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DEFENDANTS OPENED A COMPETING HAIR SALON AND WRONGFULLY ACCESSED PLAINTIFF’S ACCOUNT SOFTWARE TO BOOK CLIENTS; THE COMPLAINT STATED CAUSES OF ACTION FOR TRESPASS TO CHATTELS, TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS AND BREACH OF THE EMPLOYMENT CONTRACT (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that plaintiff’s causes of action for trespass to chattels, tortious interference with business transactions and breach of contract should not have been dismissed. Plaintiff alleged defendants opened a competing hair salon and accessed and used plaintiff’s computer program for booking clients by using plaintiff’s username and password:

To establish a cause of action to recover damages for trespass to chattels, the plaintiff is required to establish that the defendants “intentionally, and without justification or consent, physically interfered with the use and enjoyment of personal property in [plaintiff’s] possession” … . “Liability for trespass to chattels will be imposed only if the interference results in harm to the physical condition, quality or value of the chattel or if the owner is deprived of use of the chattel for a substantial time” … . Interference with information stored on a computer may give rise to trespass to chattels if the plaintiff is dispossessed of the information or the information is impaired as to its condition, quality, or value … . …

[To] “… set forth a cause of action sounding in tortious interference with business relations, a plaintiff is required to plead that the defendant interfered with the plaintiff’s business relationships either with the sole purpose of harming the plaintiff or by means that were unlawful or improper” … . “This standard is met where the interference with prospective business relations was accomplished by wrongful means or where the offending party acted for the sole purpose of harming the other party” … . The wrongful means supporting a cause of action alleging intentional interference with a business relationship includes acts that constitute a crime or independent tort or other egregious wrongdoing … . Hello Beautiful Salons, Inc. v Dimoplon, 2026 NY Slip Op 00242, Second Dept 1-21-26

Practice Point: Using plaintiff hair salon’s credentials to access plaintiff’s business-account software to wrongfully book clients for defendants’ competing hair salon constitutes the tort of “trespass to chattels.”

 

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DEFENDANT HOME CARE AGENCY WAS HIRED BY DEFENDANT HEALTHCARE PLAN AS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE; THEREFORE THE HEALTHCARE PLAN WAS NOT LIABLE FOR THE ALLEGED ASSAULT, BATTERY AND NEGLIGENT SUPERVISION COMMITED BY AN EMPLOYEE OF THE HOME CARE AGENCY (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, determined that Lighthouse, the parent company of GuildNet, a long-term healthcare plan, could not be held liable for the assault, battery and negligence allegedly committed by an employee of Ellison Home Care Companion Agency, which provided healthcare aides who attended to plaintiff’s mother. Plaintiff alleged his mother was assaulted and battered by Shaw, who was employed by Ellison. The contract between GuildNet and Ellison described Ellison as an independent contractor. Because Shaw was not GuldNet’s employee, GuildNet was not vicariously liable for Shaw’s actions:

The assault, battery, and negligence claims should have been dismissed as against GuildNet on the ground that Shaw was not its employee at the time of the underlying events. GuildNet and Ellison’s Participating Provider Agreement expressly defined their relationship as one of independent contractors rather than employer-employee … . The record discloses that GuildNet had only incidental control and general supervisory power over Ellison’s work, which is insufficient to establish an employer-employee relationship … . Further, Ellison admitted that Shaw was its employee and acting within the scope of her employment at the time of the underlying events.

The remaining claim for negligent supervision should also have been dismissed. To the extent that it is predicated on GuildNet’s alleged failure to supervise Shaw despite knowledge of her “propensity for the sort of behavior which caused” [plainiff’s mother’s] injuries and death … , Shaw was not GuildNet’s employee, and the record is bereft of any information that could impute to GuildNet knowledge of her propensity either to commit assault or battery or to ignore a client in distress … . To the extent that the claim is instead predicated on GuildNet’s alleged failure to supervise the care that [plaintiff’s mother] received, namely, by failing to assign a competent agency to assign a competent home health care aide to work with [her], plaintiff has not identified how such a failure proximately caused [her] injuries and death, assuming that GuildNet even had a duty to do so in the first place … . Pander v GuildNet, Inc., 2026 NY Slip Op 00201, First Dep-15-26

Practice Point: A party which hires a party as an “independent contractor” and does not exercise supervisory control over the independent contractor’s work will not be vicariously liable for wrongdoing by the independent contractor.

 

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HERE AN INDEPENDENT CLEANING CONTRACTOR APPARENTLY CREATED A DANGEROUS FLOOR CONDITION WHICH INJURED PLAINTIFF; ALTHOUGH THE COMPANY WHICH HIRED THE INDEPENDENT CONTRACTOR WAS NOT LIABLE FOR THE INDEPENDENT CONTRACTOR’S NEGLIGENCE, MARSHALLS, THE RETAIL STORE WHERE THE INJURY OCCURRED, COULD BE VICARIOUSLY LIABLE FOR THE INDEPENDENT CONTRACTOR’S NEGLIGENCE BECAUSE MARSHALLS HAS A NONDELGABLE DUTY TO KEEP THE PUBLIC AREAS OF ITS STORE SAFE; WHETEHER MARSHALLS HAD NOTICE OF THE DANGEROUS CONDITION IS NOT AN ISSUE WHERE VICARIOUS LIABILITY MAY APPLY (FIRST DEPT).

The First Department noted that Marshall’s had a nondelegable duty to keep the public area of its store safe. The underlying fact of the case are not described but plaintiff was apparently injured because of the negligence of defendant cleaning subcontractor. The defendant which hired the subcontractor was not liable because the subcontractor was retained as an independent contractor. But the store was liable for the subcontractor’s negligence based upon its nondelegable duty to keep public areas safe (notice of the dangerous condition is not an issue):

The general rule is that a party who retains an independent contractor is not liable for that contractor’s negligent acts … . The record establishes that neither USM [the company which hired the independent contractor] nor Marshalls exercised control over how [the independent contractor] performed its cleaning tasks at the Marshalls store where plaintiff was injured, and that USM was not even present at the location at the time of the accident. * * *

… [T]he court should not have granted summary judgment dismissing the complaint as against Marshalls, which had a nondelegable duty to maintain the public area of its store in a reasonably safe condition. Therefore, Marshalls can be held vicariously liable for any negligence on the part of the subcontractor that caused the floor to become unsafe … . In light of the foregoing, we find it unnecessary to consider whether Marshalls established lack of notice of the hazardous condition. Jones v Marshalls, 2026 NY Slip Op 00087, First Dept 1-13-26

Practice Point: Here a retail store, Marshall’s could be vicariously liable for a slip and fall caused by the negligence of an independent cleaning contractor. The store has a nondelegable duty to keep its public areas safe. The question whether Marshall’s had notice of the dangerous condition is irrelevant where liability is vicarious. [Why is a retail store’s notice of the dangerous condition a crucial issue where no independent contractor is involved, but irrelevant when the cleaning is done by an independent contractor?]

 

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THE DISMISSAL OF PLAINTIFF’S FEDERAL EMPLOYMENT DISCRIMINATION (RETALIATION) ACTION PURSUANT TO THE NEW YORK STATE HUMAN RIGHTS LAW PRECLUDED A RELITIGATION OF THE RETALIATION CLAIMS IN STATE COURT PURSUANT TO THE NEW YORK CITY HUMAN RIGHTS LAW (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Shulman, determined plaintiff’s employment discrimination (retaliation) cause of action pursuant to the New York City Human Rights Law (NYCHRL) was collaterally estopped by the dismissal of plaintiff’s action in federal court pursuant to the New York State Human Rights Law (NYSHRL):

Plaintiff asserts that his cooperation in [an] investigation [of another employee] provoked animus from his supervisors … who allegedly retaliated by reducing his business opportunities and ultimately terminating him.

Plaintiff alleged seven discrete adverse employment actions: (1) the artificial depression of his revenue; (2) denial of his request to transfer to a new position; (3) reassignment of his clients; (4) denial of funding to attend conferences; (5) a negative performance review; (6) no bonus in 2015; and (7) termination in August 2016. * * *

The City HRL is “uniquely broad and remedial,” requiring courts to construe its provisions “independently from similar or identical provisions of New York state or federal statutes” … . However, the requirement to interpret the City HRL under a more liberal lens does not relieve plaintiff of his burden to produce evidence of a retaliatory motive behind the adverse actions.

* * * Plaintiff’s arguments … invite relitigating facts already adjudicated by two federal courts after full and fair litigation. The federal courts expressly found no retaliatory animus after reviewing extensive evidence. … [T]his compels preclusion.

We emphasize that the City HRL’s liberal construction rule lowers the causation threshold, not the evidentiary one. Once the federal record established the absence of any retaliatory motive, no genuine factual issue remained even under the City HRL’s mixed-motive framework. To allow this case to go to a jury under the guise of liberal construction finds no support in the record. Abromavage v Deutsche Bank Sec. Inc., 2026 NY Slip Op 00052, First Dept 1-8-25

Practice Point: Here the federal courts’ dismissal of plaintiff’s employment discrimination (retaliation) claims pursuant to the New York State Human Rights Law (NYSHRL) precluded relitigation of those claims in state court pursuant to the New York City Human Rights Law (NYCHRL). Consult this opinion for insight into when collateral estoppel will be invoked to preclude a state action under the NYCHRL which raises retaliation claims identical to those dismissed by the federal courts under the NYSHRL. Although the NYCHRL lowers the causation threshold in comparison with the NYSHRL, it does not lower the evidentiary threshold.

 

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UNDER THE LIEN LAW, THE GENERAL CONTRACTOR IN A FAILED SOLAR ENERGY PROJECT, AS TRUSTEE OF THE SETTLEMENT FUNDS, WAS PROPERLY PRECLUDED FROM USING THE FUNDS TO PAY ITSELF FIRST; THE SUBCONTRACTORS MUST BE PAID FIRST; THERE WAS A TWO JUSTICE DISSENT (THIRD DEPT).

The Third Department, affirming Supreme Court, over a two-justice dissent, in a matter of first impression, determined the subcontractors’ motion to enjoin the general contractor from using settlement funds to pay itself for expenditures in a failed solar-energy project was properly granted. The Lien Law created a trust for the settlement funds and required the general contractor, as trustee, to pay the subcontractors before paying itself:

“Article 3-A of the Lien Law impresses with a trust any funds paid or payable to a contractor ‘under or in connection with a contract for an improvement of real property’ ” ( … Lien Law § 70 [1]). Given this statutory definition, we readily conclude that the settlement funds at issue constitute trust funds under Lien Law article 3-A … . The Court of Appeals has “repeatedly recognized that the primary purpose of [Lien Law] article 3-A . . . is to ensure that those who have directly expended labor and materials to improve real property . . . at the direction of the owner or a general contractor receive payment for the work actually performed” … . With respect to a contractor’s trust, the parties entitled to a beneficial status are expressly enumerated in Lien Law § 71 (2) (a)-(f) … Pursuant to Lien Law § 71 (2) (a), “[t]he trust assets of which a contractor . . . is trustee shall be held and applied for [enumerated] expenditures arising out of the improvement of real property,” including “payment of claims of subcontractors, architects, engineers, surveyors, laborers and materialmen” (Lien Law § 71 [2] [a] … ). The language is mandatory and does not include the “cost[s] of improvement,” which is a term specifically defined to address an owner’s costs (Lien Law § 2 [5]; see Lien §§ 70 [5]; 71 [1] …).  L.C. Whitford Co., Inc. v Babcock & Wilcox Solar Energy, Inc., 2025 NY Slip Op 07063, Third Dept 12-18-25

Practice Point: Under the Lien Law the general contractor here is the trustee of the settlement funds and must use the funds to pay the subcontractors before paying itself.

 

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THE MINISTERIAL EXCEPTION DOES NOT PRECLUDE THIS HOSTILE-WORK-ENVIRONMENT ACTION BY EMPLOYEES OF A PRIVATE CATHOLIC HIGH SCHOOL; THE MINISTERIAL EXCEPTION PRECLUDES ACTIONS AGAINST RELIGIOUS INSTITUTIONS WHICH INTERFERE WITH RELIGIOUS DOCTRINE; THE ALLEGATIONS OF HARASSMENT BY SCHOOL OFFICIALS DO NOT INVOLVE RELIGIOUS DOCTRINE (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the-hostile work-environment causes of action by employees of a private Catholic high school should not have been dismissed pursuant to the “ministerial exception” which, in certain circumstances, will preclude employment discrimination actions against a religious institution:

Plaintiffs … were all employed by … a private Catholic school . The case stems from plaintiffs’ allegations that the school’s Principal … regularly subjected them to vulgar, sexist, ageist, racist and homophobic remarks and epithets. Plaintiffs further allege that … the school’s Vice Principal … and … the school’s Dean of Men, regularly repeated [the Principal’s] vile language and assisted in his efforts to discriminate against staff. In addition, plaintiffs allege that … the head of defendant Archdiocese of New York … and the defendant Archdiocese knew about [the Principal’s] conduct but did nothing to stop it.

Plaintiffs’ claims for hostile work environment were improperly dismissed under the ministerial exception, which precludes some employment claims against religious institutions on First Amendment grounds … . Although the ministerial exception was created to protect churches from state interference in their decisions to employ and supervise ministerial employees, it was not intended as a shield from all types of workplace conduct … . * * *

Here, plaintiffs are correct that there is no religious justification for [the Principal’s] appalling conduct, and analyzing their hostile work environment claims would not require the Court to improperly interfere with religious doctrine or defendants’ personnel decisions. Boliak v Reilly, 2025 NY Slip Op 07088, First Dept 12-18-25

Practice Point: Some employment discrimination actions against religious institutions are barred by the ministerial exception. Here the allegations plaintiffs, employees of a private Catholic School, were harassed by school officials did not require a court’s interference with religious doctrine and therefore were not precluded by the ministerial exception.​

 

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PLAINTIFF, WHO WAS HIRED BY DEFENDANT TEMPLE AS A “FULL TIME JEWISH EDUCATOR,” WAS FIRED AFTER WRITING A BLOG POST CRITICIZING ISRAEL AND ZIONISM; PLAINTIFF SUED ALLEGING HER FIRING WAS A VIOLATION OF THE LABOR LAW; THE COURT DID NOT ADDRESS THE LABOR-LAW-VIOLATION THEORY FINDING THAT THE “MINISTERIAL EXCEPTION” PRECLUDED THE APPLICATION OF EMPLOYMENT DISCRIMINATION LAWS TO THE RELATIONSHIP BETWEEN A RELIGIOUS INSTITUTION AND ITS MINISTERS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Halligan, over two concurrences, determined the ministerial exception precluded this employment discrimination action brought by plaintiff, a “full time Jewish educator” employed by the Westchester Reform Temple. Plaintiff was fired after writing a blog post criticizing Israel and Zionism. She alleged her firing was a violation of Labor Law 201-d (2) which prohibits an employer from taking adverse action against an employee based on legal “recreational activities.” The court did not address the viability of the Labor-Law theory. The court held that plaintiff’s lawsuit was precluded by the ministerial exception, which precludes application of employment discrimination laws to relationships between a religious institution and its ministers:

We need not resolve today questions such as whether the [Labor Law 201-d (2)] covers blogging specifically or public expression generated during any protected activity, because the ministerial exception dispositively bars Plaintiff’s claim. That exception “precludes application of [employment discrimination] legislation to claims concerning the employment relationship between a religious institution and its ministers” … . Requiring a religious institution “to accept or retain an unwanted minister, or punishing [them] for failing to do so” both “infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments” and “violates the Establishment Clause, which prohibits government involvement in such ecclesiastical decisions” … . * * *

Defendants invoked the ministerial exception here as grounds for dismissal on a CPLR 3211 (a) (1) motion. Such a motion “may be appropriately granted only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” … . Defendants rely on Plaintiff’s offer letter, which is appended as an exhibit to the motion to dismiss. It states that Plaintiff was responsible for guiding the development of programs such as “Shabbat, Havdalah, and other teen led events and initiatives”; planning, supporting, and attending “Confirmation” experiences; and supporting the “Rabbi’s Table initiative.” In her fifteen weekly hours of teaching, she was responsible for “Chevruta (1:1 tutoring for our learners),” “Pre-bimah tutoring,” and “Parsha of the week.” And she was responsible for furthering the Temple’s “mission,” including by “support[ing] the development of a strong Jewish identity” and “bringing Torah to life and inspiring Jewish dreams.” Sander v Westchester Reform Temple, 2025 NY Slip Op 06958, CtApp 12-16-25

Practice Point: The “ministerial exception” precludes the application of employment discrimination laws to the relationship between a religious institution and its ministers. Here the ministerial exception precluded a suit alleging plaintiff was fired from her teaching job at the defendant temple for a blog post criticizing Israel and Zionism.

 

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CERTAIN EMPLOYEES OF THE DEPARTMENT OF CORRECTIONS AND COMMUNITY SUPERVISION (DOCCS) WERE NOT ENTITLED TO “PANDEMIC UNEMPLOYMENT ASSISTANCE” DURING THE SUMMER OF 2020 PURSUANT TO THE “CORONAVIRUS AID, RELIEF AND ECONOMIC SECURITY (CARES) ACT;” THE COURT’S ANALYSIS IS TOO DETAILED TO FAIRLY SUMMARIZE HERE (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Singas, determined certain employees of the Department of Corrections and Community Supervision (DOCCS) who were not offered employment during the summer of 2020 because of the COVID-19 pandemic were not entitled to “pandemic unemployment assistance” under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The opinion has a detailed analysis of the federal and state unemployment insurance systems and how they interact with the COVID-related legislation. Matter of Klosterman v New York State Dept. of Corr. & Community Supervision, 2025 NY Slip Op 06960, CtApp 12-16-25

 

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PLAINTIFF HVAC CONTRACTOR WAS NOT LICENSED TO DO HOME IMPROVEMENT IN NASSAU COUNTY; THEREFORE THE CONTRACTOR COULD NOT SUE FOR BREACH OF CONTRACT AND COULD NOT ENFORCE A MECHANIC’S LIEN; THE FACT THAT THE HVAC INSTALLATION WAS DONE BY A LICENSED SUBCONTRACTOR MADE NO DIFFERENCE (SECOND DEPT).

The Second Department, reversing Supreme Court and dismissing the complaint, determined that plaintiff, a heating, ventilation and air-conditioning (HVAC) contractor, could not recover on his breach of contract claim and could not enforce a mechanic’s lien because the company was not licensed to do home improvement in Nassau County. The fact that the installation was actually done by a licensed subcontractor made no difference:

Pursuant to Nassau County Administrative Code § 21-11.2, anyone operating a home improvement business must be licensed. “Licensing statutes are to be strictly construed and an unlicensed contractor forfeits the right to recover damages based either on breach of contract or quantum meruit” … . “Moreover, a home improvement contractor must plead possession of a valid license in order to commence an action to foreclose a mechanic’s lien” … .

Here, the complaint, even as supplemented by an affidavit from the plaintiff’s president, failed to allege that the plaintiff was licensed to perform home improvement work in the County. As the plaintiff was not licensed to perform home improvement work in the County, it may not recover damages for breach of contract against the defendant and has forfeited the right to foreclose the mechanic’s lien … . The plaintiff’s contention that recovery should not be denied because the installation of the HVAC system was performed by a duly licensed subcontractor is without merit, as such a relationship is insufficient to permit an unlicensed contractor to recover for work performed … . Nationwide HVAC Supply Corp. v Mosby, 2025 NY Slip Op 06712, Second Dept 12-3-25

Practice Point: Municipal home-improvement licensing requirements are strictly enforced. Here the HVAC contractor was not licensed in Nassau County but the subcontractor who did the work was licensed. The contractor could not sue for breach of contract and could not enforce the mechanic’s lien. The contractor’s complaint was dismissed.

 

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PETITIONERS, THE NEW YORK TAXI WORKERS ALLIANCE, HAD STANDING TO CONTEST THE NYC TAXI AND LIMOUSINE COMMISSION’S PILOT PROGRAM WHICH WOULD ADD 2500 FOR-HIRE VEHICLES TO THE CITY STREETS; PETITIONERS DEMONSTRATED THE ADDED VEHICLES WOULD REDUCE MEMBERS’ INCOME (INJURY-IN-FACT) IN VIOLATION OF A LOCAL LAW (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Higgitt, reversing Supreme Court, determined the petitioners, the New York Taxi Workers Alliance and two individual drivers, had standing to challenge a pilot program initiated by the NYC Taxi and Limousine Commission as violating a Local Law. The pilot program would put 2500 more for-hire vehicles (FHV’s} on the street. Petitioners argued standing based on evidence the pilot program will lower the income of the members of the Taxi Workers Alliance. Supreme Court had held the loss-of-income claim was speculative:

… [P]etitioners established both an injury in fact and that their alleged harm satisfies the zone of interest requirement, and they therefore have standing.

… [P]etitioners allege a concrete, particularized harm: a loss of income and a deterioration of driver well-being occasioned by the introduction or potential introduction of additional vehicles into the for-hire market. That harm is neither speculative nor conjunctural; rather, it is well-demonstrated by the legislative facts underpinning Local Law 147, which facts are based, in part, on industry data. Moreover, petitioners’ alleged harm is supported by the findings of the Committee on For-Hire Vehicles as expressed in their reports. The legislative materials evince a clear connection between the number of FHVs on the streets and driver income: when the number of FHVs increases without a corresponding increase in passenger demand, driver income decreases. * * *

… [P]etitioners demonstrated that the alleged harms of loss of income and deterioration of driver well-being fall within the zone of interests or concerns promoted or protected by Local Law 147. Two of the principal interests or concerns expressly promoted or protected by the law are driver income and driver well-being (see Administrative Code § 19-550[a]; 35 RCNY 59A-06[a][1]), and the significant legislative history of Local Law 147 confirms that the City Council was concerned with the human costs associated with the exceptional growth in the FHV market, particularly drivers’ ability to earn a living. Matter of New York Taxi Workers Alliance v New York City Taxi & Limousine Commission, 2025 NY Slip Op 06551, First Dept 11-25-25

Practice Point: To have standing to challenge a local law, the challenger must demonstrate an injury-in-fact and the injury is within the scope of the protections afforded by the local law.

 

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