L'SHANAH TOVA

LANDLORD'S LAWYER SUED BY EVICTED TENANT

After an eviction in Housing Court and NYC Marshall, the tenant sued the landlord's counsel for damages ("On the summons application form annexed to the complaint, Plaintiff wrote that Defendant violated the "rules that govern the courts, unlawful eviction, fraudulent petition holdover, fraudulent deed, theft of property, destruction of property." With regards to the property damage claim, Plaintiff alleges that Defendant "stole his property and used an ax and bar bell to destroy the entire house." As to the fraud claim, Plaintiff alleges that Defendant submitted fraudulent evidence to the Housing Court in the summary proceeding, that a lease was never produced in the Housing Court matter and that the deed transferring the property to landlord...was fraudulent.")

Moore v Balsamo & Rosenblatt PC, 2019 NY Slip Op 51480(U), Decided on September 16, 2019, Civil Court Of The City Of New York, Kings County, Mallafre-Melendez, J:

"Upon review of the submissions and oral argument, the court finds that Defendant sustained its prima facie burden for summary judgment and that Plaintiff has not established proof in evidentiary form that a triable issue of fact exists (see Zuckerman v. City of New York, 49 NY2d 557 [1980]). It has long been recognized that "[t]he public interest . . . demands that attorneys, in the exercise of their proper functions as such, shall not be civilly liable for their acts when performed in good faith and for the honest purpose of protecting the interests of their clients" (Hahn v. Wylie, 54 AD2d 629 [1st Dept. 1976]). "Absent a showing of fraud or collusion, or of a malicious or tortious act, an attorney is not liable to third parties for purported injuries caused by services performed on behalf of a client or advice offered to that client" (Levine v. Graphic Scanning Corp., 87 AD2d 755 [2d Dept. 1982]; Hahn v. Wylie, 54 AD2d 629; Burger v. Brookhaven Medical Arts Bldg., Inc., 131 AD2d 622 [2d Dept. 1987]). Here, Plaintiff's allegation regarding fraudulent documentation was previously adjudicated by Judge McClenahan. Judge McClenahan clearly held that the allegations of fraud on the part of the landlord were not supported in fact. The claim against Defendant herein rests on the very documents that were presented to Judge McClenahan which were admitted into evidence and formed the basis for the Housing Court's Decision/Order. The decision of Judge McClenahan is law of the case. This court is not an appellate court and cannot and will not disturb the findings of another trial judge.

As to the claim of property damage, the court finds that Plaintiff's allegations are baseless as there is no evidence that Defendant ever came into contact with Plaintiff's property. Defendant merely represented the landlord. Even if this court should assume Plaintiff's property was damaged, liability would not rest on the landlord, much less the landlord's attorneys. As a matter of law, the landlord cannot be liable for any claimed property damage (see generally Sialeu v. New York City Housing Authority, 124 AD3d 623 [2d Dept. 2015]). In an eviction that is carried pursuant to a lawfully issued warrant, a landlord, is not liable to a tenant for any damage caused by the marshal (Funding Assistance Corp. v. Mashreq Bank, 277 AD2d 127, 127 [2000]; see Campbell v. Maslin, 91 AD2d 559 [1982], affd 59 NY2d 722 [1983]; Foxworth v. Tjutjulis, 15 Misc 3d 129[A], 2007 NY Slip Op 50606[U] [App Term, 2d & 11th Jud Dists 2007]; see also Ide v. Finn, 196 AD3d 304 [1st Dept. 1921]; Slepoy v. Kliger, 26 Misc 3d 126[A] [App Term, 2d Dept., 2d, 11th & 13th Jud Dists 2009]). Pursuant to the May 15, 2018 Housing Court Decision/Order, a lawful warrant of eviction was issued. Therefore, as a matter of law, liability for property damage cannot rest on the landlord or the attorneys for the landlord as is claimed herein."

REAL ESTATE - TIME IS OF THE ESSENCE

The real estate contract typically states a closing date "on or about" but there is no "time is of the essence" clause. Thereafter, either Seller or Buyer is not ready to close. That is when a a "time is of the essence" letter giving notice that the closing on the property must take place by a certain date.

DILAURO v. Johns, 2019 NY Slip Op 32328, (Supreme Court, Kings County, July 22, 2019):

"Further, the law is clearly established that even where time is not made of the essence in the original contract and the closing date set forth therein has passed, either party can declare time of the essence by giving a clear, distinct and unequivocal notice of (1) a new closing date; (2) giving the other party a reasonable time in which to act; and, (3) informing the other party that if he does not perform by the designated date, he/she will be considered in default. Nehmadi v Davis, 63 A.D.3d 1125, 1127 (2nd Dept. 2009), citing Guippone v Gaias, 13 A.D.3d 339 (2nd Dept. 1989). Specifically, the Appellate Division has held that three (3) days', Smith v Lynch, 50 A.D.3d 881 (2nd Dept. 2008), four (4) days', 3M Holding Corp. v Wagner, 166 A.D.2d 580 (2nd Dept. 1990), and five (5) days' Guippone v Gaias, 13 A.D.3d 339 (2nd Dept. 2004), notice was sufficient. The failure to appear at a closing constitutes a willful default Smith v Lynch 50 A.D.3d 881, 882 (2nd Dept. 2008)."

SERVING CORPORATIONS UNDER BCL 306

See NOTE below.

Siemens Elec. LLC v New York Elec. Power Servs. LLC, 2019 NY Slip Op 32715(U), September 11, 2019, Supreme Court, New York County, Docket Number: 653803/2018, Judge: Arlene P. Bluth:

""CPLR 5015 (a) provides that a party may be relieved from a judgment on the ground of, among others, 'excusable default.' A defendant seeking to vacate a default under this provision must demonstrate a reasonable excuse for its delay in appearing and answering the complaint and a meritorious defense to the action" (Eugene Di Lorenzo, Inc. v A.C. Dutton Lumber Co., 67 NY2d 138, 141, 492 NE2d 116 [1986]).

While a corporation is required to keep its address updated with the Secretary of State, mistakes happen, and the Court may relieve a defendant of its default for that reason as a reasonable excuse. "It is also well established that service on a corporation through delivery of process to the Secretary of State is not personal delivery to the corporation or to an agent designated under CPLR 318. Thus, corporate defendants served under Business Corporation Law § 306 have frequently obtained relief from default judgments where they had a wrong address on file with the Secretary of State, and consequently, did not receive actual notice of the action in time to defend" (Eugene Di Lorenzio, Inc. v A.C. Dutton Lumber Co., Inc., 67 NY2d 138, 141, 42, 501 NYS2d 8 [1986] [citations omitted]). This Court finds defendant's mistake excusable."

NOTE: Judge Bluth earlier that year held the same in HESS CORP. v. 936-938 CLIFFCREST HOUS. DEV. FUND CORP., 2019 NY Slip Op 30384 - NY: Supreme Court 2019:

"The fact is that courts often grant motions to vacate default judgments where the summons and complaint was served via the Secretary of State and the corporation claims it never received the commencing papers (Eugene Di Lorenzio, Inc., 67 NY2d at 141). Case law is clear that these types of cases should be decided on the merits."

Yet Judge Engoron this year may have felt differently in Commissioners of State Ins. Fund v. NEWGLE CORP., 2019 NY Slip Op 31456 - NY: Supreme Court 2019:

"Service of process upon a corporation under Business Corporation Law § 306 (b) is complete upon delivery of the summons and complaint to the Secretary of State (see State Farm Mut. Auto. Ins. Co. v Dr. Ibrahim Fatiha Chiropractic, P.C., 147 AD3d 696, 696 [1st Dept 2017], lv denied 29 NY3d 912 [2017]). Jurisdiction is obtained "irrespective of whether the process ever actually reached [the corporate] defendant" (Shanker v 119 E. 30th, Ltd., 63 AD3d 553, 554 [1st Dept 2009])."

DIVORCE - WHEN ONE SPOUSE REFUSES TO COOPERATE IN SALE OF MARITAL RESIDENCE

Uttamchandani v Uttamchandani, 2019 NY Slip Op 06644, Decided on September 18, 2019, Appellate Division, Second Department:

"...….

In October 2015, the plaintiff moved, inter alia, to enforce certain provisions of the judgment of divorce, including those relating to the defendant's obligation to cooperate in the sale of the marital residence, and for a determination of certain credits to be paid to the plaintiff from the defendant's share of the net proceeds of the sale. Among other things, the plaintiff sought a determination of a credit for 50% of the mortgage, taxes, and insurance she had paid on the marital residence since April 15, 2013. In the order appealed from, the Supreme Court, inter alia, determined that the plaintiff was entitled to credits of (1) $32,472.58, representing 50% of the payments she had made for the mortgage, taxes, and insurance on the marital residence; (2) $45,547.47, representing child support arrears; (3) $49,200, representing her share of the value of the defendant's business, ConnectIt, LLC; and (4) $24,963.25, representing the balance of the TD Ameritrade account. The defendant appeals, arguing that the court erred in awarding the plaintiff these credits.

The defendant contends that the Supreme Court erred in granting the plaintiff a credit for 50% of the mortgage, taxes, and insurance that she had paid on the marital residence since April 15, 2013, arguing that this resulted in the defendant making "double shelter payments" for the parties' children inasmuch as he was paying child support during the relevant period of time. We reject this contention.

The burden of repaying marital debt should be equally shared by the parties, in the absence of countervailing factors, and any such liability should be distributed in accordance with general equitable distribution principles and factors (see Westreich v Westreich, 169 AD3d 972, 976; Minervini v Minervini, 152 AD3d 666, 668; Gillman v Gillman, 139 AD3d 667, 671). It is generally the responsibility of both parties to maintain the marital residence and keep it in good repair during the pendency of a matrimonial action (see Brinkmann v Brinkmann, 152 AD3d 637, 639; Goldman v Goldman, 131 AD3d 1107, 1108; Hymowitz v Hymowitz, 119 AD3d 736, 742; Le v Le, 82 AD3d 845, 846). "Where . . . a party has paid the other party's share of what proves to be marital debt, such as the mortgage, taxes, and insurance on the marital residence, reimbursement is required" (Le v Le, 82 AD3d at 846; see Morales v Carvajal, 153 AD3d 514, 515; Goldman v Goldman, 131 AD3d at 1108).

Here, the plaintiff was entitled to receive a credit against the proceeds of the sale of the martial residence for the money that she paid to reduce the balance of the mortgage during the pendency of the action (see Morales v Carvajal, 153 AD3d at 515; Le v Le, 82 AD3d at 845-846). In deciding to award the plaintiff credit for 50% of the carrying charges, the Supreme Court considered the defendant's payment of child support, but nonetheless concluded that the plaintiff should receive 50% reimbursement. Under the circumstances of this case, where the plaintiff effectively was compelled to live in the marital residence during the subject time because of the defendant's refusal to cooperate in its sale, we agree with the court's determination to award the plaintiff a credit for 50% of the payments she made on the mortgage, taxes, and insurance on the marital residence since April 15, 2013 (cf. Markopoulos v Markopoulos, 274 AD2d 457, 459). The amount of child support paid by the defendant was less than the amount of the expenses the plaintiff incurred with respect to the marital residence and the defendant's refusal to cooperate in the sale prevented the plaintiff from reducing the housing expense for herself and the children."

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FORECLOSURE FAILURE - MUST TAKE A DEFAULT WITHIN ONE YEAR

Chase Home Fin., LLC v Fernandez, 2019 NY Slip Op 06589, Decided on September 18, 2019, Appellate Division, Second Department:

"The plaintiff commenced this mortgage foreclosure action on or about August 8, 2007. The defendant mortgagor, Judeson Fernandez, neither appeared in the action nor answered the complaint. In October 2008 the plaintiff moved, inter alia, for leave to enter a default judgment and an order of reference, but that motion was eventually marked off the calendar. In or about September 2010, the plaintiff once again moved, inter alia, for leave to enter a default judgment and an order of reference, but the motion was later withdrawn by the plaintiff following the issuance of Administrative Order 548/10 of the Chief Administrative Judge of the State of New York.

On or about February 11, 2013, the plaintiff moved a third time, inter alia, for leave to enter a default judgment and an order of reference. In an order dated May 16, 2013, the Supreme Court, upon denying the plaintiff's unopposed motion as inadequate, sua sponte directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c).

Shortly thereafter, the plaintiff moved, inter alia, to vacate the portion of the May 16, [*2]2013, order that had directed dismissal of the complaint as abandoned. In an order dated April 15, 2014, the Supreme Court, inter alia, denied that branch of the plaintiff's unopposed motion. Nonparty Federal National Mortgage Association, as successor in interest to the plaintiff, appeals.

Since it is undisputed that the plaintiff failed to take proceedings for leave to enter a default judgment within one year after the borrower's default, the Supreme Court acted within its statutory authority in directing dismissal of the complaint as abandoned (see CPLR 3215[c]; Perricone v City of New York, 62 NY2d 661, 663).

In order to obtain vacatur of the Supreme Court's sua sponte order directing dismissal of the complaint, the plaintiff was required "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). Since the plaintiff's moving papers offered no reason for the plaintiff's decision to wait until October 2008 to move for leave to enter a default judgment, the court providently exercised its discretion in denying that branch of the plaintiff's motion."

A DISCHARGE OF MORTGAGE

This is what happens after the statute of limitations runs out on a mortgage foreclosure.

BH 263, LLC v Bayview Loan Servicing, LLC, 2019 NY Slip Op 06586, Decided on September 18, 2019, Appellate Division, Second Department:

"In March 2007, nonparty Noel Palmer obtained a loan from Washington Mutual Bank, FA (hereinafter WaMu), secured by a mortgage on real property located in Brooklyn. In July 2008, WaMu commenced an action to foreclose the mortgage (hereinafter the 2008 foreclosure action), and sought, in the complaint, to recover the full balance due. In an order dated September 10, 2013, the Supreme Court directed the dismissal of the complaint in the 2008 foreclosure action as abandoned pursuant to CPLR 3215(c), and vacated the notice of pendency. In April of 2014, the mortgage was assigned to Bayview Loan Servicing, LLC (hereinafter Bayview).

In January 2015, the plaintiff purchased the subject property from Palmer. In March 2016, the plaintiff commenced this action to cancel and discharge the mortgage of record. The plaintiff subsequently moved, inter alia, for summary judgment on the complaint, and Bayview cross-moved for summary judgment dismissing the complaint. The Supreme Court, inter alia, granted the motion and denied the cross motion, and Bayview appeals.

Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real [*2]property at the time the action to cancel and discharge the mortgage was commenced (see Lubonty v U.S. Bank N.A., 159 AD3d 962, 963, lv granted 32 NY3d 903). An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]; Lubonty v U.S. Bank N.A., 159 AD3d at 962; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d 985, 986). "[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt" (Lubonty v U.S. Bank N.A., 159 AD3d at 963 [internal quotation marks omitted]; see Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d at 986).

Here, in support of its motion the plaintiff established that it was the current owner of the subject property, that "[a]n acceleration of the full amount of the debt occurred in this instance upon the filing of the summons and complaint in the [2008] foreclosure action" (Milone v US Bank N.A., 164 AD3d 145, 152), i.e., on July 23, 2008, and that, accordingly, the statute of limitations expired six years later, on July 23, 2014 (see id. at 152-153). Thus, by establishing that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations (see Milone v US Bank N.A., 164 AD3d at 152-153; Deutsche Bank Natl. Trust Co. v Gambino, 153 AD3d 1232, 1234; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d at 986), the plaintiff met its prima facie burden of demonstrating its entitlement to judgment as a matter of law on the complaint (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Zuckerman v City of New York, 49 NY2d 557, 562). In opposition to the plaintiff's prima facie showing, Bayview failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d at 324). Bayview also failed to demonstrate its prima facie entitlement to judgment as a matter of law dismissing the complaint."

DISCOVERY IN MORTGAGE FORECLOSURE

If you are raising standing as an affirmative defense....

Bayview Loan Servicing, LLC v Charleston, 2019 NY Slip Op 06463, Decided on September 11, 2019, Appellate Division, Second Department:

"On June 30, 2015, the defendant sent the plaintiff a notice for discovery and inspection, as well as a first demand for interrogatories. On January 21, 2016, the plaintiff answered the discovery demands by presenting some of the requested documents, including copies of the note and mortgage, but raising objections to most of the demands as being "overbroad, unduly burdensome, and vague" and "duplicative in nature." In June 2016, the defendant moved, inter alia, to compel the plaintiff to present for the personal inspection of the defendant's counsel the originals of the documents sought as part of the defendant's notice for discovery and inspection, and to compel the plaintiff to answer the defendant's interrogatories. The plaintiff opposed the motion. By order entered October 26, 2016, the Supreme Court denied the motion. The defendant appeals.

CPLR 3101 provides that "[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof, by . . . a party, or the officer, director, member, agent or employee of a party" (CPLR 3101[a][1]). Pursuant to CPLR 3124, "[i]f a person fails to respond to or comply with any request, notice, interrogatory, demand, question or order . . . the party seeking disclosure may move to compel compliance or a response." To prevail on its motion, the defendant was required to "satisfy the threshold requirement of demonstrating that the disclosure sought is material and necessary' to [its] affirmative defense alleging that the plaintiff lacked standing to commence this action" (U.S. Bank N.A. v Ventura, 130 AD3d 919, 920; see Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 686; Altonen v Kmart of NY Holdings, Inc., 94 AD3d 920).

Here, the defendant contends that the documents and interrogatories at issue are "material and necessary" to prove the defense of lack of standing. We find there is merit to this contention to the extent that it pertains to the production, for the defendant's inspection, of the original note and endorsements.

A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362; Nationstar Mtge., LLC v Rodriguez, 166 AD3d 990, 992; Central Mtge. Co. v Jahnsen, 150 AD3d 661, 663; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753-754). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" (Nationstar Mtge., LLC v Rodriguez, 166 AD3d at 992 [internal quotation marks omitted]; see Central Mtge. Co. v Jahnsen, 150 AD3d at 663; Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d 725, 726). A plaintiff may establish, prima facie, its standing as the holder of the note by demonstrating that a copy of the note, including an endorsement in blank, was among the exhibits annexed to the complaint at the time the action was commenced (see U.S. Bank N.A. v Fisher, 169 AD3d 1089; Nationstar Mtge., LLC v Rodriguez, 166 AD3d at 992; U.S. Bank N.A. v Duthie, 161 AD3d 809, 811; Deutsche Bank Natl. Trust Co. v Carlin, 152 AD3d 491, 492-493; JPMorgan Chase Bank, N.A. v Weinberger, 142 AD3d 643, 645). A "promissory note [is] a negotiable instrument within the meaning of the Uniform Commercial Code" (Mortgage Elec. Registration Sys., Inc. v. Coakley, 41 AD3d 674, 674; see UCC 3-104[2][d]; Bayview Loan Servicing, LLC v Kelly, 166 AD3d 843, 845; US Bank, N.A. v Zwisler, 147 AD3d 804, 806). A "holder" is "the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession" (UCC 1-201[b][21][A]; see UCC 3-301; Bayview Loan Servicing, LLC v Kelly, 166 AD3d at 845-846; US Bank, N.A. v Zwisler, 147 AD3d at 806). Where an instrument is endorsed in blank, it may be negotiated by delivery (see UCC 3-202[1]; 3-204[2]; Bayview Loan Servicing, LLC v Kelly, 166 AD3d at 845-846; US Bank, N.A. v Zwisler, 147 AD3d at 806). "An indorsement must be . . . on the instrument or on a paper so firmly affixed thereto as to become a part thereof" (UCC 3-202[2]).

It is undisputed that a copy of the underlying note was annexed to the complaint. However, it cannot be ascertained from the copy of the note provided by the plaintiff whether the separate page that bears the endorsement in blank was stamped on the back of the note, as alleged by the plaintiff, or on an allonge, and if on an allonge, whether the allonge was "so firmly affixed as to become a part thereof," as required under UCC 3-202(2). Since the answers to these questions are "material and necessary" to the defense of lack of standing, the Supreme Court should have [*2]granted that branch of the defendant's motion which was pursuant to CPLR 3124 to compel the plaintiff to produce the original note and endorsements (see One Westbank FSB v Rodriguez, 161 AD3d 715, 716; HSBC Bank USA, N.A. v Roumiantseva, 130 AD3d 983, 985)."

WHO MUST SIGN A HOME IMPROVEMENT CONTRACT

J.B. Sterling Co. v. Verhelle, NYLJ September 16, 2019, Date filed: 2019-09-09, Court: U.S. District Court for the Western District of New York, U.S. - WDNY, Judge: District Judge Elizabeth Wolford, Case Number: 6:15-CV-06271:

"Defendants’ primary argument in support of their motion for partial summary judgment is that the Contract is unenforceable because it does not satisfy the requirements of GBL §771, which governs home improvement contracts in New York. (See Dkt. 68-13 at 8-11). The Court agrees, for the reasons that follow.

GBL §771 sets forth the requirements for a valid home improvement contract under New York State law. First, the home improvement contract must be “evidenced by a writing” and “signed by all the parties to the contract.” N.Y. Gen. Bus. L. §771(1). Second, the home improvement contract must contain various disclosures regarding the contractor, the work to be performed, pricing and payment, and the homeowner’s rights and obligations. Id. at §§771(1)(a)-(h).

It is undisputed that the Contract in this case was a home improvement contract within the meaning of GBL §771 and, accordingly, compliance with that law was required. As such, the Contract was required to be “evidenced by a writing” and “signed by all the parties to the Contract.” N.Y. Gen. Bus. L. §771(1) (emphasis added). The Contract itself defines “William & Cyndee Verhelle” as “signing parties” (Dkt. 67-18 at 2 (emphasis added)), yet it is undisputed that Mrs. Verhelle never signed the Contract. Accordingly, a reasonable jury would have to conclude that the Contract fails, on its face, to comply with GBL §771′s fundamental requirement that a home improvement contract be signed by all the parties.2

Plaintiff offers several arguments in support of its position that Mrs. Verhelle’s signature was not required on the Contract. First, it claims that there “can be no question that there was a meeting of the minds in a written agreement,” because Mr. Verhelle participated in the drafting of the Contract, and because “both parties acknowledge that they entered into a contract for remodeling and renovation.” (Dkt. 71-1 at 3). Second, Plaintiff contends that it was Mr. Verhelle who modified the Contract to identify “William & Cyndee Verhelle (Homeowner)” as signing parties, and that Mr. Verhelle held himself out as a homeowner. (Id. at 3-4). Finally, Plaintiff contends that Mr. Verhelle intended to bind Mrs. Verhelle to the terms of the Contract, and that he had the authority to bind Mrs. Verhelle as her spouse under “an implied agency theory.” (Id. at 4). The Court is not persuaded by these arguments.

Plaintiff’s argument that there was a “meeting of the minds” between it and Mr. Verhelle, who purportedly participated in drafting the Contract, misses the point. GBL §771 is a consumer protection statute, and its requirement that a home improvement contract be signed by “all parties” ensures that a homeowner is aware of his or her rights. See Carrea & Sons, Inc. v. Hemmerdinger, 42 Misc. 3d 791, 796 (Rye City Ct. 2013) (explaining GBL §771 is part of “a consumer protection disclosure regimen to protect the property of homeowners from home improvement contractors”). In this case, regardless of any agreement reached between Plaintiff and Mr. Verhelle, there is no evidence that Plaintiff ever reached a “meeting of the minds” with Mrs. Verhelle, the sole owner of the Mendon Property. Moreover, contrary to Plaintiff’s contentions, Mrs. Verhelle does not acknowledge entering into the Contract, and in fact testified at her deposition that she did not recall having ever seen the Contract in 2014, that she was not involved in the bid process, and that she was not involved in the renovation project until the very end. (Dkt. 73-1 at 6-8).

Turning next to Plaintiff’s argument that Mr. Verhelle is the one who included Mrs. Verhelle as a party to the Contract, it is not clear to the Court why Plaintiff thinks this contention supports its position. It is undisputed that Mrs. Verhelle is the sole legal owner of the Mendon Property. As such, her consent was required before any home improvement project could lawfully be undertaken. As a matter of basic property law, it was appropriate and necessary for her to be included as a party to the Contract. Additionally, under New York law, “it is the contractor’s obligation to prepare the contract in compliance with the law. If the contractor fails to do so, it is the contractor who should bear the burden, not the homeowner, who only occasionally may enter into a home improvement contract.” Carrea & Sons, 42 Misc. 3d at 796. In other words, regardless of what changes Mr. Verhelle may have requested as to the Contract, it was ultimately Plaintiff’s burden, as the contractor, to ensure compliance with GBL §771.

To the extent Plaintiff contends that Mr. Verhelle wrongfully held himself out as co-owner of the Mendon Property, the Court notes as an initial matter that property ownership is a matter of public record, and that the appropriate filing of a deed serves as constructive notice regarding the owner of real property. See, e.g., Smullens v. MacVean, 183 A.D.2d 1105, 1107 (3d Dep’t 1992) (“The recording of the deed constituted constructive notice…that [the plaintiff] was the owner of such real property. A reasonable investigation of public records…would have revealed that [the plaintiff] was the title owner of the real property adjacent to defendants’ property.” (citations omitted)). Moreover, there is no evidence in the record before the Court that Mrs. Verhelle ever represented to Plaintiff that Mr. Verhelle was a co-owner of the Mendon Property.3 Plaintiff essentially asks the Court to hold Mrs. Verhelle responsible for Mr. Verhelle’s purported misrepresentations simply because he is her husband, which is a result New York law will not countenance. See Schwartz v. Bankers Tr. Co., 28 A.D.2d 696, 698 (2d Dep’t 1967) (“[A] husband is not deemed the agent of his wife by inference from the marital relationship, the rule being that no agency is to be implied between the spouses from the mere fact of their marriage.”), aff’d, 21 N.Y.2d 927 (1968); Parent Teacher Ass’n, Pub. Sch. 72 v. Manufacturers Hanover Tr. Co., 138 Misc. 2d 289, 297 (N.Y.C. Civ. Ct. 1988) (“One spouse is not an agent of another and cannot be held liable for a spouse’s independently wrongful act because of the marital relationship.” (citation omitted)). In other words, Mr. Verhelle’s alleged misrepresentations could perhaps serve as the basis for a tort claim against Mr. Verhelle (a claim that has not been pleaded). However, the alleged misrepresentations by Mr. Verhelle cannot circumvent the statutory requirement that Mrs. Verhelle’s signature was required on the Contract in order to render it enforceable.

Lastly, the Court is not persuaded that Mr. Verhelle was serving as Mrs. Verhelle’s agent, such that he could bind her to the Contract’s terms. It is true that, under New York law, “[a] spouse, under certain circumstances, may also cause his or her spouse to incur liability under a theory of implied agency.” Jones-Soderman v. Mazawey, No. 09 CIV 3185 SCR LMS, 2010 WL 54759, at *4 (S.D.N.Y. Jan. 6, 2010). In particular, implied agency may exist “where the circumstances are such as to give rise to, or raise a presumption of, an implied authority to make such contracts or purchases, as for example, where the one spouse has been in the habit of conducting the other’s business and making purchases therefor, and the other spouse has acquiesced therein.” 45 N.Y. Jur. 2d Domestic Relations §245. However, “[i]n accordance with the general rule of agency, one spouse is not, under any theory of agency, bound by, or liable for, the act or contract of the other which is beyond the actual, and not within the apparent, scope of the other spouse’s authority or employment, unless the transaction is ratified by the spouse.” 45 N.Y. Jur. 2d Domestic Relations §247 (emphasis added). In other words, as with all theories of agency, an implied agency theory requires some affirmative act by the purported principal to demonstrate an intent or willingness to be bound by the purported agent. See Greene v. Hellman, 51 N.Y.2d 197, 204 (1980) (“As with implied actual authority, apparent authority is dependent on verbal or other acts by a principal which reasonably give an appearance of authority to conduct the transaction….”); see Hallock v. State, 64 N.Y.2d 224, 231 (1984) (“The agent cannot by his own acts imbue himself with apparent authority.”).

Here, Plaintiff has identified no affirmative acts by Mrs. Verhelle to support a finding of implied agency. To the contrary, Plaintiff has cited no facts whatsoever in support of its implied agency argument. (See Dkt. 71-1 at 4). As the party claiming apparent authority by a purported agent, Plaintiff bears the burden of proof on this issue. See Ford v. Unity Hosp., 32 N.Y.2d 464, 472 (1973) (under New York law, “[o]ne who deals with an agent does so at his peril, and must make the necessary effort to discover the actual scope of authority,” and in order to support an apparent authority argument, a party must make “a factual showing that the third party relied upon the misrepresentations of the agent because of some misleading conduct on the part of the principal – not the agent”). On the record before the Court, no reasonable jury could conclude that Plaintiff had met that burden.

The cases cited by Plaintiff are distinguishable from the instant matter, because in each of them, there was evidence of affirmative conduct by the party who was found to be potentially bound by their spouse. In In re Bear Stearns Companies, Inc. Sec., Derivative, & Erisa Litig., 308 F.R.D. 113 (S.D.N.Y. 2015), there was evidence in the record that the husband and wife had “worked in concert to make the trades at issue in the case,” and had affirmatively claimed each other as agents in a related context. Id. at 121. In Jill Real Estate, Inc. v. Smyles, 150 A.D.2d 640 (2d Dep’t 1989), the issue was whether a husband’s signature on a memorandum of sale bound his wife, the co-owner of the property at issue. Id. at 642. In that case, the wife had participated in the sale and “unequivocally informed [the plaintiff] that she was not the owner of the property.” Id. Finally, in Kozecke v. Humble Oil & Ref. Co., 46 A.D.2d 986 (3d Dep’t 1974), the Court expressly acknowledged that “an agency between husband and wife is not to be implied from the mere fact of marriage,” but explained that the evidence of record supported the conclusion that the wife in that case had participated in and ratified her husband’s conduct. Id. at 987. In this case, Plaintiff has not adduced any evidence of participation by Mrs. Verhelle in the negotiation of the Contract, or cited any facts that would support the conclusion that she ratified its terms. To the contrary, the record before the Court shows no communication between Plaintiff and Mrs. Verhelle whatsoever. Plaintiff cannot demonstrate that Mr. Verhelle was acting as Mrs. Verhelle’s implied agent based on nothing more than their marital relationship.

Moreover, even were Plaintiff able to show an implied agency relationship between Mr. and Mrs. Verhelle, the plain language of GBL §771 requires the signatures of all parties, not their agents. Plaintiff has cited to no case law supporting the position that GBL §771′s requirement that all parties sign a home improvement contract can be satisfied through a showing of implied agency. GBL §771 is a consumer protection statute that contains a writing requirement specifically to make certain that homeowners are informed of their rights and, and requiring a personal signature from every contracting party is part of that statutory scheme. Plaintiff has not demonstrated that the common-law concept of implied agency can trump this express statutory requirement. Cf. Wilner v. Allstate Ins. Co., 71 A.D.3d 155, 159 (2d Dep’t 2010) (explaining that the New York Court of Appeals reads consumer protection statutes broadly to effectuate their remedial purposes).

Having determined that the Contract in this case fails to satisfy GBL §771, the Court next considers whether, as Defendants contend, that renders the Contract unenforceable. New York’s highest court, the New York Court of Appeals, has not opined on the consequences for failing to comply with the requirements of GBL §771. However, two of New York’s intermediate appellate courts-the Appellate Divisions of the Third and Fourth Departments-have held that “the failure to strictly comply with [GBL §771] bars recovery under an oral or insufficiently detailed written home improvement contract[.]” Harter v. Krause, 250 A.D.2d 984, 986-87 (3d Dep’t 1998); see also Weiss v. Zellar Homes, Ltd., 169 A.D.3d 1491, 1493 (4th Dep’t 2019); Frank v. Feiss, 266 A.D.2d 825, 826 (4th Dep’t 1999).

The Appellate Division, Second Department has taken a somewhat more lenient approach to compliance with GBL §771, holding that “an otherwise valid, signed, written contract” is not “rendered unenforceable solely by virtue of its failure to contain each and every item enumerated in General Business Law §771.” Wowaka & Sons, Inc. v. Pardell, 242 A.D.2d 1, 7-8 (2d Dep’t 1998). However, even the Second Department has held that GBL §771 precludes enforcement of home improvement contracts that are not “in writing and signed by the parties thereto.” F & M Gen. Contracting v. Oncel, 132 A.D.3d 946, 948 (2d Dep’t 2015); see also Home Const. Corp. v. Beaury, 149 A.D.3d 699, 702 (2d Dep’t 2017) (“General Business Law §771 sets forth a number of requirements for home improvement contracts, including that the contract be evidenced by a writing signed by all the parties to the contract…. [A] contractor cannot enforce a contract that fails to comply with General Business Law §771.”).

Based on these intermediate appellate court cases, the Court concludes that, under New York law, a home improvement contract that does not comport with GBL §771′s signature requirement is unenforceable. Accordingly, the Court agrees with Defendants that Plaintiff’s first cause of action, for breach of the Contract, fails as a matter of law.

The Court’s conclusion does not leave Plaintiff without recourse to seek the compensation it contends it is owed for the work it performed. See Weiss, 159 A.D.3d at 1493 (explaining that “although the failure to strictly comply with the statute bars recovery under an oral or insufficiently detailed written home improvement contract, such failure does not preclude recovery for completed work under principles of quantum meruit” (quotation omitted)). Defendants have not sought summary judgment on Plaintiff’s unjust enrichment claim, and Plaintiff remains free to pursue that theory of recovery."

THE SHIELD ACT

In July, New York Governor Andrew Cuomo signed into law the Stop Hacks and Improve Electronic Data Security Act (SHIELD Act),

From the legislative history: "New York's current data breach notification law needs to be updated to keep pace with individuals' use and dissemination of private information. New York also needs to join the increasing number of states that require reasonable data security protections, without imposing duplicate obligations on those already subject to other federal or New York State data security regulations and without imposing excessive costs on small business. This bill expands the scope of information subject to the current data breach notification law to include biometric information, and email addresses and their corresponding passwords or security questions and answers. It broadens the definition of a data breach to include unauthorized access to private information. It applies the notification requirement to any person or entity with private information of a New York resident, not just to those that conduct business in New York State. It also updates the notification procedures companies and state entities must follow when there has been a breach of private information. It also creates reasonable data security requirements tailored to the size of a business."

VISIT OUR TABLE SEPTEMBER 21

A NEIGHBOR'S SECURITY CAMERA AND CIVIL RIGHTS LAW

"Big Brother is watching you": 1984, George Orwell

Ienopoli v. Lent, NYLJ September 05, 2019, Date filed: 2019-08-19 Court: Supreme Court, Nassau; Judge: Justice Diccia Pineda-Kirwan; Case Number: 606251/19:

"Upon the foregoing cited papers, and after conference, it is ordered that this petition for an order directing respondents to remove or redirect their cameras, pursuant to New York Civil Rights Law §52-a, is determined as follows: Petitioners and respondents are neighbors residing at 9 Jerry Lane and 7 Jerry Lane, Glen Cove, New York, respectively. The parties’ properties abut and their backyards share a common fence line. Petitioners claim that respondents installed numerous cameras on their property aimed at petitioners’ property, including their backyard and windows, without petitioners’ consent. Petitioners believe that the cameras were installed with the intent to harass, annoy, and alarm them, or with the intent to threaten petitioners’ person or property.

New York Civil Rights Law §52-a gives an owner of residential real property “a private right of action for damages” against anyone “who installs or affixes a video imaging device” on property adjoining their residential real property with “the purpose of video taping or taking moving digital images of the recreational activities which occur in the backyard of the residential real property without the written consent thereto of such owner” when such action is taken “with intent to harass, annoy or alarm another person, or with intent to threaten the person or property of another person.”
The parties acknowledge that there have not been any cases guiding the application of New York Civil Rights Law §52-a. When interpreting a statute, courts must try to ascertain the Legislature’s intent, by first looking at the statute’s plain language (see Feinman v. Cty. of Nassau, 154 AD3d 739, 740 [2017]). Here, the statute states that it permits “a private right of action for damages.” In the instant matter, petitioners admittedly are not seeking damages but equitable relief in the form of an order directing respondents to redirect or move their cameras.

Additionally, when statutory language is ambiguous, the court may reference the statute’s legislative history (see Jackson v. Bank of Am., N.A., 149 AD3d 815, 821 [2017]). The Sponsors Memorandum for the bill explains the statute’s “[j]ustification” as closing a gap in Stephanie’s Law, which was enacted in 2003 after a woman discovered that she was being videotaped in her bedroom by her landlord (see NY Sponsor’s Mem, 2017, SB 870). Stephanie’s Law codified unlawful surveillance as a Class E felony, but did not have any restriction against video monitoring a neighbor’s backyard (see Id). New York Civil Rights Law §52-a was meant to address this deficiency, and the Sponsor’s Memorandum references an instance in which a family with young children was under constant video surveillance in their backyard by a neighbor who is a registered sex offender (see Id). The statute helps to ensure the rights of individuals to enjoy their backyards with a certain expectation of privacy and not be subjected to an adjoining landowner’s harassing or annoying behavior (see Id).

Here, petitioners submit, among other things, photographs of cameras on respondent’s property and the affidavit of Lina Ienopoli. It is impossible to discern from the photographs alone where the cameras are focused and if they indeed are aimed at petitioners’ windows and backyard as petitioners allege. Additionally, aside from Ms. Ienopoli’s bare statement that “[u]pon information and belief,” the cameras were installed “with the intent to harass, annoy or alarm…or with the intent to threaten the person or property of” petitioners, there is no evidence submitted to establish same.

Furthermore, in opposition, respondents submit, among other things, the affidavit of Christopher Lent. Mr. Lent states that he installed the cameras in January of 2019 after petitioner Francesco Ienopoli allegedly threatened him stating in sum and substance “You are this close to me burning your house down,” while putting his fingers close together as he said “this close.” Mr. Lent avers that he installed the cameras solely for the purpose of protecting his family and his property. He claims that the cameras do not tape or image petitioners’ backyard and were not installed to annoy, harass, or threaten petitioners.

It is evident that the relief petitioners seek is not provided for by the plain language of the statute. Additionally, petitioners fail to establish that respondents installed their cameras with the requisite intent prohibited by the statute. Lastly, both the incident that served as the impetus for Stephanie’s Law, and the one referenced in the Sponsors Memorandum, are clearly distinguishable from the instant matter. Nothing in the statute or the Sponsors Memorandum suggests that Civil Rights Law §52-a was enacted in any part to curtail the rights of property owners to secure their property through the use of security cameras. Thus, petitioners fail to establish their entitlement to an order directing the removal or redirection of respondents’ cameras."

NEW YORK STATE BAN ON SALARY BACKGROUND CHECK

Governor Cuomo signed S6549 into law on July 10, 2019, which was designed by the state’s lawmakers to prevent wage discrimination among New York employees. In attempt to accomplish this goal, New York will now prohibit all employers from requiring applicants to provide their salary histories before they will be interviewed, employed, or promoted by the employer or as a condition to continued employment with the employer. Additionally, employers will be prohibited from retaliating against applicants who refuse to provide their salary history information.

 
   "Labor Law  § 194-a. Wage or salary history inquiries prohibited.       
    1. No employer  shall:
    a.  rely  on the wage or salary history of an applicant in determining
  whether to offer employment to such individual  or  in  determining  the
  wages or salary for such individual.
    b.  orally  or in writing seek, request, or require the wage or salary
  history from an applicant or current  employee  as  a  condition  to  be
  interviewed,  or  as  a  condition of continuing to be considered for an
  offer of employment, or as a condition of employment or promotion.
    c. orally or in writing seek, request, or require the wage  or  salary
  history  of  an  applicant  or current employee from a current or former
  employer, current or former employee,  or  agent  of  the  applicant  or
  current  employee's  current  or  former employer, except as provided in
  subdivision three of this section.
    d. refuse to interview, hire, promote, otherwise employ, or  otherwise
  retaliate against an applicant or current employee based upon prior wage
  or salary history.
    e.  refuse to interview, hire, promote, otherwise employ, or otherwise
  retaliate  against  an  applicant  or  current  employee  because   such
  applicant  or current employee did not provide wage or salary history in
  accordance with this section.
    f. refuse to interview, hire, promote, otherwise employ, or  otherwise
  retaliate against an applicant or current or former employee because the
  applicant  or  current  or  former  employee  filed a complaint with the
  department alleging a violation of this section.
    2. Nothing in this section  shall  prevent  an  applicant  or  current
  employee   from   voluntarily,  and  without  prompting,  disclosing  or
  verifying wage or salary history, including but not limited to  for  the
  purposes of negotiating wages or salary.
    3.  An employer may confirm wage or salary history only if at the time
  an offer of employment with  compensation  is  made,  the  applicant  or
  current employee responds to the offer by providing prior wage or salary
  information  to  support  a  wage  or  salary higher than offered by the
  employer.
    4. For the purposes of this section, "employer" shall include but  not
  be  limited  to  any  person,  corporation,  limited  liability company,
  association, labor organization, or entity employing any  individual  in
  any  occupation,  industry,  trade,  business  or  service, or any agent
  thereof. For the purposes of this section,  the  term  "employer"  shall
  also  include  the  state, any political subdivision thereof, any public
  authority or any other governmental entity or  instrumentality  thereof,
  and  any  person, corporation, limited liability company, association or
  entity acting as an employment agent, recruiter, or otherwise connecting
  applicants with employers.
    5. An applicant or current or former employee aggrieved by a violation
  of this section may bring  a  civil  action  for  compensation  for  any
  damages  sustained  as  a  result  of  such  violation on behalf of such
  applicant, employee, or other persons similarly situated in any court of
  competent jurisdiction. The court may award injunctive relief as well as
  reasonable attorneys' fees to a plaintiff who prevails in a civil action
  brought under this paragraph.
    6. Nothing in this section shall be deemed  to  diminish  the  rights,
  privileges,  or  remedies of any applicant or current or former employee
  under any other law or regulation or  under  any  collective  bargaining
  agreement or employment contract.
    7.  This  section  shall not supersede any federal, state or local law
  enacted prior to the effective date of this section  that  requires  the

  disclosure or verification of salary history information to determine an
  employee's compensation.
    8.  The department shall conduct a public awareness outreach campaign,
  which shall include making information available  on  its  website,  and
  otherwise informing employers of the provisions of this section.
    * NB Effective January 6, 2020"

FREE MORTGAGE FORECLOSURE CLINIC TODAY

→ Reservations are required by calling the Bar Association at 516-747-4070. Please bring any documents. Attorneys fluent in other languages are available upon request when reserving.

All clinics are 3-6 p.m. and are held at the Nassau County Bar Association in Mineola twice a month. Call to make an appointment for the next scheduled clinic.

→Please call NCBA for the scheduled dates for Free Legal Consultation

NEW STATUTE OF LIMITATIONS FOR DOMESTIC VIOLENCE VICTIMS

Intentional torts generally have a one year statute of limitation under CPLR 215 (3). On September 4, New York's civil practice law and rules was amended by adding a new section 215-a relating to actions to recover damages for injuries arising from acts of domestic violence. An action to recover damages related to domestic violence shall be commenced within two years.

MORTGAGE FORECLOSURE - BANK WITHOUT STANDING CANNOT ACCELERATE THE DEBT

Herzl Dev. Group, LLC v Federal Natl. Mtge. Assn., 2019 NY Slip Op 06385, Decided on August 28, 2019, Appellate Division, Second Department:

"In June 2005, nonparty Paul Russell executed a note in favor of Countrywide Home Loans, Inc. (hereinafter Countrywide), secured by a mortgage given to Mortgage Electronic Registration Systems, Inc., as nominee for Countrywide, encumbering real property in Brooklyn. Upon Russell's default, Countywide mailed a notice of default dated May 17, 2007. In or about July 2007, Countrywide commenced an action to foreclose the mortgage (hereinafter the 2007 foreclosure action), which was subsequently dismissed for lack of standing. A second action to foreclose the mortgage was dismissed for lack of personal jurisdiction.

Thereafter, in 2014, the plaintiff obtained title to the property and commenced this action pursuant to RPAPL 1501(4), seeking to cancel and discharge the mortgage on the ground that the statute of limitations for commencing an action to foreclose the mortgage had expired. The defendant moved pursuant to CPLR 3211(a)(1) to dismiss the complaint, arguing that documentary evidence demonstrated that the debt was never accelerated, and therefore that the statute of limitations had not expired. By order dated June 9, 2016, the Supreme Court granted the defendant's motion. The plaintiff appeals.

"With respect to a mortgage payable in installments, separate causes of action accrue for each installment that is not paid, and the statute of limitations begins to run, on the date each installment becomes due" (Wells Fargo Bank, N.A. v Burke, 94 AD3d 980, 982; see U.S. Bank N.A. v Gordon, 158 AD3d 832, 835). However, once such a mortgage debt is accelerated, the entire amount is due and the statute of limitations begins to run on the entire debt (see Nationstar Mtge., LLC v Weisblum, 143 AD3d 866, 867; Wells Fargo Bank, N.A. v Burke, 94 AD3d at 982). "Where the acceleration of the maturity of a mortgage debt on default is made optional with the holder of the note and mortgage, some affirmative action must be taken evidencing the holder's election to take [*2]advantage of the accelerating provision, and until such action has been taken the provision has no operation" (Wells Fargo Bank, N.A. v Burke, 94 AD3d at 982-983). "Where the holder of the note elects to accelerate the mortgage debt, notice to the borrower must be clear and unequivocal'" (Nationstar Mtge., LLC v Weisblum, 143 AD3d at 867, quoting Sarva v Chakravorty, 34 AD3d 438, 439).

Here, the documentary evidence submitted by the defendant conclusively demonstrated that the debt was not accelerated either by the May 17, 2007, notice of default or by the complaint in the 2007 foreclosure action, as the plaintiff herein alleged. Although the complaint in the 2007 action expressly "elect[ed] to declare immediately due and payable the entire unpaid balance of the principal" (see Milone v US Bank N.A., 164 AD3d 145, 152), Countrywide was found to lack standing in that action, and thus, did not have the authority to accelerate the debt at that time (see J & JT Holding Corp. v Deutsche Bank Natl. Trust Co., 173 AD3d 704; U.S. Bank N.A. v Gordon, 158 AD3d 836; 21st Mtge. Corp. v Adames, 153 AD3d at 475). Further, the May 17, 2007, notice of default, which provided that the debt would be accelerated if the borrower failed to cure the default by a date certain, was "nothing more than a letter discussing acceleration as a possible future event, which does not constitute an exercise of the mortgage's optional acceleration clause" (21st Mtge. Corp. v Adames, 153 AD3d at 475; see FBP 250, LLC v Wells Fargo Bank, N.A., 164 AD3d 1307, 1309; Milone v US Bank N.A., 164 AD3d at 152)."

NEW RULES - CONFESSION OF JUDGMENT

Governor Andrew M. Cuomo on August 30 signed legislation (S.6395/A.7500A) closing the legal loophole that allows creditors to use New York courts to secure confessions of judgment and seize the assets of borrowers for cases where the borrower has no connection to New York. Prior to this new law, creditors were able to exploit New York laws to freeze and seize a borrower's assets by obtaining a judgment entered in a court far from where the contested agreement was executed, making it difficult for a borrower to legally contest the unfair penalty.

Section 3218 of the civil practice law and rules, paragraph 1 of subdivision (a) is now amended