Defamation | Americans with Disabilities | Emotional Support Animal

Defamation Action Based on 2003 Posting Still Available on the Internet Is Time-Barred

Defamation Action Based on 2003 Posting Still Available on the Internet Is Time-Barred

In Huang v. Minghui.org, et al., the plaintiff, Huang, sought in excess of $1.4 billion in damages alleging, among other things, defamation and invasion of privacy violations under New York law, based on the publishing of two articles appearing on Minghui.org in 2003, and zhengjian.org in 2016.  The website Minghui.org reports Falun Gong-related news. As described in a 2018 article of The Economist, Falon Gong is a set of meditation exercises and texts that preach the virtues of truth, benevolence and forbearance, which was banned by China in 1999 as an “evil cult.”

The 2003 article was published 14 years before Huang filed his initial complaint on July 21, 2017, and lists Huang’s personal information including his name, the name on the passport, birth date, the passport number, his refugee ID, and his home address, and it provides a photo of Huang.

According to the decision, the article states:

In May 2003, Huang Renxiong came to Thailand from Mainland China and presented himself as a Dafa practitioner in order to deceive local practitioners.  In both Thailand and China, some practitioners who didn’t deeply understand the Fa were deceived.  His behavior has severely disturbed practitioners’ cultivation practice.  We hope those practitioners who were deluded by him will become clear minded as soon as possible, treat the Fa as teacher, eliminate attachments to fame, personal interest and sentimentality, and become righteous practitioners once again.

The second article, appearing in zhengjian.org in 2016 did not identify plaintiff by name or photograph, whatsoever.  Rather, the author claimed that based on her reading of the 2003 article, she “realized” that the husband of her good friend “is the special agent from the Chinese Communist Party.”  Huang obviously believed that this article referred to him.

Addressing the defendant’s motion to dismiss the claim based on the 2003 posting, the Court first explained the law of defamation in New York as “the injury to one’s reputation either by written expression, which is libel, or by oral expression, which is slander.  To state a claim for defamation under New York law, a plaintiff must allege ‘(1) a false statement of fact, (2) about the plaintiff, (3) published to a third party without authorization or privilege, (4) through fault amounting to at least negligence, and (5) causing defamation per se or a special harm.’”

The Court further explained that a plaintiff “must identify ‘(1) the allegedly defamatory statements; (2) the person who made the statements; (3) the time when the statements were made; and (4) the third parties to whom the statements were published.’”

A defamatory statement “exposes an individual ‘to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation, or disgrace, or…induces an evil opinion of one in the minds of right-thinking persons, and…deprives one of…confidence and friendly intercourse in society.’” On a motion to dismiss a defamation claim, the court must decide whether the alleged statements are ‘reasonably susceptible’ to defamatory meaning.”

However, with respect to this 14 year old posting, the Court didn’t have to address these standards because it ruled the action time barred.

“The 2003 posting is time barred because in New York, defamation actions must be commenced within one year from the date the alleged defamatory statement is made. The 2003 article is time barred even if it remains accessible on the internet because under the ‘single publication rule,’ a libel claim accrues on the ‘earliest date’ it ‘became generally available to the public.’”

As to the 2016 article, the Court held that because it “neither names him nor makes him identifiable. Huang does not allege sufficient factual evidence that demonstrates that the 2016 article was published concerning him or that those who knew him would recognize it as concerning him. Because Huang failed to satisfy this burden, his defamation claim regarding the 2016 posting must be dismissed.”

ADA Reasonable Accommodation Suit Dismissed; Height Not Shown to Limit Major Life Activity

ADA Reasonable Accommodation Suit Dismissed; Height Not Shown to Limit Major Life Activity

In Morey v. Windsong Radiology Grp. P.C., Morey, four feet five inches tall, brought a federal action alleging violations of the Americans with Disabilities Act over her former employer’s failure to reasonably accommodate her alleged height disability.  She alleged that four feet five inches is “well outside of the normal range of height for adults” in the United States and in the area of New York where she worked.  She further alleged that her “height is a physiological, musculoskeletal condition which substantially limits one or more of her major life activities.”

It was alleged that in 2014 she began working on fluoroscope exams, using a step-stool affixed to a platform, provided by her employer Windsong Radiology Group PC (WRG).  Her inability to see the machine’s controls only became an issue when she began working on hysterosalpingogram exams.  In response to her 2015 accommodation request, WRG told Morey to leave those exams to others.  Shortly thereafter she claimed she was subjected to abuse and bullying by WRG technicians.  Her April 2015 termination notice accused her of refusing to perform hysterosalpingogram exams.

WRG moved to dismiss the complaint for failure to state a claim.  In addressing the motion the Court recognized that to survive a motion to dismiss, a complaint must contain “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face,” but that “labels, conclusions, or ‘a formulaic recitation of the elements of a cause of action will not do.’” It said that “facial plausibility exists when the facts alleged allow for a reasonable inference that the defendant is liable for the misconduct charged,” but that the “plausibility standard” is not “a probability requirement: the pleading must show, not merely allege, that the pleader is entitled to relief.  Well-pleaded allegations in the complaint must nudge the claim ‘across the line from conceivable to plausible.’”

As for stating a claim under the ADA, the Court explained the ADA provides that “[n]o covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of his employment” and that discrimination in violation of the ADA includes “not making reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability.”  To be a qualified individual under the ADA a plaintiff must be “an individual who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.”  The Court concluded that to “plead a prima facie claim of discrimination based on a disability, a Plaintiff must plausibly allege the following elements: (1) plaintiff is a person with a disability under the meaning of the ADA; (2) an employer covered by the statute had notice of his disability; (3) with reasonable accommodation, plaintiff could perform the essential functions of the job at issue; and (4) the employer has refused to make such accommodations.”

The ADA defines a “disability” as: (a) a physical or mental impairment that substantially limits one or more major life activities of such individual; (b) a record of such an impairment; or (c) being regarded as having such an impairment.  The Court said that in determining whether a plaintiff has a disability that is protected by the ADA, courts “consider: (1) ‘whether the plaintiff suffered from a physical or mental impairment,’ (2) whether the life activity upon which the plaintiff relied constitutes a major life activity under the ADA,’ and (3) whether ‘the plaintiff’s impairment substantially limited the major life activity identified.’”

The Court dismissed the complaint finding that she did not allege facts from which it could be inferred she had a physical or mental impairment substantially limiting a major life activity, or that WRG saw her as having such an impairment.  Even assuming Morey requested a reasonable accommodation, her complaint did not plausibly allege she suffered any adverse action because of that request.

In applying the ADA standards, the Court recognized that the “extent to which Morey alleges an actual disability in her Complaint is as follows: her “height” is “well outside of the normal range for adults”; is of a physiological, musculoskeletal condition which substantially limits one or more of her major life activities”; and that she “suffers from a disability within the meaning of the ADA” which “substantially limits [her] major life activities.  Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” “to state a claim to relief that is plausible on its face.”

The Court concluded that “nowhere in her Complaint does Morey identify which ‘major life activity’ is limited by her alleged disability.  To the extent Morey means to allege that her height limits her ability to work, that allegation also fails as a matter of law.  In determining whether a person is substantially limited in the major life activity of working, a plaintiff must show that she is “substantially limited in her ability to perform either a class of jobs or a broad range of jobs in various classes as compared to the average person having comparable training, skills and abilities.  Morey’s Complaint does not allege that she cannot “perform either a class of jobs or a broad range of jobs in various classes; rather, she alleges only that she could not ‘see or reach the controls or maneuver the equipment safely’ when ‘operating a fluoroscope’ when performing one particular type of exam, at one particular location of her employer — hysterosalpingogram exams, for women with fertility issues, at WRG’s Williamsville location.  “The Court said that this “single allegation” does not support “a plausible inference of a substantial work limitation, as it affects at most one function of one particular job.”

Tenant Failed To Establish His Dog As An Emotional Support Animal

Tenant Failed To Establish His Dog As An Emotional Support Animal

In Westchester Plaza Holdings v. Sherwood, the petitioner-landlord Westchester Plaza Holdings, LLC commenced a holdover summary proceeding seeking to evict the respondent-tenant, Gertrude Sherwood and her occupant son, Sheldon Sherwood on the ground that they had failed to cure their violation of the no-pet clause in the parties’ lease.  Specifically, Westchester Plaza claimed that the tenants had violated their lease by harboring a dog without landlord’s permission, and sought a final judgment of possession of the subject apartment, and a money judgment in the amount of $3,467.00 for use and occupancy through August 2019.  Gertrude did not appear in the proceeding but Sheldon did and argued that dog complained of is an emotional support animal entitling him to keep the pet in the subject premises.

Generally under federal laws, “service animals” are dogs (or miniature horses) specifically trained to perform a task or service related to a person’s disability, while an assistance animal is an animal that works, provides assistance, or performs task for the benefit of a person with a disability or provides emotional support that alleviates one or more identified symptoms or effects of a person’s disability.  New York State has also adopted laws pertaining to such animals.

Here, the Court found that there was “no dispute that respondents’ lease prohibits keeping a dog in their apartment.”  Notwithstanding the no-pet clause, Sheldon admitted that he brought the dog to reside in the apartment without the written permission of Westchester Plaza.  According to the decision, he testified that he suffers from kidney problems and depression and based on his condition he should be allowed to keep the dog for his emotional support.  In support of his position, “he testified that he was advised by his therapist from the Westchester County Jewish Services . . . that he obtain a dog for emotional support.  Occupant further testified that after obtaining the Staffordshire Bull Terrier in February of 2019, he then applied to the U.S. Service Animal Registry, and received a Service Animal Registration certificate and photo ID for his dog as an Emotional Support Animal.”

In addressing Sheldon’s defense, the Court explained that the New York State “Human Rights Law provides that it is an unlawful discriminatory practice to ‘refuse to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford said person with a disability equal opportunity to use and enjoy a dwelling.’  To establish a violation of the Human Rights Law for failure to provide a reasonable accommodation, the complainant must establish a disability, the accommodation may be necessary in order for the complainant to use and enjoy his or her apartment, and the building owner refuses to make such an accommodation.”

The Court further explained that to “establish that a violation of the Human Rights Law occurred and that a reasonable accommodation should have been made,” Sheldon had to “demonstrate that he is disabled and that because of his disability it is necessary for him to keep the dog in order for him to use and enjoy the apartment, and that reasonable accommodations could be made to allow him to keep the dog.  A reasonable accommodation may be required by the State’s Human Rights Law if respondent can establish a need.  The burden is on the party requesting the reasonable accommodation.”

After a non-jury trial the Court found that Sheldon “failed to submit evidence that the dog helped him with his symptoms of depression and kidney disease.  Additionally, he failed to present any medical or psychological evidence to demonstrate that the dog was actually necessary in order for him to enjoy the apartment.”  Sheldon “did not call any professional witness from Westchester County Jewish Services, or anywhere else, to testify on his behalf.”  The Court further found that there was “documentary evidence” that Sheldon registered his dog as an emotional support animal with an internet company, USAServiceDogRegistration, and that “the registration of a dog with this entity can be completed by anyone after paying a fee and there is no case law or statute requiring this Court to accept this entity’s determination that a dog is deemed to be an emotional support animal.”

As such, the Court found that Sheldon failed to carry the burden of establishing through either medical or psychological expert testimony that the dog is an emotional support animal necessary for him to enjoy the use of his apartment, and that during the pendency of the proceeding the tenants remained in possession of the premises and petitioner was, therefore, entitled to a money judgment in the amount of the outstanding rents and use and occupancy.  However, because the proceeding was based upon a claim that the tenants had breached a provision of the lease, based on a new law enacted in New York, the Court granted a 30-day stay of issuance of the warrant, during which time the tenants may correct the breach, pay the outstanding arrears and get to stay in the apartment under the lease terms.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Child Victims Act | Child Sexual Abuse | CVA

New York Child Victims Act Revives Ability of Past Victims of Child Sexual Abuse To Sue Individual Perpetrators and Associated Institutions, But Their Time To File Such Claims Expires on August 14, 2020.

As we wrote in our March 11, 2019 Newsletter, the New York State Legislature has recently enacted the Child Victims Act, which was signed into law by Governor Cuomo on February 14, 2019. Under this law, among other things, all victims of child sexual abuse whose ability to sue was previously barred by prior-applicable statutes of limitation, have been granted a one-year reprieve to file a lawsuit against the perpetrator and any associated institution (e.g., church, temple, public school, parochial school, private school, workplace, day camp, etc.). The one-year time period runs from August 14, 2019 and expires on August 14, 2020.

Another feature of this new law is that it revives damage claims that had previously been dismissed by a court on the basis of the prior statute of limitations. In other words, if a victim had previously sued for relief, but the claims were dismissed as having been brought too late, the Child Victims Act revives those previously dismissed claims, and allows such person to sue again. In addition, the new law gives a trial priority to lawsuits alleging child sexual abuse over other types of litigations. Finally, the new law gives victims until their 28th birthday to seek felony criminal charges, and until their 25th birthday to seek misdemeanor criminal charges.

The Child Victims Act recognizes that victims of the heinous crime and trauma of child sexual abuse typically require many more years than previously allotted by governing law to come forward and seek justice against those responsible for their suffering. If you or a friend or loved one were a victim of child sexual abuse (i.e. abuse that occurred in New York prior to the victim reaching the age of 18), it is important to exercise all rights and options under the new law promptly, as the window of time for prior victims to do so will expire on August 14, 2020. Such claims may not only be brought against the perpetrator, but may also be brought against any party or institution whose intentional or negligent acts or omissions are alleged to have resulted in the commission of the abuse, including private, public and religious institutions.

Combined with compassion, keen legal knowledge and many decades of litigation experience, the attorneys at Hamburger, Maxson have successfully represented numerous victims of child sexual abuse in processing their claims against the Diocese of Rockville Centre and the Diocese of Brooklyn in connection with an Independent Reconciliation and Compensation Program previously established for survivors of child sexual abuse by Diocese clergy. We have the right team necessary to enable our clients to understand their rights, to assist them in telling their stories (often for the first time), all while vigorously prosecuting claims on their behalf. It is our ultimate goal in these delicate matters, above all, to hopefully assist our clients in not only achieving monetary recovery, but in getting on the path to emotional healing.

Individuals who wish to consider filing a claim for monetary relief are well advised to consult with a knowledgeable attorney.  Any individual victim who would like to discuss the Child Victims Act further and consider retaining our law firm to assist and represent them should promptly schedule a free consultation with David N. Yaffe, Esq. at our office.  Please call us at 631.694.2400 to schedule.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Employment Discrimination | Sexual Harassment | Breach of Contract

Principal’s Negative Evaluation Did Not Constitute and Adverse Employment Action

Principal’s Negative Evaluation Did Not Constitute and Adverse Employment Action

In Atkins v. Rochester City School District, Defendant-Appellee, an African-American school principal filed a complaint alleging race and age discrimination by a school district in the calculation of his evaluation rating. The United States District Court for the Western District of New York granted the school district summary judgment, and the Principal appealed to the Second Circuit Court of Appeals. The Court of Appeals affirmed that the Principal’s negative employment evaluation did not constitute an “adverse employment action” within the meaning of Title VII of the Civil Rights Act (“Title VII”) and the Age Discrimination in Employment Act (“ADEA”).

According to the Court it was undisputed that the plaintiff, an African-American woman in her mid-sixties, was assigned to be Principal of the Freddie Thomas High School (“Freddie Thomas”) for the 2012-13 school year. Freddie Thomas was one of ten schools in the District that had been targeted for phase-out and closure. During the 2012-13 school year, the District implemented a new evaluation process for principals: the Annual Professional Performance Review (“APPR”). Principals received a total score based on several categories, and that numerical score corresponded to one of four ratings: highly effective, effective, developing, and ineffective. In September 2013, the plaintiff received a rating of “developing” for the prior school year of 2012-13. She appealed the rating, but her appeal was denied by a unanimous appeals panel.

Although the plaintiff never saw the data used in calculating her APPR score, she contended that the District treated her differently from other employees by “deliberately” submitting to the State “inaccurate” data, which was then used in calculating her score.

The Court recognized that under Title VII and ADEA, “a plaintiff alleging employment discrimination on the basis of race and age bears the burden to establish a prima facie case of discrimination at the summary judgment stage. To establish a prima facie case of discrimination, a plaintiff must show that ‘(1) she is a member of a protected class; (2) she is qualified for her position; (3) she suffered an adverse employment action; and (4) the circumstances give rise to an inference of discrimination.’ The burden of demonstrating these elements is ‘de minimis’ at the summary judgment stage, but ‘a jury cannot infer discrimination from thin air.’”

In determining if the plaintiff established a prima facie case of discrimination, the Court also recognized that an “adverse employment action is a ‘materially adverse change in the terms and conditions of employment.’ The action must be ‘more disruptive than a mere inconvenience or an alteration of job responsibilities.’ Examples of adverse actions include ‘termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, and significantly diminished material responsibilities.’”

The plaintiff conceded that a negative employment evaluation, standing alone, does not constitute an adverse employment action, but argued that her low APPR rating resulted in her being assigned to schools that were failing and closing and being deprived of the resources she needed to perform her Principal job, and that these consequences constituted a material adverse change in her work conditions.

The Court responded to these arguments reasoning that, although the plaintiff’s work conditions may have been “suboptimal before and after her APPR rating,” the evidence did not show a material adverse change as a result of the APPR rating. “Her assignments to failing schools predate that rating, which she received in September 2013. Atkins was assigned to Freddie Thomas in 2012. From Freddie Thomas, she ‘was placed in another dying school’ in July 2013. The evidence does not show any similar assignments after that one.” Plaintiff also complained of a “lack of clerical and administrative support and the fact that she was not given a ‘clean professional private office space’ like other principals.” The Court stated that these “poor working conditions, the deprivation of resources, and the lack of staff support … pertain, in large part if not entirely, to the 2012-13 school year at Freddie Thomas. The conditions cannot have resulted from her later APPR evaluation,” and to the extent the plaintiff suggested that she faced similarly poor conditions and received similar treatment after leaving Freddie Thomas, the Court concluded “that merely shows a continuation of her situation prior to the APPR rating. Because Atkins fails to present evidence of any ‘negative ramifications’ flowing from her unfavorable APPR rating, she cannot establish an adverse employment action.”

Former Student Who Claimed Her Graduate School Retaliated Against Her After Complaining of Sexual Harassment, Stated a Claim for Breach of Contract

Former Student Who Claimed Her Graduate School Retaliated Against Her After Complaining of Sexual Harassment, Stated a Claim for Breach of Contract

In Novio v. The New York Academy of Art, a female former graduate student sued her former school for breach of contract claiming that the school retaliated against her after she complained about a professor’s sexual harassment of female students. The “contracts” she relied upon were statements made in the student handbook and on the school’s website which promised to provide career services to her, including strong job placement support, an educational environment free of sex discrimination and sexual harassment, and freedom from retaliation for those who reported sex discrimination or sexual harassment.

According to the complaint, the Plaintiff attended the graduate school from September 2013 until May 2015, when she graduated with a Masters of Fine Arts degree. She had taken courses from a professor, a Department Chairman, in 2014 and 2015, during which time she found his persistent sexual commentary in the classroom and inappropriate touching of female students created a hostile educational environment that interfered with her education.

She further alleged that she was consistently worried that she would run into the professor at NYAA’s facilities and be subjected to his sexist comments and inappropriate touching. She alleged that the professor’s “persistent sexual comments and touching distracted her and significantly interfered with her ability to engage in and enjoy her studies” and that the professor “allegedly showed favoritism to female students who reacted favorably to his sexual comments and advances,” believing this to be the professor “implicitly communicating a quid pro quo” to her and other female students, such that she worried that the professor could block her from important academic and career opportunities if she was not nice to him.”

Plaintiff alleged that the school retaliated against her once they learned that she had joined three other students in alleging sexual harassment claims against the professor by refusing to provide references or recommendations, discouraging her discouraging attending school events; the school alumni association stopped sending emails to the her even though she had previously been elected Secretary of that organization; and it stopped making her aware of school functions, art shows, and networking events that could help her find employment as an artist.

She also alleged that the school did not take adequate action to stop the sexual harassment or acts of retaliation against her when she complained further, and that this failure to take adequate corrective action only emboldened the professor and the other faculty members who were retaliating against her.

She alleged that in an email to another professor that professor rejected her request for a job recommendation, saying “I have never turned down a student I loved, as I did you, in 27 years of teaching. But the fact that you piled on to hurt Wade, makes it impossible for me to help you.”

Her complaint alleges that she and the school entered into a valid and binding contract, and that she substantially performed all of her duties and obligations under the contract, including by paying monetary consideration. In return for the monetary consideration paid by her, she alleged that the school made specific promises to her to “(a) to provide Plaintiff with an educational environment free of sex discrimination in all programs and activities, including academic programs and school-sponsored activities on an off campus; (b) to provide Plaintiff with an educational environment free of sexual harassment; (c) to respond promptly to complaints of sexual harassment, including unwelcome advances and sexist comments, whether they occurred in a single episode or were part of a recurring pattern of behavior; (d) to take immediate action to eliminate sexual harassment, prevent its recurrence, and address its effects; (e) to designate a Title IX coordinator who is trained and experienced to address complaints of sex discrimination, including helping victims navigate the process and seek remedies; (f) not to retaliate against anyone who participated in the process of reporting or attempting to remedy sexual harassment or discrimination; and (g) to provide career services to Plaintiff, including strong job placement support.”

First, the Court recognized that “‘New York State courts have permitted a student to bring a breach of implied contract action against an institution of higher education,’ but first, such ‘a student must identify specific language in the school’s bulletins, circulars, catalogues and handbooks which establishes the particular “contractual” right or obligation alleged by the student in order to make out an implied contract claim.’”

The Court found that here the plaintiff had listed “certain specific promises relating to the alleged rights and obligations of the parties, and has pointed to the documents where such promises can be found. Accordingly, Plaintiff has identified a contract with the school sufficient to satisfy the first element of this inquiry.”

Second, the Court reasoned that a student must identify promises made by the school “to provide for certain specified services.” Here, Plaintiff did identify promises made by the Academy that qualify as “certain specified services,” including to respond promptly to complaints of sexual harassment, including unwelcome advances and sexist comments, whether they occurred in a single episode or were part of a recurring pattern of behavior; to take immediate action to eliminate sexual harassment, prevent its recurrence, and address its effects; to designate a Title IX coordinator who is trained and experienced to address complaints of sex discrimination, including helping victims navigate the process and seek remedies; and to provide career services to plaintiff, including strong job placement support.

Lastly, the Court said that “‘to state a valid claim for a breach of contract, a plaintiff must state when and how the defendant breached the specific contractual promise.’ Here, Plaintiff has adequately alleged when and how Defendant Academy has breached each of the four specific promises noted above.

Thus, the school’s motion to dismiss was denied.

Student Entitled to Continuance to Let His Attorney Attend Disciplinary Proceeding

Student Entitled to Continuance to Let His Attorney Attend Disciplinary Proceeding

In the Matter of Bursch v. Purchase College of the State University of New York, a student brought an Article 78 proceeding to review a public college’s determination upholding a decision of its disciplinary hearing committee, finding that the student committed disciplinary violations including sexual assault of another student, and expelling him from the school. The Supreme Court, Appellate Division, confirmed the determination and dismissed the petition, and student appealed to the State’s highest Court.

An Article 78 proceeding refers to a special proceeding brought under Article 78 of New York’s Civil Practice Law and Rules and is used to appeal the decision of a New York State or a local agency to the New York courts.

The Court of Appeals held that “under the particular circumstances of this case” the public college’s disciplinary hearing committee members abused their discretion by failing to grant the student’s request for a three-hour adjournment so that his attorney could attend the proceeding.  There was no further elaboration. The Appellate Division’s ruling was reversed, with costs, and the petition insofar as it sought to annul the student’s disciplinary determination was granted and the matter was remitted to the Appellate Division, Second Department, with directions to remand the matter to the disciplinary hearing committee for a new disciplinary hearing.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Corporate Rules | Student Dignity | Disability Discrimination

Majority Shareholders Failed To Treat Female Minority Shareholder With Dignity And Respect

majority shareholders failed to treat

In Straka v. Arcara Zucarelli Lenda & Associates CPAs, P.C., plaintiff, a female minority shareholder, and experienced accountant in a closely held professional corporation – an accounting firm – sought dissolution of the corporation, alleging corporate oppression. A Supreme Court in Erie County ruled that, among other things, by failing to treat the female minority shareholder with equal dignity and respect as male shareholders forming the majority, the majority male shareholders engaged in such oppressive actions as could provide a basis to dissolve the corporation.

In so ruling, the Court noted that the case raised the “question of whether disrespectful and unfairly disproportionate treatment of a female shareholder by the male majority in a closely held corporation constitutes corporate ‘oppression’” within the meaning of New York’s Business Corporation Law § 1104-a(a)(1).

The Court recognized that a “minority shareholder may petition the Court for dissolution of the corporation in which he or she owns at least 20% of the outstanding shares, and where the majority shareholders have engaged in illegal, fraudulent, or oppressive actions towards the petitioning shareholder (Business Corporation Law § 1104-a[a][1] ). The term “oppressive” has not been statutorily defined, but ‘disappointment alone should not necessarily be equated with oppression.’ Instead, the Court of Appeals has held that ‘oppression should be deemed to arise only when the majority’s conduct substantially defeats expectations that, objectively viewed, were both reasonable under the circumstances and were central to the petitioner’s decision to join the venture.’ ‘A court considering a petition alleging oppressive conduct must investigate what the majority shareholders knew, or should have known, to be the petitioner’s expectations in entering the particular enterprise.’”

The Court found that the accounting firm “and indeed, any shareholder of any corporation, should know that a female shareholder reasonably expects to be treated with equal dignity and respect as male shareholders forming the majority.” The Court concluded that the petitioner was not. “The shareholders’ slow and inadequate response to Urbanek’s demeaning behavior marginalized Straka, as did the lack of respect provided to her as the head of IT at the corporation.” Furthermore, two of the male shareholders promised but failed to foster collaboration by the former staff members” of their former corporation.

The Court went further and found that the petitioner’s “reasonable expectation for fair compensation was frustrated by the use of the earnings matrix,” that was used to allocate corporate profits as salaries to certain shareholders as opposed to dividends. “When the majority shareholders of a close corporation award de facto dividends to all shareholders except a class of minority shareholders, such a policy may constitute ‘oppressive actions’ and serve as a basis for an order made pursuant to section 1104-a of the Business Corporation Law dissolving the corporation.’”

While the Court concluded that the petitioner had “proven oppressive conduct and was entitled to relief under the Business Corporation Law, it noted New York’s highest Court has held that “once oppressive conduct is found, consideration must be given to the totality of circumstances surrounding the current state of corporate affairs and relations to determine whether some remedy short of or other than dissolution constitutes a feasible means of satisfying both the petitioner’s expectations and the rights and interests of any other substantial group of shareholders.”

The Court considered the “size and nature of the business of the corporation,” and found that a buyout of the petitioner’s shares, rather than dissolution, “would satisfy her expectations and the rights of the remaining shareholders.”

“Dignity for All Students Act” Does Not Provide Private Right of Action

dignity for all students act

In Eskenazi–Mcgibney v. Connetquot Central School District, a public school student brought an action against his School District, asserting causes of action for, among other things, a Dignity for All Students Act (“DASA”) violation based on alleged bullying and harassment by a fellow student. The Supreme Court, Suffolk County, denied the District’s motion to dismiss for failure to state cause of action. The District appealed and the Second Department of the Appellate Division held that DASA does not provide a “private right of action,” and dismissed that claim.

As the Appellate Court framed it, the appeal provided it with “an occasion to consider whether the Dignity for All Students Act creates a private right of action in favor of a student injured by a school’s failure to enforce its policies prohibiting discrimination and harassment.”

By way of background, the complaint alleged that the student was a learning-disabled high school student attending Connetquot High School and Eastern Suffolk BOCES, and was repeatedly bullied and harassed by a fellow student, including multiple physical assaults and death threats. The assaults and threats allegedly occurred at the high school, at BOCES, on the school bus, and on a school trip. The plaintiffs, the student and his parents, alleged that they repeatedly made complaints to the school district and BOCES teachers and officials, and that they received assurances that the matter would be dealt with, but the other student was not disciplined and the bullying and harassment continued.

In addressing the DASA issue, the Appellate Court said that “DASA prohibits discrimination, harassment, and bullying by public school employees or students on school property or at a school function. It requires school districts to create policies, procedures, and guidelines intended to create a school environment that is free from harassment, bullying, and discrimination, including guidelines ‘relating to the development of measured, balanced and age-appropriate responses to instances of harassment, bullying or discrimination by students.’”

It also stated that “DASA does not expressly provide for civil damages to a student who has been the victim of such harassment, bullying, or discrimination. Thus, an injured student can seek civil relief based on a violation of DASA only if a private right of action may be fairly implied in the statutory provisions and their legislative history. A private right of action ‘may be fairly implied when (1) the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) recognition of a private right of action would promote the legislative purpose of the governing statute; and (3) to do so would be consistent with the legislative scheme.’ The third factor is generally the most critical because ‘the Legislature has both the right and the authority to select the methods to be used in effectuating its goals, as well as to choose the goals themselves. Thus, regardless of its consistency with the basic legislative goal, a private right of action should not be judicially sanctioned if it is incompatible with the enforcement mechanism chosen by the Legislature or with some other aspect of the over-all statutory scheme.’”

After reviewing DASA’s legislative history, the Appellate Court found “that finding a private right of action under the act would be inconsistent with the legislative scheme. As noted above, DASA requires school districts to create and implement certain policies, procedures, and guidelines aimed at creating an educational environment in which children can thrive free of discrimination and harassment. In a letter to the Governor, Senator Thomas Duane described DASA as focusing ‘on the education and prevention of harassment and discrimination before it begins rather than punishment after the fact.’ The letter stated that under the existing regime, school districts were paying ‘a high cost in civil damages for failure to prevent bullying,’ thereby suggesting that implementing DASA would alleviate such costs. Similarly, the Assembly sponsor of the bill also advised the Governor that ‘the Legislature intends DASA to be primarily a preventive, rather than punitive, measure; it should therefore be implemented accordingly, with the emphasis on proactive techniques such as training and early intervention to prevent discrimination and harassment.’”

Thus, the Court concluded that the “legislative history plainly demonstrates that the Legislature did not intend to provide for civil damages for a violation of DASA, and that recognizing one would be inconsistent with the legislative scheme. As recognized by one federal court, DASA does not prevent a student from bringing other statutory claims against a school district, and thus, holding that DASA does not provide a private right of action does not leave students without enforcement mechanisms and remedies. Because there is no private right of action under DASA, the Supreme Court should have granted those branches of the defendants’ respective motions which were pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging a violation of DASA insofar as asserted against each of them” by the student.

Employee Failed to Sufficiently Allege Disability Discrimination Claim

employee failed to sufficiently allege disability

In Laface v. Eastern Suffolk BOCES, an employee brought an action against the county Board of Cooperative Educational Services (“BOCES”), and the BOCES’ administrators, alleging that transfers of his assignment among BOCES’ facilities constituted discrimination in violation of, among other things, the Americans with Disabilities Act. Although the federal District Court held that the employee sufficiently alleged his health condition constituted an “impairment” within the meaning of the Americans With Disabilities Act (“ADA”), it held that the employee failed to sufficiently allege that his impairment limited a major life activity, as required to state an ADA claim.

At the time of the decision, plaintiff Laface was employed by BOCES as a Custodial Worker I. He had been assigned to the Gary D. Bixhorn Technical Center (“BTC”) at 350 Matra Avenue in Bellport, New York for 30 years. During his tenure at BTC, Laface worked from 7:00 a.m. to 3:00 p.m. during the workweek and was supervised by two others. At an unknown time, Laface developed a condition that causes stress and anxiety and prevented him from traveling further than 10 miles from his home. He had previously informed one of his supervisors as well as BOCES’ Human Resources Department of his traveling restriction prior to the events that led to his complaint.

Thereafter, on or about October 17, 2016, Laface was notified that he was reassigned to the H.B. Ward Campus (“HBW”) in Riverhead, New York, effective on October 28, 2016. The letter did not provide an explanation as to why BOCES was transferring Laface. HBW is located more than 10 miles from the Laface’s residence.

According to his complaint, Laface’s impending transfer caused him enormous anxiety and prevented him from being able to continue to work. Unable to drive to HBW without his condition flaring up, Laface began a period of sick leave beginning on October 28, 2016. On or about November 22, 2016, Laface received a letter from the School Personnel Officer, which directed him to report to BOCES Human Resources Department for a meeting on November 28, 2016. Laface’s last day of documented sick leave was November 27, 2016, the day before the meeting. He reported to the November 28, 2016 meeting and requested “a reasonable accommodation for his documented disability.” She “refused to engage in the required interactive process … to identify a reasonable accommodation for Plaintiff’s travel/driving restrictions and stated to Plaintiff that BOCES was not going to accommodate him.”

The HR Department again met with the Laface on December 23, 2016, along with his union representative. At that meeting, Laface was accused of being uncooperative in refusing to answer questions and he was informed that he was to report to HBW using public transportation rather than remain at BTC. Following the December 23, 2016 meeting, Laface was placed on paid administrative leave. Ultimately, Laface never reported to his assignment at HBW. On or about January 19, 2017, Laface received a letter ordering him to report to Jefferson Academic Center (“JAC”) for a temporary work assignment beginning on February 1, 2017. The letter further informed Laface that he was assigned to work from 10:00 a.m. to 6:00 p.m. at JAC during the regular workweek and indicated that JAC is less than 10 miles from Laface’s residence. Laface began working at JAC as instructed and continues to report to this temporary work assignment, which he contends involves different work and added responsibilities, including additional manual labor.

Throughout this time there were vacant custodial positions at BTC, including Laface’s original position.

To establish a case of discrimination under the ADA, a plaintiff first “must show: (1) his employer is subject to the ADA; (2) he is disabled within the meaning of the ADA; (3) he is otherwise qualified to perform the essential functions of his job; and (4) he suffered an adverse employment action because of his disability.”

The Court explained that to determine whether or not a plaintiff suffers from a disability, “the Supreme Court compels district courts to follow a three-step process to conclude: ‘(1) whether plaintiff had an impairment; (2) whether the impairment affected a ‘major life activity’ within the meaning of the ADA; and (3) whether that major life activity was substantially limited by the impairment.’ If he fails to satisfy any of these three prongs, the Plaintiff’s discrimination claim must be dismissed.”

As for Laface’s physical or mental impairment, that he suffers from stress and anxiety which precludes him from driving more than 10 miles from his home, the Court noted that “‘stress and depression are conditions that may or may not be considered impairments, depending on whether these conditions result from a documented physiological or mental disorder.’ The Defendants contend that he suffers from job-related stress or anxiety. However, Laface describes his condition as more than just anxiety or stress resulting from his job. The complaint states that the Plaintiff’s driving restriction is due to his psychological disorder. He does not argue that this restriction is limited to work-related driving. At the pleading stage, Laface has successfully alleged that he suffers from an impairment within the meaning of the ADA.”

As for whether Laface’s impairment “substantially limits a major life activity,” the Court noted that in “‘deciding whether a particular activity is a ‘major life activity,’ the Court asks whether that activity is a significant one within the contemplation of the ADA, rather than whether that activity is important to a particular plaintiff.’ ‘The touchstone for determining an activity’s inclusion under the statutory rubric is its significance.’ ‘Major life activities’” include ‘caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working.’ This list is illustrative, not exhaustive. In this Circuit, courts have previously ruled that sitting, standing, sleeping, lifting and reaching are major life activities.”

Although Laface alleged that he is unable to drive or commute to a job that is further than 10 miles from his residence, the Court noted that “this Circuit has repeatedly held that driving is not a major life activity” within the meaning of the ADA, and that “being unable to use public transportation as an alternative to driving does not rise to the level of a major life activity. This restriction more closely resembles the limitations found in the regulations or the jurisprudence of this Circuit which are not considered major life activities rather than those which have been found to qualify as such.”

The Court dismissed the ADA claim.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Claim Preclusion | Parent Not Guarantor | Restricting School Access

Small Claims Ruling Has Preclusive Effect

Small Claims Ruling Has Preclusive Effect

In Simmons v. Trans Express Inc., plaintiff brought a federal action against her former employer for violations of Fair Labor Standards Act and New York Minimum Wage Act. The employer moved to dismiss on grounds of “res judicata.”

Res judicata translates to “a matter judged.” Generally, res judicata is the principle that a cause of action may not be re-litigated once it has been judged on the merits. “Finality” is the term which refers to when a court renders a final judgment on the merits. Res judicata is also frequently referred to as “claim preclusion.” As a related principle, collateral estoppel, also known as issue preclusion, is a common law estoppel doctrine that prevents a person from re-litigating an issue – as opposed to the entire claim. Once a court has decided an issue of fact or law necessary to its judgment, that decision precludes re-litigation of the issue in a suit on a different cause of action involving a party to the first case. The rationale behind these preclusions is the prevention of legal harassment and the prevention of overuse or abuse of judicial resources.

Here, in August 2018, plaintiff filed suit in a New York small claims court seeking “monies arising out of nonpayment of wages.” Simmons was awarded $1,000 less than the $5,000 Small Claims statutory maximum. Then, Simmons commenced the instant federal action alleging that she is entitled to unpaid overtime wages, liquidated damages, and attorney’s fees stemming from the defendant Trans Express Inc.’s violations of the Fair Labor Standards Act, and the New York Minimum Wage Act. Trans Express moved to dismiss the complaint contending that the action was barred by the doctrine of res judicata because of the previous small claims proceeding. The motion was granted.

The federal Court recognized that the employer’s “motion rests entirely on the doctrine of res judicata. According to that doctrine, ‘a final judgment on the merits of an action precludes the parties or their privies from re-litigating issues that were or could have been raised in that action.’ Because the small claims action brought by Simmons was decided by a New York court, New York law determines the preclusive effect of the earlier judgment. The issues presented by the judgment awarded to Simmons are: (1) whether res judicata applies to judgments rendered in small claims court, (2) whether an exception to res judicata applies due to the limits on recovery in small claims court, and (3) whether plaintiff’s present claims arise from the same facts as the previous action and could have been raised in that action.”

In dismissing the action, the Court reasoned that as a “fundamental rule, res judicata applies to judgments of New York’s small claims courts. Arguing to the contrary, plaintiff relies in principal part on New York City Civil Court Act § 1808. This statute provides that judgments in small claims courts ‘shall not be deemed an adjudication of any fact at issue or found therein in any other action or court.’ However, the legislative history of this provision makes clear that it concerns only collateral estoppel, or issue, as opposed to claim, preclusion, and, therefore, not the preclusive effects of res judicata. The legislative bill jacket, completed at the bill’s signing, which compiles the pertinent legislative history, makes clear that the very purpose of the bill was to clarify that ‘the true intent of section 1808 is to make clear that a small claims judgment has no collateral estoppel or ‘issue preclusion’ effect in a subsequent proceeding.’”

The Court found that an “earlier version of the statute used the term ‘res judicata,’ but the legislative history of this 2005 amendment explains that ‘the use of the term ‘res judicata’ was … inapposite.’ The Legislature noted that ‘the courts have consistently held that a small claims judgment is res judicata when the same claim is filed in another court,’ and cited five examples with approval. Plainly, this history confirms that New York law gives claim preclusive effect to small claims court judgments. It is a conclusion that is reinforced by abundant case law. Therefore, the fact that Simmons’s prior suit was decided in small claims court will not rescue this action from the bar of res judicata, if the bar is otherwise applicable.”

As for the plaintiff’s argument that res judicata does not apply because the small claims court was only empowered to award $ 5,000.00 in damages, and the federal action seeks greater relief, the Court noted that a New York Appellate Division “rejected this precise argument … where it held that a small claims judgment operated as a bar to a future action, ‘even though, were plaintiff to have brought and proven his claims in state Supreme Court in the first instance, he could have sought a larger award.’ The court explained that ‘plaintiffs could have pursued all relief in a single action in the Supreme Court, but opted instead to pursue the claim in the Small Claims Part of the Civil Court,’ and it refused to allow plaintiffs to escape the consequences of that decision.”

The Court concluded that because the “plaintiff’s federal claims, like her claims in small claims court, arise from her employment at Trans Express and had accrued prior to the small claims proceeding, they could have been raised in the prior proceeding and are barred by res judicata. In other words, the present claims are ‘based upon the same harm and arise out of the same or related facts.’ The notice of judgment in the small claims proceeding clearly indicates that Simmons had raised a claim for ‘unpd. OT. Notice of Judgment, Simmons.’” It is hard to construe this to mean anything other than unpaid overtime.”

We note that the unsuccessful plaintiff in this action has filed a notice of appeal and, if overturned, we will update this article.

Parent Could Not Be Held Liable as Guarantor for Adult Child’s Unpaid Medical Bills

Parent Could Not Be Held Liable as Guarantor for Adult Child’s Unpaid Medical Bills

In Westchester County Health Care Corporation v. Ceus, a medical provider brought an action against the parent of an adult former patient, seeking to recover for unpaid hospital and medical services allegedly rendered to the patient.

The medical services that were the subject of the complaint were provided to the defendant’s daughter who was over the age of 21 at the time the services were provided.
The defendant parent moved for summary judgment, contending she cannot be held liable for services rendered to her adult daughter, for which she neither provided a guarantee nor signed a promise to pay.

The medical provider opposed the motion arguing that the insurance card allegedly provided by the daughter at the time of her visit, listed her as a “covered family member” on a plan on which the defendant parent was the named insured.

The Court noted that under the “common law, absent a statutory obligation, ‘a parent is not liable for the support and maintenance of an adult child.’ In addition, it has long been held that even where a parent affirmatively requested the medical services that were provided to an adult child by a physician or medical professional, the parent is not, without more, liable for the cost of those services.” Here, there was no allegation that the parent requested any services for the daughter.

Although the medical provider referred the Court to the requirement under the Patient Protection and Affordable Care Act mandating coverage for children up to age 26 on their parents’ insurance, the Court stated that “this mandated coverage does not include any mandate for parents’ continued liability for the non-covered medical expenses incurred by their children after they reach age 21.”

The Court further stated that there was no support for the medical provider’s “proposition that the primary insured person under a group insurance plan is personally liable as a guarantor for the cost of services provided to her adult children, based on their inclusion under her coverage. In order to claim that defendant may be held liable, in the absence of a common law obligation or a statutory obligation, plaintiff relies exclusively on the inclusion of [the daughter’s] name as an additional insured on a health insurance card on which defendant parent is the primary insured. In effect, plaintiff treats the inclusion of [the daughter’s] name on the insurance card as either a guarantee or a promise by the primary insured to pay for services rendered to any listed family member. However, there is no signed writing to this effect.”

“To be enforceable, either a guaranty or any form of promise ‘to answer for the debt … of another person,’ must be in writing and executed by the party to be charged” and the medical provider’s insertion of the parent’s name in its invoice as “Guarantor” had “no legal effect in the absence of any indication that plaintiff affirmatively undertook to stand in that capacity, let alone a signed writing. Plaintiff’s position amounts to, at best, a claim of an implicit promise. Such a claimed promise is unenforceable.”

The Court granted the parent’s motion and dismissed the complaint.

School’s Restriction on Convicted-Rapist-Father’s Access to Son’s School Upheld

School’s Restriction on Convicted-Rapist-Father’s Access to Son’s School Upheld

In Lujan v. Carranza, a father filed an Article 78 petition challenging the determination of the N.Y.C. Department of Education, which restricted his access to his son’s school, and the determination of Commissioner of New York State Education Department, which dismissed his administrative appeal. The Supreme Court in Albany County held that the middle school’s restrictions, limiting father’s access to school, were not made in violation of lawful procedure, affected by error of law, or arbitrary and capricious and dismissed the petition.

According to the Appellate Court, in 1988, the petitioner-father was convicted of Rape in the First Degree. Petitioner’s victim was a fourteen year old girl, and the rape was committed with a deadly weapon. Based on this conviction, the petitioner has been adjudicated a Level III sex offender. He was released from prison and discharged from parole supervision in 1998. He is also the father and sole caretaker for his son, “X.” During the 2015-2016 school year, “X” attended Yorkville Community School, PS 151 in New York City. On November 20, 2015, the Principal of that school sent a letter to the petitioner, informing him that the school was placing restrictions on his access to the school based on his Level III sex offender status and because his victim was under the age of 18. Those restrictions prevented him from coming within 1,000 feet of school grounds. If the petitioner needed to pick up his son on an emergency basis, he would have to contact the school to make arrangements. Similar restrictions continued as the son moved through the school system through Middle School.

The Court noted that the “petitioner is a Level III sex offender. As the Risk Assessment Guidelines and Commentary (see Board of Sex Examiners, Sex Offender Registration Act [SORA]: Risk Assessment Guidelines and Commentary [Jan. 1996]) makes clear, SORA was passed to protect society from the threat posed by a sex offender who is about to be released into the community. The magnitude of the threat depends upon two considerations: the defendant’s likelihood of re-offense, and the harm that would be inflicted if that defendant did re-offend. Risk Assessment Guidelines and Commentary, Commentary, op. cit., at 2. A defendant’s risk category is dictated by the number of points scored on the Risk Assessment Guidelines; 110 points or more results in a classification as a level three offender, that is, an offender with a high risk of recidivism who poses a threat to public safety.”

In upholding the determination, the Court said that the petitioner “has been adjudicated as a Level III sex offender which means he poses the highest possible risk to re-offend. His prior crime was committed against a girl of Middle School age. In light of these facts, the school’s determination to place supervisory restrictions on the petitioner has a sound basis in fact. Petitioner notes that he often attended his son’s elementary school without restriction and without incident, and that is to his credit. However, at oral argument, counsel for the petitioner conceded that a school has the right to take “precautionary measures” to address “particular concerns.” As noted above, schools stands in loco parentis to their students and have a duty to protect them. The precautionary measures and restrictions here address the particular concerns petitioner presents and are rationally related to the school’s in loco parentis duty.”

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Constructive Eviction | Summary Judgment in Lieu of Complaint | Off-Campus College Housing

Tenant Fails to Establish Breach of Covenant of Quiet Enjoyment in Nonpayment

Tenant Fails to Establish Breach of Covenant of Quiet Enjoyment in Nonpayment

In Cent. Blvd. Bldg. Corp. v. Purville, a landlord sought to evict its commercial tenant in a nonpayment summary proceeding, alleging she owed outstanding arrears for three months’ rent, late charges, and a water bill. The tenant answered the petition raising various affirmative defenses and asserting a counterclaim alleging that there had been a breach of the covenant of quiet enjoyment by the landlord constituting a partial eviction and demanding a rent abatement.

At the trial, the tenant stated that she works well into the evening at her hair salon. From 2010 through 2014 everything was fine until a gun range opened in the basement of the building in 2014. The tenant alleged to have had numerous conversations with the landlord about problems of “noise and shaking,” and introduced two letters she sent concerning the problems. The tenant also played a tape recording which lasted 35 seconds in which six gun “pops” were heard in the background. The tenant stated that after the complaints, she nevertheless renewed the lease and stayed at the premises because the landlord said it would fix the problem and she had already invested a lot in the development of her business.

The landlord had the gun range manager testify. The manager stated, and the landlord agreed, that in 2010 when the tenant moved into the premises she knew that eventually a gun range was going to be re-installed in the building; it was originally chartered in 1935.

The landlord testified that the range is open on Saturdays and Sundays from 11:00 am to 6:00 p.m. It is closed on Mondays. On Tuesday, Wednesday and Friday it is open from 12:00 p.m. to 9:00 p.m. and on Thursday from 12 p.m. to 5:00 p.m. The landlord also testified that it arranged for large caliber shooting to be done when the tenant was closed or late at night, and installed sound proof ceiling tiles and foam insulation. The landlord was about to put in a sub-floor in the hope of abating any noise when the tenant stopped paying rent.

The lease contains a typical provision which waives the tenant’s right to assert a counterclaim in a summary proceeding stating: “It is further mutually agreed that in the event Landlord commences any summary proceeding, Tenant will not interpose any counterclaim of whatever nature or description in any such proceeding.”

The court noted that such a provision in commercial landlord-tenant summary proceedings is generally enforceable, the exception being if a counterclaim was “inextricably intertwined” with petitioner’s claim so that a joint resolution of claims would expedite disposition of the entire controversy. The court noted the “principal example of a counterclaim within such exception in a commercial nonpayment proceeding is a respondent’s counterclaim based on actual or constructive eviction, to offset the obligation to pay rent, because such claim is inextricably intertwined with nonpayment of rent.” “To establish constructive eviction, a tenant need not prove physical expulsion, but must prove that the landlord’s wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the premises. The tenant, however, must abandon possession in order to claim that there was an eviction. A constructive eviction may be partial rather than total, in which case the tenant must have abandoned only the portion of the premises affected.”

The court found the tenant failed to establish a breach of the covenant of quiet enjoyment constituting partial actual or constructive eviction as there was no claim that the tenant abandoned at least a portion of the premises, and she renewed her lease even after the gun range was re-installed in the basement. Thus, the landlord was granted a judgment and warrant of eviction.

Invoice Did Not Qualify as Instrument for Payment of Money Only

Invoice Did Not Qualify as Instrument for Payment of Money Only

The civil procedural rules in New York recognize that some claims have greater presumptive merit than others, and should have easier access to resolution than an ordinary action gets. New York singles out these claims and permits them to be brought on by an initial summary judgment motion instead of the usual complaint accompanying the summons. This is more commonly known as a “motion for summary judgment in lieu of complaint.” Instead of having the defendant answer the complaint in the normal course, the motion papers pick out a specific return date and require the defendant to answer the motion and argue why judgment should not be immediately granted. In addition to eliminating the requirement of answering a complaint, this procedure also sidesteps what is often a long, expensive, and somewhat tortuous discovery process.

The type of claims which may benefit from this expedited treatment are those based on “an instrument for the payment of money only” or based upon “any judgment.”

In Henry Quentzel Plumbing Supply Co. v. Riggs Plumbing & Heating at 58th Inc., it was alleged that the plaintiff sold over $58,000 of plumbing supplies to the defendant, and was never paid. Thus, the plaintiff moved for summary judgment in lieu of complaint. The court stated while plaintiff may have a plenary cause of action for an account stated based on numerous invoices and a statement issued to defendant over the period from May to December 2018, it could not do so by this “expedited procedural vehicle of summary judgment in lieu of complaint” as it is reserved for “an instrument for the payment of money only.”

The Court found the invoice-referencing statement of account did not qualify as an instrument for the payment of money only and, therefore, denied the plaintiff’s motion. It noted that the “prototypical example of an instrument within the ambit of the statute is of course a negotiable instrument for the payment of money — an unconditional promise to pay a sum certain, signed by the maker and due on demand or at a definite time.”

All was not lost for the plaintiff, because upon denial the Court converted the matter to a plenary action, and directed the plaintiff “to serve a regular complaint on the defendants.”

College Did Not Assume Duty to Ensure Safety of Off-Campus Housing Listed on Its Website

College Did Not Assume Duty to Ensure Safety of Off-Campus Housing Listed on Its Website

In Fitzsimons v. Brennan, various estate administrators brought wrongful death actions against Marist College and off-campus landlords following students’ deaths in a fire in the landlords’ house. The Supreme Court, Suffolk County, granted the college’s motion for summary judgment, in consolidated cases and the administrators appealed. The Supreme Court, Appellate Division, held that the College did not owe a duty of care to students to ensure off-campus housing listed on the College’s website complied with all relevant fire safety standards, and the College did not assume a duty to ensure that off-campus housing listed on its website was safe for its students to live in. The Supreme Court’s dismissal of the consolidated cases was affirmed.

According to the decision, Kerry Fitzsimons and Eva Ryan Block were students at Marist College. During the 2011–2012 school year, they lived in an off-campus house owned by the defendants Kevin Brennan and Kristine Brennan. Marist College made available to its students a list of off-campus housing, which included the Brennan house.

On January 21, 2012, Kerry and Eva, and a third person died in a fire in the Brennans’ house. The administrators of Kerry’s estate and of Eva’s estate, each commenced a separate wrongful death action, also against the Brennans and Marist College. The Supreme Court consolidated the two actions.

On appeal, the Appellate Court stated that the “‘threshold question in any negligence action is: does defendant owe a legally recognized duty of care to plaintiff?’ In the context of this action, a critical consideration in determining whether such a duty exists is whether Marist College’s relationship with either the Brennans or Kerry and Eva placed the college in the best position to protect against the risk of harm. Also relevant is the principle that ‘one who assumes to act, even though gratuitously, may thereby become subject to the duty of acting carefully.’”

The Appellate Court concluded that under the circumstances of this case, “we agree with the Supreme Court’s determination that Marist College did not owe a duty of care to Kerry and Eva. Contrary to the plaintiffs’ argument, Marist College demonstrated, prima facie, that it did not owe a duty to ensure that the off-campus housing listed on its website, which included the Brennan house, complied with all relevant fire safety standards. Even if, in theory, Marist College could have refused to list landlords on its website unless each landlord’s off-campus housing met all relevant fire safety laws and regulations, imposing such a requirement on the college is simply not warranted because the college is not ‘in the best position to protect against the risk of harm.’ In this regard, it bears recalling that the doctrine of in loco parentis has no application at the college level. Adult students who chose to live off campus, as well as the private landlords with whom they enter into a contractual relationship, are in the best position to ensure that off-campus apartments and houses have the required number of smoke detectors and other fire safety features. While the risk of fire is all too foreseeable—often with tragic consequences, as this case demonstrates—‘foreseeability, alone, does not define duty—it merely determines the scope of the duty once it is determined to exist.’”

“Moreover, Marist College also demonstrated, prima facie, that it did not assume a duty to ensure that the Brennan house was safe for Kerry and Eva to live in, as the college did not engage in any conduct that may have induced Kerry and Eva to forgo some opportunity to avoid risk, thereby placing them ‘in a more vulnerable position than they would have been in had Marist College done nothing.’ In fact, the evidence shows, among other things, that Kerry and Eva found the Brennan house because they knew some of the students who had been renting it.”

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Incurable Tenant Default | Defamation | Judicial Blue Pencil

Landlord’s Failure to Serve Notice of Default Excused as Default was Incurable

In 159 W. 23rd LLC v. Spa Ciel de NY Corp., a landlord brought a holdover summary proceeding against the tenant of the basement, first floor and second floor of the landlord’s building.  Under the terms of the 15-year lease, Spa (tenant) was obligated to obtain all required approvals and certificates prior to any alterations, additions, installations or improvements to the premises, ensure all contractors and subcontractors carried the insurance required by the landlord as set forth in the lease, and maintain commercial general liability insurance against claims for bodily injury or death or property damage on the premises from the date tenant entered into possession throughout the term of the lease.

Spa leased the premises with the intention of converting it to a high-end day spa, and after work on the conversion was underway, the landlord bought the building from the former landlord.  After its purchase, the landlord discovered that Spa had proceeded with the construction without first obtaining the permits required by the New York City Department of Buildings and had failed to maintain and deliver to the landlord commercial general liability insurance effective from the date the tenant entered into possession of the premises.

The landlord acknowledged that Spa’s alleged failure to procure the required permits was because the landlord refused to sign a form Spa needed to gain DOB approval for the installation of new air conditioner equipment in the premises, but Spa’s failure to obtain the requisite insurance had nothing to do with it.

The landlord sent the tenant a five-day Notice of Cancellation of the Lease under the terms of the lease.  In the Notice of Cancellation, the landlord stated that the tenant was in breach of its obligations under the specific paragraphs of the lease that required it to obtain the required commercial general liability insurance and ensure that all contractors and contractors were properly insured prior to commencing construction at the premises.  When the five days expired and the tenant remained in possession, the landlord commenced the holdover summary proceeding.

There are two basic types of summary proceedings available to landlords against their tenants: “non-payment” and “holdover.”  A non-payment proceeding is the route to take when a tenant fails to pay rent.  A holdover proceeding is brought to remove a tenant which is “holding over” beyond the expiration of term.  How can a term expire?  (1) By the lease term naturally ending; (2) by notice to quit a “month-to-month tenancy” or the like; and (3) by landlord terminating the lease early after tenant’s failure to timely cure a default.

Spa moved to dismiss the proceeding arguing the petitioner failed to serve a notice to cure, among other things.  The petitioner conceded it did not serve a notice of default or notice to cure arguing it was unnecessary as the default was incurable.  The court agreed, finding that Spa’s failure to maintain insurance was an incurable default.

The court reasoned that “‘where a landlord fails to serve a requisite notice to cure, the lease remains in effect and the tenancy cannot be terminated.’  An exception exists, however ‘in circumstances where a cure is impossible.’  The rationale for this exception is that, although a lease or statute provides time for a cure, the existence of such a provision ‘does not necessarily imply that a means or method to cure must exist in every case’ of default.  Where no such means or method of cure exists, ‘to insist upon the service of a formal notice to cure in such circumstances is to compel the performance of a useless and futile act.’”

Faculty Emails Questioning Another Faculty Member’s Doctoral Degree were Protected by Qualified Privilege and not Defamatory

In Udeogalanya v. Kiho, a faculty member of the School of Business at Medgar Evers College, a college of the City University of New York filed an action against her fellow faculty members, alleging that fellow faculty members and staff exchanged emails defaming her by calling into question the legitimacy of her doctoral degree.  The emails included statements that she did not have a recognized Ph.D., that her degree was not genuine, and that it was purchased from a “diploma mill.”

The Supreme Court, Nassau County, granted the fellow faculty members’ motion for judgment during trial, and dismissed complaint. The plaintiff appealed, and the Supreme Court, Appellate Division, held that the alleged statements made by fellow faculty members were protected by “qualified privilege,” and dismissed her appeal.

Defamation is the communication of a false statement that harms the reputation of the party who was the subject of the communication.  In New York, spoken defamation is called “slander” and defamation in other media is called “libel.”  The “common interest privilege,” as explained by the Court of Appeals, New York’s highest Court, holds that one cannot be held liable for defamation, even if the statement is false, if the “communication is made by one person to another upon a subject in which both have an interest.”  This privilege has been applied, for example, to communications among employees of an organization.

There, the Appellate Court determined that the challenged statements “concerned a matter in which the defendants and the recipients of the defendants’ emails had a common interest, namely, the academic reputation and integrity of the School of Business and its faculty.  Contrary to the plaintiff’s contention, accepting her evidence as true and affording her every favorable inference which may be properly drawn from it, that evidence does not support a reasonable conclusion that the challenged statements were motivated solely by malice” – required to overcome the privilege.

Court Properly Severed Agreement’s Illegal Provision

In Aventine Props. v. Branchinelli, the parties had entered into a written agreement where the defendant retained the plaintiff to obtain a tax reduction on the premises he owned.  The plaintiff represented defendant at a Small Claims Assessment Review proceeding and obtained a tax reduction, but the defendant failed to pay the plaintiff’s bill for services rendered and plaintiff sought over $6,600 based on defendant’s breach of contract.

The Small Claims Assessment Review, or SCAR, is a procedure that provides property owners with an opportunity to challenge the tax assessment on their real property as determined by the Board of Assessment Review (in counties outside Nassau and NYC) or the Assessment Review Commission (Nassau County) or the New York City Tax Commission (NYC).  It is a less costly and more informal alternative to a formal Tax Certiorari proceeding, which can be time consuming and expensive.  As outlined in Section 730 of New York’s Real Property Tax Law, property owners may petition the court for review of their property assessment before a specially trained hearing officer for a nominal fee of $30.

The defendant argued the retainer agreement was “void and unenforceable” because “the retainer agreement included language whereunder plaintiff, which is not composed of attorneys, could potentially have represented defendant in a judicial tribunal where representation by a nonattorney is prohibited.”

The District Court granted the plaintiff’s motion for summary judgment, and denied the defendant’s cross-motion.  On appeal, the Appellate Court affirmed under what is often referred to as the “blue pencil” doctrine or rule.  This is a legal concept in common law, where a court finds that portions of a contract are void or unenforceable, but other portions of the contract are enforceable.  The blue pencil rule allows the legally-valid, enforceable provisions of the contract to stand despite the nullification of the legally-void, unenforceable provisions.  However, the revised version must represent the original meaning; the rule may not be invoked, for example, to delete the word “not” and thereby change a negative to a positive.

The Appellate Court stated “Where an agreement consists of a legal and an illegal component, a court may sever the illegal component and enforce the legal one, so long as the illegal aspects of the agreement are merely incidental to the legal aspects and are not the main objectives of the agreement.  ‘Courts will be particularly ready to sever the illegal components and enforce the other components of a contract where the injured party is less culpable and the other party would otherwise be unjustly enriched by using his own misconduct as a shield against otherwise legitimate claims.’  The issue of severability turns also on the ‘question of intention, to be determined from the language employed by the parties.’”

The Court found that the plaintiff, a tax reduction service, is qualified to represent property owners challenging their property tax assessments pursuant to the SCAR procedure referenced in the agreement, but is prohibited from representing the defendant in any other judicial proceeding.  “Consequently, the language of the retainer agreement, which permitted plaintiff to represent defendant in ‘any other proceeding pursuant to New York State Property Tax Law’ is overly broad.  The sole issue presented on this appeal is whether, as defendant contends, the inclusion of such overly broad language renders the entire retainer agreement unenforceable, or whether the District Court properly severed such language and, upon such severance, awarded judgment in favor of plaintiff, as there had been no court proceeding in the SCAR case beyond the SCAR procedure.”

“The fundamental, lawful, objective of the retainer agreement was for plaintiff to procure a tax assessment reduction on the premises by filing all necessary papers and representing plaintiff at town assessment proceedings, in settlement negotiations with the Town Assessor, and in SCAR proceedings.  The language which would have permitted plaintiff to represent defendant in other judicial proceedings where plaintiff was prohibited from appearing was, we find, merely incidental to the main objective of the retainer agreement.  Moreover, the severability provision in the retainer agreement expressed the parties’ intention that, in the event any provision was unlawful, it be severed.  The severance of the unlawful provision did not impair or affect the legality or enforceability of the remaining provisions of the retainer agreement.”

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

New York Enacts Child Victims Act

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New York Enacts Law Reviving And Extending Time Period For Victims of Child Sexual Abuse To Bring Claims Against Individual Perpetrators and Associated Institutions.

Recognizing that victims of the heinous crime and trauma of child sexual abuse typically require many more years than previously allotted by governing law to come forward and seek justice against those responsible for their suffering, the New York State Legislature has recently enacted the Child Victims Act, which was signed into law by Governor Cuomo on February 14, 2019.  Under this new law, previously time-barred claims of victims of child sexual abuse have been revived, and they may now sue for damages up until they reach the age of 55 years.  For those victims of child sexual abuse who are already past the age of 55, the statute provides them a one time, one year grace period, from on or about August 14, 2019 through August 14, 2020 to commence litigation.

Another feature of this new law revives damage claims that had previously been dismissed by a court on the basis of the prior statute of limitations.  In other words, if one had previously sued for relief, but the claims were dismissed as having been brought too late, the Child Victims Act revives those previously dismissed claims, and allows such person to sue again.  In addition, the new law gives a trial priority to lawsuits alleging child sexual abuse over other types of litigations.  Finally, the new law gives victims until their 28th birthday to seek felony criminal charges, and until their 25th birthday to seek misdemeanor criminal charges.

If you or a friend or loved one were a victim of child sexual abuse (i.e. abuse that occurred in New York prior to the victim reaching the age of 18), it is important to exercise all rights and options under the new law promptly, particularly if you or they are now over the age of 55.  Such claims may not only be brought against the perpetrator, but may also be brought against any party whose intentional or negligent acts or omissions are alleged to have resulted in the commission of the abuse, including private, public and religious institutions.

Combined with compassion, keen legal knowledge and many decades of litigation experience, the attorneys at Hamburger, Maxson, Yaffe & McNally, LLP have successfully represented numerous victims of child sexual abuse in processing their claims against the Diocese of Rockville Centre and the Diocese of Brooklyn in connection with an Independent Reconciliation and Compensation Program previously established for survivors of child sexual abuse by Diocese clergy.  We have the right team necessary to enable our clients to understand their rights, to assist them in telling their stories (often for the first time), all while vigorously prosecuting claims on their behalf.  It is our ultimate goal in these delicate matters, above all, to hopefully assist our clients in not only achieving monetary recovery, but in getting on the path to emotional healing.

Individuals who wish to consider filing a claim for monetary relief are well advised to consult with a knowledgeable attorney.  Any individual victim who would like to discuss the Child Victims Act further and consider retaining our law firm to assist and represent them should promptly schedule a free consultation with David N. Yaffe, Esq. at our office.  Please call us at 631.694.2400 to schedule.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

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Church and State/First Amendment | Attorney’s Fees | Holdover Rent

Divided Court Refused To Rule On Dispute Between A Nun and Priest Over Priest’s Alleged Sexual Misconduct

Church and State

In Russian Orthodox Convent Novo–Diveevo, Inc. v. Sukharevskaya, the Appellate Division, Second Department, citing the First Amendment’s mandate that civil courts not interfere in religious disputes, deemed “non-justiciable” an ejectment action brought by a Russian Orthodox convent against a resident nun who was defrocked and ordered to vacate her convent home after she alleged that a resident priest was sexually harassing and abusing her. The appeal was from a judgment of the Supreme Court, Rockland County that found, after a non-jury trial, in favor of the nun and against the convent, dismissing the summary proceeding for ejectment.

According to the decision, the Russian Orthodox Convent, Novo Diveevo, Inc., operates a church and convent on its property in Nanuet. The defendant nun has resided at the convent since 1999.

In about 2003, the nun complained to her superiors about sexual misconduct by one of the convent’s priests. About two years later, the ruling bishops directed the nun to vacate the convent property. When she refused to do so, an ecclesiastical court in June 2006 disciplined her by making her ineligible to wear religious garb and to receive communion for a two-year period. The nun continued to complain of sexual harassment by the resident priest and in 2008, an ecclesiastical court permanently defrocked the nun and, because of this, disallowed her continued residency at the convent.

In January 2008, the convent commenced a summary proceedings in the Justice Court for the Town of Clarkstown to evict the nun. In May 2008, the convent commenced an action in the Supreme Court, Rockland County, for ejectment and to recover damages for use and occupancy against the nun. In September 2008, the Supreme Court consolidated the action with the summary proceedings and conducted a nonjury trial. The Supreme Court determined that the defendant had established an equitable defense to her eviction and ejectment in that the proceedings and findings of the ecclesiastical court were in retaliation for the sexual misconduct allegations. As a result, the Supreme Court dismissed the summary proceeding and the complaint, and the convent appealed.

The Second Department quoting New York’s highest court held that “The First Amendment forbids civil courts from interfering in or determining religious disputes, because there is substantial danger that the state will become entangled in essentially religious controversies or intervene on behalf of groups espousing particular doctrines or beliefs.” Citing to the United State Supreme Court, it also said that a court may properly preside over a dispute involving a religious body only when the dispute may be resolved utilizing neutral principles of law, but here, it determined “that the summary proceedings for eviction and the action, inter alia, for ejectment are inextricably intertwined with the determinations of the ecclesiastical court, particularly its 2008 determination defrocking the defendant and ordering her to vacate the convent.” The Court reasoned that action involved a “review of an ecclesiastical determination that may not be resolved by resort to neutral principles of law,” and that it did not involve “a purely religious determination” requiring the Court to accept the actions of the ecclesiastical court as final and binding.

One Justice dissented stating that the convent established its entitlement to ejectment because a “cause of action for ejectment may be maintained by the owner of real property against a person who wrongfully remains in possession of the property, or who wrongfully claims superior title to the property,” and here “at trial, the plaintiff established, prima facie, that it is the owner of the property, that it requested the defendant to vacate the property, and that the defendant failed to do so.”

And even assuming the retaliation defense to be true the dissenting Justice concluded that the nun “failed to establish that had she not been defrocked (i.e., if she remained in good status as an ordained nun), she would have enjoyed a legally enforceable right to remain and live at the property in perpetuity. Further, even assuming that the plaintiff acted inequitably toward the defendant in defrocking her, the dissenting Justice concluded that the defendant failed to demonstrate that the plaintiff acted inequitably vis-a-vis its property rights, such that equity should be invoked to deny the plaintiff the right to exclude the defendant from its property,” and that because the right to an ejectment was established, “it is unnecessary to reach the issue of whether the defendant’s defrocking was improper.”

State Statute Implies Reciprocal Right for Consumer to Recover Attorney’s Fees in Successful Defense

In DBCA LLC v. Cohen, plaintiff sued for breach of contract seeking to recover a balance Cohen owed under a credit card agreement, and was awarded a default judgment for $14,926.07 in 2006. On February 26, 2018, some 12 years later, the defendant moved by Order to Show Cause to vacate his default and the resulting money judgment claiming that he defaulted because he was not properly served and, therefore, the court did not have personal jurisdiction over him to award the money judgment.

Personal jurisdiction is a court’s jurisdiction over the parties to a lawsuit, as opposed to subject-matter jurisdiction, which is jurisdiction over the law and facts involved in the suit. If a court does not have personal jurisdiction over a party, its rulings or decrees cannot be enforced upon that party. A court that has personal jurisdiction has both the authority to rule on the law and facts of a suit and the power to enforce its decision upon a party to the suit. The Fifth and Fourteenth Amendment to the United States Constitution preserve the right of the individual to due process. Due process requires that notice be given in a manner “reasonably calculated” to inform a party of the action affecting him. New York has a statute that provides for several methods of service, none of which, Cohen argued, were satisfied.

The matter was set down for a “traverse hearing” to determine if Cohen was served personally or otherwise in accordance with the statute. The Court found Cohen “successfully raised a fact issue if personal jurisdiction was properly obtained,” and his motion to vacate was granted, dismissing DBCA’s action entirely. Cohen then sought reasonable attorney’s fees noting the card member agreement specifically authorized such recovery to DBCA LLC had it prevailed in the action, and arguing that because he was the prevailing party as he successfully asserted and won his lack of personal jurisdiction claim, New York’s General Obligations Law §5-327 created a reciprocal right for his recovery of attorney’s fees on the consumer contract.

In pertinent part, GOL §5-327(2) provides the following:

Whenever a consumer contract provides that the creditor, seller or lessor may recover attorney’s fees and expenses incurred as the result of a breach of any contractual obligation by the debtor, buyer or lessee, it shall be implied that the creditor, seller or lessor shall pay the attorney’s fees and expenses of the debtor, buyer or lessee incurred as the result of a breach of any contractual obligation by the creditor, seller or lessor, or in the successful defense of any action arising out of the contract commenced by the creditor, seller or lessor. Any limitations on attorney’s fees recoverable by the creditor, seller or lessor shall also be applicable to attorney’s fees recoverable by the debtor, buyer or lessee under this section.  Any waiver of this section shall be void as against public policy.

Quoting legal precedent, the Court said that the statute “evens the playing field between a consumer and a creditor, seller, or lessor,” by implying a reciprocal right on behalf of the consumer (the debtor, buyer, or lessee).  “As such, even if not provided for by contract, a consumer may recover its attorneys’ fees in a successful breach-of-contract action against a creditor, seller, or lessor or in the event of a successful defense of an action for breach of contract brought by the creditor, seller, or lessor.”

Relying on the General Obligations Law, the Court set the case down for an inquest to determine the amount of fees to be awarded.

Liquidated Damage Lease Clause Was Not A Penalty

In Carlyle, LLC v. Quik Park Beekman II, LLC, a Landlord brought a holdover summary proceeding against a tenant under a commercial lease, its successor tenant by assignment, and the undertenant. A City Civil Court awarded the landlord, among other things, the holdover use and occupancy liquidated damages as stated in the lease, and the tenant Quik Park Beekman II, LLC appealed.

According to the decision, the underlying 2001 commercial lease agreement for the East 76th Street, multi-level, parking garage at issue, as well as its 2009 extension/modification agreement, contained liquidated damages provisions together providing for use and occupancy at two times the rent plus $25,000 per month in the event of a holdover – what is commonly referred to as a “holdover rate.”

Generally, a party’s freedom to contract includes their freedom to contract for liquidated damages. A liquidated damages provision is an estimate, made by the parties at the time they enter into their agreement, of the extent of the injury that would be sustained as a result of any breach of the agreement. Courts will generally uphold the validity of liquidated damage provisions so long as the damages are neither “unconscionable nor contrary to public policy.”

In determining whether a liquidated damages clause constitutes an unenforceable penalty, the issue is whether the amount liquidated bears a reasonable relationship to the probable harm or whether the amount fixed is “grossly disproportionate” to the probable harm. The lease is to be interpreted as of the date of its execution, not the date of its breach. Thus, a court must look to the anticipated loss discernible at the time of contracting and not the actual loss incurred by the breach to determine whether liquidated damages are reasonable or whether the damages are capable of calculation. The fact that a plaintiff’s damages as a result of defendant’s holdover may be capable of calculation at the time of the wrongful holding over is irrelevant. The only question is whether, at the time the lease was executed, the liquidated damage amount bore a reasonable relationship to the probable harm to be incurred by the landlord in the event that the tenant held over after the expiration of the lease and whether the landlord’s damages were incapable of being precisely fixed at that time. Obviously the parties’ estimation of the fair market value can virtually always be gleaned by the amount specified as the monthly rent for the final month of the lease. But the rental value of the premises is not the only factor in a landlord’s damages, it is merely the only factor capable of a precise estimation at the time the lease is executed. That is precisely why “holdover” rates are calculated based upon a multiple of the last month’s rent which at the time of executing the lease is the amount the parties agreed was their best “guestimate” of what the fair market value of the Lease would be during the last year of the lease. Otherwise, focusing solely on the fair market value of the property during the holdover period would nullify the very purpose of a “liquidated damages” holdover clause. The fair market value, or “use and occupancy,” is already an incident of damages, as a matter of law, for a tenant holding over beyond the expiration of the lease term. Thus, a liquidated damages clause should be seen as something more than merely the usual use and occupancy fee, or fair market value of the property at the time of holding over.

In actuality, there are numerous other factors which may affect the damages incurred by a landlord in the event of a holdover, all of which are incapable of any precise valuation at the time a lease is entered into and which justify the imposition of double rent as liquidated damages. Among damages which might result from a tenant’s holdover, a landlord might be liable to an in-coming tenant for damages in failing to timely deliver possession, or might lose the tenant altogether. A landlord might also be liable for brokerage fees on a subsequent lease even though the tenant has elected to walk away from the lease as a result of the failure to timely deliver possession. Additionally, the landlord’s ability to market the premises would undoubtedly be hindered by uncertainty as to when the landlord will be able to deliver possession and thus the premises may be vacant for a longer period of time than if tenant had vacated timely.

All of these things, among others, may potentially contribute to the damage incurred by a landlord in the event of a holdover. Again, the reasonableness of the double rent provision is to be determined as of the date the lease is entered into, not the date of its breach. Thus, the issue is not whether these damages were actually incurred by plaintiff, the issue is whether, given all of these possible damages, the double rent provision in the Lease bore a reasonable relationship, at the time the lease was negotiated, to the harm likely to be incurred by a landlord as a result of the tenant’s holdover

As for “unconscionability” the Court stated that it “has been defined as the ‘absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party” and is usually accompanied by ‘a gross inequality of bargaining power.’

Here, the Court found that the agreement was “entered into by sophisticated parties as part of a commercial lease agreement setting forth a monthly rent in excess of $100,000 per month,” and because the Tenant failed to establish that damages could have easily been anticipated when the lease and its extension/modification were executed, or that the amount fixed was plainly or grossly disproportionate to the loss, it did not constitute an unenforceable penalty.”

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Lease Renewal | FLSA | Life Partner

Lease Renewal Option Missing Essential Element Found Void and Unenforceable

Lease Renewal Option Missing Essential Element Found Void and Unenforceable

In Vizel v. Vitale, the plaintiff-tenant and defendant-landlord argued in cross-motions for summary judgment over whether a renewal option for the operative lease was valid or invalid as a matter of law.

The landlord argued that because the option-to-renew clause did not identify a rent amount or methodology to calculate rent during a renewal, it was therefore unenforceable. The tenant argued that the option was binding because the renewal rent would increase by three percent annually as the rental amounts increased throughout the lease term, and claimed he timely exercised his option and was not in default at the time he opted to renew.

The Court found in favor of the landlord, concluding that because the lease did not contain a methodology to determine missing rent for the renewal period, and the renewal clause was silent as to renewal rent, the lease option was missing an essential element and unenforceable and void as a matter of law. The Court declared the tenant a holdover tenant, and granted the landlord use and occupancy as he was entitled to holdover rent from expiration to the time the tenant vacates the premises, and issued a warrant of eviction.

In so concluding, the Court reasoned that the “doctrine of definiteness or certainty is well established in contract law.” A court cannot enforce a contract unless it is able to determine what in fact the parties have agreed to, and if an agreement is not “reasonably certain in its material terms,” there can be no legally enforceable contract. It noted that “a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable.”

Using a well-defined test established by the State’s highest court, the Court stated there are two ways in which the requirement of definiteness could be satisfied in the absence of an explicit contract term: (1) an agreement could contain a methodology for determining the missing term within the four corners of the lease, for a term so arrived at would have been the end product of agreement between the parties themselves; or (2) an agreement could invite recourse to an objective extrinsic event, condition or standard on which the amount was made to depend.

The lease renewal option stated in relevant part:

At the option of the Tenant, the term of the Lease shall extend for an additional five (5) year period from July 1, 2015 to June 30, 2020 provided Tenant provides written notice to the Owner by certified mail, with return receipt to be received by the Landlord no later than April 1, 2015 provided the Tenant is not in default of any provisions of the Lease as amended and modified.

Clearly, the lease did not within its four corners contain a methodology to determine the missing rent for the renewal period, nor invited recourse to an objective extrinsic event, condition or standard on which the amount was made to depend. It was silent as to a renewal rent. For this reason, the Court determined that the lease option-to-renew “is missing an essential element and is therefore void and unenforceable.”

Fashion Magazine Interns Were Not Employees Under FLSA

Fashion Magazine Interns Were Not Employees Under FLSA

In Wang v. The Hearst Corporation, unpaid interns for various fashion magazines brought a putative class action against the corporation that owned the magazines, alleging they were “employees” entitled to minimum wage under, among other things, the Fair Labor Standards Act (FLSA). The United States District Court for the Southern District of New York denied the interns’ motion for partial summary judgment and class certification and the interns appealed. The Second Circuit Court of Appeals held that there was a connection between one intern’s formal education program and her internship, even though she did not receive academic credit for internship, and the totality of the circumstances supported a finding that the interns were not “employees” entitled to minimum wage under FLSA.

As the Court stated, the question before it was whether Hearst “furnishes bona fide for-credit internships or whether it exploits student-interns to avoid hiring and compensating entry-level employees.”

In determining the question, the Court noted that the U.S. “Supreme Court has long recognized that not every individual who performs a service for an employer qualifies as an ‘employee’ under the FLSA,” and applied the Court’s “primary beneficiary” test as the way to distinguish employees from bona fide interns. “To guide our ‘flexible’ analysis,” the Court wrote that it weighed and balanced the totality of the circumstances while looking to “seven non-exhaustive considerations specific to the context of unpaid internships:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa;
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions;
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit;
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar;
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning;
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern;
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The Court further noted that the “totality of the circumstances should be considered in view of the ‘purpose of a bona fide internship … to integrate classroom learning with practical skill development in a real-world setting.’”

The plaintiffs conceded that as to factors one and seven (expectation of payment and entitlement to a job, respectively), they had none. As for the second factor (training), the Court concluded that this “clearly contemplates that training opportunities offered to the intern include ‘product[s] of experiences on the job.’” The Court also found that “the internships did provide beneficial training” and for this reason the plaintiffs had “also misread the closely related” fifth factor (valuable duration) in “arguing that the interns were not receiving ‘beneficial learning’ when they performed repetitive or similar tasks they had already ‘learned,’” noting that as “exemplified by the meeting minutes and photoshoots, practical skill may entail practice, and an intern gains familiarity with an industry by day to day professional experience.” As for factors three and four, the Court said that these “relate to the integration of the internship to the student-intern’s academic program and academic calendar, respectively,” and that in general “the internships were arranged to fit the academic calendar and required academic credit as a prerequisite.” For factor three (academic integration) all interns, except one that had interned between the completion of her undergraduate degree in fashion and the start of her graduate degree, also in fashion. But for her, the Court concluded that she “intentionally deferred her start date for graduate school and took a full time internship at a Hearst magazine to gain professional experience” and concluded that a jury is “not necessary to infer from these undisputed facts” that her internship was “tied to” her formal education. The “program required a student to earn approval from an accredited university for the ‘receipt of academic credit’ generally is more telling than whether credit was actually awarded in that individual’s case.” As for the sixth factor (displacement) the Court examined the “extent to which an intern’s work complements the work of paid employees or displaces it, and although the district court found that the sixth factor favored the interns because the interns completed some work regularly performed by paid employees, the Court concluded that this factor “alone is not dispositive. An intern may perform complementary tasks and in doing so confer tangible benefits on supervisors.”

Thus, the Court affirmed the district court’s conclusion that the interns were not “employees” for the purposes of the FLSA.

“Life Partner” Was Not Child’s Parent

“Life Partner” Was Not Child’s Parent

In Garnys v. Westergaard, a life partner of a child’s deceased mother filed a visitation petition. The Family Court dismissed petition and the life partner appealed. The Appellate Court held that the life partner was not the child’s “parent,” and thus she did not have standing to seek visitation with the child, even if the life partner played a role in the daily upbringing of the child from his birth until his mother became ill.

According to the decision of the Appellate Division, Second Department, in May 2015, the child’s biological mother died of cancer. The mother was not married when the child was born in 2005, and a second parent is not listed on the child’s birth certificate. Prior to her death, the mother executed a will providing that Kermit Stang Westergaard and Azadeh Houshyar Westgaard, the child’s maternal uncle and aunt, be appointed the child’s guardians. In January 2016, the uncle and aunt filed a petition pursuant to Family Court Act Article 6 to be appointed the guardians of the child. In June 2016, while the guardianship proceeding was pending, the petitioner commenced this proceeding pursuant to Family Court Act Article 6 against the uncle and aunt, seeking visitation with the child. The uncle and aunt moved to dismiss the visitation petition, arguing that the petitioner lacked standing to seek visitation under Domestic Relations Law § 70, and the Family Court granted the motion and dismissed the visitation petition. The petitioner appealed.

The Appellate Court found that the “Legislature has clearly limited the right to seek visitation to noncustodial parents, grandparents, and siblings.” Here, the petitioner argued that she should be considered a “parent” under the law because “she moved in with the mother shortly before the child’s birth, she played a role in the daily upbringing of the child from his birth until the mother became ill, and she and the mother considered each other ‘life partners,’ even though they never married or registered as domestic partners.” Noting that a recent decision from the State’s highest court expanded the definition of parent “beyond biological and adoptive parents to include a person who establishes, by clear and convincing evidence, that he or she agreed with the biological parent of the child to conceive and raise the child as co-parents, the Court concluded that petitioner “failed to sustain her burden of establishing standing to seek visitation. The petitioner failed to demonstrate that the mother consented to anything more than the petitioner assisting her with child-rearing responsibilities. For example, the petitioner does not contend that the child referred to her as his mother, and the petitioner was not listed as a parent on school records or legal documents. Most importantly, after the mother was diagnosed with terminal cancer, she executed a will providing that the respondents be appointed the child’s guardians.”

“Under the particular circumstances of this case,” the Court agreed with the Family Court that the respondent lacked standing to seek visitation.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such