ADMINISTRATIVE LAW



CPLR 7511 Review of Compulsory Arbitration Under the Education Law



The First Department explained and applied the principles of a CPLR 7511 review of a hearing officer’s determination after compulsory arbitration pursuant to the Education Law. The case concerned allegations of inappropriate touching of students by a tenured school librarian.  In affirming the hearing officer’s findings and penalty, the Court noted that “ ‘ where the parties have submitted to compulsory arbitration, judicial scrutiny is stricter than that for a determination rendered where the parties have submitted to voluntary arbitration’ … . [T]he determination must be in accord with due process and supported by adequate evidence, and must also be rational and satisfy the arbitrary and capricious standards of CPLR article 78’ …”.  In re Ash v New York City Board/Dept of Education, 8655, 108528/10 1st Dept. 3-5-13



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State Equal Access to Justice Act



In a full-fledged opinion by Justice Mazzarelli, the First Department interpreted the State Equal Access to Justice Act to allow the award of attorney’s fees under the “catalyst theory.” The petitioner had brought an Article 78 proceeding to compel the City to reinstate public assistance benefits after the Office of Temporary and Disability Assistance had ordered the City to do so. Two weeks after the Article 78 proceeding was started, the City complied with the order and reinstated the benefits.  The First Department determined the Article 78 proceeding was the “catalyst” for the City’s reinstatement of the benefits and, under the State Equal Access to Justice Act, the petitioner was entitled to attorney’s fees.  In re Luz Solla v Berlin, et al, 7847 & 401178/11, 2259, 1st Dept. 3-5-13









CIVIL PROCEDURE





Service Upon Employee Did Not Confer Personal Jurisdiction Over Corporation



Service upon an employee who was not an officer, director, managing agent, cashier, or an agent authorized to accept service, did not confer jurisdiction over a corporation, and the motion to dismiss for lack of personal jurisdiction should have been granted.  Fernandez v Town of Babylon …, Omni Recycling of Babylon, Inc., 2012-05513, Index No 4102/01, 2nd Dept. 3-6-13





Law Office Failure Justified Vacation of Default Judgment



“Here, the moving defendants’ claim of law office failure was supported by a ‘detailed and credible’ explanation of the default.  Moreover, the moving defendants demonstrated the existence of a potentially meritorious opposition to plaintiff’s motion. Accordingly, the Supreme Court providently exercised its discretion in vacating their default in opposing the plaintiff’s motion for summary judgment.”  Properties, LLC v McDonald, LLC, et al, 2011-11434, 2012-04529, Index No 14525/09, 2nd Dept. 3-6-13



Lack of Standing Argument Waived



Failure to raise plaintiff’s lack of standing in either the answer or the pre-answer motion to dismiss the complaint constituted a waiver of the defendant’s standing argument.  HSBC Bank USA v Ashley, 513730, 3rd Dept. 3-7-13





Counsel for Nonparty Witness Cannot Participate in Deposition



The Fourth Department determined that counsel for a nonparty witness cannot object, i.e., participate, in a deposition of that witness.  The Court wrote:



…“[C]ounsel for a nonparty witness does not have a right to object during or otherwise to participate in a pretrial deposition.CPLR 3113 (c) provides that the examination and cross-examination of deposition witnesses ‘shall proceed as permitted in the trial of actions in open court’ ” (id. [emphasis added]), and it is axiomatic that counsel for a nonparty witness is not permitted to object or otherwise participate in a trial (see e.g. id.).We recognize that 22 NYCRR 221.2 and 221.3 may be viewed as being in conflict with CPLR 3113 (c) inasmuch as sections 221.2 and 221.3 provide that an “attorney” may not interrupt a deposition except in specified circumstances.Nevertheless, it is well established that, in the event of a conflict between a statute and a regulation, the statute controls (see Matter of Hellner v Board of Educ. of Wilson Cent. School Dist., 78 AD3d 1649, 1651).  Justices Fahey and Martoche dissented in a memorandum. Sciara v Surgical Associates of Western New York, P.C., et al, 1466, CA 12-00809, 4th Dept. 3-15-13





​Amendment of Reply to Add Statute of 

Limitations Defense Allowed

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In affirming the grant of a motion to amend a reply to add the “statute of limitations” defense, the Second Department wrote:

       “Leave to amend a pleading should be freely given (see CPLR                                   3025[b]), provided that the amendment is not palpably insufficient, does not prejudice or surprise the opposing party, and is not patently devoid of merit” … . “A determination whether to grant such leave is within the Supreme Court’s broad discretion, and the exercise of that discretion will not be lightly disturbed” … . “Mere lateness is not a barrier to the amendment. It must be lateness coupled with significant prejudice to the other side” … .The plaintiff waived its statute of limitations defense by failing to assert it as an affirmative defense in its initial reply to the appellants’ counterclaims (see CPLR 3211[e]). However, defenses waived under CPLR 3211(e) can nevertheless be interposed by leave of court pursuant to CPLR 3025(b) so long as the amendment does not cause the other party prejudice or surprise resulting directly from the delay … . Aurora Loan Services, LLC v Dimura, et al, 2013 NY Slip Op 01797, 2012-04739,Index No 2455/09, 2nd Dept. 3-20-13





Acknowledgment of Debt in Bankruptcy Proceeding Restarted Statute of Limitations



​The defendant’s acknowledgment of a debt in his bankruptcy petition restarted the 20 statute of limitations for the enforcement of a judgment:
Contrary to defendant's contention, enforcement of the judgment issued against him is not barred by CPLR 211(b). While [plaintiff] first sought to enforce the judgment in 2011, more than 20 years after the judgment could have first been enforced, defendant acknowledged the judgment in 2005 within his bankruptcy petition, thereby recommencing the statute of limitations from that date. Based on the 2005 acknowledgment, the statute of limitations to enforce the judgment ran anew in 2005 and [plaintiff] has until 2025 to enforce the judgment … . Since a debtor sufficiently acknowledges a debt pursuant to a judgment simply by admitting to the creditor in writing that a debt is owed, here, defendant's listing of the judgment within his bankruptcy petition constitutes such an admission and is thus, an acknowledgment under the statute. Moreover, insofar as an acknowledgment need not specify the amount nor the character of the debt owed …, defendant's failure to list the correct amount of the judgment or the court in which it was obtained does not constitute a shortcoming which avails defendant. First NY Bank for Bus. v Alexander, 2013 NY Slip Op 01796, 4800/90, 9377, 1st Dept. 3-19-13





Sanctions for Discovery Noncompliance and Spoliation



​The First Department concluded preclusion and an adverse inference charge were appropriate discovery sanctions for defendant’s failure to produce documents and the apparent destruction of evidence:

             Having been conditionally ordered to produce all correspondence …, and the transcripts of the audio tapes of meetings …, in order to successfully oppose plaintiff's motion for discovery sanctions, defendant had to demonstrate (1) a reasonable excuse for the failure to produce the requested items and (2) the existence of a meritorious claim or defense in order to relieve itself from the dictates of that order … . Defendant did not satisfy these requirements. Defendant's history of noncompliance with the court's prior discovery orders supports the motion court's finding that defendant's actions were willful and contumacious …. The court providently granted plaintiffs' motion for an order precluding defendant from offering any evidentiary proof with respect to the transcription of committee meetings and/or correspondence … and defendant in defense and/or opposition to plaintiffs' prosecution of their bad faith claim at trial … .
Plaintiffs also made a prima facie showing that defendant had either intentionally or negligently disposed of the transcript of the … meeting and that the spoliation of this critical evidence compromised its ability to prosecute their bad faith action against defendant … . The motion court did not abuse its discretion in finding that certain evidence may have existed, but was not produced by defendant either because it was destroyed or withheld. Although plaintiffs moved to strike the answer, the court imposed the reasonable lesser sanction of an adverse inference charge, which will prevent defendant from using the absence of these documents at trial to its tactical advantage … .  General Motors Acceptance Corp. v New York Cent. Mut. Fire Ins. Co., 2013 NY Slip Op 01774, 109668/06, 9272, 1st Dept. 3-19-13





Wife’s Derivative Claim Added to Complaint After Expiration of Statute of Limitations



The First Department held that a wife’s derivative claim in a medical malpractice action brought by her husband could be added to the complaint after the statute of limitations had expired (disagreeing with the Second and Fourth Departments):

                The motion court properly exercised its discretion in granting leave to amend. The original complaint placed Kings Harbor on notice of the underlying transaction (see CPLR 203 [f] …. We are in accord with the Third Department's view that "[i]n the absence of any prejudice and under these circumstances, Supreme Court should be permitted to exercise that same discretion which would allow the addition of a plaintiff's derivative cause of action" … . We disagree with the cases holding that a spouse's derivative claim cannot be added to a complaint through the relation back provision of CPLR 203 (f) (see e.g. Dowdall v General Motors Corp., 34 AD3d 1221, 1222 [4th Dept 2006]; Lucido v Vitolo, 251 AD2d 383, 384 [2d Dept 1998]).  Giambrone v Kings Harbor Multicare Ctr., 2013 NY Slip Op 01898, 9235N 307139/09, 1st Dept. 3-21-13





Court’s Sua Sponte Dismissal of Complaint Reversed



​The Second Department reversed the trial court’s sua sponte dismissal of plaintiff’s mortgage foreclosure complaint.  The trial court dismissed the complaint on the ground that the plaintiff lacked standing and imposed sanctions based on plaintiff’s alleged reliance upon a “robosigner” (according to the trial court’s own Internet research).  On the issues of “sua sponte” dismissal and standing, the Second Department wrote:

                The Supreme Court abused its discretion in, sua sponte, directing dismissal of the complaint with prejudice and cancellation of the notice of pendency … . "A court's power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal" … . Here, the Supreme Court was not presented with any extraordinary circumstances warranting sua sponte dismissal of the complaint. Moreover, as the defendants failed to answer the complaint and did not make pre-answer motions to dismiss the complaint, they waived the defense of lack of standing … . Furthermore, a party's lack of standing does not constitute a jurisdictional defect and does not warrant sua sponte dismissal of a complaint by the court … .  HSBC Bank USA, NA v Taher, 2013 NY Slip Op 01806, 2011-06455, 2012-00841, Inex No 9320/09, 2nd Dept. 3-20-13





Criteria for Motion to Renew Based on New Facts Not Met

In reversing the trial court’s grant of summary judgment, the Second Department explained that CPLR 2221(a) had been misused to revisit a prior motion, and that the motion should have been brought under CPLR 2221 (e) as a motion for leave to renew based on new facts.  The motion should have been denied because the defendant failed to provide “reasonable justification” for the failure to present the “new” facts in the first motion:

                 The Supreme Court improperly granted the defendant’s motion, denominated as one pursuant to CPLR 2221(a) to modify the order entered September 28, 2011. CPLR 2221(a) merely provides that certain motions may be made, on notice, to the judge who signed the order that is the subject of the motion. In actuality, the defendant sought to present new facts in partial opposition to the motion for summary judgment, which were not presented on the initial motion. Thus, the defendant’s motion should have been made pursuant to CPLR 2221(e) for leave to renew its prior opposition to the motion for summary judgment, based upon new facts, and we construe it as such. However, the defendant failed to show its entitlement to that relief. The defendant failed to demonstrate “reasonable justification” for its failure to present such facts on the prior motion (CPLR 2221[e][2]). Mount Sinai Hosp v Dust Tr., Inc., 2013 NY Slip Op 01811, 2012-03767, Ind No 10715/10, 2nd Dept. 3-20-13
 

Criteria for Dismissal of Cause of Action Based on Documentary Evidence Explained


The Second Department, in reversing the dismissal of causes of action in a complaint, explained the criteria for dismissal based on documentary evidence:

               A motion to dismiss based on documentary evidence pursuant to CPLR 3211(a)(1) may be appropriately granted “only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” … . Here, to the extent that the sponsor’s submissions constituted “documentary evidence” within the meaning of CPLR 3211(a)(1) …, they failed to utterly refute the cooperative’s allegations … . Accordingly, the Supreme Court should have denied those branches of the sponsor’s motion which were to dismiss the first, second, and fourth causes of action pursuant to CPLR 3211(a)(1). North Shore Towers Apts. Inc. v Three Towers Assoc., 2013 NY Slip Op 01812, 2012-00848, Index No 11834/10, 2nd Dept. 3-20-13​



Deliberate Avoidance of Service of Process



The First Department determined the defendants, who deliberately attempted to avoid notice of the summons and complaint, did not raise an issue of fact in the face of the affidavits of the process server:
 

                  Relief under CPLR 317 is not warranted where, as here, defendants’ failure to obtain proper notice was the result of a deliberate attempt to avoid such notice … . The individual defendant averred that neither he nor the corporate defendant received actual service of the summons and complaint, or of the supplemental summons and amended complaint, or of any of the notices served by plaintiff following commencement of the action. However, this conclusory denial of receipt is insufficient to raise an issue of fact as to proper service in the face of plaintiff’s submission of affidavits from a process server, which constitute prima facie evidence of proper service … .  Pina v JObar, USA, LLC, 2013 NY Slip Op 01794, 9570N, 300756/08, 1st Dept. 3-19-13

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TRIAL PROCEDURES





10-Year-Old Plaintiff’s Testimony Should Have Been Considered---No Need for Hearing to Determine Testimonial Capacity



The trial court’s determination the testimony of the 10-year-old plaintiff at a 50-h hearing should not be considered because there was no hearing to determine the infant plaintiff’s testimonial capacity was reversed by the Second Department.  “None of the parties challenged the infant plaintiff’s capacity to testify.  Under the circumstances, neither the infant plaintiff’s age nor his responses to the questioning necessitated a hearing.”  Perez v City of New York, 2012-03711, Index No 3451/10, 2nd Dept. 3-6-13



INSURANCE LAW



Record-Keeping Was a Condition Precedent to Insurance Coverage



The record-keeping requirement in an insurance policy was a condition precedent. “Here, the defendant established its prima facie entitlement to judgment as a matter of law by submitting evidence that the plaintiff failed to comply with the record-keeping requirement set forth in the subject insurance policy, which was a clear condition precedent to coverage … “ Stars Jewelry…v Hanover Insurance Group, Inc., 2011-09098, Index No 5221/10, 2nd Dept. 3-6-13



Punitive Damages Award Not Recoverable in Subsequent  “Bad Faith Failure to Settle” Case Against Insurer



​A judgment which included punitive damages was assessed against an insured.  The insured sued the insurance company for a bad-faith failure to settle the libel and slander claims within policy limits.  The First Department determined the insurance company was entitled to summary judgment because public policy precludes the insured from recovering the punitive damages portion of any judgment resulting from the insurer’s bad faith.  The Court also noted that the public policy argument could be raised for the first time on appeal because no new facts were alleged and only purely legal arguments were made.  Seldon v Allstate Ins. Co., 2013 NY Slip Op 01628, 9542, 116217/08, 1st Dept. 3-14-13





Duty to Defend



In finding that an insurance company was required to defend, the Fourth Department explained the relevant criteria in the context of a summary judgment motion:

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An insurer’s duty to defend is “ ‘exceedingly broad’ and an insurer will be called upon to provide a defense whenever the allegations of the complaint ‘suggest . . . a reasonable possibility of coverage’ ”.. .“If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be” ….Thus, the duty to defend exists “ ‘even though facts outside the four corners of [the] pleadings indicate that the claim may be meritless or not covered’ ” ….

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The insured has the initial burden of establishing coverage under an insurance policy while the insurer bears the burden of proving that an exclusion in the policy applies to defeat coverage … .“[E]xclusions are subject to strict construction and must be read narrowly” … .In order to establish that an exclusion defeats coverage, the insurer has the “heavy burden” of establishing that the exclusion is expressed in clear and unmistakable language, is subject to no other reasonable interpretation, and is applicable to the facts ….An insurer “will be required to ‘provide a defense unless it can “demonstrate that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and, further, that the allegations, [in toto], are subject to no other interpretation” ’ ” … .  Georgetown Capital Group, Inc. v Everest National Insurance Company, 82, CA 12-01337, 4th Dept. 3-15-13





Late Disclaimer of Coverage Invalid



​In finding the insurer’s (Country-Wide’s) disclaimer of coverage invalid, the Second Department wrote:

                   [County-Wide’s] written disclaimer of coverage was untimely and invalid as a matter of law (see Insurance Law § 3420[d][2]). It is undisputed that [plaintiff] Jose R. Ramirez gave notice of the accident and claim to Country-Wide in a letter dated June 14, 2011, and that Country-Wide did not issue its disclaimer until August 15, 2011. While an insurer's time to give written notice of disclaimer "is measured from the point in time when the insurer first learns of the grounds for disclaimer of liability or denial of coverage" …, the record demonstrates that the facts supporting the disclaimer in this case were either apparent from the claim documents submitted by Ramirez or were readily ascertainable upon the performance of a cursory investigation by Country-Wide … . Therefore, even if some investigation was warranted in this matter, the burden was on Country-Wide to demonstrate that the two-month delay in disclaiming was reasonably related to its performance of a prompt, diligent, thorough, and necessary investigation … . Since Country-Wide merely made a conclusory statement that the delay was occasioned by its investigation, and provided no details with regard to the specific efforts undertaken in conducting that investigation, it failed to sustain its burden of demonstrating that the delay was excusable, and the disclaimer was untimely as a matter of law … . Matter of Country-Wide Ins. Co. v Ramirez, 2013 NY Slip Op 01828, 2012-02056, Inex No 12759/11, 2nd Dept. 3-20-13

FAMILY LAW





Failure to Hold a Hearing on Mother’s Petition for Custody and Failure to Inform Father of Right to Counsel Required Reversal of Custody Determination



Family Court’s failure to hold a hearing to determine the mother’s petition for custody, and the Court’s failure to advise the father that he had the right to counsel, required reversal of the grant of custody to the mother.   In the Matter of Savoca v Bellofatto, 2012-02935, Docket No V-22033-11



Insufficient Proof to Support “Medical Neglect” Finding



​The First Department reversed Family Court’s finding of medical neglect related to a five-month-old’s fractured femur.  Family Court accepted the proof that the baby, for the first time in his life, rolled over and fell off a couch when the father left him briefly to throw away a soiled diaper.  Family Court’s medical-neglect determination was based on testimony that the fracture “would cause the child evident pain…” and the length of time between the accident and when medical attention was sought.  The First Department noted the proof that swelling would not be immediately apparent and that a hairline fracture would not cause much pain until it progressed into a full fracture, as well as a video of the child showing no movement problems or signs of pain. In light of proof the child may not have exhibited symptoms of pain, the First Department determined the finding of neglect was not supported by a preponderance of the evidence.  In re Amir L., 2013 NY Slip Op 01617, 9277-9278-9279, 1st Dept. 3-14-13

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“Aid of the Court No Longer Required” in Neglect Proceeding

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The grandmother and mother of a seven-month-old were found to have neglected the child by briefly leaving the child unattended in the kitchen sink with the water running when the hot water “spiked” causing burns.  The mother and grandmother moved to dismiss the petition pursuant to Family Court Act 1051 (c) on the ground aid of the court was not required.  The Second Department noted that the facts were sufficient to sustain the petition, but determined the petition should be dismissed because the aid of the court was not required.  Following the incident the mother completed all the programs required by children’s services, the grandmother attended parenting classes with the mother voluntarily, the child was returned to the mother 18 months before the hearing, home visits confirmed the child was not left unattended and was bathed properly, and the hot water “spikes” had been eliminated. The Second Department wrote:  “The foregoing demonstrates that the incident on which the petition was based was an isolated one, that the mother and grandmother have been rehabilitated, and that the child is no longer at risk of being neglected …”.  Matter of Kayden H., 2013 NY Slip Op 01549, 2011-09702, 2011-09704, Docket No N-22472-09, 2nd Dept. 3-13-13





Suspended Sentence for Non-Payment of Support Could Not Be Revoked Without Hearing



The Fourth Department ruled that Family Court could not revoke a suspended jail sentence for non-payment of support by the father without giving the father the chance to rebut the allegations against him:

The Support Magistrate previously had issued an order “on consent” in November 2011 (November order), setting forth that the father admitted that he willfully violated the February order and finding him in willful violation of the February order. The Support Magistrate imposed a sentence of four months in jail but suspended the sentence on the condition that the father did not miss two consecutive support payments.

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Although the court had the discretion to revoke the suspension of the jail sentence, the court erred in doing so without first affording the father “an opportunity to be heard and to present witnesses . . . on the issue whether good cause existed to revoke the suspension of the sentence” (Matter of Thompson v Thompson, 59 AD3d 1104, 1105, quoting Family Ct Act § 433 [a] [internal quotation marks omitted]; see Ontario County Dept. of Social Servs. v Hinckley, 226 AD2d 1126, 1126). “No specific form of a hearing is required, but at a minimum the hearing must consist of an adducement of proof coupled with an opportunity to rebut it” (Thompson, 59 AD3d at 1105 [internal quotation marks omitted]). “ ‘[I]t is well settled that neither a colloquy between a respondent and Family Court nor between a respondent’s counsel and the court is sufficient to constitute the required hearing’ ” (id.). Here, there was only the admission of nonpayment by the father’s attorney, which was insufficient (see id.), and there was no opportunity for the father to present evidence rebutting the allegations against him.  In the Matter of Davis v Bond, 281, CAF 12-00553, 4th Dept. 3-15-13

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DISCIPLINARY HEARINGS (INMATES)





Failure to Determine if Witness Would Testify Required New Hearing



“It is well settled that an inmate has a conditional right to call witnesses at a disciplinary hearing provided their testimony would not jeopardize institutional safety or correctional goals… .  ‘[A] hearing officer’s actual outright denial of a witness without a stated good-faith reason, or lack of any effort to obtain the requested witness’s testimony, constitutes a clear constitutional violation … .  On the other hand, where a good-faith reason for the denial appears on the record, this amounts to a regulatory violation requiring that the matter be remitted for a new hearing…”  Here the hearing officer’s failure to determine whether a retired correction officer could testify required a new hearing.  In the Matter of Morris-Hill v Fischer, 514093, 3rd Dept. 3-7-13





Prisoner Must Object at Hearing to Obtain Judicial Review



A prisoner’s failure to object or raise any procedural issues before the Hearing Officer renders any such issues unpreserved for judicial review.  In the Matter of Austin v Fischer, 514568, 3rd Dept. 3-7-13





Punishment Was “Shocking to One’s Sense of Fairness”



In an Article 78 proceeding, the Fourth Department determined the punishment imposed upon an inmate (for an assault on staff) after a Tier III disciplinary hearing, was too severe. The Court determined that “the punishment imposed of four years’ confinement in the Special Housing Unit (SHU) together with four years’ loss of good time and various privileges “ ‘ is so disproportionate to the offense, in the light of all the circumstances, as to be shocking to one’s sense of fairness’ “ … .  Considering the inmate’s age at the time of the incident (17) and the facts of the incident, the Fourth Department reduced the time in the SHU and the loss of good time and privileges to 18 months.  In the Matter of Cookhorne v Fischer, 162, TP 12-01634, 4th Dept. 3-15-13





Tape Recording Reflecting Frustration About Treatment of Muslim Inmates Did Not Warrant Punishment

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​The Third Department annulled the disciplinary hearing determination which found that the petitioner had engaged in prohibited “violent conduct” based on a tape recorded conversation.  After reviewing the tape, the Court ruled that the disciplinary rules prohibiting “conduct involving the threat of violence” and participation in “a work stoppage, sit-in, lock-n, or other actions which may be detrimental to the order of the facility” had not been violated. The evidence revealed only that “petitioner was agitated after incidents in which other Muslim inmates had allegedly been assaulted by correction officers. He indicated to the inmates at the meeting that they needed to do something about it and specifically mentioned ‘starting a paper trail.’ Significantly, he did not advocate violent or disorderly action.”  In the Matter of Murray, v Fischer, 514687, 3rd Dept. 3-14-13

TRUSTS AND ESTATES





Stepmother Had Right to Portion of Children’s Trust Under Spouse’s Right of Election



Petitioners were the children of the grantors of a trust and were co-beneficiaries of the trust.  The grantors of the trust were the beneficiaries’ mother and father. The mother died and respondent was the children’s stepmother.  The children moved to dismiss the objections to the trust accounting made by the respondent-stepmother on the ground she did not have standing.  In ruling the stepmother had standing pursuant to the right of election, the Third Department wrote:  …[A] revocable trust … is a testamentary substitute, subject to [the surviving spouse’s] right of election … . Where a trustee voluntarily commences judicial settlement of the account of a trust, process must be provided ‘to all persons who are entitled absolutely or contingently by the terms of the will, lifetime trust instrument or by operation of law to share in the estate’ …” .  The surviving spouse, by operation of law, was entitled to a portion of the estate, including the trust.  In the Matter of Garrasi …, 515128, 3rd Dept. 3-7-13



Supreme Court Has the Power to Appoint a Temporary Representative to Substitute for a Defendant in a Personal Injury Action



One of the defendants in a personal injury action died.  The plaintiff moved pursuant to CPLR 1015 to have Supreme Court appoint a temporary representative of the estate, and to have the temporary representative substituted for the deceased defendant. The defendants opposed the motion arguing that Surrogate’s Court was the appropriate forum for the appointment of a temporary administrator. In finding that Supreme Court could make the appointment, the Second Department wrote:

"In most instances the personal representative of the decedent's estate should be substituted in the action" …. However, in the event no such representative exists, an appropriate appointment should be made and that individual should be substituted in place of the decedent … . "In determining who shall be substituted for the decedent, conflict of interest questions may be raised" … .

The Second Department, however, determined that the person Supreme Court appointed, the attorney for the insurance company defending the action, had a conflict of interest because the insurance company had disclaimed coverage for the subject accident.  The matter was remitted for the appointment of a different temporary administrator.  Dieye v Royal Blue Services, Inc., 2012 NY Slip Op 01527, 2012-03428, Index No 3392/09, 2nd Dept. 3-13-13





Co-Executor Can Object to Final Accounting Solely By Virtue of the Executor’s Fiduciary Duty to the Estate



In finding that a co-executor (who could no longer be sued by any of the beneficiaries because all had executed releases) had standing to contest a final accounting submitted by the other co-executor, the Fourth Department wrote:

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An executor is a fiduciary who owes “a duty of undivided loyalty to the decedent and ha[s] a duty to preserve the assets that [decedent] entrusted to them” …, and “an executor’s duties are derived from the will itself, not from the letters issued by the Surrogate” … .

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“Suffice it to say, an executor who knows that his co[-]executor is committing breaches of trust and not only fails to exert efforts directed towards prevention but accedes to them is legally accountable” … .

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…[T]the Surrogate concluded that, because there were no remaining creditors of the estate and all of the other beneficiaries had executed releases absolving objectant of liability, objectant no longer had standing as a co-executor to file any objections to petitioner’s final accounting. * * *

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Contrary to the Surrogate’s conclusion, the mere fact that the estate has no creditors and objectant can no longer be sued successfully by any of the beneficiaries does not establish that he has fulfilled his fiduciary duty to the decedent and the estate so as to vitiate his standing to raise objections to the accounting filed by the co-executor.

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An executor’s duty is not fulfilled merely because he or she has obtained releases from liability.

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The standard of care for a fiduciary cannot be set so low; rather, a fiduciary has a “duty of active vigilance in the collection of assets belonging to the estate” …   In the Matter of Schultz, 51, CA 12-01283, 4th Dept. 3-15-13





Old Age, Infirmity, Dementia and Medical Opinion Did Not Demonstrate Lack of Testamentary Capacity



In affirming the dismissal of objections to a will, the Fourth Department explained that proof the decedent suffered from old age, infirmity and dementia was not necessarily inconsistent with testamentary capacity, and, where there is direct evidence the decedent had the necessary ability to understand, even medical opinion is of minor importance:

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“It is the indisputable rule in a will contest that ‘[t]he proponent has the burden of proving that the testator possessed testamentary capacity and the [Surrogate] must look to the following factors: (1) whether []he understood the nature and consequences of executing a will; (2) whether []he knew the nature and extent of the property []he was disposing of; and (3) whether []he knew those who would be considered the natural objects of h[is] bounty and h[is] relations with them’ ” … .“ ‘Mere proof that the decedent suffered from old age, physical infirmity and . . . dementia when the will was executed is not necessarily inconsistent with testamentary capacity and does not alone preclude a finding thereof, as the appropriate inquiry is whether the decedent was lucid and rational at the time the will w made’ ”… . “Where there is direct evidence that the decedent possessed the understanding to make a testamentary disposition, even ‘medical opinion evidence assumes a relatively minor importance’ ”….  In the Matter of Alibrandi, 136, CA 12-00963, 4th Dept. 3-15-13





No Proof Misrepresentation Caused Decedent to Disinherit Daughter



​In reversing a jury verdict finding that a will had been procured by fraud, i.e., a misrepresentation made to the decedent by one daughter, Zucker, against the other daughter, Ranaldo, resulting in the disinheritance of Ranaldo, the Second Department wrote:

                …[T]here was no evidence presented at trial to demonstrate that Zucker conveyed the alleged misrepresentation to the decedent with the intention of inducing the decedent to alter her estate plan …, or that the alleged misrepresentation in fact induced the decedent to change her testamentary plan. There was no evidence presented to show that the decedent considered or discussed disinheriting Ranaldo when she met with her attorney two weeks after the alleged misrepresentation. The decedent's attorney, who drafted the will, testified that the first time the decedent mentioned disinheriting Ranaldo was at a subsequent meeting, approximately eight months after the alleged misrepresentation. In the absence of any evidence to establish that Zucker conveyed the alleged misrepresentation to the decedent with the intention of inducing the decedent to alter her estate plan, and that the alleged misrepresentation in fact induced the decedent to change her testamentary plan, no valid line of reasoning and permissible inferences could lead a rational person to the conclusion reached by the jury that the will and the first amendment to the Trust were the product of fraud … . Accordingly, the jury's verdict was not supported by legally sufficient evidence … .  Matter of Ranaldo, 2013 NY Slip Op 01834, 2011-03624, 2011-03625, 2nd Dept. 3-20-13









REAL ESTATE



Condominium Unit Owner Has Common Law Right to Examine Books


Although a condominium unit owner is not entitled under the Business Corporation Law to examine the books and records of a condominium, an unincorporated association governed by the Real Property Law, there is a common law right of a stockholder to examine the books and records of a corporation. Because the unit owners of a condominium own the common elements of the condominium and are responsible for common expenses, the common law right of a stockholder to examine the books applies to a unit owner of a condominium.  Pomerance v McGrath, 650129/11, 9457, 1st Dept. 3-7-13

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Erroneous Discharge of Mortgage Can Be Set Aside Where No Detrimental Reliance


“ ‘ A mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage reinstated where there has not been detrimental reliance on the erroneous recording’ … .Only bona fide purchasers and lenders for value are entitled to protection from an erroneous discharge of a mortgage based upon their detrimental reliance thereon.”  Beltway Capital, LLC v Soleil,et al, 2011-02773, Index no 22244/07, 2nd Dept. 3-6-13



Procedure for Extending Real Property Lien Based on Money Judgment



The procedure for extending a real property lien which is based on a New York money judgment was explained by the Second Department:

Although a New York money judgment is enforceable for 20 years (see CPLR 211[b]), a real property lien resulting from the judgment is viable for only 10 years (see CPLR 5203[a]). For this reason, the Legislature enacted CPLR 5014 to give a judgment creditor an opportunity to extend the life of the lien by commencing an action for a renewal judgment … . "Pursuant to CPLR 5014(1), an action upon a money judgment may be maintained between the original parties where ten years have elapsed since the judgment was originally docketed" … . "An action may be commenced under subdivision one of this section during the year prior to the expiration of ten years since the first docketing of the judgment" (CPLR 5014). The plaintiff here established her prima facie entitlement to judgment as a matter of law awarding her a renewal judgment pursuant to CPLR 5014(1) by demonstrating the existence of the prior judgment, that the defendant was the judgment debtor, that the judgment was docketed at least nine years prior to the commencement of this action, and that the judgment remains partially or completely unsatisfied …. . Rose v Gulizia, 2013 NY Slip Op 01542, 2011-08302, Inex No 40635/15, 2nd Dept. 3-13-13





Buyer Not Entitled to “Loss of Bargain” Damages for Breach of Purchase Contract



The contract for the sale of a parcel of real property included the following: 

“It is the understanding of the parties that at the present time, seller is not in title to the property.  Seller is a first mortgage holder and the mortgage is in default.  In the event that the title holder does not agree to signing over a deed in lieu of foreclosure, the seller will institute foreclosure proceedings with the courts.  Seller shall be able to provide good and clear title in accordance with this contract.” The defendant-seller, however, was outbid at the foreclosure sale and could not provide the buyer with good and clear title.  In the lawsuit brought by the buyer, the buyer sought so-called “loss of bargain” damages.  In affirming the trial court’s denial of buyer’s request for “loss of bargain” damages, the Fourth Department explained:

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It is well settled that “[t]he vendee in a contract for the sale of land is not ordinarily entitled, upon breach, on failure to convey, to recover of the vendor damages measured by the goodness of his bargain or the financial benefit which would result from performance, and it is only when the vendor is for some reason chargeable with bad faith in the matter that recovery beyond nominal damages on that account can be had” … .Thus, “[i]f a vendee knows of the inability of his vendor to convey the title he has undertaken to convey, the vendee’s damages are not measurable by the loss of his bargain” … .  Khanjani v Schreiber, 141, CA 12-00494, 4th Dept. 3-15-13

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Pre-Closing Inspection Disallowed Because There Was No Mention of a Pre-Closing Inspection in the Purchase Contract



​A purchase contract that contained a merger clause prohibiting oral modifications and which did not have a provision allowing a pre-closing inspection was held not to provide the buyer with the right to inspect the property.  Under the rules for the interpretation of an unambiguous contract, “ ‘courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include’ . ..”.  Thirty One Development, LLC v Jeffery Cohen, et al, 161 CA 11-02577, 4th Dept. 3-15-13





Injury to Real Property, Waste, Trespass, Conversion and Private Nuisance Actions Based Upon Removal of Trees from Unrecorded Easement



​In an action for breach of contract, waste, injury to real property, trespass, conversion and private nuisance, based upon clearing land of trees pursuant to an unrecorded easement, the Second Department wrote:

                 Pursuant to RPAPL 861(1), a property owner may maintain an action for damages against any person who, without the consent of the owner, removes or causes to be removed trees on the owner’s property … . “To recover damages based on the tort of private nuisance, a plaintiff must establish an interference with his or her right to use and enjoy land, substantial in nature, intentional or negligent in origin, unreasonable in character, and caused by the defendant’s conduct”… . “In order to establish a cause of action to recover damages for conversion, the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in question . . . to the exclusion of the plaintiff’s rights” … . * * *

                “[A]n unrecorded conveyance of an interest in real property is deemed void as against a subsequent good faith purchaser for value who acquires his interest without actual or constructive notice of the prior conveyance” … . However, “ [w]here a purchaser has knowledge of any fact, sufficient to put him on inquiry as to the existence of some right or title in conflict with that he is about to purchase, he is presumed either to have made the inquiry, and ascertained the extent of such prior right, or to have been guilty of a degree of negligence equally fatal to his claim, to be considered as a bona fide purchaser’” …. “This presumption, however, is a mere inference of fact, and may be repelled by proof that the purchaser failed to discover the prior right, notwithstanding the exercise of proper diligence on his part” … .   Schulz v Dattero, et al, 2013 NY Slip Op 01815, 2011-05813, 2012-02942, Index No 876/06, 2nd Dept. 3-20-13





Damages for Breach of Purchase Contract Are Measured by the Difference Between the Purchase Price and the Market Value at Time of Breach



​In a lengthy opinion by Judge Read, the Court of Appeals determined that, where a purchase contract for real property has been breached, the measure of damages is the difference between the sale price and the market value of the property at the time of the breach.  The price at which the property subsequently sells can be taken into consideration when determining what the value was at the time of the breach, but it is not the measure of damages.  White v Farrell, et al, No. 43, Court of Appeals, 3-21-13



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MEDICAL MALPRACTICE





Failure to Instruct Jury that Medical Practice Guidelines Did Not Set Forth the Applicable Standard of Care Required Reversal



The case turned on whether the defendant failed to recommend and perform a timely colonoscopy (the plaintiff, who had a history of colon polyps, contracted colon cancer).  At trial the defendant doctor was allowed to introduce in evidence guidelines published by the American Gastroenterological Association which included the recommended frequency of colonoscopies.  The plaintiff objected and requested a limiting instruction informing the jury that the guidelines “did not set forth the standards of care with regard to the diagnosis and treatment of plaintiff’s colon cancer.” The trial court gave a cursory limiting instruction at the time the guidelines were admitted, and told the jury another instruction would be forthcoming.  The trial court subsequently declined to give any further instructions on the issue.  In reversing the judgment for the defendant and ordering a new trial, the First Department wrote:
The court erred in failing to give the instruction that plaintiff requested.
Although the trial court's instruction informed the jury that it was to make its determination based on "all the evidence," this instruction was not sufficient to guide the jury on how to apply the Guidelines to the facts before it. The court's instruction as rendered failed to make clear to the jury that the Guidelines were simply recommendations regarding treatment, and thus, that compliance with the Guidelines did not, in and of itself, constitute good and accepted medical practice … . The trial court should have given the jury an instruction specifically stating that the Guidelines were not the same as standards of care and that the jury was to make its determination based on the particular circumstances of the case, not on the Guidelines alone. Introducing the Guidelines into evidence without the appropriate limiting instruction allowed the jury to infer that a physician need not exercise professional judgment with regard to individual patients, but could simply abide by the recommendations promulgated in the Guidelines.  Hall v Kiyici, 2013 NY Slip Op 01616, 9067, 23531/05, 1st Dept. 3-14-13





* “Emergency Exception” to Rule Hospital Is Not Vicariously Liable for Negligence of Non-Employee Physicians Did Not Apply



​The Second Department determined the hospital’s (Winthrop-University Hospital’s) motion for summary judgment dismissing the cause of action alleging it was vicariously liable for the actions of a non-employee physician (Raio) should have been granted.  The hospital demonstrated that the “emergency room exception” to vicarious liability for the negligence of a non-employee physician did not apply:

          "In general, a hospital may not be held vicariously liable for the                malpractice of a private attending physician who is not an employee" … . "However, an exception to the general rule exists when a patient comes to the emergency room seeking treatment from the hospital and not from a particular physician of the patient's choosing" … .

          Here, Winthrop-University Hospital made a prima facie showing of its entitlement to judgment as a matter of law dismissing so much of the complaint as alleged that it was vicariously liable for the alleged malpractice of Raio by submitting evidence that Raio was not an employee of Winthrop-University Hospital, but rather, an attending physician at the hospital …. Furthermore, Winthrop-University Hospital made a prima facie showing that the emergency room exception was inapplicable, by demonstrating that the decedent was referred to Raio's care by his own internist … .  Giambona v Hines, et al, 2013, NY Slip Op 01803, 2011-05943, Ind No 7819/07, 2nd Dept. 3-20-13



Expert Affidavit Did Not Raise a Question of Fact



In affirming the grant of summary judgment to the defendant hospital, the Second Department explained the flaws in the plaintiffs’ expert’s affidavit, finding the expert did not lay a foundation for an opinion outside the expert’s area of specialization and made “speculative” and “conclusory” assertions:

                In opposition, the affidavit of the plaintiffs' expert did not raise a triable issue of fact. When, as here, "a physician opines outside his or her area of specialization, a foundation must be laid tending to support the reliability of the opinion rendered" … . Here, the plaintiffs' expert failed to lay the requisite foundation. Moreover, even assuming the requisite foundation had been laid, the expert's assertions that a diagnosis of the fracture at the hospital would have led to adequate immobilization, without specifying what adequate immobilization would have entailed, and may have resulted in "normal healing," are conclusory and speculative, and thus, insufficient to raise a triable issue of fact as to causation … . Shashi v Nassau Communities Hosp., 2013 NY Sip Op 01818, 2011-04552, Index No 15636/08, 2nd Dept. 3-20-13

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NOTARY PUBLIC





No Need to Demonstrate Detrimental Reliance to Recover for Misconduct by Notary Public



The Second Department determined that “detrimental reliance” does not need to be demonstrated to recover for misconduct by a notary public under Executive Law section 135 where the plaintiff does not allege fraud as the theory of recovery.  The plaintiff in this case alleged the notary’s misconduct resulted in the recording of a forged deed which caused the subrogors to sustain damages.  In reversing the trial court’s dismissal of the notarial-misconduct cause of action, the Second Department wrote:

Executive Law § 135 provides, in relevant part, that "[f]or any misconduct by a notary public in the performance of any of his powers such notary public shall be liable to the parties injured for all damages sustained by them." Thus, the plain language of the statute does not require a showing of detrimental reliance … . Rather, a plaintiff seeking to recover under that section need only show that the notary engaged in notarial misconduct and that such misconduct was a proximate cause of the plaintiff's injury … .  Chicago Title Insurance Co. v LaPierre, 2013 NY Slip Op 01523, 2012-05101, Index No 15384/08, 2nd Dept. 3-13-13









CONTRACT LAW





Interpretation of Unambiguous Language/Doctrine of Expressio Unius est Exclusio Alterious/Criteria for Declaratory Judgment



In a contract action, the Second Department laid out the black letter law on the interpretation of unambiguous language, the doctrine of “exclusio unius est exclusio alterious,” and the criteria for a declaratory judgment.  The controversy concerned the amount of a bonus which was determined, according to the terms of the contract, by whether the plaintiff resigned or was fired, a disputed issue:

The defendant acknowledges that if the language of a written contract is free of ambiguity, the court must determine its meaning as a matter of law based upon the writing alone, without resort to extrinsic evidence …. Contrary to the defendant’s contention, the language of paragraph 4.2 clearly limits bonus compensation to a share of distributions based upon either the sale of all of RDL’s assets, or some of RDL’s assets. Pursuant to the doctrine of “exclusio unius est exclusio alterious,” which means that the expression of one thing is the exclusion of the other …, the references to the sale of assets implies that bonus compensation does not apply to distributions based upon something other than the sale of assets. If the parties had intended for bonus compensation to be based upon all distributions, these references to the sale of assets would have been unnecessary.  * * * The courts may issue declaratory judgments declaring the rights of the parties only where there is a justiciable controversy …. There is no justiciable controversy warranting declaratory relief if the controversy is over a future event “beyond the control of the parties and may never occur” … . However, in the instant case, the future event is in the control of RDL …, and is likely to occur … . Therefore, the question of whether the defendant was discharged without cause or resigned constitutes a justiciable controversy, which must be resolved by the Supreme Court after a trial.  Realtime Data, LLC v Melone, 2013 NY Slip Op 01540, 2011-11936, Index No 50021/10, 2nd Dept. 3-13-13





Performance and Design Specification Contracts Defined



​This breach of contract case concerned the installation of “jet grout bottom seal” at a wastewater treatment plant.  In the course of its discussion, the Fourth Department explained the difference between performance and design specification contracts:



We … conclude that there are issues of fact concerning whether the contract was one of performance or design specification, thus precluding summary judgment with respect to the additional expenses that plaintiff allegedly incurred in remediating the jet grout bottom seal. “A performance specification [contract] requires a contractor to produce a specific result without specifying the particular method or means of achieving that result” (Fruin-Colnon Corp. v Niagara Frontier Transp. Auth., 180 AD2d 222, 229).“In other words, the contractual risk of nonperformance is upon the contractor” (id.). In contrast, a design specification contract is one in which “the owner specifies the design, materials and methods and impliedly warrants their feasibility and sufficiency” (id.).     “In that instance, the contractor’s guarantee . . . is limited to the quality of the materials and workmanship employed in following the owner’s design” (id. at 230). The proper characterization of a construction contract as one of either performance or design specification “depends upon the language of the contract as a whole,” and relevant factors in such an inquiry “include the nature and degree of the contractor’s involvement in the specification process, and the degree to which the contractor is allowed to exercise discretion in carrying out its performance” ​(id.).Here, the unresolved issues of fact with respect to those factors, particularly as to plaintiff’s ability to change the design without Falter’s approval, precludes a determination whether as a matter of law the subject contract is one of either performance or design specification, and thus whether plaintiff may recover expenses incurred in remediating the jet grout bottom seal.  Howard Baker, Inc. v C.O. Falter Construction Corp., et al, 1441, CA 12-00398, 4th Dept. 3-15-13





Flaws in Fraud and Negligent Misrepresentation Allegations in Complaint Explained



​The First Department, in affirming the dismissal of fraud and negligent misrepresentation claims in a contract action, described the flaws in the complaint as follows:
 

             The court properly dismissed the fraud claim for failure to plead fraud with the particularity required by CPLR 3016(b) and for failure to plead loss causation … .

 
             The court properly dismissed the negligent misrepresentation claim for failure to plead a special relationship. An arm's length business relationship, as existed here, is not generally considered to be the sort of confidential or fiduciary relationship that would support a cause of action for negligent misrepresentation … . Nor did [defendants] "possess unique or specialized expertise" … .  Greentech Reasearch LLC v Wissman, 2013 NY Slip Op 01787, 9561, 602477/09, 1st Dept. 3-19-13









MUNICIPAL LAW





County Executive Has Authority to Commence Lawsuit Without Resolution from County Legislature



The Fourth Department determined the Erie County Executive had the authority to bring a lawsuit alleging fraud on the part of a County Commissioner which resulted in the payment of more than $4,000,000 for goods and services that had not been provided.  The defendant contended the County could not bring the suit absent a resolution by the County Legislature.  The Fourth Department wrote:



There is no dispute that the County Legislature did not pass a resolution authorizing the commencement of this action. Contrary to defendant’s contention, however, we conclude that, notwithstanding the absence of such a resolution, the County Executive was empowered to commence this action on behalf of the County (see Matter of County of Rockland v Town of Clarkstown, 167 Misc 2d 367, 371). Under the County Charter, the County Executive is the Chief Executive Officer, the administrative head of the County government, and the Chief Budget Officer of the County.The County Charter grants the County Executive “all necessary incidental powers to perform and exercise any of the duties and functions specified . . . or lawfully delegated to him” (Erie County Charter § 302 [former (n)], now [m]).The County Executive is empowered by the County Charter to authorize the County Attorney to commence civil litigation to enforce any of the duties and functions lawfully designated to the County Executive (see § 602; see also § 302 [former (m)], now [l]; [former (n)], now [m]).Inasmuch as this action seeks to recover over $4 million dollars of the County’s funds that were allegedly improperly paid under the M/A-Com contract as a result of defendant’s alleged fraud, we conclude that the County Executive’s duties as Chief Executive Officer and Chief Budget Officer of the County clearly embrace the subject matter of this action and empower him to authorize the County Attorney to commence the litigation (see Rockland County, 167 Misc 2d at 371).  Justices Sconiers and Whalen disagreed in a substantial dissent.  County of Erie v M/A-Com, Inc., et al, 1184, CA 12-00075, 4th Dept. 3-15-13





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DEFAMATION



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Elements of Defamation, Invasion of Privacy and Intentional Infliction of Emotional Distress Explained



​Plaintiff, an English professor, brought suit for defamation and invasion of privacy based upon two articles in the defendant New York Post and on the websites of two other defendants.  In affirming the trial court’s grant of summary judgment to the defendants, the First Department applied the facts of the case to the proof requirements for defamation (finding the statements were not false or were expressions of opinion), “invasion of privacy” pursuant to the NY Civil Rights Law sections 50 and 51 (involving the use of plaintiff’s image), prima facie tort and intentional infliction of emotional distress.  The decision briefly but clearly articulates the essential elements of these causes of action and the reasons the elements were not demonstrated.  Fleischer v NYP Holdings, Inc., 2013 NY Slip Op 01784, 150164/10, 9557, 1st Dept. 3-19-13