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While we don’t have a criminal practice, this recently decided case is interesting in how science can change, impacting prior court decisions.  This same concept was found regarding fire science, in prior posts found here and here.

From the New York State Bar Association:

The Fourth Department affirmed the grant of defendant’s motion to vacate her conviction based on newly discovered evidence. Defendant, a daycare provider, was convicted in the death of a toddler. Medical testimony at trial attributed the death to shaken baby syndrome. In the motion to vacate her conviction, defendant argued that advances in medicine and science have called into question the prior opinions about shaken baby syndrome, and indicate a short-distance fall can mimic shaken baby symptom.

Parties fighting about the proceeds of a life insurance policy agreed to proceed before a beth din. Although the Second Department’s decision which reversed the lower court does not provide details, it seems that the losing party before the beth din was unhappy with that decision and sued the beth din and one of the rabbis involved. Because the lower court had earlier found that the beth din had exceeded its authority and vacated its decision, that court denied the beth din’s motion for summary judgment dismissing the case.

The Second Department held that unless the rabbinical beth din arbitrators “acted in the clear absence of all jurisdiction,” they were immune from being sued in their roles as arbitrators. The fact that the lower court had previously found that the rabbinical court acted in excess of its authority did not alter their arbitral immunity.

This outcome is unsurprising which leaves the question as to the real motivation behind this lawsuit.

In preparing to purchase a condo unit, the buyer informed the condo board that she was not going to conduct any business in that unit. After she closed, the buyer sought board approval to renovate the unit to accommodate a children’s play group. The condo board filed an action seeking to rescind the contract based on fraud and breach of contract.

The buyer claimed that because State law allows a day care facility in a condo unit, which was to be the actual use of the unit, the board could not point to damages as a result of the buyer’s fraud which was required to recover the unit. The First Department rejected that argument, finding that equitable rescission based on fraud requires no damages, only a misrepresentation that induces the other party to enter into a contract “resulting in some detriment.” Even intent to defraud is unnecessary for rescission.

With that, the Court granted the board’s request to rescind the contract.

A dispute involving the distribution of an estate was submitted to arbitration. The parties proceeded to court where one party sought to have the arbitration decision confirmed, while the other requested that it be vacated.

One of the grounds for vacatur was the claim that one of the arbitration hearings took place on a Sunday, something prohibited under Judiciary Law §5. While that law addresses court business, the court in this case extended that rule to arbitration, because “arbitrators perform a judicial function.” With that, the court refused to enforce the arbitration proceeding.

The court also found that the arbitrators exceeded their authority on a number of grounds. One of those grounds dealt with the arbitrators’ direction to transfer a property free and clear of liens or mortgages. Because the party holding the lien or mortgage was not party to the arbitration, such directive could not be enforced.

In interpreting deal documents, an issue arose as to the definition of the word “control” when used in an attempt to obtain “control” over a board of directors. For that reason, and others, the law firm that drafted those documents was found liable to its client to the tune of $17.2 million. The details are a bit complex, but worth a read. Have a look here. Read the comments too.

Bottom line: Write what you mean. As simply as possible.

We have written and counseled on an employer’s right to access an employee’s personal email account from a work computer. Here is an article that goes beyond email, to an employer’s ability to access an employee’s social media account, for a host of reasons, even if accessed from a personal computer.

Its a bit technical, so please let us know if you have any questions.

Plaintiff, Castle Oil Corp., operated a fuel oil terminal in the Bronx, receiving and supplying fuel. The terminal was insured by defendant ACE American Insurance Co. for “direct physical loss or damage” during the policy period. The policy included provisions for flood damage, including from storm surges, which carried a $2.5 million annual limit. The policy had a deductible provision specifically for flood damage that was equal to “2% of the total insurable values at risk,” with a minimum of $250,000. During Superstorm Sandy, Castle’s terminal suffered flood damage of $2.2 million. When Castle submitted an insurance claim, ACE declined to pay claiming that applying the 2% deducible against the entire insurable value of the $124,701,000 policy resulted in a deducible amount of $2,494,202, which was more than the loss.

Castle disputed that computation, claiming that the deductible was not be setoff against the value of the entire property and operation, but only against the property that was “at risk” from flood loss. Because the limit for flood loss “at risk” was $2.5 million, the 2% deductible was $250,000. Castle also pointed out that the $124 million amount was for “premium purposes only,” meaning, to determine the policy cost, but not for deductible calculation.

The Court first recited the law applicable to interpreting insurance policies–according to their plain terms and definitions. The Court’s role was to look at the policy as a whole and attempt to enforce the policy as intended, so that all provisions of the policy are defined and implemented. In this case, the court noted that “at risk” was not defined in the policy. If the policy was interpreted as ACE argued, the term “at risk” would be redundant and the provision “premium purposes only” would be irrelevant. Finally, the court pointed out that following ACE’s logic, the $2.5 million limit on flood damage would also be meaningless, as the deductible amount would always be more than the flood loss limit. Given that the approach proposed by ACE left provisions of the policy without any import or meaning, the Court rejected that position and found for Castle.

After Johnson was terminated by her employer, a subsidiary of a Florida company, Johnson went to work for a competitor. Claiming that working at Johnson’s new job violated a non-compete agreement that she had signed, her prior employer sued Johnson and her new employer. The agreement sued upon contained a provision dictating that Florida law governed the parties’ relationship. The Court determined that because the parties contracted to apply Florida law, Florida Law controlled. Notwithstanding that holding, the court refused to apply Florida law.

The court discussed the general rule that while parties to a contract are free to agree to be governed by a particular state’s law, that was true so long as that governing state had some relationship to the parties or their transaction, and the law was not “truly obnoxious” to New York’s public policy. In this case, the court found that one of the related parties to Johnson’s former employer was based in Florida so that Florida law could apply. However, because Florida law on the enforcement of non-compete agreements was “truly obnoxious” to New York’s public policy, the court refused to apply that law.

The court explained that New York disfavors restricting an employee from competing with a past employer once employment has been terminated so that an individual is not prevented from earning a livelihood. Even when non-compete agreements are enforced, they are done so only to the extent that they are not unduly harsh or burdensome. Florida law, however, specifically excludes any consideration of the hardship suffered by the employee when enforcing such an agreement. Florida law further provides that a Florida court must consider the reasonable protection of the legitimate business interest established by the employer, and should not construe the non-compete provision narrowly against the employee. This “anti-employee bias” contained in Florida law, which is almost the mirror image of New York law, was found to be obnoxious and unenforceable in New York. The New York court was not persuaded by the employer’s argument that while Florida law was written as such, undue hardship was in fact considered by Florida courts’ in their practical application of the statute.

An issue that client’s grapple with concerns how to measure damages where a contract to buy real property is breached by the purchaser. In 2013, the Court of Appeals (New York State’s highest court) addressed this in a comprehensive decision.

Parties to a real estate contract often assume that where a buyer fails to close, and the seller is forced to sell that property to another, the seller is entitled to damages from the first buyer that is equal to the difference between the first contract price and the second contract price (assuming the contract does not limit damages, which is often the case). This assumption is drawn from general legal principles and common-sense intuition. That assumption, however, is wrong.

The court in White v. Farrell addressed this issue. White entered into a contract to purchase a property from Farrell for $1.725 million. As in almost every transaction, the contract had certain contingencies. In an effort to close, the parties agreed to remove the contingencies in exchange for certain promises and a payment. Ultimately, unhappy with a particular issue, White terminated the contract.

After closing on their house, plaintiffs Douglas and Joanna Dean found extensive termite damage. At that time, a home owner’s policy was in place. The Deans spent the next year or so renovating the house. Their insurance policy renewed in March 2006. As the renovations were being completed, a fire destroyed the house, in May 2006. In June 2006, the carrier refused to cover, claiming that the house was unoccupied and thus not a “‘residence premises’ [sic]” and ineligible for coverage. The carrier also alleged that the Deans lied about their intended use of the property-that they would live there.

Remarkably, the trial court granted the carrier’s request to dismiss the case. The Appellate Divisions reversed, finding ambiguity in how the term “residence” was defined. The Court of Appeals, New York’s highest court, agreed with that finding.

The court questioned how the word residence should, or could, be defined. Mr. Dean stated that he was at the house regularly to work on it, and that he sometimes ate and slept there. Therefore, Mr. Dean could be seen as residing in the house. The court further held that just because the house contained no furniture did not mean that the house was not occupied (which the carrier also used as its basis to deny coverage). Because of this confusion, the Appellate Division’s decision was confirmed and the dismissal was reversed.

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