General Interest

September 7, 2012

Do You Have the Right Amount of Insurance– Think About it when you Buy a House in New York?

It can be difficult to strike a balance in finding adequate insurance coverage, while avoiding unnecessary coverage or being underinsured.

While states generally require a minimum amount of auto insurance coverage, and mortgage lenders also generally require you to maintain homeowner’s insurance for at least the value of the mortgage, these amounts may not represent the optimum amount of insurance for your circumstances. For example, in New York, motorists are required to carry $25,000 in liability insurance for bodily injury to a single person, $50,000 for bodily injury to all persons, and $10,000 for property damage in any accident. Minimum “no-fault” coverage of $50,000 is also required. However, given the price of auto repairs and the price of a replacement car if a car is totaled in an accident, damages could far exceed the $10,000 minimum. If you only carry the minimum amount of insurance, you will be personally liable for any property damage in excess of $10,000.

In addition, insurance policies, whether they are auto, homeowner’s, or life insurance, contain a seemingly endless list of exclusions from coverage – it can be hard to determine exactly what is covered. However, these exclusions and limits are very important in protecting your hard earned nest egg in the event of an accident or other unforeseeable event.

August 18, 2012

How Much will that Building Permit Cost? It depends …

by Peter Klose

Before you start knocking down walls and get knee deep in home improvements, make sure you have all of the required building permits. Obtaining a building permit involves completing an application with plans for the improvements, and paying a fee.

Even seemingly small home improvement projects may require a building permit. For example, in Nyack, like many other towns, installing a wood burning stove or fireplace would require a building permit, and failing to get the proper permit can result in a fine of up to $500 or 30 days in jail, or both. Also, a “Stop Order” can be issued by the Building Inspector if he or she has reasonable grounds to believe that the proper building permit was not obtained or the work is not being done in accordance with the building permit issued.

Permit fees are generally based on the cost of construction, and bills and invoices are normally required with the application to substantiate the stated cost of construction. This serves to prevent fraud and discourage homeowners from understating the cost of construction to save some money on the permitting fees. However, building permit fees can vary widely throughout New York, with little rhyme or reason.

August 10, 2012

What Effect Does Your Landlord’s Housing Violation Have on Your Duty to Pay Rent?

by Peter Klose

So your landlord just got slapped with a housing violation – what does that mean for you as a tenant? Can you stop paying your rent altogether? If you live in New York, not so fast.

Although your duty as a tenant to pay rent is dependent on the landlord’s “satisfactory maintenance of the premises in habitable condition,” a housing violation on its own does not relieve you of your obligation to pay rent. Park West Management Corp. v. Mitchell, 47 N.Y.2d 316 (1979). The key factor is whether the violation threatens the health and safety of the tenant thereby breaching the landlord’s warranty of habitability. Park West, supra; New York Real Property Law, § 235-b. Therefore, a housing violation is merely the “starting point” in such a determination, and it is possible that the finding of a violation does not have an impact on habitability. Note, however, that the landlord’s warranty of habitability cannot be waived. Real Property Law, § 235-b-2.

If a breach of the landlord’s warranty of habitability is found, damages are measured by the difference between the fair market value of the premises in their habitable condition (as measured by the rent set forth in the lease), and the value of the premises during the period of the breach. Park West, supra. An award of damages to a tenant can be made through a lawsuit by the tenant to recover lease payments from the landlord, or in defense to an action by the landlord for non-payment of rent. Park West, supra.

August 9, 2012

Punitive Damages: A New Risk in Legal Malpractice in New York?

by Peter Klose

A Florida Court recently affirmed a significant award of punitive damages against a law firm in a legal malpractice case, raising the question: could this happen in New York? See Young v. Becker & Poliakoff, P.A., No. 4D09-4869 (Fla. 4th DCA May 23, 2012). In the Young case, the plaintiff brought a legal malpractice action against a law firm that handled her federal employment discrimination lawsuit. An associate of the law firm failed to attach the correct EEOC right-to-sue letter to the Complaint, and the plaintiff’s case was dismissed. The plaintiff successfully alleged that the law firm intentionally delayed telling her about the dismissal of her case in an effort to settle a related case in which they would receive over $2.9 million in fees. The jury awarded the plaintiff $394,000 in compensatory damages, including $144,000 in past lost wages and $250,000 in damages for “pain and suffering, mental anguish, or loss of dignity,” and $4.5 million in punitive damages, which was reduced by the trial court to $2 million. The Court of Appeals upheld this award finding that “the punitive damages in this case were properly assessed to further the State’s legitimate interests in punishing reprehensible conduct and deterring its repetition.” Young, supra.

In New York, a Plaintiff in a legal malpractice action may recover “actual and ascertainable damages” that were proximately caused by a defendant’s negligence. M & R Ginsburg, LLC v. Segal, Goldman, Mazzotta & Sigel, P.C., 90 A.D.3d 1208 (3d Dep’t 2011). Unlike the Young case in Florida, New York courts have consistently rejected awards for emotional distress in legal malpractice actions. Epifano v. Schwartz, 279 A.D.2d 501 (2d Dep’t 2001); Dirito v. Stanley, 203 A.D.2d 903 (4th Dep’t 1994); Andrewski v. Devine, 280 A.D.2d 992 (4th Dep’t 2001); Kaiser v. Van Houten, 12 A.D.3d 1012 (3d Dep’t 2004).

Moreover, New York’s First Department (which handles New York City) has rejected a punitive damages award where plaintiff failed to establish that defendant’s conduct “was so outrageous as to evince a high degree of moral turpitude and showing such wanton dishonesty as to imply a criminal indifference to civil obligations.” Zarin v. Reid & Priest, 184 A.D.2d 385 (1992). However, the court’s limited basis for rejecting a punitive damages claim in such a legal malpractice case seems to leave the door open for an award of punitive damages under the right facts – a scary thought for legal practitioners, particularly in light of the exclusion for punitive damages under most professional liability policies.

August 8, 2012

Want fresh eggs everyday? Get a chicken (but check the Town Code first in New York).

by Peter Klose

(Update-COVID Response-June 23, 2020-Nyack)- A few years ago, farm to table eating became a “thing,” now it is even more important because of the COVID response of homeowners to staying in place. Everywhere you look in suburbia gardens are going in, chickens are being tended, honey bees added to back yards like never before. At the same time, people who have never lived next to animals, bees, poultry, chickens, or other back yard friends (some say “nuisances”), are reporting their friends and neighbors to building departments to complain. Suddenly the back yard chicken farmers must review the laws of zoning and morality.

We have seen these types of complaints in the Town of Clarkstown, New York. New neighbors, new problems. If taking fresh eggs to the new neighbor doesn’t work and you need to review the law, zoning and planning attorneys can help with violations, building permit applications and zoning variances we can help you. In places like Congers, Valley Cottage, Nanuet, different zones beget different sized lots. Right now, the Town of Clarkstown Code provides:

Additional Bulk Regulations §290-20(K). In the R-160, R-80, R-40, R-22, R-15 and R-10 Zoning Districts, keeping domestic animals (except pigs) for individual domestic purposes shall be permitted, provided that not more than one horse or cow per acre, five cats or dogs over six months old, and not more than 25 fowl shall be kept on any lot. No animals (except cats or dogs) shall be penned or housed within 50 feet of any lot line, and there shall be no storage of manure, animal waste or odor- or dust-producing substance or use, except spraying or dusting to protect vegetation, within 50 feet of any lot line, watercourse or wetland. [Added 3-22-2016 by L.L. No. 5-2016].

August 5, 2012

Does the Estate Owe Money in New York– Surrogate Court Bonding.

by Peter Klose

Surrogate Courts in New York may require a probate bond – also called an “executor bond,” an “administrator bond,” or a “trustee bond” – when an individual is appointed to handle the distribution of a deceased person’s estate. The bond acts as a guarantee that the estate’s debts will be paid and the assets will be distributed properly. Before a bond will be issued, bond companies will review the credit history of the person administering the estate to assess their risk in issuing the bond.

Depending upon the facts and circumstances, the Surrogate Court sitting in Rockland, Dutchess, or Westchester County, New York, may require a bond if the gross value of the probate assets for the estate is $30,000 or more. N.Y. Surrogate’s Court Procedure, § 801-1(a) and § 1301-1. The amount of the bond required is determined by the court, but is generally equal to the value of the property in the estate, including rents on real property for 18 months and the “probable recovery” of any lawsuit being prosecuted by the fiduciary of the estate. N.Y. Surrogate’s Court Procedure, § 801-1(a). The size of the bond will depend upon the number of “creditors” and the claimed amount due.

The premiums on the bond are paid from the deceased person’s estate. Bond premiums are generally paid annually until the estate is settled, i.e. all of the property has been distributed. In your will, you may direct that the court not require a bond. By doing this, you will save your estate money on bond premiums, but there will no longer be a third-party guarantee ensuring that your estate is properly distributed.

August 1, 2012

New York State Thoughts on Same Sex Couples and the Obstacles to Equal Rights in Parenting.

by Peter Klose

The New York Times recently ran an article highlighting the myriad of legal obstacles gay couples face in raising a family together.

For example, although many states allow a second mother to be listed on a child’s birth certificate, when a same sex married couple travels to a state that does not recognize their union, the relationship established by the child’s birth certificate may not be recognized (despite the general principle that state courts give full faith and credit to other states’ judgments).

This failure to recognize the same sex parent-child relationship can have widespread consequences. For example, an unrecognized parent may not have authority to make medical or other decisions for the child, and in the event of the legally recognized parent’s death, the other spouse would not necessarily be granted guardianship of the child.

July 30, 2012

FB, Linkedin, Social Profiles and death in New York and on the internet.

by Peter Klose

So maybe your will was drafted a while ago or you are just starting to put together your important papers in anticipation of getting a new will. You’ve considered all the basics: who gets the house, the cash and stocks, and who will take care of your children, but have you thought about what will happen to your social media accounts when you die?

Most social media sites will not give your account information to anyone in an effort to protect your privacy, but allow certain people to cancel your account upon your death. For example, Facebook has a policy of “memorializing” deceased users’ accounts, and permits only confirmed friends to see the deceased user’s profile and post on their page. Facebook allows immediate family members to request the removal of a deceased user’s account, but it will not provide login information to anyone. Twitter has a similar policy allowing family members or other “authorized” persons to deactivate a deceased user’s account, but will not provide login information to third parties. LinkedIn also allows family members or other survivors to close an account upon satisfactory verification of a user’s death. On the other hand, email providers like Gmail, allow authorized persons to access the deceased user’s email account upon a lengthy verification process, including obtaining a Court Order directing Google to disclose account information.

In New York earlier this year, Assemblyman Felix Ortiz introduced legislation that would allow users to appoint an “online executor” in their will providing them with the authority to cancel social media accounts upon the user’s death. The Committee on Judiciary is currently considering the bill. Other states have enacted similar legislation in an effort to bring probate laws into the 21st century.

July 23, 2012

A Decision Heard ‘Round the Legal World—Fischer & Mandell LLP v. Citibank.’

by Peter Klose

In February 2011, the Court of Appeals for the Second Circuit (including New York) handed down a decision that should have every attorney dotting their “I’s” and crossing their “T’s.” In Fischer & Mandell LLP v. Citibank, 632 F.3d 793 (2d Cir. 2001), the court affirmed summary judgment against a law firm who deposited a client’s check into a bank, and disbursed the funds as requested by the client before the check cleared the account.

The facts were as follows: in January 2009, plaintiff-appellant, Fischer & Mandell LLP, received from a new client what appeared to be an official Wachovia Bank check. Id. at 795. The check was made payable to the firm, and the firm was advised that it represented partial payment of a debt owed by another entity to the client. The firm then deposited this check for $225,351 into its account at defendant-appellee, Citibank. In the usual case, if there is enough money in the account to cover the check, the bank will make the funds available immediately, before the check clears-that is what happened here. Id.

The client then requested two wire transfers of a portion of the funds-one to South Korea, and then next to Canada. After both transfers were complete, the Federal Reserve Bank returned the check as dishonored and unpaid. Id. at 796. A Citibank representative then telephoned the firm to advise them of the counterfeit check. Citibank then charged back to the trust account the amount of the check and a $10 returned check fee, resulting in an overdraft. Id. Next, Citibank debited an amount necessary to satisfy the overdraft from a money market account the firm had at Citibank.

July 23, 2012

STAR Exemptions in residential New York Real Estate transactions.

by Peter Klose

In your search for a home in New York State (Rockland, Dutchess, Putnam, Ulster, Westchester County), you may have come across listings that say that the annual taxes include STAR – what does that mean for you as a potential homebuyer?

The STAR exemption, which is the New York State School Tax Relief Program, provides partial tax exemptions for homeowners that live in their home as a primary residence and meet certain income requirements. So, if you see a real estate or multiple listing that says the taxes “include STAR,” it likely means that the taxes listed have been reduced to reflect this exemption (i.e.reduced). However, it is important to realize that the exemption is specific to the individual homeowner, and just because the previous owner got the STAR exemption, it does not mean that you will too, unless you meet the guidelines and file your application by the deadline.

There are two types of exemptions under STAR: (1) “Basic Star” which applies to resident homeowners whose income combined with their spouse is $500,000 or less and exempts the first $30,000 of the full assessed value of the home from school taxes; and (2) “Enhanced Star” which applies to resident homeowners age 65 and older with an income of $79,050 or less and exempts the first $62,200 of the full assessed value of the home from school taxes. There are limits, however, on the amount of savings a homeowner can get from the STAR exemption.