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 In New York City Economic Dev. Corp. v. Harborside Mini Storage, Inc., New York City sought possession of commercial space occupied by Harborside Mini Storage.
In 1989, the City of New York leased out the Bush Terminal Industrial Complex to Harborside Management's predecessor, for a 10-year term ending February of 1999.
In June of 1999, four months after its lease expired, Management entered into a sublease with Mini Storage's predecessor, U.S. Movers, which rented out a building within the Complex. Although Management negotiated a renewal with the City, and sued to declare that renewal effective, Management ultimately surrendered its interest to the City, which then leased the Complex to the New York City Economic Development Corporation (NYCEDC). Mini Storage thereafter remained in possession and paid rent directly to NYCEDC.
NYCEDC later filed an eviction case against Mini Storage alleging Management was only a "month-to-month tenant" when the sublease was executed. Mini Storage argued that its sublease had been "validated" by NYCEDC's acceptance of Mini Storage's rent payments. When the Kings County Civil Court found against Mini Storage, an appeal to the Appellate Term, Second Department, followed.
Since the City never executed a renewal lease, the AT2 concluded Management was nothing more than a month-to-month tenant and, as a subtenant, Mini Storage had no greater rights than those held by Management.
NYCEDC didn't "validate" the sublease by the mere acceptance of sublease payments, particularly in view of the parties' procedural history and interaction -- such as a Civil Court nonpayment stipulation which characterized Mini as a "monthly tenant," notices sent to Mini informing Mini that payments were accepted as "use and occupancy" rather than "rent," together with the fact NYCEDC neither sought nor collected a rent increase, as provided by the "sublease."
What a Mini mess!
 To download a copy of the Appellate Term's decision, please use this link: New York City Economic Dev. Corp. v. Harborside Mini Storage, Inc.
 In Bouchard v. Champlain Enterprises, Inc., Gilles Bouchard and Champlain Enterprises were general partners in a venture to construct and operate a Lake Champlain marina and boat storage facility.
Enterprises contributed an initial $500,000, Bouchard was obligated to pay one half of all capital improvements.
While Enterprises continued to remit payments, Bouchard refused to make any contributions. When the partnership later defaulted on its mortgage, Enterprises purchased the marina at a foreclosure sale and excluded Bouchard from the marina's operations.
After suit was filed, the Clinton County Supreme Court found Bouchard beached the partnership agreement and owed Enterprises $1,144,319.
On appeal, the Appellate Division, Third Department discredited Bouchard's argument he never consented to marina expenditures -- such as a pool, a gazebo, tennis courts, and boat house -- since his construction company built the boat house and his signature was required for the payment of those improvements.
Will these parties be sailing to the Court of Appeals?
 To download a copy of the Appellate Division's decision, please use this link: Bouchard v. Champlain Enterprises, Inc.
 In Duane Reade, Inc. v. Cardtronics, LP, Duane Reade sued Cardtronics for breach of an ATM-placement agreement.
In 1999, American Express Travel Related Services Company (Amexco) entered into a contract to place Amexco ATMs in Duane Reade stores. In 2003, Amexco assigned its rights under the agreement to Cardtronics, and the parties amended the contract shortly thereafter to expand the number of Duane Reade locations that would be equipped with ATMs.
The amendment provided the ATMs could be branded with a bank's name and trademark, but would continue to be operated by Cardtronics. The bank's customers would be able to use the ATM without any surcharge whereas, previously, all cardholders paid a transaction fee.
To compensate for the lost revenue, the agreement provided Cardtronics would look at "the number of surcharged transactions conducted by said bank's customers during the immediately preceding month at all of the ATMs covered by such arrangement ... and thereafter through the term of this Agreement on a monthly basis [would] credit [Duane Reade] with the full amount of the Branding Surcharge Transactions."
In 2005, Cardtronics and Chase entered into a branding agreement, and later that year, Duane Reade claimed the payments it received were incorrect, because the agreement required a monthly transaction-based calculation credit. Cardtronics alleged the credit was limited to the number of Chase transactions that occurred the month prior to the branding agreement's effective date.
When the New York County Supreme Court agreed with Cardtronics's interpretation of the contract and dismissed Duane Reade's breach of contract claim, an appeal to the Appellate Division, First Department, followed.
Because it viewed the document as "ambiguous," and questioned the "logic" of Cardtronics' position, the AD1 reversed the lower court's determination and sent the matter back for a formal hearing or trial.
The AD1 branded that one real good.
 To download a copy of the Appellate Division's decision, please use this link: Duane Reade, Inc. v. Cardtronics, LP
 In Matter of Sanders v. Slater, Kristian Sanders, Daphne Slater, and Frederick Burdick each sought to modify an agreement which granted them joint legal custody of a four-year-old girl and gave "physical placement" to Slater -- the child's grandmother.
Burdick -- the father -- had "difficulty managing his daily life and the lives of his children." He had no phone, no "consistent" means of transportation, wasn't steadily employed, and lived in a two-bedroom apartment with his wife and their two children. (Interestingly, a "recurring lice problem" wasn't abated until the child stopped visiting her dad.)
By contrast, Sanders -- the girl's mother -- was employed, addressed her daughter's medical needs and her own "psychological condition," improved her "living situation" and demonstrated appropriate parenting skills.
After the Tompkins County Family Court awarded Sanders sole legal custody (as long as she lived with Slater) and only gave Burdick visitation rights, he appealed to the Appellate Division, Third Department.
Based on the evidence presented, "and giving due deference to Family Court," the AD3 was of the opinion that the custody arrangement's modification had a "sound and substantial" basis.
What will they do for an encore?
 To download a copy of the Appellate Division's decision, please use this link: Matter of Sanders v. Slater
 In Lafleur v. MLB Industries Inc., Roderick Lafleur -- an employee of Alltek Energy Systems (Alltek) -- was injured while renovating a large exhaust hood in a grocery store.
Hannaford Bros., Inc. contracted with MLB Industries Inc. (MLB) to do the work, which then subcontracted the project out to Alltek.
While an indemnification agreement between MLB and Alltek existed when an exhaust hood was originally installed, that agreement wasn't renewed until after Lafleur was injured installing the second hood.
Since New York's Workers Compensation Law requires indemnity agreements be in place before an accident occurs, the Rensselaer County Supreme Court granted Alltek's request to dismiss the case.
On appeal, the Appellate Division, Third Department, affirmed. Unless the parties specifically provide to the contrary, indemnification contracts aren't retroactive.
Don't know about you, but we're exhausted.
 To download a copy of the Appellate Division's decision, please use this link: Lafleur v. MLB Industries Inc.
 In Friedman v. Eisner, landlords David and Rachel Friedman sued Ben Eisner based on his failure to pay seven months' rent.
While the parties' lease cited a monthly rate of $1,200, David testified he had negotiated the sum of $1,240 with Eisner's brother. And although court papers reflected that he was suing for $1,250 per month, David insisted that latter sum was a typographical error. (Interestingly, Eisner claimed he wasn't a party to any agreement reached with his brother and, inexplicably, his brother wasn't called to testify at trial.)
Despite all those inconsistencies, the Kings County Civil Court awarded the Friedmans seven months' rent at the rate of $1,240 per month.
On appeal, the Appellate Term, Second Department, modified the outcome. While it agreed the Friedmans had sufficiently established that seven months' rent was due, and the typographical error was "de minimis," the Friedmans were unable to prove the existence of an agreement which bound the tenant to a higher rate. As a result, the amount owed for the period was reduced to $1,200 per month (less $400 for conditions which justified a rent reduction).
Oh, brothers!
 To download a copy of the Appellate Term's decision, please use this link: Friedman v. Eisner
 In Trakis v. Manhattanville Coll., Louis Trakis sued Manhattanville College after he was fired for "breach of employment contract, civil rights violations, and defamation."
Trakis taught Art at Manhattanville College as an "at will" employee who held the title of "professor emeritus." In 2002, Trakis recommended a colleague be denied tenure because she was "lacking in her performance as a teacher, in research, and in her service to the college."
When that teacher asked for reconsideration, she alleged Trakis had made "sexist and racist comments." An investigation was conducted and the College concluded there had been misconduct and relieved Trakis of his duties.
After the Kings County Supreme Court only granted the College's request to dismiss the defamation component of the case (leaving "breach of an employment contract" and "civil rights violations" in place), the school appealed to the Appellate Division, Second Department, which threw the whole thing out.
Because Trakis was an "at will" employee, he could be discharged for any or no reason. And since the AD2 could discern no other irregularity or misconduct on the school's part, it believed Trakis's suit warranted dismissal in its entirety.
We ain't tracking that one any further.
 For a copy of the Appellate Division's decision, please use this link: Trakis v. Manhattanville Coll.
 In Matter of Yitzhak "James" Pastreich v. New York State Div. of Hous. & Community Renewal, Pastreich sued his landlord to keep a "preferential rent" in place.
In 1991, Pastreich and his landlord entered into a lease which acknowledged that even though the monthly rent was $5,747.52, Pastreich only needed to pay $3,000, provided he accepted the apartment in "as is" condition. (The parties renewed this lease five more times, for two years each.)
In 2004, when the landlord refused to allow Pastreich to pay the reduced rent, the tenant filed a "rent overcharge complaint" with the New York State Division of Housing and Community Renewal (DHCR). And, interestingly, the DHCR denied the tenant's request as time-barred.
On review -- when a case was filed (pursuant to CPLR Article 78) -- the New York County Supreme Court agreed. But, on appeal, the Appellate Division, First Department, reversed and found DHCR should have conducted a hearing.
According to the AD1, since each subsequent renewal was based on the original 1991 "preferential rent," the underlying rate wasn't barred from review, particularly in view of the uncertainty as to that reduction's duration.
For some reason, we're thinking that's not the result this landlord would have preferred.
 To download a copy of the Appellate Division's decision, please use this link: Matter of Yitzhak "James" Pastreich v. New York State Div. of Hous. & Community Renewal
 In Baccash v. Sayegh, Iman Baccash owned "Bridal Couture" a bridal gown boutique, and decided to purchase "Peggy Peters," a nearby bridal shop, after its owner died.
Instead of structuring the deal as an asset purchase, Iman's attorney, Andrew Sayegh, negotiated a stock purchase, which obligated Baccash to "assume [Peggy Peter's] trade debt and a bank loan guaranteed by the prior owner."
Baccash claimed her lawyer committed malpractice by failing to advise her of the deal's terms and by defaulting in a lawsuit creditors had started against the two companies.
The Nassau County Supreme Court found Sayegh hadn't exercised the "ordinary reasonable skill and knowledge" an attorney in his position should have and awarded Baccash $53,000.
On appeal, the Appellate Division, Second Department, found Baccash "failed to prove that she suffered any direct damages as a consequence of [her attorney's] alleged acts of legal malpractice."
Since Baccash wasn't personally affected by Sayegh's actions -- her corporate entity was -- and the company had a "separate legal existence," Baccash couldn't prove the entity was her "alter ego" and that she (personally) sustained any damage as a result of the purported malpractice, the AD2 concluded that case should be dismissed.
Did the AD2 leave Baccash at the altar?
 To download a copy of the Appellate Division's decision, please use this link: Baccash v. Sayegh
Congratulations to our partner, Glenn H. Spiegel, who recently responded to a question posed by a New York Times reader. Here's the piece in its entirety:
September 12, 2008, 2:59 pm
After Subletting Apartment, Is Holder of Lease Still Liable?
By Jay Romano
 My wife recently sublet her market-rate apartment on the Upper West Side to two people. The subtenants, along with a third person, did not move out when my wife's lease expired on July 31, but asked if they could sign a renewal lease. The management company has stated that everyone has to be out of the apartment or the landlord will take legal action. Is my wife liable for anything relating to the subletters after her lease expired?
"In free-market situations, when a lease expires, a tenant on the lease is typically expected to surrender the space free and clear of any occupants and personal belongings," said Glenn H. Spiegel, a Manhattan real estate lawyer. So, Mr. Spiegel said, the wife, as the named tenant on the lease, would be liable for the fair market "rent" or "use and occupancy" that comes due until the landlord can recover possession of the apartment.
"If an eviction proceeding is commenced, the tenant on the lease may also be responsible for other charges including, but not limited to, the landlord's reasonable attorneys' fees," he said. "The tenant may also be liable for any apartment repair costs -- other than for ordinary wear and tear -- and for cleaning, locksmith, movers and other eviction related expenses."
Mr. Spiegel said that to determine the extent of the tenant's liability, she should review the provisions of the lease and any sublease with a lawyer.
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To download the actual piece, please use this link: After Subletting Apartment, Is Holder of Lease Still Liable?
 In Hoft v. Frenkel, Joanne Hoft sued for breach of contract after Baila Frenkel cancelled an agreement to purchase Hoft's home. (Hoft believed she was entitled to keep the $54,500 down payment.)
The sale had been conditioned upon Baila's ability to secure a mortgage commitment within 30 days. Although her mortgage application was "provisionally" approved, when it was later denied, Bailia's attorney informed Hoft the buyer wanted to cancel the deal according to the "mortgage contingency clause."
After the Rockland County Supreme Court granted Baila's request for relief in her favor, Hoft appealed to the Appellate Division, Second Department.
Baila established that she made a good-faith effort to obtain financing and was denied because she failed to meet certain qualifying criteria. According to the AD2, that entitled her to the lawsuit's dismissal and return of her contract deposit.
The AD2 certainly bailed Baila out of that one.
 To download a copy of the Appellate Division's decision, please use this link: Hoft v. Frenkel
 In Master Mech. Corp. v Macaluso, Master Mechanical Corp. (MMC) hired James Macaluso to secure bids for "heating, ventilating, and air conditioning (HVAC) work" and entered into a non-disclosure contract wherein Macaluso agreed not disclose certain "trade secrets" acquired over the course of his employment. He was also prohibited from engaging in any HVAC and/or plumbing business with any of MMC's customers for up to two years following termination.
When he later formed his own company and left MMC, his former employer sought a "preliminary injunction" from the Suffolk County Supreme Court stopping Macaluso from disclosing confidential information and soliciting business from MMC's clients.
After the Suffolk County Supreme Court denied MMC's request, an appeal to the Appellate Division, Second Department, followed.
By the time the appeal was heard, part of MMC's case was found to be "academic," since two years had elapsed since Macaluso's departure and he was thus free to solicit clients. As for the injunction preventing the disclosure of confidential information, MMC was unable to establish two essential elements upon which such equitable remedies are predicated -- that it could "succeed on the merits" and that it would suffer "irreparable harm." Therefore, the denial of injunctive relief was allowed to remain undisturbed.
How masterly mechanical was that?
 To download a copy of the Appellate Division's decision, please use this link: Master Mech. Corp. v Macaluso
 In Hearst v. Hearst, John Randolph Hearst, Jr. fought to protect his family fortune and inheritance from his wife, Barbara Hearst, after she filed for divorce.
John and Barbara were married in 1990, the year after John suffered a stroke. When Barbara filed for divorce in 2004, John allegedly "discovered that Barbara, with the aid of their attorney [Leonard Ackerman] ... fraudulently deprived him of title and use of more than $20 million in real property and other investments."
Because of John's poor health, he entrusted Barbara with the day-to-day financial affairs and was often "induced to execute" documents. Eventually Barbara was "able to transfer assets controlled by [John] to a joint back account and then to several accounts solely controlled by her." At the time of the divorce, Barbara's accounts reflected $8 million and another $10 million in real estate owned by John prior to their marriage -- effectively disinheriting John's daughter and grandchildren.
After John filed suit against Barbara and attorney Ackerman for fraud, breach of fiduciary duty, conversion, and legal malpractice, the Suffolk County Supreme Court dismissed the case.
On appeal, the Appellate Division, Second Department, noted that to establish undue influence, "there must be evidence that [Barbara's] influence amounted to a moral coercion, which restrained independent action and destroyed free agency." The AD2 felt that there were unresolved questions as to whether "[John] and Barbara were in a confidential relationship and whether the various executed documents and transfers of property were procured through undue influence," resulting from John's "severely weakened condition [which] left him housebound." The AD2 also reinstated John's claim for legal malpractice against Ackerman, finding that if the lawyer represented both Hearsts, that was a "conflict of interest."
Who'll be the king of that castle?
To download a copy of the Appellate Division's decision, please use this link: Hearst v. Hearst
 In 936 Second Ave. L.P. v. Second Corporate Dev. Co., Inc., Second Corporate Development Co. (Second) leased three adjoining buildings -- with 22 rent-regulated apartments and four retail stores -- to 936 Second Avenue by way of a 20-year net lease. The parties' agreement provided that if 936 exercised a renewal option, "the annual rent would be seven percent of the value of the [leased] premises as of the date of commencement of each successive 10-year period."
The document provided that if the parties couldn't agree on the property's value, they could each seek their own appraisal.
When a dispute arose, Second's appraiser valued the property at $7.1 million, 936's appraiser came back with $3.43 million -- with the latter expert having "considered the effect of the net lease on the value of the premises."
936 later filed suit asking a court to declare that the net lease and all its terms had to be considered when calculating the property's value. When the New York County Supreme Court disagreed with 936's position, the company appealed to the Appellate Division, First Department, which affirmed.
On appeal to our state's highest court, the New York State Court of Appeals determined "valuations of land must take into consideration all encumbrances, including restrictions as to its use, unless there is a clear provision to the contrary." Since it impeded the property's "highest and best use," the net lease couldn't be disregarded. ["If the parties to a lease desire to exclude that encumbrance in valuing the property, they need only include language to that effect in their agreement. Indeed, courts have routinely enforced such provisions."]
We'll second that!
 To download a copy of the Court of Appeals' decision, please use this link: 936 Second Ave. L.P. v. Second Corporate Dev. Co., Inc.
 In Arthur Glick Leasing, Inc. v. William J. Petzold, Inc., after Glick Leasing acquired a 52-foot yacht -- manufactured by Ocean Yachts, Inc. -- from William J. Petzold, Glick decided to upgrade to a twin diesel Caterpillar engine.
After Glick began having problems with the boat's acceleration and temperature controls, suit was filed against Petzold, Ocean Yachts, and Caterpillar alleging misrepresentation, breach of contract, negligence, breach of implied and express warranties, and violation of the Magnuson-Moss Warranty Act (MMWA) -- a federal law which governs warranties on consumer products.
The Sullivan County Supreme Court dismissed everything but those claims made against Caterpillar for breach of implied and express warranties and MMWA violations and, after trial, a jury awarded Glick $130,400 in damages.
On appeal, the Appellate Division, Third Department, vacated the award and dismissed Glick's case in its entirety.
As to the express warranties, Caterpillar merely promised that their engines would be "free from defects in material or workmanship." It was Ocean Yachts who advertised that Caterpillar's engines delivered "exceptional power with excellent acceleration response."
Since Glick's complaints about the engines were "performance-based," and had nothing to do with technical defects, Caterpillar hadn't breached any express warranties. Further, there was no breach of "implied warranties" because Glick and Caterpillar weren't in "privity of contract" -- meaning that Glick was a "remote purchaser" of the upgraded engine since it was purchased through Ocean Yachts. Finally, since privity of contract was a necessary element for a MMWA violation, that claim also couldn't survive.
In other words, Glick's case got sunk.
 To download a copy of the Appellate Division's decision, please use this link: Arthur Glick Leasing, Inc. v. William J. Petzold, Inc.
 In Pizzo v. Goor, Janet Pizzo sued Rabbi Joel Goor on an agreement which provided Pizzo would be paid a sum of money upon the termination of the couple's "cohabitation relationship" which consisted of "companionship (both platonic and sexual)."
When the Bronx County Supreme Court granted the Rabbi's motion to dismiss the case, Pizzo appealed to the Appellate Division, First Department, which found the agreement unenforceable.
And, since her fraud, unjust enrichment, constructive trust, and intentional infliction of emotional distress claims all arose from that questionable "deal," they also couldn't survive.
We're just wondering who got the benefit of that bargain?
 Anyone wanna take a slice?
To download a copy of the Appellate Division's decision, please use the following link: Pizzo v. Goor
 In Leiderman v. Leiderman, Susan Leiderman wasn't pleased when the Nassau County Supreme Court denied her request for an award of attorneys' fees against her ex-husband, Jeffrey, who defaulted on an agreement reached when they divorced.
The terms provided that if either side breached, the non-defaulting party could ask the court to award reasonable attorneys' fees.
When the Nassau County Supreme Court denied her request, Susan appealed to the Appellate Division, Second Department, which found since Susan was "successful in obtaining a settlement" of a disputed term, Jeffrey was required to pay her fees. But because he hadn't been given the opportunity to oppose his former spouse's application, the case was sent back for a determination as to the "reasonableness" of the charges incurred.
A reasonable outcome, no?
 To download a copy of the Appellate Division's decision, please use this link: Leiderman v. Leiderman
 In Weadick v. Herlihy, Pamela Weadick sued attorney Carol Anne Herlihy claiming a constructive trust -- an ownership right to an interest in property Herlihy had acquired.
Herlihy had discussed an opportunity to purchase a Tribeca building with Weadick and David Tullock. However, the latter two opted to go with another partner and bid separately on the structure. Herlihy still managed to acquire a 50% interest while Weadick and her partners secured the remaining 50% interest from another seller.
Weadick later claimed that Herlihy betrayed a "fiduciary duty" by secretly compelling the seller to exclude Weadick and Tullock from the sale, and by raising funds and bidding on the building on her own.
Interestingly, tape-recorded conversations revealed that Weadick and Tullock were the ones who had acted inappropriately. The recordings disclosed that the duo had approached the seller about excluding Herlihy and had recruited another partner before they parted ways with her.
While the New York County Supreme Court originally denied Herlihy's request to dismiss the case, it later granted her relief based on this "newly discovered evidence" and also awarded her "costs and sanctions." On appeal, the Appellate Division, First Department, affirmed.
The AD1 held that Herlihy "upheld her fiduciary duty," "did not undertake to divert the opportunity to herself prior to termination" and "did not abandon plaintiffs." Furthermore, the AD1 saw no basis to disturb the lower court's finding that Herlihy was entitled to "costs and sanctions."
By Decision and Order dated April 18, 2008, the New York County Supreme Court assessed sanctions in the amount of $3,000.00 and awarded Herlihy reasonable attorneys' fees in the amount of $52,158.60.
You go, Carol Anne!
To download a copy of the Appellate Division's decision, please use this link: Weadick v. Herlihy
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To download a copy of Justice Kapnick's order granting Herlihy fees, please use this link: Decision and Order dated April 18, 2008
To download a copy of JHO Beverly S. Cohen's recommendations (with respect to fees and sanctions), please use this link: Referee Report with Recommendations
To download a copy the underlying Supreme Court order affirmed by the Appellate Division, please use this link: Decision and Order dated January 2, 2007
 In Matter of Johna M.S. v. Russell E.S., Johna and Russell entered into a separation agreement wherein Russell agreed to pay Johna $100 per week in spousal maintenance, and $250 per week in child support, and, Johna could later seek additional maintenance by addressing it with Russell or asking the court to modify the arrangement. Any application made by Johna was to be treated as a new or "de novo" request -- because the agreement didn't consider Johna's future needs or Russell's future earnings.
When Johna later filed for an increase, the Otsego County Family Court denied the request citing the "lack of jurisdiction," and both the Appellate Division, Third Department, and, the New York State Court of Appeals, agreed.
According to our state's highest court, the Family Court lacked the power to alter or rescind a valid separation agreement, unless the spouse was "likely to become in need of public assistance or care." Finding the statutory exception inapplicable here, the parties' agreement didn't give the Family Court the necessary power. The court further noted that Johna wasn't really bringing a "de novo" application for maintenance, but was asking for the agreement's "modification," which could only be achieved by way of a Supreme Court action for separation or divorce.
How divorcing is that?
 To download a copy of the Court of Appeals' decision, please use this link: Matter of Johna M.S. v. Russell E.S.
 In Rios v. Carrillo, Maria Rios leased a residential apartment to Alfredo Carrillo for a period of two years. A year into that lease, Carrillo left the apartment, stopped paying rent, and claimed he did so with Rios' consent. Rios didn't agree and filed suit in 2003 seeking the monies due.
Since Rios hadn't demonstrated that she attempted to "mitigate" or reduce her damages by re-renting the space, advertising its availability and/or listing the apartment with real-estate brokers, the Queens County Supreme Court decided Rios wasn't entitled to the cash and dismissed her case.
On appeal, the Appellate Division, Second Department, reversed.
While Carrillo argued that a landlord should have a duty to take action, the AD2 found that "well-settled law in [New York] imposes no duty on a residential landlord to mitigate damages."
Relying on the Court of Appeals' decision in Holy Props. v. Cole Prods., 87 N.Y.2d 130, 637 N.Y.S.2d 964 (1995), the AD2 noted that unlike other contracts, "'leases have been historically recognized as a present transfer of an estate in real property,'" a sort of "hybrid" between a contract and a conveyance in land. Therefore, since landlords aren't required to re-rent or otherwise assist the tenant find a replacement during the lease term, Carrillo remained liable for all monies that accrued in his absence.
Only the Court of Appeals can mitigate that.
For a copy of the Appellate Division's decision, please use this link: Rios v. Carrillo
Yesterday, July 23, 2008, our partner, Lucas A. Ferrara, was quoted in a New York Times Q&A feature on the enforceability of early termination provisions.
Here's the piece in its entirety:
July 23, 2008
Can a Landlord End a Lease Prematurely?
By Jay Romano
I signed an agreement to rent an apartment that allows the landlord to give me 90 days' notice to vacate regardless of when the lease expires. My broker advised me to sign the lease, saying that the clause is likely to be unenforceable. Do you agree with her?
"Whether or not such early-vacate provisions are enforceable will depend, in large part, on the nature of the tenancy," said Lucas A. Ferrara, a Manhattan lawyer and adjunct professor at New York Law School. Mr. Ferrara said that if the letter writer signed a lease for an unregulated apartment, the parties are free to agree to a wide array of mutually acceptable conditions, including the right for one or both sides to prematurely end the occupancy arrangement. "Absent any unusual or extenuating circumstances, such an early termination provision would be honored by our courts," he said.
Rent-regulated tenants, on the other hand, benefit from an extensive set of statutory protections. By law, Mr. Ferrara said, tenants signing a stabilized lease must be offered the choice of a one- or two-year term and landlords may not circumvent that right by inserting early- termination language. "If this letter writer is a rent-stabilized tenant, the maneuver would likely be viewed as an attempt to circumvent regulatory safeguards and would not be enforceable," Mr. Ferrara said.
It probably would be prudent, he noted, for the letter writer to have a lawyer review the agreement. "He or she would be in a better position to give the writer more particularized legal advice," he said.
To download a copy of the Q&A piece, please use this link: Can A Landlord End A Lease Prematurely?
 In Allen v. Harlem Intl. Community School, LaShawn Allen - parent of an expelled student -- sought to recover the tuition paid to Harlem International -- a "private charter grammar school."
LaShawn's daughter and the school's principal, Ms. Simpson, had an "acrimonious" relationship which worsened when Ms. Simpson directed the child to write "I will not say shut up," 1000 times, as a disciplinary assignment.
LaShawn was none too pleased when she heard of the punishment and filed harassment charges against the principal. Soon thereafter, LaShawn's daughter was expelled for "incorrigible behavior."
After the New York County Small Claims Court found in LaShawn's favor and awarded her $1,500, an appeal to the Appellate Term, First Department, ensued.
Relying on the School's "Rules and Regulations," the AT1 found that the only situations warranting expulsion were a "student's use of illegal drugs or resort to violent behavior." Since neither basis applied, the AT1 thought the expulsion was wrongful.
Justice Douglas McKeon, a lone dissenter, was of the opinion the school's "Rules and Regulations" shouldn't be read so narrowly. Private schools, such as Harlem International, have "broad discretion" when it comes to disciplining students and "a private school may expel a pupil when such action is in the best interest of the school, child, or other students." Further, LaShawn was fully aware of the school's rules before she enrolled her daughter and, if she felt they were too strict, was free to choose another institution. However, the dissent noted LaShawn "got what she bargained for: an ultra-strict private school run by a no nonsense principal who is a strict disciplinarian."
As there was no evidence of "corporal punishment or criminal conduct," McKeon believed the claim should have been dismissed.
 This school's out!
To download a copy of the Appellate Term's decision, please use this link: Allen v. Harlem Intl. Community School
 In F. Richard Wolff & Son, Inc. v. Tutora, F. Richard Wolff & Son (Wolff) sued Anthony Tutora for a commission Tutora allegedly owed to the company.
Tutora hired Wolff as a real-estate broker to sell Tutora's "adult care resident facility" business and accompanying real estate, "as a package." The terms of their contract provided that Wolff's commission would be 6.5% of the selling price.
After Wolff found a prospective buyer, Tutora agreed to a $1.3 million deal, but the sale was subject to the purchaser getting a substantial bank loan. When that fell through, the parties continued their negotiations and the purchaser bought the business and leased the real property from Tutora, months after the brokerage agreement expired.
Wolff felt that it was still owed a commission based on the $1.3 million price because the company had procured a "ready and willing" buyer. The Westchester County Supreme Court felt otherwise and dismissed the case.
On appeal, the Appellate Division, Second Department, reiterated the established rule that "a real estate broker will be deemed to have earned his or her commission when he or she produces a purchaser who is not only ready and willing to purchase ... but able to do so as well." As the sale of the business and real estate was contingent upon bank financing, and the purchaser was unable to close the deal originally contemplated without those proceeds, Wolff wasn't entitled to a commission.
The AD2 wasn't afraid of no Wolff.
 For a copy of the Appellate Division's decision, please use this link: F. Richard Wolff & Son, Inc. v. Tutora
 In Hakimi v. Cantwell Landscaping & Design, Inc., Farhad Hakimi claimed breach of contract stemming from landscaping work Cantwell performed on the homeowner's property.
Apparently, when Hakimi hired the company, Cantwell wasn't a licensed home improvement contactor as required by Suffolk County Law.
After a suit was filed, Cantwell countered with its own claim for the unpaid balance, and sought to foreclose on a mechanic's lien it filed on Hakimi's property.
Hakimi argued that Cantwell wasn't entitled to the monies since the company wasn't licensed when it performed the services. Cantwell contended that the work fell within a license exemption for "new construction," and the Suffolk County Supreme Court agreed with the landscaper's position.
On appeal, the Appellate Division, Second Department, looked at the law's wording and found the loophole only applied to the actual construction of a new structure. The AD2 noted that "interpreting the phrase to include landscaping work performed at a property ... would require this Court to 'impermissibly rewrite a clearly worded statute to obtain a desired result.'" Therefore, since the work didn't fall within the governing licensing exemption, Cantwell couldn't get paid for its services and its lien was vacated.
Do you share that view of the landscape?
 To download a copy of the Appellate Division's decision, please use this link: Hakimi v. Cantwell Landscaping & Design, Inc.
 In Tower Ins. Co. of N.Y. v. Lin Hsin Long Co., Tower wanted a court to rule that it wasn't obligated to defend or indemnify Lin Hsin Long Co. -- known as Hunan Ritz Restaurant -- in connection with a personal injury suit filed against the establishment.
When it received notice some nine months after Charlotte Theodoratos fell in defendant's place of business, Tower filed its own lawsuit contending that, since neither Lin Hsin nor Theodoratos timely notified the insurer of a possible claim, Tower wasn't responsible for the payment of any sums found due to Theodoratos.
After the New York County Supreme Court denied Tower's motion for relief in its favor, the insurer appealed to the Appellate Division, First Department, which agreed Tower hadn't been given notice of the accident within a "reasonable period of time."
While Lin Hsin argued that it didn't contact Tower because it didn't believe there would be a claim, the AD1 was of the opinion the restaurant wasn't in a position to make that kind of assessment. (The AD1 also found Theodoratos' counsel failed to exercise "due dilgence" when he merely urged the restaurant to notify its carrier.)
A lone dissenter -- Justice Andrias -- didn't believe Theodoratos or her attorney did anything wrong, and that the governing standard should have been less stringently applied to an injured party (rather that the insured).
If the Court of Appeals doesn't intervene, this Tower will be insurmountable.
To download a copy of the Appellate Division's decision, please use this link: Tower Ins. Co. of N.Y. v. Lin Hsin Long Co.
 In Sanatass v. Consolidated Investing Co., Inc., Christopher Sanatass was injured while installing an air conditioning unit in a building owned by Consolidated Investing.
C2 Media (C2) -- a tenant in Consolidated's building -- agreed not to make any changes to the premises without the owner's written consent. Yet, C2 secretly hired Sanatass's employer to install an air-conditioning unit and, because of faulty lifts, Sanatass was "nearly crushed."
Sanatass sued Consolidated under a New York State law which imposes "strict liability" on building owners when laborers employed to perform services are injured. Consolidated argued that since its tenant didn't have permission to make these repairs, C2 was solely responsible for Sanatass's damages. The New York County Supreme Court agreed with that position, as did the Appellate Division, First Department.
On appeal to our state's highest court, the New York State Court of Appeals looked to the Labor Law's legislative history and found the statute clearly intended to hold building owners responsible for most on-site accidents which result in a laborer's injuries. As a result, Consolidated was unable to "escape strict liability" even though it had no "notice or control over the work ordered by its tenant."
In a dissent, Judge Smith rejected such a "literal, mechanical" application of the law and was of the opinion the majority was inappropriately treating the building owner as an "insurer" and wrongfully holding it responsible for the tenant's misconduct.
The law's "strict liability" standard is quite frigid, wouldn't you agree?
To download a copy of the Court of Appeals' decision, please use this link: Sanatass v. Consolidated Investing Co., Inc.
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