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DOCUMENT PURPORTING TO CONSTITUTE A CONTRACT FOR THE SALE OF TWO PROPERTIES DID NOT SATISFY THE STATUTE OF FRAUDS, PLAINTIFF’S ACTION FOR SPECIFIC PERFORMANCE PROPERLY DISMISSED (SECOND DEPT).

The Second Department determined the one page document purporting to be a contract to sell two properties to defendant did not satisfy the statute of frauds. Therefore plaintiff’s action for specific performance was properly dismissed:

In a real estate transaction, the essential terms of a contract typically include the purchase price, the time and terms of payment, the required financing, the closing date, the quality of title to be conveyed, the risk of loss during the sale period, and adjustments for taxes and utilities … . “[W]here a contract’s material terms are not reasonably definite, the contract is unenforceable” … .

Here, the defendant demonstrated her prima facie entitlement to judgment as a matter of law dismissing the complaint on the basis that the agreement did not satisfy the statute of frauds. The agreement did not state all of the essential terms, including allocation of the price between the two properties, whether one property could be sold without the other, the terms of payment, and the risk of loss during the sale period, and did not mention the adjustments for taxes and utilities which would customarily be included in a transaction of this nature … . In addition, the agreement did not include the necessary parties because not all of the owners of the properties executed the agreement … . 443 Jefferson Holdings, LLC v Sosa, 2019 NY Slip Op 05376, Second Dept 7-3-19

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ARBITRATOR’S AWARD OF ATTORNEY’S FEES TO PLAINTIFF IN THIS BREACH OF CONTRACT DISPUTE REINSTATED; MONEY JUDGMENT SHOULD NOT HAVE BEEN GRANTED TO A PARTY WHICH HAD CONTRACTED WITH PLAINTIFF, BUT WITH WHICH DEFENDANT DID NOT HAVE AN AGREEMENT TO ARBITRATE; COURT-REVIEW OF ARBITRATION AWARDS DISCUSSED IN DETAIL (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Renwick, reversing Supreme Court, determined the arbitrator’s award of attorney’s fees to the plaintiff should not have been vacated, but the arbitrator’s award of a money judgment to OHM, which had contracted with plaintiff but was not a party to any agreement to arbitrate with the defendant, should be vacated. The opinion includes a clear explanation of a court’s limited powers of review of an arbitration award and is too comprehensive to fairly summarize here. The court noted, with regard to the American rule generally prohibiting the award of attorney’s fees, New York law is preempted by the Federal Arbitration Act (FAA):

… [T]he parties agree that manifest disregard of the law is the only appropriate ground to vacate the arbitrator’s award of attorneys’ fees … .

For an award to be set aside for manifest disregard, the arbitrator must understand and correctly state the law, but proceed to disregard the same … . Application of the “manifest disregard of law” standard requires the court to make, in essence, three inquiries: (1) whether the legal principle allegedly ignored by the arbitrator was well defined, explicit, and clearly applicable; (2) whether the arbitrators knew of the governing legal principle; and, (3) whether knowing that principle, the arbitrators refused to apply it or ignored it … . A court may not vacate an arbitration award because it thinks the arbitrators made the wrong decision … . Indeed, even if the court thinks that the arbitrator reached the wrong result or applied the law incorrectly, the court should nevertheless confirm the award, “despite [the] court’s disagreement with it on the merits, if there is a barely colorable justification for the outcome reached” … . * * *

Under established law, “[t]he question whether the parties have submitted a particular dispute to arbitration, i.e., the question of arbitrability, is an issue for judicial determination [u]nless the parties clearly and unmistakably provide otherwise”  … . * * *

Arbitration is a matter of contract, and a party cannot be forced to arbitrate a dispute that it did not expressly agree to submit to arbitration … . “Courts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so . . . . In this manner the law treats silence or ambiguity about the question who (primarily) should decide arbitrability’ differently from the way it treats silence or ambiguity about the question whether a particular merits-related dispute is arbitrable because it is within the scope of a valid arbitration agreement’ for in respect to this latter question the law reverses the presumption” … . An arbitrator’s decision to assert jurisdiction, over objection, is subject to a much broader and more rigorous judicial review than an arbitral decision on the merits, and because it is “a question for the court to decide,” it is subject to de novo judicial review … . Matter of Steyn v CRTV, LLC, 2019 NY Slip Op 05341, First Dept 7-2-19

 

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RESTITUTION SHOULD NOT HAVE BEEN ORDERED BECAUSE IT WAS NOT PART OF THE PLEA AGREEMENT, THE ARGUMENT SURVIVES THE GUILTY PLEA AND THE WAIVER OF APPEAL; DEFENDANT’S CONTENTION HE WAS DEPRIVED OF HIS RIGHT TO COUNSEL DID NOT SURVIVE THE WAIVER OF APPEAL BECAUSE DEFENDANT DID NOT ASSERT THE DEPRIVATION INFECTED THE PLEA AGREEMENT OR THE VOLUNTARINESS OF THE PLEA (FOURTH DEPT).

The Fourth Department determined restitution should not have been ordered because it was not part of the plea agreement. The court noted that defendant’s argument he was deprived of his right to counsel with respect to his decision to testify before the grand jury was not forfeited by his guilty plea, but was encompassed by his waiver of appeal. The Fourth Department declined to follow a 3rd Department decision which held a deprivation-of-counsel argument survives a waiver of appeal irrespective of whether the deprivation infected the guilty plea. Here defendant did not assert that the alleged deprivation of his right to counsel infected the plea bargaining process or tainted the voluntariness of the plea:

Defendant’s further contention that County Court erred in ordering him to pay restitution because restitution was not part of the plea agreement survives both his guilty plea and his unchallenged waiver of the right to appeal … . Moreover, contrary to the People’s contention, defendant preserved his contention for appellate review by objecting to the imposition of restitution on the same ground he now advances … . On the merits, it is undisputed that the plea bargain did not include restitution, and the court therefore erred in awarding restitution without affording defendant the opportunity to withdraw his plea … . People v Richardson, 2019 NY Slip Op 05310, Second Dept 6-28-19

 

PLAINTIFF HOMEOWNER WAS NOT ENTITLED TO PAYMENTS MADE TO AN UNLICENSED HOME IMPROVEMENT CONTRACTOR FOR WORK PERFORMED SOLELY ON THE GROUND THAT THE CONTRACTOR WAS UNLICENSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff was not entitled to the return of payments made to defendant unlicensed contractor for work performed. Plaintiff’s motion for summary judgment on that cause of action should not have been granted:

Although an unlicensed contractor may not enforce a home improvement contract against a homeowner or seek recovery in quantum meruit for work performed … , here, the defendant is not seeking to enforce the parties’ contract or to recover in quantum meruit. Rather, the plaintiff homeowner is seeking to recover money already paid to the defendant pursuant to the contract. Where a homeowner receives the benefit of the services of an unlicensed contractor, he or she is not entitled to recoup payments made for such services solely on the basis that the defendant was unlicensed … . “The parties, in these circumstances, should be left as they are” … . Rusin v Design-Apart USA, Ltd., 2019 NY Slip Op 05172, Second Dept 6-26-19

 

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CHILD CONCEIVED WITH AN EGG FROM AN ANONYMOUS DONOR AND CARRIED BY A GESTATIONAL SURROGATE PURSUANT TO AN UNPAID SURROGACY CONTRACT MAY BE ADOPTED BY THE BIOLOGICAL FATHER (SECOND DEPT).

The Second Department, reversing Family Court, determined the biological father of a child conceived with an egg from an anonymous donor and carried by a gestational surrogate can adopt the child. Family Court had held that the unpaid surrogacy contract was against public policy and should not be legitimized by adoption. Family Court also held that a biological father cannot adopt his own child. The Second Department rejected both arguments in an extensive opinion which cannot fairly be summarized here:

While commercial surrogacy contracts subject participants, and those who assist in the formation of such contracts, to civil penalties or felony conviction (see Domestic Relations Law § 123; Social Services Law §§ 374[6]; 389), the only sanction against unpaid surrogacy contracts is to treat them as void and unenforceable (see Domestic Relations Law § 122 …). …

… [T]he fact that a child was born as the result of an unenforceable surrogacy agreement does not foreclose an adoption of the resulting child, upon the surrogate’s consent … . …

There is nothing in the text of the Domestic Relations Law which precludes a parent from adopting his or her own biological child. While adoption, as we recognized above, is a statutory creation, the adoption sought here is authorized by the governing statute and there is nothing in the statute which precludes it. Further, to the extent that the Legislature has contemplated this subject, it has permitted adoptions notwithstanding an existing biological connection.

Domestic Relations Law § 110 expressly provides that “[a]n adult or minor married couple together may adopt a child of either of them born in or out of wedlock.”  Matter of John (Joseph G.), 2019 NY Slip Op 05132, Second Dept 6-26-17

 

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DOCUMENTARY EVIDENCE SUBMITTED IN SUPPORT OF THE MOTION TO DISMISS DID NOT MEET THE CRITERIA REQUIRED BY CPLR 3211(a)(1) (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant insurer’s (Reliastar’s) motion to dismiss based on documentary evidence should not have been granted. Plaintiffs sued for breach of contract when Reliastar canceled the life insurance policy:

“To succeed on a motion to dismiss based upon documentary evidence pursuant to CPLR 3211(a)(1), the documentary evidence must utterly refute the plaintiff’s factual allegations, conclusively establishing a defense as a matter of law”… . “In order for evidence to qualify as documentary,’ it must be unambiguous, authentic, and undeniable” … . “[J]udicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable, would qualify as documentary evidence in the proper case” … . “Conversely, letters, emails, and affidavits fail to meet the requirements for documentary evidence” … . Here, in support of that branch of its motion which was pursuant to CPLR 3211(a)(1), Reliastar submitted the policy and certain policy notices, which, according to Reliastar, refuted the plaintiffs’ contention that the policy cancellation was the result of Reliastar’s breach of its obligations under the policy. The policy notices, however, were, in effect, letters, which fail to meet the requirements for documentary evidence within the meaning of CPLR 3211(a)(1) … . Magee-Boyle v Reliastar Life Ins. Co. of N.Y., 2019 NY Slip Op 05118, Second Dept 6-26-19

 

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PLAINTIFF’S BREACH-OF-AN-EMPLOYMENT-CONTRACT ACTION SHOULD NOT HAVE BEEN DISMISSED, DESPITE THE FACT THAT DEFENDANT NEVER SIGNED IT (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s breach-of-an-employment-contract action should not have been dismissed. The defendant never signed the contract. However, plaintiff performed and was paid according to the contract. When plaintiff was terminated, defendant refused to pay the six month’s severance which was provided for in the contract:

The fact that defendant never signed the agreement is not, at this pleading stage, an impediment to a finding that the parties intended to be bound … . There is nothing in the agreement stating that it will not be binding until executed by both sides … . The counterparts clause provides that each party may indicate its assent by signing a separate counterpart; it does not state that the parties can assent only by signing. The merger and written amendments clauses provide only that the agreement, and any subsequent amendments, must be in writing; they do not state that the parties may convey their assent only by affixing signatures.

The complaint also sufficiently alleges causes of action for promissory estoppel … and recovery of severance as unpaid wages under Labor Law article 6 … . However, plaintiff fails to sufficiently allege a claim for unjust enrichment as he does not allege he was not paid for the work he actually performed … . Lord v Marilyn Model Mgt., Inc., 2019 NY Slip Op 05093, First Dept 6-25-19

 

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ABUTTING PROPERTY OWNER HAS A NON-DELEGABLE DUTY TO MAINTAIN THE SIDEWALK WHICH IS NOT DIMINISHED BY HIRING AN INDEPENDENT CONTRACTOR TO WORK ON THE SIDEWALK, PROPERTY OWNER’S MOTION FOR SUMMARY JUDGMENT IN THIS SLIP AND FALL CASE PROPERLY DENIED (FIRST DEPT).

The First Department determined defendant abutting property owner’s (Hillman’s) motion for summary judgment in this sidewalk slip and fall case was properly denied. Hillman had hired an independent contractor to do concrete work on the sidewalk, but that did not relieve Hillman of his nondelegable duty to keep the sidewalk in good repair (NYC Administrative Code):

Although the “general rule is that a party who retains an independent contractor . . . is not liable for the independent contractor’s negligent acts,” an exception arises when the hiring party “is under a specific nondelegable duty” … . Here, Hillman, as the property owner, had a nondelegable duty to maintain the sidewalk, including the sidewalk around the subject sign post stump …

Contrary to Hillman’s contention, the motion court did not conclude that Hillman is, in fact, liable for any alleged wrongs committed by the independent contractor in performing cement sidewalk resurfacing work. Rather, the motion court correctly found that under these circumstances the record raises issues of fact as to whether the cement work ordered by this defendant, the property owner, caused or exacerbated a hazardous tripping condition, and whether Hillman had actual or constructive knowledge of the metal protrusion on the sidewalk outside its building. Factual issues are also presented as to whether the condition was open and obvious, or, alternatively the defect trivial … . Vullo v Hillman Hous. Corp., 2019 NY Slip Op 05087, First Dept 6-25-19

 

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HANDWRITTEN PROVISION OF A LETTER OF INTENT CONTROLS, THE LETTER OF INTENT IS NOT A BINDING CONTRACT, BREACH OF A FIDUCIARY DUTY AND TORTIOUS INTERFERENCE WITH CONTRACT CAUSES OF ACTION PROPERLY DISMISSED IN THE ABSENCE OF A BINDING CONTRACT, UNJUST ENRICHMENT CAUSE OF ACTION PROPERLY DISMISSED BECAUSE THE BENEFIT TO THE DEFENDANTS WAS UNIDENTIFIED (SECOND DEPT).

The Second Department determined that a letter of intent concerning the development of defendant-church’s property was not a binding contract because of a handwritten provision. Because there was no binding contract, the fiduciary duty, joint venture, covenant of good faith, and tortious interference with contract causes of action were properly dismissed. The unjust enrichment cause of action was properly dismissed because the benefit allegedly received by defendants was not identified:

“It is a fundamental principle of contract interpretation that when a handwritten or typewritten provision conflicts with the language of a preprinted form document, the former will control, as it is presumed to express the latest intention of the parties'” … . Here, there are inconsistent provisions in the letter of intent regarding whether the parties intended it to be a binding agreement. However, the parties modified the letter of intent, with a handwritten provision, to state that it is “not intended to constitute a binding contract.” Accordingly, this handwritten provision controls over the conflicting printed provisions stating that the letter of intent will become binding after a period of five days … . …

“To prevail on a claim of unjust enrichment, a party must show that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered” … . A bare legal conclusion that it is against equity and good conscience to retain an unidentified benefit is insufficient to adequately allege that an asserted enrichment was unjust … . Here, the complaint does not identify the benefit the defendants allegedly obtained or explain why it is against equity and good conscience to allow the defendants to retain such benefit. FoxStone Group, LLC v Calvary Pentecostal Church, Inc., 2019 NY Slip Op 04916, Second Dept 6-19-19

 

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UNLESS THE PARTIES OPT OUT BY STIPULATION, A CHILD SUPPORT ORDER MAY BE MODIFIED WITHOUT A DEMONSTRATION OF A SUBSTANTIAL CHANGE IN CIRCUMSTANCES IF A PARTY’S INCOME INCREASES BY 15 % OR MORE AND THREE YEARS HAVE PASSED SINCE THE LAST ORDER (SECOND DEPT).

The Second Department noted that a court can modify child support without a substantial change of circumstances where a party’s income has increased by 15% or more and three years have passed since the last support order:

Section 451 of the Family Court Act allows a court to modify an order of child support, without requiring a party to allege or demonstrate a substantial change in circumstances, where (1) either party’s gross income has changed by 15% or more since the order was entered or modified, or (2) three years or more have passed since the order was entered, last modified, or adjusted (see Family Ct Act § 451[3][b][i]; Domestic Relations Law § 236[B][9][b][2][ii] …). The statutory grounds are not available in the event that the parties specifically opt out of that statutory provision in a validly executed stipulation (see Family Ct Act § 451[3][b]). In this case, the parties, in their stipulation, did not opt out of that statutory provision. Thus, the increase in the father’s gross income of more than 15% was sufficient, by itself, to permit the Family Court to modify his child support obligation … . .Matter of Regan v Regan, 2019 NY Slip Op 04702, Second Dept 6-12-19

 

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