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."

SEALING THE FILES UNDER RPAPL 757

New York RPAPL 757 provides:

"In the event that a lessee is removed from real property pursuant to this article, and the leased real property was the subject of a foreclosure proceeding pursuant to this chapter or the subject of a tax foreclosure proceeding, the court records relating to any such lessee shall be sealed and be deemed confidential. No disclosure or use of such information relating to any such lessee shall be authorized, and the use of such information shall be prohibited."

And its applicability was addressed in this case. LNV Corp. v. Amin, NYLJ July 08, 2020, Date filed: 2020-07-01, Court: Civil Court, Judge: Judge David Bryan, Case Number: 032975/19:

"This matter was brought as a residential holdover case by Notice of Petition and Petition. The petitioner alleges service of a 90-day Notice to Vacate dated December 28, 2018 upon Luis Estrada, Maria Estrada, Zucely Estrada, and “Tenants”. The notice indicated in part that the property located at 508 Morris Park Avenue, Bronx, NY 10460 has been sold at a foreclosure sale and is now owned by LNV Corporation. The matter appeared on the Court’s calendar on August 22, 2019 to October 2, 2019 and the matter was adjourned for Zucely Estrada to seek counsel. On October 2, 2019 the matter was adjourned to October 29, 2019 for settlement or trial. On October 29, 2019 Zucely Estrada reached a settlement by stipulation with petitioner for a final judgment of possession with execution of the warrant stayed to January 31, 2020 so respondent might vacate. On October 29, 2019 the matter was adjourned to December 4, 2019 for an inquest against all non-appearing parties. Inquests were adjourned on December 4, 2019 and December 16, 2019 and postcards were sent to respondents on both occasions.

On January 27, 2020 an inquest was held against Amin as well as John and Jane Doe. During the inquest petitioner presented a referee’s deed pursuant to LNV Corporation v. Mohammad R. Amin a/k/a Mohammad R. Ramin et. al., Index 35447/2013 E conveying the premises to petitioner and away from Amin a/k/a Ramin. The Court was able to determine that John and Jane Doe were tenants of the former owner and that Luis, Maria and Zucely Estrada were tenants as well. The Court asked petitioner’s counsel what steps had been taken to comply with RPAPL §757′s requirement that the court’s file must be sealed when a holdover is brought against the former tenants of the foreclosed owner. Counsel was unable to answer other than to state that inasmuch as John and Jane Doe were named, no one’s privacy was compromised. The Court noted that the Estradas were also tenants and their names remained in the public domain. After submission, the Court reserved decision as to the judgment of possession after inquest. Upon further consideration, the Court finds that petitioner has satisfied its prima facie burden in this holdover and may apply for a judgment of possession when appropriate given the coronavirus pandemic.

Discussion
The Court begins its analysis of RPAPL §757 by noting it is contained within the larger body of newly enacted laws encompassed within the “Housing Stabilization and Tenant Protection Act of 2019″ (HSTPA). The Court analyzes the provisions of the HSTPA considering the legislative intent of the Act to be the protection of tenants and the preservation and maintenance of affordable housing stock. RPAPL §757 protects tenants remaining in foreclosed homes during summary holdover proceedings brought against them by the new owners. RPAPL §757 requires that summary holdover proceedings against tenants of the foreclosed owner be sealed so that those tenant’s identities are protected. This decision will discuss the factors encountered by the Court on inquest in the application of and enforcement of RPAPL §757.

Given that the HSTPA and RPAPL §757 are only a few months old, the Court has found no current authority showing the application of RPAPL §757. Inasmuch as RPAPL §757 is a statute focused on protecting the financial reputation and credit score of tenants¹, the Court makes an analogy to RPL §227 F, a similar statute² that follows a long struggle to remove the impact of tenant screening companies (TSC) on prospective tenants because of prior landlord and tenant proceedings commenced pursuant to Article 7 of the RPAPL.

TSC’s are utilized by landlords to advise them as to their decisions to accept the applications of prospective tenants. The advice provided is customized by landlords setting their own criteria for acceptance or exclusion. A landlord may determine that any litigation against a tenant excludes them from a prospective tenancy. Another landlord may determine that a certain number of cases or type of litigation (e.g. a nuisance holdover) would exclude a prospective tenant all together. Courts have found that being placed on what is effectively a tenant blacklist as a result of the commencement of a housing court proceeding makes obtaining another rental or cooperative apartment nearly impossible. This result has been held to constitute irreparable harm. Even if a tenant were to prevail in part or in whole in any such housing court proceeding, they remain subject to blacklisting due to the practice of TSCs disseminating incomplete information regarding the outcome of these housing court proceedings. See, Nieborak v. W54-7 LLC, 2016 NY Slip Op 31040[U] [Sup Ct, NY County 2016]; See also, Pultz v. Economakis, 8 Misc 3d 1022[A], 2005 NY Slip Op 51238[U] [Sup Ct, NY County 2005]. Tenant advocates have long sought to have these “blacklisting” companies deprived of the necessary data to report on tenants involved in New York City Housing Court proceedings.
Some aspects of the TSC business model are illustrated in Wenning v. On-Site Mgr., Inc., 2016 US Dist LEXIS 81126, [SDNY June 22, 2016] In that case two individuals were denied apartments based upon a report generated by On-Site Manager, Inc. (On-Site) upon the request of prospective landlords. While that case concerns itself with inaccuracies and remedies under the Fair Debt Collections Practices Act (FDCPA), the business of gathering information regarding tenants is described.

Since 2009, On-Site has obtained data relating to New York City Housing Court proceedings from LexisNexis Risk Data Retrieval Services LLC and its successors (“Lexis”). Before that, On-Site purchased Housing Court data directly from the New York State Office of Court Administration (“OCA”). Lexis is an established and experienced vendor, and On-Site believed it a reputable source of accurate information concerning Housing Court Proceedings. Lexis obtains information directly from the paper files in the Housing Court clerk’s office, which it translates into a daily stream of data made available to companies like On-Site (emphasis added) (internal citations to the record omitted).
Wenning v. On-Site Mgr., Inc., 2016 US Dist LEXIS 81126, 18-19 [SDNY June 22, 2016].

In Wenning, one of the two tenants, Correa, was the subject of a negative report from On-Site indicating that he had a New York City Housing Court case and this report was used to deny him a new apartment. The lawsuit alleged that Correa had sublet an apartment from Scroczynski, another respondent. Correa rented an apartment allegedly believing that Scroczynski had the right to rent the apartment to him. The landlord disagreed and Scroczynski and Correa were the subject of a residential holdover case in Housing Court based upon an impermissible sublet. The landlord served a Notice of Termination and commenced a holdover against Correa and Scroczynski. Correa quickly executed a stipulation agreeing to a final judgment of possession with several months to vacate as long as use and occupancy was paid at the rent stabilized rate. Correa then vacated the apartment as agreed.

The Housing Court case against Correa is analogous to the position of a tenant after foreclosure. Correa was the sub-tenant of Alexander Scroczynski, the prime tenant and Correa contends that he believed that Scroczynski had the right to sublet the apartment. In short, Correa was named as a respondent so that he could be removed if the landlord prevailed against Scroczynski, not because of any fault of Correa. The analogy to the instant matter is that tenants in premises that have been sold as a consequence of foreclosure proceedings did not default on the mortgages and their eventual eviction is a consequence of the landlord’s default, not due to any fault of their own.

Correa’s cause of action against On-Site arose when he sought to obtain a new home. On-Site was used by two of the landlords that Correa submitted applications to for a new apartment. One of the two landlords required On-Site to use an algorithm to reject any prospective tenant with any housing court record. This landlord indicated that they might reconsider if a letter of explanation was provided by the petitioner in the prior case, but this request was rejected by the petitioner-landlord. The second prospective landlord also rejected Correa on the same basis of having a housing court record, but Correa’s request for a letter of explanation from the petitioner in the prior case was granted and provided to the prospective landlord.

The Court in Wenning identified a host of problems with the reporting by On-Site that may well be endemic to the industry. These problems include a lack of mitigating information (such as the fact that Correa was also victimized by Scroczynski and that he paid the use and occupancy required and exited as agreed), and a lack of understanding of housing court proceedings (the report described the holdover action as a “Forcible Entry/Detainer”³ with associated pejorative assessments).

The intent of the legislature in passing RPAPL §757 was that the tenants remaining in a property after a foreclosure sale will constitute a separate class of tenants. It is clear that the HSTPA intended that tenants in possession after foreclosure would not suffer a negative impact of their credit ratings⁴ or their ability to obtain new housing because of their involvement in a holdover after foreclosure brought against their landlord. It is notable that the remedy provided to this class of tenants was not only to prohibit the use of TSC reports to deprive tenants of housing but to remove their identities from the stream of commerce. The concerns of the legislature that credit and tenant reporting agencies would paint these tenants with an overly broad brush is echoed by Judge Kaplan in White v. First Am. Registry, Inc., 2007 US Dist LEXIS 18401 [SDNY Mar. 7, 2007].

This lawsuit arises by reason of the nature of defendants’ business, which consists of selling landlords the opportunity to consult a list of individuals who have been involved in landlord-tenant litigation. As defendants doubtless well understand, risk averse landlords are all too willing to use defendants’ product as a blacklist, refusing to rent to anyone whose name appears on it regardless of whether the existence of a litigation history in fact evidences characteristics that would make one an undesirable tenant. Thus, defendants have seized upon the ready and cheap availability of electronic records to create and market a product that can be, and probably is, used to victimize blameless individuals. The problem is compounded by the fact that the information available to defendants from the New York City Housing Court (“NYCHC”) is sketchy in the best of cases and inaccurate and incomplete in the worst. Any failure by defendants to ensure that the information they provide is complete, accurate, and fair heightens the concern — and there has been ample reason for heightened concern.
White v. First Am. Registry, Inc., 2007 US Dist LEXIS 18401, 3-4 [SDNY Mar. 7, 2007]
The Court has concerns regarding the instant matter due to the provisions of RPAPL §757 as modified under the HSTPA. It is clear that the legislature intended that tenants remaining in homes lost after judgments of foreclosure should not be the subject of a negative tenant profile or poor credit rating based upon the filing of a summary proceeding. Senator Kevin Parker’s sponsor memo makes it clear that the objective was “To seal court records regarding a tenant’s eviction due to foreclosure and to ensure that credit scores of lessees of foreclosed properties are not adversely affected.”⁵

The Court’s inquiries permits judicial notice that there appears to be no affirmative duty established on petitioner to identify the respondents as tenants after foreclosure. Often petitioner will establish standing or jurisdiction by a relevant document such as a referee’s deed after foreclosure or a 90-day predicate notice. However, there appears to be no expectation that the file will be identified as a tenant holdover after foreclosure sale against the original landlord. Despite the high propensity of one-and two-family homes lost to foreclosure in this county, this Court has never had a petitioner on inquest or through stipulation of settlement prepared to address compliance with RPAPL §757. While foreclosures have diminished in the public’s perception, New York City’s “outer boroughs” are still being impacted on a large scale. Foreclosures in the past five years have increased 313 percent in Staten Island and have approximately doubled in Brooklyn and Queens. The Bronx has lost approximately 40 percent of its homeowners since 2008, and it is particularly notable that foreclosure auctions are rising, indicating no shortage of holdovers after foreclosure awaiting filing in Housing Court. Therefore, there will be an ongoing class of individuals for whom RPAPL §757 was intended to protect.⁶ This consequence is only exacerbated by the unprecedented amount of vast and sudden unemployment resulting from the coronavirus pandemic of 2020.

If a methodology that would identify cases subject to RPAPL §757′s requirements could be implemented, the operation of the judgments obtained would also require modification. Practically speaking, most residential holdovers of tenants after foreclosure will require a judgment of possession. The landlord will need a method to compel the tenant to leave even if a stipulated agreement is reached for the tenant to vacate. The “stick” of the judgment and warrant of eviction is often required to assist the landlord in obtaining possession with or without the intervention of the Marshall or Sheriff. However, absent some other remedy a residential judgment of possession must be obtained against an entity, not an anonymous person. To achieve RPAPL §757 objectives there must be a method to maintain the anonymity of the tenant after foreclosure while maintaining the effectiveness of the judgment of possession.

As previously stated, a tenant’s identity is captured at the start when case is filed in the clerk’s office. If the Court seals the matter on its own motion or on petitioner’s motion, the tenant’s identity has already entered the stream of commerce with the consequent damage to their credit rating and ability to obtain housing. If a remedy is to be found, it must come by having an affirmative duty put upon the petitioner to identify the case as a post foreclosure case and a method must be implemented at the point in time of filing by the clerk to safeguard the tenant’s identity.⁷

Conclusion
Although the inquest reveals that this holdover is not in compliance with RPAPL §757, the inquest is GRANTED. Petitioner has satisfied its prima facie burden in this holdover and may apply for a judgment of possession when appropriate given the coronavirus pandemic. As noted above, the Court is without a clear method to enforce the statute and sealing the file would be moot at this stage as the respondent’s identities are already known and in the Court’s computer system. This Court will not seek to lock the barn door after the horse has left.

Footnotes

1. See, S4084A (ACTIVE) --- Sponsor Memo at https://www.nysenate.gov/legislation/bills/2019/S4084.
2. See, RPL §227 F --- Denial on the basis of involvement in prior disputes prohibited: No landlord of a residential premises shall refuse to rent or offer a lease to a potential tenant on the basis that the potential tenant was involved in a past or pending landlord-tenant action or summary proceeding under article seven of the real property actions and proceedings law. There shall be a rebuttable presumption that a person is in violation of this section if it is established that the person requested information from a tenant screening bureau relating to a potential tenant or otherwise inspected court records relating to a potential tenant and the person subsequently refuses to rent or offer a lease to the potential tenant.
3. The Court notes On-Site changed its terminology; in lieu of "Forcible Entry/Detainer," it now uses the term "Civil Action for Possession." See, Wenning v. On-Site Mgr., Inc., 2016 US Dist LEXIS 81126, 19-20 [SDNY June 22, 2016].
4. The inclusion of judgments in the calculation of credit scores was repealed by the National Consumer Assistance Plan in 2017. While not explicitly included in the credit scoring, the information is available to potential lenders or others seeking to assess whether to extend credit. For more information regarding the National Consumer Assistance Plan see http://www.nationalconsumerassistanceplan.com. See also Removal of public records has little effect on consumers' credit scores by Jasper Clarksberg and Michelle Kambara https://www.consumerfinance.gov/about-us/blog/removal-public-records-has-little-effect-consumers-credit-scores/.
5. Sponsor Memo at https://www.nysenate.gov/legislation/bills/2019/S4084.
6. ¨See: Aftermath: Affordable Homeownership in New York City, by John Baker, Leo Goldberg, Caroline Nagy and Ivy Perez. Published by Center for New York City Neighborhoods. https://s28299.pcdn.co/wpcontent/ uploads/2018/10/CNY002-AH-Summit-Report_v7_FINAL_online.pdf See also: 2019 Annual Foreclosure Report: NYC Foreclosures Dip 6 percent Y-o-Y https://www.propertyshark.com/Real-Estate-Reports/NYC-Foreclosure-Report
7. It should be noted that there is no penalty in the HSTPA for failure to comply with §757."

NYC FREELANCE ISN'T FREE ACT

Prior to this pandemic, New York City addressed the magnitude of the "gig economy" and on May 15, 2017, Local Law 140 of 2016 took effect. The law establishes and enhances protections for freelance workers, specifically the right to a written contract, timely and full payment and protection from retaliation.

Turner v Sheppard Grain Enters., LLC 2020 NY Slip Op 20139 Decided on June 23, 2020 Supreme Court, New York County Bluth, J.:

"Background Plaintiff seeks purportedly unpaid consulting fees under a consulting agreement he had with defendant, an agricultural products processor and distributor. He insists his fees were withheld in bad faith based on a non-existent pretextual termination for cause and he is owed over $150,000 in fees plus double damages under New York City's Freelance Isn't Free Act ("FIFA").

Defendant moves to dismiss the third and fourth causes of action on the ground that the Freelance Isn't Free Act does not apply to this case because plaintiff did not perform the work in New York City. Defendant acknowledges that the law is ambiguous on this point and that there are few cases on the scope of the statute but insists that plaintiff has no standing to bring these types of claims. It stresses that defendant only maintains a New York office for notice purposes, plaintiff did not sign the contract in New York City and that plaintiff is not a freelance worker.

In opposition, plaintiff emphasizes that defendant is an LLC with its principal office on Seventh Avenue in New York City. He contends that the agreement was signed by Mr. Song (manager of defendant) in New York City and details work that he performed for defendant relating to tasks based in New York City. Plaintiff acknowledges that defendant does not "mash soybeans" in New York City but argues it is the place where much of defendant's work is done.

Plaintiff adds that defendant is owned, controlled and run by a private equity firm based in New York City. He argues that a person's residency is not determinative under FIFA and the law is remedial, meaning it should be interpreted broadly to support its purpose. Plaintiff asks the Court to consider how work is performed in the digital age and not to limit the scope of FIFA to a person who is physically in New York City.

In reply, defendant stresses that plaintiff did little to no work in New York City and defendant has little to no operations here. It argues that plaintiff identified two meetings over a three-year period in New York City and that the New York office is only used to receive mail. Defendant argues its "nerve center" is in Phelps, New York, hundreds of miles from the city.

Discussion FIFA defines a freelance worker as "any natural person or any organization composed of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services in exchange for compensation"(FIFA § 20-927). A review of the consulting agreement reveals that this was an agreement where plaintiff would provide his operations management expertise to defendant in exchange for compensation (NYSCEF Doc. No. 32). Clearly, plaintiff qualifies as an independent contractor based on this agreement and falls within FIFA's definition of a freelance worker.

FIFA was passed largely to protect freelance workers who were denied compensation by inter alia imposing double damages on companies that breached agreements (Caitlin M. Baranowski, Freelance Isn't Free: The High Cost of New York City's Freelance Isn't Free Act on Hiring Parties, 12 Brooklyn J Corp Fin & Com L 439, 443 [2018]). However, FIFA does not provide any guidance or definitions as to its scope or applicability. The statute is completely silent on how to assess scenarios such as the one present here: a freelancer based out of state and doing work remotely from out of state for a company whose address (in the agreement) is in New York City but whose business is physically conducted outside the city.

"FIFA does not clarify whether individuals must have physical locations in N.Y.C., mailing addresses in N.Y.C., or simply conduct business regularly in N.Y.C., in order to meet FIFA's definition of freelance workers or hiring parties. FIFA may apply to work performed outside N.Y.C. depending on the particular circumstance, including whether some of the work is performed in N.Y.C, whether the freelance worker was hired or retained in N.Y.C, and whether the hiring party's operations are within N.Y.C." (id. at 456).

In fact, the NYC Department of Consumer Affairs posits (on its FAQ page) that "The Freelance Isn't Free Act is a New York City law. While judges will decide how the Law applies in each case, the Law does apply to work performed inside New York City and may apply to work performed outside New York City depending on the overall circumstances. For example, whether the Law applies may depend on whether some, but not all of the work is performed in New York City, the freelance worker is hired or retained in New York City, or the hiring party has significant operations in New York City" (NYC Consumer Affairs, Freelance Isn't Free Act: Frequently Asked Questions, http://wwwl.nyc.gov/assets/dca/downloads/pdf/workers/FAQs-Freelance.pdf).

Because the law provides no guidance on how to assess the application of FIFA, the Court must consider the purpose and intent of the law in light of the present circumstances. When considering another city law, the New York City Human Rights Law ("NYCHRL"), the Court of Appeals adopted the impact requirement, which holds that "the nonresident plaintiff [*2]must demonstrate that the alleged discriminatory conduct had an 'impact' within the city" (Hoffman v Parade Publs., 15 NY3d 285, 290, 907 NYS2d 145 [2010]).

The Court observes that the NYCHRL contains an entire section (8-101) about the policy of the NYCHRL and it specifically mentions the city's inhabitants. No such language is included in FIFA. But the Court sees no reason to depart from this standard when evaluating whether a non-resident (plaintiff lives in Connecticut and does his work remotely there) should be afforded the protections of FIFA.

Under the impact standard, the Court finds that plaintiff is not entitled to the protections of FIFA because he is not a New York City resident and he performed the vast majority of his work from Connecticut. In fact, the termination letter is addressed to plaintiff at a location in Darien, Connecticut (NYSCEF Doc. No. 33). While plaintiff attempts to document that he went to a few meetings in New York City (NYSCEF Doc. No. 31, ¶ 10), that does not sufficiently establish that he is entitled to the protections of a New York City provision.

Under somewhat analogous circumstances, a federal court found that a housekeeper at an estate in Southampton, New York could not state a claim under the NYCHRL because she could not establish a sufficient connection to New York City (Amaya v Ballyshear LLC, 340 F Supp 3d 215, 221 [ED NY 2018]). The Court found that the termination of plaintiff (a non-NYC resident who did not work in New York City) did not satisfy the impact requirement (id. at 221-22). The Court also concluded that plaintiff's attendance at a few meetings in New York City did not save her claim under the NYCHRL (id. at 222). Also rejected was plaintiff's argument that her discussions and interactions with supervisors based in New York City permitted her to seek the protection of the NYCHRL (id.). The Court stressed that "To accept the Plaintiff's argument that mere interactions with a non-resident plaintiff are sufficient would expand the scope of the NYCHRL to cover all decisions of New York City-based employers regardless of the location of their employees. . . .The NYCHRL's reach is not so expansive" (id.). The Court concluded that the impact of the alleged discriminatory conduct towards plaintiff was felt solely on Long Island (id. at 223).

The Amaya case is instructive here. The fact that plaintiff had a few meetings in New York City, had interactions with supervisors in New York City and that he was fired by an employee (Mr. Chong) based in New York City is not enough to satisfy the impact requirement. Rather, the Court finds that the impact was felt in Connecticut, where plaintiff both lived and worked.

In order to permit plaintiff the protections of FIFA, the Court would have to ignore both his residency status and the work requirements of the job. That would expand the scope of FIFA substantially. Consider if plaintiff lived in California or in London rather than in Connecticut; under his theory, he would be entitled to the protection of FIFA in either location solely because defendant was based in New York City.[FN1] That expansive reading of a New York City-specific provision cannot be embraced. It lacks common sense, rationality and has no bearing on the purpose of this statute. Plaintiff argues that FIFA's purpose was to apply to businesses with any connection to New York City and benefit freelance workers no matter where they did their work; this Court disagrees.

The press release announcing the passage of FIFA mentions "protecting New York City's [*3]gig economy" and cited examples of a film producer and a pattern-maker from the Bronx both of whom didn't get paid after performing freelance work (Mayor Bill de Blasio Signs Legislation Strengthening Protections for Freelance Workers, available at https://ww1.nyc.gov/office-of-the-mayor/news/243-18/mayor-bill-de-blasio-signs-legisation-strengthening-protections-for-freelance-workers [November 16, 2016]). The intention is clear: FIFA was passed to ensure that people working in the city are afforded protection in an economy where workers are increasingly hired for discrete or short-term tasks rather than for full-time employment.

Summary Of course, there may be situations in which non-residents can seek redress under FIFA. The clearest example is when a non-resident is hired to perform work in New York City (see Eelco Van Den Berg v Clinton Hall Holdings, LLC, 2019 NY Slip Op. 32036[U] [Sup Ct, New York County 2019] [involving a resident of the Netherlands bringing a claim under FIFA for unpaid work relating to a mural at a bar in South Street Seaport]). Certainly, if a New York City company hires a non-resident to do freelance work within New York City, then that freelancer can seek protection under FIFA.

Under those circumstances, the impact of the non-payment is felt in New York City because that is where the work took place. But that is not the case here, where plaintiff worked in another state and his only connection to New York City is that at least one employee of defendant was based there.
The Court recognizes that FIFA is not exactly the same as the NYCHRL, a human rights statute that alludes to the city's inhabitants. However, the Court sees no reason to depart from the analysis used to determine the applicability of the NYCHRL when considering the scope of FIFA. In its most basic example, FIFA was passed to help the photographer hired for a photoshoot in Manhattan who was never paid. Its drafters did not think to contemplate that an out of state resident working remotely while out of state would seek its protection and, consequently, FIFA is completely silent about its scope.

There is no doubt that any analysis of FIFA must consider the fact that many freelancers complete tasks remotely, especially given the current pandemic. Interpretation of FIFA must strike a balance that protects New York City residents and those who come to this city to do work without expanding its scope exponentially to cover every person hired to do freelance work for a New York City company regardless of where this work is performed. Because there is no indication that FIFA's drafters sought to include plaintiffs like the one here, the Court grants the motion."

NEW RULES - RESIDENTIAL LANDLORD & TENANT - SAFE HARBOR ACT

Signed on June 30, the purpose of the Tenant Safe Harbor Act is to help keep residential tenants in their homes following the COVID-19 pandemic by allowing only money judgments, and not evictions, for unpaid rent that comes due while restrictions are in place due to COVID-19 on businesses, public accommodations, and nonessential gatherings. Thus, the act, during the COVID-19 covered period,: (1) prohibits courts from issuing a warrant of eviction or judgment of possession against a residential tenant or other lawful occupant that suffered financial hardship during the COVID-19 covered period for the nonpayment of rent that accrues or becomes due during the COVID-19 covered period, (2) allows tenants to raise financial hardship as an affirmative defense and provides factors a court may examine in determining hardship, and (3) allows courts to award a judgment for the rent due and owing to a landlord in a summary proceeding under Article 7 of the Real Property Actions and Proceedings Law.

TO ESTABLISH TORTIOUS INTERFERENCE

Astro Kings, LLC v Scannapieco, 2020 NY Slip Op 03637, Decided on July 1, 2020. Appellate Division, Second Department:

"The plaintiff, the owner of certain commercial real property located in Rockville Centre, commenced this action against, among others, the defendants Silvio Sports, Inc., and Dennison Silvio (hereinafter together the Silvio defendants), alleging that the Silvio defendants tortiously interfered with a lease between the plaintiff and its tenant, Rockville Centre Spa Corp., and tortiously interfered with the plaintiff's prospective business relations. The Supreme Court, inter alia, granted that branch of the Silvio defendants' motion which was for summary judgment dismissing the amended complaint insofar as asserted against them. The plaintiff appeals.

We agree with the Supreme Court's determination that the Silvio defendants were entitled to summary judgment dismissing the cause of action to recover damages for tortious interference with contract asserted against them. The elements of a cause of action to recover damages for tortious interference with a contract are: "(1) the existence of a contract between plaintiff and a third party; (2) defendant's knowledge of the contract; (3) defendant's intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to plaintiff" (Kronos, Inc. v AVX Corp., 81 NY2d 90, 94; see Oxford Health Plans [NY], Inc. v Biomed Pharms., Inc., 181 AD3d 808; Kimso Apts., LLC v Rivera, 180 AD3d 1033; Nero v Fiore, 165 AD3d 823, 825). The plaintiff must also establish that the defendant intentionally procured the breach of contract "without justification" (Lama Holding Co. v Smith Barney, 88 NY2d 413, 424; see Oxford Health Plans [NY], Inc. v Biomed Pharms., Inc., 181 AD3d at 808). Here, the Silvio defendants established, prima facie, that they did not intentionally induce or procure any breach of the lease. In opposition, the plaintiff failed to raise a triable issue of fact (see generally [*2]Alvarez v Prospect Hosp., 68 NY2d 320, 324).


Moreover, we agree with the Supreme Court's determination that the Silvio defendants were entitled to summary judgment dismissing the cause of action to recover damages for tortious interference with prospective business relations asserted against them. To succeed on this cause of action, a plaintiff must demonstrate, inter alia, that the defendant's interference was accomplished by "wrongful means" or that the defendant acted "for the sole purpose of harming" the plaintiff (Law Offs. of Ira H. Leibowitz v Landmark Ventures, Inc., 131 AD3d 583, 585; see Carvel Corp. v Noonan, 3 NY3d 182, 190; NBT Bancorp v Fleet/Norstar Fin. Group, 87 NY2d 614, 621; Caprer v Nussbaum, 36 AD3d 176, 204). "Wrongful means include physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure" (Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183, 191 [internal quotation marks omitted]; see Law Offs. of Ira H. Leibowitz v Landmark Ventures, Inc., 131 AD3d at 586). Here, the Silvio defendants established, prima facie, that to the extent that any of their conduct may have interfered with the plaintiff's prospective business relations, there were no "wrongful means" employed by them, nor did they act for the sole purpose of harming the plaintiff (see Carvel Corp. v Noonan, 3 NY3d at 190; MVB Collision, Inc. v Progressive Ins. Co., 129 AD3d 1040; Pink v Half Moon Coop. Apts., S., Inc., 68 AD3d 739, 741). In opposition, the plaintiff failed to raise a triable issue of fact (see generally Alvarez v Prospect Hosp., 68 NY2d at 324)."

MEET THE ONE YEAR DEADLINE FOR DEFAULT JUDGMENTS

Deadlines are sacred.

16501 Jamaica Ave., LLC v Hara, 2020 NY Slip Op 03635, Decided on July 1, 2020, Appellate Division, Second Department:

In March 2016, the plaintiff commenced this action, inter alia, to recover on a personal guaranty. The defendant failed to timely appear or answer the complaint. In October 2018, the plaintiff moved for leave to amend the complaint. Thereafter, the defendant cross-moved pursuant to CPLR 3215(c) to dismiss the complaint as abandoned. In an order entered March 21, 2019, the Supreme Court granted the plaintiff's motion and denied the defendant's cross motion. The defendant appeals.

CPLR 3215(c) provides that "[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned . . . unless sufficient cause is shown why the complaint should not be dismissed" (see HSBC Bank USA, N.A. v Slone, 174 AD3d 866, 867; Ixis Real Estate Capital, Inc. v Herbst, 170 AD3d 691, 691-692; Myoung Ja Kim v Wilson, 150 AD3d 1019, 1020). "The language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts shall' dismiss claims (CPLR 3215[c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned" (Giglio v NTIMP, Inc., 86 AD3d 301, 307-308; see HSBC Bank USA, N.A. v Slone, 174 AD3d at 867; Myoung Ja Kim v Wilson, 150 AD3d at 1020). "Failure to take proceedings for entry of judgment may be excused, however, upon a showing of sufficient cause," which requires the plaintiff to "demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action" (Aurora Loan Servs., LLC v Hiyo, 130 AD3d 763, 764; see Myoung Ja Kim v Wilson, 150 AD3d at 1020).


Here, the plaintiff failed to offer a reasonable excuse as to why it did not seek leave to enter a default judgment within one year following the defendant's default (see Myoung Ja Kim v Wilson, 150 AD3d at 1020). Accordingly, the Supreme Court should have granted the defendant's cross motion pursuant to CPLR 3215(c) to dismiss the complaint as abandoned and denied the plaintiff's motion for leave to amend the complaint.

BE SAFE THIS HOLIDAY WEEKEND

LITIGATION - MOTION FOR LEAVE TO RENEW

Wells Fargo Bank, N.A. v Mone, 2020 NY Slip Op 03688, Decided on July 1, 2020, Appellate Division, Second Department:

"The defendant appeals, principally arguing that the plaintiff failed to meet its burden of establishing its entitlement to leave to renew inasmuch as the plaintiff did not set forth a reasonable justification for failing to submit the purported new fact contained in Flannigan's affidavit on the prior motion. Although this argument is raised for the first time on appeal, we reach the argument because it presents a question of law which appears on the face of the record and "which could not have been avoided if raised at the proper juncture" (Coscia v Jamal, 156 AD3d 861, 864 [internal quotation marks omitted]; see Bank of Am., N.A. v Sebrow, 180 AD3d 982; Rivera v Rochester Gen. Health Sys., 173 AD3d 1758, 1758-1759; Matter of Sagres 9, LLC v State of New York, 164 AD3d 903, 905; Shahid v City of New York, 144 AD3d 1127, 1129).

Pursuant to CPLR 2221, a motion for leave to renew "shall be based upon new facts not offered on the prior motion that would change the prior determination" (CPLR 2221[e][2]) and "shall contain reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221[e][3]; see Deutsche Bank Natl. Trust Co. v Wilkins, 97 AD3d 527, 528; Bank of N.Y. Mellon v Izmirligil, 88 AD3d 930, 932). " The new or additional facts either must have not been known to the party seeking renewal or may, in the Supreme Court's discretion, be based on facts known to the party seeking renewal at the time of the original motion'" (Wells Fargo Bank, N.A. v Rooney, 132 AD3d 980, 982, quoting Deutsche Bank Trust Co. v Ghaness, 100 AD3d 585, 586). " However, in either instance, a reasonable justification for the failure to present such facts on the original motion must be presented'" (Cioffi v S.M. Foods, Inc., 129 AD3d 888, 891, quoting Deutsche Bank Trust Co. v Ghaness, 100 AD3d at 586). "A motion to renew is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation'" (Sobin v Tylutki, 59 AD3d 701, 702, quoting Renna v Gullo, 19 AD3d 472, 473 [*3][internal quotation marks omitted]).

Here, the plaintiff failed to demonstrate that the purported new fact contained in Flannigan's affidavit was not available to it at the time of the prior motion and otherwise failed to offer any excuse, let alone a reasonable justification, for failing to submit it on the prior motion (see CPLR 2221[e][3]). Contrary to the plaintiff's contention, the Supreme Court, by its determination of the prior motion, did not "invite[ ] a second motion." "[T]o accept this proposition would mean that any time the court found a motion for summary judgment to lack a prima facie foundation, the unsuccessful party could simply try again" (Deutsche Bank Natl. Trust Co. v Elshiekh, 179 AD3d 1017, 1020). "As the Supreme Court lacks discretion to grant renewal where the moving party omits a reasonable justification for failing to present the new facts on the original motion" (Carmike Holding I, LLC v Smith, 180 AD3d 744, 747; see HSBC Bank USA, N.A. v Nemorin, 167 AD3d 855), the court should have denied the plaintiff's motion for leave to renew that branch of its prior motion which was for summary judgment declaring that the subject mortgage is a first priority lien on the subject property and that a copy of the mortgage may be recorded."

FAMILY COURT - SUMMARY JUDGMENT FOR DERIVATIVE NEGLECT

Derivative neglect means that if you are a danger to one child, then you are a danger to all children. It is basically an accusation that you are a bad parent and should not have any children in your care.

Matter of Elijah G. (Chastity G.), 2020 NY Slip Op 03511, Decided on June 24, 2020, Appellate Division, Second Department:

"As is relevant to these appeals, in 2012, the Administration for Children's Services (hereinafter ACS) filed a petition pursuant to article 10 of the Family Court Act against the mother and the father, alleging that they neglected their child—their only child at that time—based on, inter alia, their failure to follow up on mental health treatment and the extreme unsanitary conditions in the home. Thereafter, findings of neglect, on consent, were entered as to the mother and the father [*2]with respect to that child. Subsequent petitions were filed against the mother and the father shortly after the birth of each of two additional children (hereinafter, collectively with the oldest child, the three oldest children), based on allegations, inter alia, that the mother and the father were not compliant with therapy and mental health treatment. Findings of neglect as to the mother and the father with respect to the two additional children were entered on consent, and the fact-finding order pursuant to which the findings were entered specified that the neglect findings were entered as to all allegations in the petitions.

Thereafter, ACS filed additional petitions, in 2016 and 2018, respectively (hereinafter the 2016 and 2018 petitions), against the mother and the father, alleging that they derivatively neglected their two youngest children. The three oldest children had been and remained in foster care at the time the 2016 and 2018 petitions were filed and, by January 2017, ACS had filed petitions to terminate the parental rights of the mother and the father as to each of the three oldest children.

In September 2018, ACS moved for summary judgment on the 2016 and 2018 petitions alleging that the mother and the father derivatively neglected the two youngest children. ACS asserted that the conduct that formed the basis of the findings of neglect as to the three oldest children was so proximate in time to these derivative proceedings that it could reasonably be concluded that the condition still existed. The Family Court granted the motion for summary judgment, and the mother and the father separately appeal.

Although there is no express provision for a summary judgment procedure in a Family Court Act article 10 proceeding, summary judgment pursuant to CPLR 3212 may be granted in such a proceeding when there is no triable issue of fact outstanding (see Family Ct Act § 165[a]; Matter of Jaylhon C. [Candace C.], 170 AD3d 999, 1000-1001).

We agree with the Family Court's determination that ACS established its entitlement to judgment as a matter of law on the issue of whether the mother and the father derivatively neglected the two youngest children (see Family Ct Act § 1012[f][i]). In support of its motion, ACS submitted several prior orders of the court finding that the mother and the father neglected the three oldest children and that both the mother and the father suffered from mental health issues and continually failed to comply with recommended mental health services (see Matter of Jaylhon C. [Candace C.], 170 AD3d at 1001; Matter of Shay-Nah FF. [Theresa GG.], 106 AD3d 1398, 1400). The orders submitted demonstrated that the none of the three oldest children were returned to the care of the mother and the father, and that the conditions that resulted in the removal of those children continued to exist at the time ACS filed its motion for summary judgment (see Matter of A'Nyia P.G. [Qubilah C.T.G.], 176 AD3d 495, 496). This evidence of neglect indicates a fundamental defect in the mother's and the father's understanding of the duties of parenthood, warranting a finding of derivative neglect as to the two youngest children (see Family Ct Act § 1046[a][i]; Matter of Jaylhon C. [Candace C.], 170 AD3d at 1001; Matter of Hope P. [Stephanie B.], 149 AD3d 947, 947). The prior conduct was so proximate in time to the derivative neglect proceedings that it can reasonably be concluded that the conditions still exist (see Matter of Jaylhon C. [Candace C.], 170 AD3d at 1001; Matter of Dayyan J.L. [Autumn M.], 131 AD3d 1243, 1244-1245).


Accordingly, ACS established, prima facie, that the mother and the father derivatively neglected the two youngest children through their failure to resolve the same issues that were the basis for the prior findings of neglect as to the three oldest children (see Matter of Jaylhon C. [Candace C.], 170 AD3d at 1001; Matter of Annalise L. [Jalise P.], 170 AD3d 835, 837). In response to ACS's prima facie showing of entitlement to judgment as a matter of law, the mother and the father failed to raise a triable issue of fact."