New York Law Review

Tag: 1986

  • Kenford Co., Inc. v. County of Erie, 67 N.Y.2d 905 (1986): Enforceability of Agreement to Cooperate in Contract Law

    Kenford Co., Inc. v. County of Erie, 67 N.Y.2d 905 (1986)

    A party can be held liable for breach of contract if it fails to act in good faith and cooperate with the other party to fulfill the contract’s objectives, even if ultimate approval rests with a third party or the contract allows for termination.

    Summary

    Kenford Co. sued Erie County for breach of contract, alleging the county failed to cooperate in developing a Land Disposition Agreement (LDA) as designated. The county moved to dismiss for failure to state a cause of action. The Court of Appeals held that Kenford sufficiently pleaded causes of action for breach of contract. Even though the Board of Estimate had final approval and the county could terminate the agreement, the county had a contractual obligation to cooperate in good faith. The court found the allegation of bad faith ‘dedesignation’ sufficient to state a claim.

    Facts

    Erie County, through its Department of Housing Preservation and Development (HPD), selected Kenford Co. to negotiate a Land Disposition Agreement (LDA) for the sale and development of urban renewal areas. This selection was formalized through designation agreements. Kenford was to prepare the LDA for submission and approval, and the County agreed to cooperate in the process. Kenford alleges it fulfilled its obligations and incurred substantial expenses in preparing the LDA. However, the County, acting in bad faith and without good cause, “dedesignated” Kenford, thus breaching the agreement.

    Procedural History

    Kenford sued Erie County for breach of contract. The County moved to dismiss the complaint under CPLR 3211 (a) (7) for failure to state a cause of action. The trial court denied the motion. The Appellate Division affirmed the trial court’s decision. The County appealed to the New York Court of Appeals, which affirmed the Appellate Division’s order.

    Issue(s)

    Whether the plaintiff sufficiently pleaded a cause of action for breach of contract based on the defendant’s alleged failure to cooperate in good faith, despite the fact that final approval of the Land Disposition Agreement rested with a third party (the Board of Estimate) and the defendant had the right to terminate the agreement.

    Holding

    Yes, because the County undertook a contractual obligation to cooperate with Kenford in preparing the LDA for submission and approval, and the allegation that the County acted in bad faith by “dedesignating” Kenford without cause was sufficient to state a claim for breach of contract.

    Court’s Reasoning

    The Court of Appeals reasoned that the claims rested upon an alleged breach of the obligation undertaken by Erie County, acting through HPD, to cooperate with Kenford in preparing the necessary LDA for approval. The court stated that the fact that the city might have refused to continue negotiations, that only the Board of Estimate was authorized to finally approve the LDA, or that HPD could “dedesignate” Kenford before the LDA was approved were immaterial on a motion addressed to the face of the pleadings. “The allegation is that defendant acted without cause and for improper motives in ‘dedesignating’ plaintiff in violation of its good-faith contractual obligation to cooperate.”

    The court acknowledged that Kenford might not be able to recover damages resulting from the County’s failure to sell the sites or approve the LDA because no agency with the authority to act on behalf of the city was bound by the designation agreement. However, the court emphasized that the County, through HPD, did undertake to cooperate with Kenford in the preparations and negotiations leading to the LDA submission and approval. The court stated that Kenford did not assume the risk of bad faith by the County or of its unexcused breach of its contractual obligation. The court stated that “Similarly immaterial on a motion addressed to the sufficiency of the pleading is defendant’s claim that plaintiff cannot recover all of the items of damage claimed.”

  • People v. Burger, 68 N.Y.2d 326 (1986): Warrantless Searches and Pervasively Regulated Industries

    68 N.Y.2d 326 (1986)

    Warrantless searches of commercial premises are unconstitutional unless the business is part of a pervasively regulated industry and the search is part of a regulatory scheme designed to further an urgent state interest, authorized by a statute carefully limited in time, place, and scope.

    Summary

    The New York Court of Appeals held that Vehicle and Traffic Law § 415-a (5) (a) and New York City Charter § 436, authorizing warrantless inspections of vehicle dismantling businesses and junkyards, are unconstitutional. The police conducted a warrantless search of Burger’s junkyard, discovering stolen vehicles and parts. The Court of Appeals reversed the lower court decisions, finding that the statutes authorized searches solely to uncover evidence of criminality, not to enforce a comprehensive regulatory scheme, thus violating the Fourth Amendment’s protection against unreasonable searches and seizures.

    Facts

    Joseph Burger owned a junkyard in Brooklyn where he dismantled automobiles and sold their parts. On November 17, 1982, five plain-clothes police officers entered Burger’s junkyard without a warrant. They asked Burger if he was licensed to dismantle vehicles and if he had a “police book” (a record of vehicles and parts). Burger stated he did not have either. The officers then conducted a warrantless inspection under Vehicle and Traffic Law § 415-a, copying vehicle identification numbers (VINs) and serial numbers. The officers discovered stolen vehicles and parts and seized the property, leading to Burger’s arrest.

    Procedural History

    Burger moved to suppress the evidence, arguing the search was unconstitutional. The hearing court denied the motion, finding the auto junkyard industry pervasively regulated and the statute constitutional. The Appellate Division affirmed. The New York Court of Appeals reversed, granted the motion to suppress, vacated Burger’s guilty plea, dismissed the charges of criminal possession of stolen property, and remitted the case for further proceedings.

    Issue(s)

    Whether Vehicle and Traffic Law § 415-a (5) (a) and New York City Charter § 436 are facially unconstitutional because they authorize warrantless searches that are not designed to further any administrative objective, thus violating the Fourth Amendment?

    Holding

    Yes, because the statutes authorize searches undertaken solely to uncover evidence of criminality rather than to enforce a comprehensive regulatory scheme.

    Court’s Reasoning

    The Court of Appeals reasoned that while the Fourth Amendment’s prohibition against unreasonable searches and seizures applies to commercial premises, an exception exists for industries deemed “pervasively regulated.” However, to validate a warrantless administrative search, the search must be part of a regulatory scheme designed to further an urgent State interest, and the State’s ability to conduct warrantless inspections must be essential to effectuating that scheme. Additionally, the authorizing statute must be carefully limited in time, place, and scope. The court emphasized that administrative searches must serve an administrative purpose and not be designed to uncover evidence of a crime.

    The court distinguished the statutes in question from those upheld by the Supreme Court in cases like Donovan v. Dewey and United States v. Biswell, where the statutes authorized warrantless inspections by agents of the regulatory agency to determine compliance with specific regulations. In contrast, New York City Charter § 436 and Vehicle and Traffic Law § 415-a allowed general searches, including those conducted by the police, without requiring compliance with any administrative or regulatory scheme. The court noted that the search in this case was undertaken solely to discover whether Burger was storing stolen property on his premises, as conceded by the People. Therefore, because the statutes permitted warrantless searches designed to uncover evidence of criminality rather than enforce a regulatory scheme, they were deemed facially unconstitutional. The court stated, “The fundamental defect in the statutes before us is that they authorize searches undertaken solely to uncover evidence of criminality and not to enforce a comprehensive regulatory scheme.”

  • Sawyer v. Dreis & Krump Mfg. Co., 67 N.Y.2d 328 (1986): Expert Testimony Required for Amnesia Claim in Negligence Cases

    Sawyer v. Dreis & Krump Mfg. Co., 67 N.Y.2d 328 (1986)

    In a negligence action where the plaintiff claims amnesia due to the defendant’s actions, expert testimony is required to establish the amnesia and its causal relationship to the defendant’s fault before the jury can apply a lesser degree of proof in evaluating the plaintiff’s claim.

    Summary

    Sawyer sued Dreis & Krump for injuries sustained while operating a press brake. Sawyer claimed he lost his memory of the incident. The trial court instructed the jury on the “amnesia rule,” allowing them to apply a lesser burden of proof. The Court of Appeals reversed a judgment for Sawyer, holding that expert testimony is required to prove the amnesia and its causal link to the defendant’s actions. The court also addressed the admissibility of prior accident evidence and the appropriate jury charge regarding industry safety standards (ANSI standards), finding errors in both.

    Facts

    Sawyer, an experienced press brake operator, was injured while working on a machine manufactured by Dreis & Krump. He claimed he lost his memory of the events leading to the injury. Sawyer contended he reached under the ram to secure slipping metal and accidentally activated the machine. Dreis & Krump argued Sawyer was operating the machine improperly, causing the metal to slip and his hand to be pulled under the ram. The set-up procedure required the use of L-shaped stops at the back of the bed to secure the metal but Dreis & Krump contended that Sawyer set the stops improperly, without using a scrap piece of metal to measure. Plaintiff’s foreman heard metal fall, and found the plaintiff conscious but quiet, saying, “I finally done it.”

    Procedural History

    Sawyer sued Dreis & Krump, who then impleaded Sawyer’s employer, Cambridge Filter Corporation. The jury found in favor of Sawyer, apportioning fault equally between Dreis & Krump and Cambridge Filter. The Appellate Division affirmed. The Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the trial court erred in submitting the question of Sawyer’s amnesia to the jury without expert testimony establishing the condition or causally relating it to the accident.
    2. Whether the trial court erred in permitting Sawyer’s engineering expert to testify how the accident happened.
    3. Whether the trial court erred in allowing Sawyer’s cross-examination of Dreis & Krump’s witnesses about other accidents with the press.
    4. Whether the trial court erred in failing to properly instruct the jury on the weight to be accorded industry safety standards (ANSI).

    Holding

    1. Yes, because amnesia is a medical condition beyond the understanding of laymen, and expert testimony is required to prove the condition by clear and convincing evidence.
    2. Yes, because the expert’s opinion was based on facts not established by the evidence.
    3. Yes, because Sawyer failed to establish that the prior accidents were similar to his.
    4. Yes, because the ANSI standards were not conclusive on the issue of negligence, and the jury should have been so instructed.

    Court’s Reasoning

    The Court of Appeals held that while a plaintiff with amnesia is held to a lesser degree of proof, they must still establish a prima facie case, and the jury cannot presume due care. The court emphasized that “[b]ecause loss of memory is easily feigned, before plaintiff may receive the benefit of the rule, he must prove by clear and convincing evidence that defendant’s acts were a substantial factor in causing his condition.” The court reasoned that amnesia, like most medical conditions, requires expert evidence to establish its existence and causal relationship to the defendant’s actions. Without such evidence, a jury of laypersons cannot adequately evaluate the effects of trauma or the symptoms verifying the loss of memory. The court cited Koehler v Schwartz, 48 NY2d 807 as precedent. The Court determined that the expert testimony was required to determine if the loss of memory was “real and not feigned”.

    The court also found the expert’s testimony on how the accident occurred was speculative and lacked a proper factual foundation, noting the expert said that the metal slipped and plaintiff reached for it reflexively and stepped on the pedal, but the expert opinion was “based upon facts which were not established by the evidence”. The court found the evidence about prior accidents was improperly admitted because the plaintiff did not show the prior accidents were similar.

    Regarding the ANSI standards, the Court cited Trimarco v Klein, 56 NY2d 98, holding that industry standards can be considered as “some evidence of negligence if it first found that the standards set forth in the booklet represented the general custom or usage in the industry,” but also that the jury should have been instructed that such standards were not conclusive.

  • Sisters of St. John the Baptist, Providence Rest Convent v. Geraghty Constructor, Inc., 67 N.Y.2d 997 (1986): Scope of Arbitration Clause

    Sisters of St. John the Baptist, Providence Rest Convent v. Geraghty Constructor, Inc., 67 N.Y.2d 997 (1986)

    When a broad arbitration clause exists in a contract, disputes relating to extra work allegedly authorized and required for the completion of the contract fall within the scope of the arbitration clause, even if the extra work is claimed to be outside the original scope of the agreement.

    Summary

    Sisters of St. John the Baptist (Petitioner) contracted with Geraghty Constructor, Inc. (Respondent) for convent renovations. A dispute arose over cost overruns, with Respondent claiming the work was outside the original contract and demanding arbitration. Petitioner sought to stay arbitration, arguing the work wasn’t authorized. The Court of Appeals held that the dispute fell within the broad arbitration clause covering disputes “arising out of, or relating to, the Contract Documents”. The court emphasized that the arbitration clause applied not only to the original agreement but also to modifications and changes, making arbitration the proper forum for resolving the dispute.

    Facts

    Respondent contracted with Petitioner to renovate a convent for a stipulated sum, with allowances for changes. The contract contained a broad arbitration clause for all disputes arising from the contract. As renovations progressed, modifications were made due to unforeseen conditions. Respondent submitted payment applications, receiving a substantial amount for labor and materials. A dispute arose concerning cost overruns; Respondent claimed that certain labor and materials were outside the scope of the agreement and demanded arbitration for the unpaid balance.

    Procedural History

    Respondent filed a notice of intention to arbitrate. Petitioner sought a stay of arbitration. Special Term granted the stay, which the Appellate Division affirmed. The New York Court of Appeals reversed the Appellate Division’s order, denying the stay of arbitration.

    Issue(s)

    Whether a dispute over extra work allegedly authorized and required for the completion of a construction contract falls within the scope of a broad arbitration clause in that contract, even if the extra work is claimed to be outside the original scope of the agreement.

    Holding

    Yes, because the arbitration clause provided broadly for arbitration of all disputes “arising out of, or relating to, the Contract Documents,” and those documents included not only the original agreement and plans but also later modifications and written changes. Given these defined terms, disputes relating to extra work allegedly authorized and required for execution and completion of respondent’s renovation of the convent arise out of or relate to the “Contract Documents” and thus fall generally within the arbitration clause.

    Court’s Reasoning

    The court emphasized that its role is limited to determining whether the parties agreed to arbitrate and whether the dispute falls within the scope of the arbitration agreement. The court’s inquiry ends once it establishes a relationship between the dispute’s subject matter and the underlying agreement to arbitrate. Interpretation of specific contract terms is left to the arbitrators.

    The court noted that the arbitration clause was broad, encompassing all disputes “arising out of, or relating to, the Contract Documents.” The “Contract Documents” included not only the original agreement but also later modifications and written changes. The court reasoned that disputes over extra work, even if outside the original agreement’s scope, still relate to the “Contract Documents” because the parties provided for “changes in the scope of work.”

    The court addressed the lower courts’ reliance on the Respondent’s statement that some work was outside the original agreement, clarifying that the possibility of changes in the scope of work brought it under the arbitration clause. The court also stated that submitting to arbitration did not equate to acknowledging liability for costs exceeding the stipulated sum.

    The court directly quoted the contract language to support its conclusion: “The Work comprises the completed construction required by the Contract Documents and includes all labor necessary to produce such construction, and all materials and equipment incorporated or to be incorporated in such construction.”

  • People v. Wheeler, 67 N.Y.2d 960 (1986): Defining Lesser Included Offenses in New York Criminal Law

    People v. Wheeler, 67 N.Y.2d 960 (1986)

    A crime is only a lesser included offense if it is impossible to commit the greater offense without also committing the lesser offense.

    Summary

    The New York Court of Appeals affirmed the lower court’s decision, holding that attempted sexual abuse in the first degree is not a lesser included offense of attempted rape in the first degree. The court reasoned that it is possible to commit attempted rape without necessarily having the specific intent to gratify sexual desire, which is a required element of sexual abuse. Therefore, because it is not impossible to commit the greater offense (attempted rape) without committing the lesser offense (attempted sexual abuse), the defendant’s request for a jury instruction on the lesser charge was properly denied.

    Facts

    The defendant was indicted for attempted rape in the first degree. At trial, the defendant requested that the court also submit to the jury the charge of attempted sexual abuse in the first degree as a lesser included offense. The trial court denied this request.

    Procedural History

    The trial court refused the defendant’s request to charge the jury on attempted sexual abuse as a lesser included offense. The Appellate Division affirmed this decision. The case then went to the New York Court of Appeals.

    Issue(s)

    Whether attempted sexual abuse in the first degree is a lesser included offense of attempted rape in the first degree, such that the trial court was required to instruct the jury on the lesser charge.

    Holding

    No, because it is not impossible to commit attempted rape in the first degree without also committing attempted sexual abuse in the first degree.

    Court’s Reasoning

    The Court of Appeals based its decision on the statutory definitions of rape and sexual abuse. Rape in the first degree, under Penal Law § 130.35, requires “sexual intercourse with a female * * * by forcible compulsion.” Sexual intercourse, under Penal Law § 130.00(1), “has its ordinary meaning and occurs upon any penetration, however slight.” Sexual abuse in the first degree, under Penal Law § 130.65(1), requires subjecting “another person to sexual contact * * * by forcible compulsion.” Sexual contact, under Penal Law § 130.00(3), is “any touching of the sexual or other intimate parts of a person not married to the actor for the purpose of gratifying sexual desire of either party.”

    The court emphasized the element of intent: while rape requires only penetration, however slight, sexual abuse requires the specific intent of gratifying sexual desire. The court stated: “Although it would be impossible to commit the crime of rape without ‘touching of the sexual or other intimate parts’ of the victim, it is, of course, possible to commit rape without the actor having as his purpose the gratification of either party’s sexual desire.”

    The court further noted that nonsexual motives for rape, such as a desire to humiliate, injure, or dominate the victim, have been recognized. Because the “impossibility” test for a lesser included offense was not met, the trial court properly refused to submit the charge of attempted sexual abuse to the jury.

  • Corinno Civetta Constr. Corp. v. City of New York, 67 N.Y.2d 300 (1986): Enforceability of No-Damage-for-Delay Clauses

    Corinno Civetta Constr. Corp. v. City of New York, 67 N.Y.2d 300 (1986)

    A contractual clause exculpating a contractee from liability for delay damages is enforceable unless the delays were (1) caused by bad faith, willful, malicious, or grossly negligent conduct; (2) uncontemplated; (3) so unreasonable as to constitute abandonment; or (4) a breach of a fundamental contract obligation.

    Summary

    This case clarifies the exceptions to the enforceability of “no-damage-for-delay” clauses in construction contracts. The New York Court of Appeals held that such clauses are generally valid but will not bar recovery for delays caused by the contractee’s bad faith, gross negligence, uncontemplated delays, abandonment of the contract, or breach of a fundamental obligation. The court emphasized that uncontemplated delays are outside the scope of the exculpatory clause, reinforcing the concept of mutual assent and the contractor’s reasonable expectations at the time of contracting. The court applied these principles to four consolidated cases, affirming dismissal in two where the delays were contemplated or not attributable to the city’s fault, and reversing in two where the city failed to demonstrate that the delays were contemplated.

    Facts

    Four separate construction contracts with New York City were at issue. Corinno Civetta involved sewer reconstruction delayed by a street opening moratorium and subsurface conditions. Catapano concerned sewer construction delays in Queens. Honeywell involved installation of equipment in sewage treatment plants, delayed by wiring omissions and equipment incompatibility. Nab-Tern pertained to the Yankee Stadium reconstruction project.

    Procedural History

    In Corinno Civetta, the Appellate Division reversed the trial court’s denial of the city’s motion for summary judgment and dismissed the delay damages claim. In Catapano, the Appellate Division modified Special Term’s order, granting summary judgment to the city on the delay damages claim. In Honeywell, the Appellate Division reversed a jury verdict for Honeywell and dismissed the complaint. In Nab-Tern, the Appellate Division reversed Special Term and granted the city’s motion for summary judgment, dismissing the delay damages claim.

    Issue(s)

    1. Whether a “no-damage-for-delay” clause bars recovery for delays that were not within the contemplation of the parties when entering the contract.

    2. Whether the City’s conduct in Honeywell was so unreasonable as to constitute abandonment or breach of contract, thus negating the exculpatory clause.

    3. Whether claims for increased costs due to inefficiencies during the contract period in Catapano and Nab-Tern are distinct from delay damages and therefore not barred by the exculpatory clause.

    Holding

    1. Yes, because exculpatory clauses do not bar claims for uncontemplated delays since it cannot be presumed that the contractor bargained away rights to claim damages for unforeseen delays.

    2. No, because Honeywell failed to establish that the city’s conduct was so unreasonable as to relinquish the contract with the intention of never resuming it, or that the city breached a fundamental contract obligation.

    3. No, because all claims seeking compensation for increased costs, whether due to project delays or inefficiencies, are considered delay damages and are barred by the exculpatory clause.

    Court’s Reasoning

    The court reaffirmed the validity of “no-damage-for-delay” clauses but emphasized exceptions. Regarding uncontemplated delays, the court stated that exculpatory clauses encompass only reasonably foreseeable delays arising from the contractor’s work or mentioned in the contract. The court distinguished Kalisch-Jarcho, Inc. v City of New York, clarifying that its holding pertained to contemplated delays and did not abolish the exception for uncontemplated delays. As for abandonment or breach of contract, the court explained that the delays must be so unreasonable as to suggest relinquishment of the contract with no intention of resumption. Breach of contract must involve a fundamental, affirmative obligation expressly imposed on the contractee. The court dismissed the argument that inefficiencies during the contract period constituted a separate basis for recovery, holding that all increased costs are delay damages.

    Applying these principles, the court found the delays in Corinno Civetta were contemplated because the contract warned of a street opening moratorium and the contractor assumed responsibility for unforeseen subsurface conditions. In Honeywell, the court found the delays were contemplated, given the contract’s coordination clauses and Honeywell’s own communications attributing delays to electrical contractors. The court emphasized that to avoid the exculpatory clause, delays must be “so great or so unreasonable that they may fairly be deemed equivalent to [its] abandonment of the contract” (People ex rel. Wells & Newton Co. v Craig, 232 NY 125, 144). In Catapano and Nab-Tern, the court found the city’s moving papers insufficient to demonstrate that the delays were contemplated, thus warranting denial of summary judgment.

    The court quoted People ex rel. Wells & Newton Co. v Craig, 232 NY 125, 144, stating that, in certain limited circumstances, “the exculpatory clause may be avoided if the contractee causes delays which are ‘so great or so unreasonable that they may fairly be deemed equivalent to [its] abandonment of the contract’”.

  • People v. Pollenz, 67 N.Y.2d 264 (1986): Legislative Limits on Appellate Jurisdiction

    People v. Pollenz, 67 N.Y.2d 264 (1986)

    A statute that disallows an appeal as of right to the Appellate Division based solely on the excessiveness of a negotiated sentence imposed after a guilty plea unconstitutionally limits the Appellate Division’s jurisdiction.

    Summary

    This case addresses the constitutionality of CPL 450.10, which attempted to prevent appeals to the Appellate Division based solely on the excessiveness of negotiated sentences after a guilty plea. The Court of Appeals held that this statute violated Article VI, § 4(k) of the New York Constitution, which protects the Appellate Division’s jurisdiction. The court reasoned that the statute impermissibly limited the Appellate Division’s duty to hear appeals from final judgments, a duty that existed before the constitutional provision and was therefore protected from legislative curtailment. The court reversed the Appellate Division’s dismissal of the appeals and remitted the cases for determination.

    Facts

    Two defendants, Pollenz and Minor, appealed their sentences to the Appellate Division, arguing that their negotiated sentences were excessive. The Appellate Division, relying on CPL 450.10, dismissed their appeals because the statute purported to disallow appeals based solely on the excessiveness of a negotiated sentence imposed upon a guilty plea.

    Procedural History

    The defendants appealed to the Appellate Division, Second Department. The Appellate Division dismissed the appeals based on CPL 450.10. The defendants then appealed to the New York Court of Appeals.

    Issue(s)

    Whether CPL 450.10, which disallows an appeal as of right to the Appellate Division where the sole issue is the excessiveness of a negotiated sentence imposed after a guilty plea, imposes an unconstitutional limitation on the jurisdiction of the Appellate Division under Article VI, § 4(k) of the New York Constitution.

    Holding

    Yes, because CPL 450.10 imposes a limitation on the jurisdiction of the Appellate Division of the Supreme Court in contravention of NY Constitution, article VI, § 4 (k).

    Court’s Reasoning

    The Court of Appeals held that CPL 450.10 unconstitutionally limited the jurisdiction of the Appellate Division. The court reasoned that Article VI, § 4(k) of the New York Constitution prohibits the legislature from curtailing the Appellate Division’s jurisdiction over appeals from final judgments, including those rendered upon guilty pleas imposing negotiated sentences. The court emphasized that this duty to entertain appeals was “constitutionalized” by prior constitutional provisions. The court rejected the People’s argument that “jurisdiction” only relates to the power to decide a case, not the duty to hear it, citing precedents indicating that jurisdiction encompasses the duty to consider appeals brought as of right.

    The court cited People v. Kevlon, where it had previously held that the absence of compliance with a statute requiring a certificate for appeals to the Court of Appeals meant the court lacked jurisdiction to hear the appeal. The court analogized this to the statutory abrogation of the unconditional right to appeal in the present case, stating that it is similarly jurisdictional.

    The court interpreted the constitutional provision as allowing the legislature to expand, but not contract, the Appellate Division’s jurisdiction, except for appeals from non-final orders. The court stated that “the statutory abrogation of the right to appeal, leaving only the right to seek leave of a single Justice, not even the court itself, to take an appeal, represents both a limitation and condition on the formerly existing right to appeal from a final judgment or sentence.” Therefore, the court reversed the Appellate Division’s dismissal of the appeals and remitted the cases for determination.

  • Kenford Co. v. County of Erie, 67 N.Y.2d 266 (1986): Recovering Lost Profits for New Businesses

    67 N.Y.2d 266 (1986)

    A new business seeking to recover lost future profits faces a stricter standard of proof, as there is often no reasonable basis of experience to estimate profits with reasonable certainty.

    Summary

    Kenford Co. sued Erie County for breach of contract after the county failed to build a domed stadium. Kenford sought damages for lost profits it expected to earn over 20 years managing the stadium. The New York Court of Appeals held that Kenford’s proof of lost profits was too speculative, given the newness of the business and the lack of certainty that the stadium would be built and successfully operated as planned. The court emphasized the need for certainty and foreseeability in proving lost profits, particularly for new ventures.

    Facts

    Erie County contracted with Kenford and Dome Stadium, Inc. (DSI) to build and lease a domed stadium. The contract stipulated the County would start construction within 12 months and negotiate a 40-year lease with DSI. If a lease wasn’t agreed upon, a 20-year management contract appended to the agreement would take effect. The parties failed to agree on a lease, and the County never commenced construction, breaching the contract. DSI sought damages for lost profits it anticipated earning over the 20-year management period.

    Procedural History

    Kenford and DSI sued Erie County for breach of contract. The trial court granted summary judgment against the County on liability. A trial on damages resulted in a large jury verdict for the plaintiffs. The Appellate Division reversed the damages award for lost profits, finding the projections too speculative, and ordered a new trial on other issues. The Court of Appeals reviewed the Appellate Division’s decision regarding lost profits.

    Issue(s)

    Whether DSI presented sufficient evidence to recover lost profits for a 20-year period for a stadium that was never built or operated, considering the business was new and lacked an established earnings record.

    Holding

    No, because the damages were too speculative and not within the contemplation of the parties when the contract was formed. Furthermore, the multitude of assumptions required to establish projections of profitability over the life of the contract require speculation and conjecture, making it beyond the capability of even the most sophisticated procedures to satisfy the legal requirements of proof with reasonable certainty.

    Court’s Reasoning

    The court emphasized that loss of future profits must be proven with reasonable certainty and must have been within the contemplation of the parties at the time of the contract. The court acknowledged that DSI’s methodology was sound but, it found the economic model’s foundations undermined the certainty of the projections. The court stated, “If it is a new business seeking to recover for loss of future profits, a stricter standard is imposed for the obvious reason that there does not exist a reasonable basis of experience upon which to estimate lost profits with the requisite degree of reasonable certainty.”

    The court noted the speculative nature of projecting profits over 20 years for a facility that never existed, stating, “Quite simply, the multitude of assumptions required to establish projections of profitability over the life of this contract require speculation and conjecture, making it beyond the capability of even the most sophisticated procedures to satisfy the legal requirements of proof with reasonable certainty.”

    Furthermore, the court stated, “The economic facts of life, the whim of the general public and the fickle nature of popular support for professional athletic endeavors must be given great weight in attempting to ascertain damages 20 years in the future.”

    The court rejected the “rational basis” test used by the Appellate Division, reaffirming the stricter standard for proving lost profits for new businesses articulated in Cramer v Grand Rapids Show Case Co., 223 NY 63.

  • People v. Rosner, 67 N.Y.2d 290 (1986): Sufficiency of Circumstantial Evidence in Perjury Cases

    People v. Rosner, 67 N.Y.2d 290 (1986)

    In New York, a perjury conviction can be based solely on circumstantial evidence, provided that evidence is sufficient to establish guilt beyond a reasonable doubt, and the two-witness rule (Penal Law § 210.50) does not bar such a conviction.

    Summary

    Rosner was convicted of perjury for false statements made to a grand jury investigating a homicide. The prosecution’s case relied on circumstantial evidence to prove that Rosner lied about his interactions with John Bonizio, who was involved in the assault that led to the victim’s death. Rosner argued that the prosecution failed to establish a prima facie case because they relied entirely on circumstantial evidence and did not produce a witness who directly contradicted his statements. The New York Court of Appeals affirmed the conviction, holding that circumstantial evidence alone can be sufficient to prove perjury, and the two-witness rule only requires corroboration of a witness testifying to the falsity of the defendant’s statement, not direct evidence.

    Facts

    Rosner complained to the police about Darren McNamara harassing his daughter. He expressed an intent to handle the situation himself if the police couldn’t. The next day, after the officer said he couldn’t find McNamara, Rosner stated he had “two guys that can handle it.” That evening, McNamara was assaulted by John Bonizio, a friend and former employee of Rosner’s, who beat him with a baseball bat, telling him to stay away from Rosner’s daughter. McNamara died as a result of the beating. Bonizio was later seen entering Rosner’s apartment. Before the grand jury, Rosner denied asking Bonizio to contact McNamara or speaking to Bonizio about McNamara on August 25th.

    Procedural History

    Rosner was indicted for perjury based on his grand jury testimony. At trial, the People presented circumstantial evidence linking Rosner to Bonizio and the assault on McNamara. Rosner moved to dismiss the indictment, arguing the prosecution’s case was entirely circumstantial. The trial court denied the motion, and the jury found Rosner guilty. The Appellate Division affirmed the conviction.

    Issue(s)

    Whether a perjury conviction can be based solely on circumstantial evidence, where the alleged falsity of the defendant’s statements was capable of being proved by direct evidence.

    Holding

    Yes, because New York law does not prohibit the use of circumstantial evidence to prove perjury, and the two-witness rule only requires corroboration of a witness who testifies to the falsity of the defendant’s statement; it does not mandate direct evidence of the perjury.

    Court’s Reasoning

    The Court of Appeals rejected Rosner’s argument that circumstantial evidence is generally insufficient to prove perjury. The court emphasized that Penal Law § 210.50, the two-witness rule, only requires corroboration of a witness testifying to the falsity of the defendant’s statement. It does not preclude the prosecution from relying on circumstantial evidence. The court explicitly stated, “That holding is consistent with the limited purpose Penal Law § 210.50 serves in this State. The common-law rule was retained by the Legislature to protect ‘honest witnesses’ from unfounded, retaliatory complaints of perjury by ‘defeated litigants’.” The court clarified that People v. Doody, which Rosner cited, did not create a narrow exception for cases inherently incapable of direct proof. The court found that the two-witness rule is analogous to the accomplice rule, both designed to prevent conviction solely on the testimony of a witness with a motive to fabricate. The court concluded that the prosecution’s circumstantial evidence was sufficient to establish Rosner’s guilt, and the two-witness rule did not require the People to produce direct testimony. The court emphasized that the purpose of the two-witness rule is to protect honest witnesses from retaliatory perjury claims, not to prevent perjury convictions based on strong circumstantial evidence.

  • Friedman v. State of New York, 67 N.Y.2d 271 (1986): Qualified Immunity for Highway Design Decisions

    67 N.Y.2d 271 (1986)

    Under the doctrine of qualified immunity, a governmental body is shielded from liability for highway planning decisions unless its study of a traffic condition is plainly inadequate or there is no reasonable basis for its traffic plan; however, once a remedial plan is formulated, an unjustifiable delay in implementing that plan can constitute a breach of the municipality’s duty to the public.

    Summary

    These consolidated cases address the State of New York’s liability for ‘crossover’ accidents on state highways where median barriers were absent. The Court of Appeals held that while the state has a qualified immunity for highway design decisions, shielding it from liability when its plans are based on reasonable safety considerations, this immunity is not absolute. Unjustified delays in implementing a decided-upon remedial plan to address a known dangerous condition can result in liability. The court found liability in cases where unreasonable delays occurred after the decision to install median barriers, but not where the initial decision not to install barriers was based on a reasonable safety plan.

    Facts

    Friedman: A car accident occurred on the Roslyn Viaduct, which lacked a median barrier. The Department of Transportation (DOT) had recognized the need for a barrier years earlier but had not installed one. Cataldo & Muller: Accidents occurred on the Tappan Zee Bridge’s tangent section, also lacking a median barrier. The Thruway Authority had studied the issue, deciding against barriers due to concerns about increased accidents and operational difficulties, but later decided to install them. Muller was injured in an accident after the decision to install, but before installation.

    Procedural History

    Friedman: The Court of Claims found the State and claimant equally liable. The Appellate Division affirmed. Cataldo: The Court of Claims ruled for the claimant. The Appellate Division reversed, dismissing the claim. Muller: The Court of Claims ruled for the claimant. The Appellate Division reversed, dismissing the claim. The Court of Appeals consolidated the cases.

    Issue(s)

    1. Whether the State of New York can be held liable for accidents occurring on highways where it has not installed median barriers, given its qualified immunity for highway design decisions under Weiss v. Fote?

    2. Whether a delay in implementing a remedial plan to address a known dangerous highway condition, after the decision to implement that plan has been made, constitutes a breach of the State’s duty to the public?

    Holding

    1. No, because the state has a qualified immunity for highway design decisions that are based on reasonable public safety considerations; however, this immunity is not absolute. A governmental body may be held liable when its study of a traffic condition is plainly inadequate or there is no reasonable basis for its traffic plan.

    2. Yes, because an unjustifiable delay in implementing the plan constitutes a breach of the municipality’s duty to the public, just as surely as if it had totally failed to study the known condition in the first instance.

    Court’s Reasoning

    The Court relied on the doctrine of qualified immunity established in Weiss v. Fote, which protects governmental bodies from liability arising from highway planning decisions when those decisions are based on reasonable safety considerations. The court emphasized that it would obstruct normal governmental operations to allow a jury’s verdict on the reasonableness of a government plan to override the judgment of the governmental body with expertise in the matter. However, the court clarified that this immunity is not absolute. It does not apply when the state’s study of a traffic condition is inadequate, or when there’s no reasonable basis for its traffic plan.

    The Court distinguished between the initial decision not to install barriers and the subsequent delay in implementing a plan to install them. In Cataldo, the initial decision not to install barriers was based on reasonable safety concerns, so no liability was found. However, in Friedman and Muller, the court found that the State had unreasonably delayed implementing a remedial plan after the decision to install barriers had been made. The court reasoned that such a delay constitutes a breach of the State’s duty to maintain its roads in a reasonably safe condition, especially when the delay is not justified by design considerations, funding limitations, or a legitimate ordering of priorities.

    The Court emphasized that the State has a continuing duty to review its highway plans in light of their actual operation. When a dangerous condition is recognized and a remedial plan is formulated, any unjustified delay in implementing that plan constitutes a breach of the municipality’s duty to the public.