DeVita v. Macy’s East, Inc. is a case for the Internet age.

An action was originally brought before the Queens County Supreme Court to recover damages for personal injuries. During the course of that case, counsel to the insurer for one of the defendants sent an email proposing settlement to the plaintiff’s attorney, who appears to have accepted the offer via e-mail.

When the court denied a motion made by Macy’s and the other defendants to have that email exchange enforced as a settlement, an appeal was taken to the Appellate Division, Second Department.

To be enforceable, stipulations of settlement must adhere to the strictures of a certain law -- CPLR 2104 -- which requires such agreements to be in writing and signed by the parties to be bound. Since this agreement was neither signed by the parties nor made by counsel in open court, the AD2 was of the opinion that the email could not be used and that the motion had been properly denied.

The moral of the story is, if you want it to stick, put it on paper.

To download a copy of the Appellate Division's decision, please use this link: DeVita v. Macy’s East, Inc.

Posted by Lucas A. Ferrara, Esq. at 12:00 PM | Permalink | TrackBacks (0) | Comments (0)

Just because someone is found to have breached an agreement with you doesn't mean you'll recover anything. 

You've got to be able to prove -- to a judge's satisfaction -- damages were suffered.

By way of example, in F & D Bagel Corp. v. Wald Realty, F & D Bagel d/b/a Bernie's Bagels, sued its landlord for refusing to consent to an assignment of the store's lease to a prospective purchaser. (The lease provided that the owner would not "unreasonably" withhold its approval to such a transaction.) 

Although the Rockland County Supreme Court found the landlord had violated the agreement, it ultimately dismissed the case due to Bernie's inability to prove damages. And, on appeal, the Appellate Division, Second Department, affirmed.

Despite Bernie's claim that the failed deal was the landlord's fault, the evidence demonstrated that the buyer had only executed a "letter of intent" to acquire the business for $275,000. And, that the document afforded the purchaser a 30-day due diligence period and was also subject to a formal contract of sale. (Isn't that an "agreement to agree?")

Without a "valid and enforceable agreement to sell the business," Bernie was unable to prove he had been damaged by the landlord's misconduct.*

We're at a loss to figure out why it took a trial to get to that point. Wouldn't that have been an issue readily disposable by way of motion practice? 

(Something to nosh on, no?)

For a copy of the Appellate Division's decision, please use this link: F & D Bagel Corp. v. Wald Realty

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*It didn't help Bernie's case that he was a bit "fast and loose" with his facts and figures. When presented with a copy of the deli's tax returns -- which revealed that the business's income generation had been "significantly overstated" -- the purchaser testified at trial that had that information been made know to him he never would have purchased the deli nor made an offer.

Posted by Lucas A. Ferrara, Esq. at 8:25 AM | Permalink | TrackBacks (0) | Comments (0)

Most teachers (and students) look forward to summer vacation, but not Cynthia Last. She wanted to spend her summer teaching.

In Last v. Syosset Central School District, the principal of the Syosset Summer School program sent Last a letter offering her a summer teaching position. Last claimed to have detrimentally relied upon the offer when she declined a position at a different school.

The Nassau County District Court agreed and awarded Last $3,969 for Syosset’s contract breach. On appeal, the Appellate Term, 9th and 10th Judicial Districts, reversed and dismissed Last's case.

According to New York Education Law § 3012, the Board of Education is empowered to make all final hiring decisions. As a result, the AT2 held that Last’s reliance on the principal's letter was not reasonable because she knew her name had to be submitted to the Board of Education for approval.

Looks like Syosset Central got the Last laugh.

For a copy of the following Appellate Term’s decision, please use this link: Last v. Syosset Central School District

Posted by Lucas A. Ferrara, Esq. at 12:00 PM | Permalink | TrackBacks (0) | Comments (0)

If your lease is about to expire and you live in a free market (unregulated) apartment, or if you're a tenant of a commercial space, it is always best to assume you will have to leave on the agreement's end date, particularly if you don't have a written option or lease renewal in-hand.

Without an extension signed by your landlord, you can be sued for "holding over," that is, your landlord can start a special landlord-tenant proceeding asking a judge to order your eviction, direct that you pay the fair market value of the space during the period you remained in occupancy (after the expiration of your lease), and may further seek an award of the legal fees and costs that were incurred removing you from the premises. 

In 4446-50 Realty Inc. v. Rojas, the tenants, Rafel Rojas, "Jane" Oryden, d/b/a/La Mesquita Restaurant a/k/a El Cactus Restaurant, claimed to have a lease renewal which allowed them to remain in possession beyond their original May 31, 2001 expiration date. In an eviction proceeding started against them in the New York County Civil Court, the tenants were unable to produce an original copy of the renewal document and were otherwise unable to prove the existence of an extension (since the tenants' sole witness inexplicably refused to submit to cross-examination).

Because the renewal document was found to be nothing more than a "draft agreement," which had never been countersigned by the landlord, both the Civil Court and the Appellate Term, First Department, concluded that the El Cactus Restaurant's eviction was appropriate.

What is left unanswered by the decision is why it took this particular landlord some six years to get to this point?

Are we missing some prickly details?

For a copy of the Appellate Term's decision, please use this link: 4446-50 Realty Inc. v. Rojas

Posted by Lucas A. Ferrara, Esq. at 12:00 PM | Permalink | TrackBacks (0) | Comments (0)

Settlement agreements -- or "stipulations" -- reached within the context of litigation are typically viewed as preferred dispute resolution mechanisms, and will not be cast aside absent some significant misunderstanding or irregularity.

If you think you've got at an agreement with someone, it's best to get that understanding documented in a final written form as soon as possible, and not leave any important elements or aspects of the arrangement "open" or unresolved, since problems are likely to ensue.

By way of example, in Split Rock Developers, LLC v. Zartab, Inc., a tenant ended its subtenant's lease based on the occupant's failure to pay rent for the months of October, November and December 2004. Although the parties had entered into a "so-ordered preliminary stipulation" which provided that the subtenant would vacate the space and pay $5,800 upon execution of a more formalized agreement, when the time came to execute that formal document, the subtenant refused to do so.

When tenant moved the Nassau County District Court to compel the subtenant to perform as originally represented, the District Court vacated the underlying settlement agreement based on "mutual mistake" and directed the parties to proceed to trial on the underlying dispute. On appeal, the Appellate Term, 9th and 10th Judicial Districts, modified the outcome by reinstating the "preliminary agreement" and suggested that the parties could duke out the agreement's enforcement in another forum (like the local Supreme Court).

In its decision, the AT noted as follows:

In our view, the relief sought of compelling tenant to execute the more formal stipulation and the releases is equitable and injunctive in nature, and thus beyond the jurisdiction of the District Court to grant ... Therefore, we sustain the court's denial of landlord's motion to enforce the stipulation on the ground that the court lacked the jurisdiction to grant the relief sought. In so holding, we do not pass on the ultimate issue of whether the so-ordered stipulation is enforceable. We note, however, that, generally, when a contract does not specify a time of performance, a reasonable time is implied ....

That last sentence piqued our curiosity.

If the appellate court had been disinterested in passing upon the agreement's enforceability, then why did it offer a comment on a party's "reasonable time" performance requirement?

And, if the agreement was unenforceable, why would the appellate court bother reinstating it?

(Not to split rock hairs, but this wouldn't be another instance of our courts elevating forum over substance?)

For a copy of the Appellate Term's decision, please use this link: Split Rock Developers, LLC v. Zartab, Inc.

Posted by Daniel Finkelstein, Esq. at 8:25 AM | Permalink | TrackBacks (0) | Comments (0)

The way I remember it, it was a Monday morning, about 9:45, when my intercom rang. "Mr. Silver" is here to see you," the receptionist announced.

"Who?" I inquired, while thumbing through my desk calendar.

"'Richie Silver'," she robotically replied.

"I don't have an appointment with a 'Richie Silver'...or with anyone else for that matter. Hold him for a minute, I'll get back to you." In a panic, I immediately dialed my assistant's extension. "Vanessa, who's 'Richie Silver'?"

"Is that a trick question?," she snidely retorted. "How am I supposed to know?"

"Vanessa, I was wondering if you had scheduled an appointment without telling me."

"Listen," she snapped, "in the five years I've been working for you, I've never done that. So, why would I start now?... Right? What do you want from me?"

"Ah," I stalled, "go out and tell this guy that I'll be with him in a few minutes."

Seconds later Vanessa was back on the intercom. "You've got a 'live one' out here," she whispered with nervous laughter. "He's not a happy camper...you're keeping him waiting."

"What's his story?" I asked, knowing that I could always count on Vanessa's catty penchant for sizing up my visitors with incredibly minute detail.

"Well...he's this good-looking guy, in his late forties, early fifties. He's short and slightly stubby. He's wearing a really expensive-looking, blue pin-striped, double-breasted suit, complete with a red handkerchief, black suspenders, and patent leather shoes. If you ask me, he's a little overdressed. By the way, the "get-up" had to cost him at least two thousand bucks. Oh, his fingers were only recently manicured, and...he's married."

"Vanessa," I interrupted, "I didn't want his vital statistics, I want to know why he's here!"

She stuttered momentarily, "He said he was in the neighborhood and wants to talk to you about a case."

"Let him in." I muttered in total frustration.

Moments later, the man who had been so accurately described entered my office with exaggerated flurrish.

I rose to welcome him into my office and motioned for him to take a seat. "Mr. Silver, how may I help you?"

"Lissen," he said with an undeniably unique cadence. "I'z come ta spick wit ya 'bout dis heer sitwation datsa prubblim."

"Oh?" I cautiously queried. "What 'problem' is that?"

"Dis heer ten-nant wanz outta his liss and weez ain't gonna let 'em do dat, yuz see?"

"What do you mean?" I reluctantly asked.

"Heez gonna try to brick his liss, but youz gonna stop him, see? I'z heard yuz goes ta Court, and dat yuz can get sum judge to stop dis heer ten-nant from leavin."

"Well," I interjected, "it's not that simple. In fact, forcing a tenant to comply with a lease could prove to be a lot more complicated than that. Injunctions are difficult to secure, particularly in the type of situation you've just described. No judge is likely to stop a tenant from leaving space. Based on what you've told me thus far, the Court will probably find equitable relief inappropriate since you will probably be able to recoup money damages."

As I continued with my analysis and questioning, I was able to ascertain that my mystery man was a "self-made" millionare from Brooklyn, New York.

"Ferrara? Nice name. Yuz I-talian?" He inquired with a smile.

"Italian-American," I responded. "Born in the U.S. of A."

"Ferrara. I'z tink I know ya fam-milly. Yuz in da bissnez?"

"I don't think so..., what 'business' are you referring to?"

"Truckin' 'n cartin'."

"Definitely not." I quickly replied. "I'm just an attorney."

"Dat's ok, kid, you just gotta help me 'fore dis turns worst. Yaz capice? Yaz gotta try dis fa me! Yeh, dis'll be difcult, but, lez givva try!"

After discussing additional case-related particulars and the terms of the firm's retention, I requested an opportunity to review all of "Richie's" documentation.

"This lease is unsigned!" I gasped.

"No prub-blim," he calmly retorted with a slow and majestic wave of his hand. "He ain't gonna deny it."

"The lease doesn't have a commencement date and doesn't even cite the amount of the tenant's rent." I continued.

"Not ta wurry," he regally and calmly consoled.

As I continued reviewing the documents, I stated, "Look Sir, you don't even have a description of the space the tenant occupies or the amount of square footage allocated for his use! I mean, the tenant's name isn't even filled in!"

"Baloney!" He continued to shout, "Dat jerk knows! He'z in dem der space! Da bum knows how much space he'z got and what he'z supposta pay! Listen, yuz askin' me too many questins! We nevva gotta round ta signin' da stupid ting, O.K.? Just get me dat order from da judge, udderwise someone's gonna ta be pushin' daisies."

The entire exchange was surreal. I pictured myself on a movie set in Hollywood. And it felt like I was living out a scene from "Goodfellas." But, as I returned to reality, I concluded that this was only an instance of life imitating art. And a poorly written version of the "screenplay" at that--unfolding right before my very eyes.

"Weez don't truss lawyers." He advised as he reached for his handkerchief. "In fakt, wez truss no-body. Ya heard me?"

As an agitated Silver wiped his perspiring brow, I replied, "That's probably a sound policy, ... but I don't think I can assist you."

"Iz dat so? Well, weez see 'bout dat." He rose from his chair, and exclaimed rather dramatically, "No-boddy! And Iz mean no-boddy, says 'no' to Richie S.!"

With that, "Richie" abruptly left my office, not to be seen or heard from for the balance of the work day.

Later that evening, as I exited the office building, a husky young man greeted me by name, quickly grabbed me by the arm, and guided me to an awaiting vehicle.

"Get in, Ferrara," ordered a familiar voice. It was Silver. "Weez gonna have anudder tahk." Before I could blink an eye, I was pushed into the rear of a plush blue Lincoln and immediately blindfolded.

"Weez gonna go for a ride," announced an adjacent passenger. "Richie's real mad. Yuz made him mad. He hates when ya lawyers tells 'em he ain't gotsa case. He gets like, mad."

Paralyzed with fear, I remained silent.

"Weez takin' ya to da 'facility' and weez gonna 'process' ya," warned another anonymous voice.

"Let's do him here!" Excitedly exclaimed another.

"This is not real," I reassured myself. "This can't be real."

"Oh, dis is real, kid..." Richie S. happily confirmed. "But itz nuddin' pursnal ... dis heer is juss bissnez ... just bissnez."

Still blindfolded, my remaining senses became intensely acute to what was happening around me. I could hear the beginnings of a metallic "click," then another. The sensation of helplessness was overwhelming.

Suddenly, without warning, I could see shades of light and began to hear a cacophony of recognizable sounds. From what I could tell, it was a young woman's voice interspersed with chirping sounds. "Am I dead?" I inquired.

"It's 6:30 A.M.," the disembodied voice responded. "It's partly cloudy, 35 degrees, the temperature is expected to go up to a high of 50, with the possibility of rain and thunderstorms...."

Once again, I had been saved by my trusty old clock radio. It was time for work.

Posted by Lucas A. Ferrara, Esq. at 8:25 AM | Permalink | TrackBacks (0) | Comments (0)

When is an option to renew, not an option at all? When the language used by the parties is vague or ambiguous.

Typically, outside of rent regulation, tenants are not entitled to automatic lease renewals, unless the extension has been negotiated in advance and the parties' agreement clearly outlines the delineated terms or a procedure to arrive at the rent calculation has been set by the participants.

While Courts are frequently called upon to "interpret" agreements, they will usually not manufacture terms or conditions which were not previously reserved by the parties. A case in point is 188-90 Eighth Ave. HDFC v. Havana Chelsea Luncheonette, Inc. In that dispute, a judge was asked to decide whether a lease agreement--which had language requiring the parties to execute a new lease "with a new rental amount no less than 30 days prior to the end of the term of this lease"--contained an enforceable "option to renew."

After a nonjury trial, Judge Anil C. Singh, of the Civil Court of the City of New York, concluded that the agreement in question did not obligate the landlord to sign a new lease with the tenant (even at fair-market value). The absence of key language (such as a method for determining or calculating the rental amount) worked to the tenant's detriment. On appeal, the Appellate Term, First Department, concurred, noting as follows:

The clause provided no objective basis for determining the rental amount the parties intended tenants to pay upon renewal and thus constituted a "mere agreement to agree"...Contrary to tenants' contention, the "unamplified language" of the provision did not convey a commitment to be bound by the fair market rental value of the commercial premises...nor did it invite recourse to an objective extrinsic event, condition or standard to determine the rental amount....

Thus, when a landlord and tenant are unable to agree (in advance) what the rental rate will be upon the lease's expiration, then some objective means of arriving at the figure should be negotiated. By way of example, if the parties had provided for a dispute-resolution mechanism (such as binding arbitration) to determine or assess the fair-market rental rate, that kind of language would likely have been given deference. [See, e.g., 166 Mamaroneck Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.2d 88 (1991].

So, when it comes to lease renewals, playing it "fast and loose" could leave you optionless.

For a copy of the Appellate Term's decision in 188-90 Eighth Ave. HDFC v. Havana Chelsea Luncheonette, Inc., please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2006/2006_50806.htm

Posted by Robert Finkelstein, Esq. at 8:25 AM | Permalink | TrackBacks (0) | Comments (2)