You are here: / Contract Law
, , ,

UNDER THE CIRCUMSTANCES OF THIS CASE, WHETHER THE CONDITIONS PRECEDENT TO ARBITRATION OF A GRIEVANCE REQUIRED BY THE COLLECTIVE BARGAINING AGREEMENT WERE COMPLIED WITH IS A QUESTION FOR THE COURT, NOT THE ARBITRATOR (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined it was for the court, not the arbitrator, to determine whether the conditions precedent for arbitration were met in this action seeking General Municipal Law Section 207-a benefits for an injured firefighter:

… [T]he CBA [collective bargaining agreement] contains conditions precedent to arbitration within the provisions addressing the grievance procedure and … the court should have decided whether the conditions precedent had been met. “Questions concerning compliance with a contractual step-by-step grievance process have been recognized as matters of procedural arbitrability to be resolved by the arbitrators,” except in cases involving “a very narrow arbitration clause or a provision expressly making compliance with the time limitations a condition precedent to arbitration” … . Here, compliance with the requirements of steps one and two of the grievance procedure and the time limitations for serving a grievance were conditions precedent to arbitration. Under these circumstances, we conclude that “it was for the court, and not the arbitrator, to decide whether the grievance[] had been timely [served] and completed by the . . . employee at steps one and two of the grievance procedure” … . Therefore, we … remit the matter to Supreme Court for a hearing on the issue whether the conditions precedent to arbitration were met and thereafter for a new determination on the petition to stay arbitration … . Matter of Village of Manlius (Town of Manlius Professional Firefighters Assn., Iaff Local #3316), 2020 NY Slip Op 04251, Fourth Dept 7-24-20

 

,

DEFENDANT ARGUED THE INSURANCE COMPANY WHICH REPRESENTED THE PROPERTY OWNER AND THE GENERAL CONTRACTOR IN THIS CONSTRUCTION ACCIDENT CASE UNFAIRLY APPORTIONED THE PAYMENT OF THE SETTLEMENT BETWEEN THEM SUCH THAT THE NON-NEGLIGENT, VICARIOUSLY LIABLE PARTY PAID $2 MILLION, AND THE NEGLIGENT PARTY PAID $200,000; AFTER INDEMNIFYING THE PROPERTY OWNER IN THE AMOUNT OF $2 MILLION DEFENDANT SOUGHT TO BE INDEMNIFIED BY THE NEGLIGENT PARTY; THE ATTEMPT WAS REJECTED UNDER BOTH CONTRACTUAL AND COMMON LAW INDEMNIFICATION THEORIES (THIRD DEPT).

The Third Department, over a concurrence, determined Lamela & Sons, Inc. (Lamela), the employer of plaintiffs James and Robert Lamela, was required to indemnify the property owner, Satin, for Satin’s portion of the $3.2 million settlement in this construction accident case. The settlement agreement required payment of $2,199,999 by Satin and Verticon, the general contractor. Lamela paid Satin $2 million in satisfaction of its contractual indemnity obligation to Satin. The insurance company which represented both Verticon and Satin apportioned a larger portion of the settlement to Satin, which was not negligent but was vicariously liable, and a lesser portion to Verticon, which was negligent. Lamela argued that a larger portion of the settlement should have been apportioned to the negligent party, Verticon. Lamela’s indemnity obligation to Satin, therefore, should have been less. On that basis, Lamela sought indemnity from Verticon. Lamela’s argument was rejected:

Verticon submitted the construction contract … between Verticon and Lamela, which provides for indemnity flowing from Lamela to Verticon, specifically stating, “To the fullest extent permitted by law, [Lamela] shall indemnify, defend and save harmless [Verticon] . . . against any and all suits [or] actions . . . arising from the use or operation by [Lamela] of construction equipment, tools, scaffolding or facilities furnished to [Lamela] to perform the [w]ork.” The provision, as expected, does not provide for indemnification flowing the other way, from Verticon to Lamela, as is being sought by Lamela. Thus, as “the subject of indemnification [is] clearly contemplated and expressly addressed by [Lamela and Verticon] in their contract, . . . there [can] only be a one-way obligation to indemnify by [Lamela] as the indemnitor, and any reciprocal obligation is extinguished” … . * * *

… .[C]ommon-law indemnity is not the appropriate relief here because Lamela is not responsible by operation of law … ; rather, its payment to Satin was based solely upon a voluntarily assumed obligation that it undertook by virtue of the contract. There has been no case cited that permits common-law indemnity under this scenario. Although we are mindful that Lamela’s motivation for seeking common-law indemnity stems from its concern that the settlement was unfairly apportioned, to attempt to remedy this by way of common-law indemnity is unavailing. Lamela v Verticon, Ltd., 2020 NY Slip Op 04214, Third Dept 7-23-20

 

,

THE ACTION ALLEGING DEFECTIVE CONSTRUCTION OF A CONDOMINIUM ACCRUED WHEN THE WORK WAS COMPLETED, I.E., WHEN THE CERTIFICATE OF OCCUPANCY WAS ISSUED; THE ACTION WAS TIME-BARRED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the action alleging defective construction of a condominium was time-barred. The action accrued the work was completed, i.e., when the certificate of occupancy was issued:

A claim for damages arising from defective construction accrues on the date of completion of the work … . “This rule applies no matter how a claim is characterized in the complaint’ because all liability’ for defective construction has its genesis in the contractual relationship of the parties'” … . Here, the corporate defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the first through third and fifth through seventh causes of action insofar as asserted against them. The corporate defendants established that the causes of action accrued on October 5, 2007, the date the certificate of occupancy was issued … , and that this action was not commenced until June 2016, more than eight years later, at which time the applicable statutes of limitations had expired. Board of Mgrs. of the 23-23 Condominium v 210th Place Realty, LLC, 2020 NY Slip Op 04143, Second Deptp 7-22-20

 

,

ONE DEFENDANT BREACHED A CONTRACT; THE OTHER DEFENDANT TORTIOUSLY INTERFERED WITH PLAINTIFF’S PROSPECTIVE BUSINESS RELATIONS; THE JURY AWARDED SEPARATE DAMAGE-AMOUNTS FOR EACH DEFENDANT; SUPREME COURT SHOULD NOT HAVE HELD BOTH DEFENDANTS JOINTLY AND SEVERALLY LIABLE FOR THE COMBINED AMOUNT OF DAMAGES (SECOND DEPT). ​

The Second Department, in a full-fledged opinion by Justice Cohen, reversing Supreme Court, determined the defendants, one of which was found by the jury to have breached a contract, and the other which was found to have tortiously interfered with plaintiff’s prospective business relations, should not have been deemed jointly and severally liable. Each was separately liable for the separate damage-amounts assigned by the jury:

The jury determined that the plaintiff sustained damages in the amount of $60,000 resulting from [defendant] DIG’s interference with the plaintiff’s prospective business relationship with [defendant] B1 Advanced, and that the plaintiff sustained damages in the amount of $657,000 resulting from B1 Advanced’s breach of contract. Contrary to the Supreme Court’s determination, the damages arising out of DIG’s tortious interference could, in fact, differ from the damages arising out of B1 Advanced’s breach of contract. The jury assessed the amount of damages against DIG based on the plaintiff’s loss of prospective profits resulting from DIG’s tortious interference with the plaintiff’s ongoing business relationship with B1 Advanced … . Conversely, “[d]amages for breach of contract include general (or direct) damages, which compensate for the value of the promised performance, and consequential damages, which are indirect and compensate for additional losses incurred as a result of the breach, such as lost profits” … . The jury’s apportionment of damages reflects its finding that DIG was not responsible for all of the damages caused by B1 Advanced’s breach of contract. Achieve It Solutions, LLC v Lewis, 2020 NY Slip Op 04137, Second Dept 7-22-20

 

, , ,

FORMER LAW FIRM PARTNER WAS ENTITLED TO AN ACCOUNTING; IN DETERMINING THE BUYOUT PRICE UPON THE PARTNER’S WITHDRAWAL FROM THE PARTNERSHIP, THE TERMS OF THE PARTNERSHIP AGREEMENT, RATHER THAN PARTNERSHIP LAW, CONTROL (SECOND DEPT).

The Second Department determined plaintiff, a former partner in a law firm, was entitled to an accounting and a buyout price calculated pursuant to the provisions of the partnership agreement:

” The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest'” … . A plaintiff seeking an accounting has to show that he or she entrusted money or property to the defendant with respect to which he or she has an interest or which, in equity, ought to be divided … . Here, we agree with the Supreme Court’s determination awarding the plaintiff summary judgment on the cause of action for an accounting to determine the amount due to him pursuant to the terms of the partnership agreement. ” … [W]here . . . there is a fiduciary relationship between the parties, there is an absolute right to an accounting notwithstanding the existence of an adequate remedy at law” … Here, it is undisputed that there was a fiduciary relationship between the plaintiff and the defendants. …

… “[A] partnership is a voluntary, contractual association in which persons carry on a business for profit as co-owners. In the agreement establishing a partnership, the partners can chart their own course” … . … [W]hile New York’s Partnership Law provides certain default provisions where a partnership agreement is silent, where the agreement clearly sets forth the terms between the partners, it is the agreement that governs … .

Here, the partnership agreement expressly provides that the partnership “shall not be dissolved” upon the resignation of a partner. The terms of the partnership agreement take precedence over Partnership Law § 62, which permits a partnership to be dissolved at any time by any partner. The firm was not dissolved, but rather, the plaintiff withdrew from the firm on August 3, 2010. Accordingly, pursuant to the terms of the partnership agreement, the plaintiff was entitled to the buyout price, as defined in that agreement, and payable in accordance with the terms of that agreement. Zohar v LaRock, 2020 NY Slip Op 04202, Second Dept 7-22-20

 

,

SUSPENDED ATTORNEY ENTITLED TO QUANTUM MERUIT COMPENSATION FOR WORK DONE PRIOR TO THE SUSPENSION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined a suspended attorney was entitled to quantum meruit compensation for work done prior to the suspension. The matter was remitted for a hearing to determine the appropriate amount of compensation:

The nonparty-appellant, a suspended attorney, contends that he is entitled to legal fees in quantum meruit for work performed on behalf of the plaintiff in this personal injury action prior to his suspension from the practice of law; the suspension was unrelated to his representation of the plaintiff in this action. The Supreme Court should have granted the appellant’s motion for that relief.

22 NYCRR 1240.15(g) of the rules for attorney disciplinary matters provides as follows: “Compensation. A respondent who has been disbarred or suspended from the practice of law may not share in any fee for legal services rendered by another attorney during the period of disbarment or suspension but may be compensated on a quantum meruit basis for services rendered prior to the effective date of the disbarment or suspension. On motion of the respondent, with notice to the respondent’s client, the amount and manner of compensation shall be determined by the court or agency where the action is pending or, if an action has not been commenced, at a special term of the Supreme Court in the county where the respondent maintained an office. The total amount of the legal fee shall not exceed the amount that the client would have owed if no substitution of counsel had been required” … . Ragland v Molloy, 2020 NY Slip Op 03933, Second Dept 7-15-20

 

, ,

TENANT’S MOTION TO REMOVE AN EVICTION PROCEEDING FROM CIVIL COURT AND CONSOLIDATE IT WITH A BREACH-OF-LEASE ACTION IN SUPREME COURT SHOULD HAVE BEEN GRANTED; LEASE PROVISIONS PRECLUDED THE COUNTERCLAIMS AND EQUITABLE RELIEF IN THE EVICTION PROCEEDING, BUT THAT RELIEF IS AVAILABLE IN THE SUPREME COURT PROCEEDING (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff’s (tenant’s) motion pursuant to CPLR 602(b) to remove a summary proceeding (eviction proceeding) from Civil Court and consolidate it with the breach-of-lease proceeding in Supreme Court should have been granted:

On January 1, 2015, the plaintiff executed a five-year commercial lease with the defendant for a condominium unit in a building in Brooklyn for the purpose of operating a medical practice on the premises. In May 2017, the defendant commenced a summary proceeding against the plaintiff in the Civil Court, Kings County, to recover possession of the premises and unpaid rent. In October 2017, the plaintiff commenced this action against the defendant in the Supreme Court, Kings County, inter alia, to recover damages for breach of the lease. The plaintiff also moved, in effect, pursuant to CPLR 602(b) to remove the summary proceeding from the Civil Court to the Supreme Court and to consolidate it with the instant action. … Although the Civil Court is the preferred forum for the resolution of landlord-tenant disputes when the tenant may obtain full relief in a summary proceeding … , here, the lease provisions preclude the plaintiff from asserting counterclaims in the summary proceeding and the equitable relief sought by the plaintiff in the Supreme Court is unavailable to it in the summary proceeding in Civil Court … . Barkagan v S&L Star Realty, LLC, 2020 NY Slip Op 03759, Second Dept 7-8-20

 

, , ,

QUESTIONS OF FACT WHETHER THE CONTINUOUS REPRESENTATION DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS ARCHITECTURAL MALPRACTICE/BREACH OF CONTRACT ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined there were questions of fact about whether the continuous representation doctrine tolled the statute of limitations in this architectural malpractice/breach of contract action. Defendant’s decedent was hired by plaintiff to construct a four-story condominium. Although the work was completed in 2008 there were problems getting approval by the city and new architectural services contracts were entered in 2015 and 2018. The court noted that, where a motion to dismiss pursuant to CPLR 3211 is made on statute-of-limitations grounds, a plaintiff may remedy any defects in the pleadings in an affidavit:

“[A]n action to recover damages for malpractice, other than medical, dental or podiatric malpractice, regardless of whether the underlying theory is based in contract or tort” is subject to a three-year statute of limitations (CPLR 214[6] … ). Such an action, founded upon “defective design or construction accrues upon the actual completion of the work to be performed and the consequent termination of the professional relationship” … . However, “a professional malpractice cause of action asserted against an architect or engineer may be tolled under the continuous representation’ doctrine if the plaintiff shows its reliance upon a continued course of services related to the original professional services provided” … . * * *

Even if the defendant had met her prima facie burden, the plaintiff raised a question of fact as to whether the continuous representation toll applied. Specifically, the plaintiff averred in an affidavit in opposition to the motion that [defendant’s decedent] continued to work on the project from 2008 through the time that the parties entered into the 2015 agreement, including by continuing to revise the plans so as to subdivide the property, regularly meeting with the plaintiff, renewing building permits with the plaintiff, meeting with a “commissioner” at the DOB [NYC Department of Buildings] to discuss revised plans, and filing an application concerning the project with the DOB in 2014. Anderson v Pinn, 2020 NY Slip Op 03636, Second Dept 7-1-20

 

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT IN THIS COMPLEX BREACH OF CONTRACT ACTION INVOLVING THE SALE OF A BUSINESS AND A RELATED LEASE WAS PROPERLY GRANTED; THE TERMS OF THE CONTRACTS WERE UNAMBIGUOUS AND NEITHER THE DOCTRINE OF PREVENTION NOR THE DOCTRINE OF FRUSTRATION OF PURPOSE APPLIED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Mazzarelli, determined plaintiffs’ motion for summary judgment in this complex business-sale and lease breach of contract action was properly granted. The transaction involved the sale of an ambulatory surgery business and lease of the premises to the buyer. More specifically, the transaction included an asset purchase agreement, an administrative services agreement, a lease agreement and a personal guarantee. The facts are too involved to fairly summarize. Essentially, the buyers (defendants) defaulted on several aspects of the contracts and their defenses were rejected. The First Department held the terms of the contracts were clear and unambiguous, the doctrine of prevention did not apply, and the frustration of purpose doctrine did not apply:

“`[U]nder the doctrine of prevention, when a party to a contract causes the failure of the performance of the obligation due, it cannot in any way take advantage of that failure'” … . In other words, “a party to a contract cannot rely on the failure of another to perform a condition precedent where he has frustrated or prevented the occurrence of the condition” … . …

“In order to invoke the doctrine of frustration of purpose, the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense” … . Examples of a lease’s purposes being declared frustrated have included situations where the tenant was unable to use the premises as a restaurant until a public sewer was completed, which took nearly three years after the lease was executed … , and where a tenant who entered into a lease of premises for office space could not occupy the premises because the certificate of occupancy allowed only residential use and the landlord refused to correct it  … .

However, “frustration of purpose . . . is not available where the event which prevented performance was foreseeable and provision could have been made for its occurrence” … . Center for Specialty Care, Inc. v CSC Acquisition I, LLC, 2020 NY Slip Op 03631, First Dept 6-25-20

 

, ,

THE ACTION TO ENFORCE THE POSTNUPTIAL AGREEMENT WAS GOVERNED BY THE THREE-YEAR STATUTE OF LIMITATIONS IN THE DOMESTIC RELATIONS LAW, NOT THE SIX-YEAR CONTRACT STATUTE OF LIMITATIONS IN CPLR 213; THEREFORE THE ACTION WAS TIME-BARRED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the statute of limitations with respect to the enforcement of a postnuptial agreement is that provided for in Domestic Relations Law 250, not the six-year statute of limitations for contract actions generally:

… [T]he six-year statute of limitations that pertains to breach of contract causes of action (see CPLR 213[2]) is not applicable. Rather, the applicable statute of limitations is provided for in Domestic Relations Law § 250. Pursuant to Domestic Relations Law § 250, the statute of limitations for claims arising from prenuptial and postnuptial agreements is three years and that period is tolled, as relevant here, until process has been served in a matrimonial action. The language of the statute makes it broadly applicable to claims arising from prenuptial and postnuptial agreements, such that it applies equally where a party seeks to invalidate the agreement and where a party seeks to enforce it … .

Here, the defendant did not assert his claim to enforce the postnuptial agreement until more than 4½ years after he was served with process in the matrimonial action. Accordingly, the defendant’s claim is untimely, and should have been rejected. Washiradusit v Athonvarangkul, 2020 NY Slip Op 03562, Second Dept 6-24-20

 

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