Rochester Legal Briefs: October 6, 2005

In recent Appellate Division, Fourth Department decisions, various issues relating to real estate law, contract law and employment law were addressed. The appeals court considered issues relating to employee non-competition agreements in employment, and a prescriptive easement by one neighbor against another.

CIVIL DECISIONS

Contract - Delivery Of Contract

The parties entered into a five-year contract for delivery of linen for use in the defendant's business. When the defendant terminated the contract after 1.5 years, the plaintiff brought suit. The defendant moved for summary judgment on the ground that the contract was never delivered to her. The Fourth Department reversed the granting of summary judgment to the defendant, reinstating the complaint. A binding contract may be made despite the lack of physical delivery of the instrument evidencing the contract. The defendant failed to establish that the parties agreed that delivery was essential to making the contract.

Morgan Services, Inc. v. Abrams, Erie County, no. 974.

Real Property - Prescriptive Easement

The plaintiff sued an adjoining landowner under the Real Property Actions and Proceedings Law regarding the property between their houses. The plaintiff established by clear and convincing evidence that he had a prescriptive easement; his use of the defendant's land was adverse, open and notorious, continuous and uninterrupted.

Bush v. Ozogar, Cattaraugus County, no. 1138.

Employment - Restrictive Covenant

In another appeal relating to a restrictive employment covenant, the Fourth Department found that summary judgment was properly granted to the former employee, who established as a matter of law that the Employee Non-Compete Agreement was unreasonable both temporally and geographically.

Scalise Industries, Inc. v. Murdock, Herkimer County, no. 1060.

Real Estate - Employment

It's not often that real estate law and employment law intersect; this breach of contract suit from Erie County is such an occasion.

The defendant was hired as a sales representative for Ryan Homes and signed a special employee discount agreement that allowed her a 10 percent refund on the purchase price of a home. She received the refund in the form of an extra paycheck with taxes deducted. The employee was to execute a promissory note at the time of the closing, requiring her to repay the amount of the refund if she voluntarily left the company's employ within three years; the note was not executed.

Nearly a year later, when she expressed dissatisfaction with her working environment, her employer demanded that she sign the promissory note. She refused to do so and resigned a month later. She contended the resignation was involuntary, resulting from threats, abuse and harassment.

Ryan Homes brought suit for breach of contract to recover the 10 percent purchase price. The motion and cross motion for summary judgment were denied by Justice Frank A. Sedita, Jr., which the Fourth Department affirmed.

The general rule is that a real estate sales contract merges with the deed, and any inconsistencies between the contract and deed are governed by the deed, which is presumed to contain the parties' final agreement. One exception is where the provisions concern collateral matters that cannot be performed until after the conveyance. The agreement here fit within that exception. The appellate court found an issue of fact whether the defendant's supervisor informed the employee that the repayment obligation would not be enforced and thus whether Ryan Homes waived the repayment provision. A second issue of fact was whether the defendant voluntarily resigned or was constructively terminated.

NVR Inc. dba Ryan Homes v. Edwards, Erie County, no. 1003.

Employment - Restrictive Covenant

An employer sued its former employee to enforce a restrictive covenant as well as for breach of duty of loyalty. Supreme Court, Monroe County, denied the former employee's summary judgment motion as to the restrictive covenant, which the Fourth Department affirmed: the covenant was not unreasonable as a matter of law, geographically or temporally.

The Appellate Division also affirmed Justice Thomas Stander's granting of partial summary judgment to the company on the cause of action for breach of duty of loyalty. The plaintiff established as a matter of law that the former employee usurped corporate resources, opportunities and profits for his own benefit or that of another company.

Onsite Companies, Inc. v. Comfort and Mploy, Inc., Monroe County, no. 1001.

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