Chapter Twenty-Three
Rochester, New York
Summaries of Recently Released Decisions to Be Included In the Next Issue of the Digest (uncorrected)
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COURT OF APPEALS
CIVIL PROCEDURE
Despite the Absence of a Motion to Dismiss on Forum Non Conveniens Grounds, the Court Properly Dismssed the Action on that Ground (After Briefing by the Parties)/The Fact that the Underlying Transaction Was to Be In American Dollars Was Not Enough to Justify Bringing the Action (Involving Foreign Banks and Parties) in New York State
The Court of Appeals, in a full-fledged opinion by Judge Smith, determined Supreme Court properly dismissed the action on "forum non conveniens" grounds, even though no motion to dismiss on that ground had been made. Although Supreme Court raised the issue, the court asked to parties to brief it. In addition, the Court of Appeals noted that, although the underlying dispute involved millions of dollars, the fact that American dollars were involved was not enough to hold the case in New York State. The dispute was between a bank in Dubai and a partnership (AHAB) in Saudi Arabia. The third-party defendant, Al-Sanea, was a citizen of Saudi Arabia, and another third-party defendant, Awal Bank BSC, was headquartered in Bahrain:
We held in VSL Corp. v Dunes Hotels & Casinos, Inc. (70 NY2d 948 [1988]) that it was error for the Appellate Division to dismiss a complaint sua sponte on forum non conveniens grounds, adding that such a dismissal may occur "only upon the motion of a party" (id. at 949). Here, though no party formally moved to dismiss plaintiff's complaint because of the inconvenience of the forum, the issue was briefed and argued at Supreme Court. We hold that VSL did not bar the court from dismissing the complaint under these circumstances. We also hold that, on this record, Supreme Court was correct as a matter of law in dismissing both the complaint and the third-party complaint. * * *
While the idea of dismissing the main complaint on forum non conveniens grounds was first mentioned by the Supreme Court Justice, he gave the parties a full opportunity to address the issue indeed, he asked them to do so. Al-Sanea argued in favor of dismissing the complaint on forum non conveniens grounds, though he did not serve motion papers seeking that relief. We see no reason to read CPLR 327(a) as prohibiting a forum non conveniens dismissal where only the formality of a document labeled "notice of motion" was lacking, and where AHAB, the only party opposed to dismissal, neither objected to nor was prejudiced by the omission of that formality. * * *
Our State's interest in the integrity of its banks is indeed compelling, but it is not significantly threatened every time one foreign national, effecting what is alleged to be a fraudulent transaction, moves dollars through a bank in New York. Indeed, the parties here agree that, as a practical matter, any dollar transaction comparable in size to the one now at issue must go through New York ... . That does not mean that every major fraud case in the world in which dollars are involved belongs in the New York courts. New York's interest in its banking system "is not a trump to be played whenever a party to such a transaction seeks to use our courts for a lawsuit with little or no apparent contact with New York" ... . Mashreqbank PSC v Ahmed Hamad Al Gosaib i & Bros Co, 2014 NY Slip Op 02381, CtApp 4-8-14
CRIMINAL LAW
Criteria for Submission of Lesser Included Offense Explained
The Court of Appeals, in a full-fledged opinion by Judge Read, over a dissent, determined the trial court properly refused to submit the lesser included offence of reckless manslaughter to the jury. The victim died of a deep, forceful stab wound. The pathologist testified the wound could not have been inflicted by waving a knife around, which is what the defendant claimed he did. In explaining the criteria for submission of a lesser included offense, the Court of Appeals wrote:
A party who seeks to have a lesser included crime charged to the jury must satisfy a two-pronged inquiry. First, the crime must be a lesser included offense within the meaning of Criminal Procedure Law § 1.20 (37). Here, defendant asked the trial judge to charge second-degree manslaughter, which is a lesser included crime of second-degree intentional murder ... . Second, the party making the request for a charge-down "must then show that there is a reasonable view of the evidence in the particular case that would support a finding that [the defendant] committed the lesser included offense, but not the greater" (...Criminal Procedure Law § 300.50 [1]...). In assessing whether there is a "reasonable view of the evidence," the proof must be looked at "in the light most favorable to the defendant" ..., which requires awareness of "the jury's right to accept some part of the evidence presented by either side and reject other parts of that proof" ... . We have never, however, "countenance[d] selective dissection of the integrated testimony of a single witness as to whom credibility, or incredibility, could only be a constant factor" ... .
A "reasonable view of the evidence" does not mean, as defendant insists, that a trial court must charge reckless manslaughter as a lesser included offense of second-degree murder unless the record "completely excludes the possibility that the defendant acted recklessly." People v Rivera, 2014 NY Slip Op 02379, CtApp 4-8-14
EMPLOYMENT LAW/MUNICIPAL LAW
No Private Right of Action for Unequal Pay Under Civil Service Law Section 115
The Court of Appeals, over a dissent, determined Civil Service Law section 115 does not create a private right of action concerning unequal pay for the same work. Rather, section 115 merely states a policy, unenforceable by the courts:
Civil Service Law Article VIII, "Classification and Compensation of Employees", contains three titles, the first of which (Title A), entitled, "Classification and Allocation of Positions", begins with section 115, "Policy of the state," which provides:"In order to attract unusual merit and ability to the service of the state of New York, to stimulate higher efficiency among the personnel, to provide skilled leadership in administrative departments, to reward merit and to insure to the people and the taxpayers of the state of New York the highest return in services for the necessary costs of government, it is hereby declared to be the policy of the state to provide equal pay for equal work, and regular increases in pay in proper proportion to increase of ability, increase of output and increase of equality of work demonstrated in service."
Courts of this State have routinely interpreted section 115 and its predecessor, the nearly identically-worded former Civil Service Law § 37, as merely enunciating a policy, conferring no jurisdiction on a court to enforce what is simply that - a statement of policy... . * * *
It is clear that Section 115 is a preamble to Civil Service Law article VIII, and no private right of action flows from it. Article 14 of the Civil Service Law (the Taylor Law) provides the mechanism for represented employees to challenge alleged wage disparities between classifications. Matter of Subway Surface Supervisors Assn v New York City Tr Auth, 2014 NY Slip Op 02380, CtApp 4-8-14
EMPLOYMENT LAW/ASSOCIATIONS/CIVIL PROCEDURE
A Union Is Not an Entity Separate from Its Members---A Union, Therefore, Can Not Be Sued By a Member Unless Every Member Participated In the Action Which Gave Rise to the Suit
The Court of Appeals, in a full-fledged opinion by Judge Abdus-Salaam, over a dissent, upheld the so-called "Martin" rule (Martin v Curran, 303 NY 276 [1951]) which prohibits a suit against an unincorporated association, here a union, unless the suit can be maintained against every member of the association. The executive board of the union decided against taking plaintiff's grievance to arbitration. Because only the executive board participated in the decision, plaintiff's suit against the union was prohibited by statute:
In a 4-3 decision authored by Judge Desmond, this Court held in Martin that a voluntary unincorporated association "is neither a partnership nor a corporation. It is not an artificial person, and has no existence independent of its members" (303 NY at 280). The Court determined that "for better or worse, wisely or otherwise, the Legislature has limited . . . suits against association officers, whether for breaches of agreements or for tortious wrongs, to cases where the individual liability of every single member can be alleged and proven" (id. at 282). Although there were policy considerations that might suggest a different result, the Martin Court was "under the command of a plainly stated, plainly applicable statute, uniformly held by this court, for many years, to require pleading and proof of authorization or ratification by all the members of the group" (id. at 280). That statute, General Associations Law § 13, is entitled "Action or proceeding against unincorporated association" and provides:"An action or special proceeding may be maintained, against the president or treasurer of such an association, to recover any property, or upon any cause of action, for or upon which the plaintiff may maintain such an action or special proceeding, against all the associates, by reason of their interest or ownership, or claim of ownership therein, either jointly or in common, or their liability therefor, either jointly or severally. Any partnership, or other company of persons, which has a president or treasurer, is deemed an association within the meaning of this section."The Martin Court also noted that McCabe v Longfellow (133 NY 89 [1892]), the leading case on the right to maintain an action against an unincorporated association, held that a plaintiff could not maintain an action against the officer of an unincorporated association "unless the debt which he seeks to recover is one upon which he could maintain an action against all the associates by reason of their liability therefor" (303 NY at 281...), and that there had been a "line of consistent decisions to that effect" since McCabe. Ultimately, the Martin Court concluded that, because a labor union is a voluntary unincorporated association, the plaintiff was required to plead and prove that each member of the union authorized or ratified the alleged wrongful conduct. Palladino v CNY Centro Inc, 2014 NY Slip Po 02378, CtApp 4-8-14
FAMILY LAW/CRIMINAL LAW
Gabriela A's Actions Constituted Disobedience Under PINS Criteria, Not Criminal Actions (Resisting Arrest/Obstruction of Governmental Administration) Under Juvenile Delinquency Criteria
The Court of Appeals, in a full-fledged opinion by Judge Read, over a dissent, determined, under the facts, a "Person In Need of Supervision (PINS)" should not have been adjudicated a juvenile delinquent. Gabriela A., a PINS who had left the non-secure facility where she was placed, apparently resisted to some extent when police officers came to return her to the facility. After the fact-finding hearing, Gabriela A was placed in a secure facility pending disposition. Family Court ultimately determined Gabriela A was a juvenile delinquent finding Gabriele A had committed acts, which, if committed by an adult, would constitute the criminal offenses of obstruction of governmental administration and resisting arrest. The Court of Appeals did not rule out the procedure used by Family Court, which essentially converted a PINS proceeding to a Juvenile delinquency proceeding. Rather, the court determined, under the facts, Gabriela A's behavior was properly characterized as PINS behavior, not criminal behavior:
The crime of resisting arrest requires that a person intentionally prevent "an authorized arrest" (Penal Law § 205.30). The restraint of a PINS pursuant to Family Court Act § 718, however, is not the same as a criminal arrest ... . A PINS proceeding is fundamentally civil in nature. ... Thus, a PINS who resists being restrained or transported back to a placement facility is not resisting arrest within the meaning of Penal Law § 205.30.
Next, a person is guilty of the misdemeanor of obstructing governmental administration when he or she "intentionally obstructs, impairs or perverts the administration of law or other governmental function or prevents or attempts to prevent a public servant from performing an official function, by means of intimidation, physical force or interference" (Penal Law § 195.05). Probation officers qualify as "public servants" within the broad definition supplied in the Penal Law (see Penal Law § 10.00 [15]), and Gabriela A. admitted that she wanted to "make it hard" for Officer Flores and the other probation officers to handcuff and take her to the non-secure facility. On the other hand, the legislature has defined a PINS to include someone who is "habitually disobedient and beyond the lawful control of . . . lawful authority" (Family Court Act § 712 [a]). Thus, a PINS's disobedience and obstruction of "lawful authority" is not necessarily the same as an adult's. Since Family Court Act §§ 720 (1) and (2) forbid placement of a PINS in a secure facility, the legislature surely did not intend the type of behavior that might cause a child to be designated a PINS in the first place to become the basis for secure detention ... . Matter of Gabriela A, 2014 NY Slip Op 02376, CtApp, 4-8-14
APPELLATE DIVISION
ADMINISTRATIVE LAW/MUNICIPAL LAW/EMPLOYMENT LAW
Penalty Which Effectively Made It Impossible for an Architect to Practice His Profession Too Severe
The First Department found the punishment imposed by the Department of Buildings (DOB) on an architect for falsely representing he was licensed during a six-month suspension from practice was too severe:
...[W]e find that the penalty imposed is excessive upon considering the following factors: DOB did not place any temporal limitation on the prohibition of petitioner filing documents, nor did it explain why such a permanent penalty was imposed; petitioner is a solo practitioner for whom over ninety percent of his business is in New York City; the prohibition applies to the entire city, and would essentially end petitioner's independent architectural business, thus depriving him of his livelihood; and respondent has never alleged, much less made any showing, that the falsehood at issue pertained to the substance or content of the building plans and thus presented potential safety risks which Administrative Code of City of NY § 28-211.1.2 was designed to address... . Matter of Benlevi v New York City Dept of Bldgs, 2014 NY Slip Op 02396, 1st Dept 4-8-14
LEGAL MALPRACTICE/NEGLIGENCE/ATTORNEYS
Failure to Allege a Favorable Result Would Have Obtained "But For" the Attorney's Alleged Malpractice Required Dismissal of the Complaint
The Second Department determined a legal malpractice action was properly dismissed because the plaintiff failed to adequately allege that but for the malpractice the result would have been favorable to the plaintiff. The court explained the elements of a legal malpractice action:
To recover damages in a legal malpractice action, a plaintiff must establish "that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession' and that the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages" ... . "To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence" ... . " A claim for legal malpractice is viable, despite settlement of the underlying action, if it is alleged that settlement of the action was effectively compelled by the mistakes of counsel'" ... . Nonetheless, a plaintiff's conclusory allegations that merely reflect a subsequent dissatisfaction with the settlement, or that the plaintiff would be in a better position but for the settlement, without more, do not make out a claim of legal malpractice ... . Benishai v Epstein, 2014 NY Slip Op 02404, 2nd Dept 4-9-14
CIVIL PROCEDURE
Court Has Discretion to Deny a Motion to Dismiss for Failure to Prosecute Pursuant to CPLR 3216 Even in the Absence of an Adequate Excuse and a Showing of a Potentially Meritorious Cause of Action
In finding plaintiff did not intend to abandon the action, the Second Department explained the "extremely forgiving" nature of CPLR 3216:
Where a 90-day demand to resume prosecution of an action pursuant to CPLR 3216(b)(3) has been properly served, a plaintiff may avoid dismissal, as a matter of law, by either timely filing a note of issue or moving, before the default date, to vacate the notice or to extend the 90-day period (see CPLR 3216[c]...). Even where a plaintiff has failed to pursue either of these options, however, "the statute prohibits the Supreme Court from dismissing a complaint based on failure to prosecute whenever the plaintiff has shown a justifiable excuse for the delay and the existence of a potentially meritorious cause of action" ... .
Moreover, CPLR 3216 is an "extremely forgiving" statute ..., which "never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff's action based on the plaintiff's unreasonable neglect to proceed" ... . Under the plain language of CPLR 3216, a court retains some "residual discretion" to deny a motion to dismiss, even when a plaintiff fails to comply with the 90-day requirement and additionally fails to proffer an adequate excuse for the delay or a potentially meritorious cause of action ... . Thus, while the statute prohibits the Supreme Court from dismissing a complaint based on failure to prosecute whenever the plaintiff has shown a justifiable excuse for the delay and the existence of a potentially meritorious cause of action (see CPLR 3216[e]...), "such a dual showing is not strictly necessary in order for the plaintiff to escape such a dismissal" ... .
Here, the record demonstrates affirmative steps taken by the plaintiff to continue the prosecution of this action that are inconsistent with an intent to abandon it. Ramon v Zangari, 2014 NY Slip Op 02420, 2nd Dept 4-9-14
CIVIL PROCEDURE/NEGLIGENCE/MUNICIPAL LAW
Service of a Notice of Claim on the City Did Not Constitute the Service of a Notice of Claim on the New York City Transit Authority
The First Department determined the service of a notice of claim on the City did not constituted the service of a notice of claim on the New York City Transit Authority:
It is well settled that service of a notice of claim on the City through the Comptroller's Office is not service upon a separate public authority ... . Since plaintiff did not comply with the condition precedent of service of a notice of claim upon the Transit Authority defendants, and they deny having received the notice of claim from the Comptroller's Office, dismissal is required. Glasheen v Valera, 2014 NY Slip Op 02512, 1st Dept 4-10-14
CONSUMER LAW
General Business Law 349 Action Must Be Based Upon a Deceptive Act Which Has an Impact on the General Public
The Third Department determined an action pursuant to General Business Law 349 was properly dismissed because the underlying financial service (re: tax deferred retirement plans) was offered to school districts, not the general public:
"A cause of action to recover damages pursuant to General Business Law § 349 has three elements: first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act" ... . "The threshold requirement of consumer-oriented conduct is met by a showing that 'the acts or practices have a broader impact on consumers at large' in that they are 'directed to consumers' or 'potentially affect similarly situated consumers'" .. . "Consumers," in turn, generally are defined as "those who purchase goods and services for personal, family or household use" ... . An act or practice will be deemed to be deceptive where it "is likely to mislead a reasonable consumer acting reasonably under the circumstances" ... .
Applying these principles to the matter before us, it is readily apparent that Supreme Court properly granted defendant's motion to dismiss. As a starting point, the underlying complaint fails to sufficiently allege that defendant's purportedly "deceptive practices [were] aimed at the general public" ... . In this regard, it is undisputed that defendant contracted with the plan sponsors, i.e., the relevant school districts, and not the districts' individual employees, the latter of whom selected their particular investment options from the list of service providers chosen by their employers. School districts, as business-like entities, cannot properly be viewed as consumers for purposes of General Business Law § 349 ... . Benetech Inc v Omni Fin Group Inc, 2014 NY Slip Op 02480, 3rd Dept 4-10-14
CONTRACT LAW/NEGLIGENCE
Breach of Contract Allegations Did Not Give Rise to Tort Causes of Action---No Duty Independent of the Contract Itself
The First Department determined that the negligence causes of action were subsumed in the breach of contract allegations and could not be separately pled:
Breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated ... . Allegations of negligence based on defects in construction of a condominium sound in breach of contract rather than tort ... . A claim for negligent misrepresentation is not separate from a breach of contract claim where the plaintiff fails to allege a breach of any duty independent from contractual obligations ... . Here, plaintiff failed to allege any legal duty that would give rise to an independent tort cause of action. Neither General Business Law art 23-A nor its regulations create a special duty or support a private right of action. Thus, the negligence and negligent misrepresentation claims were duplicative of the breach of contract claim and did not state a cause of action. Board of Mgrs of Soho N 267 W 124th St Condominium v NW 124 LLC, 2014 NY Slip Op 02513, 1st Dept 4-10-14
CORPORATION LAW/LANDLORD-TENANT
Shareholder in a Cooperative Apartment Corporation Had Right to Inspect Books
The Second Department determined a shareholder in a cooperative apartment corporation (Acropolis) had a right to inspect the corporate books, including the minutes of board meetings:
...[T]he petitioner satisfied the requirements of Business Corporation Law § 624(b), and is, therefore, entitled to a list of shareholders and their mailing addresses ... as well as all Board meeting minutes from 2001 to the present. Moreover, in light of the terms of the relevant proprietary lease ..., the petitioner established his contractual right to inspect all of Acropolis's books of account from 2001 to the present. With respect to the petitioner's entitlement to inspect additional corporate documents, "a shareholder has a common-law right to inspect a corporation's books and records if the inspection is sought in good faith and for a valid purpose" ... . Contrary to Acropolis's contention, the Supreme Court was not required to hold a hearing prior to issuing its order and judgment directing it to allow the petitioner to review its books and records, because no substantial question of fact existed as to the petitioner's good faith and purpose in seeking Acropolis's books and records... . Matter of Goldstein v Acropolis Gardens Realty Corp, 2014 NY Slip Op 02436, 2nd Dept 4-9-14
CRIMINAL LAW/EVIDENCE
Intent Must Exist Simultaneously with the Act/Accidental Discharge of a Firearm, Even Where the Shooter Intends to Assault the Victim, Does Not Constitute Intentional Assault/Loss of Police Officer's Handwritten Notes Did Not Mandate Adverse Inference Jury Charge---Insufficient Showing of Prejudice
The First Department determined the trial court did not give the right response to a question from the jury and reversed the intentional assault conviction. The jury asked whether a person who intends to commit assault is guilty of intentional assault if the gun goes off accidentally. The trial court answered "yes." The First Department determined the answer should have been "no" because the intent must be simultaneous with the act. The First Department further determined that the loss of the police officer's handwritten notes was a Brady/Rosario violation, but the defendant failed to demonstrate prejudice flowing from the loss:
We agree with defendant that the court's response erroneously allowed the jury to find defendant guilty of intentional assault without finding that the intent element of that crime existed beyond a reasonable doubt. "It is a well-established rule of law that the intent to commit a crime must be present at the time the criminal act takes place" ... . The intent element is not satisfied if, as in the jury's hypothetical, the individual does not intend to pull the trigger at the moment the gun discharges. While those facts might have supported liability for a crime requiring a lesser mens rea than acting intentionally, defendant here was not charged with such a crime. Because the court's response to the jury's note incorrectly signaled that an accidental firing of the gun could support a conviction for intentional assault, the conviction on that count must be reversed. People v Lee, 2014 NY Slip Op 02507, 1st Dept 4-10-14
CRIMINAL LAW/EVIDENCE
No Justification for Handcuffing Defendant/Handcuffing Constituted an Arrest Before Officer Had Probable Cause to Arrest
The First Department determined probable cause for defendant's arrest did not exist when defendant was handcuffed and the act of handcuffing constituted an arrest, not a detention pending information providing probable cause:
During a buy and bust operation, a ghost undercover detective issued a radio transmission identifying defendant as a participant in a drug sale, made to another undercover officer. Based on that radio transmission describing defendant and his location, a third officer approached defendant on the sidewalk, identified himself, and asked defendant to put his hands up. When defendant acted "a little resistant," the officer attempted to handcuff him. Defendant then resisted, and the police forcibly handcuffed him.
The suppression court [ruled] that although when the officer stopped the defendant, he did not have probable cause to arrest him based on the information that he had received from the radio transmission, the officer obtained probable cause to arrest defendant after the purchasing undercover officer subsequently radioed his confirmatory identification. ...[By] finding that there was no probable cause to arrest defendant until the confirmatory identification, the court implicitly found that the initial apprehension, which preceded that identification, was a proper temporary detention based on reasonable suspicion and that the application of handcuffs on defendant did not transform the detention into a full-scale arrest.
...[W]e reject the People's argument that defendant was not under arrest at the point when he was handcuffed. Although the use of handcuffs is not dispositive of whether an investigatory detention on reasonable suspicion has been elevated to an arrest, handcuffing is permissible in such a detention only when justified by the circumstances ... . In this case, the police had no reason to believe that defendant was either armed or dangerous. Nor was there any indication on the record that defendant offered any resistance prior to the handcuffing, or gave the police any reason to believe that he might flee. People v Blanding, 2014 NY Slip Op 02508, 1st Dept 4-10-14
CRIMINAL LAW
Courtroom Properly Closed During Testimony of Undercover Officer
The First Department determined the trial court properly closed the courtroom and excluded defendant's sister from the courtroom during the testimony of the undercover officer:
...[T]he evidence established the type of overriding interest warranting the limited closure of the courtroom that has been upheld ... . The undercover officer's testimony at the hearing supported the court's finding that testifying at trial in an open courtroom would compromise his undercover work and jeopardize his and his family's safety ... . The officer testified that he had been working undercover for four years, that he was on active duty and bought drugs for buy and bust arrests three or four times per week, and that he had made about 10 purchases near where he bought the drugs from defendant. The officer further testified that several of his investigations were ongoing, that certain targets remained at large, that he had been verbally threatened while working undercover, and that he took numerous precautions to conceal his identity when he had to testify in court. The court's decision to exclude defendant's sister, who lived within two blocks of the location where the officer bought drugs from defendant and where he continued to work undercover, is consistent with our prior holdings ... . The officer testified that he was concerned that defendant's sister might expose his identity. * * *
...[A]s the Court of Appeals has held, where the record in a buy-and-bust case "makes no mention of alternatives but is otherwise sufficient to establish the need to close the particular proceeding . . . it can be implied that the trial court, in ordering closure, determined that no lesser alternative would protect the articulated interest" ... . People v Johnson, 2014 NY Slip Op 02510, 1st Dept 4-10-14
CRIMINAL LAW
Unauthorized Use of Another's Credit Card Number Is Not Identity Theft Where the Card Owner's Identity Is Not Otherwise Assumed/Unauthorized Use of Another's Credit Card Number Can Constitute Possession of Stolen Property
The First Department, in a full-fledged opinion by Justice Acosta, determined: (1) the use of another's credit card number does not constitute identity theft unless the person using the number assumes the other's identity; and (3) the use of another's credit card number constitutes possession of stolen property: THIS CASE HAS BEEN REVERSED
This appeal raises questions about the elements of identity theft and whether intangible property can be criminally possessed, where a defendant used his associate's credit card number to pay for hotel expenses without authorization. Specifically, we are called upon to determine, first, whether assumption of identity is a discrete element of identity theft or whether it occurs automatically when a person uses another's personal identifying information, and second, whether criminal possession of stolen property includes intangible property, namely a credit card number. Regarding the first issue, we find that to secure a conviction for identity theft the People must prove not only that a defendant used another's personal identifying information, but that he or she consequently assumed the identity of that person. Because the hotel was aware of defendant's identity, he did not assume the identity of his associate by charging the credit card and, accordingly, the evidence was legally insufficient to support his conviction of identity theft. As to the second issue, we have determined that the legislature intended intangibles, including credit card numbers, to fall within the ambit of criminal possession of stolen property. Defendant constructively possessed his associate's stolen credit card number, and thus he was properly convicted of the latter offense. People v Barden, 2014 NY Slip Op 02527, 1st Dept 4-10-14
CRIMINAL LAW/APPEALS
Weight of the Evidence Review Required Reversal
The Second Department determined the defendant's conviction was not supported by the weight of the evidence---there were too many unexplained problems in the People's proof:
Although great deference is accorded the jury's opportunity to view the witnesses, hear the testimony, and observe demeanor ..., objective facts, which were not adequately explained, cast doubt upon the officers' credibility, including the loss of the arresting officer's memo book, the fact that the ammunition allegedly retrieved from the gun was only submitted to the police laboratory for analysis five days after the gun was submitted for analysis, and the fact that a photograph of the gun was exhibited in the precinct with a caption referring to a white lie. Further, the eyewitness who initially called the police to the scene testified at the trial that the man involved in the incident was not the defendant, and that the police arrested the wrong man. Upon the exercise of our factual review power (see CPL 470.15), we find that the rational inferences which can be drawn from the evidence presented at trial do not support the conviction beyond a reasonable doubt. Thus, the judgment must be reversed and the indictment dismissed... . People v Battle, 2014 NY Slip Op 02447, 2nd Dept 4-9-14
CRIMINAL LAW/ATTORNEYS
When the Police Are Aware Suspect Is Represented by an Attorney and the Attorney's Assistance Is Specifically Requested, the Attorney Must Be Contacted Before Conducting a Lineup Identification Procedure
Although the issue was not raised by the facts in the case, the Second Department noted the proper procedure for a lineup when the police are aware the suspect is represented by an attorney:
Where police are "aware that a . . . defendant is represented by counsel and the defendant explicitly requests the assistance of his attorney," the police may not proceed with a lineup procedure, "without at least apprising the defendant's lawyer of the situation and affording him or her an opportunity to appear" ... . People v Blyden, 2014 NY Slip Op 02448, 2nd Dept 4-9-14
CRIMINAL LAW
Failure to Give the Jury Instruction on Intoxication Required Reversal
The Second Department reversed defendant's conviction, finding that the trial court erred by not giving the intoxication charge to the jury. There was sufficient evidence defendant was so intoxicated at the time he committed the sexual offense, he could not form the requisite intent:
According to the defendant, during the night or early morning before he committed the instant offense, he finished drinking a "big" bottle of vodka. Then, within the hour leading up to the crime, he "kept pouring cognac" in his coffee and drinking it. The complainant observed the defendant drinking cognac shortly before he committed the crime, and observed that he "smelled a little bit like" alcohol. Additionally, the complainant's mother knew that the defendant had a bottle of cognac in his possession because she had bought him a bottle as a gift.
The defendant further testified that, before he committed the acts constituting the instant offense, he "started to feel like out of [his] mind" and he did not have "control of the situation." The complainant testified that, before the defendant committed the criminal acts against her, he said several "weird" things to her and acted in a "weird" manner. She opined that the defendant "wasn't thinking" when he committed the instant offense.
With the foregoing in mind, we conclude that "there is sufficient evidence of intoxication in the record for a reasonable person to entertain a doubt as to the element of intent on that basis" ... .
Contrary to the People's contention, intent is an element of criminal sexual act in the first degree, and " the intent required is the intent to perform the prohibited acti.e., the intent to forcibly compel another to engage in [oral or] anal sexual conduct"' ... . People v Velcher, 2014 NY Slip Op 02464, 2nd Dept 4-9-14
CRIMINAL LAW/EVIDENCE
Automobile Exception to Warrant Requirement Applied
The Third Department determined the police had probable cause to conduct a warrantless search of the glove box of defendant's car based upon information provided by a confidential informant:
...[T]here was probable cause for the search of the vehicle pursuant to the automobile exception to the warrant requirement, which permits a search of a vehicle where there is probable cause to believe that contraband or evidence of a crime will be found inside ... . Following defendant's arrest, the information furnished by the confidential informant provided the police with probable cause to believe that there was a large quantity of ecstasy in the glove box. Inasmuch as the police were authorized to conduct a warrantless search of defendant's vehicle, County Court properly denied his suppression motion. People v Portelli, 2014 NY Slip Op 02467, 3rd Dept 4-10-14
CRIMINAL LAW/APPEALS
Waiver of Appeal Invalid
The Second Department determined defendant's waiver of his right to appeal, which included a written waiver, was invalid:
A waiver of the right to appeal is effective only so long as the record demonstrates that it was made knowingly, intelligently and voluntarily" ... . " Though a trial court need not engage in any particular litany' or catechism in satisfying itself that a defendant had entered a knowing, intelligent and voluntary appeal waiver, a trial court must make certain that a defendant's understanding' of the waiver . . . is evident on the face of the record" ... . Further, it must be made clear to the defendant that an appeal waiver " is separate and distinct from those rights automatically forfeited upon a plea of guilty'" ... . "A detailed written waiver can supplement a court's on-the-record explanation of what a waiver of the right to appeal entails, but a written waiver does not, standing alone, provide sufficient assurance that the defendant is knowingly, intelligently and voluntarily giving up his or her right to appeal as a condition of the plea agreement'" ... .
Here, although the defendant executed a written waiver of his right to appeal, the defendant's understanding of the appeal waiver is not evident on the face of the record due to the deficiency of the oral colloquy conducted by the Supreme Court in light of the absence of any mention of the waiver during the discussion of the terms of the plea. After the plea agreement had been reached, the court told the defendant that "[b]efore I accept your plea, you need to sign a waiver of your right to appeal." First, the court's "terse colloquy [which included this mandatory-sounding language] at the plea allocution failed to sufficiently advise the defendant of the nature of his right to appeal" ... . Second, the court suggested that the right to appeal is automatically forfeited upon pleading guilty when it advised the defendant that the written appeal waiver "tells me you understand the rights you have waived by pleading guilty" ... . Accordingly, under these circumstances, including the defendant's relative inexperience with the criminal justice system ..., the defendant's appeal waiver was invalid ... . People v Pressley, 2014 NY Slip Op 02461, 2nd Dept 4-9-14
DEFAMATION
Remarks Made In the Course of Litigation Privileged
The Second Department determined that the allegedly defamatory remarks were privileged because they were made during the course of litigation:
To properly state a cause of action alleging defamation, a plaintiff must allege that, without privilege or authorization, and with fault as judged, at minimum, by a negligence standard, the defendant published to a third party a false statement ... . Additionally, unless the defamatory statement fits within one of the four "per se" exceptions ..., a plaintiff must allege that he or she suffered "special damages"--"the loss of something having economic or pecuniary value" ... . Where an allegedly false statement is defamatory per se, the law presumes that damages will result, so the plaintiff need not allege or prove them ... . An otherwise defamatory statement may be "privileged" and therefore not actionable ... . Generally, as relevant here, statements made at all stages of a judicial proceeding in communications among the parties, witnesses, counsel, and the court are accorded an absolute privilege, so long as the statements may be considered in some way "pertinent" to the issue in the proceeding ... . This privilege, or "immunity" ..., applies to statements made in or out of court, on or off the record, and regardless of the motive with which they were made... . El Jamal v Weil, 2014 NY Slip Op 02408, 2nd Dept 4-9-14
EMPLOYMENT LAW/HUMAN RIGHTS LAW/CIVIL PROCEDURE
Alleged Discriminatory Acts Did Not Have an "Impact" in New York---Therefore the Lawsuit Could Not Be Maintained Under the New York City and New York State Human Rights Law
The First Department determined a lawsuit based on alleged violations of New York State and New York City Human Rights Law could not be maintained because the defendants were out-of-state residents and because the discriminatory actions complained of took place outside the United States, despite plaintiff's being employed in New York:
The State and City Human Rights Laws do not apply to acts of discrimination against New York residents committed outside their respective boundaries by foreign defendants ... . In analyzing where the discrimination occurred, "courts look to the location of the impact of the offensive conduct" ... . A non-New York City resident cannot avail him or herself of the protections of the City Human Rights Law unless he or she can demonstrate that the alleged discriminatory act had an impact within the City's boundaries ... . Although plaintiff does not reside in New York City, she resides within the state and is employed by the NBA which is based in New York City. However, the order on appeal addresses plaintiff's claims against [defendants], none of which are residents of this state. Thus, the focus is on whether the actions these defendants are alleged to have committed had an impact within the respective boundaries of the City and State of New York, in order for the court to exercise jurisdiction over them. Plaintiff contends that the decision to reassign her and later reduce her responsibilities took place within the City boundaries and, therefore, her place of employment is where the impact of the alleged discriminatory acts occurred. However, it is the place where the impact of the alleged discriminatory conduct is felt that controls whether the Human Rights Laws apply, not where the decision is made ... . This standard applies whether the claim is made under the City or State Human Rights Laws ... . Without more, plaintiff's mere employment in New York does not satisfy the "impact" requirement. Hardwick v Auriemma, 2014 NY Slip Op 02383, 1st Dept 4-8-14
ENVIRONMENTAL LAW
Commissioner's Finding Site Constituted a Significant Threat to Public Health or Environment Upheld
The Third Department affirmed the Commissioner of Environmental Conservation's denial of petitioner's request to reclassify a hazardous waste site. The site is polluted with PCBs and is classified at level 2 (significant threat to public health or environment--action required). The petitioner sought reclassification at level 3 (no significant threat to public health or environment--action may be deferred). In finding the Commissioner's determination supported by the evidence, the court wrote:
The Commissioner did not ... premise his determination in this matter upon the mere presence of PCBs at the site and a potential for harm. He found that a highly toxic contaminant (i.e., PCBs) was present in concentration levels at the site that exceeded the environmental quality standards (see 6 NYCRR part 703; see also 6 NYCRR former 375-1.4 [b] [7]; 375-2.7 [a] [3] [viii]), and he determined that, under such circumstances, the contaminant could constitute a significant threat. We need not decide in this case whether such exceedances of environmental standards alone can as stated by the Commissioner constitute a significant threat since ultimately he did not premise his determination solely on such ground. Although setting forth in detail the reasons and record proof supporting a conclusion that the onsite impact of the PCB contamination at the site constituted a significant threat, he went on to find record support for actual threats and offsite impact on the river, wetlands and nearby wildlife. The exceedances of groundwater standards was clearly a significant factor; however, it was considered in conjunction with other proof pertinent to the ultimate finding of a significant threat. We are not persuaded that the Commissioner used an analysis at odds with the regulations or case law. Matter of ELG Utica Alloys Inc v Department of Envtl Conservation, 2014 NY Slip Op 02485, 3rd Dept 4-10-14
FAMILY LAW
Neglect Finding Can Be Based Upon a Single Incident of Excessive Corporal Punishment
The Second Department noted that a finding of neglect can be based upon a single incident of excessive corporal punishment:
Neglect may be established by even a single incident of excessive corporal punishment ... . The Family Court's assessment of the credibility of witnesses is entitled to considerable deference ... .Here, contrary to the appellant's contention, the Family Court's finding of neglect of the child Shervon M., based on excessive corporal punishment, was supported by a preponderance of the evidence (see Family Ct Act § 1012[f][i][B]...). The Family Court's finding that the appellant engaged in excessive corporal punishment when he struck the child Shervon M. several times with a belt, causing raised red marks on her arm and legs, is supported by the evidence presented at the fact-finding hearing. Shervon's out-of-court statements that the appellant struck her with a belt were sufficiently corroborated by the caseworker's observations of Shervon's injuries and the appellant's admission to the caseworker that he had struck Shervon with a belt in the past (see Family Ct Act § 1046[a][vi]...). Matter of Nurridin B, 2-14 NY Slip Op 02431, 2nd Dept 4-9-14
FAMILY LAW
Mother's Interference With Relationship Between Father and Child Warranted Modification of Custody Arrangement Entered Into by Stipulation
The Second Department determined father had made a sufficient showing of a change in circumstances to justify a modification of custody arrangements created by stipulation:
Here, the father established that there had been a sufficient change in circumstances since the time of the stipulation. Specifically, he demonstrated that the mother had interfered with his relationship with the child, such that a modification in the custody arrangement was in the best interests of the child. The mother's unfounded allegations of sexual abuse of a child that she made against the father were an act of interference with the parent-child relationship so inconsistent with the best interests of the child as to raise a strong probability that the mother is unfit to act as custodial parent ... . The mother's conduct here in making these unfounded allegations demonstrated a purposeful placement of her self-interest above the interests of others ... . The record shows that the father is more likely than the mother to foster a relationship between the child and the noncustodial parent ... . The mother's unfounded allegations of sexual abuse of a child, along with her other acts of interference in the relationship between the father and child since the stipulation, established a sound and substantial basis for the Family Court's determination that there had been a sufficient change in circumstances warranting a modification of the custody arrangement in the child's best interests. Matter of Fargasch v Alves, 2014 NY Slip Op 02435, 2nd Dept 4-9-14
FAMILY LAW/EVIDENCE/CRIMINAL LAW
Children's Out-Of-Court Statements May Corroborate One Another
The Second Department noted that out-of-court statements by children can corroborate one another in a sexual abuse case:
The Family Court's determination that the maternal stepgrandfather sexually abused the subject children was supported by a preponderance of the evidence (see Family Ct Act §§ 1012[e], [g]; 1046[b][i]...). "It is well established that the out-of-court statements of siblings may properly be used to cross-corroborate one another" ... . Here, the evidence presented at the fact-finding hearing established that, in May 2011, then-10-year-old Naziya D. and 3-year-old Jada A. made independent and consistent out-of-court statements to several individuals describing similar incidents of sexual abuse by the maternal stepgrandfather. Further, the children's statements were corroborated by the petitioner's progress notes and the mother's testimony as to the children's statements ... .Additionally, where, as here, the Family Court is primarily confronted with issues of credibility, its findings must be accorded deference on appeal, as they were supported by the record ... .The Family Court, upon a finding of abuse pursuant to Family Court Act § 1012(e), must make a further finding of the specific sex offenses that were committed, as defined in Penal Law article 130 ... . Even if the Family Court fails to make such a finding, this Court can make the finding that the Family Court should have made... . Matter of Jada A, 2014 Slip Op 02430, 2nd Dept 4-9-14
FREEDOM OF INFORMATION LAW (FOIL)
Intra-Agency Exemption Applied to FOIL Request About AIG Prosecution
The Third Department determined the "intra-agency" exemption applied to documents requested from the Attorney General's office concerning the prosecution of American International Group (AIG):
The intra-agency exemption applies to "opinions, ideas, or advice exchanged as part of the consultative or deliberative process of government decision making" (...see Public Officers Law § 87 [2] [g]...). The purpose of such exemption is "to protect the deliberative process of the government by ensuring that persons in an advisory role [will] be able to express their opinions freely to agency decision makers" ... . Matter of Smith v New York State Off of the Attorney Gen, 2014 NY Slip Op 02488, 3rd Dept 4-10-14
LABOR LAW-CONSTRUCTION LAW
Aeration Tank Constituted an Unventilated Confined Area Requiring Air Quality Monitoring
The First Department determined plaintiff had stated a cause of action under Labor Law 241(6) based upon his inhalation of toxic fumes inside an aeration tank, finding the tank constituted an unventilated confined area requiring air quality monitoring:
The court properly denied the portion of defendants' motion seeking dismissal of plaintiffs' Labor Law § 241(6) claim as predicated on 12 NYCRR 23-1.7(g). We find that, as a matter of law, the aeration tank is an unventilated confined area requiring air quality monitoring ... . Pursuant to 12 NYCRR 23-1.7(g), the atmosphere of an unventilated confined area must be monitored "where dangerous air contaminants may be present or where there may not be sufficient oxygen to support life." Here, the cement tank is a large container used to aerate and clean sewage. Entering the tank poses a potential hazard since, as admitted by a deputy superintendent for the DEP in his deposition, a person could experience oxygen depletion as gases "displace the oxygen." Defendants contend that in order for an area to be a confined space, as defined by 12 NYCRR 12-1.3(f), it must have a restricted means of access, such as a trap door or a manhole. We reject this argument. An area does not need to be accessible only by a narrow opening in order to have a "restricted means of egress" (12 NYCRR 12-1.3[f]). Although the top of the tank was open to the air, access was still restricted as [plaintiff] needed to use a 20-foot ladder to enter and exit the tank. Therefore, given the tank's use in the process of filtering sewage and its restricted means of access, 12 NYCRR 23-1.7(g) is applicable. Cerverizzo v City of New York, 2014 NY Slip Op 02385, 1st Dept 4-8-14
INSURANCE LAW
Although "Imprudent" in Hindsight, Insurer Did Not Breach Duty of Good Faith by Refusing to Offer a Settlement at the Policy Limit
The First Department determined the insurer's failure to make a settlement offer at the policy limit was "imprudent" in hindsight, but did not constitute a breach of its duty of good faith:
We reject plaintiffs' argument that defendant avoided acknowledging the underlying plaintiff's potential damages such that a refusal to offer the policy limit constituted a reckless or conscious disregard of the excess insurer's rights. While there was some indication that damages could be significant if the medical records substantiated the underlying plaintiff's claim of a loss of smell from a severe blow to the head, the record established that defendant's investigation presented a great deal of medical evidence tending to show that the underlying plaintiff's injuries were primarily preexisting soft tissue injuries unrelated to the automobile accident on April 24, 1994. Defendant's investigation included the medical opinion of four physicians that conducted independent medical examinations; one psychologist who conducted a review of the extensive medical records; experienced defense counsel; and separate monitoring counsel for the damages trial. The review of the numerous medical records, which included contradicting evaluations of the underlying plaintiff's treating physicians, provided a justifiable basis to fairly evaluate potential damages and assess the relative risks of declining to offer a settlement of the policy limit.
Given this evaluation, defendant's actions do not amount to bad faith. In hindsight, it is evident that defendant's failure to make a settlement offer of the policy limit was not prudent. However, "[a]n insurer does not breach its duty of good faith when it makes a mistake in judgment or behaves negligently" ... . Here, the assessment of the insured's exposure and the failure to make a settlement offer of the policy limit was a mistake in judgment. It does not demonstrate that defendant acted in bad faith by failing to heed contrary evidence. Instead, the record shows defendant's reasonable belief that, under the No Fault Law, the underlying plaintiff did not sustain a serious injury causally related to the accident. Thus, we find that the record does not demonstrate any pattern of reckless or conscious disregard for plaintiffs' rights. General Motors Acceptance Corp v New York Cent Mut Fire Ins Co, 2014 NY Slip Op 02384, 1st Dept 4-8-14
INSURANCE LAW
No Duty Owed by Agent to Client---Client Never Requested Type of Insurance At Issue
The Second Department determined an insurance agent was not obligated to indemnify the plaintiffs in the underlying action because the client never requested the specific (automobile) coverage at issue. The court explained the nature of a duty owed by an agent to the agent's client:
"An insurance agent or broker has a common-law duty to obtain requested coverage for a client within a reasonable amount of time or to inform the client of the inability to do so" ... . This "duty is defined by the nature of the client's request" ... . "Absent a specific request for coverage not already in a client's policy or the existence of a special relationship with the client, an insurance agent or broker has no continuing duty to advise, guide, or direct a client to obtain additional coverage" ... . Here, Ginsberg, a Nationwide insurance agent who sold the plaintiff ... the subject policies of insurance, established, prima facie, that the plaintiffs did not specifically request automobile coverage, either in connection with their initial 2003 insurance applications, or in connection with subsequent renewal applications. Maxwell Plumb Mech Corp v Nationwide Prop & Cas Ins Co, 2014 NY Slip Op 02412, 2nd Dept 4-9-14
CRIMINAL LAW
Facts Admitted In Guilty Plea Have Subsequently Been Found Insufficient to Constitute the Offense (Possession of Child Pornography)---Yet Vacation of the Conviction Not Warranted
The Third Department determined the fact that judicial interpretation of the law had changed since defendant's guilty plea did not provide a basis for vacation of the plea. The defendant contended he merely viewed child pornography on his computer but did not download, print or save them, and he was unaware the images were stored by the computer's cache function (relying upon People v Kent, 19 NY3d 290 [2012]):
"[A]bsent misrepresentation or other impermissible conduct by state agents, a voluntary plea of guilty intelligently made in the light of the then applicable law does not become vulnerable because later judicial decisions indicate that the plea rested on a faulty premise" ... . Here, defendant's guilty plea was unequivocal, and his motion papers failed to present any evidence that tends to establish that his plea was less than a knowing, voluntary and intelligent choice among the alternatives available to him at that time ... . By his definitive admission of guilt, defendant thus waived his claim that the facts, as previously alleged by him, were not sufficient to establish the crime ... . Accordingly, we find that County Court did not abuse its discretion in denying defendant's motion without a hearing. People v Mauro, 2014 NY Slip Op 02470, 3rd Dept 4-10-14
CRIMINAL LAW/SEX OFFENDER REGISTRATION ACT (SORA)
Remote Drug-Related Convictions and a Single DWAI Not Enough to Assess Points (in a SORA Proceeding) for Substance Abuse
The Third Department determined points for substance abuse should not have veen assessed against the defendant in a SORA proceeding:
Here, there is no indication on this record that either drugs or alcohol played a role in the offense at issue herein or in defendant's prior sex offense. County Court relied on defendant's 1992 convictions for criminal sale of a controlled substance in the third degree, his 2002 conviction for criminal possession of a controlled substance in the seventh degree, and his 2009 conviction for driving while ability impaired. However, in our view these widely spaced incidents are not of the nature or degree to establish a pattern of drug or alcohol use by clear and convincing evidence (see Correction Law § 168-l [5] [a] [ii]...). The 1992 convictions, as well as other information relied upon in the case summary pertaining to defendant's drug and/or alcohol use at that time, are excessively remote ..., and his 2002 conviction for criminal possession of a controlled substance in the seventh degree does not prove drug use ..., leaving his 2009 conviction for driving while ability impaired as the sole evidence of defendant's substance abuse within the past 20 years ... . People v Ross, 2014 NY Slip Op 02472, 3rd Dept 4-10-14
JUDGES
Judge Immune from Suit
The Third Department upheld the dismissal of a suit against a judge which alleged "intentional professional and malicious misconduct." The court explained the applicable law:
It is well settled that a "[j]udge is immune from civil liability for acts done in the exercise of his [or her] judicial function" ... . "Absolute immunity is . . . necessary to assure that judges, advocates, and witnesses can perform their respective functions without harassment or intimidation" ... and "discourages inappropriate collateral attacks on court rulings and fosters judicial independence by protecting courts and judges from vexatious litigation" ... . There are only two recognized exceptions to the broad cloak of judicial immunity, namely "when a [j]udge does not act as a [j]udge, or when a [j]udge, though acting under color of judicial authority, lacks any jurisdiction supporting judicial authority for the action taken" ... . As to the latter exception, there is a clear "'distinction between acts performed in excess of jurisdiction[, which fall within the scope of immunity,] and acts performed in the clear absence of any jurisdiction over the subject matter,'" which do not.... . Best v State of New York 2014 Slip Op 02484, 3rd Dept 4-10-14
FORECLOSURE/CIVIL PROCEDURE
Plaintiff Did Not Demonstrate Standing---No Proof Underlying Debt Was Transferred to the Plaintiff Along with the Mortgage
The Second Department determined the plaintiff in a mortgage foreclosure proceeding did not demonstrate standing because there was no proof the underlying debt was transferred to the plaintiff along with the mortgage:
Where, as here, standing is put into issue by the defendant, the plaintiff must prove its standing in order to be entitled to relief... . In a mortgage foreclosure action, "[a] plaintiff has standing where it is the holder or assignee of both the subject mortgage and of the underlying note at the time the action is commenced" ... . " Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation'" ... . "Where a mortgage is represented by a bond or other instrument, an assignment of the mortgage without assignment of the underlying note or bond is a nullity" . Here, the evidence submitted by the plaintiff in support of its motion did not demonstrate that the note was physically delivered to it prior to the commencement of the action, and the plaintiff similarly failed to submit a written assignment of the note. Bank of NY Mellon v Gales, 2014 NY Slip Op 02402, 2nd Dept 4-9-14
FORECLOSURE
Plaintiff Did Not Establish It Was the Lawful Holder of the Note on the Date the Action Was Commenced
The Second Department determined plaintiff did not demonstrate entitlement to summary judgment because it did not establish it had standing as the lawful holder or assignee of the underlying note. The court explained the applicable law, noting that the assignment of a mortgage without an assignment of the note is a nullity, but the where a note is transferred, the mortgage securing the debt passes as an incident to the note:
Where, as here, the issue of standing is raised by a defendant, a plaintiff must prove its standing to be entitled to relief ... . In a mortgage foreclosure action, a plaintiff has standing where it is both the holder of the subject mortgage and of the underlying note at the time the action is commenced ... . Where a note is transferred, a mortgage securing the debt passes as an incident to the note ... . By contrast, an assignment of a mortgage without assignment of the underlying note or bond is a nullity ... . "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation" ... .
Here, the plaintiff failed to demonstrate its prima facie entitlement to judgment as a matter of law because it did not establish that it had standing as the lawful holder or assignee of the subject note on the date it commenced this action... . MLCFC 2007-9 Mixed Astoria LLC v 36-02 35th Ave Dev LLC, 2014 NY Slip Op 02416, 2nd Dept 4-9-14
NEGLIGENCE
Plaintiff's Allegation of Inadequate Lighting Was a Sufficient Indication She Was Aware of the Cause of Her Fall
The Second Department determined summary judgment should not have been granted to the defendants in a slip and fall case. The court found that plaintiff had presented evidence of the cause of the fall (inadequate lighting) and the defendants did not demonstrate that they neither created the dangerous condition nor had constructive notice of it:
"In order for a landowner to be liable in tort to a plaintiff who is injured as a result of an allegedly defective condition upon property, it must be established that a defective condition existed and that the landowner affirmatively created the condition or had actual or constructive notice of its existence" ... . A plaintiff's inability in a premises liability case to identify the cause of the fall is fatal to the cause of action because a finding that the defendant's negligence, if any, proximately caused the plaintiff's injuries would be based on speculation
Here, the respondents failed to establish, prima facie, that the injured plaintiff did not know what had caused her to fall. The injured plaintiff testified during her deposition that the lighting in the hallway was so poor that she could hardly see her surroundings and that she kept her hand on the wall to guide her down the hallway. This testimony, which the respondents submitted with their motion, itself demonstrated the existence of a triable issue of fact as to whether the alleged lack of adequate lighting was a proximate cause of the accident ... . Additionally, the respondents failed to establish that they neither created the allegedly dangerous condition nor had actual or constructive notice of it ... . Since the respondents failed to satisfy their initial burden of establishing their prima facie entitlement to judgment as a matter of law, their motion should have been denied without regard to the papers submitted in opposition ... . Palahnuk v Tiro Rest Corp, 2014 NY Slip Op 02418, 2nd Dept 4-9-14
NEGLIGENCE
Open and Obvious Condition Precluded Slip and Fall Suit
The Second Department determined a slip and fall case was properly dismissed because the condition which caused the fall, seed pods which had fallen on the steps from a tree, was open and obvious:
The plaintiff allegedly was injured when she slipped and fell on the back steps of the defendant's residence. The plaintiff testified that, prior to her fall, she felt a "hard cone" or "ball" underneath her foot. After her fall, she observed a crushed seed ball, about the size of a golf ball, on the step. Two or three other seed balls and some leaves were scattered about the steps and landing. The seed balls and leaves apparently had fallen from a nearby tree belonging to the defendant's neighbor.
The defendant made a prima facie showing that the complained-of condition was both open and obvious, i.e., readily observable by those employing the reasonable use of their senses, and not inherently dangerous ... . In opposition, the plaintiff failed to raise a triable issue of fact. Scalice v Braisted, 2014 NY Slip Op 02421, 2nd Dept 4-9-14
NEGLIGENCE
Question of Fact About Whether Golfer, Who Was Injured When the Golf Cart He Was Driving Tipped Over, Was Subject to More than the Normal Hazards Associated with Golfing
The Third Department determined there were triable issues of fact about whether the occupants of a golf cart were exposed to more than the usual hazards associated with golf. The cart tipped over on an incline. There was (disputed) evidence indicating wet leaves were on the ground and the tires of the cart were "bald:"
A person who chooses to participate in an athletic or recreational activity "'consents to those commonly appreciated risks which are inherent in and arise out of the nature of the sport generally and flow from such participation'" ... . "[G]olfers are deemed to assume the risks of open topographical features of a golf course" ...and they are "held to a common appreciation of the fact that there is a risk of injury from improperly used carts" ... . Nevertheless, liability may be found where the participant proves "a dangerous condition over and above the usual dangers that are inherent in the sport" ... .
Although plaintiff was an experienced golfer, he had not previously played on this particular course. He claimed that he was driving slowly and cautiously when the car simply slid out of control on wet leaves. Defendant acknowledged that the golf course path where the accident occurred was steep and winding. While defendant disputes the amount of wet leaves that plaintiff contends were on the path, it is uncontested that there were leaves present and that defendant's employees had inspected the area earlier in the day. Significantly, plaintiff produced proof via the testimony of the person with whom he was golfing that, after the accident, he observed that the tires on the golf cart were "bald." Rose v Tee-Bird Golf Club Inc, 2014 NY Slip Op 02481, 3rd Dept 4-10-14
NEGLIGENCE/IMMUNITY
No Negligence Cause of Action Against Commissioner of Mental Health (Based Upon Alleged Statutory Violations)
The Third Department determined claimant, an insanity acquittee, could not bring a negligence cause of action against the Commissioner of Mental Health based upon alleged violations of Criminal Procedure Law 330.20. The court explained the applicable law re: the liability of a governmental agency (special duty/special relationship):
The rule is well established "that an agency of government is not liable for the negligent performance of a governmental function unless there existed a special duty to the injured person, in contrast to a general duty owed to the public" ... . A special duty will only arise from a special relationship, which can be formed in three ways: "(1) when the [governmental entity] violates a statutory duty enacted for the benefit of a particular class of persons; (2) when it voluntarily assumes a duty that generates justifiable reliance by the person who benefits from the duty; or (3) when the [governmental entity] assumes positive direction and control in the face of a known, blatant and dangerous safety violation" ... . Inasmuch as claimant asserts that CPL 330.20 creates a statutory duty for the benefit of the class of which he is a member, i.e., insanity acquittees, only the first of these categories is potentially applicable.
Significantly, "[t]o form a special relationship through breach of a statutory duty, the governing statute must authorize a private right of action" ... . Because CPL 330.20 does not expressly confer upon insanity acquittees the right to seek civil damages for any failure by the Commissioner to follow the statute's provisions, "recovery may be had only if a private right of action can be implied" ... . A private right of action may be fairly implied when all of the prerequisites are fulfilled, namely: "(1) the [claimant] is one of the class for whose particular benefit the statute was enacted; (2) recognition of a private right of action would promote the legislative purpose of the governing statute; and (3) to do so would be consistent with the legislative scheme" ... . In our view, the legislative history supports the finding of the Court of Claims that CPL 330.20 was primarily enacted to benefit the public, rather than insanity acquittees ... . Justice v State of New York, 2014 NY Slip Op 02483, 3rd Dept 4-10-14
REAL PROPERTY LAW
Question of Fact About Whether Good Faith Lender, Which Recorded Its Mortgage First, Had a Duty to Inquire About a Prior Mortgage
The Second Department determined there was a question of fact about the priority of a mortgage held by a good-faith lender for value and recorded first:
"Under New York's Recording Act (Real Property Law § 291) a mortgage loses its priority to a subsequent mortgage where the subsequent mortgagee is a good-faith lender for value, and records its mortgage first without actual or constructive knowledge of the prior mortgage" ... . "[A] mortgagee is under a duty to make an inquiry where it is aware of facts that would lead a reasonable, prudent lender to make inquiries of the circumstances of the transaction at issue" ... . Here, the moving defendants demonstrated, prima facie, that they have a first lien with respect to Lot 56 by submitting evidence that they were good faith lenders for value protected by Real Property Law § 291 ... . However, in opposition, the plaintiff's submissions ... raised a triable issue of fact as to whether the moving defendants had a duty to inquire about whether the mortgage previously entered into .... was intended to encumber the entirety of [the property]. Wells Fargo NA v Savinetti, 2014 NY Slip Op 02428, 2nd Dept 4-9-14
REAL PROPERTY LAW/MUNICIPAL LAW/CONSTITUTIONAL LAW/LANDLORD-TENANT
Code Provision Requiring Issuance of Rental Certificate by City Prior to Leasing an Apartment Deemed Constitutional
The Third Department determined the code provision (Rental Certificate Ordinance or RCO) which required the issuance a rental certificate each time a vacant apartment is about to be leased is constitutional. Entry to the apartment is accomplished either with the consent of the owner, or upon the issuance of a search warrant:
The RCO provided, in relevant part, that "[i]t shall be unlawful for any owner to permit the occupancy of any rental unit subject to [former article X of the Code of the City of Schenectady], unless such unit has a current and valid rental certificate or temporary rental certificate" (Code of City of Schenectady former § 167-59 [A]). Thus, "[w]henever a vacancy shall exist in a rental unit and a leasing is about to occur, or whenever there is a change in occupancy, the owner [must] submit a written application for a rental certificate" (Code of City of Schenectady former § 167-60 [A] [1]) and, "within five working days of receipt of [such] application, the Building Inspector [must] inspect the rental unit to determine if [it] is in compliance with" certain enumerated housing standards (Code of City of Schenectady former § 167-60 [A] [2]). If the Building Inspector is unable to perform the necessary inspection within the five-day window, the property owner may apply for a temporary rental certificate, which "is valid for 30 days or until the unit is inspected . . . , whichever is less" (Code of the City of Schenectady former § 167-60 [B]). In the event that the property owner refuses to grant access to the premises, "the Building Inspector shall apply for a search warrant or court order in an appropriate court and upon a showing that there [are] reasonable grounds to believe that a building or rental unit within [the] building is rented and occupied in violation of" the RCO (Code of the City of Schenectady former § 167-61). A property owner's violation of the RCO may result in the imposition of a fine or other civil or criminal penalties (see Code of the City of Schenectady former § 167-67).
"It is well established that the 4th Amendment protection against unreasonable searches and seizures extends to administrative inspections of private commercial premises. [Thus,] to the extent that the challenged ordinance directly or in practical effect authorizes or requires a warrantless inspection, it will not pass constitutional muster" ... . Here, however, the RCO expressly required either the consent of the property owner or the issuance of a valid search warrant in order for the Building Inspector to conduct the administrative inspection. As the inclusion of the warrant requirement is sufficient to safeguard plaintiff's constitutional rights, his challenge to the facial validity of the RCO must fail ... . Wisoff v City of Schenectady, 2014 NY Slip Op 02479, 3rd Dept 4-10-14
TAX LAW/CORPORATION LAW
Corporate Officer Personally Liable for Outstanding Sales and Use Taxes
The Third Department determined the evidence was sufficient to hold a corporate officer personally liable for outstanding sales and use taxes. The court explained the criteria for such personal liability:
Tax Law § 1133 (a) imposes personal liability on any person who is responsible for collecting tax under Tax Law article 28. A person required to collect tax (a responsible person) includes "any officer, director or employee of a corporation . . . who . . . is under a duty to act for such corporation . . . in complying with any requirement of [Tax Law article 28]" (Tax Law § 1131 [1]). Whether a person has a duty to act for a corporation and is responsible for collecting sales tax is a factual determination to be made on a case by case basis (...20 NYCRR 526.11 [b] [1], [2]). The factors that the courts have considered relevant to this determination include (1) authority to sign corporate checks, (2) responsibility for managing the corporation and maintaining its books, (3) ability to hire and fire employees, (4) status as a corporate officer, and (5) receipt of substantial income from the corporation or stock ownership ... . Significantly, this Court has stressed that "[w]hat must be considered is [the person's] authority and responsibility to exercise control over the corporation, not his [or her] actual assertion of such authority" ... . Matter of Ippolito v Commissioner of NY State Dept of Taxation & Finance, 2014 NY Slip Op 02475, 3rd Dept 4-10-14
REAL PROPERTY TAX LAW/FORECLOSURE
Statutory Notice Requirements for Tax Foreclosure Met
The Third Department determined the tax foreclosure proceedings were valid. The motion to reopen the default judgment was untimely and the statutory notice requirements were met:
A motion to reopen a default judgment of tax foreclosure 'may not be brought later than one month after entry of the judgment'" ... . Significantly, "'the statute of limitations set forth in RPTL 1131 applies even where, as here, the property owner asserts that he or she was not notified of the foreclosure proceeding'"... .
...[W]e reject respondent's contention that the statute of limitations period for its motion to vacate never commenced running because petitioner failed to comply with the notice requirements of RPTL 1125. Pursuant to RPTL 1125 (1) (b) (i), notice of a foreclosure proceeding shall be sent to a party entitled to notice by certified mail and first class mail and "notice shall be deemed received unless both the certified mailing and the ordinary first class mailing are returned by the United States postal service within [45] days after being mailed" ... . Further, where one of the notices is not returned within the requisite period, a petitioner is "'not obligated to take additional steps to notify [the] respondent of the foreclosure proceeding'" ... . Here, the first class mailing sent to respondent in October 2011 was never returned to petitioner. Additionally, although the November 2011 first class and certified mailings were both returned, that did not occur within 45 days; they were returned more than 100 days after being mailed. As a result, the mailings were deemed received and petitioner's obligation to provide notice under the statute was satisfied ... . Matter of County of Clinton, 2014 NY Slip Op 02486, 3rd Dept 4-10-14
TAX LAW/CONSTITUTIONAL LAW/CORPORATION LAW
Tax Law Amendment Allowing New York to Collect Capital Gains Tax from a Nonresident Shareholder in an S Corporation Should Not Have Been Applied Retroactively to a Transaction Which Took Place Three and a Half Years Before the Amendment
In a full-fledged opinion by Justice Richter, over a dissenting opinion, the First Department determined an amendment to the tax law should not be applied retroactively. The amendment allowed New York to collect capital gains tax from a nonresident shareholder in an S corporation which has distributed an installment obligation under section 453 (h)(1)(A) of the Internal Revenue Code:
Determining whether the retroactive application of a tax statute violates a taxpayer's due process rights "is a question of degree" and "requir[es] a balancing of [the] equities"... . In James Sq. [21 NY3d 233], the Court of Appeals recently reaffirmed a three-prong test to determine whether the retroactive application of a tax statute passes constitutional muster. "The important factors in determining whether a retroactive tax transgresses the constitutional limitation are (1) the taxpayer's forewarning of a change in the legislation and the reasonableness of . . . reliance on the old law,' (2) the length of the retroactive period,' and 3) the public purpose for retroactive application'"... .
...[P]laintiffs had "no warning and no opportunity [in 2007] to alter their behavior in anticipation of the impact of the [2010 amendment]".... . * * *
In James Sq., the Court concluded that a retroactive period of 16 months "should be considered excessive and weighs against the State" (21 NY3d at 249). Here, the period of retroactivity was 3 1/2 years nearly three times longer than the period found excessive in James Sq. As in James Sq., we conclude that this excessive period was "long enough . . . so that plaintiffs gained a reasonable expectation that they would secure repose in the existing tax scheme" ... . * * *
The legislative history indicates that enactment of the legislation was necessary to implement the 2010-2011 executive budget by raising tax revenues by $30 million in that fiscal year. Indeed, defendants expressly state in their brief that the legislature made the law retroactive to prevent revenue loss. But "raising money for the state budget is not a particularly compelling justification" and "is insufficient to warrant retroactivity in a case [as here] where the other factors militate against it" (James Sq., 21 NY3d at 250). Caprio v New York State Dept of Taxation & Finance, 2014 NY Slip Op 02399l 1st Dept 4-8-14
TRUSTS AND ESTATES
Objections Based Upon Lack of Due Execution and Lack of Testamentary Capacity Properly Dismissed/Relevant Criteria Explained
The Second Department determined the objections to probate based upon lack of due execution and lack of testamentary capacity were properly dismissed:
In support of that branch of her motion which was for summary judgment dismissing the objection based on lack of due execution, the petitioner made a prima facie showing that the will was duly executed pursuant to EPTL 3-2.1. The deposition testimony of the attorney-drafter, who supervised the execution of the will and acted as an attesting witness, and of the second attesting witness, demonstrated that the statutory requirements for due execution were satisfied ... . "Further, where, as here, the drafting attorney supervised the will's execution, there is a presumption of regularity that the will was properly executed in all respects" ... . "The attestation clause and self-proving affidavit accompanying the propounded will also give rise to a presumption of compliance with the statutory requirements" ... . In opposition to the petitioner's prima facie showing of entitlement to judgment as a matter of law dismissing the objection based on lack of due execution, the objectant relied on hearsay evidence, which, by itself, was insufficient to raise a triable issue of fact ... .
The petitioner established her prima facie entitlement to judgment as a matter of law dismissing the objection based on lack of testamentary capacity by submitting the self-proving affidavit and the deposition testimony of the attesting witnesses. The petitioner's submissions demonstrated that the decedent understood the nature and consequences of making the will, the nature and extent of her property, and the natural objects of her bounty ... . In opposition, the objectant failed to raise a triable issue of fact as to whether the decedent lacked testamentary capacity ... . Matter of Templeton, 2014 NY Slip Op 02445, 2nd Dept 4-9-14
WORKERS' COMPENSATION
Detention by Immigration Officials Did Not Disqualify Claimant from Receiving Workers' Compensation Benefits
The Third Department determined detention by immigration officials did not disqualify claimant from receiving Workers' Compensation benefits. Claimant had been convicted of a felony sex offense, but was sentenced to probation, not incarceration:
We cannot agree with the employer's argument that claimant's detention by immigration officials amounts to incarceration "upon conviction of a felony," thereby rendering him ineligible to receive benefits pursuant to Workers' Compensation Law § 10 (4). That statutory language was enacted in 2007 to codify existing case law (see L 2007, ch 6, § 37; Governor's Program Bill Memo, Bill Jacket, L 2007, ch 6...). In our view, giving plain meaning to each of the words used, the statute reflects an intent that benefits should not be paid if a sentence of incarceration is imposed as punishment for a felony conviction. While claimant was convicted of a felony, his punishment did not include incarceration. Rather, he was sentenced to 10 years of probation. His confinement for immigration purposes, on the other hand, was civil and nonpunitive in nature, and its purpose was to determine whether he should be deported (see 8 USC § 1226...). Accordingly, we are unpersuaded that claimant was "incarcerated upon conviction of a felony" as that phrase is used in the statute. Matter of Islam v BD Constr & Bldg, 2014 NY Slip Op 02474, 3rd Dept 4-10-14