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WHERE AN EMPLOYEE ACTS WITHIN THE SCOPE OF EMPLOYMENT, ABSENT A VALID CLAIM FOR PUNITIVE DAMAGES, AN EMPLOYER CANNOT BE SUED FOR NEGLIGENT HIRING AND RETENTION.

The Second Department, reversing Supreme Court, determined the negligent hiring and retention cause of action against a nursing home (Sunrise Manor) alleging improper care of a resident should have been dismissed. When it is alleged an employee acted within the scope of employment, the respondeat superior theory applies and a negligent hiring and retention cause of action will not lie:

Supreme Court should have granted that branch of Sunrise Manor’s motion which was for summary judgment dismissing the fourth cause of action, which was to recover damages for negligent hiring and retention, insofar as asserted against it. “Generally, where an employee is acting within the scope of his or her employment, the employer is liable for the employee’s negligence under a theory of respondeat superior and no claim may proceed against the employer for negligent hiring, retention, supervision or training” … . Here, in opposition to Sunrise Manor’s prima facie showing that its employees were acting within the scope of their employment, the plaintiff failed to raise a triable issue of fact. While an exception exists to the above general principle where the plaintiff seeks punitive damages from the employer “based on alleged gross negligence in the hiring or retention of the employee” … , here, that exception is inapplicable because the Supreme Court granted that branch of Sunrise Manor’s motion which was for summary judgment dismissing the cause of action seeking punitive damages. Henry v Sunrise Manor Ctr. for Nursing & Rehabilitation, 2017 NY Slip Op 00634, 2nd Dept 2-1-17

NEGLIGENCE (WHERE AN EMPLOYEE ACTS WITHIN THE SCOPE OF EMPLOYMENT, ABSENT A VALID CLAIM FOR PUNITIVE DAMAGES, AN EMPLOYER CANNOT BE SUED FOR NEGLIGENT HIRING AND RETENTION)/EMPLOYMENT LAW (NEGLIGENCE, WHERE AN EMPLOYEE ACTS WITHIN THE SCOPE OF EMPLOYMENT, ABSENT A VALID CLAIM FOR PUNITIVE DAMAGES, AN EMPLOYER CANNOT BE SUED FOR NEGLIGENT HIRING AND RETENTION)/NEGLIGENT HIRING AND RETENTION (WHERE AN EMPLOYEE ACTS WITHIN THE SCOPE OF EMPLOYMENT, ABSENT A VALID CLAIM FOR PUNITIVE DAMAGES, AN EMPLOYER CANNOT BE SUED FOR NEGLIGENT HIRING AND RETENTION)

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COVERAGE FOR CLAIMS ALLEGING PAYMENT OF INADEQUATE WAGES AND RETALIATION FOR BRINGING SUIT PRECLUDED BY EXCLUSION FOR EMPLOYMENT-RELATED WRONGFUL ACTS.

The Second Department, reversing Supreme Court, determined defendant insurer (FIC) was not obligated to defend plaintiff in a suit alleging the payment of inadequate wages in violation of the Faire Labor Standards Act and retaliation for bringing suit. The policy excluded coverage for employment-related wrongful acts. “Employment-related” was not defined:

In context, the plain and ordinary meaning of the “employment-related Wrongful Act” exclusion unambiguously encompasses claims regarding violations of wage laws and retaliation for complaints about violations of wage laws. The payment of wages has such an established connection to the “act of employing” or “the state of being employed” that a contrary conclusion would be unreasonable. Put otherwise, no reasonable average insured giving the relevant terms their “plain and ordinary meaning” would conclude that complaints regarding violations of law as to payment of wages were not “employment-related” … . In short, it is clear from the language of the exclusion that … the policy did not insure against the clearly “employment-related” claims raised in the underlying action. Hansard v Federal Ins. Co., 2017 NY Slip Op 00633, 2nd Dept 2-1-17

INSURANCE LAW (COVERAGE FOR CLAIMS ALLEGING PAYMENT OF INADEQUATE WAGES AND RETALIATION FOR BRINGING SUIT PRECLUDED BY EXCLUSION FOR EMPLOYMENT-RELATED WRONGFUL ACTS)/EMPLOYMENT LAW (INSURANCE LAW, COVERAGE FOR CLAIMS ALLEGING PAYMENT OF INADEQUATE WAGES AND RETALIATION FOR BRINGING SUIT PRECLUDED BY EXCLUSION FOR EMPLOYMENT-RELATED WRONGFUL ACTS)/EXCLUSIONS (INSURANCE LAW, COVERAGE FOR CLAIMS ALLEGING PAYMENT OF INADEQUATE WAGES AND RETALIATION FOR BRINGING SUIT PRECLUDED BY EXCLUSION FOR EMPLOYMENT-RELATED WRONGFUL ACTS)

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APPELLATE COURT NEED NOT REVIEW ISSUES NOT SUPPORTED BY DOCUMENTS IN THE APPENDIX; COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL; FAITHLESS SERVANT DOCTRINE FORFEITED PLAINTIFF’S RIGHT TO A STOCK OPTION.

The Second Department determined (1) certain issues in plaintiff’s appeal could not be addressed because the necessary documents were not included in the appendix provided to the appellate court, (2) the faithless servant doctrine applied to plaintiff who, by his disloyalty, forfeited his contractual right to a stock option, and (3) the plaintiff waived his right to a jury trial in this declaratory judgment action:

This Court is not obligated to determine an issue where the appendix submitted to it is inadequate to permit review … . * * *

Where a plaintiff joins an equitable claim for specific performance to a legal claim for damages, the plaintiff waives the right to a jury trial … . “[A] declaratory judgment action . . . can be legal or equitable in nature, and to determine whether a party is entitled to a jury trial, it is necessary to examine which of the traditional actions would most likely have been used to present the instant claim had the declaratory judgment action not been created'” … .

Here, the Supreme Court correctly determined that the plaintiff’s declaratory judgment cause of action was in the nature of a prayer for specific performance … . Accordingly, the court correctly determined that the plaintiff had waived his right to a jury trial … .  * * *

… [T]he court properly applied the faithless servant doctrine and determined that, pursuant to that doctrine, the plaintiff forfeited the right to exercise the stock option … . Trimarco v Data Treasury Corp., 2017 NY Slip Op 00503, 2nd Dept 1-25-17

 

EMPLOYMENT LAW (FAITHLESS SERVANT DOCTRINE FORFEITED PLAINTIFF’S RIGHT TO A STOCK OPTION)/FAITHLESS SERVANT DOCTRINE (FAITHLESS SERVANT DOCTRINE FORFEITED PLAINTIFF’S RIGHT TO A STOCK OPTION)/CIVIL PROCEDURE (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/DECLARATORY JUDGMENT (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/SPECIFIC PERFORMANCE (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/CONTRACT LAW (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/JURY TRIAL (CIVIL, COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/APPEALS (APPELLATE COURT NEED NOT REVIEW ISSUES NOT SUPPORTED BY DOCUMENTS IN THE APPENDIX)

PLAINTIFF’S EMPLOYMENT DISCRIMINATION SUIT SHOULD NOT HAVE BEEN DISMISSED, QUESTIONS OF FACT ABOUT WHETHER ACCOMMODATIONS FOR DISABLING ANXIETY SHOULD HAVE BEEN MADE.

The First Department, reversing Supreme Court, determined plaintiff’s employment discrimination suit should go forward. Questions of fact had been raised about whether plaintiff’s employer was made sufficiently aware of plaintiff’s disabling anxiety and whether reasonable accommodations should have been made pursuant to the Administrative Code (NYC):

Under these circumstances, issues of fact exist as to whether, based on plaintiff’s disclosures, defendant reasonably “should have known” that plaintiff was suffering from a disabling anxiety condition (Administrative Code of City of NY § 8-107[15][a]…). Issues of fact likewise exist as to whether defendant should have entered into a good faith interactive dialogue with plaintiff, inquiring into the nature of her disabling condition and exploring what sorts of accommodations might reasonably be required, and whether reasonable accommodations would have enabled her to perform the “essential requisites of [her] job” (Administrative Code § 8-107[15][b]), without causing defendant “undue hardship in the conduct of . . . [its] business” (id. § 8-102[18]…).

Issues of fact also exist as to whether plaintiff’s alleged disabling anxiety condition caused the poor performance (i.e., absenteeism and unresponsiveness) that defendant pointed to as the reason for her termination … , and, if so, whether plaintiff could have performed the essential requisites of her job with reasonable accommodation (see Administrative Code §§ 8-107[15][b]; 8-102[18]). Chernov v Securities Training Corp., 2017 NY Slip Op 00126, 1st Dept 1-10-17

EMPLOYMENT LAW (PLAINTIFF’S DISCRIMINATION SUIT SHOULD NOT HAVE BEEN DISMISSED, QUESTIONS OF FACT ABOUT WHETHER ACCOMMODATIONS FOR DISABLING ANXIETY SHOULD HAVE BEEN MADE)/DISCRIMINATION (PLAINTIFF’S EMPLOYMENT DISCRIMINATION SUIT SHOULD NOT HAVE BEEN DISMISSED, QUESTIONS OF FACT ABOUT WHETHER ACCOMMODATIONS FOR DISABLING ANXIETY SHOULD HAVE BEEN MADE)/ADMINISTRATIVE CODE (NYC) (EMPLOYMENT LAW, DISCRIMINATION, PLAINTIFF’S DISCRIMINATION SUIT SHOULD NOT HAVE BEEN DISMISSED, QUESTIONS OF FACT ABOUT WHETHER ACCOMMODATIONS FOR DISABLING ANXIETY SHOULD HAVE BEEN MADE)/ANXIETY (EMPLOYMENT LAW, DISCRIMINATION, PLAINTIFF’S DISCRIMINATION SUIT SHOULD NOT HAVE BEEN DISMISSED, QUESTIONS OF FACT ABOUT WHETHER ACCOMMODATIONS FOR DISABLING ANXIETY SHOULD HAVE BEEN MADE)/ACCOMMODATIONS (EMPLOYMENT LAW, DISCRIMINATION, PLAINTIFF’S DISCRIMINATION SUIT SHOULD NOT HAVE BEEN DISMISSED, QUESTIONS OF FACT ABOUT WHETHER ACCOMMODATIONS FOR DISABLING ANXIETY SHOULD HAVE BEEN MADE)

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METROPOLITAN OPERA STAR’S NEGLIGENCE SUIT STEMMING FROM A FALL DURING A PERFORMANCE SURVIVED A MOTION DISMISS WHICH ARGUED SHE WAS AN EMPLOYEE AND THE WORKERS’ COMPENSATION LAW WAS HER ONLY REMEDY.

The First Department, in a full-fledged opinion by Justice Acosta, determined the defendant Metropolitan Opera’s motion to dismiss the complaint was properly denied. Plaintiff is a singer who has performed with the Met for over twenty years as a featured soloist. Plaintiff, during a performance, fell from an elevated platform and was injured. She sued in negligence. The Met argued plaintiff was an employee and her only recourse was workers’ compensation benefits. The court concluded the negligence cause of action was viable:

WCL [Workers’ Compensation Law] § 2(4) defines “employee” to include “a professional musician or a person otherwise engaged in the performing arts who performs services as such for … a theatre … or similar establishment … unless, by written contract, such musician or person is stipulated to be an employee of another employer covered by this chapter.” Here, plaintiff’s services were provided to the Met pursuant to a per-performance contractor’s agreement, entered into between her corporation and the Met, that provided that the corporation “agree[d] to furnish to The Met the services of its employee, Wendy White . . ., as singer on an individual performance basis.” Plaintiff’s corporation meets the definition of an “employer covered by this chapter,” inasmuch as it is a corporation “having one or more persons in employment” (WCL § 2[3]). Thus, by written contract, plaintiff was stipulated to be an employee of another employer … .

The Met is correct that the plain language of WCL § 2(4) … draws no distinction between regular performers and stars. * * * … Here, the legislative history supports plaintiff’s suggested distinction, since it indicates that the statutory definition of employees was intended to protect the vast majority of performers, who are not “stars,” and that the statutory exception was designed to exclude those performers with the clout to negotiate the terms of their own engagements. White v Metropolitan Opera Assn., Inc., 2017 NY Slip Op 00093, 1st Dept 1-5-17

NEGLIGENCE (METROPOLITAN OPERA STAR’S NEGLIGENCE SUIT STEMMING FROM A FALL DURING A PERFORMANCE SURVIVED A MOTION DISMISS WHICH ARGUED THE WORKERS’ COMPENSATION LAW WAS PLAINTIFF’S ONLY REMEDY)/WORKERS’ COMPENSATION LAW (METROPOLITAN OPERA STAR’S NEGLIGENCE SUIT STEMMING FROM A FALL DURING A PERFORMANCE SURVIVED A MOTION DISMISS WHICH ARGUED THE WORKERS’ COMPENSATION LAW WAS PLAINTIFF’S ONLY REMEDY)/STARS (METROPOLITAN OPERA STAR’S NEGLIGENCE SUIT STEMMING FROM A FALL DURING A PERFORMANCE SURVIVED A MOTION DISMISS WHICH ARGUED THE WORKERS’ COMPENSATION LAW WAS PLAINTIFF’S ONLY REMEDY)/EMPLOYMENT LAW (METROPOLITAN OPERA STAR’S NEGLIGENCE SUIT STEMMING FROM A FALL DURING A PERFORMANCE SURVIVED A MOTION DISMISS WHICH ARGUED THE WORKERS’ COMPENSATION LAW WAS PLAINTIFF’S ONLY REMEDY)

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FACULTY MEMBERS SUFFICIENTLY ALLEGED BREACH OF CONTRACT CAUSE OF ACTION AGAINST UNIVERSITY BASED UPON POLICIES DESCRIBED IN THE FACULTY HANDBOOK.

The First Department, reversing Supreme Court, determined faculty members sufficiently alleged the policies in the university’s faculty handbook had the force of contract and therefore a breach of contract action was viable:

A university’s academic and administrative decisions require professional judgment and may only be reviewed by way of an article 78 proceeding to ensure that such decisions are not violative of the institution’s own rules and neither arbitrary nor irrational … . However, “[i]f the claim involves a matter of contractual right it may, of course, be vindicated in an action [at] law” … .

For the purpose of surviving respondents’ cross motion to dismiss, petitioners, tenured faculty members of respondent New York University’s School of Medicine, have sufficiently alleged that the policies contained in respondent’s Faculty Handbook, which “form part of the essential employment understandings between a member of the Faculty and the University,” have the force of contract … . Further, for the purposes of surviving respondents’ cross motion to dismiss, petitioners have sufficiently alleged that they had a mutual understanding with respondent that tenured faculty members’ salaries may not be involuntarily reduced. Additionally, petitioners have sufficiently alleged that they reasonably relied on oral representations by respondents that their salaries would not be involuntarily reduced. Matter of Monaco v New York Univ. & N.Y. Univ. School of Medicine, 2016 NY Slip Op 08467, 1st Dept 12-15-16

 

EMPLOYMENT LAW (FACULTY MEMBERS SUFFICIENTLY ALLEGED BREACH OF CONTRACT CAUSE OF ACTION AGAINST UNIVERSITY BASED UPON POLICIES DESCRIBED IN THE FACULTY HANDBOOK)/CONTRACT LAW (EMPLOYMENT LAW, FACULTY MEMBERS SUFFICIENTLY ALLEGED BREACH OF CONTRACT CAUSE OF ACTION AGAINST UNIVERSITY BASED UPON POLICIES DESCRIBED IN THE FACULTY HANDBOOK)/EDUCATION-SCHOOL LAW (UNIVERSITIES, FACULTY MEMBERS SUFFICIENTLY ALLEGED BREACH OF CONTRACT CAUSE OF ACTION AGAINST UNIVERSITY BASED UPON POLICIES DESCRIBED IN THE FACULTY HANDBOOK)

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NOTICE OF CLAIM REQUIRED FOR WRONGFUL TERMINATION SUIT AGAINST A COUNTY, EVEN THOUGH A NOTICE OF CLAIM WOULD NOT BE REQUIRED FOR A SIMILAR SUIT AGAINST A CITY.

The Third Department determined plaintiff’s wrongful termination suit against the county was properly dismissed for failure to file a notice of claim. The court noted that the notice of claim requirement for suits against cities is more narrow and applies only to tort cases. The notice of claim requirements for suits against counties are not limited to tort actions:

County Law § 52 (1) broadly provides that “[a]ny claim . . . against a county for damage [or] injury . . . and any other claim for damages arising at law or in equity, alleged to have been caused . . . by or because of any misfeasance, omission of duty, negligence or wrongful act on the part of the county, its officers, agents, servants or employees, must be made and served in compliance with [General Municipal Law § 50-e]” … . Here, plaintiff’s complaint sought damages for wrongful termination and, thus, pursuant to County Law § 52 (1), General Municipal Law § 50-e (1) (a) required service of a notice of claim within 90 days after the claim for retaliatory termination arose. It is undisputed that plaintiff failed to serve a notice of claim, entitling defendant to dismissal of the complaint … .

Plaintiff’s reliance on appellate decisions involving complaints asserting a Civil Service Law § 75-b or similar claims against cities, in which the courts have ruled that the filing of a notice of claim is not required … , is misplaced. The cases cited by plaintiff involve claims against cities to which the more narrow notice of claim provisions of General Municipal Law §§ 50-e and 50-i apply, limiting the requirement for notices of claim to “tort” claims (General Municipal Law § 50-e [1] [a]) or claims for “personal injury, wrongful death or damage to real or personal property” (General Municipal Law § 50-i [1]). Sager v County of Sullivan, 2016 NY Slip Op 08152, 3rd Dept 12-1-16

 

EMPLOYMENT LAW (NOTICE OF CLAIM REQUIRED FOR WRONGFUL TERMINATION SUIT AGAINST A COUNTY, EVEN THOUGH A NOTICE OF CLAIM WOULD NOT BE REQUIRED FOR A SIMILAR SUIT AGAINST A CITY)/MUNICIPAL LAW (NOTICE OF CLAIM REQUIRED FOR WRONGFUL TERMINATION SUIT AGAINST A COUNTY, EVEN THOUGH A NOTICE OF CLAIM WOULD NOT BE REQUIRED FOR A SIMILAR SUIT AGAINST A CITY)/WRONGFUL TERMINATION (NOTICE OF CLAIM REQUIRED FOR WRONGFUL TERMINATION SUIT AGAINST A COUNTY, EVEN THOUGH A NOTICE OF CLAIM WOULD NOT BE REQUIRED FOR A SIMILAR SUIT AGAINST A CITY)/COUNTIES (WRONGFUL TERMINATION, NOTICE OF CLAIM REQUIRED FOR WRONGFUL TERMINATION SUIT AGAINST A COUNTY, EVEN THOUGH A NOTICE OF CLAIM WOULD NOT BE REQUIRED FOR A SIMILAR SUIT AGAINST A CITY)

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CLAIMANT WAS NOT A NECESSARY EMPLOYEE WITHIN THE MEANING OF THE CIVIL SERVICE LAW, NO OBLIGATION TO TRANSFER HER AFTER HER POSITION WAS ABOLISHED.

The Third Department, affirming Supreme Court, determined petitioner was not a “necessary employee” under the Civil Service Law. Therefore her position with the respondent school district was not obligated to transfer her when her position was abolished:

Mandamus to compel, sought by petitioner, is “an extraordinary remedy that lies only to compel the performance of acts which are mandatory, not discretionary, and only when there is a clear legal right to the relief sought” … . Civil Service Law § 70 (2) provides, in relevant part: “Upon the transfer of a function . . . from one department or agency of the state to another department or agency of the state, . . . provision shall be made for the transfer of necessary officers and employees who are substantially engaged in the performance of the function to be transferred” … . This language imposes a mandatory duty … . Thus, the ultimate issue is whether petitioner has “established a right to the relief sought which is ‘so clear as not to admit of reasonable doubt or controversy'” … . An employee is eligible for a transfer pursuant to Civil Service Law § 70 (2) only if he or she is a “necessary . . . employee[]” — i.e., if the agency or the department to which his or her duties are being transferred does not have sufficient staff at the time of the transfer to perform the duties being transferred … . Matter of Thornton v Saugerties Cent. Sch. Dist., 2016 NY Slip Op 08139, 3rd Dept 12-1-16

EMPLOYMENT LAW (CIVIL SERVICE LAW, CLAIMANT WAS NOT A NECESSARY EMPLOYEE WITHIN THE MEANING OF THE CIVIL SERVICE LAW, NO OBLIGATION TO TRANSFER HER AFTER HER POSITION WAS ABOLISHED)/EDUCATION LAW (EMPLOYMENT LAW, CIVIL SERVICE LAW, CLAIMANT WAS NOT A NECESSARY EMPLOYEE WITHIN THE MEANING OF THE CIVIL SERVICE LAW, NO OBLIGATION TO TRANSFER HER AFTER HER POSITION WAS ABOLISHED)/CIVIL SERVICE LAW (EDUCATION-SCHOOL LAW, CLAIMANT WAS NOT A NECESSARY EMPLOYEE WITHIN THE MEANING OF THE CIVIL SERVICE LAW, NO OBLIGATION TO TRANSFER HER AFTER HER POSITION WAS ABOLISHED)

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COUNTERCLAIMS ALLEGING ENTITLEMENT TO A NONDISCRETIONARY BONUS PRECLUDED BY TERMS OF EMPLOYEE HANDBOOK.

The First Department, over an extensive dissent, determined the terms of the employee handbook, signed by the plaintiff, precluded counterclaims alleging an oral promise to pay an annual bonus:

The operative employee handbook stating, inter alia, that bonuses were paid at the sole discretion of plaintiff, and the acknowledgment of the handbook’s terms signed by defendant, conclusively refute the counterclaims based on the alleged oral promise to pay an annual nondiscretionary bonus … .

Nor was the discretionary bonus policy modified by the alleged oral agreement. As defendant’s acknowledgment makes clear, “[N]o supervisor, manager or other representative of [plaintiff] has the authority to make any verbal promises, commitments, or statements of any kind regarding the Company’s policies, procedures, or any other issues that are legally binding on the Company.”

The quasi-contractual counterclaims based on the alleged agreement are likewise precluded by the discretionary bonus policy … .

The alleged oral promise to pay acquisition proceeds, however, was not established to be a “bonus” within the scope of the discretionary bonus policy. The complaint alleges that the promised payment was not performance-based, but was an inducement to keep defendant from quitting … . The breach of contract counterclaim based on this alleged promise is nonetheless barred because the promise was not in writing, as required by the broad language of the acknowledgment … .

The quasi-contractual counterclaims, to the extent predicated on an alleged agreement to pay acquisition proceeds, likewise fail. Such claims require an element of reasonable reliance on a promise, a reasonable expectation of compensation, or an inequity, all of which are negated where, as here, the plaintiff receives adequate compensation and signed a written acknowledgment confirming the fact that no representative of plaintiff had authority to make legally binding verbal promises … . Newmark & Co. Real Estate, Inc. v Frischer, 2016 NY Slip Op 08100, 1st Dept 12-1-16

EMPLOYMENT LAW (COUNTERCLAIMS ALLEGING ENTITLEMENT TO A NONDISCRETIONARY BONUS PRECLUDED BY TERMS OF EMPLOYEE HANDBOOK)/CONTRACT LAW (EMPLOYMENT LAW, COUNTERCLAIMS ALLEGING ENTITLEMENT TO A NONDISCRETIONARY BONUS PRECLUDED BY TERMS OF EMPLOYEE HANDBOOK)/BONUSES (EMPLOYMENT LAW, COUNTERCLAIMS ALLEGING ENTITLEMENT TO A NONDISCRETIONARY BONUS PRECLUDED BY TERMS OF EMPLOYEE HANDBOOK)

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CRITERIA FOR A MOTION TO DISMISS NOT MET, SUPREME COURT SHOULD NOT HAVE DISMISSED BY MAKING A FINDING IN A MATTER PENDING BEFORE THE COMPTROLLER.

In an action stemming from the withholding of payment to plaintiff subcontractor, the Second Department determined the breach of contract cause of action should not have been dismissed, but noted that a conversion action cannot be based upon a breach of contract, and an unjust enrichment cause of action cannot coexist with a breach of contract cause of action.  Supreme Court had dismissed the breach of contract cause of action, finding the defendant had a legal right to withhold payment under Labor Law 220 because complaints had been lodged for failure to pay the prevailing wage for this school construction project. But since the Comptroller had not yet ruled on the Labor Law 220 complaints, Supreme Court should not have based its dismissal on them by making its own finding:

On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), the court must “accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” … . While a court is “permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7)” … , “where the motion is not converted to one for summary judgment, the criterion is whether the [third-party plaintiff] has a cause of action, not whether [it] has stated one, and, unless it has been shown that a material fact as claimed by the [third-party plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it . . . dismissal should not eventuate'” … . A motion to dismiss pursuant to CPLR 3211(a)(1) may appropriately be granted “only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” … . * * *

The Supreme Court erred in dismissing the third-party cause of action alleging breach of contract on the ground that the third-party defendants had a legal right to withhold payment pursuant to Labor Law §§ 220 and 220-b. Based upon the record before us, there is no indication that the Comptroller has rendered a final determination regarding the alleged Labor Law § 220 violation. As such, the court, in effect, determined the prevailing wage issue, which is within the exclusive province of the Comptroller, prior to a determination by the Comptroller … . Thus, the evidentiary material submitted by the third-party defendants, which demonstrated that payment to AGC under the subject contracts was withheld pending the Comptroller’s determination, failed to establish that any fact alleged in support of the third-party breach of contract cause of action was undisputedly not a fact, and failed to conclusively establish a defense as a matter of law to that cause of action. Gym Door Repairs, Inc. v Astoria Gen. Contr. Corp., 2016 NY Slip Op 08047, 2nd Dept 11-30-16

 

CIVIL PROCEDURE (CRITERIA FOR A MOTION TO DISMISS NOT MET, SUPREME COURT SHOULD NOT HAVE DISMISSED BY MAKING A FINDING IN A MATTER PENDING BEFORE THE COMPTROLLER)/DISMISS, MOTION TO (CRITERIA FOR A MOTION TO DISMISS NOT MET, SUPREME COURT SHOULD NOT HAVE DISMISSED BY MAKING A FINDING IN A MATTER PENDING BEFORE THE COMPTROLLER)

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