[App Div 1st Dept]

Contract terms

MHR Capital Partners LP v Presstek, Inc., 2009 NY Slip Op 05200 (Ct. App., 2009)

It is well settled that a contract is to be construed in accordance
with the parties' intent, which is generally discerned from the four
corners of the document itself. Consequently, "a written agreement that
is complete, clear and unambiguous on its face must be enforced [*4]according to the plain meaning of its terms" (Greenfield v Philles Records,
98 NY2d 562, 569 [2002]). Furthermore, a condition precedent is "an act
or event, other than a lapse of time, which, unless the condition is
excused, must occur before a duty to perform a promise in the agreement
arises" (Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co.,
86 NY2d 685, 690 [1995] [internal quotation marks and citations
omitted]). We have recognized that the use of terms such as "if,"
"unless" and "until" constitute "unmistakable language of condition" (id. at 691). Express conditions must be literally performed; substantial performance will not suffice.

Rahman v Park, 2009 NY Slip Op 04882 (App. Div., 2nd, 2009)

The operating agreement and the side agreement clearly conflict as
to the manner in which disputes under the respective agreements are to
be determined. The operating agreement requires arbitration of
disputes, while the side agreement contemplates judicial resolution of
disputes by the court, with certain provisions of confidentiality.

"The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court" (Franklin Apt. Assoc., Inc. v Westbrook Tenants Corp., 43 AD3d 860, 861; see Jackson & Wheeler, Inc. v Village of Pleasantville, 56 AD3d 723, 724; Yu Han Young v Chiu, 49
AD3d 535, 535-536). "[A] written agreement that is . . . clear and
unambiguous [as a matter of law] must be enforced according to the
plain meaning of its terms" (Greenfield v Philles Records, 98 NY2d 562, 569; Maroney v Hawkins, 50 AD3d 862, 863; see Ross v Sherman, 57 AD3d 758).

The parties clearly agreed that in case of conflict the
provision of the side agreement controlled. Rahman did not agree to
arbitrate issues arising under the side agreement as opposed to the
operating agreement. A party cannot be required to submit to
arbitration issues it did not agree to arbitrate (see Credit Suisse First Boston Corp. v Cooke, 284 AD2d 365; Matter of American Centennial Ins. Co. v Williams, 233 AD2d 320; see also Brach v Fried, 16 AD3d 533; Matter of Miriam Osborn Mem. Home Assn. v Kreisler Borg Florman Gen. Constr. Co., 306
AD2d 533). To the extent the present action seeks to enforce Rahman's
rights under the side agreement, it is not subject to the mandatory
arbitration provision of the operating agreement.

P.J.P. Mech. Corp. v Commerce & Indus. Ins. Co., 2009 NY Slip Op 04984 (App. Div., 1st, 2009)

Well established principles governing the interpretation of insurance
contracts provide that the unambiguous provisions of the policy must be
given their plain and ordinary meaning (Greater N.Y. Mut. Ins. Co. v United States Underwriters Ins. Co., 36 AD3d 441, 442 [2007]). This is a question of law for the court to determine (Titlebaum Holdings v Gold, 48 NY2d 51, 56 [1979]; Seaport Park Condominium v Greater N.Y. Mut. Ins. Co., 39 AD3d 51,
54 [2007]). However, a court is not at liberty to "make or vary the
contract of insurance to accomplish its notions of abstract justice or
moral obligation" (Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978]).

…

Significantly, if plaintiff believed that Cauldwell's defense was
truly a counterclaim, the prudent action was to immediately move to
strike the defense and force Cauldwell to
replead the claim as a counterclaim. This would have triggered the
insurer's duty to defend. Had these steps been taken in the instant
action, defendant would have been forced to defend plaintiff at the
beginning of the case, rather than when the counterclaim was
voluntarily asserted by Cauldwell several months later.

There do not appear to be any New York cases addressing the
issue of whether the assertion of a claim such as Cauldwell's offset
claim, when pleaded as an affirmative defense, triggered the insurer's
duty to defend. Plaintiff relies on Construction Protective Servs. v TIG Specialty Ins. Co. (29
Cal 4th 189, 57 P3d 372 [2002]) and argues that we should adopt the
rationale therein. In that case, a security firm sued the insurance
company that provided its comprehensive general liability policy,
claiming the insurer breached its duty to defend and indemnify against
a setoff claim. The setoff was asserted as an affirmative defense in a
lawsuit for unpaid services. The customer alleged that the security
firm was legally responsible for fire damage at its construction site
and thus was entitled to set those damages off against the amounts owed
for security services. The trial court sustained the insurance
company's demurrer without leave to amend, based on its conclusion that
a liability insurer's duty to defend does not extend to affirmative
defenses raised in response to a lawsuit initiated by the insured.
Based solely on its Code of Civil Procedure, the California Supreme
Court held that the trial court had erroneously sustained the demurrer,
but it declined to address the question on the facts where the precise
terms of the insurance policy were not before the court. In an action
on a written contract, a [*6]plaintiff
could, under California procedure, plead "the legal effect of the
contract rather than its precise language," thus enabling the court to
determine whether "a prima facie right to relief" had adequately been
stated, notwithstanding the specific language of the contract (29 Cal
4th at 198-199, 57 P3d at 377).

Despite the omission of a copy of the insurance policy as an
exhibit to the complaint, the court concluded that the allegations in
the complaint were sufficient to allege that the setoff claim fell
within the scope of the contractual obligation to defend against suits
seeking damages, and left open the question whether the duty would
extend to the setoff claim once the precise language of the policy was
known.

We decline to follow this holding. Were we to adopt the reasoning of Construction,
it would represent a dramatic change in long-established New York law,
which mandates that unambiguous contract language controls. It would
essentially eliminate our pleading distinctions between affirmative
defenses and counterclaims by holding that how the setoff is pleaded
does not control. While Construction recognized that a setoff
is limited to defeating a plaintiff's claim in the same manner that an
affirmative defense is so limited, it then went on to hold the effect
of pleading a setoff defense is the same as if it were pleaded as a
counterclaim, and thus, at least for the purposes of whether utilized
defensively (as in an affirmative defense) or offensively (as in a
counterclaim), there is no distinction between the two. In either case,
an insurer would be mandated to assign counsel to defend the insured.
This would impact the long-established business practices of insurers,
and lead to uncertainty in the drafting of insurance contracts.

To ignore the clear language of an insurance policy and order a
carrier to litigate an affirmative action chosen by the policyholder
based on a mere claim in a defendant's answer that the affirmative
action somehow relates, however tenuously, to an occurrence or
allegation of negligence on the part of the insured would run afoul of
the rule enunciated in Breed (46 NY2d at 355). We see no reason to set aside long-standing precedent on this issue.

The bold is mine.

CPLR § 3101(d) Experts and Weight

CPLR § 3101(d)

Board of Mgrs. of the 195 Hudson St. Condominium v 195 Hudson St. Assoc., LLC, 2009 NY Slip Op 04950 (App. Div., 1st, 2009)

While the "qualification of an expert witness is within the court's
sound discretion, and its determination will not be disturbed in the
absence of serious mistake, an error of law or abuse of discretion" (People v Jones, 171 AD2d 609, 610 [1991], lv denied 77 NY2d 996 [1991]), this expert should not have been precluded from testifying as to future cost estimates (see generally Issacs v Incentive Sys.,
52 AD2d 550 [1976]). Licensed professionals acting as experts have been
found qualified to give their opinions regarding future or estimated
costs (see Matter of City of Troy v Town of Pittstown, 306 AD2d 718, 719 [2003], lv denied 1 NY3d 505 [2003]), and this witness's education, training and experience qualified him to testify as an expert in connection [*2]with
estimating costs. The computer database utilized by plaintiff's expert
to prepare pre-bid cost estimates was based on the same methodology
employed in connection with the completed remediation work —
specifications and bids of hundreds of prior projects on which the
expert had worked. Furthermore, "any alleged lack of knowledge in a
particular area of expertise goes to the weight and not the
admissibility of the testimony," and could have been cured with a
limiting instruction to the jury (see Moon Ok Kwon v Martin, 19 AD3d 664 [2005]).

K & J/Gonzalez's argument that it is entitled to set off
against the $2,059,692.09 jury verdict the $1,960,000 received from the
settling codefendants is unsupported by the record (see e.g. Promenade v Schindler El. Corp., 39 AD3d 221, 222-223 [2007], lv dismissed
9 NY3d 839 [2007]). Based on the explicit language of the second
amended complaint, the verdict sheet and the settling agreements, there
is no basis for concluding that the jury allocated damages to these
defendants based on the same claims or injuries by which plaintiff had
entered into its agreements with the settling codefendants. Plaintiff's
Amended CPLR 3101(d) Expert Disclosure clearly indicated that this
expert's testimony would address construction defects caused by K &
J and the "costs to remedy" those defects.

The bold is mine.

CPLR § 5205(c)(2)&(5)

CPLR § 5205 Personal property exempt from application to the satisfaction of money judgments

Memmo v Perez, 2009 NY Slip Op 04710 (App. Div., 1st, 2009)

Order, Supreme Court, New York County (Saralee Evans, J.), entered
February 20, 2009, which, in an action for divorce, inter alia,
directed plaintiff to satisfy the charging lien of his former attorneys
(MSAR) "from the retirement accounts retained by or transferred to
Plaintiff" pursuant to the settlement in the divorce action,
unanimously modified, on the law, to delete the words "retained by or,"
and otherwise affirmed, without costs. Appeal from paper, denominated
decision and order, which granted MSAR's motion seeking, inter alia,
the above relief and directed settlement of an order, unanimously
dismissed, without costs.

MSAR's charging lien came about not by virtue of Judiciary Law § 475, but rather a stipulation, so ordered by the court, in which plaintiff agreed that MSAR "shall have a charging lien
against plaintiff and plaintiff's share of equitable distribution, if
any, in the amount of $70,000." Accordingly, plaintiff will not be
heard to argue that because MSAR's efforts did not create a "new fund"
greater than the value of interests already held by plaintiff, MSAR
does not have a valid charging lien (see Miller v Kassatly, 216 AS2d 260 [1995]; Resnick v Resnick, 24 AD3d 238
[2005]). Nor is the stipulation rendered unenforceable by CPLR
5205(c)(2), exempting personal retirement accounts from application to
the satisfaction of money judgments. First, the transfer of assets from
defendant's IRA account to plaintiff's IRA account pursuant to the
settlement in the divorce action admittedly took place within 90 days
of plaintiff's stipulation to MSAR's lien (CPLR 5205[c][5][i]). Second,
because the matrimonial settlement agreement left plaintiff with no
immediate liquid assets to which MSAR's lien could attach, the court
providently exercised its discretion to look behind that settlement to
determine if plaintiff had used all liquid assets to which he had a
claim to defray obligations other than the lien (see Haser v Haser,
271 AD2d 253 [2000]). However, the directive that payment be made of
out of funds "retained by" plaintiff in retirement accounts is
incorrect, since any funds originally held by plaintiff in his name
would be [*2]exempt from judgment under CPLR 5205(c)(2). In accordance with CPLR 5205(c)(5)(i), only the funds
transferred into plaintiff's IRA account from defendant's IRA account
may be used to satisfy MSAR's lien.

The bold is mine

CPLR R. 5015(a)(2)

CPLR R. 5015 Relief from judgment or order

(a) On motion.
The court which rendered a judgment or order may relieve a party from
it upon such terms as may be just, on motion of any interested person
with such notice as the court may direct, upon the ground of:

2.
newly-discovered evidence which, if introduced at the trial, would
probably have produced a different result and which could not have been
discovered in time to move for a new trial under section 4404

Woori Am. Bank v Winopa Intl. Ltd., 2009 NY Slip Op 04734 (App. Div., 1st, 2009)

Defendants were properly denied relief under CPLR 5015 (a)(2) since
they did not show that their new evidence refuted the essential
findings underlying the order and would probably have resulted in a
different outcome (see Bongiasca v Bongiasca, 289 AD2d 121, 122 [2001]). The evidence submitted did not establish that the statements in question were fabricated (cf. McCarthy v Port of N.Y. Auth.,
21 AD2d 125, 127 [1964]). In any event, Justice Heitler's determination
did not rest solely on those statements, but also on defendants'
initial failure to deny their indebtedness and their inability to offer
any other evidence that they had made the payments as they claimed.

The bold is mine.

CPLR § 3101(a)

CPLR § 3101 Scope of disclosure

Rivera v NYP Holdings Inc., 2009 NY Slip Op 04706 (App. Div., 1st, 2009)

We conclude that the denial of defendants' motion to compel constituted
an improvident exercise of discretion. Full disclosure is required of
"all matter material and necessary" to the defense of an action (CPLR
3101[a]), and the words "material and necessary" are "to be interpreted
liberally to require disclosure . . . of any facts bearing on the
controversy" (Allen v Crowell-Collier Publ. Co., 21 NY2d 403,
406 [1968]). Defendants are entitled to the discovery they seek in
their efforts both to establish their defense of truth to plaintiff's
defamation claims (see Wright v Snow, 175 AD2d 451 [1991], lv dismissed 79 NY2d 822 [1991]), and to defend against plaintiff's assertion of damage to his reputation (cf. Burdick v Shearson Am. Express, 160 AD2d 642 [1990], lv denied 76 NY2d 706 [1990]). Moreover, defendants are entitled to the opportunity to demonstrate the truth of the articles as a wholesee Miller v Journal News,
211 AD2d 626, 627 [1995]), warranting disclosure even as to assertions
in those articles that are not directly challenged in plaintiff's
complaint. Therefore, the inquiries related to grand jury testimony by
plaintiff, information sought from or provided by plaintiff to the
Commission on [*2]Judicial Conduct, and
plaintiff's arrest record, if any, seek information sufficiently
material and relevant to the defense of the action to warrant
disclosure. (

Laguna v Mario's Express Serv., Inc., 2009 NY Slip Op 04869 (App. Div., 2nd, 2009)

In an action to recover damages for personal injuries, the plaintiff
appeals, as limited by her brief, from so much of an order of the
Supreme Court, Kings County (Bayne, J.), dated November 21, 2007, as
granted the defendants' motion for renewal and reargument of their
prior oral application for access to the plaintiff's medical records
"beyond a 3 year period," which was denied by order of the same court
(Ambrosio, J.) dated June 28, 2007, and upon renewal and reargument
granted the defendants access to "the complete medical records relating
the plaintiffs' initial diagnosis & follow up treatment to present
for cerebral palsy."

ORDERED that the order dated November 21, 2007, is reversed
insofar as appealed from, on the facts and in the exercise of
discretion, with costs, and the motion is denied.

The evidence submitted by the defendants upon their motion for
renewal and reargument was insufficient to justify a new determination.
The defendants failed to establish that the additional disclosure was
material and necessary to the defense of the action (see Cynthia B. v New Rochelle Hosp. Med Ctr, 60 NY2d 452, 465, 457; Chevrin v Macura, 28 AD3d 600; DeStrange v Lind, 277
AD2d 344), nor did they demonstrate that "access to earlier medical
records would result in the discovery of admissible or relevant
evidence" (DeStrange v Lind, 277 AD2d at 345).

The bold is mine.