts that accrued on or after September 13, 2013, and we remand for the calculation of the proper award and commensurate reduction in statutory interest. Abarrotes Mixteca Corp., Inc. v Brisk, 2025 NY Slip Op 00034, First Dept 1-7-25

Practice Point: For a breach of contract, the statute of limitations begins to run when the party can demand payment pursuant to the contract, not when the demand is actually made. The statute of limitations cannot be extended by failing to make a demand.

 

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PLAINTIFF WAS INJURED IN A LYFT CAR WHICH HAD BEEN ORDERED BY HIS FRIEND THROUGH THE FRIEND’S ACCOUNT; BECAUSE PLAINTIFF HAD SCROLLED THROUGH AND AGREED TO LYFT’S TERMS OF SERVICE, WHETHER PLAINTIFF WAS BOUND BY THE ARBITRATION CLAUSE MUST BE DETERMINED BY THE ARBITRATOR (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff, who used another’s Lyft account to order transportation, and who was injured in an accident involving the Lyft car, was subject to an arbitration provision in the contract between Lyft and the account-holder. Whether the plaintiff was bound by the arbitration clause was deemed to be an issue to be decided by the arbitrator:

Arbitration must be compelled because plaintiff was a party to an arbitration agreement with Lyft that expressly delegated the threshold question of arbitrability to the arbitrator. It is undisputed that, prior to the subject accident, plaintiff scrolled through and agreed to Lyft’s Terms of Service (the TOS), which included an agreement to arbitrate. As part of the arbitration agreement, the parties agreed to delegate “disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement)” to the arbitrator. When the parties’ contract delegates the arbitrability question to an arbitrator, the courts must respect the parties’ decision “even if the arguments of the party seeking to arbitrate ‘appear[] to the court to be frivolous’ or even ‘wholly groundless'” … .

There is no dispute that if plaintiff had ordered the subject ride through his own Lyft account, then the instant claims would be subject to arbitration because plaintiff was party to a valid and enforceable arbitration agreement with a valid and enforceable delegation provision — even if there were a question as to the arbitration agreement’s scope … . We find that the question of whether the agreement to arbitrate encompassed claims stemming from plaintiff’s presence in a Lyft that he did not order is a question of arbitrability that must be decided by the arbitrator … . Samuel v Islam, 2024 NY Slip Op 06675, First Dept 12-31-24

Practice Point: If you scroll through and agree to the terms of service when a Lyft car is ordered though another’s account, and you are subsequently injured in an accident in the Lyft car, you are compelled to arbitrate the question whether you are subject to the arbitration clause just as the account-holder would be.

 

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DEFENDANT SNOW-REMOVAL CONTRACTOR WAS ENTITLED TO SUMMARY JUDGMENT IN THIS SLIP AND FALL CASE; NO “ESPINAL” EXCEPTIONS WERE ALLEGED IN THE COMPLAINT OR DEMONSTRATED IN RESPONSE TO THE SUMMARY JUDGMENT MOTION; THE CONTRACT WITH THE PROPERTY OWNER DID NOT MAKE THE SNOW-REMOVAL CONTRACTOR COMPLETELY RESPONSIBLE FOR MAINTENANCE OF THE PARKING LOT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant snow-removal contractor was entitled to summary judgment in this parking-lot slip and fall case. The defendant demonstrated plaintiff was not a party to the snow-removal contract with the owner of the parking lot, a nursing home. The plaintiff had not alleged in the complaint that any “Espinal” exception applied and was unable to raise a question of fact on the “Espinal” issue in response to defendant’s summary judgment motion:

“‘As a general rule, a limited contractual obligation to provide snow removal services does not render the contractor liable in tort for the personal injuries of third parties'” … . However, the Court of Appeals has recognized three exceptions to the general rule: “(1) where the contracting party, in failing to exercise reasonable care in the performance of his [or her] duties, launche[s] 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 the other party’s duty to maintain the premises safely” …  * * *

… [T]he defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the complaint by submitting evidence that the plaintiff was not a party to the snow removal contract … . Since the plaintiff did not allege facts in the pleadings that would establish the possible applicability of any of the Espinal exceptions, the defendants were not required to affirmatively demonstrate that these exceptions did not apply to establish their prima facie entitlement to judgment as a matter of law … .

… [T]he plaintiff failed to raise a triable issue of fact based on any of the Espinal exceptions. The plaintiff failed to raise a triable issue of fact as to whether the defendants launched a force or instrument of harm. The affidavit of a former coworker that the plaintiff relied upon was insufficient because it only addressed the general conditions of the parking lot and not the cause of the specific ice on which the plaintiff allegedly was injured … . The plaintiff also failed to raise a triable issue of fact as to whether the defendants entirely displaced the nursing home’s duty to maintain the parking lots. The affidavit of the former assistant to the head administrator of the nursing home that the plaintiff submitted failed to address the language in the snow removal contract that provided that the nursing home retained some duties and responsibilities to maintain the parking lots … . Brito-Hernandez v Superior Contr., 2024 NY Slip Op 06619, Second Dept 12-24-24

Practice Point: Consult this decision for a discussion of all the issues relevant to suing a snow-removal contractor for a slip and fall. Are any “Espinal” exceptions raised or applicable? Did the snow-removal contract make the contractor completely responsible for maintenance of the parking lot, or did the property-owner retain some responsibility?

 

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THE CHOICE OF FORUM CLAUSE (ARIZONA) IN THE CONTRACT IS ENFORCEABLE AND IS NOT AFFECTED BY AN ARGUMENT QUESTIONING THE VALIDITY OF A CHOICE OF LAW CLAUSE; THE FACT THAT THE NEW YORK PLAINTIFF WILL HAVE TO TRAVEL TO ARIZONA DOES NOT AFFECT THE ENFORCEABILITY OF THE CHOICE OF FORUM CLAUSE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined defendant’s motion to dismiss the New York complaint based upon the choice of forum clause (Arizona) in the contract should have been granted. Plaintiff argued the contract was illegal under New York law. But a choice of forum clause is independent from a choice of law clause:

The contract between the parties provided that Arizona law would govern “the rights and obligations” of the parties under the contract. It further provided that all disputes arising out of the contract “shall be subject to the exclusive jurisdiction and venue of the state or federal courts sitting in Maricopa County, Arizona.” That forum selection clause is prima facie valid and enforceable unless shown by plaintiff to be ” ‘unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court’ ” … .

In opposition to the motion, plaintiff argued that the contract’s “pay-if-paid” provision, together with a provision prohibiting plaintiff from contacting clients of defendant, rendered the contract void as against public policy of New York. Plaintiff’s argument, however, “is misdirected [inasmuch as t]he issue [it] raise[s] is really one of choice of law, not choice of forum” … . ” ‘[O]bjections to a choice of law clause are not a warrant for failure to enforce a choice of forum clause’ ” … . Plaintiff has not shown that enforcement of the forum selection clause contravenes New York public policy … . Nor has plaintiff shown that enforcement would be unreasonable or unjust or alleged that the clause was the result of fraud or overreaching … . Plaintiff’s further argument in opposition to the motion—i.e., that it would be a hardship for plaintiff’s owner to go to Arizona to litigate this dispute—is an insufficient basis on which to deny the motion … . The fact that New York may be a more convenient forum is immaterial inasmuch as defendant’s motion is based on the parties’ contract and not on the doctrine of forum non conveniens … . Prestige Lawn Care of WNY, LLC v Facilitysource, LLC, 2024 NY Slip Op 06483, Fourth Dept 12-20-24

Practice Point: Consult this decision for a discussion of a choice of forum clause versus a choice of law clause versus the doctrine of forum non conveniens.

 

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ALTHOUGH PLAINTIFF ALLEGED FRAUDULENT INDUCEMENT, THE ESSENCE OF THE LAWSUIT IS THE ALLEGED BREACH OF THE CONTRACTS; THIS IS NOT A CASE WHERE IT IS ALLEGED THE FRAUDULENT INDUCEMENT NULLIFIED THE CONTRACTS; THEREFORE THE JURY-TRIAL WAIVER PROVISIONS REMAIN ENFORCEABLE (FIRST DEPT). ​

The First Department, in a full-fledged opinion by Justice Kapnick, determined the “fraudulent inducement” claim in this breach of contract action was covered by the contractual waiver of a jury trial. The First Department distinguished this case, which is in essence a “breach of contract” action, from cases where fraudulent inducement is alleged to have nullified the entire agreement. The contracts here involved the manufacture of semiconductor chips by defendant GlobalFoundries for plaintiff IBM:

From 2013 to June 2015, plaintiff International Business Machines Corporation (IBM) and defendant GlobalFoundries U.S. Inc., a manufacturer of semiconductors, engaged in discussions concerning a collaborative venture whereby IBM would transfer its microelectronics business, including technology, engineers and employees, to GlobalFoundries, along with a sum of $1.5 billion, and GlobalFoundries would develop, manufacture and supply next generation 14nm and 10nm high performance semiconductor chips for IBM. * * *

… [W]here a claim of fraudulent inducement challenges the validity of the agreement, a provision waiving the right to a jury trial in litigation arising out of the agreement may not apply … . This Court has taken care to distinguish between actions where the primary claim is fraudulent inducement and the validity of the entire contract is clearly being challenged … , and actions that do not challenge the validity of the contract but rather seek to enforce the underlying contract by obtaining damages for fraudulent inducement … . The present case falls into the latter category. * * *

It is clear from IBM’s complaint that its primary claim is not fraudulent inducement but rather breach of the agreements. International Business Machs. Corp. v GlobalFoundries U.S. Inc., 2024 NY Slip Op 06425, First Dept 12-19-24

Practice Point: It is possible that fraudulent inducement can nullify an underlying contract rendering all of the contract provisions unenforceable. Here however, although fraudulent inducement was alleged, the essence of the suit is the alleged breach of the underlying contracts. Therefore, the jury-trial waiver provisions remain enforceable.

 

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HERE THE PROVISIONS IN THE LETTER AGREEMENT DID NOT GIVE PLAINTIFF THE EXCLUSIVE RIGHT TO SELL THE PROPERTY (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the letter agreement did not give plaintiff an exclusive right to sell the property:

Plaintiff’s argument that the parties’ letter agreement gave it an exclusive right to sell is unavailing. To create an exclusive right to sell, a contract “must clearly and expressly provide that a commission is due upon sale by the owner or exclude the owner from independently negotiating a sale” … . The agreement here lacks express language excluding a direct conveyance by defendants, nor is that a necessary implication of its terms … . The agreement’s language requiring defendants to “inform” plaintiff if contacted about potential transactions is insufficient to create an exclusive right to sell … . Moreover, plaintiff fails to show that the agreement’s tail provision, entitling plaintiff to a fee for efforts at procuring a transaction during its engagement even if the transaction were completed only after the termination of that engagement, necessarily implied that the parties intended to create an exclusive right to sell. Cantor Fitzgerald & Co. v ObvioHealth Pte Ltd., 2024 NY Slip Op 06421, First Dept 12-19-24

Practice Point: This decision gives some insight into the criteria for conferring the exclusive right to sell property.

 

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AN ELECTRICAL SUBCONTRACTOR WHICH IS NOT LICENSED IN NEW YORK CITY CANNOT SUE FOR PAYMENT FOR WORK DONE IN THE CITY AND CANNOT FORECLOSE ON RELATED MECHANIC’S LIENS (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiff electrical subcontractor, Mikoma Tech, did not prove it was licensed to perform electrical work in New York City. Therefore plaintiff could not sue for breach of contract or under a quantum meruit theory and could not foreclose on mechanic’s liens:

… [T]he complaint … failed to allege that Mikoma Tech was licensed to perform electrical work in New York City. As Mikoma Tech was not licensed to perform electrical work in the City, it may not recover against the defendants under a breach of contract or quantum meruit theory and has forfeited the right to foreclose on mechanic’s liens … . Mikoma Elec., LLC v Otek Bldrs., LLC, 2024 NY Slip Op 06332, Second Dept 12-18-24

Practice Point: The rule requiring a license to perform electrical work in New York City is strictly construed. The unlicensed contractor cannot sue for payment and cannot foreclose mechanic’s liens.

 

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THE REPRESENTATION THAT THE INSURED PROPERTY WAS A TWO-FAMILY DWELLING WHEN, IN FACT, IT WAS A THREE-FAMILY DWELLING, WAS A MATERIAL MISREPRESENTATION; COVERAGE FOR FIRE DAMAGE PROPERLY DISCLAIMED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the representation that the insured property was a two-family dwelling when, in fact, it was a three-family dwelling, was a material misrepresentation and was a proper basis for denying coverage for fire damage:

“‘[T]o establish its right to rescind an insurance policy, an insurer must demonstrate that the insured made a material misrepresentation. A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented'” … . “‘To establish materiality as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins, or rules pertaining to similar risks, that show that it would not have issued the same policy if the correct information had been disclosed in the application'” … . “‘[E]ven innocent misrepresentations, if material, are sufficient to allow an insurer to defeat recovery under the insurance contract'” … .

Here, MIC [the insurer] demonstrated, prima facie, that the application for insurance contained a misrepresentation regarding whether the premises was a two-family dwelling and that this misrepresentation was material … . … MIC established that the material misrepresentation was attributable to her, since, even if the application for insurance had been submitted without her actual or apparent authority, she ratified the representations contained in the application by accepting the policy for a two-family dwelling … . Estiverne v MIC Gen. Ins. Corp., 2024 NY Slip Op 06327, Second Dept 12-18-24

Practice Point: Even an innocent misrepresentation supports the denial of insurance coverage if it was material.​

Practice Point: Here plaintiff alleged she was unaware of the misrepresentation. The court held she ratified the misrepresentation when she accepted the insurance policy.

 

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THE COMPLAINT, WHICH ALLEGED PLAINTIFF’S FORMER EMPLOYER “BLACKBALLED” HIM BY PREVENTING HIM FROM PROCURING EMPLOYMENT WITH OTHER COMPANIES. STATED A CAUSE OF ACTION FOR TORTIOUS INTERFERENCE WITH PROSPECTIVE CONTRACTUAL RELATIONS (SECOND DEPT). ​

The Second Department, reversing (modifying) Supreme Court, determined the complaint stated a cause of action for tortious interference with prospective contractual relations. Plaintiff was allegedly “blackballed” by his former employer, Con Edison, when he sought employment with other companies after he was fired by Con Edison, allegedly for complaining about illegal dumping of waste:

Contrary to the plaintiff’s contention, the amended complaint failed to state a cause of action to recover damages for tortious interference with contract insofar as asserted against Con Edison. The amended complaint alleged that the plaintiff entered into certain employment contracts after he was terminated from Restani and that Con Edison interfered with those contracts, causing the plaintiff’s termination. Inasmuch as the plaintiff failed to allege that those employment contracts were for a definite term, we presume that they were terminable at will … . A contract that is terminable at will cannot form the basis of a claim for tortious interference with contract because such a contract “contemplates prospective contractual relations only” … .

… [T]he amended complaint stated a cause of action to recover damages for tortious interference with prospective contractual relations insofar as asserted against Con Edison. “Where, as here, the alleged interference was with prospective contractual relationships, rather than existing contracts, a plaintiff must show that the defendant interfered with the plaintiff’s business relationships either with the sole purpose of harming the plaintiff or by means that were unlawful or improper” … . “‘This standard is met where the interference with prospective business relations was accomplished by wrongful means or where the offending party acted for the sole purpose of harming the other party'” … . Wrongful means may include physical violence, fraud, misrepresentation, civil suits, criminal prosecutions, and economic pressure … . Here, the plaintiff sufficiently alleged that Con Edison tortiously interfered with his prospective contractual relationship with his employers by engaging in unlawful retaliatory conduct in violation of Labor Law § 740 … . Ackerson v Restani Constr. Corp., 2024 NY Slip Op 06322, Second Dept 12-18-24

Practice Point: The court noted that interference with at will contracts cannot be the basis for a tortious interference with contract cause of action. However interference with at will contracts can be the basis for a tortious interference with prospective contractual relations cause of action.

 

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