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DEFENDANTS REPUDIATED THE HOME-RENOVATION CONTRACT WHEN THEY SUBMITTED A PROPOSED CHANGE ORDER REQUESTING ADDITIONAL PAYMENTS AND THREATENED TO STOP WORK IF PLAINTIFFS DID NOT AGREE; THE REPUDIATION ENTITLED PLAINTIFFS TO DAMAGES FOR TOTAL BREACH (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendants (Star) repudiated the home-renovation contract when they submitted a proposed change order and threatened to stop work unless paid in accordance with the change order. The repudiation entitled plaintiffs to damages for a total breach:

On January 14, 2022, Star sent plaintiffs a proposed “Change Order 11,” which sought payment of $117,200 for overhead allegedly incurred between September and December 2021 and additional monthly payments of $29,300 starting in January 2022 through the project’s conclusion. Plaintiffs refused to approve Change Order 11 and, by January 24, 2022, Star substantially ceased performing on the project. * * *

Plaintiffs are entitled to summary judgment on their breach of contract claim because they proved as a matter of law that defendants repudiated the contract. “[W]hen a party repudiates contractual duties prior to the time designated for performance and before all of the consideration has been fulfilled, the repudiation entitles the nonrepudiating party to claim damages for total breach” … . Here, the record establishes that defendants repudiated the contract by issuing a change order requesting additional payments followed by a threat to not return to the job unless plaintiffs agreed to pay the initial amount demanded, which threat was fulfilled when they abandoned the project … . Ho v Star Contrs., Inc., 2026 NY Slip Op 05908, First Dept 10-13-26

Practice Point: Here the defendants, by demanding more payments and threatening to stop work if their demands were not met, repudiated the home-renovation contract entitling plaintiffs to damages for total breach.

 

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WHETHER PLAINTIFF FELL FROM THE SIXTH STEP OF AN UNSECURED A-FRAME LADDER OR THE SECOND STEP WAS IRRELEVANT; BOTH ARE COVERED UNDER LABOR LAW 240(1) (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff was entitled to summary judgment on the Labor law 240(1) cause of action in this ladder-fall case. Whether plaintiff fell from the sixth step of the A-frame ladder or the second step was irrelevant:

Plaintiff “established prima facie entitlement to summary judgment on his Labor Law § 240(1) claim by submitting proof, including an expert affidavit, that he fell from an unsecured [eight]-foot A-frame ladder that suddenly moved” as he was removing plywood sheets from the ceiling above him … . Plaintiff’s testimony that he fell from the ladder after it was struck by a falling piece of plywood is uncontroverted. It is irrelevant whether plaintiff was on the sixth step of the ladder when the plywood fell, as he testified, or on the second step of the ladder, as his coworker averred, because a fall from a height of two feet can constitute the type of elevation-related risk that is covered by the protections of Labor Law § 240(1) … .

Defendants’ argument that plaintiff was the sole proximate cause of his accident is unavailing. Even if plaintiff was negligent, it is “conceptually impossible” for a plaintiff’s negligence to be the sole proximate cause where it is shown that defendants’ violation of Labor Law § 240(1) was also a proximate cause of the accident … . In any event, plaintiff was not solely liable for the accident, because he followed his employer’s instruction in performing the work … . De Souza v 4720 Third Ave LLC, 2026 NY Slip Op 05905, First Dept 10-13-26

Practice Point: A fall from the second step of an unsecured A-frame ladder is covered under Labor Law 240(1) (two feet in height).

 

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A FEDERAL COURT APPOINTED PLAINTIFF-RECEIVER TO TAKE OVER A BUSINESS RUNNING A PONZI SCHEME; THE PLAINTIFF-RECEIVER SUED THE BROKER TO WHICH THE PONZI-SCHEME FUNDS WERE TRANSFERRED; BECAUSE PLAINTIFF-RECEIVER STEPPED INTO THE SHOES OF A WRONGDOER (THE PONZI SCHEME OPERATOR) TO SUE ANOTHER WRONGDOER (THE BROKER), THE “IN PARI DELICTO” (“IN EQUAL FAULT”) DOCTRINE APPLIED TO PROHIBIT THE SUIT (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Michael, over a comprehensive dissenting opinion, determined the plaintiff-receiver (appointed by the federal court to takeover a business running a Ponzi scheme) was prohibited from suing the broker to which the Ponzi scheme funds were transferred by the doctrine of “in pari delicto” (“in equal fault”). Under the doctrine, the courts will not get involved in a suit between two wrongdoers. The issue in this case is whether the court-appointed receiver steps into the shoes of the “Ponzi scheme” wrongdoer. The First Department held that the doctrine applies to the receiver, over an extensive dissent:

The common law doctrine of in pari delicto “mandates that the courts will not intercede to resolve a dispute between two wrongdoers” … . In other words, the doctrine bars a corporation engaged in wrongdoing from suing its co-conspirators on the grounds of negligence or fraud … . “The justice of the in pari delicto rule is most obvious where a willful wrongdoer is suing someone who is alleged to be merely negligent” … . The notion that “a wrongdoer should not profit from his own misconduct is so strong in New York that we have said the defense applies even in difficult cases and should not be weakened by exceptions” … .

The wrongdoer’s misconduct is not only imputed to the corporation through the bad acts of its officers … , but also to the corporation’s successors … . …

Plaintiff [receiver] argues, and the dissent agrees, that the in pari delicto doctrine does not apply to plaintiff because he is not a derivative shareholder plaintiff or a bankruptcy trustee appointed pursuant to 11 USC § 541, but rather a receiver appointed pursuant to 28 USC § 3103. It is true that plaintiff, as a receiver, is not subject to section 541 of the Bankruptcy Code. Nevertheless, there is no significant difference between bankruptcy trustees and nonbankruptcy receivers for purposes of in pari delicto … . Castleman v Interactive Brokers LLC, 2026 NY Slip Op 05904, First Dept 10-13-26

Practice Point: Here the “in pari delicto” (“in equal fault”) doctrine was applied to prohibit a suit by a court-appointed receiver which had taken over a business running a Ponzi scheme. The receiver sued the broker to which the Ponzi-scheme funds had been transferred. Under the “in pari delicto” doctrine, a court will not get involved in a dispute between wrongdoers. The doctrine applies to a wrongdoer’s successor, even a court-appointed receiver.

 

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CAUSES OF ACTION AGAINST “BIG OIL” ALLEGING “GREENWASHING” IN VIOLATION OF NYC’S CONSUMER PROTECTION LAW PROPERLY DISMISSED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Friedman, affirmed the dismissal of the “product greenwashing” and “corporate greenwashing” causes of action in a suit by the City of New York against Exxon Mobil, Royal Dutch Shell, Shell and BP. The opinion is a comprehensive discussion of the application of the City’s Consumer Protection Law (CPL) to the defendants’ claims re: the environmental benefits of fossil fuel products and the role of renewable energy in defendants’ businesses:

In this action, plaintiff City of New York alleges that defendant energy companies … have engaged in “deceptive . . . trade practice[s]” proscribed by the City’s Consumer Protection Law (CPL) (Administrative Code of the City of NY § 20-700 et seq.). The City’s first cause of action alleges that defendants violated the CPL “by misrepresenting the purported environmental benefits of using their fossil fuel products” — a practice referred to as “product greenwashing.” The City’s second cause of action alleges that defendants also violated the CPL “by creating a misleading impression of the role of renewables [i.e., renewable energy] in their businesses” — a practice referred to as “corporate greenwashing.”

The City now appeals to this Court from Supreme Court’s order granting defendants’ motion to dismiss both causes of action. The court dismissed the first cause of action, for product greenwashing, as against all defendants, pursuant to CPLR 3211(a)(7), on the ground that the alleged “product greenwashing” statements did not, as a matter of law, have “the capacity, tendency or effect of . . . deceiving or misleading consumers” (Administrative Code § 20-701), as required to constitute a deceptive trade practice within the meaning of the CPL. … The court also dismissed the second cause of action, for corporate greenwashing, as against all defendants, pursuant to CPLR 3211(a)(7), on the ground that the alleged “corporate greenwashing” statements were not “made in connection with the sale . . . or in connection with the offering for sale of consumer goods or services,” as also required to constitute a deceptive trade practice within the meaning of the CPL. … [W]e affirm. City of New York v Exxon Mobil Corp., 2026 NY Slip Op 05851, First Dept 10-8-26

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THE ASSETS TRANSFERRED TO IRREVOCABLE TRUSTS FOR THIRD PARTY BENEFICIARIES ARE NOT SUBJECT TO EQUITABLE DISTRIBUTION, TRIAL COURT REVERSED OVER AN EXTENSIVE DISSENT (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court in this divorce proceeding, over a comprehensive dissent, determined the assets transferred to irrevocable trusts were not subject to equitable distribution:

While a trial court has broad discretion in fashioning an equitable distribution award, that discretion is not unlimited. Courts must respect the parties’ economic decisions made during the marriage, and may not disregard the legal character of property based solely on equitable concerns. As the Court of Appeals has emphasized, courts should not second-guess how parties chose to structure and allocate their assets during the marriage (see Mahoney-Buntzman v Buntzman, 12 NY3d 415, 420-421 [2009]). Consistent with this principle, assets transferred to valid, irrevocable trusts for third-party beneficiaries are not subject to equitable distribution absent evidence that the trust is a sham or that a spouse retains revocation power or a beneficial interest … . C.S. v R.H., 2026 NY Slip Op 05849, First Dept 10-8-26

Practice Point: Assets transferred to Irrevocable trusts for third-party beneficiaries are not subject to equitable distribution.

 

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PLAINTIFF ALLEGED SHE WAS SUBJECTED TO SEXUAL MISCONDUCT BY BILL COSBY, THE STAR OF THE TELEVISION SERIES “THE COSBY SHOW,” WHILE COSBY WAS EMPLOYED BY DEFENDANT CW, THE OWNER OF THE TV STUDIO; THE MAJORITY DISMISSED THE NEGLIGENT HIRING, RETENTION AND SUPERVISION CAUSE OF ACTION AGAINST CW; THERE WAS A TWO-JUSTICE DISSENT (FIRST DEPT).

The First Department, reversing Supreme Court, over a two-justice dissenting opinion, determined the cause of action against Bill Cosby’s employer (CW) alleging negligent hiring, retention and supervision should have been dismissed  Plaintiff alleged she was subjected to sexual misconduct by Bill Cosby, the star of the television series “The Cosby Show,” while Cosby was employed by CW:

​To establish a claim of negligence, a plaintiff must show that there was a duty owed to the plaintiff by the defendant, that there was a breach of that duty, and that there was an injury proximately resulting therefrom … . Further, “[w]here the negligence claim relates to an employer’s retention and supervision of an employee, the complaint must include allegations that: (1) the employer had actual or constructive knowledge of the employee’s propensity for the sort of behavior which caused the injured party’s harm; (2) the employer knew or should have known that it had the ability to control the employee and of the necessity and opportunity for exercising such control; and (3) the employee engaged in tortious conduct on the employer’s premises or using property or resources available to the employee only through their status as an employee, including intellectual property and confidential information” … . * * *

… [T]he sole factor that distinguishes the present complaint from the negligent hiring, retention, and supervision claim against CW that we dismissed in B.B [a similar action against Bill Cosby by a different plaintiff] is the allegation in this case that plaintiff visited Cosby at CW’s television studio. But plaintiff does not allege that anything remotely illegal or tortious occurred during this one innocuous studio visit. Given that plaintiff had no relationship with CW and no tortious act was committed upon CW’s premises … , and given that Cosby is not alleged to have directly used any CW resources in committing his assaults … , the bare allegations that Cosby met with plaintiff at CW’s television studio and used his status as the star of a CW-produced television show to impress her — neither of which constitutes independently tortious or illegal activity — does not give rise to a sufficient nexus between Cosby’s employment by CW and his alleged assaults on plaintiff to support making CW liable for Cosby’s reprehensible conduct.

From the dissent:

… Cosby’s alleged use of the set to gain plaintiff’s trust provides the nexus between Cosby’s employment by CW and his alleged assaults; that nexus was not present in B.B. The allegation that Cosby groomed and preyed on plaintiff by inviting her to the set, and claiming that The Cosby Show wanted to hire plaintiff, satisfies the pleading requirement that Cosby “us[ed] property or resources available to [him] only through [his] status as an employee” … . Picard v Cosby, 2026 NY Slip Op 05612, First Dept 10-1-26

Practice Point: Consult this decision for an in-depth discussion of the elements of “negligent hiring, retention and supervision.”​

Similar issues and result in M.P. v Cosby, 2026 NY Slip Op 05859 First Dept 10-8-26

 

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THE $1 BILLION SETTLEMENT REACHED BY FORMER NFL FOOTBALL PLAYERS AND THE NFL FOR CONCUSSION-RELATED INJURIES WAS DEEMED REASONABLE BY THE FIRST DEPARTMENT (FIRST DEPT). ​

The First Department, modifying Supreme Court, in a full-fledged opinion by Justice Pitt-Burke, determined the class action settlement in the federal multidistrict litigation (MDL) brought by former football players against the National Football League (NFL) for concussion-related injuries was reasonable. The opinion lays out the lengthy history of this litigation and addresses several insurance-contract-interpretation issues which are too complex to fairly summarize here:

While this Court is not bound by the findings of the federal courts on this issue, their determinations provide guidance as to the question of reasonableness before us. Although the MDL settlement was projected to cost $1 billion over its lifetime, given the claims asserted, the extensive publicity and media coverage of the case, and the defense costs, we cannot say the settlement was objectionably unreasonable. In fact, a main contention of the objectors to the settlement in the federal action was that the settlement amount was too lenient (id. at 440). Thus, taking into account the complexity of the claims, “it cannot be said . . . that there was no possibility that litigating the case to the end would result in a judgment . . . in an amount greater than the settlement” … . Discover Prop. & Cas. Co. v National Football League, 2026 NY Slip Op 05595, First Dept 10-1-26

 

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HERE THE DEFENDANT’S AFFIDAVIT SHOULD NOT HAVE BEEN REJECTED BECAUSE IT WAS MADE BY A PARTY; THE AFFIDAVIT WAS BASED ON FIRSTHAND KNOWLEDGE AND WAS COMPETENT TO RAISE A QUESTION OF FACT (FIRST DEPT).

The First Department, reversing Supreme Court, determined that the affidavit which raised a question of fact should not have been rejected because it was made by a party, here the defendant:

… [Defendant’s] affidavit was competent to raise issues of fact as to the parties’ 2007 loan agreement sufficient to preclude summary judgment on [plaintiff’s] breach of contract claim. As we have recognized, “[t]hat an affidavit is submitted by a party or other interested person does not detract from its sufficiency as competent evidence” … . Such is the case here. Indeed, [defendant’s] affidavit provided firsthand knowledge of the transaction with [plaintiff]. .Tahari v Narkis, 2026 NY Slip Op 05505, First Dept 9-29-26

Practice Point: Here an affidavit by a party (defendant) was based on firsthand knowledge and was deemed competent to raise a question of fact.

 

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HERE THE EVIDENCE SUBMITTED BY AN ATTORNEY AFFIRMATION WAS REJECTED BECAUSE IT DID NOT STATE THAT IT WAS MADE “UNDER THE PENALTIES OF PERJURY UNDER THE LAWS OF NEW YORK, WHICH MAY INCLUDE A FINE OR IMPRISONMENT” (FIRST DEPT).

The First Department, reversing Supreme Court, determined the evidence submitted by attorney affirmation was not in admissible form:

… [P]laintiff failed to proffer evidence in admissible form, as all of its evidence was submitted by way of an attorney affirmation that failed to substantially conform to the language of CPLR 2106, which requires any affirmation to explicitly state that it is made “under the penalties of perjury under the laws of New York, which may include a fine or imprisonment” … . Interasian Digital Tech. Holdings Ltd. v In Jin Moon Park, 2026 NY Slip Op 05478, First Dept 9-29-26

Practice Point: Evidence submitted by attorney affirmation will be rejected if the affirmation does not include the language mandated by CPLR 2106.

 

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DEFENDANT REBUTTED THE PROCESS SERVER’S AFFIDAVIT; A TRAVERSE HEARING IS NECESSARY (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant rebutted the process server’s affidavit and a traverse hearing should have been held:

Defendant’s affidavit was sufficient to rebut plaintiff’s prima facie evidence of service. While defendant did not dispute that the service address listed was her home address, she stated that she was not personally served, that she was not the woman described in the affidavit, and provided a detailed, nonconclusory account of how she was in a different state at the time of service, providing childcare to her granddaughter … . In addition, the discrepancies identified in the descriptions of the woman served, who was white and had brown and blonde hair, and defendant, who is African American, were not “minor” … . US Bank Trust N.A. v Smith, 2026 NY Slip Op 05463, First Dept 9-29-26

Practice Point: Consult this decision for insight into the nature of evidence deemed sufficient to rebut a process server’s affidavit and necessitate a traverse hearing.

 

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