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ALTHOUGH THE AGREEMENT BETWEEN PLAINTIFF COUNTRY CLUB AND DEFENDANT FOR THE CONSTRUCTION, MAINTENANCE AND USE OF A BOAT SLIP WAS A LICENSE, NOT A LEASE, THE LICENSE, BY THE TERMS OF THE AGREEMENT, WAS NOT TERMINABLE AT WILL BY THE COUNTRY CLUB; TWO-JUSTICE DISSENT (FOURTH DEPT).

The Fourth Department, over a two-justice dissent, determined the agreement between plaintiff country club and defendant concerning the construction, maintenance and use of a boat slip was a license, not a lease, but, under the terms of the agreement, the license was not terminable at will by the country club:

… [T]he terms of the agreement unambiguously state that defendant is required to pay the annual maintenance fee and to comply with plaintiff’s rules and policies, thereby establishing through implication that plaintiff may terminate the license only when defendant fails to comply with those specified terms … . Plaintiff’s interpretation of the agreement as permitting plaintiff to terminate the license at will, despite the aforementioned provisions governing defendant’s obligations, renders those specific provisions nugatory, contrary to the general approach to interpreting contracts …

… [T]he agreement expressly permits defendant to terminate it and receive a return of the monies contributed pursuant to the payment agreement, less any monies owed to plaintiff. We agree with defendant that the express inclusion of a right of termination for her compels the conclusion that the exclusion of any corresponding express right for plaintiff to terminate the agreement was intentional … . … [The] structure of the agreement establishes that the license is not terminable at will by plaintiff. Skaneateles Country Club v Cambs, 2022 NY Slip Op 07315, Fourth Dept 12-23-22

Practice Point: Licenses for the use of real property, here the construction, maintenance and use of a boat slip, are not automatically terminable at will. Here the terms of the underlying agreement were interpreted to mean the license was terminable only if defendant breached the agreement.

 

THE PARTIES TO THE CONSTRUCTION CONTRACT DID NOT COMPLY WITH THE FORMAL REQUIREMENTS FOR CHANGE ORDERS; THEREFORE THE FORMAL REQUIREMENTS WERE WAIVED AND THE FAILURE TO COMPLY WAS NOT A BREACH (THIRD DEPT). ​

The Third Department, reversing Supreme Court, determined the failure to follow the construction contract provisions for change orders was not a breach of contract:

… [T]he parties’ lack of compliance with the change order procedure contained in the contract did not constitute a breach. … [T]he trial evidence established that the parties used informal text messages and emails in furtherance of project changes rather than following the formal, detailed change order process set forth in the contract. … [A] written change order requirement included in a construction contract “is not applicable where, as here, the conduct of the parties demonstrates an indisputable mutual departure from the written agreement and the changes were clearly requested by plaintiff and executed by defendant” …  Thus, the record amply demonstrates that the parties “waived their contractual right to insist upon strict compliance” with the change order condition … . 107 S. Albany St., LLC v Scott, 2022 NY Slip Op 07276, Third Dept 12-22-22

Practice Point: The parities did not comply with the formal change order requirements in the construction contract. Therefore the formal requirements were waived and failure to comply was not a breach of contract.

 

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DEFENDANT OUT-OF-POSSESSION LANDLORD WAS NOT RESPONSIBLE FOR MAINTENANCE OF THE STAIRWAY WHERE PLAINTIFF ALLEGEDLY SLIPPED AND FELL (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant in this stairway slip and fall case was an out-of-possession landlord who was not responsible for maintenance of the stairway treads:

Article 7(A)(i) of the lease imposed on Cava [the tenant] the obligation to maintain and repair the nonstructural portions of the demised premises … . The testimonial evidence established that Cava, consistent with its obligations under the lease, assumed responsibility over the subject staircase … . Although the lease granted defendants the right to re-enter to make repairs, the stairway condition was not a significant structural or design defect that was contrary to a specific statutory safety provision … . Kamara v 323 Pas Owner LLC, 2022 NY Slip Op 07296, First Dept 12-22-22

Practice Point: The tenant, pursuant to the lease, had assumed responsibility for maintenance of the stairway where plaintiff fell. The defendant out-of-possession landlord was entitled to summary judgment.

 

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THE DEFAULTING DEFENDANT WAS DEEMED TO HAVE ADMITTED ALL THE ALLEGATIONS IN THE BREACH-OF-CONTRACT COMPLAINT; THERFORE WHETHER DEFENDANT CAUSED THE DAMAGES SUSTAINED BY PLAINTIFF SHOULD NOT HAVE BEEN CONSIDERED IN THE INQUEST; THE FACT THAT THE AMOUNT OF DAMAGES IS UNCERTAIN DOES NOT JUSTIFY THE FAILURE TO AWARD DAMAGES (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the defendant’s default admitted all the allegations in the complaint. Therefore damages should have been awarded for breach of contract:

A defaulting defendant is “deemed to have admitted all factual allegations contained in the complaint and all reasonable inferences that flow from them” … . “The sole issue to be determined at an inquest is the extent of damages sustained by the plaintiff” … . Here, the inquest court erred in considering the question of whether the defendants caused the damages sustained by the plaintiff … .

… [W]hile there is some uncertainty with respect to the plaintiff’s claim of lost profits, “when it is certain that damages have been caused by a breach of contract, and the only uncertainty is as to their amount, there can rarely be good reason for refusing, on account of such uncertainty, any damages whatever for the breach. A [party] violating [a] contract should not be permitted entirely to escape liability because the amount of the damages which [the party] has caused is uncertain” … . LD Acquisition Co. 9, LLC v TSH Trade Group, LLC, 2022 NY Slip Op 07227, Second Dept 12-21-22

Practice Point: A defaulting defendant is deemed to have admitted all the allegations in the complaint. Therefore whether the defendant caused the damages alleged in the complaint should not be considered in the inquest. Here the failure to award any damages for breach of contract was not appropriate.

 

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THE SO-ORDERED STIPULATION BETWEEN THE PARTIES RENDERED THE RELATED CAUSE OF ACTION IN THE COMPLAINT MOOT; THE OTHER CAUSE OF ACTION RELIED ON SPECULATION ABOUT FUTURE EVENTS AND THEREFORE WAS NOT RIPE FOR JUDICIAL REVIEW (SECOND DEPT).

​The Second Department, reversing Supreme Court, determined; (1) the stipulation between the two parties rendered the related cause of action in the complaint moot’ and (2) the other cause of action in the complaint was based on speculation about future events and therefore was not ripe for judicial review:

… [P]ursuant to the mootness doctrine, courts are precluded “from considering questions which, although once live, have become moot by passage of time or change in circumstances” … . By contrast, if an “anticipated harm is insignificant, remote or contingent the controversy is not ripe” for judicial review … . “To determine whether a matter is ripe for judicial review, it is necessary first to determine whether the issues tendered are appropriate for judicial resolution, and second to assess the hardship to the parties if judicial relief is denied” … .

… [T]he first cause of action was resolved by the parties’ so-ordered stipulation. … [T]hat cause of action was rendered academic pursuant to the mootness doctrine … . … [T]he second cause of action relied on speculation about what the County and its various departments might do in response to future audits, and therefore the contemplated harm was both remote and contingent and the controversy was not ripe for judicial review … . Kennedy v Suffolk County, 2022 NY Slip Op 07226, Second Dept 12-21-22

Practice Point: If a cause of action has already been addressed by a so-ordered stipulation, the cause of action is precluded by the mootness doctrine. If a cause of action is based on speculation about future events, it is not ripe for judicial review.

 

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THE ELECTRONIC LEGAL RESEARCH (LEXISNEXIS) CONTRACT SIGNED BY PLAINTIFF ATTORNEY WAS NOT PROCEDURALLY OR SUBSTANTIVELY UNCONSCIONABLE (FIRST DEPT).

The First Department, reversing Supreme Court, determined the legal research contract (LexisNexis) signed by plaintiff-attorney was not procedurally or substantively unconscionable:

A determination of unconscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made, namely, some showing of “an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party” … . Procedural unconscionability examines the circumstances at the time an agreement was entered into, including the commercial setting, whether deceptive or high-pressured tactics were employed, whether a party had a reasonable opportunity to understand the terms of the contract, which party drafted the contract, whether fine print was used in an agreement as to material terms, whether there was an alternative supply for the goods or services in question, the experience and education of the party claiming unconscionability, whether there was disparity in the bargaining power, and whether a contract of adhesion is at issue … . Whether a contract is procedurally unconscionable presents a question of law for the court although it is a fact-based determination … .

… Plaintiff is an attorney, who did not assert any mental deficiencies, but only alleged duress from defendants’ conduct in pursuing his signature on the 2020 Agreement. The urgency underlying plaintiff’s signing the 2020 Agreement, without reading it, apart from promised lower service rates, is unclear. Plaintiff has not demonstrated how there is inequality in the bargaining power in this instance. Plaintiff is on equal footing with the defendants in understanding contract law, as well as the consequences of signing a contract. Moreover, the terms in the 2020 Agreement were similar to the majority of the material terms in the parties’ 2019 Agreement, which plaintiff does not claim was unconscionable. Kaufman v Relx Inc., 2022 NY Slip Op 07192, First Dept 12-20-22

Practice Point: Here the plaintiff-attorney alleged the electronic legal research contract he signed with LexisNexis was unconscionable. The decision explains procedural and substantive unconscionability and held plaintiff, as an attorney, was on equal footing in negotiating the contract.

 

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PLAINTIFFS WERE ENTITLED TO LIQUIDATED DAMAGES OF $1000 PER DAY FOR THE TIME PLAINTIFFS WERE UNABLE TO LIVE IN THEIR TOWNHOUSE BECAUSE OF THE DEFENDANTS’ RENOVATIONS NEXT DOOR (FIRST DEPT).

The First Department, in a decision addressing many issues not summarized here, determined the plaintiffs were entitled to liquidated damages of $1000 per day for the time plaintiffs were unable to live in their townhouse because of the renovation work undertaken by the defendants next door:

On May 2, 2013, after intensive negotiations guided by legal counsel, Mr. Seymour [plaintiff] and the Hovnanians [defendants] executed a license agreement. The purpose of the license agreement was to grant the Hovnanians 18 months of access to the Seymours’ property while simultaneously protecting the Seymours’ property from further harm during construction. The license agreement contained a liquidated damages clause providing that if the “Project Owner failed to obtain a temporary certificate of occupancy (TCO) within Eighteen (18) months from the date of this Agreement, he shall pay liquidated damages to the Adjacent Owner of $1,000 per day for every day thereafter until the TCO is issued.” The Hovnanians never obtained a temporary certificate of occupancy but, 318 days after the expiration of the 18-month license term, they obtained a certificate of occupancy. …

The court correctly awarded plaintiffs $318,000 in liquidated damages, plus interest, comprised of $1,000 per day for the period of November 2, 2014 to September 15, 2015. “Liquidated damages constitute the compensation which, the parties have agreed, should be paid in order to satisfy any loss or injury flowing from a breach of their contract” … . These provisions “have value in those situations where it would be difficult, if not actually impossible, to calculate the amount of actual damage” … . Liquidated damages will be sustained if, at the time of the contract, “the amount liquidated bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation” … . Seymour v Hovnanian, 2022 NY Slip Op 07172, First Dept 12-15-22

Practice Point: Here the license agreement properly required liquidated damages of $1000 per day for the time plaintiffs were not able to live in their townhouse because of defendants’ renovations next door.

 

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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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