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THE COVID-19 PANDEMIC DID NOT ENTITLE PLAINTIFF COMMERCIAL TENANT TO RENT ABATEMENT UNDER THE LEASE OR RESCISSION BASED UPON FRUSTRATION OF PURPOSE OR IMPOSSIBILITY (FIRST DEPT).

The First Department, reversing Supreme Court, determined that the COVID-19 pandemic did not entitle plaintiff to rent abatement under the lease and did support rescission of the lease based upon frustration of purpose or impossibility:

… [P]laintiff is not entitled to a rent abatement under the lease “due to loss of use of all or a portion of the Demised Premises due to [a] Casualty[.]” That portion of the lease refers to singular incidents causing physical damage to the premises and does not contemplate loss of use due to a pandemic or resulting government lockdown … . …

The doctrine of frustration of purpose does not apply as a matter of law where, as here, the tenant was not “completely deprived of the benefit of its bargain” (… 558 Seventh Ave. Corp. v Times Sq. Photo Inc., 194 AD3d 561 [1st Dept 2021] [finding that reduced revenues did not frustrate the purpose of the lease]). Furthermore, plaintiff’s assertion that Executive Order 202.8 [re: COVID-related suspension of laws] rendered it objectively impossible to perform its operations as a retail store as required by the lease is unavailing as defendant correctly points out that by the time plaintiff filed its complaint in July 2020, this was no longer the case … . Gap, Inc. v 170 Broadway Retail Owner, LLC, 2021 NY Slip Op 04115, First Dept 6-29-21

 

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THE HARASSMENT-RELATED SPEECH PROHIBITIONS IN THE ORDER OF PROTECTION DID NOT VIOLATE THE FIRST AMENDMENT BUT THE PROVISION PROHIBITING RESPONDENT FROM DISCSUSSING THE PETITIONER OR THE FAMILY OFFENSE PROCEEDING WAS STRUCK FROM THE ORDER OF PROTECTION AS UNNECESSARY (FIRST DEPT).

The First Department affirmed the finding respondent committed the family offense of harassment by sending email about petitioner’s personal matters to 53 people. Although the harassment prohibitions in the order of protection did not violate the Firs Amendment, the provision in the order of protection which prohibited respondent from discussing the petitioner or the proceedings was struck as unnecessary:

Respondent contends that the provision of the order prohibiting him from discussing petitioner or the case with anyone familiar with petitioner violated his First Amendment right to freedom of speech. To be sure, respondent’s repeatedly sending petitioner emails articulating his unwanted opinions about her, her mother and their family dynamic or making petitioner aware of the emails he sent to several third parties broadcasting those opinions by blind-copying her on those messages is not protected by the First Amendment, because those repeated and unwanted communications serve no legitimate purpose … . However, because the harassment is adequately addressed by the provision that respondent stay away from petitioner and not contact her, we delete the prohibition against his discussing petitioner or the proceeding … . Matter of Sophia M. v James M., 2021 NY Slip Op 03992, First Dept 6-22-21

 

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THE AMBIGUITY IN THE HOME INSURANCE POLICY WAS NOT CLEARED UP BY EXTRINSIC EVIDENCE AND MUST BE RESOLVED AGAINST THE INSURER; THE INSURER SHOULD NOT HAVE DISCLAIMED COVERAGE FOR WATER DAMAGE CAUSED BY FROZEN PIPES (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the insurer should not have disclaimed coverage for water damage caused by frozen pipes in plaintiffs’ seasonal home. The case turned on the whether the plaintiffs took “reasonable care” (within the meaning of the policy) to maintain the heat in the house:

… [P]laintiffs established as follows: the home’s heating system was recently installed, was regularly maintained, and had never required repairs; Robert P. McAleavey (plaintiff) winterized the property by setting the internal temperature to approximately 50 degrees in the late fall of 2017; plaintiff checked on the home approximately 15 times during the winter of 2017-2018; during those visits, plaintiff ensured that the temperature was appropriate, that no windows were broken, that the toilets flushed, and that the water ran; and plaintiff last visited the house on January 11 or 12, 2018, at which point the interior temperature was “comfortable.” Although plaintiff was unable to visit the property between mid-January and late February 2018 due to a broken leg and his resulting hospitalization, plaintiffs’ submissions established that, during such period, they had no notice or reason to suspect that anything was wrong with the premises or the heating system. Moreover, plaintiffs’ neighbors and realtor periodically checked on the property’s exterior.

In our view, the term “reasonable care” as used in the policy is ambiguous inasmuch as it is susceptible of at least two reasonable interpretations, at least one of which supports plaintiffs’ contention that they exercised reasonable care, and this ambiguity was not resolved by extrinsic evidence … .

” ‘[U]nder [these] circumstances, the ambiguity must be resolved against the insurer which drafted the contract’ ” … . We thus conclude that plaintiff’s loss is specifically covered under the policy and that the exclusion relied on by defendant does not unambiguously apply in this case … . McAleavey v Chautauqua Patrons Ins. Co., 2021 NY Slip Op 03954, Fourth Dept 6-17-21

 

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PLAINTIFF RECEIVED THE FULL BENEFIT OF A LOAN AGREEMENT; THE DOCTRINE OF EQUITABLE ESTOPPEL PRECLUDED PLAINTIFF’S CLAIM THE LOAN AGREEMENT IS UNENFORCEABLE BECAUSE THE UNDERLYING RECORDED MORTGAGE DID NOT BEAR HIS SIGNATURE (SECOND DEPT).

The Second Department determined the defendants” motion to dismiss was properly granted. Plaintiff contended the underlying mortgage which was part of a loan agreement was void because it was not signed, rendering the loan agreement unenforceable. Plaintiff had however accepted the proceeds of the loan and therefore was precluded from contesting the agreement by the doctrine of equitable estoppel:

… [T]he plaintiff does not … deny that he executed a copy of the mortgage in accordance with the loan agreement, he merely contends that the copy that was recorded … , did not bear his signature. The plaintiff contends that this defect rendered the recorded mortgage void ab initio and therefore unenforceable … . * * *

… [T]he defendants’ uncontradicted submissions demonstrated that the plaintiff “had the full benefit” of the loan agreement … . … [T]he plaintiff does not seek to rescind the loan agreement, but he nevertheless seeks to recoup “all closing costs paid to Defendants with any payments to [Citibank] since June 22, 2007,” the date the loan agreement was executed … . Under the circumstances, the doctrine of equitable estoppel precludes the plaintiff from asserting that the recorded mortgage was void … . Bernard v Citibank, N.A., 2021 NY Slip Op 03822, Second Dept 6-16-21

 

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THE CITY OF ROCHESTER LOCAL LAW WHICH PURPORTED TO TRANSFER THE POWER TO DISCIPLINE POLICE OFFICERS TO THE POLICE ACCOUNTABILITY BOARD (PAB) IS INVALID AND CANNOT BE ENFORCED (FOURTH DEPT).

The Fourth Department, in a full-fledged opinion by Justice NeMoyer, determined the City of Rochester Local Law which transferred the power to discipline police officers from the police chief to the Police Accountability Board (PAB) is invalid and cannot be enforced:

… [t]he challenged Local Law No. 2 necessarily falls insofar as it takes police discipline out of collective bargaining because, in that respect, it conflicts with the general law mandating collective bargaining over police discipline (see Civil Service Law § 204 [2] … ). As the Court of Appeals has explained, “a local law is inconsistent [with the general law] where local laws prohibit what would be permissible under State law”… , and by creating a permanent administrative apparatus for disciplining police officers that is impervious to alteration or modification at the bargaining table, Local Law No. 2 necessarily and structurally prohibits something that … is statutorily mandated for the City of Rochester: collective bargaining of police discipline. The court therefore properly invalidated Local Law No. 2 insofar as it imbues PAB with disciplinary authority over Rochester police officers without regard to collective bargaining. Matter of Rochester Police Locust Club, Inc. v City of Rochester, 2021 NY Slip Op 03787, Fourth Dept 6-11-21

 

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THE FORECLOSURE ACTION WAS PROPERLY DISMSSED AS TIME-BARRED; RPAPL 1304 IS A CONDITION PRECEDENT, NOT A STATUTORY PROHIBITION WHICH WOULD TOLL THE STATUTE OF LIMITATIONS (SECOND DEPT).

The Second Department, over a two-justice partial dissent, determined the defendant’s motion to dismiss the foreclosure action as time-barred, cancel the notice of pendency and cancel and discharge the mortgage (RPAPL article 15) was properly granted. The decision is too complex and factually specific to fairly summarize here (but well worth reading). One of the issues addressed was the difference between a statutory prohibition, which would toll the statute of limitations, and a condition precedent, which would not:

CPLR 204(a) provides that “[w]here the commencement of an action has been stayed by a court or by a statutory prohibition, the duration of the stay is not part of the time within which the action must be commenced” … . RPAPL 1304, which the plaintiff argues is a “statutory prohibition,” requires that “at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower . . . , including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower.” RPAPL 1304 describes the required content and manner of service of the notice. “Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action” … .

“A statutory prohibition and a condition precedent are separate concepts” … . The salient feature of a “statutory prohibition” is the plaintiff’s lack of control. Since a plaintiff has complete control over the acts necessary to effectuate compliance with a condition precedent, a condition precedent is not a statutory prohibition … . Thus, because the plaintiff had control over when to serve the RPAPL 1304 notice, and could have done so at least 90 days prior to the expiration of the statute of limitations, RPAPL 1304 is not a statutory prohibition within the meaning of CPLR 204(a) … . Everhome Mtge. Co. v Aber, 2021 NY Slip Op 03574, Second Dept 6-9-21

 

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PLAINTIFF FAILED TO DEMONSTRATE STANDING TO SUE UNDER AN INSTALLMENT CONTRACT ALLEGEDLY ASSIGNED TO HIM; THE DOCUMENTS UPON WHICH PLAINTIFF RELIED DID NOT MEET THE CRITERIA FOR THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff should not have been granted summary judgment on an installment contract for the purchase of a car which plaintiff alleged was assigned to him. Plaintiff did not demonstrate the documents he relied on for standing fit the criteria for the business records exception to the hearsay rule:

“A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker’s business practices and procedures” … . As a general rule, “the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records” … . “However, such records may be admitted into evidence if the recipient can establish personal knowledge of the maker’s business practices and procedures, or establish that the records provided by the maker were incorporated into the recipient’s own records and routinely relied upon by the recipient in its own business” … .

Here, Dunn [plaintiff’s record manager] failed to attest to her personal knowledge of the business practices of either Baron Auto City, Inc., [the dealer which sold the car] or the entity to which Baron Auto City, Inc., allegedly assigned the installment contract. She also failed to allege that either the installment contract or the initial assignment of the installment contract to the third party were incorporated into the plaintiff’s records and routinely relied upon by the plaintiff in its business. Accordingly, under the circumstances, Dunn’s affidavit was insufficient to lay a proper foundation for either the installment contract or the initial assignment of the installment contract to the third party … . Autovest, LLC v Cassamajor, 2021 NY Slip Op 03570, Second Dept 6-9-21

 

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THE ARBITRATOR EXCEEDED HIS AUTHORITY UNDER THE COLLECTIVE BARGAINING AGREEMENT BY DISMISSING TWO CHARGES BECAUSE OF THEIR PUPORTED FACIAL DEFICIENCIES AND FAILING TO ASSESSS THE EVIDENCE IN SUPPORT OF THE CHARGES (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the arbitrator’s dismissal of two of the disciplinary charges against a corrections officer (Norde) based solely on alleged defects in the charges, as opposed to the relevant evidence, exceeded the arbitrator’s authority under the collective bargaining agreement (CBA):

… [R]espondent complied with the CBA by pleading in the notice of discipline that the exception [to the usual time limits] applied, and by citing and quoting the language of the specific criminal statute that Norde had allegedly violated; respondent would then need to prove the elements of that statute at the hearing to establish the basis of the timeliness exception … . Accordingly, by requiring respondent to prove the underlying crime in the notice to support the CBA’s time exception, the arbitrator essentially added a term to the CBA and, thus, exceeded his authority … . …

… [T]he arbitrator modified the CBA and exceeded his authority by dismissing the first two charges as facially deficient due to an alleged lack of particularization in the notice of discipline. As the charges in the notice were sufficiently stated, the arbitrator should have rendered a determination as to Norde’s guilt based on the evidence presented at the hearing. Matter of New York State Corr. Officers & Police Benevolent Assn., Inc. (New York State Dept. of Corr. & Community Supervision), 2021 NY Slip Op 03504, Third Dept 6-3-21

 

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PLAINTIFFS, ATTORNEYS PRACTICING LANDLORD-TENANT LAW, ALLEGED DEFENDANT PUBLISHER OF “NEW YORK LANDLORD-TENANT LAW” OMITTED OR INACCURATELY PRESENTED SOME OF THE RELEVANT STATUTES AND REGULATIONS AND THEREFORE VIOLATED GENERAL BUSINESS LAW 349 (DECEPTIVE BUSINESS PRACTICES); THE COMPLAINT FAILED TO ADEQUATELY ALLEGE DEFENDANT’S ACT OR PRACTICE WAS MATERIALLY MISLEADING (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Rivera, over a dissent, determined plaintiffs did not state a cause of action for deceptive business practices (General Business Law (GBL) 349) against the defendant-publisher of a legal resource book, “New York Landlord-Tenant Law” (commonly called the “Tanbook”). Plaintiffs, attorneys who practice landlord-tenant law, alleged the Tanbook, which is published annually, purported to include all the relevant statutes and regulations but, in fact, omitted or inaccurately presented some statutes and regulations. The Court of Appeals found that the complaint adequately alleged a cause of action that was consumer-oriented, but did not adequately allege defendant’s act or practice was misleading in a material way:

… [P]laintiffs’ cause of action is based on purchases of yearly editions of the Tanbook, under a sales agreement that charged extra for any updates of the year’s materials contained in the corresponding edition. Plaintiffs’ allegations are limited to omissions and inaccuracies in a section of the Tanbook they knew was subject to legislative amendment, which they concede were corrected in the 2017 edition after the errors were brought to defendant’s attention, and which were specifically contemplated by defendant’s express disclaimer of the currentness of the Tanbook’s contents. Under the circumstances, plaintiffs, or any reasonable consumer, could not have been materially misled to believe that defendant guaranteed Part III of the Tanbook was complete and accurate at any given time. Thus, because plaintiffs failed to adequately plead this element, their GBL § 349 cause of action was properly dismissed. Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v Matthew Bender & Co., Inc., 2021 NY Slip Op 03485, CtApp 6-3-21

 

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COLLATERAL ESTOPPEL PRECLUDED THE GENERAL CONTRACTOR’S INDEMNIFICATION ACTION AGAINST A SUBCONTRACTOR BECAUSE THE SUBCONTRACTOR HAD BEEN GRANTED SUMMARY JUDGMENT IN THE UNDERLYING PERSONAL INJURY ACTION BROUGHT BY THE GENERAL CONTRACTOR’S EMPLOYEES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that Conrad Geoscience Corp was not required to indemnify Kento, the general contractor for the removal of contaminated soil. Kento had hired Conrad to draw up environmental safety plans. The underlying lawsuit was brought by four Kento dump truck drivers who experienced dizziness during work and were treated at a hospital. Conrad won its motion for summary judgment in the underlying action because it did not exercise and supervisory control over the work done by the Kento employees. Collateral estoppel precluded Kento’s indemnification action against Conrad:

Several days prior to the Supreme Court’s denial of Conrad’s motion for summary judgment in this action, the court had granted that branch of Conrad’s motion, made in the underlying action commenced by the Ketco employees, which was for summary judgment dismissing the complaint in that action insofar as asserted against it. That determination was affirmed by this Court in a prior appeal, in which we concluded, “Conrad submitted evidence that, as the entity charged with creating environmental safety plans, it exercised no supervisory authority at the highway construction project work site and owed no duty of care to the plaintiffs. In opposition, the plaintiffs failed to raise a triable issue of fact” … . Based upon Ketco’s concession in its papers submitted in opposition to Conrad’s motion for summary judgment in this action, Conrad contends, in effect, that Ketco is collaterally estopped from seeking contractual indemnification against it. “Collateral estoppel precludes a party from relitigating in a subsequent action or proceeding an issue raised in a prior action or proceeding and decided against that party or those in privity” … . Privity may be found where a nonparty to a prior litigation has “a relationship with a party to the prior litigation such that his [or her] own rights or obligations in the subsequent proceeding are conditioned in one way or another on, or derivative of, the rights of the party to the prior litigation” … . Here, we agree with Conrad’s contention that, under the circumstances, Ketco, which was clearly in privity with the Ketco employees, is bound by the prior determination of Conrad’s nonliability for the Ketco employees’ alleged injuries. New York State Thruway Auth. v Ketco, Inc., 2021 NY Slip Op 03462, Second Dept 6-2-21

 

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