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REMEDIES FOR BREACH OF CONTRACT WERE NOT CONFINED TO THE REMEDIES MENTIONED IN THE CONTRACT; THERE WAS NO INDICATION THE REMEDIES DESCRIBED WERE ‘SOLE AND EXCLUSIVE’ (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined the breach of contract cause of action should not have been dismissed. Plaintiff provided a healthcare plan to defendant employer (ESC). Plaintiff alleged defendant extended healthcare coverage to an employee who was not qualified, and thereby breached the underlying contract:

… [D]ismissal under CPLR 3211 (a) (1) was not warranted. In granting the motion insofar as it sought dismissal of the breach of contract cause of action, the court determined that the provision of certain remedies in the Contract precluded plaintiff from seeking additional damages from ESC under the “canon of contract construction expressio unius est exclusio alterius, that is, that the expression of one thing implies the exclusion of the other” … . The court further determined that the indemnification provision in the Contract did not apply to disputes between the parties. We conclude that the court erred in determining that plaintiff was limited to the remedies set forth in the Contract.

“[I]t is a basic tenet of the law of damages that where there has been a violation of a contractual obligation the injured party is entitled to fair and just compensation commensurate with [the] loss” … . “Limitations on a party’s liability will not be implied and to be enforceable must be clearly, explicitly and unambiguously expressed in a contract” … . As a result, “[u]nder New York law, a provision must be included in the agreement limiting a party’s remedies to those specified in the contract in order for courts to find that th[o]se remedies are exclusive” … .

Here, the Contract provided that, in the event an ineligible person was enrolled in the health care plan, plaintiff “may elect” certain remedies. It also addressed the obligations of the person who had received such benefits. There was nothing in the Contract stating that the contractual remedies were plaintiff’s sole and exclusive remedies against ESC, i.e., the other party to the Contract … . HealthNow N.Y., Inc. v David Home Bldrs., Inc., 2019 NY Slip Op 07177, Fourth Dept 10-4-19

 

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DEFENDANT IN THIS FORECLOSURE ACTION WAS A ‘BORROWER’ AND THEREFORE WAS ENTITLED TO THE 90-DAY NOTICE REQUIRED BY RPAPL 1304; THE BANK HAD ARGUED SHE WAS NOT A BORROWER BECAUSE SHE DID NOT SIGN THE NOTE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant in this foreclosure action was a “borrower” within the meaning of RPAPL 1304 and therefore she was entitled to the required 90-day notice, which she did not receive. That bank argued that she was not a borrower because only her deceased husband signed the note. However she was named on the mortgage and she signed the mortgage:

While RPAPL 1304 provides that the notice shall be sent to the “borrower,” that term is not defined in the statute (see RPAPL 1304). It is undisputed that only the defendant’s deceased husband, Solomon Forman, is identified as a “borrower” in the note which is secured by the mortgage. That is not determinative in this case. In the mortgage instrument, the defendant is referred to as a borrower. On the first page of the mortgage instrument, under the heading entitled “Words Used Often in this Document,” the defendant is identified, along with her husband, as ” Borrower.'” The defendant is also designated as “Borrower” under her signature on the signature page of the mortgage instrument. While the plaintiff contends that this standard mortgage form mischaracterizes the defendant as a borrower, any ambiguities in the language of the document must be construed against the plaintiff, as the plaintiff is the party who supplied the document … . Bank of N.Y. Mellon v Forman, 2019 NY Slip Op 07045, Second Dept 10-2-19

 

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NO ESPINAL EXCEPTIONS WERE PLED SO THE SNOW REMOVAL CONTRACTOR’S MOTION FOR SUMMARY JUDGMENT IN THIS SLIP AND FALL CASE WAS PROPERLY GRANTED; QUESTIONS OF FACT WERE RAISED ABOUT WHETHER THE STORM IN PROGRESS RULE APPLIED AND WHETHER THE AREA WAS SLIPPERY BEFORE THE STORM, PRECLUDING SUMMARY JUDGMENT IN FAVOR OF THE OTHER DEFENDANTS (FOURTH DEPT).

The Fourth Department, modifying Supreme Court, in this slip and fall case, determined: (1) the snow removal contractor’s (Fitzgerald’s) motion for summary judgment was properly granted because no Espinal exception was pled; and (2) there were questions of fact whether there was a storm in progress at the time of the fall and whether there were slippery areas prior to the storm:

“[A] contractual obligation, standing alone, will generally not give rise to tort liability in favor of a third party” (Espinal v Melville Snow Contrs., 98 NY2d 136, 138 [2002]). Although there are three well-established exceptions to that rule (see id. at 140), plaintiff did not allege facts in his complaint or bill of particulars that would establish the applicability of any of those exceptions, and thus Fitzgerald was not required to affirmatively negate the possible application of any of them in order to meet her initial burden … . Instead, Fitzgerald had to demonstrate only that plaintiff was not a party to the snow removal contract and that she therefore owed no duty to him, which she accomplished by submitting a copy of the contract … . …

… [D]efendants submitted the deposition testimony of plaintiff, who testified that snow and rain had been predicted that day, but during the time leading up to his fall it was merely overcast. Thus, defendants’ own submissions raise an issue of fact whether there was a storm in progress at the time of the fall …. Furthermore, defendants submitted the deposition testimony of an assistant store manager, who testified that there were “a few” “different” “slippery spots” in the parking lot when she arrived for her shift at 2:00 p.m. on the day of plaintiff’s fall, thus raising issues of fact whether the slippery condition preexisted the alleged storm … , and whether defendants had actual or constructive notice of the slippery condition … . Govenettio v Dolgencorp of N.Y., Inc., 2019 NY Slip Op 06907, Fourth Dept 9-27-19

 

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OHIO TRUSTEE’S REQUEST FOR PAYMENT PURSUANT TO A ROYALTY AGREEMENT WITH THE NEW YORK PLAINTIFF DID NOT CONFER JURISDICTION UPON NEW YORK, DESPITE A NEW YORK CHOICE OF LAW PROVISION (FIRST DEPT).

The First Department, reversing Supreme Court, determined the Ohio trustee’s request for payment under a 1986 royalty agreement with the New York plaintiff  did not confer jurisdiction upon New York, even though the contract included a New York choice of law provision:

The trustee’s requests from Ohio, by letter, telephone, and/or email, to plaintiff in New York to send him monies due under the royalty agreement that plaintiff had entered into in 1986 with nonparty Denise Somerville …— which would merely continue plaintiff’s previous practice of sending royalties to Somerville in Ohio — do not constitute the transaction of business under CPLR 302(a)(1) … .

… [N]egotiating a contract from outside New York “is insufficient to constitute the transaction of business in New York” … . …

The fact that the contract chooses New York law does not “constitute a voluntary submission to personal jurisdiction in New York” … . ABKCO Music, Inc. v McMahon, 2019 NY Slip Op 06721, First Dept 9-24-19

 

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SELLER’S ACTION FOR SPECIFIC PERFORMANCE OF A REAL ESTATE PURCHASE AGREEMENT PROPERLY DISMISSED; THE CONTRACT WAS SUBJECT TO ATTORNEY APPROVAL BUT NO DEADLINE FOR ATTORNEY-APPROVAL WAS SET BY THE AGREEMENT; DEFENDANTS’ COUNSEL INFORMED PLAINTIFF’S COUNSEL THAT DEFENDANTS DID NOT WISH TO GO FORWARD WITH THE PURCHASE EITHER SEVEN OR NINE DAYS AFTER THE CONTRACT WAS EXECUTED, WHICH WAS DEEMED A REASONABLE TIME (SECOND DEPT).

The Second Department determined defendant-purchasers’ motion to dismiss the complaint seeking specific performance of a real estate purchase agreement was property granted. The agreement was subject to attorney approval and defendants’ attorney disapproved the contract either seven or nine days after the agreement was executed. There was no time-limit for attorney approval in the agreement, and seven or nine days were deemed a reasonable time:

… [T]he defendants established their entitlement to dismissal of the complaint pursuant to CPLR 3211(a)(7). “On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” … . “Moreover, where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the motion should not be granted unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it” … .

The evidentiary material submitted by the defendants in support of their motion demonstrated that the plaintiff had no cause of action against them. Contrary to the plaintiff’s contention, the evidence conclusively established that the purchase agreement was unenforceable because it was subject to attorney approval, which was not given by the defendants’ attorney. As the purchase agreement contained no time limit within which approval was required “a reasonable time for cancellation thereunder is implied” … . Whether, as acknowledged by the defendants, it was seven days after the parties entered into the purchase agreement that the defendants’ attorney disapproved it, or as alleged by the plaintiff, it was nine days after the parties entered into the purchase agreement that the defendants’ attorney disapproved it, the time between the parties entering into the agreement and the disapproval was minimal, during which no prejudice would inure to the plaintiff, and was a reasonable time period as a matter of law. Makris v Boylan, 2019 NY Slip Op 06598, Second Dept 9-18-19

 

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THE “PARTICULARITY” PLEADING-REQUIREMENTS FOR A FRAUD CAUSE OF ACTION DO NOT APPLY TO CAUSES OF ACTION ALLEGING A FRAUDULENT CONVEYANCE PURSUANT TO THE DEBTOR-CREDITOR LAW (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that, because a fraudulent conveyance action does not require an intent to defraud, the specificity requirements in the CPLR for pleading a fraud cause of action do not apply. Here plaintiff alleged the defective design and construction of a condominium:

Pursuant to Debtor and Creditor Law § 273, a conveyance that renders the conveyor insolvent is fraudulent as to creditors without regard to actual intent, if the conveyance was made without fair consideration (see Debtor and Creditor Law § 273 …). Pursuant to Debtor and Creditor Law § 274, a conveyance is fraudulent as to creditors without regard to actual intent when it is “made without fair consideration when the person making it is engaged or is about to engage in a business or transaction for which the property remaining in his [or her] hands after the conveyance is an unreasonably small capital” … . Section 270 of the Debtor and Creditor Law defines “creditor” as any “person having any claim, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent.”

Here, the complaint’s fifth cause of action sufficiently states cognizable claims alleging fraudulent conveyances pursuant to Debtor and Creditor Law §§ 273 and 274. Since valid claims of violations of Debtor and Creditor Law §§ 273 and 274 do not require proof of actual intent to defraud, such claims are not required to be pleded with the particularity required by CPLR 3016(b) … . Further, the plaintiff sufficiently alleged that it is a creditor of the sponsor since it asserted a breach of contract cause of action against the sponsor, even though said cause of action was unmatured at the time of the alleged conveyances … . Board of Mgrs. of E. Riv. Tower Condominium v Empire Holdings Group, LLC, 2019 NY Slip Op 06587, Second Dept 9-18-19

 

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BANK DID NOT SUBMIT SUFFICIENT EVIDENCE OF ITS STANDING, ITS COMPLIANCE WITH CONDITIONS PRECEDENT IN THE MORTGAGE, OR ITS COMPLIANCE WITH THE NOTICE REQUIREMENTS OF THE RPAPL, THE BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank was not entitled to summary judgment in this foreclosure action because it presented: (1) insufficient proof of standing; (2) insufficient proof of compliance with the notice provisions of the mortgage; and (3) insufficient proof of compliance with the RPAPL notice requirements:

… [T]he plaintiff failed to establish, prima facie, its standing because it did not show that it was a holder of the note at the time the action was commenced. The affidavits of Melissa Guillote and Myrna Moore, both vice presidents of loan documentation of the plaintiff’s loan servicer, nonparty Wells Fargo Bank, N.A. (hereinafter the loan servicer), that were submitted by the plaintiff in support of its motion, conflict as to whether the plaintiff or the loan servicer possessed the note on the date the action was commenced. Moreover, neither affidavit attaches any admissible document to show that the plaintiff possessed the note endorsed in blank prior to the commencement of this action (see CPLR 4518[a] …). The affidavits also fail to show that either Guillote or Moore possessed personal knowledge of whether the plaintiff possessed the note prior to commencement of the action. …

The plaintiff also failed to establish, prima facie, that it complied with the conditions precedent contained in sections 15 and 22 of the mortgage, which provide that required notice to the defendants is considered given when it is mailed by first class mail or when it is actually delivered to the defendants’ notice address if sent by any other means … . …

The plaintiff also failed to show, prima facie, that it strictly complied with RPAPL 1304. Proper service of the RPAPL 1304 notice containing the statutorily mandated content is a condition precedent to the commencement of a foreclosure action … . The plaintiff did not submit an affidavit of service or proof of mailing by the post office demonstrating that it properly served the defendants as prescribed by the statute … . HSBC Bank USA, Natl. Assn. v Dubose, 2019 NY Slip Op 06481, Second Dept 9-11-19

 

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ALTHOUGH PLAINTIFF’S COUNSEL SENT A LETTER TO THE INSURED SHORTLY AFTER PLAINTIFF WAS INJURED IN THE INSURED’S HOME REQUESTING THAT THE INSURED NOTIFY HER INSURER, THE INSURER WAS NOT NOTIFIED UNTIL IT RECEIVED THE SUMMONS AND COMPLAINT SIX MONTHS AFTER THE INCIDENT; THE INSURER PROPERLY DISCLAIMED COVERAGE ON THE GROUND IT HAD NOT BEEN TIMELY NOTIFIED (SECOND DEPT).

The Second Department determined defendant insurance company (State Farm) properly disclaimed coverage on the ground it was not notified of the underlying incident (plaintiff was injured in an altercation in the insured’s home) until six months after it occurred. Plaintiff was awarded $715,000 after a non-jury trial. Plaintiff then brought a declaratory judgment action against State Farm:

By letter dated October 31, 2007, the plaintiffs’ counsel requested that [defendant] direct her insurance carrier to contact the plaintiffs’ counsel to discuss the subject occurrence. …

In February 2008, the injured plaintiff, and his wife suing derivatively, commenced a personal injury action (hereinafter the underlying action) against, among others, [the insured] to recover damages arising from the September 2007 occurrence. On or about March 13, 2008, State Farm received a copy of the summons and complaint filed in the underlying action. By letter dated April 3, 2008, State Farm disclaimed coverage to [the insured] on the ground, among others, that notice of the occurrence was untimely. …

“[A]n insurer has the right to demand that it be notified of any loss or accident that is covered under the terms of the insurance policy. The purpose of such a requirement is to afford the insurer an opportunity to protect itself by, for example, investigating claims soon after the underlying events” … . Where, as here, an insurance policy requires that notice of an occurrence or loss be given “as soon as practicable,” such notice constitutes a condition precedent to coverage, and notice must be provided within a reasonable time in view of all of the circumstances … . “Where there is no excuse or mitigating factor, the issue [of reasonableness] poses a legal question for the court, rather than an issue for the trier of fact” … . …

… State Farm established its prima facie entitlement to judgment as a matter of law declaring that it is not obligated to pay the judgment in the underlying action by demonstrating that it did not receive notice of the occurrence giving rise to the underlying action until approximately six months after the occurrence … . In opposition, the plaintiffs failed to raise a triable issue of fact, including as to whether they made a reasonably diligent effort to ascertain the identity of [defendant’s] insurer … . Henaghan v State Farm Fire & Cas. Co., 2019 NY Slip Op 06480, Second Dept 9-11-19

 

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PLAINTIFF DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE OF DEFAULT PROVISION OF THE MORTGAGE; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

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

… [T]he plaintiff failed to establish, prima facie, that it complied with the condition precedent contained in section 22 of the mortgage agreement regarding the notice of default. The plaintiff’s submissions did not establish that the notice was sent by first class mail or actually delivered to the notice address if sent by other means, as required by the terms of the mortgage agreement … . PNMAC Mtge. Opportunity Fund Invs., LLC v Torres, 2019 NY Slip Op 06523, Second Dept 9-11-19

 

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TWO YOUNG MEN DID NOT REALIZE THE CONCRETE THEY WERE MOVING WAS A CESSPOOL COVER; ONE FELL IN AND THE OTHER JUMPED IN TO RESCUE HIM; BOTH DIED FROM CHEMICAL ASPHYXIATION; QUESTIONS OF FACT WHETHER THE COVER WAS A DANGEROUS CONDITION, WHETHER THE CESSPOOL CONTRACTOR LAUNCHED AN INSTRUMENT OF HARM AND WHETHER THE RESCUE ATTEMPT WAS FORESEEABLE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined there were questions of fact whether the property owner (Cruzate) was negligent and whether the cesspool contractor (Port Jefferson) launched an instrument of harm. Two young men were planning to build a campfire in the backyard of a rental property owned by Cruzate. The men did not realize the pieces of concrete they decided to move were cesspool covers. One of the men (Fuentes) fell in, the other (Castro) jumped in to rescue him. Both were asphyxiated by chemicals that had been added when the cesspool was serviced:

… [T]he plaintiff raised a triable issue of fact as to whether the cesspool cover was in a defective condition because Port Jefferson Cesspool had improperly replaced it after servicing the cesspool, enabling Suarez to get his fingers underneath the cover and lift it … . The plaintiff submitted the affidavit of his expert, who opined that, on the date of the accident, the cover was not secure to the ground. According to the expert, there was soil between the cover and the cesspool, so that the cover did not rest firmly on the cesspool, which was a substantial factor in the deaths of Castro and Fuentes. Moreover, Cruzate testified that he hired Port Jefferson Cesspool to service the cesspool, supervised the work, observed Port Jefferson Cesspool lift the cesspool cover, and was present when the work was completed. Therefore, there are triable issues of fact as to whether Cruzate had actual or constructive notice of the allegedly defective condition of the cesspool cover … . …

… [T]he plaintiff raised a triable issue of fact as to whether Port Jefferson Cesspool launched a force of harm and created a dangerous condition by improperly replacing the cement cover after servicing the cesspool (see generally Espinal v Melville Snow Contrs., 98 NY2d 136). The plaintiff’s expert opined, as discussed above, that there was soil between the cover and the cesspool, so that the cover did not rest firmly on the cesspool, and that this was a substantial factor in the deaths of Castro and Fuentes. …

… [T]he fact that Castro decided to jump into the cesspool in an attempt to save his friend does not necessarily act as a bar to recovery. In 1921, the Court of Appeals, in an opinion by Judge Benjamin Cardozo, established that, with regard to the principle of foreseeability, “[d]anger invites rescue. . . . The wrong that imperils life is a wrong to the imperiled victim; it is also a wrong to his rescuer” (Wagner v International Ry. Co., 232 NY at 180 … ) this principle applies where “the actions of the injured person were reasonable in view of the emergency situation,” that is, where the rescuer “acted as a reasonably prudent person would act in the same situation, even if it later appears that the rescuer did not make the safest choice or exercise the best judgment” … . Calderon v Cruzate, 2019 NY Slip Op 06377, Second Detp 8-28-19

 

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