HAVE A SAFE LABOR DAY WEEKEND

DIVORCE - DEPLETING PENSION PRIOR TO QDRO

There are times after the judgment of divorce when the fight continues.

Walsh v Walsh, 2019 NY Slip Op 06428, Decided on August 28, 2019, Appellate Division, Second Department:

"The parties were divorced pursuant to a judgment of divorce dated October 15, 2012, which incorporated, but did not merge, the parties' stipulation of settlement dated May 31, 2012. Pursuant to the judgment of divorce, the parties agreed that "[t]he [defendant's] retirement assets (including but not limited to 457 plan, variable supplement, annuity, pension) shall be divided by [Qualified Domestic Relations Order] pursuant to the Majauskas formula [(see Majauskas v Majauskas, 61 NY2d 481)] . . . . As well, if any retirement asset no longer has the sums necessary to provide the plaintiff with her Majauskas share of said asset, the plaintiff shall receive her share from another retirement asset." Before the Supreme Court issued a Qualified Domestic Relations Order (hereinafter QDRO), the defendant depleted his New York City Deferred Compensation Plan and Detective's Endowment Annuity. In a postjudgment order dated December 22, 2015, the court directed that the plaintiff be paid her share of the depleted deferred compensation plan and annuity via additional distributions from the defendant's pension and variable supplement fund. On March 3, 2017, the court issued a QDRO. The defendant subsequently moved, inter alia, to vacate or amend the QDRO, arguing that the QDRO was not submitted on notice as required by the parties' stipulation of settlement, and that the distribution awarded to the plaintiff was excessive. In an order dated December 13, 2017, the court denied that branch of the defendant's motion, and the defendant appeals.

The defendant's contention that the QDRO was not submitted on notice lacks merit. The defendant's unsubstantiated allegation that his attorney never received a properly mailed notice of settlement with a copy of the QDRO was insufficient to rebut the presumption of proper mailing and receipt arising from the affidavit of mailing as well as the email sent by his attorney's office manager acknowledging receipt of the QDRO (see Platonov v Sciabarra, 305 AD2d 651; Orlando [*2]v Corning, Inc., 213 AD2d 464, 464-465; Jeraci v Froehlich, 129 AD2d 557, 558-559). The defendant also failed to adduce evidence that the distribution from his pension and variable supplement fund awarded to the plaintiff by the QDRO conflicted with the terms of parties' stipulation of settlement, the judgment of divorce, or the postjudgment order directing that the plaintiff be paid her share of the depleted deferred compensation plan and annuity via additional distributions from the defendant's pension and variable supplement fund (see generally McCoy v Feinman, 99 NY2d 295, 304; Murphy v Murphy, 120 AD3d 1319). Accordingly, we agree with the Supreme Court's determination to deny that branch of the defendant's motion which was to vacate or amend the QDRO."

SPOTLIGHT ON BUSINESS

NEW RULES - CHILD CUSTODY/VISITATION AND ABUSERS

Paragraph (b) of subdivision 1-c of section 240 of the domestic relations law and subdivision (a) of section 651 of the family court act have been amended to establish a rebuttable presumption that it is not in the best interests of a child to be placed in the custody of or to have unsupervised visits with a person who has been convicted of one or more delineated felony sex offenses where the victim of such offense or offenses is the child who is the subject of the proceeding seeking custody or unsupervised visitation.

The legislation was signed on August 22 and takes effect immediately. According to the bill (S2836C/A4784C):

"Approximately 3 million cases of child abuse and neglect involving almost 5.5 million children are reported each year. The majority of cases reported to Child Protective Services involve neglect, followed by physical and sexual abuse. There is considerable overlap among children who are abused, with many suffering a combination of physical abuse, sexual abuse, and/or neglect.

Sexual abuse is any sexual activity that a child cannot understand or consent to. It includes acts such as fondling, oral-genital contact, and genital and anal intercourse. It also includes exhibitionism, voyeurism, and exposure to pornography. Studies have suggested that up to one in four girls and one in eight boys will be sexually abused before they are eighteen years old. Most child abuse occurs within the family. Risk factors include parental depression or other mental health issues, a parental history of childhood abuse, and domestic violence.

In most cases, children who are abused or neglected suffer greater mental health than physical health damage. Emotional and psychological abuse and neglect deny the child the tools needed to cope with stress, and to learn new skills to become resilient, strong, and successful. So a child who is maltreated or neglected may have a wide range of reactions and may even become depressed or develop suicidal, withdrawn, or violent behavior. As the child victim get older, he or she may use drugs or alcohol, try to run away, refuse discipline, or abuse others.

As an adult, he or she may develop marital and sexual difficulties, depression, or suicidal behavior.

Not all children who are abused have severe reactions. Usually the younger the child, the longer the abuse continues, and the closer the child's relationship with the abuser, the more serious the mental health effects will be."

BREACH OF ORAL CONTRACT NOT ENFORCEABLE

Always better to have agreements in writing.

Martin Greenfield Clothiers, Ltd. v Brooks Bros. Group, Inc., 2019 NY Slip Op 06225, Decided on August 21, 2019, Appellate Division, Second Department:

"Pursuant to the terms of an alleged oral agreement, the plaintiff, a men's tailored clothing manufacturer, was to be the exclusive manufacturer of certain custom suits for the defendant, a retail clothier. As per the terms of the alleged oral agreement, either party could terminate the agreement upon one-year notice. Allegedly, the defendant breached the oral agreement by terminating it without providing the requisite notice.

Based on the foregoing, the plaintiff, by its amended complaint, sought to recover damages for breach of contract and under the theory of promissory estoppel. The defendant made a pre-answer motion pursuant to CPLR 3211(a) to dismiss the amended complaint. The Supreme Court granted the motion, and the plaintiff appeals.

We agree with the Supreme Court's determination directing dismissal of the plaintiff's breach of contract cause of action pursuant to CPLR 3211(a)(5), since the alleged oral agreement is unenforceable as violative of the statute of frauds (see Uniform Commercial Code § 2-201[1]; General Obligations Law § 5-701[a][1]). The plaintiff's contention that UCC 2-201(1) is not applicable to the alleged oral agreement is improperly raised for the first time in a reply brief on appeal (see Coppola v Coppola, 291 AD2d 477, 477). Further, contrary to the plaintiff's contention, the alleged oral agreement does not fall within the exception to UCC 2-201(1) for "specially manufactured" goods (Uniform Commercial Code § 2-201[3][a]; see e.g. Automated Cutting Techs., Inc. v BJS N. Am. E, Inc., 2012 WL 2872823, *5, 2012 US Dist Lexis 96745, *15 [ED KY, July 12, 2012, No. 5:10-CV-208-REW]). Moreover, the alleged oral agreement, which by its terms cannot be performed within one year, also is unenforceable under General Obligations Law § 5-701(a)(1) (see Halpern v Shafran, 131 AD2d 434, 435-436; Tip Top Farms v Dairylea Coop., 114 AD2d 12, 33, affd 69 NY2d 625; cf. D & N Boening v Kirsch Beverages, 63 NY2d 449, 458).

In addition, we agree with the Supreme Court's determination directing dismissal of the plaintiff's promissory estoppel cause of action pursuant to CPLR 3211(a)(7) for failure to state a cause of action, as the cause of action is impermissibly predicated on allegations that the defendant violated the same promise it made under the oral agreement (see Celle v Barclays Bank P.L.C., 48 AD3d 301, 303; Brown v Brown, 12 AD3d 176, 176-177; see generally Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389-390). Moreover, to the extent that the plaintiff's promissory estoppel cause of action may have been asserted to circumvent the statute of frauds, the plaintiff was required, but failed to, assert that it suffered unconscionable injury in reliance on the defendant's alleged promise (see Carvel Corp. v Nicolini, 144 AD2d 611, 612-613; D & N Boening v Kirsch Beverages, 99 AD2d 522, 524, affd 63 NY2d 449; Swerdloff v Mobil Oil Corp., 74 AD2d 258, 263-264)."

SANCTIONS FOR FAILURE TO NOTIFY COURT OF SETTLEMENT

Lesson: Don't waste the court's time.

Bank of N.Y. Mellon v Smith, 2019 NY Slip Op 06228, Decided on August 13, 2019, Appellate Division, Second Department:

"Section 1250.2(c) of the Rules of the Appellate Division, All Departments (22 NYCRR), provides, in pertinent part, that "[t]he parties or their attorneys shall immediately notify the court when there is a settlement of a matter or any issue therein or when a matter or any issue therein has been rendered moot . . . Any such notification shall be followed by an application for appropriate relief. Any party or attorney who, without good cause shown, fails to comply with the requirements of this subdivision may be subject to the imposition of sanctions."

This subdivision, by its plain language, is applicable to both "the parties" and "their attorneys" and it imposes a continuing obligation to monitor the status of the case and to apprise the Appellate Division of certain developments that might affect a pending appeal (22 NYCRR 1250.2[c]). Although, pursuant to this subdivision, only one party or attorney needs to notify the Court of the relevant developments, all of the parties and their attorneys are independently responsible for ensuring that timely notification occurs (see id. ). Where, as here, timely notification is not given by any of the parties or their attorneys, they may each be held independently responsible and, absent a showing of good cause for the failure to ensure a timely notification, sanctioned for their respective conduct (see id. ).

Here, the record demonstrates that on July 12, 2018, Gross Polowy "received confirmation" that the 2013 action had been settled as a result of a modification of the underlying mortgage. Since that same mortgage formed the basis for the 2014 action, the modification of the mortgage triggered Gross Polowy's duty to "immediately notify the court" (22 NYCRR 1250.2[c]). Indeed, by continuing to actively participate in these actions in its capacity as trial counsel during the pendency of these appeals, Gross Polowy had a continuing obligation to advise its client's appellate counsel, Day Pitney, of the settlement of the 2013 action and the modification of the mortgage. However, it is undisputed that, over the course of the next six months, Gross Polowy did not take any steps to ensure or confirm that this Court or New York Mellon's appellate counsel was notified of the settlement. Under the circumstances, Gross Polowy's excessive delay, coupled with the absence of any viable explanation for its failure to comply with 22 NYCRR 1250.2(c), warrants the imposition of sanctions in the sum of $1,000.

As indicated, New York Mellon had an independent duty to take steps to ensure that this Court was notified of the settlement that it had reached with Smith (see 22 NYCRR 1250.2[c]). There is no allegation that New York Mellon took any steps to ensure or confirm that this Court was timely notified of the settlement. The only explanation for this failure was provided by Gross Polowy during oral argument of this motion to impose sanctions, where it was argued that the attorneys it had assigned to handle the 2013 action had not communicated with the attorneys it had assigned to handle the 2014 action. Contrary to Gross Polowy's contention, the confusion stemming from New York Mellon's dubious practice of maintaining two simultaneous actions against the same party for the same relief does not constitute good cause for its failure to comply with 22 NYCRR 1250.2(c). Under the circumstances, New York Mellon's excessive delay, coupled with the absence of any viable explanation for its failure to comply with 22 NYCRR 1250.2(c), warrants the imposition of sanctions in the sum of $500.

The record establishes that Marcos & Sitaras was aware of the settlement and modification in July 2018. However, unlike Gross Polowy and New York Mellon, an attorney for Marcos & Sitaras outlines the affirmative steps he took to secure dismissal of the 2014 action after the underlying mortgage had been modified and provides an explanation as to why he was reluctant to withdraw the appeals after the settlement was reached. In this regard, he contends that New York Mellon and Gross Polowy refused to voluntarily discontinue the 2014 action and, since that action remained pending, the orders that had been appealed remained valid and enforceable. Under these circumstances, we decline to impose sanctions, in the exercise of discretion, against Smith or Marcos & Sitaras pursuant to 22 NYCRR 1250.2(c).

Finally, New York Mellon's appellate counsel, Day Pitney, represents that it first learned of the settlement from Gross Polowy on January 15, 2019. Day Pitney sets forth the steps it took to obtain the stipulation withdrawing the appeals once it was apprised of the settlement. However, notwithstanding these actions, Day Pitney did not contact this Court until February 6, 2018, approximately three weeks after it first learned of the settlement and modification of the underlying mortgage. It cannot be said that this conduct complied with Day Pitney's obligation to "immediately notify the court" when there is a relevant development (22 NYCRR 1250.2[c] [emphasis added]). As the rule itself suggests, once this Court was notified of the settlement and modification of the underlying mortgage, "an application for appropriate relief" could have been submitted on a later date (id. ).

Day Pitney further contends that, although there was a "delay" in notifying this Court of the modification of the underlying mortgage, that "delay has not prejudiced appellant or respondent." This argument fails to account for one of the primary purposes of section 1250.2(c) of the Rules of the Appellate Division, All Departments (22 NYCRR), which is to protect the Appellate Courts from spending time analyzing matters that have been rendered academic. Indeed, if this Court had been timely advised of the settlement and modification in this case, it would have been able to devote additional resources to one of the many actual controversies that fill our docket. Under the circumstances, the failure of Day Pitney to comply with 22 NYCRR 1250.2(c) warrants the imposition of sanctions in the sum of $250."

THE STATUS OF MANDATORY ARBITRATION CLAUSES OF DISCRIMINATION CASES IN NY

Who knows? As reported earlier (https://jmpattorney.blogspot.com/2019/08/new-workplace-protections-signed-into.html), New York law prohibits mandatory arbitration to resolve cases of discrimination and sexual harassment.

However, on June 26, in Mahmoud Latif v. Morgan Stanley & Co. LLC (1:18-cv-11528) District Court, S.D. New York, the court held that an agreement to arbitrate sexual harassment claims is enforceable pursuant to the Federal Arbitration Act (FAA) and rejected arguments that New York law voids such an agreement.

The court in Latif was dealing with a prior NY law prohibiting arbitration: "(CPLR) Section 7515 is titled “Mandatory arbitration clauses; prohibited.” It was signed into law in April 2018 and became effective on July 11, 2018. The law was enacted as Part KK, Subpart B of the 2018-2019 New York budget bill. Part KK of this bill contains six subparts all addressing sexual harassment. These subparts address, among other things, certifications concerning sexual harassment in bids submitted to the state, “reimbursement of funds paid by state agencies, state entities and public entities for the payment of awards adjudicated in sexual harassment claims,” and a model policy and training program for the prevention of sexual harassment. 2018 N.Y. Sess. L., ch. 57, at 4-5. The bill was described in Senate Floor debate as “sweeping legislation that deals with the scourge of sexual harassment” and that “handles all different kinds of sexual harassment situations.” N.Y. State Senate, Stenographic Rec., 241st Leg., Reg. Sess., at 1855 (Mar. 30, 2018)."

Latif started the action prior to the enactment this year of legislation (S.6577/A.8421) providing even more sweeping new workplace harassment protections, as noted in the link above. The court in Latif was aware of this and stated: "On June 19, 2019, the New York legislature passed bill S6577/A8421, which would, inter alia, amend § 7515 to change the definition of “prohibited clause” and “mandatory arbitration clause” to encompass mandatory arbitration of claims of discrimination generally, rather than specifically of sexual harassment. For the same reasons described above, § 7515 as so amended would not provide a defense to the enforcement of the Arbitration Agreement."

A FAMILY COURT DRAMA REVERSED ON APPEAL

Matter of Means v Miller, 2019 NY Slip Op 06088, Decided on August 7, 2019, Appellate Division, Second Department

"On March 4, 2010, the Family Court issued an order (hereinafter the custody order) awarding the father custody of the parties' child. On or about August 18, 2017, the mother filed a petition to modify the custody order so as to award her sole legal and residential custody of the child. At a court appearance, the mother indicated that she wished to represent herself. The court permitted the mother's assigned counsel to be relieved, with a general caution to the mother that she had a right to counsel and that, if she were to represent herself, she would be held to "the same standards as an attorney." Thereafter, the court summarily dismissed the petition "due to lack of jurisdiction," relying upon certain statements made by a caseworker of the New York City Administration for Children's Services and statements made by the attorney for the child that the child lived in New Jersey.

Pursuant to the Uniform Child Custody Jurisdiction and Enforcement Act, codified at article 5-A of the Domestic Relations Law, a court of this state which has made an initial custody determination has exclusive, continuing jurisdiction over that determination until it finds that it should relinquish that jurisdiction because "neither the child" nor "the child and one parent" have a "significant connection" with New York, and "substantial evidence is no longer available in this state concerning the child's care, protection, training, and personal relationships" (Domestic Relations Law § 76-a[1][a]; see Matter of Helmeyer v Setzer,173 AD3d 740; Matter of Montanez v Tompkinson, 167 AD3d 616; Matter of LaCour v Puglisi, 147 AD3d 842; Matter of Nelson v McGriff, 130 AD3d 736, 737; Miller v Shaw, 123 AD3d 1131, 1132).

Here, it is undisputed that the initial custody determination was rendered in New York. Nothing on the record before the Family Court established that it had been divested of exclusive, continuing jurisdiction pursuant to Domestic Relations Law § 76-a(1). Therefore, the court erred in summarily dismissing the mother's modification petition (see Matter of LaCour v Puglisi, 147 AD3d at 843; Matter of Nelson v McGriff, 130 AD3d at 737; Matter of Greenidge v [*2]Greenidge, 16 AD3d 583), and not affording the mother an opportunity to present evidence on that issue (see Matter of LaCour v Puglisi, 147 AD3d at 843; Miller v Shaw, 123 AD3d at 1132).

Moreover, the parent of any child seeking custody in any proceeding before the Family Court has the right to the assistance of counsel (see Family Ct Act § 262[a][v]). A party may waive that right and proceed without counsel provided he or she makes a knowing, voluntary, and intelligent waiver of the right to counsel (see Matter of Sauders v Scott, 172 AD3d 724; Matter of Pitkanen v Huscher, 167 AD3d 901, 902; Matter of Graham v Rawley, 140 AD3d 765, 767). In order to determine whether a party has validly waived the right to counsel, a court must conduct a "searching inquiry" to ensure that the waiver has been made knowingly, voluntarily, and intelligently (People v Arroyo, 98 NY2d 101, 103 [internal quotation marks omitted]). A waiver is valid where the party was aware of the dangers and disadvantages of proceeding without counsel (see Matter of Rosof v Mallory, 88 AD3d 802). Here, the Family Court did not conduct a sufficiently searching inquiry to ensure that the mother's waiver of her right to counsel was knowingly, voluntarily, and intelligently made (see Matter of Belmonte v Batista, 102 AD3d 682, 683).

Accordingly, we reverse the order and remit the matter to the Family Court, Kings County, for a determination on the issue of whether the court had exclusive, continuing jurisdiction pursuant to Domestic Relations Law § 76-a. If, upon remittal, the court determines, upon a complete examination of the evidence submitted, that it retains exclusive, continuing jurisdiction over the custody issues, it may exercise that jurisdiction, or it may decline to do so if it determines, upon consideration of the relevant statutory factors, that New York is an inconvenient forum (see Domestic Relations Law § 76-a[1]; Matter of La Cour v Puglisi, 147 AD3d at 843; Matter of Williams v Davis, 119 AD3d 950; Matter of Elbakri v Farag, 71 AD3d 767, 768; Matter of Greenidge v Greenidge, 16 AD3d at 583), or that another statutory basis for declining jurisdiction exists. Further, upon remittitur, the court must conduct an appropriate inquiry as to whether the mother wishes to proceed with or without counsel, and render a new determination thereafter."

EXPOSING CHILD TO DOMESTIC VIOLENCE

The ending here is different than HBO's courtroom scene finale in Big Little Lies.

Matter of Jayce J. v. Jaquana J., Date filed: 2019-07-29, Court: Family Court, Bronx, Judge: Judge Michael Milsap, Case Number: NN-34471-2/18:

"….It is clear there is a history of domestic violence between Mr. M. and Ms. J. and that such violence has occurred in the presence of the children. In fact, respondent has filed two recent family offense petitions seeking an order of protection on behalf of herself and the children. (Docket O-XXXX/XX filed on 5/7/19 was dismissed for failure to prosecute and Docket O-XXXXX/XX filed on 6/25/19 is currently pending). The petitions allege Mr. M. has threatened Ms. J. with harm, including a threat with the use of a gun.

Pursuant to FCA §1012(f)(i)(B), a neglected child is defined as one “whose physical, mental or emotional condition has been impaired or is in imminent danger of becoming impaired as a result of the failure of his/her parent…to exercise a minimum degree of care…in providing the child with proper supervision or guardianship, by inflicting harm , or a substantial risk thereof”.

This court entered an order of protection on 5/10/17 that required John M. to stay away from Jaquana J. and the children Avianna M. and Jayce J. except for ACS arranged visits. That order continued beyond that date and was in place when respondent Ms. J. appeared and submitted to the court’s jurisdiction. Ms. J. with counsel present was aware that the order was thereafter continued and therefore was in place on 6/4/18. Respondent acknowledged knowing that the full stay away order was in place when she initiated a meeting with Mr. M. and on that date she was assaulted by Mr. M. on the street with the children being present. It is well established that acts of domestic violence may be a basis of a neglect finding due to the children being at risk of physical or emotional harm. See In Re Mohammed J., 121 A.D.3rd 994, 995 N.Y.S.2d 126 (2nd Dept. 2014); In Re Jordan E., 57 A.D.3d 539, 869 N.Y.S.2d 162 (2nd Dept. 2008). Additionally, a neglect finding may be based on a parent’s failure to protect a child from continued exposure to domestic violence. Katherine GG v. Kenneth II, 254 A.D.2d 538, 678 N.Y.S.2d 689 (3rd Dept. 1998). Respondent Ms. J. has shown flawed parental judgment by continuing to have contact with Mr. M. with the children being present knowing of his assaultive behavior and thus knowingly exposing the children to violence with a risk of physical and/or emotional harm.

Therefore, this court enters a finding of neglect against respondent Ms. J. due to her inadequate supervision and guardianship by allowing the children to be exposed to domestic violence despite an order of protection that was in place to protect the children from further exposure to such."

MORTGAGE FORECLOSURE - NECESSARY EVIDENCE FOR SUMMARY JUDGMENT

The rules of evidence do apply to summary judgment motions.

U.S. Bank N.A. v Cope, 2019 NY Slip Op 06111, Decided on August 7, 2019, Appellate Division, Second Department:

""Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default'" (Hudson City Sav. Bank v Genuth, 148 AD3d 687, 688-689, quoting Deutsche Bank Natl. Trust Co. v Abdan, 131 AD3d 1001, 1002). Pursuant to UCC 3-804, the owner of a lost note may maintain an action "upon due proof of [1] his [or her] ownership, [2] the facts which prevent his [or her] production of the instrument and [3] its terms" (UCC 3-804). The party seeking to enforce a lost instrument is required to "account for its absence" (UCC 3-804, Official Comment).

Here, although the plaintiff came forward with evidence establishing that the note was assigned to it and establishing the note's terms, the affidavit of lost note submitted in support of its motion failed to establish the facts that prevent the production of the original note (see UCC 3-804; Deutsche Bank Natl. Trust Co. v Anderson, 161 AD3d 1043, 1044-1045; US Bank N.A. v Richards, 155 AD3d 522, 524; Marrazzo v Piccolo, 163 AD2d 369; see also New York Community Bank v Jennings, 2015 NY Slip Op 31591[U], *4-5 [Sup Ct, Queens County]). Additionally, we note that Riley's out-of-state affidavit lacked a certificate of conformity as required by CPLR 2309(c), although such defect by itself would not be fatal to the plaintiff's motion (see Bank of N.Y. Mellon v Vytalingam, 144 AD3d 1070, 1071).

Further, the evidence submitted in support of the plaintiff's motion failed to establish, prima facie, that the plaintiff strictly complied with RPAPL 1304. Proper service of the RPAPL 1304 notice containing the statutorily mandated content is a condition precedent to the commencement of a foreclosure action (see Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 103). The plaintiff failed to submit an affidavit of service or any proof of mailing by the post office [*2]demonstrating that it properly served the defendant pursuant to the terms of the statute (see U.S. Bank N.A. v Henry, 157 AD3d 839; Investors Sav. Bank v Salas, 152 AD3d 752; Citibank, N.A. v Wood, 150 AD3d 813; cf. Citimortgage, Inc. v Banks, 155 AD3d 936). Contrary to the plaintiff's contention, the affidavit of a representative of its loan servicer was insufficient to establish that the notice was sent to the defendant in the manner required by RPAPL 1304, as the representative did not provide evidence of a standard office mailing procedure and provided no independent evidence of the actual mailing (see Wells Fargo Bank, NA v Mandrin, 160 AD3d 1014; Bank of Am., N.A. v Wheatley, 158 AD3d 736; U.S. Bank N.A. v Henry, 157 AD3d at 842; Investors Sav. Bank v Salas, 152 AD3d at 754; Citibank, N.A. v Wood, 150 AD3d at 814; cf. Flagstar Bank, FSB v Mendoza, 139 AD3d 898).

Likewise, the plaintiff failed to establish, prima facie, that it complied with the condition precedent contained in the mortgage requiring it to give notice of default prior to demanding payment in full (see Emigrant Bank v Myers, 147 AD3d 1027). The affidavit of a representative of the plaintiff's loan servicer claiming that notice of default was sent to the defendant on November 7, 2012, was conclusory and unsubstantiated, and even when considered together with a copy of the notice of default, was insufficient to prove that the notice was sent in accordance with the terms of the mortgage (see id.; GMAC Mtge., LLC v Bell, 128 AD3d 772; Wells Fargo Bank, N.A. v Eisler, 118 AD3d 982).

Accordingly, since the plaintiff failed to meet its prima facie burden, those branches of its motion which were for summary judgment on the complaint insofar as asserted against the defendant, to strike the defendant's answer, and for an order of reference should have been denied without regard to the sufficiency of the defendant's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). In light of the foregoing, we need not reach the defendant's contention that the plaintiff failed to establish that it had standing to commence the action."

ERRONEOUS DISCHARGE OF MORTGAGE

Recently, I conferred with a client, who was in foreclosure, and they had discovered a satisfaction of mortgage was filed - yet admitted that they did not pay off the mortgage. So this situation is not unique.

Beltway Capital, LLC v Soleil, 2019 NY Slip Op 06057, Decided on August 7, 2019, Appellate Division, Second Department:

"The underlying facts and procedural history of this case can be found in our decision and order on a prior appeal in this action (see Beltway Capital, LLC v Soleil, 104 AD3d 628). On that prior appeal, this Court reversed an order of the Supreme Court, Kings County, dated January 7, 2011, and concluded that, while the discharge of a mortgage held by Beltway Capital, LLC [*2](hereinafter Beltway), on the subject property (hereinafter the Soleil mortgage), was accomplished by the fraud and misrepresentation of the defendant Andre Soleil, whether Beltway was entitled to reinstatement of the Soleil mortgage turned on the question of whether the defendant Deborah Hughes, a subsequent purchaser of the subject property, was a bona fide purchaser for value. On the record before us, and with only limited discovery having been conducted, this Court concluded that the Supreme Court erred in determining conclusively that Hughes was a bona fide purchaser for value. As such, we reversed the order insofar as appealed from, reinstated the Soleil mortgage, and, effectively, remitted the matter for further discovery (see id. at 631-632).

Upon the completion of that discovery, Hughes and Sperry Associates Federal Credit Union (hereinafter Sperry), an alleged subsequent encumbrancer, separately moved for summary judgment dismissing the complaint insofar as asserted against each of them. Hughes also moved for summary judgment declaring her a bona fide purchaser for value and discharging the mortgage as to her, and Sperry also moved for summary judgment declaring it a bona fide encumbrancer with first priority of lien on the property, and discharging the Soleil mortgage as to it. In an order dated February 9, 2016, the Supreme Court granted the motions. Judgment was thereafter entered on May 17, 2016, in Hughes's and Sperry's favor. Beltway appeals from both the order and the judgment.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

"A mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage reinstated where there has not been detrimental reliance on the erroneous recording" (New York Community Bank v Vermonty, 68 AD3d 1074, 1076; see Bank of Am. N.A. v Snyder, 154 AD3d 671; Deutsche Bank Trust Co., Ams. v Stathakis, 90 AD3d 983, 984). Only bona fide purchasers and lenders for value are entitled to protection from an erroneous discharge based upon their detrimental reliance thereon (see Bank of Am., N.A. v Snyder, 154 AD3d at 672; Beltway Capital, LLC v Soleil, 104 AD3d at 631).

Here, Hughes and Sperry each met their prima facie burden of establishing their status as bona fide purchaser and encumbrancer for value, respectively.

Hughes demonstrated that, at the time she purchased the subject property for value from Soleil, an order of the Supreme Court dated July 18, 2008, which, inter alia, cancelled and discharged the Soleil mortgage (hereinafter the 2008 order) had been duly recorded and that she was entitled to rely upon that order without conducting any further inquiry. Her deed was recorded on October 14, 2008, well before Beltway moved, in February 2009, inter alia, to vacate the 2008 order discharging the Soleil mortgage. Thus, Hughes was not on notice at the time of the purchase of any prior lien against the property which would lead a reasonably prudent purchaser to make inquiry, and there was nothing on the face of the 2008 order that would have alerted Hughes to Beltway's claim. Contrary to Beltway's contention, Hughes had no duty to conduct any further inquiry into the propriety of the discharge of the Soleil mortgage by the Supreme Court (see DLJ Mtge. Capital, Inc. v Windsor, 78 AD3d 645, 647; Baron Assoc. v Latorre, 74 AD3d 714, 716; Regions Bank v Campbell, 291 AD2d 437, 438).

Similarly, Sperry met its prima facie burden by demonstrating that, at the time it granted a mortgage to, among others, Hughes, secured against the subject property, the 2008 order had been duly recorded, that a title search did not reveal the prior lien, and that it was entitled to rely upon the title search and 2008 order without conducting any further inquiry into the propriety of the recorded order (see Andy Assoc. v Bankers Trust Co., 49 NY2d 13, 22-23; Maiorano v Garson, 65 AD3d 1300, 1302; Emerson Hills Realty v Mirabella, 220 AD2d 717)."

USURY DEFENSE NOT AVAILABLE TO CORPORATION

Is a corporation a person? Not when it comes to the defense of usury.

Principis Capital LLC v FNI Healthcare, Inc., 2019 NY Slip Op 51202(U), Decided on July 18, 2019, Supreme Court, New York County, Reed, J. :

"In opposition, defendants failed to raise a triable issue of fact. They do not contest that they owe money to plaintiff pursuant to the agreements. The only legal stance in opposition to the motion is that the contract is usurious (see NYSCEF Doc No. 23). However, a "corporation ... is prohibited from asserting the defense of usury" (Schneider v Phelps, 41 NY2d 238, 242 [1977]). "Likewise, an individual guarantor of a corporate obligation is also precluded from asserting such a defense" (id.). Defendants' defense of usury must therefore be stricken pursuant to CPLR 3211(b) (dismissing a defense where it has no merit). Likewise, their counterclaim for usury must be dismissed (see Intima-Eighteen, Inc. v A.H. Schreiber Co., Inc., 172 AD2d 456, 457 [1st Dept 1991])."

This is codified in General Obligations Law 5-521:

"1. No corporation shall hereafter interpose the defense of usury in any action. The term corporation, as used in this section, shall be construed to include all associations, and joint-stock companies having any of the powers and privileges of corporations not possessed by individuals or partnerships.

2. The provisions of subdivision one of this section shall not apply to a corporation, the principal asset of which shall be the ownership of a one or two family dwelling, where it appears either that the said corporation was organized and created, or that the controlling interest therein was acquired, within a period of six months prior to the execution, by said corporation of a bond or note evidencing indebtedness, and a mortgage creating a lien for said indebtedness on the said one or two family dwelling; provided, that as to any such bond, note or mortgage executed by such a corporation and effective prior to April sixth, nineteen hundred fifty-six, the defense of usury may be interposed only in an action or proceeding instituted for the collection, enforcement or foreclosure of such note, bond or mortgage.

Any provision of any contract, or any separate written instrument executed prior to, simultaneously with or within sixty days after the delivery of any moneys to any borrower in connection with such indebtedness, whereby the defense of usury is waived or any such corporation is estopped from asserting it, is hereby declared to be contrary to public policy and absolutely void.

3. The provisions of subdivision one of this section shall not apply to any action in which a corporation interposes a defense of criminal usury as described in section 190.40 of the penal law."

PRE-ACTION DISCLOSURE

One of the disclosure devices is CPLR 3102 (c) which provides: "Before action commenced.  Before an action is commenced, disclosure to aid in bringing an action, to preserve information or to aid in arbitration, may be obtained, but only by court order.  The court may appoint a referee to take testimony."

Matter of Weitzman v Long Beach City Sch. Dist., 2019 NY Slip Op 06092, Decided on August 7, 2019, Appellate Division, Second Department:

"On September 7, 2016, the petitioners commenced this proceeding pursuant to CPLR 3102(c) to obtain pre-action disclosure to ascertain the identity of the individuals who had drafted and distributed an alleged defamatory letter regarding the petitioners, so that those individuals could be named as defendants in a prospective action to recover damages for defamation. While this proceeding was pending, the petitioners commenced a defamation action on September 30, 2016, against, among others, John Doe and Jane Doe, representing the individuals who drafted and distributed the letter. In an order entered December 21, 2016, the Supreme Court, inter alia, denied the petition and dismissed the proceeding to obtain pre-action disclosure on the ground that such disclosure was unavailable because an action had been commenced. The petitioners appeal.

CPLR 3102(c) provides in relevant part that, "[b]efore an action is commenced, disclosure to aid in bringing an action, to preserve information or to aid in arbitration, may be obtained, but only by court order." " [D]isclosure to aid in bringing an action (CPLR 3102[c]) authorizes discovery to allow a plaintiff to frame a complaint and to obtain the identity of the [*2]prospective defendants'" (Matter of Leff v Our Lady of Mercy Academy, 150 AD3d 1239, 1240, quoting Matter of Stewart v New York City Tr. Auth., 112 AD2d 939, 940 [internal quotation marks omitted]; see East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d 122, 129 affd 16 NY3d 775). However, pre-action disclosure pursuant to CPLR 3102(c) to identify prospective defendants ordinarily is not available to a petitioner once the action for which the identities are sought has been commenced (see Page v Niagara Falls Mem. Med. Ctr., 167 AD3d 1428, 1432; Matter of Johnson v Union Bank of Switzerland, AG, 150 AD3d 436).

Here, the petitioners commenced the defamation action while their proceeding pursuant to CPLR 3102(c) was pending. Thus, the Supreme Court providently exercised its discretion in denying the petition for pre-action disclosure (see CPLR 3102[c]; Matter of Johnson v Union Bank of Switzerland, AG, 150 AD3d at 436). As the court noted in the order appealed from, the identities of the individuals who drafted and distributed the subject letter may be obtained through discovery in the related defamation action (see CPLR 3101[a]; see generally Bumpus v New York City Tr. Auth., 66 AD3d 26, 33-35)."

NEW WORKPLACE PROTECTIONS SIGNED INTO LAW

Governor Andrew M. Cuomo yesterday signed legislation (S.6577/A.8421) to enact sweeping new workplace harassment protections. The following is from the Senate Bill: 

"PURPOSE OR GENERAL IDEA OF BILL:

This bill increases protections to employees of all protected classes

who have been subject to discriminatory harassment in the workplace.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1: provides that the Human Rights Law covers all employers in
the state, including the state and all political subdivisions thereof

Section 1-a: This section further defines "private employer"

Section 2: Extends protections against all forms of discriminatory
harassment based on all protected categories; eliminates the "severe or
pervasive" standard; combats the Faragher/Ellerth defense

Section 3: Expands protections to domestic workers

Section 4: Expands protections to independent contractors

Section 5: Allows punitive damages and attorney's fees in employment
discrimination cases

Section 6: Expands the construction clause to require courts to inter-
pret Human Rights Law liberally

Section 7: Prohibits non-disclosure agreements from prohibiting the
disclosure of the underlying facts and circumstances to the claim or
action unless the condition of confidentiality is in the plaintiff's
preference in all discrimination cases

Section 8: Prohibits mandatory arbitration to resolve cases of sexual
harassment

Section 9: Expands the prohibition on non-disclosure agreements regard-
ing discriminatory harassment

Section 10: Expands the powers of the Attorney General to enforce the
Human Rights Law

Section 11: Requires employers to provide employees with notice in
English and in the employee's primary language containing the employer's
sexual harassment prevention policy

Section 12: Requires a study on expanding harassment policies to all
types of discrimination

Section 13: Expands the statute of limitations for Human Rights
complaints

Section 14: Requires quadrennial review of sexual harassment policies

Section 15: Established a severability clause

Section 16: Sets forth the effective date

 
JUSTIFICATION:

Despite our reputation as a leader in progressive reform, New York State
is behind the rest of the country when it comes to its statutes regard-
ing discrimination in the workplace, including, but not limited to,
sexual harassment.

Working individuals in the State who have experienced egregious and
debilitating forms of harassment must overcome significant and unwar-
ranted legal barriers before they can seek justice for the wrongdoing
they have been subjected to. One such example is the requirement that an
employee alleging harassment must prove the harassment was severe or
pervasive to prevail on a claim. The legal disparities surrounding
discrimination in the workplace addressed in this particular bill give
workers in the State the impression that the law, as it is currently
written, exists to protect institutions, not it's millions of vulnerable
employees.

In conjunction with the newly enacted legislation coming out of the
Women's Equality Agenda budget items introduced in 2018, the passage and
signage of this bill will bring the State up to speed with widely
accepted reforms. Vital to this bill are the protections against all
forms of discriminatory harassment, not just sexual harassment.  Addi-
tional key aspects of the legislation include, but are not limited to:
the elimination of the aforementioned "severe or pervasive" standard,
which currently allows for significant levels of discriminatory harass-
ment to be endured before an individual's case would be deemed actiona-
ble; it combats the Faragher/Ellerth defense, which enables an employer
to avoid liability; it extends the Human Rights Law to cover all employ-
ers of the state; it allows for punitive damages and attorney's fees in
employment discrimination cases, and prohibits non-disclosure agreements
from preventing the claimant's disclosure of the underlying facts and
circumstances surrounding their discrimination case to certain parties.

It is time for New York State law to recognize and serve all victims of
discrimination, not just protect the powerful."

MORTGAGE FORECLOSURE - DELAY IN SEEKING DEFAULT JUDGMENT

Justice delayed through one's own actions may mean justice denied.

Bank of Am., N.A. v Santos, 2019 NY Slip Op 06056, Decided on August 7, 2019, Appellate Division, Second Department:

"In October 2009, the plaintiff commenced this action against, among others, the defendant Cristy Santos (hereinafter the defendant) to foreclose a mortgage on residential property. The defendant failed to appear or answer the complaint. In August 2010, the plaintiff filed a request for judicial intervention. The action was sent to the foreclosure settlement conference part on December 23, 2010, and was released from that part on February 9, 2011. The action was marked inactive in December 2013. In December 2015, the plaintiff moved, inter alia, to restore the action to the court's active calendar, for leave to enter a default judgment against the defendant, and for an order of reference. The defendant opposed the motion and cross-moved pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her as abandoned. The Supreme Court denied the plaintiff's motion, and granted the defendant's cross motion. The plaintiff appeals.

"CPLR 3215(c) generally provides that [i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion'" (BAC Home Loans Servicing, LP v Broskie, 166 AD3d 842, 843, quoting CPLR 3215). "The failure to timely seek a default may be excused if sufficient cause is shown why the complaint should not be dismissed, which requires the plaintiff to proffer a reasonable excuse for the delay in timely moving for a default judgment and to demonstrate that the cause of action is potentially meritorious" (HSBC Bank USA, N.A. v Grella, 145 AD3d 669, 671 [citation and internal quotation marks omitted]; see Ibrahim v Nablus Sweets Corp., 161 AD3d 961, 963; JBBNY, LLC v Begum, 156 AD3d 769, 771). " The determination of whether an excuse is reasonable in any given instance is committed to the sound discretion of the motion court'" (HSBC Bank USA, N.A. v Seidner, 159 AD3d 1035, 1036, quoting Giglio v NTIMP, Inc., 86 AD3d 301, 308; see Ibrahim v Nablus Sweets Corp., 161 AD3d at 963).

Here, the plaintiff's vague, conclusory, and unsubstantiated assertions that unspecified periods of delay were attributable to changes in loan servicer and counsel, and compliance with a then newly adopted administrative order, were insufficient to excuse the lengthy delay in moving for a default judgment (see BAC Home Loans Servicing, LP v Broskie, 166 AD3d at 843; Wells Fargo Bank N.A. v Cafasso, 158 AD3d 848, 849-850). Since the plaintiff failed to proffer a reasonable excuse, this Court need not consider whether it had a potentially meritorious cause of action (see BAC Home Loans Servicing, LP v Broskie, 166 AD3d at 843)."

ECONOMIC ABUSE AS DOMESTIC VIOLENCE - NEW YORK STATE BILL

Governor Andrew M. Cuomo yesterday signed three pieces of legislation expanding protections for victims of domestic violence. One of these measures broaden the definition of the crime of domestic violence to include forms of economic abuse such as identity theft, grand larceny and coercion (S.2625/ A.5608).

Economic abuse has a broad definition but in the new legislation it is limited to just three types (indicated below in bold) and is subject to the additional limitations in subparagraphs (i) and (ii). Thus, subdivision 1 of section 459-a of the social services law, as amended by chapter 11 of the laws of 2011, is amended to read as follows:

"1. "Victim of domestic violence" means any person over the age of sixteen, any married person or any parent accompanied by his or her minor child or children in situations in which such person or such person's child is a victim of an act which would constitute a violation of the penal law, including, but not limited to acts constituting disorderly conduct, harassment, aggravated harassment, sexual misconduct, forcible touching, sexual abuse, stalking, criminal mischief, menacing, reckless endangerment, kidnapping, assault, attempted assault, attempted murder, criminal obstruction of breathing or blood circulation, [or] strangulation, IDENTITY THEFT, GRAND LARCENY OR COERCION; and

(i) such act or acts have resulted in actual physical or emotional injury or have created a substantial risk of physical or emotional harm to such person or such person's child; and

(ii) such act or acts are or are alleged to have been committed by a family or household member."

DIVORCE, PENSIONS, CARRYING CHARGES, IMPUTED INCOME

Burke v Burke, 2019 NY Slip Op 06060, Decided on August 7, 2019, Appellate Division, Second Department:

"The parties were married in 1992. They have four children, born between 1992 and 1998. The plaintiff was a homemaker for many years before obtaining employment at a dental office in 2006 or 2007. Between 1984 and 1988, the defendant worked part-time as a school janitor. On or about April 30, 1991, approximately 15 months before the parties married, the defendant became a New York City police officer, and he retired at age 44 in October 2013, with the rank of Sergeant.

The plaintiff commenced this action for a divorce and ancillary relief in February 2014. After a nonjury trial, the Supreme Court rendered a decision, and subsequently issued a judgment of divorce dated May 12, 2016. The defendant appeals from so much of the judgment of divorce as awarded the plaintiff 50% of his total retirement assets and benefits; exclusive use and occupancy of the marital residence pending its sale, with the defendant to pay the carrying charges until such sale; counsel fees in the sum of $30,000; and child support based on the imputation of an annual income of $80,000 to the defendant. We modify the judgment.

Domestic Relations Law § 236(B)(1)(c) defines marital property, in part, as "all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action." Section 236(B)(1)(d)(1) defines separate property, in part, as "property acquired before marriage." "[M]arital property consists of a wide range of intangible interests which in other contexts might not be recognized as divisible property at all'" (DeLuca v DeLuca, 97 NY2d 139, 144, quoting DeJesus v DeJesus, 90 NY2d 643, 647). The term marital property should be "construed broadly in order to give effect to the economic partnership' concept of the marriage relationship" (Price v Price, 69 NY2d 8, 15). "[P]ension rights earned during a marriage, prior to a separation agreement or matrimonial action, are properly considered marital property subject to equitable distribution" (Olivo v Olivo, 82 NY2d 202, 207; see Majauskas v Majauskas, 61 NY2d 481, 491-492). Post-divorce benefits are marital property to the extent that they constitute compensation for past services rendered during the marriage (see DeLuca v DeLuca, 97 NY2d at 145-146).

Contrary to the defendant's contention, the inclusion in the plaintiff's distributive award of a portion of certain pension credits the defendant "bought back" for his part-time employment as a school janitor was proper. The purchase of the pension credits, which was realized during the marriage and effected with the use of marital funds, resulted in an enhanced pension benefit, as the defendant acknowledged at trial. Inasmuch as this occurred during the marriage and through the use of marital funds, it constituted marital property subject to equitable distribution (see Whalen v Whalen, 177 Misc 2d 39, 41 [Sup Ct, Rockland County]).

The vast majority of the defendant's retirement assets, which encompassed his pension, his interest in the Sergeants Benevolent Association Annuity Fund, his Deferred Compensation Plan account, and his benefits from the Police Superior Officers' Variable Supplement Fund, constituted marital property (see DeLuca v DeLuca, 97 NY2d at 145-146; Olivo v Olivo, 82 NY2d at 207; Majauskas v Majauskas, 61 NY2d at 491-492). Furthermore, the trial court has broad discretion in making an equitable distribution of marital property and, absent an improvident exercise of that discretion, its determination should not be disturbed (see Michaelessi v Michaelessi, 59 AD3d 688, 689). Here, upon consideration of all of the attendant circumstances, we discern no basis upon which to disturb the Supreme Court's distribution to the plaintiff of a 50% interest in the marital portion of the defendant's retirement assets and benefits.

However, in equitably distributing the defendant's retirement benefits, the Supreme Court should not have included that portion of those benefits attributable to the defendant's employment as a police officer for approximately 15 months before the parties married. Since that period of employment predated the marriage, any value that those 15 months of service may have added to the defendant's various retirement assets constituted his separate property and was not subject to equitable distribution (see Majauskas v Majauskas, 61 NY2d 481). Accordingly, we remit the matter to the Supreme Court, Westchester County, for a recalculation of the plaintiff's distributive award of retirement benefits after subtracting the value attributable to the defendant's 15 months of premarital employment from the marital property subject to distribution.

We agree with the Supreme Court's determination awarding exclusive use and occupancy of the marital residence to the plaintiff, so that she and the parties' children could continue to reside there pending the contemplated sale of the residence and division of the proceeds (see generally Greisman v Greisman, 98 AD3d 1079, 1080). The court did not improvidently exercise its discretion in directing the defendant to continue to pay the carrying charges on the residence until it was sold, since the evidence established that he possessed the financial ability to meet these expenses, and the payments provided an incentive for him to cooperate in facilitating the sale.

The court may impute income to a party based on his or her employment history, future earning capacity, and educational background (see Matter of Rohme v Burns, 92 AD3d 946, 947; Duffy v Duffy, 84 AD3d 1151, 1152), and "[w]here a party's account is not believable, the court may impute a true or potential income higher than alleged" (Wesche v Wesche, 77 AD3d 921, 923). Here, the Supreme Court providently exercised its discretion in imputing to the defendant an annual [*2]income of $80,000, based on, among other things, his share of retirement benefits as well as certain rental income and his earning potential.

The Supreme Court's award of counsel fees to the plaintiff in the amount of $30,000 did not constitute an improvident exercise of discretion under the circumstances presented (see Domestic Relations Law § 237[a]; see e.g. Gulotta v Gulotta, 215 AD2d 724, 726)."

FORECLOSURE FAILS DUE TO ABANDONMENT

A failure to secure a default judgment within one year has consequences under CPLR 3215 (c).

HSBC Bank USA, N.A. v Slone, 2019 NY Slip Op 05963, Decided on July 31, 2019. Appellate Division, Second Department:

"In October 2012, a prior action to foreclose the same mortgage that is at issue in this action was dismissed as abandoned. In March 2015, the plaintiff commenced this action against the defendants Robert Slone and Mary Slone (hereinafter together the appellants), among others, to foreclose the mortgage. The appellants failed to timely appear or answer the complaint. On July 1, 2015, the plaintiff and the appellants attended the first of several mandatory foreclosure settlement conferences pursuant to CPLR 3408. When no settlement was reached, on July 7, 2016, this action was released from the residential foreclosure conference part, and the plaintiff was permitted to proceed with this action.

On October 23, 2017, the appellants moved pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against them as abandoned. The Supreme Court denied the motion, and this appeal ensued.

As an initial matter, contrary to the Supreme Court's determination, the appellants' failure to move to vacate their default in answering the complaint or appearing in this action did not operate as a waiver of their right to seek dismissal of the complaint pursuant to CPLR 3215(c). "A defendant may waive the right to seek a dismissal pursuant to CPLR 3215(c) by serving an answer or taking any other steps which may be viewed as a formal or informal appearance'" (Private Capital Group, LLC v Hosseinipour, 170 AD3d 909, 910, quoting Myers v Slutsky, 139 AD2d 709, 711; see HSBC Bank USA, N.A. v Grella, 145 AD3d 669, 671). Here, the appellants did not appear either formally or informally, since they did not actively litigate the action before the Supreme Court [*2]or participate in the action on the merits (see Private Capital Group, LLC v Hosseinipour, 170 AD3d at 910). Accordingly, the appellants did not waive their right to seek dismissal of the complaint pursuant to CPLR 3215(c).

CPLR 3215(c) provides, in part, that if the plaintiff fails to take proceedings for the entry of judgment within one year after the defendant's default, "the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion" (CPLR 3215[c]; see HSBC Bank USA, N.A. v Jean, 165 AD3d 632, 633; Myoung Ja Kim v Wilson, 150 AD3d 1019, 1020). "The language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts shall' dismiss claims (CPLR 3215[c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned" (Giglio v NTIMP, Inc., 86 AD3d 301, 307-308; see Ibrahim v Nablus Sweets Corp., 161 AD3d 961, 963; HSBC Bank USA, N.A. v Grella, 145 AD3d at 671). However, the failure to timely seek a default judgment may be excused if "sufficient cause is shown why the complaint should not be dismissed" (CPLR 3215[c]). To establish sufficient cause as required by CPLR 3215(c), a plaintiff must proffer a reasonable excuse for the delay in timely moving for a default judgment and demonstrate that it has a potentially meritorious cause of action (see HSBC Bank USA, N.A. v Grella, 145 AD3d at 671; Aurora Loan Servs., LLC v Hiyo, 130 AD3d 763, 764; Pipinias v J. Sackaris & Sons, Inc., 116 AD3d 749, 751; Giglio v NTIMP, Inc., 86 AD3d at 308).

Here, after this action was released from the mandatory foreclosure settlement conference part in July 2016, the plaintiff was authorized to proceed with the prosecution of this action. However, despite the fact that the appellants failed to answer or otherwise appear in the action after being served with process, the plaintiff took no steps to initiate proceedings for the entry of a default judgment against the appellants. The plaintiff's participation in the mandatory foreclosure settlement part conferences did not constitute the initiation of proceedings for the entry of a default judgment. Moreover, more than one year passed from the time that the plaintiff was authorized to resume prosecution of this action prior to the appellants moving in October 2017 to dismiss the complaint as abandoned (see HSBC Bank USA, N.A. v Grella, 145 AD3d 669; U.S. Bank, N.A. v Dorvelus, 140 AD3d 850, 852). In light of the plaintiff's failure to meet its burden to show sufficient cause why the complaint should not be dismissed as abandoned, it is not necessary to address the issue of whether the plaintiff demonstrated that it had a potentially meritorious cause of action (see U.S. Bank, N.A. v Dorvelus, 140 AD3d at 852)."

FOR LONG ISLAND CHAMBERS OF COMMERCE

On August 2, I was one of the guests on an episode of the radio show Chamber Chatter. Chamber Chatter  is a monthly round table discussion with today's Long Island business leaders, hosted by Mark Snider. A production of LIU Public Radio.

To listen o the episode, or any other prior episode, go to Chamber Chatter LIU Studios

TOO MANY CONTRACTS CAN SPOIL THE BROTH

Here there were so many contracts between the parties that had inconsistent language: another type of battle of the forms

County of Nassau v Technology Ins. Co., Inc., 2019 NY Slip Op 05954, Decided on July 31, 2019, Appellate Division, Second Department"

"The plaintiffs, County of Nassau and Nassau County Department of Public Works, commenced this action against Technology Insurance Co., Inc. (hereinafter TIC), and Looks Great Services, Inc. (hereinafter LGS). The plaintiffs alleged that LGS performed work for the plaintiffs and was required to maintain general liability insurance naming the plaintiffs as additional insureds. LGS's work for the plaintiffs included performing emergency debris removal services following a hurricane. The plaintiffs further alleged that LGS, through its agents, employees, subcontractors, or sub-subcontractors, was involved in a motor vehicle collision while operating a tractor trailer on an expressway. Allegedly, the plaintiffs had received multiple claims and had been named in two underlying actions related to the collision. LGS produced evidence that it was insured under a certain general liability insurance policy issued by TIC. According to that insurance policy, the plaintiffs were additional insureds as "required by written contract." TIC, however, had refused to defend or indemnify the plaintiffs in the claims related to the collision. The plaintiffs sought a judgment declaring that TIC is obligated to defend and indemnify the plaintiffs under the TIC policy. The plaintiffs also sought, inter alia, to recover damages from TIC for breach of the insurance policy and from LGS for breach of contract.

The plaintiffs moved for summary judgment declaring that TIC is obligated to defend [*2]and indemnify the plaintiffs, and on the issue of liability on the second and third causes of action, which alleged breach of contract against TIC and LGS, respectively. In an order entered October 28, 2016, the Supreme Court, inter alia, denied the plaintiffs' motion. The plaintiffs appeal.

"When determining whether a third party is an additional insured under an insurance policy, a court must ascertain the intention of the parties to the policy, as determined from within the four corners of the policy itself" (Superior Ice Rink, Inc. v Nescon Contr. Corp., 52 AD3d 688, 691). Here, the subject insurance policy provides that the plaintiffs were additional insureds as "required by written contract." Consequently, the plaintiffs' entitlement to defense and indemnification under the insurance policy depends on whether LGS was contractually required to maintain general liability insurance naming the plaintiffs as insureds.

The question of whether LGS was contractually required to maintain general liability insurance naming the plaintiffs as insureds cannot be resolved on the record before us. "The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent. The best evidence of what parties to a written agreement intend is what they say in their writing. Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (Greenfield v Philles Records, 98 NY2d 562, 569 [citations and internal quotation marks omitted]). "While the meaning of a contract is ordinarily a question of law, when a term or clause is ambiguous and the determination of the parties' intent depends upon the credibility of extrinsic evidence or a choice among inferences to be drawn from extrinsic evidence, then the issue is one of fact" (Amusement Bus. Underwriters v American Intl. Group, 66 NY2d 878, 880).

The record includes multiple agreements between the plaintiffs and LGS. A "Blanket Purchase Order" (hereinafter BPO), awarded under a formal sealed bid proposal and relating to tree pruning and stump removal, included provisions requiring LGS to procure liability insurance naming the plaintiffs as insureds and to defend and indemnify the plaintiffs. A "Debris Management Agreement" (hereinafter DMA), relating to "such professional services as may be required to effect disaster response and recovery," did not include these provisions. Four "Supplemental Agreement[s]" each provide, in part, that "[t]his Supplemental Agreement is entered into pursuant to the provisions of the original [DMA] . . . entered into in 2011 under the existing [BPO]." Under these circumstances, triable issues of fact exist regarding whether the occurrences were covered by the DMA or the BPO, and thus the plaintiffs were not entitled to summary judgment on the cause of action seeking a declaration that TIC was obligated to defend and indemnify the plaintiffs.

Similarly, the plaintiffs failed to demonstrate their prima facie entitlement to judgment as a matter of law on the second and third causes of action, alleging breach of contract. Given the triable issue of fact as to whether the plaintiffs are covered under the insurance policy, the plaintiffs have not shown, prima facie, that TIC breached the insurance policy by, inter alia, failing to defend or indemnify the plaintiffs. Additionally, the plaintiffs failed to establish, prima facie, that a binding indemnification agreement between LGS and the plaintiffs was in effect at time of the collision, and, moreover, failed to eliminate all triable issues of fact as to whether the plaintiffs were free from negligence in connection with the collision (see Poalacin v Mall Props., Inc., 155 AD3d 900, 910).

Since the plaintiffs did not demonstrate their prima facie entitlement to summary judgment declaring that TIC is obligated to defend and indemnify the plaintiffs, and on the issue of liability on the second and third causes of action, alleging breach of contract, we agree with the Supreme Court's denial of their motion, without regard to the sufficiency of the defendants' opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

BASIC CONTRACT INTERPRETATION RULES

"The shorter and the plainer the better." ~ Beatrix Potter

Atlantic Shores Bldrs. & Devs., Inc. v Federico, 2019 NY Slip Op 05950, Decided on July 31, 2019, Appellate Division, Second Department:

"" In reviewing a determination made after a nonjury trial, this Court's power is as broad as that of the trial court, and it may render the judgment it finds warranted by the facts, taking into account that in a close case the trial court had the advantage of seeing and hearing the witnesses'" (Quadrozzi v Estate of Quadrozzi, 99 AD3d 688, 691, quoting BRK Props., Inc. v Wagner Ziv Plumbing & Heating Corp., 89 AD3d 883, 884; see Yarom v Poliform S.P.A., 153 AD3d 760, 761). " The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court, as is the inquiry of whether the writing is ambiguous in the first instance. If the language is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence'" (Palombo Group v Poughkeepsie City Sch. Dist., 125 AD3d 620, 621, quoting Law Offs. of J. Stewart Moore, P.C. v Trent, 124 AD3d 603, 603 [citations omitted]; see Yarom v Poliform S.P.A., 153 AD3d at 761). Accordingly, "[w]hen the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the parties' reasonable expectations" (Patsis v Nicolia, 120 AD3d 1326, 1327)."

PROBATE DISPUTES AND IN TERROREM CLAUSE

Not all blended families work out like they do on TV - as this probate proceeding demonstrates.

Matter of Sochurek, 2019 NY Slip Op 05987, Decided on July 31, 2019, Appellate Division, Second Department:

"The decedent, Robert W. Sochurek, died in February 2014. He was survived by his wife, Anna Marie T. Sochurek (hereinafter Anna Marie), and two daughters from a previous marriage, Lynn Ammirato and Lisa Birch (hereinafter together the daughters). At the time of his death, the decedent owned a 50% interest in a self-storage company, nonparty Brady Avenue Associates LLC (hereinafter Brady Avenue). The decedent's will named Anna Marie as executor of his estate, and bequeathed to her a life estate in the decedent's 50% interest in Brady Avenue, including "all the duties and responsibilities for the operation of said Limited Liability Company as if she was the owner and member thereof." The will also granted Anna Marie, as executor, the power to "sell, exchange, or otherwise dispose of any or all of my property, real or personal," and the power to "run, manage and direct any business of which I may die possessed, temporarily or permanently, or to sell or otherwise dispose of such business and all the assets thereof upon any terms which [Anna Marie] deem[s] advisable." The will provided that, upon the death of Anna Marie, her life estate would terminate and the decedent's interest in Brady Avenue would pass to the daughters, in equal shares.

The will included an in terrorem clause which provided for the revocation of the interest of any beneficiary who "institute[s] . . . any proceedings to set aside, interfere with, or make null any provision of this Will, . . . or shall in any manner, directly or indirectly, contest the probate [*2]thereof." The will left the "rest, residue, and remainder" of the decedent's estate to Anna Marie, absolutely, "to the exclusion of any children of mine."

After letters testamentary were issued and the will probated, Anna Marie entered into a contract to sell all of the assets of Brady Avenue to a nonparty for the sum of $7.5 million, the net proceeds of which were to be divided between Anna Marie and the holder of the other 50% interest in Brady Avenue. The daughters entered into a Standstill Agreement with Anna Marie whereby Anna Marie agreed to hold the proceeds from the sale in a segregated bank account while Anna Marie and the daughters determined the daughters' interests in the liquidated assets of Brady Avenue as remainder beneficiaries of Anna Marie's life estate. The daughters subsequently commenced an action in the Supreme Court against Anna Marie to recover damages, inter alia, for breach of the Standstill Agreement and breach of fiduciary duty, and for the imposition of a constructive trust. The complaint alleged, in sum, that Anna Marie had breached her fiduciary duty to the daughters as remainder beneficiaries, and demanded an accounting of the assets of Brady Avenue.

Anna Marie then petitioned pursuant to SCPA 1420 to construe the in terrorem clause of the decedent's will. The petition alleged that the decedent's will granted Anna Marie the absolute and sole discretion to dispose of any and all of the assets of the estate, including the assets of Brady Avenue, that the daughters had interfered with Anna Marie's administration of the decedent's estate by commencing the Supreme Court action, and that such interference violated the in terrorem clause of the decedent's will. In a decision dated June 30, 2016, the Surrogate's Court determined, among other things, that the will granted to Anna Marie, as executor, broad powers to dispose of all estate property, and that the daughters had interfered with those powers by commencing the Supreme Court action. By decree entered August 11, 2016, the Surrogate's Court determined that the daughters had violated the in terrorem clause of the will, and by doing so, had forfeited their legacies under the will. The daughters appeal.

Initially, contrary to the daughters' contention, the Surrogate's Court acted within its jurisdiction in construing the in terrorem clause of the decedent's will (see SCPA 201). In addition, the Supreme Court action did not effect a bar to this proceeding under the doctrine of law of the case (see J.A. Preston Corp. v Fabrication Enters., 68 NY2d 397, 402; Pollack v Pollack, 290 AD2d 548).

"The paramount consideration in will construction proceedings is the testator's intent" (Matter of Singer, 13 NY3d 447, 451; see Matter of Carmer, 71 NY2d 781, 785; Matter of Levine, 136 AD3d 920, 921). The testator's intent must be ascertained "not from a single word or phrase but from a sympathetic reading of the will as an entirety and in view of all the facts and circumstances under which the provisions of the will were framed" (Matter of Bieley, 91 NY2d 520, 525 [emphasis and internal quotation marks omitted]; see Matter of Bernstein, 40 AD3d 1086, 1087; Williams v Williams, 36 AD3d 693, 694). "[W]hile in terrorem clauses are enforceable, they are not favored and [must be] strictly construed'" (Matter of Singer, 13 NY3d at 451, quoting Matter of Fairbairn, 46 AD3d 973, 974; see Matter of Ellis, 252 AD2d 118, 127).

Here, the daughters alleged in the Supreme Court action that Anna Marie breached her fiduciary duty as executor and holder of the life estate in the decedent's interest in Brady Avenue by taking possession of the entire proceeds of the sale to the exclusion and detriment of the daughters as remainder beneficiaries. The daughters have not lodged any contest to the validity of the will, or otherwise interfered with its provisions granting Anna Marie discretion to dispose of estate assets in her capacity as executor. Moreover, the claim that Anna Marie violated the standstill agreement did not implicate any challenge to the will. Thus, we disagree with the determination of the Surrogate's Court that the daughters violated the in terrorem clause of the will and forfeited their legacies under the will (see Matter of Prevratil, 121 AD3d 137, 146)."