You are here: / Contract Law
,

THE HANDWRITTEN ADDITION TO THE PRINTED CONTRACT IS PRESUMED TO EXPRESS THE LATEST INTENTION OF THE PARTIES; HERE THE ENTRY CREATED AMBIGUITY IN THE “NO DAMAGES FOR DELAY” CLAUSE REQUIRING DISCOVERY (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined a handwritten entry in a printed contract is presumed to express the latest intention of the parties and created ambiguity requiring discovery:

The subcontractor agreement between plaintiff and defendant JDS Construction Group LLC contains clauses precluding damages for delay. It also provides that if plaintiff’s work was “delayed or disrupted by fault of [JDS], Architect, or any other contractor, or by abnormal weather conditions, then the time fixed for the completion of the Work shall be extended for a period equivalent to the time actually lost, in the discretion of [JDS] and compensated for additional, mutually agreed to costs,” with the words in italics handwritten onto the typed agreement.

… [A] handwritten provision that conflicts with the language of the preprinted form document will control, “as it is presumed to express the latest intention of the parties” … . The handwritten amendment to the no-damages-for-delay clause renders the clause ambiguous as to whether plaintiff is entitled to be compensated for costs incurred as a result of such delays, which requires discovery to discern the parties’ intent … . Henick-Lane, Inc. v 616 First Ave. LLC, 2023 NY Slip Op 01163, First Dept 3-7-23

Practice Point: A handwritten entry in a printed contract is presumed to reflect the latest intention of the parties.

 

, ,

THE INJURED PARTY WAS STRUCK WITH A BATON IN AN ALTERCATION OUTSIDE A BAR; IT WAS ALLEGED THE INJURY WAS ACCIDENTAL; THE INSURER SOUGHT A DECLARATORY JUDGMENT RE: THE OBLIGATION TO DEFEND AND INDEMNIFY; THERE WERE QUESTIONS OF FACT WHETHER THE INCIDENT FELL OUTSIDE THE COVERAGE OF THE POLICY (NO DISCLAIMER REQUIRED) OR WHETHER THE INCIDENT WAS SUBJECT TO A POLICY EXCLUSION (TIMELY DISCLAIMER REQUIRED) (SECOND DEPT).

The Second Department, reversing Supreme Court, determined there were questions of fact whether the disclaimer by the insurer, Mapfre, was required and/or timely in this personal injury case. In the midst of some sort of altercation outside a bar, Groskopf was struck with a baton by Edward Ferrall. Edward Ferrall claimed he did not intend to strike Groskopf. The two questions before the court in this declaratory judgment action were (1) whether the injury was the result of an “occurrence” (accident) within the coverage terms of the policy, and (2) whether the injury was intended and therefore subject to a policy exclusion. If the claim falls outside the coverage terms no disclaimer is required. If the claim is subject to an exclusion from coverage, a timely disclaimer is required:

… Groskopf and the Ferrall defendants failed to establish, prima facie, their respective entitlement to judgment as a matter of law on whether an “occurrence” was involved giving rise to policy coverage and, if so, whether such occurrence fell within the “expected or intended” injury policy exclusion. * * *

… [D]efendants also failed to demonstrate their respective prima facie entitlement to judgment as a matter of law based upon Mapfre’s alleged untimely disclaimer. * * * [G]iven that there are triable issues of fact regarding whether the claim falls within the coverage, [the] defendants failed to establish, prima facie, that a timely disclaimer was required. Mapfre Ins. Co. of N.Y. v Ferrall, 2023 NY Slip Op 01082, Second Dept 3-1-23

Practice Point: Here there was an altercation outside a bar and the injured party was struck with a baton. It was alleged the injury was accidental and the insurer sought a declaratory judgment on its obligation to defend and indemnify. There were questions of fact whether the incident fell within the coverage terms (if so, no disclaimer was required) and whether the incident was subject to an exclusion from coverage (if so, a timely disclaimer was required).

 

, , ,

AFFIDAVITS NOT BASED ON PERSONAL KNOWLEDGE AND NOT SUPPORTED BY CERTIFIED BUSINESS RECORDS HAVE NO PROBATIVE VALUE; HERE THE AFFIDAVITS FAILED TO PROVE DEFENDANT WAS IN THE BUSINESS OF RENTING TRUCKS SUCH THAT THE GRAVE’S AMENDMENT APPLIED, AND FAILED TO PROVE THE TRUCK WAS PROPERLY MAINTAINED; DEFENDANT SHOULD NOT HAVE BEEN AWARDED SUMMARY JUDGMENT IN THIS TRAFFIC ACCIDENT CASE (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Mendez, determined defendant lessor of the truck which struck plaintiff’s vehicle did not present sufficient evidence that it was in the business of renting trucks, such that the Grave’s amendment applied, or that the truck was properly maintained. The defendant attempted to show it was in the business of renting trucks with affidavits which referred to documents that were not attached. In addition, the papers did not demonstrate the truck was properly maintained:

… [Defendant] failed to establish their entitlement to summary judgment under the Graves Amendment, which bars state law vicarious liability actions against owners of motor vehicles when (1) they are engaged in the trade or business of renting or leasing motor vehicles, (2) they leased the vehicle involved in the accident, (3) the subject accident occurred during the period of the lease or rental and (4) there is no triable issue of fact as to the plaintiff’s allegation of negligent maintenance contributing to the accident ,,, , ,,,

Neither affidavit sufficiently establishes the basis — personal knowledge or from identifiable business records — for the affiants’ knowledge of the contents of the affidavits. Therefore, they are of no probative value.

The documents submitted with the motion cannot be admitted as business records because they are not certified, and the affidavits do not lay a sufficient foundation for their admissibility … . Although an affidavit that is not based on the affiant’s personal knowledge may still serve to authenticate a document for its admissibility as a business record, as long as the affiant demonstrates sufficient personal knowledge of the document in question … , and the affidavit sufficiently establishes that the document falls within the business record exception to the hearsay rule … , here we are lacking both. The “acknowledgment of lease” letters — which refer to an unattached “previously executed Equipment Rental Agreement” — submitted with these affidavits are not certified as business records, nor do the affidavits lay a sufficient foundation for the letters’ introduction as business records. Without a proper foundation, these documents are not admissible. …

When a plaintiff seeks to hold a vehicle owner liable for the failure to maintain a rented vehicle, the owner is not afforded protection under the Graves Amendment if it fails to demonstrate that it did not negligently maintain the vehicle … , or to prove that it was not responsible for the maintenance and repair of the vehicle during the lease … .  Muslar v Hall, 2023 NY Slip Op 01063, First Dept 2-28-23

Practice Point: Affidavits must either be based upon the affiant’s personal knowledge or supported by certified business records. Here the affidavits did not show defendant was in the business of renting trucks and did not show the truck involved in the accident was properly maintained. Therefore the Grave’s amendment criteria were not proven and defendant was not entitled to summary judgment. The Grave’s amendment provides that the vehicle-owner who is in the business of renting vehicles will not be liable for an accident if the vehicle was properly maintained.

 

, ,

IN THIS DIVORCE ACTION, THE SETTLEMENT AGREEMENT STATED THE WIFE’S INCOME WAS WELL BELOW THE FEDERAL POVERTY LEVEL YET SHE WAIVED SPOUSAL SUPPORT; GENERAL MUNICIPAL LAW 5-311 MAY, THEREFORE, HAVE BEEN VIOLATED; ALTHOUGH THE AGREEMENT AS A WHOLE WAS NOT UNCONSCIONABLE, THE MATTER WAS SENT BACK TO ALLOW THE JUDGE TO ENQUIRE ABOUT THE WAIVER (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court in this divorce action, determined a portion of the settlement agreement may violate the General Municipal Law and sent the matter back for further inquiry by the judge. The wife’s income is well below the federal poverty guidelines yet she waived spousal support:

General Obligations Law § 5-311 prohibits spouses from contracting to dissolve a marriage and “relieve either of his or her liability to support the other in such a manner that he or she will become incapable of self-support and therefore is likely to become a public charge …”. * * *

… [A]rticle four of the settlement agreement, concerning spousal support, sets forth the wife’s income as $11,446, which is well below the applicable federal 2020 poverty guidelines … . As such, there is a question as to whether this provision is in violation of General Obligations Law § 5-311 in that the wife “is likely to become a public charge.” Because of this, we find that Supreme Court erred when it failed to make an inquiry into the circumstances surrounding the wife’s waiver of spousal support … .Majid v Hasson, 2023 NY Slip Op 01035, Third Dept 2-23-23

Practice Point: The settlement agreement in this divorce action was not unconscionable, but a provision may violate the General Municipal Law which prohibits agreeing to a level of support which will result in the wife becoming a public charge. The wife’s income is well below the federal poverty level, yet she waived spousal support. The matter was sent back for judicial inquiry into the waiver.

, ,

THE TENANT WAS NOT ENTITLED TO A YELLOWSTONE INJUNCTION BECAUSE THE RELIEF WAS SOUGHT AFTER THE DEADLINE IN THE NOTICE TO CURE; THAT DEADLINE WAS CONTROLLED BY THE LEASE AND THEREFORE WAS NOT EXTENDED BY THE COVID-RELATED EXECUTIVE ORDERS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the tenant was not entitled to a Yellowstone injunction because the relief was not sought before the deadline in the notice to cure, which is controlled by the lease. The time-limit extensions in response to COVID do not apply to the notice-to-cure deadline which is contractual:

… [T]he landlord served a notice to cure on the tenant on May 15, 2020, and the cure period ended on June 1, 2020, in accordance with the terms of the lease. When the tenant did not cure the alleged defects, the landlord served a notice of termination on June 2, 2020. The tenant commenced this action and moved for a Yellowstone injunction on June 15, 2020, well after the cure period expired.

Executive Order 202.8, and the subsequent orders extending that order, did not toll the cure period since the cure period, set by contract, was not “prescribed by [a] procedural law[ ] of the state” or “any other statute, local law, ordinance, order, rule, or regulation” (9 NYCRR 8.202.8). Moreover, filing of new non-essential matters through the New York State Courts Electronic Filing System was available in the five New York City counties, including Kings County, as of May 25, 2020 … . Prestige Deli & Grill Corp. v PLG Bedford Holdings, LLC, 2023 NY Slip Op 01019, Second Dept 2-22-23

Practice Point: The deadlines extended by the COVID Executive Orders do not apply to contractual deadlines (here the deadline for seeking a Yellowstone injunction after the tenant’s receipt of a notice to cure).

 

, ,

THIS BREACH OF CONTRACT, QUASI CONTRACT, UNJUST ENRICHMENT COMPLAINT SHOULD HAVE BEEN DISMISSED; PLAINTIFF SCHOOL BUS COMPANY WAS SEEKING PAYMENT FOR THE MONTHS THE SCHOOLS WERE CLOSED DUE TO COVID-19 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined this breach of contract, quasi contract, unjust enrichment complaint should have been dismissed. Defendant school-bus company was demanding payment for those months the schools were closed due to COVID-19:

… [T]he complaint failed to specify the provision of the parties’ contract that was allegedly breached … . … [N]o provision was identified which would permit the plaintiff to demand payment from the defendant in exchange for merely remaining available to provide transportation services … . In addition, the evidentiary material submitted by the plaintiff in opposition to the defendant’s motion failed to remedy this defect in the complaint … .

… “[T]he existence of a valid contract governing the subject matter generally precludes recovery in quasi contract for events arising out of the same subject matter” … . “[T]he theory of unjust enrichment lies as a quasi-contract claim. It is an obligation the law creates in the absence of an agreement” … . “An unjust enrichment claim is not available where it simply duplicates, or replaces, a conventional contract or tort claim” … .

“The essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered” … . “A plaintiff must show that (1) the other party was enriched, (2) at the plaintiff’s expense, and (3) that it is against equity and good conscience to permit the [defendant] to retain what is sought to be recovered” … . Here, the complaint fails to sufficiently allege that the defendant was enriched or otherwise received a benefit at the plaintiff’s expense to support a cause of action for quasi contract sounding in restitution or unjust enrichment … . Pierce Coach Line, Inc. v Port Wash. Union Free Sch. Dist., 2023 NY Slip Op 01018, Second Dept 2-22-23

Practice Point: An unjust enrichment cause of action will not fly if there is a contract covering the same subject matter (here there was such a contract). Unjust enrichment sounds in equity and addresses when it is unfair for a party to retain what the other party is seeking to recover. The defendant school district was not unjustly enriched by not paying the plaintiff school bus company for those months when the school was closed due to COVID.

 

, , , , ,

THE CHALLENGES TO THE PROCEDURES FOR RELIGIOUS AND MEDICAL EXEMPTIONS FROM THE COVID-19 VACCINE MANDATE FOR NYC TEACHERS, AS WELL AS “LEAVE WITHOUT PAY” FOR THOSE WHO DID NO APPLY FOR AN EXEMPTION, WERE PROPERLY REJECTED (FIRST DEPT).

The First Department, over a dissent, determined the COVID-19 vaccine mandates imposed by the arbitrator for NYC Department of Education (DOE) employees properly survived the hybrid Article 75/78 challenge. The arbitration initiated by the United Federation of Teachers (UFT) resulted in the September 10, 2021 Impact Award which established procedures for religious and medical exemptions:

The article 75 claims were properly dismissed, as petitioners lack standing to challenge the Impact Award and failed to join UFT as a necessary party. The article 75 claims also fail on the merits. As to the article 78 claims, petitioners are unable to show that DOE made an error of law or acted irrationally. * * *

Petitioners are similarly situated teachers employed by DOE. All received notification by email that they were being placed on Leave Without Pay (LWOP) status because they were not in compliance with DOE’s COVID-19 Vaccine Mandate. They were informed that they could not report to their school sites as of Monday, October 4, and that, in order to return to work, they were required to upload proof of having received the first vaccine shot and “E-sign the attestation stating that you are willing to return to your worksite within seven calendar days of submission.” The notifications also summarized the options for separation and leave extensions. Petitioners, with the exception of Loiacono, did not submit proof of vaccination or request religious or medical exemptions. * * *

When a union represents employees during arbitration, only that union — not individual employees — may seek to vacate the resulting award … .

Petitioners also failed to join UFT as a party. UFT advocated successfully for the exemptions, accommodations, and extended benefits for teachers otherwise unwilling to be vaccinated, all of which were prescribed in the Impact Award. Accordingly, UFT would be adversely impacted by a judgment favorable to petitioners and is thus a necessary party (CPLR 1001[a] …). Matter of O’Reilly v Board of Educ. of the City Sch. Dist. of the City of N.Y., 2023 NY Slip Op 00957, First Dept 2-21-23

Practice Point: The individual NYC Department of Education (DOE) employees did not have standing to challenge the results of the COVID-19 vaccine-mandate arbitration initiated by the United Federation of Teachers (UFT). The UFT was a necessary party to the challenge but was not made a party. The DOE did not act arbitrarily or capriciously. Essentially the procedures for religious and medical exemptions to the vaccine mandate were upheld. Teachers who did not apply for an exemption and were not vaccinated were deemed properly placed on leave without pay (LWOP).

 

, , ,

THE JUDGE CANNOT, SUA SPONTE, DIRECT ARBITRATION WITHOUT A REQUEST FROM A PARTY; NON-SIGNATORIES TO AN AGREEMENT CONTAINING A FORUM SELECTION PROVISION MAY BE BOUND BY THE PROVISION IF THEY ARE SIGNATORIES TO A RELATED AGREEMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Connolly, interpreted jurisdiction, forum selection and arbitration provisions in the subject agreements. The decision is fact-specific and cannot be fairly summarized here. The court summarized its rulings as follows:

This appeal presents novel questions related to jurisdiction, as well as arbitration and forum selection provisions in agreements. The first question is whether, upon reviewing an agreement and determining that an arbitration provision governs, a court should, sua sponte, direct the parties to arbitrate. We hold that a court should not direct parties to arbitrate absent a request from one of the parties.

The second question requires us to examine the circumstances under which non-signatories to an agreement containing a forum selection provision may be bound by that provision consistent with due process. We hold that non-signatories to an agreement may be bound by that agreement’s forum selection provision when they are signatories to a related agreement, which forms part of the same transaction, and are closely related to both the transaction and one of the signatories to the agreement containing the forum selection provision. P.S. Fin., LLC v Eureka Woodworks, Inc., 2023 NY Slip Op 00877, Second Dept 2-15-23

Practice Point: A judge should not, sua sponte, direct parties to arbitrate pursuant to an agreement absent a request from a party.

Practice Point: Non-signatories may be bound by a forum selection provision in an agreement if they are signatories to a related agreement.

 

, , ,

A BREACH OF CONTRACT ACTION IS NOT PROPERLY CONVERTED TO AN ARTICLE 78 PROCEEDING; HERE THE PHYSICIAN SUED THE HOSPITAL FOR FAILING TO HONOR A CONTRACTUAL COMMITMENT TO ADMIT PLAINTIFF TO A RESIDENCY PROGRAM; THE PHYSICIAN’S ACTION WAS PRECLUDED FOR FAILURE TO EXHAUST THE ADMINISTRATIVE REMEDIES UNDER THE PUBLIC HEALTH LAW (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the breach of contract action should not have been converted to an Article 78 and the action was precluded by plaintiff-physician’s failure to exhaust the administrative remedies under the Public Health Law. Plaintiff was matched to a residency program at defendant hospital and the hospital was contractually bound to offer the residency to the plaintiff. The hospital sought a waiver which was denied, and the hospital still refused to offer the residency to plaintiff. Plaintiff sued for breach of contract and requested a preliminary injunction. Supreme Court improperly converted the action to an Article 78 (mandamus) proceeding and granted the preliminary injunction. The appellate division held a breach of contract action cannot be converted to an Article 78:

Invoking CPLR 103(c), the Supreme Court erroneously converted the subject branch of the plaintiff’s motion and this action into a proceeding pursuant to CPLR article 78. Under CPLR 103(c), courts are empowered to convert a civil judicial proceeding that was brought in the improper form to the proper form and convert a motion into a special proceeding. Here, the court erred in concluding that a proceeding pursuant to CPLR article 78 was the proper form. “[A] CPLR article 78 proceeding is not the proper vehicle to resolve contractual rights” … . “Indeed, it is well settled that mandamus relief lies only to compel the performance of purely ministerial acts, and may not be used when there are other available remedies at law, such as a breach of contract action” … . * * *

Supreme Court should not have rejected the hospital’s argument that the branch of the plaintiff’s motion which was for preliminary injunctive relief against it should be denied because the plaintiff failed to exhaust his administrative remedies under Public Health Law article 28. Public Health Law § 2801-b(1) makes it an “improper practice” for a hospital to deny, withhold, or terminate professional privileges for a reason unrelated to “patient care, patient welfare, the objectives of the institution or the character or competency of the applicant.” “To enforce the statutory prohibition against improper practices, the Legislature created a two-step grievance process by which a physician may obtain injunctive relief requiring the hospital to restore wrongfully terminated staff privileges” … . “First, the physician must submit a complaint to the [public health and health planning council (hereinafter PHHPC)]” … . “It is the duty of the [PHHPC] to undertake a prompt investigation of the action complained of and to allow the parties to the dispute to submit, in a strictly confidential setting, any relevant information in support of their respective positions” … . “After investigating the physician’s complaint, the [PHHPC] will either direct the hospital to reconsider its decision or inform the parties of its determination that the complaint lacks merit” … . Khass v New York Presbyt. Brooklyn Methodist Hosp., 2023 NY Slip Op 00851, Second Dept 2-15-23

Practice Point: A breach of contract action is not properly converted to an Article 78 proceeding pursuant to CPLR 103(c).

Practice Point: A hospital’s failure to honor its contractual commitment to admit plaintiff physician to a residency program is subject to administrative remedies under the Public Health Law which must be exhausted before bringing suit.

 

,

NEW YORK HAS LONG-ARM JURISDICTION OVER THE MICHIGAN MANUFACTURER OF UNMANNED AERIAL VEHICLES (UAV’S) PURCHASED BY SUNY STONY BROOK FOR USE IN MADAGASCAR IN THIS BREACH OF CONTRACT ACTION (CT APP). ​

The Court of Appeals, in a full-fledged opinion by Judge Garcia, over a dissenting opinion, reversing the appellate division, determined New York had long-arm jurisdiction over a Michigan manufacturer of unmanned aerial vehicles (UAV’s) purchased by SUNY Stony Brook for transporting medical supplies to remote areas of Madagascar. The two UAV’s purchased by SUNY Stony Brook didn’t meet Stony Brooks’ needs and were returned to Michigan for replacement. The UAV’s were not replaced and SUNY Stony Brook sued for breach of contract:

… “[T]he nature and purpose of a solitary business meeting conducted for a single day in New York may supply the minimum contacts necessary to subject a nonresident participant to the jurisdiction of our courts” … . Here … there was more than this bare minimum: the meeting was part of a far reaching and long-standing relationship … . * * *

… Plaintiff’s claims are based on the sale of the two UAVs, and [the UAV manufacturer’s] contacts in New York were directly related to efforts to resolve the dispute over operability of the purchased UAVs … .Thus, “[t]here is an articulable nexus or substantial relationship between defendant’s New York activities and the parties’ contract, defendant’s alleged breach thereof, and potential damages” … .

Finally, the exercise of jurisdiction must also comport with due process, a constitutional inquiry focused on “the relationship among the defendant, the forum, and the litigation” … . * * * Those requirements are satisfied here. State of New York v Vayu, Inc., 2023 NY Slip Op 00801, CtApp 2-14-23

Practice Point: Even a single solitary business meeting in New York may supply the minimum contacts necessary for long-arm jurisdiction.

 

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