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THE REAL ESTATE PURCHASE CONTRACT DID NOT INCLUDE THE CLOSING DATE OR THE MORTGAGE TERMS; THE CONTRACT WAS THEREFORE UNENFORCEABLE PURSUANT TO THE STATUTE OF FRAUDS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the seller was entitled to summary judgment dismissing the action for specific performance of the real estate purchase contract, because the contract did not meet the requirements of the statute of frauds:

Under the statute of frauds, a contract for the sale of real property must be evidenced by a writing (see General Obligations Law § 5-703[1]). The writing must “identify the parties, describe the subject matter, be signed by the party to be charged, and state all of the essential terms of an agreement” … . “In a real estate transaction, the essential terms of a contract typically include the purchase price, the time and terms of payment, the required financing, the closing date, the quality of title to be conveyed, the risk of loss during the sale period, and adjustments for taxes and utilities” … . “‘[T]he writing must set forth the entire contract with reasonable certainty so that the substance thereof appears from the writing alone . . . If the contract is incomplete and it is necessary to resort to parol evidence to ascertain what was agreed to, the remedy of specific performance is not available'” … . …

In addition to the document not specifying the closing date, the evidence established that the parties never agreed with respect to the mortgage terms. At his deposition, the plaintiff testified that he was purchasing the property “subject” to the existing mortgage and that he had the “option” of obtaining a purchase money mortgage. The document, however, did not state whether the plaintiff was purchasing the property subject to the existing mortgage, obtaining a purchase money mortgage, or obtaining his own mortgage. The failure to include such terms makes the purported real estate contract unenforceable … . Cohen v Holder, 2022 NY Slip Op 02778, Second Dept 4-27-22​

Practice Point: A real estate purchase contract which does not include all the material terms is not enforceable pursuant to the Statute of Frauds. Here the contract did not include the closing date or the mortgage terms. It was deemed unenforceable and the action for specific performance was dismissed.

 

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THE VENUE DESIGNATION IN THE NURSING HOME ADMISSION AGREEMENT, SIGNED BY PLAINTIFF’S DECEDENT’S WIFE, WAS NOT ENFORCEABLE BY THE NURSING HOME (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the nursing home admission agreement, signed by plaintiff’s decedent’s wife (Anderson), was not a sufficient basis for changing the venue of this action against the nursing home from plaintiff’s residence, Bronx County, to the venue designated in the admission agreement, Westchester County. The decision is comprehensive and addresses several substantive issues (agency, rights of non-signatories, for example) not summarized here:

Although the defendant submitted a copy of the admission agreement, it did not provide an affidavit from anyone who signed the agreement, who was present when it was signed, or who otherwise claimed to have personal knowledge of that agreement. The admission agreement was not signed by the plaintiff or the decedent, and it did not identify or include the names of the plaintiff or the decedent anywhere on that document. * * *

An admission agreement may be enforced against an individual where it was properly executed by that individual’s “designated representative” … . As relevant here, “[d]esignated representative shall mean the individual or individuals designated in accordance with [10 NYCRR 415.2(f)] to receive information and to assist and/or act in behalf of a particular resident to the extent permitted by State law” … . The subdivision lists three ways in which a designation may occur … .

As the plaintiff correctly contends, the defendant failed to establish that Anderson was properly designated in any of the three ways authorized by applicable law … . Sherrod v Mount Sinai St. Luke’s, 2022 NY Slip Op 02826, Second Dept 4-27-22

Practice Point: In this case, the venue designation in the nursing home admission agreement, signed by plaintiff’s decedent’s wife, could not be enforced by the nursing home.

 

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ALTHOUGH THE ISSUE WAS NOT PRESERVED, DEFENDANT’S GUILTY PLEA WAS VACATED BECAUSE IT WAS INDUCED BY THE JUDGE’S PROMISE THAT ALL THE COURT’S ORDERS COULD BE APPEALED; IN FACT, THE DEFENDANT’S CONTENTION THAT TWO COUNTS OF THE INDICTMENT WERE DUPLICITOUS COULD NOT BE RAISED ON APPEAL (FOURTH DEPT).

The Fourth Department, vacating defendant’s sentence in the interest of justice, determined the defendant’s guilty plea was induced by the judge’s promise that defendant could appeal from all the court’s orders. In fact, however, by pleading guilty defendant could not appeal the order rejecting his argument that the first two counts of the indictment were duplicitous:

We agree … with defendant that his plea was not knowingly, voluntarily, and intelligently entered. Although defendant failed to preserve that contention for our review … , we nevertheless exercise our power to review it as a matter of discretion in the interest of justice (see CPL 470.15 [3] [c]). “A trial court is constitutionally required to ensure that a defendant, before entering a guilty plea, has a full understanding of what the plea entails and its consequences” … , and where “a guilty plea has been induced by an unfulfilled promise, the plea must be vacated or the promise must be honored” … . Here, the court repeatedly promised defendant, who was proceeding pro se, that he would retain the right to appeal from all of its orders. The court reiterated that promise during the plea colloquy and did not advise defendant that he was forfeiting any challenge by pleading guilty. We conclude, however, that “[b]y pleading guilty, defendant forfeited his . . . contention that the first two counts of the indictment were duplicitous” … . Consequently, “[i]nasmuch as the record establishes that defendant, in accepting the plea, relied on a promise of the court that could not, as a matter of law, be honored, defendant is entitled to vacatur of his guilty plea” … . People v Mothersell, 2022 NY Slip Op 02661, Fourth Dept 4-22-22

Practice Point: Here the defendant’s guilty plea was induced by the judge’s promise all the court’s orders could be appealed. In fact, the guilty plea precluded raising on appeal defendant’s contention two indictment counts were duplicitous. Even though the issue was not preserved for appeal, the Fourth Department vacated the guilty plea.

 

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THE CITY FIREFIGHTERS WHO, AS ESSENTIAL EMPLOYEES, WERE REQUIRED BY EXECUTIVE ORDER TO WORK DURING THE PANDEMIC, SOUGHT TIME-OFF OR MONETARY COMPENSATION EQUIVALENT TO THE TIME-OFF AFFORDED THE NONESSENTIAL CIVILIAN EMPLOYEES WHO WERE SENT HOME DURING THE PANDEMIC PURSUANT TO THE SAME THE EXECUTIVE ORDER; THE THIRD DEPARTMENT DETERMINED ARBITRATION OF THE ISSUE WAS PRECLUDED BY PUBLIC POLICY (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the city firefighters’ claim to entitlement to time off from work or monetary compensation equivalent to the time-off afforded the civilian employees ordered to stay home (due to COVID) was prohibited by public policy. The firefighters were deemed essential employees and were required to report to work by Executive Order. The “nonessential” civilian employees were ordered to stay home by the same Executive Order:

… [W]e cannot agree that petitioner breached the CBA [collective bargaining agreement] by responsibly implementing the Governor’s directives. To hold otherwise would create an untenable result — i.e., it would sanction a finding that petitioner breached the CBA based upon its required compliance with state public policy. Based on the very nature of the pandemic, requiring extreme public health measures as implemented through the executive orders, we conclude that arbitration of the resulting impact on respondent’s members is precluded as a matter of public policy. Matter of City of Troy (Troy Uniformed Firefighters Assn., Local 86 IAFF, AFL-CIO), 2022 NY Slip Op 02174, Third Dept 3-31-22

Practice Point: Here is a rare example of the preclusion of the arbitration of an employment issue by public policy. The firefighters were ordered to work during COVID as essential employees. The nonessential civilian employees were ordered to stay home. Public policy prohibited arbitration of the question whether the firefighters were entitled to equivalent time-off or monetary compensation.

 

PLAINTIFF AGREED TO PROVIDE POURED, NOT PUMPED, CONCRETE AND SPECIFICALLY EXCLUDED THE INSTALLATION OF TACTILE STRIPS FROM THE SUBCONTRACT; DEFENDANT SUBSEQUENTLY REQUESTED THAT PLAINTIFF PROVIDE PUMPED CONCRETE AND INSTALL TACTILE STRIPS; THESE CHANGES WERE MATERIAL BUT NOT “CARDINAL” SUCH THAT PLAINTIFF’S PERFORMANCE WAS EXCUSED (THIRD DEPT).

The Third Department, reversing Supreme Court, determined that defendant’s (Banton’s) requested changes to the contract were not a “cardinal changes” such that Banton breached the contract. The plaintiff, pursuant the subcontract, provided concrete for the construction project. The original subcontract indicated plaintiff would “pour” not “pump” the concrete and would not install “tactile strips.” Subsequently, Banton requested that the concrete be pumped and that tactile strips be installed. The parties then agreed to proceed with those changes:

Supreme Court found that Banton’s request to modify the concrete delivery method from pouring to pumping, in light of the express subcontract exclusion, was a material change to the scope of plaintiff’s work under the agreement. Although we agree with the court that this was a material change, we do not find it to be a cardinal change such that Banton can be found to have breached the contract … . A cardinal change is one that affects “‘the essential identity or main purpose of the contract,’ such that it ‘constitutes a new undertaking'” … . The main purpose of this subcontract was to complete the concrete work for the project, and we do not find that the changes in the work requested by Banton fundamentally changed this purpose so as to constitute a cardinal change that would relieve plaintiff of its obligation to perform under the subcontract … . This conclusion is further supported by the fact that plaintiff was ready, willing and able to implement these changes and continue to perform under the subcontract, but only if its price was met. McCarthy Concrete, Inc. v Banton Constr. Co., 2022 NY Slip Op 02168, Third Dept 3-31-22

Practice Point: Here it was determined that the changes to the subcontract requested by the defendant were “material” but they were not “cardinal” such that plaintiff’s performance was excused. Plaintiff had specifically excluded “pumped,” as opposed to “poured,” concrete and the installation of tactile strips from the subcontract. Defendant subsequently requested “pumped” concrete and the installation of tactile strips. Essentially the parties agreed to proceed with the changes. Supreme Court should not have held plaintiff was not obligated to perform.

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PLAINTIFF COUNTY, ACTING ON BEHALF OF THE NURSING HOME WHERE DECEDENT WAS CARED FOR, WAS ENTITLED TO DISCLOSURE OF DECEDENT’S TAX RETURNS; THE RETURNS ARE RELEVANT TO WHETHER DECEDENT’S SON BREACHED THE “RESPONSIBLE PARTY AGREEMENT” WHICH REQUIRED HIM TO USE THE DECEDENT’S INCOME TO PAY THE NURSING HOME (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, plaintiff county (on behalf of the nursing home where decedent was cared for) was entitled to disclosure of decedent’s tax returns in this action against decedent’s son. The action alleged the son breached the “responsible party agreement” in which the son agreed to pay the decedent’s nursing home costs from the decedent’s income and resources:

Unlike a typical action where the assets of a defendant are irrelevant unless and until a judgment is obtained, here … the existence and value of decedent’s assets are critical to the issue of whether Jeffrey Garry [decedent’s son] breached the agreement by failing to use such assets to pay for decedent’s care … . …

Although “tax returns are generally not discoverable unless the party seeking them shows that they are relevant to issues in the case, indispensable to the claim and unavailable from other sources” … , we are satisfied that plaintiff made the requisite showing here, particularly given defendants’ reluctance to produce responsive documents or interrogatory responses that may have otherwise provided information contained in decedent’s tax returns … . County of Warren v Swan, 2022 NY Slip Op 02169, Third Dept 3-31-22

Practice Point: Although tax returns are generally not discoverable until a judgment is obtained, here the decedent’s returns were deemed relevant to whether decedent’s son breached the “responsible party agreement” with the nursing home which cared for decedent. The agreement required decedent’s son to pay the nursing home from decedent’s income and resources.

 

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THE BIOLOGICAL MOTHER AND THE ADOPTIVE MOTHER ENTERED A POSTADOPTION CONTACT AGREEMENT WHICH ALLOWED TWO SUPERVISED VISITS WITH THE BIOLOGICAL MOTHER PER YEAR; THE EVIDENCE OF THE CHILDREN’S BEHAVIOR AFTER VISITING WITH THE BIOLOGICAL MOTHER SUPPORTED FAMILY COURT’S CONCLUSION IT WAS IN THE BEST INTERESTS OF THE CHILDREN TO TERMINATE VISITATION WITH THE BIOLOGICAL MOTHER; THE DISSENT ARGUED THE EVIDENCE OF THE DAUGHTER’S, IN CONTRAST TO THE SON’S, POST-VISIT BEHAVIOR DID NOT SUPPORT TERMINATION OF VISITATION WITH THE DAUGHTER (THIRD DEPT).

The Third Department, over a two-justice partial dissent, determined Family Court properly terminated the biological mother’s visitation with her children who had been adopted. The biological mother and the adoptive mother had entered a postadoption contact agreement which allowed the biological mother two supervised visits per year with her son and daughter. The evidence at the fact-finding hearing demonstrated that the son’s behavior changed drastically after visits. His behavior was characterized as “out of control.” There was evidence the daughter began banging her head and had nightmares after a visit. The dissent argued the evidence supported termination of visits with the son, but did not support the termination of visits with the daughter:

The adoptive mother testified that after visiting the biological mother in December 2017, the son destroyed rooms in the house and was completely out of control for close to a month. After the July 2018 visit with the biological mother, the son “climb[ed] the walls in [his] classroom,” hit his friend, hurt his sister and had difficulties regulating his behavior for several months. * * *

With respect to the dissent’s reference to the policy concerns underlying postadoption contact agreements, we note that we wholeheartedly embrace and promote the policies and goals of these types of agreements and encourage open adoptions. However, it is not our intention to address the underlying policies of postadoption contact agreements, but, instead, to focus solely upon the principle governing and guiding the initiation and continuation of open contact between the children and the biological parent — the best interests of the children. Here, it is uncontroverted that the daughter displayed a persistent pattern of bizarre and harmful behavior — head banging and disrupted sleep due to nightmares — commensurate with visits with her biological mother. These behaviors continued for 1½ years. Although the daughter did not display the behaviors at the time of the visits, a time when the adoptive parents were present and the daughter’s attention was directed toward other activities, the behaviors were manifested subsequent to each visit. … [W]e cannot agree that enforcing visitation with respect to one sibling but not the other serves the best interests of either. Matter of Jennifer JJ. v Jessica JJ., 2022 NY Slip Op 02043, Third Dept 3-24-22

Practice Point: The postadoption contact agreement allowing the biological mother to visit her children after adoption was properly terminated by the court because the evidence of the children’s post-visit behavior supported the conclusion continued visitation was not in the best interests of the children.

 

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THE MATERIAL MISREPRESENTATION THAT THERE WAS NO SWIMMING POOL ON THE PROPERTY JUSTIFIED THE DISCLAIMER OF COVERAGE FOR FIRE DAMAGE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant insurer (Union Mutual) was entitled to rescission of the insurance policy based upon a material misrepresentation made by the plaintiff (the insured). The plaintiff-insured represented that there was no swimming pool on the property. After the property was damaged by fire, the insurer learned there was a swimming pool on the property and disclaimed coverage:

… Union Mutual established its prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff made misrepresentations on his application for insurance, and that it would not have issued the 2017 policy and the 2018 policy had the plaintiff disclosed that there was a swimming pool on the property … .. Union Mutual submitted with its motion for summary judgment an affidavit from its underwriter, along with Union Mutual’s Underwriting Guidelines for its New York Landlord/Tenant Property and General Liability Package Program, which provide that swimming pools are an unacceptable risk, and if a potential insured answered “yes” to the question on the application asking if there is a swimming pool on the property, no policy of insurance would issue. With these undisputed facts, Union Mutual demonstrated as a matter of law that the misrepresentations in the plaintiff’s applications for insurance were material. In opposition, the plaintiff failed to raise a triable issue of fact.

A material misrepresentation, even if innocent or unintentional, is sufficient to warrant rescission of an insurance policy … . Nabatov v Union Mut. Fire Ins. Co., 2022 NY Slip Op 02005, Second Dept 3-23-22

Practice Point: Here the insured represented to the insurer that there was no swimming pool on the property. After a fire the insurer learned there was a swimming pool on the property. The insurer demonstrated it would not have issued the policy if it had been aware of the swimming pool. The misrepresentation was therefore “material” and justified the denial of coverage for the fire.

 

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IN THIS FORECLOSURE ACTION, THE FAILURE TO ATTACH THE RELEVANT BUSINESS RECORDS, AS WELL AS THE FAILURE TO PROVIDE PROOF OF MAILING, RENDERED THE PROOF OF COMPLIANCE WITH THE NOTICE-OF-DEFAULT PROVISIONS OF THE MORTGAGE INSUFFICIENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate compliance with the notice-of-default provisions of the mortgage in this foreclosure action:

… [T]he plaintiff failed to establish … that it complied with the notice of default provisions of the mortgage, which … required the plaintiff to send the notice by first-class mail to the subject property and to provide a 30-day cure period. Copies of the notice without proof of mailing, along with the affidavit of a representative of the loan servicer averring, based upon her review of unspecified business records which were not attached to the affidavit, that such a notice of default was sent on an unspecified date, was insufficient to satisfy the plaintiff’s prima facie burden … .Bank of Am., N.A. v Shirazi, 2022 NY Slip Op 01984, Second Dept 3-23-22

Practice Point: Although most foreclosure-reversals are due to the bank’s failure to demonstrate compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304, here the bank failed to demonstrate compliance with the notice-of-default provisions in the mortgage document.

 

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PLAINTIFFS’ LEGAL MALPRACTICE ACTION SHOULD NOT HAVE BEEN DISMISSED; PLAINTIFFS’ 2010 BREACH OF A CONDOMINIUM-SALE CONTRACT ACTION WAS DISMISSED ON STATUTE OF FRAUDS GROUNDS; WHEN A WRITTEN CONTRACT SUBSEQUENTLY SURFACED, DEFENDANT ATTORNEYS DID NOT MOVE TO RENEW, VACATE OR APPEAL THE ORDER (FIRST DEPT).

The First Department, reversing Supreme Court, determined the legal malpractice action should not have been dismissed. Plaintiffs, apparently represented by defendant attorneys, brought a 2010 action for breach of a condominium-sale contract which was dismissed on statute of frauds grounds (no written contract). When the written contract for the condominium sale surfaced, the defendants did not move to renew, vacate or appeal the order:

Regardless of whether the dismissal on statute of frauds grounds was ultimately correct, defendants should have known that the condominium claims, which involved the sale of real property, would be subject to the statute of frauds and thus would require reference to a written contract (General Obligations Law § 5-703[2]); that the statute of frauds could be raised and adjudicated on a motion to dismiss under CPLR 3211(a)(5); and that a dismissal under the statute of frauds would be on the merits, thus precluding any future claim for damages on the sale of the condominium … . As a result, with respect to the condominium sale, it cannot be determined as a matter of law that plaintiffs failed to plead a claim for legal malpractice based upon defendants’ actions in litigating the breach of contract claim. Komolov v Popik, 2022 NY Slip Op 01966, First Dept 3-22-22

Practice Point: The defendant attorneys apparently represented plaintiffs in their 2010 action for breach of a condominium-sale contract. The 2010 action was dismissed on statute of frauds grounds. Subsequently a written contract surfaced and defendant attorneys did not move to renew, vacate or appeal the order. Plaintiffs’ legal malpractice complaint should not have been dismissed.

 

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