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A 2021 BUYBACK AGEEMENT BETWEEN A NATURAL GAS PRODUCER AND A NATURAL GAS SELLER WHICH WAS ENTERED IN ANTICIPATION OF A WINTER STORM WHICH WOULD REDUCE THE PRODUCER’S ABILITY TO DELIVER THE USUAL AMOUNT OF GAS IS VALID AND ENFORCEABLE AND CANNOT BE CANCELLED BASED UPON THE “FORCE MAJEURE” CLAUSE IN THE ORIGINAL 2019 CONTRACT BETWEEN THE PARTIES (FIRST DEPT).

The First Department, affirming Supreme Court, in a full-fledged opinion by Justice Mendez, determined a buyback agreement between Vaquero, a natural gas producer, and Hartree, a natural gas seller, which was entered in anticipation of an imminent winter storm during which Vaquero would be unable to meet its gas-delivery requirements under the 2019 contract, was valid and enforceable. The buyback contract could not be cancelled by asserting the “force majeure” clause in the original delivery and sales contract entered in 2019:

To the extent that Vaquero argues that its force majeure declaration eliminated its obligations under the buyback, the argument fails. The parties agree that the buyback did not require any physical delivery of gas, and created only a financial obligation. Indeed, Vaquero’s witnesses conceded at their depositions that the February 12, 2021, buyback was a purely financial agreement, with no physical delivery expected from either party. The mere fact that Vaquero had no gas to sell did not relieve it of its financial obligation to Hartree under the February 12, 2021 buyback agreement which did not contain a force majeure provision … . Moreover, the parties are sophisticated entities familiar with the natural gas industry and had a prior history of buyback arrangements. The February 12, 2021, buyback agreement, similar to the parties’ other buyback agreements, created an independent carve out that, because no physical delivery of gas was required, is not affected by the force majeure provisions of the base agreement … . Hartree Partners, LP v Vaquero Permian Processing LLC, 2024 NY Slip Op 01779, First Dept 4-2-24

Practice Point: Here a 2021 contract entered into in anticipation of the natural gas producer’s inability to deliver the required amount of gas during an imminent winter storm could not be cancelled under the “force majeure” clause in the original 2019 contract between the parties. The 2021 buyback agreement was an independent, enforceable contract which did not include a “force majeure” clause.

 

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THE POLICE OFFICER WHO STRUCK PLAINTIFF’S CAR WAS ENGAGED IN AN “EMERGENCY OPERATION” AND DID NOT ACT IN “RECKLESS DISREGARD” OF THE SAFETY OF OTHERS; COMPLAINT DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the city demonstrated the police officer who struck plaintiff’s car was engaged in an “emergency operation” at the time of the accident and did not act in “reckless disregard” for the safety of others:

Defendants demonstrated that defendant police officer was engaged in an “emergency operation” within the meaning of Vehicle and Traffic Law § 1104 by submitting evidence that the officer was responding to a radio call about a man with a gun when his police vehicle struck plaintiff’s car … . Accordingly, defendants demonstrated that the officer’s conduct is to be assessed under the statute’s “reckless disregard” standard (Vehicle and Traffic Law § 1104 [e] …).

Defendants further demonstrated that the officer did not operate the police vehicle in reckless disregard for the safety of others (see Vehicle and Traffic Law § 1104 [e] …). The officer testified that he approached a red light with a vehicle stopped at the intersection, so he had to cross the double yellow lines to avoid it. He also testified that he reduced his speed and looked both ways when approaching the red light at the intersection. The officer attempted to avoid colliding with plaintiff by braking hard and swerving upon realizing that plaintiff’s car had entered the intersection. Seo v City of New York, 2024 NY Slip Op 01785, First Dept 4-2-24

Practice Point: When a police officer engaged in an emergency operation takes steps to avoid colliding with other vehicles the “reckless disregard for the safety of others” standard has not been met.

Similar issues and result in a suit against a private ambulance company in Alonso v Crest Transp. Serv., Inc., 2024 NY Slip Op 01788, Second Dept 4-3-24

 

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HERE DEFENDANT ASHKENAZY’S COUNSEL TOOK POSITIONS WHICH WERE BASED UPON AN INTERPRETATION OF THE EVIDENCE; THE FACT THAT THE JUDGE DISAGREED WITH THE INTERPRETATION DID NOT WARRANT A FINDING COUNSEL ENGAGED IN FRIVOLOUS CONDUCT OR ACTED IN BAD FAITH; THE IMPOSITION OF SANCTIONS WAS REVERSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the attorney’s (defendant Ashkenazy’s counsel’s) actions did not amount to “frivolous conduct” and did not warrant the imposition of sanctions:

Conduct is frivolous if it is “completely without merit in law,” “undertaken primarily to delay or prolong the resolution of the litigation,” or “asserts material factual statements that are false” (22 NYCRR 130-1.1[c]). Here, the record does not support an award of sanctions under any of the prongs. The conduct that Supreme Court found sanctionable does not rise to the level of being frivolous. Supreme Court took issue with counsel’s statement that a document squarely addressing the question of timing did not exist. According to Supreme Court, based on its in camera review of documents, there were communications in which the timing of the payment would have been mentioned if it were in fact due on a date other than the five-year paydown date. Supreme Court disagreed with Ashkenazy’s counsel’s interpretation of the documents, and did so by relying on the absence of a statement in the documents rather than an overt statement contained in the documents. Counsel put forth its interpretation of the documents exchanged during discovery — namely, among other things, Ashkenazy’s personal interpretation of the contract, Ashkenazy’s deposition testimony, and the deposition testimony of Ashkenazy’s drafting counsel — and then made arguments based on its interpretation. Those arguments were not completely devoid of merit. Nor is there any indication in the record that counsel’s interpretation and arguments were made in bad faith ,,, , The fact that the court took a different view of the evidence is not grounds for sanctions…. . Talos Capital Designated Activity Co. v 257 Church Holdings LLC, 2024 NY Slip Op 01786, First Dept 4-2-24

Practice Point: As long as an attorney’s argument is based upon an interpretation of the evidence which is not meritless, the attorney’s argument is not frivolous or made in bad faith such that sanctions are warranted.

 

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DISPUTES ABOUT ENCROACHMENTS ON EASEMENTS RESOLVED; UNCLEAN HANDS AND LACHES DEFENSES REINSTATED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Moulton, modifying Supreme Court, determined the unclean hands and laches defenses should not have been dismissed in this complicated case resolving the removal of encroachments from easements. The case is too complex and entails too much minutia to fairly summarize. 214 Lafayette House LLC v Akasa Holdings LLC, 2024 NY Slip Op 01762, First Dept 3-28-24

 

THERE EXISTS A STATUTORY CAUSE OF ACTION FOR AN EMPLOYER’S FAILURE TO ADOPT AND IMPLEMENT A WHISTLEBLOWER POLICY (FIRST DEPT).

The First Department noted that plaintiff sufficiently alleged a cause of action under N-PCL 715-b (a) based on the employer’s (ZOA’s) alleged failure to adopt and implement whistleblower policies:

… [P]laintiff has sufficiently alleged a cause of action under N-PCL 715-b(a). This statute requires certain nonprofit organizations to adopt and implement whistleblower policies to protect individuals who report suspected improper conduct from retaliatory conduct and defendants failed to refute plaintiff’s allegation that he was an employee rather than an officer of ZOA … . Rosen v Zionist Org. of Am., 2024 NY Slip Op 01770, First Dept 3-28-24

Practice Point: N-PCL 715-b (a) provides a cause of action against an employer for failure to adopt and implement a policy to protect whistleblowers.

 

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IT WAS ALLEGEDLY EVIDENT FROM THE EMPLOYEE’S JOB APPLICATION THAT HE HAD BEEN IN PRISON; THE ALLEGED FAILURE TO INVESTIGATE RAISED QUESTIONS OF FACT IN SUPPORT OF THE NEGLIGENT HIRING AND SUPERVISION CAUSE OF ACTION; THE CORRECTION LAW DOES NOT PROHIBIT CONSIDERATION OF PRIOR CONVICTIONS (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, determined the negligent hiring and supervision cause of action against defendant LLC stemming from an altercation between plaintiff and the LLC’s employee (McIntosh) should not have been dismissed. It was allegedly evident from McIntosh’s employment application that he had been in prison:

… [P]laintiff raised triable issues of fact as to whether the LLC “should have known of the employee’s propensity for the conduct which caused the injury” … . It is well settled that “an employer has a duty to investigate a prospective employee when it knows of facts that would lead a reasonably prudent person to investigate that prospective employee” … . McIntosh’s handwritten job application provided facts that should have led the LLC to investigate, as he indicated that he worked at the address of a state prison, he earned a “stipend” instead of the typical hourly wage, and one of his supervisors was a corrections officer, or “C.O.” Although “the depth of inquiry prior to hiring, irrespective of convictions, may vary in reasonable proportion to the responsibilities of the proposed employment,” the record shows that the LLC made no effort to investigate … . Its owner-witness admitted that no background check was performed. She did not know whether a restaurant manager called McIntosh’s past employers, and she had no knowledge of his criminal background, as would have been revealed by a call to the past employer … . Contrary to the LLC’s contention, the Correction Law does not prohibit consideration of a job applicant’s prior convictions, but instead provides a balancing test to determine whether there was a “direct relationship between” a prior offense and the job or whether the employment “would involve an unreasonable risk . . . to the safety or welfare of . . . the general public” (Correction Law §§ 752[1]- Darbeau v 136 W. 3rd St., LLC, 2024 NY Slip Op 01672, First Dept 3-26-24

Practice Point: Where an applicant’s job application indicates the applicant had been incarcerated, an employer’s failure to investigate may support a negligent hiring and supervision cause of action. The Correction Law does not prohibit an inquiry into prior convictions.

 

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THE DEPARTMENT OF CORRECTIONS AND COMMUNITY SUPERVISION (DOCCS) VIOLATED THE LESS IS MORE ACT (LIMA) BY FAILING TO HOLD A RECOGNIZANCE HEARING WITHIN 24 HOURS, AND FAILING TO HOLD A PRELIMINARY HEARING WITHIN FIVE DAYS OF THE EXECUTION OF THE PAROLE-VIOLATION WARRANT; HABEAS CORPUS PETITION PROPERLY GRANTED (FIRST DEPT).

The First Department, affirming the grant of the habeas corpus petition, in a full-fledged opinion by Justice Gonzalez, determined the Department of Corrections and Community Supervision’s (DOCCS’s) failure to hold a recognizance hearing on petitioner’s alleged violation of parole within 24 hours as required by the Less is More Act (LIMA) (Executive Law 259-i) violated due process:

LIMA’s plain language was abrogated when petitioner’s recognizance hearing was held five days after the execution of the warrant, instead of within the requisite 24 hours. This error was compounded when the preliminary hearing was held seven days after the execution of the warrant, instead of the requisite five days (Executive Law § 259-i[3][c][i][B]). The interpretation that DOCCS advances would bypass LIMA and effectively remove its statutory duty to ensure that recognizance hearings are timely held within 24 hours of the warrant execution … . Matter of People of the State of N.Y. v Annucci, 2024 NY Slip Op 01685, First Dept 3-26-24

Practice Point: The statutory requirement that a recognizance hearing must be held within 24 hours and a preliminary hearing must be held within five days of the execution of a parole-violation warrant is strictly enforced. Failure to comply with the statutory time-limits violates due process and warrant granting a habeas corpus petition.

 

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SM STABBED INFANT PLAINTIFF SHORTLY AFTER BEING TREATED BY DEFENDANT HOSPITAL WHICH ALLEGEDLY NEGLIGENTLY FAILED TO DETAIN OR REPORT SM; ALTHOUGH SM DID NOT WAIVE THE PATIENT-PHYSICIAN PRIVILEGE, PLAINTIFF WAS ENTITLED TO AN IN CAMERA REVIEW OF SM’S MEDICAL RECORDS AND DISCLOSURE OF ANY RELEVANT NONMEDICAL INFORMATION (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the demand for disclosure of SM’s medical records was properly denied because SM had not waived the physician-patient privilege, but the request for an in camera review of the records for nonmedical information should have been granted. SM has been treated by defendant New York City Health + Hospital/Lincoln Medical Center (NYCHH) shortly before SM stabbed infant plaintiff. Plaintiff alleged NYCHH should have reported SM and detained her or taken some other measures to protect infant plaintiff:

Infant plaintiff and her father allege that NYCHH’s employees negligently treated SM when she presented to the hospital on April 26 and April 27, 2016, shortly before she stabbed the infant plaintiff and brother, resulting in the brother’s death. They allege that SM had a history of mental illness for which she had been treated by NYCHH on “scores of previous occasions,” and that NYCHH failed to detain SM, call a report to the Statewide Central Register of Child Abuse and Maltreatment, or “take any other action to protect” the infant plaintiff. SM, who is currently incarcerated, has not waived the physician-patient privilege and is believed to be unable or unwilling to do so.

Supreme Court properly determined that Mental Hygiene Law § 33.13(c)(1) does not apply to allow disclosure of SM’s hospital records in the interests of justice, absent SM’s consent or express or implied waiver of the physician-patient privilege provided by CPLR 4504, 4507 … . … Supreme Court should have granted plaintiffs’ alternative request for in camera review to determine whether the records include information of a nonmedical nature, such as observations of SM’s conduct, language, and appearance and factual matters, which is subject to disclosure … . S.M. v City of New York, 2024 NY Slip Op 01689, First Dept 3-26-24

Practice Point: Although medical records are protected from disclosure by the patient-physician privilege, relevant nonmedical, factual information in the records may be disclosed pursuant to an in camera review.

 

ALTHOUGH THE PLAINTIFF WAS STANDING ON A LADDER WHEN THE DEFECTIVE GRINDER INJURED HIM, THE LADDER DID NOT FAIL AND THE LABOR LAW 240(1) ACTION WAS PROPERLY DISMISSED; HOWEVER THE DEFECTIVE GRINDER PRESENTED A SAFETY ISSUE COVERED BY LABOR LAW 241(6) AND THE OWNER AND GENERAL CONTRACTOR MAY BE LIABLE EVEN IF THEY DID NOT SUPERVISE THE WORKSITE (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, determined the Labor Law 240(1) cause of action was properly dismissed because the ladder did not malfunction, but the Labor Law 241(6) cause of action based upon the defective grinder which kicked back and injured plaintiff should not have been dismissed. The court noted defendants had notice of the defective grinder and the property owner and the general contractor may be liable even if they did not control the worksite:

Defendants established their entitlement to summary judgment on plaintiff’s Labor Law § 240(1) cause of action by submitting evidence that plaintiff’s injury was caused by the grinder and that he did not fall from the ladder. Because plaintiff’s injury did not arise from any elevation-related risk presented by the ladder, Labor Law § 240(1) does not apply … .

However, Supreme Court should have denied defendants’ motion to dismiss plaintiff’s Labor Law § 241(6) claim insofar as it was predicated on a violation of Industrial Code (12 NYCRR) § 23-1.5(c)(3). Despite defendants’ assertion otherwise, the section is a sufficiently specific safety standard to support a Labor Law § 241(6) claim, and the deposition testimony established that plaintiff’s grinder had no guard, thus violating the mandate of the regulation … . Plaintiff also proffered evidence that defendants had notice of a defect in the grinder, as he testified that he complained to his supervisor that the grinder shook and lacked a guard and the owner and general contractor bear the ultimate responsibility for safety practices at building construction sites even where they do not control or supervise the worksite … . Desprez v United Prime Broadway, LLC, 2024 NY Slip Op 01607, First Dept 3-19-24

Practice Point: Although plaintiff was standing on a ladder when he was injured by a defective grinder, because the ladder did not fail the incident was not elevation-related within the meaning of Labor Law 240(1).

Practice Point: Because the defective grinder raised a safety issue about which the defendants had notice, the owner and general contractor may be liable pursuant to Labor Law 241(6) even if they did not supervise the worksite.

 

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IT WAS NOT CLEAR FROM THE RECORD WHETHER THE JUDGE IMPROPERLY DEEMED YOUTHFUL OFFENDER STATUS TO HAVE BEEN WAIVED BY THE PLEA, OR WHETHER THE JUDGE REJECTED YOUTHFUL OFFENDER STATUS AFTER CONSIDERING IT AS REQUIRED; MATTER REMITTED (FIRST DEPT).

The First Department, remanding the matter for consideration of youthful offender status, determined it was not clear from the record whether the judge improperly denied youthful offender status because it has been waived by the plea or whether youthful offender status had been considered and rejected:

Although the court stated at sentencing that it would not grant defendant youthful offender status with regard to Indictment Nos. 3801/16 and 583/17, “there is nothing in the record to indicate that it actually independently considered youthful offender treatment,” as required by CPL 720.20(1) and People v Rudolph (21 NY3d 497 [2013]), “instead of denying such treatment because it was not part of the plea agreement” … . While a court need not set forth its reasons for denying youthful offender treatment … , it is still required to “clarify expressly whether it had ‘actually consider[ed] youthful offender treatment’ or whether it had improperly ‘ruled it out on the ground that it had been waived as part of defendant’s negotiated plea'” … . Because the court did not satisfy this obligation, we remand the matter for a determination of whether defendant should be afforded youthful offender treatment as to the promoting prison contraband and attempted criminal sale of a controlled substance convictions. People v J.G., 2024 NY Slip Op 01520, First Dept 3-19-24

Practice Point: In rejecting youthful offender status, the judge need not give the reasons but the record must reflect the judge considered the issue and did not improperly consider it waived by the plea.

 

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