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ALTHOUGH THE DEFENDANT NEW YORK COMPANY IS A WHOLLY OWNED SUBSIDIARY OF AN ISRAELI COMPANY, THE TWO ENTITIES OPERATED INDEPENDENTLY SUCH THAT NEW YORK COULD NOT EXERCISE JURISDICTION OVER THE ISRAELI COMPANY, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT).

The First Department found that a defendant company, IAI, which operates in Israel, was not subject to personal jurisdiction in New York under the theory that defendant IAINA, which operates in New York, was a department of IAI. The court explained the relevant criteria. The court further held that a common interest privilege (with respect to alleged defamatory remarks regarding the plaintiff, defendant IAINA’s employee) does not insulate defendant from the alleged breach of a contractual non-disparagement clause:

Defendants established that IAI North America, Inc. (IAINA), which does business in the State of New York, is not a mere department of IAI, which operates primarily in Israel, and therefore that jurisdiction over IAINA is not jurisdiction over IAI … . The key executive personnel of the subsidiary were not assigned to their positions by the foreign parent, the subsidiary trained its own personnel, the parent did not write and publish all of the sales literature used by the subsidiary, and the subsidiary prepared its own financial statements … . … While IAINA is a wholly owned subsidiary of IAI, common ownership is “intrinsic to the parent-subsidiary relationship and, by [itself], not determinative”… . IAINA showed that it observed corporate formalities. Nothing in plaintiff’s affirmation indicates that IAI interferes in the selection and assignment of IAINA’s executive personnel, and the CEO of IAINA denied this. He also denied that IAI controlled IAINA’s marketing and operational policies. Plaintiff claimed that IAI had control over the approval of IAINA’s annual budget during the 11 years he worked at IAINA. However, this does not suffice … . …

IAINA … contends that the cause of action for breach of a non-disparagement clause should be dismissed because, even if it made disparaging remarks about plaintiff (its former employee), the remarks were privileged. However, the common interest privilege it relies on — which is part of the law of defamation — does not apply to a claim for breach of a non-disparagement clause … . Wolberg v IAI N. Am., Inc., 2018 NY Slip Op 03321, First Dept 5-8-18

CIVIL PROCEDURE (ALTHOUGH THE DEFENDANT NEW YORK COMPANY IS A WHOLLY OWNED SUBSIDIARY OF AN ISRAELI COMPANY, THE TWO ENTITIES OPERATED INDEPENDENTLY SUCH THAT NEW YORK COULD NOT EXERCISE JURISDICTION OVER THE ISRAELI COMPANY, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/JURISDICTION (CIVIL PROCEDURE, CORPORATIONS, ALTHOUGH THE DEFENDANT NEW YORK COMPANY IS A WHOLLY OWNED SUBSIDIARY OF AN ISRAELI COMPANY, THE TWO ENTITIES OPERATED INDEPENDENTLY SUCH THAT NEW YORK COULD NOT EXERCISE JURISDICTION OVER THE ISRAELI COMPANY, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/CORPORATIONS (JURISDICTION, ALTHOUGH THE DEFENDANT NEW YORK COMPANY IS A WHOLLY OWNED SUBSIDIARY OF AN ISRAELI COMPANY, THE TWO ENTITIES OPERATED INDEPENDENTLY SUCH THAT NEW YORK COULD NOT EXERCISE JURISDICTION OVER THE ISRAELI COMPANY, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/DEFAMATION (NON-DISPARAGEMENT CLAUSE, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/QUALIFIED PRIVILEGE (DEFAMATION, NON-DISPARAGEMENT CLAUSE, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/NON-DISPARAGEMENT CLAUSE (DEFAMATION, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/CONTRACT LAW (DEFAMATION, NON-DISPARAGEMENT CLAUSE, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/PRIVILEGE (DEFAMATION, COMMON INTEREST,  A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))/COMMON INTEREST PRIVILEGE (DEFAMATION, A QUALIFIED PRIVILEGE RE DEFAMATORY REMARKS ALLEGEDLY MADE BY DEFENDANT DOES NOT INSULATE THE DEFENDANT FROM A CAUSE OF ACTION BASED UPON BREACH OF A CONTRACTUAL NON-DISPARAGEMENT CLAUSE (FIRST DEPT))

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COMPLAINT DID NOT SUFFICIENTLY ALLEGE DEFENDANT HAD WAIVED THE REQUIREMENT OF WRITTEN NOTICE TO EXERCISE THE OPTION TO RENEW THE LEASE, PROPOSED AMENDMENT OF THE COMPLAINT WAS PALPABLY WITHOUT MERIT, MOTION TO AMEND WAS NOT FRIVOLOUS CONDUCT WARRANTING SANCTIONS (SECOND DEPT).

The Second Department determined the allegations in the complaint were insufficient to allege there was a waiver of the requirement that the option to renew the lease be in writing. Therefore the complaint was properly dismissed for failure to state a cause of action. The motion to amend the complaint was properly denied because the amendment was palpably insufficient or patently devoid of merit. The proposed amendment did not allege the existence of a specific agreement with the defendant. However, the motion to amend was not frivolous conduct and Supreme Court should not have awarded sanctions to defendant:

“Although a party may waive his or her rights under an agreement or decree, waiver is not created by negligence, oversight, or thoughtlessness, and cannot be inferred from mere silence” … . Moreover, with respect to the plaintiff’s allegations that [defendant’s representative] stated that the defendant would not object to the assignment [of the lease to the prospective purchaser of plaintiff’s business], subject to, inter alia, a credit check, “a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable” … . …

The plaintiff’s proposed amended complaint was palpably insufficient and devoid of merit. The plaintiff failed to allege that (1) it actually came to an agreement with the proposed purchaser six months prior to the expiration of the lease, (2) it gave the defendant notice of its intention to exercise the option within six months of the expiration of the lease, irrespective of whether it came to an agreement with the proposed purchaser, or (3) the proposed purchaser was creditworthy. …

… [T]he plaintiff’s conduct in moving for leave to amend the complaint and/or replead was not, under the circumstances, “frivolous” within the meaning of 22 NYCRR 130-1.1(c) … . NHD Nigani, LLC v Angelina Zabel Props., Inc., 2018 NY Slip Op 03135, Second Dept 5-2-18

​CONTRACT LAW (COMPLAINT DID NOT SUFFICIENTLY ALLEGE DEFENDANT HAD WAIVED THE REQUIREMENT OF WRITTEN NOTICE TO EXERCISE THE OPTION TO RENEW THE LEASE, PROPOSED AMENDMENT OF THE COMPLAINT WAS PALPABLY WITHOUT MERIT, MOTION TO AMEND WAS NOT FRIVOLOUS CONDUCT WARRANTING SANCTIONS (SECOND DEPT))/LANDLORD-TENANT (COMPLAINT DID NOT SUFFICIENTLY ALLEGE DEFENDANT HAD WAIVED THE REQUIREMENT OF WRITTEN NOTICE TO EXERCISE THE OPTION TO RENEW THE LEASE, PROPOSED AMENDMENT OF THE COMPLAINT WAS PALPABLY WITHOUT MERIT, MOTION TO AMEND WAS NOT FRIVOLOUS CONDUCT WARRANTING SANCTIONS (SECOND DEPT))/CIVIL PROCEDURE (SANCTIONS, FRIVOLOUS CONDUCT, MOTION TO AMEND THE COMPLAINT WAS NOT FRIVOLOUS CONDUCT WARRANTING SANCTIONS (SECOND DEPT))/SANCTIONS (FRIVOLOUS CONDUCT, MOTION TO AMEND THE COMPLAINT WAS NOT FRIVOLOUS CONDUCT WARRANTING SANCTIONS (SECOND DEPT))/FRIVOLOUS CONDUCT (MOTION TO AMEND THE COMPLAINT WAS NOT FRIVOLOUS CONDUCT WARRANTING SANCTIONS (SECOND DEPT))

DEFENDANTS’ OWN MOTION PAPERS RAISED A QUESTION OF FACT WHETHER THE PARTIES INTENDED TO BE BOUND BY AN UNSIGNED LLC OPERATING AGREEMENT, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED WITHOUT REFERENCE TO THE OPPOSING PAPERS (SECOND DEPT).

The Second Department determined defendants’ own motion papers raised a question of fact whether defendants intended to be bound by an unexecuted limited liability company operating agreement. Therefore defendants’ motion for summary judgment in this breach of contract action was properly denied without reference to the opposing papers:

Contrary to the defendants’ contention, the agreement does not, on its face, demonstrate that the parties did not intend to be bound absent formal execution … . Moreover, in support of their motion, the defendants submitted emails exchanged between the parties and their respective attorneys. The defendants failed to eliminate triable issues of fact as to whether the parties had agreed upon the major terms of the agreement and whether the parties began to perform the agreement. Accordingly, they failed to establish, prima facie, that the parties did not intend to be bound by the terms of the agreement … . Therefore, the defendants were not entitled to summary judgment, regardless of the sufficiency of the plaintiffs’ opposition papers … . 223 Sam, LLC v 223 15th St., LLC, 2018 NY Slip Op 03118, Second Dept 5-2-18

​CONTRACT LAW (UNEXECUTED AGREEMENT, DEFENDANTS’ OWN MOTION PAPERS RAISED A QUESTION OF FACT WHETHER THE PARTIES INTENDED TO BE BOUND BY AN UNSIGNED LLC OPERATING AGREEMENT, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED (SECOND DEPT))/UNEXECUTED CONTRACTS (DEFENDANTS’ OWN MOTION PAPERS RAISED A QUESTION OF FACT WHETHER THE PARTIES INTENDED TO BE BOUND BY AN UNSIGNED LLC OPERATING AGREEMENT, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED (SECOND DEPT))/UNSIGNED CONTRACTS (DEFENDANTS’ OWN MOTION PAPERS RAISED A QUESTION OF FACT WHETHER THE PARTIES INTENDED TO BE BOUND BY AN UNSIGNED LLC OPERATING AGREEMENT, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED (SECOND DEPT))

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ARBITRATION AWARD BY A RABBINICAL COURT IN THIS DIVORCE PROCEEDING SHOULD NOT HAVE BEEN VACATED, FAILURE TO FOLLOW THE EQUITABLE DISTRIBUTION LAW DID NOT VIOLATE PUBLIC POLICY, UNCONSCIONABILITY IS NOT A STATUTORY GROUND FOR VACATING AN ARBITRATION AWARD (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the arbitration award by a Rabbinical Court in this divorce proceeding should not have been vacated. The fact that the Equitable Distribution Law was not followed did not warrant vacation of the award because parties can elect to deviate from the Domestic Relations Law (no violation of public policy). The Second Department further held that unconscionability is not a statutory ground for reviewing or setting aside an arbitration award:

Judicial review of an arbitration award is extremely limited (see CPLR 7510, 7511…). “Outside of the narrowly circumscribed exceptions of CPLR 7511, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact'” … .

“An award is irrational only where there is no proof whatever to justify the award” … . Moreover, that showing must be made by clear and convincing evidence … . Here, the very limited record does not even reveal what evidence was submitted to the arbitrators regarding, among other things, the parties’ assets and financial condition. Therefore, the Supreme Court lacked any basis upon which to conclude that the award was irrational.

“An arbitration award violates public policy only where a court can conclude, without engaging in any extended fact-finding or legal analysis, that a law prohibits the particular matters to be decided by arbitration, or where the award itself violates a well-defined constitutional, statutory, or common law of this state” … . …

… [W]e disagree with the Supreme Court’s determination that the … award was unconscionable on its face. Unconscionability is a doctrine grounded in contract law, which can be applied to invalidate an agreement to arbitrate …  or a marital agreement entered into before or during the marriage … . The doctrine, which requires proof of both procedural unconscionability in the formation of the contract, as well as substantive unconscionability in the terms of the contract  … , is not a statutory ground upon which an arbitration award may be reviewed, let alone set aside… . If the arbitral procedure was tainted by corruption, fraud, or misconduct, or the partiality of an arbitrator appointed as a neutral, the proper remedy is to move to vacate the award pursuant to CPLR 7511(b)(1)(i) or (ii).  Zar v Yaghoobzar, 2018 NY Slip Op 03170, Second Dept 5-2-18

​ARBITRATION (FAMILY LAW, RELIGION, ARBITRATION AWARD BY A RABBINICAL COURT IN THIS DIVORCE PROCEEDING SHOULD NOT HAVE BEEN VACATED, FAILURE TO FOLLOW THE EQUITABLE DISTRIBUTION LAW DID NOT VIOLATE PUBLIC POLICY, UNCONSCIONABILITY IS NOT A STATUTORY GROUND FOR VACATING AN ARBITRATION AWARD (SECOND DEPT))/FAMILY LAW (ARBITRATION AWARD BY A RABBINICAL COURT IN THIS DIVORCE PROCEEDING SHOULD NOT HAVE BEEN VACATED, FAILURE TO FOLLOW THE EQUITABLE DISTRIBUTION LAW DID NOT VIOLATE PUBLIC POLICY, UNCONSCIONABILITY IS NOT A STATUTORY GROUND FOR VACATING AN ARBITRATION AWARD (SECOND DEPT))/CONTRACT LAW (ARBITRATION AWARD BY A RABBINICAL COURT IN THIS DIVORCE PROCEEDING SHOULD NOT HAVE BEEN VACATED, FAILURE TO FOLLOW THE EQUITABLE DISTRIBUTION LAW DID NOT VIOLATE PUBLIC POLICY, UNCONSCIONABILITY IS NOT A STATUTORY GROUND FOR VACATING AN ARBITRATION AWARD (SECOND DEPT))/RELIGION (RABBINICAL COURT, ARBITRATION AWARD BY A RABBINICAL COURT IN THIS DIVORCE PROCEEDING SHOULD NOT HAVE BEEN VACATED, FAILURE TO FOLLOW THE EQUITABLE DISTRIBUTION LAW DID NOT VIOLATE PUBLIC POLICY, UNCONSCIONABILITY IS NOT A STATUTORY GROUND FOR VACATING AN ARBITRATION AWARD (SECOND DEPT))/RABBINICAL COURT (ARBITRATION AWARD BY A RABBINICAL COURT IN THIS DIVORCE PROCEEDING SHOULD NOT HAVE BEEN VACATED, FAILURE TO FOLLOW THE EQUITABLE DISTRIBUTION LAW DID NOT VIOLATE PUBLIC POLICY, UNCONSCIONABILITY IS NOT A STATUTORY GROUND FOR VACATING AN ARBITRATION AWARD (SECOND DEPT))

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QUESTION OF FACT WHETHER SNOW PLOWING CONTRACTOR LAUNCHED AN INSTRUMENT OF HARM OR CREATED OR EXACERBATED A DANGEROUS CONDITION IN THIS ICE AND SNOW SLIP AND FALL CASE (FOURTH DEPT).

The Fourth Department, in a comprehensive decision not fully summarized here, determined there was a question of fact whether the snow removal contractor (SWBG) had launched an instrument of harm or created or exacerbated a dangerous condition by piling snow near where plaintiff slipped and fell:

With respect to the third-party action, we agree with defendants that the court erred in granting SWBG’s motion insofar as it sought dismissal of the contribution cause of action. It is undisputed that SWBG entered into a contract with the Church to provide snowplowing services, which included salting or sanding the plowed areas at the discretion of SWBG. There are “three situations in which a party who enters into a contract to render services may be said to have assumed a duty of care—and thus be potentially liable in tort—to third persons: (1) where the contracting party, in failing to exercise reasonable care in the performance of his [or her] duties, launche[s] a force or instrument of harm’ . . . (2) where the plaintiff detrimentally relies on the continued performance of the contracting party’s duties . . . and (3) where the contracting party has entirely displaced the other party’s duty to maintain the premises safely” … . In their verified bill of particulars, defendants relied solely on the first situation.

With respect to the first situation, although SWBG piled the snow in the area of the incline, SWBG established that it did so only at the Church’s direction. Even assuming, arguendo, that such evidence is sufficient to establish that SWBG did not launch a force or instrument of harm, we conclude that defendants raised a triable issue of fact whether SWBG piled the snow at that location on its own initiative and thus whether SWBG launched a force or instrument of harm, i.e., created or exacerbated a dangerous condition … . Chamberlain v Church of the Holy Family 2018 NY Slip Op 02949, Fourth Dept 4-27-18

​NEGLIGENCE (SLIP AND FALL, CONTRACTOR LIABILITY, QUESTION OF FACT WHETHER SNOW PLOWING CONTRACTOR LAUNCHED AN INSTRUMENT OF HARM OR CREATED OR EXACERBATED A DANGEROUS CONDITION IN THIS ICE AND SNOW SLIP AND FALL CASE (FOURTH DEPT))/CONTRACT LAW (NEGLIGENCE, SLIP AND FALL, CONTRACTOR LIABILITY, QUESTION OF FACT WHETHER SNOW PLOWING CONTRACTOR LAUNCHED AN INSTRUMENT OF HARM OR CREATED OR EXACERBATED A DANGEROUS CONDITION IN THIS ICE AND SNOW SLIP AND FALL CASE (FOURTH DEPT))/SLIP AND FALL (CONTRACTOR LIABILITY, QUESTION OF FACT WHETHER SNOW PLOWING CONTRACTOR LAUNCHED AN INSTRUMENT OF HARM OR CREATED OR EXACERBATED A DANGEROUS CONDITION IN THIS ICE AND SNOW SLIP AND FALL CASE (FOURTH DEPT))

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LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT).

The Fourth Department determined the liquidated damages provision in the non-compete covenant was enforceable and the defendant should have been granted summary judgment on its claim for attorney’s fees pursuant to the employment contract. Plaintiffs had argued the liquidated damages encompassed the defendant’s attorneys’ fees:

… [W]e conclude that the court properly determined that defendant met its initial burden of establishing that the liquidated damages clauses are enforceable because they represent a ” reasonable measure of the anticipated probable harm’ ” … , and plaintiffs failed to raise an issue of fact. We note that plaintiffs do not dispute that the potential damages flowing from a breach of the restrictive covenant were not readily ascertainable at the time the parties entered into the employment agreements … . Indeed, the fact that these types of damages are difficult to measure provides the foundation for a liquidated damages clause … .

… [T]he attorney fee clause of the employment agreement is not duplicative of the liquidated damages clause. One of the express purposes of the liquidated damages clause is “avoiding the costs, expenses, and uncertainties of litigation over the amount of actual damages that will be suffered by the Employer in the event of breach” … . Here, defendant seeks attorney’s fees and costs incurred in enforcing the restrictive covenant and the liquidated damages clause, which is distinct from any attorney’s fees and costs that would be incurred in litigation over the amount of actual damages … . Mathew v Slocum-Dickson Med. Group, PLLC, 2018 NY Slip Op 03059, Fourth Dept 4-27-18

​EMPLOYMENT LAW (NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/CONTRACT LAW (EMPLOYMENT LAW, NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/NON-COMPETE COVENANT (LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/ATTORNEY’S FEES (EMPLOYMENT LAW , NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))/LIQUIDATED DAMAGES (NON-COMPETE COVENANT, LIQUIDATED DAMAGES CLAUSE IN NON-COMPETE COVENANT ENFORCEABLE, ATTORNEY’S FEES NOT ENCOMPASSED BY THE LIQUIDATED DAMAGES (FOURTH DEPT))

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PLAINTIFF, PURSUANT TO THE CONDOMINIUM DECLARATION AND OFFERING PLAN, WAS THE OWNER OF THE BASEMENT SPACE USED BY DEFENDANTS, PLAINTIFF WAS ENTITLED TO SUMMARY JUDGMENT ON ITS TRESPASS ACTION, BECAUSE THE DECLARATION AND OFFERING PLAN, AND THE REFERENCE TO IT IN THE DEEDS, WERE UNAMBIGUOUS, PAROL AGREEMENTS TRANSFERRING OWNERSHIP OF THE AREA TO DEFENDANTS WERE NOT ENFORCEABLE (FIRST DEPT).

The First Department determined plaintiff was entitled to summary judgment on its trespass action against defendant condominium owners based on defendants’ use of a basement storage area which, according to the Declaration and Offering Plan, was owned by plaintiff. Any attempt to transfer ownership of the basement area to defendants’ condominium was ineffectual because there was never a meeting and vote by unit members:

The Declaration and Offering Plan are unambiguous and clearly state that the disputed basement space was a Limited Common Element of the front unit owned by plaintiff. The deeds to both parties’ units were silent on this issue, but provided that each buyer agreed that their ownership was subject to the Declaration. Paragraph Fifth of the Declaration provided that the use of the basement space was deemed conveyed with the conveyance of the front unit, even if the interest was not expressly described in the conveyance. In order to amend the Declaration, pursuant to paragraph Tenth(b), the board was required to execute an instrument upon the affirmative vote of 80% of the unit owners held at a duly called meeting. Moreover, paragraph Tenth(b)(I) provided that an amendment which altered the right to portions of the common elements required the consent of 100% of the affected unit owners.

Here, there was never a duly held meeting of the unit owners at which 80% voted to amend the Declaration to permit transfer of the right to use the basement space from the front unit to the rear unit. Thus, plaintiff retained the right to use the basement space. Parol evidence of the parties’ contrary intent is irrelevant in the face of the unambiguous governing documents … . Plaintiff’s acknowledgment in the contract of sale that it was not purchasing the right to use the basement storage space is not controlling because the deed contained a provision that the sale was subject to the provisions of the Declaration, which stated that the storage space was for the use of the front unit. P360 Spaces LLC v Orlando, 2018 NY Slip Op 02749, First Dept 4-27-18

​CONDOMINIUMS (PLAINTIFF, PURSUANT TO THE CONDOMINIUM DECLARATION AND OFFERING PLAN, WAS THE OWNER OF THE BASEMENT SPACE USED BY DEFENDANTS, PLAINTIFF WAS ENTITLED TO SUMMARY JUDGMENT ON ITS TRESPASS ACTION, BECAUSE THE DECLARATION AND OFFERING PLAN, AND THE REFERENCE TO IT IN THE DEEDS, WERE UNAMBIGUOUS, PAROL AGREEMENTS TRANSFERRING OWNERSHIP OF THE AREA TO DEFENDANTS WERE NOT ENFORCEABLE (FIRST DEPT))/CONTRACT LAW (CONDOMINIUMS, PLAINTIFF, PURSUANT TO THE CONDOMINIUM DECLARATION AND OFFERING PLAN, WAS THE OWNER OF THE BASEMENT SPACE USED BY DEFENDANTS, PLAINTIFF WAS ENTITLED TO SUMMARY JUDGMENT ON ITS TRESPASS ACTION, BECAUSE THE DECLARATION AND OFFERING PLAN, AND THE REFERENCE TO IT IN THE DEEDS, WERE UNAMBIGUOUS, PAROL AGREEMENTS TRANSFERRING OWNERSHIP OF THE AREA TO DEFENDANTS WERE NOT ENFORCEABLE (FIRST DEPT))/TRESPASS (CONDOMINIUMS,  PLAINTIFF, PURSUANT TO THE CONDOMINIUM DECLARATION AND OFFERING PLAN, WAS THE OWNER OF THE BASEMENT SPACE USED BY DEFENDANTS, PLAINTIFF WAS ENTITLED TO SUMMARY JUDGMENT ON ITS TRESPASS ACTION, BECAUSE THE DECLARATION AND OFFERING PLAN, AND THE REFERENCE TO IT IN THE DEEDS, WERE UNAMBIGUOUS, PAROL AGREEMENTS TRANSFERRING OWNERSHIP OF THE AREA TO DEFENDANTS WERE NOT ENFORCEABLE (FIRST DEPT))

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A GENERIC NEW YORK CHOICE OF LAW PROVISION IN A CONTRACT DOES NOT TRANSFORM ALL NEW YORK STATUTORY REQUIREMENTS INTO CONTRACTUAL OBLIGATIONS, HERE THE CONSTRUCTION MANAGEMENT CONTRACT DID NOT MENTION BOND REQUIREMENTS UNDER THE LIEN LAW AND THE CHOICE OF LAW PROVISION COULD NOT BE USED TO READ THE LIEN LAW REQUIREMENT INTO THE CONTRACT (CT APP).

The Court of Appeals, affirming the Appellate Division, determined that the clause of a contract indicating construction of the contract was governed by New York law did not incorporate a specific statutory requirement, here a requirement of the Lien Law:

Plaintiff’s complaint does not identify which, if any, provision or provisions of the [CM agreement] were purportedly breached. Unlike the Development and Lease Agreements — to which plaintiff is not a party — the CM Agreement contains no express provision requiring compliance with the Lien Law. Plaintiff nevertheless maintains that section 5 of the Lien Law should be “read into” the CM Agreement because the contract is governed by New York law. Specifically, plaintiff points to section 17.3 of the CM Agreement, which provides that “[t]he construction, validity and performance of [the CM Agreement] shall be exclusively governed by the laws of the State of New York, excluding any provisions or principles thereof which would require the application of the laws of a different jurisdiction.” However, this is a typical choice-of-law provision that we do not read as imposing a contractual obligation here. The mere fact that an agreement, and disputes arising thereunder, are governed by the law of a particular jurisdiction does not transform all statutory requirements that may otherwise be imposed under that body of law into contractual obligations, and we decline to interpret the CM Agreement as “impliedly stating something which [the parties] have neglected to specifically include” … . Skanska USA Bldg. Inc. v Atlantic Yards B2 Owner, LLC, 2018 NY Slip Op 02828, CtApp 4-26-18

​CONTRACT LAW (A GENERIC NEW YORK CHOICE OF LAW PROVISION IN A CONTRACT DOES NOT TRANSFORM ALL NEW YORK STATUTORY REQUIREMENTS INTO CONTRACTUAL OBLIGATIONS, HERE THE CONSTRUCTION MANAGEMENT CONTRACT DID NOT MENTION BOND REQUIREMENTS UNDER THE LIEN LAW AND THE CHOICE OF LAW PROVISION COULD NOT BE USED TO READ THE LIEN LAW REQUIREMENT INTO THE CONTRACT (CT APP))/CIVIL PROCEDURE (CONTRACT LAW, CHOICE OF LAW, A GENERIC NEW YORK CHOICE OF LAW PROVISION IN A CONTRACT DOES NOT TRANSFORM ALL NEW YORK STATUTORY REQUIREMENTS INTO CONTRACTUAL OBLIGATIONS, HERE THE CONSTRUCTION MANAGEMENT CONTRACT DID NOT MENTION BOND REQUIREMENTS UNDER THE LIEN LAW AND THE CHOICE OF LAW PROVISION COULD NOT BE USED TO READ THE LIEN LAW REQUIREMENT INTO THE CONTRACT (CT APP))/CONSTRUCTION CONTRACTS (A GENERIC NEW YORK CHOICE OF LAW PROVISION IN A CONTRACT DOES NOT TRANSFORM ALL NEW YORK STATUTORY REQUIREMENTS INTO CONTRACTUAL OBLIGATIONS, HERE THE CONSTRUCTION MANAGEMENT CONTRACT DID NOT MENTION BOND REQUIREMENTS UNDER THE LIEN LAW AND THE CHOICE OF LAW PROVISION COULD NOT BE USED TO READ THE LIEN LAW REQUIREMENT INTO THE CONTRACT (CT APP))/LIEN LAW (CONSTRUCTION CONTRACTS, ERE THE CONSTRUCTION MANAGEMENT CONTRACT DID NOT MENTION BOND REQUIREMENTS UNDER THE LIEN LAW AND THE CHOICE OF LAW PROVISION COULD NOT BE USED TO READ THE LIEN LAW REQUIREMENT INTO THE CONTRACT (CT APP))

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CONTRACTUAL AGREEMENT TO A ONE YEAR STATUTE OF LIMITATIONS FOR A BREACH OF CONTRACT ACTION SHOULD NOT HAVE BEEN ENFORCED, PLAINTIFF HAD NO CONTROL OVER WHEN THE DEFENDANT COULD TAKE AN ACTION WHICH BREACHED THE CONTRACT, HERE THE ALLEGED BREACH BY DEFENDANT DIDN’T TAKE PLACE UNTIL AFTER THE LIMITATIONS PERIOD (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that, under the facts, the contractual provision creating a one year statute of limitations for a breach of contract action was not fair and should not have been enforced. It was not the duration of the limitations period that was deemed unfair, rather it was the defendant’s lack of control over the actions by the plaintiff which could be deemed to have breached the contract:

There is nothing inherently unreasonable about the one-year period of limitation, to which the parties here freely agreed … . “The problem with the limitation period in this case is not its duration, but its accrual date” … . It is neither fair nor reasonable to require that an action be commenced within one year from the date of the plaintiff’s substantial completion of its work on the project, while imposing a condition precedent to the action that was not within the plaintiff’s control and which was not met within the limitations period. “A limitation period’ that expires before suit can be brought is not really a limitation period at all, but simply a nullification of the claim” … . The limitation period in the subcontract conflicts with the conditions precedent to payment becoming due to the plaintiff, which, under the circumstances of this case, acted to nullify any claim the plaintiff might have for breach of the subcontract. Therefore, interpreting the subcontract against the defendant, which drafted the agreement … , we find that the one-year limitation period is unenforceable under the circumstances here … . D&S Restoration, Inc. v Wenger Constr. Co., Inc., 2018 NY Slip Op 02768, Second Dept 4-25-18

​CIVIL PROCEDURE (CONTRACTUAL AGREEMENT TO A ONE YEAR STATUTE OF LIMITATIONS FOR A BREACH OF CONTRACT ACTION SHOULD NOT HAVE BEEN ENFORCED, PLAINTIFF HAD NO CONTROL OVER WHEN THE DEFENDANT COULD TAKE AN ACTION WHICH BREACHED THE CONTRACT, HERE THE ALLEGED BREACH BY DEFENDANT DIDN’T TAKE PLACE UNTIL AFTER THE LIMITATIONS PERIOD (SECOND DEPT))/STATUTE OF LIMITATIONS (CONTRACTUAL AGREEMENT TO A ONE YEAR STATUTE OF LIMITATIONS FOR A BREACH OF CONTRACT ACTION SHOULD NOT HAVE BEEN ENFORCED, PLAINTIFF HAD NO CONTROL OVER WHEN THE DEFENDANT COULD TAKE AN ACTION WHICH BREACHED THE CONTRACT, HERE THE ALLEGED BREACH BY DEFENDANT DIDN’T TAKE PLACE UNTIL AFTER THE LIMITATIONS PERIOD (SECOND DEPT))/CONTRACT LAW (STATUTE OF LIMITATIONS, CONTRACTUAL AGREEMENT TO A ONE YEAR STATUTE OF LIMITATIONS FOR A BREACH OF CONTRACT ACTION SHOULD NOT HAVE BEEN ENFORCED, PLAINTIFF HAD NO CONTROL OVER WHEN THE DEFENDANT COULD TAKE AN ACTION WHICH BREACHED THE CONTRACT, HERE THE ALLEGED BREACH BY DEFENDANT DIDN’T TAKE PLACE UNTIL AFTER THE LIMITATIONS PERIOD (SECOND DEPT))

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NO CHILD SUPPORT OR MAINTENANCE ORDER WAS IN EFFECT AT THE TIME HUSBAND MOVED TO REDUCE HIS OBLIGATION BECAUSE OF A LOSS OF EMPLOYMENT, THE CHILD SUPPORT AND MAINTENANCE PROVISIONS OF THE SEPARATION AGREEMENT, WHICH WAS NOT MERGED INTO THE DIVORCE DECREE, CONTROLLED, HUSBAND DID NOT DEMONSTRATE THE SETTLEMENT AGREEMENT WAS INVALID (THIRD DEPT).

The Third Department, reversing Supreme Court, determined that husband did not present sufficient proof to warrant a change in the support provisions of the settlement agreement, as opposed to a child support order. No child support order was in effect at the time the husband sought to reduce the support obligation described in the settlement agreement:

“The case law distinguishes between modification of a separation agreement and that of a divorce decree. A separation agreement that is incorporated into but not merged with a divorce decree is an independent contract binding on the parties unless impeached or challenged for some cause recognized by law. Indeed, courts of this [s]tate enjoy only limited authority to disturb the terms of a separation agreement” … . The husband sought modification of the terms of the agreement with respect to his child support and maintenance obligations, by motion, on the ground that his loss of employment constituted a change in circumstances that warranted modification — a standard that applies to modification of orders and judgments … — but he made no argument that the settlement agreement was invalid. Supreme Court may, upon a proper showing establishing a change in circumstances, modify an order or judgment of divorce that incorporates a settlement agreement. However, the court had no authority under the present circumstances to grant the husband’s motion by modifying the settlement agreement. Abdelrahman v Mahdi, 2018 NY Slip Op 02698, Third Dept 4-19-18

​FAMILY LAW (NO CHILD SUPPORT OR MAINTENANCE ORDER WAS IN EFFECT AT THE TIME HUSBAND MOVED TO REDUCE HIS OBLIGATION BECAUSE OF A LOSS OF EMPLOYMENT, THE CHILD SUPPORT AND MAINTENANCE PROVISIONS OF THE SEPARATION AGREEMENT, WHICH WAS NOT MERGED INTO THE DIVORCE DECREE, CONTROLLED, HUSBAND DID NOT DEMONSTRATE THE SETTLEMENT AGREEMENT WAS INVALID (THIRD DEPT))/CHILD SUPPORT  (NO CHILD SUPPORT OR MAINTENANCE ORDER WAS IN EFFECT AT THE TIME HUSBAND MOVED TO REDUCE HIS OBLIGATION BECAUSE OF A LOSS OF EMPLOYMENT, THE CHILD SUPPORT AND MAINTENANCE PROVISIONS OF THE SEPARATION AGREEMENT, WHICH WAS NOT MERGED INTO THE DIVORCE DECREE, CONTROLLED, HUSBAND DID NOT DEMONSTRATE THE SETTLEMENT AGREEMENT WAS INVALID (THIRD DEPT))/SETTLEMENT AGREEMENT (FAMILY LAW, CHILD SUPPORT, MAINTENANCE, NO CHILD SUPPORT OR MAINTENANCE ORDER WAS IN EFFECT AT THE TIME HUSBAND MOVED TO REDUCE HIS OBLIGATION BECAUSE OF A LOSS OF EMPLOYMENT, THE CHILD SUPPORT AND MAINTENANCE PROVISIONS OF THE SEPARATION AGREEMENT, WHICH WAS NOT MERGED INTO THE DIVORCE DECREE, CONTROLLED, HUSBAND DID NOT DEMONSTRATE THE SETTLEMENT AGREEMENT WAS INVALID (THIRD DEPT))/MAINTENANCE (FAMILY LAW, NO CHILD SUPPORT OR MAINTENANCE ORDER WAS IN EFFECT AT THE TIME HUSBAND MOVED TO REDUCE HIS OBLIGATION BECAUSE OF A LOSS OF EMPLOYMENT, THE CHILD SUPPORT AND MAINTENANCE PROVISIONS OF THE SEPARATION AGREEMENT, WHICH WAS NOT MERGED INTO THE DIVORCE DECREE, CONTROLLED, HUSBAND DID NOT DEMONSTRATE THE SETTLEMENT AGREEMENT WAS INVALID (THIRD DEPT))/CONTRACT LAW (FAMILY LAW, SETTLEMENT AGREEMENT, NO CHILD SUPPORT OR MAINTENANCE ORDER WAS IN EFFECT AT THE TIME HUSBAND MOVED TO REDUCE HIS OBLIGATION BECAUSE OF A LOSS OF EMPLOYMENT, THE CHILD SUPPORT AND MAINTENANCE PROVISIONS OF THE SEPARATION AGREEMENT, WHICH WAS NOT MERGED INTO THE DIVORCE DECREE, CONTROLLED, HUSBAND DID NOT DEMONSTRATE THE SETTLEMENT AGREEMENT WAS INVALID (THIRD DEPT))

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