Escape Clause | Parkland Trust | Intern Discrimination

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A Contract With A Hatch

A Contract With A HatchIn Kenny v. Tung, a New York Supreme Court concluded that the seller of real property properly cancelled a sales contract pursuant to its “escape-hatch.” Plaintiff Kenny, the purchaser under the sales contract, brought an action seeking specific performance of the contract with at least $65,000 in liens and fines on the property that had to be removed.

Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to awarding money damages, and is an equitable remedy commonly used in enforcing the sale of real property.

Here, the defendant-seller Tung cancelled the contract and the validity of that cancellation was the issue of a motion to dismiss brought by Tung, based on documentary evidence and failure to state a cause of action. The documentary evidence was the sales contract and rider. The Court framed the issue as follows:

The central issue before the Court is whether the defendant has demonstrated entitlement to dismissal since the contract was validly canceled under the terms of the agreement itself. If not, the defendant’s wrongful rescission constituted a breach of contract entitling the plaintiff to summary judgment on his claim for specific performance of the contract for the sale of real property.

The Court reasoned that “[w]here the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the parties’ reasonable expectations. The parties to a contract for the sale of real property may agree, as they did here, to restrict the liability resulting from a breach, or may agree that no damages will be payable at all once the status quo has been restored. However, an obligation to act in good faith will be implied in connection with such liability-limiting clauses, in the event of an inability to convey good title.”

Paragraph 21 of the contract of sale provided that:

In the event the cost to Seller to comply with any of Seller’s obligations under this Contract exceeds $500.00, Seller may cancel the Contract or offer Purchaser a $500.00 credit.

The Court found that it was “essentially uncontroverted that there were objections to title, consisting of liens and fines, which amounted to over $65,000.00. The contract of sale obligates the defendant-seller Tung to deliver title to the premises free of all liens and violations. The defendant-seller attempted to do so, but the cost was prohibitive.”

The Court concluded that “[t]his was exactly the purpose of the “escape-hatch” provision in paragraph 21.” Thus, the Court found that Tung validly exercised her right to cancel the contract of sale under that provision and returned the down payment to plaintiff’s attorneys. The complaint for specific performance was dismissed.

No Dedication, No Park

No Dedication, No ParkIn Matter of Glick v. Harvey, the Appellate Division, First Department, recently 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 three 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.

The petitioners had argued that the proposed construction would be in violation of the “public trust doctrine” because areas on the blocks were used for recreational purposes, including LaGuardia Park between Houston Street and Bleecker Street, which has been used as a community garden and small park. But the parcels have been mapped as streets since they were acquired by New York City, and the City has refused various requests to have the streets de-mapped and re-dedicated as parkland.

We recently wrote about the public trust doctrine when highlighting the Court of Appeals’ decision in Union Square Park Cmty. Coalition, Inc. v. N.Y. City Dept. of Parks and Recreation. There, the Court rejected an argument that the City Parks Department’s agreement with a private entity to operate a restaurant in the park violated the “public trust doctrine,” which holds that “dedicated parkland cannot be converted to a non-park purpose for an extended period of time absent the approval of the State Legislature. We again wrote about this doctrine in highlighting the decision in Capruso v. Village of Kings Point, 2014 Slip Op. 04228 (2014), which prevented a proposed plan to construct a DPW facility measuring some 12,000 square feet in area, re-grade and pave access roads, destroy numerous mature trees and remove hiking trails on a 5.4 acres of land known as the “Western Corner” in the Village of Kings Point, because it violated this public trust doctrine.

In Glick, the First Department held that while the City has allowed continuous use of parts of the parcels for park-like purposes, such use was not exclusive. It stated, “[w]here, as here, there is no formal dedication of land for public use, an implied dedication may exist when the municipality’s acts and declarations manifest a present, fixed and unequivocal intent to dedicate.” The Court found that petitioners had failed to meet their burden of showing that the City’s acts and declarations manifested a present, fixed, and unequivocal intent to dedicate any of the parcels at issue as public parkland. The Court held that the land was not implied parkland because the parcels were mapped as streets, not parks, and have been used as pedestrian thoroughfares. Further, any management of the property by the Department of Parks was understood to be “temporary” and pursuant to a permit or license.

Thus, the “park” was not parkland within the meaning of the public trust doctrine and New York University may continue with its plans.

Still No Pay, But At Least No Discrimination Allowed

Still No Pay, But At Least No Discrimination AllowedAlmost a year ago, in our December 10, 2013 newsletter, we highlighted a decision in which the court dismissed an unpaid intern’s hostile work environment claim brought under the New York State and New York City Human Rights Laws (“NYSHRL” and “NYCHRL” respectively). In an apparent question of first impression, the court looked to the near identical language of Title VII and the NYSHRL to conclude that the NYCHRL did not provide unpaid interns with protections from employment discrimination, because such protections were reserved for “employees” only — not “interns.” See Wang v. Phoenix Sattelite Television US, Inc. 976 F.Supp.2d 527 (S.D.N.Y. 2013).

Although that decision seems rather recent as far as case-law is concerned, if such an action was brought today, the plaintiff’s claims would certainly have survived such a motion to dismiss. Effective July 22, 2014, both the NYCHRL and NYSHRL were amended to provide interns with protection from employment discrimination. Under the NYSHRL, “intern” is defined as follows:

Intern” means a person who performs work for an employer for the purpose of training under the following circumstances:

a. the employer is not committed to hire the person performing the work at the conclusion of the training period;

c. the work performed:

(1) provides or supplements training that may enhance the employability of the intern;

(2) provides experience for the benefit of the person performing the work;

(3) does not displace regular employees; and

(4) is performed under the close supervision of existing staff.

See, 15 Executive Law § 296-c(1).

Under the NYCHRL an “intern” is similarly defined, with the only notable exception being that the “intern” need not be unpaid. Both, however, provide “interns” with the full spectrum of protections accorded to “employees,” i.e., making it unlawful for an employer to “refuse to hire or employ or to bar or to discharge from internship an intern or to discriminate against such intern in terms, conditions or privileges of employment as an intern because of the intern’s age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, or domestic violence victim status,” or otherwise to create a hostile work environment based upon these protected classes — finally.

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