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THE DEFENDANT REHABILITATION FACILITY DID NOT PROVE PLAINTIFF’S DECEDENT SIGNED THE ADMISSIONS AGREEMENT USING AN ELECTRONIC FORMAT CALLED DOCUSIGN; THEREFORE THE AGREEMENT WAS NOT AUTHENTICATED AND THE FORUM SELECTION CLAUSE IN THE AGREEMENT COULD NOT BE ENFORCED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Gonzalez, reversing Supreme Court, over a dissent, determined the defendant rehabilitation facility, Dewitt. did not demonstrate plaintiff’s decedent signed the facility’s admission agreements. Therefore the forum selection clause in the agreements should not have been enforced by the motion court. The agreements were allegedly signed using an electronic format called Docusign. But the defendant did not submit any evidence demonstrating how Docusign works and did not submit an affidavit by the representative who allegedly witnessed plaintiff’s signatures. The agreement was not, therefore, authenticated and was not admissible evidence of an agreement to the forum:

… [T]he “burden of proving the existence, terms and validity of a contract rests on the party seeking to enforce it” … . This requires, in the first instance, authentication of the purported writing … . Authentication may be effected by various means, including, for example, by certificate of acknowledgment (see CPLR 4538), by comparison of handwriting (see CPLR 4536), or by the testimony of a person who witnessed the signing of the document … .

Here, …in support of its motion, Dewitt submitted Trimarchi’s [the defendant’s director of admission’s] affidavit, along with copies of the admissions agreements. Trimarchi admitted, however, that she was not present during the signing of the admissions agreement. Trimarchi attested only to her understanding of how admissions agreements were usually signed; she had no actual knowledge of how the agreements bearing decedent’s name came to be signed. Moreover, Trimarchi did not describe any protocols governing the use of Docusign. Accordingly, her affidavit cannot serve to authenticate the agreements … . Dewitt did not seek to authenticate decedent’s signature by any other means, such as a certificate of acknowledgment or a handwriting exemplar. Since Dewitt failed to authenticate the agreements, it correspondingly failed to show that the forum selection clauses set forth in those documents are enforceable against plaintiff … . Knight v New York & Presbyt. Hosp., 2023 NY Slip Op 04258, First Dept 8-10-23

Practice Point: This case illustrates the need to authenticate signatures which involve some sort of electronic signing format. Here the defendant did not demonstrate how the electronic signature format worked and therefore did not authenticate plaintiff’s decedent’s signature. The forum selection clause in the agreement, therefore, could not be enforced.

 

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UNDER THE “AGE 29 LAW” MEDICAL-INSURANCE COVERAGE FOR PLAINTIFF’S CHILD WAS AVAILABLE THROUGH PLAINTIFF’S EMPLOYER’S PLAN UNTIL THE CHILD TURNED 29; THEREFORE THE STIPULATED ORDER IN THE DIVORCE PROCEEDING REQUIRING PLAINTIFF TO COVER THE CHILD UNDER THE PLAN FOR AS LONG AS THE LAW ALLOWS REQUIRED COVERAGE TO AGE 29; THE ARGUMENT THAT THE PARTIES CONTEMPLATED A CUT-OFF AT AGE 26 PURSUANT TO THE AFFORDABLE CARE ACT WAS REJECTED (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Higgitt, determined the provisions of a stipulated order in a divorce proceeding (section 6.3)  providing that plaintiff would pay for medical insurance for a child (T.D.) for as long as coverage was available under the employer’s family plan were unambiguous and must be enforced. Because the “Age 29” law allowed the child to remain covered by plaintiff’s employer’s plan until age 29. plaintiff was obligated to pay for that coverage. The argument that the provision was ambiguous allowing extrinsic evidence that the parties contemplated only the Affordable Care Act’s cut-off at age 26 was rejected: The “Age 29” act was passed before the issuance of the stipulated order:

… [T]he practical and reasonable interpretation of § 6.3 is that, to the extent plaintiff can maintain health insurance for T.D. through his employer, he is required to do so as long as any relevant law permits coverage for T.D. As he acknowledges in his brief (and as the evidence he submitted in opposition to the motion establishes), T.D. has coverage under the same health insurance plan provided by plaintiff’s employer to its employees. Thus, by virtue of the fact that plaintiff has health insurance through his employer, Age 29 Law coverage is available to T.D. B.D. v E.D., 2023 NY Slip Op 03971, First Dept 7-27-23

Practice Point: Here the stipulated order entered in the divorce proceedings required plaintiff to provide medical insurance to the child as long as the child could be covered by law under the employer’s plan. The Age 29 Law allowed coverage until age 29. The argument that the stipulated order was ambiguous allowing extrinsic proof that the parties contemplated only the age 26 cut-off under the Affordable Care Act was rejected.

 

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PLAINTIFF, WORKING FOR A SUBSIDIARY OF VERIZON, WAS INJURED LAYING A CABLE UNDER A CITY STREET; THE MAJORITY HELD THERE WERE QUESTIONS OF FACT WHETHER A FRANCHISE AGREEMENT BETWEEN THE CITY AND VERIZON AND/OR THE ISSUANCE OF A CITY PERMIT RENDERED THE CITY A PROPER DEFENDANT; A TWO-JUSTICE DISSENT DISAGREED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Mendez, over a two-justice dissent, determined the City was not entitled to summary judgment in this Labor Law case. Plaintiff was working for a subsidiary of Verizon (Empire City) laying a conduit in a trench in the street when a backhoe pushed a metal plate onto his foot. The City argued it was not an owner under the Labor Law, had no notice of the alleged dangerous condition, and there was no nexus between the City and and the work performed by Verizon. The majority held there were questions of fact about the existence of a franchise agreement between the City and Verizon, and whether a permit for the work had been issued by the City. Although the “lack of a nexus” argument was raised for the first time in reply, the majority held the issue raised a question of law and was properly considered by the motion court:

The witness’s lack of knowledge renders his testimony inconclusive and speculative as to whether Empire City was working without a permit on the day plaintiff was injured, warranting denial of summary judgment … . * * *

… [T]here remain triable issues of fact as to whether there existed a nexus between plaintiff and the City … . Furthermore, plaintiff sought certified copies of the franchise agreements for both Verizon and Empire City as part of discovery and defendant failed to provide them. Thus, the City’s challenge to the franchise documentation as being unauthenticated should have been rejected by the court, as copies of the documents remained in defendant’s exclusive possession and control but were not provided to plaintiff …  Powell v City of New York, 2023 NY Slip Op 03843, First Dept 7-17-23

Practice Point: The plaintiff was employed by a subsidiary of Verizon and was injured laying a conduit in a trench under a City street. The City claimed it had no nexus to the work done by Verizon. The majority held questions of fact about the existence of a franchise agreement between the City and Verizon and the issuance of a permit by the City precluded summary judgment in favor of the City. There was a two-justice dissent.

 

AN UNJUST ENRICHMENT CAUSE OF ACTION IS NOT AVAILABLE WHERE A CONTRACT COVERS THE RELEVANT ISSUE, EVEN IF THE DEFENDANTS ARE NONSIGNATORIES; UNJUST ENRICHMENT IS NOT A “CATCH ALL” CAUSE OF ACTION, CRITERIA EXPLAINED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the existence of a contract covering the relevant issue precluded the unjust enrichment cause of action, even though defendants were not signatories to the contract:

“The existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter” … . It makes no difference that defendants are not parties to the contracts governing the dispute, as “a nonsignatory to a contract cannot be held liable where there is an express contract covering the same subject matter” … . * * *

… “[U]njust enrichment is not a catchall cause of action . . . . It is available only in unusual situations when, though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff” … . Here, plaintiff states a claim against defendants for recognized torts, obviating the need for the creation of that obligation. Iberdrola Energy Projects v MUFG Union Bank, N.A., 2023 NY Slip Op 03841, First Dept 7-13-23

Practice Point: If a contract covers the relevant issue, unjust enrichment is not available, even if the defendants are nonsignatories. Unjust enrichment is not a “catch all” cause of action and is appropriate only when there is no actionable breach of contract and the relevant issue is not otherwise addressed by other causes of action (here certain torts).

 

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HERE THE CLOSE RELATIONSHIP BETWEEN THE NON-SIGNATORY AND THE PARTY TO THE AGREEMENT WARRANTED FINDING THAT THE NON-SIGNATORY WAS BOUND BY THE FORUM SELECTION CLAUSE IN THE AGREEMENT (FIRST DEPT).

The First Department, after reinstating the tortious interference with contract cause of action, determined a non-signatory can be bound by a forum selection clause under the “closely related” doctrine. where the non-signatory and the party to the agreement have such a close relationship that it is foreseeable the forum selection clause will be enforced against the non-signatory:

We find that plaintiff alleged a sufficiently close relationship between Vivendi and the Editis Defendants to justify subjecting it to personal jurisdiction in New York … .  Plaintiff alleged that Editis … was a wholly-owned subsidiary of Vivendi, that Vivendi’s CEO was also the Chairman of Editis, and that Vivendi managed the Editis Defendants’ performance of the subject agreement …. . EPAC Tech. Ltd. v Interforum S.A., 2023 NY Slip Op 03543, First Dept 6-29-23

Practice Point: Here the “close relationship” doctrine warranted finding the non-signatory was bound by the forum selection clause in the agreement. The non-signatory was a wholly-owned subsidiary of the party to the agreement and the non-signatory’s CEO was the chairman of the party to the agreement.

 

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PLAINTIFFS’ ATTORNEY FAILED TO SUBMIT MEDICAL RECORDS REQUESTED BY THE JUDGE FOR MORE THAN A YEAR AFTER THE INQUEST; THE APPLICATION FOR DAMAGES SHOULD NOT HAVE BEEN DENIED ON THAT GROUND; PLAINTIFFS SHOULD NOT BE PENALIZED FOR THE NEGLECT OF THEIR ATTORNEY (SECOND DEPT). ​

The First Department, reversing Supreme Court, determined the application for damages in this personal injury action should not have been denied due to plaintiffs’ counsel’s failure to submit medical records for more than a year after the inquest. Plaintiffs should not be prejudiced by their counsel’s inaction:

Although plaintiffs’ counsel had timely subpoenaed the relevant medical records and those records were apparently delivered to the subpoenaed records room in the courthouse, they were not available at the inquest. Supreme Court therefore reserved decision to give plaintiffs time to submit evidence supporting their damages claim. After a period of more than one year in which plaintiffs’ counsel failed to provide the requested information, Supreme Court issued an order … denying the application for damages on the ground of failure of proof.

Supreme Court improvidently exercised its discretion in denying plaintiffs’ motion to vacate the underlying default. Although we share the court’s concern regarding the extended delay and the inattentiveness of plaintiffs’ former counsel, counsel’s neglect in pursuing his clients’ action should not be permitted to redound to the clients’ detriment … . Counsel did not deny that he failed to respond to communications from the court, but explained that the delays were due to a problem in his firm’s case management system, which did not provide reminders … . These circumstances present a type of law office failure for which the clients should not be penalized , particularly in light of the strong public policy preference for deciding cases on the merits … . In addition, defendants defaulted and therefore will not be prejudiced … . Rosario v General Behr Corp., 2023 NY Slip Op 03560, Second Dept 6-28-23

Practice Point: Here the attorney’s failure to submit medical records requested by the judge after an inquest was not the type of law office failure for which plaintiffs should be penalized. The judge should not have dismissed the application for damages based on counsel’s neglect.

 

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DEFENDANT IN THIS TRAFFIC ACCIDENT CASE SHOULD HAVE BEEN ALLOWED TO AMEND HIS ANSWER TO ASSERT A GRAVES AMENDMENT AFFIRMATIVE DEFENSE (AVAILABLE TO THE LESSOR OF A VEHICLE); PLAINTIFF WAS NOT PREJUDICED BY THE LATENESS OF THE MOTION (FIRST DEPT). ​

The Second Department, reversing Supreme Court, determined the defendant’s (Lubman;s) motion to amend his answer in this traffic accident case should have been granted. The lateness of the motion to amend did not cause sufficient prejudice to plaintiff to justify denial:

… [T]he court … improperly determined that the Graves Amendment is inapplicable here. Although Lubman did not clearly establish that he was a commercial lessor of motor vehicles … , he proffered sufficient evidence to create a question of fact as to the Graves Amendment’s applicability. He submitted evidence that he owned between four and seven cars that he rented fifty-nine times over a nine-month period through Turo, a peer-to-peer car sharing service. This volume of rental activity, which involved several vehicles, demonstrated more than a casual or occasional endeavor. The fact that Lubman operated under his own name rather than a corporate entity was not determinative. The Graves Amendment defines “owner” as “a person,” which it defines, in part, as “any individual” as well as a “corporation, company . . . or any other entity” … . Thus, by its own terms, the Graves Amendment is intended to cover both individuals and corporate entities.

Supreme Court should have granted Lubman’s motion for leave to amend his answer to assert a Graves Amendment affirmative defense. Lubman demonstrated that his proposed amended answer was not palpably insufficient or clearly devoid of merit …  Although plaintiff … claimed that they would be prejudiced by the amendment because Lubman waited ten months after his deposition before seeking leave to amend his answer, such delay was not significant prejudice that hindered their case preparation or prevented them from acting in support of their position … , as the note of issue had not yet been filed and Lubman could have been deposed further on the limited issue of the Graves Amendment affirmative defense. Ventura v Lubman, 2023 NY Slip Op 03444, First Dept 6-27-23

Practice Point: Although the motion to amend the answer was made 10 months after depositions, the note of issue had not been filed and defendant could be deposed further. The delay therefore did not prejudice plaintiff sufficiently to warrant denial of the motion.

Practice Point: The Graves Amendment limits the liability of a lessor of a vehicle involved in an accident to negligent maintenance or repair. The affirmative defense is available to individuals as well as business entities.

 

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NO APPEAL LIES FROM AN ORDER ISSUED ON DEFAULT, A MOTION TO VACATE IS THE ONLY REMEDY; NO APPEAL LIES FROM AN ORDER ISSUED ON CONSENT (FIRST DEPT).

The First Department, dismissing the appeal in this custody case, determined (1) no appeal lies from an order issued on mother’s default, and (2) no  appeal lies from an order entered with mother’s consent:

Because the fact-finding order was issued on the mother’s default, it is not appealable as of right and her remedy was to move to vacate (CPLR 5511 …). Although the mother appeared on the final date of the inquest after petitioner’s witnesses had testified, she was not present during the majority of the fact-finding hearing, and her counsel was not authorized to proceed in her absence … . The mother also did not offer any evidence or seek to testify.

Furthermore, no appeal lies from the dispositional order, as it was entered on the mother’s consent and she is therefore not an aggrieved party under CPLR 5511 … .  Matter of P. A. (Joseph M.), 2023 NY Slip Op 03432, First Dept 6-27-23

Practice Point: No appeal lies from an order issued on default. The only available remedy is a motion to vacate the default.

Practice Point: No appeal lies from an order issued on consent because the consenting party is not “aggrieved.”

 

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IN THIS DIVORCE PROCEEDING (1) THE HUSBAND’S REQUEST FOR CLOSURE OF THE COURTROOM SHOULD HAVE BEEN PUBLIC, NOT CONCEALED FROM THE PUBLIC IN EMAILS, AND (2), THE COURTROOM CLOSURE WAS IMPROPERLY BASED ON AN EXCEPTION TO THE PUBLIC-TRIAL REQUIREMENT WHICH IS NOT INCLUDED IN JUDICIARY LAW SECTION 4 (FIRST DEPT).

The First Department, reversing Supreme Court, determined the judge should not have ordered closure of the courtroom pursuant to Judiciary Law section 4 in this divorce proceeding. The criteria for closure of a courtroom are discussed in some detail. Here the judge ordered some documents to be submitted under seal and then based the closure on the existence of sealed documents as evidence. That justification for closure is not one of the exceptions in Judiciary Law section 4:

The motion court did not provide the public and the press adequate notice of the husband’s courtroom closure request. Because it directed the parties to file their submissions on the application for courtroom closure by email, the submissions were not reflected on “the publicly maintained docket entries,” as required … .

We also reverse on substantive grounds. “Public access to court proceedings is strongly favored, both as a matter of constitutional law . . . and as statutory imperative …” … . In the order appealed here, the motion court improperly read an exception into the “statutory imperative” of NY Judiciary Law §4 that does not exist. The first part of that statute, entitled “Sittings of courts to be public,” states: “The sittings of every court within this state shall be public, and every citizen may freely attend the same . . .” The only exceptions to this rule are set forth in the statute’s next sentence: “except that in all proceedings and trials in cases for divorce, seduction, rape, assault with intent to commit rape, criminal sexual act, bastardy or filiation, the court may, in its discretion, exclude therefrom all persons who are not directly interested therein, excepting jurors, witnesses, and officers of the court” … .

Here, the motion court used its discretion to insert another, unwritten category of cases into the statutory exception: proceedings that could entail arguments that implicate documents filed under seal. We find its decision to do so to have been improper … . Paulson v Paulson, 2023 NY Slip Op 03310, First Dept 6-20-23

Practice Point: A request for courtroom closure must be accessible by the public, not concealed in email exchanges.

Practice Point: Courtroom closure based on a reason not included in the public-trial exceptions in Judiciary Law section 4 is an abuse of discretion.

 

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THE LETTER OF INTENT WAS AN AGREEMENT TO AGREE WHICH CONTEMPLATED ONLY OUT-OF-POCKET DAMAGES FOR A BREACH; THE JUDGE SHOULD NOT HAVE RELIED ON CREDIBILITY DETERMINATIONS TO, SUA SPONTE, AWARD SUMMARY JUDGMENT TO PLAINTIFFS (FIRST DEPT).

​The First Department, reversing Supreme Court, determined that the letter of intent (LOI) was an agreement to agree which, if breached, supported only out-of-pocket damages, not cover damages. The judge improperly relied on credibility determinations to, sua sponte, award summary judgment to plaintiffs:

… [R]ecovery for breach of a preliminary agreement’s confidentiality provision could not be based on “the theory that it would have acquired” the company at issue, as the “defendant[] w[as] not bound to go forward with the transaction” … . * * *

… [T]he text of the LOI and the surrounding circumstances support a finding that the parties did not contemplate cover damages at the time of contracting. That the parties entered only a preliminary agreement with no obligation to close a transaction and no specific damage provision for breach conclusively shows that defendant did not wish to assume the risk of covering whatever replacement transaction plaintiffs might pursue … .

… [T]he court improperly relied on credibility determinations to resolve material issues that should have been resolved by the jury. It is “not the function of a court deciding a summary judgment motion to make credibility determinations” … . Cresco Labs N.Y., LLC v Fiorello Pharms., Inc., 2023 NY Slip Op 03305, First Dept 6-20-23

Practice Point: Here the letter of intent was an agreement to agree which contemplated only out-of-pocket damages for a breach.

Practice Point: The judge should not have relied on credibility determinations to, sua sponte, award summary judgment to plaintiffs.

 

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