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You are here: Home1 / Contract Law
Civil Procedure, Contract Law, Defamation, Immunity, Privilege

THE LITIGATION PRIVILEGE WHICH APPLIES TO DEFAMATION ACTIONS WAS NOT APPLICABLE HERE IN THIS BREACH OF CONTRACT ACTION ALLEGING BREACH OF CONFIDENTIALITY AND NONDISPARAGEMENT PROVISIONS; DEFENDANT ALLEGEDLY THREATENED TO PROVIDE DAMAGING TESTIMONY IN ANOTHER ACTION INVOLVING PLAINTIFFS, IN WHICH DEFENDANT WAS NOT A PARTY, IF DEFENDANT’S DEMANDS WERE NOT MET (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant was not entitled to immunity in this breach of contract action alleging breach of confidentiality and nondisparagement provisions. The immunity and privilege which applies to statements made in defamation litigation does not apply in breach of contract litigation:

Plaintiffs allege that defendant breached the confidentiality and nondisparagement provisions of their agreement when he threatened to provide damaging testimony in a separate action between plaintiffs and Reebok (a litigation to which defendant was not a party) if his demands in an unrelated arbitration with plaintiffs were not accepted. Plaintiffs further allege that when his demands were rejected, defendant acted on his threats, contacted Reebok, and offered to provide damaging false testimony in that action.

Defendant … argues … that the Court of Appeals’ recent holding in Gottwald v Sebert (40 NY3d 240 [2023]) bars plaintiffs’ action. In Gottwald, the court held that there is no “sham exception” to the litigation privilege in a defamation action, thus conferring absolute litigation privilege no matter the motivation for the suit … . The motion court agreed that Gottwald barred plaintiff’s action and granted defendant summary judgment on that basis.

Gottwald specifically holds that “absolute immunity from liability for defamation exists for . . . statements made . . . in connection with a proceeding before a court when such words and writings are material and pertinent to the questions involved” … . However, here, plaintiffs’ sole cause of action is for breach of contract, not defamation, and thus, Gottwald is not applicable. Moreover, the absolute litigation privilege granted by the Gottwald court was conferred upon parties to the suit. Gottwald does not speak to whether that privilege extends to individuals ancillary or collateral to the litigation, such as a potential witness.  TRB Acquisitions LLC v Yedid, 2025 NY Slip Op 03872, First Dept 6-26-25

Practice Point: The litigation privilege which applies in defamation actions was not applicable here in this breach of contract action where defendant threatened to give damaging testimony in another action involving plaintiffs in which defendant was not a party.

 

June 26, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-06-26 10:00:542025-06-30 07:46:20THE LITIGATION PRIVILEGE WHICH APPLIES TO DEFAMATION ACTIONS WAS NOT APPLICABLE HERE IN THIS BREACH OF CONTRACT ACTION ALLEGING BREACH OF CONFIDENTIALITY AND NONDISPARAGEMENT PROVISIONS; DEFENDANT ALLEGEDLY THREATENED TO PROVIDE DAMAGING TESTIMONY IN ANOTHER ACTION INVOLVING PLAINTIFFS, IN WHICH DEFENDANT WAS NOT A PARTY, IF DEFENDANT’S DEMANDS WERE NOT MET (FIRST DEPT).
Contract Law, Employment Law, Insurance Law, Municipal Law

THE DOCUMENTS RELIED UPON BY RETIRED NEW YORK CITY EMPLOYEES TO PROVE THE CITY PROMISED TO PROVIDE THEM WITH MEDICARE SUPPLEMENTAL INSURANCE COVERAGE FOR LIFE DID NOT DEMONSTRATE A CLEAR AND UNAMBIGUOUS PROMISE; THEREFORE THE RETIREES WERE NOT ENTITLED TO JUDGMENT ON THEIR PROMISSORY ESTOPPEL CAUSE OF ACTION (CT APP).

The Court of Appeals, reversing the Appellate Division, in a full-fledged opinion by Judge Troutman, determined the petitioners were not entitled to judgment on the promissory estoppel cause of action. Petitioners are retired New York City employees who argued the city had promised to provide them with Medicare supplemental insurance coverage for life. In 2021 the city made significant changes to its health benefits program, discontinuing its most popular program, Senior Care, and most other options, and enrolling retirees in a Medicare Advantage Plan (MAP) managed by Aetna Life Insurance Company:

To support the allegation of a clear and unambiguous promise of Medicare supplemental insurance coverage for life, petitioners submitted copies of Summary Program Descriptions (SPDs) that the City provides its employees and retirees on an annual basis to inform them of their health insurance options. * * *

The SPDs themselves contain nothing that could be construed as a clear and unambiguous promise of Medicare supplemental insurance coverage for life. To the contrary, we agree with the City that the language in the SPDs is descriptive and for informational purposes only. The language on which petitioners rely—”becomes eligible,” “is provided,” “provides,” and “supplements”—is in the present tense. The descriptive nature of the SPD is reflected in the title of the document—Summary Program Description—and its informational nature is also clear from the context of the SPD, the purpose of which is to explain benefits for the upcoming year. Indeed, annual SPDs are necessary only because benefits change from year to year, a fact petitioners do not contest. Petitioners rely heavily on the phrase “and thereafter” in the SPDs as conclusive evidence of a continuing promise, but read in context this language is used only to explain when someone is eligible for Medicare and not in reference to any promise of future benefits. To the extent that one might infer a commitment of sorts from the SPDs’ language, it does not rise to the level of a clear and unambiguous promise that the City would pay for Medigap coverage, as opposed to some other form of health insurance coverage, for the rest of every retiree’s life. Matter of Bentkowski v City of New York, 2025 NY Slip Op 03690, CtApp 6-18-25

Practice Point: Consult this opinion for insight into the proof requirements for a “clear and unambiguous promise,” in the context of promissory estoppel.

 

June 18, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-06-18 16:00:292025-06-20 17:03:31THE DOCUMENTS RELIED UPON BY RETIRED NEW YORK CITY EMPLOYEES TO PROVE THE CITY PROMISED TO PROVIDE THEM WITH MEDICARE SUPPLEMENTAL INSURANCE COVERAGE FOR LIFE DID NOT DEMONSTRATE A CLEAR AND UNAMBIGUOUS PROMISE; THEREFORE THE RETIREES WERE NOT ENTITLED TO JUDGMENT ON THEIR PROMISSORY ESTOPPEL CAUSE OF ACTION (CT APP).
Appeals, Arbitration, Civil Procedure, Contract Law, Negligence, Trusts and Estates

PLAINTIFF’S DECEDENT WAS KILLED WHEN THROWN FROM A RENTED MOPED; THE RENTAL AGREEMENT INCLUDED AN ARBITRATION CLAUSE; THE NEGLIGENCE CAUSES OF ACTION ARE SUBJECT TO THE ARBITRATION CLAUSE; HOWEVER, THE WRONGFUL DEATH CAUSE OF ACTION IS NOT SUBJECT TO THE ARBITRATION CLAUSE; NEGLIGENCE AND WRONGFUL-DEATH CAUSES OF ACTION ARE DISTINCT AND ADDRESS DIFFERENT INJURIES; THE WINNING ISSUE WAS RAISED FOR THE FIRST TIME ON APPEAL (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice McCormack, determined the plaintiffs in this wrongful death action, who are the parents of plaintiffs’ decedent and the administrators of decedent’s estate, are not bound by the decedent’s agreement to arbitrate. The decedent rented an electric moped from defendant Ravel by downloading an app with an arbitration clause. Decedent was killed when he was thrown from the moped and struck by a car. All agreed that the negligence causes of action were subject to the arbitration clause. Plaintiffs successfully argued the wrongful death action is distinct from the negligence actions and is not subject to the arbitration clause. The winning argument was first raised on appeal. The court heard the appeal because it “present[ed] a pure question of law that appears on the face of the record and could not have been avoided if raised at the proper juncture” …:

Here, it is undisputed that the plaintiffs, individually, did not enter into an agreement with Revel to arbitrate. However, the plaintiffs are the administrators of the decedent’s estate, and the causes of action arise from the same incident that caused the decedent’s death. The issue, therefore, turns on the nature of wrongful death causes of action and whether they are derivative of negligence causes of action or independent of negligence causes of action. * * *

The law of this State is clear that a wrongful death cause of action is a separate and distinct cause of action to redress the injuries suffered by a decedent’s distributees as a result of the decedent’s death. “‘A cause of action to recover damages for wrongful death is a property right belonging solely to the distributees of the decedent and vests in them at the decedent’s death'” … . This is true even where no cause of action alleging negligence exists. * * * … [T]his Court [has] determined that a cause of action alleging wrongful death was not derivative of a negligence cause of action, but [is] an independent cause of action vested in the distributees. “… [T]he surviving personal injury action and the wrongful death cause of action … are different in many respects. The two causes of action exist in order to protect the rights of different classes of persons, and the measure of damages is entirely different” … . “Wrongful death actions are brought not to compensate the decedent or his [or her] estate for the pain and suffering attendant to the injury, but rather to recover, on behalf of decedent’s distributees, the pecuniary value of the decedent’s life” … . Further, the different causes of action accrue at different times. A negligence cause of action accrues at the time of the injury, while a wrongful death cause of action does not accrue until the decedent’s death, which can occur after the injury is sustained … . Marinos v Brahaj, 2025 NY Slip Op 03561, Second Dept 6-11-25

Practice Point: Negligence and wrongful death causes of action are distinct and address different injuries. Here an arbitration clause in a moped rental contract executed to by plaintiffs’ decedent was deemed to apply to the negligence causes of action stemming from the moped accident, but not to the related wrongful death cause of action.​

Practice Point: Consult this opinion for an example of when an issue raised for the first time on appeal will be considered by the appellate court.

 

June 11, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-06-11 10:32:582025-06-15 12:59:06PLAINTIFF’S DECEDENT WAS KILLED WHEN THROWN FROM A RENTED MOPED; THE RENTAL AGREEMENT INCLUDED AN ARBITRATION CLAUSE; THE NEGLIGENCE CAUSES OF ACTION ARE SUBJECT TO THE ARBITRATION CLAUSE; HOWEVER, THE WRONGFUL DEATH CAUSE OF ACTION IS NOT SUBJECT TO THE ARBITRATION CLAUSE; NEGLIGENCE AND WRONGFUL-DEATH CAUSES OF ACTION ARE DISTINCT AND ADDRESS DIFFERENT INJURIES; THE WINNING ISSUE WAS RAISED FOR THE FIRST TIME ON APPEAL (SECOND DEPT).
Contract Law, Fraud, Negligence

PLAINTIFF IN THIS TRAFFIC ACCIDENT CASE RAISED QUESTIONS OF FACT ABOUT WHETHER THE RELEASE HE SIGNED WAS INVALID DUE TO MUTUAL MISTAKE ABOUT THE EXISTENCE OF LUMBAR DISC INJURIES AND LEFT HIP DEGENERATIVE JOINT DISEASE; IN ADDITION, PLAINTIFF RAISED QUESTIONS OF FACT ABOUT WHETHER THE RELEASE WAS INVALID BECAUSE IT WAS “NOT FAIRLY AND KNOWINGLY MADE;” CRITERIA EXPLAINED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined plaintiff had raised questions of fact the validity of the release he signed in this traffic accident case:

A plaintiff seeking to invalidate a release on the ground that there was a mutual mistake with respect to the extent of the injuries that the plaintiff sustained must establish that, at the time the release was executed, “the parties were under ‘[a] mistaken belief as to the nonexistence of [a] presently existing injury’ ” … . “[I]n resolving claims of mutual mistake as to injury at the time of release, there has been delineated a sharp distinction between injuries unknown to the parties and mistake as to the consequence of a known injury” … . “A mistaken belief as to the nonexistence of presently existing injury is a prerequisite to avoidance of a release” … , whereas “[i]f the injury is known, and the mistake . . . is merely as to the consequence, future course, or sequelae of [the] known injury, then the release will stand” … . “Even where a releasor has knowledge of the causative trauma, . . . there must be actual knowledge of the injury. Knowledge of injury to an area of the body cannot cover injury of a different type and gravity” … . Accepting the facts as alleged in the complaint as true and according plaintiff the benefit of every possible favorable inference … , we agree with plaintiff that he sufficiently alleged facts on which to invalidate the release on the ground of mutual mistake inasmuch as, despite the fact that at the time the release was signed plaintiff had pain in the cervical spine and left hip and a diagnosis of a cervical strain, plaintiff alleged that neither party was aware of plaintiff’s lumbar disc injuries or left hip degenerative joint disease at that time … .

A plaintiff seeking to invalidate a release on the ground that it was not fairly and knowingly entered into must establish that “the release was signed by the plaintiff under circumstances that indicate unfairness, [or that] it was not ‘fairly and knowingly’ made” … . Again accepting the facts as alleged in the complaint as true and according plaintiff the benefit of every possible favorable inference … , we agree with plaintiff that, in the complaint and his affidavit in opposition to the motion, he sufficiently alleged facts on which to invalidate the release on the ground of whether the release was fairly and knowingly entered into inasmuch as plaintiff averred in his affidavit in opposition to the motion that, inter alia, he signed the release a short time after the accident occurred, he is unable to fluently read, understand or speak English, he did not understand the release, at the time he signed the release he did not have an attorney, he was not provided with an interpretation of the release, and he needed money for a vehicle in order to attend medical appointments … . Pastrana-Ortiz v Wemple, 2025 NY Slip Op 03425, Fourth Dept 6-6-25

Practice Point: Consult this decision for explanations of the criteria for invalidating a release (1) due to fraud, (2) due to mutual mistake, and (3) because it was “not fairly and knowingly made.”

 

June 6, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-06-06 15:53:362025-06-08 16:15:56PLAINTIFF IN THIS TRAFFIC ACCIDENT CASE RAISED QUESTIONS OF FACT ABOUT WHETHER THE RELEASE HE SIGNED WAS INVALID DUE TO MUTUAL MISTAKE ABOUT THE EXISTENCE OF LUMBAR DISC INJURIES AND LEFT HIP DEGENERATIVE JOINT DISEASE; IN ADDITION, PLAINTIFF RAISED QUESTIONS OF FACT ABOUT WHETHER THE RELEASE WAS INVALID BECAUSE IT WAS “NOT FAIRLY AND KNOWINGLY MADE;” CRITERIA EXPLAINED (FOURTH DEPT).
Civil Procedure, Contract Law, Judges

HERE A DISPUTE AMONG BROTHERS ABOUT OWNERSHIP OF REAL PROPERTY WAS RESOLVED BY AN OPEN COURT STIPULATION (CONTRACT) WHICH CANNOT BE INVALIDATED ABSENT FRAUD, COLLUSION, MISTAKE OR ACCIDENT; THEREFORE SUPREME COURT SHOULD HAVE HELD A HEARING BEFORE APPROVING THE SUBSEQUENT APPORTIONMENT OF THE PROPERTY BY A RECEIVER WHICH WAS INCONSISTENT WITH THE STIPULATION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the receiver’s (Hafner’s) apportionment of the proceeds of the sale of real property owned by several brothers was inconsistent with the open court stipulation which had attempted to resolve the dispute before the receiver was appointed. Absent fraud, collusion, mistake or accident, a stipulation (contract) should not be invalidated. Therefore, Supreme Court should have held a hearing to determine whether there are grounds for avoiding the terms of the stipulation:

Supreme Court should have held an evidentiary hearing before approving Hafner’s amended final report and account based on the factual issues raised by the parties and the contentious nature of the proceedings … . “Stipulations of settlement are favored by the courts and not lightly cast aside . . . Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation” … . Here, Hafner’s amended final report and account was confirmed without the off-the-top credits owed to John and Thomas pursuant to the stipulation. Further, the amended final report and account allocated receivership costs for insurance that were inconsistent with the allocation of costs agreed to in the stipulation.

Additionally, a hearing is necessary to calculate Hafner’s commissions and to determine whether special circumstances exist warranting a recovery in excess of five percent of the sums received and disbursed … . CPLR 8004 allows a receiver to be paid commissions for his or her work “‘not exceeding five percent of sums received and disbursed by him or her'” … . Feeney v Giannetti, 2025 NY Slip Op 03043, Second Dept 5-21-25

Practice Point: An open court stipulation is a contract which cannot be invalidated absent fraud, collusion, mistake or accident. Here the apportionment of disputed property by the receiver was inconsistent with the stipulation. The court, therefore, should not have upheld the receiver’s apportionment without holding a hearing to determine whether there exist grounds for invalidating the stipulation.

 

May 21, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-05-21 09:16:512025-05-25 09:40:26HERE A DISPUTE AMONG BROTHERS ABOUT OWNERSHIP OF REAL PROPERTY WAS RESOLVED BY AN OPEN COURT STIPULATION (CONTRACT) WHICH CANNOT BE INVALIDATED ABSENT FRAUD, COLLUSION, MISTAKE OR ACCIDENT; THEREFORE SUPREME COURT SHOULD HAVE HELD A HEARING BEFORE APPROVING THE SUBSEQUENT APPORTIONMENT OF THE PROPERTY BY A RECEIVER WHICH WAS INCONSISTENT WITH THE STIPULATION (SECOND DEPT).
Appeals, Civil Procedure, Contract Law, Foreclosure, Real Estate, Real Property Law

THE JUDGMENT OF FORECLOSURE AND SALE WAS REVERSED ON APPEAL; THE DEFENDANT IN THE FORECLOSURE ACTION DID NOT SEEK A STAY PENDING APPEAL; THE FACT THAT THE NOTICE OF PENDENCY, FILED BY THE BANK AT THE OUTSET OF THE FORECLOSURE PROCEEDINGS, WAS STILL IN EFFECT AT THE TIME OF THE FORECLOSURE SALE DID NOT AFFECT THE TRANSFER OF TITLE TO A GOOD FAITH PURCHASER AT THE FORECLOSURE SALE (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Brathwaite Nelson, determined the defendant in the foreclosure action, Yesmin, upon reversal of the judgment of foreclosure and sale on appeal, was not entitled to cancel and discharge the referee’s deed transferring title to a good faith purchaser of the foreclosed property. It is significant here that the defendant in the foreclosure action did not seek a stay pending appeal. The notice of pendency, filed by the bank in the foreclosure action, which was still in effect at the time of the foreclosure sale, did not affect the title acquired by the good faith purchaser:

This appeal raises the question of what effect an extant notice of pendency has on the title to real property acquired by a third party from a judicial foreclosure sale when the judgment of foreclosure and sale is reversed on the appeal of a defendant to the foreclosure action. For the reasons that follow, we hold that a notice of pendency that was unexpired at the time of the foreclosure sale has no effect on the title acquired by a good faith purchaser for value from a sale conducted pursuant to the judgment of foreclosure and sale. * * *

Once a judgment is entered, the need to obtain a stay pending appeal in order to protect the right to restitution of the property is shared equally by a defendant or a plaintiff against whom the judgment is entered. Where a judgment has been entered against a plaintiff, “the plaintiff’s right to impair the marketability of the property during the pendency of an appeal [is conditioned] upon the issuance of a discretionary CPLR 5519(c) stay” … . Thus, regardless of whether the judgment is issued in favor of a defendant or the plaintiff, once a judgment is entered, a stay is necessary to protect the property, and in the absence of a stay, the winning party is free to transfer the property as it sees fit. * * *

Since [the good faith purchaser of the foreclosed property] established that it is “a purchaser in good faith and for value” whose title would be affected by restitution of Yesmin’s property rights lost by the judgment of foreclosure and sale, Yesmin may not seek restitution by canceling the referee’s deed and, instead, is limited to monetary relief against the plaintiff to the foreclosure action (CPLR 5523 …). Yesmin v Aliobaba, LLC, 2025 NY Slip Op 02964, Second Dept 5-14-25

Practice Point: If the defendant in a foreclosure action which is appealed does not seek a stay pending appeal, the reversal on appeal does not affect title transferred to a good faith purchaser at the foreclosure sale.

 

May 14, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-05-14 13:34:382025-05-18 14:14:51THE JUDGMENT OF FORECLOSURE AND SALE WAS REVERSED ON APPEAL; THE DEFENDANT IN THE FORECLOSURE ACTION DID NOT SEEK A STAY PENDING APPEAL; THE FACT THAT THE NOTICE OF PENDENCY, FILED BY THE BANK AT THE OUTSET OF THE FORECLOSURE PROCEEDINGS, WAS STILL IN EFFECT AT THE TIME OF THE FORECLOSURE SALE DID NOT AFFECT THE TRANSFER OF TITLE TO A GOOD FAITH PURCHASER AT THE FORECLOSURE SALE (SECOND DEPT).
Agency, Contract Law, Labor Law-Construction Law

ALTHOUGH A CONSTRUCTION MANAGER IS GENERALLY NOT LIABLE FOR INJURIES TO A WORKER UNDER LABOR LAW 240(1) OR 241(6), HERE THE CONSTRUCTION MANAGER, BY CONTRACT, WAS RESPONSIBLE FOR SAFETY AT THE WORKSITE AND SUPERVISED THE WORK; THEREFORE THE CONSTRUCTION MANAGER WAS A STATUTORY AGENT OF THE PROPERTY OWNER AND POTENTIALLY LIABLE UNDER LABOR LAW 240(1) (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the construction manager, Tishman, was the property owner’s statutory agent in charge of safety at the worksite. Therefore Tishman could be liable for injury to a worker pursuant to Labor Law 240(1):

“A construction manager of a work site is generally not responsible for injuries under Labor Law . . . [§ ] 240(1) . . . or § 241(6) unless it functions as an agent of the property owner or general contractor in circumstances where it has the ability to control the activity which brought about the injury” … . “The label given a defendant, whether ‘construction manager’ or ‘general contractor,’ is not determinative” … . “Instead, the core inquiry is whether the defendant had the ‘authority to supervise or control the activity bringing about the injury so as to enable it to avoid or correct the unsafe condition'” … .

Here, in support of his motion for summary judgment, the plaintiff submitted the construction management services contract, which charged Tishman with, inter alia, enforcing subcontractors’ compliance with safety requirements and taking precautions to minimize the risk of injuries. The contract further gave Tishman the right to choose the means and methods of construction. Although Tishman did not directly supervise or control the plaintiff’s work, Tishman’s safety manager for the project testified at his deposition that he was “in charge of safety at . . . [the] project full-time.” In addition, a foreperson for another trade testified at his deposition that Tishman would correct other workers who were performing their work in an unsafe manner. Under these circumstances, Tishman was a statutory agent of DDC and was, therefore, potentially liable for the plaintiff’s alleged injuries under Labor Law § 240(1) … . Weekes v Tishman Tech. Corp., 2025 NY Slip Op 02959, Second Dept 5-14-25

Practice Point: Although a construction manager is generally not liable to an injured worker under Labor Law 240(1) or 241(6), here the construction manager was, by contract, a statutory agent of the property owner responsible for the supervision of the work and the safety of the workers. Statutory agents of the property owner or general contractor are potentially liable to injured workers under Labor Law 240(1) and 241(6).

 

May 14, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-05-14 12:58:172025-05-18 13:26:34ALTHOUGH A CONSTRUCTION MANAGER IS GENERALLY NOT LIABLE FOR INJURIES TO A WORKER UNDER LABOR LAW 240(1) OR 241(6), HERE THE CONSTRUCTION MANAGER, BY CONTRACT, WAS RESPONSIBLE FOR SAFETY AT THE WORKSITE AND SUPERVISED THE WORK; THEREFORE THE CONSTRUCTION MANAGER WAS A STATUTORY AGENT OF THE PROPERTY OWNER AND POTENTIALLY LIABLE UNDER LABOR LAW 240(1) (SECOND DEPT).
Contract Law, Cooperatives, Landlord-Tenant, Real Estate

HOLDOVER RENT IN AN AMOUNT THREE TIMES EXISTING RENT CONSTITUTED APPROPRIATE LIQUIDATED DAMAGES, NOT A PENALTY; DEFENDANT, THE SELLER OF THE COOPERATIVE APARTMENT, REQUESTED POSSESSION FOR THIRTY DAYS AFTER THE CLOSING (FIRST DEPT).

The First Department, reversing Supreme Court, determined the holdover rent, which was three times the existing rent, constituted appropriate liquidated damages, not a penalty. Plaintiffs are purchasers of defendant’s cooperative apartment:

Defendant seller, who requested continued possession of the apartment after closing for one month, complains that the holdover rent set in the liquidated damages provision of the post-closing possession agreement is grossly disproportionate because, over the course of 30 days, it amounted to three times the amount of rent set for the initial 30-day period of possession. However, “[w]hether a provision in an agreement is an enforceable liquidation of damages or an unenforceable penalty is a question of law, giving due consideration to the nature of the contract and the circumstances” … . The party “seeking to avoid liquidated damages” bears the burden “to show that the stated liquidated damages are, in fact, a penalty” … .

Plaintiffs’ cross-motion for summary judgment should have been granted. “[L]iquidated damages clauses that permit a landlord to recover between two or three times the amount of the existing rent or license fee in a holdover proceeding are not ‘grossly disproportionate’ to the probable loss and therefore, not a penalty” … . Moreover, defendant does not account for plaintiffs’ payment during the holdover period of the maintenance and assessment, in addition to the mortgage. The agreement further provides that defendant is responsible for plaintiffs’ costs of administering the agreement, among other things, which were unknown at the time the agreement was signed. Thus, “the amount liquidated bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation” … . Sang Min Kim v Bedouet, 2025 NY Slip Op 02875, First Dept 5-13-25

Practice Point: Here holdover rent in an amount three times the existing rent was deemed appropriate liquidated damages, not a penalty.

 

May 13, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-05-13 10:58:582025-05-17 11:20:41HOLDOVER RENT IN AN AMOUNT THREE TIMES EXISTING RENT CONSTITUTED APPROPRIATE LIQUIDATED DAMAGES, NOT A PENALTY; DEFENDANT, THE SELLER OF THE COOPERATIVE APARTMENT, REQUESTED POSSESSION FOR THIRTY DAYS AFTER THE CLOSING (FIRST DEPT).
Contract Law, Real Property Actions and Proceedings Law (RPAPL), Real Property Law

BECAUSE THE INITIAL USE OF THE ROADWAY WAS PERMISSIVE, AND THERE WAS NO HOSTILE USE FOR THE REQUIRED TEN YEARS, THE CRITERIA FOR A PRESCRIPTIVE EASEMENT WERE NOT MET; HOWEVER BECAUSE THE INITIAL USE WAS PERMISSIVE AND CONTINUED FOR 50 YEARS, THE CRITERIA FOR AN EASEMENT BY ESTOPPEL WERE MET (THIRD DEPT).

The Third Department, reversing Supreme Court, determined that plaintiffs did not have a prescriptive easement over defendants’ properties, but did have an easement by estoppel. Because there was an agreement among the original owners of the three adjacent camps to construct, maintain and use a roadway providing vehicular access to all three camps, and because there had been no hostile use of the roadway for ten years, the requirements for a prescriptive easement were not met. However plaintiffs were entitled to an easement by estoppel. The court noted that the Statute of Frauds does not apply to an easement by estoppel:

[Re; a prescriptive easement] … [B]ecause plaintiffs’ predecessors’ use of the extension was permissive, the element of hostility was negated … . Therefore, no adverse use could have arisen until there was the assertion of a hostile right … , which, at the earliest, occurred in 2018. We are presented with a permissive use that did not ripen into a prescriptive one for the time required … .

Yet, these same facts establish plaintiffs’ entitlement to an easement by estoppel … . “An easement by estoppel may arise when, among other things, a party reasonably relies upon a servient landowner’s representation that an easement exists” … . The uncontested existence of the agreement between the parties’ predecessors for the construction and use of the extension, together with the time and expense of not only the initial construction but, also, the continued 50-year maintenance thereof, demonstrates that plaintiffs “undertook . . . action[s] to their detriment in reasonable reliance upon a representation that they held an easement” … . Sardino v Scholet Family Irrevocable Trust, 2025 NY Slip Op 02828, Third Dept 5-8-25

Practice Point: Consult this decision for clear illustrations of the criteria for a prescriptive easement and an easement by estoppel.

 

May 8, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-05-08 10:29:132025-05-11 10:56:58BECAUSE THE INITIAL USE OF THE ROADWAY WAS PERMISSIVE, AND THERE WAS NO HOSTILE USE FOR THE REQUIRED TEN YEARS, THE CRITERIA FOR A PRESCRIPTIVE EASEMENT WERE NOT MET; HOWEVER BECAUSE THE INITIAL USE WAS PERMISSIVE AND CONTINUED FOR 50 YEARS, THE CRITERIA FOR AN EASEMENT BY ESTOPPEL WERE MET (THIRD DEPT).
Contract Law, Landlord-Tenant, Real Property Law

TENANT WAS PRECLUDED FROM ASSERTING A CLAIM FOR BREACH OF THE COVENANT OF QUIET ENJOYMENT BECAUSE THE TENANT HAD ALREADY STOPPED PAYING RENT WHEN IT VACATED THE PREMISES (FIRST DEPT).

The First Department, reversing Supreme Court, determined the tenant’s claim for breach of the covenant of quiet enjoyment was precluded because the tenant was in default (failure to pay rent) at the time the tenant vacated the premises:

Under … the lease between the landlord and defendant tenant … , the tenant was entitled to “peaceabl[y] and quietly enjoy the premises,” which were in the basement of the landlord’s building, as long as it performed its obligations under the lease, which included the obligation to pay rent. Under … the lease, the tenant waived the provisions of Real Property Law § 227. The premises were shut down in March 2020 under Executive Order 202.7 (9 NYCRR 8.202.7) in response to COVID. At that time, the tenant stopped paying rent. * * *

The tenant is precluded from asserting a claim for breach of the covenant of quiet enjoyment because it was already in default of its obligation to pay rent at the time it vacated the leased premises. The law is clear that, in order for a tenant to assert a claim for breach of the covenant of quiet enjoyment, the tenant must have performed all obligations which are a condition precedent to its right to insist upon the covenant … . When a tenant vacates the premises after defaulting on its obligation to pay rent, it is deprived of its right to insist upon the performance of the covenant of quiet enjoyment … . By the express terms of the lease, the tenant was obligated to pay rent while remaining in possession of the premises as a condition precedent to receiving the benefit of quiet enjoyment of the premises. Since the tenant remained in possession of the premises without paying rent, the tenant has failed to satisfy the condition precedent in the lease and is thereby precluded from claiming a breach of the covenant of quiet enjoyment … . 558 Seventh Ave. Corp. v E&B Barbers Inc., 2025 NY Slip Op 02546, Frist Dept 4-29-25

Practice Point: Here, under the terms of the lease, payment of rent was a condition precedent for the benefit of quiet enjoyment of the premises. Therefore the tenant, who had stopped paying rent at the time the premises were vacated, could not make a claim for breach of the covenant of quiet enjoyment.

 

April 29, 2025
https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png 0 0 Bruce Freeman https://www.newyorkappellatedigest.com/wp-content/uploads/2018/03/NYAppelateLogo-White-1.png Bruce Freeman2025-04-29 13:03:082025-05-02 13:21:39TENANT WAS PRECLUDED FROM ASSERTING A CLAIM FOR BREACH OF THE COVENANT OF QUIET ENJOYMENT BECAUSE THE TENANT HAD ALREADY STOPPED PAYING RENT WHEN IT VACATED THE PREMISES (FIRST DEPT).
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