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QUESTION OF FACT WHETHER CONTRACTORS WHICH DID SIDEWALK/GRATE WORK LAUNCHED AN INSTRUMENT OF HARM IN THIS SLIP AND FALL CASE; THE CONTRACTORS’ MOTIONS FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the actions against two contractors (MPM and VRD) which did sidewalk/grate work should not have been dismissed in this slip and fall case. The two contractor defendants did not demonstrate, as a matter of law, that they did not launch an instrument of harm:

In general, a contractual obligation, standing alone, will not give rise to tort liability in favor of a third party (see Espinal v Melville Snow Contrs., 98 NY2d 136, 138). Nonetheless, the Court of Appeals has recognized three exceptions to this general rule: “(1) where the contracting party, in failing to exercise reasonable care in the performance of his [or her] duties, launches a force or instrument of harm . . . (2) where the plaintiff detrimentally relies on the continued performance of the contracting party’s duties . . . and (3) where the contracting party has entirely displaced the other’s party’s duty to maintain the premises safely” … .

Here, the owner, MPM, and VRD failed to establish their prima facie entitlement to judgment as a matter of law by demonstrating that the work performed on the grate and vault did not create the allegedly dangerous condition that caused the plaintiff to trip and fall and, thus, launched a force or instrument of harm … . Randazzo v Consolidated Edison Co. of N.Y., Inc., 2019 NY Slip Op 08236, Second Dept 11-13-19

 

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THERE IS A REASONABLE RELATIONSHIP BETWEEN THE GRIEVANCE AND THE COLLECTIVE BARGAINING AGREEMENT (CBA); THE CITY’S PETITION TO PERMANENTLY STAY ARBITRATION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the city-employer’s motion to permanently stay arbitration should not have been granted:

In determining whether a grievance is arbitrable, a court must “first ask whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance,” and if there is no prohibition against arbitration, the court must “then examine the CBA [collective bargaining agreement] to determine if the parties have agreed to arbitrate the dispute at issue” … . …

Where, as here, the relevant arbitration provision of the CBA is broad, providing for arbitration of any grievance “involving the interpretation or application of any provision of this Agreement,” a court “should merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA” … . “If there is none, the issue, as a matter of law, is not arbitrable. If there is, the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the CBA, and whether the subject matter of the dispute fits within them” … . …

According to Local 628, the City, by offering a paramedic training course to its firefighters, violated article 33 of the CBA, which contains various provisions concerning the EMS Program, including a provision stating that the “EMS Program shall mean the level of services provided as of the date of this Agreement.” Contrary to the City’s contention, a reasonable relationship exists between Local 628’s grievance and the general subject matter of the CBA … . “[T]he question of the scope of the substantive provisions of the CBA is a matter of contract interpretation and application reserved for the arbitrator” … . Matter of City of Yonkers v Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO, 2019 NY Slip Op 07776, Second Dept 10-30-19

 

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PLAINTIFF SUBMITTED INSUFFICIENT PROOF THAT THE NOTICE REQUIRED BY RPAPL 1304 AND THE MORTGAGE WAS PROVIDED TO DEFENDANTS; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff did not present sufficient evidence to demonstrate compliance with Real Property Actions and Proceedings Law (RPAPL) 1304 or with the notice provisions of the mortgage:

… [T]he plaintiff failed to attach, as exhibits to the motion, any documents to prove that the mailing actually happened … . Nor did [plaintiff’s employee] attest that she had personal knowledge of the mailing practices of her employer at the time the RPAPL 1304 notices allegedly were sent. Accordingly, “[s]ince the plaintiff failed to provide proof of the actual mailing, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure, the plaintiff failed to establish its strict compliance with RPAPL 1304” … .

The plaintiff also failed to establish, prima facie, that a notice of default in accordance with section 22 of the mortgage was properly transmitted to the defendants prior to the commencement of this action. [Plaintiff’s employee’s] unsubstantiated and conclusory statements that a representative … mailed such notice “[i]n accordance with the provisions of the Mortgage” to the defendants at their last known address at least 30 days prior to commencement of the action, even combined with copies of the notices of default and envelopes, with no evidence as to the date the envelopes were sent, “failed to establish that the required notice was mailed to the defendant[s] by first-class mail or actually delivered to [their] notice address’ if sent by other means, as required by the mortgage agreement” … . U.S. Bank N.A. v defendants., 2019 NY Slip Op 07806, Second Dept 10-30-19

 

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A REGULATORY AGREEMENT ENTERED INTO BY THE OUT-OF-POSSESSION LANDLORD IN CONNECTION WITH AN FHA MORTGAGE, WHICH REQUIRED THAT THE LANDLORD KEEP THE PROPERTY IN GOOD REPAIR, DID NOT CHANGE THE TERMS OF THE LEASE WHICH MADE THE TENANT RESPONSIBLE FOR REPAIRS; THE OUT-OF-POSSESSION LANDLORD THEREFORE IS NOT LIABLE FOR A SLIP AND FALL CAUSED BY A ROOF LEAK (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Stein, over a two-judge dissenting opinion, determined the owner of a nursing home, Hamilton Inc., as an out-of-possession landlord, was not liable to plaintiff who slipped and fell on the premises. It was alleged the pool of water which caused plaintiff to slip and fall was the result of a leak in the roof. The lease had made the tenant, Grand Manor, responsible for repairs. However a HUD regulatory agreement subsequently entered into by Hamilton Inc in connection with an FHA mortgage required that the property be kept in good repair by Hamilton. The Court of Appeals held that the regulatory agreement did change the terms of the lease:

… [T]he HUD regulatory agreement, as incorporated into the 1978 amendment to the lease, did not alter the contractual relationship between the Hamilton defendants and Grand Manor regarding control of the premises or replace Grand Manor’s contractual duty to perform maintenance and repairs at the facility. Although the terms of the HUD agreement were to supersede all other requirements in conflict therewith, the regulatory agreement did not conflict with, or absolve Grand Manor of, its responsibilities under the original lease. Indeed, as previously noted, the amendment continued all terms from the lease that did not conflict with the regulatory agreement. Given the absence of a conflict on the issue of Grand Manor’s duties to make repairs, the HUD agreement, as incorporated into the lease amendment, was not a covenant that could be said to displace Grand Manor’s duties or alter the relationship between landlord and tenant … .  * * *

… [T]he “exception to the general rule” set forth in Putnam is inapplicable to the regulatory agreement, and the general rule applies — that is, the “landlord is not liable for conditions upon the land after the transfer of possession” (38 NY2d at 617). Indeed, adoption of plaintiff’s proposed rule — that would require us to extend the exception set forth in Putnam to any agreement made by the lessor to make repairs — would mean that lessees could assume the sole obligation in a lease to maintain premises in good repair but avoid making repairs in reliance on a covenant later discovered between the land owner and a third party, a result not intended or supported by Putnam. Henry v Hamilton Equities, Inc., 2019 NY Slip Op 07642, CtApp 10-24-19

 

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PLAINTIFF’S ACTION WAS NOT TIME-BARRED BECAUSE THE SIX-MONTH LIMITATION PERIOD IN THE SUBCONTRACT EXPIRED BEFORE SUIT COULD BE BROUGHT; THE TERMS OF THE ONE-YEAR LIMITATION PERIOD IN THE LABOR AND MATERIAL BOND CONFLICTED WITH THE REQUIREMENTS OF THE STATE FINANCE LAW; THE STATE FINANCE LAW CONTROLS (THIRD DEPT).

The Third Department, reversing Supreme Court, determined plaintiff-subcontractor’s breach of contract action against the general contractor and the insurance company (Liberty Mutual) which issued the labor and material payment bond for the construction work should not have been dismissed, and plaintiff was entitled to summary judgment on its action against the general contractor. The Third Department held that the six-month statute of limitations in the subcontract and the one-year statute of limitations in the bond did not render the actions time-barred:

“A ‘limitation period’ that expires before suit can be brought is not really a limitation period at all, but simply a nullification of the claim” … . The conflict in the subcontractor agreement between the limitation period and the payment provisions had the effect of nullifying plaintiff’s breach of contract claim; thus, the six-month limitation period is unreasonable and unenforceable, and Supreme Court should not have dismissed plaintiff’s complaint as time-barred … . * * *

State Finance Law § 137 (4) (b) sets forth a later accrual date than the payment bond, providing that “no action on a payment bond furnished pursuant to [State Finance Law § 137] shall be commenced after the expiration of one year from the date on which the public improvement has been completed and accepted by the public owner” (emphasis added). The provisions of State Finance Law § 137 govern bonds furnished pursuant to that statute, and, although parties may agree to expand the statute’s protections, they may not limit them … . As the accrual date set forth in the first part of the contractual limitation provision conflicts with State Finance Law § 137 (4) (b), the second part of the provision must be given effect, and the bond agreement must be deemed to be amended to provide for the accrual date set forth in the statute … . The record does not reveal the date on which the project was accepted … for this purpose. Accordingly, there are issues of fact as to when plaintiff’s cause of action against Liberty Mutual accrued and whether it is time-barred, and summary judgment dismissing the complaint against Liberty should not have been granted … . Digesare Mech., Inc. v U.W. Marx, Inc., 2019 NY Slip Op 07668, Third Dept 10-24-19

 

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A CAUSE OF ACTION FOR SUB-PAR PERFORMANCE OF A CONTRACT SOUNDS IN CONTRACT LAW, NOT NEGLIGENCE; NEGLIGENCE CAUSE OF ACTION SHOULD HAVE BEEN DISMISSED (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, determined that the negligence cause of action was really a breach of contract action and therefore the negligence cause of action should have been dismissed. The underlying contract was for demolition and construction work and the complaint alleged damage by the diversion of water:

… [W]e agree with J. Luke [defendant demolition-construction contractor] that  [the negligence cause of action] should have been dismissed. Town Homes [defendant property owner] denominated that claim as one for negligence, alleging that J. Luke deviated from accepted standards of care by failing to perform contracted-for demolition and construction work “in a good workmanlike manner.” Supreme Court correctly categorized those assertions as a claim for negligent performance of contract; the problem is “that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated” … . A failure to plead a cognizable claim would not warrant summary judgment if Town Homes subsequently made out a viable cause of action … . Town Homes never suggested that J. Luke owed it a duty of care independent from the contract, however, and confirmed in its opposition to J. Luke’s motion that the issue was whether J. Luke rendered subpar performance under the contract. Accordingly, in the absence of any indication that J. Luke owed an independent duty to Town Homes arising “from circumstances extraneous to, and not constituting elements of, the contract” … . 517 Union St. Assoc. LLC v Town Homes of Union Sq. LLC, 2019 NY Slip Op 07461, Third Dept 10-17-19

 

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PURCHASE AGREEMENT DID NOT ALLOW BUYERS TO TERMINATE THE CONTRACT DURING THE CONTINGENCY PERIOD, BUYERS’ ACTION TO RECOVER THE DOWN PAYMENT PROPERLY DISMISSED (SECOND DEPT).

The Second Department determined the seller’s motion for summary judgment in this action by the buyers for return of the deposit was properly granted. The buyers purported to cancel the real estate purchase contract when the bank denied the mortgage application. But the purchase agreement did not allow the buyers to terminate the contract at that point:

Section 5.8 of the rider clearly and unambiguously provided that if the buyers were unable to obtain a mortgage commitment within 45 days of executing the contract, the seller had the unilateral right to either cancel the contract or extend the mortgage contingency period for an additional 30 days. The buyers were only entitled to cancel the contract upon the expiration of that 30-day period. Neither the rider nor the contract contained any provision permitting the buyers to cancel the contract during the mortgage contingency period upon receiving notice that their application had been denied … .

In opposition, the buyers failed to raise a triable issue of fact. The record does not support the buyers’ contention that their mortgage application was denied on the ground that the subject property constituted “unacceptable collateral,” and that, therefore, their performance under the contract was rendered impossible. Under these circumstances, the buyers willfully defaulted and anticipatorily breached the contract by purporting to cancel the contract during the mortgage contingency period. Federico v Dolitsky, 2019 NY Slip Op 07383, Second Dept 10-16-19

 

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PLAINTIFF BANK SUBMITTED EVIDENCE IN INADMISSIBLE FORM AND DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE CONDITIONS IN THE MORTGAGE; DEFENDANT’S SUMMARY JUDGMENT MOTION IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the evidence submitted by defendant in this foreclosure action was either not in admissible form or did not comply with the requirements of the mortgage:

In support of those branches of its motion which were for summary judgment on the complaint insofar as asserted against the defendant and to appoint a referee, the plaintiff submitted an affidavit of an employee of its loan servicer, Ocwen Loan Servicing, LLC (hereinafter Ocwen). The employee attested that she was familiar with business records of Ocwen but failed to lay a proper foundation for the admission of records concerning the defendant’s payment history and default. Accordingly, the plaintiff failed to demonstrate that the records relied upon in the affidavit were admissible under the business records exception to the hearsay rule … .

… [T]he defendant … failed to establish that the required notice of default was mailed by first class mail or actually delivered to the notice address if sent by other means, as required by paragraphs 15 and 22 of the mortgage. U.S. Bank N.A. v Kochhar, 2019 NY Slip Op 07439, Second Dept 10-16-19

 

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THE CITY DID NOT DEMONSTRATE THE SALARY PROMISED PLAINTIFF AT THE OUTSET WAS A MISTAKE WHICH HAD BEEN CORRECTED, THE CITY’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED; PLAINTIFF’S CROSS MOTION FOR SUMMARY JUDGMENT ON HER BREACH OF CONTRACT ACTION SHOULD HAVE BEEN GRANTED; SUPREME COURT’S ANALYSIS UNDER AN “AT-WILL EMPLOYEE” THEORY WAS NOT APPLICABLE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the city-employer’s motion for summary judgment in this salary dispute should have been denied, and plaintiff-employee’s cross motion for summary judgment should have been granted. When plaintiff applied for the job the Notice of Appointment provided by the city indicated her salary would be approximately $47,000. However plaintiff was being paid approximately $41,000. The city argued the $47,000 figure was a mistake, but the evidence submitted by the city did not support that argument. In addition the city argued that plaintiff was an at-will employ. But the Second Department noted that this is a contract action for unpaid salary to which the “at-will employee” concept was not applicable:

The elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff’s performance pursuant to the contract, the defendant’s breach of its contractual obligations, and resulting damages … . The Supreme Court’s reliance on the body of law concerning at-will employees was error. The plaintiff’s breach of contract cause of action solely seeks to recover unpaid, agreed-to compensation for services rendered while she was actually employed by the City, and thus, the at-will doctrine does not apply … . …

At best, the City’s evidence suggests that after the plaintiff was hired at the Step 4 level, some budgeting concern caused the City to seek to readjust the plaintiff’s salary to a Step 1 level. The City, however, produced no evidence demonstrating that there was any error in the Notice of Appointment or that there was any lawful change to the plaintiff’s salary. Rather, it appears that the City simply reduced the plaintiff’s salary to the Step 1 level, even though she was appointed at the Step 4 level. The City failed to demonstrate that it had any lawful basis for unilaterally changing the plaintiff’s salary. Since the City failed to make a prima facie showing of entitlement to judgment as a matter of law, the Supreme Court should have denied its motion for summary judgment dismissing the complaint. Ayers v City of Mount Vernon, 2019 NY Slip Op 07230, Second Dept 10-9-19

 

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PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT ON THE LABOR LAW 240 (1) CAUSE OF ACTION SHOULD HAVE BEEN GRANTED IN THIS CRANE-ACCIDENT CASE; THE ESPINAL ‘LAUNCHED AN INSTRUMENT OF HARM’ CAUSE OF ACTION AGAINST THE COMPANY WHICH REFURBISHED AND MAINTAINED THE CRANE SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined plaintiff’s motion for summary judgment on his Labor Law 240 (1) cause of action should have been granted in this crane-accident case. The First Department also held that the negligence action against the company (Hoffman) which refurbished and maintained the crane, based upon the Espinal “launched an instrument of harm” theory, should not have been dismissed:

The collapse of a crane constitutes a prima facie violation of Labor Law § 240(1) … . A plaintiff need not be directly injured by a portion of the crane for the Labor Law to apply — injuries that occur while trying to avoid being struck during a hoisting accident may qualify … . While plaintiff’s testimony at his deposition varied somewhat from his 50-h testimony, he repeatedly cautioned that the accident happened so fast it was difficult for him to describe exactly how it occurred. In any event, no matter which version is accepted, Labor Law § 240(1) applies to the … defendant … .

Hoffman refurbished the subject crane one year before the accident and performed maintenance on it several times thereafter. Although a contractual obligation, standing alone, will generally not give rise to tort liability in favor of a third person … , an exception exists where a contractor who undertakes to perform services pursuant to a contract negligently creates or exacerbates a dangerous condition so as to have “launched a force or instrument of harm” (Espinal v Melville Snow Contrs., 98 NY2d 136, 141-142 [2002] …). Hoffman failed to adequately address the findings of the independent crane company that conducted the post-accident investigation, which concluded that several maintenance and repair issues contributed to over wear on the crane’s wire ropes … . DeGidio v City of New York, 2019 NY Slip Op 07218, First Dept 10-8-1

 

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