You are here: / Contract Law

Question of Fact Whether Defendant’s Negligence Precluded Her Reliance on the Doctrine of Mutual Mistake to Rescind a Valid Oral Contract

The First Department determined there a question of fact about defendant’s negligence and the related applicability of the doctrine of mutual mistake. The parties orally agreed to share funeral expenses and commence a lost will proceeding based upon the understanding that the original will could not be found.  However, the original will was subsequently found.  The defendant moved to rescind the contract on the basis of mutual mistake and Supreme Court granted the motion.  In reversing, the First Department noted the doctrine of mutual mistake would not be available if defendant were negligent in initially failing to find the will, and a question of fact had been raised about defendant’s negligence in that regard:

Plaintiff met her obligations under the agreement to pay one half of the decedent’s funeral expenses and attorneys fees for the proceeding. Defendant did, as required, commence a lost will proceeding. Both parties thus fulfilled the terms of the oral agreement. It was only less than one month before the hearing on the lost will proceeding was to commence that defendant’s husband found the original will in the same box which defendant had searched prior to entering into the agreement. It was at that point that defendant attempted to abrogate the contract. It is noteworthy that defendant, in her motion for summary judgment dismissing the complaint argued that the contract should be rescinded due to a mutual mistake as to the existence of the original will. The question of mutual mistake, therefore, is central to the disposition of this case.

Defendant’s alleged negligence in searching for the original 1991 will, the absence of which formed the basis of the oral agreement to commence a lost will proceeding, is an important factor in determining whether the doctrine of mutual mistake may be invoked to rescind this otherwise valid oral agreement. ” Mistake, to be available in equity, must not have arisen from negligence, where the means of knowledge were easily accessible.'” … . The doctrine of mutual mistake “may not be invoked by a party to avoid the consequences of its own negligence” … . Gitelson v Quinn, 2014 NY Slip Op 03942, 1st Dept 5-3-14

 

, ,

Lack of Standing Defense Waived By Absence from Answer—Objections to Authority to Sign Lease Waived by Ratification of the Signed Documents

The Third Department, in a dispute over what was due and owing under a lease agreement, determined the “lack of standing” defense had been waived by the failure to raise it in the answer, and allegedly unauthorized execution of relevant documents had been ratified:

Initially, defendant claims that plaintiff lacks standing to enforce any obligations created by the lease or confirmation agreement, as it was not a party to either document. We agree with Supreme Court that this claim was waived by defendant’s failure to assert it in the answer (see CPLR 3211 [a]; [3]; [e]…).. Defendant further argues that the confirmation agreement is not legally valid, as it was not signed by plaintiff and … PDC [the original lessor, Provident Development Corporation] had transferred the building to plaintiff prior to executing the confirmation agreement. However, “[a];n unauthorized execution of an instrument affecting the title to land or an interest therein may be ratified by the owner of the land or interest so as to be binding upon him [or her];” … . Such a ratification may be shown by the owner’s failure to timely repudiate the unauthorized actions, or by conduct consistent with an intent to be bound … . Here, plaintiff has never repudiated PDC’s execution of the confirmation agreement; on the contrary, the record reveals that, beginning on the commencement date established by the agreement and continuing through 2011, plaintiff regularly invoiced defendant for payments due at the intervals and in the amounts specified in that agreement and accepted defendant’s resulting payments — thus ratifying the confirmation agreement by accepting benefits due thereunder … . Provident Bay Rd LLC v NYSARC Inc, 2014 NY Slip Op 03895, 3rd Dept 5-29-14

 

,

Criteria for Reformation of a Deed (Removing a Restrictive Covenant) Not Met

The Third Department explained the criteria for reformation of a document, in this case a deed.  The court determined that the plaintiff, who was seeking to have a restrictive covenant removed from a deed, did not demonstrate the criteria for reformation of the deed.  The criteria were described as follows:

“A party seeking reformation must establish, by clear and convincing evidence, that the writing in question was executed under mutual mistake or unilateral mistake coupled with fraud” … . The burden is on the proponent of reformation to establish, by clear and convincing evidence, that the relief is warranted … .

Here, it is undisputed that the deed’s restrictive covenant was not set forth in the contract of sale and Salenger testified that he first became aware of it when he received the deed after the closing. Thus, plaintiff established the existence of a unilateral mistake regarding whether the restrictive covenant was intended to be included as a condition of the sale. Nonetheless, plaintiff’s proof fell short of establishing fraud on decedent’s part, which requires “‘a misrepresentation that is false and that the defendant knows is false, made to induce the other party to rely on it, justifiable reliance on the misrepresentation by the other party, and injury'” … . Timber Rattlesnake LLC v Devine, 2014 NY Slip Op 03718, 3rd Dept 5-22-14

 

, ,

Security Guard and College Had No Duty to Protect Taxi Driver from Attack by Students on Campus—Plaintiff Was Not a Third Party Beneficiary of Contract Between Security Company and College

The Second Department determined defendants security company (Secuitas), security guard (Jarrett) and college (Manhattanville) did not owe any duty to a taxi driver who was allegedly attacked and injured by students on a college campus.  The complaint alleged a security guard (Jarrett) was nearby and did nothing to intervene in the attack:

A contractual obligation, standing alone, generally will not give rise to tort liability in favor of a third party … . Before an injured party may recover as a third-party beneficiary for failure to perform a duty imposed by contract, it must clearly appear from the provisions of the contract that the parties thereto intended to confer a direct benefit on the alleged third-party beneficiary to protect him or her from physical injury … .

The plaintiff here was not a third-party beneficiary of the contract between Securitas and Manhattanville, as the contract did not contain any express provision that it would protect individuals on the campus from physical injury or attack … . Securitas and Jarrett did not assume a duty to exercise reasonable care to prevent harm to the plaintiff by virtue of its contractual duty to provide an unarmed security guard … . Securitas did not assume a duty pursuant to the contract to prevent assaults, or to protect the plaintiff from physical injury inflicted by intervening third-party assailants … . As such, Securitas and Jarrett established their prima facie entitlement to judgment as a matter of law. In opposition, the plaintiff failed to raise a triable issue of fact. Ramirez v Genovese, 2014 NY Slip Op 03673, 2nd Dept 5-21-14

 

,

No Basis for Liability of Snow-Removal Contractor Re: Slip and Fall

The Second Department determined a snow-removal contractor was properly granted summary judgment in a slip and fall case.  The plaintiff did not raise a question of fact about any of the three “Espinal” [98 NY2d 136] situations (which would allow recovery against a contractor with whom plaintiff does not have a contractual relationship):

The Court of Appeals has recognized three situations in which a party such as the defendant may be said to have assumed a duty of care, and thus potentially may be liable in tort to third persons such as the plaintiff: (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 … . * * *

…[T]he plaintiff offered only speculation and conjecture in support of her contention that the defendant launched a force or instrument of harm by creating or exacerbating the ice patch that allegedly caused the plaintiff’s fall …, or that the subject snow removal contract was a comprehensive and exclusive agreement which displaced Communicar’s duty to maintain the premises in a safe condition … . Javid v Sclafmore Constr, 2014 NY Slip Op 03656, 2nd Dept 5-21-14

 

,

Complaint Stated Causes of Action for Breach of Contract and Fraud—Plaintiff Agreed to Forgo Compensation for Work Done for Defendant in Return for a Stake in Defendant’s Business—Defendant Terminated the Relationship Without Paying Plaintiff

The Second Department determined plaintiff had stated causes of action for breach of contract and fraud.  The complaint alleged plaintiff had agreed to forego compensation for his construction and managerial work for defendant in return for a stake in defendant’s business.  The complaint further alleged defendant, after plaintiff had done the work, terminated the relationship without paying plaintiff:

The essential elements for pleading a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff’s performance pursuant to the contract, the defendant’s breach of his or her contractual obligations, and damages resulting from the breach … . According the plaintiff the benefit of every possible favorable inference, the complaint alleged that the defendants breached the parties’ agreement and that, as a result, the plaintiff was entitled to recover its normal fees and compensation for the subject work. …

“The elements of a cause of action sounding in fraud are a material misrepresentation of an existing fact, made with knowledge of the falsity, an intent to induce reliance thereon, justifiable reliance upon the misrepresentation, and damages” … . Where the gravamen of the alleged fraud does not arise from the mere failure of a promisor to perform his or her obligations under a contract, but arises from a promisor’s successful attempts to induce a promisee to enter into a contractual relationship despite the fact that the promisor harbored an undisclosed intention not to perform under the contract, a proper cause of action sounding in fraud may be stated. “[A]; false statement, promissory in nature, may be deemed the statement of a material existing fact, because it falsely represents the [declarant’s]; state of mind and the state of his [or her]; mind is a fact'” … . “There is no doubt that a misrepresented intention to perform a contract may constitute actionable fraud” … , and “a statement of present intention is deemed a statement of a material existing fact, sufficient to support a fraud action” … .

Here, viewing the complaint in the light most favorable to the plaintiff, the third cause of action alleged that the defendants made a promise to give the plaintiff an equity stake in the maple syrup venture if the plaintiff agreed to forego its normal fees and compensation for the subject work, that the defendants made that promise while harboring an undisclosed intention never to give the plaintiff such an equity stake, and that the plaintiff detrimentally relied on the defendants’ representation of intent by performing the subject work for them. These allegations were sufficient to state a cause of action sounding in fraud. Neckles Bldrs Inc v Turner, 2014 NY Slip Op 03668, 2nd Dept 5-21-14

 

,

Broker’s Complaint Stated Causes of Action for Breach of Implied Contract and Unjust Enrichment—Complaint Alleged Broker Was Entitled to a Commission Where Defendant Buyers Abandoned the Potential Purchase in which Broker Was Involved and 18 Months Later Purchased Nearly Identical Property from the Same Seller

The First Department, in a full-fledged opinion by Justice Acosta, determined a real estate broker (SPRE) had sufficiently stated causes of action for breach of implied contract and unjust enrichment.  The complaint alleged that the broker introduced the defendants to the developer of condominium units (397 West) and found an architect.  The defendants subsequently informed the broker they were no longer looking to buy.  18 months later the defendants purchased different but nearly identical condominium units from the same developer:

In this appeal, we must determine whether plaintiff broker has alleged facts sufficient to establish its entitlement to a commission on the sale of real estate, where it expended significant effort locating an apartment for buyers who abandoned the transaction and purchased another apartment in the same building 18 months later. In addition, we take this opportunity to clarify the standard by which a broker may be found to have been the “procuring cause” of a real estate transaction. We find that the complaint sufficiently alleges that plaintiff was a direct and proximate link between the introduction of defendant buyers and the seller and the consummation of the transaction to withstand defendants’ motion to dismiss. * * *

“[I];n the absence of an agreement to the contrary, a real estate broker will be deemed to have earned his commission when he [or she]; produces a buyer who is ready, willing and able to purchase at the terms set by the seller” … . A broker does not earn a commission merely by calling the property to the attention of the buyer … . But this does not mean that the broker “must have been the dominant force in the conduct of the ensuing negotiations or in the completion of the sale” (id. at 206). Rather, the broker must be the “procuring cause” of the transaction, meaning that “there must be a direct and proximate link, as distinguished from one that is indirect and remote,” between the introduction by the broker and the consummation of the transaction … . * * *

In the present case, … under the … “direct and proximate link” standard, we find that the allegations in the complaint sufficiently state that SPRE was the procuring cause of defendants’ purchase of the second duplex at 397 West. SPRE brought defendants to the building on several occasions; introduced defendants to the developer and attended several meetings between the developer and defendants; reviewed floor plans with defendants; negotiated favorable terms for defendants on the original units; prepared a deal sheet with defendants’ preliminary offer terms on the first duplex for the developer’s consideration; drafted a contract of sale; and connected defendants with a reputable architect whom SPRE specially selected to implement defendants’ design plans. Affording these allegations a liberal construction, we find that they establish that SPRE’s actions and efforts may have been a direct and proximate link between the introduction of defendants to the developer and defendants’ purchase of the second duplex at 397 West. Whether SPRE was the procuring cause “is a question of fact to be decided on the evidence” … . SPRE Realty Ltd v Dienst, 2014 NY Slip Op 03642, 1st Dept 5-20-14

 

New York Has Not Adopted the “First Clause” Doctrine for Interpretation Contracts with Conflicting Provisions

The First Department noted that New York has not adopted the “first clause” doctrine of contract interpretation with respect to conflicting provisions, i.e., the clause appearing first in the agreement does not necessarily control:

The motion court correctly reconciled apparently conflicting provisions of the partnership agreement, giving meaning to both … . Contrary to plaintiff’s contention, the provision that appears first does not automatically govern, as New York has not adopted the “first clause” doctrine of contract interpretation … . Further, as plaintiff concedes, her interpretation of the contract renders section 6.8(b) superfluous, depriving it of all effect. Section 6.8(a) provides that “[a]; voluntary dissolution (including any dissolution by law resulting from only one Partner remaining . . . following the death . . . of the other Partner(s)) and termination of the Partnership shall override any of the provisions of this Article VI . . . .” Section 6.8(b) of the agreement provides that the partnership will survive the death of a partner if a new partner is admitted no more than 90 days after the death. When read together, these sections provide for dissolution upon the death of a partner unless a new partner is admitted within 90 days … . Le Bel v Donovan, 2014 NY Slip Op 03608, 1st Dept 5-20-14

 

,

Forum Selection Clause in Nursing Home Admission Agreement Should Have Been Enforced

The Second Department determined Supreme Court should not have granted plaintiff’s request for a change of forum, the forum selection clause in the agreement between plaintiff’s decedent and defendant nursing home (Concourse) controlled:

The plaintiff’s claim that the forum selection clause should not be upheld because this is a tort action and not a breach of contract action is without merit. The applicability of a forum selection clause does not depend on the nature of the underlying action. This Court has upheld nonnegotiated forum selection clauses contained in various contracts even where the underlying action was a personal injury action or medical malpractice action … . Rather, it is the language of the forum selection clause itself that determines which claims fall within its scope … . Here, the contract provision reciting that “[a]ny and all actions arising out of or related to th[e] Agreement” includes the causes of action in this action …, which are predicated on the care rendered by Concourse to the decedent pursuant to the terms of the Admission Agreement.

Furthermore, the plaintiff failed to show that the forum selection clause was unreasonable or unjust, or that a trial in Westchester County would be so gravely difficult that, for all practical purposes, she would be deprived of her day in court. Also, the plaintiff did not allege, or demonstrate, that the forum selection clause was the result of fraud or overreaching. Under these circumstances, the plaintiff failed to make any showing that the forum selection clause should be set aside … . Couvertier v Concourse Rehabilitation & Nursing Inc, 2014 NY Slip Op 03473, 2nd Dept 5-14-14

 

,

Waiver and Release Signed by Plaintiff When She Rented a Segway Vehicle Precluded Her Personal Injury Action Even Though the Accident Occurred During a Tour Conducted by Defendant’s Employees

The Second Department determined the waiver and release signed by plaintiff when she rented a Segway vehicle precluded  her personal injury action.  Plaintiff was taking a tour in the vehicle which was conducted by defendant’s employees.  The vehicle became stuck in mud causing plaintiff to fall:

“Absent a statute or public policy to the contrary, a contractual provision absolving a party from its own negligence will be enforced” … . Here, the defendant established its prima facie entitlement to judgment as a matter of law by producing the waiver and release signed by the plaintiff … . Further, contrary to the plaintiff’s contention, General Obligations Law § 5-326 does not invalidate the release because the fee she paid to the defendant was for the rental of the Segway vehicle, and was not an admission fee for the use of the public trail over which the tour was conducted … .  Deutsch v Woodridge Segway LLC, 2014 NY Slip Op 03475, 2nd Dept 5-14-14

 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy