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WHEN THE TERMS OF THE PLEA AGREEMENT WERE DISCUSSED BOTH TWO AND THREE-YEAR SENTENCES WERE MENTIONED; DEFENDANT WAS SENTENCED TO THREE YEARS; DEFENDANT’S GUILTY PLEA WAS THEREFORE NOT VOLUNTARY; THE ISSUE WAS NOT PRESERVED BY A MOTION AND WAS CONSIDERED IN THE INTEREST OF JUSTICE (THIRD DEPT).

The Third Department, vacating defendant’s guilty plea, determined defendant was not clearly informed of the sentence, rendering his plea involuntary. Although the issue was not preserved by a motion, the Third Department considered the appeal in the interest of justice:

… [W]hen the terms of the plea agreement were placed on the record, it was stated that the prison term to be imposed would be two years. County Court then, in discussing defendant’s second felony offender status, stated that the prison term was three years but, thereafter, informed defendant that, if he violated any jail rules prior to sentencing, it would not be bound by the promise of a two-year prison term. The record does not reflect that there was any clarification or correction regarding the misstatements as to the agreed-upon sentence either during the plea colloquy or at sentencing before a three-year prison term was imposed. As “[t]he record thus fails to reveal that defendant was accurately advised of the essential terms and conditions of the plea agreement” … , we find that his plea was not knowing, voluntary and intelligent. People v Lumpkin, 2022 NY Slip Op 00477, Third Dept 1-27-22

 

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DEFENDANT HAD WITHHELD PAYMENT ON THE CONTRACT AS AN OFFSET FOR THE LIQUIDATED DAMAGES PROVISION OF THE CONTRACT; THE AWARD OF LIQUIDATED DAMAGES TO THE DEFENDANT THEREFORE CONSTITUTED A DOUBLE RECOVERY (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined defendant should not have been awarded summary judgment on the liquidated damages counterclaim because defendant had withheld payment on the contract as an offset to the liquidated damages:

Supreme Court should have denied summary judgment in defendant’s favor on the liquidated damages counterclaim. To be sure, the liquidated damages provision of the contract, providing for damages of $100 for each day that plaintiff failed to timely respond to a request for repairs or to complete repairs already begun and $100 for failing to timely provide a written estimate, was not an unenforceable penalty … . However, to the extent defendant has withheld payment from plaintiff for work performed to offset liquidated damages, the award of liquidated damages constitutes a double recovery. Summit Rest. Repairs & Sales, Inc. v New York City Dept. of Educ., 2022 NY Slip Op 00526, First Dept 1-27-22

 

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THE BANK DID NOT DEMONSTRATE: (1) STANDING TO BRING THE FORECLOSURE ACTION; (2) COMPLIANCE WITH THE NOTICE PROVISION IN THE MORTGAGE; AND (3), COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank did not demonstrate standing to bring the foreclosure action and did not demonstrate compliance with the notice provision of the mortgage and RPAPL 1304:

… [T]he record does not reflect that a copy of the endorsed note was attached to the summons and complaint when the action was commenced … . Moreover, the plaintiff failed to establish its status as the holder of the note at the time of commencement of the action … . * * *

The plaintiff failed to establish … it complied with the condition precedent contained in the mortgage agreement, which required that it provide the defendant with a notice of default prior to demanding payment of the loan in full. The evidence submitted by the plaintiff did not establish that a notice of default was mailed by first-class mail or actually delivered to the defendant’s “notice address” if sent by other means, as required by the terms of the mortgage agreement … . [Plaintiff] failed to provide proof of a standard office mailing procedure and provided no independent evidence of the actual mailing … . For the same reason, the plaintiff failed to establish … it sent the defendant the required notice under RPAPL 1304 … . Deutsche Bank Natl. Trust Co. v Crosby, 2022 NY Slip Op 00402, Second Dept 1-26-22

 

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PETITIONERS DID NOT TAKE STEPS TO PRESERVE THE STATUS QUO AS THEY SOUGHT TO VACATE A CONSTRUCTION CONTRACT; THE CONSTRUCTION PROGRESSED TO THE POINT WHERE THE COURT MUST DISMISS THE APPEAL AS MOOT (THIRD DEPT).

The Third Department determined the petitioners’ appeal of the denial of a declaratory judgment seeking to vacate the award of a construction contract by the Office of State Comptroller (OSC) must be dismissed as moot. The petitioners did not seek to maintain the status quo by injunction and the work had progressed too far:

… [T]he doctrine of mootness is invoked where a change in circumstances prevents a court from rendering a decision that would effectively determine an actual controversy” … . Where a change in circumstances involves the substantial completion of construction, “courts must consider several factors, including whether the challengers sought preliminary injunctive relief or otherwise attempted to preserve the status quo to prevent construction from commencing or continuing during the pendency of the litigation”… . Although injunctive relief is theoretically available, as a project can be dismantled, courts consider how far the work has progressed toward completion in determining mootness … . Matter of Bothar Constr., LLC v Dominguez, 2022 NY Slip Op 00346, Third Dept 1-20-22

 

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IN THIS ELEVATOR-ACCIDENT CASE, THE BUILDING OWNERS WERE ENTITLED TO A CONDITIONAL JUDGMENT ON CONTRACTUAL INDEMNIFICATION AGAINST THE ELEVATOR-MAINTENANCE COMPANY BEFORE THE PRIMARY ACTION IS DETERMINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant property owner in this elevator accident case was entitled to a conditional judgment (pending determination of the primary action) against the elevator maintenance company (Otis) for contractual indemnification:

“A court may render a conditional judgment on the issue of indemnity pending determination of the primary action in order that the indemnitee may obtain the earliest possible determination as to the extent to which he or she may expect to be reimbursed” … . To obtain conditional relief on a claim for contractual indemnification, “the one seeking indemnity need only establish that it was free from any negligence and [may be] held liable solely by virtue of . . . statutory [or vicarious] liability” … .

… [The building-owner] defendants established their … entitlement to judgment as a matter of law by showing that they did not have notice of the alleged defect in the subject elevator … , and Otis did not notify the [them] when repairs and/or maintenance was performed on the elevators in the building. Winter v ESRT Empire State Bldg., LLC, 2022 NY Slip Op 00333, Second Dept 1-19-22

 

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SUPREME COURT PROPERLY CONSIDERED A SUCCESSIVE AND LATE MOTION FOR SUMMARY JUDGMENT, CRITERIA EXPLAINED; DEFENDANT DEMONSTRATED PLAINTIFF WAS NOT A THIRD-PARTY BENEFICIARY OF THE CONTRACT AT ISSUE, CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined plaintiff’s breach of contract cause of action should have been dismissed because plaintiff did not qualify as a third-party beneficiary of the contract entered into by defendant county. The Second Department noted that Supreme Court properly exercised its discretion in allowing the defendant county to make a successive and late motion for summary judgment:

… [A] subsequent summary judgment motion may be properly entertained when it is substantively valid and the granting of the motion will further the ends of justice and eliminate an unnecessary burden on the resources of the courts” … . … [T]he “Supreme Court is afforded wide latitude with respect to determining whether good cause exists for permitting late motions. It may . . . entertain belated but meritorious motions in the interest of judicial economy where the opposing party fails to demonstrate prejudice” … . …

“A party asserting rights as a third-party beneficiary must establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for [its] benefit and (3) that the benefit to [it] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [it] if the benefit is lost” … . * * *

… [T]he County established … that the plaintiff was not a third-party beneficiary of the … contract, by showing that the plaintiff was not the only entity that could recover under the contract, and that the contract did not contain any language evincing the parties’ intent to authorize the plaintiff to enforce any obligations thereunder … . Old Crompond Rd., LLC v County of Westchester, 2022 NY Slip Op 00310, Second Dept 1-19-22​

 

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THE AGREEMENT WHICH PROVIDED PLAINTIFF WOULD PAY DEFENDANT ABOUT $38,500 AND PLAINTIFF WOULD BE ENTITLED TO MONTHLY PAYMENTS FROM DEFENDANT’S REVENUE TOTALING ABOUT $52,500 WAS NOT A “LOAN” TO WHICH THE USURY DEFENSE COULD BE APPLIED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the contract between plaintiff and defendant (I Do) in which plaintiff paid defendant about $38,500 in return for monthly payments from defendant’s revenue totally about $52,500 did not constitute a “loan” to which the usury defense would apply:

Unless a principal sum advanced is repayable absolutely, the transaction is not a loan. Usually, courts weigh three factors when determining whether repayment is absolute or contingent: (1) whether there is a reconciliation provision in the agreement; (2) whether the agreement has a finite term; and (3) whether there is any recourse should the merchant declare bankruptcy” … .

… [T]he plaintiff established that the transaction set forth in the agreement was not a loan. The terms of the agreement specifically provided for adjustments to the monthly payments made by I Do to the plaintiff based on changes in I Do’s monthly sales. Concomitantly, as the amount of the monthly payments could change, the term of the agreement was not finite. Moreover, no contractual provision existed establishing that a declaration of bankruptcy would constitute an event of default … . Principis Capital, LLC v I Do, Inc., 2022 NY Slip Op 00203, Second Dept 1-12-22

 

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PLAINTIFF TRIPPED AND FELL ON AN UNEVEN MAT WHEN SHE STEPPED OFF THE DEFENDANT’S SKATING RINK; THE ACTION AGAINST THE COMPANY WHICH SOLD AND INSTALLED THE MAT SHOULD HAVE BEEN DISMISSED; THERE WAS NO CONTRACT BETWEEN THE OWNER OF THE SKATING RINK AND THE SELLER/INSTALLER OF THE MAT AND THERE WAS NO EVIDENCE THE SELLER/INSTALLER OF THE MAT LAUNCHED AN INSTRUMENT OF HARM (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined that the action against the company “Classic” which sold and installed a mat used on an entrance ramp for a skating rink should have been dismissed. Plaintiff alleged the mat was uneven with lumpy ice build-ups which caused her to fall after she stepped off the skating rink. Classic had no contractual relationship with the owner of the skating rink, WRO, and  there was no evidence Classic “launched an instrument of harm:”

The record shows that WRO purchased the ramp matting from Classic and that Classic installed the matting. Classic owed no duty to plaintiff, and there was no contract between WRO and Classic. Thus, contrary to plaintiff’s argument, Classic has no tort liability based upon Espinal v Melville Snow Contrs. (98 NY2d 136 [2002]), where under certain circumstances, a duty of care to noncontracting third parties may arise out of a contractual obligation. In any event, even if there had been a contractual relationship between WRO and Classic, the record does not raise any triable issue as to whether Classic “launche[d] a force or instrument of harm” … . Samuelsen v Wollman Rink Operations LLC, 2022 NY Slip Op 00149, First Dept 1-11-22

 

BECAUSE PLAINTIFF ALLEGED THE ORAL CONTRACT WAS ENFORCEABLE EVEN IF THE TRIGGERING EVENT OCCURRED AFTER A YEAR, THE CONTRACT WAS WITHIN THE STATUTE OF FRAUDS AND THEREFORE MUST IN BE WRITING (FIRST DEPT).

The First Department determined the oral contract was within the statute of frauds because it was not susceptible of performance within one year. Plaintiff alleged he was entitled to 50% of the placement fee received by defendant for job candidates he referred to defendant, even if placement was made after a year:

The alleged oral agreement upon which plaintiff sues is within the statute of frauds, since plaintiff contends that when he refers a job candidate to defendant, he is entitled to 50% of the fee defendants receive for placing the candidate, even when the candidate is placed more than a year after plaintiff’s referral (General Obligations Law § 5-701[a][1] … ). As a result, because plaintiff has fully executed the contract while defendant’s obligation continues past a one-year period, the contract is not, by its terms, susceptible of performance within one year, and therefore must be in writing to be enforceable … . Although oral agreements that violate the statute of frauds are enforceable where the party to be charged admits having entered into the contract, defendant never admitted that it agreed to pay plaintiff a fee on placements occurring more than a year after a referral … . Birnbaum v Goldenberg Consulting Group, Inc., 2022 NY Slip Op 00042, First Dept 1-6-22

 

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DEFENDANT PROPERLY REJECTED THE MACHINES AS NONCONFORMING GOODS, PLAINTIFF DID NOT CURE THE NONCONFORMITY, AND DEFENDANT WAS ENTITLED TO CONSEQUENTIAL DAMAGES AND LOST PROFITS (SECOND DEPT). ​

The Second Department determined Supreme Court properly found that defendant had rejected the machines as nonconforming goods, plaintiff did not cure the nonconformity, and defendant was properly awarded consequential damages and lost profits:

… [T]he Supreme Court found … the defendant[] demonstrated that the plaintiff had breached express and implied warranties by showing that the machines which were delivered to [defendant] Expansion did not conform to the descriptions set forth in the invoice. The court determined that Expansion was entitled to damages in the principal sum of $53,298.75 for breach of express and implied warranties, representing the amount of lease payments it made on the machines, as well as damages in the principal sum of $2,852,430 for lost profits resulting from that breach. …

… [T]he evidence established that Expansion rejected the machines with particularity as required by UCC 2-605. …

… [W]hile Expansion’s rejection triggered the plaintiff’s right pursuant to UCC 2-A-513 to cure the alleged nonconformity, the … determination that the plaintiff failed to do so was warranted by the facts. …

… [T]he determination that, at the time the parties entered into the contract, damages for lost profits were within the contemplation of the parties is warranted by the facts. It was foreseeable that a breach on the part of the plaintiff with respect to delivering functioning machines would result in Expansion being unable to manufacture sufficient ammunition to fill existing orders, or to accept new orders, culminating in lost profits … . Mil-Spec Indus. Corp. v Expansion Indus., LLC, 2022 NY Slip Op 00035, Second Dept 1-5-22

 

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