You are here: / Contract Law
, ,

THE TRANSFER OF CERTAIN ASPECTS OF SELLER’S BUSINESS TO BUYER DID NOT MEET THE CRITERIA IN LABOR LAW 581; THEREFORE THE TRANSFER DID NOT TRIGGER THE TAKEOVER OF THE SELLER’S UNEMPLOYMENT INSURANCE EXPERIENCE ACCOUNT (THIRD DEPT).

The Third Department, reversing Supreme Court, determined that the HOP’s purchase of certain aspects of a competing business, Playground, did not trigger HOP’s takeover of Playground’s unemployment insurance experience account:

The statute provides that where a business has been transferred from one employer to another, either in whole or in part, the transferee shall take over and continue the unemployment insurance experience account of the transferor (see Labor Law § 581 [4] [a] …). A transfer, however, will not be deemed to have occurred “if the transferee has not assumed any of the transferring employer’s obligations, has not acquired any of the transferring employer’s good[]will, has not continued or resumed the business of the transferring employer either in the same establishment or elsewhere, and has not employed substantially the same employees as those of the transferring employer” … . To negate a transfer, all four of these requirements must be met … . …

… [U]ndisputed evidence was presented that, in connection with its purchase of assets from Playground, HOP did not assume any of Playground’s obligations, did not continue or resume operation of Playground’s screening room … and did not retain any of Playground’s employees. The sole basis upon which the Board concluded that a transfer had occurred was HOP’s alleged acquisition of Playground’s goodwill. The record, however, does not support the Board’s finding in this regard.

The asset purchase agreement did not identify goodwill as an asset encompassed by the agreement, nor was it specifically mentioned on the list of property set forth on schedule 2.1 of the agreement. Matter of HOP N.Y. Entertainment, LLC (Commissioner of Labor), 2021 NY Slip Op 03093, Third Dept 5-13-21

 

, , ,

PLAINTIFF BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 AND THE MORTGAGE IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff bank did not demonstrate compliance with the notice requirements of RPAPL 1304 and the mortgage. Therefore the bank’s motion for summary judgment in this foreclosure action should not have been granted:

… [T]he plaintiff failed to submit proof of the actual mailings, such as the affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure. Instead, the plaintiff relied on the affidavit of an employee of the plaintiff’s loan servicer, who did not attest that she had personal knowledge that the notices were mailed, or attest to a standard office mailing procedure designed to ensure that items are properly addressed and mailed … .

Likewise, relying on the same affidavit, the plaintiff failed to establish compliance with the requirements for a notice of default pursuant to sections 15 and 22 of the mortgage agreement. Statements in the employee’s affidavit, “which asserted that the notice of default was sent in accordance with the terms of the mortgage, [were] unsubstantiated and conclusory and . . . , even when considered together with the copy of the notice of default, failed to show that the required notice was in fact mailed by first class mail or actually delivered to the designated address if sent by other means, as required by the subject mortgage” … . U.S. Bank N.A. v Peykar, 2021 NY Slip Op 03077, Second Dept 5-12-21

 

,

DEFENDANT DOCTOR’S FAILURE TO APPEAR FOR THE NO-FAULT EXAMINATION UNDER OATH (EUO) REQUESTED BY THE INSURER JUSTIFIED THE DENIAL OF DEFENDANT’S CLAIMS FOR BENEFITS (FIRST DEPT).

The First Department, reversing Supreme Court, determined the surgeon’s failure to appear for the no-fault examination under oath (EUO) requested by the insurer voided the insurance policy:

Plaintiff sent defendant a timely request for an examination under oath (EUO) with respect to a claim for benefits in the amount of $6,106.56, for shoulder surgery performed by defendant on an individual that was a passenger in a vehicle involved in an accident, covered by a no-fault insurance policy issued by plaintiff. Defendant failed to appear and plaintiff denied all claims for benefits made by defendant.

The failure to appear for an EUO that was requested in a timely fashion by the insurer is a breach of a condition precedent to coverage and voids the policy ab initio … . The coverage defense applies to any claim and is not determined on a bill by bill basis … . The EUO was timely requested as to the second claim for benefits for the shoulder surgery, accordingly, defendant’s failure to appear at that EUO voided the policy ab initio as to all claims, and plaintiff’s cross motion for summary judgment should have been granted in its entirety. Unitrin Advantage Ins. Co. v Dowd, 2021 NY Slip Op 03012, First Dept 5-11-21

 

, ,

FORMER STUDENT’S ALLEGATIONS DEFENDANT COLLEGE BREACHED ITS AGREEMENT THAT IT WOULD NOT DISCLOSE ITS DISCIPLINARY PROCEEDINGS AGAINST THE STUDENT TO SCHOOLS TO WHICH THE STUDENT APPLIED FOR ADMISSION PROPERLY SURVIVED THE COLLEGE’S MOTION TO DISMISS; ADOPTING AND APPLYING THE HEIGHTENED STANDARD FOR DEFAMATION BY IMPLICATION, THE DEFAMATION CAUSE OF ACTION SHOULD HAVE BEEN DISMISSED (FOURTH DEPT).

The Fourth Department, modifying Supreme Court, determined defendant college breached its agreement with plaintiff-student regarding the disclosure of information about the school’s disciplinary proceedings alleging sexual misconduct. After finding the student had violated the code of student conduct the student was expelled. The student was then acquitted of criminal charges stemming from the same allegations. The student and the school entered an agreement prohibiting the school from disclosing information about the disciplinary proceedings to schools to which the student applied for admission. The complaint alleged the school breached that agreement and included a cause of action for defamation by implication. The breach of contract causes of action properly survived the motion to dismiss, but the defamation cause of action should have been dismissed:

” ‘Defamation by implication’ is premised not on direct statements but on false suggestions, impressions and implications arising from otherwise truthful statements” (id. at 380-381). We now join the other Departments in adopting the heightened legal standard for a claim of defamation by implication … . Under that standard, “[t]o survive a motion to dismiss a claim for defamation by implication where the factual statements at issue are substantially true, the plaintiff must make a rigorous showing that the language of the communication as a whole can be reasonably read both to impart a defamatory inference and to affirmatively suggest that the author intended or endorsed that inference” … . …

The disclosure that plaintiff was found responsible in a student disciplinary proceeding for sexual misconduct and assault as defined in a student code of conduct does not imply that there was a criminal proceeding … . …

 … [A]lthough plaintiff may wish that additional information from the College would have provided further context for the truthful information that was conveyed, the disclosure to Buffalo State did not imply anything false about plaintiff … . Bisimwa v St. John Fisher Coll., 2021 NY Slip Op 02962, Fourth Dept 5-7-21

 

, ,

PLAINTIFF RAISED GROUNDS TO INVALIDATE A RELEASE IN THIS TRAFFIC ACCIDENT CASE BASED ON FRAUD (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined plaintiff in this traffic accident case raised grounds to invalidate a release plaintiff had signed  based upon fraud:

Defendants met their initial burden of establishing that they were released from any claims by submitting the release executed by plaintiff … . The burden thus shifted to plaintiff to show that the release was voidable based on fraud … . Plaintiff submitted an affidavit in which she averred that, in the midst of negotiating a settlement of her personal injury claim for pain and suffering, a representative of Morgan’s insurer told her that, “under New York Law, [plaintiff] would not be able to sue . . . because [she] did not have any major surgeries or life-threatening injuries.” Plaintiff further averred that, based on those representations, she agreed to sign the release in exchange for $1,500. Accepting plaintiff’s allegations as true … , we conclude that plaintiff sufficiently alleged grounds on which to invalidate the release … . Cain-Henry v Shot, 2021 NY Slip Op 02961, Fourth Dept 5-7-21

 

, ,

QUESTION OF FACT WHETHER A LADDER WAS INTENDED FOR USE AS A STAGE PROP BY ACTORS AS OPPOSED TO AN OSHA COMPLIANT LADDER; EVEN WHERE A LABOR LAW 200 ACTION WILL NOT LIE, A COMMON-LAW NEGLIGENCE CAUSE OF ACTION MAY BE VIABLE; HERE IT WAS ALLEGED DEFENDANT LAUNCHED AN INSTRUMENT OF HARM BY ALTERING THE LADDER (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined that the Labor Law 200 cause of action against Center Line should have been dismissed but the common law negligence cause of action properly survived summary judgment. Although the decision doesn’t spell it out, it appears that defendant Center Line altered the ladder in question by gluing on an extra rung. Apparently the ladder was to be used by actors and Center Line argued it was a stage prop and was not intended for use an OSHA compliant ladder. The viable contract-based “Espinal” negligence theory was based upon launching an instrument of harm (altering the ladder):

Even assuming that Center Line is a proper Labor Law § 200 defendant, it cannot be held liable under the statute. This case is a means and methods of work case, and there is no proof that Center Line had authority to supervise and control plaintiff’s work … .

A claim for common-law negligence may lie even though there is no Labor Law § 200 liability … . A triable issue of fact exists as to whether Center Line negligently created or exacerbated a dangerous condition so as to have “launche[d] a force or instrument of harm” … . Although Center Line augmented the ladder as directed by Production Core, a triable issue of fact exists as to whether Center Line could have reasonably anticipated that the gluing of the rung to the top of the ladder would pose a hazard and likely to cause injury … . While plaintiff and the codefendants claim that Center Line dangerously altered the ladder despite knowing that the ladder was structural and climbable, Center Line claims that the ladder was a prop ladder that was not meant to be OSHA compliant, and that it augmented the ladder in reliance on Production Core’s assurances that the top portion of the ladder would not be ascended by the actors. Such raises an issue of fact for the jury to decide. Mullins v Center Line Studios, Inc., 2021 NY Slip Op 02756, First Dept 5-4-21

 

, ,

IN AN ACTION BY CATERING WAITSTAFF SEEKING TIPS ALLEGEDLY WITHHELD BY THE EMPLOYER IN VIOLATION OF THE LABOR LAW, THE EMPLOYER CANNOT SEEK INDEMNIFICATION FROM A CONTRACTOR WHICH SUPPLIED CATERING STAFF TO THE EMPLOYER (FIRST DEPT). ​

The First Department, in a full-fledged opinion by Justice Kern, in a matter of first impression, determined that an employer (Great Performances) cannot seek indemnification from from a contractor (Kensington) for alleged violations of the Labor Law. The plaintiffs alleged Great Performances kept tips which should have gone to tie waitstaff. Kensington had supplied staff to Great Performances for catered events:

We … find that Great Performances’ third-party complaint was properly dismissed as against Kensington on the ground that an employer has no right to contractual indemnification from a third party for claims brought pursuant to NYLL [New York Labor Law] 196-d because indemnification under that statute, whether contractual or otherwise, is against public policy. * * *

The policies behind the statute sought to ensure that employers be held accountable for any wage violations and are not permitted to contract away liability. Indeed, holding that an employer has a right to contractual indemnification from a third party for claims brought pursuant to NYLL 196-d would undermine the employer’s willingness to comply with its obligations under the statute. Robinson v Great Performances/Artists as Waitresses, Inc., 2021 NY Slip Op 02769, First Dept 5-4-21

 

,

THE COMPLAINT STATED CAUSES OF ACTION FOR CONSTRUCTIVE TRUST AND PROMISSORY ESTOPPEL; THE UNJUST ENRICHMENT ELEMENT OF THE CONSTRUCTIVE TRUST WAS NOT PRECLUDED BY A CONTRACT SIGNED BY PLAINTIFF AS A TRUSTEE (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, over a partial dissent, determined the complaint stated a cause of action for a constructive trust, the unjust enrichment element of the constructive trust was not precluded by a contract, and the alleged promise to take care of plaintiff in return for an interest in an LLC was clear and unambiguous enough to support a cause of action for promissory estoppel:

According to plaintiff, defendant [plaintiff’s daughter] had promised that, if plaintiff created the LLC and gave her a 90% membership interest in the LLC and control as sole manager, she would “help [plaintiff] manage his businesses and real property interests, help take care of [plaintiff and his wife], help ensure their financial well-being, and visit them often.” After plaintiff’s wife died, defendant allegedly ended all direct communication with plaintiff and gave “sporadic and cursory” attention to plaintiff’s business and real property interests, prompting him to commence this action. * * *

Inasmuch as the amended complaint alleged a confidential or fiduciary relation, a promise, and a transfer made in reliance on that promise, the issue concerning the [constructive trust] cause of action is whether the amended complaint adequately alleged unjust enrichment.

“[I]n order to sustain an unjust enrichment claim, ‘[a] plaintiff must show that (1) the other party was enriched, (2) at [the plaintiff’s] expense, and (3) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered’ ” … . … Where the parties executed a valid and enforceable written contract governing a particular subject matter, recovery on a theory of unjust enrichment for events arising out of that subject matter is ordinarily precluded” … .

Here, there is a written contract that covers the particular subject matter, i.e., the LLC’s operating agreement. That agreement, however, was executed by defendant and plaintiff in his role as trustee. … Inasmuch as plaintiff, individually, was not a party to the operating agreement, his first cause of action, insofar as it was asserted by him, individually, is not precluded by the written contract … . Van Scoter v Porter, 2021 NY Slip Op 02692, Fourth Dept 4-30-21

 

,

QUESTIONS OF FACT ABOUT WHETHER THE INSURER IS ESTOPPED FROM DENYING COVERAGE TO A PARTY LISTED AS AN ADDITIONAL INSURED IN A CERTIFICATE OF INSURANCE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined there were questions of fact about plaintiff’s reliance on a certificate of insurance and whether the certificate was issued by the carrier or its agent. Although a certificate of insurance is not a contract, the carrier may be estopped from denying coverage if the party named as an additional insured in the certificate relied on the certificate and the certificate was issued by the insurer or its agent:

“It is well established that a certificate of insurance, by itself, does not confer insurance coverage, particularly [where, as here,] the certificate expressly provides that it is issued as a matter of information only and confers no rights upon the certificate holder [and] does not amend, extend or alter the coverage afforded by the policies” … . “A certificate of insurance is only evidence of a carrier’s intent to provide coverage but is not a contract to insure the designated party nor is it conclusive proof, standing alone, that such a contract exists” … .

” ‘Nevertheless, an insurance company that issues a certificate of insurance naming a particular party as an additional insured may be estopped from denying coverage to that party where the party reasonably relies on the certificate of insurance to its detriment’ ” … ” ‘For estoppel based upon the issuance of a certificate of insurance to apply, however, the certificate must have been issued by the insurer itself or by an agent of the insurer’ ” … . County of Erie v Gateway-Longview, Inc., 2021 NY Slip Op 02631, Fourth Dept 4-30-21

 

, ,

THE CONTINUING WRONG DOCTRINE APPLIES TO THIS COMPLEX BREACH OF CONTRACT ACTION SUCH THAT EACH BREACH WAS AN ACTIONABLE EVENT; THEREFORE THE STATUTE OF LIMITATIONS DID NOT START RUNNING FOR ALL SUBSEQUENT BREACHES WHEN THE FIRST BREACH OCCURRED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Mazzarelli, over a two-justice dissent, reversing Supreme Court, determined the continuing wrong doctrine applied to this breach of contract action such that each breach was actionable and, therefore, the statute of limitations for all subsequent breaches was not triggered by the first breach. The subjects of the contracts were commercial mortgage-backed securities (CMBS). The complaint alleged defendant CWCI breached a collateral management agreement (CMA):

Generally speaking, a claim accrues for statute of limitations purposes when “all of the factual circumstances necessary to establish a right of action have occurred, so that the plaintiff would be entitled to relief” … . However, the mere fact that a claim has accrued and the time to bring an action on it has commenced to run does not mean that a new claim, with a new limitations period, may not arise out of a new set of facts that forms part of a series with the original wrong. [Plaintiff] maintains that the allegations against CWCI comprise such a series of individual wrongs. Thus, it relies on cases such as Bulova Watch Co. v Celotex Corp. (46 NY2d 606 [1979]). There, a new claim, with a new limitations period, was held to have accrued each time the plaintiff, the obligee under a bond that guaranteed that the defendant roofer would make repairs necessary to ensure the watertightness of the plaintiff’s roof over the 20-year life of the bond, asked the defendant, to no avail, to repair a leak. Accordingly, the plaintiff’s failure to commence suit within the limitations period based on the initial leak did not bar the action. * * *

We find that the continuing wrong doctrine does apply to this case. CWCapital Cobalt VR Ltd. v CWCapital Invs. LLC, 2021 NY Slip Op 02487, First Dept 4-27-21

 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy