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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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DEFENDANT SCHOOL DISTRICT WAS NOT A PARTY TO THE LONG-TERM DISABILITY INSURANCE CONTRACT WHICH COVERED PLAINTIFF, A SCHOOL DISTRICT EMPLOYEE WHO WAS INJURED ON THE JOB; THEREFORE THE SCHOOL DISTRICT COULD NOT BE SUED BY THE EMPLOYEE AFTER THE INSURER CUT OFF BENEFITS (SECOND DEPT).

The Second Department determined that plaintiff, a security guard for the School District who was injured on the job, did not have a cause of action against District based upon the long-term disability insurer’s (Sun Life’s) decision to terminate her disability benefits. The District was not a party to the contract between Sun Life and the policyholder. Although the Summary Plan Description issued by Sun Life’s predecessor mentioned the insured rights under the Employee Retirement Income Security Act (ERISA), the District was not obligated by the Summary-Plan language:

… [T]he plaintiff contends that, based on the language of portions of the Summary Plan Description, the District subjected itself to ERISA’s statutory scheme governing appeals from denials of claims. …

An insurance policy is a contract to which standard provisions of contract interpretation apply … . “Liability for breach of contract does not lie absent proof of a contractual relationship or privity between the parties”… . “One cannot be held liable under a contract to which he or she is not a party” … .

Here, the District was not a party to the long-term disability policy issued by Sun Life to a different named policyholder. Even assuming the authenticity of the Summary Plan Description excerpts relied upon by the plaintiff, nothing in the record reflects that the District authored, published, or agreed to be bound by the Summary Plan Description, which, by its terms, did not form part of the insurance policy. Nor do the terms of the insurance policy incorporate the provisions of ERISA … . Arroyo v Central Islip UFSD, 2019 NY Slip Op 04669, Second Dept 6-12-19

 

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SCHOOL EMPLOYEE’S NEGLIGENCE ACTION AGAINST THE DEPARTMENT OF EDUCATION IS NOT GOVERNED BY THE COLLECTIVE BARGAINING AGREEMENT (CBA), NO NEED TO EXHAUST ADMINISTRATIVE REMEDIES; DENIAL OF MEDICAL LEAVE DID NOT HAVE RES JUDICATA OR COLLATERAL ESTOPPEL EFFECT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined an employee’s personal injury complaint against the NYC Department of Education (DOE), stemming from an elevator accident, should not have been dismissed. The plaintiff-employee first applied to the DOE for line of duty injury paid medical leave pursuant to the collective bargaining agreement (CBA) and was denied. Plaintiff then commenced the personal injury action. The DOE argued that plaintiff had failed to exhaust the administrative remedies required by the CBA and, in the alternative, the denial of the line of duty pay should be given res judicata or collateral estoppel effect. Supreme Court decided plaintiff had failed to exhaust the administrative remedies. The Second Department held that her injury and the resulting negligence action were not covered by the CBA:

An employee covered by a collective bargaining agreement which provides for a grievance procedure must exhaust administrative remedies prior to seeking judicial remedies … or face dismissal of the action …. Here, however, the plaintiff seeks to recover damages against the defendants for pain and suffering based upon a negligence theory of liability which is outside the scope of, and is not governed by, the CBA’s “line of duty injury” paid leave grievance provisions… . There is no need to exhaust administrative remedies when the cause of action by the plaintiff is not governed by the CBA … .

The defendants’ contention that dismissal is also warranted on the basis of collateral estoppel and res judicata is without merit … . Collateral estoppel is inapplicable, as the defendants failed to demonstrate that the issue that the plaintiff seeks to pursue here was necessarily decided by the DOE when it denied the plaintiff’s “line of duty injury” paid leave application … . Likewise, the doctrine of res judicata, or claim preclusion, also is inapplicable to the plaintiff’s complaint because the relief she seeks could not have been awarded within the context of the prior administrative proceeding … . Shortt v City of New York, 2019 NY Slip Op 04745, Second Dept 6-12-19

 

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THE QUALIFIED DOMESTIC RELATIONS ORDER (QDRO) OBTAINED BY STIPULATION OF SETTLEMENT MUST BE ENFORCED AS WRITTEN, BECAUSE NO PROVISION WAS MADE FOR GAINS OR LOSSES AFTER THE DIVORCE PROCEEDINGS COMMENCED, SUPREME COURT SHOULD NOT HAVE TRANSFERRED THE AGREED AMOUNT PLUS THE GAINS THAT HAD ACCRUED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the qualified domestic relations order (QDRO) obtained pursuant to a stipulation of settlement must be enforced as written. Because the stipulation made no provision for the transfer of gains which accrued after the divorce action started, Supreme Court erred by transferring the agreed amount plus the gains:

“A QDRO obtained pursuant to a [stipulation of settlement] can convey only those rights which the parties [agreed to] as a basis for the judgment’ ” … . Thus, “a court errs in granting a domestic relations order encompassing rights not provided in the underlying stipulation” … . A stipulation of settlement that is incorporated, but not merged, into the judgment of divorce ” is a contract subject to the principles of contract construction and interpretation’ ” … . If the stipulation of settlement is ” complete, clear, and unambiguous on its face[, it] must be enforced according to the plain meaning of its terms’ ” … . Here, the stipulation of settlement clearly and unambiguously made no provision for plaintiff to receive gains or losses on the amount that the stipulation of settlement specified would be transferred to her. Thus, plaintiff is not entitled to any gains on that amount that accrued after the divorce action commenced … . Reber v Reber, 2019 NY Slip Op 04557, Fourth Dept 6-7-19

 

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ARBITRATOR EXCEEDED HIS AUTHORITY PURSUANT TO THE COLLECTIVE BARGAINING AGREEMENT (CBA) BY RELYING ON EVIDENCE WHICH WAS NOT PART OF THE HEARING EVIDENCE TO DETERMINE WHETHER THE RESPONDENT HAD PROBABLE CAUSE TO SUSPEND THE PETITIONER (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the arbitrator in this employment dispute covered by a collective bargaining agreement (CBA) , exceeded his authority by relying on the information in the notice of suspension, as opposed to the hearing evidence, to determine whether the employee, who was suspended without pay, was entitled to back pay:

Respondents’ sole contention on appeal is that the arbitrator’s award of back pay for the period of interim suspension exceeded his authority. We agree. “Judicial review of arbitral awards is extremely limited. Pursuant to CPLR 7511 (b) (1), a court may vacate an award when it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator’s power” … . Moreover, “although an arbitrator’s interpretation of contract language is generally beyond the scope of judicial review, where a benefit not recognized under the governing CBA is granted, the arbitrator will be deemed to have exceeded his or her authority”… . Therefore, “if the arbitrator imposes requirements not supported by any reasonable construction of the CBA, then the arbitrator’s construction[,] in effect, made a new contract for the parties, which is a basis for vacating the award” … . …

Here, the arbitrator’s award of back pay for the period of interim suspension was based upon a determination that DOCCS lacked probable cause to suspend petitioner. As relevant here, section 33.4 (c) (1) of the CBA states that “[s]uspensions without pay . . . shall be reviewable by a disciplinary arbitrator . . . to determine whether the [respondent] had probable cause.” This Court has previously held that hearing evidence should be considered by the arbitrator in determining probable cause (see Matter of Livermore-Johnson … . However, the decision makes clear that the arbitrator did not rely on the hearing evidence to reach this determination … . Matter of Czerwinski (New York State Dept. of Corr. & Community Supervision), 2019 NY Slip Op 04526, Third Dept 6-6-19

 

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