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Ambiguity in Separation Agreement Construed Against Drafter

The Second Department determined the ambiguity in a separation agreement about whether the decedent was obligated to maintain life insurance policy should be construed against the decedent, whose attorney drafted the document:

Here, the separation agreement was ambiguous as to whether the decedent’s obligation to maintain a life insurance policy naming the defendants as beneficiaries extended beyond the date of the defendants’ emancipation. However, it is undisputed that the decedent’s attorney drafted the separation agreement. Pursuant to the doctrine of contra proferentem, the Supreme Court should have construed the ambiguity against the decedent’s estate … .  DeAngelis v DeAngelis, 2013 NY Slip Op, 2011-08587, Index No 8485/08, 2nd Dept 3-27-13

 

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Circumstances Under Which Contractor Can Be Held Liable for Slip on Snow and Ice 

In this slip and fall case, the Second Department explained the circumstances under which a snow-and-ice-removal contractor can be held liable for injuries to third parties:

Generally, “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, there are three recognized exceptions: “(1) where the contracting party, in failing to exercise reasonable care in the performance of his 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” … .  Santos v Deanco Servs, Inc, 2013 NY Slip Op 02065, 2012-02786, Index No 5927/09, 2nd Dept 3-27-13

 

 

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Oral Partnership Agreement Dissolvable at Will Because of Lack of Specificity

In finding that an oral partnership agreement was dissolvable at will because no “definite term” or “particular undertaking” was included, the Court of Appeals, in a full-fledged opinion by Judge Graffeo, wrote:

…[W]e believe that [the] complaint lacks a fixed, express period of time during which the enterprise was expected to operate. Instead, the complaint alleges a flexible temporal framework: the parties were to solicit investments for an indefinite length of time; conduct an open-ended (possibly two-year) search for an unidentified business in an unknown business sector or industry; secure additional capital investments over the course of an unspecified period of time; and then purchase and operate the enterprise for an indeterminate duration (perhaps four to seven years) until a liquidity event would hopefully occur. Since the complaint does not set forth a specific or even a reasonably certain termination date, it does not satisfy the “definite term” element of [Partnership Law] section 62 (1) (b). * * *

Furthermore, when the entire scheme is considered, the alleged sequence of anticipated partnership events detailed in the complaint are too amorphous to meet the statutory “particular undertaking” standard for precluding unilateral dissolution of a partnership. The stages of the plan … were to: (1) raise money; (2) identify a business to buy; (3) raise more money to purchase the business; (4) “operate the business to increase its value”; (5) “achieve the liquidity event”; (6) “sell the business”; and (7) secure profit from the sale. But these objectives are fraught with uncertainty and are less definitive than the declarations referring to specific industries that have been found to be inadequate by other courts *  *  *.  In the absence of a definite term of duration or a particular undertaking to be achieved, the partnership agreement at issue, however well-intended, was dissolvable at will by either partner under Partnership Law § 62 (1) (b). Gelman v Buehler, 37, Ct.App. 3-26-13

 

 

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Lawsuit Prohibited by Unambiguous Release

In reversing the trial court, the Second Department determined a medical malpractice complaint should have been dismissed based on the unambiguous language of a release signed by the plaintiff:

The action should have been dismissed as against defendants-appellants based on the unambiguous language in the release, which clearly intended to put an end to the action …. Given the unambiguous terms of the release, the motion court should not have considered extrinsic evidence… . Bernard v Sayegh, 2013 NY Slip Op 02027, 8619, 111756/06, 1st Dept. 3-26-13

 

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Choice of Forum; Choice of Law

The Fourth Department determined a choice of forum clause must be enforced and noted the difference between choice of forum and choice of law:

Supreme Court properly granted defendant’s motion to dismiss the complaint pursuant to CPLR 3211 (a) (1). According to the “Standard Terms and Conditions” of the agreement …, “[a]ny litigation arising in any way from this Agreement shall be brought in the Courts of Common Pleas of Pennsylvania having jurisdiction.”  That forum selection clause is “ ‘prima facie valid and enforceable unless it is shown by the challenging party to be[, inter alia,] unreasonable, unjust, [or] in contravention of public policy’ ” … 

Contrary to plaintiff’s contention, the enforcement of the forum selection clause does not contravene New York public policy … .

The “Standard Terms and Conditions” also provide that “[t]he laws of the Commonwealth of Pennsylvania shall govern the validity of this Agreement, its interpretation and performance,” and plaintiff contends that the enforcement of the “limitation of legal liability” provision of the agreement pursuant to Pennsylvania law violates General Obligations Law §§ 5-322.1 and 5-324 and would thus contravene New York public policy. That contention, however, concerns choice of law, not choice of forum, and it may properly be raised before a court in the forum chosen by the parties in Pennsylvania … .“[O]bjections to a choice of law clause are not a warrant for failure to enforce a choice of forum clause” … .  Erie Insurance Company of New York, … v AE Design, Inc., 337, CA 12-01549, 4th Dept. 3-22-13

 

 

 

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Procedure for Invalidation of a Stipulation to the Record

The Fourth Department noted the criteria for invalidating a stipulation to a record on appeal:

It is undisputed … that plaintiff stipulated to settle the record … prior to seeking leave to reargue or renew and has not sought to be relieved from his stipulation … .  Once plaintiff stipulated to the record on appeal, he was no longer entitled to move to settle the record or, indeed, to seek leave to reargue or renew a motion to settle the record that preceded the stipulation.  “Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation” …, and plaintiff made no such showing here.  Hale v Meadowood Farms of Cazenovia, LLC, et al, 351, CA 12-01192, 4th Dept. 3-22-13

 

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Damages for Breach of Purchase Contract Are Measured by the Difference Between the Purchase Price and the Market Value at Time of Breach

In a lengthy opinion by Judge Read, the Court of Appeals determined that, where a purchase contract for real property has been breached, the measure of damages is the difference between the sale price and the market value of the property at the time of the breach.  The price at which the property subsequently sells can be taken into consideration when determining what the value was at the time of the breach, but it is not the measure of damages.  White v Farrell, et al, No. 43, CtApp, 3-21-13

 

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Injury to Real Property, Waste, Trespass, Conversion and Private Nuisance Actions Based Upon Removal of Trees from Unrecorded Easement

In an action for breach of contract, waste, injury to real property, trespass, conversion and private nuisance, based upon clearing land of trees pursuant to an unrecorded easement, the Second Department wrote:

Pursuant to RPAPL 861(1), a property owner may maintain an action for damages against any person who, without the consent of the owner, removes or causes to be removed trees on the owner’s property … . “To recover damages based on the tort of private nuisance, a plaintiff must establish an interference with his or her right to use and enjoy land, substantial in nature, intentional or negligent in origin, unreasonable in character, and caused by the defendant’s conduct”… . “In order to establish a cause of action to recover damages for conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question . . . to the exclusion of the plaintiff’s rights” … . * * *

“[A]n unrecorded conveyance of an interest in real property is deemed void as against a subsequent good faith purchaser for value who acquires his interest without actual or constructive notice of the prior conveyance” … . However, “ [w]here a purchaser has knowledge of any fact, sufficient to put him on inquiry as to the existence of some right or title in conflict with that he is about to purchase, he is presumed either to have made the inquiry, and ascertained the extent of such prior right, or to have been guilty of a degree of negligence equally fatal to his claim, to be considered as a bona fide purchaser’” …. “This presumption, however, is a mere inference of fact, and may be repelled by proof that the purchaser failed to discover the prior right, notwithstanding the exercise of proper diligence on his part” … .   Schulz v Dattero, et al, 2013 NY Slip Op 01815, 2011-05813, 2012-02942, Index No 876/06, 2nd Dept. 3-20-13

 

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Flaws in Fraud and Negligent Misrepresentation Allegations in Complaint Explained

The First Department, in affirming the dismissal of fraud and negligent misrepresentation claims in a contract action, described the flaws in the complaint as follows:

The court properly dismissed the fraud claim for failure to plead fraud with the particularity required by CPLR 3016(b) and for failure to plead loss causation … .

The court properly dismissed the negligent misrepresentation claim for failure to plead a special relationship. An arm’s length business relationship, as existed here, is not generally considered to be the sort of confidential or fiduciary relationship that would support a cause of action for negligent misrepresentation … . Nor did [defendants] “possess unique or specialized expertise” … .  Greentech Reasearch LLC v Wissman, 2013 NY Slip Op 01787, 9561, 602477/09, 1st Dept. 3-19-13

 

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County Executive Has Authority to Commence Lawsuit Without Resolution from County Legislature

The Fourth Department determined the Erie County Executive had the authority to bring a lawsuit alleging fraud on the part of a County Commissioner which resulted in the payment of more than $4,000,000 for goods and services that had not been provided.  The defendant contended the County could not bring the suit absent a resolution by the County Legislature.  The Fourth Department wrote:

There is no dispute that the County Legislature did not pass a resolution authorizing the commencement of this action. Contrary to defendant’s contention, however, we conclude that, notwithstanding the absence of such a resolution, the County Executive was empowered to commence this action on behalf of the County (see Matter of County of Rockland v Town of Clarkstown, 167 Misc 2d 367, 371). Under the County Charter, the County Executive is the Chief Executive Officer, the administrative head of the County government, and the Chief Budget Officer of the County.The County Charter grants the County Executive “all necessary incidental powers to perform and exercise any of the duties and functions specified . . . or lawfully delegated to him” (Erie County Charter § 302 [former (n)], now [m]).The County Executive is empowered by the County Charter to authorize the County Attorney to commence civil litigation to enforce any of the duties and functions lawfully designated to the County Executive (see § 602; see also § 302 [former (m)], now [l]; [former (n)], now [m]).Inasmuch as this action seeks to recover over $4 million dollars of the County’s funds that were allegedly improperly paid under the M/A-Com contract as a result of defendant’s alleged fraud, we conclude that the County Executive’s duties as Chief Executive Officer and Chief Budget Officer of the County clearly embrace the subject matter of this action and empower him to authorize the County Attorney to commence the litigation (see Rockland County, 167 Misc 2d at 371).  Justices Sconiers and Whalen disagreed in a substantial dissent.  County of Erie v M/A-Com, Inc., et al, 1184, CA 12-00075, 4th Dept. 3-15-13

 

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