New York Law Review

Tag: Waiver

  • Civil Service Employees Ass’n v. Newman, 61 N.Y.2d 1001 (1984): Public Sector Labor Relations and Waiver of Bargaining Rights

    Civil Service Employees Ass’n v. Newman, 61 N.Y.2d 1001 (1984)

    A union can waive its right to challenge employer directives through inaction, specifically by failing to request negotiation on known policies during collective bargaining.

    Summary

    This case addresses whether the Civil Service Employees Association (CSEA) waived its right to challenge State University of New York (SUNY) directives regarding a “directed absence” policy. The Public Employment Relations Board (PERB) initially determined that CSEA had waived its right by failing to negotiate the policy in 1977 and 1978, despite knowing about it. The Appellate Division reversed, but the Court of Appeals affirmed the reversal, with a dissent arguing that PERB’s original determination had a rational basis. The key issue is whether PERB’s finding of waiver was supported by evidence and rationally based, considering CSEA’s prior attempts to negotiate the policy and its subsequent inaction.

    Facts

    SUNY issued directives in 1977 and 1978 concerning a “directed absence” policy. CSEA, the union representing SUNY employees, was aware of this policy and that it would continue to be enforced. In 1976, CSEA had unsuccessfully sought to negotiate an end to a similar “directed absence” policy contained in SUNY’s 1976 directive. Despite this prior attempt and knowledge of the continuing policy, CSEA did not request negotiation on the “directed absence” policy in 1977 or 1978. PERB determined that CSEA waived its right to challenge the 1977 and 1978 directives due to this inaction.

    Procedural History

    PERB initially ruled that CSEA had waived its right to challenge the SUNY directives. The Appellate Division reversed PERB’s determination. The Court of Appeals affirmed the Appellate Division’s reversal, with a dissenting judge voting to reinstate PERB’s original determination, arguing it was rationally based and supported by substantial evidence.

    Issue(s)

    Whether PERB’s determination that CSEA waived its right to challenge SUNY’s 1977 and 1978 directives regarding the “directed absence” policy was rationally based and supported by substantial evidence, given CSEA’s failure to request negotiation on the policy despite knowing of its existence and enforcement.

    Holding

    No, because the Court of Appeals affirmed the Appellate Division’s reversal of PERB’s determination.

    Court’s Reasoning

    The majority of the Court of Appeals affirmed the Appellate Division’s decision, effectively rejecting PERB’s determination that CSEA had waived its right to challenge the SUNY directives. The dissent, however, argued that PERB’s determination was rational and supported by the evidence. The dissent emphasized the limited scope of judicial review of PERB’s interpretations, stating that unless PERB’s determination was “affected by an error of law,” “arbitrary and capricious,” or unsupported by substantial evidence, the court should not interfere. (CPLR 7803, subds 3, 4.) The dissent further quoted Matter of West Irondequoit Teachers Assn. v Helsby, 35 N.Y.2d 46, 50, stating: “So long as PERB’s interpretation is legally permissible and so long as there is no breach of constitutional rights and protections, the courts have no power to substitute another interpretation”. The dissenting judge highlighted that CSEA knew of the “directed absence” policy and had been advised that it would continue, yet never challenged it at the bargaining table or requested negotiation on the issue. This inaction, according to the dissent, provided a rational basis for PERB to conclude that CSEA waived its right to challenge the directives. The dissent emphasized the importance of the continuous union-SUNY negotiating process and CSEA’s prior unsuccessful attempt to negotiate the policy in 1976 as further support for PERB’s determination. The key takeaway is that a union’s failure to actively pursue negotiation on a known policy can be interpreted as a waiver of their right to challenge it, but the ultimate determination is subject to judicial review for rationality and evidentiary support.

  • Matter of Silverman (Benmor Coats) and Norris v. Cooper, 57 N.Y.2d 298 (1982): Enforceability of Arbitration Awards and Limitations on Arbitrator Power

    Matter of Silverman (Benmor Coats) and Norris v. Cooper, 57 N.Y.2d 298 (1982)

    An arbitration award can only be vacated when the arbitrator exceeds their power as explicitly defined in the arbitration clause itself, and the challenging party has preserved the objection.

    Summary

    These consolidated cases address the scope of an arbitrator’s power and the circumstances under which a court can vacate an arbitration award. The Court of Appeals held that a party participating in arbitration waives the right to challenge the award as exceeding the arbitrator’s power unless the limitation is explicitly stated in the arbitration clause or fairly implied and the party raises the issue before the lower court. The court emphasizes a strong policy favoring arbitration finality, limiting judicial review of arbitration awards to instances where the arbitrator’s power is clearly circumscribed by the arbitration agreement itself.

    Facts

    Matter of Silverman (Benmor Coats): Silverman’s estate sought arbitration against Benmor Coats for failing to make payments on a subordinated loan as per a settlement agreement. The agreement contained an arbitration clause for disputes regarding payment obligations, subject to creditor consent. The arbitrator ordered principal payments without explicitly addressing creditor consent.

    Norris v. Cooper: Norris, a former distributor, sought arbitration against Cooper for breach of contract regarding profit-sharing from a distributorship. The agreement stipulated that the company accountants’ determination of after-tax profits was final. The arbitrator awarded Norris $750,000 for “disposition of assets,” a decision Cooper challenged as exceeding the arbitrator’s power since it should have been determined by the accountants.

    Procedural History

    Matter of Silverman (Benmor Coats): The Supreme Court confirmed the arbitration award, and the Appellate Division affirmed. Benmor Coats appealed, arguing the arbitrator exceeded his power by ordering repayments without creditor consent.

    Norris v. Cooper: The Supreme Court confirmed the arbitration award, and the Appellate Division affirmed. Cooper appealed, arguing the arbitrator exceeded his power by awarding damages related to asset disposition, which should have been determined by the accountants.

    Issue(s)

    1. Whether a party waives its right to challenge an arbitration award as exceeding the arbitrator’s power by participating in the arbitration without seeking a stay.

    2. Whether an arbitrator exceeds their power by making an award that allegedly violates a limitation not explicitly stated in the arbitration clause (Silverman) or by intruding into an area designated to be determined by accountants (Norris).

    3. Whether, in the case of Silverman, the creditors were necessary parties to the confirmation proceeding.

    Holding

    1. No, because participating in the arbitration does not waive the right to challenge the award if the challenge is based on the arbitrator exceeding their power as defined in the arbitration clause.

    2. No in Silverman, because the arbitration clause was broad and lacked explicit limitations. No in Norris, the appellant waived the right to appeal on the specific grounds alleged.

    3. No, because the award does not inequitably affect the creditors, and they retain their rights under the subordination agreement.

    Court’s Reasoning

    The court emphasized that CPLR Article 75 reflects the legislature’s intent that arbitration be a final and binding process. Judicial review is strictly limited. “The only basis upon which an award can be vacated at the behest of a party who participated in the arbitration…is that the rights of that party were prejudiced by…that the arbitrator exceeded his power”.

    Any limitations on the arbitrator’s power must be expressly included in the arbitration clause. “To exclude a substantive issue from arbitration, therefore, generally requires specific enumeration in the arbitration clause itself of the subjects intended to be put beyond the arbitrator’s reach.” Absent such explicit limitations, arbitrators are not bound by substantive law or rules of evidence and can “do justice as he sees it”.

    While a party generally waives a challenge to the arbitrator’s power by not seeking a stay of arbitration, this does not preclude a post-arbitration challenge if the party asserts the limitation in opposition to confirmation or as the basis for vacating the award. However, the specific argument supporting the challenge must be raised before the lower court to be considered on appeal.

    In Silverman, the arbitration clause was broad enough to cover the dispute, and there was no express limitation on the arbitrator’s power. Further, the creditors were not necessary parties because the award did not bind them or inequitably affect their rights.

    In Norris, the arbitration clause contained an exception for matters determined by the accountants. While Cooper could challenge the arbitrator’s intrusion into that area, he waived the specific argument that the accountants had implicitly determined the $3,000,000 payment was not profit by failing to include the $3,000,000 payment as profits in its financial statement for the period. By not raising this argument below, Norris had no opportunity to rebut it.

  • Shapiro v. McNeill, 92 A.D.2d 1092 (1983): Requirements for a Binding Stipulation

    Shapiro v. McNeill, 92 A.D.2d 1092 (1983)

    A stipulation in an action is not binding unless it is made in open court, contained in a writing subscribed by the party or his attorney, or reduced to the form of an order and entered.

    Summary

    This case addresses the requirements for a valid and binding stipulation between parties in a legal action. Plaintiff’s attorney sent defendant’s attorney a stipulation to extend the time to answer or move to dismiss. Plaintiff’s attorney modified the stipulation by striking the motion to dismiss clause and adding a clause admitting service and jurisdiction, and then returned the stipulation. Defendant then filed an answer including a defense that the court lacked personal jurisdiction. The New York Court of Appeals held that because the defendant did not sign the modified stipulation, it was not binding under CPLR 2104. Therefore, the defendant was not barred from including the jurisdictional defense in the answer.

    Facts

    Defendant’s attorney sent a proposed stipulation to Plaintiff’s attorney, seeking an extension of time for Defendant to file an answer or move to dismiss the complaint.

    Plaintiff’s attorney modified the stipulation by:

    (1) Striking out the provision allowing Defendant to make a motion to dismiss, and

    (2) Adding a provision stating Defendant admitted the propriety of service and jurisdiction.

    Plaintiff’s attorney then signed and returned the modified stipulation.

    Defendant’s attorney filed an answer asserting lack of personal jurisdiction as an affirmative defense.

    Procedural History

    The trial court dismissed Plaintiff’s complaint based on lack of personal jurisdiction. The Appellate Division affirmed the dismissal. The New York Court of Appeals then reviewed the Appellate Division’s order.

    Issue(s)

    Whether the defendant, by relying on the beneficial terms of the proposed stipulation (extending time to answer), waived the defense of lack of personal jurisdiction, or should be estopped from asserting that defense, even though the stipulation was modified by the plaintiff and not signed by the defendant.

    Holding

    No, because the purported agreement did not amount to a valid stipulation since the defendant did not sign it as modified. Therefore, the defendant was not barred from including the jurisdictional defense in the answer.

    Court’s Reasoning

    The Court of Appeals relied on CPLR 2104, which dictates the requirements for a binding stipulation. CPLR 2104 states that a stipulation is only binding if it is: (1) made in open court between counsel, (2) contained in a writing subscribed by the party or his attorney, or (3) reduced to the form of an order and entered. Because the defendant did not sign the stipulation as modified by the plaintiff, the court found the stipulation not binding. The Court stated, “We conclude that the purported agreement did not amount to a valid stipulation upon which plaintiff could rely to preclude defendant’s assertion of the lack of jurisdiction or extend his time to answer. A stipulation concerning any matter in an action is not binding unless it is made in open court between counsel, contained in a writing subscribed by the party or his attorney, or reduced to the form of an order and entered (CPLR 2104). The claimed stipulation is not binding upon defendant, because he did not sign it as modified. Accordingly, there was no bar to inclusion of the jurisdictional defense in the answer.” The court also noted that although the defendant’s answer was untimely, the plaintiff never moved for a default judgment on that basis, meaning the plaintiff waived the untimeliness argument.

  • Mitchell v. New York Hospital, 61 N.Y.2d 212 (1984): Enforceability of Stipulations Waiving Statutory Rights

    Mitchell v. New York Hospital, 61 N.Y.2d 212 (1984)

    Parties to a civil dispute can stipulate away statutory rights, including the protection against contribution claims provided by General Obligations Law § 15-108(c), if the stipulation is made knowingly, openly, and does not offend public policy.

    Summary

    In a personal injury lawsuit, New York Hospital settled with the plaintiff and sought contribution from third-party defendants, despite General Obligations Law § 15-108(c) generally prohibiting such claims by settling tortfeasors. All parties had stipulated to allow the hospital to pursue these claims. The New York Court of Appeals held that the stipulation was enforceable, allowing the hospital to seek contribution. The court reasoned that parties can waive statutory rights through stipulations, and that enforcing this particular agreement fostered the public policy goals of encouraging settlement and ensuring equitable sharing of liability among tortfeasors. The court modified the Appellate Division’s order, reinstating the contribution claims against some of the third-party defendants.

    Facts

    Michael Mitchell, a steamfitter employed by Wolf & Munier, Inc. (W & M), was injured while working at New York Hospital. He was scalded by steam or hot water from a ruptured pipe during renovation work. Mitchell sued the Hospital, alleging failure to provide a safe workplace. The Hospital then initiated a third-party action against W & M, Syska & Hennessy, Inc. (S & H), Utilex Demolition, Inc. (Utilex), and Regal Insulation Corp. for contribution and indemnification.

    Procedural History

    The parties informed the trial court that they had reached a settlement, stipulating that the Hospital would settle with the plaintiff and then pursue its third-party claims for contribution or indemnification. The third-party defendants later moved to dismiss the Hospital’s third-party complaint, arguing that General Obligations Law § 15-108(c) barred the contribution claim. The trial court denied the motion, holding that the third-party defendants had waived the statute’s protection. The Appellate Division reversed regarding contribution, holding the statutory right could not be waived. The Court of Appeals granted leave to appeal after dismissing an earlier appeal as nonfinal.

    Issue(s)

    Whether subdivision (c) of section 15-108 of the General Obligations Law, which prohibits a settling tort-feasor from obtaining contribution from another person, can be waived by agreement of all parties to the litigation.

    Holding

    Yes, because parties to a civil dispute can stipulate away statutory rights unless public policy is affronted, and enforcing this stipulation furthers the policy goals of encouraging settlements and ensuring equitable sharing of liability among tortfeasors. The statute was not intended to be nonwaivable.

    Court’s Reasoning

    The Court of Appeals emphasized the long-standing judicial preference for stipulations as a means of resolving disputes efficiently. The court stated that parties are generally free to chart their own litigation course and can even stipulate away statutory and constitutional rights, as long as public policy is not violated. Here, the court found that the stipulation did not offend public policy; rather, it promoted the fair compensation of the injured party and facilitated the equitable sharing of liability among the tortfeasors.

    The court analyzed the legislative history of General Obligations Law § 15-108, noting that it was enacted to balance the competing policies of encouraging settlement and ensuring equitable apportionment of liability. While subdivision (c) generally prohibits settling tortfeasors from seeking contribution, the court found no indication that the Legislature intended this protection to be nonwaivable. The court reasoned that enforcing the stipulation would remove a barrier to settlement and allow for a more equitable distribution of liability.

    The court distinguished prior cases, such as Lettiere v. Martin Elevator Co., where the nonsettling tortfeasor was not a party to the stipulation. The court also clarified that Rock v. Reed-Prentice and McDermott v. City of New York were not applicable because they involved different factual scenarios. Finally, the court upheld the principle that a plaintiff can advance inconsistent theories of recovery, such as contribution and contractual indemnity.

    The court emphasized the importance of enforcing stipulations that are “freely, knowingly and openly agreed to by all of the named parties.” By allowing the Hospital to pursue contribution claims, the stipulation removed a barrier to settlement and promoted the equitable sharing of liability.

  • People v. Smith, 59 N.Y.2d 156 (1983): Effective Assistance of Counsel and Waiver of Confidentiality

    People v. Smith, 59 N.Y.2d 156 (1983)

    A defendant is not deprived of effective assistance of counsel merely because a defense strategy, reasonably conceived at the time, ultimately proves unsuccessful; furthermore, allowing the public disclosure of confidential information by a defense witness waives any prior agreement to keep that information secret.

    Summary

    Lemuel Smith was convicted of two murders. He appealed, arguing ineffective assistance of counsel and breach of a stipulation of confidentiality. Smith’s attorney had negotiated a stipulation to keep statements Smith made about multiple murders secret. Smith’s attorney then used the transcript of those statements at trial to support an insanity defense. The New York Court of Appeals held that Smith’s attorney provided effective assistance, as the strategy was reasonable at the time. The Court further held that Smith waived confidentiality by allowing his psychiatrist to publicly disclose the content of the statements.

    Facts

    Robert Hedderman and Margaret Byron were murdered in their religious shop in Albany, New York. During the investigation, William Weber identified Smith as being in the store near Byron’s body. Maureen Toomey identified Smith as leaving the store around the time of the murders. A hair found on Smith’s sweater matched Byron’s hair. Smith was also indicted in Schenectady County for kidnapping and attempted robbery. Smith’s attorney met with the District Attorneys of Schenectady, Albany, and Saratoga Counties to negotiate a plea bargain for all charges. An agreement was reached to allow Smith to be questioned under the condition that all statements would be kept secret and all individuals present would be considered agents of the Schenectady County District Attorney’s office.

    Procedural History

    Smith was indicted by an Albany County Grand Jury for the Hedderman-Byron murders after confessing to those murders at the March 5th meeting. Prior to his Albany County murder trial, Smith unsuccessfully sought to suppress the transcript and tapes of the March 5th meeting. Smith was convicted and sentenced to consecutive terms of 25 years to life. The Appellate Division affirmed the conviction. Smith appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether Smith was deprived of the effective assistance of counsel.
    2. Whether the Schenectady County District Attorney breached the terms of the March 5 stipulation.
    3. Whether the Albany County District Attorney was bound by the March 5 stipulation.
    4. Whether the trial court erred in its Sandoval ruling.
    5. Whether unqualified opinion testimony was improperly admitted into evidence.
    6. Whether the statements Smith made at the March 5 meeting were given voluntarily.

    Holding

    1. No, because the attorney provided meaningful representation under the circumstances.
    2. No, because the Schenectady County District Attorney honored the promise.
    3. No, because no agency relationship existed.
    4. No, because the trial court exercised its discretion.
    5. No, because Dr. Davies was testifying about the nature of the attack, not to Smith’s state of mind.
    6. Yes, because the record supports the factual determination that Smith’s statements were given freely and voluntarily.

    Court’s Reasoning

    The Court of Appeals reasoned that defense counsel’s strategy to assert an insanity defense was reasonable given the overwhelming evidence against Smith in both the Schenectady and Albany County cases. By cooperating with police, counsel hoped to revive plea negotiations. The Court emphasized that “the constitutional requirement of effective assistance of counsel will be met where ‘the evidence, the law, and the circumstances of a particular case, viewed in totality and as of the time of the representation, reveal that the attorney provided meaningful representation’.” The court held that the Schenectady County District Attorney’s office did not improperly allow Albany County District Attorney Greenberg to obtain a copy of Smith’s March 5 statements. “The transcript was lawfully subpoenaed by District Attorney Greenberg and only after defendant allowed certain of its contents to be publicly disclosed by Dr. Klopott during his testimony at defendant’s prior Schenectady County trial.” The Court also found no evidence of an agency relationship between Diane Kassel and the Albany County District Attorney’s office. Finally, the court found that the trial court exercised sound discretion in its Sandoval ruling and that Dr. Davies testified about the nature of the attack, not Smith’s state of mind.

  • Hodes v. Axelrod, 70 N.Y.2d 364 (1987): Waiver of Collateral Estoppel Defense

    Hodes v. Axelrod, 70 N.Y.2d 364 (1987)

    A defense based on collateral estoppel is waived if not raised in a responsive pleading or a pre-answer motion, and the decision to grant leave to amend an answer to include such a defense is within the trial court’s discretion.

    Summary

    This case addresses the issue of waiving the defense of collateral estoppel and the trial court’s discretion in allowing amendment of pleadings. The defendants, having failed to assert collateral estoppel in their initial pleadings or pre-answer motion, attempted to raise it during trial. The trial court denied their motion to amend the answer. The Court of Appeals affirmed, holding that the defense was waived due to the defendants’ delay in raising it. The court emphasized judicial economy and fairness to the plaintiff as key considerations in upholding the trial court’s discretionary decision.

    Facts

    The specific facts underlying the plaintiff’s claim are not detailed in this decision. The relevant facts pertain to the defendant’s procedural actions: The defendants did not raise the defense of collateral estoppel in their initial answer or in a motion prior to filing the answer. During the trial, after the plaintiff had presented most of their evidence, the defendants moved to amend their answer to include the defense of collateral estoppel.

    Procedural History

    The trial court denied the defendant’s motion to amend their answer to include the collateral estoppel defense. The Appellate Division affirmed the trial court’s decision. The New York Court of Appeals then reviewed the case.

    Issue(s)

    1. Whether the defense of collateral estoppel is waived if not raised in a responsive pleading or a motion made before the service of the responsive pleading is required, as per CPLR 3211(e)?

    2. Whether the trial court abused its discretion by denying the defendants’ motion to amend their answer to include the defense of collateral estoppel after the plaintiff had presented nearly all of their evidence?

    Holding

    1. Yes, because CPLR 3211(e) explicitly states that a defense based upon collateral estoppel is waived unless raised in a responsive pleading or a pre-answer motion.

    2. No, because the decision to grant or deny leave to amend an answer is within the trial court’s discretion, and considering the purpose of collateral estoppel (conserving resources) and the defendants’ delay, the trial court’s decision was not an abuse of discretion.

    Court’s Reasoning

    The Court of Appeals based its decision on the plain language of CPLR 3211(e), which mandates that the defense of collateral estoppel must be raised in the initial pleadings or a pre-answer motion to avoid waiver. The court emphasized that the purpose of collateral estoppel is to conserve judicial resources and protect litigants from repetitive litigation, citing Gilberg v. Barbieri, 53 N.Y.2d 285, 291. By waiting until trial to raise the issue, the defendants undermined this purpose. The court also highlighted the trial court’s broad discretion in deciding whether to allow amendments to pleadings. Given the timing of the motion (late in the trial, after the plaintiff had presented nearly all evidence), the court found no abuse of discretion in denying the amendment. The court stated, “Since one of the purposes upon which the doctrine of collateral estoppel is premised is to conserve the resources of the courts and litigants and since defendants failed to move to amend their answer until plaintiff had presented nearly all his evidence, we cannot say, as a matter of law, that the trial court, in denying the motion, abused its discretion.”

  • Nassau Trust Co. v. Montrose Concrete Products Corp., 56 N.Y.2d 175 (1982): Oral Waiver as Defense to Foreclosure

    Nassau Trust Co. v. Montrose Concrete Products Corp., 56 N.Y.2d 175 (1982)

    A mortgagee’s oral waiver of the right to accelerate a mortgage and foreclose, granted to give the mortgagor a reasonable opportunity to negotiate a sale, is a valid defense to foreclosure absent reasonable notice of withdrawal of that waiver.

    Summary

    Montrose Concrete mortgaged property to Nassau Trust. After Montrose became delinquent, Nassau Trust allegedly made oral representations to waive default, allowing Montrose time to sell the property. Nassau Trust then commenced foreclosure. Montrose argued waiver, unconscionability, and unclean hands. The New York Court of Appeals held that genuine issues of material fact existed regarding whether Nassau Trust had waived its right to foreclose by granting Montrose time to sell the property. The Court reversed the Appellate Division’s order of summary judgment, reinstating the Special Term’s original order.

    Facts

    In February 1976, Montrose mortgaged property to Nassau Trust for a $300,000 loan, requiring quarterly payments. The agreement allowed Nassau Trust to accelerate the principal upon failure to make payments within 30 days. In February 1977, Montrose was delinquent, and Nassau Trust entered a written extension agreement with a clause prohibiting oral modifications. Montrose defaulted again, and in March 1979, Nassau Trust initiated foreclosure proceedings. Montrose alleged that Nassau Trust officers made oral representations at meetings in June, October, and December 1978, agreeing to waive any default in payment.

    Procedural History

    Nassau Trust sued to foreclose. Montrose pleaded affirmative defenses of waiver, unconscionability, and unclean hands, also asserting a counterclaim. Special Term denied Nassau Trust’s motion for summary judgment, finding issues of fact regarding waiver. The Appellate Division modified the order, striking the affirmative defenses and granting summary judgment of foreclosure. Montrose appealed to the New York Court of Appeals, which reversed the Appellate Division’s order and reinstated the Special Term order.

    Issue(s)

    1. Whether a mortgagee’s oral waiver of the right to accelerate the mortgage and foreclose, in order to allow the mortgagor time to sell the property, is a valid affirmative defense to foreclosure.
    2. Whether the provision in the extension agreement against oral change or termination forecloses the defense Montrose asserts.

    Holding

    1. Yes, because the unrefuted allegations raised a triable issue of fact as to whether Nassau Trust had waived its right to declare a default and foreclose.
    2. No, because the provision against oral change or termination speaks only to a change by agreement (modification) and not to a waiver.

    Court’s Reasoning

    The Court reasoned that while a modification of a mortgage requires consideration (or a statutory substitute like a signed writing), waiver and estoppel do not. Waiver requires only the voluntary and intentional abandonment of a known right. Estoppel requires a party to detrimentally rely on the opposing party’s words or conduct. The Court emphasized that an executory waiver can be withdrawn if the waiving party provides notice and a reasonable time to perform.

    The Court distinguished between an oral agreement purporting to modify a written agreement (requiring consideration) and an oral waiver of a right to require performance under that agreement. It cited cases where unwithdrawn waivers prevented the enforcement of original agreements, even without a legally binding modification.

    Quoting Judge Cardozo, the Court highlighted the principle that no one should benefit from their own inequity. The court noted that even with the clause against oral modifications, the bank may have waived its right to foreclose.

    The Court considered Louis Imperato’s affidavit, which alleged assurances from Nassau Trust, and found that these created a triable issue of fact regarding waiver. It also found a potential basis for estoppel because Montrose relied on those assurances to continue negotiations with Imperia, who withdrew when the foreclosure was initiated.

  • Matter of Tilbury Fabrics, Inc. v. Stillwater, Inc., 56 N.Y.2d 627 (1982): Arbitrator Error of Law and Contractual Statute of Limitations

    Matter of Tilbury Fabrics, Inc. v. Stillwater, Inc., 56 N.Y.2d 627 (1982)

    An arbitrator’s error of law is an insufficient basis to vacate an arbitration award; furthermore, failure to raise a contractual statute of limitations defense before the arbitrator constitutes a waiver of that defense.

    Summary

    Tilbury Fabrics, Inc. sought to confirm an arbitration award, which Stillwater, Inc. opposed, arguing the claim was barred by a contractual one-year statute of limitations, the counterclaims were too vague, and the award potentially included consequential damages prohibited by contract. The New York Court of Appeals affirmed the confirmation of the award, holding that Stillwater waived the statute of limitations defense by not raising it before the arbitrator. The court also stated that even if the defense had been raised, the arbitrator’s decision on the matter would not be grounds to vacate the award based on an error of law. Furthermore, Stillwater did not preserve the argument regarding the vagueness of the counterclaims, and the mere possibility of consequential damages being included was insufficient to disturb the award.

    Facts

    Tilbury Fabrics, Inc. and Stillwater, Inc. were parties to a contract containing an arbitration clause. A dispute arose, and Tilbury initiated arbitration proceedings. Stillwater participated in the arbitration without raising a contractual statute of limitations defense. After the arbitration panel issued an award in favor of Tilbury, Stillwater challenged the award, alleging it was barred by a one-year contractual statute of limitations, that the counterclaims were too vague, and that the award potentially included consequential damages, which were expressly prohibited by the contract.

    Procedural History

    The lower court confirmed the arbitration award. Stillwater appealed. The Appellate Division affirmed the lower court’s decision. Stillwater then appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether Stillwater waived its contractual statute of limitations defense by failing to raise it in a motion to stay arbitration or before the arbitrators?
    2. Whether an arbitrator’s error of law constitutes a sufficient basis to vacate an arbitration award?
    3. Whether Stillwater preserved its argument that the counterclaims were so vaguely described that Stillwater was unable to ascertain the subject matter of the dispute?
    4. Whether the mere possibility that an arbitration award included consequential damages, which were expressly prohibited by the contract, is enough to permit the award to be disturbed?

    Holding

    1. Yes, because Stillwater did not raise the contractual statute of limitations defense in a motion to stay arbitration or before the arbitrators, it was waived.
    2. No, because an error of law committed by the arbitrator is an insufficient basis to vacate an award.
    3. No, because it simply was that the scope of the arbitration was limited to the three contracts which were the basis for the institution of the arbitration.
    4. No, because “the mere possibility” that such damages, award of which was expressly prohibited by the contract, indeed were included, is not enough to permit the award to be disturbed.

    Court’s Reasoning

    The court reasoned that Stillwater waived its statute of limitations defense by not raising it earlier in the proceedings, citing CPLR 7502(b) and 7503. The court further noted that even if the defense had been properly raised, compliance with the contractual period of limitation would have been a question for the arbitrators to decide. In such a case, the court emphasized the well-established principle that an arbitrator’s error of law is not a sufficient basis to vacate an award, referencing Matter of Granite Worsted Mills [Aaronson Cowen, Ltd.], 25 NY2d 451, 454-455.

    Regarding the vagueness of the counterclaims, the court found that Stillwater failed to properly preserve this issue for appeal, arguing “It simply was that the scope of the arbitration was limited to the three contracts which were the basis for the institution of the arbitration.”

    Finally, concerning the potential inclusion of consequential damages, the court applied a deferential standard to the arbitration award, stating that “the mere possibility” that such damages were included, despite being prohibited by the contract, was not enough to justify disturbing the award. The court again cited Matter of Granite Worsted Mills [Aaronson Cowen, Ltd.], supra, at pp 455-456, to support this position.

  • Gager v. White, 53 N.Y.2d 475 (1981): Retroactivity of Rush v. Savchuk and Waiver of Jurisdictional Objections

    Gager v. White, 53 N.Y.2d 475 (1981)

    The Supreme Court’s decision in Rush v. Savchuk, which invalidated quasi in rem jurisdiction based solely on the attachment of an out-of-state defendant’s liability insurance policy, applies retroactively only when a specific jurisdictional objection was properly preserved; otherwise, the objection is waived.

    Summary

    This case addresses whether the Supreme Court’s decision in Rush v. Savchuk, which eliminated quasi in rem jurisdiction based solely on attaching an out-of-state insurance policy, applies retroactively. The New York Court of Appeals held that Rush applies retroactively to cases still in litigation *only* if the defendant preserved a specific objection to quasi in rem jurisdiction. Failure to raise this objection constitutes a waiver, and the court retains jurisdiction. The court reasoned that while constitutional due process limitations on jurisdiction are fundamental, the right to object to basis jurisdiction can be waived, similar to other procedural defenses.

    Facts

    These cases involve New York domiciliaries seeking damages for injuries sustained in out-of-state automobile accidents caused by non-resident defendants. The primary connection to New York was the ability to attach the defendant’s liability insurance policy in New York, based on the Seider v. Roth doctrine. After the Supreme Court decided Rush v. Savchuk, which invalidated this type of quasi in rem jurisdiction, defendants moved to dismiss the pending cases for lack of jurisdiction.

    Procedural History

    The trial courts initially denied the motions to dismiss, relying on prior New York case law supporting Seider jurisdiction. The intermediate appellate courts reversed in four out of five cases, dismissing the complaints because of Rush v. Savchuk. The New York Court of Appeals then reviewed these decisions.

    Issue(s)

    Whether the Supreme Court’s decision in Rush v. Savchuk, which invalidated quasi in rem jurisdiction based solely on attachment of a liability insurance policy, should be applied retroactively to pending cases.

    Holding

    Yes, Rush v. Savchuk applies retroactively, but *only* if the defendant preserved a specific objection to the assertion of quasi in rem jurisdiction by appropriate motion or affirmative defense. No, if the defendant failed to properly object to quasi in rem jurisdiction, the objection is waived because basis jurisdiction is waivable under CPLR 3211(e).

    Court’s Reasoning

    The court acknowledged the general rule that changes in decisional law are usually applied retrospectively. However, it recognized an exception when a sharp break in the law would cause significant disruption and reliance interests are at stake. While plaintiffs argued that retroactive application would foreclose actions in other jurisdictions due to statute of limitations, the court emphasized the fundamental nature of jurisdictional determinations. The court stated that a constitutional due process limitation on a state’s exercise of jurisdiction is an absolute abnegation of the state’s power to act beyond those boundaries. The court discussed the evolution of jurisdictional principles, highlighting Pennoyer v. Neff, International Shoe Co. v. Washington, and Shaffer v. Heitner, leading up to Rush v. Savchuk. The court quoted World-Wide Volkswagen Corp. v. Woodson, reminding that “[a] judgment rendered in violation of due process is *void* in the rendering State and is not entitled to full faith and credit elsewhere”. However, unlike subject matter jurisdiction, the court emphasized that basis jurisdiction is waivable under CPLR 3211(e). The court held that a defendant’s voluntary participation in litigation without properly objecting to quasi in rem jurisdiction constitutes a submission to the jurisdiction of the state’s courts. Therefore, the court distinguished between cases where a specific objection to quasi in rem jurisdiction was raised in the answer and those where it was not. In cases where the objection was properly raised, dismissal was appropriate. Where no such objection was made, jurisdiction was deemed waived, and the action could proceed.

  • People v. Taylor, 65 A.D.2d 805 (1978): Guilty Pleas and Waiver of Procedural Rights

    People v. Taylor, 65 A.D.2d 805 (1978)

    A defendant’s guilty plea generally waives the right to appeal non-jurisdictional defects in the proceedings, even if the defendant attempts to reserve the right to appeal those issues.

    Summary

    The defendant, Taylor, appealed his conviction for assault in the second degree, arguing that the indictment should have been dismissed because his wife, the complainant, was not advised of the option to pursue family offense proceedings in Family Court, as required by the Family Court Act. The New York Court of Appeals affirmed the Appellate Division’s order upholding the conviction. The Court held that Taylor’s guilty plea waived his right to raise this issue on appeal because the alleged failure to advise his wife of alternative forums did not constitute a jurisdictional defect, and a defendant cannot unilaterally reserve the right to appeal issues waived by a guilty plea.

    Facts

    Taylor was charged with assault in the second degree. The charge stemmed from an incident involving his wife. Prior to entering a guilty plea, Taylor moved to dismiss the indictment, arguing that his wife, as the complainant, had not been advised of the procedures available for instituting family offense proceedings in Family Court, as mandated by former subdivision 2 of section 812 of the Family Court Act. The trial court denied the motion.

    Procedural History

    The defendant pleaded guilty to assault in the second degree. He then appealed, arguing that the trial court erred in denying his motion to dismiss the indictment. The Appellate Division affirmed the conviction. The New York Court of Appeals then reviewed the Appellate Division’s order.

    Issue(s)

    1. Whether the failure to advise a complainant of the option to pursue family offense proceedings in Family Court, as required by the Family Court Act, constitutes a jurisdictional defect that survives a guilty plea.

    2. Whether a defendant can unilaterally reserve the right to appeal an issue that is otherwise waived by a guilty plea.

    Holding

    1. No, because the provisions of the Family Court Act regarding advising complainants of family offense proceedings do not affect the court’s fundamental jurisdiction to hear the case.

    2. No, because a defendant cannot unilaterally avoid the consequences of a guilty plea by attempting to reserve the right to appeal issues that are otherwise waived.

    Court’s Reasoning

    The Court reasoned that the Family Court Act’s requirement to advise complainants of family offense proceedings does not pertain to the Supreme Court’s jurisdiction or authority. The Court stated, “At most they consist of a threshold, statutory directive with respect to procedures to be followed for access to the Family Court or to the criminal courts, unrelated to the judicial competence of those courts.” The statute aims to inform complainants of their right to choose the court of prosecution, a right the defendant cannot control. The Court emphasized that nothing in the statute suggested that failure to give the advice would strip either Family Court or the criminal courts of jurisdiction.

    Regarding the attempted reservation of rights, the Court stated, “A defendant cannot by a unilateral recital of an intention or desire to preserve a legal contention evade what would otherwise be the consequences of his guilty plea.” The Court clarified that even if defense counsel had explicitly reserved the right to appeal the issue, it would not have been effective because a guilty plea generally waives all non-jurisdictional defects. The court considered it likely that the defense counsel was merely acknowledging the standard rule that jurisdictional challenges are always preserved, even after a guilty plea.