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THE TERMS ‘EVENT OF DEFAULT’ AND ‘DEFAULT’ WHICH APPEARED IN TWO DIFFERENT SECTIONS OF THE CONTRACT WERE DEEMED TO MEAN THE SAME THING, BECAUSE THE TERMS WERE DEEMED SYNONYMOUS PLAINTIFF DID NOT MEET ALL THE CONDITIONS PRECEDENT FOR STANDING TO SUE, COMPLAINT PROPERLY DISMISSED (FIRST DEPT).

The First Department determined the derivative action for breach of an Amended and Restated Pooling and Servicing Agreement (PSA) was properly dismissed because plaintiffs did not fulfill all of the conditions precedent for bringing the suit, which alleged the defendants’ failure to determine the fair value of a loan. Whether the contractual conditions precedent were met turned on whether the term “event of default” in one provision was synonymous with the term “default” in another provision. Because the two terms were deemed to mean the same thing, a condition precedent for the suit was not met:

Because the uncontroverted and unambiguous documentary evidence demonstrates that plaintiff failed to satisfy the terms of section 7.01(a)(iii) defining the Event of Default here at issue, plaintiff’s compliance with the conditions precedent of section 12.03(c) does not suffice to afford it standing to sue, as it has failed to demonstrate an actionable Event of Default under the PSA. Thus, KeyBank and Berkadia have conclusively established a defense to plaintiff’s asserted claims as a matter of law … and the motion court correctly granted both defendants’ CPLR 3211(a)(1) motions to dismiss. Alden Global Value Recovery Master Fund, L.P. v KeyBank N.A., 2018 NY Slip Op 02241, First Dept 3-29-18

CONTRACT LAW (THE TERMS ‘EVENT OF DEFAULT’ AND ‘DEFAULT’ WHICH APPEARED IN TWO DIFFERENT SECTIONS OF THE CONTRACT WERE DEEMED TO MEAN THE SAME THING, BECAUSE THE TERMS WERE DEEMED SYNONYMOUS PLAINTIFF DID NOT MEET ALL THE CONDITIONS PRECEDENT FOR STANDING TO SUE, COMPLAINT PROPERLY DISMISSED (FIRST DEPT))/DEFAULT (CONTRACT LAW, THE TERMS ‘EVENT OF DEFAULT’ AND ‘DEFAULT’ WHICH APPEARED IN TWO DIFFERENT SECTIONS OF THE CONTRACT WERE DEEMED TO MEAN THE SAME THING, BECAUSE THE TERMS WERE DEEMED SYNONYMOUS PLAINTIFF DID NOT MEET ALL THE CONDITIONS PRECEDENT FOR STANDING TO SUE, COMPLAINT PROPERLY DISMISSED (FIRST DEPT))/EVENT OF DEFAULT (CONTRACT LAW, THE TERMS ‘EVENT OF DEFAULT’ AND ‘DEFAULT’ WHICH APPEARED IN TWO DIFFERENT SECTIONS OF THE CONTRACT WERE DEEMED TO MEAN THE SAME THING, BECAUSE THE TERMS WERE DEEMED SYNONYMOUS PLAINTIFF DID NOT MEET ALL THE CONDITIONS PRECEDENT FOR STANDING TO SUE, COMPLAINT PROPERLY DISMISSED (FIRST DEPT))

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DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Stein, determined that an exchange of correspondence supported plaintiff’s allegation of the existence of an employment contract and a breach of that contract. The documentary evidence submitted by the defendant did not utterly refute the allegations in the complaint. Therefore the defendant’s motion to dismiss was properly denied:

… [W]e conclude that, based on all the documentary evidence proffered by defendant, a reasonable fact-finder could determine that a binding contract was formed. Ertel’s [the CEO’S] initial email to plaintiff stated that “[t]he terms of our offer are the same [as the] terms of your existing contract” — apart from “a clarification” concerning an issue that plaintiff characterizes as minor — and outlined the core terms that were included in the 2009 Agreement. He added that, if plaintiff had “[a]ny further questions” he should consult his “existing contract.” Inasmuch as this email explained that “the terms of the offer” were to be nearly identical to the terms of plaintiff’s existing contract, a reasonable fact-finder could interpret it as evincing an objective manifestation of defendant’s intent to enter into a bargain, such that plaintiff was justified “in understanding that his assent to that bargain [was] invited and [would] conclude it”… . Put differently, it could reasonably be inferred that Ertel’s email constituted a valid offer by defendant. In response to that email, plaintiff wrote “I accept. pls [sic] send contract,” to which Ertel replied, “Mazel. Looking forward to another great run.”… Affording plaintiff the benefit of every favorable inference, this exchange — in essence, we “offer” and “I accept,” followed by an arguably congratulatory exclamation, coupled with a forward-looking statement about the next stage of the parties’ continuing relationship — sufficiently evinces an objective manifestation of an intent to be bound for purposes of surviving a motion to dismiss … . Although Ertel’s email referenced one outstanding “clarification,” the parties’ further communications indicate that such clarification was incorporated into the first draft of the new agreement sent by Zeliger [general counsel] to plaintiff, and no evidence was offered to suggest that plaintiff resisted that change to the terms of the 2009 Agreement. We reject defendant’s argument that plaintiff’s contract claim should have been dismissed because the additional correspondence defendant proffered in support of its motion to dismiss reflects a lack of mutual assent to material terms — such as plaintiff’s minimum guaranteed compensation and the length of the non-compete term — and that this indefiniteness renders the purported contract invalid as a matter of law. As the Appellate Division concluded, that correspondence does not conclusively refute contract formation … . Kolchins v Evolution Mkts., Inc., 2018 NY Slip Op 02209, CtApp 3-29-18

CONTRACT LAW (CORRESPONDENCE, DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP))/EMPLOYMENT LAW (CONTRACT LAW, DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP))/CIVIL PROCEDURE (MOTION TO DISMISS, DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP))/CPLR 3211 (DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP))/CORRESPONDENCE (CONTRACT LAW,  DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP))/EMAILS (CONTRACT LAW,  DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP))/LETTERS (CONTRACT LAW,  DOCUMENTARY EVIDENCE DID NOT UTTERLY REFUTE PLAINTIFF’S CORRESPONDENCE-EVIDENCE THAT AN EMPLOYMENT CONTRACT HAD BEEN ENTERED AND BREACHED BY THE DEFENDANT, DEFENDANT’S MOTION TO DISMISS PROPERLY DENIED (CT APP))

THE PROMISE TO REPAY THE LOAN WAS NOT UNCONDITIONAL BUT RATHER THE DEFENDANT’S HAVING AVAILABLE CASH TO REPAY THE LOAN WAS A CONDITION PRECEDENT, BECAUSE PLAINTIFF DID NOT DEMONSTRATE THE DEFENDANT HAD AVAILABLE CASH, ITS MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined that summary judgment should not have been awarded to the plaintiff (Related) in this breach of contract action. The agreement provided that loan payments be made to plaintiff by the defendant (Tesla) from available cash. The existence of available cash was deemed a condition precedent. Because plaintiff could not show defendant had available case, summary judgment was not an available remedy:

A condition precedent is “an act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises” … . The term sheet does not contain an unconditional promise by Tesla to repay the cash advances, distinguishing the transactions from the typical loan arrangement, which involves an unconditional promise to repay the amount advanced. Rather, pursuant to the waterfall provision, Tesla was to repay the cash advances from cash that was available for distribution after the payment of taxes. Related failed to establish that this condition precedent was satisfied, and its motion for summary judgment should have therefore been denied once the court determined that Tesla presently had no “available cash” to repay Related … . Related Cos., L.P. v Tesla Wall Sys., LLC, 2018 NY Slip Op 02122, First Dept 3-27-18

CONTRACT LAW (CONDITION PRECEDENT, THE PROMISE TO REPAY THE LOAN WAS NOT UNCONDITIONAL BUT RATHER THE DEFENDANT’S HAVING AVAILABLE CASH TO REPAY THE LOAN WAS A CONDITION PRECEDENT, BECAUSE PLAINTIFF DID NOT DEMONSTRATE THE DEFENDANT HAD AVAILABLE CASH, ITS MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT))/CONDITION PRECEDENT (CONTRACT LAW, THE PROMISE TO REPAY THE LOAN WAS NOT UNCONDITIONAL BUT RATHER THE DEFENDANT’S HAVING AVAILABLE CASH TO REPAY THE LOAN WAS A CONDITION PRECEDENT, BECAUSE PLAINTIFF DID NOT DEMONSTRATE THE DEFENDANT HAD AVAILABLE CASH, ITS MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT))

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EXTENSION OF A LEASE WITH A MUNICIPALITY WAS RATIFIED BY THE MUNICIPALITY’S ACCEPTANCE OF RENT PAYMENTS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined a cell phone tower lease with a municipality did not expire. An extension of the lease was ratified by the municipality when it continued to accept lease payments after the expiration of the first five-year term:

… [I]n seeking a declaration that the lease expired … , the plaintiffs alleged that the Village’s Board of Trustees … only authorized the lease for a term of five years. Indeed, the resolution provided that “the term of the leases [sic] shall not exceed a period of five (5) years from the date upon which it is executed.” The lease, however, provided that the initial term of the lease “will be five (5) years from the Commencement Date'” … , “and shall automatically renew for up to ten (10) additional terms of five (5) years each.

Verizon and AG separately moved for summary judgment, arguing that the lease did not expire … , because the Village ratified the lease by accepting rental payments, issuing building permits, and granting variance applications in connection with the construction of the cell tower. …

“A contract that is not approved by a relevant municipal or governmental body, as required by law, rule, or regulation, may be ratified by the municipality or government body by subsequent conduct, such as by making payments pursuant to the contract” … . Giunta v AG Towers, Inc., 2018 NY Slip Op 01905, Second Dept 3-21-18

MUNICIPAL LAW (EXTENSION OF A LEASE WITH A MUNICIPALITY WAS RATIFIED BY THE MUNICIPALITY’S ACCEPTANCE OF RENT PAYMENTS (SECOND DEPT))/CONTRACT LAW (RATIFICATION, MUNICIPAL LAW, EXTENSION OF A LEASE WITH A MUNICIPALITY WAS RATIFIED BY THE MUNICIPALITY’S ACCEPTANCE OF RENT PAYMENTS (SECOND DEPT))/RATIFICATION (CONTRACT LAW, MUNICIPAL LAW, EXTENSION OF A LEASE WITH A MUNICIPALITY WAS RATIFIED BY THE MUNICIPALITY’S ACCEPTANCE OF RENT PAYMENTS (SECOND DEPT))/LANDLORD-TENANT (CONTRACT LAW, MUNICIPAL LAW, EXTENSION OF A LEASE WITH A MUNICIPALITY WAS RATIFIED BY THE MUNICIPALITY’S ACCEPTANCE OF RENT PAYMENTS (SECOND DEPT))

THE STIPULATED SUM CONTRACT FOR SCHOOL CONSTRUCTION DID NOT ALLOW THE SCHOOL DISTRICT ACCESS TO THE PROGRAM MANAGER’S ACTUAL CONSTRUCTION AND ADMINISTRATIVE COSTS (FOURTH DEPT).

The Fourth Department, over a two-justice partial dissent, in a complex decision covering many issues not summarized here, determined that the language of the contracts and agreements re: the construction of new schools precluded the City of Buffalo Joint Schools Construction Board (Board) from learning the program manager’s (LPC’s) construction and administrative costs. The Board entered construction agreements with LPC as an agent of the City of Buffalo School District (District):

In 2014 and 2015, after operating under the [relevant contracts and agreements] for over 12 years, the Board and the District refused to process or pay the last four payment requisitions until LPC provided them with documentation concerning LPC’s actual construction and administrative costs, information that LPC contended was confidential, proprietary and not subject to disclosure under the [relevant contracts and agreements]. * * *

[The relevant agreements provide] the District with audit and examination rights to any and all records related to the ” construction contingency’ ” portion of the stipulated sum. Nevertheless, that section further provides that, “[n]otwithstanding anything to the contrary contained herein, the foregoing audit and examination rights do no[t] apply to any records maintained by [LPC] (or . . . on behalf of [LPC]) with respect to any Project Administration Costs or Construction Costs other than records directly related to the expenditure of the construction contingency.’ ” …

The contract is a stipulated-sum construction contract. In such contracts, “[t]he owner is obligated to pay the contractor the fixed amount no matter what it costs to finish the work” and, generally, “the owner is not entitled to review the costs that the contractor incurs during the project” … . Considering the general purpose of the contract and the fact that the [related agreements] specifically provide that the audit rights for construction contingency funds did not apply to records concerning LPC’s “Project Administration Costs or Construction Costs” unrelated to the construction contingency, we conclude that the only reasonable way to interpret [the applicable contract] is to determine that it applies to the District’s actual costs only. City of Buffalo City Sch. Dist. v LPCiminelli, Inc., 2018 NY Slip Op 01832, Fourth Dept 3-16-18

CONTRACT LAW (THE STIPULATED SUM CONTRACT FOR SCHOOL CONSTRUCTION DID NOT ALLOW THE SCHOOL DISTRICT ACCESS TO THE PROGRAM MANAGER’S ACTUAL CONSTRUCTION AND ADMINISTRATIVE COSTS (FOURTH DEPT))/CONSTRUCTION CONTRACTS (THE STIPULATED SUM CONTRACT FOR SCHOOL CONSTRUCTION DID NOT ALLOW THE SCHOOL DISTRICT ACCESS TO THE PROGRAM MANAGER’S ACTUAL CONSTRUCTION AND ADMINISTRATIVE COSTS (FOURTH DEPT))/STIPULATED SUM CONTRACTS (THE STIPULATED SUM CONTRACT FOR SCHOOL CONSTRUCTION DID NOT ALLOW THE SCHOOL DISTRICT ACCESS TO THE PROGRAM MANAGER’S ACTUAL CONSTRUCTION AND ADMINISTRATIVE COSTS (FOURTH DEPT))

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SNOW REMOVAL CONTRACTOR AND PARKING LOT MANAGER NOT LIABLE FOR SLIP AND FALL UNDER ESPINAL (SECOND DEPT).

The Second Department, in a comprehensive decision dealing with several related issues not summarized here, determined a snow removal contractor (Cristi) and parking lot manager (Five Star) demonstrated their contracts with Port Authority did not give rise to liability for a slip and fall in the parking lot:

A contractual obligation, standing alone, does not generally give rise to tort liability in favor of a third party unless one of three exceptions applies: “(1) where the contracting party, in failing to exercise reasonable care in the performance of his 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” … . …

The submissions in support of their respective motions show that neither Cristi nor Five Star created or exacerbated the icy condition and thereby launched an instrument of harm. Rather, they merely failed to be ” an instrument for good,’ which is insufficient to impose a duty of care upon a party not in privity of contract with the injured party” …

The contracts between the Port Authority, Cristi, and Five Star were not comprehensive and exclusive property maintenance agreements intended to displace the Port Authority’s general duty to keep the premises in a safe condition … . Castillo v Port Auth. of N.Y. & N.J., 2018 NY Slip Op 01593, Second Dept 3-14-18

NEGLIGENCE (SLIP AND FALL, SNOW REMOVAL CONTRACTOR AND PARKING LOT MANAGER NOT LIABLE FOR SLIP AND FALL UNDER ESPINAL (SECOND DEPT))/CONTRACT LAW (SLIP AND FALL, ESPINAL,  SNOW REMOVAL CONTRACTOR AND PARKING LOT MANAGER NOT LIABLE FOR SLIP AND FALL UNDER ESPINAL (SECOND DEPT))/SLIP AND FALL (ESPINAL, SNOW REMOVAL CONTRACTOR AND PARKING LOT MANAGER NOT LIABLE FOR SLIP AND FALL UNDER ESPINAL (SECOND DEPT))

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DEFAMATION ACTION AGAINST UNINCORPORATED ASSOCIATION SHOULD HAVE BEEN DISMISSED UNDER THE MARTIN RULE, DEFAMATION ACTION AGAINST INDIVIDUAL DEFENDANTS SHOULD NOT HAVE BEEN DISMISSED, BREACH OF CONTRACT ACTION AGAINST THE ASSOCIATION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, modifying Supreme Court, determined a defamation action against an unincorporated association (the Grand Lodge of Free & Accepted Masons of the State of New York) was properly dismissed, but the defamation action against individuals acting in individual capacities should not have been dismissed. The court further held that the breach of contract action against the association should not have been dismissed. The action was brought against a lodge after plaintiff was accused of fraud and was expelled:

Actions against unincorporated associations, whether for breaches of agreements or for tortious wrongs, are limited to cases where the individual liability of every single member can be alleged and proven … . The Martin rule “bars all actions against an unincorporated voluntary membership association, and bars claims against the officers of such an association in their representative capacities where there is no allegation that the members of the association authorized or ratified the wrongful conduct complained of” … .

Here, the plaintiff made no factual allegations in the complaint or in opposition to the motion to dismiss to indicate that all members of the Grand Lodge did in fact ratify the allegedly defamatory statements. …

… [T]he Martin rule does not purport to immunize individual members of an unincorporated association, acting in their individual capacities, from the consequences of their own tortious conduct… . …

Moreover, the Martin rule does not preclude breach of contract causes of action against unincorporated associations and their officers acting in their representative capacities based on an allegedly wrongful expulsion from the association … . Bidnick v Grand Lodge of Free & Accepted Masons of the State of N.Y., 2018 NY Slip Op 01591, Second Dept 3-14-18

CORPORATION LAW (UNINCORPORATED ASSOCIATIONS, MARTIN RULE, DEFAMATION ACTION AGAINST UNINCORPORATED ASSOCIATION SHOULD HAVE BEEN DISMISSED UNDER THE MARTIN RULE, DEFAMATION ACTION AGAINST INDIVIDUAL DEFENDANTS SHOULD NOT HAVE BEEN DISMISSED, BREACH OF CONTRACT ACTION AGAINST THE ASSOCIATION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT))/UNINCORPORATED ASSOCIATIONS (MARTIN RULE, DEFAMATION ACTION AGAINST UNINCORPORATED ASSOCIATION SHOULD HAVE BEEN DISMISSED UNDER THE MARTIN RULE, DEFAMATION ACTION AGAINST INDIVIDUAL DEFENDANTS SHOULD NOT HAVE BEEN DISMISSED, BREACH OF CONTRACT ACTION AGAINST THE ASSOCIATION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT))/MARTIN RULE (UNINCORPORATED ASSOCIATIONS, DEFAMATION ACTION AGAINST UNINCORPORATED ASSOCIATION SHOULD HAVE BEEN DISMISSED UNDER THE MARTIN RULE, DEFAMATION ACTION AGAINST INDIVIDUAL DEFENDANTS SHOULD NOT HAVE BEEN DISMISSED, BREACH OF CONTRACT ACTION AGAINST THE ASSOCIATION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT))/DEFAMATION (UNINCORPORATED ASSOCIATIONS, MARTIN RULE, DEFAMATION ACTION AGAINST UNINCORPORATED ASSOCIATION SHOULD HAVE BEEN DISMISSED UNDER THE MARTIN RULE, DEFAMATION ACTION AGAINST INDIVIDUAL DEFENDANTS SHOULD NOT HAVE BEEN DISMISSED, BREACH OF CONTRACT ACTION AGAINST THE ASSOCIATION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT))/CONTRACT LAW  (UNINCORPORATED ASSOCIATIONS, MARTIN RULE, DEFAMATION ACTION AGAINST UNINCORPORATED ASSOCIATION SHOULD HAVE BEEN DISMISSED UNDER THE MARTIN RULE, DEFAMATION ACTION AGAINST INDIVIDUAL DEFENDANTS SHOULD NOT HAVE BEEN DISMISSED, BREACH OF CONTRACT ACTION AGAINST THE ASSOCIATION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT))/MASONS (UNINCORPORATED ASSOCIATIONS, MARTIN RULE, DEFAMATION ACTION AGAINST UNINCORPORATED ASSOCIATION SHOULD HAVE BEEN DISMISSED UNDER THE MARTIN RULE, DEFAMATION ACTION AGAINST INDIVIDUAL DEFENDANTS SHOULD NOT HAVE BEEN DISMISSED, BREACH OF CONTRACT ACTION AGAINST THE ASSOCIATION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT))

RECOVERY FOR INJURY TO A KITTEN SHIPPED BY AIR LIMITED TO $50 BY THE TERMS OF THE AIR WAYBILL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s recovery for injury to a kitten shipped by air was subject to the $50 limit in the air waybill signed by plaintiff:

An air waybill forms the basic contract between a shipper and an air carrier … . In order to enforce a limited liability provision contained in an air waybill, a carrier must demonstrate that its contract satisfies the released-valuation doctrine … . Under the released-valuation doctrine, the shipper “is deemed to have released the carrier from liability beyond a stated amount” in exchange for a low shipping rate … . The shipper is bound by the limited liability provision if he or she (1) has reasonable notice of the rate structure, and (2) is given a fair opportunity to pay a higher rate in order to obtain greater protection … . … The fact that the language setting forth the limited liability provision is found on the reverse side of the air waybill does not render the provision unable to satisfy the released-valuation doctrine … . …

Here, the air waybill signed by the plaintiff’s shipper demonstrates that the shipper did not declare a value for the kitten and no additional coverage was purchased. The terms of the air waybill also provided a fair opportunity to purchase greater coverage … . …… [T]he plaintiff had the burden of showing that she did not have a fair opportunity to purchase greater liability protection … . The plaintiff, who submitted only her attorney’s affirmation and certain veterinary bills in opposition, failed to raise a triable issue of fact as to whether she was not given the opportunity to purchase additional coverage. Lentini v Delta Air Lines, Inc., 2018 NY Slip Op 01597, Second Dept 3-14-18

CONTRACT LAW (RECOVERY FOR INJURY TO A KITTEN SHIPPED BY AIR LIMITED TO $50 BY THE TERMS OF THE AIR WAYBILL (SECOND DEPT))/AIR WAYBILL (RECOVERY FOR INJURY TO A KITTEN SHIPPED BY AIR LIMITED TO $50 BY THE TERMS OF THE AIR WAYBILL (SECOND DEPT))/DAMAGES (CONTRACT LAW, AIR WAYBILL, RECOVERY FOR INJURY TO A KITTEN SHIPPED BY AIR LIMITED TO $50 BY THE TERMS OF THE AIR WAYBILL (SECOND DEPT))

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PLAINTIFF, IN THE FACE OF WRITTEN CONTRACTS TO THE CONTRARY, DID NOT DEMONSTRATE AT TRIAL THAT A PARTNERSHIP, AS OPPOSED TO AN INDEPENDENT CONTRACTOR, RELATIONSHIP EXISTED BETWEEN PLAINTIFF AND DEFENDANT, DEFENDANT’s MOTION FOR A JUDGMENT AS A MATTER OF LAW SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s(Kaufman’s) motion for judgment as a matter of law pursuant to CPLR 4401 should have been granted. There were written contracts between plaintiff and Kaufman indicating plaintiff was an independent contractor. Plaintiff alleged he was a partner, entitled to 50% of the income. The proof submitted by plaintiff, a vague email and testimony by an accountant that plaintiff and Kaufman often received equal pay, was deemed insufficient:

“A motion for judgment as a matter of law pursuant to CPLR 4401 or 4404 may be granted only when the trial court determines that, upon the evidence presented, there is no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusion reached by the jury upon the evidence presented at trial, and no rational process by which the jury could find in favor of the nonmoving party”… . In considering such a motion, ” the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant'” … .

The Supreme Court erred in denying the defendants’ motion, made at the close of trial, in effect, pursuant to CPLR 4401 for judgment as a matter of law dismissing the complaint. The existence of a partnership agreement between Kaufman and the plaintiffs with respect to Kaufman’s businesses cannot be inferred from the evidence presented at the trial. The parties’ relationship was governed by written agreements. The 2005 email which makes reference to splitting income is not sufficient to draw such an inference. Although an email message can constitute a binding contract if it sets forth the material terms of the agreement, and contains an expression of mutual assent … , the email in question fails to set forth the material terms of a partnership agreement. There was no valid line of reasoning and permissible inferences from which the jury could have concluded that there was such a partnership agreement in this case. Weg v Kaufman, 2018 NY Slip Op 01567, Second Dept 3-7-18

CONTRACT LAW (PLAINTIFF, IN THE FACE OF WRITTEN CONTRACTS TO THE CONTRARY, DID NOT DEMONSTRATE AT TRIAL THAT A PARTNERSHIP, AS OPPOSED TO AN INDEPENDENT CONTRACTOR, RELATIONSHIP EXISTED BETWEEN PLAINTIFF AND DEFENDANTS, DEFENDANTS’ MOTION FOR A JUDGMENT AS A MATTER OF LAW SHOULD HAVE BEEN GRANTED (SECOND DEPT))/CIVIL PROCEDURE (JUDGMENT AS A MATTER OF LAW, PLAINTIFF, IN THE FACE OF WRITTEN CONTRACTS TO THE CONTRARY, DID NOT DEMONSTRATE AT TRIAL THAT A PARTNERSHIP, AS OPPOSED TO AN INDEPENDENT CONTRACTOR, RELATIONSHIP EXISTED BETWEEN PLAINTIFF AND DEFENDANTS, DEFENDANTS’ MOTION FOR A JUDGMENT AS A MATTER OF LAW SHOULD HAVE BEEN GRANTED (SECOND DEPT))/CPLR 4401  (JUDGMENT AS A MATTER OF LAW, PLAINTIFF, IN THE FACE OF WRITTEN CONTRACTS TO THE CONTRARY, DID NOT DEMONSTRATE AT TRIAL THAT A PARTNERSHIP, AS OPPOSED TO AN INDEPENDENT CONTRACTOR, RELATIONSHIP EXISTED BETWEEN PLAINTIFF AND DEFENDANTS, DEFENDANTS’ MOTION FOR A JUDGMENT AS A MATTER OF LAW SHOULD HAVE BEEN GRANTED (SECOND DEPT))/JUDGMENT AS A MATTER OF LAW (CPLR 4401, PLAINTIFF, IN THE FACE OF WRITTEN CONTRACTS TO THE CONTRARY, DID NOT DEMONSTRATE AT TRIAL THAT A PARTNERSHIP, AS OPPOSED TO AN INDEPENDENT CONTRACTOR, RELATIONSHIP EXISTED BETWEEN PLAINTIFF AND DEFENDANTS, DEFENDANTS’ MOTION FOR A JUDGMENT AS A MATTER OF LAW SHOULD HAVE BEEN GRANTED (SECOND DEPT))

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PLAINTIFF’S NEGLIGENCE ACTION AGAINST A SECURITY COMPANY HIRED BY KMART SHOULD HAVE BEEN DISMISSED, PLAINTIFF WAS INJURED IN A FIGHT WITH A KMART EMPLOYEE, PLAINTIFF WAS NOT A THIRD PARTY BENEFICIARY OF THE CONTRACT BETWEEN KMART AND THE SECURITY COMPANY, PLAINTIFF DID NOT RELY ON THE PERFORMANCE OF THE SECURITY COMPANY’S DUTIES, AND THE SECURITY COMPANY DID NOT FULLY DISPLACE KMART’S DUTY TO PROVIDE SECURITY (ESPINAL FACTORS) (FIRST DEPT).

The First Department, reversing Supreme Court, determined that plaintiff’s negligence action against a security company (US Security) hired by Kmart did not state a cause of action for tort liability stemming from a contract (Espinal criteria). Plaintiff was injured in a fight with a Kmart employee in a Kmart store. The First Department held that plaintiff was not a third party beneficiary of the contract between Kmart and US Security, did not rely to his detriment on the performance of US Security’s duties, and US Security did not entirely supplant Kmart’s duty to secure the store:

Plaintiff was not an intended third-party beneficiary of the contract between Kmart and U.S. Security, which contains a “No Third Party Beneficiaries” clause … .

Nor can a duty be imposed on U.S. Security on the ground either that plaintiff relied to his detriment on the continued performance of U.S. Security’s contractual duties or that U.S. Security had entirely displaced Kmart’s duty to secure its store … . Plaintiff’s affidavit says nothing about having knowledge of the contract between Kmart and U.S. Security or about detrimental reliance on U.S. Security’s continued performance thereunder … .

As for entire displacement, while the written scope of U.S. Security’s services included “the protection of … customers … in the Premises,” the deposition testimony of the loss prevention manager at the relevant Kmart store makes it clear that, in actual practice, U.S. Security’s services at that store were limited to deterring shoplifting … . Furthermore, U.S. Security did not totally displace Kmart’s duty to secure its store, because Kmart retained supervisory authority over the security guards and required U.S. Security’s staff to complete training in accordance with its (Kmart’s) safety policies and procedures … . Santiago v K Mart Corp., 2018 NY Slip Op 01296, First Dept 2-27-18

NEGLIGENCE (THIRD PARTY ASSAULT, SECURITY COMPANY, PLAINTIFF’S NEGLIGENCE ACTION AGAINST A SECURITY COMPANY HIRED BY KMART SHOULD HAVE BEEN DISMISSED, PLAINTIFF WAS INJURED IN A FIGHT WITH A KMART EMPLOYEE, PLAINTIFF WAS NOT A THIRD PARTY BENEFICIARY OF THE CONTRACT BETWEEN KMART AND THE SECURITY COMPANY, PLAINTIFF DID NOT RELY ON THE PERFORMANCE OF THE SECURITY COMPANY’S DUTIES, AND THE SECURITY COMPANY DID NOT FULLY DISPLACE KMART’S DUTY TO PROVIDE SECURITY (FIRST DEPT))/ASSAULT, LIABILITY FOR THIRD PARTY (SECURITY COMPANY, PLAINTIFF’S NEGLIGENCE ACTION AGAINST A SECURITY COMPANY HIRED BY KMART SHOULD HAVE BEEN DISMISSED, PLAINTIFF WAS INJURED IN A FIGHT WITH A KMART EMPLOYEE, PLAINTIFF WAS NOT A THIRD PARTY BENEFICIARY OF THE CONTRACT BETWEEN KMART AND THE SECURITY COMPANY, PLAINTIFF DID NOT RELY ON THE PERFORMANCE OF THE SECURITY COMPANY’S DUTIES, AND THE SECURITY COMPANY DID NOT FULLY DISPLACE KMART’S DUTY TO PROVIDE SECURITY (FIRST DEPT))/ESPINAL (THIRD PARTY ASSAULT LIABILITY, SECURITY COMPANY, PLAINTIFF’S NEGLIGENCE ACTION AGAINST A SECURITY COMPANY HIRED BY KMART SHOULD HAVE BEEN DISMISSED, PLAINTIFF WAS INJURED IN A FIGHT WITH A KMART EMPLOYEE, PLAINTIFF WAS NOT A THIRD PARTY BENEFICIARY OF THE CONTRACT BETWEEN KMART AND THE SECURITY COMPANY, PLAINTIFF DID NOT RELY ON THE PERFORMANCE OF THE SECURITY COMPANY’S DUTIES, AND THE SECURITY COMPANY DID NOT FULLY DISPLACE KMART’S DUTY TO PROVIDE SECURITY (FIRST DEPT))/SECURITY COMPANIES (LIABILITY FOR THIRD PARTY ASSAULT, PLAINTIFF’S NEGLIGENCE ACTION AGAINST A SECURITY COMPANY HIRED BY KMART SHOULD HAVE BEEN DISMISSED, PLAINTIFF WAS INJURED IN A FIGHT WITH A KMART EMPLOYEE, PLAINTIFF WAS NOT A THIRD PARTY BENEFICIARY OF THE CONTRACT BETWEEN KMART AND THE SECURITY COMPANY, PLAINTIFF DID NOT RELY ON THE PERFORMANCE OF THE SECURITY COMPANY’S DUTIES, AND THE SECURITY COMPANY DID NOT FULLY DISPLACE KMART’S DUTY TO PROVIDE SECURITY (FIRST DEPT))/CONTRACT, TORT LIABILITY BASED UPON PLAINTIFF’S NEGLIGENCE ACTION AGAINST A SECURITY COMPANY HIRED BY KMART SHOULD HAVE BEEN DISMISSED, PLAINTIFF WAS INJURED IN A FIGHT WITH A KMART EMPLOYEE, PLAINTIFF WAS NOT A THIRD PARTY BENEFICIARY OF THE CONTRACT BETWEEN KMART AND THE SECURITY COMPANY, PLAINTIFF DID NOT RELY ON THE PERFORMANCE OF THE SECURITY COMPANY’S DUTIES, AND THE SECURITY COMPANY DID NOT FULLY DISPLACE KMART’S DUTY TO PROVIDE SECURITY (FIRST DEPT))/CONTRACT LAW (TORT LIABILITY STEMMING FROM, ESPINAL CRITERIA, PLAINTIFF WAS INJURED IN A FIGHT WITH A KMART EMPLOYEE, PLAINTIFF WAS NOT A THIRD PARTY BENEFICIARY OF THE CONTRACT BETWEEN KMART AND THE SECURITY COMPANY, PLAINTIFF DID NOT RELY ON THE PERFORMANCE OF THE SECURITY COMPANY’S DUTIES, AND THE SECURITY COMPANY DID NOT FULLY DISPLACE KMART’S DUTY TO PROVIDE SECURITY (FIRST DEPT))

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