CREDIT CARD SURCHARGES - PART 2

People v. Fulvio, 136 Misc. 2d 334 - NY: City Court, Criminal Court 1987:

"Nor, as the People here contend, is the statute saved by the semantic gyration of claiming that it contemplates the establishment of a "regular price" for a product, that a "discount for cash" from that "regular price" is permitted and that it is only the "surcharge", or additional charge, for use of a credit card, which is prohibited. The fact of the matter is that, at least for this product, there is at the "gas" pump, a legally permissible "cash price" and a legally permissible "credit price" — that fact is amply established by the position taken by the People and the evidence in this case, as well as by the authorities above cited. What is intolerable is that the gasoline station operator careful enough or sophisticated enough to always characterize the lower of these prices as a "discount for cash" may enter his automobile at the end of his business day and drive home a free man; however, if the same individual, or his colleague operating the station down the street, or his employee is careless enough to describe the higher price in terms which amount to the "credit price" having been derived from adding a charge to the lower price, he faces the prospect of criminal conviction and possible imprisonment.

Thus, what General Business Law § 518 permits is a price differential, in that so long as that differential is characterized as a discount for payment by cash, it is legally permissible; what General Business Law § 518 prohibits is a price differential, in that so long as that differential is characterized as an additional charge for payment by use of a credit card, it is legally impermissible. In each case the innocent and the criminal conduct is based upon the same factual configuration. General Business Law § 518 creates a distinction without a difference; it is not the act which is outlawed, but the word given that act. The Bard had the phrase (of course) for the defendant's best defense to the surcharge offense alleged here: "Oh, be some other name! What's in a name? That which we call a rose/By any other name would smell as sweet" (Shakespeare, Romeo and Juliet [2.2: 42-44]) or, in this case, as bad.

The motion to dismiss the charge of attempting to violate General Business Law § 518 is granted, the conviction thereon is set aside and dismissed and the defendant is discharged."

CREDIT CARD SURCHARGES - PART 1

New York Consolidated Laws, General Business Law § 518. Credit card surcharge prohibited:

" No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means. Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both."

THIS MONDAY

FRAGRANCE SENSITIVITY AND UNEMPLOYMENT INSURANCE

IN THE MATTER OF KUBIAK, 23 AD 3d 980 - NY: Appellate Div., 3rd Dept. 2005:

"In October 2003, claimant began experiencing headaches and sensitivity to a coworker's fragrance. She reported this to her laboratory supervisor, who spoke with the coworker, and the coworker ceased wearing the perfume. Claimant continued to experience problems and, on January 12, 2004, resigned. Claimant was disqualified from receiving unemployment insurance benefits on the basis that she voluntarily left her employment without good cause. This decision was upheld by the Unemployment Insurance Appeal Board initially and again upon reconsideration. Claimant now appeals.

We affirm. Inasmuch as claimant's resignation was not based upon the advice of a physician (see Matter of Karastathis [Commissioner of Labor], 298 AD2d 822, 823 [2002]) and was done before affording the employer the opportunity to remedy the situation (see Matter of Estrada [Commissioner of Labor], 261 AD2d 760 [1999]), the Board could find that she left her employment for personal and noncompelling reasons. Claimant admitted that her doctor did not advise her to quit her job, and there was testimony that the employer suggested other options to address the problem, such as relocating claimant to another work station. Claimant, however, resigned before trying these options; in fact, she prepared her letter of resignation before even returning to work following her medical leave of absence. Under the circumstances presented, substantial evidence supports the Board's decision."

STATUTE OF LIMITATIONS IN ACTIONS AGAINST CO-OP BOARD

Herriott v. 206 W. 121st ST., 2017 NY Slip Op 30218 - NY: Supreme Court 2017:

""Generally, the applicable statute of limitations depends upon the substantive remedy sought" (Board of Managers of Bayside Plaza Condominium v. Mittman, 43 Misc.3d 1208(A), 990 N.Y.S.2d 436 [Supreme Court, New York County 2014]). "When the relief sought is equitable in nature, the six-year limitations period found in CPLR 213(1) applies" (Board of Managers of Bayside Plaza Condominium, supra citing Kaufman v. Cohen, 307 A.D.2d 113, 760 N.Y.S.2d 157 [1st Dept 2003]).

Nevertheless, any allegations that the Co-op was acting "in violation of its own governing documents," are subject to "the four-month statute of limitations associated with Article 78 proceeding" (Konigsberg v. 333 East 46th St. Apartment Corp., 2016 WL 3455940 (N.Y.Sup.), 2016 N.Y. Slip Op. 31180(U) (emphasis added) citing see e.g. Katz v Third Colony Corp., 101 AD3d 652, 653 [1st Dept 2012] [allegations that defendant cooperative acted beyond the powers granted to them in the cooperative's governing documents are governed by the four month statute of limitations for an Article 78 proceeding]; and Buttitta v Greenwich House Coop. Apts., Inc., 11 AD3d 250 [1st Dept 2004]). And, even actions that are allegedly violative of the BCL are governed by the four-month statute of limitations (see e.g., Lindkvist v. Honest Ballot Ass'n, 31 Misc.3d 1234(A), 932 N.Y.S.2d 761 (Table), 2011 (stating, The court's jurisdiction flows from BCL § 619 to which a four-month Statute of Limitations applies"))."

CAN SPOUSE ASK COURT FOR FINANCIAL PRESSURE TO OBTAIN RELIGIOUS DIVORCE

Masri v. Masri, 2017 NY Slip Op 27007 - NY: Supreme Court, Orange 2017:

"In view of the foregoing, this court holds that in the circumstances presented here, increasing the amount or the duration of Defendant's post-divorce spousal maintenance obligation pursuant to DRL §236B(6)(o) by reason of his refusal to give Plaintiff a Jewish religious divorce or "Get" would violate the First and Fourteenth Amendments to the United States Constitution. There is no evidence that the Defendant has withheld a Get to extract concessions from Plaintiff in matrimonial litigation or for other wrongful purposes. The religious and social consequences of which Plaintiff complains flow not from any impropriety in Defendant's withholding a "Get", but from religious beliefs to which Plaintiff no less than Defendant subscribes. To apply coercive financial pressure because of the perceived unfairness of Jewish religious divorce doctrines to induce Defendant to perform a religious act would plainly interfere with the free exercise of his (and her) religion and violate the First Amendment. The court accordingly declines Plaintiff's invitation to apply DRL §236B(6)(o) in determining Defendant's maintenance obligation."

A footnote in the decision notes: "On November 29, 2016, this Court gave notice to the Attorney General of the State of New York pursuant to CPLR §1012(b) and Executive Law §71 that the constitutionality of DRL §236B(6)(o), and of DRL §253(6) as incorporated therein, is at issue in this action. By letter dated December 27, 2016, the Attorney General responded that he does not intend to intervene in this action pursuant to CPLR §1012(b)."

MORTGAGE FORECLOSURE CLINIC TODAY

I will be volunteering today, Monday May 22, at the Nassau County Bar Association's free clinic for Mortgage Foreclosure, Bankruptcy and Superstorm Sandy issues, from 3pm to 6pm.

For more information, contact Nassau County Bar Association, 15^th and West Streets, Mineola, NY 11501 at (516) 747-4070

UNJUST ENRICHMENT CLAIMS - MOTION TO DISMISS

Bose v. THINK CONSTR. LLC, 2017 NY Slip Op 30944 - NY: Supreme Court 2017:

"The court next turns to that portion of the moving defendants' motion to dismiss plaintiff's unjust enrichment claim pursuant to CPLR § 3211(a)(7) on the ground that it fails to state a claim. On a motion addressed to the sufficiency of the complaint, the facts pleaded are assumed to be true and accorded every favorable inference. Morone v. Morone, 50 N.Y.2d 481 (1980). Moreover, "a complaint should not be dismissed on a pleading motion so long as, when plaintiff's allegations are given the benefit of every possible inference, a cause of action exists." Rosen v. Raum, 164 A.D.2d 809 (1st Dept. 1990). "Where a pleading is attacked for alleged inadequacy in its statements, [the] inquiry should be limited to `whether it states in some recognizable form any cause of action known to our law.'" Foley v. D'Agostino, 21 A.D.2d 60, 64-65 (1st Dept 1977) (quoting Dulberg v. Mock, 1 N.Y.2d 54, 56 (1956)). However, "conclusory allegations — claims consisting of bare legal conclusions with no factual specificity — are insufficient to survive a motion to dismiss." Godfrey v. Spano, 13 N.Y.3d 358, 373 (2009).

To state a cause of action for unjust enrichment, a plaintiff must allege "that (1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit the other party to retain that is sought to be recovered." Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 182 (2011). However, it is well-settled that "a plaintiff cannot succeed on an unjust enrichment claim unless it has a sufficiently close relationship with the other party." Georgia Malone & Co., Inc. v. Rieder, 19 N.Y.3d 511, 516 (2012). "[A]lthough the plaintiff [is] not required to allege privity, it [has] to assert a connection between the parties that [is] not too attenuated." Id. at 517. The "relationship between the parties" must be one "that could have caused reliance or inducement." Mandarin Trading Ltd., 16 N.Y.3d at 182-183. "[M]ere knowledge" of the other party is insufficient to support a claim for unjust enrichment when the parties "had no dealings with each other" or when the parties had no contact "regarding the purchase transaction." Georgia Malone & Co., Inc., 19 N.Y.3d at 517-518.

In the instant action, the moving defendants' motion to dismiss plaintiffs' unjust enrichment claim is granted on the ground that plaintiffs' relationship with the moving defendants is too attenuated to support a claim for unjust enrichment. It is undisputed that plaintiffs hired MAD as the architect on the Project and that it was MAD, and not plaintiff, which hired and contracted with the moving defendants for their work on the Project. It is also undisputed that plaintiff paid MAD for the architectural work performed on the Project and that it was MAD, and not plaintiff, which paid the moving defendants for their work on the Project. Plaintiffs do not allege that they had any dealings or relationship with the moving defendants whatsoever or that they ever had any contact with them. Mere awareness on the part of the moving defendants that the plaintiffs existed and were the owners of the plaintiffs' property is insufficient to support a claim for unjust enrichment."

STALE DEBT CLAIM - FILING A PLENARY ACTION VERSUS CHAPTER 13 BANKRUPTCY - THE DISSENT

MIDLAND FUNDING, LLC v. JOHNSON, No. 16–348, US SUPREME COURT, Decided May 15, 2017

JUSTICE SOTOMAYOR, with whom JUSTICE GINSBURG and JUSTICE KAGAN join, dissenting.

"........

First, the majority contends, structural features of the bankruptcy process reduce the risk that a stale debt will go unnoticed and thus be allowed. Ante, at 6–7. But there is virtually no evidence that the majority’s theory holds true in practice. The majority relies heavily on the presence of a bankruptcy trustee, appointed to act on the debtor’s behalf and empowered to (among other things) object to claims that he believes lack merit. See 11 U. S. C. §§704(a)(5), 1302(b). In the majority’s view, the trustee’s gatekeeping role makes it “considerably more likely that an effort to collect upon a stale claim in bankruptcy will be met with resistance, objection, and disallowance.” Ante, at 7. The problem with the majority’s ipse dixit is that everyone with actual experience in the matter insists that it is false. The Government, which oversees bankruptcy trustees, tells us that trustees “cannot realistically be expected to identify every time-barred . . . claim filed in every bankruptcy.” Brief for United States as Amicus Curiae 25–26; see also Resurgent Complaint ¶43 (“Filing objections to all of [one collector]’s unenforceable claims would clog the docket of this Court and other courts with objections to frivolous claims”). The trustees themselves (appearing here as amici curiae) agree, describing the practice as “wasteful” and “exploit[ative].” Brief for National Association of Chapter Thirteen Trustees as Amicus Curiae 12. And courts across the country recognize that Chapter 13 trustees are struggling under a “deluge” of stale debt. Crawford, 758 F. 3d, at 1256.

Second, the other features of the bankruptcy process that the majority believes will serve as a backstop against frivolous claims are even less likely to do so in practice. The majority implies that a person who files for bankruptcy is more sophisticated than the average consumer debtor because the initiation of bankruptcy is a choice made by a debtor. Ante, at 6. But a person who has filed for bankruptcy will rarely be in such a superior position; he has, after all, just declared that he is unable to meet his financial obligations and in need of the assistance of the courts. It is odd to speculate that such a person is better situated to monitor court filings and lodge objections than an ordinary consumer. The majority also suggests that the rules of bankruptcy help “guide the evaluation of claims.” Ibid. But the rules of bankruptcy in fact facilitate the allowance of claims: Claims are automatically allowed and made part of a plan unless an objection is made. See 11 U. S. C. §502(a). A debtor is arguably more vulnerable in bankruptcy—not less—to the oversights that the debt buyers know will occur.

Finally, the majority suggests, in some cases a consumer will actually benefit if a claim for an untimely debt is filed. Ante, at 7–8. If such a claim is filed but disallowed, the majority explains, the debt will eventually be discharged, and the creditor will be barred from collecting it. See §1328(a). Here, too, practice refutes the majority’s rosy portrait of these proceedings. A debtor whose trustee does not spot and object to a stale debt will find no comfort in the knowledge that other consumers with more attentive trustees may have their debts disallowed and discharged. Moreover, given the high rate at which debtors are unable to fully pay off their debts in Chapter 13 proceedings, see Porter, The Pretend Solution: An Empirical Study of Bankruptcy Outcomes, 90 Texas L. Rev. 103, 111–112 (2011), most debtors who fail to object to a stale claim will end up worse off than had they never entered bankruptcy at all: They will make payments on the stale debts, thereby resuscitating them, see supra, at 6–7, and may thus walk out of bankruptcy court owing more to their creditors than they did when they entered it. There is no benefit to anyone in such a proceeding—except the debt collectors.

........"

ATTORNEY IMPAIRMENT

Today, I will be one of the speakers at a CLE at Nassau County Bar Association: "Because Everyone Knows Someone: Legal and Ethical Implications of Attorney Impairment Start"

STALE DEBT CLAIM - FILING A PLENARY ACTION VERSUS CHAPTER 13 BANKRUPTCY

MIDLAND FUNDING, LLC v. JOHNSON CERTIORARI TO THE UNITED STATES. No. 16–348, US SUPREME COURT, Decided May 15, 2017

"Whether Midland’s assertion of an obviously timebarred claim is “unfair” or “unconscionable” (within the terms of the Fair Debt Collection Practices Act) presents a closer question. First, Johnson points out that several lower courts have found or indicated that, in the context of an ordinary civil action to collect a debt, a debt collector’s assertion of a claim known to be time barred is “unfair.” See, e.g., Phillips v. Asset Acceptance, LLC, 736 F. 3d 1076, 1079 (CA7 2013) (holding as much); Kimber v. Federal Financial Corp., 668 F. Supp. 1480, 1487 (MD Ala. 1987) (same); Huertas v. Galaxy Asset Management, 641 F. 3d 28, 32–33 (CA3 2011) (indicating as much); Castro v. Collecto, Inc., 634 F. 3d 779, 783 (CA5 2011) (same); Freyermuth v. Credit Bureau Servs., Inc., 248 F. 3d 767, 771 (CA8 2001) (same).

We are not convinced, however, by this precedent. It considers a debt collector’s assertion in a civil suit of a claim known to be stale. We assume, for argument’s sake, that the precedent is correct in that context (a matter this Court itself has not decided and does not now decide). But the context of a civil suit differs significantly from the present context, that of a Chapter 13 bankruptcy proceeding. The lower courts rested their conclusions upon their concern that a consumer might unwittingly repay a timebarred debt. Thus the Seventh Circuit pointed out that “‘few unsophisticated consumers would be aware that a statute of limitations could be used to defend against lawsuits based on stale debts.’” Phillips, supra, at 1079 (quoting Kimber, supra, at 1487). The “‘passage of time,’” the Circuit wrote, “‘dulls the consumer’s memory of the circumstances and validity of the debt’” and the consumer may no longer have “‘personal records.’” 736 F. 3d, at 1079 (quoting Kimber, supra, at 1487). Moreover, a consumer might pay a stale debt simply to avoid the cost and embarrassment of suit. 736 F. 3d, at 1079.

These considerations have significantly diminished force in the context of a Chapter 13 bankruptcy. The consumer initiates such a proceeding, see 11 U. S. C. §§301, 303(a), and consequently the consumer is not likely to pay a stale claim just to avoid going to court. A knowledgeable trustee is available. See §1302(a). Procedural bankruptcy rules more directly guide the evaluation of claims. See Fed. Rule Bkrtcy. Proc. 3001(c)(3)(A); Advisory Committee’s Notes on Rule 3001–2011 Amdt., 11 U. S. C. App., p. 678. And, as the Eighth Circuit Bankruptcy Appellate Panel put it, the claims resolution process is “generally a more streamlined and less unnerving prospect for a debtor than facing a collection lawsuit.” In re Gatewood, 533 B. R. 905, 909 (2015); see also, e.g., 11 U. S. C. §502 (outlining generally the claims resolution process). These features of a Chapter 13 bankruptcy proceeding make it considerably more likely that an effort to collect upon a stale claim in bankruptcy will be met with resistance, objection, and disallowance."

END OF LIFE CHOICES

In February of 2015 End of Life Choices New York filed a lawsuit, Myers v. Schneiderman, to establish aid in dying as a right under current law or under the New York State Constitution. The lawsuit was dismissed by a lower court, an appeal to the Appellate Division, First Department. affirmed the lower court ruling in May 2016. In September of 2016, the Court of Appeals ruled to hear the appeal and oral arguments are scheduled for May 30, 2017.

Many organizations have requested to file briefs or appear amici curiae - most recently on May 13, news correspondent and author Betty Rollin, who has been active in the Death with Dignity movement, was granted leave to file a brief. Myers v. Schneiderman, 2017 NY Slip Op 72536 - NY: Court of Appeals May 4, 2017. Motion No. 2017-477.

FROM LEVITTOWN CHAMBER OF COMMERCE

Of which I am a member and Second Vice President

FOOD AT FUNERALS

Effective January 16, 2017, Public Health Law (PHL) Article 34 created an additional section 3444 to allow certain types of food and/or beverages to be served to consumers attending vistitation hours and funeral services in funeral establishments.

The NYS Department of Health on their website has a "Dear Funeral Directors Letter Re Food in Funeral Homes"

See https://www.health.ny.gov/professionals/funeral_director/2017-01-11_guidance_letter.htm

TAXI MEDALLIONS AND UBER ET AL.

HERVIAS, MARCELINO vs. CITY OF NEW YORK, 154059/2017, New York Civil Supreme, is an Article 78 proceeding filed on May 2. As reported by the NY Daily News, the plaintiffs, two medallion taxi drivers, "claim that e-mail apps create 'unfair competition' and  financial woes for taxi medallion owners". They also note that the value of a medallion has been reduced in some cases by over 50%.

The Article 78 petition can be viewed online on e courts.

VOLUNTEER LAWYERS PROJECT

Today I will be a volunteer lawyer with Nassau Suffolk Law Services at Landlord/Tenant court in Hempstead. From the Nassau/Suffolk Law Services website:

"The Volunteer Lawyers Project (Nassau) and The Pro Bono Project (Suffolk)

Nassau/Suffolk Law Services operates a nationally lauded pro bono program with the Bar Association of Nassau County and the Suffolk County Bar Association. Established in 1981, the program provides legal representation in civil cases for individuals meeting low income guidelines.

Volunteer Lawyers Project and Pro Bono Project:

The Projects strive to supplement the funded civil legal services provided by Law Services’ staff with the generous volunteer assistance of the private bar. The Project staff refers a variety of legal matters to private volunteer attorneys, usually in the areas of matrimonial, bankruptcy and landlord-tenant law. The demand for pro bono services is great and may involve a waiting list, as in the case of divorce matters.  However, we maintain an active outreach and recruitment program in an effort to meet the challenge. The Projects also screen prospective clients for the Modest Means Panel, private attorneys who have agreed to accept divorce cases at a reduced fee. The Volunteer Lawyers and Pro Bono Projects are supported in part by The Nassau Bar Association, the We Care Fund, and The Suffolk County Bar Association, the Suffolk County Bar Pro Bono Foundation, as well as by The Legal Services Corporation. For information in Nassau County call 516-292-8299 and in Suffolk County 631-232-2400. HOW MANY LAWYERS  DOES  IT  TAKE TO CHANGE. . . The World ? It’s a simple idea. Use your powers for good. When you represent the poor and disabled, you also represent the best of our profession. A profession full of caring, committed people who firmly believe a just world is possible. Our clients don’t pay.  But the rewards —-that’s another story entirely. Once you’ve made a difference in the life of another , it can’t but help make a difference in yours. You’ve been given a gift, a powerful skill –you can put it to no better use than to help the powerless. You can help.  The only question is: will you? The Collateral Rewards:

• Free CLE credits
• Free pass to a CLE course
• Access to expert consultation and mentoring
• Eligibility for Pro Bono Attorney of the Month award and Pro Bono Recognition Reception
• Free professional liability insurance
• Networking with attorney colleagues and judges
• Expand your knowledge and experience in various disciplines of law

How can you help?

• Provide direct client representation
• Be a mentor to other volunteer attorneys
• Assist Project staff with intake, case analysis, referral and recruitment of volunteer attorneys
• Volunteer to work alongside Nassau Suffolk Law Services staff in landlord/tenant court, assist in disability, access to health care, Social Security advocacy, etc

Help is especially needed in the following areas:

• Matrimonial and Family Law
• Bankruptcy
• Guardianships (Article 17A)
• Foreclosure
• Consumer Issues
• Access to Medical Care and Public Benefits
• Wills, Trusts, and Estates

Take the challenge! You can make a difference. Call Maria Dosso for more information about volunteering. 631 232-2400 x 3369 Each month Nassau Suffolk Law Services celebrates the labors of individual attorneys who have demonstrated an outstanding commitment to the Pro Bono effort and who serve as a role model for the legal profession and its commitment to pro bono work."

MORTGAGE FORECLOSURE CLINIC TODAY

I will be volunteering today, Monday May 8, at the Nassau County Bar Association's free clinic for Mortgage Foreclosure, Bankruptcy and Superstorm Sandy issues, from 3pm to 6pm.

For more information, contact Nassau County Bar Association, 15^th and West Streets, Mineola, NY 11501 at (516) 747-4070

DISSOLVING AN LLC

If there is no operating agreement which covers disputes among members, it is Section 702 of the Limited Liability Company Law which governs. Matter of 47th Rd. LLC, 2017 NY Slip Op 30607 - NY: Supreme Court 2017:

"Section 702 of the LLCL provides for dissolution of a limited liability corporation under the following circumstances:

On application by or for a member, the Supreme Court in the judicial district in which the office of the limited liability company is located may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement. A certified copy of the order of dissolution shall be filed by the applicant with the Department of State within 30 days of issuance. . .

Under Section 702 of the Limited Liability Company Law ("LLCL"), the Supreme Court in the judicial district in which the office of the company is located may, on application by or for a member, decree dissolution of the company "whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement." LLCL $702.

The Operating Agreement, in Article II, states only that the company is formed for "any lawful business purpose." The standard operating agreement, in Article 6, provides that the company shall be dissolved and its affairs wound up upon the first to occur of the following: a the latest date on which this company is to dissolve, if any, as set forth in the articles of organization, or by a judicial decree pursuant to section 702 of the New York limited liability company law.
In determining applications for a judicial dissolution of a limited liability company, the court must first look to such company's operating agreement to determine "whether it is or is not reasonably practicable for the limited liability company to continue to carry on its business in conformity with the operating agreement" (Matter of 1545 Ocean Avenue, LLC v Crown Royal Ventures, LLC, 72 AD3d 121 [2d Dept 2010]; see LLCL § 702). Considered a statutory "default provision" for judicial dissolution (see Man Choi Chiu v Chiu, 71 AD3d 646 [2d Dept 2010]), LLCL § 702 is available whenever the court finds that it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement. Appellate case authorities have instructed that the court's initial analysis is one that is contract-based because the statute mandates an examination of the articles and operating agreement to determine the reasonable practicability of carrying on the business in conformity with these governing documents (see Matter of 1545 Ocean Avenue, LLC v Crown Royal Ventures, LLC, supra; see also Matter of Shure v S&S Eatery LLC, 35 Misc.3d 1218(A), 2012 WL 1521915 (Sup. Ct., Nassau Co., 2012); Matter of Spires v Lighthouse Solutions, LLC, 4 Misc.3d 428, 436 [Sup. Ct., Monroe Co., 2004]).

Here, the general nature of the stated purpose in the Operating Agreement is vague; hence, it does not assist in determining the reasonable practicability of continuing the business. Normally, the LLCL would operate to fill in the voids (see Flax v Shirian, 44 Misc. 3d 1222(A), 3 N.Y.S.3d 284, 2014 N.Y. Misc. LEXIS 3679, 2014 NY Slip Op 51229(U), 2014 WL 4056810 [Sup. Ct. Suffolk Co. 2014]). However, the evidence adduced at the hearing makes it clear that the purpose of the company is to operate an eight-unit residential apartment building in an up and coming area of Queens County.

To successfully petition for the dissolution of a limited liability company under the "not reasonably practicable" standard imposed by LLCL § 702, the petitioning member must demonstrate, in the context of the terms of the articles of incorporation of the operating agreement, the following: 1) the management of the entity is unable or unwilling to reasonably permit or promote the stated purpose of the entity to be realized or achieved; or 2) continuing the entity is financially unfeasible (see Matter of 1545 Ocean Avenue, LLC., v Crown Royal Ventures, LLC, supra; see also Doyle v Icon, LLC, 103 AD3d 440 [1st Dept 2013]). Disputes between members are alone not sufficient to warrant the exercise of judicial discretion to dissolve an LLC that is operates in a manner within the contemplation of it purposes and objectives as defined in its articles of organization and/or operating agreement (see eg. Matter of Natanel v Cohen, 43 Misc.3d 1217(A), 2013 NY Misc Lexis 2900 *12-13 [Sup. Ct. Kings Co. 2014]). It is only where discord and disputes by and among the members are shown to be inimical to achieving the purpose of the LLC will dissolution under the "not reasonably practicable" standard imposed by LLCL § 702 be considered by the court to be an available remedy to the petitioner (see Matter of 1545 Ocean, supra at 130-132; see also Matter of Sieni v Jamsfab, LLC, 2013 WL 3713604 *5, 2013 NY Misc Lexis 2900 *12-13, 2013 NY Slip Op 31473[U] *5 [Sup Ct, Suffolk County 2013]; Goldsein v Pikus, 2015 N.Y. Misc. LEXIS 2849, *1, 2015 NY Slip Op 31455(U), 1 [Sup. Ct. NY Co. 2015])."

ALLEGING DAMAGES IN FRAUD CASES

Connaughton v Chipotle Mexican Grill, Inc. 2017 NY Slip Op 03445 Decided on May 2, 2017 Court of Appeals:

To allege a cause of action based on fraud, plaintiff must assert "a representation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission and injury" (Lama Holding Co. v Smith Barney Inc., 88 NY2d 413, 421 [1996] [internal citation omitted]). Critically, "[a] false representation does not, without more, give rise to a right of action, either at law or in equity, in favor of the person to whom it is addressed. To give rise, under any circumstances, to a cause of action, either in law or equity, reliance on the false representation must result in injury . . . . If the fraud causes no loss, then the plaintiff has suffered no damages" (Sager v Friedman, 270 NY 472, 480-481 [1936]).

In New York, as in multiple other states, "'[t]he true measure of damage is indemnity for the actual pecuniary loss sustained as the direct result of the wrong' or what is known as the 'out-of-pocket' rule" (Lama Holding, 88 NY2d at 421, quoting Reno v Bull, 226 NY 546, 553 [1919]). Under that rule, "[d]amages are to be calculated to compensate plaintiffs for what they lost because of the fraud, not to compensate them for what they might have gained . . . . [T]here can be no recovery of profits which would have been realized in the absence of fraud" (id. at 421, citing Foster v Di Paolo, 236 NY 132 [1923], AFA Protective Sys. v American Tel. & Tel. Co., 57 NY2d 912 [1982], and Cayuga Harvester, Inc. v Allis-Chalmers Corp., 95 AD2d 5 [4th Dept 1983]). Moreover, this Court has "consistent[ly] refus[ed] to allow damages for fraud based on the loss of a contractual bargain, the extent, and indeed . . . the very existence of which is completely undeterminable and speculative" (Dress Shirt Sales v Hotel Martinique Assocs., 12 NY2d 339, 344 [1963]).

Here, plaintiff's pleading is fatally deficient because he did not assert compensable [*5]damages resulting from defendants' alleged fraud. The complaint alleges that in reliance on defendants' fraudulent omissions, plaintiff stopped soliciting potential buyers. However, the complaint fails to allege that, in doing so, he rejected another prospective buyer's offer to purchase the concept. Instead, plaintiff avers that once Ells showed an interest in his ramen restaurant idea, plaintiff turned to selling the concept to Chipotle. These are factual assertions of the quintessential lost opportunity, which are not a recoverable out-of-pocket loss (see Lama Holding, 88 NY2d at 422). As this Court has repeatedly stated, such damage is "disallowed as too speculative a recovery" (Dress Shirt Sales, 12 NY2d at 344; see also Lama Holding, 88 NY2d at 422).

Similarly inadequate to satisfy his pleading burden are plaintiff's allegations that he might incur litigation expenses and potential loss of reputation if named in a civil action by the other chef. These are not claims of actual out-of-pocket loss but speculative claims of possible future damages, and fare no better than his lost profits claim. There are also no facts alleged in the complaint to support allegations of reputational harm. For example, plaintiff did not assert or provide facts from which it could be inferred that he lost standing within the restaurant industry, or that he is unemployable as a result of his association with Chipotle.

Nor is plaintiff entitled to nominal damages under this Court's holding in Kronos, Inc. v AVX Corp. (81 NY2d 90, 95 [1993]). In that case, the Court explained that while nominal damages are typically available in a contracts case to vindicate a party's contractual rights, nominal damages are only available in tort actions to "protect an important technical right" (id. at 96, quoting Note, Damages Recoverable in an Action for Inducing Breach of Contract, 30 Colum L Rev 232, 238 [1930] [internal quotation marks omitted]). Nominal damages are not available when actual harm is an element of the tort (Restatement [Second] of Torts § 907; accord 16 NY Practice Series, NY Law of Torts §§ 1:74, 21:2 [2016]). Conversely, nominal damages may be available in an intentional tort case where the plaintiff need not allege harm to maintain an action against defendant (see Kronos, 81 NY2d at 95 [explaining that nominal damages are available for trespass, which does not require a showing of harm]). Since actual harm is an element of fraudulent inducement (see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 [2009]), and there is no compelling reason to carve out an exception for such cause of action, as a general matter or specifically in this case, plaintiff is not entitled to nominal damages.[FN2]

........

Footnotes

Footnote 1: Plaintiff also alleged a cause of action for unjust enrichment against Chipotle for its failure to compensate him for his restaurant concept. Plaintiff does not challenge the dismissal of this cause of action on appeal to our Court.

Footnote 2: Based on our conclusion that the cause of action was properly dismissed because plaintiff failed to plead compensable damages, we have no reason to address defendants' alternative argument that plaintiff's at-will status bars his action for fraudulent inducement against his former employer."

AGAIN WHEN DEALING WITH UNLICENSED CONTRACTORS

This case is a year old but a warning to those in home improvement to go through the licensing procedure. HOLISTIC HOMES, LLC v. Greenfield, 138 AD 3d 689 - NY: Appellate Div., 2nd Dept. 2016:

"`An unlicensed contractor may neither enforce a home improvement contract against an owner nor seek recovery in quantum meruit'" (J.M. Bldrs. & Assoc., Inc. v Lindner, 67 AD3d 738, 741 [2009], quoting Blake Elec. Contr. Co. v Paschall, 222 AD2d 264, 266 [1995]; see ENKO Constr. Corp. v Aronshtein, 89 AD3d 676, 677 [2011]). "Pursuant to CPLR 3015 (e), a complaint that seeks to recover damages for breach of a home improvement contract or to recover in quantum meruit for home improvement services is subject to dismissal under CPLR 3211 (a) (7) if it does not allege compliance with the licensing requirement" (ENKO Constr. Corp. v Aronshtein, 89 AD3d at 677; see Westchester Stone, Sand & Gravel v Marcella, 262 AD2d 403, 404 [1999]).

Here, the complaint did not allege that the plaintiff was duly licensed in Nassau County at the time of the services rendered (see Nassau County Administrative Code § 21-11.2). Moreover, in opposition to the motion of the defendant Alan B. Greenfield (hereinafter the defendant), the plaintiff conceded that it did not possess the necessary license. Therefore, the plaintiff was not entitled to enforce its contract against the defendant or to recover in quantum meruit (see ENKO Constr. Corp. v Aronshtein, 89 AD3d at 677; Flax v Hommel, 40 AD3d 809, 810 [2007]; cf. Ozkurt v Hyatt Realty, LLC, 117 AD3d 926, 926 [2014])."

TRI - CUSTODY

An interesting fact pattern and a Solomon like decision in DAWN M. v. Michael M., 2017 NY Slip Op 27073 - NY: Supreme Court 2017

"Plaintiff and defendant were married on July 9, 1994. After being unsuccessful at attempts to have a child, the parties went to a fertility doctor. The plaintiff was artificially inseminated with defendant's sperm and conceived a child. Unfortunately, that child was miscarried at ten weeks gestation.

In April of 2001, plaintiff met Audria G. (hereinafter referred to as "Audria") and they became close friends. Audria and her boyfriend moved into an apartment downstairs from plaintiff and defendant. When Audria's boyfriend moved out, Audria moved upstairs with plaintiff and defendant. Sometime in 2004, the relationship between plaintiff, defendant and Audria changed and the three began to engage in intimate relations.

As time went on, Audria, plaintiff and defendant began to consider themselves a "family" and decided to have a child together. The parties and Audria went to the fertility doctor previously utilized by plaintiff and defendant with the hope that Audria could be artificially inseminated with defendant's sperm. The fertility doctor, however, refused to artificially inseminate Audria because she was not married to defendant. Thereafter, the parties and Audria decided they would try to conceive a child naturally by defendant and Audria engaging in unprotected sexual relations. The credible evidence establishes that it was agreed, before a child was conceived, that plaintiff, Audria and defendant would all raise the child together as parents.
Audria became pregnant and J.M. was born on January 25, 2007. The evidence establishes that plaintiff's medical insurance was used to cover Audria's pregnancy and delivery, and that plaintiff accompanied Audria to most of her doctor appointments. For more than eighteen months after J.M.'s birth, defendant, plaintiff and Audria continued to live together. Audria and plaintiff shared duties as J.M.'s mother including taking turns getting up during the night to feed J.M. and taking him to doctor visits.

As time went on, however, the relationship between defendant and plaintiff became strained. In October of 2008, Audria and plaintiff moved out of the marital residence with J.M. A divorce action was commenced by plaintiff against defendant in 2011. Plaintiff testified credibly that after the divorce action was commenced, defendant no longer considered her to be J.M.'s parent. Prior to this divorce, a custody case was commenced by defendant against Audria. Defendant and Audria settled their custody proceeding by agreeing to joint custody; residential custody with Audria and liberal visitation accorded to defendant.^[3] The plaintiff still resides with Audria and J.M., and sees J.M. on a daily basis. She testified that she brought this action to assure continued visitation and to secure custody rights for J.M. because she fears that without court-ordered visitation and shared custody, her ability to remain in J.M.'s life would be solely dependent upon obtaining the consent of either Audria or the defendant.

The Court finds plaintiff's love for J.M. evident from her actions, testimony and demeanor on the stand. Indeed, during her testimony, plaintiff beamed whenever she spoke of J.M., including her earliest involvement in his life during Audria's pregnancy. The court finds credible the testimony of Audria and plaintiff that J.M. was raised with two mothers and that he continues to the present day to call both "mommy." The court does not find credible defendant's claim that he called plaintiff by her first name and never referred to her as "mommy" in front of J.M. The court finds that in all respects, during the first eighteen months of J.M.'s life when defendant, plaintiff and Audria all lived together, and thereafter, plaintiff acted as a joint mother with Audria and that they all taught the child that he has two mothers. In fact, the credible evidence establishes that when J.M. had an ear operation at age two, the defendant told the nurse that both plaintiff and Audria were J.M.'s mother so that both could be with him in the recovery room.

Moreover, the in camera interview conducted by the court with J.M. clearly establishes that J.M. considers both plaintiff and Audria his mothers. When asked to distinguish them, he refers to Audria as "mommy with the orange truck" and to plaintiff as "mommy with the grey truck."^[4] He makes no distinction based on biology. J.M. is a well adjusted ten-year-old boy who loves his father and his two mothers. He knows nothing about this action. He has no idea that his father opposes tri-custody and court-ordered visitation with plaintiff.^[5] The in camera with J.M. leaves no doubt that J.M. considers both plaintiff and Audria to be equal "mommies" and that he would be devastated if he were not able to see plaintiff. The interview with J.M. also clearly shows that he enjoys his present living situation and would not want it altered in any way.

Although not a biological parent or an adoptive parent, plaintiff argues that she has been allowed to act as J.M.'s mother by both Audria and defendant. She has always lived with J.M. and J.M. has known plaintiff as his mom since his birth. Plaintiff asserts that the best interest of J.M. dictates that she be given shared legal custody of J.M. and visitation with him. J.M.'s biological mother Audria strongly agrees. Plaintiff argues, along with the child's attorney, that defendant should be estopped from opposing this application because he has created and fostered this situation by voluntarily agreeing, before the child was conceived, to raise him with three parents. And, further, that the defendant has acted consistent with this agreement by allowing the child to understand that he has two mothers.

Pursuant to DRL § 70, a parent may apply to the court for custody based solely upon what is for the best interest of the child, and what will promote his welfare and happiness. DRL § 240 also requires that in any proceeding for divorce, the court "shall enter a custody order having regard to the circumstances of the case and of the respective parties and to the best interests of the child. . . ." The Court of Appeals in Brooke S.B. stressed that its decision only addressed the ability of a person who was not a biological or adoptive parent to establish standing as a parent to petition for custody and visitation, and that the ultimate determination of whether to grant those rights rests in the sound discretion of trial courts in determining the best interests of the child (28 NY3d at 28).^[6]

Similarly, in determining shared legal custody, J.M.'s best interests control (see Braiman v. Braiman, 44 NY2d 584, 589 [1978]). Such an arrangement "reposes in both parents a shared responsibility for and control of a child's upbringing" (id.). As the Court in Braiman noted "children are entitled to the love, companionship, and concern of both parents . . . [and] a joint award affords the otherwise noncustodial parent psychological support which can be translated into a healthy environment for the child" (id.). Joint custody is usually encouraged primarily as a voluntary alternative when the parents are amicable (Braiman, 44 NY2d at 589). When it is a court-ordered arrangement upon embittered parents, it only promotes familial chaos (id. at 590). That is not the case here. Here, the evidence establishes that the plaintiff acts as a defacto joint custodial parent with defendant and Audria and shares in making all major decisions in J.M.'s life.

Based on the evidence adduced at trial, including the demeanor and credibility of all three witnesses, the in camera interview and the factual findings made by this court, it is clear that the best interests of J.M. will be served by granting plaintiff's application for shared legal custody with defendant. Plaintiff and defendant have raised J.M. in a loving environment as evidenced by the fact that he does not know that the defendant opposes custody and court-ordered visitation with plaintiff. They clearly do not present as so embattled and embittered that they will not work together to put J.M.'s needs first. J.M. needs a continuing relationship with the plaintiff as his mother and that relationship cannot be left to depend on the consent or whim of either his biological mother or father. Anything less will promote great hardship and suffering for J.M. This Court concludes based on the evidence that plaintiff, defendant and Audria can and will get along as they have in the past, to maintain J.M.'s psychological stability and to act in his best interest, and that they will be able to cooperate in making major decisions in J.M.'s life such as health, education and welfare as they have done for his entire life.
Such joint legal custody will actually be a tri-custodial arrangement as Audria and defendant already share joint legal custody. As it appears from Audria's testimony that she whole-heartedly supports such an arrangement, this Court finds no issue with regards to Audria's rights in granting this relief. Indeed, tri-custody is the logical evolution of the Court of Appeals' decision in Brooke S.B., and the passage of the Marriage Equality Act and DRL § 10-a which permits same-sex couples to marry in New York.

Regarding visitation, plaintiff requests that she be given one weekend a month and that such weekend can be carved out of defendant's time with J.M. (he presently sees J.M. from Saturday afternoon to Sunday late afternoon, three times a month). To grant plaintiff's request at defendant's expense, however, would be inappropriate as plaintiff presently lives with J.M. and sees him regularly when defendant does not have visitation. Additionally, J.M. enjoys his time with his father. Taking one of defendant's three weekends each month would significantly limit J.M.'s visitation with defendant and could have a detrimental impact on his relationship with his father. The Court does recognize plaintiff's need and right to time alone with J.M. and, accordingly, will grant plaintiff Wednesday night visitation with J.M. for dinner pursuant to a schedule to be established by plaintiff with input from Audria whose time with J.M. will be impacted by this court-ordered visitation. Lastly, plaintiff also requests one week-long school recess visitation each year and two weeks of visitation each summer. The court grants this relief and directs that all parties cooperate to determine which school recess and which two weeks out of the summer will belong to plaintiff.

In sum, plaintiff, defendant and Audria created this unconventional family dynamic by agreeing to have a child together and by raising J.M. with two mothers. The Court therefore finds that J.M.'s best interests cry out for an assurance that he will be allowed a continued relationship with plaintiff. No one told these three people to create this unique relationship. Nor did anyone tell defendant to conceive a child with his wife's best friend or to raise that child knowing two women as his mother. Defendant's assertion that plaintiff should not have legal visitation with J.M. is unconscionable given J.M.'s bond with plaintiff and defendant's role in creating this bond. A person simply is responsible for the natural and foreseeable consequences of his or her actions especially when the best interest of a child is involved. Reason and justice dictate that defendant should be estopped from arguing that this woman, whom he has fostered and orchestrated to be his child's mother, be denied legal visitation and custody. As a result of the choices made by all three parents, this ten-year-old child to this day considers both plaintiff and Audria his mothers. To order anything other than joint custody could potentially facilitate plaintiff's removal from J.M.'s life and that would have a devastating consequence to this child. Accordingly, plaintiff is granted shared legal tri-custody and visitation as outlined above.

[1] This decision determines only plaintiff's custody and parenting time. All other issues including child support have been settled by stipulation between the parties dated June 15, 2015.
[2] Defendant contended that Alison D. v Virginia M. (77 NY2d 651 [1991]), required this court to deny plaintiff's requested relief for custody and visitation based on her lack of standing. Prior to the Court of Appeals' decision in Brooke S.B. v Elizabeth A.C.C. (28 NY3d 1 [2016]), this court denied defendant's motion for summary judgment based upon the Marriage Equality Act and the Court's analysis of Vermont Law in Debra H. v Janice R. (14NY3d 576 [2010]), and found plaintiff had standing as a parent.
[3] There is no written parenting schedule.
[4] Referring to the color of the vehicle each mother drives.
[5] To this extent the parties are to be complimented.
[6] Under Brooke S.B. v Elizabeth A.C.C. (28 NY3d 1), relying heavily on the dissent written by Chief Judge Judith Kaye in Allison D. (77 NY2d 651, 657[1991]), the law states "where a partner shows by clear & convincing evidence that the parties agreed to conceive a child and to raise the child together, the non-biological, non-adoptive parent has standing to seek visitation and custody under DRL 70." This case represents the logical next step."

NATIONAL LAW DAY

President Dwight Eisenhower established the first Law Day in 1958 to mark the nation's commitment to the rule of law. In 1961, Congress issued a joint resolution designating May 1 as the official date for celebrating Law Day, which is subsequently codified (U.S. Code, Title 36, Section 113). Every president since then has issued a Law Day proclamation on May 1 to celebrate the nation's commitment to the rule of law.