After Regent Abstract Services sued Fidelity National Title Insurance Company to get payment on a life insurance policy, Fidelity asked for the case's dismissal on the grounds the policy had been canceled due to an unpaid premium.

When the New York County Supreme Court granted the dismissal request, Regent went to the Appellate Division, First Department, claiming that the policy had been reactivated once the overdue premium had been paid.

The AD1 noted that the policy's terms expressly required that the insured be alive at the time a past-due premium was received. Since the payment was due on February 27, the insured died on March 3, and the monies weren't received until March 6, the appellate court concluded that the policy hadn't been reinstated.

No reviving that.

To view a copy of the Appellate Division's decision, please use this link: Fidelity Natl. Tit. Ins. Co. v. Regent Abstract Servs., Ltd.

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

After Martin Brothers agreed to have an ADT home security system installed in his home, a worker for the installer -- Tyco International -- accidentally drilled a hole into a waste pipe and the resulting leak caused a mold condition.

After he received $40,000 from his insurance carrier, Brothers sued Tyco in Westchester County Supreme Court to recover consequential and incidental damages. When that court granted Tyco's dismissal request, an appeal to the Appellate Division, Second Department, followed.

Since the parties' contract released Tyco from any liability for a mold condition, the AD2 affirmed the dismissal -- particularly in the absence of a "compelling public policy consideration" which would have warranted "voiding the exculpatory provision."

Oh Brothers!

To view a copy of the Appellate Division's decision, please use this link: Brothers v. Tyco Intl., Ltd.

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When Stella Arabov sued her former employer, DePinto Realty, over a real-estate commission, the Nassau County District Court only awarded her $1,111.32.

On appeal, the Appellate Term, Second Department, reviewed the evidence and concluded that "substantial justice" hadn't been done and that Stella was entitled to $4,003.90 (25% of $20,765.63, less $1,187.50).

The AT2 sure treated her right!

To view a copy of the Appellate Term's decision, please use this link: Arabov v. DePinto Realty

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After Anagen, Inc., prematurely ended its lease and sued to recover its security deposit, the New York County Civil Court denied the owner's request to dismiss the case -- despite a lease provision which indicated that the tenant forfeited the proceeds if it vacated in advance of the stated expiration date.

On appeal, the Appellate Term, First Department, thought the parties' agreement was clear as to the consequences of the tenant's actions and was of the view a refund wasn't warranted in this instance.

What kind of shinAnagen was that?

To view a copy of the Appellate Term's decision, please use the link: Anagen, Inc. v. Damasco

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Anthony Chiofalo was fired from his position as a New York City Police Department detective when a drug test allegedly revealed he was using marijuana.

Chiofalo argued that the results came out positive because he had inadvertently ingested contaminated food and had inhaled second-hand smoke. He also claimed that the report's use violated his constitutional rights because the test hadn't been authorized by his union.

After he filed a special proceeding -- pursuant to CPLR Article 78 -- with the New York County Supreme Court, his case was transferred to the Appellate Division, First Department.

That court found Chiofalo's termination justified, given NYPD's evidence that the inadvertent ingestion of marijuana wouldn't have caused the levels found in his system. His constitutional argument was also rejected because officials were permitted to use any drug-testing method even though the precise procedure hadn't been identified in the collective bargaining agreement.

The AD1 couldn't have gotten more blunt?

To view a copy of the Appellate Division's decision, please use this link: Matter of Chiofalo v. Kelly 

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New York City Industrial Development Agency Approves FRESH Incentives for Supermarket in the Bronx

Agency Also Approves Industrial and Commercial Incentives for Two Companies to Grow Employment in New York City

On Tuesday, New York City Industrial Development Agency (NYCIDA) approved 3462 Third Ave. Food Corp. to receive Food Retail Expansion to Support Health (FRESH) financial incentives of approximately $449,000 to construct a $1.1 million, 17,000-square-foot Associated Supermarket in the Morrisania section of the Bronx. The project is the third to be approved for FRESH incentives and is expected to create 28 new permanent jobs. NYCIDA also approved a growth-based financial assistance package for Deloitte LLP and an industrial incentive package for J & J Johnson General Contracting Co., Inc. NYCIDA also approved an amended benefits agreement for Thomson Reuters LLC, a successor to Reuters America Inc.

"The purpose of the FRESH program is to provide healthy food options to all New Yorkers, particularly in neighborhoods that are severely underserved by fresh food retail," said NYCIDA Chairman Seth W. Pinsky. "Today's approval of a new full-service grocery store in Morrisania is the third designation of a FRESH beneficiary in the last six months - a clear sign that the program is making progress on its goals."

"For a number of years, the New York City Council has been working to address many of the challenges facing New Yorkers who want to eat a healthier diet. A lack of nutritious food options in many communities has made it virtually impossible for many New Yorkers to access the food they need and has been the target of much of our work," said City Council Speaker Christine C. Quinn. "The FRESH initiative marked the first time any city in the country used zoning as a way to support supermarket expansion, creating incentives for developers to include grocery stores in new construction. Today's approval is not only great news for Morrisania residents but also excellent news for the local economy."

3462 Third Ave. Food Corp. plans to enter into a long-term lease and to furnish and equip an approximately 17,000-square-foot retail supermarket facility located on the ground floor of "La Casa de La Luna," an approximately 135,000-square-foot affordable residential building currently under construction at 3462 Third Avenue in the Bronx. Benefits will come in the form of land, building, and sales tax exemptions. The site is located within the FRESH program area, making it eligible for zoning and financial incentives to aid in the development of a neighborhood grocery store.

3462 Third Ave. Food Corp. is a retail supermarket operating company run by Mr. Teofilo De Jesus, who owns and operates six other retail supermarkets in the metro area under the Associated Supermarket and Compare Foods banners.

NYCIDA also approved today a growth-based incentive package of up to $10.6 million in net present value for Deloitte LLP and a $1.6 million tax incentive package for J & J Johnson General Contracting Co., Inc.

The Deloitte package will assist the company in relocating and expanding its headquarters in up to 630,000 square feet of space at 4 World Financial Center in Lower Manhattan. Deloitte is not entitled to, but can earn an estimated $10.6 million (NPV) in growth benefits if it increases its employment in Lower Manhattan by 2,100 above its current employment count of 4,211 in New York City. Deloitte will be required to maintain its 4,211 existing New York City employee count, any new growth employees in New York City and the Company's headquarters in Lower Manhattan for the 18-year-term of this project agreement.

Deloitte LLP and its subsidiaries are among the nation's leading professional services firms providing, audit, tax, consulting and financial advisory services through a workforce of approximately 40,000 people spread over 90 cities within the United States.

The J & J Johnson incentive package will assist in the acquisition, renovation and construction of an approximately 20,000-square-foot industrial facility located on an approximately 17,000-square-foot parcel of land at 42-26 13th Street in the Long Island City section of Queens. As a direct result of the incentive package, J & J will retain 28 full time jobs and projects it will create six new permanent positions in the next three years.

J & J Johnson is a furniture manufacturer and distributor.

The amendment to an existing 1998 agreement with Reuters America Inc. allows the recently merged company Thomson Reuters to access benefits in exchange for a number of enhancements that benefit the City. The new agreement requires Thomson Reuters to increase its base employment commitment from 1,800 to 3,744, and grow its overall employment count in New York City above 4,210 to access the full $20.77 million (NPV) in benefits. Thomson Reuters will also be required to locate its corporate headquarters in New York City and report project information under Local Law 48 until the end of the agreement in 2025.

Thomson Reuters is a leading business information company in both the media and financial services industries.

About NYCEDC
New York City Economic Development Corporation is the City's primary vehicle for promoting economic growth in each of the five boroughs. NYCEDC's mission is to stimulate growth through expansion and redevelopment programs that encourage investment, generate prosperity and strengthen the City's competitive position. NYCEDC serves as an advocate to the business community by building relationships with companies that allow them to take advantage of New York City's many opportunities. Find us on Facebook or follow us on Twitter to learn more about NYCEDC projects and initiatives.

About NYCIDA
The New York City Industrial Development Agency (NYCIDA) is administered by the New York City Economic Development Corporation and provides financing assistance to businesses, including small industrial and manufacturing companies and not-for-profit organizations. NYCIDA is a conduit agency that issues tax-exempt industrial revenue bonds to assist eligible commercial, industrial, not-for-profit and other qualified entities to finance expansion opportunities. NYCIDA also offers qualified companies abatements on sales, real estate and mortgage taxes. To request information and details on NYCIDA programs, call (212) 312-3600 or e-mail info@nycedc.com.

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When Shaydie Cammann sued her former employer, Prudential World Homes Realty, on an unpaid brokerage commission, Prudential claimed that its policies and procedures obligated her to assist the company with the collection of unpaid commissions. (Apparently, according to that policy, if Cammann failed to cooperate, she forfeited her right to the commission.)

After the Justice Court Putnam County granted Prudential's request to dismiss the case, Shaydie appealed to the Appellate Term, Second Department, which reversed.

Prudential failed to offer any evidence which established that Shaydie knew of the policy when she entered into her employment contract. And because that issue wasn't resolvable based on the papers before it, the AT2 thought the lower court's dismissal of that Shaydie claim had been premature.

Cammann!!!

To view a copy of the Appellate Term's decision, please use this link: Cammann v. Kaplan

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

Michael Picozzi III wanted to buy property from Michael Marcantonio.

Although the parties' contract of sale reflected that a downpayment had been received, that apparently wasn't the case and the funds were deposited at "a later date."

After the house was sold, Marcantonio sued the buyer, and the law firm that processed the transaction, for fraud.

When the Nassau County Supreme Court dismissed the case, the dispute ended up before the Appellate Division, Second Department.

While it thought Marcantonio should have brought a "breach of contract" rather than fraud case, since the deed had been delivered, the AD2 was of the view any possible claim had been "extinguished" by the transfer and that the dismissal needed to stand.

That grief was not crowned with consolation.

To view a copy of the Appellate Division's decision, please use this link: Marcantonio v. Picozzi

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I am pleased to announce that on August 1, 2010, I will establish my own law practice, Joshua Stein PLLC, limited to commercial real estate law.  I will continue to represent clients in most areas of commercial real estate law, including loan enforcement, workout, resolution, origination, and modification; ground leases; space leases and subleases; acquisitions and sales; joint ventures; hotel transactions; and development.

I have also always enjoyed working on special projects for other attorneys, sometimes in the nature of consulting and often based on issues I have explored in my books, articles, and speaking.  In my new practice, I will welcome more assignments of this type, such as:

·         Expert witness engagements, including related consultation;

·         Acting as a neutral third party for dispute resolution, either informally or through the American Arbitration Association, which recently added me to its roster of neutrals;

·         Ground lease review (particularly for financeability issues) and repair;

·         Strategizing and framing issues and arguments for appellate and other litigation;

·         Receivership and similar assignments (my name appears on the Part 36 list);

·         Local counsel work for California and New York, including issuing opinions; and

·         Providing another pair of experienced eyes to help deal with problems and issues.

Please keep me in mind not only for special assignments like these, but also for referrals for any other commercial real estate matter.  Please rest assured that every referral will be handled professionally and in a way intended to return an appreciative client back to you.

I have leased my own space on East 54^th Street and have installed technology so I can deliver service that meets the highest standards of the profession.  I have a couple of extra offices, which I plan to fill quickly, so I'd be happy to receive resumes from potential attorneys, paralegals, or other staff members.

As I undertake this adventure, in addition to continuing to write and speak, I may offer formal fee-based accredited CLE programs on commercial real estate law and practice for law firms and law departments.  If you might be interested in such a program, please let me know.  If I see a reasonable level of interest, I will explore this idea.  If not, I am sure I will find other things to do.

I invite you to visit my website, www.joshuastein.com, for more information on my practice and to view some of my articles and completed matters.  I will soon add a blog with thoughts on commercial real estate, financial markets, and other topics.  You can sign up on my website to receive updates.

In the meantime, I look forward to hearing from you.  Thank you for your friendship and support over the years.

Joshua Stein

JOSHUA STEIN PLLC
59 East 54th Street, Suite 22
New York, NY  10022
(212) 688-3300
joshua@joshuastein.com
www.joshuastein.com

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Our partner, Jarred I. Kassenoff, appeared in Sunday's New York Times Real Estate Section responding to a reader's question.

Here's the piece in its entirety:

A New Cycle for Appliances

By Jay Romano 

Q I am a rent-stabilized tenant in a sponsor-owned apartment in a Manhattan condominium. I have lived here for 30-plus years and have had a washer and dryer in my unit since the 1980s. Do I have the right to replace the appliances?

A Jarred I. Kassenoff, a Manhattan real estate lawyer, says it is unclear whether the owner originally gave permission for the appliances, limited permission to the particular machines the tenant had, or gave the tenant blanket permission to have a washer and dryer. In the absence of a written agreement, this is the kind of issue that a judge would need to resolve after a hearing or trial, Mr. Kassenoff said. He noted, however, that as long as the replacements didn't interfere with the building's plumbing, or otherwise damage the structure, it was likely that a New York City housing court judge would find in favor of this tenant.

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When the City of New York entered into a contract with L&L Painting Co. to paint the Queensboro Bridge, the parties' agreement supposedly provided that L&L would redo any work damaged by fire.

Of course, a fire occurred and, since it wasn't responsible for the incident, L&L wanted to be paid for the extra services it provided. The City of New York countered that the parties' agreement obligated the contractor to perform regardless of the fire's cause.

After the Contract Dispute Resolution Board decided that L&L wasn't entitled to additional compensation, and the New York County Supreme Court refused to disturb that determination, the company appealed to the Appellate Division, First Department.

Since L&L's contract provided there would be no additional cost for the work in question, the AD1 saw no basis to modify the outcome.

Did the AD1 brush over that?

To view a copy of the Appellate Division's decision, please use this link: Matter of L&L Painting Co., Inc. v. City of New York

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After Ronald Popadich ran over 27 pedestrians with his car, his insurer, Commercial Insurance Company of Newark, N.J., sought a court order declaring that it owed no duty to defend or indemnify Popadich against any personal injury claims brought by his victims due to the intentional nature of the driver's misconduct.

After the New York County Supreme Court granted relief in the company's favor, an appeal to the Appellate Division, First Department, followed.

Since Popadich's intentional acts weren't covered by the governing policy, the appellate court agreed that Commercial Insurance had no liability in this instance.

That's the rundown.

To view a copy of the Appellate Division's decision, please use this link: Commercial Ins. Co. of Newark, N.J. v. Popadich

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

Amcan Holdings wanted a loan from Canadian Imperial Bank of Commerce (CIBC) in exchange for a $500,000 fee and signed a "Summary of Terms and Conditions," which noted that the transaction couldn't be finalized until the actual loan documents were signed.

Although Amcan paid $200,000 of the $500,000, CIBC prematurely ended negotiations and refused to refund the $200,000 payment.

When Amcan later sued CIBC alleging contract breach, a violation of the covenant of "good faith and fair dealing," and fraud, the New York County Supreme Court dismissed all the claims except the one based on breach.

On appeal, the Appellate Division, First Department, examined whether the "Summary" qualified as an enforceable contract or merely comprised an "agreement to agree," and was of the view the parties hadn't intended to be bound by that document and that a "future definitive agreement, including a credit agreement," had been contemplated. As a result, even Amcan's breach of contract claim was dismissed.

That summarizes that.

To view a copy of the Appellate Division's decision, please use this link: Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce

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Although Rita A. Fitzsimmons had agreed to sell her farm to Barry B. Ouimet, he was only prequalified for $120,000 of the $150,000 purchase price.

When Rita later decided that she wanted out of the deal, the Franklin County Supreme Court ordered that she honor the agreement's terms and proceed with the sale.

On appeal, the Appellate Division, Third Department, reversed because Barry hadn't shown he was "ready, willing, and able" to fulfill his contractual obligations.

Apparently, the letter he received from his lender wasn't binding, and a mortgage commitment was subject to a formal application which apparently hadn't been completed.

Ee-eye, ee-eye OH.

To view a copy of the Appellate Division's decision, please use this link: Ouimet v. Fitzsimmons

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361 West 121st Housing Dev. Fund Corp. (HDFC) entered into an agreement with Liza and Tony Frazier, wherein the tenants agreed to pay $9,384.09 in maintenance arrears, together with the HDFC's legal fees and future maintenance charges as they came due and payable.

When the Fraziers' first payment was $8.13 short, and five days late, the HDFC wanted to have the Fraziers evicted because of their breach of the governing contract.

After the New York County Civil Court denied the Fraziers' request to stop their eviction, the couple appealed.

The Appellate Term, First Department, thought this wasn't the type of default which warranted removing the tenants from their home. (Their non-compliance wasn't seen as a material breach of the stipulation.)

Who was short-changed there?

To view a copy of the Appellate Term's decision, please use this link: 361 W. 121st Hous. Dev. Fund Corp. v. Frazier

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

From 1995 through September 2006, Joseph G. Livolsi was employed as a director of photography by FPS Productions, Inc. -- a film and video production company.

While associated with FPS, Livolsi privately formed two companies, one of which provided "lighting and gripping" services, while the other was used for billing purposes. And after the guy resigned from FPS, his former employer filed suit claiming a breach of fiduciary duty and conversion of property.

When the Nassau County Supreme Court granted relief in FPS's favor, Livolsi appealed to the Appellate Division, Second Department.

Although FPS alleged that its former employee wrongfully used its time, facilities, diverted potential customers, and, that company property had been purloined, the AD2 still thought a trial was warranted because those claims had been credibly refuted.

Picture that.

To view a copy of the Appellate Division's decision, please use this link: 30 FPS Prods., Inc. v. Livolsi

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When Yong Qing Wang failed to renew his lease, his landlord started a holdover proceeding to recover possession of the commercial space.

After the Queens County Civil Court found in the owner's favor, Wang appealed to the Appellate Term, Second Department.

Since the guy's occupancy was terminable upon a month's notice, which had been given, the AT2 thought the landlord was within its rights to end the tenancy.

There was no hanging on to what he'd got.

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Andrew Buxton wanted to buy a house from Barbara Streany but backed out of the contract when he was unable to get a mortgage.

When Streany refused to return the downpayment, Buxton sued and the Westchester County Supreme Court granted relief in his favor.

On appeal to the Appellate Division, Second Department, Streany argued that Buxton didn't really try to get a mortgage and that the governing provisions, which supposedly allowed Buxton to cancel if a loan wasn't secured, weren't clear.

The AD2 thought the governing language wasn't ambiguous and that Streany's accusations -- as to Buxton's ulterior motives for wanting out of the deal -- couldn't be substantiated and weren't relevant since the guy made a good-faith effort to get the money.

There's no questioning a man's faith?

To view a copy of the Appellate Division's decision, please use this link: Buxton v. Streany

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

This piece appeared in the Real Estate Section of Sunday's New York Times.

Promises, Promises Should Be in Writing

BY: JAY ROMANO

Q I recently used Craigslist to find an apartment. The person showing the place said the building had a laundry room. But when I moved in, I discovered the building did not have on-site laundry. The management company acknowledged that the agent who showed the unit had made a "misrepresentation" and said it would try to find another tenant -- but would hold me to the lease until then. I don't see any urgency in its efforts. Is there anything I can do?

A Lucas A. Ferrara, a Manhattan real estate lawyer, says most lease forms provide that the tenant does not rely on any oral representations made by anyone before the signing of the agreement -- unless those promises were incorporated into the written lease. "If the lease is silent as to the availability of laundry-related equipment or services," Mr. Ferrara said, "the tenant will be hard pressed to assert a claim that she was somehow misled." He said the tenant could ask to be released from the lease, and perhaps offer to forfeit the security deposit.

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After Meir Sharoni filed suit to recover his real-estate commission, the Kings County Civil Court awarded him a judgment in the amount of $10,500 as against the seller, the buyer, and the realty company's agent, Jessica Villaplana.

On appeal, Villaplana claimed she wasn't liable for the money because she was only acting as the company's agent. And the Appellate Term, Second Department, agreed -- noting that an agent of a disclosed principal isn't liable for a contract's breach unless there is clear evidence that the agent intended to be personally bound.

Her disinterest put her out of commission.

To view a copy of the Appellate Term's decision, please use this link: Sharoni v. Villaplana

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DiNapoli's Office Completes Yonkers Schools Audit

New York State Comptroller Thomas P. DiNapoli today announced his office completed an audit of the Yonkers City School District.

"My office's audits of school districts and BOCES help schools improve their financial management practices," DiNapoli said. "These audits are tools for schools to make sure proper policies and procedures are in place to protect taxpayer dollars and provide students with the best possible education."

Yonkers City School District - Internal Controls Over Selected Financial Activities
DiNapoli's auditors found that although the board adopted a procurement policy and officials developed procedures to implement the policy, there were no guidelines for the use of requests for proposals (RFPs) for awarding energy service companies contracts and professional services contracts. DiNapoli's auditors reviewed the process used to award contracts to energy service companies and professional services providers who received contracts totaling approximately $19 million. They found that the district did not always document the reason for selecting a bidder, did not always award the bid to the lowest responsible bidder and in some instances, did not use RFPs when soliciting professional services. The board had not adopted comprehensive policies and procedures to ensure that access to the district's computerized financial data was restricted to only those functions required by individual employee's job duties. In addition, district officials had not implemented access controls to ensure proper segregation of duties within the computer system and to limit access to users based on their job descriptions and responsibilities.

To view the audit, click here: http://osc.state.ny.us/localgov/audits/schools/2010/yonkers.pdf.

If you have any questions or would like a comment from the Comptroller's office regarding these audits, please call the Press Office at 518-474-4015.

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DiNapoli: State's Financial Crisis Hurting Not-For-Profits

Long Contract Delays and No State Budget
Forcing NFPs to Scramble to Provide Services or Even Stay Open

Breakdown of Late Contracts by Geographic Region and Organization Available

State contracts with not-for-profit organizations providing services to New Yorkers were approved late 82 percent of the time in 2009, compared to 63 percent in 2008, according to a report issued today by State Comptroller Thomas P. DiNapoli. In addition, as a result of the late state budget not-for-profits are not getting paid for services provided under existing contracts, forcing some organizations to consider suspending services until the state passes a budget or even closing their doors.

"The budget crisis is causing a financial crisis for not-for-profits," DiNapoli said. "It's a double shot of trouble. Contracts for services are being held up and organizations can't get reimbursed for services they have already provided. It's wrong to expect organizations that operate on shoe string budgets to float the state.

"This is another example of why the state cannot continue to operate by passing weekly emergency spending bills. New York needs to change the way it does business because business as usual is hurting New Yorkers."

The state adopted a prompt contracting law in 1991 to expedite the contract process and payments for not-for-profits to avoid service interruptions and financial hardships. State law requires that not-for-profit contracts be processed by state agencies within 150 to 180 days. DiNapoli's office is required to report annually on how quickly state agencies process contracts for not-for-profits based on data that is self-reported by state agencies to his office. Currently, the state has 25,811 contracts with not-for profits totaling $41.9 billion.

DiNapoli's office found that higher dollar not-for-profits' contracts $50,000 or higher were approved late nearly 93 percent of the time. In total, DiNapoli's office found 5,844 of 6,318 contracts, valued at $4.2 billion, were approved an average of 152 days late by state agencies in 2009 (see late contracts broken down by geographic region and organization). DiNapoli's office typically approves contracts within 11 days after receiving them from state agencies.

Approximately $176,000 was paid in interest to not-for-profits by state agencies for processing their contracts late in 2009, an 18 percent increase from last year.

Richard E. Barnes, executive director, New York State Catholic Conference, said "Comptroller Tom DiNapoli has again shown himself to be an ally of the non-profit community in our struggle to obtain fairness and equity in the contracting process. We know within our non-profit service agencies that the system is broken. Comptroller DiNapoli's Annual Report proves it. Now we stand ready to work with him and our other friends in state government to fix the problems once and for all."

Ron Soloway, chair of the NYS Not for Profit Contracting Advisory Committee and mangaing director of Government and External Relations for UJA-Federation of New York State, said, "It is disappointing that another year has passed with no improvement in prompt contracting with not-for-profit organizations. We hope that with the new initiatives proposed by Comptroller DiNapoli that progress will be made in the coming year."

After identifying the persistent problems that not-for-profits have when contracting with state agencies, DiNapoli's office issued regulations last year that detail when state agencies owe interest to not-for-profits. He also hosted a series of forums statewide on contracting and responding to tough economic times for not-for-profits and issued a report examining the challenges facing the not-for-profit sector.

In the report issued today, DiNapoli made a series of recommendations to streamline and speed up the contracting process including:
State agencies should choose start dates for grant contracts that are later than April 1, the start of the state's fiscal year, so that the processing of contracts is not affected by the timeliness of adopting a state budget;
State agencies need to use the grant contract boilerplate in a consistent manner ensuring that the terms are uniform for all state agency grant programs;
Master contracts with the same not-for-profit should be utilized when feasible; and
The Not-for-Profit Contracting Advisory Committee should continue to meet regularly to review recommendations from the not-for-profit community and state agencies.

Click here for a copy of the prompt contracting report.

Click here for a breakdown of late contracts by geographic region and organization.

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Peter and Mary Kornman contracted to buy a half acre of waterfront property from Stenda Realty LLC and tendered a $243,250 down payment. And, before that agreement was signed, Stenda sent the Kornmans' attorney a survey of the parcel.

When the title company refused to remove an "underwater exception" on land beneath the high water line, and it was discovered that the property was actually smaller than a half acre, the Kornmans refused to show up at the closing.

After Stenda sued to keep the down payment as liquidated damages, the Suffolk County Supreme Court found in the seller's favor.

Since Stenda was "ready, willing and able" to close, and the Kornmans had been given a copy of an accurate survey before the contract was signed, the Appellate Division, Second Department, thought there was no basis for the Kornmans to back out of the deal.

Bet the Kornmans took exception to that.

To view a copy of the Appellate Division's decision, please use this link: Stenda Realty, LLC v. Kornman

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St. Lawrence Factory Stores wanted to build a shopping center and sought to purchase about 12 acres of land from the Ogdensburg Bridge and Port Authority (OBPA) for that purpose.

When OBPA backed out of the deal, St. Lawrence sued seeking "lost profits," based on money it would have made had the shopping center been built, "the benefits of the bargain" (the difference between the property's contract price and its fair market value), together with "reliance damages," the money the company spent procuring financing and finding tenants for the property.

After the St. Lawrence County Supreme Court granted a pre-trial request to dismiss the reliance and lost-profits claims, and rejected the "benefits of bargain" theory after a trial, the Appellate Division, Third Department, affirmed.

When the dispute reached the New York State Court of Appeals, our state's highest court was of the view state law had long adopted the principle of "reliance" -- as set forth in the Restatement (Second) of Contracts § 349 -- and that a party may seek the recovery of such sums expended in anticipation of a contract's performance.

Since it thought dismissal of the reliance claim was wrongful, the Court of Appeals sent the case back for "further proceedings."

There's no defiance of reliance.

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Our partner, Jonathan H. Newman, was quoted in yesterday's New York Times responding to a reader's question.

Here's the piece, that ran on Sunday, June 6, 2010, in its entirety:

A Question of 'Double-Dipping'

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Tazewell Delaney and John Weston were supposed to be partners in a business related to music sales, but Weston allegedly stole the idea and started a competing company.

After Delaney filed suit which alleged breach of a joint venture agreement, misappropriation of ideas, and, unjust enrichment, Weston asked the New York County Supreme Court to dismiss the case. When that request was granted, an appeal to the Appellate Division, First Department, followed.

Because Delaney's idea wasn't original, and the parties' agreement lacked language which would have made their contract enforceable, the AD1 thought dismissal was appropriate. (It also couldn't find any "unjust enrichment," since Weston's company suffered net losses of approximately $1MM in its four years of existence.)

Sour notes all around.

To view a copy of the Appellate Division's decision, please use this link: Delaney v. Weston

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Gene Altman wanted to buy a cooperative unit from Kenneth and Diane Kaplan.

Soon after placing a deposit of $230,000 in escrow, Altman suffered a stroke and died.

Although the estate representative demanded the return of the proceeds, the Kaplans refused the request, claiming the contract was binding on Altman's heirs.

When litigation ensued, the New York County Supreme Court found the contract enforceable and dismissed the case.

On appeal, the Appellate Division, First Department, rejected the argument that Altman's death justified nonperformance -- particularly since the parties' contract addressed that particular contingency.

Because the estate representative had been obligated to seek the cooperative's approval, that failure to do so -- coupled with the agreement's repudiation -- entitled the Kaplans to keep the $230,000 downpayment as liquidated damages.

Not that's some parting gift.

To view a copy of the Appellate Division's decision, please use this link: Warner v. Kaplan

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Nearly 30,000 NYC Homes Foreclosed 2008-2009

Washington, DC - As families across New York and across the country struggle to find work after losing their jobs for no fault of their own, U.S. Senator Kirsten Gillibrand is advancing legislation to provide temporary mortgage relief for struggling families to stave off the threat of foreclosure. The Homeowners' Relief and Neighborhood Stabilization Act of 2010 would provide $3 billion for loans for up to 24 months for out of work homeowners so they can keep their families in their homes.

Senator Gillibrand is working with her colleagues Senators Bob Casey (D-PA) and Charles E. Schumer (D-NY) to include the legislation as an amendment to the financial regulatory reform bill now being debated in the Senate. The House-passed version of financial regulatory reform includes a similar provision. 

"During these tough economic times, when thousands of New Yorkers are looking for work but struggling to make their mortgage payments, we need to do more to help prevent foreclosure," Senator Gillibrand said. "When a family is foreclosed on, vacancies rise, property values plummet, crime increases, and the entire neighborhood suffers. This amendment will help keep thousands of families in their homes protecting neighborhoods across this region."According to RealtyTrac, more than 50,000 New York homes were foreclosed on from 2008 to 2009. Nationally, foreclosures increased more than 20 percent, reaching a record of nearly 9 million foreclosure filings in 2009 alone.  In March, over 350,000 properties nationwide received foreclosure filings, their highest monthly total since RealtyTrac started reporting numbers in 2005.

In New York City, nearly 30,000 homes were foreclosed on from 2008 to 2009.

Modeled after an effective Pennsylvania-based initiative in, key provisions of the Homeowners' Relief and Neighborhood Stabilization Act of 2010 include:

•           Directing $3 billion in TARP funds to a program established at the U.S. Department of Housing and Urban Development (HUD) called the Emergency Homeowners Relief Fund;

•           Allowing homeowners facing a temporary loss in income due to unemployment, underemployment or medical condition to receive low-interest loans for up to 24 months to assist in their monthly mortgage payment.  Homeowners must be at least 3 months behind on their mortgage payments and have received a notice stating that the holder of the mortgage intends to foreclose;

•           Instructing the HUD Secretary to take a homeowner's ability to repay into account when establishing the terms, conditions and rates of the loan.  Interest rates shall be fixed for the life of the loan and capped at FHA rates and prepayment penalties may not be assessed;

•           Providing $1 billion to the Neighborhood Stabilization Program, created in the Housing and Economic Recovery Act of 2008, to provide grants to state and local governments and eligible entities to purchase and redevelop foreclosed and abandoned homes and residential properties.

Additionally, Senator Gillibrand is pushing another amendment with Senator Al Franken (D-MN) and Senator Olympia Snowe (R-ME) to improve the administration's existing foreclosure prevention program by establishing an Office of the Homeowner Advocate modeled on the successful Office of the Taxpayer Advocate program at the IRS. 

Many homeowners about to lose their home have struggled to receive assistance through the existing Home Affordable Modification Program (HAMP), facing unresponsive loan servicers with few resources to turn to.  The new Office of the Homeowner Advocate would have an independent director, charged with helping homeowners resolve difficulties with the HAMP program, identifying areas where the program is not effectively assisting homeowners, and proposing administrative and legislative changes to make it easier for struggling homeowners to keep their homes. 

Posted by Lucas A. Ferrara, Esq. at 3:00 PM | Permalink | TrackBacks (0) | Comments (1)

On Sunday, Robert Knakal (of Massey Knakal Realty Services) posted this article to his blog:  

1031 Exchanges Come Roaring Back to the Market

Welcome back old friend! Yes, we have seen a re-emergence of the blessed 1031 tax-deferred exchange in recent weeks, and what a welcome sight it is.

The opportunity to protect hard earned equity in the sale of an investment has been available to investors since 1921. However, this part of the tax code was so complex that only a small segment of the investment community took advantage of this mechanism.

In 1990, the Omnibus Budget Act provided more widespread access to a broader set of investors as this option was clarified and simplified. Section 1031 exchanges are often mischaracterized as "tax free" when they are actually "tax deferred."

The theory behind this mechanism is that when a property owner has reinvested the sale proceeds into another property, the economic gain has not been realized in a way that generates funds to pay taxes. Only the form of investment has changed, therefore, it would be unfair to collect a tax on a "paper" gain.

When an investor utilizes this mechanism, the deferred gain is payable when the replacement property is sold and is not part of yet another exchange. At that point, the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.

1031 exchanges in the investment property market have been growing in popularity since the mid-90s and fueled a majority of transactions in the mid to late 2000s. With falling property values and transaction volumes beginning in late 2007, we saw a significant reduction in 1031 transactions.

In previous StreetWise columns, I have gone into detail about the supply / demand imbalance and the fact that the volume of sales was so low due, mainly, to lack of supply as opposed to waning demand. The supply of available properties for sale is generally fed by discretionary sellers. When value falls, as it has done since 2007, discretionary sellers withdraw from the market and the supply is then fed by distressed sellers. Distressed sellers have not fed the supply in numbers which were expected because everything that has occurred from a regulatory perspective has allowed these sellers to avoid dealing with their distressed assets.

Recently, we have seen the flow of distressed assets begin to loosen as banks and special servicers are beginning to clean up their balance sheets and portfolios. Simultaneously, we have seen discretionary sellers returning to the market. The tangible evidence that this is actually happening can be seen in the 1031 activity we have seen recently. Distressed sellers are rarely left with any equity to reinvest in the form of a 1031 exchange. Discretionary sellers, on the other hand, often have significant equity to redeploy via this tax-deferred vehicle. We are, once again, seeing sellers ask for flexibility in closing periods to provide them with better chances of being able to effectuate an exchange.

During the past 4 weeks alone, we have signed 12 contracts with purchasers who are investing 1031 funds. Moreover, we are receiving multiple calls each day from investors who are looking for properties to complete exchange transactions. This is certainly reminiscent of 2006 and 2007 when so many transactions were motivated by tax-deferment. The demand side has been very strong for quite a while as institutional capital has returned to the market, joining the high-net-worth individuals and families which have dominated the horizon for the past couple of years. Foreign high-net-worth investors are present in rapidly growing numbers and the re-emergence of 1031 capital adds more pressure to already overwhelming demand for investment properties.

Dont mistake my perspective as I am not suggesting that market conditions are back to the go-go, bubble inflating, years of 2005 to 2007. I am, merely, passing along a trend that we are seeing which has, for the most part, been absent for quite a while. It is yet another sign that the recovery is upon us.

From an intermediary's point of view, or anyone's, who is reliant upon transaction volume for their livelihood, it is positive to see this type of activity returning to the market. To the extent that distressed sellers continue to dispose of assets and discretionary sellers return to the market, transaction volume has no choice but to increase. As sellers with real equity sell, each transaction is likely to stimulate another transaction as a 1031 is contemplated.

This trend certainly bodes well for our projection that transaction volume will increase by about 40% this year over last year. Welcome back old friend, indeed!

Posted by Lucas A. Ferrara, Esq. at 11:00 AM | Permalink | TrackBacks (0) | Comments (0)

After he was physically attacked by several of his fellow co-workers, James Wolfgeorge filed a personal-injury case against William Ambrister, Delta Funding Corporation, and others.

When the Bronx County Supreme Court denied the defendants' request to dismiss the case, on the grounds that Wolfgeorge had settled the claim in exchange for a $1,500 payment, the group appealed to the Appellate Division, First Department.

Based on its review of the record, the AD1 couldn't find any evidence which supported the defendants' position. Wolfgeorge's purported signature on a general release didn't match his signature on other documents, nor was there any proof the guy had received a payment.

Did someone cry Wolf ...?

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

Supreme Court Deals A Blow to Consumers In Case on Class Actions & Arbitration

Yesterday, the five members of the Supreme Court's conservative wing dealt a blow to consumers and workers in the fight over forced arbitration. In Stolt-Nielsen v. Animalfeeds, the Court ruled that "imposing class arbitration on parties who have not agreed to authorize class arbitration is inconsistent with the Federal Arbitration Act." The arbitration panel in the case, according Justice Alito's opinion for the Court, had "exceeded its powers" by adopting its own "policy choice" in favor of allowing class actions.

Public Citizen filed an amicus brief in the case. We argued that the case was not ripe for judicial review under the Federal Arbitration Act, which limits judicial review of arbitral decisions to final "awards." The arbitral panel had decided only a preliminary issue of contract interpretation, had not even certified a class, and had issued no "award" in anyone's favor, so review by the Supreme Court would be premature.

Justice Ginsburg's dissent closely echoed our arguments. She would have dismissed the case without deciding it. But even if Stolt-Nielsen's case were ripe, Justice Ginsburg said, the Court should have rejected it because the parties in the case had both "asked the arbitrators to decide whether the arbitration clause in their contracts permitted class proceedings" and "the panel did just what it was commissioned to do." Under those circumstances, there was no basis for a court to overturn the decision.

Stolt's implications for the larger debate over forced arbitration in consumer and employment cases are troubling-especially for the ongoing fight over class-action bans. But the impact of the decision is unclear at this point, and will have to be worked out by the lower courts.

Although today's decision will undoubtedly affect consumers and workers, the Stolt case itself involved claims brought by a group of large businesses, who alleged that a handful of shipping companies had engaged in a global price-fixing conspiracy. One major question that will have to be addressed is how the decision will apply in cases where consumers' claims are especially small and a class action is the only realistic means of redress. The decision also does not address the fairness defenses that are available to consumers under general state contract law.

Read More about Public Citizen Litigation Group

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In 8109 Pizzeria of New York, Inc. v. Polo Pizza One Corp., Polo agreed to buy a pizzeria for $228,000, gave a $30,000 downpayment, and promised to pay the rest by way of monthly installments.

When Polo defaulted on its payments, 8109 called for the acceleration of the remaining monies due, as per the terms of the parties' agreement.

After the Queens County Supreme Court denied 8109's request for relief, the company appealed to the Appellate Division, Second Department.

Although Polo claimed to have expended significant sums repairing the establishment, the AD2 thought that had nothing to do with the entity's obligations under the contract and that Polo had an "independent" obligation to pay the purchase price.

While the precise amounts due weren't clear, the AD2 still felt 8109 was entitled to a finding that Polo was liable for its contract breach.

That ain't amore!

To view a copy of the Appellate Division's decision, please use this link: 8109 Pizzeria of New York, Inc. v. Polo Pizza One Corp. 

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MAYOR BLOOMBERG, CHANCELLOR KLEIN AND UFT PRESIDENT MULGREW ANNOUNCE BREAKTHROUGH AGREEMENT TO ELIMINATE "RUBBER ROOMS"

Posted by Lucas A. Ferrara, Esq. at 9:00 AM | Permalink | TrackBacks (0) | Comments (0)

After buying two buildings from Mocal Enterprises, Inc., for $92 million dollars, 1225 Realty Owner LLC sued the seller on "fraudulent concealment" grounds -- claiming Mocal failed to disclose the existence of certain lease extensions.

When the New York County Supreme Court dismissed the case, 1225 appealed to the Appellate Division, First Department.

Since a revised rent roll had been provided more than a month before the contract was signed, and a schedule was also attached to the contract of sale, the AD1 could discern no misconduct, particularly since both sides were "sophisticated business entities, represented by counsel."

Reading is fundamental!

To view a copy of the Appellate Division's decision, please use this link: 1225 Realty Owner v. Mocal Enters., Inc.

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Twenty minutes after informing David Grais's attorney that a real-estate deal was dead, Loryn Kass received a fully executed contract of sale.

While Kass claimed that the contract was unenforceable because the offer had been timely withdrawn, Grais countered that the deal had been sealed when the papers were deposited with FedEx, rather than when they were actually received by Kass.

Since the parties' agreement provided it would be effective upon delivery, and Kass backed out before that occurred, the New York County Supreme Court found in Kass's favor.

On appeal, in the absence of any ambiguity as to the contract's terms, the Appellate Division, First Department, also delivered Kass a nice win.

(Absolutely, positively.) To view a copy of the Appellate Division's decision, please follow this link: Kass v. Grais

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

Our partner, Glenn H. Spiegel was quoted in the Real Estate Section of Sunday's New York Times.

Claiming Interest on Security Deposits

By JAY ROMANO

I rent a Westchester condominium apartment and have never received a notice of interest earned on my two months' security deposit held by the owner. Are condo renters entitled to interest on their security deposits?

"The state's General Obligations Law requires that a tenant's security deposit be placed in an interest-bearing account whenever the deposit is for a rental in a building that contains six or more dwelling units," said Glenn H. Spiegel, a real estate lawyer in Manhattan. He said the law did not differentiate between rental buildings and condo buildings.

So if the writer's apartment is in a building with six or more units, he is entitled to interest on the security deposit and to know the name and address of the bank where the account is maintained. He added that when a security deposit is placed in an interest-bearing account, the landlord -- here, the apartment owner -- is entitled to an annual administration fee equal to 1 percent of the deposit.

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Andrew Langer owed Judith Solomon $200,000 and claimed to have satisfied that debt by working out a deal with Solomon's mom (who was a former business acquaintance).

When Judith later filed suit in the New York County Supreme Court seeking to recover the proceeds and was awarded a $200,000 judgment, Langer appealed to the Appellate Division, First Department.

Since the promissory note's terms specifically required that payments be made to Judith, and since she hadn't authorized her mom to act on her behalf, the AD1 refused to consider any purported oral arrangement that had been reached and affirmed the outcome.

Now that's Solomonic!

To view a copy of the Appellate Division's decision, please use this link: Solomon v. Langer 

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In Zellner v. Tarnell, the Tarnells wanted to buy a home in Westchester County and gave the Zellners a downpayment.

When the sellers later sued the buyers for for failing to comply with the terms of the contract of sale, the Westchester County Supreme Court granted the Zellners' request to keep the monies which had been remitted, as "liquidated damages" for the breach.

On appeal, the Appellate Division, Second Department, thought that the parties' agreement only required the Tarnells to proceed with the deal if they got a binding mortgage commitment from a lender wtihin a thirty day period.

Since the commitment they received was revocable "at any time," the AD2 reversed and let the buyers out of the deal. (The appellate court was of the view the Tarnells hadn't procured a binding mortgage commitment within the governing timeframe and thus could withdraw from the purchase, scot free.)

See why people are afraid to commit?

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The Federal Reserve's new rules for credit card companies mean new credit card protections for you. Here are some key changes you should expect from your credit card company beginning on February 22, 2010.

What your credit card company has to tell you

• When they plan to increase your rate or other fees. Your credit card company must send you a notice 45 days before they can
  • increase your interest rate;
  • change certain fees (such as annual fees, cash advance fees, and late fees) that apply to your account; or
  • make other significant changes to the terms of your card.

  If your credit card company is going to make changes to the terms of your card, it must give you the option to cancel the card before certain fee increases take effect. If you take that option, however, your credit card company may close your account and increase your monthly payment, subject to certain limitations.

  For example, they can require you to pay the balance off in five years, or they can double the percentage of your balance used to calculate your minimum payment (which will result in faster repayment than under the terms of your account).

  The company does not have to send you a 45-day advance notice if
  • you have a variable interest rate tied to an index; if the index goes up, the company does not have to provide notice before your rate goes up;
  • your introductory rate expires and reverts to the previously disclosed "go-to" rate;
  • your rate increases because you are in a workout agreement and you haven't made your payments as agreed.
• How long it will take to pay off your balance. Your monthly credit card bill will include information on how long it will take you to pay off your balance if you only make minimum payments. It will also tell you how much you would need to pay each month in order to pay off your balance in three years. For example, suppose you owe $3,000 and your interest rate is 14.4%--your bill might look like this:

  New balance	$3,000.00
  Minimum payment due	$90.00
  Payment due date	4/20/12

  Late Payment Warning: If we do not receive your minimum payment by the date listed above, you may have to pay a $35 late fee and your APRs may be increased up to the Penalty APR of 28.99%.

  Minimum Payment Warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance. For example:

  If you make no additional charges using this card and each month you pay. . .	You will pay off the balance shown on this statement in about. . .	And you will end up paying an estimated total of. . .
  Only the minimum payment	11 years	$4,745
  $103	3 years	$3,712 (Savings = $1,033)

New rules regarding rates, fees, and limits

• No interest rate increases for the first year. Your credit card company cannot increase your rate for the first 12 months after you open an account. There are some exceptions:
  • If your card has a variable interest rate tied to an index; your rate can go up whenever the index goes up.
  • If there is an introductory rate, it must be in place for at least 6 months; after that your rate can revert to the "go-to" rate the company disclosed when you got the card.
  • If you are more than 60 days late in paying your bill, your rate can go up.
  • If you are in a workout agreement and you don't make your payments as agreed, your rate can go up.
• Increased rates apply only to new charges. If your credit card company does raise your interest rate after the first year, the new rate will apply only to new charges you make. If you have a balance, your old interest rate will apply to that balance.
• Restrictions on over-the-limit transactions. You must tell your credit card company that you want it to allow transactions that will take you over your credit limit. Otherwise, if a transaction would take you over your limit, it may be turned down. If you do not opt-in to over-the-limit transactions and your credit card company allows one to go through, it cannot charge you an over-the-limit fee.
  • If you opt-in to allowing transactions that take you over your credit limit, your credit card company can impose only one fee per billing cycle. You can revoke your opt-in at any time.
• Caps on high-fee cards. If your credit card company requires you to pay fees (such as an annual fee or application fee), those fees cannot total more than 25% of the initial credit limit. For example, if your initial credit limit is $500, the fees for the first year cannot be more than $125. This limit does not apply to penalty fees, such as penalties for late payments.
• Protections for underage consumers. If you are under 21, you will need to show that you are able to make payments, or you will need a cosigner, in order to open a credit card account.
  • If you are under age 21 and have a card with a cosigner and want an increase in the credit limit, your cosigner must agree in writing to the increase.

Changes to billing and payments

• Standard payment dates and times. Your credit card company must mail or deliver your credit card bill at least 21 days before your payment is due. In addition
  • Your due date should be the same date each month (for example, your payment is always due on the 15th or always due on the last day of the month).
  • The payment cut-off time cannot be earlier than 5 p.m. on the due date.
  • If your payment due date is on a weekend or holiday (when the company does not process payments), you will have until the following business day to pay. (For example, if the due date is Sunday the 15th, your payment will be on time if it is received by Monday the 16th before 5 p.m.).
• Payments directed to highest interest balances first. If you make more than the minimum payment on your credit card bill, your credit card company must apply the excess amount to the balance with the highest interest rate. There is an exception:
  • If you made a purchase under a deferred interest plan (for example, "no interest if paid in full by March, 2012"), the credit card company may let you choose to apply extra amounts to the deferred interest balance before other balances. Otherwise, for two billing cycles prior to the end of the deferred interest period, the credit card company must apply your entire payment to the deferred interest-rate balance first.
• No two-cycle (double-cycle) billing. Credit card companies can only impose interest charges on balances in the current billing cycle.

Posted by Lucas A. Ferrara, Esq. at 5:00 PM | Permalink | TrackBacks (0) | Comments (0)

A wrongful-death case was filed after Isaac Evans was killed in a car accident with Matthew Graber, who had been driving a 1999 Chevrolet Blazer.

When the claim was forwarded to LM Property and Casualty Company, the insurer asked to be relieved of any liability in the case and the Wyoming County Court agreed.

On appeal, the Appellate Division, Fourth Department, found that the Chevy Blazer was covered by a company known as the United Services Automobile Association.

LM's policy only covered a 2000 Pontiac Bonneville sedan and a 2001 Chevrolet S10 pickup truck -- neither of which was involved in the accident.

Although Graber's name appeared on an LM policy, that wasn't enough to trigger that company's responsibility.

Bet Graber didn't pay a premium for that.

To view a copy of the Appellate Division's decision, please use LM Prop. & Cas. Co., Inc. v. Evans

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MAYOR BLOOMBERG AND CENTRAL AMUSEMENT INTERNATIONAL UNVEIL PLANS FOR EXPANDED OUTDOOR AMUSEMENT PARK IN CONEY ISLAND TO OPEN SUMMER 2010

Two New Amusement Areas - "Luna Park" and "Scream Zone - will Feature 23 New Rides, Including New Roller Coasters, a Human Sling Shot and Go-Karts

330 New Jobs to be Created by 2011 with Emphasis on Local Hiring

Earlier this week, Mayor Michael R. Bloomberg and Central Amusement International (CAI)unveiled plans for a new amusement park on three City-owned parcels in Coney Island that will open by Memorial Day 2010. CAI will lease the parcels, totaling 6.2-acres, for ten-years and invest nearly $30 million to build and operate the amusement park. The park will feature both traditional and cutting edge, state-of-the-art rides from renowned ride designer and manufacturer, Zamperla.  The new amusement park will be built in two stages: This summer, CAI will open "Luna Park at Coney Island," which will feature 19 rides, including one - Air Race - that will make its worldwide debut at Coney Island; and by summer 2011, the "Scream Zone at Coney Island" will provide additional attractions, including two custom roller coasters, a human slingshot ride, and go-karts. In total, 23 new rides will be installed, designed to celebrate Coney Island's unique history and character while adding modern amusements. In its inaugural season, Luna Park is projected to create 247 new jobs in Coney Island, increasing to 330 full and part-time positions in 2011, with an emphasis on local hiring. The Mayor was joined at the announcement, held at the New York Aquarium, by Council Member Domenic M. Recchia, Jr., Brooklyn Borough President Marty Markowitz, Congressman Jerrold Nadler, New York City Economic Development Corporation President Seth W. Pinsky, Department of City Planning Commissioner Amanda M. Burden, and Central Amusement International Vice President Peter Pelle.

"Coney Island remains one of the most known and beloved neighborhoods around the world, but for decades its famed amusement park has dwindled to just a tiny fraction of what it once was. This summer, we're reversing that trend," said Mayor Bloomberg. "As part of our Administration's revitalization plan for Coney Island - passed by the City Council last year - we're making necessary infrastructure investments and joining with Central Amusement International to build new amusements that celebrate Coney Island's historic past while featuring modern rides - some making their worldwide debut - that will attract people from around the City and around the globe."

The expanded amusement park is part of the City's Coney Island Revitalization Plan, which will preserve and grow the historic amusement area; create a vibrant mixed-use neighborhood with new retail options and nearly 5,000 new units of housing, including 900 income-targeted units; and generate more than 25,000 construction jobs and 6,000 permanent jobs. In total, the plan is expected to generate more than $14 billion in economic activity for New York City over 30 years. In November 2009, the City released a Request for Proposals for a private sector amusement and entertainment operator for the three sites that it purchased earlier that month from Thor Equities. The proposal submitted by CAI was selected based on criteria that included: the strength of its amusement and entertainment programming; a clear understanding of the redevelopment objectives put forth in the Coney Island Comprehensive Plan; the economic impact of the proposal; the development's financial feasibility; the team's qualifications and safety record; and an innovative approach to site design and planning respecting Coney Island's history and culture.

As part of planned infrastructure improvements, the City will invest $6.6 million in site preparation and basic infrastructure to support the ongoing redevelopment of the neighborhood. In addition, CAI will invest about $30 million: $3 million for additional site preparation, more than $15 million to open Luna Park and more than $12 million to open the Scream Zone. The new amusement park will be operational by Memorial Day and remain open daily until Labor Day and weekends through Columbus Day for its inaugural season.

"I am thrilled that Central Amusement International has been selected as the amusement operator for Coney Island," said Council Member Recchia. "They have a proven track record of exciting, diverse rides for young children and families that will fit right in to the Coney Island aesthetic. I am looking forward to working with them to ensure that we have rides and amusements in place for this summer, and that we continue to make good on our promise of bringing Coney Island into the future while honoring the history that makes it an iconic, worldwide tourist destination.  And I encourage them to remember, when they start hiring, that we have an eager, dedicated workforce right here in Coney Island."

"I am delighted to welcome Central Amusements to America's playground. This summer, Luna Park will shine during the day and sparkle under the stars at night," said Borough President Markowitz. "As they say in Italy, where the roots of Central Amusements were formed, 'Benvenuti alla Republica di Brooklyn!'"

"I welcome the arrival of Central Amusement International and Zamperla to Coney Island, and I'm very pleased that they will be open for business this summer," said Congressman Nadler. "This 10-year agreement will be the foundation upon which we can plan the future redevelopment of Coney Island for the benefit of both residents and visitors, and it is truly a major step in the revitalization of the long-suffering amusement district.  New public and private investment in the neighborhood will finally reverse the decline of the amusement district and, critically, create new jobs and economic development locally. I congratulate the City on this positive move forward."

"I am happy that after all these years of negotiation and speculation we are finally delivering what I hope is a new day for the residents of Coney Island," said State Senator Diane J. Savino. "I want to thank the Mayor's office and the staff of the New York City Economic Development Corporation, but most of all want to thank the residents of Coney Island for their patients and their desire to move the community forward."

"I'm thrilled to welcome Central Amusement International to Coney Island," said Assembly Member Alec Brook-Krasny. "It's great news for Coney Island and the entire City. In today's economy, the prospect of 330 new jobs for the members of our community is significant news and much needed."

"Today's announcement represents a significant step forward in the transformation of Coney Island - offering a substantial down payment on the promise of the Administration's plans for the redevelopment of this important Brooklyn neighborhood," said New York City Economic Development Corporation President Pinsky. "By early this summer, we expect Central Amusements to invest millions of dollars on a vastly-improved and substantially-expanded amusement area, reversing years of decline and disinvestment, while simultaneously creating hundreds of jobs and drawing many, many thousands of visitors to the area.  It took a team effort to get to this point and I look forward to celebrating the opening of Luna Park this summer."

"Today is a major milestone for Coney Island. Not long ago, we were celebrating the adoption of a comprehensive rezoning as a first step towards the restoration of Coney Island's title as the world's greatest open and accessible urban amusement park," said City Planning Commissioner Burden. "We are following through with this commitment with the announcement that the new Luna Park will open this summer. This park is the first step towards a permanent year round 27-acre amusement and entertainment district."

"Central Amusement International is excited to be chosen by New York City to be a part of the revitalization of Coney Island," said CAI Vice President Peter Pelle. "Coney Island has long been known as a place of innovative thrills and attractions. Our dedicated team will work with the City to revitalize this iconic New York destination to make it a must-see attraction for locals and visitors coming to New York from around the world. We are bringing back the fun to Coney Island this May and for many years to come."

Luna Park at Coney Island will reestablish the area as an amusement park destination offering 19 new mechanical rides from Antonio Zamperla S.p.A., games, food and beverage concessions, and live entertainment. Four new prototype rides will have their debut in 2010 including Air Race, where riders will soar and barrel roll around a control tower; and the Speedy Coaster, a gravity coaster designed especially for families. In addition, the iconic Astrotower will be repurposed and utilized as signage to draw visitors to the area.  By summer 2011, the Scream Zone will expand the park's entertainment offerings by introducing four additional thrill rides, including the debut of two new roller coasters.

Renderings can be viewed at nyc.gov.

Luna Park and the Scream Zone will more than double the acreage currently utilized for amusements in Coney Island, with Luna Park encompassing 3.16-acres on the former Astroland site and the Scream Zone covering an additional 3-acres between West 12th and West 15th Streets. Pursuant to its lease, CAI will pay a base rent to the City of $100,000 per year for each year of its term; the City will also receive additional revenue derived from gross receipts from the amusement park. It is anticipated that existing amusements on other City-owned sites in Coney Island, including the Cyclone and Deno's Wonder Wheel Park, will continue to be operated by their current management for the duration of their leases. Upon expiration of the 10-year interim lease and the completion of necessary infrastructure, the City expects to issue another Request for Proposals to identify a permanent amusement park developer for a lease term of 25 years.

Coney Island Craft Lagers, made by Shmaltz Brewing Company, will celebrate the opening of the new Luna Park with its own brand new summer attraction: Coney Island Luna Lager.

In total, the City will invest over $150 million, together with millions more from the State and federal governments, to improve Coney Island's infrastructure, including upgrading the underground infrastructure throughout the neighborhood and rebuilding large sections of the Boardwalk. The City is currently in design for a new Steeplechase Plaza to serve as the western entryway to the revitalized amusement and entertainment district, with construction expected to commence by fall 2010. The City also expects to break ground on Coney Island Commons, a new residential and community development with more than 180-units of affordable housing and a new, state-of-the-art, 40,000-square-foot YMCA in fall 2010. More than 5,000 new units of new housing will be built in Coney Island in the coming years with more than 900 affordable to low-and-moderate-income families.

CAI currently operates two amusement facilities including Victorian Gardens at Wollman Rink in Central Park and Minitalia Leolandia Amusement Park in Capriate San Gervasio, Italy. Zamperla, which is providing the rides, is the largest manufacturer and designer of amusement park rides in the world and creates nearly 200 rides annually for parks including Disney Parks & Resorts, Morey's Piers, Legoland, Knott's Berry Farm, Universal Studios, Cedar Fair, Six Flags, Sea World and Merlin Entertainment Theme Parks.

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June Ricca sued Samhal Interiors to recover money paid for some design work.

While the parties' written agreement separated the project into two components, a completion date wasn't specified. (It did provide that the $5,000 retainer fee wasn't refundable, unless Samhal failed to complete the work.)

During the course of a non-jury trial, Samhal showed it spent quite a bit of time on the project an gave the court an abstract of the services performed. The company was also established that Ricca didn't make design decisions -- which impeded the company's efforts.

Ricca, on the other hand, thought the project had taken too long and wanted to terminate the contract without losing her retainer fee.

After the District Court awarded Ricca a refund of $2,037.50, the Appellate Term, Second Department, reversed that outcome on appeal.

The AT2 found that Samhal hadn't breached the agreement and that Ricca's indecisiveness was what caused the delay.

How would you dress that up?

To view a copy of the Appellate Term's decision, please use this link: Ricca v. Samhal Interiors

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

STANDARDS ARE NEEDED FOR COMMUNITY BENEFIT AGREEMENTS

Comptroller Liu Initiates Task Force to Review Best Practices and Draft Standard Framework

NEW YORK, NY - City Comptroller John C. Liu stated the following in response to questions about the need for more oversight into Community Benefit Agreements associated with development projects that consistently fall short of public expectations.

"Community Benefit Agreements have become commonplace whenever private developers seek public assistance, ranging in form from tax subsidies and no-bid contracting to zoning changes and invocation of eminent domain. In the absence of standards, however, these agreements will become more problematic and ultimately irrelevant.

"From Atlantic Yards to Yankee Stadium to the Columbia University expansion, the public has seen a string of broken promises to communities and questionable involvement by some government officials. Furthermore, an additional layer of unpredictability confronts developers when they engage in private negotiations over benefits associated with their projects. In fact, studies have singled out New York City's community benefit agreements as examples of what not to do. 

"It is time for this embarrassment to end. In the coming months, I'll establish standards for community benefit agreements that are accountable, transparent, consistent and inclusive. To that end, I will form a task force including business, labor and community representatives that will thoroughly examine the issue of community benefit agreements and propose best practices. It is simply common sense to have clear standards that ensure benefits for the public when private developers receive benefits from the public. I look forward to working with the Mayor and the City Council to implement a new approach that will place our city at the forefront of community engagement in economic development projects."

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When Paul Arnold purchased a home from Gale Wilkins, the contract of sale provided that the sewage disposal system was in good working order. And an inspection, conducted prior to the closing, revealed no problems.

Several months later, after a sewage back-up occurred, Arnold hired an engineer who was of the opinion the existing septic system was inadequate.

After the Essex County Supreme Court dismissed Arnold's breach of contract and fraud claims, he appealed to the Appellate Division, Third Department.

While Arnold argued that he was promised a working sewage system, nothing in the parties' contract of sale indicated that the representation survived closing or was enforceable after the sale.

And while he also argued that the problem was "latent" in nature, since it was "discoverable" before the closing, the AD3 didn't think that particular exception applied.

What a stinker!

To view a copy of the Appellate Division's decision, please use: Arnold v. Wilkins 

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DiNapoli Urges DOT to Terminate Contract with Debarred Company

New York State Comptroller Thomas P. DiNapoli today called upon the state Department of Transportation (DOT) to terminate a $1.9 million contract with Bronx-based Steed General Contractors, Inc. Steed was debarred from bidding on state contracts in January by the state Department of Labor (DOL) because it was closely tied with a company with prevailing wage violations.

"New York State should not be doing business with companies that are not paying fair wages to workers and breaking the law," DiNapoli said. "Since Steed has not started any work on this project, the responsible action for DOT is to re-bid this project and ensure work is done by an honest contractor."

In May 2009, Steed was awarded a $1.9 million contract by DOT to paint bridges in Suffolk County. The work on the contract is scheduled to begin in the spring.

After this contract was awarded, DOL investigated whether Steed was connected with another company, Delphi Painting and Decorating, which had been debarred by the state for prevailing wage violations. In August 2009, DiNapoli rejected a second contract that DOT attempted to award to Steed. The contract, a $7 million stimulus-funded contract for painting bridges in Putnam, Orange and Dutchess counties, was rejected because of the pending investigation. In January, DOL concluded its investigation, determined that Steed was affiliated with Delphi and debarred Steed from bidding on state contracts from October 2007 to October 2012.

DOT has indicated to the Comptroller's office that it has a long standing policy not to terminate existing contracts even where a contractor is debarred for future work and plans to have Steed complete the project. However, because no work has begun, DiNapoli notes that the contract contains a provision that allows DOT to cancel the contract and re-advertise the project.

A copy of the letter to DOT is available at http://www.osc.state.ny.us/press/releases/feb10/020410dot_letter.pdf.

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RELIGIOUS CORPORATIONS AND REAL PROPERTY

In this article, we will take a look at Religious Corporations and Real Property. In our Fall 2009 Newsletter, we addressed New York State and New York City Real Property Transfer Tax Exemptions for Religious Organizations. At one time or another, you will be faced with a transaction involving a Religious Corporation selling, leasing, buying and/or mortgaging real property.

A Religious Corporation is a corporation created for religious purposes. Religious Corporations are governed by both the Religious Corporations Law and Non-For-Profit Corporation Law- in cases of conflict between Religious Corporations Law and Non-For-Profit Corporation Law, Religious Corporations Law will prevail.

Whenever Religious Corporations and Real Property come up, almost invariably the case Greek Orthodox Archdiocese of North and South America v. Robert Abrams (618 N.Y.S. 2d 504) comes to mind. In Greek Orthodox Archdiocese of North and South America v. Robert Abrams, the Greek Orthodox Archdiocese obtained court approval for the sale of real property. Subsequently, the Archdiocese modified the contract of sale and later also changed the terms and conditions of the mortgage. A member of the Greek Orthodox Church challenged the Archdiocese's authority to modify the court approved contract and mortgage without further court approval. The Supreme Court, New York County held that once a contract of sale is made and approved by the Court, any modification of terms constitutes a new contract and must be re-approved by the Court.

Sale, Mortgage and Lease of Real Property

Therefore, it is important to remember that the sale, mortgage or lease of real property of Religious Corporations is governed by Section 12 of the Religious Corporations Law. Section 12(1) provides that a Religious Corporation shall not sell, mortgage or lease for a term exceeding 5 years any of its real property without applying for and obtaining leave of Court.

The petition for leave of court must comply with the provisions of Section 511 of the except for the requirement for giving notice to the Attorney General under Section 9(b) of Non-For-Profit Corporation Law. (Every Religious Corporation is considered a Type B corporation under the Non-For-Profit Corporation Law.)  Certain Religious Corporations do not have to give notice to the Attorney General: Protestant Episcopal Church, Roman Catholic Church, Ruthenian Catholic Church of the Greek Rite, African Methodist Episcopal Zion Church, Presbyterian Church of the General Assembly of the Presbyterian Church U.S.A.., United Methodist Church, Reformed Church of the General Synod of the Reformed Church in America. However, notwithstanding this exemption for giving notice to the Attorney General, it is best to provide notice to the Attorney General and obtain a "No Objection Letter."

Proceedings to sell, mortgage or lease real property owned by a Religious Corporation cannot be maintained unless the specified church first acquires the consent of the governing bodies or higher ecclesiastical authorities who are specified in the statute (Religious Corporations Law Section 12 (2-6). The petition by a Religious Corporation for leave of court must be verified and contain the following:

1. The name of the corporation and the law under or by which it was formed;
2. The name of its directors and principal officers and their places of residences;
3. The activities of the corporation;
4. A description, with reasonable certainty of the assets to be sold, leased or mortgaged;
5. A statement of the fair value of the property;
6. The consideration to be received for the sale, mortgage or lease;
7. The reasons why the purposes of the corporation or interests of its members will be promoted by the sale, lease or mortgage of the real property;
8. A statement that the proposed sale, mortgage or lease has been authorized by the board of trustees or directors in accordance with law at a meeting duly called and held and supported by annexing a copy of the resolution granting the authority with a statement of the vote thereon;
9. Where a consent of the members is required by law, a statement that such consent was given and supported by annexing a copy of the resolution granting such consent which was approved at a meeting duly called and held and a statement of the vote thereon; and
10. A prayer for leave to sell, mortgage or lease real property;
11. Where consent of church authorities is also required, compliance with provisions of Religious Corporations Law Section 12(6) must also be alleged in the petition

The Court in which application must be brought/commenced is the Supreme Court of the Judicial District or the County Court of the County where the Religious Corporation has its office or principal place of carrying out the purposes for which it is formed.

Failure to obtain leave of court to sell/mortgage the real property of a Religious Corporation renders such a sale a nullity and the conveyance/mortgage invalid. However, if the court approval to sell has not been obtained, the court may, upon application of the Religious Corporation or the Grantee or Mortgagee or any person interested in the property, confirm the sale and direct the execution of a confirmatory deed or mortgage. In addition, there are some Religious Corporations which were formed by Special Acts of the Legislature many years ago and under such statutes have the power to dispose of real property without requiring leave of Court and are therefore, exempt from the requirement of Section 12(1) of the Religious Corporations Law.

Purchase Money Mortgage

Under Section 12 of the Religious Corporations Law, a Religious Corporation may execute a Purchase Money Mortgage without obtaining leave of court. This exception only applies to a Purchase Money Mortgage.

Acquisition of Real Property

A Religious Corporation may acquire property without leave of court-for example for the acquisition of associate houses, church buildings, chapels, missions houses, schoolhouses, medicine dispensaries, home for the aged and residences.

Foreign Religious Corporations

Prior to September 1, 1972, Foreign Religious Corporations were not subject to New York Religious Corporations Law and did not need a court order to convey or mortgage real property (Muck v. Hitchevck 212 N.Y. 283). After September 1, 1972, and pursuant to Chapter 956 of the Laws of 1971, Foreign Religious Corporations authorized to conduct business in New York State must comply with the Religious Corporations Law as well as being subject to any restrictions contained in.

If you have any questions or would like further information regarding this article, please contact Michael Alfieri, Esq. at (212) 651-1200 or malfieri@prestitle.com

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NO SURPRISE THAT MTA'S CONTRACTORS ARE NOT ACCOUNTABLE TO PERFORMANCE STANDARDS 

NEW YORK, NY - City Comptroller John C. Liu stated the following in response to questions about the Metropolitan Transportation Authority (MTA) Inspector General's report finding the MTA has routinely bloated the performance evaluations of contractors' work.

"It's no surprise that MTA contractors aren't being held accountable to performance standards. It's symptomatic of the much larger accountability problem with managers at the MTA," Comptroller Liu said. "Mismanaged contracts result in huge waste at a time when the MTA can least afford it.  Just look at the $250 million the MTA has squandered with the ill-conceived and ill-fated Lockheed-Martin contract. This cozy, business-as-usual culture permeating the Authority must be fixed right away."

New York State Comptroller Thomas DiNapoli last week issued a report finding the MTA's security program to harden the subways against terrorist attacks in "disarray". Comptroller Liu will meet with Comptroller DiNapoli to further investigate the Lockheed-Martin contract and the larger issue of contract mismanagement.

In June 2009 at a City Council Transportation Committee hearing, upon reviewing the MTA's progress in hardening the subway system against potential attacks and in light of reports of litigation between the MTA and Lockheed, then-Chairperson John Liu had reiterated his call for the MTA to cut its losses and abandon the failed Lockheed-Martin project. 

BACKGROUND ON THE LOCKHEED-MARTIN CONTRACT: 

The MTA had first announced $591 million in funding for terror-proofing the subways in 2002.  The MTA added an additional $495 million in 2004 for a total of $1.1 billion toward security measures in the City's transit system.  The Committee, however, had criticized the MTA in 2004 for failing to use any of the funds and making no progress toward terror-proofing the subways.

One month after the July 2005 bombings in London's transit system, the MTA proceeded hastily -- without competitive procurement -- into a $212 million contract with Lockheed-Martin for an "Electronic Security Program" to install 3,000 cameras and artificial intelligence systems to monitor potential threats in the subways. Within a year, the no-bid contract with Lockheed had ballooned "into a monstrous $300 million behemoth" as the Authority requested an additional $80 million here for a command center and an additional $5 million there for an antennae to communicate with first responders.  Chairperson Liu condemned the MTA's apparent piecemeal strategy based on the Authority's seemingly desultory budgetary amendments. 

At a Committee hearing in February 2006, the Committee seriously questioned whether the artificial intelligence system contracted would actually work, especially after it had already been rejected by London transit officials as being ineffective.  MTA officials at the time had assured the Committee the plan was selected after having "done a tremendous amount of research to find what were the best available systems out there" and "[the plan] has proven itself to be workable and to provide real-time monitoring and real time alarms back at the monitored stations."  MTA officials also noted at the time, however, that they were still testing the artificial intelligence for reliability and accuracy, even though the contract had already been awarded to Lockheed.

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Getting Out of a Lease

We have been tenants in the same apartment for over six and a half years, but in order to register our daughter in the kindergarten of a good public school in another neighborhood, we must move by Feb. 1 to establish proper residency. We alerted our landlord immediately when we found a new place, gave him over 75 days' notice, offered to help find new tenants and offered to pay an extra month's rent as a penalty for leaving before our lease expires on April 30. Is this enough to get out of our lease amicably?

"Tenants often ask if they can end a lease in advance of the stated expiration date," said Lucas A. Ferrara, a Manhattan real estate lawyer and adjunct professor at New York Law School. And under the circumstances described by the writer, it is probably best to assume that he could be held liable for the rent for the balance of the lease term.

At the same time, Mr. Ferrara said, many landlords will be amenable to a compromise, and may be willing to accept a tenant's help in locating a new tenant. But it is unlikely that an owner will accept a single month's penalty if the unit will be left vacant for a protracted period, or if the balance of the rent due under the lease is not paid by a new tenant found to be acceptable.

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Coastal Sheet Metal Corp. filed a lawsuit which claimed it was owed money on some thirteen jobs it had performed for Martin Associates (MA).

After the Bronx County Supreme Court found Coastal had been "overpaid," and granted MA's request to dismiss the case, an appeal to the Appellate Division, First Department, followed.

Since it didn't think the record established that Coastal had been fully compensated, the AD1 was of the view the litigation had ended prematurely and that the matter needed to proceed to trial.

Clearly, that wasn't music to MA's ears. To view a copy of the Appellate Division's decision, please use this link: Coastal Sheet Metal Corp. v Martin Assoc., Inc.

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

KSW Mechanical Services Inc.'s fraud case against its insurer was based on misrepresentations purportedly contained in a manual.

After the New York County Supreme Court denied the defendants' request to dismiss the case, they appealed to the Appellate Division, First Department.

Since the manual only afforded an "overview" and referred the reader to the policy for the full extent of the coverage, the AD1 reversed the lower court's determination and ended the litigation.

Does that insure the end of that?

To view a copy of the Appellate Division's decision, please use this link: KSW Mech. Servs., Inc. v. Willis of N.Y., Inc. 

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

SCHUMER CALLS FOR FIRST EVER RULES TO PROTECT NEW YORKERS FROM LOSING THEIR FREQUENT FLIER MILES -- AIRLINES BILKING FLIERS OUT OF BILLIONS OF DOLLARS WORTH OF MILES EVERY YEAR

Current Rules Allow Airlines and Credit Card Companies to Terminate Accounts and Rescind
Unused Miles Without Notice or Reason- Even Charge Sky-high Fees to Have Your Own Miles Reinstated

Schumer Calls on the Department of Transportation Draw Up New Rules to Protect Consumers, Investigate Airlines to Determine if They Are Engaging in Deceptive Business Practices

Estimated 2 Trillion Miles Could be Lost

On Tuesday, U.S. Senator Charles E. Schumer urged the Department of Transportation (DOT) to, for the first time, regulate frequent flier programs at commercial airlines. Schumer said that New York travelers and fliers all across the county have lost tens of millions of miles because they have been rescinded by airlines and credit card companies. Schumer said consumers are not receiving sufficient notification regarding pending terminations of their frequent flier accounts or the miles they have accumulated. Fliers have found that their accounts can be terminated and miles can be deemed cancelled or expired with seemingly little to no advance notice from an airline. This affects a consumer's ability to make travel plans, which in turn can cause an undue financial hardship. Schumer also asked the agencies to draw up new rules to improve disclosure and set limits on when miles can be rescinded and accounts can be closed.

"As the holiday travel season approaches, we cannot let airlines and credit card companies continue to fly off with hard earned frequent flier miles," Schumer said. "When a consumer accumulates valuable frequent flier miles, they should not have to constantly worry that they are going to expire with little nor no notification from the airline. Playing games with frequent flier miles takes money out of people's pockets, plain and simple. It's annoying, it's unfair, and it has to stop."

There are an estimated 10 trillion unused frequent-flier miles in circulation now, worth some $165 billion. Most airlines won't say how many will expire without being used, but a few estimates report 20% or more of all frequent-flier miles may never be redeemed--in part because of confusing airline policies and scant notice of approaching expirations. When programs began in the 1980s, miles had no expiration dates. In the mid-1990s, airlines put a three-year life on them--each mile would expire if not redeemed within three years.

Airlines currently have the freedom to close frequent-flier accounts with little or no warning, leaving many travelers who believe they have accumulated hundreds of thousands of miles high and dry. For instance, different airlines have different rules for when they can cancel an account. Some cancels after 12 months, and charge $50 for reinstatement, and others cancel the account after 18 months and charges 1.25 cents per mile plus a $25 fee for reinstatement. The biggest problem with the account cancellations is that consumers are given little notice when their accounts are on the chopping block. Many airlines stop sending statements to customers before their accounts expire, making it very difficult to track their miles.

Commercial airlines may claim that frequent flier programs are a free benefit, which can be terminated at any time without advance notification. There is reasonable likelihood that consumers have actually paid for the frequent flier programs and miles through other purchases, like airfare and additional fees associated with air travel.

To protect consumers, Schumer called on the DOT to investigate whether or not air carriers are engaging in deceptive business practices. In making this determination, Schumer says that DOT should examine both the accounting statements and the frequent flier agreements of the carriers who operate frequent flier programs, in order to determine whether the airlines have treated these miles as having been purchased by consumers as opposed to being gifts from the airlines to their consumers as a reward for their patronage.

Schumer also asked the agency to draw up new rules to improve disclosure and set limits on when miles can be rescinded and accounts can be closed.

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To:  REBNY Members

Date: November 24, 2009

Re:  Stop Commercial Rent Control - Go To www.REBNYActionCenter.com

The City Council has introduced commercial rent control legislation (Intro No. 847) that would affect retail and office space.

The bill would mandate lease renewals and the arbitration of commercial rents, would allow tenants to reject the arbitration decision and remain in the space at a five percent increase and grant the tenant a right of first refusal for lease term terms the owner negotiated with a new prospective tenant.

To stop commercial rent control go to the REBNY Action Center.com and send an email to your elected official urging them to oppose this harmful legislation.

Sincerely,

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William Congdon sued Brita and William Everett claiming the couple failed to honor an oral agreement to sell a piece of property. (Congdon also thought he was entitled to relief based on "unjust enrichment" theory.)

From 1998 to 2006, Congdon lived on the property with the Everetts' daughter. After he filed for divorce, Congdon claimed the in-laws had agreed to sell the parcel to him.

When the in-laws asked for the case's dismissal, the Cattaraugus County Supreme Court denied their request.

On appeal, the Appellate Division, Fourth Department, thought Congdon's claim was barred by the "statute of frauds" -- a law which requires all transfers of real property be in written form and signed by the parties involved. Without that document, the AD4 thought the case had to be dismissed.

(Although Congdon made monthly payments to the Everetts and helped improve the property, the AD4 didn't think those acts triggered an exception to the law's writing requirement.)

And so it is written.

To view a copy of the Appellate Division's decision, please use: Congdon v. Everett 

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Deborah Nocilla appealed from a judgment issued by the Suffolk County District Court which awarded $5000 to Salvatore Piliere.

Although Piliere and Nocilla co-signed a one-year lease and each agreed to pay half of the rent, Nocilla left during the course of the agreement's term, failed to honor her share of the rent which came due, thereby forcing Piliere to remit the full amount.

After the District Court decided that Piliere was entitled to the money, Nocilla appealed to the Appellate Term, Second Department, which thought the outcome was "amply supported by the record and ... provided the parties with substantial justice ...."

There's nothing like Nocilla.

To view a copy of the Appellate Term's decision, please use this link: Piliere v. Nocilla 

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The Center for Real Estate Studies and

cordially invite you to the

 

Breakfast Forum on
Distressed Debt and

Alternative Real Estate Investments 

 

Keynote Speakers:

Joseph P. Forte, Partner,

Alston & Bird LLP

 

 Marc Lasry ('84), Chairman and CEO,

Avenue Capital Group

 

Norman J. Radow ('81), President,
The RADCO Companies

 

  When:

Wednesday, November 18, 2009 at 8:15 a.m.

 

Where:

New York Law School

185 West Broadway

 (between Leonard Street and Worth Street)

***This is the new building.*** 

 

RSVP:

The event is free of charge. Registration is required. Seating is limited. To register, please click here.

 

If you are having trouble with the registration link above, please register online at www.nyls.edu/realestate or call 212.431.2135

 

 

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He later claimed not to have appreciated the consequences of his plea. (He supposedly didn't realize that the new sentence, while running concurrently with a prior one, didn't share the same start date.)

When the New York County Supreme Court denied Guy's request to rescind the deal made, and sentenced him as a second felony offender to 1 1/2& to 3 years, an appeal followed.

The Appellate Division, First Department, noted that Guy's "subjective interpretation" of the agreement wasn't relevant since the lower court clearly explained the plea's terms and the guy had had the benefit of counsel when he considered his options.

Bet Guy gets it now.

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Juliette Espersen thought she was selling 83 feet of lake frontage to Michael R. Nowicki.

When a survey later revealed the property consisted of 114.7 feet of lake frontage, Juliette tried to rescind the deal based on "mutual mistake."

After the Chautauqua County Supreme Court granted Michael's request to force the sale, Juliette appealed to the Appellate Division, Fourth Division.

In order for a contract to be rescinded based on "mutual mistake," the error must exist at the time the contract's making and be so substantial in nature that there couldn't have been "a meeting of the minds."

While Juliette claimed that the amount of lake frontage was an important part of the deal, since she didn't obtain a survey and hadn't specified a per-foot price for the frontage, the AD4 refused to release her.

Wherefor art thou Juliette?

To view a copy of the Appellate Division's decision, please use: Nowicki v. Espersen

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DOT Warns Airlines on Improperly Limiting Reimbursements for Mishandled Baggage

            Airlines may not arbitrarily limit compensation for passengers who purchase necessities because their baggage is lost or delayed, the U.S. Department of Transportation (DOT) said in a notice issued today.

            In its notice, the Department's Aviation Enforcement Office said that a number of carriers have policies stating that they will reimburse passengers only for buying necessities purchased more than 24 hours after arrival and limiting such reimbursements to the outbound legs of trips.  This is in violation of DOT regulations which require that airlines cover all expenses caused by lost or delayed baggage up to $3,300 per passenger on domestic flights, DOT said.

            "Travelers should not have to pay for toiletries or other necessities while they wait for baggage misplaced by airlines," said U.S. Transportation Secretary Ray LaHood.  "We expect airlines to comply with all of our regulations and will take enforcement action if they do not."

            The Department said airlines should review their passenger handouts and contracts of carriage to make sure they comply with DOT rules.  The Aviation Enforcement Office will monitor carriers' compliance and take enforcement action if necessary after 90 days from the issuance of this notice.

            Last month the Department fined an airline for providing compensation for delayed baggage only for the outbound leg of round-trip flights and only for purchases made more than 24 hours after arrival, among other violations.

            The notice is available on the Internet at http://airconsumer.ost.dot.gov/rules/guidance.htm

Posted by Lucas A. Ferrara, Esq. at 1:00 PM | Permalink | TrackBacks (0) | Comments (0)

When Red Leaf Landscaping sued Lori Herasimtschuk for $800 in unpaid charges, Lori countered that the company didn't complete its work and sought to recover some $900 she had remitted.

After a nonjury trial, the City Court of Poughkeepsie awarded relief in Red Leaf's favor and dismissed Herasimtschuk's counterclaim.

On appeal, the Appellate Term, Second Department, affirmed the outcome since the determination was supported by the record and the City Court was in a better position "to observe and evaluate the testimony and demeanor of the witnesses."

Who said it's easy being green? To view a copy of the Appellate Term's decision, please use this link: Red Leaf Landscaping v. Herasimtschuk

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

Burlington Insurance Company was sued by Juvenex Ltd. in order to compel the former to defend and indemnify the latter in a personal injury case.

Because Juvenex waited over two months to advise the insurer of the claim, the New York County Supreme Court found Burlington wasn't required to intervene on its insured behalf.

Since it saw the notification delay as "unreasonable," the Appellate Division, First Department, affirmed that outcome on appeal.

Did Burlington pull the wool over the AD1's eyes?

To view a copy of the Appellate Division's decision, please use this link: Juvenex Ltd. v Burlington Ins. Co.

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

Non-Payment Workshops At RSA...
With the many changes in Housing Court today, property owners who want to represent themselves or better understand this complex process can't afford to miss RSA's Non-Payment Workshops. Howard Stern, Esq., the Administrator of RSA's Legal Plan, leads the workshops. These highly regarded sessions are held at RSA's offices, 123 William Street, 14th Floor. The next workshop is scheduled at 12:30 PM - 4:00 PM for: Wednesday, September 30, 2009.
Seating is limited, so please call (212) 214-9243 or fax (212) 732-0617 as soon as possible. The workshops are open to all dues-paid RSA members, but reservations are required. RSA will provide soda, coffee and chips. Please allow extra time to pass through building security.

Posted by Lucas A. Ferrara, Esq. at 10:00 AM | Permalink | TrackBacks (0) | Comments (0)

William Romeo supposedly lent money to Angela Saitta so that the latter could pay off her debts.

When only a part of the loan was repaid, Romeo sued alleging Angela still owed him $1,016.

Angela contended she had fully satisfied her loan -- by way of money orders totaling $900, together with three cash payments made by a friend.

After the Dutchess County City Court limited his recovery to $116.03, Romeo appealed to the Appellate Term, Second Department, which deferred to the lower court's credibility determinations.

At least this Romeo didn't die in the end!

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

Manuel Araniva challenged a Suffolk County District Court decision which required him to pay his attorney, Christopher J. Cassar, some $5,376.41 in litigation related expenses.

Araniva claimed the $20,000 he previously paid to Cassar covered those costs.

After the District Court found against him, Araniva appealed to the Appellate Term, Second Department, which agreed the unambiguous terms of the rates' retainer agreement made Araniva liable for the "reasonable, necessary expenses" sought.

Think that retained Araniva's interest? To view a copy of the Appellate Term's decision, please use this link: Cassar v. Araniva

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

Our partner, Glenn H. Spiegel was quoted in the Real Estate Section of Sunday's New York Times.

September 13, 2009

In Jeudy v. High Point Furniture Corp., Linda Jeudy appealed a Suffolk County District Court decision which refused to award her the money she had paid to High Point Furniture Corp.

After her furniture arrived damaged and incomplete, Jeudy claimed she was told that High Point would retrieve the items and refund the purchase price.

High Point's witnesses disputed Jeudy's version of events and noted that when the company attempted to address the situation, and replace the missing and damaged pieces, the customer refused to cooperate.

Because the District Court was of the view High Point "had made an attempt to cure the non-conforming tender and [Jeudy] had prevented it from doing so," Jeudy's case was dismissed.

On appeal, the Appellate Term, Second Department, deferred to the trial court's assessment of the evidence and upheld the lawsuit's dismissal.

Not a High Point for Jeudy.

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

Unregulated Tenants Have Limited Rights

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In Neri v. Sclafani, Robyn Neri filed a small claims case to recover a $700 lease deposit.

Robyn alleged Francine and Mario Sclafani breached an agreement to make an apartment available by a specified date, thereby forcing the tenant to find another place to live.

The Sclafanis countered that Robyn could have moved into the unit, but refused to do so.

After the Suffolk County District Court found in Robyn's favor, the Sclafanis appealed to the Appellate Term, Second Department.

Since the parties