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IF THE UNDERLYING INSURANCE POLICY DOES NOT INDICATE THAT A WRITTEN AGREEMENT NAMING A PARTY AS AN ADDITIONAL INSURED MUST BE SIGNED, AN UNSIGNED DOCUMENT TO THAT EFFECT IS ENFORCEABLE (FIRST DEPT).

The First Department, reversing Supreme Court, determined that the fact the the change order, which required defendant (Arsenal) to name plaintiff as an additional insured, was unsigned, it was enforceable:

​An unsigned document may qualify as a written agreement requiring a party to be named as an additional insured, provided that the additional insured provisions in the insurance policy itself do not explicitly require that the agreement be signed … . If such agreement is unsigned, it may still be enforceable, “provided there is objective evidence establishing that the parties intended to be bound” … . * * *

Since the change order qualifies as a written agreement requiring Arsenal to name plaintiff as an additional insured, Supreme Court should have granted plaintiff’s motion for partial summary judgment and found that defendant insurer is required to provide plaintiff a defense in the underlying litigation, as the duty to defend was triggered … . A1 Specialized, Inc. v James Riv. Ins. Co., 2026 NY Slip Op 00570, First Dept 2-5-26

Practice Point: An unsigned document requiring a party to be named as an additional insured is enforceable if the underlying policy does not require the agreement to be signed.

 

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EXCLUSIONS FROM COVERAGE IN AN INSURANCE POLICY ARE STRICTLY CONSTRUED AGAINST THE INSURER; HERE DAMAGE CAUSED BY “INTERIOR TILE” WORK WAS COVERED UNDER THE POLICY; IN PREPARING THE BATHROOM FLOOR FOR TILING THE INSURED USED WELDING EQUIPMENT WHICH CAUSED A FIRE; THE INSURER DID NOT DEMONSTRATE THE PREPARATORY WORK WAS NOT ENCOMPASSED BY THE COVERAGE FOR “INTERIOR TILE” WORK (FIRST DEPT).

The First Department, reversing Supreme Court, determined that plaintiff insurance company was, by the terms of the policy, obligated to cover property damage caused by defendant contractor, who was retained to refurbish a bathroom. The policy issued by plaintiff to defendant excluded from coverage any property damage caused by  the defendant. There was an “exception to the exclusion” for “interior tile” work. In preparing the bathroom floor for tiling, defendant’s worker used welding equipment which started a fire, causing damage. The question before the court was whether the “interior tile” work “exception to the exclusion” included the preparation for the tile work using welding equipment:

Policy exclusions must be stated “in clear and unmistakable terms so that no one could be misled” … and “are to be accorded a strict and narrow construction” … . To avoid coverage pursuant to an exclusion, the insurer must establish that the exclusions or exemptions apply to the incident in question and are subject to “no other reasonable interpretation” … .

Plaintiff here failed to meet this burden. The Policy fails to define “interior tile” work. Nor does it indicate the scope or extent of what constitutes “tiling work” or articulate whether the phrase was meant to encompass closely related preparatory tasks, which is a reasonable interpretation advanced by defendants … . Accordingly, the Policy’s exclusions and the “interior tile” exception is ambiguous. The record before us is conclusory and does not resolve these ambiguities. Well-settled “precedent[] require us to adopt the readings that narrow the exclusion[]” and construe ambiguities against the insurer plaintiff, resulting in coverage as a matter of law … . Mt. Hawley Ins. Co. v Michelle Kuo Corp., 2026 NY Slip Op 00427, Frist Dept 1-29-26

Practice Point: Consult this decision for insight into how a court will strictly construe “exceptions” to “exclusions from coverage” in an insurance policy.

 

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DEFENDANTS OPENED A COMPETING HAIR SALON AND WRONGFULLY ACCESSED PLAINTIFF’S ACCOUNT SOFTWARE TO BOOK CLIENTS; THE COMPLAINT STATED CAUSES OF ACTION FOR TRESPASS TO CHATTELS, TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS AND BREACH OF THE EMPLOYMENT CONTRACT (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that plaintiff’s causes of action for trespass to chattels, tortious interference with business transactions and breach of contract should not have been dismissed. Plaintiff alleged defendants opened a competing hair salon and accessed and used plaintiff’s computer program for booking clients by using plaintiff’s username and password:

To establish a cause of action to recover damages for trespass to chattels, the plaintiff is required to establish that the defendants “intentionally, and without justification or consent, physically interfered with the use and enjoyment of personal property in [plaintiff’s] possession” … . “Liability for trespass to chattels will be imposed only if the interference results in harm to the physical condition, quality or value of the chattel or if the owner is deprived of use of the chattel for a substantial time” … . Interference with information stored on a computer may give rise to trespass to chattels if the plaintiff is dispossessed of the information or the information is impaired as to its condition, quality, or value … . …

[To] “… set forth a cause of action sounding in tortious interference with business relations, a plaintiff is required to plead 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” … . The wrongful means supporting a cause of action alleging intentional interference with a business relationship includes acts that constitute a crime or independent tort or other egregious wrongdoing … . Hello Beautiful Salons, Inc. v Dimoplon, 2026 NY Slip Op 00242, Second Dept 1-21-26

Practice Point: Using plaintiff hair salon’s credentials to access plaintiff’s business-account software to wrongfully book clients for defendants’ competing hair salon constitutes the tort of “trespass to chattels.”

 

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DEFENDANT HOME CARE AGENCY WAS HIRED BY DEFENDANT HEALTHCARE PLAN AS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE; THEREFORE THE HEALTHCARE PLAN WAS NOT LIABLE FOR THE ALLEGED ASSAULT, BATTERY AND NEGLIGENT SUPERVISION COMMITED BY AN EMPLOYEE OF THE HOME CARE AGENCY (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, determined that Lighthouse, the parent company of GuildNet, a long-term healthcare plan, could not be held liable for the assault, battery and negligence allegedly committed by an employee of Ellison Home Care Companion Agency, which provided healthcare aides who attended to plaintiff’s mother. Plaintiff alleged his mother was assaulted and battered by Shaw, who was employed by Ellison. The contract between GuildNet and Ellison described Ellison as an independent contractor. Because Shaw was not GuldNet’s employee, GuildNet was not vicariously liable for Shaw’s actions:

The assault, battery, and negligence claims should have been dismissed as against GuildNet on the ground that Shaw was not its employee at the time of the underlying events. GuildNet and Ellison’s Participating Provider Agreement expressly defined their relationship as one of independent contractors rather than employer-employee … . The record discloses that GuildNet had only incidental control and general supervisory power over Ellison’s work, which is insufficient to establish an employer-employee relationship … . Further, Ellison admitted that Shaw was its employee and acting within the scope of her employment at the time of the underlying events.

The remaining claim for negligent supervision should also have been dismissed. To the extent that it is predicated on GuildNet’s alleged failure to supervise Shaw despite knowledge of her “propensity for the sort of behavior which caused” [plainiff’s mother’s] injuries and death … , Shaw was not GuildNet’s employee, and the record is bereft of any information that could impute to GuildNet knowledge of her propensity either to commit assault or battery or to ignore a client in distress … . To the extent that the claim is instead predicated on GuildNet’s alleged failure to supervise the care that [plaintiff’s mother] received, namely, by failing to assign a competent agency to assign a competent home health care aide to work with [her], plaintiff has not identified how such a failure proximately caused [her] injuries and death, assuming that GuildNet even had a duty to do so in the first place … . Pander v GuildNet, Inc., 2026 NY Slip Op 00201, First Dep-15-26

Practice Point: A party which hires a party as an “independent contractor” and does not exercise supervisory control over the independent contractor’s work will not be vicariously liable for wrongdoing by the independent contractor.

 

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THE STATUTE OF LIMITATIONS FOR DECLARATORY JUDGMENTS DEPENDS ON THE UNDERLYING THEORY, FRAUD IN THIS CASE; AN AGREEMENT TO ASSIGN OR OBTAIN A MORTGAGE IS A CONTRACT INVOLVING AN INTEREST IN REAL PROPERTY AND IS SUBJECT TO THE STATUTE-OF-FRAUDS WRITING-REQUIREMENT (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that certain causes of action in this dispute over ownership of real property should have been dismissed as time-barred or as violative of the statute of frauds:

“Actions for declaratory judgments are not ascribed a certain limitations period. The nature of the relief sought in a declaratory judgment action dictates the applicable limitations period” … . The statute of limitations for an action based upon fraud generally is six years from the date the cause of action accrued (see CPLR 213[8]). … [T]he first and second causes of action were untimely, as the amended complaint alleged that [defendant’s] fraud in obtaining those interests occurred more than six years before the commencement of this action … .

… Causes of action to impose a constructive trust upon real property and to recover damages for unjust enrichment are governed by a six-year statute of limitations, which begins to accrue at the time of the wrongful act giving rise to the duty of restitution … . … [Defendant’s] alleged fraudulent acquisition of ownership interests … occurred more than six years before the commencement of this action.

… The statute of frauds requires any contract transferring or creating an interest in real property to be in writing (see General Obligations Law § 5-703[1] …). Here, [the] … complaint alleged [defendants] breached their agreements to assign or obtain a mortgage in favor of the plaintiffs. A mortgage constitutes an interest in real property, and the agreements to transfer or obtain mortgages in favor of the plaintiffs, therefore, were required to be in writing. Hersko v Hersko, 2026 NY Slip Op 00120, Second Dept 1-14-26

Practice Point: The statute of limitations for a declaratory judgment is that which applies to the underlying theory. Here the six-year statute for fraud applied.​

Practice Point: An agreement to assign or obtain a mortgage is subject to the statute-of-frauds because a mortgage constitutes an interest in real property.

 

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A CERTIFICATE OF INURANCE NAMING A PARTY AS AN ADDITIONAL INSURED IS EVIDENCE THAT THERE IS A CONTRACT TO THAT EFFECT, BUT IT IS NOT CONCLUSIVE PROOF OF THE EXISTENCE OF A CONTRACT AND WILL NOT SUPPORT SUMMARY JUDGMENT ON THE ISSUE (SECOND DEPT).

The Second Department noted that identifying a party as an additional insured on a certificate of insurance is evidence of a contract naming that party as an additional insured, but only the contract itself constitutes definitive proof of additional-insured status:

“A certificate of insurance is evidence of a contract for insurance, but is not conclusive proof that the contract exists and not, in and of itself, a contract to insure” … . [There was no proof of] a specific agreement … to name [plaintiff] School District as an additional insured. Accordingly, the Supreme Court properly denied that branch of the School District’s motion which was for summary judgment declaring that One Beacon is obligated to defend and indemnify it as an additional insured in the underlying action … . Island Trees Union Free Sch. Dist. v A 1 Constr. Serv., Inc, 2025 NY Slip Op 07289, Second Dept 12-24-25

Practice Point: A certificate of insurance naming a party as an additional insured is evidence there is a contract to that effect, but, without the contract, the certificate will not support summary judgment on the issue.​

 

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PLAINTIFF’S SUBMISSIONS RAISED A QUESTION OF FACT WHETHER THE ORAL AGREEMENT THAT DEFENDANT WOULD BUY PLAINTIFF’S HOUSE FOR $40,000, OTHERWISE VOID UNDER THE STATUTE OF FRAUDS, WAS ENFORCEABLE BECAUSE IT WAS PARTIALLY PERFORMED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined there was a question of fact whether part performance took the oral contract to purchase property out of the statute of frauds. Plaintiff allowed defendant to move in to plaintiff’s vacant house. At some point, plaintiff and defendant entered an oral agreement that defendant would buy the house for $40,000:

… [P]laintiff submitted, inter alia, defendant’s deposition testimony. Defendant testified that he and plaintiff were friends and that plaintiff allowed him to move into plaintiff’s then-vacant home in 2019 with no agreement to pay rent. Sometime thereafter, the parties orally agreed that, over a period of three years, defendant would pay plaintiff $40,000 for the purchase of the home. Defendant was to pay $600 per month during the first year, and there was no specified payment schedule for the remainder of the term. Defendant made 12 monthly payments of $600 in the first year and thereafter made various lump-sum payments to plaintiff, for a total of $33,200. Defendant also tendered the funds to pay the outstanding balance, but plaintiff rejected that payment and commenced court proceedings. * * *

Although such an oral agreement would generally be unenforceable under the statute of frauds, which provides, inter alia, that a “contract for . . . the sale[ ] of any real property . . . is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing” … , an exception exists “in cases of part performance” … , i.e., where a party to an otherwise unenforceable oral agreement has partially performed under it. The exception is an equitable one, which recognizes that a party may “waive [the] protection [of the statute of frauds] . . . by inducing or permitting without remonstrance another party to the agreement to do acts, pursuant to and in reliance upon the agreement, to such an extent and so substantial in quality as to irremediably alter [the] situation and make the interposition of the statute against performance a fraud” … . Importantly, “[t]he [part] performance must be unequivocally referable to the agreement” … . Dacko v Kiladze, 2025 NY Slip Op 07165, Fourth Dept 12-23-25

Practice Point: Part performance of an oral contract to buy real estate may render the otherwise void contract enforceable.

 

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UNDER THE LIEN LAW, THE GENERAL CONTRACTOR IN A FAILED SOLAR ENERGY PROJECT, AS TRUSTEE OF THE SETTLEMENT FUNDS, WAS PROPERLY PRECLUDED FROM USING THE FUNDS TO PAY ITSELF FIRST; THE SUBCONTRACTORS MUST BE PAID FIRST; THERE WAS A TWO JUSTICE DISSENT (THIRD DEPT).

The Third Department, affirming Supreme Court, over a two-justice dissent, in a matter of first impression, determined the subcontractors’ motion to enjoin the general contractor from using settlement funds to pay itself for expenditures in a failed solar-energy project was properly granted. The Lien Law created a trust for the settlement funds and required the general contractor, as trustee, to pay the subcontractors before paying itself:

“Article 3-A of the Lien Law impresses with a trust any funds paid or payable to a contractor ‘under or in connection with a contract for an improvement of real property’ ” ( … Lien Law § 70 [1]). Given this statutory definition, we readily conclude that the settlement funds at issue constitute trust funds under Lien Law article 3-A … . The Court of Appeals has “repeatedly recognized that the primary purpose of [Lien Law] article 3-A . . . is to ensure that those who have directly expended labor and materials to improve real property . . . at the direction of the owner or a general contractor receive payment for the work actually performed” … . With respect to a contractor’s trust, the parties entitled to a beneficial status are expressly enumerated in Lien Law § 71 (2) (a)-(f) … Pursuant to Lien Law § 71 (2) (a), “[t]he trust assets of which a contractor . . . is trustee shall be held and applied for [enumerated] expenditures arising out of the improvement of real property,” including “payment of claims of subcontractors, architects, engineers, surveyors, laborers and materialmen” (Lien Law § 71 [2] [a] … ). The language is mandatory and does not include the “cost[s] of improvement,” which is a term specifically defined to address an owner’s costs (Lien Law § 2 [5]; see Lien §§ 70 [5]; 71 [1] …).  L.C. Whitford Co., Inc. v Babcock & Wilcox Solar Energy, Inc., 2025 NY Slip Op 07063, Third Dept 12-18-25

Practice Point: Under the Lien Law the general contractor here is the trustee of the settlement funds and must use the funds to pay the subcontractors before paying itself.

 

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ALTHOUGH PLAINTIFF MAY NOT HAVE INTENDED THE RELEASE TO APPLY TO A PENDING FALSE ARREST ACTION, THE PENDING ACTION WAS NOT LISTED IN THE RELEASE AS AN EXCLUSION AND IS THEREFORE PRECLUDED (CT APP).

The Court of Appeals determined that, even if plaintiff did not intend to release the city from the second false arrest action when he signed a release for the first false arrest action, the release must be enforced according to its plain language. The release had a section where any actions not intended to be encompassed by the release must be specifically identified and listed. Plaintiff, with counsel present, signed the release without listing the second false arrest action as an exclusion, so the release precluded the second action:

This Court has repeatedly made clear that “[i]f ‘the language of a release is clear and unambiguous, the signing of a release is a “jural act” binding on the parties’ ” … . “As with contracts generally, the courts must look to the language of a release—the words used by the parties—to determine their intent, resorting to extrinsic evidence only when the court concludes as a matter of law that the contract is ambiguous” … , or where such evidence establishes one of the ” ‘traditional bases for setting aside written agreements, namely, duress, illegality, fraud, or mutual mistake’ ” … . With respect to mutual mistake, a “high order of evidence is required” to overcome the ” ‘heavy presumption that a deliberately prepared and executed written instrument [manifests] the true intention of the parties’ ” … .

Here, the City established its prima facie entitlement to summary judgment based on the clear language of the release, and plaintiff failed to raise any triable question of fact in opposition. The City’s intent to secure a release from plaintiff of “any and all” claims is evidenced by the plain text of the document it transmitted for plaintiff’s signature. As the Appellate Division correctly held, there was nothing “surreptitious” about the way the release was drafted or transmitted … . Although plaintiff, who was represented by counsel, could have excluded this action from the release by the simple act of listing it in the space provided for that purpose, he signed the release without doing so, an objective manifestation of assent that is binding upon him notwithstanding any unilateral mistake or subsequent regret on his part … . Smith v City of New York, 2025 NY Slip Op 07081, CtApp 12-18-24

Practice Point: A release is strictly enforced according to its plain language. If a release includes a section where any exclusions from its reach must be listed, and that section is left blank, the release will preclude any other pending action, even where the failure to list a pending action was unintentional.

 

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A CONTRACT (A MEMORANDUM OF UNDERSTANDING OR “MOU”) WHICH PURPORTED TO BIND CURRENT AND FUTURE TOWN OFFICIALS TO A REZONING REQUEST FOR A REAL ESTATE DEVELOPMENT PROJECT VIOLATED THE “TERM LIMITS DOCTRINE” AND WAS THEREFORE UNENFORCEABLE (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Singas, over a three-judge concurrence, determined that a memorandum of understanding (MOU) which purported to bind current and future municipal officials to plaintiff’s rezoning request for a real estate development project violated the term limits doctrine and was unenforceable:​

“The term limits rule prohibits one municipal body from contractually binding its successors in areas relating to governance unless specifically authorized by statute or charter provisions to do so” … . It recognizes that “[e]lected officials must be free to exercise legislative and governmental powers in accordance with their own discretion and ordinarily may not do so in a manner that limits the same discretionary right of their successors” … . The doctrine thus instructs “that where a contract ‘involves a matter of discretion to be exercised by the [municipal body,] unless the statute conferring power to contract clearly authorizes th[at body] to make a contract extending beyond its own term, no power . . . so to do exists’ ” … . The term limits doctrine reaches only “matters relating to governmental or legislative functions” … and does not apply where the municipality is “acting in its proprietary capacity” … . * * *

… [W]e conclude that by entering into the MOU, the Town Board violated the term limits doctrine by purporting to “limit” a “discretionary right of [its] successors,” rendering the MOU invalid and unenforceable … . Absent an enforceable agreement, plaintiff’s contractual claims fail as a matter of law. Hudson View Park Co. v Town of Fishkill, 2025 NY Slip Op 07080, CtApp 12-18-25

Practice Point: Here an attempt to bind current and future municipal officials to a rezoning request for a real estate development project was deemed unenforceable because it violated the “term limits doctrine.” Consult this opinion for insight into how the “term limits doctrine” is applied.​

 

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