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ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT).

The First Department determined the individual defendants, officers or employees of the corporate defendant, are entitled to enforce the arbitration provision of the contract, even though they were not signatories:

The individual defendants, who were officers or employees of [defendant corporation] and did not sign the [agreement] in their individual capacities, are nevertheless entitled to enforce the arbitration provision, because any breach of the [agreement] would have to be the result of an action or inaction attributable to them. A rule allowing corporate officers and employees to enforce arbitration agreements entered into by the corporate principal “is necessary not only to prevent circumvention of arbitration agreements but also to effectuate the intent of the signatory parties to protect individuals acting on behalf of the principal in furtherance of the agreement” … . Further, even a nonsignatory may be estopped from avoiding arbitration where he knowingly accepted the benefits of an agreement with an arbitration clause … . Huntsman Intl. LLC v Albemarle Corp., 2018 NY Slip Op 04962, First Dept 7-3-18

​CONTRACT LAW (ARBITRATION, CORPORATION LAW, ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT))/ARBITRATION (CORPORATION LAW, CONTRACT LAW, ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT))/CORPORATION LAW (CONTRACT LAW, ARBITRATION, ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT))

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THE COLLECTIVE BARGAINING AGREEMENTS ARE AMBIGUOUS ON THE ISSUE WHETHER COUNTY RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE ENTITLED TO THE FULL MEDICAL BENEFITS AFFORDED THEM AT RETIREMENT, EXTRINSIC EVIDENCE, I.E., WHAT HAD BEEN DONE IN THE PAST, SUPPORTS THE DETERMINATION THAT RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE NOT ENTITLED TO FULL BENEFITS (FOURTH DEPT).

The Fourth Department determined retired Monroe County employees who become eligible for Medicare are not entitled to the full medical insurance benefits which were afforded them at retirement. The collective bargaining agreements (CBAs) were deemed ambiguous on the issue and the court looked to what had been done in the past as controlling extrinsic evidence:

Inasmuch as the contract language is reasonably susceptible of more than one interpretation, we conclude that the CBAs are ambiguous with respect to whether retirees who are eligible for or enrolled in Medicare are entitled to fully-paid health insurance coverage that is equivalent to the insurance coverage in effect at the time they retired. Thus, we turn to extrinsic evidence to determine the parties’ intent with respect to the health insurance coverage to be provided to those retirees who are eligible for or enrolled in Medicare. Where, as here, “a contract is ambiguous, its interpretation remains the exclusive function of the court unless determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence’ ” … . …

For decades, defendants provided retirees who were not yet eligible for Medicare with health insurance benefits, but provided retirees enrolled in Medicare with only Medicare supplement plans. No objection was made and, until recently, the union representing plaintiffs never sought to negotiate any additional benefits for retirees eligible for or enrolled in Medicare. Ames v County of Monroe, 2018 NY Slip Op 04886, Fourth Dept 6-29-18

​MUNICIPAL LAW (EMPLOYMENT LAW, THE COLLECTIVE BARGAINING AGREEMENTS ARE AMBIGUOUS ON THE ISSUE WHETHER COUNTY RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE ENTITLED TO THE FULL MEDICAL BENEFITS AFFORDED THEM AT RETIREMENT, EXTRINSIC EVIDENCE, I.E., WHAT HAD BEEN DONE IN THE PAST, SUPPORTS THE DETERMINATION THAT RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE NOT ENTITLED TO FULL BENEFITS (FOURTH DEPT))/CONTRACT LAW (MUNICIPAL LAW, THE COLLECTIVE BARGAINING AGREEMENTS ARE AMBIGUOUS ON THE ISSUE WHETHER COUNTY RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE ENTITLED TO THE FULL MEDICAL BENEFITS AFFORDED THEM AT RETIREMENT, EXTRINSIC EVIDENCE, I.E., WHAT HAD BEEN DONE IN THE PAST, SUPPORTS THE DETERMINATION THAT RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE NOT ENTITLED TO FULL BENEFITS (FOURTH DEPT))/EMPLOYMENT LAW (MUNICIPAL LAW, THE COLLECTIVE BARGAINING AGREEMENTS ARE AMBIGUOUS ON THE ISSUE WHETHER COUNTY RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE ENTITLED TO THE FULL MEDICAL BENEFITS AFFORDED THEM AT RETIREMENT, EXTRINSIC EVIDENCE, I.E., WHAT HAD BEEN DONE IN THE PAST, SUPPORTS THE DETERMINATION THAT RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE NOT ENTITLED TO FULL BENEFITS (FOURTH DEPT))/COLLECTIVE BARGAINING AGREEMENTS (MUNICIPAL LAW, THE COLLECTIVE BARGAINING AGREEMENTS ARE AMBIGUOUS ON THE ISSUE WHETHER COUNTY RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE ENTITLED TO THE FULL MEDICAL BENEFITS AFFORDED THEM AT RETIREMENT, EXTRINSIC EVIDENCE, I.E., WHAT HAD BEEN DONE IN THE PAST, SUPPORTS THE DETERMINATION THAT RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE NOT ENTITLED TO FULL BENEFITS (FOURTH DEPT))/MEDICAL INSURANCE BENEFITS (MUNICIPAL LAW, EMPLOYMENT LAW, THE COLLECTIVE BARGAINING AGREEMENTS ARE AMBIGUOUS ON THE ISSUE WHETHER COUNTY RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE ENTITLED TO THE FULL MEDICAL BENEFITS AFFORDED THEM AT RETIREMENT, EXTRINSIC EVIDENCE, I.E., WHAT HAD BEEN DONE IN THE PAST, SUPPORTS THE DETERMINATION THAT RETIREES WHO BECOME ELIGIBLE FOR MEDICARE ARE NOT ENTITLED TO FULL BENEFITS (FOURTH DEPT))

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ELIMINATION OF A POSITION WAS ALLEGED TO CONSTITUTE AN IMPROPER DISMISSAL UNDER THE GUISE OF RETRENCHMENT, ALTHOUGH RETRENCHMENT IS NOT ARBITRABLE UNDER THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT, THE CLAIM THAT THE EMPLOYEE WAS IMPROPERLY DISMISSED UNDER THE GUISE OF RETRENCHMENT WAS DEEMED ARBITRABLE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the petition seeking a permanent stay of arbitration of an employment dispute should not have been granted. The Fourth Department found that the dispute concerned whether an employee of a community college was improperly dismissed (by eliminating the position). The matter was deemed arbitrable based upon the language of the collective bargaining agreement (CBA) and the grievance. Under the CBA, if a position is “retrenched” the action is not arbitrable. Although the term “retrenched” was used in eliminating the position, the grievance alleged the employee was improperly dismissed under the guise of “retrenchment:”

We … agree with respondent that the grievance, as properly construed, should be submitted to arbitration. The CBA defines “grievance,” in relevant part, as “a claimed violation, misinterpretation or inequitable application of this agreement, except as excluded herein.” Pursuant to the CBA, a grievance may be submitted to arbitration if it remains unresolved after the second stage of the grievance procedure. Although the CBA specifies several exclusions from the definition of a “grievance” that are therefore not subject to arbitration, including a decision by petitioner to retrench a position, all other grievances remain subject to arbitration. Contrary to the court’s determination, we conclude that the arbitration clause at issue here is broad, despite the existence of such exclusions … .

Where, as here, “there is a broad arbitration clause and a reasonable relationship between the subject matter of the dispute and the general subject matter of the parties’ [CBA], the court should rule the matter arbitrable, and the arbitrator will then make a more exacting interpretation of the precise scope of the substantive provisions of the [CBA], and whether the subject matter of the dispute fits within them”… . The grievance at issue concerns whether the member was improperly dismissed without just cause under the guise of retrenchment, and a reasonable relationship exists between the subject matter of the grievance and the general subject matter of the CBA … . Thus, ” it is for the arbitrator to determine whether the subject matter of the dispute falls within the scope of the arbitration provisions of the [CBA]’ ” … . Matter of Onondaga Community Coll. (Professional Adm’rs of Onondaga Community Coll. Fedn. of Teachers & Adm’rs), 2018 NY Slip Op 04878, Fourth Dept 6-29-18

​ARBITRATION (EMPLOYMENT LAW, ELIMINATION OF A POSITION WAS ALLEGED TO CONSTITUTE AN IMPROPER DISMISSAL UNDER THE GUISE OF RETRENCHMENT, ALTHOUGH RETRENCHMENT IS NOT ARBITRABLE UNDER THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT, THE CLAIM THAT THE EMPLOYEE WAS IMPROPERLY DISMISSED UNDER THE GUISE OF RETRENCHMENT WAS DEEMED ARBITRABLE (FOURTH DEPT))/CONTRACT LAW (COLLECTIVE BARGAINING AGREEMENT, ELIMINATION OF A POSITION WAS ALLEGED TO CONSTITUTE AN IMPROPER DISMISSAL UNDER THE GUISE OF RETRENCHMENT, ALTHOUGH RETRENCHMENT IS NOT ARBITRABLE UNDER THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT, THE CLAIM THAT THE EMPLOYEE WAS IMPROPERLY DISMISSED UNDER THE GUISE OF RETRENCHMENT WAS DEEMED ARBITRABLE (FOURTH DEPT))/COLLECTIVE BARGAINING AGREEMENT (ARBITRATION, ELIMINATION OF A POSITION WAS ALLEGED TO CONSTITUTE AN IMPROPER DISMISSAL UNDER THE GUISE OF RETRENCHMENT, ALTHOUGH RETRENCHMENT IS NOT ARBITRABLE UNDER THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT, THE CLAIM THAT THE EMPLOYEE WAS IMPROPERLY DISMISSED UNDER THE GUISE OF RETRENCHMENT WAS DEEMED ARBITRABLE (FOURTH DEPT))/EMPLOYMENT LAW (ARBITRATION, COLLECTIVE BARGAINING AGREEMENT, ELIMINATION OF A POSITION WAS ALLEGED TO CONSTITUTE AN IMPROPER DISMISSAL UNDER THE GUISE OF RETRENCHMENT, ALTHOUGH RETRENCHMENT IS NOT ARBITRABLE UNDER THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT, THE CLAIM THAT THE EMPLOYEE WAS IMPROPERLY DISMISSED UNDER THE GUISE OF RETRENCHMENT WAS DEEMED ARBITRABLE (FOURTH DEPT))

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FRAUDULENT INDUCEMENT CAUSE OF ACTION MUST BE BASED UPON MATTERS COLLATERAL TO THE CONTRACT, NOT THE BREACH OF PROVISIONS OF THE CONTRACT ITSELF (FIRST DEPT).

The First Department noted that contract provisions cannot be the bases for a fraudulent inducement cause of action. Only matters collateral to the contract will support fraudulent inducement:

Plaintiffs alleged six different bases for the fraudulent inducement claim. The alleged misrepresentations regarding assistance operating the preschool, the working fire alarm, and use of the stroller area, area near the kitchen, and upstairs gym, are all ” directly related to a specific provision of the contract,'” not collateral to the lease, and cannot be used to sustain a fraudulent inducement claim … . Plaintiffs properly pled a fraudulent inducement claim with respect to defendants materially misrepresenting that a 2004 letter of no objection was all plaintiffs would need, failing to disclose to plaintiffs that defendant intended to remove oversight over homeless individuals on the property, and fraudulently misrepresenting that homeless individuals were living on the property legally, when they were doing so illegally … . Plaintiffs properly pled that, as a result of these statements, which plaintiffs allege were made with the intention to deceive them, they signed the lease and developed the property … . Iken v Bohemian Brethren Presbyt. Church, 2018 NY Slip Op 04830, First Dept 6-28-18

FRAUD (FRAUDULENT INDUCEMENT CAUSE OF ACTION MUST BE BASED UPON MATTERS COLLATERAL TO THE CONTRACT, NOT THE BREACH OF PROVISIONS OF THE CONTRACT ITSELF (FIRST DEPT))/CONTRACT LAW (FRAUDULENT INDUCEMENT CAUSE OF ACTION MUST BE BASED UPON MATTERS COLLATERAL TO THE CONTRACT, NOT THE BREACH OF PROVISIONS OF THE CONTRACT ITSELF (FIRST DEPT))/LANDLORD-TENANT (LEASE, CONTRACT LAW, FRAUDULENT INDUCEMENT CAUSE OF ACTION MUST BE BASED UPON MATTERS COLLATERAL TO THE CONTRACT, NOT THE BREACH OF PROVISIONS OF THE CONTRACT ITSELF (FIRST DEPT))

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PLAIN LANGUAGE OF THE COLLECTIVE BARGAINING AGREEMENT LIMITED THE RIGHT TO DEMAND ARBITRATION TO THE UNION, NOT THE FIRED EMPLOYEE (CT APP).

The Court of Appeals, in a brief memorandum, over a three-judge dissenting opinion, determined that the plain language of the collective bargaining agreement (CBA) limited the right to demand arbitration to the union and not the fired employee:

From the dissent:

The language of CBA clearly grants the employee the right to elect arbitration. Even were the agreement ambiguous in that regard, it must be construed in favor of the employee’s right to demand arbitration. New York has established a policy favoring arbitration … , and the CBA itself provides that “in order to establish a more harmonious and cooperative relationship between the County. . . and its [p]ublic [e]mployees. . . [t]he provisions of this resolution shall be liberally construed.”

The majority’s contrary interpretation — that the CBA gives the right to proceed to arbitration only to the union — would mean that the employee could “elect” to exercise “his/her rights” only where the union agrees to arbitrate — a restriction that does not appear in the agreement. The employee may not know at the time of election whether the union will pursue arbitration, and therefore could not know the scope of “his/her rights” until it is too late. Further, the rights-granting language in the CBA treats the arbitration right and the [Civil Service Law] 75 right in parallel, emphasizing the employee’s right to choose. Matter of Widrick (Carpinelli), 2018 NY Slip Op 04780, CtApp 6-28-18

​ARBITRATION (COLLECTIVE BARGAINING AGREEMENT, PLAIN LANGUAGE OF THE COLLECTIVE BARGAINING AGREEMENT LIMITED THE RIGHT TO DEMAND ARBITRATION TO THE UNION, NOT THE FIRED EMPLOYEE (CT APP))/CONTRACT LAW (COLLECTIVE BARGAINING AGREEMENT, PLAIN LANGUAGE OF THE COLLECTIVE BARGAINING AGREEMENT LIMITED THE RIGHT TO DEMAND ARBITRATION TO THE UNION, NOT THE FIRED EMPLOYEE (CT APP))/EMPLOYMENT LAW (COLLECTIVE BARGAINING AGREEMENT, PLAIN LANGUAGE OF THE COLLECTIVE BARGAINING AGREEMENT LIMITED THE RIGHT TO DEMAND ARBITRATION TO THE UNION, NOT THE FIRED EMPLOYEE (CT APP))/COLLECTIVE BARGAINING AGREEMENT (PLAIN LANGUAGE OF THE COLLECTIVE BARGAINING AGREEMENT LIMITED THE RIGHT TO DEMAND ARBITRATION TO THE UNION, NOT THE FIRED EMPLOYEE (CT APP))/UNIONS (ARBITRATION, COLLECTIVE BARGAINING AGREEMENT, PLAIN LANGUAGE OF THE COLLECTIVE BARGAINING AGREEMENT LIMITED THE RIGHT TO DEMAND ARBITRATION TO THE UNION, NOT THE FIRED EMPLOYEE (CT APP))

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IN THIS ACTION STEMMING FROM PLAINTIFF’S INSURING OF RESIDENTIAL MORTGAGE BACKED SECURITIES ISSUED BY DEFENDANT, PLAINTIFF WAS REQUIRED TO SHOW JUSTIFIABLE RELIANCE AND LOSS CAUSATION FOR ITS FRAUDULENT INDUCEMENT CAUSE OF ACTION, PLAINTIFF’S RECOVERY WAS LIMITED TO THAT DESCRIBED IN THE SOLE REMEDY PROVISION, AND PLAINTIFF WAS NOT ENTITLED TO ATTORNEY’S FEES (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Garcia, over a partial dissent, determined certain aspects of defendant Countrywide’s motion for summary judgment against plaintiff insurer, Ambac, stemming from residential mortgage backed securities issued by Countrywide, were properly granted. Ambac’s argument that it need not demonstrate justifiable reliance or loss causation in support of its fraudulent inducement cause of action was rejected, as was Ambac’s argument that it was entitled to relief over and above that specified in the sole remedy clause, as well as attorney’s fees:

Public policy reasons support the justifiable reliance requirement. Where a “sophisticated business person or entity . . . claims to have been taken in,” the justifiable reliance rule “serves to rid the court of cases in which the claim of reliance is likely to be hypocritical” … . Excusing a sophisticated party such as a monoline financial guaranty insurer from demonstrating justifiable reliance would not further the policy underlying this “venerable rule.”

Likewise, there is no merit to Ambac’s argument that it need not show loss causation. Loss causation is a well-established requirement of a common law fraudulent inducement claim for damages. * * *

Ambac’s complaint fails to include breach of contract allegations beyond those that fall under the sole remedy provision … , and accordingly Ambac is limited to the repurchase protocol as the potential remedy for those claims. * * *

In New York, “the prevailing litigant ordinarily cannot collect . . . attorneys’ fees from its unsuccessful opponents. . . . Attorneys’ fees are treated as incidents of litigation, rather than damages. . . . The exception is when an award is authorized by agreement between the parties or by statute or court rule” … . … [T]his Court [has] held that a court “should not infer a party’s intention to waive the benefit of the rule unless the intention to do so is unmistakably clear from the language of the promise … . Ambac Assur. Corp. v Countrywide Home Loans, Inc., 2018 NY Slip Op 04686, CtApp 6-27-18

​INSURANCE LAW (IN THIS ACTION STEMMING FROM PLAINTIFF’S INSURING OF RESIDENTIAL MORTGAGE BACKED SECURITIES ISSUED BY DEFENDANT, PLAINTIFF WAS REQUIRED TO SHOW JUSTIFIABLE RELIANCE AND LOSS CAUSATION FOR ITS FRAUDULENT INDUCEMENT CAUSE OF ACTION, PLAINTIFF’S RECOVERY WAS LIMITED TO THAT DESCRIBED IN THE SOLE REMEDY PROVISION, AND PLAINTIFF WAS NOT ENTITLED TO ATTORNEY’S FEES (CT APP))/FRAUD  (IN THIS ACTION STEMMING FROM PLAINTIFF’S INSURING OF RESIDENTIAL MORTGAGE BACKED SECURITIES ISSUED BY DEFENDANT, PLAINTIFF WAS REQUIRED TO SHOW JUSTIFIABLE RELIANCE AND LOSS CAUSATION FOR ITS FRAUDULENT INDUCEMENT CAUSE OF ACTION, PLAINTIFF’S RECOVERY WAS LIMITED TO THAT DESCRIBED IN THE SOLE REMEDY PROVISION, AND PLAINTIFF WAS NOT ENTITLED TO ATTORNEY’S FEES (CT APP))/CONTRACT LAW  (IN THIS ACTION STEMMING FROM PLAINTIFF’S INSURING OF RESIDENTIAL MORTGAGE BACKED SECURITIES ISSUED BY DEFENDANT, PLAINTIFF WAS REQUIRED TO SHOW JUSTIFIABLE RELIANCE AND LOSS CAUSATION FOR ITS FRAUDULENT INDUCEMENT CAUSE OF ACTION, PLAINTIFF’S RECOVERY WAS LIMITED TO THAT DESCRIBED IN THE SOLE REMEDY PROVISION, AND PLAINTIFF WAS NOT ENTITLED TO ATTORNEY’S FEES (CT APP))/SECURITIES  (IN THIS ACTION STEMMING FROM PLAINTIFF’S INSURING OF RESIDENTIAL MORTGAGE BACKED SECURITIES ISSUED BY DEFENDANT, PLAINTIFF WAS REQUIRED TO SHOW JUSTIFIABLE RELIANCE AND LOSS CAUSATION FOR ITS FRAUDULENT INDUCEMENT CAUSE OF ACTION, PLAINTIFF’S RECOVERY WAS LIMITED TO THAT DESCRIBED IN THE SOLE REMEDY PROVISION, AND PLAINTIFF WAS NOT ENTITLED TO ATTORNEY’S FEES (CT APP))/RESIDENTIAL MORTGAGE BACKED SECURITIES  (IN THIS ACTION STEMMING FROM PLAINTIFF’S INSURING OF RESIDENTIAL MORTGAGE BACKED SECURITIES ISSUED BY DEFENDANT, PLAINTIFF WAS REQUIRED TO SHOW JUSTIFIABLE RELIANCE AND LOSS CAUSATION FOR ITS FRAUDULENT INDUCEMENT CAUSE OF ACTION, PLAINTIFF’S RECOVERY WAS LIMITED TO THAT DESCRIBED IN THE SOLE REMEDY PROVISION, AND PLAINTIFF WAS NOT ENTITLED TO ATTORNEY’S FEES (CT APP))/ATTORNEY’S FEES (IN THIS ACTION STEMMING FROM PLAINTIFF’S INSURING OF RESIDENTIAL MORTGAGE BACKED SECURITIES ISSUED BY DEFENDANT, PLAINTIFF WAS REQUIRED TO SHOW JUSTIFIABLE RELIANCE AND LOSS CAUSATION FOR ITS FRAUDULENT INDUCEMENT CAUSE OF ACTION, PLAINTIFF’S RECOVERY WAS LIMITED TO THAT DESCRIBED IN THE SOLE REMEDY PROVISION, AND PLAINTIFF WAS NOT ENTITLED TO ATTORNEY’S FEES (CT APP))

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PLAINTIFFS’ CONCLUSORY ALLEGATION OF FRAUD DID NOT DEFEAT THE AGREEMENT TO ARBITRATE (SECOND DEPT).

The Second Department determined the arbitration clause of the contract between plaintiffs and defendant was enforceable, despite the plaintiffs’ allegation of fraud in connection with the contract:

A party may not be compelled to arbitrate a dispute unless there is evidence which affirmatively establishes that the parties clearly, explicitly, and unequivocally agreed to arbitrate the dispute… . Under both federal and New York law, unless it can be established that there was a grand scheme to defraud which permeated the entire agreement, including the arbitration provision, a broadly worded arbitration provision will be deemed separate from the substantive contractual provisions, and the agreement to arbitrate may be valid despite the underlying allegation of fraud … .

The broad arbitration clause in the 2014 agreement, together with the other provisions of the 2014 agreement, demonstrate that the plaintiffs explicitly and unequivocally agreed to arbitrate the matters that are the subject of this action. In addition, the plaintiffs’ bare conclusory assertions of fraud failed to establish that any alleged fraud was part of a grand scheme that permeated the entire agreement, including the arbitration clause … . Zafar v Fast Track Leasing, LLC, 2018 NY Slip Op 04774, Second Dept 6-27-18

ARBITRATION (CONTRACT LAW, FRAUD, PLAINTIFFS’ CONCLUSORY ALLEGATION OF FRAUD DID NOT DEFEAT THE AGREEMENT TO ARBITRATE (SECOND DEPT))/CONTRACT LAW (ARBITRATION, PLAINTIFFS’ CONCLUSORY ALLEGATION OF FRAUD DID NOT DEFEAT THE AGREEMENT TO ARBITRATE (SECOND DEPT))/FRAUD (ARBITRATION, CONTRACT LAW, PLAINTIFFS’ CONCLUSORY ALLEGATION OF FRAUD DID NOT DEFEAT THE AGREEMENT TO ARBITRATE (SECOND DEPT))

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PURPORTED ORAL AGREEMENT TO PURCHASE ART WORKS BY PLAINTIFF PETER BEARD BARRED BY THE STATUTE OF FRAUDS, PAYMENTS ALLEGEDLY MADE TO PLAINTIFF WERE NOT UNEQUIVOCALLY REFERABLE TO THE ALLEGED CONTRACT (FIRST DEPT).

The First Department, over a detailed, comprehensive two-justice dissent, determined that a purported oral agreement to sell works of art by Peter Beard was barred by the statute of frauds. Plaintiffs’ motion for summary judgment on the causes of action for declaration, conversion and replevin was properly granted. Plaintiff Peter Beard was properly declared to be the sole owner of the art works. The dissent includes a detailed rendition of the facts which is not summarized here:

The motion court correctly found that the works of art at issue were goods, and thus that the purported oral agreement to sell them was barred by the statute of frauds (see UCC 2-201…). Defendants’ wire transfers to a third party, who then purportedly remitted the funds to plaintiffs, were not unequivocally referable to the agreement alleged, such as to deem the agreement partially completed and outside the statute of frauds … . Alternative explanations, including that the funds were for financing other projects involving the third party, defeat such claims … . Beard v Chase, 2018 NY Slip Op 04636, First Dept 6-21-18

​CONTRACT LAW (STATUTE OF FRAUDS, PURPORTED ORAL AGREEMENT TO PURCHASE ART WORKS BY PLAINTIFF PETER BEARD BARRED BY THE STATUTE OF FRAUDS, PAYMENTS ALLEGEDLY MADE TO PLAINTIFF WERE NOT UNEQUIVOCALLY REFERABLE TO THE ALLEGED CONTRACT (FIRST DEPT))/ORAL CONTRACTS (STATUTE OF FRAUDS, PURPORTED ORAL AGREEMENT TO PURCHASE ART WORKS BY PLAINTIFF PETER BEARD BARRED BY THE STATUTE OF FRAUDS, PAYMENTS ALLEGEDLY MADE TO PLAINTIFF WERE NOT UNEQUIVOCALLY REFERABLE TO THE ALLEGED CONTRACT (FIRST DEPT))/STATUTE OF FRAUDS (ORAL CONTRACT, PURPORTED ORAL AGREEMENT TO PURCHASE ART WORKS BY PLAINTIFF PETER BEARD BARRED BY THE STATUTE OF FRAUDS, PAYMENTS ALLEGEDLY MADE TO PLAINTIFF WERE NOT UNEQUIVOCALLY REFERABLE TO THE ALLEGED CONTRACT (FIRST DEPT))/ART WORKS (STATUTE OF FRAUDS, PURPORTED ORAL AGREEMENT TO PURCHASE ART WORKS BY PLAINTIFF PETER BEARD BARRED BY THE STATUTE OF FRAUDS, PAYMENTS ALLEGEDLY MADE TO PLAINTIFF WERE NOT UNEQUIVOCALLY REFERABLE TO THE ALLEGED CONTRACT (FIRST DEPT))/UNIFORM COMMERCIAL CODE (STATUTE OF FRAUDS, PURPORTED ORAL AGREEMENT TO PURCHASE ART WORKS BY PLAINTIFF PETER BEARD BARRED BY THE STATUTE OF FRAUDS, PAYMENTS ALLEGEDLY MADE TO PLAINTIFF WERE NOT UNEQUIVOCALLY REFERABLE TO THE ALLEGED CONTRACT (FIRST DEPT))/UCC  (STATUTE OF FRAUDS, PURPORTED ORAL AGREEMENT TO PURCHASE ART WORKS BY PLAINTIFF PETER BEARD BARRED BY THE STATUTE OF FRAUDS, PAYMENTS ALLEGEDLY MADE TO PLAINTIFF WERE NOT UNEQUIVOCALLY REFERABLE TO THE ALLEGED CONTRACT (FIRST DEPT))

THE RELATIONSHIP BETWEEN PLAINTIFF AND DEFENDANT WAS NOT CLOSE ENOUGH TO ALLOW AN UNJUST ENRICHMENT ACTION, DEFENDANT’S ACTIONS COULD NOT HAVE CAUSED PLAINTIFF’S RELIANCE OR INDUCEMENT (SECOND DEPT

The Second Department determined the relationship between plaintiff and defendant (Trovato) was not close enough to allow an unjust enrichment suit. Plaintiff had paid for shares in a corporation which were later sold to defendant. Plaintiff alleged the price paid by defendant was reduced by the amount plaintiff had already paid:

To recover for unjust enrichment, a plaintiff must show that (1) the defendant was enriched, (2) at the plaintiff’s expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered… . “Although privity is not required for an unjust enrichment claim, a claim will not be supported if the connection between the parties is too attenuated” … . The relationship must be one that could have caused reliance or inducement … . Here, the defendant established her prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff and Trovato did not have a relationship that could have caused reliance or inducement on the plaintiff’s part. Crescimanni v Trovato, 2018 NY Slip Op 04529, Second Dept 6-20-28

​UNJUST ENRICHMENT (THE RELATIONSHIP BETWEEN PLAINTIFF AND DEFENDANT WAS NOT CLOSE ENOUGH TO ALLOW AN UNJUST ENRICHMENT ACTION, DEFENDANT’S ACTIONS COULD NOT HAVE CAUSED PLAINTIFF’S RELIANCE OR INDUCEMENT (SECOND DEPT))/PRIVITY (UNJUST ENRICHMENT, THE RELATIONSHIP BETWEEN PLAINTIFF AND DEFENDANT WAS NOT CLOSE ENOUGH TO ALLOW AN UNJUST ENRICHMENT ACTION, DEFENDANT’S ACTIONS COULD NOT HAVE CAUSED PLAINTIFF’S RELIANCE OR INDUCEMENT (SECOND DEPT))

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CONTINUING WRONG DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS BREACH OF CONTRACT AND BREACH OF WARRANTY OF HABITABILITY ACTION BASED UPON THE ALLEGED FAILURE TO REPAIR DAMAGE TO A COOPERATIVE APARTMENT (SECOND DEPT).

The Second Department, modifying Supreme Court, determined the continuing wrong doctrine operated to toll the statute of limitations in this breach of contract/breach of warranty of habitability action involving damage to plaintiff’s cooperative apartment during a 2004 renovation. Plaintiff alleged the damage had never been repaired and brought his action in 2016. The Second Department held that the continuing wrong doctrine tolled the statute of limitations but damages were recoverable for only the six years preceding the commencement of the action:

The continuing wrong doctrine “is usually employed where there is a series of continuing wrongs and serves to toll the running of a period of limitations to the date of the commission of the last wrongful act” … . “In contract actions, the doctrine is applied to extend the statute of limitations when the contract imposes a continuing duty on the breaching party” … . Here, the plaintiff alleged that the damage to his unit persisted and had not been repaired, and that such breach constituted a continuing breach of the defendants’ contractual duty to keep the building in good repair and to provide habitable premises … . However, where, as here, the sole remedy sought for the alleged continuing contractual breaches is monetary damages, the plaintiff’s recovery must be limited to damages incurred within the six years prior to commencement of the action … . Garron v Bristol House, Inc., 2018 NY Slip Op 04533, Second Dept 6-20-18

​CONTRACT LAW (CONTINUING WRONG DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS BREACH OF CONTRACT AND BREACH OF WARRANTY OF HABITABILITY ACTION BASED UPON THE ALLEGED FAILURE TO REPAIR DAMAGE TO A COOPERATIVE APARTMENT (SECOND DEPT))/CIVIL PROCEDURE (STATUTE OF LIMITATIONS, CONTINUING WRONG DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS BREACH OF CONTRACT AND BREACH OF WARRANTY OF HABITABILITY ACTION BASED UPON THE ALLEGED FAILURE TO REPAIR DAMAGE TO A COOPERATIVE APARTMENT (SECOND DEPT))/STATUTE OF LIMITATIONS (CONTINUING WRONG DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS BREACH OF CONTRACT AND BREACH OF WARRANTY OF HABITABILITY ACTION BASED UPON THE ALLEGED FAILURE TO REPAIR DAMAGE TO A COOPERATIVE APARTMENT (SECOND DEPT))/COOPERATIVES (CONTINUING WRONG DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS BREACH OF CONTRACT AND BREACH OF WARRANTY OF HABITABILITY ACTION BASED UPON THE ALLEGED FAILURE TO REPAIR DAMAGE TO A COOPERATIVE APARTMENT (SECOND DEPT))/HABITABILITY, WARRANTY OF  (CONTINUING WRONG DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS BREACH OF CONTRACT AND BREACH OF WARRANTY OF HABITABILITY ACTION BASED UPON THE ALLEGED FAILURE TO REPAIR DAMAGE TO A COOPERATIVE APARTMENT (SECOND DEPT))

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