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March Page I

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


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Delay In Retaining Expert Did Not Warrant Preclusion of Expert's Testimony


The Second Department determined Supreme Court should not have precluded plaintiff's expert from testifying based upon the timing of the retaining of the expert and the serving of his expert information.  There was no evidence the delay was intentional or willful,  and no showing of prejudice to the opposing party:


CPLR 3101(d)(1)(i) "does not require a party to respond to a demand for expert witness information at any specific time nor does it mandate that a party be precluded from proffering expert testimony merely because of noncompliance with the statute,' unless there is evidence of intentional or willful failure to disclose and a showing of prejudice by the opposing party" ... . Here, the record does not support a conclusion that the plaintiff's delay in retaining his expert or in serving his expert information was intentional or willful. Furthermore, any potential prejudice to the defendants was ameliorated by a two-month adjournment of the retrial agreed to by the parties ... . Accordingly, the Supreme Court improvidently exercised its discretion in granting the defendants' motion to preclude the plaintiff's expert from testifying at the retrial ... . Burbige v Siben & Ferber, 2014 NY Slip Op 01426, 2nd Dept 3-5-14




Failure to Make Timely Motion to Dismiss Based Upon Improper Service Constituted a Waiver of the Jurisdictional Defense


The Third Department determined defendant's (O'Neill's) jurisdictional defense based on improper service was waived by the failure to move for judgment on that ground within 60 days:


Plaintiff did not effectuate proper substituted service on O'Neill because she failed to mail a copy of the pleadings to O'Neill after the process server left a copy with the president of Hafner Valuation at O'Neill's place of business (see CPLR 308 [2]). Despite the error in service and defendants having raised it in their answer,O'Neill waived his objection on this ground by failing to move for judgment on that basis within 60 days of serving the answer (see CPLR 3211 [e]...).  Sutton v Hafner Valuation Group Inc, 516779, 3rd Dept 3-6-14





Police Pursuit Not Justified by Defendant's "Grabbing of his Waistband Area" or Subsequent Flight/Gun Suppressed


The Second Department affirmed the suppression of a weapon.  After seeing the defendant "grab... his waistband area" the police approached and the defendant ran, ultimately discarding a gun.  The pursuit was not justified by what the police saw prior to the defendant's flight:


A suspect's "flight alone . . . even [his or her flight] in conjunction with equivocal circumstances that might justify a police request for information, is insufficient to justify pursuit" ... . However, flight, "combined with other specific circumstances indicating that the suspect may be engaged in criminal activity, could provide the predicate necessary to justify pursuit" ... .Under the circumstances of this case, the defendant's "grabb[ing]" of his "waistband area" in such a way that it "[s]eemed" to the detectives that the defendant "had a bulge or something heavy that he was holding on the outside of his garments," did not constitute specific circumstances indicative of criminal activity so as to establish the reasonable suspicion that was necessary to lawfully pursue the defendant, even when coupled with the defendant's having made eye contact with the detectives and his flight from the detectives ... . As the detectives' pursuit of the defendant was unlawful, and the defendant's disposal of the weapon during the pursuit was precipitated by the illegality and was not attenuated from it ..., the Supreme Court properly granted that branch of the defendant's omnibus motion which was to suppress the weapon. People v Haynes, 2014 NY Slip Op 01462, 2nd Dept 3-5-14




Defendant Entitled to Hearing on Motion to Vacate His Conviction (by Guilty Plea) 

Based Upon Defense Counsel's Alleged Failure to Inform Him of the Risk of Deporatation


The Second Department determined defendant was entitled to a hearing on his motion to vacate his conviction. Defendant presented sufficient evidence to warrant a hearing about whether his attorney's alleged failure to inform him that his guilty plea could result in deportation constituted ineffective assistance of counse under Padilla v Kentucky, 559 US 356.  The court explained the analytical criteria:


"In order to prevail on a claim that, prior to deciding whether to plead guilty, a defendant was deprived of the right to the effective assistance of counsel under the United States Constitution, he or she must meet the two-part standard set forth in Strickland v Washington ... . "Under the first prong of that standard, the defendant must show that counsel's representation fell below an objective standard of reasonableness'" ... . "The second prong focuses on whether counsel's constitutionally ineffective performance affected the outcome of the plea process'" ... . * * *


In Padilla, the Supreme Court held that the Sixth Amendment to the United States Constitution requires an attorney for a criminal defendant to provide advice to the defendant about the risk of deportation which will arise as a result of a plea of guilty ... . Thus, in those cases in which Padilla is applicable, "where an attorney fails to advise a criminal defendant, or misadvises the defendant, regarding clear removal consequences of a plea of guilty, his or her representation falls below an objective standard of reasonableness" ... . * * *


"To satisfy the second prong of the Strickland standard, also known as the prejudice prong, the defendant must show that there is a reasonable probability that, but for counsel's errors, he would not have pleaded guilty and would have insisted on going to trial" ... . "In the context of a Padilla claim, the defendant must convince the court that a decision to reject the plea bargain would have been rational under the circumstances'" ... . Under the particular circumstances of this case, the defendant established, sufficiently to warrant an evidentiary hearing, that a decision to reject the plea bargain would have been rational.  People v Varenga, 2014 NY Slip Op 01472, 2nd Dept 3-5-14





Testimony of Defense Expert About Reliability of Eyewitness Identifications Properly Precluded/Criteria for Such Testimony Explained


The Second Department determined Supreme Court appropriately denied the defendant's request to present expert testimony about the reliability of eyewitness identifications because there was sufficient corroborating identification evidence.  The court explained the relevant criteria:


Where a case "turns on the accuracy of eyewitness identifications and there is little or no corroborating evidence connecting the defendant to the crime, it is an abuse of discretion for a trial court to exclude expert testimony on the reliability of eyewitness identifications if that testimony is (1) relevant to the witness's identification of defendant, (2) based on principles that are generally accepted within the relevant scientific community, (3) proffered by a qualified expert and (4) on a topic beyond the ken of the average juror" ... . Here, there was sufficient corroborating evidence connecting the defendant to the crimes to obviate the need for expert testimony, including, inter alia, independent identifications by two witnesses other than the three complainants, surveillance videos, and the defendant's incriminatory statements to police officers ... . People v Rhodes, 2014 NY Slip Op 01469, 2nd Dept 3-5-14





Mistakes Leading to Miscalculation of Defendant's Sentence Privileged


The Third Department determined plaintiff's false imprisonment action against the state was properly dismissed.  Although there were errors resuliting in the erroneous calculation of defendant's sentence, the erroneous actions were privileged:


In order to state a claim for false imprisonment or unlawful confinement, claimant was required to demonstrate that (1) defendant intended to confine him, (2) he was conscious of the confinement, (3) he did not consent to the confinement, and (4) such confinement was not otherwise privileged ... . As there is no dispute as to the first three elements, we are left to consider whether defendant's confinement of claimant indeed was privileged.


As the Court of Appeals recently reiterated, "[a] detention, otherwise unlawful, is privileged where the confinement was by arrest under a valid process issued by a court having jurisdiction" ... .Here, regardless of the validity of the sentence actually imposed, the asserted ambiguity in the sentence and commitment order or the reasonableness of [Department of Correctional Services'] interpretation thereof, there is no question that the sentencing court had jurisdiction over claimant, and the record does not otherwise suggest that the underlying process was defective. Accordingly, we are satisfied that defendant met its burden of demonstrating that its detention of claimant was privileged. * * *


Although DOCS' determination, which was predicated upon its analysis of the relevant sentencing statutes and claimant's criminal history, proved to be erroneous, that error in judgment neither negates nor defeats defendant's claim of privilege ... . Simply put, DOCS – in treating claimant's sentence as running consecutively to his prior undischarged term of imprisonment – acted in excess of its jurisdiction, not in the complete absence of jurisdiction, and its conduct therefore was privileged ... . Hudson v State of New York, 516333, 3rd Dept 5-6-14





"Mail Watch" Should Not Have Been Authorized/Determination Based on Contents of Inmate's Mail Annulled


The Third Department annulled at determination which resulted from the interception of the inmate's mail, finding that the "mail watch" authorization was invalid:


A superintendent of a correctional facility may authorize a mail watch only where "there is a reason to believe that the provisions of any department directive, rule or regulation have been violated, that any applicable state or[f]ederal law has been violated, or that such mail threatens the safety, security, or good order of a facility or the safety or well being of any person" (7 NYCRR 720.3 [e] [1]). Where a mail watch has been authorized, such authorization must "set forth the specific facts forming the basis for the action" (7 NYCRR 720.3 [e] [1]). Here, the Superintendent's authorization failed to set forth any facts upon which its issuance was based, stating only that it was based upon a request of a deputy superintendent "to investigate activity that may jeopardize the safety and security of the facility." Inasmuch as the authorization was not in compliance with the applicable regulation, it was invalid and the resulting mail watch was not properly authorized ... . Mena v Fischer, 516758, 3rd Dept 3-6-14





Excessive Absences Do Not Establish a Parent's "Educational Neglect"


The First Department, over a dissent, reversed Family Court's finding that mother neglected the child by failing to provide for the child's educational needs.  The record demonstrated that the child was defiant, violent and difficult to control, and mother had made substantial efforts to provide for her education:


Although the child had an excessive amount of absences from school, such absences "do[] not, ipso facto, establish either the parental misconduct or the harm or potential harm to the child necessary to a finding of [educational] neglect under Family Ct Act 1012(f)(i)(A)" ... . Here, the record shows that the mother faced obstacles in getting the child to attend school on a regular basis. The mother took the child to school for a period of time, but she was financially unable to escort the child to school on an ongoing basis ... . Moreover, even when the child was present, she had a history of truancy, tardiness, leaving school early and loitering in the hallways. The record further demonstrates that the child was defiant, violent, and had a history of lying and threatening to harm herself when the mother did not allow her to do what she wanted. The child also suffered from mood disorder, and had continuous hallucinations that made sleep difficult. The child was eventually hospitalized, and was given a number of psychiatric diagnoses. As a result, she was prescribed medication that caused her to be drowsy and disoriented, which further exacerbated her unwillingness and inability to attend school.Under the circumstances, the mother was unable to control the child and, despite her best efforts, struggled to get the child to attend school regularly, as well as to her therapy and drug treatment appointments... .  Matter of Brianna R, 2014 NY Slip Op 01410, 1st Dept 5-4-14




New York Court Properly Declined to Exercise Jurisdiction Over Child Custody and Visitation Matters Due to Child's Substantial Contacts with California


The Second Department determined Supreme Court had properly found that California, rather than New York, was the appropriate forum for determining child custody and visitation matters:


A court of this State which has jurisdiction under the Uniform Child Custody Jurisdiction and Enforcement Act (Domestic Relations Law art 5-A) may decline to exercise jurisdiction if it finds that New York is an inconvenient forum and that a court of another state is a more appropriate forum (see Domestic Relations Law § 76-f[1]...). The factors to be considered in making this determination include the length of time the subject child has resided outside the state, any agreement between the parties as to which state should assume jurisdiction, the nature and location of the evidence required to resolve the pending litigation, the ability of the court of each state to decide the issue expeditiously and the procedures necessary to present the evidence, and the familiarity of the court of each state with the facts and issues in the pending litigation (see Domestic Relations Law § 76-f[2]...). "Particularly relevant to the jurisdictional determination is whether the forum in which the litigation is to proceed has optimum access to relevant evidence" ... . "Maximum rather than minimum contacts with the State are required" ... . Greenfield v Greenfield, 2014 NY Slip Op 01434, 2nd Dept 3-5-14





"Prompt Pay Law" Affords a Private Right of Action Against An Insurer Which Fails to Pay a Patient's Undisputed Medical Claim


In a full-fledged opinion by Justice Austin, the Second Department determined the so-called "Prompt Pay Law" (Insurance Law 3224-a) affords an implied private right of action.  The law, therefore, can be enforced by a private lawsuit based upon its breach.  The defendant insurance company (First United) argued only the NYS Insurance Department could enforce the statute. 



The Prompt Pay Law requires an insurer to pay undisputed claims within 30 days after receipt of an electronic submission or within 45 days after receipt by other means (see Insurance Law § 3224-a[a]). If a claim is disputed, the insurer is obligated to pay the undisputed portion of the claim, if there is any, and, within 30 days of receipt of the claim, notify the policyholder, covered person, or health care provider in writing of the specific reason that the insurer is not liable to pay the claim (see Insurance Law § 3224-a[b][1]). In the alternative, the insurer may request additional information necessary to determine its potential liability with respect to payment of the claim (see Insurance Law § 3224-a[b][2]). First United allegedly did neither. An insurer that fails to comply with the provisions of the Prompt Pay Law is obligated to pay the health care provider or the person submitting the claim the full amount of the claim, plus 12% interest per annum, to be computed from the date the claim was required to be paid (see Insurance Law § 3224-a[c][1]). * * *


Where a statute does not expressly confer a private cause of action upon those it is intended to benefit, a private party may seek relief under the statute "only if a legislative intent to create such a right of action is fairly implied' in the statutory provisions and their legislative history" ... . This inquiry involves three factors:" (1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme'" ... .Only the third factor, which is generally the "most critical" ... is disputed here. * * *


A review of the legislative history of the Prompt Pay Law reflects that the law was directed toward the protection of health care providers and patients from late payment of claims, and was not primarily designed to provide a mechanism for preventing harm to the public in general.  Maimonides Med Ctr v First United Am Life Ins Co, 2014 NY Slip Op 01441, 2nd Dept 3-5-14















Insurance Company Could Not Rely On Plaintiff's Personal Injury Action to Recoup What It Paid Out on a Related Property Damage Claim---Not a Valid Subrogation Vehicle


The Third Department determined an insurance company's (Erie's) attempt to rely on plaintiff's personal injury complaint as the basis of its subrogation claim for property damage was properly dismissed.  The insured's house exploded due to a gas leak.  Next to the insured's house was a garage owned by the insured.  Erie paid $50,000 for damage to the garage.  The Erie attempted to rely on the insured's personal injury action to recoup the money paid out for the property damage:


"Subrogation is an equitable doctrine that allows an insurer to stand in the shoes of its insured to seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse" ... . To that end, an insurer seeking to enforce its right of subrogation generally has two options – "the insurer can bring an independent action against the wrongdoer in the name of its insured, the subrogor, or seek to intervene in an existing action between the insured and the wrongdoer" ... . Neither path was pursued by Erie here; rather, Erie sought to use plaintiffs' personal injury complaint "as a vehicle to assert [its] subrogation theory against . . . defendants."As Supreme Court aptly observed, the principal flaw inErie's methodology is that although plaintiffs' complaint indeed recites that plaintiffs' home exploded as a result of the natural gas leak, that pleading makes absolutely no reference to the property damage sustained to Pete's Garage, nor does it "plead or otherwise spell out that damages are being sought for [the] property damage/loss" sustained thereto.  Although this Court has limited an insurer's right to intervene in certain circumstances ..., such circumstances are not present here.  Peterson v NYS Electric and Gas Corporation..., 516423, 3rd Dept 3-6-14





Question of Fact About Whether Managing Member Breached Fiduciary Duty Owed to Nonmanaging Member with Respect to Managing Member's Alleged Reliance Upon an Outside Professional


The First Department determined the defendant (Gary) was not entitled to summary judgment.  Gary was the managing member of a Limited Liability Company (LLC) and was sued by a nonmanaging member. Gary argued that, under the Limited Liability Company Law (section 409), he was entitled to rely on the advice of an accountant, and that the cause of action based upon Gary's acting in accordance with the accountant's advice should be dismissed. The court described the fiduciary duty owed by Gary to the plaintiff and the criteria for the managing member's reliance on an outside professional:


As the managing member of the LLCs, Gary owed plaintiff — a nonmanaging member — a fiduciary duty ... . "[I]t is elemental that a fiduciary owes a duty of undivided and undiluted loyalty to those whose interests the fiduciary is to protect. This is a sensitive and inflexible rule of fidelity, barring not only blatant self-dealing, but also requiring avoidance of situations in which a fiduciary's personal interest possibly conflicts with the interest of those owed a fiduciary duty" ... .Reliance on outside professionals under Limited Liability Company Law § 409(b)(2) must be in good faith (see Limited Liability Company Law § 409[a]...).  As described here, Gary does not meet his initial burden of showing that he acted in good faith and undivided loyalty to plaintiff so as to rely on Limited Liability Company Law § 409 or the business judgment rule. Pokoik v Pokoik, 2014 NY Slip Op 01502,, 1st Dept 5-6-14





Question of Fact Whether Driver's Gesture to Turn Was Proximate Cause of Collision


The Third Department determined there was a question of fact about whether defendant driver's (Slawiendski's) gesture indicating a second defendant driver (Shaut) could make a left turn in front of him was the proximate cause of plaintiff's collision with the turning car:


...[T]he duty of a driver to act reasonably in signaling to another driver that he or she will yield the rightof-way or that the other driver may safely proceed is owed not just to the driver being signaled, but also to other motorists and passengers ... . Here, there is evidence that Slawienski acted unreasonably based upon his testimony that he failed to check for traffic in his rear or side view mirrors before signaling to Shaut.  However, a signaling driver is liable only when the gesture is a proximate cause of a subsequent collision – an inquiry that "depends on whether the recipient of the gesture relied on it as an indication that the path was safe and clear" ... . Proximate cause is generally a factual issue for a jury to resolve ... . Here, Shaut testified that he relied on Slawienski's signal in deciding to make the turn and would not have done so if not for the gesture; further, Slawienski testified that Shaut did not stop as he crossed into plaintiff's lane, suggesting that Shaut relied on the gesture to indicate that the lane was clear. However, Shaut testified that he knew that he was separately obliged to check the safety of plaintiff's lane; he stated that he slowed or stopped his vehicle before entering plaintiff's lane to look for oncoming traffic, but did not see the motorcycle until after the collision. This evidence neither establishes as a matter of law that Shaut fully relied upon Slawienski's gesture nor that his decision to proceed into plaintiff's lane was entirely independent ... . Thus, there are factual issues for the jury regarding the degree of Shaut's reliance on Slawienski's gesture, whether Shaut independently checked the safety of plaintiff's lane, and if he did, whether the check was a superseding act severing the causal link between the gesture and the collision... . Nasadoski v Shaut, 516374, 3rd Dept 3-6-14





Question of Fact Whether Deed Procured by Fraud and Whether Mortgagee Had Notice of the Potential Fraud


The Second Department determined a question of fact had been raised about whether a property transfer was procured by fraud.  If so, the deed and the related mortgage would be void with respect to the mortgagee/incumbrancer (Wells Fargo).  There was evidence the mortgagee was on notice about the possible fraud and there was evidence of fraud in the factum:


Real Property Law § 266 protects the "title of a purchaser or incumbrancer for a valuable consideration, unless it appears that he [or she] had previous notice of the fraudulent intent of his [or her] immediate grantor, or of the fraud rendering void the title of such grantor." Thus, a mortgagee is not protected in its title if it had previous notice of potential fraud by the immediate seller, or knowledge of facts which put it on inquiry notice as to the existence of a right in potential conflict with its own ... . A mortgagee has a duty to inquire when it is aware of facts that would lead a reasonable, prudent lender to inquire into the circumstances of the transaction at issue ... . A mortgagee who fails to make such an inquiry is not a bona fide incumbrancer for value ... . Here, Wells Fargo's submissions contain information regarding the plaintiff's possession of the property that put it on inquiry notice as to the plaintiff's potential right to the property ... . Thus, Wells Fargo failed to establish its prima facie entitlement to judgment as a matter of law on the issue of whether it lacked notice of a potential fraud ... . Real Property Law § 266 also does not protect a bona fide incumbrancer for value where there has been fraud in the factum, as the deed is void and conveys no title ... . Such a conveyance conveys nothing, and a subsequent bona fide incumbrancer for value receives nothing ... . Here, Wells Fargo failed to establish its prima facie entitlement to judgment as a matter of law on the issue of whether the subject deeds are void ab initio on the ground of fraud in the factum ... . Williams v Mentore, 2014 NY Slip Op 01449, 2nd Dept 3-5-14





Use of Church Property Sufficient to Maintain Tax-Exempt Status


The Third Department determined the City (respondents) did not demonstrate church-owned property was no longer used for religious purposes.  Therefore the City could not revoke the tax-exempt status of the property:


Although the burden of proof in tax exemption matters ordinarily lies with the party seeking an exemption, a municipality seeking to withdraw an existing exemption bears the burden of proving that the real property in question has become subject to taxation ... . Here, although it is undisputed that petitioners continue to be organized exclusively for tax-exempt religious purposes, respondents contend that their properties are not entitled to tax exemptions because they are no longer "used primarily for the furtherance of [religious] purposes" ... . To meet their burden in this regard, respondents contend that statements made by the Diocese establish that the properties no longer function as churches, that regular worship services and religious activities that were formerly conducted on the properties now take place elsewhere, and that the parcels are now investment properties being marketed for sale for the non-exempt purpose of generating income.


... Petitioners ... submitted affidavits from church officials stating that both properties continue to be used for religious services conducted to serve the spiritual needs of the parish faithful, in the form of monthly morning prayers on one of the properties and periodic prayer services that include scripture readings and communion services on the other.  Contrary to respondents' contention that such occasional or periodic use cannot be deemed to be primary,"[i]t is the actual or physical use of the property" that determines whether it is exempt from real property taxation ... . Here, the record reveals that petitioners' only actual or physical use of their properties is for religious purposes. Absent any showing by respondents that the properties are used for anything other than the religious purposes for which petitioners were organized, the mere fact that this use is now less frequent does not alter the properties' tax-exempt status ... . The record also includes a letter from a Diocese official to the Assessor averring that the properties are used to store religious artifacts and fixtures. Matter of St Williams Church of Troy..., v Dimitriadis..., 516532, 3rd Dept 3-6-14






Suit by Beneficiaries to Recoup Estate Property, Alleging Breach of Fiduciary Duty by Executor, Allowed to Go Forward


The Third Department determined the beneficiaries of an estate had stated a cause of action to recoup property for an estate (the role of the executor).  The complaint alleged misappropriation of decedent's assets and included a cause of action against the executor (DiMaggio) for breach of fiduciary duty:


Initially, we note that, absent extraordinary circumstances, beneficiaries of an estate generally do not have a right to bring an action seeking to recoup property for the estate since that role belongs to the executor ... . However, such extraordinary circumstances may be implicated where the executor is allegedly directly involved in purported egregious conduct and self-dealing that negatively impacts the potential assets of the estate ... . When asserting conduct involving fraud or undue influence, the complaint must set forth in detail the circumstances constituting the wrong (see CPLR 3016 [b]...). .


Plaintiffs' amended complaint sets forth a series of purported acts by defendants occurring during the last two years of decedent's life when she was allegedly suffering from cancer and depression. Among other things, defendants allegedly induced decedent to give DiMaggio power of attorney by telling decedent that she would retain control over her accounts, but then used the power of attorney to withdraw funds, modify ownership interest, and change beneficiaries on accounts. Plaintiffs contend that defendants convinced decedent to cash about $360,000 in United States savings bonds by informing her it was illegal to continue to hold the bonds and that the government would take all her money. Most of that money was moved into a trust that defendants allegedly falsely informed decedent would benefit her descendants when proceeds of the trust actually went to defendants and their families. Plaintiffs further assert thatDiMaggio, who was substituted for decedent's daughter as executor when decedent executed a new will in 2007, neglected to make an effort to recover funds inappropriately diverted from the estate. Lewis v DiMaggio..., 516811, 3rd Dept 3-6-14





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