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

Contract By E-Mail | Adverse Possession | Dead Tenant

State’s Highest Court Finds E-Mails Did Not Refute Employee’s Claim Those E-Mails Formed A Binding Contract

State’s Highest Court Finds E-Mails Did Not Refute Employee’s Claim Those E-Mails Formed A Binding Contract

In Kolchins v. Evolution Markets, Inc., a former employee brought an action against his employer, alleging that the employer breached his employment agreement when it terminated him and failed to pay him a production bonus or non-compete payment. After an unsuccessful motion to dismiss, the employer appealed to New York’s highest Court, the Court of Appeals.

The issue on appeal was “whether the documentary evidence proffered by defendant Evolution Markets, Inc. on its motion to dismiss pursuant to CPLR 3211(a)(1) conclusively refuted plaintiff Andrew Kolchins’ breach of contract claims.”

The plaintiff and the defendant had entered into a written three-year employment agreement with an “ending date” of August 31, 2012. Under this agreement. The plaintiff was an “at will” employee; however, if defendant terminated him without “Cause” or he ceased employment for “Good Reason,” and he complied with certain restrictive covenants, he would be paid his base salary through the ending date, as well as a “special non–compete payment” thereafter. His compensation package included a $200,000 annual base salary and a “sign on bonus” of $750,000.  Separately, the agreement set forth terms under which plaintiff was eligible to receive a “production bonus” that was “based on [his] performance” each trimester, and which would be “paid within two months of the close of a given trimester.” It also provided for minimum “guaranteed compensation” of $750,000 each contract year. The guaranteed compensation consisted of plaintiff’s “base salary and any bonus paid or payable” to him for such period, but did not include the amount paid as his sign on bonus, and it expressly stated that “[f]or the avoidance of doubt,” the bonus to be paid in respect of the second trimester of 2009 was not included in the calculation of the guaranteed compensation, but that any special non-compete payment made during the last year of the agreement would “count towards” his guaranteed compensation. Importantly it also provided that “in order to be eligible to receive any production bonus, bonus from the discretionary management bonus pool, or guaranteed compensation,” he had to be “actively employed” at the time of the defendant’s “firm-wide bonus payment dates.”

As the ending date of the employment agreement approached, the defendant’s chief executive officer sent the plaintiff an email with the subject line “In writing,” which stated that, “[t]he terms of our offer are the same [as the] terms of your existing contract (other than a clarification around the issue of departed members of the team), and include: [a] 3 year term[,] $200,000 base salary[,] $750,000 sign on bonus … [,] $750,000 per year minimum cash compensation[, and the same] production bonus.” He added, “[a]ny further questions, let me know but u [sic] do have your existing contract.” One month later, on July 16, plaintiff responded by email with “I accept, pls [sic] send contract,” to which Ertel replied, “Mazel. Looking forward to another great run.” Following this exchange, plaintiff and defendant’s general counsel communicated by email and in person over the ensuing weeks “in an unsuccessful attempt to reduce the parties’ mutual understanding to a more formal written instrument. Despite these efforts, defendant no tified plaintiff, by letter dated September 1, 2012, that his employment had ceased up on the expiration of the 2009 agreement.”

The plaintiff then commenced the breach of contract action against the defendant, alleging, that the e-mail exchanges constituted a written confirmation of the new agreement.

On the appeal to the Court of Appeals, the Court reasoned that in considering whether a binding contract exists, the first step is to determine whether there is a sufficiently definite offer by which its unequivocal acceptance will create an enforceable contract, and it was necessary to look to the “objective manifestations of the intent of the parties as gathered by their expressed words and deeds,” and that “disproportionate emphasis is not to be put on anysingle act, phrase or other expression, but, instead, on the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain.” It also recognized that if an agreement is not “reasonably certain in its material terms,” there can be no legally enforceable cont ract because courts will not impose contractual obligations when the parties did not intend to have a binding agreement But it also recognized that while a “mere agreement to agree, in which a material term is left for future negotiations, is unenforceable” the terms of a contract do not need to be “fixed with absolute certainty” to create a binding agreement. The Court noted that if the parties had expressly stated that there would be no binding agreement until it is reduced to writing and signed by both of them, there would be no agreement until it had been written out and signed – but that was not expressed here. Here, the initial email to the plaintiff that “[t]he terms of our offer are the same [as the] terms of your existing contract”—apart from “a clarification” concerning an issue that plaintiff characterizes as minor—and outlined the core terms that were included in the 2009 agreement,” and that if plaintiff had “[a]ny further questions” he should consult his “existing contract,” the Court noted, “explained that ‘the terms of the offer’ were to be nearly identical to the terms of plaintiff’s existing contract,” and that “a reasonable factfinder could interpret it as evincing an objective manifestation of defendant’s intent to enter into a bargain, such that plaintiff was justified ‘in understanding that his assent to that bargain [was] invited and [would] conclude it.’” The Court stated that it could “reasonably be inferred” that this email “constituted a valid offer by defendant. In response to that email, plaintiff wrote “I accept. pls [sic] send contract,” to which there was a reply, “Mazel. Looking forward to another great run.”

The Court concluded that “this exchange—in essence, we ‘offer’ and ‘I accept,’ followed by an arguably congratulatory exclamation, coupled with a forward-looking statement about the next stage of the parties’ continuing relationship—sufficiently evinces an objective manifestation of an intent to be bound for purposes of surviving a motion to dismiss.” And although the initial email referenced one outstanding “clarification,” the Court found that the “parties’ further communications indicate that such clarification was incorporated into the first draft of the new agreement” to which the plaintiff had not objected.

Simply. If you don’t intend your communications to create a contract, you should expressly reserve the right not be bound except in a formal written document signed by the parties.

Occupants of Residence Fail to Show Adverse Possession

Occupants of Residence Fail to Show Adverse Possession

In Jaffer v. Hirji, the occupants of a residential house brought action against their brother and his wife, for, among other things, adverse possession. Adverse possession is a process by which real property can change ownership. In New York, it is governed by statute, as interpreted by the courts. By adverse possession, title to another’s real property can be acquired without compensation, by holding the property in a manner that conflicts with the record owner’s rights for a specified period. Here, the occupants appealed from order of the United States District Court for the Southern District of New York, which granted defendants judgment on the pleadings on the adverse possession claim. The Second Circuit affirmed that part of the lower Court’s judgment holding that the occupants failed to show that their possession of the residence was “open and notorious,” as a necessary element of adverse possession.

According to the decision of the Court, this case involved an intra-family dispute over who owns a residential house in Hartsdale, New York. In 1982, the now-deceased Mohamed Hirji purchased the house, and put the title in the names of two of his sons: plaintiff Ahmed Hirji and non-party Mustafa Hirji. According to the attorney who represented Mohamed at the purchase, Mohamed intended the house to be “a place that the family could reside in.” In 1989, plaintiff Ahmed and Mustafa transferred the title to their father Mohamed and their brother, defendant Naushad Hirji, as “joint tenants with the right of survivorship.” Mohamed and defendant Naushad paid no consideration. Mohamed died in 1998, and his interest in the house devolved by operation of New York law to defendant Naushad. In 2001, defendant Naushad deeded the house to himself and his wife, defendant Sabira Hirji. The defendants currently possess title to the house, but live in Tanzania. The defendant Naushad testified that he never spoke to the attorney who prepared the deeds in 1989 and 2001. During this whole period, defendant Naushad visited the house only once and never hired anyone to inspect it.

Meanwhile, plaintiffs Ahmed, Shehzad Hirji (son of Ahmed), Latifa Jaffer (daughter of Mohamed, sister of Ahmed), and Hussein Jaffer (husband of Latifa) now reside at the house, where they all (except Shehzad) have lived since 1984. Between 1984 and 2013, plaintiffs maintained and made capital improvements to the house, paid all subject property taxes, and never remitted rent payments to defendants.

In January 2014, defendants issued a Notice of Termination to the plaintiffs requiring them to vacate the house on or before February 28, 2014. Three days before they were required to vacate, the plaintiffs commenced this action.

As for the adverse possession claim, the Court reasoned that to establish such a claim under New York law, “one must show that the occupation of a property is ‘(1) hostile and under claim of right; (2) actual; (3) open and notorious; (4) exclusive; and (5) continuous for the required period’ of 10 years. While New York courts typically presume hostility where the other elements are satisfied, this presumption does not apply where ‘there is a close and cooperative relationship between the record owner and the person claiming title through adverse possession ….’ In such circumstances, the ‘party asserting the adverse possession claim must come forward with affirmative facts to establish that the use of the property was under a claim of right and adverse to the interests of the true owners.’” Here, because Ahmed conveyed title to his brother, defendant Naushad, in 1989, “permission can be implied from the beginning,” and adverse possession will not arise until there is a “distinct assertion of a right hostile to the owner.” Because the amended complaint did not contain any affirmative facts that the plaintiffs did anything that constituted “a distinct assertion of a right hostile to” defendants, the Court concluded that the District Court appropriately granted Defendants’ motion to dismiss the adverse possession claim.

Lease Relied on In Nonpayment Proceeding Could Not Have Been Signed by A Dead Tenant

Lease Relied on In Nonpayment Proceeding Could Not Have Been Signed by A Dead Tenant

In 470 Realty NY LLC v. Estate of Orange a residential landlord sought to collect arrears in a nonpayment summary proceeding. The respondent moved to dismiss the  proceeding, providing the Court with decedent tenant’s death certificate showing she died June 27, 2015, and arguing that the petition sought arrears at a time no lease existed between the parties, and failed to state a cause of action for nonpayment of rent. In response, the landlord provided a renewal lease allegedly signed by the decedent tenant, almost a year after she died, for a two-year term to commence May 1, 2016.

The Court noted it was undisputed the arrears accrued during the period of this purported lease, but ruled that while an executor may remain in possession until a lease expired—it became the estate’s personal property—it may not be renewed.

It found petitioner failed to state a cause of action as any lease signed in April 2016, and relied on by petitioner as a basis for this suit, could not have been signed by the decedent tenant,  noting arrears were sought well after expiration of the last lease the decedent tenant could have signed. “Upon the death of the tenant -of-record, the lease does not terminate but becomes the personal property of the deceased tenant’s estate. The executor, administrator, or other legal representative of the estate of the deceased tenant, may remain in possession until the expiration of the current lease, but may not renew the lease.” RPAPL §711(2) sets forth that a nonpayment proceeding must be predicated on a default in payment of rent owed pursuant to the agreement under which the premises are held.

Because there could not have been a renewal lease, the non-payment proceeding was dismissed.

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

Yellowstone Injunction Unavailable | Inmate Renounces Inheritance | Hotel Hair Policy

No Yellowstone Injunction For Tenant’s Failure to Carry Insurance

No Yellowstone Injunction For Tenant’s Failure to Carry InsuranceIn NY Great Stone Inc. v. Two Fulton Square a “Yellowstone” injunction was denied to a tenant.

As the Court noted: “Yellowstone injunctions are routinely granted to avoid forfeiture of a commercial tenant’s interest prior to a determination of the merits. A tenant must demonstrate the existence of a commercial lease, receipt of a notice of default, a timely application for a temporary restraining order and the desire and ability to cure the alleged default.”

In prior newsletters, we explained that since the Court of Appeals’ decision in First Nat’l Stores v. Yellowstone Shopping Ctr., 21 N.Y.2d 630 (1968), tenants have developed a practice of obtaining a stay of the cure period before it expires to preserve a lease until the merits of a dispute over the default notice may be resolved in court. Effectively, tenants have learned from the mistake of the tenant in the case of Yellowstone who commenced an action for declaratory judgment on the last day of the cure period, but did not obtain a temporary restraining order. The Court of Appeals ultimately held that in absence of the injunction, it was powerless to revive the expired lease. Significantly, the courts have since granted such injunctive relief on less than the normal showing required for a preliminary injunction because of the threat of a forfeiture of the valuable leasehold interest.

Thirty years later, the Court of Appeals revisited its Yellowstone decision in the case of Grabuard Mollen Horowitz Pomeranz & Shapiro v. 600 Third Ave. Assocs., 93 N.Y.2d 508 (1999). In that case, the Court of Appeals analyzed what it recognized was the seminal decision to a “new era of commercial landlord-tenant law in New York State[,]” creating a “remedy for tenants when confronted with a tangible threat of lease termination.”

Importantly, in reaffirming the standards which a party requesting the Yellowstone injunction must demonstrate, the Court of Appeals re-enforced the restrictive nature of the common law remedy that has evolved out of its original decision in Yellowstone, concluding that “[t]hese standards reflect and reinforce the limited purpose of a Yellowstone injunction: to stop the running of the applicable cure period.”

For example, it is a well-established tenet in Yellowstone applications that if the application is made after the expiration of the cure period, and even before the expiration of subsequent notice of termination of lease, a court is divested of any power to issue the injunction, regardless of the merits of the tenant’s position on the default, because the court cannot “stop” what has already run.

Here, in NY Great Stone Inc., the action arose out of a 10-day notice to cure dated November 21, 2014. The defaults in the notice pertained to the tenant’s “failure to conduct a hydrostatic pressure test on the sprinkler system as a violation of Article 6 of the lease and a separate violation of Article 8 of the lease and Article 6 of the rider for failure to obtain comprehensive general liability insurance.”

The Court reasoned that “[e]ssential to obtaining a Yellowstone injunction is a demonstration by movant that it desires and has the ability to cure the alleged default. *** In the instant case, the subject lease and rider impose an obligation on the tenant to procure and maintain general liability insurance from the commencement of the lease throughout the term of the tenancy that names the landlord as an additional insured.” Although the enant had annexed a Certificate of Liability Insurance dated December 2, 2014 which provides coverage effective April 7, 2014 to April 7, 2015 and indicates defendant is an additional insured, the Landlord argued that the failure to deliver actual insurance policies rather than a certificate is also a violation of the lease, and that tenant’s submission is clearly inadequate to evidence the maintenance of insurance coverage during the entire term of the lease which commenced on March 10, 2011.

The Court held that a “tenant’s failure to maintain insurance constitutes a material default of the terms of the lease. *** A default of this type is incurable as a prospective insurance policy does not protect a landlord against unknown claims that might arise during the period in which no coverage existed. *** Although plaintiff points to that portion of the notice to cure which directs it to obtain general public liability insurance, it does not alter the specific terms of the lease which require insurance be maintained from the inception of its tenancy.”

Yellowstone relief was, therefore, unavailable to avoid forfeiture.

Will Renunciation Prevents Crime Victim’s Son-of-Sam Pay

Will Renunciation Prevents Crime Victim’s Son-of-Sam PayIn Estate of Grochocki, a Surrogate recently decided that an inmate validly renounced his deceased mother’s inheritance before claims for a share of her estate were filed by the Office of Victim Services and the father of the inmate’s victim. As a result, the mother’s estate will go to the inmate’s friend rather than to compensate the victims of his crime—a drug-fueled fatal stabbing in 1993.

According to this recent decision, Deborah A. Grochocki died September 10, 2014, leaving a Last Will and Testament dated October 9, 2012, which devises her entire estate to her son, John C. Greenleaf. The Will also provides that if Mr. Greenleaf predeceases decedent, the estate will pass to decedent’s friend, Cari Marie Slater, who survived decedent and was also nominated as Executor in the Will.

The petition for the probate of the Will, filed September 22, 2014 by the named Executor, lists Mr. Greenleaf as under disability, due to incarceration. Mr. Greenleaf is a convicted murderer and has been incarcerated since long before the Will was prepared. On September 30, 2014, the Court forwarded a letter to the New York State Office of Victim Services (“OVS”) advising it of Mr. Greenleaf’s status as a beneficiary, as required by SCPA §2222-a.

This law provides:

Where the legatee, distributee or beneficiary is an inmate serving a sentence of imprisonment with the state department of corrections and community supervision or a prisoner confined at a local correctional facility, the court shall give prompt written notice to the office of victim services, and at the same time direct that no payment be made to such inmate or prisoner for a period of thirty days following the date of entry of the order containing such direction.

According to the statute’s commentary, a crime victim has certain rights to recover damages from the convicted criminal under Executive Law § 632-a (the “Son-of-Sam law”). Before 2001, the relief offered by that statute was inadequate, particularly because victims could recover only funds that were the product of the crime, such as royalties on a book made possible by the criminal’s notoriety, but not the prisoner’s funds from other sources. The legislature amended the Son-of-Sam law to broaden the categories of criminals subject to these laws, to broaden the categories of funds available for the victim, and to extend the statute of limitations for victims to bring these actions. It simultaneously enacted this statute, which provides that if a prisoner is a distributee or legatee of an estate, the court must promptly notify the Office of Victim Services and direct that no payment be made to the prisoner for thirty days after the date of its order containing that direction. The Son-of-Sam law requires the Office of Victim Services (formerly “State Crime Victims Board,”) to notify the victim and authorizes it to apply for additional provisional relief for the victim.

The Court recognized renunciation as valid. It noted that the renunciation was properly filed within nine months of the decedent’s death, as required by Estates, Powers & Trusts Law §2-1.11. “A renunciation is a declination of a right or property bestowed by another, without the disclaiming party ever coming legally into possession of that right or property. The right to renounce has existed in New York in the common law for two centuries. *** The steps, conditions and effects of a renunciation are now codified in EPTL §2-1.114.

“The elements of a statutory renunciation include: 1. a written renunciation of interest; 2. an affidavit from the renouncing party that he has not and will not receive consideration for the renunciation from a person whose interest is accelerated by the renunciation; 3. service of a notice of enunciation upon the fiduciary or other individual/entity holding the assets to be disclaimed, and upon the individual(s) whose interest is accelerated by virtue of the renunciation. EPTL §2-1.11(c)(2). The renunciation and affidavit of no consideration are filed in the Surrogate’s Court, together with proof of service of the notice of enunciation upon the proper persons. To satisfy the statute, all of these steps need to be taken within nine months of, in this case, decedent’s death. EPTL §§2-1.11(c)(2) and (b)(2)(A). A renunciation is irrevocable and the effect of the renunciation is that the renouncing party is treated as if he had predeceased the decedent, with respect to the interest(s) renounced. SCPA §§2-1.11(h) and (e).”

Broome County Surrogate said that while the “laudable” provisions of Executive Law §632-a provide for crime victims to recover compensation from perpetrators, the Legislature has not barred convicts from renouncing inheritances.

“The Legislature could choose to further expand Executive Law §632-a by restricting the rights of a convicted person to disclaim [inheritances], but to date has not done so,” Guy wrote in Matter of Grochocki, 2014-605. “The court must abide by the law as it currently exists, not as it might wish it to be.”

Long Hair Policy Makes the Cut, If Even Handed

Long Hair Policy Makes the Cut, If Even HandedRecently in Viscecchia v. Alrose Allegria LLC, a federal District Court upheld a claim of selective enforcement as a form of gender discrimination, but dismissed a gender discrimination claim under an employer’s grooming policy.

Richard Viscecchia, Jr., who had long hair, was a line cook at defendant’s hotel since June 2009. In 2012, hotel management told him to cut his hair because it was too long. On October 1, 2013, the hotel’s human resources department issued a written warning that Viscecchia had to cut his hair by October 15th in accordance with the hotel’s hair policy. Viscechia was fired on October 16th after failing to comply.

He brought a federal action alleging gender discrimination violating Title VII of the Civil Rights Act and New York Human Rights Law (“NYHRL”), as well as federal and State claims for retaliation for engaging in protected activities. On motion by he defendant, the District Court only partly dismissed the lawsuit. It dismissed, as a matter of law, Viscecchia’s claim that the portion of defendant’s hair policy requiring only male employees to have short hair was inherently discriminatory. As held by the Second Circuit, every other federal court of appeals that has addressed the issue, and New York State courts, an employer does not violate Title VII or the NYHRL by requiring short hair on men, but not on women, as part of an overall grooming policy.

In this case, the defendant’s hair policy … clearly imposes grooming requirements on both male and female employees. Male employees are required to have hair cut ‘above the shirt collar’ and side burns less than ‘one inch in length and … neatly trimmed. *** Female employees are also bound by the remaining provisions of the policy, including having hair ‘clean, trimmed, well brushed and neat at all times’ and the prohibition against ‘[e]xtreme styles’ and against ‘flowers, colored ribbon’s [sic], beaded, braided or streaked hair.’ *** Female and male employees are similarly required to maintain their hair color ‘at neutral tones.’ *** The Court notes that these portions of the policy apply to all employees, whether male or female. Thus, it is clear that the hair length requirement is part of a comprehensive personal grooming code regarding hair that is applicable to all employees.”

Because the law is clear that an employer can adopt sex-differentiated grooming policies that require only male employees to have short hair, Viscecchia could not have had a good faith, reasonable belief that such policy was discriminatory.

However, the Court further held that Viscecchia’s claim that defendant selectively enforced its hair policy against men while allowing women to violate the policy— by among other things having streaked hair—absent enforcement stated a plausible claim of gender-based discrimination violating Title VII and the NYHRL. “[T]hough hair length policies that differentiate based on sex are permissible under Title VII, the grooming policies still must be ‘enforced even-handedly between men and women, even though the specific requirements may differ.’ *** Courts have found that, even if a policy is facially non-discriminatory, if it is not enforced uniformly across gender lines, a valid discrimination claim may exist.”

As for the retaliation claim, the Court recognized that “Title VII forbids an employer to retaliate against an employee for, inter alia, complaining of employment discrimination prohibited by Title VII.” “Further, Title VII protects not only those employees who opposed employment practices made unlawful by the statute but also those who have ‘a good faith, reasonable belief that the underlying challenged actions of the employer violated the law’ even if those actions did not.”

The Court noted that the Amended Complaint alleged that Viscecchia “‘complained to Defendant that their policy on hair length was unlawfully discriminatory towards men.’ He does not state that his complaint to the employer was limited to one of ‘inherent discrimination’ based upon hair length, as opposed to discrimination based upon selective enforcement. In other words, it is plausible — depending upon the nature of the conversation between plaintiff and the employer, and circumstances surrounding that conversation — that plaintiff’s complaint about unlawful discrimination regarding the hair policy could have included, or have been understood by the defendant to include, a complaint about selective enforcement of the overall hair policy.”

In sum, the Amended Complaint gave defendant notice of the bases for plaintiff’s retaliation claim and states a plausible claim for retaliation.

Marriage Equality Not Retroactive | NYC Park | MTA Ads And The First Amendment

The Marriage Equality Act is Not Retroactive, So Decedent’s Former Partner Can Inherit His Estate

The Marriage Equality Act is Not Retroactive, So Decedent’s Former Partner Can Inherit His Estate In Matter of the Estate of Leyton, a Manhattan Surrogate recently ruled that a same-sex couple who held a “commitment ceremony” but broke up years before New York State passed the Marriage Equality Act legalizing gay marriage, could not formally divorce because their ceremony was not a marriage under the Act. As a result, the bequest made by one of the men to his former partner in an estate with assets worth more than $1 million, was not voided by New York’s laws that disqualify inheritance to a divorced spouse named in a will.

A petition was brought by the decedent’s mother and sister who sought to disqualify the former partner under New York’s Estates, Powers and Trusts Law (“EPTL”). The EPTL provides:

(a) Except as provided by the express terms of a governing instrument, a divorce . . . or annulment of a marriage revokes any revocable (1) disposition or appointment of property made by a divorced individual to, or for the benefit of, the former spouse, including, but not limited to, a disposition or appointment by will, by security registration in beneficiary form (TOD), by beneficiary designation in a life insurance policy or (to the extent permitted by law) in a pension or retirement benefits plan, or by revocable trust, including a bank account in trust form, (2) provision conferring a power of appointment or power of disposition on the former spouse, and (3) nomination of the former spouse to serve in any fiduciary or representative capacity, including as a personal representative, executor, trustee, conservator, guardian, agent, or attorney-in-fact.

According to the recent decision, the decedent’s mother and sister argued that because the former partner, who was also named as the executor under the will, and the decedent, both men, entered into a commitment ceremony in New York in 2002, but thereafter separated, the former partner is a “former spouse” who is disqualified pursuant to the provisions of the EPTL and thus cannot inherit from the estate. “Petitioners contend that because the minister at the commitment ceremony observed that the executor and decedent were entering into a state of companionship that the world recognizes as marriage, they were in fact married, and therefore their subsequent separation was a divorce.”

The Court disagreed, holding that it is the “province of the Legislature to decide questions regarding same-sex marriage. It was not until 2011 that the State of New York passed the Marriage Equality Act. Here, petitioners seek to have this court apply the Marriage Equality Act retroactively to the commitment ceremony, deeming that ceremony as formalizing a marriage and the subsequent separation as a divorce. Given that the Legislature did not authorized same-sex marriage until 2011, this court cannot deem the commitment ceremony to have sanctified a marriage, so decedent and the executor cannot be deemed to be divorced.”

Accordingly, the Court denied the petition of the mother and sister, and the former partner gets the estate. It may be time to revisit your will.

No Dedication, No Park

No Dedication, No ParkIn our November 11, 2014 Newsletter we reported on the case of Matter of Glick v. Harvey, in which the Appellate Division, First Department, reversed a New York Supreme Court order which had enjoined New York University from beginning any construction in connection with its expansion project that would result in any alienation of four parcels of land found by the Supreme Court to be public parkland, unless and until the State Legislature authorizes the alienation of any parkland to be impacted by the project. According to the petition, the project involved the construction of about two million square feet in four high rises on two university-owned blocks in Greenwich Village, needed for faculty housing.

Last month, the highest court in New York State, the Court of Appeals, upheld the Appellate Division’s reversal. In addition to the parties, there were several amici curiae. An amicus curiae (literally, friend of the court; plural, amici curiae) is someone who is not a party to a case, but who believes the Court’s decision may affect its interests, and offers information that bears on the case to assist a court in reaching its decision. They included: Friends of La Guardia Place; Inc.; New York Civic; New York State Legislators; New Yorkers for Parks; New York State Conference of Mayors and Municipal Officials; The Association of Towns of the State of New York; and the Sierra Club.

The Court fashioned the question before it as follows: “The issue before us is whether four parcels of municipal land in the Greenwich Village area of New York City near the campus of New York University (NYU) were impliedly dedicated as public parkland and therefore fall under the protection of the public trust doctrine, which requires approval of the State Legislature before the land can be alienated.”

According to the decision, the “four disputed parcels, which are Mercer Playground, LaGuardia Park, LaGuardia Corner Gardens, and the Mercer-Houston Dog Run, feature open space that has been available to the public for years. Two of the parcels (Mercer Playground and LaGuardia Park) will be inaccessible during construction and have been approved for later dedication as parkland, subject to perpetual easements granted to NYU for utilities and access. LaGuardia Corner Gardens will be affected during construction as well as by shadows that will result from a building being constructed as part of the project. The Dog Run will be moved to a nearby space.”

In support of their appeal, petitioners again advanced their argument that the City’s actions manifest its intent to impliedly dedicate the parcels as parkland. “Under the public trust doctrine, a land owner cannot alienate land that has been impliedly dedicated to a public use without obtaining the approval of the Legislature. A party seeking to establish such an implied dedication and thereby successfully challenge the alienation of the land must show that: (1) ‘[t]he acts and declarations by the land owner indicating the intent to dedicate his land to the public use [are] unmistakable in their purpose and decisive in their character to have the effect of a dedication’ and (2) that the public has accepted the land as dedicated to a public use.”

The Court held that “[i]t remains an open question whether the second prong of the implied dedication doctrine applies to a municipal land owner, but we need not and do not resolve that issue on this appeal because we conclude that the City’s acts are not an unequivocal manifestation of an intent to dedicate the parcels as permanent parkland. With respect to the element of the owner’s intent — the only matter contested in this appeal — if a landowner’s acts are ‘equivocal, or do not clearly and plainly indicate the intention to permanently abandon the property to the use of the public, they are insufficient to establish a case of dedication.’”

The Court reasoned that “[h]ere, as the Appellate Division noted, several documents created prior to this litigation demonstrate that the City did not manifest an unequivocal intent to dedicate the contested parcels for use as public parks. The permit, memorandum of understanding and lease/license relating to Mercer Playground, LaGuardia Park and LaGuardia Corners Gardens, respectively, show that ‘any management of the parcels by the New York County Department of Parks and Recreation was understood to be temporary and provisional’. Thus, those documents’ restrictive terms show that, although the City permitted and encouraged some use of these three parcels for recreational and park-like purposes, it had no intention of permanently giving up control of the property. And, as the Appellate Division observed, the City’s ‘refus[al of] various requests to have the streets de-mapped and re-dedicated as parkland’ further indicates that the City has not unequivocally manifested an intent to dedicate the parcels as parkland.”

It concluded that just because a “portion of the public may have believed that these parcels are permanent parkland does not warrant a contrary result. Petitioners did not establish the City’s unequivocal intent to permanently dedicate this municipal property, as there was evidence that the City intended the uses to be temporary, with the parcels to remain under the City’s control for possible alternative future uses.”

NYU is free to build. Washington Square Park is nice.

MTA’s New Policy Creates a Limited Public Forum

MTA’s New Policy Creates a Limited Public ForumIn American Freedom Defense Initiative v. Metropolitan Transportation Authority, a federal District Court had previously granted a preliminary injunction prohibiting the Metropolitan Transportation Authority (“MTA”) from barring the American Freedom Defense Initiative’s controversial “Killing Jews” advertisement on city buses criticizing Hamas. That same Court has now recently held that as a result of a “new policy” of MTA, which now prohibits any advertisements that are “political in nature,” the MTA ceased the conduct previously identified as unconstitutional. Now, the advertising spaces on the MTA buses under this “new policy” are considered a “limited public forum” under First Amendment analysis.

The ad in question criticized Hamas, which the parties termed the “Killing Jews” ad. The ad includes a quote from “Hamas MTV”: “Killings Jews is Worship that draws us close to Allah.” Underneath the quote, the ad stated: “That’s His Jihad. What’s yours?” The American Freedom Defense Initiative (“AFDI”) had sought to run that ad on MTA buses.

In the Court’s previous decision, the Court held that “when the MTA excluded the ad based solely on the MTA’s policy prohibiting ads that imminently incite violence, the MTA violated the First Amendment” and the Court granted the AFDI’s motion for a preliminary injunction enjoining the MTA’s enforcement of its policy to prohibit the ad, and staying the effect of the injunction for 30 days to allow the MTA “to consider their options for appeal and methods for displaying the proposed advertisement.”

The Court further found that “[s]hortly thereafter, the MTA, in what it contends was an action it had been considering for some time, amended its regulations to prohibit the display of all political advertisements on MTA property (the “New Policy”).”

The New Policy prohibits any advertisement that falls into the following two categories:

  1. Promotes or opposes a political party, or promotes or opposes any ballot referendum or the election of any candidate or group of candidates for federal, state, judicial, or local governmental offices.
  2. Is political in nature, including but not limited to advertisements that either:

a. Are directed or addressed to the action, inaction, prospective action or policies of a governmental entity, except as permitted in [sections allowing governmental advertising and public service announcements]; or

b. Prominently or predominantly advocate or express a political message, including but not limited to an opinion, position, or viewpoint regarding disputed economic, political, moral, religious or social issues or related matters, or support for or opposition to disputed issues or causes.

Upon the MTA’s motion to dissolve the injunction based on the New Policy, the Court noted that the “MTA’s ban of all political ads is a dramatic change of circumstances from when the Court issued the preliminary injunction order. The Court’s grant of the preliminary injunction was based on the MTA’s enforcement of its standard prohibiting ads that ‘would imminently incite or provoke violence or other immediate breach of the peace,’ but the MTA’s exclusion of the plaintiffs’ ad is no longer based on that standard. The Court analyzed the defendants’ exclusion of the ad under strict scrutiny because the MTA’s advertising space constituted a ‘designated public forum under binding Second Circuit precedent. *** However, the status of MTA buses as a designated public forum was based largely on the MTA’s acceptance of political advertisements. Because the MTA no longer accepts any political advertisements, a different standard of review likely applies under the First Amendment.”

The AFDI argued that the New Policy remains unconstitutional because: “(1) the amendments were motivated by a desire to suppress the plaintiff’s viewpoint; (2) the Killing Jews ad does not qualify as “political in nature” under the New Policy; and (3) the New Policy is facially invalid.”

The Court rejected those arguments, recognizing that “the government may decide to close a designated public forum” at any time, and that if allowing political speech shows an intent to open the forum, “[d]isallowing political speech, and allowing commercial speech only, indicates that making money is the main goal.” The “Supreme Court and several courts of appeals have made clear that public authorities are not required to accept political advertisements, and when they exclude such ads, they create a limited public or nonpublic forum.”

Thus, the Court determined that the MTA’s exclusion of all political ads has converted its advertising space from a designated public forum to a limited public forum. Consequently, now, the restriction must only be viewpoint neutral and reasonable to be constitutional and valid.

The Court concluded: “Some may regret the MTA’s prohibition of political advertisements and the resulting loss of a public forum for heated political debate. But no law requires public transit agencies to accept political advertisements as a matter of course, and it is not for this Court to impose its own views on what type of forum the MTA should create. Just as the MTA created a designated public forum on its property by “invit[ing] . . . political speech” and the ensuing “clashes of opinion and controversy,” *** the MTA may rescind that invitation in order to reduce the political controversy amidst the MTA’s day-to-day operation of its public transit system. The plaintiffs may raise the question of whether the MTA’s actions were unconstitutional in an amended complaint. But at this stage, the plaintiffs’ original request for injunctive relief is moot, and the Court’s preliminary injunction order should be vacated. Accordingly, the defendants’ motion to dissolve the preliminary injunction order is granted.”

We picture Gildna Radner back, dressed as Emily Litella, meekly turning to the camera saying “Never mind.”

Debtor’s Credit | Employee’s Facebook | Chimps Not Persons

Credit Card Line of Credit Is Not Available To Judgment Creditor

Credit Card Line of Credit Is Not Available To Judgment Creditor In litigation, winning the case is sometimes only half of the battle — collecting on the judgment can be just as difficult, or more so.

In New York, “a money judgment may be enforced against any property which could be assigned or transferred, whether it consists of a present or future right or interest and whether or not it is vested, unless it is exempt from application to the satisfaction of the judgment.” CPLR 5201. “Where it is shown that the judgment debtor is in possession or custody of money or other personal property in which he has an interest, the court shall order that the judgment debtor pay the money, or so much of it as sufficient to satisfy the judgment, to the judgment creditor.” CPLR 5225(a).

With this language in mind, the judgment-creditor in Carbo Indus., Inc. v. Alcus Fuel Oil, Inc., 2014 WL 6607172 (Sup. Ct. Nassau Cnty. 2014), who obtained a judgment for nearly $843,000, creatively sought to enforce its judgment against a defendant’s available credit line on his two credit cards, in the combined amount of $18,250. The creditor argued that the defendant has “intangible rights pursuant to CPLR 5201 under his credit line agreement with HSBC Bank,” with the “right to withdraw cash from these credit cards and deliver it to a third person.”

The Court disagreed. It held that the plaintiff failed to establish that these lines of credit are “assignable or transferable property which defendant can be compelled to use to satisfy the subject judgment[.]” Moreover, as a matter of policy, the Court noted that determining otherwise would simply create an additional creditor for the defendants, as the likelihood of repayment to the credit card company, who had no relationship or interests in the instant matter whatsoever, is very unlikely.

Employee’s Facebook Not Protected Activity

Employee’s Facebook Not Protected ActivityAs we have discussed in several prior newsletters, people’s actions on social media can land them in serious trouble at work, and even get them fired. This was the case in Richmond District Neighborhood Center v. Calaghan, where the National Labor Relations Board weighed in on the boundaries under which an employee’s speech on Facebook is a “protected concerted activity.”

In Richmond, the respondent operates the Beacon Teen Center at San Francisco’s George Washington High School, providing after-school activities to students. The petitioners, Callaghan and Moore, were two employees who occupied the positions of “activity leader” and “program leader,” respectively. In May 2012, the supervisor of the program held a year-end staff meeting at which she asked the employees to write down the pros and cons of working at the Beacon; the comments ended up being predominately negative.

Both petitioners, however, were rehired for the following year, albeit, Moore was demoted from “program leader” to “activity leader” because of a negative review from her supervisor. The record reflects that during the evening of August 2, Callaghan and Moore had the following exchange on Facebook concerning their return the Beacon:

MOORE: U gOin baCk or nO??

CALLAGHAN: I’ll be back, but only if you and I are going to be ordering shit, having crazy events at the Beacon all the time. I don’t want to ask permission, I just want it to be LIVE. You down?

MOORE: Im gOin to be a activity leader im not doin the t.c let them figure it out and when they start loosn kids i aint helpn HAHA

CALLAGHAN: hahaha. Sweet, now you gonna be one of us. Let them do the numbers, and we’ll take advantage, play music loud, get artists to come in and teach the kids how to graffiti up the walls and make it look cool, get some good food. I don’t feel like bein their bitch and making it all happy-friendly-middle school campy. Let’s do some cool shit, and let them figure out the money. No more Sean. Let’s fuck it up. I would hate to be the person takin your old job.

MOORE: Im glad im done with that its to much and never appriciated sO we just gobe have fuN dOin activities and the best part is WE CAN LEAVE NOW hahaha I AINT GOBE NEVER BE THERE even thO shawn gone its still hella stuCk up ppl there that don’t appriciate nothing.

CALLAGHAN: You right. They dont appreciate shit. Thats why this year all I wanna do is shit on my own. have parties all year and not get the office people involved. just do it and pretend they are not there. I’m glad you arent doing that job. let some office junkie enter data into a computer. well make the beacon pop this year with no ones help.

MOORE: They gone be mad cuZ on wednesday im goin there aNd tell theM mY title is ACTIVITY LEADER dont ask me nothing abOut the teen cenTer HAHA we gone have hella clubs and take the kids 😉

CALLAGHAN: hahaha! Fuck em. field trips all the time to wherever the fuck we want!

MOORE: U fUckn right see u wednesdaY

CALLAGHAN: I won’t be there wednesday. I’m outta town. But I’ll be back to raise hell wit ya. Dont worry. Whatever happens I got your back too.

The next day, a Beacon employee sent screen-shots of this conversation to management. On August, 13, relying solely on the Facebook posts, the respondents rescinded Callaghan and Moore’s rehire offers, explaining that “these statements give us great concern about you not following the direction of your managers in accordance with RDNC program goals. . . . We have great concern that your intention and apparent refusal to work with management could endanger our youth participants.”

As a result of his termination, Callaghan filed a charge with the National Labor Relations Board (“NLRB”) alleging that the Richmond District Neighborhood Center committed certain violations of Section 8(a)(1) of the National Labor Relations Act (“NLRA”), namely that the conversation was a “protected concerted activity.” Congress enacted the NLRA in 1935 to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy. Section 8(a)(1) of that Act grants employees the right to act together to try to improve their pay and working conditions, with or without a union, i.e., engage in a “protected concerted activity.” If employees are fired, suspended, or otherwise penalized for taking part in protected group activity, the NLRB will fight to restore what was unlawfully taken away. Here, the petitioners argued that the Facebook conversation was a “continuation of the complaints made in the May meeting,” and thus, a protected activity.

The Administrative Law Judge rejected this argument, and the NLRB agreed, holding that “the pervasive advocacy of insubordination in the Facebook posts, comprised of numerous detailed descriptions of specific insubordinate acts, constituted conduct objectively so egregiously as to lose the Act’s protection and render Callaghan and Moore unfit for further service.”

We are not presented here with brief comments that might be more easily explained away as a joke, or hyperbole divorced from any likelihood of implementation. The magnitude and detail of insubordinate acts advocated in the posts reasonably gave the Respondent concern that Callaghan and Moore would act on their plans, a risk a reasonable employer would refuse to take. The Respondent was not obligated to wait for the employees to follow through on the misconduct they advocated.

The two are apparently available for hire.

Treat Them As Such, But A Chimp Is Not A Person

Treat Them As Such, But A Chimp Is Not A PersonThe common law writ of habeas corpus provides a summary procedure in which a “person” who has been detained or imprisoned, can challenge that detention or imprisonment as unlawful. In New York, Article 70 of the Civil Practice Laws and Rules (“CPLR”) codifies this procedure.

On December 2, 2013, the Nonhuman Rights Project filed a habeas corpus petition in Fulton County Court, New York, on behalf of Tommy, a chimpanzee, who allegedly was being held in a cage in Gloversville, New York. The suit alleged that “chimpanzees have attributes sufficient to consider them ‘persons’ for the purposes of their interest in personal autonomy and freedom from unlawful detention. . . . [C]himpanzees exhibit highly complex cognitive functions — such as autonomy, self-awareness and self-determination, among others — similar to those possessed by human beings.” The Supreme Court disagreed, and held that the term “person” under CPLR Article 70 did not include chimpanzees, and refused to grant the petition. The petitioner appealed to the Appellate Division, Third Department. People ex rel. Non Human Rights Project, Inc. v. Lavery, 2014 Slip Op. 08531 (3d Dept. Dec. 4, 2014).

In its decision, the Third Department first recognized the limited scope of its inquiry. Petitioners had not asked the Court to evaluate the quality of Tommy’s living conditions, but instead to “enlarge the common-law definition of ‘person’ in order to afford legal rights to an animal.” The Court noted that “animals have never been considered persons for the purpose of habeas corpus relief nor have they been explicitly considered as persons or entities capable of asserting rights for the purpose of state or federal law.” However, this lack of precedent was not determinative. The writ of habeas corpus has gained increased use, and proved to have great flexibility.

The liberty rights protected by habeas corpus “has historically been connected with the imposition of societal obligations and duties. Reciprocity between rights and responsibilities stems from principals of social contract[.]” Society extends rights to “persons” in exchange for an express or implied agreement from those “persons” to submit to social responsibilities. “Legal personhood has consistently been defined in terms of both rights and duties.”

[U]unlike human beings, chimpanzees cannot bear any legal duties, submit to societal responsibilities or be held legally accountable for their actions. In our view, it is this incapability to bear any legal responsibilities and societal duties that renders it inappropriate to confer upon chimpanzees the legal rights—such as the fundamental right to liberty protected by the writ of habeas corpus—that have been afforded to human beings.

Thus, the Court rejected the petition, and affirmed the Supreme Court’s ruling.

The Court noted, however, that just because it chose not to extend the rights of a “person” to chimpanzees, does not leave Tommy, or other animals, defenseless. The Legislature has extended significant protections to animals, subject to criminal penalties, such as the prohibition of torture or unjustifiable killing, abandonment in a public place, and cruel or inhuman transportation, just to name a few.