As part of the parties’ divorce settlement, the husband kept an account held by Bernie Madoff and his firm. Upon learning of the Madoff fraud, the husband asked the court to reform the agreement to divide the parties’ assets as the Madoff account was worthless or non-existent. After finding that the parties’ agreement was comprehensive and left no place for modification, and found further that no mutual mistake could be found as the division was fair when made, the court denied the reformation.
Attempted Service at Foreclosed Property Insufficient
Lender’s counsel had the defendant served with the summons and complaint at the property that it sought to foreclose and at another address listed with the parking violations bureau. The process server could not locate the defendant at the foreclosed property and, when told that the defendant lived at the second address, sought to serve the defendant at the second address. The defendant was not served personally at either address. The process server had no detailed information concerning the second address and did not serve the defendant at a third address, the address listed on the mortgage. After the time to respond expired, the lender moved for a default judgment. In denying the unopposed motion, the court determined that the process server failed to properly exercise due diligence in serving the summons and complaint. The court also dismissed the case because the lender did not own the note at the time the lawsuit was commenced.
Heart Attack Three Years after Accident Possibly Related
In February 2005, plaintiff was hit as he crossed a street. Plaintiff complained of chest pain and was treated for heart-related injures. Plaintiff suffered a heart attack in February 2008 and argued that the accident was the cause of the heart attack. Defendant’s doctor stated that the heart attack did not seem related to the accident years earlier, although no cause was determined. Plaintiff’s doctor stated that to a reasonable degree of medical certainty, the heart attack was related. The court refused to find that as a matter of fact the heart attack was unrelated to the accident and refused to dismiss the case.
Buyer’s Death Requires Heirs to Close
Buyer entered into a contract to purchase a co-op. In connection with doing so, the buyer put his $230,000 deposit into escrow. Between his signing of the contract and closing, the buyer died. The seller argued that the contract was binding on the buyer’s heirs and demanded that the heirs close. The heirs refused. The court found that the contract was binding on the buyer’s heirs, and that no claim of impossibility or frustration of purpose sufficed to excuse performance. The heirs’ refusal to closes was deemed a repudiation and breach.
Court Compels Borrower and Lender to “Split the Difference”
A foreclosure action reached an impasse when a borrower agreed to pay $2000 per month while the lender would accept no less than $3000. After noting that the court could allow the negotiations to stall, and the foreclosure to continue, the court, suspecting that the lender engaged in discriminatory lending, directed the borrower to pay $2500 per month and the lender to accept it.
Dogs That Attack Neighbor Not Euthanized
Town of Hempstead sued to have three dogs that attacked a neighbor deemed dangerous and euthanized. Although the injuries incurred were sever, the court found that they were not “serious” as required by statute, and did not meet other statutory requirements. Thus, although the Court felt that the dogs were dangerous and should be euthanized, it was without authority to order it. Instead, the Court required that the dogs undergo behavior evaluation, be muzzled in public and be treated as dangerous dogs.
Bank Sanctioned and Existing Mortgage Discharged
In a dramatic case, a Suffolk County judge has cancelled a valid and existing note and mortgage. During the course of a foreclosure action, the bank, Indymac Bank, refused to cooperate in reasonable settlement negotiations, engaged in misleading tactics, could not establish the amount that was owed, and demanded full payment of the loan or foreclosure of the property. The court found such conduct to not be in good faith, particularly because an outcome that would have benefitted both the owner and bank was possible under the circumstances yet refused by the bank. Finding the bank’s conduct to be so egregious, the court cancelled the note and mortgage and barred the bank from ever again seeking to collect on the loan.
No Act of G-d in Failing to Maintain Sewer
Claimant sought $5,000 from the City of New York for flooding in her home. The City claimed that it was not negligent in maintaining the sewer system, and that no matter what the cause, because of the torrential rain, any flooding was an act of G-d, excusing any misconduct by the City. The court found the City liable because it performed no inspection even though the City, as a municipality, had an obligation to periodically inspect the sewer and keep it clear from obstruction.
Competition and Existing Contracts
In the normal course of events, two parties that enter into a contract are obligated to perform in accordance with that contract. Where a party fails to do so that party has breached the contract and will ordinarily be liable for any resulting damage to the other, non-breaching party. Although in most cases only the breaching party can be liable, there are limited scenarios where others may be liable as well. This article will discuss situations where a third- party that is not a party to the breached contract can also be liable to the non-breaching party. This third-party’s liability is based on its improper interference with an existing contract, known as tortious interference with an existing contract.
Before discussing the details of this claim and liability, it is important to understand that courts will generally sanction and encourage legitimate business competition. Courts will not penalize a third-party’s ordinary attempts to solicit business, even when doing so may result in the breach of a contract between two other parties. Therefore, the fact that a party to a contract breached that contract to respond to the solicitations of a third- party, does not automatically create liability for that third-party. As discussed below, the conduct of the third-party in soliciting the business often determines whether its conduct was proper.
For example, Tire Supply, Inc., has an exclusive contract to sell tires to Tire Depot, Inc., for $10 a tire. The agreement provides that Tire Supply may sell to no one other than Tire Depot and Tire Depot may purchase tires only from Tire Supply. Tire Meddler Corp., approaches Tire Supply and offers to buy all of its tires for $12 a tire, $2 more than Tire Supply receives from Tire Depot. Selling to Tire Meddler will require that Tire Supply breach and terminate its agreement with Tire Depot. Assuming that Tire Supply agrees to sell to Tire Meddler, and breaches its contract with Tire Depot, and is sued by Tire Depot for that breach, can Tire Depot sue Tire Meddler for causing Tire Supply to breach their agreement? Has Tire Meddler done anything legally wrong considering that from a strict business point of view, Tire Meddler did nothing more than offer Tire Supply a better deal?
Oral Promise Does Not Extend Note’s Maturity Date
Plaintiff bank sued to collect on a note. Defendant claimed that a bank official orally extended the maturity date on its loan for an additional year so that defendant was not in default. Without denying the oral promise and the fact that negotiations had been undertaken, plaintiff claimed that the loan documents did not allow oral modifications. The court agreed with plaintiff and refused to consider the alleged oral extension of the note’s deadline. The court also decided that plaintiff did not waive the note’s maturity date, regardless of the alleged oral promises.