 Stanley Guy was charged with, and pled guilty to, atempted grand larceny in the third degree.
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.
 To view a copy of the Appellate Division's decision, please use this link: People v. Guy
 After 1114 Morris Ave. HDFC brought a chronic nonpayment holdover against Georgette Johnson, its tenant, the parties entered into an agreement which allowed her to avoid eviction if she timely paid her future rent obligations.
When Johnson allegedly breached that arrangement, 1114 sought to evict her from the apartment.
When the Bronx County Civil Court denied Johnson's request to stop the eviction, she appealed to the Appellate Term, First Department.
The AT1 was of the view that the agreement's "'strict enforcement'" was warranted especially since its terms were "unambiguous" and, during the course of a probationary period, Johnson continued to be delinquent in her payment obligations.
"Rent, rent, rent, rent, rent ... 'Cause everything is rent."
 To view a copy of the Appellate Term's decision, please use this link: 1114 Morris Ave. HDFC v Johnson
 In Ruxton Towers, L.P. v. Floratos, Andrew and Jean Floratos leased two different rent-stabilized apartments, removed the adjoining wall, and, combined the units without the owner's permission. Thereafter, a holdover proceeding against the Floratos was filed, based on those unauthorized alterations.
The parties then entered into a stipulation of settlement wherein the tenants agreed to incur the costs of legalizing the combined premises, signed an "unregulated lease," and, the rent was set at $2,001 a month. (A sum which exceeded the "legal rent" for the two units.)
After the tenants breached that agreement, and the New York City Civil Court awarded possession to Ruxton Towers (the landlord), the Floratos appealed to the Appellate Term, First Department, claiming the settlement was unenforceable because it violated public policy.
Unless the agreement falls within an exception authorized by statute or case law, a waiver of statutory protections usually isn't unenforceable, even when they might benefit a tenant.
The AT1 was of the view that since the alterations which triggered the higher rent were made by the tenants, rather than the owner, a "newly created unit" didn't come into existence and the underlying agreement couldn't be "countenanced."
Why wouldn't the Appellate Term allow for a stipulated resolution of the controversy?
Didn't the tenants face possible eviction for the unit's illegal alteration?
Guess, all in all it's just another brick ....
 To view a copy of the Appellate Term's decision, please use this link: Ruxton Towers, L.P. v. Floratos
 In Blakney v. Leathers, after Nashon Blakney was injured in a car accident, his lawyer negotiated a settlement with GEICO Insurance Company for $35,000 and forwarded a stipulation of discontinuance and a general release, which Blakney purportedly signed.
While the company sent a settlement check to his attorney, Blakney claimed he was unable to reach counsel and first learned of the settlement four months after the case had been resolved. (Blakney also claimed he neither authorized nor consented to the settlement and that his attorney forged his signature on the release and settlement check.)
After the Kings County Supreme Court granted Blakney's request to vacate the settlement and to restore the case to the calendar, an appeal to the Appellate Division, Second Department, followed.
The AD2 reiterated the long-standing requirement that an attorney be specifically authorized to resolve a claim. And, in this instance, since the attorney was unable to show Blakney approved the settlement, the deal was appropriately vacated.
With that, we're signing off.
 To download a copy of the Appellate Division's decision, please use this link: Blakney v. Leathers
 In Greenspan v. Greenspan, Richard agreed to be responsible for one-half of his kids' schooling expenses -- including tuition, room and board, books and uniforms. He also agreed to allow his ex, Michele, to have direct communication with their children's health-insurance provider and his life-insurance carrier.
Six and a half years after their divorce, when Michele asked the Nassau County Supreme Court to compel her former husband's compliance with the agreement, Richard was ordered to reimburse Michele for the sums sought and found Richard in civil contempt for his refusal to supply the insurance related authorizations.
On appeal, the Appellate Division, Second Department, ended up fully supporting that.
 To download a copy of the Appellate Division's decision, please use this link: Greenspan v. Greenspan
 In Weiner v. Weiner, Jay Weiner was allowed use of Edie Weiner's vacation home as part of the couple's separation agreement.
When the New York County Supreme Court granted Edie's request to stop Jay's use of the property, an appeal to the Appellate Division, First Department, followed.
The AD1 noted a promise not to bother or "harass" a former spouse is an independent part of a separation agreement. And, even when that representation is violated, the violator is typically able to enjoy the separation agreement's benefits.
In this case, however, the AD1 found fundamental principles of fairness outweighed the governing law, and Jay's egregious behavior toward Edie, required the forfeiture of rights reserved by the stipulation to share living space.
"Ex" marks the spot?
 To download a copy of the Appellate Division's decision, please use this link:Weiner v. Weiner
 In J.G. v. The Board of Education of the Rochester City School District, parents of disabled students attending the Rochester City School District sued claiming there was a failure to provide "free, appropriate public education to special education students in the Rochester City Schools."
A 1981 complaint filed by "J.G." alleged the School District hadn't been evaluating or placing students in educational programs in a timely manner nor involving parents in the process.
In 1983, the parties entered into a Consent Decree, wherein the School District pledged to "improve the way it provided special education services to special needs students." It agreed to improve programs, placement procedures, extra-curricular opportunities for special needs students, to undergo a self-assessment, and to train teachers and staff "to be more aware and responsive to the needs of disabled students."
In 1993, J.G. sought and secured an Enforcement Order compelling the School District to adhere to the Consent Decree. In 1996 -- after J.G. filed a motion for contempt, alleging that the District wasn't in compliance with the 1983 Consent Decree or the 1993 Enforcement Order -- the parties entered into another Consent Decree which set forth "specific numeric goals" such as: "(1) timely recommendation by the Committee on Special Education and Committee on Preschool Special Education; (2) timely placement of students in appropriate programs once evaluations had occurred; (3) parental participation and satisfaction; (4) nondiscrimination and equal access; and (5) inclusion in mainstream curriculum and education in the least restrictive environment." This latter Consent Decree set May 1, 2000 as its termination date "after which the Court would no longer retain jurisdiction over the matter."
In 2001, when Judge Michael Telesca -- a United States District Court Judge of the Western District of New York -- hadn't heard from the parties concerning the School District's compliance with the 1997 Consent Decree, he issued an "Order to Show Cause why this case should not be dismissed with prejudice."
J.G. responded the School District wasn't in substantial compliance with the terms of the 1997 Decree's terms. Of course, the School District disagreed and contended that even though all of the standards hadn't been met, it was unreasonable to expect "statistical perfection" in only three years. It further argued it had expended considerable resources paying J.G.'s attorneys fees and generating "reports and data for review by [J.G.'s] attorneys" which could have been better spent on special needs students, and that the School District had begun development of a "Rochester Plan" -- a self-monitoring program designed to "ensure compliance with all regulations, specifically including regulations involving students with disabilities."
J.G. debunked the "Rochester Plan" as a sham and asked the Court to keep the Consent Decree in place.
Judge Telesca concluded the 1997 Consent Decree had expired on its own terms and the Court no longer retained jurisdiction.
Even though the case had been inactive for a considerable period of time, the Judge noted he wasn't arbitrarily terminating the Consent Decree without passing on the significant improvements the School District had made in its supervision and care of special needs students. Specifically, during the 1999-2000 school year, almost 87% of school-age children and 76% percent of preschool children were evaluated within 30 days of a request. The School District also retained a group known as the Advocacy Center to "conduct parent workshops at which parents of special education students are trained and shown how to actively participate in their child's education."
Not only was the School District's placement rate of students in special education programs over 90%, but the number of special needs students routinely placed in general curriculum classes had dramatically improved. As a result, Judge Telesca concluded that "where a court determines that a party to a consent decree is operating in compliance with the commands of the Constitution, and that it is unlikely that the party would revert to non-compliance, the court may terminate a consent decree."
That was the end of that.
 To download a copy of the District Court's decision, please use this link: J.G. v. The Board of Education of the Rochester City School District
 In Aison v. Hudson River Black River Regulating District, Howard Aison argued the Hudson River Black River Regulating District violated an agreement which governed the use of the Sacandaga Park's beach and swimming area.
In 2003, Aison and other homeowners entered into an agreement which allowed the District to "regulate and control the beach and swimming area, ... make reasonable rules and regulations governing the use of said beach and swimming area," and promulgate an annual permit system. Aison thought the District violated that arrangement by "allowing boat docks, a pontoon boat and personal watercraft."
When Aison asked the District be held in contempt of court for its breach, the Fulton County Supreme Court denied that request.
On appeal, the Appellate Division, Third Department, reiterated that civil contempt is available when "to a reasonable degree of certainty, a party has knowingly disobeyed a clear and unequivocal mandate of the court which results in prejudice to the rights of another party."
While the parties' stipulation specifically prohibited "pets, glass, cooler, cooking or barbeque equipment" on the beach and in the swimming area, since there was no mention of pontoon boats or boat docks, the District wasn't in violation of the agreement.
Bet those homeowners were singing the Hudson River Blues.
 To download a copy of the Appellate Division's decision, please use this link: Aison v. Hudson River Black River Regulating District
 In 2246 Holding Corp. v. Nolasco, 2246 Holding brought a holdover proceeding against Maria Nolasco, a 30-year tenant in its building, due to a pattern of late rent payments. While the parties agreed Maria would pay back rent and the landlord's legal fees by the next month, since the Human Resources Administration (HRA) was paying part of the tenant's arrears, a 10-day delay was contemplated to allow HRA to cut a check.
More than a month later, when Maria remitted her share of the rent, 2246 refused to accept it. Maria got several stays of a warrant of eviction's execution on the grounds HRA had failed to fork over its share. Some five months later, when the agency finally made payment, 2246 claimed the tender was untimely and asked for the eviction to proceed.
The New York County Civil Court found the tardiness attributable to HRA and excused the lapses. After 2246 appealed, the Appellate Term, First Department, reversed, finding Maria's repeated failure to adhere to the "time of the essence" requirements of the parties' agreement justified an eviction.
On appeal, the Appellate Division, First Department, ended up siding with the Civil Court and found "[t]he policies underlying the rent stabilization laws are generally better served by holding out to a tenant the opportunity usually afforded in a nonpayment proceeding to cure the breach of his rent obligations." It believed Maria shouldn't be penalized since she was a long-term "indigent tenant" who made good-faith efforts to comply with the stipulation "only to be stymied by events beyond her control."
Actually, wasn't 2246 the one stymied by that outcome?
How was forgiving compliance with the TOE's terms consistent with the parties' original intentions? Wasn't the agreement's essence lost?
 To download a copy of the Appellate Division's decision, please use this link: 2246 Holding Corp. v. Nolasco
 In Handel v. Handel, ex-spouses Gary Handel and Coleen Farraday-Handel had a dispute over the terms of their divorce settlement.
Gary didn't think he should pay for his kids' summer camp since the couple's agreement only required him to pay two-thirds of "child care expenses incurred by the mother while working," and half of the children's "educational tutoring, PSAT/SAT courses, drivers education, and religious instruction." ("Extracurricular activities" weren't specifically encompassed.)
Coleen believed Gary should pay the "reasonable extracurricular expenses of the children on a pro rata basis" and asked for the modification of their settlement and divorce judgment to include that obligation.
When the Suffolk County Supreme Court sided with Coleen, Gary appealed to the Appellate Division, Second Department
While the lower court erred by modifying the settlement, (because Coleen failed to make "a showing sufficient" to warrant modification of the couple's stipulation), the AD2 thought camp costs were child-care related and Gary was obligated to remit his share of the expense.
Interestingly, since she sought to modify the agreement, rather than seek its enforcement, the AD2 wouldn't award her legal fees.
Was that a campy result?
 To download a copy of the Appellate Division's decision, please use this link: Handel v. Handel
 In Milone v. Milone, Angelo Milone made a motion to direct his ex-wife to comply with a settlement agreement's "visitation provisions."
Upon their divorce, Maria and Angelo Milone entered into an arrangement which provided that Maria -- who was awarded custody of their children -- wouldn't "do anything which estrange the children" from Angelo.
When the children turned 10 years of age, they no longer wanted to hang with their dad, and Angelo claimed Maria "poisoned" their minds.
After the Westchester County Supreme Court sided with Angelo, Maria appealed to the Appellate Division, Second Department, which found his request had been incorrectly granted because he failed to provide evidence that Maria was "estranging the children from him." In fact, the evidence revealed Maria actively encouraged the children to have a relationship with their father. And since she was complying with her obligations under the agreement, there was no basis to compel her to do so.
That wasn't estranging.
 To download a copy of the Appellate Division's decision, please use this link: Milone v. Milone
 In 5576 Realty, LLC v. Bourdeau, 5576 Realty filed a nonpayment proceeding against its tenant, Chantal Bourdeau. When Bourdeau failed to show up for trial, the Kings County Civil Court awarded 5576 Realty possession of her apartment and a money judgment in the amount of $4,524.02.
Bourdeau later filed an order to show cause to vacate the judgment, alleging that the amount sought by her landlord was incorrect and that she was actually entitled to a credit due to a rent overcharge.
A few days later, the parties entered into an agreement which provided the possessory judgment would remain in place, and the eviction stayed for a month, to allow Bourdeau to pay the amount owed.
Bourdeau didn't make the payment and brought another order to show cause alleging 5576 wouldn't give her a lease which was necessary for her to get financial assistance. Although the Civil Court found Bourdeau had received a lease, the judgment was stayed for another 15 days to allow Bourdeau to get financial assistance and remit payment. When Bourdeau failed to meet that deadline, she brought another order to show cause, this time claiming she needed more time to get the money. Although that request was denied by the Civil Court, the Appellate Term, Second Department, granted relief -- based on CPLR 5704(b) -- and the Department of Social Services then paid most of Bourdeau's rent. But the Civil Court ultimately denied her request to vacate the stipulation and judgment because she was unable to pay her share of the rent.
On appeal, the Appellate Term, Second Department, found Bourdeau "repeatedly failed to abide by the terms of the stipulation and did not show an ability to pay her share of the rent, she failed to demonstrate good cause to vacate the warrant."
That Bordeau turned.
 To download a copy of the Appellate Term's decision, please use this link: 5576 Realty, LLC v. Bourdeau
 In 377 Broome St. Corp. v. McManamon, Kathleen McManamon appealed from an order of the New York County Civil Court which denied her request to stop an eviction which had been triggered by late rent payments.
The Appellate Term, First Department, found McManamon repeatedly breached the terms of a settlement which delineated the payment deadlines as "time is of the essence."
Since such court ordered agreements or stipulations are "strictly enforced," the AT1 refused to further delay or set aside the eviction.
Guess you could say the AT1 gave McManamon the broom.
 To download a copy of the Appellate Term's decision, please use this link: 377 Broome St. Corp. v. McManamon
 In New York City Economic Dev. Corp. v. Harborside Mini Storage, Inc., New York City sought possession of commercial space occupied by Harborside Mini Storage.
In 1989, the City of New York leased out the Bush Terminal Industrial Complex to Harborside Management's predecessor, for a 10-year term ending February of 1999.
In June of 1999, four months after its lease expired, Management entered into a sublease with Mini Storage's predecessor, U.S. Movers, which rented out a building within the Complex. Although Management negotiated a renewal with the City, and sued to declare that renewal effective, Management ultimately surrendered its interest to the City, which then leased the Complex to the New York City Economic Development Corporation (NYCEDC). Mini Storage thereafter remained in possession and paid rent directly to NYCEDC.
NYCEDC later filed an eviction case against Mini Storage alleging Management was only a "month-to-month tenant" when the sublease was executed. Mini Storage argued that its sublease had been "validated" by NYCEDC's acceptance of Mini Storage's rent payments. When the Kings County Civil Court found against Mini Storage, an appeal to the Appellate Term, Second Department, followed.
Since the City never executed a renewal lease, the AT2 concluded Management was nothing more than a month-to-month tenant and, as a subtenant, Mini Storage had no greater rights than those held by Management.
NYCEDC didn't "validate" the sublease by the mere acceptance of sublease payments, particularly in view of the parties' procedural history and interaction -- such as a Civil Court nonpayment stipulation which characterized Mini as a "monthly tenant," notices sent to Mini informing Mini that payments were accepted as "use and occupancy" rather than "rent," together with the fact NYCEDC neither sought nor collected a rent increase, as provided by the "sublease."
What a Mini mess!
 To download a copy of the Appellate Term's decision, please use this link: New York City Economic Dev. Corp. v. Harborside Mini Storage, Inc.
 Last December, we looked at the case of 565 Tenant's Corp. v. Adams, an Appellate Term decision wherein a cooperative shareholder faced eviction from his apartment based on "nuisance."
The underlying case was settled by way of an agreement (dated July 31, 2006) which provided the tenant would "not permit his dogs to defecate or urinate in the [apartment or common areas of the building] and/or if same occurs shall promptly [and] properly clean so as to avoid issuance of any odor. If [tenant] or any authorized individual is in [the apartment] said clean-up to be done immediately."
For a period of two years, any breach by the tenant was to be treated with "zero tolerance" and would result in the issuance of a warrant of eviction on as little as five days' notice.
As luck would have it, about a month later (August 22, 2006), one of the tenant's Afghans defecated on the unit's hallway floor and there the deposit remained for about a three week period - until the tenant returned from a Caribbean vacation.
When the cooperative alleged breach and sought to evict the tenant for his noncompliance with the parties' agreement, the New York County Civil Court was of the opinion the tenant had not seen the "accident" occur (as he had been leaving for a vacation) and removed the pile upon his return -- thus satisfying the "immediate" clean-up requirement.
On appeal, the Appellate Term, First Department, reversed.
The AT1 didn't buy the tenant's "professed unawareness of the dog's mess," since it had been "conspicuously deposited immediately outside tenant's bedroom." Undeniably, the tenant's "ignorance defense" didn't pass the smell test:
In evaluating tenant's breach using the "zero tolerance" standard formulated by the parties, it is not unreasonable to charge tenant with knowledge of what he ought to have discovered through the ordinary use of his senses.
The appellate court also professed concern for the sanctity of the agreements reached in Housing Court, and noted owners would be discouraged from amicably resolving disputes if settlements were dishonored and unenforced by our courts.
In an attempt to forestall an eviction, the case was taken to the Appellate Division, First Department, which was also unreceptive to the tenant's explanations. In a decision released on September 18, 2008, the AD1 concluded as follows:
The Appellate Term correctly held that under the terms of the parties' stipulation, tenant's admitted presence in the apartment at the time his dog defecated on the floor required that the mess be immediately cleaned up. Tenant's claim that the dog must have defecated while he and his girlfriend were in another area of the apartment and in a hurry to make a plane, and that they were unaware of the mess until they returned from vacation three weeks later, is unavailing (see Hotel Cameron, Inc. v Purcell, 35 AD3d 153 [2006]), especially in view of the clause that the stipulation was to be applied with "zero tolerance" and that no violation was to be deemed "de minimus" (sic) (see 1029 Sixth v Riniv Corp., 9 AD3d 142, 149 [2004], appeals dismissed 4 NY3d 795 [2005]).
To download a copy of the Appellate Division's decision in this case, please use this link: 565 Tenant's Corp. v. Adams
To download a copy of the Appellate Term's decision, please use this link: 565 Tenant's Corp. v. Adams
To view a copy of the Civil Court's Decision/Order in this case, please use this link: 656 Tenant's Corp. v Adams (Civil)
To view our related posts on this topic, please use this link: Stipulations
 In Leiderman v. Leiderman, Susan Leiderman wasn't pleased when the Nassau County Supreme Court denied her request for an award of attorneys' fees against her ex-husband, Jeffrey, who defaulted on an agreement reached when they divorced.
The terms provided that if either side breached, the non-defaulting party could ask the court to award reasonable attorneys' fees.
When the Nassau County Supreme Court denied her request, Susan appealed to the Appellate Division, Second Department, which found since Susan was "successful in obtaining a settlement" of a disputed term, Jeffrey was required to pay her fees. But because he hadn't been given the opportunity to oppose his former spouse's application, the case was sent back for a determination as to the "reasonableness" of the charges incurred.
A reasonable outcome, no?
 To download a copy of the Appellate Division's decision, please use this link: Leiderman v. Leiderman
 In Matter of Johna M.S. v. Russell E.S., Johna and Russell entered into a separation agreement wherein Russell agreed to pay Johna $100 per week in spousal maintenance, and $250 per week in child support, and, Johna could later seek additional maintenance by addressing it with Russell or asking the court to modify the arrangement. Any application made by Johna was to be treated as a new or "de novo" request -- because the agreement didn't consider Johna's future needs or Russell's future earnings.
When Johna later filed for an increase, the Otsego County Family Court denied the request citing the "lack of jurisdiction," and both the Appellate Division, Third Department, and, the New York State Court of Appeals, agreed.
According to our state's highest court, the Family Court lacked the power to alter or rescind a valid separation agreement, unless the spouse was "likely to become in need of public assistance or care." Finding the statutory exception inapplicable here, the parties' agreement didn't give the Family Court the necessary power. The court further noted that Johna wasn't really bringing a "de novo" application for maintenance, but was asking for the agreement's "modification," which could only be achieved by way of a Supreme Court action for separation or divorce.
How divorcing is that?
 To download a copy of the Court of Appeals' decision, please use this link: Matter of Johna M.S. v. Russell E.S.
 Section 130-1.1 of New York State’s rules and regulations authorizes courts to impose costs and other monetary sanctions against any party or attorney engaged in “frivolous conduct.”
According to 22 NYCRR 130-1.1, conduct is frivolous if: (1) it is without merit and "cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;" (2) its primary purpose is to delay proceedings or "harass or maliciously injure" another party; or (3) "it asserts material factual statements that are false." When considering whether there has been a possible violation of that rule, a court is required to examine the circumstances surrounding the party’s conduct and must consider -- among other things -- whether its frivolous nature was apparent, should have been apparent, or had been brought to a party’s attention. In 1050 Tenants Corp. v. Lapidus, a cooperative tenant was sanctioned under this Rule by the New York County Civil Court for falsely testifying at a nonpayment proceeding about the signing of a stipulation of settlement. Since the agreement’s enforceability was a focal point of the case, and the tenant was found to have asserted a “material factual statement” that was false, the court awarded costs to the cooperative. When the Appellate Term, First Department, affirmed on appeal, we doubt the tenant-shareholder sanctioned the outcome. To download a copy of the Appellate Term’s decision, please use this link: 1050 Tenants Corp. v. Lapidus
Continue reading "FALSE TESTIMONY SANCTIONED" »
 In Fa Wah Management, Inc. v. Alvarrez, “Fa Wah” Management (“FWM”) started a holdover summary proceeding against Zoilo Gavilan “Alvarrez,” who was doing business as Juquiliuta Bar & Restaurant.
FWM terminated Alvarrez’s lease, after Alvarrez failed to pay several months' rent. When negotiations for a new lease proved unproductive, the parties entered into two successive stipulations, which required Alvarrez to pay FWM certain sums of money for "use and occupancy" and to provide FWM proof of insurance on or before April 4, 2006. When he defaulted and an inquest was held by the Kings County Civil Court, FWM “established a prima facie case, including proof of [Alvarrez’s] original rent default,” and possession was awarded to the landlord. On appeal, the Appellate Term, Second Department, affirmed. Alvarrez’s main defense was that the pleadings in the case -- the Notice of Petition and Petition -- were fatally defective, because FWM’s true name was “Fai Wa,” rather than “Fa Wah,” and Alvarrez’s last name was really spelled “Alvarez.” Notwitstanding those gaffes, the AT2 was of the opinion, that the tenant “was not, and could not reasonably have been confused by these minor errors.” Alvarrez further asserted on appeal that since he had eventually obtained the required insurance, enforcement of the stipulation would prove to be inequitable. But the AT2 was unmoved. Since that claim was unsubstantiated, and more importantly, not in the record, it could not be considered on appeal. Discerning no irregularity, the AT2 directed Fa Wah (or “Fai Wa”) to proceed with the eviction ForthWith. 
To download a copy of the Appellate Term’s decision, please use this link: Fa Wah Management, Inc. v. Alvarrez
 After denying their landlord access to their rent-stabilized apartment (for extermination and inspection purposes), a holdover proceeding ensued and the Earleys eventually agreed to a stipulation of settlement which awarded the landlord a possessory judgment to their unit.
Under the agreement's terms, their eviction would be stayed for a two-year period provided that the Earleys never filed a complaint regarding "housing repairs and/or conditions" with "any agency or forum" including the New York City Department of Housing Preservation and Development and the New York State Division of Housing and Community Renewal. Less than two weeks before that agreement expired, the landlord -- One Convent Avenue Realty -- moved to evict the Earleys because the tenants had filed a complaint with the Davidson Senior Center alleging they had not received a renewal lease from their building's owner. In One Convent Ave. Realty Corp. v. Earley, the New York County Civil Court granted the landlord’s motion and allowed the tenants’ eviction to proceed. On appeal, the Appellate Term, First Department, reversed. According to the AT1, because the Earleys’ complaint did not relate to housing repairs or conditions, their conduct did not violate the stipulation's terms. Luckily for the Earleys, the AT1’s decision arrived Not A Moment Too Soon. To download a copy of the Appellate Term’s decision, please use this link: One Convent Ave. Realty Corp. v Earley
 During the course of litigation, it's not uncommon for counsel to agree on certain "housekeeping matters" of pertinence to the case -- like extending deadlines for pleadings, motions, and responsive papers, adjourning dates for court appearances (whether it be for a hearing or trial), compromising disputes relating to discovery, or even settling the matter -- and that understanding is usually memorialized in a writing known as a "stipulation."
Once the terms of that agreement are finalized, the document will usually call for the signatures of the respective counsel. Pressed for time, and unable to access a fax machine or computer, an opponent might ask you to sign his or her name to the document. (We've all been there and done that.) The danger of that practice was reinforced by the outcome of a case which reached the Appellate Term, 9th and 10th Judicial Districts. In DiGennaro v. Schmid, the attorneys were addressing unresolved discovery issues and it was allegedly agreed that defendants would produce certain documents within 45 days or suffer an "order of preclusion" -- that is, the defendants would be unable to introduce those documents at a hearing or trial and would be hindered in presenting a defense or proving any counterclaims they had in the case. When motion practice later ensued (based on the defendants' breach of the agreement), defendants' counsel claimed he never consented to the memorialized terms. Notwithstanding that denial, a Nassau County District Court Judge granted plaintiff's motion for summary judgment and awarded the plaintiff a victory in the case. On appeal, the Appellate Term reversed since the stipulation had been rendered "unenforceable" by the parties' noncompliance with the requirements of a certain law -- the Civil Practice Law and Rules (CPLR). As the appellate court observed: In our view, the stipulation does not satisfy the requirements of CPLR 2104 and cannot be enforced. As relevant here, CPLR 2104 provides that an agreement "is not binding upon a party unless it is in a writing subscribed by him or his attorney ...." The requirement that the agreement be in writing and signed by the party or his attorney grew out of the frequent conflict between attorneys as to agreements made with reference to proceedings and actions and was intended to relieve the courts from the constant determination of controverted questions of fact with reference to such proceedings ... The purpose of the statute would be defeated if one party or its attorney were permitted to subscribe a stipulation as agent for the adverse party pursuant to an alleged oral authorization ... It would have been a simple matter for plaintiff's attorney to fax the written agreement to defendants' then attorney for his signature, rather than faxing it to him after he had signed it on behalf of defendants' then attorney. In our view, the statute requires no less than this, if conflicts as to the terms of the agreement are to be avoided. Accordingly, we hold that the writing is of no force and effect. 
Don't get zapped. DiGennaro v. Schmid reinforces that you can't take anyone at their word ... particularly if they're fellow members of the Bar. To view a copy of the Appellate Term's decision, please use this link: DiGennaro v. Schmid
In 565 Tenant's Corp. v. Adams, a cooperative shareholder faced eviction from his apartment based on "nuisance."
The underlying holdover proceeding was settled by way of an agreement (dated July 31, 2006) which provided that the tenant would "not permit his dogs to defecate or urinate in the [apartment or common areas of the building] and/or if same occurs shall promptly [and] properly clean so as to avoid issuance of any odor. If [tenant] or any authorized individual is in [the apartment] said clean-up to be done immediately."
For a period of two years, any breach by the tenant was to be treated with "zero tolerance" and would result in the issuance of a warrant of eviction on as little as five days' notice.
As luck would have it, about a month later (August 22, 2006), one of the tenant's Afghans defecated on the unit's hallway floor and there the deposit remained for about a three week period - until the tenant returned from a Caribbean vacation.
When the cooperative alleged breach and sought to evict the tenant for his noncompliance with the parties' agreement, the New York County Civil Court concluded that the tenant had not seen the "accident" occur (as he had been leaving for a vacation) and removed the pile upon his return -- thus satisfying the "immediate" clean-up requirement.
On appeal, the Appellate Term, First Department, reversed.
The AT1 didn't buy the tenant's "professed unawareness of the dog's mess," since it had been "conspicuously deposited immediately outside tenant's bedroom." Undeniably, the tenant's "ignorance defense" didn't pass the smell test:
In evaluating tenant's breach using the "zero tolerance" standard formulated by the parties, it is not unreasonable to charge tenant with knowledge of what he ought to have discovered through the ordinary use of his senses.
The appellate court also expressed concern (as had been cited in an earlier Appellate Division decision) for the sanctity of the contractual arrangements reached in Housing Court, and noted that owners would be discouraged from amicably resolving disputes if settlements were dishonored and unenforced by our courts.*
The Appellate Term, 2nd and 11th Judicial Districts, didn't share that sentiment in 600 Hylan Associates v. Polshak. In that case, Ilonka Polshak sought to vacate a money judgment and a possessory judgment which she had agreed to in a nonpayment case. While she initially stipulated to owing some $11,000 in "back rent, costs and fees," she later retained counsel and sought to be relieved of her obligations under that agreement, claiming to have "inadvisably" waived certain defenses to the landlord's claim.
Since her motion failed to cite any of the typical factors -- fraud, collusion, accident or mistake --which would have triggered an entitlement to relief, the Richmond County Civil Country denied the request. On appeal, the AT2 reversed.
Since the tenant had "made it clear" she was unable to remit payment of the monies sought to be recovered without assistance from the Department of Social Services, and, in view of the possibility that the landlord may have waited too long -- i.e., two years -- to bring the nonpayment case, the AT2 was of the opinion that the tenant had made "a sufficient showing of prejudice arising from landlord's delay" in filing its lawsuit.
Having demonstrated a "meritorious and substantial laches defense," the AT2 rescinded the parties' agreement and restored them to the status quo ante - so that there could be a full and complete trial on the parties' respective claims.
A lone dissenter, Justice Michelle Patterson, did not agree with the appeal's outcome and noted as follows:
[T]he record shows that the tenant entered into the stipulation freely and knowingly in open court and that the amount agreed to was in fact owed. To unravel a stipulation of settlement under these circumstances would have a chilling effect upon future litigants entering into such settlements and, indeed, would render them meaningless. While the Court is sympathetic to this self-representing litigant, it must be mindful of its role to administer justice fairly and evenly and cannot ignore the basic tenets of the law.
This much is certain, folks: There are no absolutes in landlord-tenant law.
And, that's no crock.
To view the Appellate Term decisions, please use these links: 565 Tenant's Corp. v. Adams or 600 Hylan Associates v. Polshak
To view a copy of the Civil Court's Decision/Order in the Adams case, please use this link: 656 Tenant's Corp. v Adams (Civil)
To view our related posts on this topic, please use this link: Stipulations
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*We understand that the tenant's attorney is seeking leave to appeal to the Appellate Division, First Department. (Unfortunately, we do not hold out much hope for that application being granted.)
Continue reading "WHAT'S THE POOP WITH THE APPELLATE TERM?" »
 In Starr v. Rogers, Steven Starr sued Dr. Scott Rogers for dental malpractice.
Starr began seeing Rogers for dental work in December 1996, and continued treatments through May 2003. Dissatisfied with the outcome, Starr later claimed that Dr. Rogers had not complied with “accepted dental and medical standards,” and filed suit. Dismissal was later sought on the grounds that Starr’s claim was time-barred and that the doctor had provided his patient with the "requisite standard of care.” When the Westchester County Supreme Court granted the motion, and also refused to enforce an oral settlement reached with the dentist’s insurer, Starr appealed to the Appellate Division, Second Department. The AD2 found that Dr. Rogers met his burden of establishing “the absence of any departure from good and accepted medical [or dental] practice.” (He accomplished that by submitting an expert affidavit, his deposition testimony, together with copies of Starr’s medical and dental records.) Furthermore, the AD2 agreed that any oral settlement reached with the doctor's insurance company was unenforceable because the agreement failed to conform to CPLR 2104 -- a law which requires settlements made in open court to be “reduced to a court order and entered, or contained in a writing subscribed by the parties or their attorneys.” Not a shining moment for this Starr. 
To download a copy of the Appellate Division’s decision, please use this link: Starr v. Rogers
 According to a press release issued by the City of New York's Conflict of Interest Board, a City worker was suspended, without pay, for thirty days for engaging in his private real-estate business (on City computer equipment) while on City time.
Joseph Tulace, an Associate Staff Analyst with the Human Resources Administration (HRA), admitted to using his "HRA office computer to do work for [his] private real estate business during [his] City work hours." Apparently, back in January of this year, Tulace was charged with conduct violative of City Charter section 2605(b)(2) and Board Rules sections 1-13(a) and (b), which provide, in part, as follows: No public servant shall engage in any business, transaction or private employment, or have any financial or other private interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties. [Charter section 2604(b)(2)] [I]t shall be a violation of City Charter section 2604(b)(2) for any public servant to pursue personal and private activities during times when the public servant is required to perform services for the City. [Board Rules section 1-13(a)] [I]t shall be a violation of City Charter section 2604(b)(2) for any public servant to use City letterhead, personnel, equipment, resources, or supplies for non-City purpose. [Board Rules section 1-13(b)]
In a "Stipulation and Dispos[i]tion" (S&D), dated October 18, 2007, Tulace "freely and voluntarily" conceded that for a three month period -- from September 2005 to November 2005 -- he engaged in the activities in question and further agreed to a 30-day suspension without pay. According to the S&D, the "approximate value" of the suspension is $4,550. Of course, it is unclear whether the dollar amount Tulace was penalized has any correlation to the actual harm which taxpayers suffered as a result of Tulace's indiscretion and/or whether the City recouped any monies or profits Tulace may have earned during the period he was engaged in the violative conduct. So, while the Board may have intended to use incident as a way "to remind public servants that they are prohibited from using City time or City resources for any non-City purposes," we're not sure that message was adequately conveyed or will be seriously received. Without additional information, it is unclear whether the $4,550 penalty had any correlation to any objective critieria. As far as we can tell, this could have been a mere "slap on the wrist." Frankly, it all seems like a rather pointless (and costly) exercise. To download a copy of the Board's Press Release (dated October 26, 2007) and accompanying "S&D," please use this link: In re Joseph Tulace
 DeVita v. Macy’s East, Inc. is a case for the Internet age.
An action was originally brought before the Queens County Supreme Court to recover damages for personal injuries. During the course of that case, counsel to the insurer for one of the defendants sent an email proposing settlement to the plaintiff’s attorney, who appears to have accepted the offer via e-mail. When the court denied a motion made by Macy’s and the other defendants to have that email exchange enforced as a settlement, an appeal was taken to the Appellate Division, Second Department. To be enforceable, stipulations of settlement must adhere to the strictures of a certain law -- CPLR 2104 -- which requires such agreements to be in writing and signed by the parties to be bound. Since this agreement was neither signed by the parties nor made by counsel in open court, the AD2 was of the opinion that the email could not be used and that the motion had been properly denied. The moral of the story is, if you want it to stick, put it on paper. To download a copy of the Appellate Division's decision, please use this link: DeVita v. Macy’s East, Inc.
 Many landlord-tenant cases never get to the trial stage and are frequently resolved by way of an agreement known as a "stipulation of settlement" or "stip."
Like other contracts, these documents can be the subject of protracted litigation, particularly when errors, omissions, interpretative disputes or other misunderstandings arise. So, while one party may think it's getting a form of closure by signing the document, the other may later feel that the agreement should be rescinded, or not enforced as written, and may ask a judge to restore the litigants to the status quo ante -- the way things were before the stip was signed. While often an effective plot device for works of fiction, judges will typically resist use of this "way-back machine" power, unless extenuating circumstances -- like fraud, collusion or mistake -- are present. If the existence of one or more of those factors can not be demonstrated to a court's satisfaction, the agreement's silence about a right or remedy will likely be perceived as a knowing and intentional relinquishment or "waiver" and a litigant will not be afforded an opportunity to rewrite the deal. By way of example, in Rosewohl Enters., LLC v Gluck, Rosewohl settled a nonpayment case it had brought against its tenant, Jack Gluck, by way of a stipulation of settlement that was "so ordered" by a judge. When Rosewohl later sought to collect the fees it incurred for having to commence the case, both the New York County Civil Court and the Appellate Term, First Department, rebuffed that effort, finding that the stipulation's silence precluded the recoupment of those charges. So, for some, silence is golden. For a copy of the Appellate Term's decision, please use this link: Rosewohl Enters., LLC v Gluck
 While courts usually favor and encourage arbitration -- since it is perceived as a way to expedite the resolution of disputes in a cost-effective manner -- that doesn’t mean arbitration is appropriate in all instances.
In D’Agostino v. Forty-Three East Equities Corp., Peter D’Agostino commenced a Housing Part (HP) proceeding to compel his landlord to repair the building’s roof and to address water damage to his apartment (caused by alleged roof and window defects). The landlord moved to stay or dismiss the HP proceeding, based on an arbitration clause that was contained in a prior settlement agreement reached by the parties. The New York County Civil Court denied the landlord’s motion to compel arbitration, since enforcement of an arbitration clause in this context would violate public policy. On appeal, the Appellate Term, First Department, concurred. While arbitration undoubtedly has its virtues, courts continue to play the role of “gatekeeper,” and must decide whether the contested issues are appropriately arbitratable. In this instance, the AT1 concluded that HP disputes are “beyond the reach of an arbitrator’s discretion.” An HP proceeding is not your typical landlord-tenant case. It's a process which involves both the Housing Part of the Civil Court and the New York City Department of Housing Preservation and Development (HPD). The Housing Part recommends and employs any appropriate legal remedy to enforce housing laws and codes, while HPD investigates building conditions, issues violations, and levies fines and penalties. By compelling the maintenance and preservation of our City’s housing stock, both the impacted tenants and the public-at-large benefit. The AT1 was of the opinion that if enforcing housing standards were left to an arbitrator -- who is not bound by substantive law -- “critical decisions carrying potentially adverse consequences” would result. While the parties would secure a decision in the matter, the Housing Part of the Civil Court and HPD would lack input and thus be prevented from safeguarding the public interest. Ultimately, the appellate court found that these kind of cases belonged in a judicial forum. In an interesting twist, Justice William P. McCooe dissented. McCooe was of the opinion that the public policy favoring arbitration should have been applied and that the majority’s stated rationale for preventing the dispute from proceeding in a manner which the parties had contractually selected lacked precedential support. Looks like the Appellate Division, First Department, will be arbitrating this one in the near future. For a copy of the Appellate Term’s decision, please use this link: D’Agostino v. Forty-Three East Equities Corp.
 Did you catch the Appellate Term's decision in 701 Empire Blvd., LLC v. Sweet?
You're certain to like it, particularly if you despise attorneys. In that case, the tenant retained counsel to vacate a judgment of possession and warrant of eviction that had issued against her on default. Although the tenant had a breach of warranty of habitability defense (as a result of certain violations) and alleged that she had not been served with either the demand of the rent or any of the pleadings in the case, the tenant's attorney settled the dispute by stipulating that the tenant would pay some $10,148.60 in about 40 days, together with such prospective rent that would become due and payable. When the tenant later learned what happened, she retained another attorney and alleged that her prior counsel had entered into the agreement "without her knowledge and consent." She also objected to a $4,000 error in the amount of rent claimed to be due and to the lack of any repair obligations on the landlord's behalf. After the Kings County Civil Court refused to set aside that agreement, the Appellate Term, 2nd and 11th Judicial Districts, intervened and reversed. The appellate court noted that while an attorney may usually make "procedural or tactical decisions" on a client's behalf, counsel is not permitted to "compromise or settle a claim" without the client's approval. Absent that authority, any agreement reached may not be binding. When entering into a settlement, how does a third-party know that the adversary's attorney may rightfully take such action? Without the litigant's active participation in the process, you really don't. And, according to the AT's decision, it isn't prudent to blindly accept an adversary's representation that they are acting with authority. In fact, you do so at your own peril. In this instance, the AT was of the opinion that the tenant was denied an opportunity to consult with her attorney before the stipulation was reached, that she only learned of the disposition of her case after the agreement had been signed in her absence, and, that she never ratified the agreement by "words or conduct." As a result, the settlement was annulled and the case remanded for a decision on the tenant's motion to vacate her default. A bittersweet outcome for the landlord, that's for sure. For a copy of the Appellate Term's decision, please use this link: 701 Empire Blvd., LLC v. Sweet
 Settlement agreements -- or "stipulations" -- reached within the context of litigation are typically viewed as preferred dispute resolution mechanisms, and will not be cast aside absent some significant misunderstanding or irregularity.
If you think you've got at an agreement with someone, it's best to get that understanding documented in a final written form as soon as possible, and not leave any important elements or aspects of the arrangement "open" or unresolved, since problems are likely to ensue. By way of example, in Split Rock Developers, LLC v. Zartab, Inc., a tenant ended its subtenant's lease based on the occupant's failure to pay rent for the months of October, November and December 2004. Although the parties had entered into a "so-ordered preliminary stipulation" which provided that the subtenant would vacate the space and pay $5,800 upon execution of a more formalized agreement, when the time came to execute that formal document, the subtenant refused to do so. When tenant moved the Nassau County District Court to compel the subtenant to perform as originally represented, the District Court vacated the underlying settlement agreement based on "mutual mistake" and directed the parties to proceed to trial on the underlying dispute. On appeal, the Appellate Term, 9th and 10th Judicial Districts, modified the outcome by reinstating the "preliminary agreement" and suggested that the parties could duke out the agreement's enforcement in another forum (like the local Supreme Court). In its decision, the AT noted as follows: In our view, the relief sought of compelling tenant to execute the more formal stipulation and the releases is equitable and injunctive in nature, and thus beyond the jurisdiction of the District Court to grant ... Therefore, we sustain the court's denial of landlord's motion to enforce the stipulation on the ground that the court lacked the jurisdiction to grant the relief sought. In so holding, we do not pass on the ultimate issue of whether the so-ordered stipulation is enforceable. We note, however, that, generally, when a contract does not specify a time of performance, a reasonable time is implied ....
That last sentence piqued our curiosity. If the appellate court had been disinterested in passing upon the agreement's enforceability, then why did it offer a comment on a party's "reasonable time" performance requirement? And, if the agreement was unenforceable, why would the appellate court bother reinstating it? (Not to split rock hairs, but this wouldn't be another instance of our courts elevating forum over substance?) For a copy of the Appellate Term's decision, please use this link: Split Rock Developers, LLC v. Zartab, Inc.
 "Releases" afford people who have been sued (or threatened with a lawsuit) a form of "closure." These documents usually seek to ensure that once a claim is resolved, and all the settlement papers are signed, that individual or party won't come after you later for the same (or different) claims.
If the form is inartfully worded, or if their are "exceptions" crafted into the document, courts will look at the release with a critical eye and may find the protections to be limited in scope. A case in point is Morales v. Solomon Management Co., Inc. In that dispute, Carmen Morales suffered from a string of misfortunes. On May 16, 1997, Morales was injured when a part of her apartment's ceiling collapsed on her. Less than a year later, in March of 1998, she slipped and fell on a puddle in her building, "exacerbating" her 1997 injuries. Two lawsuits were filed, and in 2005 the "slip and fall" case was settled for $85,000. In a document, dated March 10, 2005, Ms. Morales released her landlord "from any and all rights, causes of action, claim or demand of whatsoever kind, nature or description at law on in equity or created by statute which it [sic] now has ...." However, that very same document described the settled claim as that being for the "D/A 3/9/98" -- the accident date of March 9, 1998. When Morales sought to pursue a recovery for the earlier (1997) ceiling collapse, her adversaries claimed that the release addressed and discharged her claims for both incidents and the Bronx County Supreme Court agreed. Since the settlement document was self-limiting, the Appellate Division, Second Department, reversed. Had the parties intended to encompass both accidents, the release should have unequivocally provided for that. Here's how the AD2 put it: It has long been the law that "where a release contains a recital of a particular claim, obligation or controversy and there is nothing on the face of the instrument other than general words of release to show that anything more than the matters particularly specified was intended to be discharged, the general words of release are deemed to be limited thereby" ... The vitality of that principle has not faded in the ensuing decades ... The release signed by plaintiffs indicates that it is for the 1998 accident ("D/A 3/9/98"). Furthermore, "a release may not be read to cover matters which the parties did not desire or intend to dispose of" ... Clearly, the plaintiffs did not intend the release to cover the 1997 incident. Defendants presented no evidence that the Superintendent of Insurance (the other party to the release) intended the document to cover the earlier incident.
It's time for us to let you go. For a copy of the Appellate Division's decision, please click here: Morales v. Solomon Management Co., Inc.
 Lawyers often spend months (or years) battling a case on a client’s behalf, with the matter often getting resolved shortly before trial. The terms of that resolution will usually be embodied in a written form known as a "settlement agreement" or "stipulation of settlement."
If they’re not careful, lawyers can also end up spending months (or years) battling what was meant by the words or phrases they employed in those settlement documents. By way of example, in Widewaters Property Development Co., Inv. v. Katz, Widewaters had sued Katz (and others) for violating a settlement agreement which required the defendants to correct certain soil and groundwater contamination. It was Widewaters’ contention that the settlement required the defendants to use their "best efforts" to complete the work, and that the defendants had breached that obligation. Defendants moved to dismiss the complaint and alternatively sought summary judgment -- a formal adjudication on the merits of the dispute, based solely on the court’s review of the submitted documents. The Plaintiff later moved to dismiss the defendant’s counterclaim which alleged "tortious interference with contract." The Onondaga County Supreme Court partially granted the defendant’s request by dismissing certain allegations that appeared in plaintiff’s pleadings, but otherwise denied the parties’ requests. Since the parties’ agreement failed to define what was meant by the term "best efforts," the Appellate Division, Fourth Department, affirmed the denial of summary judgment. The AD4 did not believe that that part of the dispute was resolvable by way of motion practice, since what comprises "best efforts" is often a "question of fact," requiring a formal hearing or trial. Interestingly, the defendant also sought to recoup its legal fees incurred in making the motion. While the parties’ settlement agreement provided that such fees were recoverable "to the extent such party prevails on the merits with regard to any litigation arising from or related to this Settlement Agreement," the appellate court did not believe that the dismissal of only a portion of the plaintiff’s complaint triggered an entitlement to recoup costs, particularly in view of the litigation's ongoing nature. Finally, the AD4 reversed the Supreme Court’s refusal to dismiss the "tortious interference" counterclaim. In the absence of meddling by a "stranger," or third party, that counterclaim was unsustainable. That concludes our best efforts to analyze this case! For a copy of the Appellate Division's decision, please use this link: Widewaters Property Development Co., Inv. v. Katz
 In Fukilman v. 31st Avenue Realty Corp., a bunch of defendants agreed to purchase 20% of a plaintiff's interests in a corporation known as 31st Avenue Realty Corporation (which owned a medical office building).
While the defendants contracted to acquire that percentage interest at "full market value," a dispute arose as to whether the calculation was to be premised on the property's "highest and best use," or its "currently improved condition." The difference was substantial, with the former totaling $3.6 million, and latter at $2.7 million. The Nassau County Supreme Court concluded that the $3.6 million calculation applied, as did the Appellate Division, Second Department. While some might think that "full market value" would encompass a property's "existing use," Fukilman v. 31st Avenue Realty Corp. demonstrates that the phrase is afforded a broader interpretation -- one that could have significant financial implications. Caveat drafters! For a copy of the Appellate Division's decision, please use this link: Fukilman v. 31st Avenue Realty Corp.
 Gucci America won a $2,059,583.62 money judgment against several defendants who were found by a federal district court to have engaged in trademark infringement.
The parties subsequently entered into a settlement wherein Gucci graciously agreed to reduce the judgment to $75,000 -- subject to the defendants' remittance of $25,000 upon the agreement's signing and monthly payments of $5,000 for ten months thereafter. In the event of a default, the original judgment amount (minus any payments made) would be due and payable. The defendants paid some $35,000, but neglected to remit the balance. When Gucci sought to enforce the higher judgment amount, the defendants alleged that Gucci had failed to comply with the settlement's default provisions. Paragraph 2 of that agreement required Gucci to "give written notice of ... default by delivering such notice notice to the address provided in the paragraph 3." Paragraph 3 provided that notice "shall be given by sending a facsimile, followed by confirmation sent by U.S. Mail." Although defendants admitted receiving a copy of the default notice, they objected to Gucci's failure to serve an additional copy by fax. Siding with the defendants, the New York County Supreme Court concluded that the omission precluded Gucci's ability to enforce the judgment. On appeal, the Appellate Division, First Department, reversed. After examining the wording of the parties' settlement document, the AD1 was of the opinion that the sending a copy of the default notice by fax was not contractually required. The appellate court also viewed the omission of a fax version of the notice of little consequence since the defendants conceded receiving a copy of the document (in some fashion or form). Clearly, the AD1 was not amused by the fact that the defendants were insisting upon Gucci's literal compliance with the terms of an agreement which defendants had knowingly disregarded and, in an interesting twist, concluded that the defendants could not "compel enforcement of a settlement agreement the material terms of which they willfully breached ...." Wow! (Do you get a sense that the appellate court didn't like these particular defendants?) Putting aside for the moment whether these defendants were good or bad guys, we're not very comfortable with the court's analysis or the outcome reached in this instance. Most litigants objecting to a contract's enforcement -- whether it be a lease or any other agreement -- will cite to an opponent's failure to properly issue or serve a default notice. So, it is not unusual to find a individual with "unclean hands" insisting that an agreement's default provisions were somehow dishonored. (Often times such an argument is well received by a court, in the interests of avoiding a forfeiture or other harsh result. An attack of the notice also allows the defaulter a bonafide opportunity to cure or correct the breach.) However, if one reads this decision carefully, it would appear that the appellate court is promulgating a standard that upon an agreement's breach, hypertechnical compliance with notice of default provisions will not be of critical importance, particularly when it is uncontested that the document advising of the violation has been received by the defaulter. Since there was some ambiguity whether the cited provisions also required a default notice to be transmitted by fax, why was the appellate court reluctant to throw these defendants a bone? After all, a $2 million hit is still substantial, even in today's dollars. A bit cutting, don't you think? For a copy of the Appellate Division's decision, please use this link: Gucci America, Inc. v. Sample Sale Wholesales, Ltd.
 After Joseph Bloch ended his relationship with Jackson Heights Care Center, LLC, d/b/a Regal Heights Rehabilitation and Health Care Center (JHCC), the parties entered into a settlement agreement wherein Bloch agreed not to disclose proprietary information secured during the course of his association with JHCC, "except 'pursuant to lawfully issued process.'"
In the event of the agreement's breach, Bloch agreed to pay "liquidated damages" totaling $75,000. Several months after that agreement was executed, Modern Diagnostic Laboratory, Inc. (MDLI) and JHCC became embroiled in a dispute. A draft "subpoena" from MDLI's counsel was delivered to Bloch, who agreed to sign an affidavit on MDLI's behalf detailing JHCC's business practices; an act which breached Bloch's settlement with JHCC. JHCC later requested and was awarded a money judgment against Bloch in the amount reserved by the parties' agreement. And on appeal, the Appellate Division, Second Department, affirmed. The AD2 concluded that the draft "subpoena" did not qualify under the governing "lawfully issued process" exception since the document Bloch received did not actually "compel or demand" that he "act or refrain from acting." As the court observed: The subpoena at issue was not "lawfully issued process" pursuant to the Agreement which compelled the defendant's disclosures to Modern Diagnostic. Legal process is designed to compel or demand that a party act or refrain from acting .... Although counsel for Modern Diagnostic mailed to the defendant a letter with a copy of a subpoena, the content of counsel's letter clearly indicated that the subpoena was not being served at that time. Therefore, the defendant was not compelled to disclose the information pursuant to lawfully issued process, and violated the Agreement by disclosing the plaintiff's business information in a private meeting with counsel for Modern Diagnostic. In opposition, the defendant failed to raise a triable issue of fact as to whether he violated the nondisclosure provision of the Agreement ....
So you see, silence is golden. (It was at least worth $75,000.) For a copy of the Appellate Division's decision, please use this link: Jackson Hgts. Care Ctr., LLC v. Bloch
 Diamonds are reported to be the hardest minerals known to humankind. On the "Mohs' scale of mineral hardness," here's how diamonds rate (with a 10 being the highest rank on the scale):
Talc Gypsum Calcite Fluorite Apatite Orthoclase Feldspar Quartz Topaz Corundum Diamond
In West 45th Partners, LLC v. Moneta Diamonds, Inc., Moneta Diamonds met considerable resistance when it attempted to vacate a stipulation of settlement or to excuse its nonperformance of the terms of the parties' agreement. (Like any contract, these documents are usually enforced in accordance with their terms, particularly in the absence of any vagueness, ambiguity, or other significant irregularity.) In this instance, Moneta Diamonds reportedly failed to honor certain "time of the essence" payment provisions. Since the tenant had been represented by counsel when it acquiesced to these "unambiguous" terms, the Appellate Term, First Department, viewed the agreement as rock solid and was concrete in its resolve that, absent a good explanation for the default, an eviction could ensue. Undeniably, this particular settlement agreement didn't prove to be Moneta Diamonds's best friend. (How does that old song go?) For a copy of the Appellate Term's decision, please use this link: West 45th Partners, LLC v. Moneta Diamonds, Inc. --------------------------- To view our other blog posts on this topic, please use this link: Stipulations
 James Sykes purchased a newly constructed penthouse apartment from RFD Third Avenue I Associates (RFD) for $3.9 million. Prior to closing, Sykes found a number of problems with the unit and a punchlist was provided.
RFD agreed to complete the repairs within thirty days and placed $75,000 in escrow to ensure the work's performance. If litigation ensued, the parties further agreed that "the prevailing party [would] be entitled to recover its legal fees and disbursements." A lawsuit alleging breach was filed and RFD eventually released the $75,000 (together with accrued interest thereon) to Sykes. Since the parties were unable to reach an accord on legal fees, the New York County Supreme Court assigned the matter to a special referee to hear and determine the issue. The referee was of the opinion that since the parties had settled the repair/escrow claim, neither side had prevailed and no award of fees was appropriate under the circumstances. On appeal, the Appellate Division, First Department, reversed. The AD1 concluded that the "true scope" of the dispute was whether RFD had "work[ed] diligently and use[d] reasonable good faith efforts to complete" the open items. Since it apparently did not do so, the appellate court was of the opinion that Sykes had "won" the case, even though he achieved that favorable result by way of a "stipulation rather than than a judicial determination." While we understand the general premise, we are not certain the AD1 called it right. Shouldn't courts be encouraging the resolution of disputes? If parties feel it is in their interests to resolve a dispute amicably, then the outcome should be viewed as a "draw" -- with each side absorbing its own fees and costs. Let's face it. More often than not, disputes are settled because of the perceived "nuisance value," particularly when the costs of litigation will exceed the amount in controversy. Since such resolutions are not always a concession that a suit was rightfully maintained or that the adversary's claim had merit, then why allow a mere settlement to trigger an entitlement to fees? We believe that exposing litigants to an opponent's fees disincentivizes participants from seeking or achieving closure earlier in the process. (That can't be a good thing.) Each side should bear its own costs unless and until there has been a formal adjudication of a dispute's merits. And, at that point, if an adversary has a right to recover fees, so be it. Let's make peace, not war! Onward! For a copy of the Appellate Division's decision, please use this link: Sykes v. RFD Third Avenue I Associates, LLC
One of the easiest injunctions for a tenant to get -- particularly when faced with the threatened termination of its tenancy -- is the type known as a "Yellowstone" injunction.* The purpose of this equitable relief is to stop a landlord from prematurely ending a lease until there has been some formal adjudication of the dispute on the merits. In order to secure this remedy, a tenant must demonstrate that it has: an unexpired lease agreement for the premises in question; received some form of notice from the landlord threatening termination of that leasehold interest; timely sought the court's intervention (ideally, prior to the lapse of any validly-issued default or curative notice); and the ability and desire to address the landlord's objection(s) "by any means short of vacating the premises."
 When one or more of these elements are absent, relief will likely be denied, as was demonstrated in Hempstead Video, Inc. v. 363 Rockaway Assoc., LLP. In that case, Hempstead Video had reached an agreement (back in 1996) with the Village of Valley Stream wherein Hempstead Video represented that it would refrain from situating its "adult" video stores in certain locations. Interestingly, its lease with 363 Rockaway Associates was "explicitly conditioned upon" the video store's compliance with that agreement.
Some time later, the Village sued the tenant for violating the agreement, and a judgment declaring Hempstead Video in breach was affirmed by the United States Court of Appeals for the Second Circuit. When the landlord sought to terminate the tenancy based on the breach of the 1996 agreement, Hempstead ran to the Nassau County Supreme Court and requested an order stopping the eviction process. When that "Yellowstone" request was rebuffed, the company then appealed to the Appellate Division, Second Department, which affirmed the denial. Since the tenant had been stripped of its lease and its rights to remain in possession -- as a result of its breach of the 1996 agreement and the adverse ruling the company received from the federal court -- the AD2 was of the opinion there was nothing left to preserve. Clearly, its lapses exposed this tenant to eviction. For a copy of the Appellate Division's decision, please use this link: Hempstead Video, Inc. v. 363 Rockaway Assoc., LLP --------------------------- *For our other posts on this topic, please use this link: Yellowstones
 Most leases restrict what tenants can do within their apartments. Alterations, or other changes made without the owner's consent, are usually prohibited.
By way of example, paragraph 10 of the The Real Estate Board of New York, Inc.'s "Standard Form of Apartment Lease" provides, in substantial part, as follows: You [Tenant] cannot build in, add to, change or alter, the Apartment in any way, including wallpaper, painting, repainting or other decorating, without getting Owner's written consent before You do anything. Without Owner's prior written consent, You cannot install or use in the Apartment any of the following: dishwasher machines, clothes washing or drying machines, electric stoves, garbage disposal units, heating, ventilating or air conditioning units or any other electrical equipment which, in Owner's reasonable opinion, will overload the existing wiring installation in the Building or interfere with the use of such electrical wiring facilities by other tenants of the Building.
Violations of these kind of provisions can not only get a tenant evicted, but can also lead to liability for the costs incurred by the landlord to restore the unit to its original condition (ordinary wear and tear excepted, of course). In Ebrahimi v. Martino, Mr. Ebrahimi sued his landlord for the return of his security deposit ($850) together with an additional $200 which had been promised to him if the tenant vacated the apartment and no "damage" was found. Of course, as one might anticipate, the landlord refused to release the monies, claiming that he had to pay $1475 to undo the tenant's unauthorized "alterations." For some undisclosed reason, Ebrahimi had decided to paint the apartment's walls "red and green." After a trial, the Nassau County District Court (small claims part) concluded that Ebrahimi was not entitled to the monies in question. And, on appeal, the Appellate Term, 9th and 10th Judicial Districts, affirmed. The tenant recovered ZILCH! Nada! Nothing. Which reminds us of a bad joke, which goes something like this: What's red and green and goes 175 miles an hour? Answer: A frog in a blender. Our sincerest apologies, in advance, to all our friends at PETA. For a copy of the Appellate Term's decision, please use this link: Ebrahimi v. Martino
 Even when things look pretty bleak for a tenant, and an eviction is imminent, a court retains the power to vacate the warrant and can allow the tenant to remain in possession of commercial or residential space for "good cause shown." [RPAPL section 749(3)]
In Mack-Cali So. W. Realty Assoc., LLC v. Benni's I, LLC, the tenant, Benni's I, LLC (doing business as "Bennigan's"), conceded that it owed its landlord $126,224.59 in rent for the period February 14, 2003 through July 6, 2005, and signed a stipulation of settlement outlining the payment terms. Months later, as a result of Benni's failure to comply with the agreement's terms, the City Court of Yonkers (Westchester County) awarded the landlord a money judgment for all unpaid rent in the amount of $183,719.77, granted a final judgment of possession and issued a warrant of eviction as against the tenant. Benni's later moved by Order to Show Cause to stay the eviction and vacate the court's determination alleging that the judgment incorrectly included "disputed taxes." Upon signing of the stay request, the court directed the tenant to deposit $60,000 into court. After a subsequently scheduled hearing, the court denied the tenant's motion, ordered the release of the $60,000 to the landlord, and stayed the eviction for an additional 14 days. Within that two week period, tenant remitted the balance of the judgment amount ($123,969.77) and again asked the court to vacate the final judgment of possession and warrant of eviction based upon the tenant's full and complete payment of all sums which had been found to be due. Although the landlord objected to the request, the court granted relief in the tenant's favor, finding "good cause" to reinstate the tenancy. On appeal, the Appellate Term, 9th and 10th Judicial Districts, concurred with the District Court, noting as follows: In our view, the court could properly determine that good cause existed to vacate the warrant (RPAPL 749 (3)). "The law abhors a forfeiture of a lease ...." Here, the court found that tenant had paid the judgment in full. In addition, tenant has allegedly paid more than $2.5 million in rent over the four years of its tenancy, employs more than thirty people, who would be harmed by execution of the warrant, and stands to lose a long-term lease and its investment in the premises. Although full payment of a judgment is not grounds to vacate the judgment, in these circumstances it was not an abuse of discretion for the court to vacate the nonpayment warrant in order to prevent a forfeiture of the leasehold ....
So, for now, it looks like we can still all get together at Bennigan's. For a copy of the Appellate Term's decision, please use this link: Mack-Cali So. W. Realty Assoc., LLC v. Benni's I, LLC
 Even though courts loathe meddling with "stipulations of settlement" or other agreements reached within the context of litigation, they are occasionally compelled to do so.*
In a decision released on March 7, 2007, the Appellate Term, First Department, vacated an agreement made in a holdover case with an unrepresented tenant who mistakenly waived succession rights to a regulated unit. Apparently, George Alamo, Jr., was unaware of his statutory right to stake an entitlement to remain in the unit as a regulated tenant in his own right.** In 126 Bapaz, LLC v Alamo, here's how the AT rationalized its decision: The record reveals the existence of a potentially meritorious succession defense on behalf of the first-named respondent, which should not be deemed forfeited by his uncounseled decision to consent to judgment. The trial court, which had charge of the proceeding since its inception, properly vacated the stipulation so that respondent, now represented by counsel, will have the opportunity to contest the holdover petition at trial. The court "possesses the discretionary power to relieve parties from the consequences of a stipulation effected during litigation upon such terms as it deems just and, if the circumstances warrant, it may exercise such power if it appears that the stipulation was entered into inadvisedly or that it would be inequitable to hold the parties to it."
Tread cautiously when negotiating settlements with the unrepresented. For as George Santayana correctly observed, "Those who forget history are doomed to repeat it." For a copy of the Appellate Term's decision, please use this link: 126 Bapaz, LLC v Alamo _____________________ *Use this link for our other blog posts on: Stipulations **Use this link for our other blog posts on: Succession
In Forty Central Park South v. Wadud -- a nonpayment case -- the New York City Civil Court refused to vacate a warrant of eviction or to relieve a tenant of the consequences of his non-compliance with a “so ordered” stipulation of settlement. On appeal, Appellate Term, First Department, affirmed. When parties to a summary proceeding wish to amicably resolve all or some of the issues in a dispute, they enter into an agreement known as a stipulation. The majority of these documents are handwritten on forms available in most courtrooms and are “so ordered” by the presiding judge or judicial hearing officer. In nonpayment cases, these agreements will minimally contain a breakdown of the rent due, list a payment schedule, provide a timetable for any repair obligations, and, will reserve remedies (such as the tenant's eviction) in the event of a party’s breach or default. Viewed as efficient dispute resolution mechanisms, these agreements are stringently enforced (in the absence of some substantial irregularity). Fraud, collusion, or mistake are commonly cited as reasons for annulling the arrangement, but the party seeking to be relieved of the contract's terms has the burden of establishing the existence of one or more of these grounds. As Wadud reinforces, courts will typically avoid recrafting an agreement’s terms “based upon the principle that the parties to a civil dispute are free to chart their own litigation course.” So, chart carefully. For a copy of the Appellate Term’s decision in Forty Central Park South v. Wadud, please use the following link: http://www.nycourts.gov/reporter/3dseries/2007/2007_50281.htm
With increasing frequency, people are incurring substantial property damage or suffering from severe physical maladies as a result of mold. If you think these kinds of claims are covered by insurance, and haven't scrutinized your policy's precise wording or language, you may be woefully mistaken. More often than not, insurance companies are disclaiming liability coverage for mold-related incidents and will rebuff reimbursement efforts (unless intertwined with a covered event). A case in point is Siegel v. Chubb Corp. In that particular dispute, as a result of “high level of toxins in the air, caused by mold,” an insurer advanced its policy holder $120,000 in living expenses “without prejudice” to the company’s right to seek the return of those funds in the event the incident later proved to be an excluded event. As you may have guessed, the company eventually concluded that the policy did not apply to losses “caused by” mold and asserted a right to a refund of the proceeds. The New York County Supreme Court concurred and awarded the insurer a money judgment in the amount of $120,000. On appeal, the Appellate Division, First Department, affirmed noting as follows: The policy excludes "any loss caused by ... mold." The term "caused by" is defined as "any loss that is contributed to, made worse by, or in any way results from that peril." Plaintiffs' assertion that the loss was caused not by mold but by toxins in the air is unavailing, as mold is the "efficient proximate cause" of the insured's loss ... Moreover, there is no evidence that the mold was caused by any leak, which plaintiffs argue would be a covered occurrence.
That had to hurt! For a copy of the Appellate Division's decision in Siegel v. Chubb Corp., please click on the following link: http://www.nycourts.gov/reporter/3dseries/2006/2006_07819.htm For more information about mold, visit the U.S. Environmental Protection Agency's website: http://www.epa.gov/mold/moldresources.html
Stipulations -- agreements reached within the context of litigation -- are much like any other contract and are governed by many of the same legal precepts and principles. In summary nonpayment and holdover proceedings, for example, stipulations are frequently used to resolve those disputes and outline the parties’ respective performance obligations, payment requirements, and any other pertinent terms and conditions.* Once signed, will a court allow a participant to withdraw from the deal if it is later determined that the party was misinformed or in error as to an operative fact? The answer will depend on a variety of factors, including whether the litigant was represented by counsel at the time the agreement was made. Harmless or inconsequential mistakes have been excused, as have errors which cause "prejudice" or harm. But if the decision was the result of “negligence or carelessness,” relief will likely be denied, as was demonstrated in the case of Waterside 1 LLC v. Christian. In that particular dispute, the landlord sued its tenant in the Queens County Civil Court for all unpaid rent that had accrued from November 2002 through April 2003 (in the amount of $554.33 per month). On December 29, 2003, the tenant agreed to settle the matter by paying $5,474.74. After that agreement was reached, Waterside discovered that the State Division of Housing and Community Renewal (DHCR) had increased the tenant’s rent and that the amount reserved in the parties’ stipulation did not accurately reflect the full legal rent due. When Waterside returned to the Queens County Civil Court to correct the error, that effort was rebuffed. On appeal, the Appellate Term, 2nd and 11th Judicial Districts, offered further resistance and chastised Waterside for its “carelessness.” The appellate court noted in its decision as follows: Where a mistake of fact is attributable to the negligence or carelessness of the party seeking to vacate a stipulation, and there has been no fraud or deceit on the part of the other party thereto, such a mistake will not constitute a basis to set aside the agreement … Since landlord had an opportunity to ascertain whether the rent had been restored prior to the commencement of the proceeding and the execution of the stipulation of settlement, it cannot avoid the consequences of its own carelessness by seeking to have the stipulation vacated. Accordingly, the order of the court below is affirmed.
That wasn’t very Christian, now was it? For a copy of the Appellate Term’s decision in Waterside 1 LLC v. Christian, please click on the following link: http://www.nycourts.gov/reporter/3dseries/2006/2006_52229.htm --------------------------- *For our other blog posts on stipulations, please click on the following link: http://www.nyrealestatelawblog.com/search/mt-search.cgi?IncludeBlogs=4&search=stipulations
Ever wonder what is included in your commercial or residential space when a lease uses the word "premises?" According to the State's highest court, the definition of that term will be governed by the parties' agreement.
In South Road Assoc., LLC v. International Business Machines Corp., a dispute arose as to whether the word "premises" solely encompassed the buildings' interior areas or also included the land upon which the structures had been erected.
IBM occupied several buildings in Poughkeepsie, New York, pursuant to a 1981 lease with its landlord. The agreement described the "premises" in question as follows: That the Landlord hereby leases to the Tenant and the Tenant hereby hires and takes from the Landlord the space being more particularly shown on the attached floor plan designated Exhibit 'A' (hereinafter called the 'premises') consisting in the aggregate of 113,400 gross square feet in two buildings consisting of 113,400 gross square feet (hereinafter called the 'buildings') situated on real property (hereinafter called the 'land') located at 622 South Road (Route 9), and a Water Tower and appurtenances in the Town of Poughkeepsie, State of New York (her[e]inafter referred to as Buildings 952, 982). During its tenancy, IBM installed an underground chemical-waste storage tank which leaked and contaminated the site's bedrock, groundwater and soil. While IBM accepted responsibility for the spill and agreed to abate the pollution, the landlord still commenced an action in the Dutchess County Supreme Court alleging IBM had breached its lease by failing to return the premises in "good order and condition."
With respect to that particular obligation, the governing agreement provided that at the end of the lease term: [T]he Tenant will remove its goods and effects...and will (a) peaceably yield up to the Landlord the premises in good order and condition, excepting ordinary wear and tear, repairs required to be made by the Landlord, or damage, destruction or loss by fire or other casualty or by any other cause...and (b) repair all damage to the premises and the fixtures, appurtenances and equipment of the Landlord therein, and to the building, caused by the Tenant's removal of its furniture, fixtures, equipment, machinery and the like and the removal of any improvements or alterations. When the parties moved for summary judgment--that is, a judicial decision deciding the case based solely on the papers presented by the litigants, without the need for a formal evidentiary hearing or trial--the Dutchess County Supreme Court found in the landlord's favor. The Appellate Division, Second Department, reversed concluding that the "clear and unambiguous" language of the parties' lease limited the encompassed space to the building's interior areas and could not "be construed to include the surrounding soil and groundwater." On appeal, the New York State Court of Appeals sided with the Appellate Division and concluded as follows: Since the meaning of "premises" is clear and unambiguous in the lease, extrinsic evidence such as the conduct of the parties may not be considered. IBM's conduct--placing underground storage tanks in the surrounding land and cleaning the resulting pollution--is not sufficient to create an ambiguity in the lease where the language is clear...The contract, read as a whole, clearly and consistently uses the term "premises" to refer only to interior space and we cannot rely on extrinsic evidence to find otherwise. Clearly, by this decision, the state's highest court is cautioning all parties to a lease to ensure that their agreements are appropriately premised.
For a copy of the Court of Appeals's decision in South Road Assoc., LLC v. International Business Machines Corp., please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2005/2005_02414.htm
For a copy of the Appellate Division's decision in this case, please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2003/2003_19986.htm
Agreements reached within the context of litigation are typically memorialized in written form and are known as "Stipulations of Settlement." Like any contract, these documents will be enforced in accordance with their terms, particularly in the absence of any vagueness, ambiguity or other significant irregularity. And, usually, courts will refrain from "reading into" the document or engaging in creative interpretations.
In Aivaliotis v Continental Broker-Dealer Corp., the parties settled their employment dispute by way of an agreement which provided for plaintiffs to remit three payments to defendant in the total amount of $120,000. In the event an installment was missed, the parties could "pursue their claims and counterclaims." When plaintiffs subsequently failed to remit payment, the Nassau County Supreme Court granted defendant's motion for the entry of a money judgment totalling $120,000 as against the plaintiffs.
Since the Supreme Court fashioned a remedy which had not been expressly reseved by the litigants, the Appellate Division, Second Department, vacated the judgment on appeal, noting as follows: Contrary to the defendant's contention, its only recourse in the event the plaintiffs defaulted in their payment obligation under the stipulation was to pursue its counterclaims. Thus, the Supreme Court should not have granted that branch of the defendant's motion which was for leave to enter judgment against the plaintiffs in the settlement amount since to do so "impl[ied] a term which the parties themselves failed to insert" in the stipulation
Caveat stipulators! Sometimes you get what you bargained for.
For a copy of the Appellate Division's decision in Aivaliotis v. Continental Broker-Dealer Corp., please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2006/2006_04784.htm
A few years ago, the Appellate Division, First Department, issued an interesting decision on "time is of the essence" provisions incorporated into landlord-tenant settlement agreements (or "stipulations of settlement"). Responding to a reluctance by lower courts to enforce these agreements as written, the appellate court concluded in 1029 Sixth LLC v. Riniv Corp., that when the document is subject to extensive negotiation and includes terms advantageous to both sides, the agreement must be honored despite any hardship or inconvenience that may be subsequently encountered by a party. As the court observed: The parties having conditioned the tenants' right to the contemplated payments on the landlord's absolute right to obtain possession of the premises, broom clean, on the vacate date, their failure to so deliver possession undermines the tenants' claims to sympathy or the consideration of equity. Their references to hardworking families do not suffice; nor do claims of fiscal hardship...In a situation completely of their own making, they are the victims of a strict stipulation provision they agreed to in order to obtain the advantage of another provision favorable to themselves.
If the insertion in the stipulation of the provisions requiring strict compliance with the requirement to vacate the premises turned out to be harsh, it was nevertheless an important, negotiated term of the agreement, and as such, must be enforced.... Thus, when an agreement provides "time is of the essence," that language will typically signify that the agreement's performance obligations are steadfast, concrete, and immalleable.
A recent case which further exemplifies this point, is 291 Pleasant Ave., LLC v. Morris, wherein the tenant, Deanna Morris, is reported to have had difficulty honoring the "time of the essence" payment terms of a settlement agreement reached within the context of holdover case. Apparently, Ms. Morris filed "no fewer than six orders to show cause seeking extensions and other relief." Ultimately, a Judge of the Housing Part of the New York County Civil Court denied the tenant additional time within which to make a required payment and authorized an eviction. On appeal, the Appellate Term, First Department, affirmed quoting from Mill Rock Plaza Associates v. Lively, another Appellate Division case: "Strict enforcement of the parties' settlement stipulation...is warranted based upon the principle that the parties in a civil dispute are free to chart their own litigation course...." While stipulations are preferred dispute-resolution mechanisms, litigants must tread cautiously for noncompliance with the terms of these agreements can undoubtedly have dire consequences. (Are you willing to stipulate to that?)
For a copy of the Appellate Division's decision in 1029 Sixth LLC v. Riniv Corp, please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2004/2004_04134.htm
For a copy of the Appellate Term's decision in 291 Pleasant Ave., LLC v. Morris , please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2006/2006_50958.htm
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