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THE FACT THAT THE AMOUNT TO BE USED TO CALCULATE DEFENDANT’S COMPENSATION WAS NOT SET IN THE CONTRACT, BUT RATHER WAS TO BE ESTABLISHED AND AGREED TO, DID NOT INVALIDATE THE CONTRACT AS A MERE AGREEMENT TO AGREE; THE AMOUNT COULD BE DETERMINED BY EXTRINSIC INFORMATION.

The Third Department, reversing (modifying Supreme Court) determined a material term of a contract could be adequately fleshed out by extrinsic evidence. Therefore the contract should not have been invalidated as a mere “agreement to agree.” Defendant was hired as a consultant by plaintiff, the parent company of a number of banks, to maximize income from overdrafts. Defendant’s fee was to be based on plaintiff’s income over a “baseline” amount to be established by defendant (and agreed to by plaintiff):

Supreme Court determined that, because the baseline was an indefinite material term, the agreement was unenforceable as a “mere agreement to agree” … . We do not agree. “[W]here it is clear from the language of an agreement that the parties intended to be bound and there exists an objective method for supplying a missing term, the court should endeavor to hold the parties to their bargain. Striking down a contract as indefinite and in essence meaningless is at best a last resort” … . If, “at the time of agreement the parties have manifested their intent to be bound, a price term may be sufficiently definite if the amount can be determined objectively without the need for new expressions by the parties; . . . for example, [the price term might] be . . . ascertained by reference to an extrinsic event” … . Here, the parties’ conduct evinced that they intended to be bound by the agreement and, in our view, the baseline could be ascertained with reference to an extrinsic event, that is, defendant’s calculation derived from the existing historical data … . Accordingly, we find that the agreement was enforceable. Tompkins Fin. Corp. v John M. Floyd & Assoc., Inc., 2016 NY Slip Op 07252, 3rd Dept 11-3-16

CONTRACT LAW (THE FACT THAT THE AMOUNT TO BE USED TO CALCULATE DEFENDANT’S COMPENSATION WAS NOT SET IN THE CONTRACT, BUT RATHER WAS TO BE ESTABLISHED AND AGREED TO LATER, DID NOT INVALIDATE THE CONTRACT AS A MERE AGREEMENT TO AGREE; THE AMOUNT COULD BE DETERMINED BY EXTRINSIC INFORMATION)

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LIEN LAW DID NOT REQUIRE A BOND FOR A $170,000,000 PRIVATE CONSTRUCTION PROJECT ON PUBLIC LAND; CONTRACTUAL GUARANTEE SATISFIED THE STATUTE.

The First Department, in a full-fledged opinion by Justice Acosta, over a two-justice partial dissent, determined the requirements of section 5 of the Lien Law, which concerns private development on public land, was satisfied by a contractual guarantee, as opposed to the posting of a bond. The nearly $170,000,000 construction project ultimately collapsed. The opinion, which addresses the substance of the contracts, piercing the corporate veil, as well as a motion to disqualify a law firm on conflict grounds, is too complex to summarize here. With respect to the Lien Law issue, the court wrote:

The crux of plaintiff’s position is that the guarantee provided in this case does not comply with the law because it is not equivalent to a bond or “other form of undertaking” under the statute.

A statute, however, is to be construed so as to give meaning to each word … . Black’s Law Dictionary defines an “undertaking” first as “[a] promise, pledge, or engagement,” and second as “[a] bail bond” … . Similarly, the CPLR defines “Undertaking” first as “[a]ny obligation, whether or not the principal is a party thereto, which contains a covenant by a surety to pay the required amount, as specified therein, if any required condition . . . is not fulfilled” … . Hence, an “undertaking,” as distinct from a “bond,” is simply a “formal promise [or] guarantee” … .

That the legislature intended the term “undertaking” in Lien Law § 5 to mean a “guarantee” is strongly supported by the statute’s legislative history, which indicates that the Governor vetoed an earlier version of the 2004 amendment that added the above quoted language because the earlier version would have required the posting of a bond in every instance, disallowing “other forms of security designed to guarantee payment” … . The senate sponsor of the amendment clarified that the phrase “or some other form of undertaking” was added to meet the Governor’s concerns by providing “an alternative to posting a bond” … . Skanska USA Bldg. Inc. v Atlantic Yards B2 Owner, LLC, 2016 NY Slip Op 06903, 1st Dept 10-20-16

LIEN LAW (LIEN LAW DID NOT REQUIRE A BOND FOR A $170,000,000 PRIVATE CONSTRUCTION PROJECT ON PUBLIC LAND; CONTRACTUAL GUARANTEE SATISFIED THE STATUTE)/BONDS (CONSTRUCTION) (LIEN LAW DID NOT REQUIRE A BOND FOR A $170,000,000 PRIVATE CONSTRUCTION PROJECT ON PUBLIC LAND; CONTRACTUAL GUARANTEE SATISFIED THE STATUTE)/GUARANTEE (LIEN LAW DID NOT REQUIRE A BOND FOR A $170,000,000 PRIVATE CONSTRUCTION PROJECT ON PUBLIC LAND; CONTRACTUAL GUARANTEE SATISFIED THE STATUTE)/CONTRACT LAW (LIEN LAW DID NOT REQUIRE A BOND FOR A $170,000,000 PRIVATE CONSTRUCTION PROJECT ON PUBLIC LAND; CONTRACTUAL GUARANTEE SATISFIED THE STATUTE)

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ELEVATOR MAINTENANCE COMPANY UNDER CONTRACT WITH NURSING HOME MAY BE LIABLE IN TORT TO THIRD PARTY INJURED BY ELEVATOR MALFUNCTION.

The Second Department determined the company (Mainco) under contract with the Bronx Center (a nursing home) to maintain an elevator could be liable to plaintiff, who was injured when the elevator fell. The court explained the analytical criteria for liability in tort to third parties stemming from a contract:

Mainco failed to demonstrate its prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against it on the ground that it did not have a duty to the plaintiff. ” An elevator company which agrees to maintain an elevator in safe operating condition may be liable to a passenger for failure to correct conditions of which it has knowledge or failure to use reasonable care to discover and correct a condition which it ought to have found'” … . Further, “a party who enters into a contract to render services may be said to have assumed a duty of care—and thus be potentially liable in tort—to third persons . . . where the contracting party has entirely displaced the other party’s duty” of safe maintenance … .

Here, the maintenance agreement between Mainco and Bronx Center required Mainco to periodically “inspect” the elevator and to “perform the New York City Local Law #10 mandated annual inspection.” The evidence demonstrated that, if there were any problems with the elevator, Bronx Center called Mainco, and Mainco inspected the elevator to determine and report on the cause of the problem. The evidence further indicated that if the cause of the problem was not a repair covered by the maintenance contract, Mainco issued a repair proposal, and would perform the repair upon acceptance of its proposal. Under these circumstances, Mainco failed to demonstrate as a matter of law that it did not assume a duty to the plaintiff and that the plaintiff’s claims did not fall within the scope of that duty. Fajardo v Mainco El. & Elec. Corp., 2016 NY Slip Op 06678, 2nd Dept 10-12-16

 

NEGLIGENCE (ELEVATOR MAINTENANCE COMPANY UNDER CONTRACT WITH NURSING HOME MAY BE LIABLE IN TORT TO THIRD PARTY INJURED BY ELEVATOR MALFUNCTION)/CONTRACT LAW (TORT LIABILITY STEMMING FROM CONTRACT, ELEVATOR MAINTENANCE COMPANY UNDER CONTRACT WITH NURSING HOME MAY BE LIABLE IN TORT TO THIRD PARTY INJURED BY ELEVATOR MALFUNCTION)/TORT LIABILITY STEMMING FROM CONTRACT ELEVATOR MAINTENANCE COMPANY UNDER CONTRACT WITH NURSING HOME MAY BE LIABLE IN TORT TO THIRD PARTY INJURED BY ELEVATOR MALFUNCTION)

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NEW YORK’S BORROWING STATUTE APPLIES PURSUANT TO CONTRACTUAL CHOICE OF LAW PROVISION; UNDER THE BORROWING STATUTE, THE CANADIAN STATUTE OF LIMITATIONS APPLIES AND RENDERS THE ACTION BROUGHT BY A CANADIAN PLAINTIFF UNTIMELY.

The First Department, in a full-fledged opinion by Justice Gische, determined a broad choice of law provision in a contract required the application of New York’s borrowing statute (CPLR 202). Plaintiff is a corporation incorporated under the law of the Province of Ontario Canada. The statute of limitations for breach of contract under Ontario law is two years. New York’s statute of limitations is six years. Because, under the facts, New York’s borrowing statute applies and therefore the Ontario statute of limitations controls, the action is untimely:

The borrowing statute is itself a part of New York’s procedural law and is a statute of limitations in its own right, existing as a separate procedural rule within the rules of our domestic civil practice, addressing limitations of time … . Thus, applying the borrowing statute is perfectly consistent with a broad choice-of-law contract clause that requires New York procedural rules to apply to the parties’ disputes. 2138747 Ontario, Inc. v Samsung C&T Corp., 2016 NY Slip Op 06671, 1st Dept 10-11-16

CIVIL PROCEDURE (NEW YORK’S BORROWING STATUTE APPLIES PURSUANT TO CONTRACTUAL CHOICE OF LAW PROVISION; UNDER THE BORROWING STATUTE, THE CANADIAN STATUTE OF LIMITATIONS APPLIES AND RENDERS THE ACTION BROUGHT BY A CANADIAN PLAINTIFF UNTIMELY)/CONTRACT LAW (CHOICE OF LAW, NEW YORK’S BORROWING STATUTE APPLIES PURSUANT TO CONTRACTUAL CHOICE OF LAW PROVISION; UNDER THE BORROWING STATUTE, THE CANADIAN STATUTE OF LIMITATIONS APPLIES AND RENDERS THE ACTION BROUGHT BY A CANADIAN PLAINTIFF UNTIMELY)/CORPORATION LAW (CHOICE OF LAW CONTRACTUAL PROVISION, NEW YORK’S BORROWING STATUTE APPLIES PURSUANT TO CONTRACTUAL CHOICE OF LAW PROVISION; UNDER THE BORROWING STATUTE, THE CANADIAN STATUTE OF LIMITATIONS APPLIES AND RENDERS THE ACTION BROUGHT BY A CANADIAN PLAINTIFF UNTIMELY)/STATUTE OF LIMITATIONS (NEW YORK’S BORROWING STATUTE APPLIES PURSUANT TO CONTRACTUAL CHOICE OF LAW PROVISION; UNDER THE BORROWING STATUTE, THE CANADIAN STATUTE OF LIMITATIONS APPLIES AND RENDERS THE ACTION BROUGHT BY A CANADIAN PLAINTIFF UNTIMELY)/BORROWING STATUTE (NEW YORK’S BORROWING STATUTE APPLIES PURSUANT TO CONTRACTUAL CHOICE OF LAW PROVISION; UNDER THE BORROWING STATUTE, THE CANADIAN STATUTE OF LIMITATIONS APPLIES AND RENDERS THE ACTION BROUGHT BY A CANADIAN PLAINTIFF UNTIMELY)/CHOICE OF LAW (CONTRACT, NEW YORK’S BORROWING STATUTE APPLIES PURSUANT TO CONTRACTUAL CHOICE OF LAW PROVISION; UNDER THE BORROWING STATUTE, THE CANADIAN STATUTE OF LIMITATIONS APPLIES AND RENDERS THE ACTION BROUGHT BY A CANADIAN PLAINTIFF UNTIMELY)

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PROOF OF SPECIFIC AS OPPOSED TO GENERAL CLEANING PRACTICES, UNDER THE CIRCUMSTANCES, WAS DEEMED SUFFICIENT TO DEMONSTRATE A LACK OF CONSTRUCTIVE NOTICE OF THE CONDITION WHICH CAUSED PLAINTIFF TO FALL; FAILURE TO ALLEGE ANY ESPINAL EXCEPTION MANDATED SUMMARY JUDGMENT IN FAVOR OF THE CLEANING CONTRACTOR.

Although the facts were not explained, the Second Department determined proof of “specific,” as opposed to “general,” cleaning practices, “under the circumstances,” was sufficient to meet defendant’s burden demonstrating the absence of constructive notice of the condition which caused plaintiff to fall (not specified in the decision). In addition, because plaintiff did not allege any of the “Espinal” exceptions, proof the plaintiff was not a party to the building owner’s contract with the cleaning contractor was sufficient to warrant summary judgment in favor of the contractor:

A defendant has constructive notice of a hazardous condition on property when the condition is visible and apparent and has existed for a sufficient length of time to afford the defendant a reasonable opportunity to discover and remedy it … . To meet its initial burden on the issue of lack of constructive notice, the defendant is required to offer some evidence as to when the accident site was last cleaned or inspected prior to the plaintiff’s fall … . Although submission of evidence as to the defendant’s general cleaning practices is generally insufficient to meet the defendant’s burden on the issue of lack of constructive notice, specific evidence as to cleaning practices may be adequate, depending on the circumstances of the case … .

Here, the owner satisfied its prima facie burden through submission of the deposition testimony of an employee of the contractor and the building concierge employed by the owner. The testimony of the building concierge, and the testimony of the contractor’s employee regarding the frequency of the employee’s inspections of the area where the injured plaintiff fell, established, prima facie, that the owner did not have constructive notice of the allegedly dangerous condition … . Mavis v Rexcorp Realty, LLC, 2016 NY Slip Op 06476, 2nd Dept 10-5-16

NEGLIGENCE (PROOF OF SPECIFIC AS OPPOSED TO GENERAL CLEANING PRACTICES, UNDER THE CIRCUMSTANCES, WAS DEEMED SUFFICIENT TO DEMONSTRATE A LACK OF CONSTRUCTIVE NOTICE OF THE CONDITION WHICH CAUSED PLAINTIFF TO FALL)/SLIP AND FALL (PROOF OF SPECIFIC AS OPPOSED TO GENERAL CLEANING PRACTICES, UNDER THE CIRCUMSTANCES, WAS DEEMED SUFFICIENT TO DEMONSTRATE A LACK OF CONSTRUCTIVE NOTICE OF THE CONDITION WHICH CAUSED PLAINTIFF TO FALL)/EVIDENCE (SLIP AND FALL, PROOF OF SPECIFIC AS OPPOSED TO GENERAL CLEANING PRACTICES, UNDER THE CIRCUMSTANCES, WAS DEEMED SUFFICIENT TO DEMONSTRATE A LACK OF CONSTRUCTIVE NOTICE OF THE CONDITION WHICH CAUSED PLAINTIFF TO FALL)/CONTRACT LAW (SLIP AND FALL, FAILURE TO ALLEGE ANY ESPINAL EXCEPTION MANDATED SUMMARY JUDGMENT IN FAVOR OF THE CLEANING CONTRACTOR)

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JOINT VENTURE AGREEMENT, ALTHOUGH UNSIGNED, WAS VALID BECAUSE IT WAS CAPABLE OF BEING PERFORMED IN ONE YEAR; CAUSE OF ACTION FOR BREACH ACCRUED IN 2013 WHEN PAYMENT REQUIRED BY THE 2001 AGREEMENT WAS NOT MADE.

The First Department, in a full-fledged opinion by Justice Saxe, determined defendants’ motion to dismiss breach of contract and breach of fiduciary duty causes of action as untimely was properly denied. The facts, which concern the sale of interests in a Russian oil company, are too complex to summarize here. The court held that the complaint alleged a breach of a 2001 joint venture investment agreement based upon an alleged failure to pay plaintiff a portion of sale proceeds in 2013, making the 2014 lawsuit timely:

 

… [T]he motion court denied defendants’ motion to dismiss plaintiff’s causes of action for breach of their joint venture agreement and the 2001 Agreement, and for breach of defendants’ fiduciary duty. It held that although there was no written investment agreement signed by both defendants … plaintiff sufficiently pleaded the existence of a valid oral agreement by alleging that the parties agreed to the central terms of the unsigned investment agreement. It further held that the oral agreement was not void under the statute of frauds because it was capable of being performed within one year, and because the statute of frauds is generally inapplicable to joint ventures. It also rejected defendants’ argument that plaintiff’s breach of contract and breach of joint venture claims were time barred, reasoning that the claimed breach of the 2001 Agreement was defendants’ failure to pay plaintiff his percentage share of the 2013 … sale proceeds. * * *

This action was commenced within both limitations periods, because defendants “had a recurring obligation to pay plaintiff his . . . share of the profits generated by” the joint venture. … . A new claim accrued when the obligation to do so was allegedly breached in 2013. Lebedev v Blavatnik, 2016 NY Slip Op 06463, 1st Dept 10-4-16

 

CIVIL PROCEDURE (JOINT VENTURE AGREEMENT, ALTHOUGH UNSIGNED, WAS VALID BECAUSE IT WAS CAPABLE OF BEING PERFORMED IN ONE YEAR; CAUSE OF ACTION FOR BREACH ACCRUED IN 2013 WHEN PAYMENT REQUIRED BY THE 2001 AGREEMENT WAS NOT MADE)/CONTRACT LAW (JOINT VENTURE AGREEMENT, ALTHOUGH UNSIGNED, WAS VALID BECAUSE IT WAS CAPABLE OF BEING PERFORMED IN ONE YEAR; CAUSE OF ACTION FOR BREACH ACCRUED IN 2013 WHEN PAYMENT REQUIRED BY THE 2001 AGREEMENT WAS NOT MADE)/CORPORATION LAW (JOINT VENTURE AGREEMENT, ALTHOUGH UNSIGNED, WAS VALID BECAUSE IT WAS CAPABLE OF BEING PERFORMED IN ONE YEAR; CAUSE OF ACTION FOR BREACH ACCRUED IN 2013 WHEN PAYMENT REQUIRED BY THE 2001 AGREEMENT WAS NOT MADE)/JOINT VENTURES (JOINT VENTURE AGREEMENT, ALTHOUGH UNSIGNED, WAS VALID BECAUSE IT WAS CAPABLE OF BEING PERFORMED IN ONE YEAR; CAUSE OF ACTION FOR BREACH ACCRUED IN 2013 WHEN PAYMENT REQUIRED BY THE 2001 AGREEMENT WAS NOT MADE)/STATUTE OF FRAUDS (JOINT VENTURE AGREEMENT, ALTHOUGH UNSIGNED, WAS VALID BECAUSE IT WAS CAPABLE OF BEING PERFORMED IN ONE YEAR; CAUSE OF ACTION FOR BREACH ACCRUED IN 2013 WHEN PAYMENT REQUIRED BY THE 2001 AGREEMENT WAS NOT MADE)

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QUESTION OF FACT WHETHER THE TERM “INSURANCE” IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS.

The First Department, over an extensive dissent, determined the word “insurance” in a noncompete agreement was susceptible of two meanings, thereby precluding summary judgment. Defendant signed a noncompete agreement which prohibited the “brokering or placement of insurance.” After plaintiff started a new job during the time-period covered by the noncompete agreement with his previous employer, he brokered two “surety bonds” for two companies which had been clients of his former employer. Plaintiff argued the term “insurance” encompassed “surety bonds.” Defendants argued the term “insurance” did not encompass “surety bonds:”

… [T]the evidence produced by each side does not show that the interpretation urged by each is inevitable; rather, it shows that the language of the letter agreement is “on its face . . . reasonably susceptible of more than one interpretation” … . Accordingly, the motion court properly denied the motions for summary judgment. Frenkel Benefits, LLC v Mallory, 2016 NY Slip Op 06109, 1st Dept 9-21-16

 

INSURANCE LAW (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/CONTRACT LAW (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/NONCOMPETE AGREEMENTS (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/SURETY BONDS (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)/EMPLOYMENT LAW (QUESTION OF FACT WHETHER THE TERM INSURANCE IN A NONCOMPETE AGREEMENT ENCOMPASSES SURETY BONDS)

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AMENDMENT TO STATUTE CHANGING THE LIMITATIONS PERIOD FOR ACTION ON A PAYMENT BOND DID NOT APPLY RETROACTIVELY, CRITERIA EXPLAINED.

The Second Department determined an action by a subcontractor seeking payment under a payment bond for environmental clean-up work was time-barred. Plaintiff subcontractor had submitted invoices to the contractor which were not paid. Whether the action on the payment bond was time-barred depended upon whether an amendment to State Finance Law 137 applied retroactively. The court found the amendment did not apply retroactively and explained the analytical criteria:

” In determining whether statutory enactments should be given retroactive effect, there are two axioms of statutory interpretation'”  … . ” Amendments are presumed to have prospective application unless the Legislature’s preference for retroactivity is explicitly stated or clearly indicated. However, remedial legislation should be given retroactive effect in order to effectuate its beneficial purpose'” … . ” These axioms are helpful guideposts, but the reach of the statute ultimately becomes a matter of judgment made upon review of the legislative goal'” … .

Here, the Legislature did not explicitly state or clearly indicate, either in the amendment itself or in the legislative materials, that the 2011 amendment should be applied retroactively … . Thus, “we presume at the outset that the amendment was to have prospective application” … . Additionally, the 2011 amendment did not create a new right or a new class of individuals who could assert a cause of action under a payment bond. Instead, the amendment was simply intended to clarify the limitations period for bringing a payment bond claim. Given these circumstances, the amendment cannot be characterized as remedial, and need not be applied retroactively to achieve its purpose … . Clean Earth of N. Jersey, Inc. v Northcoast Maintenance Corp., 2016 NY Slip Op 06056, 2nd Dept 9-21-16

 

INSURANCE LAW (PAYMENT BOND,AMENDMENT TO STATUTE CHANGING THE LIMITATIONS PERIOD FOR ACTION ON A PAYMENT BOND DID NOT APPLY RETROACTIVELY, CRITERIA EXPLAINED)/CONTRACT LAW (PAYMENT BOND, AMENDMENT TO STATUTE CHANGING THE LIMITATIONS PERIOD FOR ACTION ON A PAYMENT BOND DID NOT APPLY RETROACTIVELY, CRITERIA EXPLAINED)/PAYMENT BOND (STATE FINANCE LAW, AMENDMENT TO STATUTE CHANGING THE LIMITATIONS PERIOD FOR ACTION ON A PAYMENT BOND DID NOT APPLY RETROACTIVELY, CRITERIA EXPLAINED)/STATE FINANCE LAW (PAYMENT BOND, AMENDMENT TO STATUTE CHANGING THE LIMITATIONS PERIOD FOR ACTION ON A PAYMENT BOND DID NOT APPLY RETROACTIVELY, CRITERIA EXPLAINED)/STATUTES (STATE FINANCE LAW, AMENDMENT TO STATUTE CHANGING THE LIMITATIONS PERIOD FOR ACTION ON A PAYMENT BOND DID NOT APPLY RETROACTIVELY, CRITERIA EXPLAINED

CERTAIN ASPECTS OF PLAINTIFF’S QUANTUM MERUIT AND UNJUST ENRICHMENT CAUSES OF ACTION PROPERLY SURVIVED A MOTION TO DISMISS, OTHER ASPECTS WERE BARRED BY THE STATUTE OF FRAUDS.

The First Department, in a full-fledged opinion by Justice Renwick, with extensive analysis of the “negotiation or consummation of a business opportunity” aspect of the statute of frauds (General Obligations Law 5-701(a)(10)), determined certain aspects of plaintiff’s unjust enrichment and quantum meruit causes of actions properly survived defendants’ motion to dismiss. Plaintiff alleged he supplied information and know-how which led to defendants’ creation and operation of a highly successful website which facilitates finding and renting apartments. The aspects of plaintiff’s causes of action which stemmed from “negotiating or consummating the business opportunity” were barred by the statute of frauds. But the aspects related to plaintiff’s assistance in the success of the on-going business were not barred by the statute of frauds. The opinion includes a detailed discussion of the limits of the “writing” requirement for any agreement to “negotiate or consummate a business opportunity:”

In the present case, the amended complaint contains allegations that, if accepted by the trier of fact, demonstrate that plaintiff’s role consisted of more than functioning as an intermediary that assisted in the negotiation or consummation of the business opportunity. Rather, [plaintiff] allegedly rendered a wide variety of services, which presumably took place after the company came to fruition, making these services related to a purpose other than “assisting in the negotiation or consummation” of a business opportunity, so as to escape the strictures of General Obligations Law 5-701(a)(10). Dorfman v Reffkin, 2016 NY Slip Op 06116, 1st Dept 9-21-16

CONTRACT LAW (CERTAIN ASPECTS OF PLAINTIFF’S QUANTUM MERUIT AND UNJUST ENRICHMENT CAUSES OF ACTION PROPERLY SURVIVED A MOTION TO DISMISS, OTHER ASPECTS WERE BARRED BY THE STATUTE OF FRAUDS)/STATUTE OF FRAUDS (NEGOTIATION OR CONSUMMATION OF A BUSINESS OPPORTUNITY, CERTAIN ASPECTS OF PLAINTIFF’S QUANTUM MERUIT AND UNJUST ENRICHMENT CAUSES OF ACTION PROPERLY SURVIVED A MOTION TO DISMISS, OTHER ASPECTS WERE BARRED BY THE STATUTE OF FRAUDS)/GENERAL OBLIGATIONS LAW (STATUTE OF FRAUDS, NEGOTIATION OR CONSUMMATION OF A BUSINESS OPPORTUNITY, CERTAIN ASPECTS OF PLAINTIFF’S QUANTUM MERUIT AND UNJUST ENRICHMENT CAUSES OF ACTION PROPERLY SURVIVED A MOTION TO DISMISS, OTHER ASPECTS WERE BARRED BY THE STATUTE OF FRAUDS)/NEGOTIATION OR CONSUMMATION OF A BUSINESS OPPORTUNITY (STATUTE OF FRAUDS, NEGOTIATION OR CONSUMMATION OF A BUSINESS OPPORTUNITY, CERTAIN ASPECTS OF PLAINTIFF’S QUANTUM MERUIT AND UNJUST ENRICHMENT CAUSES OF ACTION PROPERLY SURVIVED A MOTION TO DISMISS, OTHER ASPECTS WERE BARRED BY THE STATUTE OF FRAUDS)/QUANTUM MERUIT (CERTAIN ASPECTS OF PLAINTIFF’S QUANTUM MERUIT AND UNJUST ENRICHMENT CAUSES OF ACTION PROPERLY SURVIVED A MOTION TO DISMISS, OTHER ASPECTS WERE BARRED BY THE STATUTE OF FRAUDS)/UNJUST ENRICHMENT (CERTAIN ASPECTS OF PLAINTIFF’S QUANTUM MERUIT AND UNJUST ENRICHMENT CAUSES OF ACTION PROPERLY SURVIVED A MOTION TO DISMISS, OTHER ASPECTS WERE BARRED BY THE STATUTE OF FRAUDS)

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UNAMBIGUOUS TERMS OF POLICY REQUIRED A WRITTEN CONTRACT WITH ANY ADDITIONAL INSURED; THE ABSENCE OF A WRITTEN CONTRACT DIRECTLY WITH THE ADDITIONAL INSURED PRECLUDED COVERAGE, DESPITE A WRITTEN AGREEMENT WITH A THIRD PARTY TO PROVIDE COVERAGE FOR THE ADDITIONAL INSURED.

The First Department, in a full-fledged opinion by Justice Renwick, over an extensive dissenting opinion by Justice Kahn, determined that, under the unambiguous terms of the policy, the absence of a written contract directly with the additional insured precluded coverage for the additional insured, despite a written agreement with a third party to provide coverage for the additional insured. The lawsuit stemmed from damage to surrounding buildings during construction:

The principal issue in this appeal is the interpretation of the additional insurance endorsement in the policy which provides that an additional insured is “any person or organization with whom you [the insured] have agreed to add as an additional insured by written contract.” Trial courts have arrived at conflicting interpretations of a similarly worded additional insured clause as to whether coverage is extended not only to those “with whom” the insured agreed, but also to those “for whom” the insured agreed to provide coverage … . We hold that the subject additional insured clause covers only those that have a written contracts directly with the named insured. * * *

… [W]e find that the language in the “Additional Insured-By Written Contract” clause of the … policy clearly and unambiguously requires that the named insured execute a contract with the party seeking coverage as an additional insured. Since there is no dispute that [the insured] did not enter into a written contract with the JV (joint venture), [the insured’s] agreement in its contract with DASNY (Dormitory Authority of the City of New York) to procure coverage for the JV is insufficient to afford the JV coverage as an additional insured under the … policy. Gilbane Bldg. Co./TDX Constr. Corp. v St. Paul Fire & Mar. Ins. Co., 2016 NY Slip Op 06052, 1st Dept 9-15-16

 

INSURANCE LAW (UNAMBIGUOUS TERMS OF POLICY REQUIRED A WRITTEN CONTRACT WITH ANY ADDITIONAL INSURED; THE ABSENCE OF A WRITTEN CONTRACT DIRECTLY WITH THE ADDITIONAL INSURED PRECLUDED COVERAGE, DESPITE A WRITTEN AGREEMENT WITH A THIRD PARTY TO PROVIDE COVERAGE FOR THE ADDITIONAL INSURED)/CONTRACT LAW (UNAMBIGUOUS TERMS OF POLICY REQUIRED A WRITTEN CONTRACT WITH ANY ADDITIONAL INSURED; THE ABSENCE OF A WRITTEN CONTRACT DIRECTLY WITH THE ADDITIONAL INSURED PRECLUDED COVERAGE, DESPITE A WRITTEN AGREEMENT WITH A THIRD PARTY TO PROVIDE COVERAGE FOR THE ADDITIONAL INSURED)/ADDITIONAL INSURED (UNAMBIGUOUS TERMS OF POLICY REQUIRED A WRITTEN CONTRACT WITH ANY ADDITIONAL INSURED; THE ABSENCE OF A WRITTEN CONTRACT DIRECTLY WITH THE ADDITIONAL INSURED PRECLUDED COVERAGE, DESPITE A WRITTEN AGREEMENT WITH A THIRD PARTY TO PROVIDE COVERAGE FOR THE ADDITIONAL INSURED)

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