EMAIL SETTLEMENT CAN BE BINDING

Was there a deal or just "buyers remorse"?

McCalla v. LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, Dist. Court, ED New York, February 6, 2020:

"A. Procedural Posture of the Case

Plaintiff Hensley K. McCalla ("Plaintiff"), represented by counsel, commenced this action in the New York State Supreme Court, County of Nassau, asserting a claim for disability benefits against the defendant Liberty Life Assurance Company of Boston ("Defendant"). (ECF No. 1.) Defendant asserted that the claims were preempted by ERISA, 29 U.S.C. §§ 1001, et seq., and removed the case to Federal Court on April 2, 2018. (Id.) It was assigned to District Court Judge Sandra J. Feuerstein. Plaintiff filed an amended complaint and Defendant responded with an answer and counterclaims, alleging an overpayment of disability benefits. (ECF Nos. 10, 11.)

At a status conference before Judge Feuerstein on July 23, 3018, the parties discussed discovery deadlines and a date by which to serve dispositive motions. (ECF No. 16.) Approximately two months later, defense counsel wrote jointly with plaintiff's counsel to notify the Court that the parties "have reached an agreement in principle," and to request that the Court vacate all deadlines pending submission of the dismissal paperwork. (ECF No. 17.)

The Court granted this request and marked the case closed. (Electronic Order, 9/27/18.) On November 1, 2018, plaintiff's counsel moved to withdraw as counsel for Plaintiff, citing irreconcilable differences, a request which Judge Feuerstein denied. (ECF No. 17.) On December 21, 2018, Defendant filed a fully briefed "Motion for Settlement," asserting that the parties had entered into a binding settlement agreement and asking the Court to enforce that settlement. (ECF Nos. 21-26.) The filing included a Memorandum in Opposition filed by plaintiff's counsel. (ECF No. 24.)
While the Motion for Settlement was pending, Plaintiff, proceeding — pro se, filed an identical action in New York State Supreme Court, Nassau County, which Defendant again removed to Federal Court and then requested it be consolidated with the instant action. (See ECF Nos. 29, 30.) Judge Feuerstein consolidated the second-filed case (Docket 19-cv-4180) with the instant case, which she reopened. (Electronic Order, 7/25/2019.)

A few weeks later, plaintiff's counsel moved to be relieved as counsel for the second time, including a signed stipulation from Plaintiff indicating that he would proceed pro se. (ECF Nos. 36, 37.) Judge Feuerstein granted this request and scheduled a conference. (Electronic Order 8/21/2019.) Plaintiff appeared pro se before Judge Feuerstein on October 8, 2019 and the case was reassigned to the undersigned on October 15, 2019. (ECF No. 39.) The undersigned reviewed the pending motion papers and scheduled a conference for February 4, 2020 to address the requested relief, at which time the Court granted Defendant's Motion for Settlement. (ECF No. 40.)

B. Settlement Discussions and Agreement

According to the papers submitted with the Motion for Settlement, plaintiff's counsel made an initial settlement offer to defense counsel via email on June 28, 2018. (Sibbernsen Decl., Ex. A., ECF No. 23.) He then made three revised settlement offers on July 20, 2018, September 13, 2018, and September 14, 2018. (Sibbernsen Decl., Exs. A, B, C.) In each email he stated, "[a]fter further discussion with our client, we have revised our settlement offer" and noted that the parties had agreed that the settlement would also waive Defendant's claims against Plaintiff.^[1] (Id.) Following the September 14, 2018 offer, defense counsel countered, stating "[i]n exchange for a release of all claims and an agreement to usual and customary terms of a settlement agreement (including confidentiality and non-disparagement), my client offers to waive its counterclaim against Mr. McCalla (approx. $35K) and pay Mr. McCalla an additional $9,000." (Sibbernsen Decl., Ex. D.) Later that same day, plaintiff's counsel reduced the demand amount. (Id.) Three days later, on September 17, 2018, plaintiff's counsel stated, "Mr. McCalla will accept $12,500.00. This is our best and final offer." (Id.)

The next morning, defense counsel indicated that his client would accept the demand of $12,500.00 and waive its counterclaims in exchange for a release of all claims and agreement to usual and customary terms of a settlement agreement. (Id.) He indicated that he would draft a settlement agreement, asked to whom the settlement check should be made out, and requested an executed Form W-9 for plaintiff's counsel's firm. (Id.) An hour and a half later, plaintiff's counsel responded with the signed W-9 and stated that the settlement check should be payable to his firm, as attorney. (Id.) Approximately a week later, defense counsel asked if he could submit the letter notifying the Court of the settlement, to which plaintiff's counsel responded, "Letter is fine." (Id.)

Over the next few weeks, defense counsel asked clarifying questions about the preferred designation for the settlement check and sent a settlement agreement. (Sibbernsen Decl., Ex. E.) He followed up with plaintiff's counsel about the status of the settlement agreement on October 19, 2018, and plaintiff's counsel responded, "I expect my client in next week." (Id.)

According to subsequent email exchanges, plaintiff's counsel then informed defense counsel that Mr. McCalla intended to back out of the settlement agreement and defense counsel stated, by email, Defendant's position that the parties entered into a binding settlement agreement reflected in their email exchanges. (Sibbernsen Decl., Ex. F.) Plaintiff's counsel contended it was not a binding settlement agreement because the emails stated, "FOR SETTLEMENT PURPOSES ONLY WITHOUT PREJUDICE — NOT TO BE USED IN LITIGATION" and the letter to the Court indicated that the settlement had been reached only "in principle." (Id.)

DISCUSSION

The Court has considered the parties' motion papers together with the statements made on the record at the Conference.^[2] The Court first addresses counsel's authority to enter into the settlement agreement. "[B]ecause of the unique nature of the attorney-client relationship, and consistent with the public policy favoring settlements, we presume that an attorney-of-record who enters into a settlement agreement, purportedly on behalf of a client, had authority to do so. In accordance with that presumption, any party challenging an attorney's authority to settle the case . . . bears the burden of proving by affirmative evidence that the attorney lacked authority." Pereira v. Sonia Holdings (In re Artha Mgmt.), 91 F.3d 326, 329 (2d Cir. 1996).

In its opening brief, Defendant argued that plaintiff's counsel had authority to settle on behalf of Plaintiff. (ECF No. 22.) Plaintiff was still represented by counsel when he opposed the motion and his opposition papers did not contest this argument. (ECF No. 24.) Accordingly, any such claim is waived. However, at the Conference, Plaintiff claimed for the first time that his counsel did not have his authority to settle for $12,500.00. Even if this claim was not waived by failing to raise it in his motion papers, the Court does not find Plaintiff's statement credible, particularly given the email exchanges between counsel and the lack of opposition to Defendant's actual authority argument in the papers submitted to the Court.

Next, to determine if the settlement agreement was binding, "[t]he court is to consider (1) whether there has been an express reservation of the right not to be bound in the absence of a writing; (2) whether there has been partial performance of the contract; (3) whether all of the terms of the alleged contract have been agreed upon; and (4) whether the agreement at issue is the type of contract that is usually committed to writing." Winston v. Mediafare Entm't Corp., 777 F.2d 78, 80 (2d Cir. 1985). No single factor is dispositive. Id. Based on these factors, the Court finds that the parties entered into a binding settlement agreement. The Court is particularly persuaded by the case Pruiett v. City of New York, 2012 U.S. Dist. LEXIS 103793 (S.D.N.Y. May 31, 2012), which presents a very similar set of facts. The arguments raised by Plaintiff in his opposition papers, or on the record at the Conference, do not persuade the Court otherwise. Notably, at the Conference, Plaintiff did not contest any terms of the settlement other than the settlement amount—his only defense to the Motion for Settlement was that he did not want to settle the case for $12,500.00, which was clearly agreed to in the email exchanges.

Accordingly, the Court GRANTS Defendant's Motion for Settlement, (ECF No. 21), and finds that the parties agreed to settle this action for a sum of $12,500.00 to be paid by Defendant to Plaintiff which will release all claims and counterclaims in this consolidated action. Defendant shall issue a check made payable to Plaintiff for the full settlement amount by March 5, 2020 (30 days from the date of the conference), at which time the releases shall become effective.

CONCLUSION

As this matter has settled, the case is dismissed. The Clerk of the Court is directed to mail a copy of this order to Plaintiff at his last known address and to mark this case closed.
SO ORDERED.
[1] The Court notes that the July 20, 2018 email did not include the word "further." (Sibbernen Decl., Ex. A.)

[2] The Court rejects Plaintiff's argument that it lacks jurisdiction over the Motion for Settlement. (See ECF No. 24 at 10-12.) The enforceability of the settlement is properly before the Court in the instant action, which was removed to this Court on April 2, 2018. Moreover, even if it were not, the Court would have jurisdiction to address the enforceability of the settlement as part of the newly-filed identical case, 19-cv-4180-SJF-SIL, which already has been consolidated into the instant action."

MORTGAGE FORECLOSURE - EFFECT OF BANK'S DELAY

A balancing of interests.

Chase Home Fin., LLC v Berger, 2020 NY Slip Op 04289, Decided on July 29, 2020, Appellate Division, Second Department:

"In March 2004, Abraham Berger (hereinafter the defendant) borrowed the sum of $300,000 from the plaintiff's predecessor in interest. The loan was evidenced by a note and secured by a mortgage on certain real property located in Spring Valley. In October 2009, the plaintiff commenced this action against the defendant and others alleging, inter alia, that the defendant defaulted in his payment obligations under the note and mortgage.

In August 2010, the plaintiff obtained a default judgment of foreclosure and sale against the defendant. Four years later, the plaintiff attempted to enforce the judgment of foreclosure and sale by moving, inter alia, for leave to substitute the affidavit of merit. The Supreme Court granted the motion in an order dated February 20, 2015. Thereafter, the defendant moved to vacate, among other things, an order of reference dated April 6, 2010, and the judgment of foreclosure and sale, and pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him on the ground, inter alia, that he had never been served with the summons and complaint. In late 2017, the plaintiff moved, among other things, pursuant to CPLR 306-b to extend the time to serve the defendant with the summons and complaint.

After the plaintiff admitted that its original affidavit of service was erroneous and failed to produce its process server when the parties appeared for a hearing to determine the validity [*2]of service of process, the Supreme Court denied the plaintiff's motion and granted the defendant's motion, inter alia, to dismiss the complaint insofar as asserted against him. The plaintiff now appeals and argues, among other things, that the court should have granted its motion in the interest of justice.

CPLR 306-b provides, in relevant part, that "[s]ervice of the summons and complaint . . . shall be made within one hundred twenty days after the commencement of the action." CPLR 306-b further provides that, "[i]f service is not made upon a defendant within the time provided in this section, the court, upon motion, shall dismiss the action without prejudice as to that defendant, or upon good cause shown or in the interest of justice, extend the time for service."

"An extension of time for service is a matter within the Court's discretion" (Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 101). In applying the CPLR 306-b interest of justice standard, which is distinct from the good cause standard (see State of New York Mtge. Agency v Braun, 182 AD3d 63), the court must engage in " a careful judicial analysis of the factual setting of the case and a balancing of the competing interests presented by the parties'" (BAC Home Loans Servicing, L.P. v Herbst, 180 AD3d 980, 981, quoting Leader v Maroney, Ponzini & Spencer, 97 NY2d at 105). In so doing, " the court may consider diligence, or lack thereof, along with any other relevant factor in making its determination, including expiration of the Statute of Limitations, the [potentially] meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff's request for the extension of time, and prejudice to defendant'" (BAC Home Loans Servicing, L.P. v Herbst, 180 AD3d at 981, quoting Leader v Maroney, Ponzini & Spencer, 97 NY2d at 105-106).


Here, we agree with the Supreme Court that the plaintiff's delay of nearly five years between obtaining a default judgment of foreclosure and sale against the defendant and its attempt to enforce that judgment, during which time the statute of limitations expired, weighed against extending the time to serve the defendant with the summons and complaint by approximately nine years. In addition, the court found that the plaintiff was seeking relief pursuant to CPLR 306-b to avoid the consequences of its inability to produce its process server on the scheduled date of the hearing. Under these circumstances, the court providently exercised its discretion in determining that granting the plaintiff's motion would not serve the interest of justice. Likewise, we agree with the court's determination granting the defendant's motion, inter alia, to dismiss the complaint insofar as asserted against him on the ground that he had not been properly served with the summons and complaint."

ORAL JOINT VENTURE AND THE STATUTE OF FRAUDS

Get it in writing.

MacKay v Paesano, 2020 NY Slip Op 04155, Decided on July 22, 2020, Appellate Division, Second Department:

"According to the plaintiff, he entered into an oral joint venture agreement with the defendant Michael Paesano (hereinafter the defendant) in which the plaintiff would refer potential investors to the defendant, who would provide them with financial consulting services and investment opportunities for which the defendant would receive fees and commissions. In exchange for the plaintiff's referrals, the defendant allegedly agreed to pay the plaintiff an annual referral fee of 0.5% of all revenues generated from the plaintiff's referrals. The plaintiff alleges that he was never compensated by the defendant despite referring approximately 200 investors to him.

The plaintiff commenced this action, inter alia, to recover damages for breach of contract. The defendant moved, inter alia, pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him. The Supreme Court granted that branch of the defendant's motion.

"The essential elements of a joint venture are an agreement manifesting the intent of the parties to be associated as joint venturers, a contribution by the coventurers to the joint undertaking (i.e., a combination of property, financial resources, effort, skill or knowledge), some degree of joint proprietorship and control over the enterprise; and a provision for the sharing of profits and losses" (Mawere v Landau, 130 AD3d 986, 988 [internal quotation marks omitted]; see Clarke v Sky Express, Inc., 118 AD3d 935, 936). The plaintiff failed to state a cause of action based on a joint venture agreement because he failed to allege "a mutual promise or undertaking to share the burden of the losses of the alleged enterprise" (Rocchio v Biondi, 40 AD3d 615, 616). Moreover, the complaint failed to allege joint control over the purported enterprise (see Kaufman v Torkan, 51 AD3d 977). Since the complaint fails to make a showing sufficient to establish the existence of an enforceable joint venture agreement, it also fails to make a showing sufficient to establish the [*2]existence of a fiduciary obligation owed to the plaintiff by the defendant (see Kidz Cloz, Inc. v Officially For Kids, Inc., 320 F Supp 2d 164, 176 [SD NY]). Therefore, accepting the facts as alleged in the complaint as true, and according the plaintiff the benefit of every possible inference (see CPLR 3211[a][7]), we agree with the Supreme Court's determination to dismiss the causes of action alleging breach of a joint venture agreement and breach of fiduciary duty insofar as asserted against the defendant.

We agree with the Supreme Court's determination to dismiss the cause of action alleging breach of contract insofar as asserted against the defendant since enforcement of the alleged oral agreement is barred by the statute of frauds (see General Obligations Law § 5-701[a][10]; JF Capital Advisors, LLC v Lightstone Group, LLC, 25 NY3d 759). Similarly, the causes of action sounding in unjust enrichment and quantum meruit are barred by the statute of frauds (see Snyder v Bronfman, 13 NY3d 504).


Further, we agree with the Supreme Court's determination to dismiss the causes of action alleging fraudulent misrepresentation and promissory estoppel insofar as asserted against the defendant. Those causes of action are duplicative of the unenforceable breach of contract cause of action and, thus, constitute an impermissible attempt to circumvent the statute of frauds (see Martin Greenfield Clothiers, Ltd. v Brooks Bros. Group, Inc., 175 AD3d 636; Gorman v Fowkes, 97 AD3d 726)."

A FORECLOSURE SALE UNDER THE UCC

It differs from a real property mortgage foreclosure sale.

Laskaratos v Bay Ridge Hoyt Lender, LLC, 2020 NY Slip Op 04152, Decided on July 22, 2020, Appellate Division, Second Department:

"In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from a judgment of the Supreme Court, Kings County (Lawrence Knipel, J.), dated August 3, 2018. The judgment, upon an order of the same court dated July 28, 2017, granting the defendants' motion for summary judgment dismissing the complaint and on their counterclaims for a deficiency judgment and an award of attorneys' fees, is in favor of the defendants and against the plaintiff in the sum of $979,932.62.

ORDERED that the judgment is affirmed, with costs.

On or about October 15, 2014, the plaintiff and her limited liability company Konstan Realty, LLC (hereinafter Konstan Realty), entered into a loan agreement as borrowers with the defendant Bay Ridge Hoyt Lender, LLC (hereinafter Lender), for the sum of $1,525,000. The plaintiff pledged and guaranteed, inter alia, her 100% interest in Konstan Realty as collateral for the loan. The plaintiff defaulted on her January 2015 loan payment. The plaintiff contends that Davin Vounasis, an agent of Lender, advised her that she could forego paying the January 2015 installment because she was in the process of refinancing the loan. The defendants foreclosed on the plaintiff's 100% ownership interest in Konstan Realty and offered the interest for sale at a public auction. Lender purchased the interest in Konstan Realty, reportedly for $10,000.

The plaintiff commenced the instant action alleging, inter alia, breach of contract on the basis of the defendants' purported failure to conduct a commercially reasonable sale under the UCC, as required under the loan agreement. The defendants moved for summary judgment dismissing the complaint and on their counterclaims for a deficiency judgment and an award of attorneys' fees. The Supreme Court granted the motion, and an inquest was held on the defendants' counterclaims for a deficiency judgment and an award of attorneys' fees. The court, relying upon the defendants' expert appraiser, determined that the value of the collateral was $1,650,000, which was to be set off against the debt owed, and awarded the defendants attorneys' fees in the sum of $212,717.90. The plaintiff appeals from the judgment entered following the inquest.

The defendants established their prima facie entitlement to judgment as a matter of law dismissing the causes of action alleging breach of contract and breach of the implied covenant [*2]of good faith and fair dealing by submitting evidence showing that the plaintiff entered into a loan agreement with Lender and guaranteed the loan by pledging, among other things, her shares in Konstan Realty, that the plaintiff defaulted on the loan agreement by failing to make payments starting in January 2015, that Lender exercised its right to sell the shares of Konstan Realty at public auction, and that Lender adhered to the terms and conditions imposed by the loan agreement and security pledge upon the plaintiff's default (see Staffenberg v Fairfield Pagma Assoc., L.P., 95 AD3d 873; see generally Canzona v Atanasio, 118 AD3d 837). The defendants established their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging promissory or equitable estoppel by demonstrating the existence of a valid and enforceable written loan agreement and security pledge (see Pacella v Town of Newburgh Volunteer Ambulance Corps., Inc., 164 AD3d 809). The defendants established their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging tortious interference with the plaintiff's economic expectancy by demonstrating that they did not interfere with the anticipated refinancing of the loan and, instead, provided the plaintiff with the requested documents to assist in the refinancing closing (see NBT Bancorp v Fleet/Norstar Fin. Group, 87 NY2d 614, 621).

In opposition, the plaintiff proffered only conclusory and unsupported allegations. Bald, conclusory assertions, which are unsupported by the record, are insufficient to defeat summary judgment (see S.J. Capelin Assoc. v Globe Mfg. Corp., 34 NY2d 338, 342; Orellana v 7 W. 34th St., LLC, 173 AD3d 886). In addition, the plaintiff admitted that she failed to make the January 2015 payment, which constitutes a default under the loan agreement. The plaintiff's contention that she relied to her detriment upon an alleged discussion with Lender's agent, wherein he advised that because of an anticipated refinancing of the loan, Lender would accept payoff of the loan at the closing of the refinancing in lieu of the plaintiff making the payment due for January 2015, contradicts a contemporaneous email sent by Lender to the plaintiff. In any event, pursuant to the loan agreement, no modification or waiver of any provision therein was effective unless in writing signed by the party against whom enforcement is sought (see Bank of Smithtown v Boglino, 254 AD2d 319).

Accordingly, the Supreme Court properly granted the defendants' motion for summary judgment.

Contrary to the plaintiff's contention, an inquest on damages was proper upon the grant of summary judgment (see e.g. Simon v Maximum Sec. Brokerage, 198 AD2d 491). The plaintiff's contention that the report proffered by the defendants' expert appraiser was inadmissible and insufficient to establish the value of the collateral is unpreserved for appellate review. The plaintiff's remaining contentions are without merit."

LITIGATION - COMMENCE THE ACTION AGAINST THE ESTATE NOT THE DECEASED

Federal Natl. Mtge. Assn. v Tudor, 2020 NY Slip Op 04149, Decided on July 22, 2020, Appellate Division, Second Department:

"In April 2014, the plaintiff commenced this action to foreclose a mortgage executed by the defendant Gladys Tudor. Tudor passed away approximately two years prior to the commencement of the action. Tudor's daughter, Vanise Elliott, was served with the summons and complaint, purportedly as the recipient of substituted service on behalf of her mother, and purportedly as a "John Doe" occupant of the subject premises. Elliott did not answer the complaint, although she appeared for at least two settlement conferences.

In May 2015, the plaintiff moved, inter alia, for leave to enter a default judgment against Elliott and for an order of reference. The Supreme Court granted the motion without opposition.
Subsequently, the plaintiff moved for a judgment of foreclosure and sale. Elliott appeared at a conference and produced a death certificate for her mother, whereupon the plaintiff withdrew its motion.

On or about September 28, 2016, the plaintiff moved, inter alia, to amend the complaint to add additional defendants. The plaintiff sought to add any additional heirs of Tudor as defendants and to serve any such parties by publication. The plaintiff also sought to amend the complaint to reflect the "capacity" of Elliott as an heir of the defendant Tudor, rather than as a mere occupant of the subject premises. Elliott cross-moved to vacate the default judgment and for leave to serve a late answer. In an order dated September 13, 2018, the Supreme Court, among other things, denied the plaintiff's motion, and, sua sponte, directed the dismissal of the complaint.

"A party may not commence a legal action or proceeding against a dead person" (Jordan v City of New York, 23 AD3d 436, 437; see Krysa v Estate of Qyra, 136 AD3d 760, 760). Thus, where a mortgagor dies prior to the commencement of a foreclosure action, the action is a "legal nullity," insofar as asserted against the deceased mortgagor (see Citigroup Global Mkts. Realty Corp. v LaGreca, 167 AD3d 842; U.S. Bank N.A. v Cadeumag, 147 AD3d 881; Dime Sav. Bank of N.Y. v Luna, 302 AD2d 558; cf. HSBC Bank USA v Ungar Family Realty Corp., 111 AD3d 673, 673-674). Accordingly, the instant action was a legal nullity, insofar as asserted against Tudor, the sole property owner and mortgagor.

In any event, the proposed amendment of the complaint to amend the "capacity" of Elliott to reflect that she was sued as a purported heir to Tudor, and to add any additional heirs of Tudor as defendants, would not serve to effectuate jurisdiction over the estate of Tudor, for purposes of a mortgage foreclosure action (see Wendover Fin. Servs. v Ridgeway, 93 AD3d 1156; see also Deutsche Bank Natl. Trust Co. v Faden, 172 AD3d 817).




Consequently, we agree with the Supreme Court's determination to deny leave to amend the complaint and to direct dismissal of the complaint."

A BAD MARRIAGE ENDS IN A BAD DIVORCE - PART 3 - VEXATIOUS LITIGATION HAS A PRICE

JESSICA T. v. KIETH T., 2020 NY Slip Op 50673, NY: Supreme Court, Suffolk County, June 12, 2020:

"In addition, the Court cannot ignore the role the Defendant has played in wasting precious time these last several years that the Plaintiff could have utilized for training, education or building her resume. His bullying tactics enumerated above were born out of spite and ill will. He perverted the judicial process to exact some sort of revenge upon the Plaintiff and alienated his own son as a result of his actions. This Court must redress the Defendant's misbehavior in a way not to penalize the Defendant, as such would require various due process procedures such as notice absent here.^[13] This Court however, must compensate the Plaintiff for the Defendant's frivolous conduct and abuse of her through the legal system.

Federal courts have "inherent powers," not conferred by rule or statute, "to manage their own affairs so as to achieve the orderly and expeditious disposition of cases" (Link v Wabash R. Co., 370 US 626, 630-631, 82 SCt 1386, 8 LEd2d 734 [1962]). That authority includes "the ability to fashion an appropriate sanction for conduct which abuses the judicial process" (Chambers v NASCO, Inc., 501 US 32, 44-45, 111 SCt 2123, 115 LEd2d 27 [1991]). The United States Supreme Court has made clear that such a sanction, when imposed pursuant to civil procedures, must be compensatory rather than punitive in nature (see Mine Workers v Bagwell, 512 US 821, 826-830, 114 SCt 2552, 129 LEd2d 642 [1994]).

Similarly, this Court has the discretion to impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct (22 NYCRR 130-1.1[a]; see Rhodes v Rhodes, 169 AD3d 841, 844, 94 N.Y.S.3d 123, 127 [2d Dept 2019]). Conduct is frivolous and sanctions may be awarded if "it is completely without merit in law" or fact and "cannot be support by a[ny] reasonable argument for an extension, modification or reversal of existing law" (22 NYCRR 130-1.1[c][1]). Furthermore, if conduct "is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another" (22 NYCRR 130-1.1 [c] [2]) or if such conduct "asserts material factual statements that are false" (22 NYCRR 130-1.1 [c] [3]) sanctions may be warranted (see Weissman v. Weissman, 116 AD3d 848, 849, 985 N.Y.S.2d 93 [2d Dept 2014]). In light of the fact that the Defendant has abused the Plaintiff throughout the litigation with his manipulation of the court process by his blatant disregard of the truth, pressing frivolous claims, wasting court time with witnesses that had at best merely uninformed opinions, causing drawn out conferences and examinations of witnesses that were not probative, making specious arguments and accusations including parent alienation, refusing to pay timely support payments until threatened with incarceration, refusing to help save the marital home from foreclosure, harassing and annoying the Plaintiff and J., refusing to pay his share of the court-ordered business evaluation which precluded the Plaintiff from demonstrating any potential increase in business' value during the marriage, and by prolonging this case by creating unnecessary litigation, the court will award financial compensation to the Plaintiff (see id. at 850).^[14]


Therefore, pursuant to the Court's above consideration of the factors necessary to award an amount and duration of maintenance, and in order to do justice in this case and compensate the Plaintiff for some of the injuries that the Plaintiff has suffered as a result of the Defendant's malicious, vexatious/abusive litigation, and as a sanction for the Defendant's completely frivolous conduct throughout this case and certainly during this trial, the Court will award the Plaintiff ten years of maintenance payments. Furthermore, while normally the years and amounts paid during the pendente lite period are accounted for in formulating post-divorce maintenance, here, because of the Defendant's own actions and vexatious litigation which purposefully attenuated this proceeding, and the need to compensate the Plaintiff, the Defendant will receive no credit for the approximately last 6 years of pendente lite payments.^[15] There is simply no other way to accomplish justice in this case as the Defendant's malicious, egregious and conscience-shocking conduct toward the Plaintiff and the parties' son J. needs to be addressed. While the Court could under these egregious circumstances equitably distribute all of the assets to the Plaintiff as a penalty (see Howard S. v Lillian S., 14 NY3d 431, 436, 928 NE2d 399, 402, 902 NYS2d 17, 20 [2010]), it is necessary for future payment purposes to award the Defendant his business (which is addressed below).
.......

(FOOTNOTES TO ABOVE)

[13] Indeed, the only notice to the Defendant regarding the possibility of punishment was given in the Plaintiff's contempt motion that was referred to this trial, which addressed his failure to pay money, not his abuse of her through the judicial process. The Court does note, however, that over the course of this case, the Plaintiff did repeatedly request that the Court stop the Defendant from delaying the case, from harassing her with motion practice and in other ways, and from allegedly giving away her pertinent personal information to the Father's Rights groups he associated with which she found on the Group's social media. The Court, however, does not deem that to be sufficient notice.

[14] The Defendant's vexatious behavior in this case is akin to a prima facie tort or an abuse of process. A prima facie tort consists of four elements: (1) intentional infliction of harm, (2) causing special damages, (3) without excuse or justification, (4) by an act or series of acts that would otherwise be lawful (Burns J.son Miller Summit & Spitzer v Lindner, 59 NY2d 314, 332, 464 N.Y.S.2d 712, 451 N.E.2d 459 [1983]). An abuse of process has three essential elements: (1) regularly issued process, either civil or criminal, (2) an intent to do harm without excuse or justification, and (3) use of the process in a perverted manner to obtain a collateral objective (Lynn v McCormick, 153 AD3d 688, 688, 60 N.Y.S.3d 316, 317 [2d Dept 2017])."

A BAD MARRIAGE ENDS IN A BAD DIVORCE - PART 2

The case is JESSICA T. v. KIETH T., 2020 NY Slip Op 50673, NY: Supreme Court, Suffolk County, June 12, 2020 and this is how Justice Leis describes the background:

"The parties were married on August 26, 1999 and have 2 children, J. (age 17) and C. (age 15). Their assets consist of the marital home and the Defendant's landscaping business Woodstock Estate Maintenance, Ltd. ("Woodstock"). This divorce case was commenced in December of 2013.

This case has a tortured history. Both parties are pro se having exhausted hundreds of thousands of dollars in counsel fees. At present, the Court has spent 62 days on trial in this matter consisting of 29 Hearing days to determine contempt and alleged parent alienation motions, 12 Trial days to determine permanent custody of the boys and visitation issues, and 21 days on this equitable distribution phase of the Trial wherein the parties introduced a total of 164 exhibits.

This Court was assigned this matter June 8, 2017 as an M.S.R.P. case.^[1] On June 16, 2017 the Court conducted its first contempt hearing pursuant to the Plaintiff's application to hold the Defendant in contempt for his failure to pay support. During the hearing, the Defendant and his attorney provided no defense to the Plaintiff's allegations. Accordingly, on a Friday the Defendant was found in contempt and sentenced to incarceration for his failure to pay thousands of dollars in court-ordered child support and maintenance. The Defendant purged the contempt by Monday morning. The Court conducted a second contempt hearing, which should have only taken several days, but lasted 29 days because of the Defendant's frivolous and false allegations that the Plaintiff had engaged in parent alienation. After hearing from numerous experts, the Plaintiff, the Defendant and J. (in-camera), the Court concluded that the Defendant's allegations of parental alienation by the Plaintiff were totally false and without merit.^[2]

The Court notes that the experts called during that proceeding by the Defendant had never spoken to J. or the Plaintiff so could not give an opinion on whether parent alienation had occurred.

Nevertheless, to this date, the Defendant persists in his allegation of parental alienation by the Plaintiff.

The Court next conducted a custody trial which lasted 12 days after which the Court granted full custody of both C. and J. to the Plaintiff and found that the Defendant was solely responsible for J.'s refusal to visit with him.^[3] Based on the conduct of the Defendant, the Court terminated all ongoing reunification therapy between J. and the Defendant and terminated all court-ordered visitation between J. and the Defendant.

Finally, the Court has concluded the equitable distribution trial. With no assets other than the marital home and the Defendant's landscaping business, and with no expert witnesses^[4], the matter has been unnecessarily prolonged by the Defendant for a total of 21 days of trial.

The main reason this divorce action has moved so slowly is the Defendant's efforts to delay, prolong and obfuscate the proceeding. Despite repeated directions by the Court to refrain from extended diatribes and cross-examination on immaterial and collateral matters, the Defendant has refused to obey the directions of the Court. The Court was therefore forced on numerous occasions to end the Defendant's examination on irrelevant topics with witnesses in the hope of moving this case toward a final determination. The Defendant's arguments, that his collateral inquiries bear relevance on this proceeding because they deal with credibility issues, are not genuine. The Defendant's main desire seems to be to inflict some sort of harm upon the Plaintiff in any manner possible as displayed throughout the entirety of this case. Indeed, in the final stages of this equitable distribution Trial, the Defendant brought another motion to recuse the Court and another motion to hold the Plaintiff in contempt. The recusal motion was the Defendant's second written motion for recusal. The Court found in its decision dated February 19, 2020 that it was frivolous, baseless and brought solely to delay and prolong this equitable distribution Trial. The application to hold the Plaintiff in contempt was made a year and a half after the alleged contumacious conduct, and was found by this Court in a decision dated February 19, 2020 to be totally baseless, frivolous and likewise made solely to delay and prolong this proceeding.^[5]

From the inception of this divorce action, the Defendant has refused to timely pay court-ordered maintenance and support. The Defendant's resentment toward the Plaintiff's boyfriend, (who frequents the marital house but does not live there), is obsessive. The Defendant has allowed utilities to be shut off in the marital home resulting in a lack of heat in the winter in his deliberative effort to punish the Plaintiff for filing a divorce action and having a relationship with another man. The Defendant has totally lost his relationship with his older son J. by his conduct and actions, and he possibly would have lost his relationship with his younger son C. but for the Plaintiff's concerted efforts to foster the relationship.

The Defendant's penchant for intimidation of the Plaintiff and J. has evolved into attempts to intimidate the court-appointed Attorney For the Children, the attorneys involved in the case (including his own), and the Court itself by filing a frivolous Federal lawsuit seeking billions of dollars from each of the defendants named therein, including this Jurist. The Defendant's use of all aspects of both the State and Federal Judiciary to harass and annoy those whom he has set out to attack cannot be condoned or tolerated.

Although this Court has handled thousands of domestic violence cases over the course of its 34 years on the bench, in both Family Court and as a Justice of the Supreme Court (assigned to the Integrated Domestic Violence Court, Guardianship, Matrimonial and Civil cases), this case stands out as one of the most insidious. Here, the harassment did not stop at the commencement of the action or with the parties' separation, but accelerated exponentially and has continued for more than six years after the summons and notice were filed.

The Defendant has used the very system that is supposed to provide justice and protection to victims of domestic violence to terrorize and emotionally abuse the Plaintiff and the parties' oldest child, J. What the Court did not realize during the many hours spent with J. and his attorney in the in-camera interviews trying to persuade J. to visit with his father, was the malignancy and magnitude of the Defendant's vexatious/abusive litigation tactics^[6] perpetrated against this child and his mother. During the three separate proceedings held in this matter, the Defendant's actions, statements and conduct have vacillated between the absurd and the delusional. This is fully observable in his summation in this matter wherein he requested $344,860.00 in support and maintenance, and $140,000.00 for attorneys fees from the unemployed, stay-at-home, non-monied Plaintiff. One thing remains clear, however, the Defendant's conduct never waivers from the malicious which runs through the core of his concerted efforts. His compulsive lying, demonstrated throughout these proceedings, is insidious and is just one of the many things that J. dislikes in his father.

In its attempt to provide fairness and due process to the Defendant and give him a full opportunity to prove his case, the Court has unwittingly permitted the Defendant to continue to harass the Plaintiff and their son J. by prolonging this matter. This decision can now provide some form of compensatory justice to the Plaintiff and call the Defendant to task for his malignant use of the judicial process."

A BAD MARRIAGE ENDS IN A BAD DIVORCE - PART 1

In this case, life almost imitates art, as we explore a recent decision with this introductory statement by the court:

"This case is unique as it details a type of domestic violence which generally goes unnoticed in our judicial system and goes beyond the usual parameters of physical, emotional, or economic abuse occurring during the period of time that the parties reside together. This form of domestic violence is by proxy and it uses the very judicial system which is supposed to protect individuals from domestic violence, to continue the perpetrators' need for control well after the parties' separation and commencement of the divorce action. This case demonstrates the repercussions and consequences that await an individual who engages in this very insidious form of domestic violence committed through vexatious/abusive litigation."

DIVORCE - STATUTE OF LIMITATIONS FOR RAISING NUPITAL AGREEMENT AS DEFENSE

New York Domestic Relations Law § 250 provides:

"1. The statute of limitations for commencing an action or proceeding or for claiming a defense that arises from an agreement made pursuant to subdivision three of part B of section two hundred thirty-six of this article entered into (a) prior to a marriage or (b) during the marriage, but prior to the service of process in a matrimonial action or proceeding, shall be three years.

2. The statute of limitations shall be tolled until (a) process has been served in such matrimonial action or proceeding, or (b) the death of one of the parties.

3. The provisions of this section shall not apply to a separation agreement or an agreement made during the pendency of a matrimonial action or in settlement thereof."

Washiradusit v Athonvarangkul, 2020 NY Slip Op 03562, Decided on June 24, 2020, Appellate Division, Second Department:

"The parties were married in February 2001 and subsequently purchased certain real property in Woodside (hereinafter the property). Prior to the closing, the parties entered into a "Property Agreement" dated November 18, 2002 (hereinafter the postnuptial agreement). The postnuptial agreement required the parties to put the property up for sale "no later than 90 days after filing by either party for divorce or separation," and provided that the parties would split 50/50 any proceeds remaining after satisfaction of the mortgage and other costs.

In November 2011, the plaintiff commenced this action for a divorce and ancillary relief. The defendant answered the complaint, seeking spousal maintenance and counsel fees. No claims were asserted in the pleadings regarding the postnuptial agreement. In October 2016, the defendant moved, inter alia, to enforce the postnuptial agreement. In opposition, the plaintiff asserted that the defendant's claim to enforce the postnuptial agreement was time-barred pursuant to Domestic Relations Law § 250. Alternatively, the plaintiff cross-moved, among other things, in effect, to set aside the postnuptial agreement as unconscionable. The Supreme Court granted that branch of the defendant's motion which was to enforce the postnuptial agreement, and denied that branch of the plaintiff's cross motion which was, in effect, to set aside the postnuptial agreement as unconscionable. The plaintiff appeals.

Contrary to the Supreme Court's determination, the six-year statute of limitations that pertains to breach of contract causes of action (see CPLR 213[2]) is not applicable. Rather, the [*2]applicable statute of limitations is provided for in Domestic Relations Law § 250. Pursuant to Domestic Relations Law § 250, the statute of limitations for claims arising from prenuptial and postnuptial agreements is three years and that period is tolled, as relevant here, until process has been served in a matrimonial action. The language of the statute makes it broadly applicable to claims arising from prenuptial and postnuptial agreements, such that it applies equally where a party seeks to invalidate the agreement and where a party seeks to enforce it (see Domestic Relations Law § 250[1]; Alan D. Scheinkman, Practice Commentaries, McKinney's Cons Laws of NY, Domestic Relations Law C250).

Here, the defendant did not assert his claim to enforce the postnuptial agreement until more than 4½ years after he was served with process in the matrimonial action. Accordingly, the defendant's claim is untimely, and should have been rejected.

Further, since the defendant is no longer entitled to enforce the postnuptial agreement, that branch of the plaintiff's cross motion which was, in effect, to set aside the agreement as unconscionable should have been denied as academic."

DIVORCE - CAN MORE - MONIED SPOUSE RECOVER LEGAL FEES

As footnote 4 below states, the Second Department may have reached a different conclusion in this case.

Condo v Condo, 2020 NY Slip Op 20142, Decided on June 24, 2020, Supreme Court, New York County, Cooper, J.:

"The principle that even a successful litigant pays his or her own legal expenses, absent a contractual or statutory provision to the contrary, is so ingrained in our legal system that it is referred to as the "American Rule."[FN1] The New York State Domestic Relations Law (DRL), which governs matrimonial proceedings in this state, contains a number of provisions enabling a court to depart from the rule and shift responsibility for legal fees from one party to another. The question presented in this post-judgment matrimonial proceeding is whether any of these statutory provisions entitle the defendant ex-husband, who has been consistently successful in the litigation but in the process has amassed more than $2.5 million dollars in legal fees, to [*2]require the plaintiff ex-wife, who has been responsible for most of that litigation, to reimburse him for what he has had to expend. Complicating the question is the fact that while plaintiff is fabulously wealthy, defendant is even wealthier still. Thus, as will be discussed, defendant is in the position of seeking to recover legal fees as the "more-monied" former spouse as opposed to the more traditional "less-monied" one.

......

I. LEGAL AUTHORITY

a. DRL § 237 (c)

After first moving generally under DRL § 237 in support of his demand that plaintiff be held responsible for the legal fees he has incurred, defendant, in his reply papers and confirmed during oral argument, abandoned subsection (a) and (b)[FN3] and settled on subsection (c) of the section. The language of DRL § 237 (c) is as follows:
In any action or proceeding for failure to obey any lawful order compelling payment of support or maintenance, or distributive award the court shall, upon a finding that such failure was willful, order respondent to pay counsel fees to the attorney representing the petitioner.

Plaintiff maintains that this subsection is limited only to the willful non-payment of court-ordered money, be it in the form of support, maintenance, or distributive award. Consequently, plaintiff argues that DRL 237 (c) bars defendant from seeking counsel fees for any alleged willful failure on her part to obey orders that concern the process for distributing marital property, in this case artwork, inasmuch as those orders did not "compel payment" of any kind. The court must agree.

Throughout the DRL, the term "distributive award" is consistently used in the context of money payments and is specifically defined in § 236 B (1) (b) as follows:
The term "distributive award" shall mean payments provided for in a valid agreement between the parties or awarded by the court, in lieu of or to supplement, facilitate or effectuate the division or distribution of property where authorized in a matrimonial action, and payable either in a lump sum or over a period of time in fixed amounts. Distributive awards shall not include payments which are treated as ordinary income to the recipient under the provisions of the United States Internal Revenue Code.

Thus, with regards to § 237 (c), the court is constrained from awarding defendant counsel fees for plaintiff's failure, even if willful, to abide by court orders in relation to the process of equitable distribution, so long as there is no failure to actually make payment in the form of a distributive award (see Rao v Rao, 74 AD3d 1556 [3rd Dept 2010]). Given the clear and unequivocal language of the DRL and lack of First Department case law directly on point, the court will not delve into the specific distinguishability of each case cited by the parties.

b. DRL § 238

In relevant part DRL § 238 provides that in any action or proceeding to enforce any

provision of a judgment or order, a court: . . . may in its discretion require either party to pay counsel fees and fees and expenses of experts directly to the attorney of the other party to enable the other party to carry on or defend the action or proceeding as, in the court's discretion, justice requires having regard to the circumstances of the case and of the respective parties. There shall be a rebuttable presumption that counsel fees shall be awarded to the less monied spouse (emphasis added).

Here, plaintiff argues, and this court again agrees, that a decidedly less-monied spouse
cannot be ordered to pay counsel fees to the decidedly more-monied spouse under this section of the DRL. In Roddy v Roddy, (161 AD3d 441 [1st Dept 2018]), the First Department reiterated that the provisions of DRL § 238 are intended to ensure a just resolution of the issues by creating a more level playing field with respect to the parties' respective abilities to pay counsel and focuses primarily upon the paramount factor of financial need. Further, it instructed that where a party's inappropriate litigation conduct has adversely affected the other party but both are able to pay their own counsel fees, the appropriate remedy may be a sanction under 22 NYCRR 130-1.1, not an award of attorneys' fees (see also, Silverman v Silverman, 304 AD2d 41 [1st Dept 2003]).

Although plaintiff is far from an indigent party, and is in fact extremely wealthy, it cannot credibly be argued that (1) she is the more-monied spouse; and (2) that defendant does not have the ability to pay his own counsel fees. Therefore, counsel fees cannot be awarded to defendant under this section of the DRL.[FN4]

c. Sanctions (22 NYCRR 130-1.1)

Although sanctions may be an appropriate remedy in this matter for a variety of plaintiff's unfortunate transgressions, including one that required this court to recuse, albeit temporarily, as well as her repeated and malicious interference with the Special Master's performance of her duties, defendant only raised the issue of sanctions for the first time in his reply brief. Indeed, it would be reversable error to award sanctions under these circumstances where the non-movant was neither given adequate notice that such relief would be considered, nor was afforded a reasonable opportunity be heard (see Zappin v Comfort, 146 AD3d 575 [1st Dept 2017]; Minister, Elders & Deacons of Refm. Prots. Dutch Church v 198 Broadway, Inc., 76 NY2d 411 [1990]). Therefore, without an evidentiary hearing, which the court is not inclined to schedule at this time, it will not impose sanctions on plaintiff sua sponte as defendant urges, and the issue was not otherwise properly raised in the motion.

......

Footnote 1:Under the American Rule, "attorney's fees and disbursements are incidents of litigation and the prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties or by statute or court rule" (Matter of A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 5 [1986]).

Footnote 2:See Condo v Condo, 171 AD3d 435 (1st Dept 2019); Condo v Condo, 172 AD3d 595 (1st Dept 2019); Condo v Condo, 173 AD3d 595 (1st Dept 2019).

Footnote 3:DRL § 237 (a) permits a court to "direct either spouse to pay counsel fees directly to the attorney of the other spouse to enable the other party to carry on or defend the action or proceeding." DRL § 237 (b) permits a court to do the same "[u]pon any application to enforce, annul or modify an order or judgment for alimony, maintenance, distributive award, distribution of marital property or for custody, visitation, or maintenance of a child." Both subsections expressly provide for a rebuttable presumption that fees are to be awarded to the less monied spouse.

Footnote 4:It is acknowledged that whereas the Appellate Division, First Department, has been consistent in refusing to hold the less-monied spouse responsible for the more-monied spouse's counsel fees, irrespective of the conduct of the parties, the Second Department has been receptive to fee-shifting in the face of bad conduct on the part of the less-monied spouse (see Cravo v Diegel, 163 AD3d 920 [2d Dept 2018][court's requirement that husband pay 55% of wife's counsel fees, despite him being the less-monied spouse, affirmed as "not an improvident exercise of discretion," where husband's "obstructionist conduct unnecessarily prolonged the pretrial motion practice and the trial"])."

FOR NEW YORKERS - COVID RENT RELIEF

 

Starting yesterday, July 16, 2020, New York Homes and Community Renewal is accepting applications for rental assistance for a two-week period. After all applications are received, assistance will be distributed to eligible families based on economic and social need. While risk of homelessness will be considered in distributing the subsidies, tenants do NOT need to be behind on their rent or at risk of eviction to qualify.

To qualify for help, applicants must meet the following requirements:

• New York must be the applicant's primary residence.
• For residents of Long Island, the applicant's household income must have been below the following levels before March 1, 2020 and at the time of application:
• 1-person household: $65,050
• 2-person household: $74,350
• 3 person household: $83,650
• 4 person household: $92,900
• For other counties or larger families, please see HCR's website.
• The household must have paid more than 30% of its gross monthly income for rent before March 1, 2020 and now.
• The household must have lost income between April 1, 2020 to July 31, 2020.
Qualifying households are eligible for up to four (4)-months of rent subsidies equal to the increase in their "rent burden." Rent burden is based on the percentage of the applicant's income they pay towards rent each month. The payments are made directly to the applicant's landlord and do not need to be re-paid.

Visit HCR's website for more information or to apply: https://hcr.ny.gov/RRP

DIVORCE - THE MARITAL RESIDENCE

This is the same case that I discussed yesterday but on a different issue.

Marino v. Marino, 2020 NY Slip Op 2922, Appellate Div., 2nd Dept. May 20, 2020:

"Contrary to the defendant's contention, the Supreme Court did not improvidently exercise its discretion in awarding the plaintiff exclusive use and occupancy of the marital residence until the parties' youngest child reached the age of 18. "Exclusive possession of the marital residence is usually granted to the spouse who has custody of the minor children of the marriage'" (Greisman v Greisman, 98 AD3d 1079, 1080, quoting Mosso v Mosso, 84 AD3d 757, 760). "However, the need of the custodial parent to occupy the marital residence is weighed against the financial need of the parties" (Goldblum v Goldblum, 301 AD2d 567, 568). Here, the plaintiff has sole custody of the minor children, two of whom have special needs and require stability. Furthermore, the defendant has failed to establish an immediate need for the proceeds of the marital residence, especially in light of the equitable distribution award.

"[A] trial court is vested with broad discretion in making an equitable distribution of marital property, and unless it can be shown that the court improvidently exercised that discretion, its determination should not be disturbed" (Bernholc v Bornstein, 72 AD3d 625, 628; see Michaelessi v Michaelessi, 59 AD3d 688, 689). Here, we agree with the Supreme Court's determination to award the defendant 40% of the value of the marital residence. Notwithstanding the long duration of the parties' marriage, there is no requirement that the distribution of each item of property be made on an equal basis (see DeSouza-Brown v Brown, 71 AD3d 946, 946-947). Under the totality of the circumstances, including, inter alia, the parties' unequal financial contributions to the marital residence, which included the complete reconstruction of the marital residence by the plaintiff's father's company and the repayment of the home equity loan by the plaintiff's parents, the award of 40% of the value of the marital residence to the defendant was a provident exercise of discretion (see Klauer v Abeliovich, 149 AD3d 617, 622-623; Bernholc v Bornstein, 72 AD3d at 628; DeSouza-Brown v Brown, 71 AD3d at 946-947).

......

However, to the extent that the defendant will not be receiving the proceeds of the marital residence until the parties' youngest child attains the age of 18, which is approximately 10 years after the trial of this matter, the Supreme Court should not have directed that the defendant's 40% share of the marital residence be based upon the stipulated value of the marital residence of $1,200,000. At the time the parties' youngest child attains the age of 18, the plaintiff should have the option of either selling the marital residence and paying the defendant 40% of the net proceeds of the sale after payment of usual and customary closing costs, or purchasing the defendant's share of the marital residence by paying him 40% of the fair market value of the residence at that time."

CHILD SUPPORT - GOING OVER THE CAP?

This I found to be common in many "middle class" divorce settlements and/or litigations: computing child support and whether or not to go over the cap. The Combined Parental Income Cap is currently $154,000.

Marino v. Marino, 2020 NY Slip Op 2922 , Appellate Div., 2nd Dept. May 20, 2020:

""In determining parental income under the [Child Support Standards Act], the court must begin with the parent's gross (total) income as should have been or should be reported in the most recent federal income tax return'" (Matter of Peddycoart v MacKay, 145 AD3d at 1082, quoting Family Ct Act § 413[1][b][5][i]). "When the parties' combined income is more than the statutory cap . . . [,] the court has the discretion to cap the support obligation at an amount based on the statutory cap or order child support above the statutory cap'" (Matter of Spano v Spano, 168 AD3d 857, 859, quoting Matter of Santman v Schonfeldt, 159 AD3d 914, 915). The factors to be considered in making this determination "include a consideration of the financial resources of the custodial and noncusodial parent, and the standard of living the child would have enjoyed if the parties had remained together" (Matter of Peddycoart v MacKay, 145 AD3d at 1084). Here, it was not an improvident exercise of discretion to deny the plaintiff's request to exceed the statutory combined parental income cap to determine the defendant's child support obligation. The Supreme Court considered, inter alia, the financial resources of both parties, taking into account that the plaintiff's income is greater than the defendant's income, most of which is imputed income, that the defendant was denied a maintenance award, and that the children have significant expenses to which the parties must contribute."

CONTRACTS - PAST CONSIDERATION

Something to keep in mind when drafting agreements and settlements.

Cooper v. Cooper , 19-CV-3025 (NGG) (ST), (E.D.N.Y. June 26, 2020):

I. BACKGROUND

The following factual summary is drawn from the facts alleged in the complaint, which the court generally accepts as true. See N.Y. Pet Welfare Ass'n v. City of New York, 850 F.3d 79, 86 (2d Cir. 2017). Plaintiff and Defendant are sisters. (Compl. ¶ 11.) Prior to October 2014, Plaintiff loaned money to Defendant on several occasions, in various amounts; by October 15, 2014 Plaintiff had loaned Defendant $414,300, none of which Defendant had repaid. (Id. ¶¶ 12-13.) After the money was loaned, Defendant agreed to sign a writing memorializing the loans Plaintiff made to Defendant and her obligation to repay those loans. (Id. ¶ 14.) On January 4, 2015, Plaintiff's husband emailed a draft loan agreement to Defendant on behalf of Plaintiff. (Id. ¶ 15.) Defendant obtained legal advice and spoke with an accountant on the contents of the draft agreement. (Id. ¶ 16.) Shortly thereafter, on January 19, 2015, Defendant sent Plaintiff and her husband a revised agreement. (Id. ¶ 17.) On or about May 1, 2015, Plaintiff and Defendant executed the Agreement, dated as of January 19, 2015. (Id. ¶ 18; see also Agreement (Dkt. 1-3).) The opening recital of the Agreement provides: "IN CONSIDERATION OF Lender loaning certain monies to Borrower, and Borrower repaying those monies to Lender, both parties agree to keep, perform, and fulfill the following promises and conditions." (Agreement at 1) The first paragraph of the Agreement states: "Lender promises to loan the principal amount ('the loan') of four hundred fourteen thousand, three hundred dollars ($414,300) to Borrower, and Borrower promises to repay this principal amount and all accrued interest." (Id. ¶ 1) Per the Agreement, Defendant agreed to pay interest on the Loan at the rate of 0.38% per year. (Id.) The Loan provided for annual interest-only payments to be made on January 19 of 2016 and 2017, with a maturity date of January 19, 2018. (Id. ¶¶ 2-3.) The Agreement contemplates that Defendant would repay using money received from her father's estate, and provides that the term would be extended in three-year increments if Defendant had not received sufficient funds to repay the loan as of the maturity date. (Id. ¶ 5.) Defendant made the first annual interest payment on or about January 19, 2016. (Compl. ¶ 27.) However, Defendant did not make the second interest payment the following year nor did she repay the loan on the maturity date. (Id. ¶¶ 29-30, 33.) On or about June 27, 2018, Plaintiff's husband notified Defendant that she was in default and offered her an opportunity to cure by making a catch-up payment. (Id. ¶ 31.) On August 9, 2018, Defendant made a partial interest payment. (Id. ¶ 32.)

When quoting cases, unless otherwise noted, all citations and internal quotation marks are omitted and all alterations are adopted.

II. LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b)(6), the Complaint must "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "In determining the adequacy of the complaint, the court may consider any written instrument attached to the complaint as an exhibit or incorporated in the complaint by reference, as well as documents upon which the complaint relies and which are integral to the complaint." Subaru Distribs. Corp. v. Subaru of Am., Inc., 425 F.3d 119, 122 (2d Cir. 2005).

III. DISCUSSION

Defendant argues that the Agreement is unenforceable because the facts indicate that it was founded on past consideration. (See generally Mem. in Supp. of Mot. ("Mem.") (Dkt. 13-3).) Defendant further contends that the Agreement does not fall within New York General Obligations Law § 5-1105's exception to the common-law rule that past consideration cannot be used to create an enforceable obligation because it uses exclusively forward-looking language and thus can only be read as referencing a future loan. For the reasons that follow, the court agrees and, accordingly, grants Defendant's motion. Plaintiff's complaint effectively concedes that the Agreement is founded on past consideration. (Compl. ¶¶ 13-14.) Under New York law, "[c]onsideration is simply a bargained-for exchange of promises or performance." Ferguson v. Lion Holding, Inc., 312 F. Supp. 2d 484, 494 (S.D.N.Y. 2004) (citing Restatement (Second) of Contracts § 71 (1981)). "Generally, past consideration is no consideration and cannot support an agreement because the detriment did not induce the promise." Greenberg v. Greenberg, 646 F. App'x 31, 32 (2d Cir. 2016) (summary order) (applying New York law). Section 5-1105 of New York General Obligations Law, however, provides an exception to this common-law rule. Specifically, the law provides:

A promise in writing and signed by the Promisor or by his agent shall not be denied effect as a valid contractual obligation on the ground that consideration for the promise is past or executed, if the consideration is expressed in the writing and is proved to have been given or performed and would be a valid consideration but for the time when it was given or performed.

N.Y. Gen. Obl. L. § 5-1105. "To qualify for the exception [provided in § 5-1105], the description of the consideration must not be vague or imprecise, nor may extrinsic evidence be assisted to in understanding the consideration." Korff v. Corbett, 65 N.Y.S.3d 498, 502 (1st Dep't 2017). As such, courts applying § 5-1105 have enforced agreements founded on past consideration only when the past consideration is clear from the face of the agreement. Cf. Greenberg, 646 F. App'x at 31-32 (written agreement signed by Defendant promising to pay $200,000 as a gift to Plaintiff for the "many gifts and many loans" Plaintiff has given Defendant through the years invalid under Section 5-1101 consideration). Here, Plaintiff argues the past consideration is expressed within the writing, specifically, the language in the recital that Defendant's repayment obligation was undertaken "IN CONSIDERATION OF [Plaintiff] lending certain monies to [Defendant]" and the specific delineation of the amount and terms of the loan in the first paragraph of the Agreement. (See generally Opp.) Plaintiff points to numerous cases where similar loan obligations have been held enforceable notwithstanding the fact that the actual loan was made prior to the execution of the agreement at issue. See, e.g., Gruberg v. McCarthy, 735 N.Y.S. 2d 638, 915-16 (3d Dep't 2001) (agreement to assume responsibility "for debts incurred on" specific dates prior to execution of agreement enforceable under § 5-1105); In re Thomson McKinnon Sec. Inc., 139 B.R. 267, 271, 278 (S.D.N.Y. 1992) (note promising repayment "[i]n consideration for a loan ... in the amount of [$150,000]" enforceable notwithstanding fact that funds had been advanced prior to execution of note). Plaintiff also notes that courts have held that § 5-1105 does not require the use of "talismanic words" for a promise to be given effect, so long as "the writing refers to the consideration ... and couples that recitation with the promise to pay." In re Levine, 32 B.R. 742, 745 (S.D.N.Y 1983). All of these things may be true, but they do not save Plaintiff's claim. The Agreement, by its terms, expressly contemplates a future loan; the recital states that Defendant undertook her obligation in consideration of Plaintiff "loaning certain monies" to Defendant, while the operative language of the agreement provides that Plaintiff "promises to lend" money to Defendant, not that Plaintiff had already loaned such money to Defendant. While, as Plaintiff argues, at least one court has noted that § 5-1105 does not per se require an "unequivocal[] indicat[ion] that the consideration was past consideration" and opined that such a requirement would be "unsuitably narrow," Levine, 32 B.R. 745, dicta in 37-year-old district court decisions are not binding on this court. Moreover, the court is unaware of any instance in which a court has applied § 5-1105 where, as is the case here, it is asked to enforce an agreement that, by its terms, unambiguously relates to a future transaction. Cf. id. at 744 (language of agreement held enforceable provided that borrowers "acknowledge [d] ... [themselves] to be justly indebted to" lender). As a matter of first impression, the court concludes that § 5-1105 does not permit the court to do what Plaintiff asks: take an agreement—which unequivocally expresses a promise for a future loan—and interpret it as referencing an unexpressed prior loan. In other words, Plaintiff seeks to enforce the agreement not according to what it says, but according to what she claims were the parties' unexpressed intentions. While the court does not hold that no agreement may be enforced under § 5-1105 unless the words "past consideration" appear or the "past" nature of the consideration is unmistakable from the instrument, nothing in that provision permits the court to disregard the fundamental principle of contract law that Plaintiff implores it to jettison here, namely that contracts (particularly unambiguous, fully integrated contracts such as the Agreement) must be enforced according to their terms. See, e.g., R/S Assoc. v. New York Job Dev. Auth., 98 N.Y.2d 29, 32 (2002) ("When parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms."); see also Utica Mut. Ins. Co. v. Fireman's Fund Ins. Co., 957 F.3d 337, 344 (2d Cir. 2020) ("Under well-settled New York law ... a contract that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms."). Interpreting the contract by its terms, Plaintiff's breach of contract claim necessarily fails because she fails to allege that she advanced any monies to Defendant following the execution of the Agreement. See, e.g., Johnson v. Nextel Communications, Inc., 660 F.3d 131, 142 (2d Cir. 2011) (to state a valid breach of contract claim, plaintiff must allege, inter alia, her own performance under the agreement). Accordingly, Defendant's motion is granted.

 

Because Plaintiff asserts only a claim for breach of contract, the court does not resolve whether the facts she has alleged could support any other claim. --------

IV. CONCLUSION

For the foregoing reasons, Defendant's Motion to Dismiss (Dkt. 17) is GRANTED. If Plaintiff intends to move for leave to file an amended complaint, she is DIRECTED to confer with Defendant and submit a proposed briefing schedule for that motion by no later than 30 days from the date of this order. SO ORDERED. "

YELPING VERSUS DEFAMING

According to Wikipedia: "Ambulance chasing, sometimes known as barratry, is a professional slur which refers to a lawyer soliciting for clients at a disaster site. The term "ambulance chasing" comes from the stereotype of lawyers that follow ambulances to the emergency room to find clients. The phrase ambulance chaser is also used more loosely as a derogatory term for a personal injury lawyer."

Feinberg v. Lans, 2020 NY Slip Op 50706, Supreme Court, West Co. June 22, 2020:

"Plaintiff Gerry Feinberg is an attorney who represented a plaintiff in a medical malpractice action against Dr. David Lans (see Formisano v Lans, Sup Ct, Westchester County, Index No. 55042/2015); defendant Devora Lans is the spouse of the defendant in that case. The complaint in this defamation action was filed on February 12, 2020, based on defendant Devora Lans' publication of the following statement about plaintiff Gerry Feinberg on the Yelp website:

"If you can't find a lawyer to take your case, this is the lawyer for you. Ambulance chaser is too good a term for him."

The author of the posted comment is listed as "Devora L."

Plaintiff's original complaint contained causes of action for an award of money damages and for a mandatory injunction compelling defendant to delete the statement. Plaintiff contends that defendant's use of the phrase "ambulance chaser" renders the published statement defamatory, citing Flamm v American Assn. of Univ. Women (201 F3d 144 [2d Cir 2000]).

In moving to dismiss that complaint, defendant contended, inter alia, that the complaint contained insufficient allegations to state a cause of action for defamation, such as a failure to clearly assert that the statement is about plaintiff and to assert that the statement is false or factually incorrect. With regard to plaintiff's cause of action for injunctive relief, defendant also pointed out the rule that "[a]bsent extraordinary circumstances, injunctive relief should not be issued in defamation cases" (Rombom v Weberman, 309 AD2d 844, 845 [2d Dept 2003]).

In response, plaintiff's cross-motion seeks leave to amend the complaint to add details to address the insufficiency argument; however, confusingly, in his affidavit in support he states that "we are amending the complaint as of right." He submits as Exhibit F to his cross-motion an amended complaint, specifying the date and website URL of the statement at issue, and adding the assertion that "the Statement is either a statement of fact or a statement of opinion which implies that it is based upon facts unknown by the reader which supports the opinion." The amended complaint also omits the second cause of action.

Defendant's opposition to the cross-motion concedes that plaintiff was entitled to amend the complaint as of right, and proceeds with a discussion that treats the amended complaint as the operative pleading. Defendant contends that the amended complaint is similarly deficient, because it still fails to include the word "false" or "falsity," which "is a sine qua non of a libel claim" (Brian v Richardson, 87 NY2d 46, 51 [1995]), and still concerns non-actionable opinion.

Plaintiff did not file, or seek to file, any reply to defendant's argument applying the same legal arguments to the amended complaint as had been applied to the original complaint.

Discussion

First, given plaintiff's correct observation that he was entitled to serve an amended complaint as of right, there is no need for this Court to grant leave to amend. The amended complaint filed as Exhibit F to plaintiff's motion papers is deemed substituted for the original complaint. Although defendant's initial moving papers were addressed to the original rather than the amended complaint, given the substance of defendant's reply papers applying the legal arguments to the amended complaint, without objection by plaintiff, this Court will address the merits of defendant's dismissal motion as applied to the amended complaint.

"The tort of libel arises from the publication of a statement about an individual that is both false and defamatory" (Klepetko v Reisman, 41 AD3d 551, 551 [2d Dept 2007], citing Brian v Richardson, 87 NY2d 46, 50 [1995]). "In determining whether a complaint states a cause of action to recover damages for defamation, the dispositive inquiry is whether a reasonable listener or reader could have concluded that the statements were conveying facts about the plaintiff" (Goldberg v Levine, 97 AD3d 725, 725 [2d Dept 2012]). Four factors should be considered when distinguishing fact from opinion:

"(1) an assessment of whether the specific language in issue has a precise meaning which is readily understood or whether it is indefinite and ambiguous; (2) a determination of whether the statement is capable of being objectively characterized as true or false; (3) an examination of the full context of the communication in which the statement appears; and (4) a consideration of the broader social context or setting surrounding the communication including the existence of any applicable customs or conventions which might `signal to readers or listeners that what is being read or heard is likely to be opinion, not fact'"

(Steinhilber v Alphonse, 68 NY2d 283, 292 [1986], quoting Ollman v Evans, 750 F2d 970, 983 [DC Cir 1984]).

Turning to the first two of the foregoing factors, the phrase "[a]mbulance chaser is too good a term for him" is an "imprecise, subjective characterization" that is not capable of being objectively verified as true or false (see New York Horse Rescue Corp. v Suffolk County Socy. for the Prevention of Cruelty to Animals, 164 AD3d 909, 909 [2d Dept 2018]).

The case on which plaintiff relies, Flamm v American Assn. of Univ. Women (201 F3d 144), is distinguishable. It involved a published directory of attorneys and other professionals, compiled by defendant organizations, in which the following note was included with the plaintiff's listing:

"Mr. Flamm handles sex discrimination cases in the area of pay equity, harassment, and promotion. Note: At least one plaintiff has described Flamm as an `ambulance chaser' with interest only in `slam dunk cases.'"

In reversing the District Court's dismissal of the defamation complaint, which had been based on the reasoning that the statement could not reasonably be constructed as a statement of objective fact (see Flamm v American Assn. of Univ. Women, 28 F Supp 2d 185, 191 [SD NY 1998]), the Second Circuit explained that the statement's attributed description of Flamm as an "ambulance chaser" could reasonably be understood to imply that he engages in the unethical solicitation of clients, which is an accusation that is capable of being proven true or false (201 F3d at 153). In contrast, the statement at issue here, "ambulance chaser is too good a term for him," far from a straightforward and provable assertion of a fact, is the essence of a non-provable opinion.

Furthermore, while the third and fourth Steinhilber factors militated in favor of treating the statement in Flamm as fact-based, the opposite is true in the present case. The Flamm Court observed that

"the challenged language appears in a national directory nearly seventy pages in length, compiled and distributed by a reputable professional organization with a 100 year history of supporting education. The directory purports to list `attorneys and other specialists' willing to consult with women involved in higher education who are seeking redress for sex-based discrimination. The directory provides names, addresses, phone numbers and, generally, a short statement of the person's area of interest or expertise. In such a fact-laden context, the reasonable reader would be `less skeptical and more willing to conclude that [the directory] stated or implied facts'"

(Flamm, 201 F3d at 154 [emphasis added], quoting Gross v New York Times, 82 NY2d 146, 156 [1993]). Here, the context of the statement, namely, its publication on Yelp, supports the opposite conclusion. Negative comments anonymously posted on consumer review websites are typically treated as non-actionable expressions of opinion (see Torati v Hodak, 147 AD3d 502, 503 [1st Dept 2017]). The Internet reviews at issue in Torati v Hodak were quoted as "referring to plaintiff as a `bad apple,' `incompetent and dishonest,' and a `disastrous businessman,' from whom consumers should `[s]tay far away'" (147 AD3d at 503). In dismissing the defamation claims regarding those statements, the Court noted their "[l]oose, figurative or hyperbolic tone" and observed that "Internet reviews contain elements of both fact and opinion," but when viewed in context, they suggest to a reasonable reader that the author was merely expressing his opinion based on a negative business interaction with plaintiffs" (id.). Yelp, in particular, provides an opportunity for people to post both negative and positive reviews, stating their opinions and their perceptions of the relative merits of the reviewed service providers. It is the virtual opposite of a "fact-laden context" (id.).

Moreover, statements that "amount[] to no more than name-calling or a general insult" are treated as non-defamatory because it is generally understood that such name-calling is "a type of epithet not to be taken literally (Klepetko v Reisman, 41 AD3d at 551, citing DePuy v St. John Fisher Coll., 129 AD2d 972, 973 [4th Dept 1987]). Defendant's Yelp post about plaintiff is reasonably and best understood to be, simply, name-calling.


Dismissal is warranted here, because consideration of both the content and the context of the allegedly defamatory statement at issue reflects that it does not form a viable basis for an actionable claim."