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Separation Agreement Found Unconscionable

The Fourth Department affirmed Supreme Court’s vacation of a separation agreement finding insufficient evidence the agreement was signed under duress but determining the terms of the agreement were unconscionable:

“ ‘Judicial review [of separation agreements] is to be exercised circumspectly, sparingly and with a persisting view to the encouragement of parties settling their own differences in connection with the negotiation of property settlement provisions’ ” … . “[S]eparation agreements will be scrutinized ‘to see to it that they are arrived at fairly and equitably, in a manner so as to be free from the taint of fraud and duress, and to set aside or refuse to enforce those born of and subsisting in inequity’ ” … .  “A separation agreement ‘may be vacated if it is manifestly unfair to one party because of the other’s overreaching or where its terms are unconscionable’ ” … .

We agree with defendant that plaintiff did not sign the agreement under duress.  Plaintiff’s allegations that defendant threatened to evict her from the marital residence if she did not sign the agreement and that he threw the agreement at her are not substantiated by proof sufficient to justify setting it aside … .  Further, even accepting plaintiff’s allegation that defendant persistently urged her to sign the agreement, such conduct does not constitute duress, particularly inasmuch as plaintiff signed the agreement after defendant revised it in accordance with her suggested changes.

We conclude, however, that the court properly determined that the agreement was “ ‘one such as no [person] in his [or her] senses and not under delusion would make on the one hand, and as no honest and fair [person] would accept on the other’ ” … .  As defendant correctly concedes, the agreement gives him almost all of the marital property, including his pension and retirement assets, and we note that the value of the pension and retirement assets is not apparent from the record because defendant failed to include a copy of his net worth statement.  The agreement further provides that plaintiff may not seek maintenance and, most troubling under the circumstances of this case, that plaintiff waived her right to seek child support. Dawes v Dawes, 886, 4th Dept 10-4-13

 

Error to Dismiss Failure-to-Mitigate-Damages Affirmative Defense in Contract Dispute

In a contract dispute, the Second Department determined Supreme Court should not have dismissed the defendant-Everfoam’s affirmative defense alleging plaintiffs failed to mitigate damages, noting that the duty to mitigate arises from the common law and need not be expressly bargained for in the contract:

…[T]he Supreme Court erred in awarding summary judgment dismissing Everfoam’s fourth affirmative defense alleging that the plaintiffs failed to mitigate damages, based on its determination that “no such duty exists within the parties’ contract.” To the contrary, the duty to mitigate damages arising from a breach of contract is a duty that arises from common law and, therefore, need not be expressly bargained for in a contract to be enforceable … . Accordingly, assuming liability, Everfoam should be entitled to limit damages, if any, if the plaintiffs failed to make “reasonable exertions to minimize the injury” … . Mack-Cali Realty LP v Everfoam Insulation Sys Ind, 2013 NY Slip Op 06348, 2nd Dept 10-2-13

 

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Cognizable Counterclaim for Breach of Domestic Partnership Stated

In finding defendant had stated a legally cognizable counterclaim for breach of a domestic partnership agreement, the Fourth Department explained:

With respect to domestic partnership agreements, “New York courts have long accepted the concept that an express agreement between unmarried persons living together is as enforceable as though they were not living together . . . , provided only that illicit sexual relations were not ‘part of the consideration of the contract’ ” … .  Additionally, there is no statutory requirement that such a contract be in writing … .  We conclude that here defendant sufficiently pleaded counterclaims for breach of a domestic partnership agreement and that the court therefore erred in dismissing the fourth and fifth counterclaims … . Ramos v Hughes, 866, 4th Dept 9-27-13

 

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Question of Fact About Whether Horse Owner Liable for Injuries to Novice Rider

The Fourth Department affirmed the denial of summary judgment to the owners of a horse which allegedly brushed up against a tree, injuring the novice rider.  The court explained that the “knowledge of vicious propensities” doctrine applied here because there was evidence the defendants knew the horse had a propensity to ride too close to trees, the general release signed by plaintiff was void as against public policy, and the defendants did not establish as a matter of law that plaintiff had assumed the increased risk of horseback riding alleged here:

It is well settled that “the owner of a domestic animal who either knows or should have known of that animal’s vicious propensities will be held liable for the harm the animal causes as a result of those propensities” … .  “[A]n animal that behaves in a manner that would not necessarily be considered dangerous or ferocious, but nevertheless reflects a proclivity to act in a way that puts others at risk of harm, can be found to have vicious propensities—albeit only when such proclivity results in the injury giving rise to the lawsuit” (id. at 447).  In support of their motion, defendants submitted the deposition testimony of plaintiff, wherein she testified that defendant and a guide employed by the Ranch instructed plaintiff to push off of the trees if the horse walked too closely to the trees on the single-file woodland trail.  * * *

Even assuming, arguendo, that defendants conclusively demonstrated that plaintiff executed the release, we conclude that, under these circumstances, where the riding lesson was ancillary to the recreational activity of horseback riding, General Obligations Law § 5-326 renders the release void as against public policy… .* * *

Finally, defendants failed to establish as a matter of law that plaintiff assumed the risk of horseback riding.  Horseback riding “[p]articipants will not be deemed to have assumed unreasonably increased risks” … .  Here, defendants submitted evidence that raised a question of fact whether they unreasonably increased the risks of horseback riding by using a bitless bridle on their horses, which did not provide plaintiff with the ability to control the horse, and by failing to give plaintiff, who was a novice rider, adequate instructions on how to control the horse … .  Vandeerbrook v Emerald Springs Ranch…, 855, 4th Dept 9-27-13

 

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Ambiguity of Contract Is a Question of Fact Where Credibility of Extrinsic Evidence Must Be Assessed

The First Department determined there was question of fact whether defendant signed a note in his personal as well as corporate capacity. The court explained the relevant analysis where a contract is ambiguous:

A contract is ambiguous if “on its face [it] is reasonably susceptible of more than one interpretation” … . The determination whether a contract is ambiguous is a question of law for the court … . If the court deems a contract ambiguous, it may consult extrinsic evidence to resolve the ambiguity … . However, where “the determination of the parties’ intent depends upon the credibility of extrinsic evidence or a choice among inferences to be drawn from extrinsic evidence, then the issue is one of fact” … .  Chen v Yan, 2013 NY Slip Op 05957, 1st Dept 9-24-13

 

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Authenticity of Document Not Demonstrated

In finding the existence of a contract had not been demonstrated, the Second Department explained the relevant evidentiary rules concerning the authenticity of a document submitted as proof of a contract:

The general rule is that “[a] writing is ordinarily not relevant at trial unless evidence had been introduced to show that it was made, signed or adopted by a particular person” (Prince, Richardson on Evidence, § 9-101 [2008]). “A private document offered to prove the existence of a valid contract cannot be admitted into evidence unless its authenticity and genuineness are first properly established” … . The authenticity of a document may be established by submitting the document with a certificate of acknowledgment …, which was not done here. Nor was any other evidence submitted as to the validity of the documents in issue. Fairlane Fin Corp v Greater Metro Agency, Inc, 2013 NY Slip Op 05875, 9-18-13

 

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Question of Fact Whether General Releases Encompassed Environmental Damage from Leaking Fuel Tank

The Second Department determined that there was a question whether general releases contemplated damages related to environmental contamination and the action should not have been dismissed based on the releases. The action concerned gasoline which had leaked into the ground when defendant had leased the plaintiff’s property.  The court explained:

Generally, a valid release completely bars an action on a claim that is the subject of the release … . Principles of contract law govern the interpretation of a release; “a release that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms'” … . Nonetheless, as the Court of Appeals has recognized with respect to a general release, “[t]here is little doubt . . . that its interpretation and limitation by the parol evidence rule are subject to special rules. These rules are based on a realistic recognition that releases contain standardized, even ritualistic, language and are given in circumstances where the parties are sometimes looking no further than the precise matter in dispute that is being settled. Thus, while it has been held that an unreformed general release will be given its full literal effect where it is directly or circumstantially evident that the purpose is to achieve a truly general settlement …, the cases are many in which the release has been avoided with respect to uncontemplated transactions despite the generality of the language in the release form” … .

Further, “[t]he meaning and extent of coverage of a release necessarily depend, as in the case of contracts generally, upon the controversy being settled and upon the purpose for which the release was actually given'” … . A general release may not be construed to cover matters that the parties “did not desire or intend to dispose of” … .

Here, the two releases at issue, whether construed together or separately, are ambiguous regarding whether the parties intended that they cover unknown claims for environmental contamination… .  Burnside 711 LLC v Amerada Hess Corp, 2013 NY Slip Op 05869, 2nd Dept 9-18-13

 

No Evidence Release Invalidated by Fraud or Duress

In upholding the validity of a release, the Second Department explained the relevant principles:

” A release is a contract, and its construction is governed by contract law'” … . “A release may be invalidated . . . for any of the traditional bases for setting aside written agreements'” … . However, “a signed release shifts the burden of going forward . . . to the [plaintiff] to show that there has been fraud, duress or some other fact which will be sufficient to void the release'” … .

Here, the plaintiff failed to demonstrate that there was fraud, duress, or some other fact sufficient to void the release. Davis v Rochdale Vil, Inc, 2013 NY Slip Op 05874, 2nd Dept 9-18-13

 

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Relationship of Prenuptial Agreement to Temporary Maintenance and Award of Attorneys Fees

The Second Department determined that temporary maintenance was not properly granted in light of the facts (where the prenuptial agreement did not expressly deal with the topic) and legal fees in excess of the limit in the prenuptial agreement were properly granted.  The court explained the relevant analyses as follows:

“As with all contracts, prenuptial agreements are construed in accord with the parties’ intent, which is generally gleaned from what is expressed in their writing” …. “Where a prenuptial agreement is clear and unambiguous on its face, the intent of the parties is gleaned from the four corners of the writing as a whole with a practical interpretation of the language employed so that the parties’ reasonable expectations are met” … .

Contrary to the plaintiff’s contention, the parties’ prenuptial agreement did not expressly preclude an award of temporary maintenance pendente lite, nor did the defendant expressly waive such an award under the terms of the agreement… .   On the record presented, including evidence of the defendant’s expenses, the defendant’s reasonable needs were more than adequately met. Accordingly, under the circumstances of this case, the Supreme Court improvidently exercised its discretion in directing the plaintiff to pay temporary maintenance in the sum of $1,000 per month… . * * *

Supreme Court properly awarded the defendant interim counsel fees, notwithstanding a provision in the prenuptial agreement limiting, to the sum of $10,000, the plaintiff’s obligation to pay such fees incurred by the defendant in any divorce action. Because of a strong public policy favoring the resolution of matrimonial matters on a level playing field …, the determination of whether to enforce an agreement waiving the right of either spouse to seek an award of an attorney’s fee is to be made “on a case-by-case basis after weighing the competing public policy interests in light of all relevant facts and circumstances both at the time the agreement was entered and at the time it is to be enforced” … . Here, the parties are involved in extensive litigation concerning child custody, a matter not expressly addressed in their prenuptial agreement. Moreover, the plaintiff’s net worth is more than $13 million and his monthly gross income exceeds $45,000, while the defendant has no income other than what she is receiving pursuant to the agreement. Abramson v Gavares, 2013 NY Slip Op 05861, 2nd Dept 9-18-13

 

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Summary Judgment Properly Granted to Snow-Removal Contractor—”Espinal” Exceptions Explained

In affirming the grant of summary judgment to defendant snow-removal contractor (Lemp) in a slip and fall case, the Second Department clearly explained the applicable law, including the “Espinal” exceptions to the rule a contractor is not liable to third parties:

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, in Espinal v Melville Snow Contrs. (98 NY2d 136, 140), the Court of Appeals recognized that exceptions to this rule apply (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.

Contrary to the plaintiffs’ contentions, the defendant Lemp Landscapers, Inc. (hereinafter Lemp), made a prima facie showing of its entitlement to judgment as a matter of law by offering proof that the injured plaintiff was not a party to its snow removal contract with the defendant Woodland Pond Condominium Association (hereinafter Woodland), and that it thus owed no duty of care to the injured plaintiff … . Since the plaintiffs did not allege facts in their complaint or bill of particulars which would establish the possible applicability of any of the Espinal exceptions, Lemp, in establishing its prima facie entitlement to judgment as a matter of law, was not required to affirmatively demonstrate that these exceptions did not apply … .

In opposition to Lemp’s prima facie showing, the plaintiffs offered no evidence to support their contentions that Lemp launched a force or instrument of harm by creating or exacerbating the icy condition that allegedly caused the plaintiff Ernest Rudloff’s fall … . By merely plowing the snow in accordance with the contract and leaving some residual snow or ice on the plowed area, Lemp cannot be said to have created a dangerous condition and thereby launched a force or instrument of harm. Moreover, a claim that a contractor exacerbated an existing condition requires some showing that the contractor left the premises in a more dangerous condition than he or she found them … . Therefore, even if Lemp failed to sand or salt the roadway on which the injured plaintiff fell, the plaintiffs have offered nothing more than speculation that the failure to perform that duty rendered the property less safe than it was before Lemp started its work … . Rudloff v Woodland Pond Condominium Assn, 2013 NY Slip Op 05812, 2nd Dept 9-11-13

 

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