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CONTRACT WHICH CALLED FOR THE PRICE FOR EXHIBITS AT TRADE SHOWS TO BE AMORTIZED OVER UP-COMING EVENTS WAS NOT AN AGREEMENT TO AGREE AND WAS SUFFICIENTLY DEFINITE, LIQUIDATED DAMAGES CLAUSE ENFORCEABLE (FOURTH DEPT).

The Fourth Department determined a contract was not an agreement to agree and was sufficiently definite, and the liquidated damages clause was enforceable. The parties agreed that plaintiff would provide exhibit services at several trade shows with the price amortized over the upcoming shows. Defendant informed plaintiff it was not going to participate in the 2016 shows and this breach of contract action was brought:

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The agreement itself is … sufficient to establish a binding contract inasmuch as the parties agreed to a fixed cost for each show that defendant was required to attend and set a minimum amount that defendant was obligated to spend in aggregate over the four shows … . …

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” [W]here the parties have completed their negotiations of what they regard as essential elements, and performance has begun on the good faith understanding that agreement on the unsettled matters will follow, the court will find and enforce a contract even though the parties have expressly left these other elements for future negotiation and agreement, if some objective method of determination is available, independent of either party’s mere wish or desire’ ” … . …

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“Where, as here, the parties to the agreement were sophisticated business [entities], and the terms of the agreement were mutually negotiated, with each party represented by experienced counsel, a liquidated damages provision which is reached at arm’s length is entitled to deference” … . The evidence in the record … establishes that plaintiff’s damages “are sufficiently difficult to ascertain to satisfy the first requirement of a valid liquidated damages provision” … . With respect to the second requirement, we conclude that the negotiated amount of liquidated damages is not ” conspicuously disproportionate to [plaintiff’s] foreseeable losses’ ” … . RES Exhibit Servs., LLC v Genesis Vision, Inc., 2017 NY Slip Op 07796, Fourth Dept 11-9-17

 

CONTRACT LAW (CONTRACT WHICH CALLED FOR THE PRICE FOR EXHIBITS AT TRADE SHOWS TO BE AMORTIZED OVER UP-COMING EVENTS WAS NOT AN AGREEMENT TO AGREE AND WAS SUFFICIENTLY DEFINITE, LIQUIDATED DAMAGES CLAUSE ENFORCEABLE (FOURTH DEPT))/AGREEMENT TO AGREE (CONTRACT WHICH CALLED FOR THE PRICE FOR EXHIBITS AT TRADE SHOWS TO BE AMORTIZED OVER UP-COMING EVENTS WAS NOT AN AGREEMENT TO AGREE AND WAS SUFFICIENTLY DEFINITE, LIQUIDATED DAMAGES CLAUSE ENFORCEABLE (FOURTH DEPT))/DEFINITENESS DOCTRINE (CONTRACT WHICH CALLED FOR THE PRICE FOR EXHIBITS AT TRADE SHOWS TO BE AMORTIZED OVER UP-COMING EVENTS WAS NOT AN AGREEMENT TO AGREE AND WAS SUFFICIENTLY DEFINITE, LIQUIDATED DAMAGES CLAUSE ENFORCEABLE (FOURTH DEPT))/LIQUIDATED DAMAGES (CONTRACT LAW, CONTRACT WHICH CALLED FOR THE PRICE FOR EXHIBITS AT TRADE SHOWS TO BE AMORTIZED OVER UP-COMING EVENTS WAS NOT AN AGREEMENT TO AGREE AND WAS SUFFICIENTLY DEFINITE, LIQUIDATED DAMAGES CLAUSE ENFORCEABLE (FOURTH DEPT))/SOPHISTICATED BUSINESS ENTITIES (CONTRACT LAW, LIQUIDATED DAMAGES, CONTRACT WHICH CALLED FOR THE PRICE FOR EXHIBITS AT TRADE SHOWS TO BE AMORTIZED OVER UP-COMING EVENTS WAS NOT AN AGREEMENT TO AGREE AND WAS SUFFICIENTLY DEFINITE, LIQUIDATED DAMAGES CLAUSE ENFORCEABLE (FOURTH DEPT))/

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CONTRACT NOT ACTIONABLE BECAUSE IT DID NOT SPELL OUT THE CONSIDERATION FOR A PAST OR EXECUTED PROMISE, DECISION ON A MOTION TO DISMISS DOES NOT BECOME THE LAW OF THE CASE IN A SUBSEQUENT MOTION FOR SUMMARY JUDGMENT (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined a contract was not actionable because the consideration for a past or executed promise was not spelled out in it. The court noted that a decision on a motion to dismiss does not become the law of the case in a subsequent motion for summary judgment:

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General Obligations Law (GOL) § 5-1105 provides:

“A promise in writing and signed by the promisor or by his agent shall not be denied effect as a valid contractual obligation on the ground that consideration for the promise is past or executed, if the consideration is expressed in the writing and is proved to have been given or performed and would be a valid consideration but for the time when it was given or performed.”

It essentially codifies the notion that “[g]enerally, past consideration is no consideration and cannot support an agreement because the detriment did not induce the promise.’ That is, since the detriment had already been incurred, it cannot be said to have been bargained for in exchange for the promise'”… . However, General Obligations Law § 5-1105 makes an exception where the past consideration is explicitly recited in a writing. To qualify for the exception, the description of the consideration must not be “vague” or “imprecise,” nor may extrinsic evidence be employed to assist in understanding the consideration … . * * *

… “[T]he law of the case doctrine does not apply when a motion to dismiss is followed by a summary judgment motion” … . Korff v Corbett, 2017 NY Slip Op 07677, First Dept 11-2-17

 

CONTRACT LAW (CONTRACT NOT ACTIONABLE BECAUSE IT DID NOT SPELL OUT THE CONSIDERATION FOR A PAST OR EXECUTED PROMISE, DECISION ON A MOTION TO DISMISS DOES NOT BECOME THE LAW OF THE CASE IN A SUBSEQUENT MOTION FOR SUMMARY JUDGMENT (FIRST DEPT))/CIVIL PROCEDURE (DECISION ON A MOTION TO DISMISS DOES NOT BECOME THE LAW OF THE CASE IN A SUBSEQUENT MOTION FOR SUMMARY JUDGMENT (FIRST DEPT))/GENERAL OBLIGATIONS LAW 5-1105  (CONTRACT NOT ACTIONABLE BECAUSE IT DID NOT SPELL OUT THE CONSIDERATION FOR A PAST OR EXECUTED PROMISE, DECISION ON A MOTION TO DISMISS DOES NOT BECOME THE LAW OF THE CASE IN A SUBSEQUENT MOTION FOR SUMMARY JUDGMENT (FIRST DEPT))/CONSIDERATION (CONTRACT LAW, CONTRACT NOT ACTIONABLE BECAUSE IT DID NOT SPELL OUT THE CONSIDERATION FOR A PAST OR EXECUTED PROMISE, DECISION ON A MOTION TO DISMISS DOES NOT BECOME THE LAW OF THE CASE IN A SUBSEQUENT MOTION FOR SUMMARY JUDGMENT (FIRST DEPT))

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DOCTRINE OF TAX ESTOPPEL PREVENTED DEFENDANTS FROM ASSERTING FACTS ABOUT THE SALE OF PROPERTY CONTRARY TO THE INFORMATION IN THE REAL PROPERTY TRANSFER REPORT, PLAINTIFF’S ACTION TO ENFORCE A RIGHT OF FIRST REFUSAL SHOULD NOT HAVE BEEN DISMISSED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the doctrine of tax estoppel prevented defendants from asserting facts contrary to the information provided in the Real Property Transfer Report (RPT report). Plaintiff had a right of first refusal on the sale of defendants’ commercial property. Defendants sold the property without giving plaintiff the right of first refusal, claiming it was not a bona fide sale because the same person controlled the seller and the buyer, an allegation negated by the RPT report:

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Under the doctrine of tax estoppel, ” [a] party to litigation may not take a position contrary to a position taken in [a] tax return’ ” … . Here, 428 Co. and SS jointly submitted a Real Property Transfer Report (RPT report) … to the Department of Taxation and Finance in which they certified that the transfer of the subject property was not a “sale between related companies or partners in business.”  …

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The sworn statements made in the RPT report further estop defendants from asserting that various mortgage assumptions worth over $2 million constituted part of the purchase price, and that plaintiff was therefore unwilling to purchase the property “at the same price and under the same terms” … . The instructions for the tax form require that any mortgage assumptions be listed as part of the “Full Sale Price” on the RPT report, and [defendants] did not do so here. … [Defendants] listed only a cash sale price of $238,493 as the “Full Sale Price” on the RPT report, and it is undisputed that plaintiff was ready, willing, and able to purchase the property for that amount. Amalfi, Inc. v 428 Co., Inc., 2017 NY Slip Op 06770, Fourth Dept 9-29-17

 

REAL ESTATE (DOCTRINE OF TAX ESTOPPEL PREVENTED DEFENDANTS FROM ASSERTING FACTS ABOUT THE SALE OF PROPERTY CONTRARY TO THE INFORMATION IN THE REAL PROPERTY TRANSFER REPORT, PLAINTIFF’S ACTION TO ENFORCE A RIGHT OF FIRST REFUSAL SHOULD NOT HAVE BEEN DISMISSED (FOURTH DEPT))/CONTRACT LAW (REAL ESTATE, RIGHT OF FIRST REFUSAL, DOCTRINE OF TAX ESTOPPEL PREVENTED DEFENDANTS FROM ASSERTING FACTS ABOUT THE SALE OF PROPERTY CONTRARY TO THE INFORMATION IN THE REAL PROPERTY TRANSFER REPORT, PLAINTIFF’S ACTION TO ENFORCE A RIGHT OF FIRST REFUSAL SHOULD NOT HAVE BEEN DISMISSED (FOURTH DEPT))/TAX LAW  (DOCTRINE OF TAX ESTOPPEL PREVENTED DEFENDANTS FROM ASSERTING FACTS ABOUT THE SALE OF PROPERTY CONTRARY TO THE INFORMATION IN THE REAL PROPERTY TRANSFER REPORT, PLAINTIFF’S ACTION TO ENFORCE A RIGHT OF FIRST REFUSAL SHOULD NOT HAVE BEEN DISMISSED (FOURTH DEPT))/TAX ESTOPPEL (DOCTRINE OF TAX ESTOPPEL PREVENTED DEFENDANTS FROM ASSERTING FACTS ABOUT THE SALE OF PROPERTY CONTRARY TO THE INFORMATION IN THE REAL PROPERTY TRANSFER REPORT, PLAINTIFF’S ACTION TO ENFORCE A RIGHT OF FIRST REFUSAL SHOULD NOT HAVE BEEN DISMISSED (FOURTH DEPT))

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SUPREME COURT SHOULD NOT HAVE AWARDED SUMMARY JUDGMENT ON A CAUSE OF ACTION (ACCOUNT STATED) NOT RAISED IN THE MOTION PAPERS (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the award of attorney’s fees and 18% interest in this breach of contract action was error. Summary judgment cannot be granted by the court, sua sponte, on a ground (account stated) not raised in the motion papers:

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… [T]he court erred in awarding attorney’s fees and prejudgment interest at the rate of 18% based on an unpleaded account stated theory. The record establishes that plaintiff neither pleaded an account stated theory nor moved for summary judgment on that ground … . It is well settled that, generally, a party may not obtain summary judgment on an unpleaded cause of action… , but there is an exception to that general rule where the proof supports such a cause of action and the opposing party has not been misled to its prejudice … . Here, we conclude that defendant was substantially prejudiced by the court’s sua sponte reliance on the unpleaded account stated theory … . Indeed, we note that plaintiff’s moving and reply papers did not even mention that theory, nor did they mention attorney’s fees or interest at the rate of 18% per annum … .

We conclude that the court further erred in searching the record pursuant to CPLR 3212 (b) and granting summary judgment on an account stated theory to plaintiff, the moving party. Although a court has the authority to search the record and grant summary judgment to a nonmoving party (see id.), that authority is applicable “only with respect to a [claim] or issue that is the subject of the motions before the court”… . Here, plaintiff was the moving party and an account stated theory was not the subject of the motion before the court. Diamond Roofing Co., Inc. v PCL Props., LLC, 2017 NY Slip Op 06745, Fourth Dept 9-29-17

 

CIVIL PROCEDURE (SUPREME COURT SHOULD NOT HAVE AWARDED SUMMARY JUDGMENT ON A CAUSE OF ACTION (ACCOUNT STATED) NOT RAISED IN THE MOTION PAPERS (FOURTH DEPT))/CONTRACT LAW (SUPREME COURT SHOULD NOT HAVE AWARDED SUMMARY JUDGMENT ON A CAUSE OF ACTION (ACCOUNT STATED) NOT RAISED IN THE MOTION PAPERS (FOURTH DEPT))/SUMMARY JUDGMENT  (SUPREME COURT SHOULD NOT HAVE AWARDED SUMMARY JUDGMENT ON A CAUSE OF ACTION (ACCOUNT STATED) NOT RAISED IN THE MOTION PAPERS (FOURTH DEPT))/JUDGES  (SUPREME COURT SHOULD NOT HAVE AWARDED SUMMARY JUDGMENT ON A CAUSE OF ACTION (ACCOUNT STATED) NOT RAISED IN THE MOTION PAPERS (FOURTH DEPT))

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MOTION FOR DIRECTED VERDICT MADE BEFORE PLAINTIFF CLOSED ITS CASE SHOULD NOT HAVE BEEN GRANTED, MOTION FOR DIRECTED VERDICT BASED UPON PLAINTIFF’S ADMISSIONS PROPERLY GRANTED, INDEMNIFICATION AGREEMENT VOID UNDER GENERAL OBLIGATIONS LAW (FIRST DEPT).

The First Department, reversing (in part) Supreme Court, determined one of defendant’s motions for a directed verdict was premature because plaintiff had not finished presenting proof, a second motion for a directed verdict was properly granted based upon admissions made by plaintiff’s witness, and a cross-claim based upon an indemnification agreement failed because the agreement purported to indemnify a party for its own negligence (in violation of the General Obligations Law). With respect to the premature motion for a directed verdict, the court wrote:

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“Any party may move for judgment with respect to a cause of action or issue upon the ground that the moving party is entitled to judgment as a matter of law, after the close of the evidence presented by an opposing party with respect to such cause of action or issue, or at any time on the basis of admissions.”

In interpreting this provision, this Court has held that the requirement that a party opposing a directed verdict motion must have closed its presentation of evidence “must be strictly enforced” (Griffin v Clinton Green S., LLC, 98 AD3d 41, 46 [1st Dept 2012]). Further, we have held that “the grant of a dismissal [pursuant to CPLR 4401] prior to the close of the opposing party’s case will be reversed as premature, even if the ultimate success of the opposing party in the action is improbable” … . This Court in Griffin emphasized the importance of each party being “afford[ed] . . . a day in court” … . * * *

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[Defendant] essentially asks us to endorse a system whereby a party can make a directed verdict motion at any time during trial, so long as the party opposing the motion has put in some unspecified quantum of evidence that, though it may not have been everything the opposing party intended to put in, was sufficient for the trial court to determine that there were no issues of fact and it could decide for the movant as a matter of law. We decline to do so. 11 Essex St. Corp. v Tower Ins. Co. of N.Y., 2017 NY Slip Op 06709, First Dept 9-28-17

 

CIVIL PROCEDURE (MOTION FOR DIRECTED VERDICT MADE BEFORE PLAINTIFF CLOSED ITS CASE SHOULD NOT HAVE BEEN GRANTED, MOTION FOR DIRECTED VERDICT BASED UPON PLAINTIFF’S ADMISSIONS PROPERLY GRANTED (FIRST DEPT))/DIRECTED VERDICT, MOTION FOR  (MOTION FOR DIRECTED VERDICT MADE BEFORE PLAINTIFF CLOSED ITS CASE SHOULD NOT HAVE BEEN GRANTED, MOTION FOR DIRECTED VERDICT BASED UPON PLAINTIFF’S ADMISSIONS PROPERLY GRANTED (FIRST DEPT))CONTRACT LAW (INDEMNIFICATION AGREEMENT VOID UNDER GENERAL OBLIGATIONS LAW (FIRST DEPT))/GENERAL OBLIGATIONS LAW (INDEMNIFICATION AGREEMENT VOID UNDER GENERAL OBLIGATIONS LAW (FIRST DEPT))/INDEMNIFICATION AGREEMENT  (INDEMNIFICATION AGREEMENT VOID UNDER GENERAL OBLIGATIONS LAW (FIRST DEPT))/EVIDENCE  (MOTION FOR DIRECTED VERDICT MADE BEFORE PLAINTIFF CLOSED ITS CASE SHOULD NOT HAVE BEEN GRANTED, MOTION FOR DIRECTED VERDICT BASED UPON PLAINTIFF’S ADMISSIONS PROPERLY GRANTED (FIRST DEPT))

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PLAINTIFF DID NOT DEMONSTRATE HE WAS READY WILLING AND ABLE TO PURCHASE THE PROPERTY, SUMMARY JUDGMENT IN THIS SPECIFIC PERFORMANCE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff had not met the proof requirements for specific performance of a real estate contract:

“To prevail on a cause of action for specific performance of a contract for the sale of real property, a plaintiff purchaser must establish that it substantially performed its contractual obligations and was ready, willing, and able to perform its remaining obligations, that the vendor was able to convey the property, and that there was no adequate remedy at law” … . In moving for summary judgment on a complaint seeking specific performance of a contract, the plaintiff purchaser must submit evidence demonstrating financial ability to purchase the property in order to demonstrate that it was ready, willing, and able to purchase such property… . In the absence of such evidence, a plaintiff purchaser’s motion for summary judgment in its favor on a cause of action for specific performance should be denied due to the plaintiff purchaser’s failure to meet its initial burden … . “When a purchaser submits no documentation or other proof to substantiate that it had the funds necessary to purchase the property, it cannot prove, as a matter of law, that it was ready, willing, and able to close” … .

Here, the plaintiff failed to establish, prima facie, that he was ready, willing, and able to purchase the subject property, since he did not submit any evidence demonstrating his financial ability to close the transaction … . Grunbaum v Nicole Brittany, Ltd., 2017 NY Slip Op 06638, Second Dept 9-27-17

REAL ESTATE (PLAINTIFF DID NOT DEMONSTRATE HE WAS READY WILLING AND ABLE TO PURCHASE THE PROPERTY, SUMMARY JUDGMENT IN THIS SPECIFIC PERFORMANCE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/CONTRACT LAW (REAL ESTATE, SPECIFIC PERFORMANCE, PLAINTIFF DID NOT DEMONSTRATE HE WAS READY WILLING AND ABLE TO PURCHASE THE PROPERTY, SUMMARY JUDGMENT IN THIS SPECIFIC PERFORMANCE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))/SPECIFIC PERFORMANCE (REAL ESTATE, PLAINTIFF DID NOT DEMONSTRATE HE WAS READY WILLING AND ABLE TO PURCHASE THE PROPERTY, SUMMARY JUDGMENT IN THIS SPECIFIC PERFORMANCE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT))

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EMAILS DID NOT EXPLICITLY WAIVE THE INITIAL AGREEMENT THAT THE PARTIES WOULD NOT BE BOUND UNTIL A FORMAL AGREEMENT WAS EXECUTED, NO CONTRACT WAS CREATED (FIRST DEPT).

The First Department determined the complaint in this employment contract action was properly dismissed. The term sheet relied upon by plaintiff included a clause indicating neither party would be bound until a more formal agreement was executed. Subsequent emails including the phrase “firm and binding” did not waive the formal agreement required by the term sheet:

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Plaintiff’s allegations that his agent requested that any offer be “firm and binding,” that defendant’s agent acknowledged this request, that internal communications between defendant and its agents reveal an intention to make a firm offer, that the cover email transmitting the term sheet labeled the offer “firm and binding,” and that defendant later offered a fee to “kill” the contract are not sufficient to negate or demonstrate a waiver of the provision that the parties would not be bound until they executed a formal written agreement … .Morever, waiver of a contractual provision “should not be lightly presumed,” “must be unmistakably manifested, and is not to be inferred from a doubtful or equivocal act” … . Plaintiff’s agent’s demand for a firm offer and defendant’s agent’s acknowledgment of this request, before consulting with her client, prove nothing about what was ultimately agreed. Nor do defendant and its agents’ internal communications preceding the offer, to which plaintiff was not privy, prove what was ultimately agreed. Keitel v E*TRADE Fin. Corp., 2017 NY Slip Op 06624, First Dept 9-26-17

CONTRACT LAW (EMAILS DID NOT EXPLICITLY WAIVE THE INITIAL AGREEMENT THAT THE PARTIES WOULD NOT BE BOUND UNTIL A FORMAL AGREEMENT WAS EXECUTED, NO CONTRACT WAS CREATED (FIRST DEPT))/EMPLOYMENT LAW (CONTRACT LAW, EMAILS DID NOT EXPLICITLY WAIVE THE INITIAL AGREEMENT THAT THE PARTIES WOULD NOT BE BOUND UNTIL A FORMAL AGREEMENT WAS EXECUTED, NO CONTRACT WAS CREATED (FIRST DEPT))

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CONTRACT ALLEGATIONS DUPLICATED FRAUD ALLEGATIONS, FRAUD CAUSE OF ACTION SHOULD HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Friedman, over a dissenting opinion, determined the fraud cause of action should have been dismissed as duplicative of the breach of contract cause of action. The action is between two telecommunications companies. The allegations involve the responsibility for payment for fraudulent phone calls. Plaintiff (Cronos) alleged the contract required defendant (XComIP) to indemnify it for fraudulent calls. The complaint stated a cause of action for breach of contract. However, the fraud allegations were based on speculation about defendant’s intent, i.e., that defendant entered into the contract with the intention to avoid paying for fraudulent calls:

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Cronos’s fraud cause of action falls short under the principle that a fraud claim is not stated by allegations that simply duplicate, in the facts alleged and damages sought, a claim for breach of contract, enhanced only by conclusory allegations that the pleader’s adversary made a promise while harboring the concealed intent not to perform it. This Court has held numerous times that a fraud claim that “ar[ises] from the same facts [as an accompanying contract claim], s[eeks] identical damages and d[oes] not allege a breach of any duty collateral to or independent of the parties’ agreements” is subject to dismissal as “redundant of the contract claim”… . Thus, where a fraud claim was supported by allegations that the defendants had “misrepresented . . . their intentions with respect to the manner” in which they would perform their contractual duties, we dismissed the fraud claim as duplicative of the plaintiffs’ contract claim because the fraud claim was “based on the same facts that underlie the contract cause of action, [was] not collateral to the contract, and d[id] not seek damages that would not be recoverable under a contract measure of damages” … .

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… Cronos’s fraud claim is duplicative of its claim for breach of contract, inasmuch as the only fraud alleged is XComIP’s unkept promise to perform certain of its preexisting obligations under the parties’ contract (as alleged by Cronos), for which Cronos seeks exactly the same damages as are sought under the rubric of the claim for breach of contract. Based on Cronos’s own allegations, Cronos’s fraud claim is plainly redundant of its breach-of-contract cause of action. Cronos Group Ltd. v XComIP, LLC, 2017 NY Slip Op 06515, 1st Dept 9-19-17

 

CONTRACT LAW (FRAUD, CONTRACT ALLEGATIONS DUPLICATED FRAUD ALLEGATIONS, FRAUD CAUSE OF ACTION SHOULD HAVE BEEN DISMISSED (FIRST DEPT))/FRAUD (CONTRACT ALLEGATIONS DUPLICATED FRAUD ALLEGATIONS, FRAUD CAUSE OF ACTION SHOULD HAVE BEEN DISMISSED (FIRST DEPT))

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ALTHOUGH THE ASBESTOS LIABILITY RELEASE SIGNED BY PLAINTIFF’S DECEDENT IN 1997 MENTIONED MESOTHEMIOLA, THE LANGUAGE OF THE RELEASE WAS DEEMED TO BE BOILERPLATE WHICH DID NOT PRECLUDE THE INSTANT SUIT ALLEGING DEATH FROM MESOTHEMIOLA (FIRST DEPT).

The First Department, over an extensive dissent, determined a release plaintiff’s decedent (South) agreed to in 1997 did not preclude the instant suit. South alleged he had been exposed to asbestos made by Texaco on board ships during his long career in the Merchant Marine. South died of mesothelioma. The 1997 release mentioned mesothelioma as a possible result of asbestos exposure but the First Department determined it was not clear South knew he was suffering from mesothemiola at the time he signed the release (in return for $1750.00). The case was analyzed under federal admiralty law law (Jones Act):

… [W]e find that the release does not pass muster. To tease out the true intent South had when he signed the release, it is necessary to consider the context in which he did so. The 1997 complaint, while making generalized allegations that South had been exposed to asbestos, is exceedingly vague as to whether he had actually contracted an asbestos-related disease. To be sure, it mentions a “devastating pulmonary disease Plaintiff now suffers” and an exhaustive grab-bag of asbestos-related diseases, from asbestosis to mesothelioma to brain cancer. However, it is impossible to conclude from the complaint that South had actually received a diagnosis. Indeed, the “meager” consideration he received for resolving the claim suggests that he had not been diagnosed with an asbestos-related disease, much less one even approaching the severity of the mesothelioma that the complaint specifically alleges he had. The complaint leaves open that possibility, to the extent it seeks relief for fear of an asbestos-related disease and not for the disease itself. Accordingly, the risk of contracting an actual asbestos-related disease remained hypothetical to South, and we decline to read the release as if South understood the implications of such a disease but chose nonetheless to release Texaco from claims arising from it.

Further, if South had not received a definitive diagnosis at the time the 1997 complaint was filed, then the release, to the extent it warns him of the possibility of “a new and different diagnosis from the diagnosis as of the date of this Release,” does not reflect the actual circumstances known to him, since the words “new” and “different” suggest that South had already been diagnosed with a disease when he executed the release. Rather, the lack of an actual diagnosis reveals the language in the release as mere boilerplate, and not the result of an agreement the parameters of which had been specifically negotiated and understood by South. Matter of New York City Asbestos Litig., 2017 NY Slip Op 06343  First Dept 8-29-17

CONTRACT LAW (RELEASES, ALTHOUGH THE ASBESTOS LIABILITY RELEASE SIGNED BY PLAINTIFF’S DECEDENT IN 1997 MENTIONED MESOTHEMIOLA, THE LANGUAGE OF THE RELEASE WAS DEEMED TO BE BOILERPLATE WHICH DID NOT PRECLUDE THE INSTANT SUIT ALLEGING DEATH FROM MESOTHEMIOLA (FIRST DEPT))/NEGLIGENCE (ASBESTOS, RELEASES, ALTHOUGH THE ASBESTOS LIABILITY RELEASE SIGNED BY PLAINTIFF’S DECEDENT IN 1997 MENTIONED MESOTHEMIOLA, THE LANGUAGE OF THE RELEASE WAS DEEMED TO BE BOILERPLATE WHICH DID NOT PRECLUDE THE INSTANT SUIT ALLEGING DEATH FROM MESOTHEMIOLA (FIRST DEPT))/TOXIC TORTS (ASBESTOS, ALTHOUGH THE ASBESTOS LIABILITY RELEASE SIGNED BY PLAINTIFF’S DECEDENT IN 1997 MENTIONED MESOTHEMIOLA, THE LANGUAGE OF THE RELEASE WAS DEEMED TO BE BOILERPLATE WHICH DID NOT PRECLUDE THE INSTANT SUIT ALLEGING DEATH FROM MESOTHEMIOLA (FIRST DEPT))/ASBESTOS (TOXIC TORTS, RELEASES, ALTHOUGH THE ASBESTOS LIABILITY RELEASE SIGNED BY PLAINTIFF’S DECEDENT IN 1997 MENTIONED MESOTHEMIOLA, THE LANGUAGE OF THE RELEASE WAS DEEMED TO BE BOILERPLATE WHICH DID NOT PRECLUDE THE INSTANT SUIT ALLEGING DEATH FROM MESOTHEMIOLA (FIRST DEPT))/ASBESTOS (TOXIC TORTS, RELEASES, ALTHOUGH THE ASBESTOS LIABILITY RELEASE SIGNED BY PLAINTIFF’S DECEDENT IN 1997 MENTIONED MESOTHEMIOLA, THE LANGUAGE OF THE RELEASE WAS DEEMED TO BE BOILERPLATE WHICH DID NOT PRECLUDE THE INSTANT SUIT ALLEGING DEATH FROM MESOTHEMIOLA (FIRST DEPT))/MESOPTHEMIOLA (ASBESTOS, RELEASES, ALTHOUGH THE ASBESTOS LIABILITY RELEASE SIGNED BY PLAINTIFF’S DECEDENT IN 1997 MENTIONED MESOTHEMIOLA, THE LANGUAGE OF THE RELEASE WAS DEEMED TO BE BOILERPLATE WHICH DID NOT PRECLUDE THE INSTANT SUIT ALLEGING DEATH FROM MESOTHEMIOLA (FIRST DEPT))

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FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT).

The First Department determined defendant-employees’ motions for summary judgment were properly denied. Defendants were subject to deferred compensation agreements (DCA’s) which called for the “for cause” forfeiture of the deferred compensation. Here it was alleged the defendants violated a non-solicitation, non-competition clause and therefore forfeited the deferred compensation. The defendants argued a subsequent document, an “election form” which extended the date on which the deferred compensation was due and payable, and which did not include a “for cause” forfeiture provision, should control. The courts disagreed:

… [T]he Election Forms, by their express language, provide that any deferral of payment of deferred compensation is to be made “in accordance with the terms of the Deferred Compensation Agreement . . . .” The DCAs, as noted, clearly provide in paragraph 4 that deferred compensation is forfeited if the employee is terminated for cause, including violation of non-solicitation or noncompetition covenants. There is no mention in the Election Forms of any intent to override this provision.

Additionally, paragraph 5 of the DCAs specifically provides that their terms “may not be altered, modified, or amended except by written instrument signed by the parties hereto.” At a minimum, it is commercially reasonable to view the Election Forms, on their face, to be informal human resources administrative forms. In any case, they are not “written instrument[s] signed by the parties [to the DCAs],” as they lack any signature of plaintiffs, as required by paragraph 5 in order to amend the DCAs. Perella Weinberg Partners LLC v Kramer,2017 NY Slip Op 06341, First Dept 8-29-17

CONTRACT LAW (FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT))/EMPLOYMENT LAW (CONTRACT LAW, FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT))/DEFERRED COMPENSATION AGREEMENT (FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT))

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