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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ANIMAL LAW/LANDLORD-TENANT
Landlord With Notice of a Tenant's Dog's Vicious Propensities May Be Liable to the Injured Plaintiff
In finding that there were questions of fact precluding summary judgment in a dog-bite case, the Third Department noted that a landlord with notice of a dog's vicious propensities can be liable to the injured plaintiff:
"A landlord may be liable for the attack by a dog kept by a tenant if the landlord has actual or constructive knowledge of the animal's vicious propensities and maintains sufficient control over the premises to require the animal to be removed or confined" ... . Defendant was empowered to require the [tenants] to remove the animal and, indeed, its site manager testified that he took steps to do so once he learned of the dog's existence in September 2012. Rodgers v Horizons At Monticello, LLP, 2015 NY Slip Op 06189, 3rd Dept 7-16-15
APPEALS/CIVIL PROCEDURE
Supreme Court Abused Its Discretion by Vacating a Judgment Which Was Not Appealed by the Defendant
The First Department, in a full-fledged opinion by Justice Manzanet-Daniels, reversing Supreme Court, determined defendant Port Authority's motion to vacate a judgment should not have been granted. Plaintiff, Nash, was injured in the 1993 World Trade Center bombing and was awarded a multi-million dollar judgment after trial. The Port Authority did not appeal the judgment, but sought to vacate the judgment pursuant to CPLR 5015 (a), based upon the results of an appeal in an unrelated "companion" case (Ruiz), which held the Port Authority immune from such suits. Supreme Court granted the motion and the First Department reversed, explaining that the Port Authority's failure to appeal could not be "remedied" using Supreme Court's discretionary "CPLR 5015" powers:
The Port Authority made a strategic decision not to appeal either the liability or the damages determination in Nash, but to prosecute the Ruiz case instead. The Port Authority thereafter abandoned any claim that it was not liable to Nash, and represented to the Court of Appeals that a reversal in Ruiz would not affect cases like Nash's that had been finally determined. Having failed to seek leave to appeal from Nash's affirmed final judgment, the Port Authority ought not to profit from its misrepresentations to the detriment of Nash, whose judgment was indisputably final.
As Professor Siegel noted in the Practice Commentaries accompanying CPLR 5513, "[t]he time in which to appeal or to move for leave to appeal if leave is necessary is one of the most rigid in all of procedure. Its passing without the proper step being taken forfeits the appeal and puts an end to the matter . . ." (David D. Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 5513:1).
While a court under CPLR 5015(a) might possess some limited jurisdiction to vacate a final judgment — for example, where the court purporting to enter judgment lacked subject matter jurisdiction — that discretion must be sparingly exercised lest final judgments be subject to never-ending attack, undermining the sanctity and finality of judgments. As Justice Graffeo noted in her partial dissent, "We generally do not reward litigants for failing to assert arguments in a timely fashion — with few exceptions, claims not promptly advanced are deemed waived or forfeited and this proposition applies to the right to seek reversal of a judgment on the ground that it is erroneous on the facts or law (i.e., the type of argument made on direct appeal) . . . Simply stated, when a party allows its appellate rights to lapse, it forfeits the right to challenge any issue it could have raised on direct appeal" (22 NY3d at 227). The Port Authority's motion to vacate the Nash judgment was predicated on an issue that had been litigated in Nash and would have been reviewable on appeal. The Port Authority ought not to be permitted a second bite at the apple at the expense of the elderly plaintiff, who suffered traumatic brain injuries over 20 years ago, and will now never see a penny of her $5.2 million final judgment. Nash v Port Auth of NY & NJ, 2015 NY Slip Op 06095, 1st Dept 7-14-15
ARBITRATION
Arbitrator's Award Should Not Have Been Vacated---No Clear and Convincing Evidence of Arbitrator's Bias or Misconduct or that the Arbitrator Exceeded His Power
The Second Department reversed Supreme Court's vacation of an arbitration award. The vacation was based in part on a finding of an appearance of bias on the part of the arbitrator. The motion to vacate the award alleged the fact that both the mediator and arbitrator were past Supreme Court justices with overlapping terms demonstrated the arbitrator's bias or the appearance of bias. The Second Department explained the limited role of a court in reviewing an arbitrator's award and noted that any ground for vacation must be proven by clear and convincing evidence:
"It is well settled that judicial review of arbitration awards is extremely limited" ... . "A party seeking to overturn an arbitration award on one or more grounds stated in CPLR 7511(b)(1) bears a heavy burden, and must establish a ground for vacatur by clear and convincing evidence" ... .
An arbitrator's partiality may be established by an actual bias or the appearance of bias from which a conflict of interest may be inferred ... . * * * [T]he fact that both the mediator and arbitrator were former Supreme Court Justices who served overlapping terms ..., standing alone, did not constitute clear and convincing evidence of actual bias or the appearance of bias on the part of the arbitrator ... . Moreover ... [the movant] failed to present clear and convincing evidence that the arbitrator exceeded his power in issuing the award (see CPLR 7511[b][1][iii]), or that he engaged in misconduct ... . David v Byron, 2015 NY Slip Op 06107, 2nd Dept 7-15-15
ARBITRATION/EDUCATION-SCHOOL LAW
Two-Part Inquiry for Determining Whether a Dispute is Arbitrable Under a Collective Bargaining Agreement Clearly Explained and Applied
The Third Department determined the dispute between teachers and the board of education (concerning the board's hiring of a teacher from an outside agency without posting the position as required by the collective bargaining agreement [CBA]) was arbitrable. The court first determined a provision of the Education Law, which allowed hiring from an outside agency, did not erect a policy/statutory barrier to hiring in accordance with the procedures in the CBA. The statute merely allowed the board to hire from an outside agency, but the statute did not preclude the board from using the hiring process agreed to in the CBA. The Third Department then went on to hold there was a reasonable relationship between the subject of the dispute and the general subject matter of the CBA. the only factors a court can look at to determine arbitrability. The responsibility for any further inquiry and analysis then passed to the arbitrator:
Petitioner contends that arbitration of the subject matter of the dispute is barred by Education Law § 3602-e and public policy. Determining whether the subject matter of a dispute is arbitrable involves a two-step inquiry, the first issue being "whether there is any statutory, constitutional or public policy prohibition against arbitration of the grievance" ... . "[I]n order to overcome the strong [s]tate policy favoring the bargaining of terms and conditions of employment, any implied intention that there not be mandatory negotiation must be plain and clear or inescapably implicit in the statute" ... .
Under the statutory scheme at issue, a "pre[]kindergarten program plan" is defined as a plan "designed to effectively serve eligible children directly through the school district or through collaborative efforts between the school district and an eligible agency or agencies" (Education Law § 3602-e [1] [d] ...). Petitioner's argument rests upon Education Law § 3602-e (5) (d), which states that "[n]otwithstanding any other provision of law, [a] school district[] shall be authorized to enter any contractual or other arrangements necessary to implement the district's prekindergarten plan." Contrary to petitioner's contention, this language does not suggest a legislative intent that school districts be given wholly unfettered freedom to disavow existing, bargained-for contractual agreements for the purpose of entering into contracts with outside agencies for prekindergarten instructional services. A more natural reading of Education Law § 3602-e supports a finding that the statute permits school districts to enter into such contracts, without in any way necessarily affecting the enforceability of a bargained-for agreement to secure such services through a CBA ... . * * *
Having found that there is no public policy prohibition, we turn to the second part of the threshold inquiry — that is, whether the parties agreed to submit the subject matter of the dispute to arbitration ... . In considering this issue, we must only ascertain if "there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA" ... . Matter of Board of Educ. of the Catskill Cent. Sch. Dist. (Catskill Teachers Assn.), 2015 NY Slip Op 06190, 3rd Dept 7-16-15
CIVIL PROCEDURE
Failure to Enter a Default Judgment within One Year Justified Dismissal of the Complaint as Abandoned
The Second Department determined, pursuant to CPLR 3215 (c), plaintiff's failure to enter a default judgment within one year, and plaintiff's failure to explain the delay, warranted dismissal of the complaint as abandoned. The court explained the reasons for the rule:
CPLR 3215(c), which is entitled "Default not entered within one year," states, as relevant to this appeal: "[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed." The policy underlying the statute is "to prevent parties who have asserted claims from unreasonably delaying the termination of actions, and to avoid inquests on stale claims" ... . Upon a showing of the requisite one year of delay, dismissal is mandatory in the first instance ... . Failure to take proceedings for entry of judgment may be excused, however, upon a showing of sufficient cause. To establish "sufficient cause," the party opposing dismissal must demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action ... . Here, the Supreme Court correctly granted that branch of [defendant's] motion which was pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her. [Defendant] demonstrated that the plaintiff had failed to take any proceedings for entry of judgment within one year after she defaulted, and the plaintiff failed to demonstrate sufficient cause why that branch of the motion should be denied. Aurora Loan Servs., LLC v Hiyo, 2015 NY Slip Op 06100, 2nd Dept 7-15-15
CIVIL PROCEDURE
Court Abused Its Discretion In Exercising Its Inherent Power to Grant a Motion to Vacate a Default Judgment More than a Year After the Judgment Was Entered (Five Years Here)
The Second Department determined Supreme Court should not have exercised its inherent power to vacate a default judgment more than one year after the judgment was entered (five years here):
Pursuant to CPLR 5015(a)(1), a court may relieve a party from a judgment on the ground of excusable default, if a motion for that relief is made within one year after service of a copy of the judgment with written notice of entry (see CPLR 5015[a][1]...). In addition, even after expiration of the one-year limitations period set forth in CPLR 5015, "a court may vacate its own judgment for sufficient reason and in the interests of substantial justice"... .
Here, to the extent the defendant sought to vacate the judgment against her pursuant to CPLR 5015(a)(1), that branch of her motion was untimely because it was not made within one year after service upon her of a copy of the judgment with notice of entry (see CPLR 5015[a][1]... ) . Further, contrary to the Supreme Court's conclusion, the interests of substantial justice did not warrant vacating the judgment against the defendant in the exercise of the court's inherent power ... . Yung Chong Ho v Uppal, 2015 NY Slip Op 06132, 2nd Dept 7-15-15
CIVIL PROCEDURE/NEGLIGENCE
Evidence of Post-Accident Elevator-Repairs Not Discoverable
The Second Department determined plaintiff, who was injured in an elevator accident, was not entitled to the post-accident elevator-repair records. Such records are only discoverable if there is a question about whether a defendant actually maintains or has control over an instrumentality, not the case here:
CPLR 3101(a) provides that "[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof" ... . "[E]vidence of subsequent repairs is not discoverable or admissible in a negligence case" ... . An exception to this rule applies if a defendant's maintenance of, or control over, the subject instrumentality is at issue ... .
Here, the plaintiff moved to compel production of post-accident repair records generated during the three-year period between the date of the plaintiff's accident and the date of the inspection of the subject elevator by the plaintiff's expert. Yet it is undisputed that the defendant exercised maintenance and control over the elevator. Graham v Kone, Inc., 2015 NY Slip Op 06111, 2nd Dept 7-15-15
CIVIL PROCEDURE/EVIDENCE/PRODUCTS LIABILITY
Striking Answer for Spoliation of Evidence Too Severe a Sanction---Spoliation Was Not "Willful or Contumacious," Both Parties Were Prejudiced by the Loss, Plaintiff Was Not Deprived of Means of Proving the Claim
The Second Department determined striking the defendant's answer was too severe a sanction for spoliation of evidence which was not "willful or contumacious." Plaintiff was injured attempting to use a tranquilizer gun. The gun was sent out for repairs after the incident and a portion of the gun was not found after a diligent search. The sanction was too severe because both parties were prejudiced by the loss and the loss did not deprive plaintiff of the means of proving his claim:
Under the common-law doctrine of spoliation, a party may be sanctioned where it negligently loses or intentionally destroys key evidence (see CPLR 3126...). "The nature and severity of the sanction depends upon a number of factors, including, but not limited to, the knowledge and intent of the spoliator, the existence of proof of an explanation for the loss of the evidence, and the degree of prejudice to the opposing party" ... .
"The party requesting sanctions for spoilation has the burden of demonstrating that a litigant intentionally or negligently disposed of critical evidence, and fatally compromised its ability to'" prove its claim or defense ... . However, " striking a pleading is a drastic sanction to impose in the absence of willful or contumacious conduct'" and, thus, the courts must " consider the prejudice that resulted from the spoliation to determine whether such drastic relief is necessary as a matter of fundamental fairness'" ... . When the moving party is still able to establish or defend a case, a less severe sanction is appropriate .... Furthermore, where the plaintiffs and the defendants are equally affected by the loss of the evidence in their investigation of the accident, and neither have reaped an unfair advantage in the litigation, it is improper to dismiss or strike a pleading on the basis of spoliation of evidence ... .
The determination of the appropriate sanction for spoliation is within the broad discretion of the court ... . This Court will substitute its judgment for that of the Supreme Court only if that court's discretion was improvidently exercised ... .
Here, the Supreme Court, upon renewal and reargument, improvidently exercised its discretion in imposing the sanction of striking the City defendants' answer, as the plaintiff failed to establish that the City defendants' failure to preserve the subject tranquilizer gun was willful or contumacious ... , or that their conduct deprived him of the means of proving his claim ... . The City defendants' repair of the subject gun prejudiced all parties, but does not prevent the plaintiff from proving his claim ... . Morales v City of New York, 2015 NY Slip Op 06121, 2nd Dept 7-15-15
CIVIL PROCEDURE
Defendant Did Not Waive the Statute of Limitations Defense, Pled In Its Answer, by Failing to Assert It in a Pre-Answer Motion to Dismiss---Although Defendant's Post-Answer Motion Was Ostensibly Brought Pursuant to CPLR 3211(a)(5), the Parties Laid Bare Their Proof and Supreme Court Properly Treated the Motion as One for Summary Judgment Pursuant to CPLR 3212 Seeking Dismissal of the Complaint as Time-Barred
The Second Department determined defendant did not waive its statute of limitations defense, asserted in its answer, by not making a pre-answer motion to dismiss. Although defendant's subsequent motion was ostensibly brought pursuant to CPLR 3211(a)(5), the parties laid bare their proof. Therefore Supreme Court properly treated the motion as one for summary judgment pursuant to CPLR 3212, seeking to dismiss the complaint as time-barred:
Initially, contrary to the plaintiff's contention, the defendant did not waive its statute of limitations defense, asserted in its answer, by failing to make a pre-answer motion to dismiss ... . Rather, a statute of limitations defense may be asserted after joinder of issue in a motion for summary judgment pursuant to CPLR 3212 ... . Although the defendant's motion was made pursuant to 3211(a)(5), the parties clearly charted a summary judgment course by submitting extensive documentary evidence and factual affidavits laying bare their proof ... . Thus, the defendant's motion is properly treated as a motion for summary judgment dismissing the complaint as time-barred ... . Meredith v Siben & Siben, LLP, 2015 NY Slip Op 06120, 2nd Dept 7-15-15
CIVIL PROCEDURE
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Defendant Did Not Waive the Statute of Limitations Defense, Pled In Its Answer, by Failing to Assert It in a Pre-Answer Motion to Dismiss---Although Defendant's Post-Answer Motion Was Ostensibly Brought Pursuant to CPLR 3211 Instead of 3212, the Procedural Irregularity Should Have Been Excused under CPLR 2001
The Second Department explained there is no requirement that a statute of limitations defense be raised solely in a pre-answer motion to dismiss. The defense may be asserted in the answer, and subsequently raised in a summary judgment motion or at trial. Although defendant's post-answer motion was ostensibly brought pursuant to CPLR 3211 instead of 3212, the procedural irregularity should have been excused under CPLR 2001:
CPLR 3211(a) permits a defendant who wishes to raise a defense based on the statute of limitations to do so by way of a motion to dismiss. That section provides, in relevant part, that "[a] party may move for judgment dismissing one or more causes of action asserted against him [or her] on the ground that . . . the cause of action may not be maintained because of [the] statute of limitations" (CPLR 3211[a][5]). CPLR 3211(e) provides that the defendant may make the motion to dismiss before its answer is required to be served, or may include the defense in its answer and seek relief later. When the defendant does neither, the defense is waived.
"At any time before service of the responsive pleading is required, a party may move on one or more of the grounds set forth in subdivision (a) . . . . Any objection or defense based upon a ground set forth in paragraph[ ] five . . . of subdivision (a) is waived unless raised either by such motion or in the responsive pleading" (CPLR 3211[e]).
Contrary to the Supreme Court's determination, a defendant who wishes to assert the statute of limitations as a defense is not limited to asserting it by way of a pre-answer motion. The defendant may instead choose to raise that defense in its answer, and either move on that ground later in a motion for summary judgment, or wait until trial to have it determined ... .
Here, the defendant did not make a pre-answer motion to dismiss the complaint, but raised the statute of limitations as an affirmative defense in its answer. Then, after the note of issue was filed, the defendant moved to dismiss the complaint on that ground. Although the defendant denominated its motion as a motion pursuant to CPLR 3211(a) to dismiss the complaint, rather than as a motion pursuant to CPLR 3212 for summary judgment dismissing the complaint, that procedural irregularity should have been excused under CPLR 2001, upon proper notice to the parties ... . Wan Li Situ v MTA Bus Co., 2015 NY Slip Op 06130, 2nd Dept 7-15-15
CIVIL PROCEDURE
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Second Voluntary Discontinuance Operated as an Adjudication on the Merits Requiring Dismissal of Plaintiff's Third Attempt to Commence the Same Action
Before bringing the instant proceeding, the plaintiff had voluntarily discontinued two prior proceedings involving the same matter. Pursuant to CPLR 3217 (c), the second voluntary discontinuance operated as an adjudication of the merits requiring dismissal of the third action:
CPLR 3217(c) provides that unless otherwise stated, inter alia, in a notice of discontinuance, a voluntary discontinuance is "without prejudice, except that a discontinuance by means of notice operates as an adjudication on the merits if the party has once before discontinued by any method an action based on or including the same cause of action in a court of any state or the United States." In this case, the plaintiff voluntarily discontinued the second action, which was based upon the same causes of action as the first action, by notice of discontinuance. Under the circumstances of this case, where there was no legitimate purpose for discontinuing the second action, the second voluntary discontinuance by notice operated as an adjudication on the merits pursuant to CPLR 3217(c)... . Haber v Raso, 2015 NY Slip Op 06113, 2nd Dept 7-15-15
CIVIL PROCEDURE/FORECLOSURE/ATTORNEYS/REAL PROPERTY LAW
Defendant Not Entitled to Attorney's Fees after Plaintiff's Motion for a Voluntary Discontinuance in a Foreclosure Action Was Granted Without Prejudice---Defendant Was Not a "Prevailing Party" within the Meaning of Real Property Law 282---Denial of Attorney's Fees Was Not an Abuse of Discretion Under CPLR 3217 (c)
After the grant of plaintiff's motion for a voluntary discontinuance (without prejudice) of a foreclosure action defendant (Rivera) sought the award of attorney's fees pursuant to Real Property Law 282 and CPLR 3217 (b). The Second Department determined Supreme Court properly denied the request for attorney's fees. Under the Real Property Law, the prevailing party is entitled to attorney's fees, but plaintiff's voluntary discontinuance was not on the merits. Therefore defendant was not the prevailing party within the meaning of the statute. The award of attorney's fees under CPLR 3217 (b) is discretionary and Supreme Court did not abuse its discretion in denying the request:
In New York, "attorneys' fees are deemed incidental to litigation and may not be recovered unless supported by statute, court rule or written agreement of the parties" ... .
[Real Property Law 282] provides that "[w]henever a covenant contained in a mortgage on residential real property shall provide that . . . the mortgagee may recover attorneys' fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage . . . there shall be implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys' fees and/or expenses incurred by the mortgagor . . . in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract" (Real Property Law § 282). * * *
Here, the voluntary discontinuance of this action pursuant to CPLR 3217(c) was without prejudice and there was no substantive determination on the merits of either the plaintiff's cause of action or Rivera's counterclaims and defenses. Accordingly, Rivera was not a prevailing party for the purposes of Real Property Law § 282 and was not entitled to an award of an attorney's fee for a "successful defense" of this foreclosure action (Real Property Law § 282...).
* * * The determination of whether to award an attorney's fee [pursuant to CPLR 3217 (c)] as a condition of granting a voluntary discontinuance is a matter left to the sound discretion of the court ... . Here, under the circumstances, the Supreme Court providently exercised its discretion in denying that branch of Rivera's motion which was for an award of an attorney's fee pursuant to CPLR 3217(b) ... . DKR Mtge. Asset Trust 1 v Rivera, 2015 NY Slip Op 06108, 2nd Dept 7-15-15
TRUSTS AND ESTATES/CONTRACT LAW/CIVIL PROCEDURE
Constructive Trust Cause of Action Did Not Accrue When Defendant Acquired the Subject Property (In 1995 or 1996), But Rather When Defendant , Who Had Properly Acquired the Property, Breached Her Promise to Transfer an Interest in the Property to Plaintiff (In 2012)
In finding the constructive trust cause of action should not have been dismissed as time-barred, the Second Department explained that a cause of action for a constructive trust accrues (1) when the constructive trustee acquires the property wrongfully, or (2) when the constructive trustee wrongfully withholds property which was lawfully acquired but was to be transferred:
A cause of action "for the imposition of a constructive trust is governed by the six-year Statute of Limitations of CPLR 213(1), which starts to run upon the occurrence of the wrongful act giving rise to a duty of restitution" ... . "A determination of when the wrongful act triggering the running of the Statute of Limitations occurs depends upon whether the constructive trustee acquired the property wrongfully, in which case the property would be held adversely from the date of acquisition, or whether the constructive trustee wrongfully withholds property acquired lawfully from the beneficiary, in which case the property would be held adversely from the date the trustee breaches or repudiates the agreement to transfer the property" ... .
Here, the gravamen of the plaintiff's cause of action for the imposition of a constructive trust is not ... that the defendants wrongfully acquired the subject properties in or around 1995, or 1996, but rather that subsequent thereto, sometime in 2012, the defendant... breached her promise to the plaintiff that they would be equal partners with respect to those properties ... . Barone v Barone, 2015 NY Slip Op 06102, 2nd Dept 7-15-15
CONTRACT LAW/FRAUD/EVIDENCE
Specific Disclaimers Indicating No Information Extrinsic to the Written Contract Was Relied Upon Precluded Fraud in the Inducement Cause of Action/Summary Judgment on Promissory Note Precluded---Breach of Contract Cause of Action Was Intertwined with Promissory Note
In a decision addressing many other issues, the Second Department determined specific disclaimers in the contract indicating nothing extrinsic to the contract was relied upon by the parties precluded any claim alleging fraudulent inducement. The court also noted that plaintiff was not entitled to summary judgment on a promissory note because the note was intertwined with the breach of contract cause of action:
"While a general merger clause is ineffective to exclude parol evidence of fraud in the inducement, a specific disclaimer destroys the allegations in [a] plaintiff's complaint that the agreement was executed in reliance upon . . . contrary oral [mis]representations'" ... . In support of this branch of their motion, [defendant] relied upon the contract, which provides that [defendant] made no representation or warranty, either express or implied, as to the assets sold, [defendant's] business, or "any matter or thing affecting or relating to this agreement, except as specifically set forth in this agreement." The contract also indicates that it contains all of the terms agreed upon between the parties and that it was entered into after full investigation. Such clauses are sufficiently specific to bar the [plaintiffs] from claiming that they were fraudulently induced into entering the contract because of certain oral misrepresentations ... . * * *
Although the breach of a related contract generally cannot defeat a motion for summary judgment on an instrument for money only, that rule does not apply where the contract and instrument are intertwined ... . Here, the action to recover damages for breach of contract is sufficiently intertwined with the action to recover on the promissory note, such that denial of summary judgment to enforce the promissory note and personal guaranty was proper ... . Oseff v Scotti, 2015 NY Slip Op 06123, 2nd Dept 7-15-15
PRACTICE POINT
A general merger clause will not require the exclusion of parol evidence of fraud in the inducement. But specific disclaimers within the contract, stating (in essence) that nothing extrinsic to the contract was relied upon by any party, will preclude a "fraud in the inducement" cause of action.
COOPERATIVES
Cooperative Board's Denial of Plaintiff's Application to Sell His Shares in the Cooperative Was Not Tainted by Discriminatory Considerations---Denial Protected by the Business Judgment Rule
The Second Department determined the board of a cooperative dwelling acted within the scope of its authority (pursuant to the business judgment rule) when it denied plaintiff's application to sell his shares in the cooperative to a specific buyer. Although the board's action would not be protected by the business judgment rule if it were tainted by discriminatory considerations, the court concluded there was no evidence discriminatory considerations played a role in the denial:
"In the context of cooperative dwellings, the business judgment rule provides that a court should defer to a cooperative board's determination [s]o long as the board acts for the purposes of the cooperative, within the scope of its authority and in good faith'" ... . " [D]ecision making tainted by discriminatory considerations is not protected by the business judgment rule'" ... .
Here, the cooperative demonstrated its prima facie entitlement to judgment as a matter of law dismissing the complaint by establishing that its denial of the resale application was protected by the business judgment rule ... . In particular, the cooperative demonstrated that its denial of the resale application was authorized, and done in good faith and in furtherance of the legitimate interests of the cooperative, in light of significant debt the prospective buyer held relating to a separate property. The evidence the plaintiff submitted in opposition to this showing was insufficient to raise a triable issue of fact as to whether the resale application was actually denied for a discriminatory reason, or any other reason not protected by the business judgment rule. Griffin v Sherwood Vil., Co-op "C", Inc., 2015 NY Slip Op 06112, 2nd Dept 7-15-15
CRIMINAL LAW/ATTORNEYS/EVIDENCE
Defense Counsel's Failure to Investigate the Victim's Medical Condition (Which Would Have Allowed More Effective Cross-Examination of the People's Expert and the Victim), Failure to Object to Testimony Which May Have Been More Prejudicial than Probative (and which Clearly Required a Jury Instruction Limiting Its Use), and Failure to Object to Improper Comments Made by the Prosecutor, Deprived Defendant of Effective Assistance of Counsel
In a sexual abuse case based entirely on the victim's testimony (alleging anal intercourse), the Third Department determined defense counsel's failure to investigate the nature of the victim's bleeding disorder (which could have called into question the prosecution's expert's opinion that victims of sexual abuse, like the victim here, often show no signs of injury), the failure to object to the testimony of the defendant's spouse alleging his preference for anal intercourse (the prejudicial effect may well have outweighed the probative value---at the very least a limiting instruction should have been requested as to the jury's limited use of such evidence), and the failure to object to improper comments made by the prosecutor in summation (appealing to jurors' sympathy, exhorting the jurors to fight for the victim), required reversal and a new trial:
Had counsel sought to inform himself about the victim's VWD [bleeding disorder] diagnosis, he likely would have become aware of medical experts such as Howard Snyder, a board-certified doctor of emergency medicine who submitted an affidavit in support of defendant's postconviction motion. Snyder averred that "[t]he presence of VWD [in the victim] would have made the presence of bruising or bleeding during forceful, non-consensual anal intercourse more likely than in [a] patient without VWD."Undoubtedly, expert testimony similar to Snyder's would have done much to increase the significance of the SANE [sexual assault nurse examiner] report's lack of physical findings and would have provided a powerful basis for cross-examination to counter the damaging effects of the SANE's opinion testimony.
Counsel's failings were magnified by the fact that the People's only direct evidence of defendant's guilt was the victim's testimony, making counsel's efforts to undermine her credibility of paramount importance. Indeed, there were no other witnesses to the alleged sexual assaults and no DNA evidence was recovered. In similar situations, the Second Circuit, applying New York law, has repeatedly held that "when a defendant is accused of sexually abusing a child and the evidence is such that the case will turn on accepting one party's word over the other's, the need for defense counsel to, at a minimum, consult with an expert to become educated about the vagaries of abuse indicia is critical. The importance of consultation and pre-trial investigation is heightened where, as here, the physical evidence is less than conclusive and open to interpretation" (Eze v Senkowski, 321 F3d 110, 129 [2d Cir 2003] ...). Thus, the record establishes that, without any justification, counsel prejudiced defendant by "s[itting] on his hands, confident that his client would be acquitted" rather than "consult[ing with] and be[ing] prepared to call an expert" ... , whose testimony then would have been "available [to] assist[] the jury in its determination" ... .
Counsel's conduct further fell below our standard of meaningful representation because he failed to object to, and request a limiting instruction to guide the jury in assessing, the testimony of defendant's former spouse regarding defendant's sexual preferences. Counsel sat mute while the witness testified that, upon reading the victim's statement to police, it struck her that it contained details "only someone who had been intimate with [defendant] would know," including what she then proceeded to describe as defendant's preference for anal intercourse during their consensual sexual relationship [. We do not think that counsel's failure to object to this testimony can be excused on the ground that such an objection had "little or no chance of success" ... . "Not all relevant evidence is admissible as of right. . . . Even where technically relevant evidence is admissible, it may still be excluded by the trial court in the exercise of its discretion if its probative value is substantially outweighed by the danger that it will unfairly prejudice the other side" ... .
In our view, a legitimate question exists as to whether the prejudicial effect of the former spouse's testimony regarding defendant's sexual preferences substantially outweighed its probative value, especially considering that she testified that she and defendant had not been sexually active for several years prior to the alleged assaults on the victim. Supreme Court should have had the opportunity to consider this question and make an appropriate ruling in the exercise of its discretion. The court would have done so, but for counsel's inexplicable failure to object. In the event that the court had determined this testimony to be admissible, counsel could then have requested a limiting instruction, as the lack thereof would "permit[] the jurors to perhaps consider [the former spouse's statements] as proof of defendant's propensity" to engage in the sexual acts charged here ... . * * *
Finally, we note with disapproval certain remarks made by the prosecutor during summation, to which counsel did not object. The prosecutor improperly attempted to appeal to the jury's sympathy by asking the jurors to consider how they would have felt if they "were in [the victim's] shoes" ... . The prosecutor also exhorted the jurors to advocate for the victim during deliberations by using the phrase "you fight for her" ... . While counsel's failure to object to these remarks does not, in and of itself, amount to ineffective assistance of counsel, it further illustrates counsel's representation, the cumulative effect of which deprived defendant of meaningful representation, especially "where, as here, the determination of guilt . . . hinged on sharp issues of credibility" ... . People v Cassala, 2015 NY Slip Op 06176, 3rd Dept 7-16-15
PRACTICE POINT
Defense counsel's: (1) failure to investigate a bleeding disorder suffered by the alleged victim of sexual abuse which could have cast doubt on the People's expert's claim that the absence of any sign of injury was not significant; (2) failure to object to highly prejudicial yet minimally probative testimony; and (3) failure to object to improper comments and arguments made by the prosecutor, constituted ineffective assistance of counsel requiring a new trial. At the risk of stating the obvious, the adversarial system requires a zealous and relentless adversarial mind-set on the part of the defense.
CRIMINAL LAW/ATTORNEYS
Concurrent Inclusory Counts Dismissed and Sentences Vacated---Defense Counsel's Failure to Request that the Greater and Lesser Counts Be Submitted to the Jury in the Alternative, Although a Clear-Cut Error, Did Not Deprive the Defendant of Meaningful Representation
The Third Department determined defendant was entitled to dismissal of the inclusory concurrent counts and the vacation of the sentences imposed thereon, but was not entitled to reversal based upon defense counsel's failure to request the that the inclusory concurrent counts be presented to the jury in the alternative (conviction on the greater count is deemed a dismissal of every lesser count). Although the omission was clear-cut error on defense counsel's part, the error did not deprive defendant of effective assistance:
.... [T]he two counts of criminal possession of a controlled substance in the seventh degree are inclusory concurrent counts of criminal possession of a controlled substance in the third degree ... . "When inclusory counts are submitted for consideration, they must be submitted in the alternative since a conviction on the greater count is deemed a dismissal of every lesser count" ... . Therefore, defendant's misdemeanor convictions of criminal possession of a controlled substance in the seventh degree must be reversed and the concurrent, one-year sentences vacated ... .
We are not persuaded, however, that defense counsel's failure to request an alternative charge on these counts "elevates this case to the level of one of those rare cases where a single lapse can constitute ineffective assistance of counsel" ... . Although counsel erred on a clear-cut issue ..., such an error must be viewed in the context of the entire representation, particularly in light of the other charges that defendant faced. Most importantly here, counsel's error appears to arise from his failure to properly consider the misdemeanor charges of criminal possession of a controlled substance in the seventh degree. While defendant was certainly entitled to representation on those charges, defendant had previously been convicted of a felony drug offense and faced felony charges of criminal sale of a controlled substance in the third degree and criminal possession of a controlled substance in the third degree. Given the vastly disparate potential outcomes related to the felony and misdemeanor offenses with which defendant was charged, particularly in light of his prior felony drug conviction ..., and absent any proof that counsel's failure was greater than that of failing to properly attend to the misdemeanor charges, we do not find that defendant was deprived of meaningful representation ... . People v Vanguilder, 2015 NY Slip Op 06175, 3rd Dept 7-16-15
PRACTICE POINT
It is "clear-cut" error for defense counsel to fail to request that "concurrent inclusory counts" be submitted to the jury in the alternative such that conviction of the greater count requires dismissal of the lesser count.
CRIMINAL LAW/ATTORNEYS
Failure to Instruct the Jury on the Justification Defense Required Reversal and a New Trial/Referring to the Defendant as a Liar, Vouching for the People's Case, and Asking the Jury to Draw Inferences Not Based Upon the Evidence Constitutes Prosecutorial Misconduct
The Second Department determined defendant was entitled to a new trial because his request for a jury instruction on the justification defense should not have been denied. There was evidence the victim was in defendant's home and was attempting to beat and rob the defendant at the time the victim was stabbed. That evidence was sufficient to require submission of the justification defense to the jury. Although the error was not preserved for appeal, the Second Department also noted that the prosecutor improperly characterized the defendant as a liar, vouched for the strength of the People's case, and asked the jury to draw inferences which were not based upon evidence. With respect to the justification defense, the court explained:
" A trial court must charge the jury with respect to the defense of justification whenever, viewing the record in the light most favorable to the defendant, there is any reasonable view of the evidence which would permit the jury to conclude that the defendant's conduct was justified'" ... . Here, there was a reasonable view of the evidence to support the defendant's request for a justification charge pursuant to Penal Law § 35.15(2)(b). Viewing the evidence in the light most favorable to the defendant, the jury reasonably could have concluded that the defendant reasonably believed that the use of deadly force was necessary to prevent the victim from robbing him (see Penal Law § 35.15[2][b]...). Contrary to the People's contention, it would not have been irrational for the jury to credit the defendant's account of the incident ... . Accordingly, the Supreme Court erred in denying the defendant's request for a justification charge pursuant to Penal Law § 35.15(2)(b). The error in failing to give the requested justification charge was not harmless, as it cannot be said that there was no significant probability that the verdict would have been different absent this error ... . People v Irving, 2015 NY Slip Op 06167, 2nd Dept 7-15-15
CRIMINAL LAW/LABOR LAW/EMPLOYMENT LAW
Failure to Pay Wages In Violation of Labor Law 191 (1)(a) is a Class A Misdemeanor---Therefore Defendant Was Properly Sentenced to a Period of Incarceration Followed by a Period of Probation---The Statute Authorizes Incarceration or a Fine---Because the Defendant Was Incarcerated, the Fine Must Be Vacated
The Second Department determined defendant was properly incarcerated for 60 days and sentenced to a period of probation for failure to pay wages in violation of Labor Law 191(1)(a), which in a Class A misdemeanor. However, the statute allows for incarceration or a fine. Because defendant had served 60 days, the imposition of the $5000 fine was vacated:
Contrary to the defendant's contention, the County Court was permitted to sentence him to a period of probation. A conviction of failure to pay wages in violation of Labor Law § 191(1)(a), which is defined as a misdemeanor punishable by a fine or imprisonment, is a class A misdemeanor (Labor Law § 198-a[1]; see Penal Law § 55.10[2][b]) and, therefore, a crime (see Penal Law § 10.00[6]). Thus, a court may sentence a defendant to a period of probation for the crime of failure to pay wages (see Penal Law § 65.00[1][a]), and the imposition of a period of probation in addition to a 60-day term of incarceration was authorized here (see Penal Law § 60.01[2][d]...).
However, the County Court improperly imposed a $5,000 fine on the defendant. By its terms, Labor Law § 198-a(1) provides for punishment by a fine or imprisonment, but not both a fine and imprisonment, for a first conviction. As the defendant has already served his 60-day term of incarceration, the provision of the sentence imposing a $5,000 fine on the defendant must be vacated. People v DiSalvo, 2015 NY Slip Op 06164, 2nd Dept 7-15-15
EMINENT DOMAIN/MUNICIPAL LAW
Criteria for Valuation of a Partial Taking of Vacant Land Explained
The Second Department determined the valuation of a partial taking of vacant land (the value before minus the value after the taking based on the highest and best use of the land) was flawed and remitted the matter for a new valuation. The decision is detailed and fact-specific and therefore is not fully summarized here. The court explained some of the most significant valuation criteria, noting that any comparable sales considered in the valuation must be similar in character to the subject land (not so here):
When private property is taken for public use, the condemning authority must "compensate the owner so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred'" ... . Where, as here, there is a partial taking of real property, "the measure of damages is the difference between the value of the whole before the taking and the value of the remainder after the taking" ... . "The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time"... . The determination of highest and best use must be based upon evidence of a use which reasonably could or would be made of the property in the near future ... . Matter of County of Orange v Monroe Bakertown Rd. Realty, Inc., 2015 NY Slip Op 06143, 2nd Dept 7-15-15
EMINENT DOMAIN/COURT OF CLAIMS ACT/CIVIL PROCEDURE
Service of an Unverified Petition in Violation of the Court of Claims Act Did Not Constitute a Jurisdictional Defect
Reversing the Court of Claims, the Second Department determined that service of a petition which was not verified was not a jurisdictional defect in a proceeding to recover money placed in escrow by the NYS Comptroller pending claims for the state's appropriation and use of easements.
In accordance with the Eminent Domain Procedure Law, after the Attorney General determined that there was or might be a conflict with regard to the money allegedly owed as a result of the extended use of these temporary easements, the funds were deposited by the New York State Comptroller into a special interest-bearing eminent domain account (see EDPL 304[E][1]). Upon receiving notice of this deposit, the petitioner commenced this special proceeding for the distribution of the money pursuant to EDPL 304(E)(1) and Court of Claims Act § 23. The State promptly rejected the petition, noting that it was served without a proper verification. Within days, the petitioner provided the missing verification. The Court of Claims, however, dismissed the petition, concluding, inter alia, that the failure to comply with the statutory provisions requiring verification constituted a jurisdictional defect that mandated dismissal, without consideration of the merits. The petitioner appeals, and we reverse.
While the time limitations and service requirements set forth in Court of Claims Act §§ 10 and 11 have been referred to as "jurisdictional" ... , the instant matter concerns a special proceeding pursuant to EDPL 304(E) for the distribution of money that had been deposited (see Court of Claims Act § 9[12]), and service of the petition without a verification did not constitute an incurable "jurisdictional" defect ... . In this regard, the petitioner, upon notice from the State, cured the omission within a matter of days (see CPLR 3022, 3025[a]...). Moreover, considering that no substantive right of the State was prejudiced by the missing verification, even if the omitted material had not been supplied, the Court of Claims, under the circumstances presented to it, should have disregarded the technical infirmity pursuant to CPLR 2001 and 3026 ... . Matter of Mazur Bros. Realty, LLC v State of New York, 2015 NY Slip Op 06149, 2nd Dept 7-15-15
EMINENT DOMAIN/COURT OF CLAIMS ACT/CIVIL PROCEDURE
Court of Claims Must Determine the Interests of All Parties Named by the Attorney General as Potentially Entitled to Payment for a Taking by the State---Therefore a Claimant Must Join all the Parties Named by the Attorney General
The Second Department explained the procedure under the Eminent Domain Procedure Law (EDPL) for determining how to apportion payment for a taking when there is a dispute about which parties are entitled to payment. Under the EDPL and the Court of Claims Act, the Court of Claims must determine the interests of all parties named by the Attorney General as having a possible claim. Therefore a claimant must join all the named parties in any action seeking payment:
EDPL 304(E)(1) ... provides that when the Attorney General determines that there is a conflict with regard to the person or persons legally entitled to receive payment for the value of property acquired by the State through the power of eminent domain, he or she shall request the Comptroller to deposit the funds in an interest-bearing account "to be distributed as ordered by the Court of Claims on application of any person claiming an interest in the amount" (EDPL 304[E][1]). The statute further provides that the procedure to be employed in connection with such an application "shall be the same as provided in [Court of Claims Act § 23]," and that "[n]o judgment of distribution shall be made unless the court shall first obtain personal jurisdiction over all persons certified by the Attorney General as having or claiming to have an interest in the fund" (EDPL 304[E][1]).
The claimant argues, in effect, that Mazur Brothers, Inc. (hereinafter MBI), an entity that the Attorney General has determined has a possible interest in the subject proceeds, does not in fact have any such interest and that, therefore, the claimant was under no obligation to join MBI as a party to this claim. In advancing this argument, however, the claimant essentially asked the Court of Claims to assume the very fact that is the ultimate fact that must be proven, namely, that MBI has no interest in the money deposited by the Comptroller. Without jurisdiction over MBI, it would have been improper for the Court of Claims to grant the relief requested by the claimant in connection with this claim. Indeed, as the claimant appears to have recognized, its remedy, under these circumstances, lies in a special distribution proceeding pursuant to EDPL 304 ... . Mazur Bros. Realty, LLC v State of New York, 2015 NY Slip Op 06119, 2nd Dept 7-15-15
FAMILY LAW
Custody Properly Awarded to Non-Parents---Criteria Explained
The Second Department affirmed Family Court's award of custody to non-parents, explaining the relevant criteria:
In a custody proceeding between a parent and a nonparent, the parent has a superior right to custody that cannot be denied unless the nonparent establishes that the parent has relinquished that right due to surrender, abandonment, persistent neglect, unfitness, or other like extraordinary circumstances ... . The burden is on the nonparent to prove the existence of extraordinary circumstances ... . Where extraordinary circumstances are found to exist, the court must then consider the best interests of the child in awarding custody ... .
Here, the Family Court properly determined that the nonparent petitioners, Yasmin Culberson and Walter Culberson, sustained their burden of demonstrating extraordinary circumstances based upon, inter alia, the mother's prolonged separation from the subject child and lack of significant involvement in the child's life for a period of time, the mother's failure to contribute to the child's financial support, and the strong emotional bond between the child and the nonparent petitioners ... . Moreover, the Family Court's determination that an award of custody to the nonparent petitioners would be in the best interests of the child is supported by a sound and substantial basis in the record ... . Matter of Culberson v Fisher, 2015 NY Slip Op 06144, 2nd Dept 7-15-15
The Third Department determined grandmother demonstrated extraordinary circumstance justifying the award of custody to her with visiting rights for the parents. The court explained the relevant analytical criteria:
"It is well settled that a parent has a claim of custody of his or her child, superior to that of all others, in the absence of surrender, abandonment, persistent neglect, unfitness, disruption of custody over an extended period of time or other extraordinary circumstances" ... . "The burden of proving such extraordinary circumstances rests with the nonparent seeking custody and, if established, the controlling consideration in determining custody is the best interests of the child" ... . Proof regarding extraordinary circumstances may include, among other things, that "the parent has neglected 'to maintain substantial, repeated and continuous contact with' the child[] or make plans for [her] future" .... . Matter of Yandon v Boisvert, 2015 NY Slip Op 06177, 3rd Dept 7-16-15
FAMILY LAW
Ruling that Subject Child Could Not Visit Father in the Presence of Father's Other Children Is Against Established Policy and Was Not Supported by an Adequate Record---Matter Sent Back for Development of Evidence
Although the custody modification awarding sole custody to mother was upheld by the Third Department, the court was troubled by the requirement that father's other children could not be present during father's parenting time with the subject child. The restriction goes against the general policy that bonds with siblings should be strengthened and the record was not sufficient to warrant the ruling. The matter was sent back for further development of the evidence:
... [T]here is a dearth of record evidence supporting the provision limiting all parenting time with the father to periods when the child's older half siblings are not present. Considering the father's testimony upon cross-examination admitting to some prior unspecified incidents apparently involving the corporal punishment of his older children, meaningful support was not wholly lacking. These prior incidents had resulted in the imposition of supervised visitation with the older children. However, there was no evidence produced to clarify or explain any detail or establish any of the circumstances underlying these admissions. No documents or other proof or testimony was offered or entered. The father testified that the restrictions that had previously been imposed had expired at the time of the hearing. Nothing more was revealed, and the underlying facts were left wholly undeveloped.
Despite the argument by the attorney for the child that limiting the father's time with this child to periods when the half siblings are not present will protect the child by allowing the father to focus on the child exclusively, the provision is troubling. The law strongly favors the development and encouragement of sibling bonds ... . The father's apparent history of inappropriate corporal punishment certainly raises issues of significant concern. Nonetheless, the issue is too poorly developed in the record to support the argument advanced by the attorney for the child. Matter of Demers v McLear, 2015 NY Slip Op 06178, 3rd Dept 7-16-15
FAMILY LAW/ATTORNEYS
Forcing Appellant to Proceed Without Counsel in a Family Court Act Article 8 Action Required Reversal of Order of Protection
Forcing appellant proceed without counsel (because he did not complete the paperwork for the assignment of counsel) deprived him of his fundamental right to counsel in a Family Court Act Article 8 action. The order of protection was reversed and matter was remitted for a new hearing either with counsel or after appellant's knowing voluntary waiver of his right to counsel:
A party in a proceeding pursuant to Family Court Act article 8 has the right to be represented by counsel (see Family Ct Act § 262[a][ii]...), but may waive that right provided that he or she does so knowingly, intelligently, and voluntarily ... . To determine whether a party is validly waiving the statutory right to counsel, the Family Court must conduct a "searching inquiry" to ensure that the waiver is unequivocal, voluntary, and intelligent ... . A waiver is valid where the record reveals that the party was aware of the dangers and disadvantages of proceeding without counsel ... . The deprivation of a party's right to counsel, as guaranteed by Family Court Act § 262, requires reversal, without regard to the merits of the unrepresented party's position ... .
Here, the record is clear that the appellant did not wish to proceed pro se, but was forced to do so in light of his alleged inability to produce the necessary paperwork in order to be assigned counsel ... . The deprivation of the appellant's fundamental right to counsel requires reversal, without regard to the merits of his position, especially where, as here, the record demonstrates that the appellant did not have a basic understanding of court proceedings ... . Matter of Nixon v Christian, 2015 NY Slip Op 06150, 2nd Dept 7-15-15
FRAUD/CONTRACT LAW
"Special Facts Doctrine" as Applied to Fraud Allegations Explained
In an action stemming from the alleged breach of an Asset Purchase Agreement (APA), the First Department explained the applicability of the "special facts doctrine" to the related fraud allegations. There was a defense verdict. The issue was raised on appeal by the plaintiffs because the trial judge refused to instruct the jury on the special facts doctrine, an error the First Department deemed harmless. The court offered a clear description of the doctrine:
... [P]laintiffs claimed that defendants had a duty to disclose certain documents concerning alleged adverse contract information. The "special facts" doctrine holds that "absent a fiduciary relationship between parties, there is nonetheless a duty to disclose when one party's superior knowledge of essential facts renders a transaction without disclosure inherently unfair" ... . As a threshold matter, the doctrine requires satisfaction of a two-prong test: that the material fact was information peculiarly within the knowledge of one party and that the information was not such that could have been discovered by the other party through the exercise of ordinary intelligence ... . Greenman-Pedersen, Inc. v Berryman & Henigar, Inc., 2015 NY Slip Op 06091, 1st Dept 7-14-15
LIEN LAW
Court Has No Inherent Power to Vacate a Notice of Lien Which Is Valid on Its Face---Validity of Lien Must Be Determined in Foreclosure Proceeding
The Second Department noted that a court has no inherent power to vacate a notice of lien which is valid on its face. Determination of the validity of the lien must await trial by foreclosure:
A court has no inherent power to vacate or discharge a notice of lien except as authorized by Lien Law § 19(6) ... . Lien Law § 19 enumerates the grounds for the discharge of a mechanic's lien interposed against a nonpublic improvement ... . Where, as here, the notice of lien was not invalid on its face, any dispute regarding the validity of the lien must await trial thereof by foreclosure ... . Rivera v Department of Hous. Preserv. & Dev. of City of New York, 2015 NY Slip Op 06126, 2nd Dept 7-15-15
INSURANCE LAW
Once the Insurer Shows an Exclusion to Coverage Applies, the Burden is on the Insured to Demonstrate an Exception to the Exclusion Applies
In finding the insurer was properly awarded summary judgment, the Second Department explained the burdens of proof re: exclusions from coverage (burden on insurer) and exceptions to exclusions from coverage (burden on insured):
"In determining a dispute over insurance coverage, we first look to the language of the policy" ... . Although the insurer has the burden of proving the applicability of an exclusion ..., it is the insured's burden to establish the existence of coverage ... . Thus, "[where] the existence of coverage depends entirely on the applicability of [an] exception to the exclusion, the insured has the duty of demonstrating that it has been satisfied" ... .
The defendant [insurer] established its prima facie entitlement to judgment as a matter of law by demonstrating the applicability of an exclusion in the plaintiff's policy ... . ... [T]he plaintiff failed to raise a triable issue of fact regarding the applicability of an exception to the exclusion ... . Copacabana Realty, LLC v Fireman's Fund Ins. Co., 2015 NY Slip Op 06106, 2nd Dept 7-15-15
LABOR LAW-CONSTRUCTION LAW
Criteria for Common Law or Implied Indemnification Explained
In affirming Supreme Court's denial of summary judgment to the defendants in a construction-accident case, the Third Department clearly explained the criteria for common law or implied indemnification. In a nutshell, any negligence by the party seeking indemnification for payments made to the injured party on behalf of a negligent tortfeasor will preclude recovery. Common law or implied indemnification applies only to parties who are liable vicariously without fault:
"The principle of common-law, or implied indemnification, permits one who has been compelled to pay for the wrong of another to recover from the wrongdoer the damages it paid to the injured party. 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" ... . Accordingly, in order "[t]o establish a claim for common-law indemnification, the party seeking indemnity must prove not only that it was not guilty of any negligence beyond the statutory liability, but must also prove that the proposed indemnitor was guilty of some negligence that contributed to the cause of the accident" ... . Hackert v Emmanuel Cong. United Church of Christ, 2015 NY Slip Op 06192, 3rd Dept 7-16-15
MENTAL HYGIENE LAW
Best Interest of the Incapacitated Person Justified Removal of Guardian of Person and Property
The Second Department determined Supreme Court properly exercised its broad discretion in granting the cross-motion to remove the guardian of Helen S.' person and property (pursuant to Mental Hygiene Law 81.35). Helen S. testified that the guardian yelled and screamed at her, made her very nervous and upset causing her body to shake, and causing her to throw up. The court explained the relevant analytical criteria:
A guardian may be removed pursuant to Mental Hygiene Law § 81.35 when " the guardian fails to comply with an order, is guilty of misconduct, or for any other cause which to the court shall appear just'" ... . "The trial court is accorded considerable discretion in determining whether a guardian should be replaced," and the "overarching concern remains the best interest of the incapacitated person" ... . Matter of Helen S. (Falero), 2015 NY Slip Op 06153, 2nd Dept 7-15-15
MUNICIPAL LAW/NEGLIGENCE
Most Important Among the Criteria for Allowing a Late Notice of Claim Is the Municipality's Timely Knowledge of the Essential Facts Underlying the Claim (Not Met Here)
In finding Supreme Court properly denied plaintiff's petition for leave to serve a late notice of claim, the Second Department explained the relevant criteria, noting it is most important that the municipality have timely knowledge of the actual facts underlying the claim:
"In determining whether to grant a petition for leave to serve a late notice of claim, the court must consider all relevant circumstances, including whether (1) the public corporation acquired actual knowledge of the essential facts constituting the claim within 90 days after the claim arose or a reasonable time thereafter, (2) the claimant demonstrated a reasonable excuse for the failure to serve a timely notice of claim, and (3) the delay would substantially prejudice the public corporation in its defense on the merits" ... . "While the presence or the absence of any one of the factors is not necessarily determinative, whether the municipality had actual knowledge of the essential facts constituting the claim is of great importance" ... . The determination to grant leave to serve a late notice of claim lies within the sound discretion of the Supreme Court ... . Matter of Barrett v Village of Wappingers Falls, 2015 NY Slip Op 06138, 2nd Dept 7-15-15
NEGLIGENCE/EDUCATION-SCHOOL LAW
Questions of Fact Whether Infant-Plaintiff's Injury at the Hands of Other Students Was Proximately Caused by Negligent Supervision and/or Negligent Hiring and/or Retention
The Second Department determined the defendant-school's motion for summary judgment was properly denied. There were questions of fact concerning whether the school had notice of a student's prior altercations with infant plaintiff and whether a teacher took appropriate steps to intervene to prevent injury to infant plaintiff. Infant plaintiff alleged he was injured when assaulted other students:
"Schools are under a duty to adequately supervise the students in their charge and they will be held liable for foreseeable injuries proximately related to the absence of adequate supervision" ... . Here, in support of their motion, the appellants failed to establish, prima facie, that they lacked sufficiently specific knowledge or notice of the dangerous conduct that allegedly caused the infant plaintiff's injuries ... . The appellants' moving papers failed to eliminate all triable issues of fact as to whether they had knowledge of a particular student's dangerous propensities arising from his involvement in other altercations with the infant plaintiff ... . The appellants' moving papers also failed to eliminate all triable issues of fact as to whether a teacher failed to take "energetic steps to intervene" to prevent the infant plaintiff's injuries at the hands of a group of his classmates ... . Amandola v Roman Catholic Diocese of Rockville Ctr., 2015 NY Slip Op 06099, 2nd Dept 7-15-15
NEGLIGENCE/EDUCATION-SCHOOL LAW/EVIDENCE
Question of Fact Whether Negligent Supervision Was the Proximate Cause of the Injuries Plaintiff's Son Suffered in an Attack by Another Student--the School Was Aware of Prior Assaultive Behavior by the Attacker and the School Was Aware of Recent Threats of Violence (Against Plaintiff's Son) by the Attacker---The Court Noted that, In a Summary Judgment Motion, the Evidence Is Viewed in the Light Most Favorable to the Nonmovant
The Third Department determined questions of fact precluded summary judgment in favor of defendant high school in a negligent supervision case. Plaintiff's son, LaValley, was assaulted by another student, Breyette, after plaintiff had alerted school officials about threats of violence made by Breyette against her son. Breyette had a history of assaultive behavior for which he was suspended in middle school. LaValley was punched 37 times in the school cafeteria in close proximity to a teacher who did not intervene and who was not aware of the conflict between the two students. The Third Department noted that, in determining a summary judgment motion, the evidence is viewed in the light most favorable to the nonmovant:
"Schools are under a duty to adequately supervise the students in their charge and they will be held liable for foreseeable injuries proximately related to the absence of adequate supervision" ... . Where a fellow student intentionally injures another, the duty is breached if the school had actual or constructive notice of the conduct that caused the injury such that the acts of the fellow student could have been reasonably anticipated ... . The adequacy of supervision and proximate cause are generally issues of fact for the jury ... .
Viewing the evidence in the light most favorable to plaintiff as the nonmovant ..., we note that Breyette had a history of assaultive behavior, including a previous assault against LaValley in middle school that resulted in Breyette's out-of-school suspension. There is also evidence that, within the month prior to the assault, Breyette specifically threatened violence against LaValley, and plaintiff testified that she immediately informed the high school principal about this threat. Plaintiff also testified that she brought up the conflict between LaValley and Breyette during a meeting with the principal and her son's teachers. Although the principal acknowledged that plaintiff had informed him about the conflict and he testified that he spoke to Breyette about it, Breyette denied that the principal had spoken to him prior to the attack. The attack itself occurred in the school cafeteria, in close proximity to a teacher who had not been notified of the threat or the conflict between the two students. According to Breyette, he calmly approached LaValley, called his name to get his attention and proceeded to punch him in the head 37 times without any adult intervention. He did not stop until another student intervened. In light of this evidence, we agree with Supreme Court that factual issues exist with respect to the adequacy of defendants' supervision and whether the lack of adequate supervision was a proximate cause of LaValley's injuries ... . LaValley v Northeastern Clinton Cent. Sch. Dist., 2015 NY Slip Op 06187, 3rd Dept 7-16-15
NEGLIGENCE/MEDICAL MALPRACTICE
Criteria for Vicarious Liability of Hospital for Actions of Non-Employee Physician Explained (Not Met Here)
The Second Department determined summary judgment dismissing the complaint should have been granted to defendant hospital. The suit against the hospital was based upon the actions of a non-employee physician chosen by the plaintiff. The Second Department succinctly explained the theories under which a hospital may be liable for the actions of a non-employee physician (none of which applied here):
Generally speaking, a hospital may not be held vicariously liable for the negligence of a private attending physician chosen by the patient ... . Moreover, so long as the resident physicians and nurses employed by the hospital have merely carried out that private attending physician's orders, a hospital may not be held vicariously liable for resulting injuries ... . These rules will not, however, shield a hospital from liability in three situations. The first is when the private physician's orders "so greatly deviate from normal medical practice that [the hospital's employees] should be held liable for failing to intervene" ... . Put another way, a hospital may be held liable when the staff follows orders despite knowing "that the doctor's orders are so clearly contraindicated by normal practice that ordinary prudence requires inquiry into the correctness of the orders" ... . Second, a hospital may be held liable when its employees have committed independent acts of negligence ... . Third, a hospital may be held liable for the negligence of a private, nonemployee physician on a theory of ostensible or apparent agency ... . Doria v Benisch, 2015 NY Slip Op 06109, 2nd Dept 7-15-15
NEGLIGENCE
Failure to Affirmatively Demonstrate When the Area Where the Slip and Fall Occurred Was Last Inspected and Failure to Affirmatively Demonstrate the Condition Was a "Latent Defect" Precluded Summary Judgment---Defendants Failed to Affirmatively Demonstrate the Absence of Constructive Notice of the Condition
The Second Department determined Supreme Court properly denied defendants' motion for summary judgment in a slip and fall case, in another illustration of the need to eliminate every possible theory of recovery in order to be awarded summary judgment. Here it was alleged plaintiff slipped and fell on a loose piece of slate. Defendants demonstrated the absence of actual notice, but did not present evidence of when the area was last inspected prior to the fall and did not demonstrate the defect was "latent" (which would have demonstrated the absence of constructive notice):
"To constitute constructive notice, a defect must be visible and apparent and it must exist for a sufficient length of time prior to the accident to permit [the defendants] to discover and remedy it" ... . "When a defect is latent and would not be discoverable upon a reasonable inspection, constructive notice may not be imputed" ... . In demonstrating that it lacked constructive notice of a visible and apparent defect, "the defendant must offer some evidence as to when the area in question was last cleaned or inspected relative to the time when the plaintiff" slipped and fell ... .
Here, the deposition testimony ... established, prima facie, that the defendants did not create or have actual notice of the allegedly loose piece of slate on the slate stone landing which allegedly caused the plaintiff Patrick Bergin to fall ... . However, in the absence of any evidence as to when the defendants last inspected the landing before the accident ..., or that the allegedly loose piece of slate on the landing was a latent defect that could not have been discovered upon a reasonable inspection ... , the defendants failed to establish, prima facie, that they lacked constructive notice of the allegedly loose piece of slate on the landing ... . Bergin v Golshani, 2015 NY Slip Op 06103, 2nd Dept 7-15-15
PRACTICE POINT
Another example of the need for a defense attorney to think like a plaintiff's attorney when bringing a motion for summary judgment. If a summary judgment motion brought by a defendant does not affirmatively address and negate every potential theory under which plaintiff could recover, the motion will be denied without any need for the court to assess plaintiff's opposing papers.
TAX LAW/ENVIRONMENTAL LAW/ADMINISTRATIVE LAW
Conversion of Water to Steam and Steam to Water Did Not Constitute a Manufacturing Process---Therefore Petitioner Was Not Entitled to Manufacturing Tax Credits in Connection with the Operation of Its "Boiling Water" Nuclear Power Facilities---The Certification Prerequisite for Pollution Tax Credits Is Not Preempted by Federal Law which Regulates the Construction and Operation of Nuclear Power Facilities
The Third Department, in a full-fledged opinion by Justice Garry, determined that petitioner, the owner of two nuclear power plants, was not entitled to manufacturing tax credits or pollution tax credits under the Tax Law. The production of electricity is specifically excluded from the range of "manufacturing" for which manufacturing credits are available. The petitioner argued that the water which is turned into steam and then back into water (to operate the turbines) constituted a manufacturing process within the meaning of the Tax Law. The Third Department disagreed, describing the process as recycling, not manufacturing. The pollution tax credits are available only to facilities certified by the Department of Environmental Conservation as compliant with state environmental, public health and sanitary rules. Petitioner's facilities were not so certified. The Third Department determined that the state certification requirement was not preempted by federal law, which exclusively regulates the construction and operation of nuclear power facilities, because tax credits do not regulate the construction or operation of such facilities. Petitioner was not, therefore, entitled to pollution tax credits. With regard to the manufacturing tax credits, the court explained:
Manufacturing is defined as "the process of working raw materials into wares suitable for use or which gives new shapes, new quality or new combinations to matter which already has gone through some artificial process by the use of machinery . . . and other similar equipment" (Tax Law former § 210 [12] [b] [ii] [A]), and "'processing' speaks to an industrial activity related to manufacturing" ... . Here, the water that is converted to steam by petitioner's assets is then converted back to its original form as water and then to steam again in an ongoing, continuous cycle that makes no permanent change in the water and yields no final product. This is more akin to recycling than to manufacturing. On these facts, we cannot find it irrational for the Tribunal to conclude that the claimed assets were not principally engaged in producing any tangible property other than electricity ... . Petitioner has neither established that its interpretation of the governing statute is the only reasonable construction nor that the Tribunal's interpretation was "irrational or unreasonable"... and, thus, has not shown that the Tribunal's determination that it is ineligible for the manufacturing tax credits should be reversed. Matter of Constellation Nuclear Power Plants LLC v Tax Appeals Trib. of the State of N.Y., 2015 NY Slip Op 06183, 3rd Dept 7-16-15