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THE AMOUNT OF GENERAL MUNICIPAL LAW 207-A COMPENSATION TO WHICH RETIRED PERMANENTLY DISABLED YONKERS FIREFIGHTERS ARE ENTITLED UNTIL RETIREMENT AGE IS SUBJECT TO ARBITRATION UNDER THE COLLECTIVE BARGAINING AGREEMENT (CBA) (CT APP). ​

The Court of Appeals, in a full-fledged opinion by Judge Wilson, determined the amount of General Municipal Law 207-a compensation to which retired permanently disable Yonkers firefighters are entitled until reaching retirement age is subject to arbitration under the terms of the collective bargaining agreement (CBA):

If there is a “reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA,” the matter is arbitrable, leaving the arbitrator to “make a more exacting interpretation of the precise scope of the substantive provisions of the CBA, and whether the subject matter of the dispute fits within them” … . Here, the Union argues that both Appendix C and Article 31 of the CBA demonstrate that the parties agreed to arbitrate the present grievance.

Appendix C, which is entitled, “General Municipal Law Section 207-a Procedure,” contains six pages of detailed terms to which Yonkers and the Union agreed, including very broad provisions granting the arbitrator “authority to decide, de novo, the claim of entitlement [and continued entitlement] to [section] 207-a benefits.” It further provides that when “the matter presents a termination of [section] 207-a benefits, the Fire Department shall have the burden of proof by a preponderance of the evidence that the member is no longer eligible for [section] 207-a benefits.” The Union’s grievance reasonably relates to these provisions because they provide for the arbitration of disputes over General Municipal Law § 207-a benefits, and the Union contends that Yonkers is attempting to terminate such benefits by withholding special pays. Matter of City of Yonkers v Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, 2022 NY Slip Op 07095, CtApp 12-15-22

Practice Point: The Court of Appeals applied black-letter law to conclude the amount of General Municipal Law 207-a compensation to which retired permanently disabled Yonkers firefighters are entitled until retirement age is subject to arbitration under the collective bargaining agreement.

 

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RETIRED PERMANENTLY DISABLED YONKERS FIREFIGHTERS ARE ENTITLED TO HAVE HOLIDAY PAY AND CHECK-IN PAY INCLUDED IN THE AMOUNT OF COMPENSATION TO WHICH THEY ARE ENTITLED UNTIL RETIREMENT AGE; NIGHT DIFFERENTIAL PAY, HOWEVER, SHOULD NOT BE INCLUDED (CT APP). ​

​The Court of Appeals, in a full-fledged opinion by Judge Wilson, over a two-judge dissent, determined retired Yonkers firefighters (Retirees) , who are permanently disabled, are entitled to have holiday pay and check-in pay included in the amount of compensation they receive until reaching retirement age. The retired, disabled firefighters are not entitled to have “night differential” pay included, however:

General Municipal Law § 207-a (2) provides that, for firefighters who are permanently disabled due to work-related injuries and receiving certain benefits from the state, a municipality must make up the difference between those benefits and the firefighter’s “regular salary or wages” until the firefighter reaches the mandatory retirement age. Since at least 1995, the CBAs have provided for holiday pay, check-in pay, and night differential, which collectively the parties refer to as “special pays.” … Until 2015, Yonkers included all three of these payments when calculating the Retirees’ section 207-a (2) supplements. * * *

Unlike check-in and holiday pay, the Retirees have not established whether all firefighters are contractually entitled to receive night differential pay … . Night differential contains two express conditions: it is earned only by “firefighters who are regularly scheduled to work rotating tours that include the 6:00 p.m. to 8:00 a.m. night tour, and only to firefighters actually working that night tour.” The restriction of this payment to those firefighters who “actually work[] the night tour” strongly suggests that night differential must be specially earned, not paid to all, rendering it distinct from “regular salary or wages,” and the Retirees have not demonstrated that the CBAs [collective bargaining agreements] require all firefighters to work the night tour. Thus, the Retirees have not demonstrated that all firefighters are entitled to earn the night differential such that it should be included in the section 207-a (2) calculation. Matter of Borelli v City of Yonkers, 2022 NY Slip Op 07094, CtApp 12-15-22

Practice Point: Permanently disabled Yonkers firefighters are entitled to have holiday pay and check-in pay, but not night differential pay, included in the compensation they are to receive until retirement age.

 

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RESETTLEMENT OF THE JUDGMENT OF DIVORCE WAS PROPER ONLY TO THE EXTENT OF CORRECTING A MISTAKE IN THE JUDGMENT; RESETTLEMENT SHOULD NOT HAVE BEEN USED TO AMEND THE JUDGMENT (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the judgment of divorce should have been resettled to the extent that the judgment conform with the stipulation. But the judgment should not have been modified to include a provision which was not in the stipulation. Resettlement cannot be used to amend the judgment, as opposed to correcting a mistake:

Resettlement of a judgment of divorce pursuant to CPLR 5019(a) is an appropriate remedy when the judgment does not accurately incorporate the terms of a stipulation of settlement … . Here, although the judgment of divorce provided that the defendant was responsible for providing health insurance for the parties’ children, that provision was inconsistent with the terms of the stipulation. Specifically, the stipulation contained a provision which set forth that the plaintiff was responsible for providing health insurance for the parties’ children through her employer unless she became unemployed, and then the defendant would be responsible for providing health insurance for them through his employer. …

… Supreme Court should have denied that branch of the defendant’s motion which was to resettle the judgment of divorce to the extent it sought to replace the provision requiring the defendant to provide health insurance for the parties’ children with a provision requiring the plaintiff to be solely responsible to provide health insurance for the parties’ children … . The amendment proposed by the defendant failed to comport with the terms of the stipulation regarding the responsibility of the parties as to the health insurance for their children and was a substantive modification beyond the court’s inherent authority to correct a mistake, defect, or irregularity in the original judgment “not affecting a substantial right of a party” (CPLR 5019[a] …). Ferrigan v Ferrigan, 2022 NY Slip Op 07058, Second Dept 12-14-22

Practice Point: Here resettlement of the judgment of divorce pursuant to CPLR 5019 was appropriate only to the extent of correcting a mistake by conforming the judgment to the stipulation. Resettlement should not have been used to amend the judgment to include a provision which was not in the stipulation.

 

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DEFENDANT WAS A GOOD-FAITH PURCHASER OF THE REAL PROPERTY AND WAS ENTITLED TO A DECLARATION OF SOLE OWNERSHIP; DEFENDANT PURCHASED THE PROPERTY FROM THE RECORD OWNER AND WAS UNAWARE OF THE UNRECORDED BENEFICIAL OWNERSHIP AGREEMENT BETWEEN THE RECORD OWNER AND PLAINTIFF WHO RESIDED ON THE PROPERTY; THE FACT THAT PLAINTIFF FILED A NOTICE OF PENDENCY BEFORE DEFENDANT RECORDED THE DEED HAD NO EFFECT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s (Vertex’s) motion for summary judgment dismissing the complaint and declaring defendant was the sole owner of the real property should have been granted. Vertex purchased the property from the record owner. The fact that the record owner had entered into an unrecorded agreement acknowledging beneficial ownership by others who contributed to the purchase price, including plaintiff, who resided on the property, did not affect defendant’s status as a good-faith purchaser, despite plaintiff’s filing a notice of pendency prior to defendant’s recording of the deed:

… [T]o establish itself as a bona fide purchaser for value, a party has the burden of proving that it purchased the property for valuable consideration and did not have “knowledge of facts that would lead a reasonably prudent purchaser to make inquiry” … .

… Vertex established … that it purchased the subject property for valuable consideration, without actual or constructive notice of the plaintiff’s alleged interest … . Contrary to the plaintiff’s contention, his filing of a notice of pendency against the property before Vertex filed its deed did not negate Vertex’s status as a good-faith purchaser … . “[H]aving failed to avail itself of the protection of either Real Property Law §§ 291 or 294, the plaintiff may not successfully contend that its filing of a notice of pendency serves as a substitute for the recording of a conveyance or a contract” … . Vertex also established … that the plaintiff’s occupancy at the property “was not inconsistent with the title of the apparent owner of record,” and thus, did not defeat Vertex’s status as a good-faith purchaser … . In addition, Vertex established … that the 2008 agreement did not negate its status as a good-faith purchaser, as that agreement was insufficient to satisfy the statute of frauds (see General Obligations Law § 5-703 …). Bello v Ouellette, 2022 NY Slip Op 07043, Second Dept 12-14-22

Practice Point: Here plaintiff had entered an unrecorded written agreement with the record owner of the real property indicating plaintiff, who resided on the property, had a one-fourth beneficial interest in the property. Defendant was unaware of the agreement. Defendant’s goof-faith-purchaser status was not affected by the fact that plaintiff filed a notice of pendency before defendant recorded the deed.

 

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THE INSURANCE POLICY EXCLUDED COVERAGE FOR BODILY INJURY INTENDED OR EXPECTED BY THE INSURED; HERE THE INSURED UNINTENTIONALLY STRUCK COLE, WHO WAS ATTEMPTING TO BREAK UP A FIGHT BETWEEN THE INSURED AND A THIRD PERSON; BECAUSE THE INJURY TO COLE WAS UNINTENDED, THE INSURER WAS REQUIRED TO DEFEND THE INSURED IN COLE’S PERSONAL INJURY ACTION AGAINST THE INSURED (THIRD DEPT). ​

The Third Department determined plaintiff insurer was required, under the terms of the policy, to defend the insured, LePore, in the personal injury action by Cole against LePore. LePore was fighting with another and Cole was injured attempting to break it up. The policy excluded coverage for bodily injury intended or expected by the insured. The complaint alleged LePore negligently and carelessly struck Cole when LePore was trying to strike another person:

Plaintiff contends that no coverage exists under the insurance policy because LePore intended to cause physical harm to another person. An insured, however, may be indemnified for an intentional act that causes an unintended injury … . To determine whether a result was accidental, “it is customary to look at the causalty from the point of view of the insured, to see whether or not, from [the insured’s] point of view, it was unexpected, unusual and unforeseen” … . In describing the incident at issue, LePore stated that she did not intend to hit Cole. The record also contains evidence that Cole was inadvertently hit. In view of this, a sufficient basis exists to conclude that Cole’s injuries were not expected or intended within the embrace of the policy exclusion … . To that end, LePore can be indemnified under the policy, not because she acted negligently, but because her intentional act caused unintended harm. …

Plaintiff may be correct that LePore committed an intentional tort based upon [the transferred-intent] doctrine. … Plaintiff, however, erroneously conflates tort principles with contract principles — the latter of which governs the interpretation of insurance policies … . Vermont Mut. Ins. Group v LePore, 2022 NY Slip Op 06978, Third Dept 12-8-22

Practice Point: Here the insurance policy excluded coverage for bodily injury intended or expected by the insured, LePore. Cole was injured when LePore unintentionally struck her as Cole tried to break up a fight between LePore and another. Because LePore injured Cole unintentionally, the insurer was obligated to defend LePore in the personal injury action brought by Cole.

 

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PLAINTIFF, DECEDENT’S SON, SIGNED THE NURSING HOME ADMISSION AGREEMENT WHEN HIS FATHER, WHO HAD DEMENTIA, WAS ADMITTED; THE NURSING HOME DID NOT DEMONSTRATE PLAINTIFF, BY SIGNING THE ADMISSION AGREEMENT, HAD THE AUTHORITY TO BIND DECEDENT TO ARBITRATION OF DECEDENT’S NEGLIGENCE/PERSONAL INJURY ACTION AGAINST THE NURSING HOME (SECOND DEPT). ​

he Second Department, reversing Supreme Court, determined defendant nursing home did not demonstrate plaintiff had the authority to bind the decedent to arbitration concerning the decedent’s negligence/personal injury action against the nursing home. Plaintiff is the decedent’s son who signed the admission agreement when his father, who suffered from dementia, was admitted. The nursing home did not present sufficient proof of plaintiff’s authority to sign the admission agreement on decedent’s behalf:

A party seeking to compel arbitration must establish “the existence of a valid agreement to arbitrate” … . Here, the defendants failed to meet that burden because they did not submit sufficient evidence of the plaintiff’s authority to bind the decedent to arbitration at the time he signed the admission agreement on the decedent’s behalf. Most significantly, the defendants failed to submit the instrument through which the plaintiff allegedly derived his authority to bind the decedent to arbitration … . Evidence showing that the plaintiff represented to the defendants that he held a power of attorney when signing the admission agreement was insufficient to establish that he, in fact, held such authority as a matter of law … . Contrary to the defendants’ further contention, neither the plaintiff’s status as the decedent’s son … , nor his apparent willingness to be the decedent’s “responsible party” under the terms of the admission agreement … , have any bearing on his authority to bind the decedent to arbitration…. . Wolf v Hollis Operating Co., LLC, 2022 NY Slip Op 06954, Second Dept 12-7-22

Practice Point: Plaintiff, decedent’s son, signed the nursing-home admission agreement when decedent, who had dementia, was admitted. The nursing home did not demonstrate plaintiff, by signing the agreement, had the authority to bind decedent to arbitration of decedent’s negligence/personal injury action against the nursing home. The fact that plaintiff represented that he had power of attorney for decedent was not enough.

 

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THE ARBITRATOR’S RULING IN THIS STATUTORY, COMPULSORY ARBITRATION WAS ARBITRARY AND CAPRICIOUS, CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the arbitrator’s ruling in this no=fault insurance case was arbitrary and capricious, noting that judicial review of statutory, compulsory arbitration is more stringent than review of a voluntary agreement to arbitrate. Plaintiff GEICO paid the injured driver’s no-fault benefits and sought reimbursement from the insurer of the loaner car involved in the accident. The arbitrator denied reimbursement and the Second Department reversed:

Where, as here, the obligation to arbitrate arises through a statutory mandate, the arbitrator’s determination is subject to “closer judicial scrutiny” under CPLR 7511(b) than it would receive had the arbitration been conducted pursuant to a voluntary agreement between the parties … . To be upheld, an award in a compulsory arbitration proceeding “must have evidentiary support and cannot be arbitrary and capricious” … . “Moreover, with respect to determinations of law, the applicable standard in mandatory no-fault arbitrations is whether ‘any reasonable hypothesis can be found to support the questioned interpretation'” … . …

The arbitrator’s interpretation of the rental agreement … as relieving [defendant insurance company] of its obligation to provide mandatory personal injury protection (hereinafter PIP) coverage was contrary to 11 NYCRR part 65, which provides … that all motor vehicle insurance policies must contain a mandatory PIP endorsement; expressly sets forth the language of the PIP endorsement; permits deviations from the prescribed language only upon prior approval; and prohibits any release, express or implied, from mandatory or optional PIP benefits … . Matter of GEICO Gen. Ins. Co. v Wesco Ins. Co., 2022 NY Slip Op 06926, Second Dept 12-7-22

Similar issues and result in Matter of Wesco Ins. Co. v GEICO Indem. Co., 2022 NY Slip Op 06933, Second Dept 12-7-22

​Practice Point: The Second Department explained that the criteria for judicial review of statutory, compulsory arbitration is more stringent than for judicial review of arbitration by voluntary agreement.

 

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THERE CAN BE NO REPUDIATION WHERE THERE HAS BEEN A BREACH OF CONTRACT, TWO JUSTICE DISSENT (FIRST DEPT).

The First Department, over a two-justice dissent, determined plaintiff in this landlord-tenant dispute could not seek separate redress on a theory of repudiation for the breach of contract cause of action. The decision is fact-specific and cannot be fairly summarized here:

… [B]ecause a party cannot repudiate a contract it has already breached, if the landlord is found to have breached the lease in 2015, there can be no repudiation in 2021 … . * * *

From the dissent:

A party “cannot simultaneously pursue a breach of contract claim and an anticipatory breach claim premised on the same underlying conduct” … . However, where an obligation is ongoing or serial in nature, a subsequent material breach can support a claim on a theory of repudiation notwithstanding earlier claims for partial breach … . Audthan LLC v Nick & Duke, LLC, 2022 NY Slip Op 06880, First Dept 12-6-22

Practice Point: The majority held plaintiff could not seek redress on a theory of repudiation where there had been a breach of contract. There was a two-justice dissent.

 

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THE COMPLAINT STATED A CAUSE OF ACTION FOR BREACH OF CONTRACT ALLEGING BILLING FOR SERVICES RENDERED BY ATTORNEYS NOT ADMITTED IN NEW YORK (FIRST DEPT).

The First Department, reversing Supreme Court, determined the complaint stated a cause of action against defendant attorneys (BSF) alleging BSF billed for expenses associated with attorneys not admitted in New York:

The complaint stated a limited cause of action for breach of contract against BSF. The complaint sufficiently alleged that BSF overbilled or billed for unnecessary expenses associated with attorneys not admitted to practice law in, or based out of, New York, and the documentary submissions do not utterly refute those allegations … . Kaufman v Boies Schiller Flexner, LLP, 2022 NY Slip Op 06883, First Dept 12-6-22

Practice Point: Here plaintiff stated a cause of action against a law firm alleging the firm billed for unnecessary expenses associated with attorneys not admitted in New York.

 

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REDUCTION OF PETITIONER-SCHOOL-DISTRICT EMPLOYEE’S RETIREMENT HEALTH BENEFITS BELOW THE LEVEL AFFORDED ACTIVE EMPLOYEES VIOLATES INSURANCE LAW 4235 (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the school district’s reduction of petitioner-employee’s (Perrotta’s) retirement health benefits below the level afforded active employees violated the Insurance Law:

The moratorium law [Insurance Law 4235] sets “‘a minimum baseline or “floor” for retiree health benefits'” which is “‘measured by the health insurance benefits received by active employees . . . In other words, the moratorium [law] does not permit an employer to whom the statute applies to provide retirees with lesser health insurance benefits than active employees'” … . Thus, a school district may not diminish retirees’ health insurance benefits unless it makes “a corresponding diminution in the health insurance benefits or contributions of active employees” … . The purpose of the moratorium law is to protect the rights of retirees who “‘are not represented in the collective bargaining process, [and] are powerless to stop unilateral depreciation or even elimination of health insurance benefits once the contract under which they retired has expired'” … .

Here, since Perrotta submitted evidence establishing that the district diminished the health insurance contribution rate for certain retirees, and the district failed to proffer evidence that it made a corresponding diminution in the health insurance benefits or contributions for active employees, its determination violated the moratorium law. … Supreme Court should have granted the petition and annulled the district’s determination … . Matter of Perrotta v Syosset Cent. Sch. Dist., 2022 NY Slip Op 06704, Second Dept 11-23-22

Practice Point: Here the petitioner, a retired school district employee, successfully contested the reduction of her retirement health benefits below the level afforded active employees as a violation of Insurance Law 4235.

 

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