Summaries of Recently Released Decisions to Be Included In the Next Issue of the Digest (uncorrected)
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ADMINISTRATIVE LAW/CIVIL PROCEDURE
Four-Month Statute of Limitations Starts Running When Administrative Agency's Policy Change Is "Readily Ascertainable," Not When Notice of the Policy Change Is Actually Received
The Third Department explained when the four-month statute of limitations begins to run when the triggering event is a policy memorandum issued by an administrative agency:
...[B]oth the statute and case law make clear that the statute of limitations period for a CPLR article 78 proceeding begins to run when "the determination to be reviewed becomes final and binding upon the petitioner" (CPLR 217 ...). Such determination, in turn, "becomes 'final and binding' when two requirements are met: completeness (finality) of the determination and exhaustion of administrative remedies. First, the agency must have reached a definitive position on the issue that inflicts actual, concrete injury and second, the injury inflicted may not be . . . significantly ameliorated by further administrative action or by steps available to the complaining party" ... . In the context of quasi-legislative determinations such as the one at issue here, actual notice of the challenged determination is not required in order to start the statute of limitations clock; rather, the statute of limitations begins to run once the administrative agency's "definitive position on the issue [becomes] readily ascertainable" to the complaining party ... . Matter of School Adm'rs Assn of NY State v New York State Department of Civ Serv, 2015 NY Slip Op 00676, 3rd Dept 1-29-15
ADMINISTRATIVE LAW/APPEALS/EMPLOYMENT LAW
Appellate Court Defers to Agency Interpretation of a Statute When Specialized Knowledge Required
The Third Department affirmed the State Budget Director's determination that state employees normally not entitled to overtime pay are eligible for overtime pay if they worked more than 47.5 hours in a week as a result of Hurricane Sandy. Petitioners sought overtime pay for those who worked more than 40 hours per week. The Third Department explained when an appellate court must defer to the statutory interpretation made by a state agency (the court so deferred here):
Initially, we must determine whether the Budget Director's interpretation of Civil Service Law § 134 (6) is entitled to deference. This Court will defer to the governmental agency responsible for the administration of a statute when interpretation of the language at issue requires the agency's expertise in the matters covered by the statute, but will accord no such deference when "the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent" ... . Although the Civil Service Law provides that the "workweek for basic annual salary" for employees who are eligible for overtime shall not exceed 40 hours (Civil Service Law § 134 ), overtime-ineligible employees are expressly excluded from the coverage of that section, and nothing else in the legislation defines the phrase "normal workweek" as used in Civil Service Law § 134 (6) for such employees or prescribes the number of hours contained in such a workweek. Under these circumstances, in our view, the number of hours in the "normal workweek" of an overtime-ineligible state employee necessarily implicates the Budget Director's specialized knowledge of state employment practices and "involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom" ... . Accordingly, this Court will defer to the Budget Director's determination and uphold it if it is not irrational or unreasonable ... . Matter of Kent v Cuomo, 2015 NY Slip Op 00680, 3rd Dept 1-29-15
Action Should Not Have Been Dismissed Pursuant to CPLR 3211 (a)(4)---Action Was Not "Sufficiently Similar" to Pending Action
The Second Department determined Supreme Court should not have dismissed an action pursuant to CPLR 3211 (a)(4) because the dismissed action was not "sufficiently similar" to a pending action. The initial personal injury action stemmed from alleged Labor Law violations. The second action, alleging a fraudulent conveyance, stemmed from the defendant's transfer of the property where plaintiff was injured:
Pursuant to CPLR 3211(a)(4), a court has broad discretion in determining whether an action should be dismissed on the ground that there is another action pending between the same parties for the same cause of action ... . A court may dismiss an action pursuant to CPLR 3211(a)(4) where there is a substantial identity of the parties, the two actions are sufficiently similar, and the relief sought is substantially the same ... . It is not necessary that "the precise legal theories presented in the first action also be presented in the second action" ... . The critical element is whether both suits arise out of the same subject matter or series of alleged wrongs ... .
Here, the personal injury action and the instant action do not arise out of the same subject matter or series of alleged wrongs, and do not seek the same or substantially similar relief. The personal injury action arises from the defendants' alleged breach of Labor Law § 200 and the common-law duty to provide a safe workplace, and their alleged violations of the safety requirements imposed on property owners by Labor Law §§ 240(1) and 241(6). The sole relief sought in the personal injury action is a money judgment for damages. The instant action arises from the post-accident transfer ..., and the plaintiff seeks various relief authorized by Debtor and Creditor Law article 10, including setting aside the alleged fraudulent conveyance. Contrary to the defendants' contention, the claims asserted in both actions are not "sufficiently similar" to warrant dismissal simply because the plaintiff raised an argument pertaining to constructive fraud as a basis for the imposition of liability ... for violation of Labor Law § 240(1) in the personal injury action. Jadron v 10 Leonard St LLC, 2015 NY Slip Op 00730, 2nd Dept 1-28-15
Criteria for Collateral Estoppel Explained (Criteria Not Met Here)
The Second Department reversed Supreme Court finding that plaintiff's housing discrimination action was not precluded by the landlord's prior successful eviction action under the doctrine of collateral estoppel. Although it was determined that there was a nondiscriminatory reason for the eviction, the eviction proceeding did not address issues raised in the discrimination action. The court explained the criteria for collateral estoppel:
"The doctrine of collateral estoppel . . . precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same" ... . "The two elements that must be satisfied to invoke the doctrine of collateral estoppel are that (1) the identical issue was decided in the prior action and is decisive in the present action, and (2) the party to be precluded from relitigating the issue had a full and fair opportunity to contest the prior issue" ... . "Preclusive effect, however, will only be given where the particular issue was actually litigated, squarely addressed and specifically decided'" ... . "Generally, for a question to have been actually litigated' so as to satisfy the identity requirement, it must have been properly raised by the pleadings or otherwise placed in issue and actually determined in the prior proceeding'" ... .
Here, while the Supreme Court and the landlords characterize the instant action as one to recover damages for "wrongful eviction," that is not the essence of the plaintiff's claim. Rather, the complaint alleges that, upon learning that the plaintiff suffered from a mental illness, the defendants engaged in a course of "harassment, discrimination and hostile conduct" against him that spanned several years and predated the decision to enforce the rule pertaining to carpeting of the floor against him. The prior summary proceeding did not decide whether the plaintiff was subjected to harassment based on his mental illness, whether such harassment affected a term, condition, or privilege of his housing, or any other elements of his cause of action to recover damages for housing discrimination based on disability in violation of Executive Law § 296(5) ... . Curley v Bon Aire Props Inc, 2015 NY Slip Op 00718, 2nd Dept 1-28-15
Cause of Action Based Upon a Legal Theory Which Could Have Been Raised in a Prior Action Stemming from the Same Events Precluded by the Doctrine of Res Judicata
The Second Department determined Supreme Court properly dismissed a cause of action which originated from the same events which gave rise to a prior action and merely relied on a different legal theory than was raised in the prior action. The court explained the criteria for the application of the doctrine of res judicata:
" Under the doctrine of res judicata, a disposition on the merits bars litigation between the same parties, or those in privity with them, of a cause of action arising out of the same transaction or series of transactions as a cause of action that either was raised or could have been raised in the prior proceeding'" ... . "Res judicata thus operates to preclude the renewal of issues actually litigated and resolved in a prior proceeding as well as claims for different relief which arise out of the same factual grouping or transaction and which should have or could have been resolved in the prior proceeding'" ... .
The third cause of action asserted herein could have been raised in a prior action ..., as it originates from the same events which gave rise to the prior action, and merely relies upon a different legal theory. Pedote v STP Assoc LLC, 2015 NY Slip Op 00738, 2nd Dept 1-28-15
Right-to-Intervene Criteria Explained (Criteria Not Met Here)
The Second Department described the criteria for intervening in an action (criteria not met here):
Upon a timely motion, a person is permitted to intervene in an action as of right, "1. when a statute of the state confers an absolute right to intervene; or 2. when the representation of the person's interest by the parties is or may be inadequate and the person is or may be bound by the judgment; or 3. when the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely by the judgment" (CPLR 1012[a]). Additionally, upon a timely motion, the court, in its discretion, may permit a person to intervene, "when a statute of the state confers a right to intervene . . . or when the person's claim or defense and the main action have a common question of law or fact" (CPLR 1013). In exercising its discretion, the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party (see id.). Wells Fargo Bank NA v Mazzara, 2015 NY Slip Op 00750, 2nd Dept 1-28-15
Criteria for Piercing the Corporate Veil Explained/Appellate Review Powers Re: a Bench Trial Described
The Second Department determined Supreme Court (in a bench trial) had properly pierced the corporate veil to find the owner personally liable. The court described the criteria for piercing the corporate veil and noted that, in reviewing a bench trial, the appellate court has the same fact-finding powers as the trial court:
"In reviewing a determination made after a nonjury trial, the power of this Court is as broad as that of the trial court, and we may render a judgment we find warranted by the facts, bearing in mind that in a close case, the trial court had the advantage of seeing and hearing the witnesses" ... .
"The general rule . . . is that a corporation exists independently of its owners, who are not personally liable for its obligations, and that individuals may incorporate for the express purpose of limiting their liability" ... . The doctrine of piercing the corporate veil is an exception to this general rule, allowing the imposition of individual liability on owners for the obligations of their corporation "to prevent fraud or to achieve equity" ... . "A plaintiff seeking to pierce the corporate veil must demonstrate that a court in equity should intervene because the owners of the corporation exercised complete domination over it in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a wrong that resulted in injury to the plaintiff" ... . AZTE Inc v Auto Collection Inc, 2015 NY Slip Op 00711, 2nd Dept 1--28-15
Shareholder Should Not Have Been Awarded Damages Individually Re: a Derivative Cause of Action
The Second Department determined Supreme Court erred in awarding damages to a shareholder individually because the shareholder had sued on behalf of the closely held corporation:
A shareholder of a corporation, even of a closely held corporation, may not recover in his or her individual capacity for wrongs committed against the corporation, and any recovery obtained pursuant to a derivative cause of action asserted by a shareholder is obtained for the benefit of the injured corporation ... . Sakow v Waldman, 2015 NY Slip Op 00742, 2nd Dept 1-28-15
Suppression Should Not Have Been Granted Because the Officer Who Made the Vehicle Stop Had Died/Hearsay Evidence from a Police Officer Who Arrived at the Scene After the Stop and Spoke to the Deceased Officer Was Admissible at the Suppression Hearing
The Second Department determined the hearsay testimony of a police officer (Schmidt) who learned of the reason for the stop of defendant's vehicle from another officer (Olivieri) was admissible in the suppression hearing. Supreme Court had suppressed the evidence stemming from the stop because the officer who made the stop (Olivieri) had died and could not therefore be "confronted" at the hearing:
Pursuant to statute, "hearsay evidence is admissible to establish any material fact" at a pretrial suppression hearing (CPL 710.60...). Thus, "[a] police witness at a suppression hearing may establish probable cause by personal knowledge, as well as by information supplied by fellow officers" ... . Where the knowledge of the imparting officer is based on his or her first-hand observations, the People are not required to produce that officer at the suppression hearing ... .
Here, Schmidt's testimony established that the stop of the defendant's vehicle was lawful, based upon the first-hand observations of Olivieri, which were imparted to Schmidt ... . Probable cause for the defendant's arrest also was established through Olivieri's observations, as imparted to Schmidt, together with Schmidt's own personal observations ... .
Contrary to the Supreme Court's conclusion, the decision of the United States Supreme Court in Crawford v Washington (541 US 36) does not require a different result. In Crawford, the Supreme Court considered whether particular evidence admitted at trial violated the defendant's right to confrontation under the Sixth Amendment of the United States Constitution (see id. at 38...), and did not address the admission of hearsay evidence in pretrial suppression hearings ... . People v Mitchell, 2015 NY Slip Op 00786, 2nd Dept 1-28-15
EMPLOYMENT LAW/HUMAN RIGHTS LAW
Proof Requirements for an Employment-Discrimination Action (Executive Law 296) Explained
In finding that the employer demonstrated a non-discriminatory reason for firing the plaintiff, the Third Department explained the employment-discrimination proof requirements and analytical criteria under the Human Rights Law (Executive Law 296 (1)(a)):
To support a prima facie case of discrimination under the Human Rights Law (see Executive Law § 296  [a]), a plaintiff must establish: "(1) that he [or she] is a member of the class protected by the statute; (2) that he [or she] was actively or constructive discharged; (3) that he [or she] was qualified to hold the position from which he [or she] was terminated; and (4) that the discharge occurred under circumstances giving rise to an inference of . . . discrimination" ... . Assuming that low threshold is met, "[t]he burden then shifts to the employer to rebut the presumption of discrimination by clearly setting forth, through the introduction of admissible evidence, legitimate, independent, and nondiscriminatory reasons to support its employment decision" ... . If, in turn, the employer proffers the required nondiscriminatory reasons, "the plaintiff can avoid summary judgment by proving that the employer's stated reasons were merely a pretext for discrimination by demonstrating both that the stated reasons were false and that discrimination was the real reason" ... . "Notably, a challenge by a discharged employee to the correctness of an employer's decision does not, without more, give rise to the inference that the employee's discharge was due to . . . discrimination" ... . Stated another way, "[i]t is not enough for the plaintiff to show that the employer made an unwise business decision, or an unnecessary personnel move. Nor is it enough to show that the employer acted arbitrarily or with ill will. These facts, even if demonstrated, do not necessarily show that [discrimination] was a motivating factor. [A] [p]laintiff cannot meet his [or her] burden of proving pretext simply by refuting or questioning the defendant['s] articulated reason" for terminating the plaintiff's employment ... . Miranda v ESA Hudson Val Inc, 2015 NY Slip Op 00670, 3rd Dept 1-29-15
EMPLOYMENT LAW/HUMAN RIGHTS LAW
Question of Fact Whether Plaintiff-Employee Indicated Employer's Sexual Advances Were "Unwelcome"--Dismissal of Employment Discrimination Complaint Reversed
The Second Department reversed Supreme Court, finding that there were questions of fact whether plaintiff-employee indicated by her conduct that defendant's (Cohen's) sexual advances toward plaintiff were "unwelcome" and whether plaintiff's termination was for a non-discriminatory reason. Supreme Court erred when it focused on whether plaintiff participated in sexual activity "voluntarily:"
The New York State Human Rights Law (Executive Law § 296, et seq.) and the New York City Human Rights Law (Administrative Code of the City of New York § 8-107) both make it an unlawful discriminatory practice for an employer to refuse to hire, to discharge, or to discriminate in compensation or in terms, conditions, or privileges of employment because of the sex of any individual (Executive Law § 296[a]; Administrative Code of the City of New York § 8-107[a]). Moreover, under both the State and City Human Rights Laws, it is unlawful to retaliate against an employee for opposing discriminatory practices (see Executive Law § 296[e], ; Administrative Code of the City of New York § 8-107).
To establish its prima facie entitlement to judgment as a matter of law in a retaliation case commenced pursuant to either the New York State or New York City Human Rights Law, "a defendant must demonstrate that the plaintiff cannot make out a prima facie claim of retaliation or, having offered legitimate, nonretaliatory reasons for the challenged actions, that there exists no triable issue of fact as to whether the defendant's explanations were pretextual" ... . To prevail on a motion for summary judgment dismissing a cause of action alleging discrimination in violation of the New York State Human Rights Law, a defendant must demonstrate "either plaintiff's failure to establish every element of intentional discrimination, or, having offered legitimate, nondiscriminatory reasons for [the] challenged actions, the absence of a material issue of fact as to whether [its] explanations were pretextual" ... . With respect to a cause of action alleging discrimination in violation of the New York City Human Rights Law, where a defendant moves for summary judgment and has " put forward evidence of one or more nondiscriminatory motivations for its actions,' a court should turn to the question of whether the defendant has sufficiently met its burden, as the moving party, of showing that, based on the evidence before the court and drawing all reasonable inferences' in the plaintiff's favor, no jury could find the defendants liable under any evidentiary route" ... . * * *
... [T]he evidence submitted by the defendants, which included a transcript of the plaintiff's deposition testimony, failed to eliminate all triable issues as to whether Cohen used his position to intimidate her into the relationship and as to whether the sexual conduct on his part was, in fact, "unwelcome." In this regard, the plaintiff, at her deposition, consistently testified that the sexual relations were not welcome, that she felt as though she had no other choice but to participate, and that when she complained to Cohen, he made it very clear that there would be repercussions if she did not participate. In considering this testimony, we recognize that the question of whether particular conduct was "unwelcome" presents "difficult problems of proof and turns largely on credibility determinations committed to the trier of fact" ... . The Supreme Court appears to have focused on the voluntariness of the plaintiff's participation in the claimed sexual episodes. However, "the fact that sex-related conduct was voluntary,' in the sense that the [plaintiff] was not forced to participate against her will, is not a defense," and the "correct inquiry is whether [the plaintiff] by her conduct indicated that the alleged sexual advances were unwelcome" ... . Overbeck v Alpha Animal Health PC, 2015 NY Slip Op 00736, 2nd Dept 1-28-15
Access to Financial Support from Family Properly Considered In Calculating Father's Child Support and Child Care Obligations
The Second Department explained that Family Court properly imputed income to the father based upon access to financial support from his family:
Pursuant to Family Court Act § 413(1)(b)(5)(iv), the Family Court is entitled to impute income to a parent based upon various factors, including "money, goods, or services provided by relatives and friends" (Family Ct Act § 413[b][iv][D]). Here, the Family Court properly determined that the father has access to, and receives, financial support from his family. Considering, among other things, the father's employment history, his monthly expenses, and the resources provided to him by his own father over a number of years, the Family Court providently exercised its discretion in imputing income to the father in the sum of $30,000 per year for the purpose of calculating his child support and child care obligations ... . Matter of Recco v Turbak, 2015 NY Slip Op 00770, 2nd Dept 1-28-15
Claimed Gestation Period of 303 Days Requires Reliable Medical Evidence It Is Scientifically Possible/Acknowledgment of Paternity by Another Did Not Preclude Petitioner from Bringing His Paternity Action
The Second Department determined that petitioner must produce reliable medical evidence that a 303-day gestation period (the time between sexual intercourse and birth) is scientifically possible before proceeding with a paternity action. The court noted that an acknowledgment of paternity by another did not preclude petitioner from bringing his paternity action:
Appellate courts have held that the generally accepted period of gestation is between 38 and 40 weeks... . However, pregnancy periods can exceed that timeframe ... . Indeed, in 1992, the Appellate Division, Third Department, held that a period of gestation measured from the last menstrual period prior to the child's birth can be between 265 and 299 days ... . In the beginning of the last century, this Court, citing Code Napoleon, found that the period between sexual intercourse and birth could be up to 300 days ... . Here, the petitioner alleges that 303 days, or 43 weeks and 2 days, elapsed between the last date of sexual intercourse with the mother and the birth of the child.
Any material deviation from the generally accepted average period of gestation must be explained with a reliable medical opinion ... . Although no such evidence was presented at the hearing, under the circumstances of this case, a new hearing should be conducted to afford the petitioner an opportunity to present such evidence. Since the petitioner has the burden of proof, he must present reliable medical evidence to demonstrate that the 303-day gestational period alleged here is scientifically possible
A prior acknowledgment of paternity made in accordance with Family Court Act § 516-a does not serve as an insuperable bar to a claim of paternity by one who is a stranger to the acknowledgment ... . * * * Therefore, upon remittal, if the petitioner satisfies his burden of demonstrating at the hearing, with reliable medical evidence, that a 303-day gestational period is scientifically possible, then the Family Court must determine whether to direct a DNA or genetic marker test in the child's best interest.
FREEDOM OF INFORMATION LAW (FOIL)
District Attorney's Office Did Not Adequately Justify Its Denial of Inmate's Requests for Color Photographs and Unredacted Documents Re: 18-Year-Old Murder Prosecution
The Second Department determined that the Records Access Officer (RAO) of a district attorney's office did not adequately justify its failure to comply with petitioner requests for color photographs and unredacted documents related to an 18-year-old murder prosecution against him. The Second Department explained the relevant law in some depth:
In a proceeding pursuant to CPLR article 78 to compel the production of material pursuant to FOIL, the agency denying access has the burden of demonstrating that the material requested falls within a statutory exemption, which exemptions are to be narrowly construed (see Public Officers Law § 89[e], [f]... . This showing requires the entity resisting disclosure to "articulate a particularized and specific justification for denying access'" ... . "Conclusory assertions that certain records fall within a statutory exemption are not sufficient; evidentiary support is needed" ... . Because FOIL is "based on a presumption of access to the records" ..., "FOIL compels disclosure, not concealment'" wherever the agency fails to demonstrate that a statutory exemption applies ... .
In this case, in response to the petitioner's FOIL requests, the respondent provided the petitioner with certain documents that contained numerous redactions, and denied the petitioner's request for photographs of the deceased victim. The respondent based the redactions and the denial of the request for the photographs upon the "unwarranted invasion of personal privacy" statutory exemption (Public Officers Law § 87[b]). However, since the respondent failed to proffer more than conclusory assertions to support these claims, the Supreme Court erred in determining that the respondent met his burden of demonstrating that the redactions and denial of the request for the photographs of the deceased victim fell within this statutory exemption (see Public Officers Law § 89[e], [f];...).
The Supreme Court also erred in determining that the petitioner was not entitled to receive color copies of certain photographs that were disclosed to him. Public Officers Law § 86(4) provides that photographs are records within the meaning of the statute, and section 87(1)(b) of the statute requires an agency to provide copies or reproductions of records. Pursuant to Public Officer Law § 87(1)(c)(ii), an agency may engage an outside professional service to prepare a copy of a record if its information technology equipment is inadequate to prepare a copy. Applying these principles, we find that since the respondent did not claim he was unable to comply with the petitioner's request, FOIL requires him to provide the petitioner with color copies of all disclosable photographs in his possession. Matter of Baez v Brown, 2015 NY Slip Op 00754, 2nd Dept 1-28-15
INSURANCE LAW/CONTRACT LAW
Where Extrinsic Evidence Indicates a Party's Interpretation of Ambiguous Language Is the Only Fair Interpretation, Summary Judgment Is Appropriate
In finding that the meaning of a title insurance policy was properly determined as a matter of law, the Second Department explained the complicated analytical criteria:
Generally, courts determine the rights and obligations of parties under insurance contracts based on the specific language of the policies ... . However, where the language is reasonably susceptible of more than one interpretation, and thus ambiguous, "the parties to the policy may, as an aid in construction, submit extrinsic evidence of their intent at the time of contracting" ... . "[I]f the tendered extrinsic evidence is itself conclusory and will not resolve the equivocality of the language of the contract, the issue remains a question of law for the court" ... . "Under those circumstances, the ambiguity must be resolved against the insurer which drafted the contract" ... .
"It is only where such evidence does not resolve the equivocality that the ambiguity must be resolved against the insurer" ... . Where there is ambiguity and the "determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence, then such determination is to be made by the jury" ... . Where, however, a party's extrinsic evidence demonstrates "not only that its interpretation is reasonable but that it is the only fair interpretation," summary judgment is appropriate ... . Demetrio v Stewart Tit Ins Co, 2015 NY Slip Op 00720, 2nd Dept 1-28-15
INSURANCE LAW/CIVIL PROCEDURE
Criteria for Denial of Coverage Based Upon Noncooperation of the Insured Party Explained/Default Judgment In Favor of Defendant American States Re: Other Defendants Did Not Preclude, Under the Doctrine of Collateral Estoppel, Plaintiff's Direct Action Against American States
The Second Department determined a question of fact existed about whether the "noncooperation-of-an-insured-party" rationale for denying coverage applied. The court noted that a prior default judgment in favor of defendant American States re: other defendants did not preclude, under the doctrine of collateral estoppel, plaintiff's direct action against American States:
American States prevailed in that declaratory judgment action against the defendants in the underlying action which determined that American States is not obligated to defend and indemnify the defendants in the underlying action. However, those orders were entered upon the underlying defendants' default, and thus, did not collaterally estop the plaintiff from bringing the instant, direct action against American States pursuant to Insurance Law § 3420(a)(2) ... . ...
The noncooperation of an insured party in the defense of an action is a ground upon which an insurer may deny coverage, and may be asserted by the insurer as a defense in an action on a judgment by an injured party pursuant to Insurance Law § 3420(a)(2) ... . In order to establish a proper disclaimer based on its insured's alleged noncooperation, an insurer is required to demonstrate that "it acted diligently in seeking to bring about its insured's cooperation, that its efforts were reasonably calculated to obtain its insured's cooperation, and that the attitude of its insured, after the cooperation of its insured was sought, was one of wilful [sic] and avowed obstruction'" ... . The insurer has a "heavy" burden of proving lack of cooperation ... . Here, the submissions of the American States defendants were insufficient to sustain their prima facie burden on the cross motion for summary judgment, with respect to American States. West St Props LLC v American States Ins Co, 2015 NY Slip Op 00751, 2nd Dept 1-28-15
LABOR LAW-CONSTRUCTION LAW
Question of Fact Whether Failure to Wear a Harness Precluded Recovery in a Labor Law 240 (1) Action
The Second Department determined defendant had raised a question of fact whether plaintiff's actions were the sole proximate cause of the accident (which would preclude recovery in a Labor Law 240 (1) action). Plaintiff was injured when plywood flooring collapsed. However the defendant presented evidence plaintiff was aware he was required to wear a harness which would have prevented him from falling to the floor below:
" Labor Law § 240(1) imposes upon owners and general contractors, and their agents, a nondelegable duty to provide safety devices necessary to protect workers from risks inherent in elevated work sites'" ... . To prevail on a cause of action pursuant to Labor Law § 240(1), the plaintiff must establish a violation of the statute and that the violation was a proximate cause of his injuries ... . Although contributory negligence on the part of the worker is not a defense to a Labor Law § 240(1) claim ..., where a plaintiff's actions are the sole proximate cause of his injuries, liability under Labor Law § 240(1) does not attach ... .
Here, although the plaintiff met his prima facie burden of establishing a violation of Labor Law § 240(1) ... the defendants produced evidence that a safety harness and line were available to the plaintiff, that he was aware that he was required to anchor the line on the floor where he was working, and that the anchors, harness, and line would have prevented him from falling to the 14th floor, but that the plaintiff had consciously decided not to anchor his line on the 15th floor as instructed. The defendant's submissions were sufficient to raise a triable issue of fact as to whether the plaintiff's actions were the sole proximate cause of his accident ... . Bascombe v West 44th St Hotel LLC, 2015 NY Slip Op 00712, 2nd Dept 1-28-15
LABOR LAW-CONSTRUCTION LAW
"General Supervisory Authority" Over Work Not Sufficient to Impose Liability Under the Labor Law
In affirming summary judgment in favor of the defendants, the Second Department described the nature of work-supervision necessary to hold a defendant liable under Labor Law 240 (1), 241 (6), 200 and common-law negligence theories. "General supervisory authority" is not enough to impose liability:
"Labor Law §§ 240(1) and 241(6) apply to owners, contractors, and their agents" ... . "A party is deemed to be an agent of an owner or general contractor under the Labor Law when it has supervisory control and authority over the work being done where a plaintiff is injured" ... . "Similarly, where, as here, a claim against a defendant arises out of alleged defects or dangers in the methods or materials of the work, recovery cannot be had under Labor Law § 200 or pursuant to the principles of common-law negligence unless it is shown that the party to be charged under that theory of liability had the authority to supervise or control the performance of the work" ... . * * *
Here, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) by establishing that they were not owners, contractors, or statutory agents under those provisions ... . The defendants also established their prima facie entitlement to judgment as a matter of law dismissing the causes of action alleging violations of Labor Law § 200 and common-law negligence through the submission of evidence which demonstrated that they did not have the authority to supervise or control the manner in which the injured plaintiff performed his work ... .
To the extent that the defendants had general supervisory authority over the work, this was insufficient in itself to impose liability under the Labor Law ... . Fucci v Plotke, 2015 NY Slip Op 00726, 2nd Dept 1-28-15
LABOR LAW-CONSTRUCTION LAW
Construction Manager Did Not Have the Contractual Authority to Control the Manner In Which Work Was Done and In Fact Did Not Control the Manner In Which Work Was Done---Labor Law 240 (1) and 200 Causes of Action Properly Dismissed
The Third Department determined Supreme Court properly dismissed Labor Law 240 (1) and 200 causes of action against the construction manager because the construction manager (Sano-Rubin) did not possess the contractual authority to control, and in fact did not control, the manner in which the work was done. The court explained the analytical criteria:
At the time of plaintiff's injury, Sano-Rubin was serving as the construction manager for various construction projects occurring throughout the school district pursuant to a contract it had entered into with the school district. Plaintiff initially contends that there are factual issues as to whether Sano-Rubin's role renders it a statutory defendant under Labor Law § 240 (1), which "imposes liability only on contractors, owners or their agents" ... . Under this provision, a party that is operating as a construction manager is not deemed a statutory agent unless that party has "the authority to direct, supervise or control the work which brought about the injury" ... . "The key criterion in ascertaining Labor Law § 240 (1) liability is not whether the party charged with the violation actually exercised control over the work, but rather whether [that party] had the right to do so" ... . Similarly, under Labor Law § 200, which codifies the common-law duty of care as between owners, general contractors and their agents, the imposition of liability requires a showing that the defendant possessed the authority to direct or control the activity resulting in injury ... .
Sano-Rubin's contract with the school district provided that Sano-Rubin "shall not have control over or charge of and shall not be responsible for construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the [w]ork of each of the [c]ontractors" and further, that if Sano-Rubin "observes any safety program or action at the site which it believes is improper or in violation of applicable law or rules, it shall immediately advise the [o]wner." This contract was submitted upon the cross motion, together with proof of the implementation of these contractual limitations on Sano-Rubin's authority ... , These submissions were sufficient to establish its prima facie right to judgment as a matter of law... . Larkin v Sano-Rubin Constr Co Inc, 2015 NY Slip Op 00672, 3rd Dept 1-29-15
Severity of Injuries Compared With the Absence of a Damages Award for Past and Future Economic and Non-Economic Loss Indicates an "Impermissible Compromise Verdict" Was Reached---New Trial on Liability and Damages Properly Ordered
The First Department determined the trial court had properly set aside the verdict because it represented an impermissible compromise. Despite serious permanent brain and spinal cord injuries, the jury awarded no damages for past or future economic or non-economic loss. Plaintiff, a restaurant patron, was injured falling down a dangerous stairwell after opening a door which was usually locked. Plaintiff sued both the landlord and the tenant restaurant. In addition to the "impermissible compromise verdict" finding, the First Department noted that the danger posed by the stairwell supported a finding of liability re: both the landlord and the tenant. With respect to the "impermissible compromise verdict," the court wrote:
...[W]e ... believe the trial court correctly set aside that verdict and ordered a new trial. The failure of the jury to award damages beyond reimbursement of medical expenses, despite the severity and permanency of plaintiff's injuries, supported the trial court's conclusion that the jury rendered an impermissible compromise verdict ... . In cases involving seriously injured plaintiffs, where issues of liability are sharply contested, and the damages awarded are inexplicably low, the verdict is most likely the product of a jury compromise ... . The crux of the prohibited trade off is that, "in addition to finding plaintiff partially responsible for the accident, the jury also compromised on liability and damages by finding the total amount for plaintiff's injuries much too low" ... . * * *
Since the extensiveness of plaintiff's injuries cannot be reconciled with the absence of a damages award, the verdict reached by the jury was likely the outgrowth of a compromise, and a retrial is required ... . Contrary to the alternate argument that any retrial should at most be limited to damages, we simply cannot know whether the compromise entailed the issue of liability, attribution of fault, the calculating of damages, or any combination thereof. ... When there is a strong likelihood that the jury verdict resulted from some type of a trade off, retrial on all issues is mandated ... . Nakasato v 331 W 51st Corp, 2015 NY Slip Op 00619, 1st Dept 1-26-15
Basic Criteria Re: Common-Law and Contractual Indemnification Explained
In finding that the criteria for common-law and contractual indemnification were not met, the Second Department explained some of the basic requirements for both:
"[T]he key element of a common-law cause of action for indemnification is not a duty running from the indemnitor to the injured party, but rather is a separate duty owed the indemnitee by the indemnitor'" ... . " Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee, it follows that a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine'" ... .
... General Obligations Law § 5-322.1 ... "generally renders void a clause in a construction contract purporting to indemnify a party for its own negligence" (... see General Obligations Law § 5-322.1). ... [A] contractual clause that purports to indemnify a party for its own negligence " may be enforced where the party to be indemnified is found to be free of any negligence'" ... . Dreyfuss v MPCC Corp, 2015 NY Slip Op 00723, 2nd Dept 1-28-15
Question of Fact Whether Infant Plaintiff's Injuries Were the Result of Negligent Supervision at a Summer Camp
The Second Department determined there was a question of fact whether infant plaintiff was properly supervised by camp personnel when she attempted to jump from a platform to a monkey bar and slipped off:
" [S]chools and camps owe a duty to supervise their charges and will only be held liable for foreseeable injuries proximately caused by the absence of adequate supervision'" ... . Whether such supervision was adequate and, if inadequate, whether it was a proximate cause of the subject injuries are generally questions for the trier of fact to resolve ... .
Here, the defendant failed to establish, prima facie, that it provided adequate supervision to the infant plaintiff, or that lack of adequate supervision was not a proximate cause of the infant plaintiff's injuries ... . DiGiacomo v Town of Babylon, 2015 NY Slip Op 00722, 2nd Dept 1-28-15
NEGLIGENCE/EDUCATION-SCHOOL LAW/CIVIL PROCEDURE/EVIDENCE
Injury Caused by Another Student In Gym Class Could Not Have Been Prevented by Supervision/Unsigned Depositions Which Were Certified by the Stenographer Should Have Been Considered by the Court
The Second Department determined summary judgment should have been granted to the defendant in an action stemming from infant-plaintiff's participation in a gym-class basketball game. The actions of another player, which caused the injury, could not have been prevented by supervision. The Second Department noted that the unsigned deposition transcripts, which were certified by the stenographer, should have been considered by Supreme Court:
The Supreme Court also should have granted that branch of the defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against the New York City Department of Education (hereinafter the DOE). In support of their motion, the defendants submitted the transcripts of the deposition testimony of the infant plaintiff and teachers ... . While those transcripts were unsigned, they were certified by the stenographer, and the plaintiffs do not challenge their accuracy. Thus, contrary to the plaintiffs' contention, the transcripts were admissible and should have been considered by the Supreme Court on the defendants' motion ... . This evidence demonstrated, prima facie, that the spontaneous act of the other student in grabbing the infant plaintiff's left arm from behind and throwing or dragging him to the ground as the infant plaintiff attempted to shoot a basketball during a basketball game in gym class occurred in such a short span of time that it could not have been prevented even by the most intense supervision ... . Moreover, the other student's alleged prior conduct was insufficient to place the DOE on notice of the conduct that led to the infant plaintiff's injury ... . Thomas v City of New York, 2015 NY Slip Op 00748, 2nd Dept 1-28-15
Code Provision Which Requires Abutting Landowners to Keep a Sidewalk in Good Repair Does Not Impose Tort Liability on the Abutting Landowner for Failure to Do So (Absent Specific Language to that Effect)
The Second Department explained that village code provision which required abutting landowners to keep a sidewalk in good repair did not impose tort liability for the landowner's failure to do so:
Unless a statute or ordinance clearly imposes liability upon an abutting landowner, only a municipality may be held liable for the negligent failure to maintain a public sidewalk ... . Although the Code of the Village of Great Neck Plaza requires an abutting landowner to keep a sidewalk in good and safe repair, it does not specifically impose tort liability for a breach of that duty ... .
The defendant established its prima facie entitlement to judgment as a matter of law by demonstrating that it was an abutting landowner which could not be held liable under the Code of the Village of Great Neck for negligent failure to maintain the public sidewalk ... . Ahdout v Great Neck Park Dist, 2015 NY Slip Op 00710, 2nd Dept 1-28-15
Revocation of Pistol Permit Upheld Despite Petitioner's Acquittal on Related Criminal Charges---No Formal Revocation Hearing Is Required
In affirming the revocation of a pistol permit, the Third Department explained the criteria for review. Here the petitioner had displayed a weapon during an altercation with a neighbor and had been acquitted of the related menacing charges. The Third Department noted that no formal revocation hearing is required as long as petitioner has notice of the charges and an opportunity to respond:
There is no question that "[r]espondent [the judge who revoked the permit] is vested with broad discretion in determining whether to revoke a pistol permit and may do so for any good cause, including a finding that the petitioner lack[s] the essential temperament or character which should be present in one entrusted with a dangerous instrument. . . , or that he or she does not possess the maturity, prudence, carefulness, good character, temperament, demeanor and judgment necessary to have a pistol permit" ... . No formal revocation hearing is required, and due process will be satisfied where the petitioner has been provided with notice of the charges and afforded an adequate opportunity to respond thereto ... . Upon review, "respondent's resolution of factual issues and credibility assessments are accorded deference, and the determination will not be disturbed absent an abuse of discretion or a showing that [such determination] was made in an arbitrary and capricious manner" ... . Matter of DeAngelo v Burns, 2015 NY Slip Op 00669, 3rd Dept 1-29-15
Purchaser of Real Property, Who Is Aware of a Pending Lawsuit Involving the Property When the Purchase Is Made, Is Bound By the Outcome of the Lawsuit
The Second Department noted that a purchaser of real property who is aware of a pending lawsuit involving the property is bound by the outcome of that suit:
A purchaser of real property who has actual knowledge of a pending lawsuit with respect to the property is bound by the consequences of that lawsuit ..., except in circumstances not relevant in this case ... . DeMaio v Capozello, 2015 NY Slip Op 00719, 2nd Dept 1-28-15
REAL PROPERTY TAX LAW
For Each Year the Business Investment Exemption from Real Property Tax Law Is Sought, a Separate Application Must Be Made
The Third Department determined Supreme Court erred when it ruled petitioner, the owner of commercial real property, did not need to apply for a business investment property tax exemption (Real Property Tax Law [RPTL] 485-b) each year for which the exemption is sought. Supreme Court had granted the exemption for several years based upon one application:
We are mindful that an RPTL 485-b exemption may be obtained upon a single application ... . The separate point here, however, is that property owners must preserve their right to relief through annual challenges to the assessment pending a determination of the original assessment challenge. Since petitioner failed to do so here, Supreme Court lacked jurisdiction to direct the District to refund payments made based on the 2009 through 2011 assessments ... . Matter of Highbridge Broadway LLC v Assessor of the City of Schenectady, 2015 NY Slip Op 00682, 3rd Dept 1-29-15
Interest Paid In Advance Should Not Be Deducted from the Face Amount of the Loan When Determining Interest Rate---Law of Usury Does Not Apply to Interest After the Maturity of the Note (Late Payments)
The Third Department explained the law of usury as it related to interest paid in advance and interest after maturity of the note (late charges):
The defense of usury requires clear and convincing evidence of a loan given with the intent to take interest in excess of the legal rate ... . As relevant here, a loan is usurious if the annual interest rate exceeds 16% (see General Obligations Law § 5-501 ; Banking Law § 14-a ). Defendant bases his claim of usury on his advanced interest payment, claiming that the annual interest rate should be calculated by dividing the total annual interest, $18,750, by the total received at closing, $115,625, resulting in an annual interest rate of 16.2%. However, the Court of Appeals has held that "interest on the whole amount of principal agreed to be paid at maturity, not exceeding the legal rate, may be taken in advance" ... . Thus, under the traditional method of computation as set forth in Band, the prepaid interest is not deducted from the face amount of the loan and defendant was charged a legal rate of 15% interest ... . Defendant's contention that the late charges incurred after the default should also be included in the calculation of interest is unavailing, because "[t]he defense of usury does not apply where the terms of a promissory note impose a rate of interest in excess of the statutory maximum only after maturity of the note" ... . Martell v Drake, 2015 NY Slip Op 00685, 3rd Dept 1-29-15
Responsibility for Payments for a 1999 Claim (Which Was Reopened After 13 Years) Shifted from the Workers' Compensation Carrier to the Special Fund---Rationale for the Special Fund Explained---Payments Made by Carrier Re: a 2005 Claim Were Not Partially Attributable to the 1999 Claim---Therefore the Carrier Was No Longer Responsible for Payments Re: the 1999 Claim
The Third Department determined payments made by the employer re: a 2005 claim were not partially attributable to a 1999 claim. Therefore, any "new" payments re: the 1999 claim were the responsibility of the Special Fund, not the Workers' Compensation carrier:
Workers' Compensation Law § 25-a (1) provides, in relevant part, that "when an application for compensation is made by an employee . . . after a lapse of seven years from the date of the injury . . . and also a lapse of three years from the date of the last payment of compensation, . . . if an award is made it shall be against the special fund" ... . "The purpose of [the statute] is to save employers and insurance carriers from liability . . . for stale claims of injured employees" ... . Here, the 1999 claim was reopened in 2012, approximately 13 years after the December 3, 1999 injury and 12 years after the September 27, 2000 closing of the case. The Special Fund, however, asserts that the carrier continued to make payments on the 2005 claim that it knew were partially attributable to injuries sustained by claimant in connection with the 1999 claim and that, consequently, three years did not pass from the date of the last payment of compensation, thereby precluding liability from shifting under Workers' Compensation Law § 25-a. We note that "[p]ayments that are made voluntarily, and in recognition of the employer's liability, are considered advance compensation and will prevent the transfer of liability to the Special Fund" ... . Significantly, "whether an advance payment of compensation has been made is a factual question for the Board to resolve, and its determination in this regard, if supported by substantial evidence in the record as a whole, will not be disturbed" ... .
Upon reviewing the record, substantial evidence supports the Board's finding that the carrier did not make an advance payment of compensation. There is no indication that the carrier knowingly made payments on the 2005 claim that were partially to compensate claimant for injuries sustained in connection with the 1999 claim. Matter of Wetterau v Canada Dry, 2015 NY Slip Op 00672, 3rd Dept 1-29-15
Employer's Claim for Reimbursement from the Special Disability Fund for Death Benefits Paid Re: an Employee Who Died from Dust Disease Time-Barred---Even Though the Injury to the Employee Predated the Last Date for Such Claims, the Death Occurred After the Statutory Cut-Off Date
The Third Department determined the employer's claim for reimbursement for death benefits paid on behalf of an employee who died from dust disease was time-barred. Pursuant to Workers' Compensation Law 15, new claims for reimbursement from the Special Disability Fund can not be made after July 1, 2010. Even though the injury to the employee predated 2010, his death in 2011 required the filing of a "new" claim re: the death benefits (which cannot accrue until death):
Where, as here, an employee is disabled due to a dust disease, Workers' Compensation Law § 15 (8) (ee) provides that an "employer . . . or carrier shall . . . be reimbursed from the special disability fund . . . for all compensation and medical benefits subsequent to those payable for the first . . .  weeks of disability for claims where the date of accident or date of disablement occurred on or after August [1, 1994]." Likewise, if an employee has died due to a dust disease, the statute provides that an "employer or . . . carrier shall be reimbursed from the special disability fund . . . for all death benefits payable in excess of . . .  weeks for claims where the date of accident or date of disablement occurred on or after August [1, 1994]" (Workers' Compensation Law § 15  [ee]). Such reimbursement is expressly subject to the limitations contained in Workers' Compensation Law § 15 (8) (h) (2) (A), which "bars claims based upon dates of disablement or accident after July 1, 2007" ... . That subdivision further expressly provides, as here dispositive, that "[n]o carrier or employer . . . may file a claim for reimbursement from the special disability fund after July [1, 2010] and no written submission or evidence in support of such a claim may be submitted after that date"... . Given the "clear and unambiguous" terms of the reimbursement limitations provision of section 15 (8) (h) (2) (A), this Court has given effect to the plain meaning of the language employed ... by recognizing that the provision bars "all new claims after July 1, 2010" ... .
We reject the employer's argument that its claimed entitlement to reimbursement from the Special Disability Fund is not a "new" claim, on the premise that it relates back to the original disablement in 1999 thereby establishing its right to reimbursement for a death occurring after July 1, 2010. In this regard, a claim for reimbursement for death benefits is "separate and distinct" from the original claim for reimbursement for disability benefits ... . That is, "[t]he right to death benefits does not accrue prior to death" and death, while not a new injury or accident, results in a "new claim" for purposes of death benefits reimbursement... . Matter of Connolly v Consolidated Edison, 2015 NY Slip Op 00673, 3rd Dept 1-29-14
Penalty of Reasonable Attorney's Fees Properly Assessed Against Claimant's Attorney for Making Baseless Requests for a Change of Venue
The Third Department determined that the penalty of reasonable attorney's fees was appropriate where claimant's counsel made several baseless requests for a change of venue:
We have repeatedly upheld the imposition of a penalty of reasonable counsel fees pursuant to Workers' Compensation Law § 114—a (3) (ii) when, as here, the record contains substantial evidence that a venue request was made without a reasonable basis ... . The record reflects that there was no legitimate basis for seeking the venue change and the Board had previously rejected several similarly-worded venue change requests by counsel. Under these circumstances, the Board did not exceed its authority in assessing a penalty against counsel based upon the filings of the request to change venue and the appeal to the Board without reasonable grounds (see Workers' Compensation Law § 114-a  [ii]; see also Workers' Compensation Law §§ 23, 142), and its decision will not be disturbed ... . Matter of Estwick v Risk Mgt Planning, 2015 NY Slip Op 00686, 3rd Dept 1-29-15
Criteria for Area Zoning Variance and Court Review of Local Variance Proceedings Explained
The Second Department determined the zoning board had properly considered and denied an application for an area variance. The court explained its review powers and the analytical criteria to be used by a zoning board:
"Local zoning boards have broad discretion in considering applications for variances, and judicial review is limited to determining whether the action taken by the board was illegal, arbitrary, or an abuse of discretion" ... . "Accordingly, on judicial review, the determination of a zoning board should be sustained if it is not illegal, has a rational basis, and is not arbitrary and capricious"... .
In determining whether to grant an area variance, a zoning board of appeals is required to engage in a balancing test, weighing the benefit to the applicant against the detriment to the health, safety, and welfare of the neighborhood or community if the variance is granted (see Village Law § 7-712-b[b]...). A zoning board must also consider "(1) whether an undesirable change will be produced in the character of the neighborhood or a detriment to nearby properties will be created by the granting of the area variance; (2) whether the benefit sought by the applicant can be achieved by some method, feasible for the applicant to pursue, other than an area variance; (3) whether the requested area variance is substantial; (4) whether the proposed variance will have an adverse effect or impact on the physical or environmental conditions in the neighborhood or district; and (5) whether the alleged difficulty was self-created, which consideration shall be relevant to the decision of the board of appeals, but shall not necessarily preclude the granting of the area variance" (Village Law § 7-712-b[b]). In making that determination, the personal observations of members of the zoning board may be considered ... . Matter of Sacher v Village of Old Brookvile, 2015 NY Slip Op 00773, 2nd Dept 1-28-15