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HERE THE LANGUAGE IN THE RELEASE WAS CLEAR AND UNAMBIGUOUS AND NONE OF THE TRADITIONAL FACTORS WHICH INVALIDATE A CONTRACT WERE PRESENT; DEFENDANT’S MOTION TO DISMISS THE COMPLAINT SHOULD HAVE BEEN GRANTED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the release signed by plaintiff in this snowmobile accident case was enforceable and the complaint should have been dismissed. Plaintiff was a passenger on the snowmobile and she and the driver were represented by the same law firm. The settlement was for $25,000. Plaintiff signed the release but allegedly did not receive any compensation. The decision is comprehensive and well worth consulting; it addresses substantive issues not summarized here:

… [D]efendant met his initial burden of establishing that he was released from any claims by submitting the release executed by plaintiff … . As defendant contends, “the language of [the] release is clear and unambiguous” and plaintiff’s action against defendant to recover for personal injuries is barred … . * * *

The release in this case contains preliminary broad language releasing defendant from “any and all claims, demands, damages, costs, expenses, loss of services, actions, and causes of action whatsoever . . . arising from any act or occurrence up to the present time and particularly on account of BODILY INJURY, loss or damages of any kind” that plaintiff sustained or may sustain as a consequence of the accident, which is later narrowed by the language stating that the “agreement only releases the parties named above with respect to BODILY INJURY damages arising out of the accident” and that the “agreement does not waive any other party or parties from making any other claims that are not discharged or settled by this release” … . It is well established that where the language of a release is “limited to only particular claims, demands, or obligations, the instrument will be operative as to those matters alone, and will not release other claims, demands or obligations” … .

Even so, the release of defendant for any “bodily injury damages” arising from the accident clearly and unambiguously encompasses plaintiff’s action against defendant to recover for personal injuries sustained in the accident … . Putnam v Kibler, 2022 NY Slip Op 06574, Fourth Dept 11-18-22

Practice Point: Absent any of the traditional factors which will invalidate a contract, the unambiguous language of a release will be enforced to prohibit any further litigation in the matter.

 

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DEFENDANT’S EMPLOYER (TOMS) WAS NOT LIABLE FOR THE ACTS OF DEFENDANT EMPLOYEE (ROSNER) WHICH WERE NOT DONE WITHIN THE SCOPE OF ROSNER’S EMPLOYMENT OR TO FURTHER TOMS’ BUSINESS (FIRST DEPT). ​

​The First Department, reversing Supreme Court, determined that defendant Rosner, an employee of defendant TOMS Capital Management, was clearly not acting within the scope of his employment with TOMS when advising plaintiff on investments, allegedly as part of a scheme to deplete plaintiff’s assets. Therefore plaintiff’s unjust enrichment and negligence causes of action against TOMS based upon respondeat superior should have been dismissed:

In or about June 2020, Rosner allegedly began an affair with plaintiff’s wife. They then allegedly conspired to develop a scheme to deplete plaintiff’s assets. In furtherance of this scheme, Rosner began to advise plaintiff to invest in high-risk stock options which Rosner knew were not suitable for plaintiff and would not be profitable for him. Plaintiff followed the advice and sustained trading losses in excess of $300,000. Plaintiff alleges that this investment advice was part of a scheme by TOMS and Rosner to “better position the stock options,” in which TOMS was also allegedly participating, to benefit TOMS and Rosner and their clients.

The motion court incorrectly determined that the allegations in the complaint sufficiently supported claims for unjust enrichment and negligence against TOMS under a theory of respondeat superior. Even construed in the light most favorable to plaintiff … , the alleged acts by Rosner clearly were not made within the scope of his employment or in furtherance of TOMS’s business, but rather, for his own personal gain … . Courtois v TOMS Capital Mgt. LP, 2022 NY Slip Op 06545, First Dept 11-17-22

Practice Point: Here defendant allegedly gave investment advice to plaintiff which was designed to deplete plaintiff’s assets. Because defendant’s acts were not done within the scope of his employment the unjust enrichment and negligence causes of action against defendant’s employer, pursuant to the doctrine of respondeat superior, should have been dismissed.

 

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EVEN IF THE CONTRACT BETWEEN THE INSURER AND CLAIMANT INSURANCE BROKER INCLUDED ALL THE STATUTORY FACTORS IN LABOR LAW 511, THE BROKER WILL BE CONSIDERED AN EMPLOYEE IF THE SERVICES ACTUALLY PROVIDED BY THE BROKER ARE NOT CONSISTENT WITH THE CONTRACT PROVISIONS (THIRD DEPT).

The Third Department determined the insurance company, Paul Revere, did not demonstrate that claimant insurance broker was not an employee. Claimant was entitled to unemployment insurance benefits:

Labor Law § 511 (21) provides that “[t]he term ’employment’ shall not include the services of a licensed insurance agent or broker if,” among other things, “the services performed by the agent or broker are performed pursuant to a written contract” … that, in turn, contains seven statutorily enumerated provisions … . Here, the Board concluded that two of the seven statutory requirements were absent from the written agreement entered into between claimant and Paul Revere — specifically, provisions demonstrating that claimant was “permitted to work any hours he . . . chooses” … and was “permitted to work out of his . . . own office or home or the office of the person for whom services are performed” … . Paul Revere disagrees, contending that article XI (A) of the written contract satisfies such requirements by providing that “Paul Revere shall not exercise nor have the right to exercise direction or control over [claimant’s] time, when or how [claimant] may work, or over the activities of [claimant].”

… [W]e agree with the Board that the conclusory and sweeping language employed in article XI (A) of the contract does not satisfy the requirements of Labor Law § 511 (21) (d) (iii) and (iv). … [E]ven assuming, without deciding, that the written agreement between Paul Revere and claimant did … fulfill all of the statutory requirements, we agree with the Board’s further conclusion that the parties’ conduct was inconsistent with the provisions of Labor Law § 511 (21) and, therefore, the services performed by claimant do not fall within the statutory exclusion…. . …

… [T]he statute requires both that the contract at issue contain the seven enumerated provisions and “that the services performed by the insurance agent or broker actually be consistent with those provisions” … . Matter of Hoyt (Paul Revere Life Ins. Co.–Commissioner of Labor), 2022 NY Slip Op 06518, Third Dept 11-17-22

Practice Point: Even if the contract between the insurer and claimant insurance broker includes all the statutory provisions in Labor Law 511 (such that the broker would not be considered an employee for unemployment insurance purposes), if the services actually performed by the broker are not consistent with those contract provisions the broker may be deemed an employee eligible for benefits.

 

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FAILURE TO FOLLOW DECEDENT’S DIRECTIVES IN A LIVING WILL OR HEALTHCARE PROXY CAN CONSTITUTE MEDICAL MALPRACTICE; HERE THERE WERE QUESTIONS OF FACT ABOUT WHICH HEALTHCARE PROXY APPLIED, WHETHER A PROXY WAS REVOKED BY DECEDENT, AND WHETHER THE TREATMENT GIVEN TO DECEDENT WAS APPROVED (FIRST DEPT).

The First Department, reversing Supreme Court, determined there were questions of fact concerning which of two contradictory healthcare proxies applied and whether one of the healthcare proxies was revoked by decedent’s conversations:

Plaintiff commenced an action against defendants alleging medical malpractice based on the various health proxies and forms. Plaintiff claims that defendants breached their agreement with the decedent by administering antibiotics and IV Hydration from April 15, 2017 onwards that prolonged his life.

Here, there are issues of fact that preclude summary judgment. It is unclear whether the 1993 healthcare proxy (and the living will), the 2016 healthcare proxy or the 2017 FLST [Forgoing Life-Sustaining Treatment Including DNR] governed this dispute and whether the 2016 health care proxy was revoked by decedent through conversations with his agents, pursuant to Public Health Law § 2985(a). Significantly, it is not clear from the record whether the treatment prolonged decedent’s life, as neither side submits an expert affidavit. There is also a question as to whether decedent’s health care agents approved the very treatment for which they now seek to hold defendants liable. Lanzetta v Montefiore Med. Ctr., 2022 NY Slip Op 06554, First Dept 11-17-22

Practice Point: Failure to follow a decedent’s directives in a living will or healthcare proxy can constitute medical malpractice. The directives can be orally revoked.

 

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ABSENT FRAUD, COLLUSION OR A MALICIOUS OR TORTIOUS ACT, DEFENDANT ATTORNEYS COULD NOT BE LIABLE FOR ACTING WITHIN THE SCOPE OF THEIR AUTHORITY AS AGENTS OF THE CLIENTS AND ALLEGEDLY ADVISING THEIR CLIENTS TO BREACH A CONTRACT WITH PLAINTIFFS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant attorneys (Jin Hu defendants) could not be liable to third parties (plaintiffs) for allegedly advising their clients (DeVito defendants) to breach a real estate purchase contract:

… “[I]nasmuch as the relationship created between an attorney and his client is that of principal and agent, an attorney is not liable for inducing his [or her] principal to breach a contract with a third person, at least where he [or she] is acting on behalf of his principal within the scope of his [or her] authority” … . “Absent a showing of fraud or collusion, or of a malicious or tortious act, an attorney is not liable to third parties for purported injuries caused by services performed on behalf of a client or advice offered to that client” … .

Here, the allegations in the complaint regarding the conduct of the Jin Hu defendants were impermissibly vague and conclusory … . Additionally, the complaint failed to sufficiently allege that the Jin Hu defendants acted outside the scope of their authority as counsel for the DeVito defendants or engaged in any conduct that could make them liable to the plaintiffs … . Asamblea De Iglesias Christianas, Inc. v DeVito, 2022 NY Slip Op 06456, Second Dept 11-16-22

Practice Point: Absent fraud, collusion of a malicious of tortios act, an attorney, as the agent for the principal (the client) acting within the scope of the attorney’s authority, cannot be liable to the plaintiff for advising the client to breach a contract with the plaintiff.

 

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THE PROFESSIONAL LIABILITY EXCLUSION IN THE NAIL SALON’S INSURANCE POLICY IS NOT AMBIGUOUS AND EXCLUDES INJURY RESULTING FROM A “COSMETIC SERVICE;” PLAINTIFF ALLEGED SHE CONTRACTED AN INFECTION DURING A PEDICURE; COVERAGE WAS PROPERLY DENIED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the “professional liability” exclusion from the insured nail salon’s policy applied and coverage was properly denied. Plaintiff alleged she contracted an infection during a pedicure:

… [T]he professional liability exclusion states—in clear and unmistakable language—that the insured’s policy “does not apply to ‘bodily injury’ . . . due to . . . [t]he rendering of or failure to render cosmetic . . . services or treatments.” We agree with defendant that, contrary to plaintiff’s contention, “[t]here is no ambiguity in the wording of the exclusion” inasmuch as it is susceptible of only one reasonable interpretation: there is no coverage for bodily injury due to (i.e., “caused by”) the rendering (i.e., the performance) of a cosmetic service or treatment (e.g., a pedicure) … . Thus, employing ” ‘the test to determine whether an insurance contract is ambiguous [by] focus[ing] on the reasonable expectations of the average insured upon reading the policy and employing common speech’ ” … , we conclude that the exclusion is unambiguous because the average insured would understand the policy to exclude coverage for injuries caused by the performance of acts that constitute part of the pedicure service … . Walker v Erie Ins. Co., 2022 NY Slip Op 06332, Fourth Dept 11-10-22

Practice Point: Where an exclusion in an insurance policy is unambiguous it will be enforced. Here the nail salon’s insurance policy had a professional liability exclusion. Plaintiff alleged she contracted an infection during a pedicure. The pedicure was deemed included in the exclusion of bodily injury caused by the rendering of a cosmetic service (i.e., a pedicure).

 

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CONTRARY TO SUPREME COURT’S RULING, THE REAL ESTATE PURCHASE AGREEMENT, BY ITS TERMS, DECLARED THE CONTRACT CANCELLED IF THE INSPECTION REVEALED PROBLEMS AND THE PARTIES DID NOT AGREE ON HOW TO ADDRESS THOSE PROBLEMS WITHIN TEN DAYS; THE INSPECTION IN FACT REVEALED PROBLEMS AND NO AGREEMENT ON RESOLUTION WAS MADE WITHIN THE ALOTTED TEN DAYS (THIRD DEPT). ​

The Third Department, reversing Supreme Court, determined that the real estate purchase agreement was canceled in accordance with its own terms:

… [P]laintiff’s transmission of the form contract and rider constituted an offer, and the sellers counteroffered by signing and returning to plaintiff only the form contract without the rider. Plaintiff then accepted the counteroffer by proceeding with the inspections, as “a counteroffer may be accepted by conduct” … . We also agree with the court that plaintiff’s counsel’s May 18, 2020 letter did not constitute attorney disapproval of the contract under the attorney approval contingency. This letter merely acknowledged receipt of the signed contract and inquired as to the rider and other documents; in no way did it signal disapproval.

… Plaintiff’s attorney, in his letter of June 17, 2020, notified the sellers’ attorney that the property had failed multiple inspections, and provided a copy of the relevant inspection report. This conduct, in accordance with the language set forth in the inspection contingency, rendered the contract “cancelled, null and void” unless plaintiff chose to defer cancellation for 10 days. Given that the letter from plaintiff’s attorney also set forth potential ways in which the inspection issues could be resolved, we are satisfied that the 10-day option was exercised. That said, the parties did not reach a written agreement on these issues within 10 days as was expressly required pursuant to the inspection contingency … . Savignano v Play, 2022 NY Slip Op 06307, Third Dept 11-10-22

Practice Point: In reversing Supreme Court, the Third Department simply read the real estate purchase agreement and enforced the term deeming the contract cancelled if the parties did not agree on the resolution of problems revealed by inspection within ten days. No such agreement was reached.

 

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THE $40,000 PAID BY DECEDENT TO HER CAREGIVERS SHORTLY BEFORE DECEDENT ENTERED A NURSING HOME WAS PAYMENT FOR PAST SERVICES RENDERED PURSUANT TO A PERSONAL SERVICE AGREEMENT (PSA); IT WAS NOT AN “UNCOMPENSATED TRANSFER” SUBJECT TO THE 60-MONTH LOOKBACK FOR MEDICAID ELIGIBILITY (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined the $40,000 paid to decedent’s caregivers shortly before decedent entered a nursing home was pursuant to a valid personal service agreement (PSA) for past services rendered. Therefore the payment was not an “uncompensated transfer” to which the Medicaid 60-month lookback applied:

“In determining the medical assistance eligibility of an institutionalized individual, any transfer of an asset by the individual . . . for less than fair market value made within or after the look-back period shall render the individual ineligible for nursing facility services” for a certain penalty period (Social Services Law § 366 [5] [d] [3]). The look-back period is the “[60]-month period[] immediately preceding the date that an [applicant] is both institutionalized and has applied for medical assistance” … . When such a transfer has occurred, a presumption arises that the transfer “was motivated, in part if not in whole, by . . . anticipation of a future need to qualify for medical assistance,” and it is the applicant’s burden to establish his or her eligibility for Medicaid by rebutting the presumption … . As pertinent here, “an applicant may do so by demonstrating that he or she intended to receive fair consideration for the transfers or that the transfers were made exclusively for purposes other than qualifying for Medicaid” … .

Here, petitioner submitted documentary proof of the PSA, which was entered into in 2015, more than three years before decedent entered the nursing home. As noted above, while the PSA contemplated monthly payments for the personal care services, it also contemplated that decedent may make payments in advance. In addition, petitioner submitted bank statements demonstrating that decedent did not have money to pay for the services until after she received cash value for the insurance policies. Petitioner also submitted a monthly calendar that documented the care provided to decedent during the relevant time period. While the calendar did not provide the number of hours spent on each task, “a daily log of hours worked and services rendered is not necessarily required” … . Matter of Boldt v New York State Off. of Temporary & Disability Assistance, 2022 NY Slip Op 06344, Fourth Dept 11-10-22

Practice Point: Here decedent entered a personal care agreement (PSA) in which she agreed to pay her caregivers $2500 per month. Shortly before decedent was admitted to a nursing home she paid $40,000 to the caregivers. It was demonstrated that the $40,000 was for past care rendered pursuant to the PSA. The $40,000 payment, therefore, was not an “uncompensated transfer” subject to the 60-month lookback for Medicaid eligibility.

 

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THE NOTE REQUIRED THE APPLICATION OF FLORIDA SUBSTANTIVE AND PROCEDURAL LAW TO THE “TERMS OF THE DOCUMENTS” BUT SPECIFICALLY CONTEMPLATED A SUIT IN EITHER NEW YORK OR FLORIDA; THEREFORE SUPREME COURT SHOULD NOT HAVE INTERPRETED THE CHOICE OF LAW PROVISIONS TO RULE OUT A NEW YORK LAWSUIT (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined that the terms of the note which required the application of Florida law did not preclude bringing the action in New York. The language in the note indicated the parties intended suit to be brought either in New York or Florida:

[Supreme Court] stated in its decision that, “having elected to have the ‘procedur[al] laws of the State of Florida’ apply exclusively in this action, the [p]laintiff could not rely on any of the provisions of New York’s Civil Practice Law and Rules in prosecuting this action.” The court relied on CPLR 101, which the court quoted in its decision as providing, in pertinent part, that ” ‘[t]he civil practice law and rules shall govern the procedure in civil judicial proceedings in all courts of the state and before all judges, except where the procedure is regulated by inconsistent statute’ ” … . The court … concluded that, due to the perceived conflict between the contractual choice-of-law provisions and CPLR 101, it could not grant the [plaintiff’s summary judgment] motion. * * *

“Contractual ‘[c]hoice of law provisions typically apply to only substantive issues’ ” … , although parties can agree otherwise. Here, the note provides that “[t]he terms” of the documents are to be governed by the substantive and procedural rules of Florida, but that does not establish that the rules of Florida were intended to govern the procedures of the New York State court system, which would effectively preclude any action on the note in New York. Indeed, the note itself provides that venue for any action related to the note may be in either “Onondaga County, New York or Broward County, Florida.” Thus, the parties anticipated that New York courts could and would be able to handle a judicial action related to the note … . Bankers Healthcare Group, LLC v Pasumbal, 2022 NY Slip Op 06334, Fourth Dept 11-10-22

Practice Point: The choice of law provisions in the note required the application of Florida substantive and procedural law to the “terms of the documents” and also stated suit could be brought in either New York or Florida. Supreme Court should not have interpreted the choice of law provisions to rule out a New York lawsuit.

 

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THE COMPLAINT ADEQUATELY ALLEGED FACTS SUPPORTING PIERCING THE CORPORATE VEIL; THE CAUSES OF ACTION FOR UNJUST ENRICHMENT AND BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined (1) the complaint sufficiently alleged the corporate veil should be pierced, and (2) the unjust enrichment and breach of the implied covenant of good faith and fair dealing causes of action should not have been dismissed:

… [A] plaintiff seeking to pierce the corporate veil must show that (1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff’s injury” … . “The decision whether to pierce the corporate veil in a given instance depends on the particular facts and circumstances” … . “Factors to be considered in determining whether the owner has abused the privilege of doing business in the corporate form include whether there was a failure to adhere to corporate formalities, inadequate capitalization, commingling of assets, and use of corporate funds for personal use” … . A cause of action under the doctrine of piercing the corporate veil is not required to meet any heightened level of particularity in its allegations … .

… [T]he plaintiffs adequately pleaded allegations that [the individual defendants] dominated [the corporations], and that they engaged in acts amounting to an abuse of the corporate form to perpetrate a wrong or injustice against the plaintiffs … . …

Where, as here, the existence of a contract, in this case, the alleged agreements [are] in dispute, a plaintiff may allege a cause of action to recover damages for unjust enrichment as an alternative to a cause of action alleging breach of contract (see CPLR 3014 …). Consequently, the cause of action alleging unjust enrichment was not duplicative of the breach of contract cause of action … . Furthermore, the cause of action alleging breach of the implied covenant of good faith and fair dealing was not duplicative of the breach of contract cause of action since it alleged that the defendants engaged in additional conduct to realize gains from the plaintiffs, while depriving the plaintiffs of the benefits of the parties’ agreements … . F&R Goldfish Corp. v Furleiter, 2022 NY Slip Op 06112. Second Dept 11-2-22

Practice Point: The facts alleged in the complaint supported piercing the corporate veil, criteria explained.

Practice Point: Because the existence of the agreements was in dispute, the unjust enrichment cause of action should not have been dismissed as duplicative of the breach of contract cause of action.

Practice Point: The facts alleged supported a cause of action for breach of the implied covenant of good faith and fair dealing.

 

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