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REAL ESTATE CONTRACT LIMITING REMEDIES CONSTITUTED DOCUMENTARY EVIDENCE SUFFICIENT TO WARRANT DISMISSAL OF CAUSES OF ACTION FOR SPECIFIC PERFORMANCE AND REFORMATION OF THE PURCHASE CONTRACT, PLEADING REQUIREMENTS FOR FRAUDULENT MISREPRESENTATION EXPLAINED (SECOND DEPT).

The Second Department, modifying Supreme Court, determined defendant's motion to dismiss causes of action for specific performance and reformation of a real estate purchase contract should have been granted. However the motion to dismiss the fraudulent misrepresentation cause of action was properly denied. The Second Department determined the limitation of remedies in the real estate contract constituted documentary evidence justifying dismissal pursuant to CPLR 3211(a)(1). The requirements for sufficiently pleading a cause of action for fraudulent misrepresentation were explained as well:

“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” … . “An unambiguous contract provision may qualify as documentary evidence under CPLR 3211(a)(1)” … . Here, the parties' contract, which limited the plaintiff's remedies in the event that the defendants were unable to clear defects in title, established a complete defense as a matter of law to the first and third causes of action, seeking specific performance and reformation of the contract based upon mutual mistake, respectively … . …

Where a cause of action is based on a misrepresentation or fraud, “the circumstances constituting the wrong shall be stated in detail” (CPLR 3016[b]). Here, the complaint sufficiently stated a cause of action to recover damages for fraudulent misrepresentation by alleging that the defendants misrepresented that they owned 42-55 27th Street and had the right to convey it, that they made this representation despite knowing that it was false, and that the plaintiff reasonably relied upon the representation to his detriment. Hiu Ian Cheng v Salguero, 2018 NY Slip Op 05831, Second Dept 8-22-18

CIVIL PROCEDURE (MOTION TO DISMISS ON DOCUMENTARY EVIDENCE, REAL ESTATE CONTRACT LIMITING REMEDIES CONSTITUTED DOCUMENTARY EVIDENCE SUFFICIENT TO WARRANT DISMISSAL OF CAUSES OF ACTION FOR SPECIFIC PERFORMANCE AND REFORMATION OF A REAL ESTATE PURCHASE CONTRACT, PLEADING REQUIREMENTS FOR FRAUDULENT MISREPRESENTATION EXPLAINED (SECOND DEPT))/CPLR 3211 (MOTION TO DISMISS ON DOCUMENTARY EVIDENCE, REAL ESTATE CONTRACT LIMITING REMEDIES CONSTITUTED DOCUMENTARY EVIDENCE SUFFICIENT TO WARRANT DISMISSAL OF CAUSES OF ACTION FOR SPECIFIC PERFORMANCE AND REFORMATION OF A REAL ESTATE PURCHASE CONTRACT, PLEADING REQUIREMENTS FOR FRAUDULENT MISREPRESENTATION EXPLAINED (SECOND DEPT))/CONTRACT LAW (MOTION TO DISMISS ON DOCUMENTARY EVIDENCE, REAL ESTATE CONTRACT LIMITING REMEDIES CONSTITUTED DOCUMENTARY EVIDENCE SUFFICIENT TO WARRANT DISMISSAL OF CAUSES OF ACTION FOR SPECIFIC PERFORMANCE AND REFORMATION OF A REAL ESTATE PURCHASE CONTRACT, PLEADING REQUIREMENTS FOR FRAUDULENT MISREPRESENTATION EXPLAINED (SECOND DEPT))/REAL ESTATE (MOTION TO DISMISS ON DOCUMENTARY EVIDENCE, REAL ESTATE CONTRACT LIMITING REMEDIES CONSTITUTED DOCUMENTARY EVIDENCE SUFFICIENT TO WARRANT DISMISSAL OF CAUSES OF ACTION FOR SPECIFIC PERFORMANCE AND REFORMATION OF A REAL ESTATE PURCHASE CONTRACT, PLEADING REQUIREMENTS FOR FRAUDULENT MISREPRESENTATION EXPLAINED (SECOND DEPT))/FRAUD (MOTION TO DISMISS ON DOCUMENTARY EVIDENCE, REAL ESTATE CONTRACT LIMITING REMEDIES CONSTITUTED DOCUMENTARY EVIDENCE SUFFICIENT TO WARRANT DISMISSAL OF CAUSES OF ACTION FOR SPECIFIC PERFORMANCE AND REFORMATION OF A REAL ESTATE PURCHASE CONTRACT, PLEADING REQUIREMENTS FOR FRAUDULENT MISREPRESENTATION EXPLAINED (SECOND DEPT))

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DEFENDANT WHICH BUILT THE SWIMMING POOL, DEFENDANT WHICH INSTALLED THE POOL LINER, AND DEFENDANT OWNERS OF THE POOL, WERE NOT ENTITLED TO SUMMARY JUDGMENT IN THIS SWIMMING POOL INJURY CASE, PLAINTIFF WAS INJURED WHEN HE DOVE IN AND STRUCK HIS CHIN IN A SHALLOW AREA (SECOND DEPT).

The Second Department determined defendants' motions for summary judgment in this swimming pool injury case was properly denied. Plaintiff was injured when he dove into the pool allegedly unaware of a shallow area near the deep area. The builder of the pool and the installer of the pool liner (the Bertolino defendants), as well as the owners of the pool (the Olsen defendants), were sued.  The Bertolino defendants could be liable based upon their contracts with the owners because it was alleged the pool was negligently designed and constructed by them. There also was a question of fact whether the condition was readily observable (raising the duty to protect or warn on the part of the owners):

With respect to the Bertolino defendants, generally, a contractual obligation of a third party does not give rise to liability in tort to persons not a party to the contract… . An exception exists, however, where the contractor created a dangerous condition or increased the risk of harm to others in its undertaking … . Here, the plaintiff's allegation that the Bertolino defendants negligently designed and constructed the subject pool by incorporating the allegedly dangerous condition falls within this exception … . Moreover, the Bertolino defendants failed to establish, prima facie, that the alleged condition was not dangerous or that it did not unreasonably increase the risk of harm to those diving off the side of the pool, even though, as their expert opined, it was located outside the “diving water envelope,” which the expert described as the “area without constructed intrusions” … . …

As to the Olsen defendants, “[t]he owner of a private residential swimming pool has a duty to maintain the pool in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to others, the seriousness of the injury and the burden of avoiding the risk” … . “What accidents are reasonably foreseeable, and what preventive measures should reasonably be taken, are ordinarily questions of fact” … . However, there is no duty to protect or warn of conditions that are not inherently dangerous and that are readily observable by the reasonable use of one's senses … . Here, the Olsen defendants, who did not deny notice of the allegedly dangerous condition, failed to establish, prima facie, that the condition at issue was not inherently dangerous and that it was readily observable by the reasonable use of one's senses … . Grosse v Olsen, 2018 NY Slip Op 05829. second Dept 8-22-18

NEGLIGENCE (SWIMMING POOL, DEFENDANT WHICH BUILT THE SWIMMING POOL, DEFENDANT WHICH INSTALLED THE POOL LINER, AND DEFENDANT OWNERS OF THE POOL, WERE NOT ENTITLED TO SUMMARY JUDGMENT IN THIS SWIMMING POOL INJURY CASE, PLAINTIFF WAS INJURED WHEN HE DOVE IN AND STRUCK HIS CHIN IN A SHALLOW AREA (SECOND DEPT))CONTRACT LAW (TORT LIABILITY TO NON-PARTY, SWIMMING POOL, DEFENDANT WHICH BUILT THE SWIMMING POOL, DEFENDANT WHICH INSTALLED THE POOL LINER, AND DEFENDANT OWNERS OF THE POOL, WERE NOT ENTITLED TO SUMMARY JUDGMENT IN THIS SWIMMING POOL INJURY CASE, PLAINTIFF WAS INJURED WHEN HE DOVE IN AND STRUCK HIS CHIN IN A SHALLOW AREA (SECOND DEPT))/SWIMMING POOLS (NEGLIGENCE, CONTRACT LAW, DEFENDANT WHICH BUILT THE SWIMMING POOL, DEFENDANT WHICH INSTALLED THE POOL LINER, AND DEFENDANT OWNERS OF THE POOL, WERE NOT ENTITLED TO SUMMARY JUDGMENT IN THIS SWIMMING POOL INJURY CASE, PLAINTIFF WAS INJURED WHEN HE DOVE IN AND STRUCK HIS CHIN IN A SHALLOW AREA (SECOND DEPT))

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BUSINESS PURSUITS EXCLUSION IN THE HOMEOWNER’S INSURANCE POLICY DID NOT APPLY BECAUSE THE FIRE WOULD HAVE OCCURRED IRRESPECTIVE OF THE OPERATION OF THE BUSINESS, A RESPITE HOME FOR ELDERLY AND SPECIAL NEEDS ADULTS, THREE OF THE RESIDENTS DIED IN THE FIRE STARTED BY CHILDREN PLAYING IN THE GARAGE (THIRD DEPT)

The Third Department determined that an exclusion in defendant-insurer's policy applied and coverage for the death's of three residents of a respite home for the elderly and special needs adults should not have been disclaimed. The respite home was a private residence. The homeowners' son, who was 11, and other children, were playing with a gas grill in the garage and a fire started, killing the three residents. Although the policy excluded coverage for business-related injuries, incidents that would have occurred irrespective of the presence of the business were covered:

It is undisputed that the act of the insureds' son and the other children in playing with the gas grill lighter and accelerants was the impetus for the fire. Although the insureds' negligence in operating their business — i.e., the failure to have an adequate fire evacuation plan — may have been a contributing cause of decedents' deaths, it cannot be said as matter of law that the fire also was not a contributing cause. In other words, the fire would have occurred regardless of the insureds' business operations, thereby rendering the exception to the business pursuits exclusion applicable. Because the record discloses that decedents' deaths were not caused solely by acts that fell wholly within the business pursuits exclusion, defendant cannot escape its indemnity obligations with respect to decedents' deaths … . Waddy v Genessee Patrons Coop. Ins. Co., 2018 NY Slip Op 05794, Third Dept 8-15-18

INSURANCE LAW (BUSINESS PURSUITS EXCLUSION IN THE INSURANCE POLICY DID NOT APPLY BECAUSE THE FIRE WOULD HAVE OCCURRED IRRESPECTIVE OF THE OPERATION OF THE BUSINESS, A RESPITE HOME FOR ELDERLY AND SPECIAL NEEDS ADULTS, THREE OF THE RESIDENTS DIED IN THE FIRE STARTED BY CHILDREN PLAYING IN THE GARAGE (THIRD DEPT))/BUSINESS PURSUITS EXCLUSION (INSURANCE LAW, BUSINESS PURSUITS EXCLUSION IN THE INSURANCE POLICY DID NOT APPLY BECAUSE THE FIRE WOULD HAVE OCCURRED IRRESPECTIVE OF THE OPERATION OF THE BUSINESS, A RESPITE HOME FOR ELDERLY AND SPECIAL NEEDS ADULTS, THREE OF THE RESIDENTS DIED IN THE FIRE STARTED BY CHILDREN PLAYING IN THE GARAGE (THIRD DEPT))/CONTRACT LAW  (INSURANCE LAW, BUSINESS PURSUITS EXCLUSION IN THE INSURANCE POLICY DID NOT APPLY BECAUSE THE FIRE WOULD HAVE OCCURRED IRRESPECTIVE OF THE OPERATION OF THE BUSINESS, A RESPITE HOME FOR ELDERLY AND SPECIAL NEEDS ADULTS, THREE OF THE RESIDENTS DIED IN THE FIRE STARTED BY CHILDREN PLAYING IN THE GARAGE (THIRD DEPT))

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HUSBAND’S ATTORNEY SHOULD NOT HAVE BEEN DISQUALIFIED ON THE GROUND SHE WOULD BE A WITNESS FOR THE WIFE, PLENARY ACTION SEEKING TO SET ASIDE A PRENUPTIAL AGREEMENT PROPERLY JOINED WITH DIVORCE ACTION, INTERIM ATTORNEY’S FEES NOT AVAILABLE FOR THE ACTION TO SET ASIDE THE PRENUPTIAL AGREEMENT (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined (1) husband's counsel should not have been disqualified on the ground she would be a witness, (2) the plenary action seeking to set aside the prenuptial agreement on grounds of duress, coercion, undue influence and unconscionabiltiy is properly joined with the divorce action, (3) and interim attorney's fees are not available for the action to set aside the prenuptial agreement:

Rule 3.7 of the Rules of Professional Conduct… provides that, unless certain exceptions apply, “[a] lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact” … . In order to disqualify counsel on the ground that he or she may be called as a witness, a party moving for disqualification must demonstrate that (1) the testimony of the opposing party's counsel is necessary to his or her case, and (2) such testimony would be prejudicial to the opposing party… . Here, the wife failed to demonstrate that [the attorney's] testimony will be necessary to her case … . …

“The trial court has broad discretion in determining whether to order consolidation”(… see CPLR 602[a]). The interests of justice and judicial economy are better served by consolidation or a joint trial in those cases where the actions share material questions of law or fact … . A motion to consolidate or join for trial should be granted absent a showing of prejudice to a substantial right by a party opposing the motion … . …

The Supreme Court should not have awarded the wife interim counsel fees in the sum of $10,000 pursuant to Domestic Relations Law § 237, as that statute does not permit the recovery of fees for legal work performed on nonmatrimonial matters, including where, as here, a party seeks an award of counsel fees incurred in an action to set aside a prenuptial agreement … . Lombardi v Lombardi, 2018 NY Slip Op 05758, Second Dept 8-15-18

FAMILY LAW (HUSBAND'S ATTORNEY SHOULD NOT HAVE BEEN DISQUALIFIED ON THE GROUND SHE WOULD BE A WITNESS FOR THE WIFE, PLENARY ACTION SEEKING TO SET ASIDE A PRENUPTIAL AGREEMENT PROPERLY JOINED WITH DIVORCE ACTION, INTERIM ATTORNEY'S FEES NOT AVAILABLE FOR THE ACTION TO SET ASIDE THE PRENUPTIAL AGREEMENT (SECOND DEPT))/ATTORNEYS (FAMILY LAW, HUSBAND'S ATTORNEY SHOULD NOT HAVE BEEN DISQUALIFIED ON THE GROUND SHE WOULD BE A WITNESS FOR THE WIFE, PLENARY ACTION SEEKING TO SET ASIDE A PRENUPTIAL AGREEMENT PROPERLY JOINED WITH DIVORCE ACTION, INTERIM ATTORNEY'S FEES NOT AVAILABLE FOR THE ACTION TO SET ASIDE THE PRENUPTIAL AGREEMENT (SECOND DEPT))/CIVIL PROCEDURE (HUSBAND'S ATTORNEY SHOULD NOT HAVE BEEN DISQUALIFIED ON THE GROUND SHE WOULD BE A WITNESS FOR THE WIFE, PLENARY ACTION SEEKING TO SET ASIDE A PRENUPTIAL AGREEMENT PROPERLY JOINED WITH DIVORCE ACTION, INTERIM ATTORNEY'S FEES NOT AVAILABLE FOR THE ACTION TO SET ASIDE THE PRENUPTIAL AGREEMENT (SECOND DEPT))/CPLR 602  (HUSBAND'S ATTORNEY SHOULD NOT HAVE BEEN DISQUALIFIED ON THE GROUND SHE WOULD BE A WITNESS FOR THE WIFE, PLENARY ACTION SEEKING TO SET ASIDE A PRENUPTIAL AGREEMENT PROPERLY JOINED WITH DIVORCE ACTION, INTERIM ATTORNEY'S FEES NOT AVAILABLE FOR THE ACTION TO SET ASIDE THE PRENUPTIAL AGREEMENT (SECOND DEPT))/CONTRACT LAW (PRENUPTIAL AGREEMENT, HUSBAND'S ATTORNEY SHOULD NOT HAVE BEEN DISQUALIFIED ON THE GROUND SHE WOULD BE A WITNESS FOR THE WIFE, PLENARY ACTION SEEKING TO SET ASIDE A PRENUPTIAL AGREEMENT PROPERLY JOINED WITH DIVORCE ACTION, INTERIM ATTORNEY'S FEES NOT AVAILABLE FOR THE ACTION TO SET ASIDE THE PRENUPTIAL AGREEMENT (SECOND DEPT))/PRENUPTIAL AGREEMENT  (HUSBAND'S ATTORNEY SHOULD NOT HAVE BEEN DISQUALIFIED ON THE GROUND SHE WOULD BE A WITNESS FOR THE WIFE, PLENARY ACTION SEEKING TO SET ASIDE A PRENUPTIAL AGREEMENT PROPERLY JOINED WITH DIVORCE ACTION, INTERIM ATTORNEY'S FEES NOT AVAILABLE FOR THE ACTION TO SET ASIDE THE PRENUPTIAL AGREEMENT (SECOND DEPT))

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DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS’ ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that plaintiffs, who had effectively taken back a mortgage on property sold to defendant, could not enforce the purchase contract which purported to declare the contract null and void and require the defendant to vacate the property upon default. Defendant, by making substantial monthly payments pursuant to the contract, had acquired equitable title to the property. Plaintiffs only available remedies are foreclosure or an action at law for the purchase price:

A rider to the [purchase] contract contained a provision providing that in the event the defendant defaulted in making payments under the contract and failed to cure, and that said default resulted in the plaintiffs' inability to pay an existing mortgage on the property, the defendant forfeited all monies paid as liquidated damages, the contract was deemed null and void, and the premises were to be vacated in good condition. * * *

“The execution of a contract for the purchase of real estate and the making of a partial payment gives the contract vendee equitable title to the property” … . “[T]he vendor merely holds the legal title in trust for the vendee, subject to the vendor's equitable lien for the payment of the purchase price in accordance with the terms of the contract” … . Accordingly, the vendee under a land sale contract has acquired an interest in the property that must be extinguished before the vendor can resume possession, notwithstanding whether a provision in the contract provides that in the event of the vendee's uncured default in payment, the vendor has the right to declare the contract terminated and repossess the premises… . A vendor may not enforce his rights by an action in ejectment, but must instead proceed to foreclose the vendee's equitable title or bring an action at law for the purchase price … .

The defendant, having executed a contract for the purchase of property from the plaintiffs, and having made substantial payments to the plaintiffs pursuant to the contract, held equitable title to the property… . Under these circumstances, upon the defendant's default in making payments under the contract, the plaintiffs could not seek relief pursuant to the provision of the rider that provided for the contract to be deemed null and void, the premises vacated, and the defendant to forfeit all monies paid as liquidated damages. The plaintiffs were required to proceed to foreclose the defendant's equitable title or bring an action at law for the purchase price … . Russell v Pisana, 2018 NY Slip Op 05789, Second Dept 8-15-18

FORECLOSURE (DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))/REAL PROPERTY LAW  (DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))/REAL ESTATE  (DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))/CONTRACT LAW (REAL ESTATE, DESPITE THE TERMS OF THE REAL PROPERTY PURCHASE CONTRACT, WHICH PURPORTED TO REQUIRE THE DEFENDANT PURCHASER TO FORFEIT ALL MONTHLY PAYMENTS WHICH HAD BEEN MADE  AND VACATE THE PROPERTY UPON DEFAULT, DEFENDANT HAD ACQUIRED EQUITABLE TITLE TO THE PROPERTY, PLAINTIFFS' ONLY AVAILABLE REMEDIES ARE TO BRING AN ACTION TO FORECLOSE OR AN ACTION FOR THE PURCHASE PRICE (SECOND DEPT))

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COVENANT NOT TO COMPETE WHICH EFFECTIVELY PRECLUDED DEFENDANT SURGEON FROM PRACTICING MEDICINE IN METROPOLITAN NEW YORK WAS INVALIDATED, ARGUMENT FOR PARTIAL ENFORCEMENT REJECTED, CRITERIA EXPLAINED (SECOND DEPT).

The Second Department determined a covenant not to compete which prohibited defendant surgeon from practicing within a ten-mile radius of his former employer was unreasonable and was properly invalidated. The argument that the covenant should be partially enforced was rejected as well:

“Agreements restricting an individual’s right to work or compete are not favored and thus are strictly construed” … ” [A] restrictive covenant will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee'” … . The determination of whether a restrictive covenant is reasonable involves the application of a three-pronged test. “A restraint is reasonable only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public” … . The “violation of any prong renders the covenant invalid” … . “With agreements not to compete between professionals . . . [courts] have given greater weight to the interests of the employer in restricting competition within a confined geographical area” … . That said, “the application of the test of reasonableness of employee restrictive covenants focuses on the particular facts and circumstances giving context to the agreement” … . “The rationale for the differential application of the common-law rule of reasonableness . . . was that professionals are deemed to provide unique or extraordinary'” services … .

Here, the defendants made a prima facie showing that the provision of the covenant prohibiting Andrade for a period of two years from practicing surgery of any kind, within a 10-mile radius of all of the plaintiff’s offices and affiliated hospitals, even those at which he had never worked, was geographically unreasonable, because it effectively barred him from performing surgery, his chosen field of medicine, in the New York metropolitan area … . …

Contrary to the plaintiff’s contention, the Supreme Court did not err in declining to modify the covenant rather than invalidating it. The determination of whether an overly broad restrictive covenant should be enforced to the extent necessary to protect an employer’s legitimate interest involves “a case specific analysis, focusing on the conduct of the employer in imposing the terms of the agreement” … . Partial enforcement may be justified if an employer demonstrates, in addition to having a legitimate business interest, “an absence of overreaching, coercive use of dominant bargaining power, or other anti-competitive misconduct” … . “Factors weighing against partial enforcement are the imposition of the covenant in connection with hiring or continued employment—as opposed to, for example, imposition in connection with a promotion to a position of responsibility and trust—the existence of coercion or a general plan of the employer to forestall competition, and the employer’s knowledge that the covenant was overly broad”… . Long Is. Minimally Invasive Surgery, P.C. v St. John’s Episcopal Hosp., 2018 NY Slip Op 05674, Second Dept 8-8-18

EMPLOYMENT LAW (COVENANT NOT TO COMPETE WHICH EFFECTIVELY PRECLUDED DEFENDANT SURGEON FROM PRACTICING MEDICINE IN METROPOLITAN NEW YORK WAS INVALIDATED, ARGUMENT FOR PARTIAL ENFORCEMENT REJECTED, CRITERIA EXPLAINED (SECOND DEPT))/CONTRACT LAW (EMPLOYMENT LAW, COVENANT NOT TO COMPETE WHICH EFFECTIVELY PRECLUDED DEFENDANT SURGEON FROM PRACTICING MEDICINE IN METROPOLITAN NEW YORK WAS INVALIDATED, ARGUMENT FOR PARTIAL ENFORCEMENT REJECTED, CRITERIA EXPLAINED (SECOND DEPT))/COVENANT NOT TO COMPETE (EMPLOYMENT LAW, COVENANT NOT TO COMPETE WHICH EFFECTIVELY PRECLUDED DEFENDANT SURGEON FROM PRACTICING MEDICINE IN METROPOLITAN NEW YORK WAS INVALIDATED, ARGUMENT FOR PARTIAL ENFORCEMENT REJECTED, CRITERIA EXPLAINED (SECOND DEPT))

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PLAINTIFF WAS NOT ENTITLED TO PREJUDGMENT INTEREST IN THIS BREACH OF CONTRACT ACTION BECAUSE PLAINTIFF FAILED TO DEMONSTRATE WHEN THE DAMAGES WERE INCURRED (SECOND DEPT).

n a breach of contract action too complex to fairly summarize here, the Second Department determined plaintiff was not entitled to prejudgment interest pursuant to CPLR 5001 (a) because plaintiff did not demonstrate when the damages were incurred:

We agree with the Supreme Court’s determination that the plaintiff was not entitled to prejudgment interest. CPLR 5001(a) provides that interest shall be recovered upon a sum awarded for a breach of contract. CPLR 5001 further mandates that “[i]nterest shall be computed from the earliest ascertainable date the cause of action existed” (CPLR 5001[b]). “Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date” (CPLR 5001[b]…). CPLR 5001 further provides that “[t]he date from which interest is to be computed shall be specified in the verdict, report or decision” (CPLR 5001[c]). With limited exception, “[i]f a jury is discharged without specifying the date, the court upon motion shall fix the date” (id.). The party seeking prejudgment interest bears the burden of demonstrating the date from which interest should be computed… .

Here, the plaintiff failed to demonstrate when the damages were incurred. Under the particular circumstances of this case, the Supreme Court’s determination that the damages were not incurred until the jury rendered its verdict was warranted … . Kachkovskiy v Khlebopros, 2018 NY Slip Op 05671, Second Dept 8-8-18

CIVIL PROCEDURE (PREJUDGMENT INTEREST, PLAINTIFF WAS NOT ENTITLED TO PREJUDGMENT INTEREST IN THIS BREACH OF CONTRACT ACTION BECAUSE PLAINTIFF FAILED TO DEMONSTRATE WHEN THE DAMAGES WERE INCURRED (SECOND DEPT))/CPLR 5001 (PREJUDGMENT INTEREST, PLAINTIFF WAS NOT ENTITLED TO PREJUDGMENT INTEREST IN THIS BREACH OF CONTRACT ACTION BECAUSE PLAINTIFF FAILED TO DEMONSTRATE WHEN THE DAMAGES WERE INCURRED (SECOND DEPT))/PREJUDGMENT INTEREST (PLAINTIFF WAS NOT ENTITLED TO PREJUDGMENT INTEREST IN THIS BREACH OF CONTRACT ACTION BECAUSE PLAINTIFF FAILED TO DEMONSTRATE WHEN THE DAMAGES WERE INCURRED (SECOND DEPT))/INTEREST (PREJUDGMENT INTEREST, PLAINTIFF WAS NOT ENTITLED TO PREJUDGMENT INTEREST IN THIS BREACH OF CONTRACT ACTION BECAUSE PLAINTIFF FAILED TO DEMONSTRATE WHEN THE DAMAGES WERE INCURRED (SECOND DEPT))/CONTRACT LAW (PREJUDGMENT INTEREST, PLAINTIFF WAS NOT ENTITLED TO PREJUDGMENT INTEREST IN THIS BREACH OF CONTRACT ACTION BECAUSE PLAINTIFF FAILED TO DEMONSTRATE WHEN THE DAMAGES WERE INCURRED (SECOND DEPT))

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REAL ESTATE BROKER ENTITLED TO COMMISSION, DEFENDANTS TERMINATED THE BROKER’S SERVICES IN BAD FAITH JUST BEFORE ENTERING THE LEASE AGREEMENT (SECOND DEPT).

The Second Department determined plaintiff real estate broker was entitled to a commission on a lease entered by defendants (Budhu and RLRC) just after defendants terminated plaintiff’s services, an action deemed to have been done in bad fact warranting recovery under an implied contract theory and in quantum meruit:

A real estate broker is entitled to recover a commission upon establishing that it (1) is duly licensed, (2) had a contract, express or implied, with the party to be charged with paying the commission, and (3) was the procuring cause of the transaction … . There is no dispute that the plaintiff is a licensed brokerage firm. …

The plaintiff established that it had an implied contract to provide brokerage services for Budhu and RLRC. The plaintiff also established that it was the procuring cause of the transaction. In order to establish that it was the procuring cause of a transaction, a “broker must establish that there was a direct and proximate link, as distinguished from one that is indirect and remote, between the bare introduction and the consummation” … . While the plaintiff was not involved in the negotiations leading up to the completion of the deal between RLRC and Hillside, it established that it created an amicable atmosphere in which negotiations proceeded, and that it generated a chain of circumstances that proximately led to the transaction… . Even if the plaintiff were not the procuring cause of the transaction, it would still be entitled to recover a commission, as the evidence established that Budhu and RLRC terminated the plaintiff’s activities in bad faith and as a mere last-minute device to escape the payment of the commission … .

Moreover, even assuming that there was no contract, express or implied, between the parties, the plaintiff would be entitled to recover for its services in quantum meruit in order to avoid the unjust enrichment of Budhu and RLRC … . The plaintiff established that it performed services in good faith, that Budhu and RLRC accepted the services, that it expected to be compensated therefor, and the reasonable value of the services … . Gluck & Co. Realtors, LLC v Burger King Corp., 2018 NY Slip Op 05668, Second Dept 8-8-18

REAL ESTATE (REAL ESTATE BROKER ENTITLED TO COMMISSION, DEFENDANTS TERMINATED THE BROKER’S SERVICES IN BAD FAITH JUST BEFORE ENTERING THE LEASE AGREEMENT (SECOND DEPT))/BROKER’S COMMISSION (REAL ESTATE BROKER ENTITLED TO COMMISSION, DEFENDANTS TERMINATED THE BROKER’S SERVICES IN BAD FAITH JUST BEFORE ENTERING THE LEASE AGREEMENT (SECOND DEPT))/COMMISSION  (REAL ESTATE BROKER ENTITLED TO COMMISSION, DEFENDANTS TERMINATED THE BROKER’S SERVICES IN BAD FAITH JUST BEFORE ENTERING THE LEASE AGREEMENT (SECOND DEPT))CONTRACT LAW (REAL ESTATE BROKER ENTITLED TO COMMISSION, DEFENDANTS TERMINATED THE BROKER’S SERVICES IN BAD FAITH JUST BEFORE ENTERING THE LEASE AGREEMENT (SECOND DEPT))

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RELEASE ENTERED WITH THE INSURER OF THE OTHER CAR INVOLVED IN THE ACCIDENT PRECLUDED CLAIM FOR SUPPLEMENTARY UNDERINSURED MOTORIST (SUM) BENEFITS AGAINST INSURER OF THE CAR IN WHICH APPELLANT WAS A PASSENGER (SECOND DEPT).

The Second Department determined a release entered after settlement with the insurer of the other car involved in the accident precluded appellant’s attempt to claim supplementary underinsured motorist (SUM) benefits from the insurer of the car in which appellant was a passenger:

“A release is a contract, and its construction is governed by contract law” … . A valid general release will apply not only to known claims, but “may encompass unknown claims, . . . if the parties so intend and the agreement is fairly and knowingly made'” … . “Where a release is unambiguous, the intent of the parties must be ascertained from the plain language of the agreement” … . Here, the general release, in clear and unambiguous terms, releases all claims and future claims the appellant had or may have against the petitioner by reason of the subject accident. The plain language of the release thus precludes the appellant’s SUM claim against the petitioner. Matter of Travelers Home & Mar. Ins. Co. v Fiumara, 2018 NY Slip Op 05681, Second Dept 8-8-18

INSURANCE LAW (RELEASE ENTERED WITH THE INSURER OF THE OTHER CAR INVOLVED IN THE ACCIDENT PRECLUDED CLAIM FOR SUPPLEMENTARY UNDERINSURED MOTORIST (SUM) BENEFITS AGAINST INSURER OF THE CAR IN WHICH APPELLANT WAS A PASSENGER (SECOND DEPT))/TRAFFIC ACCIDENTS (INSURANCE LAW, RELEASE ENTERED WITH THE INSURER OF THE OTHER CAR INVOLVED IN THE ACCIDENT PRECLUDED CLAIM FOR SUPPLEMENTARY UNDERINSURED MOTORIST (SUM) BENEFITS AGAINST INSURER OF THE CAR IN WHICH APPELLANT WAS A PASSENGER (SECOND DEPT))/RELEASE (INSURANCE LAW, RELEASE ENTERED WITH THE INSURER OF THE OTHER CAR INVOLVED IN THE ACCIDENT PRECLUDED CLAIM FOR SUPPLEMENTARY UNDERINSURED MOTORIST (SUM) BENEFITS AGAINST INSURER OF THE CAR IN WHICH APPELLANT WAS A PASSENGER (SECOND DEPT))/CONTRACT LAW (RELEASE, INSURANCE LAW, RELEASE ENTERED WITH THE INSURER OF THE OTHER CAR INVOLVED IN THE ACCIDENT PRECLUDED CLAIM FOR SUPPLEMENTARY UNDERINSURED MOTORIST (SUM) BENEFITS AGAINST INSURER OF THE CAR IN WHICH APPELLANT WAS A PASSENGER (SECOND DEPT))/SUPPLEMENTARY UNDERINSURED MOTORIST (SUM) BENEFITS (RELEASE ENTERED WITH THE INSURER OF THE OTHER CAR INVOLVED IN THE ACCIDENT PRECLUDED CLAIM FOR SUPPLEMENTARY UNDERINSURED MOTORIST (SUM) BENEFITS AGAINST INSURER OF THE CAR IN WHICH APPELLANT WAS A PASSENGER (SECOND DEPT))

, ,

RELEASE, WHICH PURPORTED TO COVER FUTURE MALPRACTICE ACTIONS STEMMING FROM THE FIRST ADMISSION TO THE HOSPITAL, DID NOT COVER A MALPRACTICE ACTION STEMMING FROM A SECOND ADMISSION, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined a release, which purported to cover future actions in a medical malpractice suit resulting from a hospital (NSUH) admission, did not preclude a second suit that arose from a second hospital admission:

The parties settled Action No. 1 … and executed … a release that released NSUH “and all . . . related business entities . . . and all . . . employees, physicians, [and] servants, . . . from all past, present and future [*2]claims, demands, obligations, actions, causes of action, wrongful death or bodily or personal injury claims . . . of any kind whatsoever, whether known or unknown, based upon any legal or equitable theory, . . . which the RELEASORS, their heirs, executors, administrators . . . hereafter can, shall, or may now have, or may hereafter accrue or otherwise be acquired, against RELEASEES for, upon, or by reason or any actual or alleged act, omission, transaction, practice, conduct, occurrence, or other matter . . . from the beginning of the world to the day of the date of this RELEASE” (hereinafter the release). * * *

Contrary to the Supreme Court’s determination, NSUH failed to establish, as a matter of law, that the release executed by the parties settling Action No. 1 was intended to preclude the plaintiff from recovering for claims that allegedly arose during and as a result of the second admission, which were not yet in dispute at the time the release was executed … . While the plaintiff may have been aware of the incident giving rise to Action No. 2 when she signed the release, any such awareness is insufficient, itself, to establish that the release was intended to cover any potential claims which were not the subject of Action No. 1. Chiappone v North Shore Univ. Hosp., 2018 NY Slip Op 05569, Second Dept 8-1-18

MEDICAL MALPRACTICE (RELEASE, WHICH PURPORTED TO COVER FUTURE MALPRACTICE ACTIONS STEMMING FROM THE FIRST ADMISSION TO THE HOSPITAL, DID NOT COVER A MALPRACTICE ACTION STEMMING FROM A SECOND ADMISSION, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/NEGLIGENCE (MEDICAL MALPRACTICE, RELEASE, WHICH PURPORTED TO COVER FUTURE MALPRACTICE ACTIONS STEMMING FROM THE FIRST ADMISSION TO THE HOSPITAL, DID NOT COVER A MALPRACTICE ACTION STEMMING FROM A SECOND ADMISSION, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/CONTRACT (RELEASE, WHICH PURPORTED TO COVER FUTURE MALPRACTICE ACTIONS STEMMING FROM THE FIRST ADMISSION TO THE HOSPITAL, DID NOT COVER A MALPRACTICE ACTION STEMMING FROM A SECOND ADMISSION, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/RELEASE (RELEASE, WHICH PURPORTED TO COVER FUTURE MALPRACTICE ACTIONS STEMMING FROM THE FIRST ADMISSION TO THE HOSPITAL, DID NOT COVER A MALPRACTICE ACTION STEMMING FROM A SECOND ADMISSION, SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))

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