You are here: / Second Department

Posts

,

IN THIS FORECLOSURE ACTION, A PARTY WHO DID NOT SIGN THE NOTE BUT DID SIGN THE MORTGAGE IS A “BORROWER” ENTITLED TO RPAPL 1304 NOTICE; PLAINTIFF BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that a borrower, Ellen Weininger, who signed the mortgage but not the note, was entitled to notice of foreclosure pursuant to RPAPL 1304:

… [I]t is undisputed that the plaintiff failed to serve Ellen Weininger with timely notice pursuant to RPAPL 1304, and, contrary to the plaintiff’s contention, Ellen Weininger was entitled to such notice as a “borrower” within the meaning of that statute. Although Ellen Weininger did not sign the underlying note, both of the defendants executed the mortgage as a “borrower.” Where, as here, a homeowner defendant is referred to as a “borrower” in the mortgage instrument and, in that capacity, agrees to pay amounts due under the note, that defendant is a “borrower” for the purposes of RPAPL 1304, notwithstanding the absence of a consolidation, extension, and modification agreement signed by that defendant or any ambiguity created by a provision in the mortgage instrument to the effect that parties who did not sign the underlying note are not personally obligated to pay the sums secured … . Since Ellen Weininger signed the mortgage as a “borrower” and, in that capacity, agreed to pay the amounts due under the note, she was entitled to timely notice pursuant to RPAPL 1304 …  As the plaintiff conceded that it did not send the requisite notice pursuant to RPAPL 1304 to Ellen Weininger until 17 days before commencement of this action, it failed to meet its prima facie burden of establishing compliance with RPAPL 1304, and those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendants, to strike their answer, and for an order of reference should have been denied. Deutsche Bank Natl. Trust Co. v Weininger, 2022 NY Slip Op 04008, Second Dept 6-22-22

Practice Point: In this foreclosure proceeding, a party who did not sign the note but did sign the mortgage is a “borrower” entitled to the notice required by RPAPL 1304.

 

/0 Comments/by
, , ,

FAMILY COURT HELD A HEARING IN THE MODIFICATION OF CUSTODY PROCEEDING BUT DID NOT STATE IN ITS DECISION THE FACTS RELIED UPON TO DENY THE PETITION; THE APPELLATE DIVISION REVIEWED THE EVIDENCE, REVERSED FAMILY COURT, AND GRANTED MOTHER’S PETITION (SECOND DEPT).

The Second Department, reversing Family Court, determined mother’s petition to modify custody should have been granted. Family Court held a hearing but did not, in its decision, state the facts relied upon to deny the petition. Because the record was sufficient, the Second Department exercised its authority to review the evidence and make its own determination:

… [T]o facilitate effective appellate review, the hearing court “must state in its decision ‘the facts it deems essential’ to its determination” … .

… [W]hile the Family Court stated in its decision that the allegations in the mother’s petition “largely stem from the difficulties that the parties have in co-parenting which predate her petition,” and that “both parties contribute to continuing the conflict between one another,” the court did not identify the facts adduced at the hearing that supported its denial of the mother’s petition. … . …

The evidence at the hearing showed that, on numerous occasions after the issuance of the 2018 custody order, the father, in the child’s presence, denigrated the mother and behaved inappropriately toward her … . The father consistently failed to make the child available for telephone and video calls with the mother as required by the original custody order, routinely ignored the mother’s attempted communications with the child, and repeatedly failed to adhere to the court-ordered parental access schedule … . The hearing testimony established that the father not only refused to foster a good relationship between the mother and the child—he expressly testified that he did not believe he had an obligation to do so—but actively sought to thwart such a relationship. “Parental alienation of a child from the other parent is an act so inconsistent with the best interests of the child[ ] as to, per se, raise a strong probability that the offending party is unfit to act as custodial parent” …

… [T]he father demonstrated a lack of interest in the child’s education and development by, among other things, refusing to have the child evaluated for learning disabilities or treated for his speech impediment … . … [T]he father failed to respond to the mother’s inquiries about the child’s health, education, and safety. Matter of Smith v Francis, 2022 NY Slip Op 04026, Second Dept 6-22-22

Practice Point: After a hearing on a petition to modify custody, Family Court, in its decision, must, but did not, state the facts relied upon in making its ruling denying the petition. The appellate division exercised its authority to review the evidence and make its own determination (reversing Family Court and granting mother’s petition for residential custody).

 

/0 Comments/by
, , ,

IN THIS VEHICLE ACCIDENT CASE, PLAINTIFF ENTERED AN ARBITRATION AGREEMENT WHICH INDICATED THE AWARD WOULD BE BETWEEN $0 AND $50,000, BUT THE POLICY LIMITS WERE $100,000/300,000; THE UNILATERAL MISTAKE BY PLAINTIFF’S ATTORNEY RE: THE POLICY LIMITS WAS NOT INDUCED BY DEFENDANT OR DEFENDANT’S CARRIER, THEREFORE RESCISSION OF THE AGREEMENT WAS NOT AN AVAILABLE REMEDY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s motion to compel arbitration in this vehicle-accident case should have been granted. Plaintiff wanted the agreement to arbitrate rescinded because it did not reflect the actual policy limits. But the unilateral mistake by plaintiff’s attorney was not induced by the defendant because defendant’s insurance carrier had twice notified plaintiff’s attorney of the policy limits. The agreement to arbitrate set the award at between $0 and $50,000, but the policy limits were $100,000/300,000:

“Generally, a party’s unilateral mistake is a ground for rescission of a contract only where it was induced by fraud or other wrongful conduct by the other party” … . Moreover, “the equitable remedy of rescission is not available to relieve an allegedly mistaken party of the consequences of their failure to exercise ordinary care” … .

Contrary to the plaintiff’s contention, he failed to establish that the arbitration agreement was subject to the equitable remedy of rescission on the ground of unilateral mistake by his attorney regarding the policy limits … . The purported mistake in the high-low agreement at issue arose not from any fraudulent inducement by the defendant, but from the failure of the plaintiff’s attorney to exercise ordinary care under the circumstances … . Maynard v Smith, 2022 NY Slip Op 04017, Second Dept 6-22-22

Practice Point: A unilateral mistake by one party which was not induced by the other party is not a ground for rescission of a contract.

 

/0 Comments/by
, ,

THERE ARE SUBSTANTIVE QUESTIONS OF FACT ABOUT THE NATURE OF THE AGREEMENTS BETWEEN PLAINTIFF EMPLOYER AND DEFENDANT EMPLOYEE RE: THE SALE OF DEFENDANT’S TAX PREPARATION BUSINESS TO PLAINTIFF AND WHETHER DEFENDANT SOLD HER CLIENT LIST TO PLAINTIFF; PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION ENFORCING THE RESTRICTIVE COVENANT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff-employer’s motion for a preliminary injunction in this violation-of-a-restrictive-covenant case should not have been granted. There were too many issues of fact about the nature of the parties’ agreement re: plaintiff’s purchase of defendant’s tax preparation business, including whether defendant turned over her client list to the plaintiff:

… [T]he plaintiff commenced this action against the defendant, its former employee, to recover damages for breach of contract. The plaintiff alleged … the parties entered into three agreements: a purchase agreement whereby the plaintiff purchased the defendant’s tax preparation business, including her client list; an agreement whereby the plaintiff employed the defendant as a tax preparer; and a confidentiality, nonsolicit, and noncompete agreement which, inter alia, contained restrictive covenants that, among other things, prohibited the defendant from soliciting the plaintiff’s clients. …

… [T]he plaintiff failed to demonstrate a clear right to relief and, thus, did not demonstrate a likelihood of success on the merits. “‘[A] restrictive covenant will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee'” … . An employer’s interests justifying a restrictive covenant are limited “to the protection against misappropriation of the employer’s trade secrets or of confidential customer lists, or protection from competition by a former employee whose services are unique or extraordinary” … . Here, there are issues of fact as to what the parties agreed to, including whether the plaintiff purchased the rights to the defendant’s clients pursuant to the parties’ agreements and whether the plaintiff breached its own obligations pursuant to those agreements. Since these issues of fact exist, the plaintiff did not show a likelihood of success on the merits and, thus, failed to establish a clear right to preliminary injunctive relief … . R&G Brenner Income Tax Consultants v Fonts, 2022 NY Slip Op 04039, Second Dept 6-22-22

Practice Point: Where there are substantive questions of fact, a preliminary injunction should not be granted because a likelihood of success on the merits has not been demonstrated.

 

/0 Comments/by
, , , ,

IN ACCORDANCE WITH THE NURSING HOME REFORM ACT (NHRA), THE ADMISSION AGREEMENT SIGNED BY THE NURSING-HOME RESIDENT’S GRANDDAUGHTER DID NOT IMPOSE PERSONAL LIABILITY UPON THE GRANDDAUGHTER FOR PAYMENT OF THE COSTS OF THE RESIDENT’S CARE; THE GRANDDAUGHTER’S MOTION TO VACATE THE DEFAULT JUDGMENT SHOULD HAVE BEEN GRANTED AND THE BREACH-OF-CONTRACT COMPLAINT SHOULD HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the admission agreement signed by the nursing-home resident’s granddaughter (who was appointed guardian of her grandfather’s property) did not impose personal liability upon the granddaughter for payment of the cost of her resident’s care (provided by the plaintiff facility). Therefore, plaintiff should not have seized the granddaughter’s personal funds. The default judgment in favor of plaintiff should have been vacated, and the breach-of-contract complaint should have been dismissed:

… [t]he admission agreement in this case is subject to the Nursing Home Reform Act (hereinafter the NHRA). As relevant here, the NHRA provides that “[w]ith respect to admissions practices, a nursing facility must . . . not require a third party guarantee of payment to the facility as a condition of admission (or expedited admission) to, or continued stay in, the facility” … . However, that prohibition “shall not be construed as preventing a facility from requiring an individual, who has legal access to a resident’s income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident’s income or resources for such care” … .

The admissions agreement set forth the relevant contractual obligations of the granddaughter, and the admissions agreement demonstrates as a matter of law that it did not render the granddaughter a “third party guarantee of payment” … .”The admission[s] agreement merely required the [granddaughter] to facilitate payment from the . . . resident’s available income and resources, and only to the extent that the [granddaughter] had access to such income and resources and only if [the granddaughter] could do so without incurring any personal financial liability” … . …

.. [T]he plaintiff failed to adequately allege a breach of the granddaughter’s contractual obligation to facilitate payment to the plaintiff from the resident’s “income or resources” … . Nassau Operating Co., LLC v DeSimone, 2022 NY Slip Op 04029, Second Dept 6-22-22

Practice Point: The Nursing Home Reform Act (NHRA) prohibits holding a third-party who signs an admission agreement personally liable for the costs of a resident’s care. The agreement may only obligate the third party to pay the costs from the resident’s assets (over which the third party exercises control).

 

/0 Comments/by
, ,

IN ORDER TO DIRECT A DEFENDANT TO INSTALL AN IGNITION INTERLOCK DEVICE, THE DEFENDANT MUST BE SENTENCED TO A PERIOD OF PROBATION OR A CONDITIONAL DISCHARGE (SECOND DEPT).

The Second Department, reversing County Court, determined defendant could not be directed to install an ignition interlock device in the absence of a sentence to probation or a conditional discharge. Matter remitted for resentencing:

Vehicle and Traffic Law § 1193(1)(b)(ii) provides that the court shall “sentence such person convicted of . . . a violation of [Vehicle and Traffic Law § 1192(2), (2-a), or (3)] to a term of probation or conditional discharge, as a condition of which it shall order such person to install and maintain, in accordance with the provisions of [Vehicle and Traffic Law § 1198], an ignition interlock device in any motor vehicle owned or operated by such person.”

In directing the defendant to install and maintain a functioning ignition interlock device, the County Court failed to also impose a sentence of probation or conditional discharge and therefore failed to comply with the requirements of the statute … . People v Dancy, 2022 NY Slip Op 03904, Second Dept 6-15-22

Practice Point: The Vehicle and Traffic Law requires that the direction to install an ignition interlock device be part of a sentence to a period of probation or a conditional discharge.

 

/0 Comments/by
, ,

MOTHER FAILED TO APPEAR IN THE PROCEEDING TO DETERMINE FATHER’S PETITION FOR MODIFICATION OF CUSTODY; THE PETITION WAS GRANTED; BUT NO EVIDENCE WAS PRESENTED ON WHETHER MODIFICATION WAS IN THE BEST INTERESTS OF THE CHILDREN; MOTHER’S MOTION TO VACATE THE ORDER GRANTING FATHER’S PETITION SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Family Court, determined the judge should not have granted father’s petition for a modification of custody upon mother’s failure to appear. No evidence was taken on whether modification was in the best interests of the children. Mother’s motion to vacate the order should have been granted:

“A custody determination, whether made upon the default of a party or not, must always have a sound and substantial basis in the record” … .

… Family Court … granted the father’s oral application and modified the order of custody and visitation … , so as to grant the father relief which far exceeded that requested in his petition, without first receiving any testimony or other admissible evidence in the matter upon which it could determine whether modification was required to protect the best interests of the children. Under these circumstances, and in light of the policy favoring resolutions on the merits in child custody proceedings, the court improvidently exercised its discretion in denying the mother’s motion to vacate the final order of custody and visitation … . Matter of Hogan v Smith, 2022 NY Slip Op 03894, Second Dept 6-15-22

Practice Point: Even when mother fails to appear in the proceeding to determine father’s petition for modification of custody, the petition should not be granted in the absence of evidence modification in in the best interests of the children.

 

/0 Comments/by
, ,

PLAINTIFFS ALLEGED THEY WERE OVERWHELMED BY THE DOCUMENTS THEY SIGNED AND DID NOT REALIZE THE DOCUMENTS TRANSFERRED THEIR PROPERTY TO DEFENDANT; THOSE ALLEGATIONS DID NOT SUPPORT SUMMARY JUDGMENT IN PLAINTIFFS’ FAVOR ON THEIR FRAUDULENT INDUCEMENT, UNJUST ENRICHMENT AND QUIET TITLE CAUSES OF ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiffs’ motion for summary judgment on their actions for fraudulent inducement, unjust enrichment and to quiet title should not have been granted. Plaintiffs alleged the were overwhelmed by the number of documents to sign and did not realize they documents transferred the property to the defendant:

… [T]he plaintiffs … each averred that the defendant misled them into believing that they were signing documents to arrange a short sale of the property when, in fact, they executed documents that transferred the property to the defendant. One of the documents … was the deed to the property that the plaintiffs signed. The plaintiffs do not aver in their affidavits or in the complaint that they failed to read the documents they signed or that they were illiterate, blind, or did not read English, nor do they allege that they expressed any difficulty in understanding what they were signing … . Instead, the plaintiffs contend that they were “overwhelmed by the paperwork” but do not allege any facts that would suggest that they were prevented from reading the documents prior to signing them or that they were forced to sign … . Holder v Folsom PL Realty, Inc., 2022 NY Slip Op 03890, Second Dept 6-15-22

Practice Point: Here the plaintiffs alleged they signed documents without realizing what they were agreeing to. Those allegations did not support summary judgment on their fraudulent inducement, unjust enrichment and quiet title causes of action. The plaintiffs did not allege they were prevented from reading the documents, or they could not understand the documents.

 

/0 Comments/by
,

PLAINTIFF OFFERED NO EXPLANATION FOR THE SEVEN-YEAR DELAY BETWEEN THE ORDER OF REFERENCE AND THE MOTION FOR A JUDGMENT OF FORECLOSURE AND SALE; THE ACCRUAL OF INTEREST DURING THE DELAY SHOULD HAVE BEEN TOLLED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the defendant was prejudiced by the unexplained seven-year delay between the order of reference in 2009 and the motion for a judgment of foreclosure and sale in 2016, Therefore the accrual of interest during the delay should have been tolled:

… [A]pproximately seven years elapsed between the entry of the order of reference and the time the plaintiff moved for a judgment of foreclosure and sale. … [Plaintiff] failed to offer any explanation for this delay or establish that the defendant caused this delay, as the record demonstrates that the defendant’s motions and the stays due to the defendant’s bankruptcy petitions did not occur during the period for which the defendant sought to toll the accrual of interest. Since the defendant was prejudiced by the plaintiff’s unexplained delay of approximately seven years, during which time interest had been accruing, the interest on the loan should have been tolled from October 9, 2009, … until September 21, 2016 … . GMAC Mtge., LLC v Yun, 2022 NY Slip Op 03887, Second Dept 6-15-22

Practice Point: Here the plaintiff could not explain the seven-year delay between the order of reference and the motion for a judgment of foreclosure and sale. Interest should not have accrued during the delay.

 

/0 Comments/by
, , ,

THE PLAINTIFF SHOULD NOT HAVE DESTROYED THE UNDERGROUND OIL TANKS WHICH WERE ALLEGED TO HAVE LEAKED, CONTAMINATING PLAINTIFF’S PROPERTY; HOWEVER THE DEFENDANT OIL COMPANIES DID NOT DEMONSRTATE THE DESTRUCTION OF THE TANKS MADE IT IMPOSSIBLE TO PROVE A DEFENSE; THEREFORE AN ADVERSE INFERENCE JURY INSTRUCTION, NOT THE STRIKING OF THE COMPLAINT, WAS THE APPROPRIATE SANCTION (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that the plaintiff should have preserved the underground oil tanks which allegedly leaked and contaminated plaintiff’s property, but that striking the complaint was not warranted under the doctrine of spoliation. Because the defendants did not demonstrate the destruction of the tanks made it impossible to mount a defense, an adverse inference instruction was the appropriate sanction:

The plaintiff commenced this action, inter alia, to recover damages for a violation of Navigation Law § 181, alleging that the defendants Chevron U.S.A., Inc., Getty Oil Company, Getty Refining and Marketing Company, and Getty Oil Company (Eastern Operations), Inc. (hereinafter collectively the defendants), discharged petroleum from underground storage tanks on the plaintiff’s property. * * *

… [T]he defendants demonstrated that the plaintiff had an obligation to preserve the tanks at the time they were disposed of, which was before the defendants had an opportunity to inspect the tanks, that the tanks were destroyed with a culpable state of mind, and that the tanks were relevant to the litigation … . However, the defendants failed to establish that their ability to prove a defense was fatally compromised by the destruction of the tanks, or that the destruction of the tanks was willful and contumacious … . Dagro Assoc. II, LLC v Chevron U.S.A., Inc., 2022 NY Slip Op 03884, Second Dept 6-15-22

Practice Point: Where spoliation of evidence does not take away the defendants’ ability to prove a defense, and where spoliation was not done willfully and contumaciously, striking the complaint is not warranted. The appropriate sanction is an adverse inference jury instruction.

 

/0 Comments/by

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

Copyright © 2022 New York Appellate Digest, LLC
Site by CurlyHost | Privacy Policy