JUST RELEASED

Updated August 3, 2015

Summaries of Recently Released Decisions to Be Included In the Next Issue of the Digest (uncorrected)

 

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[THE SUMMARIES ON THESE JULY "JUST RELEASED" PAGES ARE INCLUDED IN ISSUE 16 OF THE DIGEST WHICH IS NOW ISSUED MONTHLY, NOT BI-MONTHLY]

 

ADMINISTRATIVE LAW/LANDLORD-TENANT/MUNICIPAL LAW

 

Agency's Failure to Follow Its Own Regulations Renders Determination Arbitrary and Capricious

 

The Second Department, over a partial dissent, in a rent-overcharge proceeding, affirmed Supreme Court's review of the propriety of rent regulated by the NYC Rent Stabilization Code. The court explained the extent of the courts' review powers of the administrative rulings, noting that the Deputy Commissioner's failure to calculate the appropriate rent in the manner dictated by the controlling regulations rendered that particular aspect of the Commissioner's ruling arbitrary and capricious:

 

"[I]n a CPLR article 78 proceeding to review a determination of the DHCR [NYC Department of Housing and Community Renewal], the court is limited to . . . the question of whether its determination was arbitrary and capricious and without a rational basis" ... . In reviewing a determination of the DHCR, "[t]he court may not substitute its judgment for that of the DHCR" ... . "The DHCR's interpretation of the statutes and regulations it administers, if reasonable, must be upheld" ... . * * *

 

In determining that the [landlord was] entitled to a rental increase of $204.01 per month pursuant to Rent Stabilization Code (9 NYCRR) § 2522.4(a)(1), the Deputy Commissioner deviated from the statutory calculations set forth in Rent Stabilization Code (9 NYCRR) § 2522.4(a)(4). Accordingly, the determination to recalculate the legal regulated rent to be $1,200 per month, by including a rental increase of $204.01 per month, was arbitrary and capricious and did not have a rational basis in the record ... . Matter of Velasquez v New York State Div. of Hous. & Community Renewal, 2015 NY Slip Op 06353, 2nd Dept 7-29-15

 

 

 

APPEALS/CIVIL PROCEDURE

 

Only Documents Relevant to the Order/Judgment Appealed from Should Be in the Record on Appeal---Motion to Settle the Record Denied

 

The Third Department affirmed Supreme Court's denial of plaintiff's motion to settle the record (on appeal) by adding documents (which were deemed not relevant to the appeal). The court described the required contents of the record:

 

Consistent with the provisions of CPLR 5526, "the record on appeal from a final judgment shall consist of a notice of appeal, the judgment roll, the transcript or a statement in lieu of a transcript if there was a trial or hearing, any exhibits in the court of original instance, any other reviewable order and any opinion in the case" ... . The judgment roll, in turn, shall contain, among other things, "the summons, pleadings, admissions, each judgment and each order involving the merits or necessarily affecting the final judgment" (CPLR 5017 [b]...). As a result, "[d]ocuments or information that were not before [the trial court] cannot be considered by this Court on appeal" .. . Here, Supreme Court expressly found that the five documents at issue were neither considered in conjunction with nor relevant to the issues that gave rise to its ... order and judgment... . Xiaoling Shirley He v Xiaokang Xu, 2015 NY Slip Op 06385, 3rd Dept 7-30-15

 

 

 

ARBITRATION/INSURANCE LAW

 

The Arbitrator Had the Power to Determine Whether Respondent Insurer Was a Motor Vehicle Insurer Subject to Mandatory Arbitration Pursuant to the No-Fault Insurance Law---The Arbitrator's Conclusion that the Respondent Insurer Was Not a Motor Vehicle Insurer Had a Rational Basis

 

The Second Department, in a full-fledged opinion by Justice Hinds-radix, held the arbitrator had the power to determine whether the respondent insurance company, American Bankers Ins. Co., was a motor vehicle insurer subject to the mandatory arbitration provision of the No-Fault Insurance Law. The court affirmed the arbitrator's determination that American Bankers Ins. Co. was not a motor vehicle insurer (and therefore was not subject to mandatory arbitration). The taxi insured by petitioner was involved in a collision with a horse. The rider was seriously injured and petitioner insurer paid out about $60,000 in no-fault benefits. The petitioner insurer then sought to recover the no-fault benefits from American Bankers Ins. Co., which insured the stable where the horse was kept. The Second Department explained the powers of the arbitrator and explained why the arbitrator's conclusion (that the matter was not subject to mandatory arbitration under the Insurance Law) was rational. With respect to the arbitrator's powers, the court wrote:

 

... [T]he arbitrator had the authority to rule on the issue of whether the controversy was subject to mandatory arbitration under Insurance Law § 5102 and its implementing regulations. An arbitrator's authority generally "extends to only those issues that are actually presented by the parties" ... . Therefore, an arbitrator is precluded from identifying and considering an affirmative defense that is not pleaded by a party to the arbitration. Here, however, the issue before the arbitrator cannot be characterized as an affirmative defense, such as lack of coverage ... . Nor was the issue whether the petitioner satisfied a condition precedent to recovery in a loss-transfer proceeding ... . Rather, the issue before the arbitrator was the threshold issue of whether American Bankers was an "insurer" subject to the mandatory arbitration procedures of Insurance Law § 5105, and 11 NYCRR 3.12(b) ... . Furthermore, the fact that American Bankers elected not to participate in the arbitration did not divest the arbitrator of the authority to determine, in the first instance, whether American Bankers was an "insurer" within the meaning of the subject statute and regulation. An arbitrator may hear and determine a controversy upon the evidence produced, notwithstanding the failure of a party to appear (see CPLR 7506[c]...), and since American Bankers did not appear at the arbitration, it did not affirmatively waive the issue of whether it was an "insurer" subject to arbitration by participating in the arbitration and raising other issues to the exclusion of that issue ... .

 

As noted by the Court of Appeals, a party may not be bound to arbitrate a dispute by mere inaction ... . Therefore, American Bankers' failure to move to stay arbitration pursuant to CPLR 7503 did not render this dispute arbitrable, where, as here, no agreement to arbitrate was ever made ..., and where ... American Bankers was not an insurer subject to the statutory requirement to submit to mandatory arbitration. Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Fla., 2015 NY Slip Op 06343, 2nd Dept 7-29-15

 

 

 

CIVIL PROCEDURE/EVIDENCE

 

Plaintiff's Requests to be Deposed (in China) by Remote Electronic Means and to Use a Video Transcription of the Deposition In Lieu of Testifying at Trial Should Not Have Been Denied

 

The Second Department determined Supreme Court abused its discretion when it denied plaintiff's requests to conduct a deposition by remote electronic means and to present a video transcription of the deposition at trial in lieu of testifying. Plaintiff returned to China before depositions were complete and subsequent applications for a visa were denied:

 

The Supreme Court improvidently exercised its discretion in denying that branch of the plaintiff's cross motion which was pursuant to CPLR 3103(a) for a protective order directing that his deposition be conducted by remote electronic means. "Generally, when a party to the action is to be deposed, the deposition should take place within the county . . . where the action is pending'" ... . "An exception to this rule is where a party demonstrates that examination in that county would cause undue hardship" ... . Here, in light of the evidence that the plaintiff's applications for a visa to return to the United States had been denied, and the evidence establishing that he presently was ineligible to be admitted to the United States, the plaintiff demonstrated that traveling from China to the United States for his deposition or independent medical examination would cause undue hardship ... .

 

Further, the Supreme Court erred in, in effect, denying that branch of the plaintiff's amended cross motion which was pursuant to CPLR 3117(a)(3) for leave to employ a video transcription of his deposition testimony at trial in lieu of appearing at trial to give testimony. The plaintiff met the criteria set forth in CPLR 3117(a)(3)(ii), (iv), and (v) ... . Feng Wang v A & W Travel, Inc., 2015 NY Slip Op 06312, 2nd Dept 7-29-15

 

 

 

CIVIL PROCEDURE/CONTRACT LAW/TRUSTS AND ESTATES/FRAUD/TORTIOUS INTERFERENCE WITH CONTRACT/LEGAL MALPRACTICE/ATTORNEYS

 

Flaws in Causes of Action Stemming from the Alleged Breach of a Joint Venture Agreement Explained

 

In an action stemming from the alleged breach of a joint venture agreement, the Second Department, in the context of a motion to dismiss for failure to state a cause of action, went through each cause of action and, where dismissal was appropriate, noted the pleading failure. The joint venture cause of action did not allege a mutual promise to share the losses. The constructive trust cause of action did not allege a confidential or fiduciary relationship. The fraud allegations were not collateral to the terms of the alleged joint venture and no out-of-pocket losses were alleged. The tortious interference with contract cause of action did not allege the intentional procurement of a breach of the joint venture agreement. The accounting cause of action did not allege that a demand for an accounting was made. The Second Department noted that the motion to amend the complaint to cure some of the defects should have been granted. With respect to the criteria for determining a motion to dismiss for failure to state a cause of action where documentary evidence supporting the motion is submitted, the court explained:

 

"A motion pursuant to CPLR 3211(a)(1) to dismiss the complaint on the ground that the action is barred by documentary evidence may be granted only where the documentary evidence utterly refutes the plaintiff's factual allegations, thereby conclusively establishing a defense as a matter of law" ... .

 

In considering a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), "the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" ... . A court may consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7) ... . When evidentiary material is considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion has not been converted to one for summary judgment, "the criterion is whether the [plaintiff] has a cause of action, not whether he [or she] has stated one, and, unless it has been shown that a material fact as claimed by the [plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it . . . dismissal should not eventuate"... . Mawere v Landau, 2015 NY Slip Op 06317, 2nd Dept 7-29-15

 

 

 

CIVIL PROCEDURE/FORECLOSURE

 

Hearing Required to Determine Whether Plaintiff Bank Negotiated in Good Faith During the Settlement Conference

 

The Second Department determined defendant homeowner had raised questions of fact whether plaintiff bank negotiated in good faith in a settlement conference pursuant to CPLR 3408 (designed to find a way to avoid foreclosure). The determinative motions heard by Supreme Court were therefore premature. The matter was sent back for a hearing on the "good faith" question:

 

CPLR 3408 requires the parties to a residential foreclosure action to attend settlement conferences at an early stage of the litigation, at which they must "negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible" (CPLR 3408[f]). During settlement conferences, "[m]otions shall be held in abeyance" (22 NYCRR 202.12-a[c][7]). Here, the defendant submitted evidence that the plaintiff may have failed to exercise good faith during the settlement conference phase of this action with respect to her applications seeking a loan modification pursuant to the federal Home Affordable Modification Program (hereinafter HAMP). Specifically, she presented evidence that the plaintiff may have violated HAMP regulations and guidelines, which would constitute a failure to negotiate in good faith as required by CPLR 3408(f) ... . She also presented evidence that the plaintiff engaged in dilatory conduct, such as making piecemeal document requests, providing contradictory information, and repeatedly requesting documents which had already been provided ... . Since the defendant's submissions raise a factual issue as to whether the plaintiff failed to negotiate in good faith, thus depriving her of a meaningful opportunity to resolve this action through loan modification or other potential workout options (see CPLR 3408[a]), the Supreme Court should have held a hearing to determine this issue prior to consideration of the plaintiff's motion and the defendant's cross motion. Onewest Bank, FSB v Colace, 2015 NY Slip Op 06321, 2nd Dept 7-29-15

 

 

 

CIVIL PROCEDURE/CONTRACT LAW

 

correspondence which was intended to lead to a settlement agreement (re: real property taxes) did not create a binding agreement

The Third Department determined correspondence which was intended to lead to a settlement agreement (re: real property taxes) did not create a binding agreement. Subsequent to the correspondence, proposed stipulations had been circulated but were not executed. The Court explained the relevant analytical criteria:

 

... [A]n out-of-court settlement agreement "is not binding upon a party unless it is in a writing subscribed by [that party] or [that party's] attorney" (CPLR 2104). Writings between parties to an action or proceeding that discuss the possibility of settlement will be considered to constitute a binding agreement if "the settlement agreement was adequately described in [such] writings, namely, the agreement was clear, the product of mutual accord and contained all material terms" ... . Settlement-related writings may be deemed to have contained sufficiently detailed terms to give rise to a binding agreement when, for example, these writings explicitly incorporate the terms of other documents prepared in anticipation of settlement ... . In contrast, settlement-related writings will not be found to have created a binding agreement if they expressly anticipate a subsequent writing that is to officially memorialize the existence of a settlement agreement and set forth all of its material terms ... . Matter of George W. & Dacie Clements Agric. Research Inst., Inc. v Green, 2015 NY Slip Op 06399, 3rd Dept 7-30-15

 

 

 

CIVIL PROCEDURE/ASSOCIATIONS/EDUCATION-SCHOOL LAW

 

Suit Against an Unincorporated Association Must Allege Every Member of the Association Ratified the Conduct Complained Of

 

In affirming the dismissal of a cause of action against unions brought by a probationary teacher who had been terminated, the Second Department noted that a suit against an unincorporated association must allege that the conduct complained of was ratified by every member of the association:

 

The Supreme Court ... properly granted the union defendants' cross motion pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against them. Because the union defendants were unincorporated associations, and because the amended complaint failed to allege that the conduct complained of on the part of the union defendants was authorized or ratified by every one of their respective members, the amended complaint failed to state a cause of action against the union defendants ... . Sweeny v Millbrook Cent. Sch. Dist., 2015 NY Slip Op 06331, 2nd Dept 7-29-15

 

 

 

 

 

CONTRACT LAW

 

"No Damages for Delay" and "Mandatory Notice" Clauses Precluded Suit

 

The Third Department affirmed the dismissal of plaintiff's breach of contract complaint, finding that the exceptions to the enforceability of a "no damages for delay" clause did not apply, and the "mandatory notice" clause precluded suit for "extra work." Plaintiff was engaged by defendant to install heating, ventilation and air conditioning equipment:

 

As a general rule, "contract clauses exculpating the contractee from liability to the contractor for damages resulting from delays in performance of the contract work" are valid and enforceable ... . However, even where the contract contains such a clause, there are several recognized exceptions. As relevant here, a contractor may still recover for "delays caused by the contractee's bad faith or its willful, malicious, or grossly negligent conduct" ... . A defendant seeking summary judgment dismissing a claim for delay damages "bears the initial burden of demonstrating prima facie that none of the exceptions to the 'damages for delay' clause are present" ... .  * * *

 

... [P]laintiff attempts to claim compensation for tasks that allegedly constituted "extra work" beyond the scope of the parties' contract. However, a provision in the contract required plaintiff to notify defendant that it considered a task to constitute extra work within 15 working days after being ordered to undertake the task or beginning to perform it. Here, plaintiff concedes that it did not notify defendant of this claim until five months after it began performance of the disputed task. Thus, "[d]efendant established its entitlement to summary judgment by submitting proof that [plaintiff] did not comply with the condition precedent" by providing timely notice ... . Tougher Indus., Inc. v Dormitory Auth. of the State of N.Y., 2015 NY Slip Op 06388, 3rd Dept 7-30-15

 

 

CONTRACT LAW

 

Criteria for an Intended Third-Party Beneficiary of a Contract Explained

 

The Second Department determined the documents submitted by defendant power companies did not utterly refute plaintiff school-district's allegation that it was an intended (not "incidental") third-party beneficiary of a Power Supply Agreement (PSA) in which the defendants agreed not to bring any further tax certiorari proceedings to challenge property tax assessments. The school district brought the breach of contract action when the defendants started a tax certiorari proceeding. Defendants' motion to dismiss based upon documentary evidence was properly denied. The court explained the criteria for a third-party beneficiary of a contract:

 

" A non-party [to a contract] may sue for breach of contract only if it is an intended, and not a mere incidental, beneficiary'" ... . However, " the identity of a third-party beneficiary need not be set forth in the contract or, for that matter, even be known as of the time of its execution'" ... . "A party asserting rights as a third-party beneficiary must establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for [its] benefit and (3) that the benefit to [it] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [it] if the benefit is lost" ... . " In determining third-party beneficiary status it is permissible for the court to look at the surrounding circumstances as well as the agreement,'" and " the obligation to perform to the third party beneficiary need not be expressly stated in the contract'" ... . Board of Educ. of Northport-E. Northport Union Free Sch. Dist. v Long Is. Power Auth., 2015 NY Slip Op 06304, 2nd Dept 7-29-15

 

 

Same issue and result in: Town of Huntington v Long Is. Power Auth., 2015 NY Slip Op 06332, 2nd Dept 7-29-15

 

 

 

CRIMINAL LAW/APPEALS

 

Re: the Unsealing of the Grand Jury Proceedings Concerning Eric Garner's Death at the Hands of the Police, a "Compelling and Particularized Need" for Disclosure Had Not Been Demonstrated---the Public Interest in Preserving Grand Jury Secrecy Outweighed the Public Interest in Disclosure

 

The Second Department, in an extensive, detailed decision (not fully summarized here), determined that the grand jury proceedings concerning the death of (unarmed) Eric Garner at the hands of the police (who were not indicted) should not be unsealed. As a threshold issue, the court found that New York City's Public Advocate, pursuant to the terms of the City Charter, did not have the capacity to bring the petition. However, the other petitioners, the Legal Aid Society, the New York Civil Liberties Union, and the local branch of the NAACP, had standing to bring the petition. In essence, the court held that petitioners had not demonstrated the requisite "compelling and particularized" need for disclosure and the public interest in preserving grand jury secrecy outweighed the public interest in disclosure. In response to the District Attorney's argument that the underlying order denying the petition to unseal the records was not appealable, the Second Department explained that the order was civil, not criminal, in nature (and therefore appealable). The court explained the general analytical criteria as follows:

 

The legal standard that must initially be applied to petitions seeking the disclosure of grand jury materials is whether the party seeking disclosure can establish a "compelling and particularized need" for access to them ... . Only if the compelling and particularized need threshold is met must the court then balance various factors to determine whether the public interest in the secrecy of the grand jury is outweighed by the public interest in disclosure ... . The decision as to whether to permit disclosure is committed to the trial court's discretion ... . However, "without the initial showing of a compelling and particularized need, the question of discretion need not be reached, for then there simply would be no policies to balance" ... .

 

A party seeking disclosure will not satisfy the compelling and particularized need threshold simply by asserting, or even showing, that a public interest is involved. The party must, by a factual presentation, demonstrate why, and to what extent, the party requires the minutes of a particular grand jury proceeding "to advance the actions or measures taken, or proposed (e.g. legal action, administrative inquiry or legislative investigation), to insure that the public interest has been, or will be, served" ... . "[I]f the supposed societal benefit of maximizing the public's awareness could by itself trump all other considerations," there would not exist a "legal presumption against disclosure of grand jury evidence, let alone a rule providing that such presumption may be overcome only by a showing of a particularized and compelling need for disclosure" ... . Significantly, courts that have permitted disclosure of grand jury evidence have uniformly done so for some purpose other than generalized public interest and dissemination ... . Matter of James v Donovan, 2015 NY Slip Op 06348, 2nd Dept 7-29-15

 

 

CRIMINAL LAW

 

"For Cause" Challenges to Three Jurors Who Said Only They Would "Try" to Be Fair Should Have Been Granted---New Trial Required

 

The Second Department reversed defendant's conviction because Supreme Court should have granted three "for cause" challenges to jurors. All three jurors expressed doubts about their abilities to be fair based upon personal experiences. All three said only that they would "try" to be fair:

 

CPL 270.20(1)(b) provides that a prospective juror may be challenged for cause if the juror "has a state of mind that is likely to preclude him [or her] from rendering an impartial verdict based upon the evidence adduced at the trial." Where an issue is raised concerning the ability of a prospective juror to be fair and impartial, the prospective juror must state unequivocally that his or her prior state of mind will not influence his or her verdict, and that he or she will render an impartial verdict based solely on the evidence ... . A prospective juror's responses, construed as a whole, must demonstrate an absolute belief that his or her prior opinion will not influence his or her verdict ... . * * *

 

At no point did the prospective jurors unequivocally state that their prior states of mind would not influence their verdict, and that they would render an impartial verdict based solely on the evidence. Under the circumstances, the Supreme Court should have granted the defense's challenges for cause to all three prospective jurors ... . People v Alvarez, 2015 NY Slip Op 06354, 2nd Dept 7-29-15

 

 

 

 

CRIMINAL LAW

 

Failure to Directly Address a Juror's Stated Bias Required Reversal---"Bright Line" Rule Explained

 

The Third Department, over a dissent, determined that, once the prospective juror (No. 383) expressed a bias based upon the age difference between the adult defendant and child complainant, the failure to gain the assurance from the juror that her prior state of mind will not influence her verdict and she will render an impartial verdict based solely on the evidence constituted reversible error. The fact that the juror assured the judge she would not vote to convict if she had a reasonable doubt and that she would follow the law as instructed was not enough to address the expressed age-related bias.  A juror who has expressed a bias must unambiguously assure the court she will put her bias aside:

 

Once a prospective juror has identified his or her own biased perspective, he or she "must expressly state that his [or her] prior state of mind concerning either the case or either of the parties will not influence his [or her] verdict, and he [or she] must also state that he [or she] will render an impartial verdict based solely on the evidence" ... . "[N]othing less than a personal, unequivocal assurance of impartiality can cure a juror's prior indication that [he or] she is predisposed against a particular defendant or particular type of case" ..., and, accordingly, the "bright-line standard . . . followed throughout the state" is "that a prospective juror who expresses partiality towards [one party] and cannot unequivocally promise to set aside this bias should be removed for cause" ... . * * * 

 

Considering the entirety of the questions posed to juror No. 383 and her responses, juror No. 383 unambiguously acknowledged a form of bias — based on the respective ages of the victim and defendant — that she identified as preventing her from being a fair and impartial juror. After juror No. 383 identified her own bias, she was never asked a question that referenced whether she could set aside any biases she held, generally, or whether she could set aside her specific bias regarding the respective ages of defendant and the victim. Further, in her responses to questions posed to her, juror No. 383 never specifically made reference to the age issue after she identified it as preventing her from being fair and impartial, and she never agreed, more generally, that she could set aside any bias that she held and decide the case in a fair and impartial manner based on the evidence presented. Therefore, juror No. 383 did not "unambiguously state that, despite preexisting opinions that might indicate bias, [she would] decide the case impartially and based on the evidence," because she never made any statement regarding her preexisting opinion, let alone an unambiguous statement that she could set such opinion aside (People v Arnold, 96 NY2d at 363)[FN3]. Accordingly, County Court committed reversible error in denying defendant's for-cause challenge to a juror who never contradicted or retracted her statement that her bias related to the respective ages of defendant and the victim prevented her from being a fair and impartial juror ... . People v Warrington, 2015 NY Slip Op 06380, 3rd Dept 7-30-15

 

 

 

CRIMINAL LAW/EVIDENCE

 

Court Should Not Have Ruled Defendant Could Be Cross-Examined About His Prior Possession of Guns Under Sandoval---Possession of Guns Has No Bearing on Credibility

 

Although the error was deemed harmless, the Second Department noted that defendant's prior conduct of possessing guns should not have been ruled a topic of proper cross-examination of the defendant. Gun possession has no relationship to credibility, which is the sole concern under Sandoval:

 

We agree with the defendant that the Supreme Court improvidently exercised its discretion in determining, after a Sandoval hearing (see People v Sandoval, 34 NY2d 371), that the People could inquire about the defendant's prior conduct of possessing guns. Whereas "[c]ommission of perjury or other crimes or acts of individual dishonesty, or untrustworthiness . . . will usually have a very material relevance, whenever committed" (id. at 377), the fact that the defendant had possessed guns on a prior occasion had little bearing on his credibility ... . People v Anderson, 2015 NY Slip Op 06355, 2nd Dept 7-29-15

 

 

 

CRIMINAL LAW/SEX OFFENDER REGISTRATION ACT (SORA)

 

Marijuana Convictions, StandIng Alone, Are Not a Sufficient Basis for Assessment of Points Against Defendant for Drug Abuse

 

The Second Department determined points for drug abuse should not have been assessed against defendant based solely on a "marijuana" convictions:

 

... [T]he hearing court erred in assessing points under risk factor 11 (Drug or Alcohol Abuse) based solely on the fact that the defendant's criminal history includes convictions for the possession and sale of marijuana. Under risk factor 11, possession or sale of marijuana does not, in itself, amount to drug abuse ... . Since the People presented no evidence that the defendant had ever used, much less abused, drugs or alcohol, the evidence offered by the People was insufficient to satisfy their burden of proving, by clear and convincing evidence, that the defendant had "a substance abuse history or was abusing drugs and or alcohol at the time of the offense".. . People v Velazquez, 2015 NY Slip Op 06323, 2nd Dept 7-29-15

 

 

 

CRIMINAL LAW/EVIDENCE

 

Police Officer's Observations Filtered Through His Experience Justified Stop and Frisk

 

The Second Department, over a dissent, determined that the street stop of the defendant was justified by reasonable suspicion. Here the officer said he made eye contact with the defendant, saw an outline of a rectangular object under defendant's clothes and the defendant's movements were consistent with adjusting a weapon under the waistband. The majority held that was enough, because the officer could rely on his experience to interpret the defendant's movements. The dissent argued that making eye contact, seeing the outline of a rectangular object, and the defendant's adjusting his waistband was not enough to justify the stop:

 

"In determining whether an individual's actions rise to the level of reasonable suspicion, police officers are permitted to interpret the behavior in light of their training and experience" ... . Here, in contrast to the opinion of our dissenting colleague, the factual circumstances described by Mourad, coupled with the officer's experience and training, were sufficient to permit him to request information from the defendant ... . The decision to make inquiry of the defendant did not stem from mere "whim or caprice," but was objectively based upon observation of the defendant's actions as filtered through the officer's experience ... . Officer Mourad specifically testified that he believed the shape of the concealed object which he observed under the defendant's clothing was the outline of a gun ... . Mourad explained that the defendant moved in a way that he recognized, from experience, as typical of attempts to adjust a firearm kept in a waistband ..., and further testified that the defendant began to increase his pace after the officers exited their vehicle and announced their presence ... . Accordingly, there was reasonable suspicion to stop and frisk the defendant ... . People v Fletcher, 2015 NY Slip Op 06366, 2nd Dept 7-29-15

 

 

 

CRIMINAL LAW/VEHICLE AND TRAFFIC LAW/EVIDENCE

 

The Prejudicial Effect of the Result of the Portable Breath Test (PBT) Outweighed Its Probative Value---New Trial Ordered

 

The Second Department determined defendant's DWI conviction must be reversed because evidence of the result of the portable breath test (PBT), which is generally inadmissible as unreliable, was allowed in evidence. The defendant had subsequently agreed to the chemical breath test, which can be admissible evidence at trial, but his breaths were so shallow during repeated attempts to administer the test that no results were obtained. The result of the PBT (which showed the presence of alcohol) was deemed admissible, not as proof of intoxication, but as evidence of defendant's state of mind when the chemical breath test was administered (the People's position was that defendant deliberately sabotaged the chemical test with shallow breaths).  Although the PBT was ostensibly not admitted as proof of intoxication, the Second Department determined the jury would have taken it as such and, therefore, the probative value of the test result was outweighed by its prejudicial effect:

 

On appeal, the defendant contends that he was deprived of his right to a fair trial based on the County Court's admission of the PBT results into evidence. We agree. Under the circumstances of this case, the probative value of the PBT evidence was outweighed by its prejudicial effect and, accordingly, should have been excluded ... .

 

Generally, the result of a PBT "is not admissible to establish intoxication, as its reliability for this purpose is not generally accepted in the scientific community" ... . Here, although the PBT evidence was not introduced for the purpose of proving intoxication, since the jurors were permitted to hear that the PBT detected the presence of alcohol, the County Court created an unacceptable risk that the jurors would improperly consider the PBT evidence for this impermissible purpose. This risk was enhanced both by the County Court's determination to take judicial notice that the PBT was on the Commissioner's conforming list and the State Trooper's trial testimony that he was trained in the operation of the PBT device. The trooper's testimony in this regard, which was directed towards the issue of whether the PBT was reliable for its intended purpose—the assessment of the defendant's level of intoxication—was irrelevant to the defendant's state of mind at the time he submitted to the chemical breath test at the State Police barracks. Thus, this testimony increased the risk that the jury would be unable to avoid considering the PBT evidence as proof of the defendant's intoxication. People v Palencia, 2015 NY Slip Op 06373, 2nd Dept 7-29-15

 

 

EDUCATION-SCHOOL LAW/ADMINISTRATIVE LAW/EMPLOYMENT LAW

 

Petitioner-Teacher Never Consented to an "Out of Area" Assignment---Therefore She Was Entitled to Seniority in Her Teaching Area, Despite Her Assignment to Another Area

 

The Third Department determined Supreme Court correctly annulled the commissioner's determination terminating petitioner's employment on the ground that her position was properly eliminated because she had the least seniority. Although petitioner was in the English tenure area, she was assigned to teach computer classes, which she had taught for 11 years. The commissioner determined she had acquired no seniority because she had not taught in her tenure area.  However, the relevant regulations require that a teacher consent to an "out of area" assignment. Because petitioner never consented to an "out of area" assignment, she was entitled to seniority in her English tenure area, despite the fact she was assigned to teach computer classes.  The Third Department noted that the Commissioner's ruling constituted an artificial or forced construction of the applicable regulations:

 

Petitioner acknowledges that, although the Board awarded her tenure in the English 7-12 tenure area, she never spent 40% or more of her time teaching English classes. She contends, however, that her seniority is preserved by another provision of the Rules, which states that "[n]o professional educator, whether on tenure or in probationary status, may be assigned to devote a substantial portion of his [or her] time in a tenure area other than that in which he [or she] has acquired tenure or is in probationary status, without his [or her] prior written consent" (8 NYCRR 30-1.9 [c]).

 

Our review of the evidence reveals that petitioner was a professional educator (see 8 NYCRR 30-1.1 [e]) who was assigned exclusively to teach computer classes, which the Board admits was an assignment outside of her probationary and acquired English 7-12 tenure area. The record is devoid of evidence that petitioner was aware that she was given an out-of-area assignment or that she consented to it in writing. * * * Nowhere in the language of 8 NYCRR 30-1.9 (c) is there a requirement that professional educators must first spend some of their time teaching within their probationary or acquired tenure areas before earning the right to consent to an out-of-area assignment. Inasmuch as the Commissioner's interpretation reads this nonexistent requirement into the provision, we view it as "an artificial or forced construction" (McKinney's Cons Laws of NY, Book 1, Statutes § 94).

 

The Commissioner's interpretation also runs contrary to the underlying purposes of the Rules governing teacher tenure and seniority credit. As the Court of Appeals has noted, 8 NYCRR former 30.9 (b) (now 8 NYCRR 30-1.9 [c]) "protects teachers from being deprived of credit in a previously appointed tenure area if they unwittingly accept, and serve in, out-of-area assignments" ... . The "twofold protective purpose" of 8 NYCRR 30-1.9 (c) — that is, to protect teachers from unknowing, involuntary out-of-area assignments and allow for the accrual of seniority credit in their original tenure area if they should accept such an assignment — is not served if the provision is construed in such a way as "to block a teacher from receiving seniority credit which, absent school district error, would have been received by reason of actual service in an out-of-tenure area"... . Because the Commissioner's interpretation of 8 NYCRR 30-1.9 (c) has precisely this effect on petitioner, we find that Supreme Court properly annulled the Commissioner's confirmation of petitioner's termination. Matter of Cronk v King, 2015 NY Slip Op 06396, 3rd Dept 7-30-15

 

 

 

EDUCATION-SCHOOL LAW

 

Breach of Contract Action Against School District Untimely---Notice of Claim Required by Education Law 3813 Not Filed Within Three Months of the Accrual of the Claim

 

In finding plaintiff's breach of contract action against defendant school district was time-barred, the Second Department noted the Education Law, as a condition precedent, requires the filing of a notice of claim within three months of the accrual of the cause of action:

 

Education Law § 3813(1) requires a party to serve a notice of claim upon a school district within three months after the accrual of such claim as a condition precedent to the commencement of an action ... . Claims arising out of a breach of contract accrue when "payment for the amount claimed was denied" (Education Law § 3813[1]). A denial of payment is only deemed to occur "upon an explicit refusal to pay" or when a party should have viewed its claim as having been constructively rejected ... . Here, in support of that branch of the defendants' cross motion which was for summary judgment dismissing the complaint, the defendants demonstrated, prima facie, that the plaintiff failed to serve a notice of claim within three months of ... the date when the defendants explicitly refused payment to the plaintiff. In opposition, the plaintiff failed to raise a triable issue of fact ... . School Aid Specialists, LLC v Board of Educ. of Warwick Val. Cent. Sch. Dist., 2015 NY Slip Op 06328, 2nd Dept 7-29-15

 

 

 

EMPLOYMENT LAW/LABOR LAW/HUMAN RIGHTS LAW/CIVIL RIGHTS LAW

 

Bringing a Cause of Action Under the Whistleblower Statute Alleging Retaliation for Reporting Misconduct Does Not Bar Claims Arising from the Misconduct Itself (Here Claims of Sexual Harassment)

 

The First Department, in a full-fledged opinion by Justice Tom, determined that a cause of action pursuant to Labor Law 740, the whistleblower statute, did not bar the underlying sexual harassment and negligence claims reported by the whistleblowers.  Labor Law 740 prohibits retaliation for blowing the whistle, which is distinct from claims arising from the misconduct which was reported:

 

In dispute is the scope of Labor Law § 740 (7), which provides:

 

"Existing rights. Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any employee under any other law or regulation or under any collective bargaining agreement or employment contract; except that the institution of an action in accordance with this section shall be deemed a waiver of the rights and remedies available under any other contract, collective bargaining agreement, law, rule or regulation or under the common law."

 

This provision makes clear that the terminated employee is neither compelled to bring an action under the statute nor limited to the relief it affords but may pursue any other available remedy. However, if the employee chooses to institute an action pursuant to the statute, any alternative means of redress is thereby waived.

 

Central to the assessment of the scope of this waiver is the purpose of the statute, both with respect to the abuse it is intended to remedy and the relief it provides. It prohibits "retaliatory personnel action" against an employee who undertakes to disclose conduct in violation of any law or regulation, who furnishes information to an investigatory body in regard to such activity or who refuses to participate in such activity (Labor Law § 740 [2]). Notably, statutory relief is confined to wrongful termination; no redress is provided to the victims of the underlying misconduct. The statute specifically addresses the termination of an employee who witnesses and reports misconduct. It is not so broad as to encompass the circumstances at bar, in which plaintiffs were not only terminated for revealing abuse by senior managers but were also targeted and victimized by that abuse. Lee v Woori Bank, 2015 NY Slip Op 06299, 1st Dept 7-28-15

 

 

 

EVIDENCE

 

The Criteria for an Exception to the "Best Evidence Rule" for Admission of an Agreement, the Terms of Which Were In Dispute, Were Not Met---New Trial Ordered

 

The Second Department determined the the criteria for an exception to the "best evidence rule" for the admission of a copy of a joint development agreement, the terms of which were in dispute, were not met. A new trial was ordered. The court explained the rule:

 

The best evidence rule requires the production of an original writing where its contents are in dispute and are sought to be proven... . The rule "serves mainly to protect against fraud, perjury and inaccuracies . . . which derive from faulty memory" ... . Under an exception to the rule, "secondary evidence of the contents of an unproduced original may be admitted upon threshold factual findings by the trial court that the proponent of the substitute has sufficiently explained the unavailability of the primary evidence, and has not procured its loss or destruction in bad faith" ... . The proponent of the secondary evidence "has the heavy burden of establishing, preliminarily to the court's satisfaction, that it is a reliable and accurate portrayal of the original. Thus, as a threshold matter, the trial court must be satisfied that the proffered evidence is authentic and correctly reflects the contents of the original before ruling on its admissibility" ... .

 

Here, the plaintiff failed to adequately explain the unavailability of the primary evidence, i.e., the original executed joint development agreement ... . Stathis v Estate of Karas, 2015 NY Slip Op 06330, 2nd Dept 7-29-15

 

 

 

INSURANCE LAW

 

Plaintiff Did Not Affirmatively Demonstrate Fire Was Not Intentionally Set by Merely Challenging the Insurer's Arson Investigation---Plaintiff's Summary Judgment Motion Properly Denied---Proof Burdens at Summary Judgment Stage Explained

 

The Third Department determined plaintiff was not entitled to summary judgment in its breach of contract action against the insurer. Plaintiff's restaurant was destroyed by fire. The insurer disclaimed coverage on the ground that the fire had been intentionally set. Plaintiff brought a summary judgment motion seeking the dismissal of the insurer's affirmative defense (arson) and judgment in its favor on liability. The court explained the relevant proof burdens re: the affirmative defense of arson at the summary judgment stage:

 

As the movant, plaintiff was required to initially demonstrate "the absence of genuine issues of material fact on every relevant issue raised by the pleadings, including any affirmative defenses" ... . Upon the affirmative defense of arson, if plaintiff, as the insured, met its initial burden, the burden would then shift to defendant, as the insurer. Although defendant's ultimate burden of proving the affirmative defense at trial would be by the standard of clear and convincing evidence ..., this strict standard is not applied at this juncture. Assuming that plaintiff met its initial burden to demonstrate that the fire was not intentionally set and that plaintiff had no motive to commit arson, to defeat the summary judgment motion defendant was merely required to demonstrate "that plaintiff's premises may have been damaged by arson and that plaintiff may have had a motive to see the property destroyed by fire" ... . Importantly, "[e]vidence of motive and incendiary origin without more is sufficient to defeat an insured's motion for summary judgment in an action on its fire insurance policy" ... .

 

Plaintiff failed to offer evidence to establish that the fire had not been intentionally set and, instead, merely challenged the validity of defendant's investigation, arguing that the evidence failed to affirmatively establish that the fire had been deliberately set. Morley Maples, Inc. v Dryden Mut. Ins. Co., 2015 NY Slip Op 06395, 3rd Dept 7-30-15

 

 

 

LABOR LAW-CONSTRUCTION LAW/CIVIL PROCEDURE/EVIDENCE

 

Plaintiff's Use of a Partially Open A-Frame Ladder Did Not Constitute Misuse of a Safety Device---Directed Verdict in Favor of Plaintiff on Labor Law 240(1) Cause of Action Was Proper/Plaintiff's Apparent Failure to Turn Over All of the Relevant Medical Records Required a New Trial on Damages

 

The First Department, over a dissent, determined that the court, after a jury trial, properly directed a verdict in favor of the plaintiff on the Labor Law 240(1) cause of action. Plaintiff was using an A-frame ladder to weld a tank. It was not possible to open the ladder completely unless the ladder was perpendicular to the tank. Because using the ladder in a perpendicular position would have forced plaintiff to twist his body to weld, plaintiff placed the ladder against the tank in a partially open position. The ladder "shook" and plaintiff fell off it. The First Department held that, under those facts, the way plaintiff used the ladder did not constitute misuse of a safety device and, because Labor Law 240(1) was violated, plaintiff's action could not constitute the sole proximate cause of the injury. A new trial was required, however, because the medical records supplied to the defendants pursuant to a subpoena were much less voluminous than the medical records brought to trial by the plaintiff's medical expert, thereby depriving the defendants of the ability to fully cross-examine the expert:

 

A verdict may be directed only if the "court finds that, upon the evidence presented, there is no rational process by which the fact trier could base a finding in favor of the nonmoving party" ... . The benefit of all inferences is afforded to the non moving party, and the facts are viewed in a light most favorable to it (id.). Here, plaintiff argued that there was no issue of fact necessary for a jury to resolve regarding whether defendants violated their obligation under Labor Law § 240(1) to provide him with an appropriate safety device to guard against the elevation-related risk. That is because, he asserts, there was no alternative safety device readily available to him, and he had no choice but to place the ladder in the closed position given the way the tank was situated. Defendants do not dispute that an unsecured ladder, even one in good condition, can give rise to Labor Law section 240(1) liability if the worker falls from it * * *

 

A worker's decision to use an A-frame ladder in the closed position is not a per se reason to declare him the sole proximate cause of an accident ... . To be sure, we do not disagree with the dissent that, in principle, placement of an A-frame ladder in the closed position "can constitute misuse of a safety device".... . * * *

 

Here, plaintiff gave a specific reason why he used the ladder in the closed position. Plaintiff testified that using the ladder in an open position and twisting his body to face the tank would have been exhausting, requiring him to take frequent breaks, which defendants did not dispute. Indeed, defendants' assertion that turning the ladder would have presented an issue of "[m]ere expediency or inconvenience" mischaracterizes the record. In any event, we are hesitant to adopt a rule that, in order to permit a worker to enjoy the protection of Labor Law section 240(1), would require him to take extraordinary measures to perform his work, when he has a good faith belief that doing so would cause him acute discomfort while drastically slowing his pace ... . Noor v City of New York, 2015 NY Slip Op 06295, 1st Dept 7-28-15

 

 

 

 

LIEN LAW/EMPLOYMENT LAW

 

Verified Statement Demonstrated Site Contractor's Improper Use of Funds Held in Trust for the Payment of Subcontractors---Plaintiff Subcontractor Entitled to Summary Judgment on Liability Re: Subcontractor's Mechanic's Lien

 

The Third Department affirmed Supreme Court's grant of summary judgment to plaintiff subcontractor in plaintiff's action against the site contractor seeking payment for completed work. Plaintiff alleged it was underpaid for its work and filed a mechanic's lien. The general contractor withheld 1 1/2 times the amount of the lien from its payment to the site contractor.  The plaintiff demanded a verified statement from the site contractor (showing the receipt and disbursement of funds held by the site contractor in trust for subcontractors) pursuant to Lien Law 76. The verified statement submitted by the site contractor indicated a multi-million dollar discrepancy between the amount it received and the amounts paid out. Because of the discrepancy, the site contractor was found to have used the funds it held in trust for subcontractors for purposes other than the trust. Plaintiff was therefore entitled to summary judgment on liability:

 

Pursuant to Lien Law article 3-A, owners, contractors and subcontractors are required to maintain funds in trust in order to "provide[] protection to certain parties involved in the improvement of real property, ensuring that they will be properly compensated for their services" ... . Specifically, and insofar as is relevant here, "[t]he funds received by a contractor or subcontractor. . . shall be a separate trust and the contractor or subcontractor shall be the trustee thereof" (Lien Law § 70 [2]). A trustee, in turn, is required to, among other things, maintain books or records with respect to each trust, detailing the trust assets receivable, trust accounts payable, trust funds received, trust payments made with trust assets and transfers in repayment of or to secure advances made pursuant to a notice of lending ... . A beneficiary of such a trust is entitled to, among other things, "receive a verified statement setting forth the entries with respect to the trust contained in such books or records" ... . "Any use of the trust funds other than the payment of claims under the contract . . . is an improper diversion of trust assets" ..., and the trustee's failure to keep the statutorily required books and records "shall be presumptive evidence that the trustee has applied or consented to the application of trust funds . . . for purposes other than a purpose of the trust" (Lien Law § 75 [4]). Anthony DeMarco & Sons Nursery, LLC v Maxim Constr. Serv. Corp., 2015 NY Slip Op 06394, 3rd Dept 7-30-15

 

 

 

 

 

 

 

 

MENTAL HYGIENE LAW

 

Insufficient Evidence of Incapacity---Appointment of Guardian Reversed

 

The Second Department, reversing Supreme Court, determined there was insufficient evidence to support the finding that the allegedly incapacitated person (AIP) was in fact incapacitated:

 

In order for a court to exercise its authority to appoint a personal needs guardian, it must make a two-pronged determination (see Mental Hygiene Law § 81.02[a]...). First, the court must determine that "the appointment is necessary to provide for the personal needs of that person, including food, clothing, shelter, health care, or safety" (Mental Hygiene Law § 81.02[a][1]). Second, the court must determine "that the person agrees to the appointment, or that the person is incapacitated" (Mental Hygiene Law § 81.02[a][2]).

 

With respect to the second prong, "[t]he determination of incapacity . . . shall consist of a determination that a person is likely to suffer harm because" (1) "the person is unable to provide for [his or her] personal needs" and (2) "the person cannot adequately understand and appreciate the nature and consequences of such inability" (Mental Hygiene Law §§ 81.02[b][1], [2]). In reaching its determination as to whether an individual is incapacitated, the court is required to "give primary consideration to the functional level and functional limitations of the person" (Mental Hygiene Law § 81.02[c]).

 

"A determination that a person is incapacitated . . . must be based on clear and convincing evidence" (Mental Hygiene Law § 81.12[a]; see Mental Hygiene Law § 81.02[b]). "The burden of proof shall be on the petitioner" (Mental Hygiene Law § 81.12[a]...).

 

Here, the petitioner failed to demonstrate, by clear and convincing evidence, that the AIP is incapacitated (see Mental Hygiene Law § 81.02[b]...). The testimony presented by the petitioner at the hearing failed to show that the AIP was unable to provide for his personal needs and that he was unable to adequately understand and appreciate the nature and consequences of any such inability ... . The Supreme Court's conclusion that the AIP "suffers from dementia" was not supported by the record. The petitioner's medical expert testified that the AIP had not "evidenced . . . dementia" and was "capable of impressive cognitive functioning" ... . Matter of Edward S. (Georgis-Corey), 2015 NY Slip Op 06351, 2nd Dept 7-29-15

 

 

 

MENTAL HYGIENE LAW/CONSTITUTIONAL LAW

 

Waiver of a Jury Trial in an Article 10 Sex-Offender Civil Commitment Proceeding Requires an On-the-Record Colloquy After Consultation with Counsel

 

The Second Department, in a full-fledged opinion by Justice Chambers, in a matter of first impression, determined that the state and federal constitutions mandated an on-the-record waiver of the right to a jury trail in an Article 10 sex-offender civil commitment proceeding. Here, the respondent sent a letter to the judge explaining his reasons for wanting a non-jury trial. The letter was deemed insufficient to establish a knowing waiver. 

 

... [A]respondent's statutory right to a jury trial in an article 10 proceeding is protected by Article I, § 2 of the New York State Constitution, which provides that "[t]rial by jury in all cases in which it has heretofore been guaranteed by constitution shall remain inviolate forever." * * *

 

In view of the fact that article 10 proceedings are civil in nature, "the Due Process Clauses of the Fifth and Fourteenth Amendments ... govern the scope of procedural due process" ... . Accordingly, a respondent's waiver of the right to a jury must comport with the procedural due process requirements under both the United States and New York Constitutions. * * *

 

With these general principles in mind, we hold that in order to accomplish a valid waiver of the right to a jury trial in an article 10 proceeding under Mental Hygiene Law § 10.07(b), and in accordance with due process, there must be an on-the-record colloquy, in order to ensure that the respondent understands the nature of the right, and that the respondent's decision is knowing and voluntary after having had sufficient opportunity to consult with counsel ... . * * *

 

We note, however, that a written waiver such as is mandated by CPL 320.10 in criminal proceedings is not required in order to satisfy the requirements of Mental Hygiene Law article 10 or due process ... . Matter of State of New York v Ted B., 2015 NY Slip Op 06352, 2nd Dept 7-29-15

 

 

 

DEBTOR-CREDITOR

 

Naming an Entity Other than the Lender as Mortgagee Did Not Render the Mortgage Null and Void

 

The Second Department rejected plaintiff's argument that the naming of an entity other than the lender as the mortgagee rendered the mortgage null and void:

 

... [T]he plaintiff borrowed the sum of $671,250 from Webster [Bank], as evidenced by an adjustable rate note payable to Webster. Together therewith, the plaintiff executed a mortgage, securing the loan with her home ... (hereinafter the subject property). As is relevant to this appeal, the mortgage defined the plaintiff as the "Borrower," Webster Bank N.A. as the "Lender," and "MERS" as Mortgage Electronic Registration Systems, Inc., "a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns" and "FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD." The loan is serviced by the defendant Bank of America, N.A. (hereinafter Bank of America).

 

The plaintiff erroneously contends that the naming of MERS as the mortgagee, even though Webster was the payee designated on the note, constituted a violation of the clear prohibition against separating the collateral from the debt and, as such, the mortgage instrument was rendered null and void ... . The plaintiff relies upon the Court of Appeals decision of Merritt v Bartholick (36 NY 44), wherein the Court stated: "As a mortgage is but an incident to the debt which it is intended to secure, the logical conclusion is, that a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it. The security cannot be separated from the debt and exist independently of it" (id. at 45; citations omitted).

 

The use of the term "nullity" by the Court in Merritt, however, does not mean, as the plaintiff argued, that the mortgage instrument itself was rendered null or void, but rather, that the enforceable interest which was intended to be transferred by the assignment of the mortgage alone was ineffective, as "no interest is acquired by it" ... . Ruiz v Mortgage Elec. Registration Sys., Inc., 2015 NY Slip Op 06325, 2nd Dept 7-29-15

 

 

 

NEGLIGENCE

 

Plaintiff Allegedly Assaulted by Intoxicated Patron--Proof Requirements Under Dram Shop Act Explained

 

The Second Department determined the defendant bar was not entitled to summary judgment dismissing the complaint. Plaintiff alleged she was assaulted by an intoxicated patron. The court explained the proof requirements under the Dram Shop Act (General Obligations Law 11-101):

 

... [W]here a plaintiff alleges that he or she was assaulted by an intoxicated individual, to establish prima facie entitlement to judgment as a matter of law dismissing a complaint alleging a violation of the Dram Shop Act, a defendant is "required to establish either that it did not serve alcohol to [the plaintiff's assailant] while he [or she] was visibly intoxicated or that its sale of alcohol to him [or her] had no reasonable or practical connection to the assault" ... . Here, the defendants failed to establish their prima facie entitlement to judgment as a matter of law. Covert v Wisla Corp., 2015 NY Slip Op 06308, 2nd Dept 7-29-15

 

 

 

NEGLIGENCE/MUNICIPAL LAW/IMMUNITY

 

Village Immune from Suit Alleging Negligence of Ambulance Personnel Who Responded to a 911 Call

 

The Second Department determined the village was entitled to summary judgment in an action alleging negligence on the part of ambulance personnel responding to a 911 call. The ambulance service is a governmental function for which the city cannot be held liable absent a special relationship with plaintiff (not the case here). The court explained the relevant law:

 

"When a municipality provides ambulance service by emergency medical technicians in response to a 911 call for assistance, it performs a governmental function and cannot be held liable unless it owed a special duty' to the injured party" ... . Such a special duty can arise, as relevant here, where "the government entity voluntarily assumed a duty to the plaintiff beyond what was owed to the public generally," or, in other words, where the municipality "voluntarily assumed a special relationship' with the plaintiffs" ... . A municipality will be held to have voluntarily assumed a duty or special relationship with the plaintiffs where there is: "(1) an assumption by the municipality, through promises or actions, of an affirmative duty to act on behalf of the party who was injured; (2) knowledge on the part of the municipality's agents that inaction could lead to harm; (3) some form of direct contact between the municipality's agents and the injured party; and (4) that party's justifiable reliance on the municipality's affirmative undertaking" ... . Earle v Village of Lindenhurst, 2015 NY Slip Op 06311, 2nd Dept 7-29-15

 

 

 

NEGLIGENCE/MUNICIPAL LAW/IMMUNITY/CONTRACT LAW

 

Security at Homeless Shelter Is a Governmental Function--City Immune from Suit by Plaintiff Who Was Assaulted at the Shelter/Private Security Company Not Immune/Plaintiff Was a Third-Party Beneficiary of the Contract Between the Department of Homeless Services and the Security Company/Security Company Did Not Demonstrate It Was Free from Negligence and the Assault Was Not Foreseeable

 

 

The Second Department determined the city and the Department of Homeless Services (DHS) were immune from suit by plaintiff, who was assaulted in a city homeless shelter. The city's obligation to provide security is a governmental function for which it cannot be held liable absent a special relationship with the plaintiff (not the case here).  However, the private security company, FJC  was not immune from suit. Plaintiff was a third-party beneficiary of the contract between DHS and FJC. FJC was not entitled to summary judgment because it failed to demonstrate it was not negligent and the attack was not foreseeable:

 

The plaintiff's theory of recovery was premised upon the alleged failure of the municipal defendants to provide an adequate and proper security force to prevent attacks by third parties at the homeless shelter where the subject incident occurred. Such a claim, however, implicates a governmental function, liability for the performance of which is barred absent the breach of a special duty owed to the injured party ... . Here, the municipal defendants demonstrated, prima facie, that they owed no special duty of care to the plaintiff, and the plaintiff failed to raise a triable issue of fact in opposition. Therefore, that branch of the municipal defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against them was properly granted ... . ...

 

However, the Supreme Court erred in granting that branch of the motion of the defendant FJC Security Services, Inc. (hereinafter FJC), which was for summary judgment dismissing the complaint insofar as asserted against it. Contrary to its contention, FJC, a private, for-profit contractor of security services, is not entitled to governmental immunity ... . In addition, the plaintiff is a third-party beneficiary of the contract between FJC and DHS. The provisions of the contract between FJC and DHS unequivocally express an intent to confer a direct benefit on the homeless clients in residence at the City shelter, such as the plaintiff, to protect them from physical injury. Thus, in order to prevail on its motion for summary judgment, FJC was required to demonstrate, prima facie, that there were no triable issues of fact as to whether it was negligent in the performance of its duties, or that the assault on the plaintiff was not a reasonably foreseeable consequence of any breach of its duties ... .  FJC failed to demonstrate either. Clark v City of New York, 2015 NY Slip Op 06307, 2nd Dept 7-29-15

 

 

 

NEGLIGENCE/MUNICIPAL LAW/IMMUNITY

 

City Did Not Demonstrate Entitlement to Qualified Immunity for a Planning Decision Re: Design of Playground Equipment

 

The Second Department determined questions of fact precluded summary judgment in favor of the city in a suit stemming from a playground injury. The complaint alleged the design of the playground equipment was unsafe. The city claimed qualified immunity for liability arising from planning decisions. But the city failed to demonstrate that it undertook a study which addressed the issue at the heart of the case:

 

Contrary to the City's contention, it failed to establish its prima facie entitlement to judgment as a matter of law on the basis of qualified governmental immunity. While a municipality will generally be accorded qualified immunity from liability arising out of its planning decisions ... , a governmental body may be liable for a planning decision when its study is "plainly inadequate or there is no reasonable basis for its plan" ... . Here, the evidence presented by the City failed to establish that it undertook a study which entertained and passed on the very same question of risk that is at issue in this case ... . Moskovitz v City of New York, 2015 NY Slip Op 06318, 2nd Dept 7-29-15

 

 

 

NEGLIGENCE

 

Pedestrian Struck from Behind Was Not Comparatively Negligent as a Matter of Law

 

The Second Department, over a dissent, determined plaintiff pedestrian, who was struck from behind by defendant's car, was free from comparative negligence as a matter of law and entitled to summary judgment. Plaintiff was properly crossing a street and had almost reached the other side when defendant, who was making a left turn into the street plaintiff was crossing, struck plaintiff from behind. Because plaintiff could not have seen defendant's car before she was struck, there was no possibility she was comparatively negligent:

 

The deposition testimony of the injured plaintiff and a nonparty witness established that prior to entering the roadway, the injured plaintiff waited for the traffic light controlling the east-west traffic on Montauk Highway to turn red, then looked to her left and right, and, seeing no cars, started to walk southbound across Montauk Highway. The testimony further established that the injured plaintiff traversed the westbound left-turn lane, and while in the eastbound lane of Montauk Highway, having almost completed crossing, was struck by the defendants' vehicle, which had turned left from Keith Lane to proceed east on Montauk Highway. Significantly, this testimony established that, prior to the impact, Karen Kruse (hereinafter the defendant driver), started her approach to the point of impact from behind and to the right of the injured plaintiff, that is, from behind the injured plaintiff's right shoulder and out of her view. The defendant driver conceded in her deposition testimony that she did not see the injured plaintiff prior to impact, despite the fact, established by her own testimony, that the injured plaintiff was generally in front of her prior to the impact. Under these circumstances, the plaintiffs established that the defendant driver was negligent and that the injured plaintiff was free from comparative fault. Castiglione v Kruse, 2015 NY Slip Op 06306, 2nd Dept 7-29-15

 

 

 

 

NEGLIGENCE/MUNICIPAL LAW

 

Failure to Construct a Concrete Pad at a Bus Stop Does Not Constitute "Affirmative Negligence" On the Part of the City---Written Notice Requirement Applied

 

The Second Department determined the city's failure to install a concrete pad for a bus stop was not the kind of "affirmative negligence" for which prior written notice of a defect is not required. 

 

"Prior written notice of a defect is a condition precedent which a plaintiff is required to plead and prove to maintain an action against the City" ... . The two recognized exceptions to the prior written notice requirement are where the defect or hazard results from an "affirmative act of negligence" by the municipality, or a special use by the municipality that conferred a special benefit from it ... . Only when one of these exceptions applies is the written notice requirement obviated ... .

 

The plaintiff's contention that the City failed to install a concrete bus pad, resulting in the formation of a physical defect in the roadway which caused her to fall, does not amount to an "affirmative act of negligence." Thus, the plaintiff's claim requires prior written notice pursuant to Administrative Code of the City of New York § 7-201(c) ... . Rodriguez v City of New York, 2015 NY Slip Op 06324, 2nd Dept 7-29-15

 

 

 

 

NEGLIGENCE/EVIDENCE/CIVIL PROCEDURE

 

With Regard to the Suit Against the Perpetrator, Perpetrator's Criminal Conviction Barred Relitigation in the Wrongful Death Case Stemming from a Stabbing Outside Defendant Bar/With Regard to the Suit Against Defendant Bar, Questions of Fact Raised About the Foreseeability of the Attack, the Proximate Cause of the Injury, and the Adequacy of Defendant Bar's Security Measures

 

The Second Department determined plaintiff's decedent's estate was entitled to summary judgment against the defendant, Taylor, who stabbed plaintiff's decedent outside a bar both had just left. Taylor had pled guilty to manslaughter and waived the justification defense. Taylor was therefore collaterally estopped from relitigating the issue in the civil proceeding. Questions of fact about the foreseeability of the stabbing, the proximate cause of the incident and the adequacy of security precluded summary judgment re: the liability of the bar defendants. The Second Department noted that Supreme Court should have overlooked the fact that the depositions submitted in motion practice were unsigned (a basis for Supreme Court's denial of requested relief). No party raised the "unsigned deposition" issue and it amounted to only a minor irregularity:

 

"Where a criminal conviction is based upon facts identical to those in a related civil action, the plaintiff in the civil action can successfully invoke the doctrine of collateral estoppel to bar the convicted defendant from relitigating the issue of liability" ... . "The doctrine applies whether the conviction results from a plea or a trial" ... . "The party seeking the benefit of collateral estoppel bears the burden of proving that the identical issue was necessarily decided in the prior proceeding, and is decisive of the present action" ... . "The party against whom preclusion is sought bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination" * * *

 

"A possessor of real property is under a duty to maintain reasonable security measures to protect those lawfully on the premises from reasonably foreseeable criminal acts of third parties" ... . "To establish foreseeability, there is no requirement that the past experience of criminal activity be of the same type as that to which the plaintiff was subjected, but the criminal conduct at issue must be shown to be reasonably predictable based on prior occurrences of the same or similar criminal activity at a location sufficiently proximate to the subject location" ... . Here, the plaintiff met her prima facie burden of establishing her entitlement to judgment as a matter of law against [the bar defendants]. In opposition, the [bar defendants] raised a triable issue of fact on behalf ... as to the issue of foreseeability, whether the decedent's own conduct preceding the stabbing was a proximate cause of his injuries, and whether the ... security measures were adequate ... . Hartman v Milbel Enters., Inc., 2015 NY Slip Op 06314, 2nd Dept 7-29-15

 

 

 

REAL ESTATE/CONTRACT LAW

 

Purchase Contract Properly Converted to a "Time Is of the Essence" Contract

 

In affirming the judgment awarded plaintiff in this breach of contract action, the Third Department noted that a "non time of the essence" real estate purchase contract can be converted to a "time of the essence" contract by giving the buyer clear, unequivocal notice and a reasonable time to perform, as was done by the seller here. 12 Baker Hill Rd., Inc. v Miranti, 2015 NY Slip Op 06400, 3rd Dept 7-30-15

 

 

 

REAL PROPERTY LAW/CIVIL PROCEDURE/APPEALS

 

agreement to maintain a driveway on a right-of-way ran with the land.

The Third Department held small claims court had properly determined an agreement to maintain a driveway on a right-of-way passing through the grantor's front parcel to the grantee's rear parcel ran with the land. The Third Department noted its review of small claims court rulings is confined to whether "substantial justice" was done according to the rules and principals of substantive law. Small claims court correctly held that the original parties to the property transfer intended the maintenance agreement to run with the land and that the agreement "touches and concerns" the land.  Therefore the defendant, the subsequent purchaser of the rear parcel, was bound by the maintenance agreement:

 

"Appellate review of small claims is limited to determining whether 'substantial justice has not been done between the parties according to the rules and principles of substantive law'" ... . Accordingly, this Court will overturn such a decision only if it is clearly erroneous ... . As relevant here, to establish that the 1982 agreement ran with the land and was binding on defendants, plaintiff was required to establish that "(1) the grantor and grantee intended the [agreement] to run with the land, (2) there is privity of estate between the parties to the current dispute, and (3) the [agreement] touches and concerns the land" ... . * * *

 

...[A]n agreement touches and concerns the land "if it affects the legal relations — the advantages and the burdens — of the parties to the [agreement], as owners of particular parcels of land and not merely as members of the community in general"... . Pugliatti v Riccio, 2015 NY Slip Op 06398, 3rd Dept 7-30-15

 

 

 

REAL PROPERTY TAX LAW/MUNICIPAL LAW

 

Village Did Not Have Authority to Sell Village Land Dedicated to Public Use (Public Roads) to Satisfy Property Tax Liens

 

The Second Department determined the village did not have the authority under the Real Property Tax Law (RPTL) to sell land dedicated to public use (dedicated public streets) to satisfy property tax liens:

 

... [W]hile RPTL [Real Property Tax Law] 995 allows a municipality to consent to the sale of property to satisfy a tax lien, not all property owned by a municipality is freely alienable. As relevant here, a municipality holds the fee of dedicated public streets in trust for the public ..., and may not convey such a fee unless there is specific legislative authorization permitting it, or the parcel's use as a dedicated public street has been discontinued... .

 

RPTL 995 did not provide the Village with that specific authorization. The statute only authorizes petitions to collect "validly levied or charged" taxes (RPTL 995). Since the Legislature limited the application of the statute in that way, it did not contemplate that municipally owned property held for public use, which is exempted from taxation by RPTL 406(1), would be subject to an enforcement proceeding under RPTL 995, or that such property would be sold by a municipality at public auction in reliance on section 995, in satisfaction of a claim for such taxes (see McKinney's Cons Laws of NY, Book 1, Statutes § 222). Contrary to the Village's contention, Village Law § 1-102 likewise did not provide the specific authorization necessary for the Village to sell a dedicated public road. Matter of AJM Capital II, LLC v Incorporated Vil. of Muttontown, 2015 NY Slip Op 06335, 2nd Dept 7-29-15

 

 

 

JUDGES/CONTRACT LAW

 

Judge's Failure to Recuse Himself Was an Abuse of Discretion/Plaintiffs' Failure to Comply with a Condition Precedent Mandated Summary Judgment to Defendants

 

The Third Department determined the judge hearing a case concerning the construction of a casino and resort should have recused himself. The judge's wife was in the county legislature and had voiced support of defendants' position. In his decision granting summary judgment to the defendants, the judge stated to do otherwise would "violate public policy," an issue which was not properly part of the case before him. However, the Third Department went on to consider the merits of the case. Plaintiffs' failure to meet a condition precedent (concerning the financing of the project) by the specified date was an unambiguous breach of the contract, mandating summary judgment in favor of the defendants:

 

Considering the irrelevancy of [the judge's] comments to the issues before the court and the parallels between them and the public comments of [his wife] in support of [defendants'] casino proposal, [the judge's] inclusion of such inherently legislative and policy considerations as a basis for his order displays a striking lack of "sensitivity to the aroma of favoritism [that] such a favorable disposition could engender" ... . Under the circumstances, it seems to us that [the judge] should have recognized that this was a situation in which his "impartiality might reasonably be questioned" (22 NYCRR 100.3 [E] [1]), and, therefore, we must conclude that his failure to recuse himself constituted a clear abuse of discretion ... . Concord Assoc., L.P. v EPT Concord, LLC, 2015 NY Slip Op 06393, 3rd Dept 7-30-15

 

 

 

 

TAX LAW/REAL PROPERTY TAX

 

Parent Corporation Not Entitled to Qualified Empire Zone Enterprise (QEZE) Property Tax Credits Because a Related But Separate Entity Did Not Make Payments Required by Its "Payment In Lieu of Taxes" (PILOT) Agreement

 

With regard to a building in the City of Rochester, the Third Department determined a parent corporation was not entitled to Qualified Empire Zone Enterprise (QEZE) tax credits because a related but separate limited partnership, Rochwil, did not make payments required by its "payment in lieu of taxes" (PILOT) agreement.

 

The primary issue presented in this proceeding is whether petitioner could claim a refund for unused QEZE real property tax credits that were reported by its subsidiary based on its partnership interest in Rochwil for PILOT payments that were not made. As the taxpayer seeking a tax credit, petitioner "bears the burden of establishing that such credit is unambiguously set forth in the statute" ... . To meet this burden, petitioner must show that its "interpretation of the statute is not only plausible, but also that it is the only reasonable construction" ... .

 

We cannot conclude that petitioner met its burden here. As a QEZE, Rochwil was entitled to a credit for eligible real property taxes (see Tax Law former § 15 [a]), and it is not disputed that petitioner was entitled to seek such credit against its corporate franchise taxes during the years at issue (see Tax Law former § 210 [27]). As relevant to this dispute, the term "eligible real property taxes" includes both "taxes imposed on real property which is owned by the QEZE . . . provided such taxes become a lien on the real property" and "[PILOT payments] made by the QEZE to . . . a public benefit corporation" (Tax Law former § 15 [e]). Contrary to petitioner's claim, the plain and unambiguous language of the statute provides that real property taxes imposed are distinct from PILOT payments made, and where, as here, a QEZE does not own the property but is instead subject to a PILOT agreement with the property owner, the PILOT payments must be made in order to qualify for the credit provided by Tax Law former § 15 ... . Matter of Wilmorite, Inc. v Tax Appeals Trib. of the State of N.Y., 2015 NY Slip Op 06386, 3rd Dept 7-30-15

 

 

 

WORKERS' COMPENSATION LAW

 

Petition for Late Approval (Eight Years Late) of a Settlement of a Third-Party Tort Action Nunc Pro Tunc Should Have Been Granted

 

The First Department determined the Court of Claims abused its discretion when it denied claimant's late petition to approve a settlement of a third-party tort action nunc pro tunc. The carrier had been aware of the settlement for eight years and had continued to pay benefits to the claimant throughout, the carrier would suffer no prejudice from the approval, and the amount of the settlement was fair and reasonable:

 

The Court of Claims erroneously denied claimant's request for the application for a nunc pro tunc order. "'A judicial order may be obtained nunc pro tunc approving a previously agreed-upon settlement, even in cases where the approval is sought more than three months after the date of the settlement, provided that the petitioner can establish that (1) the amount of the settlement is reasonable, (2) the delay in applying for a judicial order of approval was not caused by the petitioner's fault or neglect, and (3) the carrier was not prejudiced by the delay'" ... . Amacio v State of New York, 2015 NY Slip Op 06298, 1st Dept 7-28-15

 

 

 

ZONING

 

Courts' Review Powers Re: Zoning Board's Grant of Area Variances Explained

 

In affirming the zoning board's grant of area variances to "34 Cove" (re: construction of a tennis court), the Second Department explained the court's limited review powers and noted that the board applied the appropriate balancing test and considered all the statutory factors. That is as far as a reviewing court can go:

 

" 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'" ... . "Thus, the determination of a zoning board should be sustained upon judicial review if it is not illegal, has a rational basis, and is not arbitrary and capricious" ... . " It matters not whether, in close cases, a court would have, or should have, decided the matter differently. The judicial responsibility is to review zoning decisions but not, absent proof of arbitrary and unreasonable action, to make them'" ... .

 

In determining whether to grant an application for an area variance, a zoning board 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 ... 

 

Here, the Zoning Board engaged in the required balancing test and considered the relevant statutory factors ... . While we agree with the petitioner that the proposed variances were substantial ..., and that the alleged difficulty was self-created ..., there was no evidence that the granting of the variance would produce an undesirable change in the character of the neighborhood, have an adverse effect on physical and environmental conditions, or otherwise result in a detriment to the health, safety, and welfare of the neighborhood or community ... . Moreover, the Zoning Board rationally concluded that the benefit sought by 34 Cove, namely, to maximize its use of the proposed tennis court, could not be achieved by the alternative site proposed by the petitioner ... . Matter of Borrok v Town of Southampton, 2015 NY Slip Op 06340, 2nd Dept 7-29-15