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COMPLEX DECISION EXPLAINING BLACK LETTER LAW ON LABOR LAW 240(1), 241(6) AND 200 CAUSES OF ACTION, CONTRACTUAL AND IMPLIED INDEMNIFICATION, AND INSURANCE COVERAGE ISSUES (SECOND DEPT).

The Second Department reversed Supreme Court in a complex action involving Labor Law 240(1), 241(6), 200 and common law negligence causes of action, as well as several contractual and implied indemnification issues, and insurance coverage and duty to defend and indemnify issues. The decision lays out the black letter law on all the issues, illustrates how the appellate courts analyze summary judgment motions, and is well worth reading for an overview of the complexity of a construction accident case involving property owners, several insurance policies, and layers of contractors. Plaintiff fell off a ladder that had been placed on an uneven floor. There are too many substantive issues to fairly summarize them here. With respect to the Labor Law issues, the court wrote:

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The plaintiff established his prima facie entitlement to judgment as a matter of law on the issue of the defendants’ liability on the Labor Law § 240(1) cause of action. … The plaintiff used the last available ladder in his work area. According to the plaintiff, this ladder was missing two of its rubber feet, and was missing the lowest rung. The plaintiff testified that the floor was “not finished” and that it was partially covered in concrete and partially covered in rubble. The plaintiff indicated that there were “all types of things” strewn on the ground and that the floor “was not level.” The plaintiff stated that, as he was standing on the ladder to perform his work, the ladder “shook,” and he “lost [his] balance” and fell.

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The … defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the Labor Law § 241(6) cause of action insofar as it was based on Industrial Code … . Contrary to their contention, the …defendants did not make a prima facie showing that the plaintiff’s conduct was the sole proximate cause of the accident … . …

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“Cases involving Labor Law § 200 fall into two broad categories: namely, those where workers are injured as a result of dangerous or defective premises conditions at a work site, and those involving the manner in which the work is performed” … . “These two categories should be viewed in the disjunctive” … . Where, as here, “an accident is alleged to involve both a dangerous condition on the premises and the means and methods’ of the work, a defendant moving for summary judgment with respect to causes of action alleging a violation of Labor Law § 200 is obligated to address the proof applicable to both liability standards” … .

Here, in moving for summary judgment, the defendants failed to address the allegation in the complaint that the plaintiff was injured due to the dangerous or defective premises conditions at the work site. Furthermore, contrary to the Supreme Court’s conclusion, the plaintiff was not ultimately required to demonstrate that the Mall defendants actually exercised supervisory control.

“[W]hen the manner and method of work is at issue in a Labor Law § 200 analysis” the issue is “whether the defendant had the authority to supervise or control the work” … . “A defendant has the authority to supervise or control the work for purposes of Labor Law § 200 when that defendant bears the responsibility for the manner in which the work is performed” … .

Here, the defendants failed to establish that they did not have the authority to supervise or control the means and methods of the work performed by the plaintiff. Poalacin v Mall Props., Inc., 2017 NY Slip Op 08027, Second Dept 11-15-17

 

LABOR LAW-CONSTRUCTION LAW (COMPLEX DECISION EXPLAINING BLACK LETTER LAW ON LABOR LAW 240(1), 241(6) AND 200 CAUSES OF ACTION, CONTRACTUAL AND IMPLIED INDEMNIFICATION, AND INSURANCE COVERAGE ISSUES (SECOND DEPT))/INSURANCE LAW (LABOR LAW-CONSTRUCTION LAW, COMPLEX DECISION EXPLAINING BLACK LETTER LAW ON LABOR LAW 240(1), 241(6) AND 200 CAUSES OF ACTION, CONTRACTUAL AND IMPLIED INDEMNIFICATION, AND INSURANCE COVERAGE ISSUES (SECOND DEPT))/CONTRACT LAW (LABOR LAW-CONSTRUCTION LAW, COMPLEX DECISION EXPLAINING BLACK LETTER LAW ON LABOR LAW 240(1), 241(6) AND 200 CAUSES OF ACTION, CONTRACTUAL AND IMPLIED INDEMNIFICATION, AND INSURANCE COVERAGE ISSUES (SECOND DEPT))/LADDERS (LABOR LAW-CONSTRUCTION LAW, COMPLEX DECISION EXPLAINING BLACK LETTER LAW ON LABOR LAW 240(1), 241(6) AND 200 CAUSES OF ACTION, CONTRACTUAL AND IMPLIED INDEMNIFICATION, AND INSURANCE COVERAGE ISSUES (SECOND DEPT))

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PARTY IS DEEMED TO HAVE READ A SIGNED DOCUMENT, JUDGMENT OF FORECLOSURE ON THIS CONSTRUCTION MORTGAGE PROPERLY GRANTED, BANKING LAW REQUIREMENTS DO NOT APPLY TO CONSTRUCTION MORTGAGE (SECOND DEPT).

The Second Department determined the judgment of foreclosure and sale was properly granted. Defendant claimed he was tricked into signing the construction mortgage. The Second Department noted that a construction mortgage is not subject to the requirements of Banking Law §§ 6-l and 590. And the Second Department held that a party is deemed to have read a signed document:

 

“A party who executes a contract is presumed to know its contents and to assent to them”… .Thus, “[a] party who signs a document without any valid excuse for having failed to read it is conclusively bound by its terms” … , “unless there is a showing of fraud, duress, or some other wrongful act on the part of any party to the contract” … . “The elements of a cause of action sounding in fraud are a material misrepresentation of an existing fact, made with knowledge of the falsity, an intent to induce reliance thereon, justifiable reliance upon the misrepresentation, and damages” … . Here, the defendant failed to establish the element of justifiable reliance on alleged misrepresentations … , since the documents were provided to him, and he and his attorney could have read them. Nor has the defendant established any other valid excuse for his purported failure to read the construction mortgage and related documents before signing them. Prompt Mtge. Providers of N. Am., LLC v Zarour, 2017 NY Slip Op 08028, Second Dept 11-15-17

 

FORECLOSURE (PARTY IS DEEMED TO HAVE READ A SIGNED DOCUMENT, JUDGMENT OF FORECLOSURE ON THIS CONSTRUCTION MORTGAGE PROPERLY GRANTED (SECOND DEPT))/CONSTRUCTION MORTGAGES (FORECLOSURE, BANKING LAW REQUIREMENTS DO NOT APPLY (SECOND DEPT))/BANKING LAW (FORECLOSURE, BANKING LAW REQUIREMENTS DO NOT APPLY (SECOND DEPT))/CONTRACT LAW (FORECLOSURE, PARTY IS DEEMED TO HAVE READ A SIGNED DOCUMENT, JUDGMENT OF FORECLOSURE ON THIS CONSTRUCTION MORTGAGE PROPERLY GRANTED (SECOND DEPT))/MORTGAGES (CONSTRUCTION MORTGAGES, FORECLOSURE, BANKING LAW REQUIREMENTS DO NOT APPLY TO CONSTRUCTION MORTGAGE (SECOND DEPT))

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SEPARATION AGREEMENT REQUIRED BOTH PARENTS TO CONTRIBUTE TO COLLEGE EXPENSES BUT DID NOT INDICATE HOW MUCH EACH PARTY SHOULD CONTRIBUTE, AGREEMENT BREACHED BY WIFE’S FAILURE TO PAY ANYTHING, FAMILY COURT TO DETERMINE EACH PARENT’S APPROPRIATE CONTRIBUTION (THIRD DEPT).

The Third Department determined the separation agreement should not have been interpreted to require that the cost of college tuition be split 50-50. The agreement simply capped each party’s contribution at 50%. Family Court must determine the proper contribution based upon resources. The wife’s failure to pay anything, however, violated the agreement:

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Here, the parties agreed to “share in the costs of the child’s higher education,” with such contribution being capped at 50% of tuition at a state university, plus the cost of reasonable living expenses. By its plain language, the disputed provision unequivocally demonstrates that the parties intended to encourage and facilitate the child’s pursuit of a college degree and to make some financial contribution — up to, but not necessarily equaling, 50% of the total cost of tuition at a state university — toward that pursuit. In agreeing to contribute, the parties did not use language such as “split” or “50-50,” despite such language appearing elsewhere in the separation agreement, including in the sections addressing dependent care expenses and the cost of health insurance coverage. Given the appearance of such language elsewhere in the agreement, its absence in the relevant provision is telling, as it suggests that the parties did not intend, as Family Court found, to equally split the total cost of the child’s college tuition — subject to the cap — and living expenses … .. Furthermore, while the separation agreement provided that each party’s financial exposure would not exceed the tuition cap, it stopped short of defining the parties’ respective obligations. The absence of language defining their obligations does not render the provision ambiguous. Rather, by its omission, it is apparent that the parties contemplated a later agreement between themselves and, failing that, a subsequent determination by the court as to their respective contributions … .Thus, while we agree that the mother’s failure to contribute anything toward the cost of the child’s college education constituted a willful violation of the separation agreement, Family Court erred in concluding that the parties intended to equally share the total cost of the child’s college tuition and living expenses, subject to the tuition cap, and entering a judgment against the mother in the amount of $28,377.50. Matter of Dillon v Dillon, 2017 NY Slip Op 08062, Second Dept 11-15-17

 

FAMILY LAW (SEPARATION AGREEMENT REQUIRED BOTH PARENTS TO CONTRIBUTE TO COLLEGE EXPENSES BUT DID NOT INDICATE HOW MUCH EACH PARTY SHOULD CONTRIBUTE, AGREEMENT BREACHED BY WIFE’S FAILURE TO PAY ANYTHING, FAMILY COURT TO DETERMINE EACH PARENT’S APPROPRIATE CONTRIBUTION (THIRD DEPT))/CONTRACT LAW (FAMILY LAW,  SEPARATION AGREEMENT REQUIRED BOTH PARENTS TO CONTRIBUTE TO , OLLEGE EXPENSES BUT DID NOT INDICATE HOW MUCH EACH PARTY SHOULD CONTRIBUTE, AGREEMENT BREACHED BY WIFE’S FAILURE TO PAY ANYTHING, FAMILY COURT TO DETERMINE EACH PARENT’S APPROPRIATE CONTRIBUTION (THIRD DEPT))/SEPARATION AGREEMENT (FAMILY LAW, CONTRACT LAW, SEPARATION AGREEMENT REQUIRED BOTH PARENTS TO CONTRIBUTE TO COLLEGE EXPENSES BUT DID NOT INDICATE HOW MUCH EACH PARTY SHOULD CONTRIBUTE, AGREEMENT BREACHED BY WIFE’S FAILURE TO PAY ANYTHING, FAMILY COURT TO DETERMINE EACH PARENT’S APPROPRIATE CONTRIBUTION (THIRD DEPT))/COLLEGE EXPENSES (FAMILY LAW, SEPARATION AGREEMENT REQUIRED BOTH PARENTS TO CONTRIBUTE TO COLLEGE EXPENSES BUT DID NOT INDICATE HOW MUCH EACH PARTY SHOULD CONTRIBUTE, AGREEMENT BREACHED BY WIFE’S FAILURE TO PAY ANYTHING, FAMILY COURT TO DETERMINE EACH PARENT’S APPROPRIATE CONTRIBUTION (THIRD DEPT))

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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