Summaries of Recently Released Decisions to Be Included In the Next Issue of the Digest (uncorrected)
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ARBITRATION/MUNICIPAL LAW/EMPLOYMENT LAW
Whether Color-Blind Bus Driver Should Be Given a Road Test to Determine Driving Abilities Was a Proper Subject of Arbitration Pursuant to the Collective Bargaining Agreement
The Second Department determined that whether a bus driver (Cruz), who had been found by a physician to be color-blind, should be given a road test to determine the safety of his driving was the proper subject of arbitration under the collective bargaining agreement. The NYC Transit Authority (TA) argued that the driver should not undergo a road test and the physician should determine whether the driver met the vision requirements of Vehicle and Traffic Law 509-g (1) and related regulations. The union filed a grievance on behalf of the driver arguing the TA's refusal to cooperate with the administration of the road test violated the collective bargaining agreement (CBA):
In the public sector context, determining whether a grievance is arbitrable requires a court to first determine whether " there is any statutory, constitutional or public policy prohibition against arbitration of the grievance'" ... . If there is no prohibition against arbitration, then the court must determine "whether the parties in fact agreed to arbitrate the particular dispute by examining their collective bargaining agreement" ... .
Contrary to the TA's contention, no statute or public policy absolutely prohibits an arbitrator from deciding whether Cruz should undergo a road test before it is determined whether Cruz meets the vision requirements. Moreover, the parties' agreement to arbitrate this dispute is supported by the terms of the CBA. The relevant arbitration provisions of the CBA are broad, and there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the CBA ... . Any alleged ambiguity in the CBA as to whether the physician could recommend that Cruz undergo a road test " is . . . a matter of contract interpretation for the arbitrator to resolve'" ... . Matter of New York City Tr Auth v Transport Workers Union of Greater NY Local 100, 2014 NY Slip Op 03689, 2nd Dept 5-21-14
Expert Testimony Should Not Have Been Precluded Based Upon the Timing of the Disclosure---Short Adjournment Would Have Eliminated Prejudice---New Trial Ordered
The Second Department determined Supreme Court should not have precluded expert testimony based upon the timing of the expert disclosure:
"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'"... .
The defendants did not establish that the plaintiffs willfully or intentionally violated a court directive regarding expert disclosure ... . Moreover, any prejudice to the defendants from late disclosure would have been limited, inasmuch as the defendants' own engineer was present when the plaintiffs' engineer conducted his inspection (\... . A short adjournment of this nonjury trial could have eliminated prejudice entirely ... . Under these circumstances, the Supreme Court improvidently exercised its discretion in granting the defendants' application for preclusion of the plaintiffs' experts (see id.). Accordingly, a new trial is warranted. Arcamone-Makinano v Britton Prop Inc, 2014 NY Slip Op 03644, 2nd Dept 5-21-14
Rule Against Successive Summary Judgment Motions Does Not Apply to Issue Rejected as Not Properly Before the Court (Raised for the First Time in Reply Papers) in the Original Motion
The Second Department noted that the rule barring successive summary judgment motions does not apply where the issue in the second motion was not properly before the court in the first motion. Here the defendants had raised the issue the first time in their Reply papers and the court refused to consider it:
We note that the general proscription against successive motions for summary judgment would not bar the defendants from moving for summary judgment dismissing the consolidated complaint because their arguments in support of dismissal ... were not properly before the Supreme Court on their original motion ... . Vaughn v Veolia Transp Inc, 2014 NY Slip Op 03679, 2nd Dept 5-21-14
Burdens of Proof Re: Collateral Estoppel Explained
The Second Department reversed Supreme Court, finding that the injunctive relief sought by defendants was barred by the doctrine of collateral estoppel. The issues had been decided in a prior appeal of a related but separate action. The court explained the respective burdens of proof as follows:
"The doctrine of collateral estoppel bars relitigation of an issue which has necessarily been decided in a prior action and is determinative of the issues disputed in the present action, provided that there was a full and fair opportunity to contest the decision now alleged to be controlling" ... . "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" ... . Zanani v Schvimmer, 2014 NY Slip Op 03680, 2nd Dept 5-21-14
CIVIL PROCEDURE/ADMINISTRATIVE LAW/UNEMPLOYMENT INSURANCE
Collateral Estoppel Doctrine Will Not Be Invoked Unless there Has Been at Least One Full Hearing on the Issues Involved
The Second Department, in determining collateral estoppel did not apply to a Notice of Determination that plaintiff was not entitled to unemployment insurance benefits, explained that the collateral estoppel doctrine will not be invoked unless there has been at least one full hearing on the issues involved:
Pursuant to the doctrine of collateral estoppel, which is otherwise known as issue preclusion, a party may be barred from relitigating an issue which has been decided in another proceeding by a court or in a quasi-judicial administrative forum ... . In addition, ... "[a];s the consequences of a determination that a party is collaterally estopped from litigating a particular issue are great, strict requirements for application of the doctrine must be satisfied to insure that a party not be precluded from obtaining at least one full hearing on his or her claim" ... .
Here, the record does not demonstrate that the Notice of Determination was rendered after a hearing or that it otherwise constitutes a quasi-judicial determination ... . Twaddell v Drop & Lock Stor Co Inc, 2014 NY Slip Op 03678, 2nd Dept 5-21-14
Difference Between Law of the Case and Issue and Claim Preclusion Explained
The Second Department explained the difference between the doctrines of law of the case and issue and claim and issue preclusion:
"[L];aw of the case rests on a foundation that . . . distinguishes it from issue and claim preclusion. Whereas the latter concepts are rigid rules of limitation, law of the case is a judicially crafted policy that expresses the practice of courts generally to refuse to reopen what has been decided, [and is]; not a limit to their power. As such, law of the case is necessarily amorphous in that it directs a court's discretion, but does not restrict its authority"... . Matter of Mazur Bros Realty LLC v State of New York, 2014 NY Slip Op 03687, 2nd Dept 5-21-14
New York Has Not Adopted the "First Clause" Doctrine for Interpretation Contracts with Conflicting Provisions
The First Department noted that New York has not adopted the "first clause" doctrine of contract interpretation with respect to conflicting provisions, i.e., the clause appearing first in the agreement does not necessarily control:
The motion court correctly reconciled apparently conflicting provisions of the partnership agreement, giving meaning to both ... . Contrary to plaintiff's contention, the provision that appears first does not automatically govern, as New York has not adopted the "first clause" doctrine of contract interpretation ... . Further, as plaintiff concedes, her interpretation of the contract renders section 6.8(b) superfluous, depriving it of all effect. Section 6.8(a) provides that "[a]; voluntary dissolution (including any dissolution by law resulting from only one Partner remaining . . . following the death . . . of the other Partner(s)) and termination of the Partnership shall override any of the provisions of this Article VI . . . ." Section 6.8(b) of the agreement provides that the partnership will survive the death of a partner if a new partner is admitted no more than 90 days after the death. When read together, these sections provide for dissolution upon the death of a partner unless a new partner is admitted within 90 days ... . Le Bel v Donovan, 2014 NY Slip Op 03608, 1st Dept 5-20-14
Complaint Stated Causes of Action for Breach of Contract and Fraud---Plaintiff Agreed to Forgo Compensation for Work Done for Defendant in Return for a Stake in Defendant's Business---Defendant Terminated the Relationship Without Paying Plaintiff
The Second Department determined plaintiff had stated causes of action for breach of contract and fraud. The complaint alleged plaintiff had agreed to forego compensation for his construction and managerial work for defendant in return for a stake in defendant's business. The complaint further alleged defendant, after plaintiff had done the work, terminated the relationship without paying plaintiff:
The essential elements for pleading a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach ... . According the plaintiff the benefit of every possible favorable inference, the complaint alleged that the defendants breached the parties' agreement and that, as a result, the plaintiff was entitled to recover its normal fees and compensation for the subject work. ...
"The elements of a cause of action sounding in fraud are a material misrepresentation of an existing fact, made with knowledge of the falsity, an intent to induce reliance thereon, justifiable reliance upon the misrepresentation, and damages" ... . Where the gravamen of the alleged fraud does not arise from the mere failure of a promisor to perform his or her obligations under a contract, but arises from a promisor's successful attempts to induce a promisee to enter into a contractual relationship despite the fact that the promisor harbored an undisclosed intention not to perform under the contract, a proper cause of action sounding in fraud may be stated. "[A]; false statement, promissory in nature, may be deemed the statement of a material existing fact, because it falsely represents the [declarant's]; state of mind and the state of his [or her]; mind is a fact'" ... . "There is no doubt that a misrepresented intention to perform a contract may constitute actionable fraud" ... , and "a statement of present intention is deemed a statement of a material existing fact, sufficient to support a fraud action" ... .
Here, viewing the complaint in the light most favorable to the plaintiff, the third cause of action alleged that the defendants made a promise to give the plaintiff an equity stake in the maple syrup venture if the plaintiff agreed to forego its normal fees and compensation for the subject work, that the defendants made that promise while harboring an undisclosed intention never to give the plaintiff such an equity stake, and that the plaintiff detrimentally relied on the defendants' representation of intent by performing the subject work for them. These allegations were sufficient to state a cause of action sounding in fraud. Neckles Bldrs Inc v Turner, 2014 NY Slip Op 03668, 2nd Dept 5-21-14
CONTRACT LAW/REAL PROPERTY LAW
Criteria for Reformation of a Deed (Removing a Restrictive Covenant) Not Met
The Third Department explained the criteria for reformation of a document, in this case a deed. The court determined that the plaintiff, who was seeking to have a restrictive covenant removed from a deed, did not demonstrate the criteria for reformation of the deed. The criteria were described as follows:
"A party seeking reformation must establish, by clear and convincing evidence, that the writing in question was executed under mutual mistake or unilateral mistake coupled with fraud" ... . The burden is on the proponent of reformation to establish, by clear and convincing evidence, that the relief is warranted ... .
Here, it is undisputed that the deed's restrictive covenant was not set forth in the contract of sale and Salenger testified that he first became aware of it when he received the deed after the closing. Thus, plaintiff established the existence of a unilateral mistake regarding whether the restrictive covenant was intended to be included as a condition of the sale. Nonetheless, plaintiff's proof fell short of establishing fraud on decedent's part, which requires "'a misrepresentation that is false and that the defendant knows is false, made to induce the other party to rely on it, justifiable reliance on the misrepresentation by the other party, and injury'" ... . Timber Rattlesnake LLC v Devine, 2014 NY Slip Op 03718, 3rd Dept 5-22-14
CONTRACT LAW/NEGLIGENCE/EDUCATION-SCHOOL LAW
Security Guard and College Had No Duty to Protect Taxi Driver from Attack by Students on Campus---Plaintiff Was Not a Third Party Beneficiary of Contract Between Security Company and College
The Second Department determined defendants security company (Secuitas), security guard (Jarrett) and college (Manhattanville) did not owe any duty to a taxi driver who was allegedly attacked and injured by students on a college campus. The complaint alleged a security guard (Jarrett) was nearby and did nothing to intervene in the attack:
A contractual obligation, standing alone, generally will not give rise to tort liability in favor of a third party ... . Before an injured party may recover as a third-party beneficiary for failure to perform a duty imposed by contract, it must clearly appear from the provisions of the contract that the parties thereto intended to confer a direct benefit on the alleged third-party beneficiary to protect him or her from physical injury ... .
The plaintiff here was not a third-party beneficiary of the contract between Securitas and Manhattanville, as the contract did not contain any express provision that it would protect individuals on the campus from physical injury or attack ... . Securitas and Jarrett did not assume a duty to exercise reasonable care to prevent harm to the plaintiff by virtue of its contractual duty to provide an unarmed security guard ... . Securitas did not assume a duty pursuant to the contract to prevent assaults, or to protect the plaintiff from physical injury inflicted by intervening third-party assailants ... . As such, Securitas and Jarrett established their prima facie entitlement to judgment as a matter of law. In opposition, the plaintiff failed to raise a triable issue of fact. Ramirez v Genovese, 2014 NY Slip Op 03673, 2nd Dept 5-21-14
CORPORATION LAW/CIVIL PROCEDURE
The Availability of Pre-Suit Discovery in a Shareholder Derivative Action is a Substantive, Not a Procedural, Issue---The Law in the State Where the Corporation Is Chartered Controls
The First Department, in a full-fledged opinion by Justice Moskowitz, determined the law surrounding a corporation's refusal to answer a pre-suit discovery demand in a purported shareholder derivative action is a matter of substantive law, not procedural law. Therefore, under New York choice of law rules, the law of Delaware, where the corporation was chartered, applied. Under Delaware law "plaintiffs in a derivative sure are not entitled to discovery to assist their compliance with the particularized pleading requirement ... in the case of a demand refusal." The motion to compel discovery was properly denied and the motion to dismiss the amended complaint was properly granted. Lerner v Prince, 2014 NY Slip Op 03763, 1st Dept 5-22-14
Court Has Inherent Authority to Reinstate Indictment After Dismissal for Legal Insufficiency
The First Department determined the motion court properly exercised its discretion in reinstating the indictment when presented with a portion of the grand jury minutes which had inadvertently been omitted from the original submission. The court had dismissed the indictment finding the grand jury evidence legally insufficient:
The court had inherent authority to reinstate the indictment ..., and defendant's claim that the indictment was unlawfully amended is without merit, because the text of the indictment remained unchanged. People v Godbold, 2014 NY Slip Op 03624, 1st Dept 5-20-14
Supreme Court Should Have Proceeded to Second Step of Defendant's "Batson" Challenge Alleging the Prosecutor's Exclusion of Jurors on the Basis of Race
The Second Department determined Supreme Court should have proceeded to the second step of a "Batson" challenge alleging the prosecutor was excluding jurors on the basis of race. The matter was sent back for a completion of the process:
As the United States Supreme Court stated in Batson v Kentucky (476 US 79), "[s];election procedures that purposefully exclude black persons from juries undermine public confidence in the fairness of our system of justice" (id. at 87). The first step under Batson requires a defendant to make a prima facie case "by showing that the totality of the relevant facts gives rise to an inference of discriminatory purpose" ... . This first step "is not to be onerous," and is satisfied "by producing evidence sufficient to permit the trial judge to draw an inference that discrimination has occurred" ... . When a prima facie showing is made, the burden shifts to the prosecution to provide a race-neutral explanation for the challenged peremptory exclusions ... .
The defendant made a prima facie showing of discrimination based on the prosecutor's exercise of peremptory challenges to exclude the only two prospective jurors who were black, the same race as the defendant. Contrary to the Supreme Court's finding, under the circumstances of this case, those facts were sufficient to create an inference of purposeful discrimination in the prosecution's use of peremptory challenges to strike the only two jurors in the venire who were black ... .
Accordingly, the Supreme Court should have proceeded with the second step and, if applicable, the third step of the Batson inquiry. People v Chery, 2014 NY Slip Op 03697, 2nd Dept 5-21-14
Statement About Gang Affiliation Should Have Been Suppressed---Not Merely "Pedigree" Information
The Second Department determined that defendant's statement about his gang affiliation should have been suppressed. The defendant had not yet been read his Miranda rights. The People's argument that the statement was simply part of so-called "pedigree" information (like "address" and "phone number") was rejected. The error was deemed harmless however. People v Hiraeta, 2014 NY Slip Op 03698, 2nd Dept 5-21-14
Applicant Eligible for Relief Under Drug Sentencing Reform Statute Must Be Afforded a Hearing
The Third Department noted that an applicant who is eligible of for a relief under the "drug sentencing reform" statute, CPL 440.46, must be afforded a hearing. People v Cain, 2014 NY Slip Op 03711, 3rd Dept 5-22-14
Loss of Small Portion of Stenographic Record Did Not Require Reversal
The First Department noted that the loss of some of the stenographic minutes of a trial did not require reversal. The trial court had conducted a reconstruction hearing:
The loss of a relatively small portion of the stenographic record does not require reversal of defendants' convictions ... . The court conducted a reconstruction hearing at which various participants in the trial presented their recollections, to the extent possible, of the brief portions of the trial for which minutes are not available. When viewed in light of the presumption of regularity (id. at 796), the facts adduced at the reconstruction hearing regarding the missing pages support an inference that the missing minutes would have revealed any significant appellate issues. People v Negron, 2014 NY Slip Op 03752, 1st Dept 5-22-14
CRIMINAL LAW/MENTAL HYGIENE LAW
Supreme Court's Finding Respondent Was No Longer Suffering from a Dangerous Mental Condition Reversed
The Second Department, in a full-fledged opinion by Justice Chambers, over a partial dissent, determined Supreme Court erred in finding that the respondent no longer suffers from a dangerous mental condition and could be released from a secure psychiatric facility. Respondent is now 74 years old and had stabbed a woman 20 years ago. He refuses to take medication and he refused to undergo a psychiatric evaluation by the Office of Mental health. There were stark differences in the assessment of his mental condition presented at a hearing pursuant to Criminal Procedure Law 330.20. The experts arguing for continued retention were named Simon-Phelan and Formica:
Mental Hygiene Law § 1.03(20) defines a mental illness as "an affliction with a mental disease or mental condition which is manifested by a disorder or disturbance in behavior, feeling, thinking, or judgment to such an extent that the person afflicted requires care, treatment and rehabilitation" (Mental Hygiene Law § 1.03).
Upon our review of the record, we find that the credible evidence established that the respondent suffers from a mental illness, the first element of a dangerous mental disorder (see CPL 330.20;[c]). Simon-Phelan and Formica opined that the respondent suffers from bipolar disorder, along with various personality disorders, whether narcissistic, grandiose, or antisocial. Most relevant, the respondent's behaviors, consistently displayed over the past 20 years, as thoroughly documented throughout the record, are indicative of these disorders. These behaviors include his aggressive and violent acts, his abrasiveness when speaking to others, his refusal to follow rules, his inappropriate sexual advances, his inflated self-esteem, his high level of energy, his excessive writing, and his overzealousness with respect to litigation ... . Although the categorization of the respondent's mental illness has differed between mental health professionals, a number of professionals have drawn the same conclusions as Simon-Phelan and Formica, dating back as far as 1994. As one psychiatrist put it in 2003, the debate about whether the respondent's "pathology is Axis I or Axis II or some combination thereof . . . can be carried on indefinitely," but when one considers his symptomatic exacerbation, poor judgment, and poor impulse control, all of which continue to exist, he remains in "the category of dangerously mentally ill." Matter of Marvin P, 2014 NY Slip Op 03690, 2nd Dept 5-21-14
Requirements for Indefinite Tolling of 30-Day Period During Which a No-Fault Carrier Must Determine Whether to Pay or Deny a Claim Explained
The Second Department noted that a request for verification that precedes a no-fault insurer's receipt of the N-F-5 claim form does not trigger the tolling of the 30-day period within which an insurer must determine whether to pay or deny the claim. Once the tolling of the 30-day period is triggered, the insurer has 10 days from the expiration of the 30-day period to send a follow-up request for verification inorder to invoke an indefinite tolling of its time to pay or deny:
....[T]his action is not premature[---] the 30-day period in which the defendant must pay or deny the claim has not been indefinitely tolled. "[A]; request for verification that precedes a no-fault insurer's receipt of the prescribed N-F 5 claim form does not trigger the tolling of the 30-day period within which an insurer must determine whether to pay or deny such a claim" ... . Here, the defendant sent two letters requesting verification, one dated March 15, 2010, and another dated April 15, 2010. The defendant's verification request dated March 15, 2010, was sent after the defendant received an "interim bill" from the plaintiff, which was sent solely for the purpose of notifying the defendant of the claim, and preceded the defendant's receipt of the N-F 5 form. Thus, the March 15, 2010, verification request did not trigger the tolling of the 30-day period within which an insurer must determine whether to pay or deny the claim. Consequently, the only effective request for verification was the one dated April 15, 2010, six days after the defendant's receipt of the plaintiff's N-F 5 form ... .
The April 15, 2010, verification request resulted in an initial toll of the 30-day period within which to pay or deny the claim (see id.). The defendant then had 10 days from the expiration of that 30-day period to send a follow-up request for verification in order to invoke the protection of the indefinite tolling of its time to pay or deny the claim ... . However, no follow-up request was issued. Since the initial toll of the 30-day period following the plaintiff's submission of the N-F 5 form to the defendant had expired by the time this action was commenced, this action is not premature... . Mount Sinai Hosp v Dust Tr Inc, 2014 NY Slip Op 03667, 2nd Dept 5-21-14
MUNICIPAL LAW/ADMINISTRATIVE LAW/EMPLOYMENT LAW
Voluntary Firefighter Should Not Have Been Suspended Without a Hearing Pursuant to the General Municipal Law
The Second Department determined a voluntary firefighter was entitled to a hearing pursuant to the General Municipal Law. The firefighter was suspended (without a hearing) for six months for acting in a disorderly manner in an a manner unbecoming a member of the fire department:
...[T]here is no merit to the appellants' contention that they did not have to comply with the hearing requirements of General Municipal Law § 209-l because this matter did not involve the petitioner's "removal" from the Fire Company. Subsection (3) of General Municipal Law § 209-l provides that:
"[r]emovals on the ground of incompetence or misconduct, except for absenteeism at fires or meetings, shall be made only after a hearing upon due notice and upon stated charges and with the right to such officer or member to a review pursuant to article seventy-eight of the civil practice law and rules. Such charges shall be in writing and may be made by any such authority. The burden of proving incompetency or misconduct shall be upon the person alleging the same."
"[A] volunteer firefighter must be afforded due process in disciplinary proceedings" ... . This is true whether the penalty that is ultimately imposed entails the firefighter's permanent removal from his or her position, or a suspension from the position. As set forth in General Municipal Law § 209-l(5), "[t];he officer or body having the power to remove the person charged with incompetence or misconduct may suspend such person after charges are filed and pending disposition of the charges, and after the hearing may remove such person or may suspend him or her for a period of time not to exceed one year" (emphasis added). The plain meaning of this provision is that a volunteer firefighter may only be temporarily suspended, without a hearing, from the time that the charges are filed until the ultimate disposition of the charges, but that a hearing is required to actually dispose of the charges, and that a final penalty of suspension, not to exceed one year, may only be imposed after that hearing. Consequently, the appellants were required to comply with the procedures set forth in General Municipal Law § 209-l ... . Matter of McEvoy v Oyster Bay Fire Co No 1, 2014 NY Slip Op 03688, 2nd Dept 5-21-14
Verdict Properly Set Aside---Theory of Liability Alleged at Trial Altered the Theory of Liability Alleged in Notice of Claim
The First Department determined a plaintiff's verdict was properly set aside because the theory of liability advanced at trial differed from that described in the Notice of Claim:
The trial court correctly set aside the jury's verdict because the evidence presented at trial substantially altered the theory of liability set forth in the notice of claim. While the change of location of the accident was not itself substantive, we find the additional testimony, i.e., that the decedent's injuries were caused by Lewis' failure to stop at a stop sign or a blinking red light, was not alleged in the notice of claim, and thereby substantially altered the nature of the claim. Further, plaintiff's time to amend the notice of claim to assert that theory has expired (see General Municipal Law § 50-i...). Contrary to plaintiff's contention, defendants were not required to demonstrate that their investigation was prejudiced, because plaintiff never sought to amend her notice of claim pursuant to General Municipal Law § 50-e(6)... . Davis v New York City Tr Auth, 2014 NY Slip Op 03743, 1st Dept 5-22-14
No Liability for Out-of-Possession Landlord---No "Significant Structural Defect" and No Code Violation
The First Department determined the out-of-possession landlord could not be held liable for an accident which occurred on a spiral staircase in a restaurant which connected a basement prep kitchen to the main-floor kitchen. The staircase was not a "significant structural defect" and did not violation any provision of the NYC Administrative Code:
Liability does not lie against defendant out-of-possession landlord because the claimed riser, tread and handrail violations were not significant structural defects ... . The staircase was not an "interior stair" as defined in § 27-132 of the NYC Administrative Code .... . Nor were the claimed violations of former §§ 27-127 and 27-128 specific statutory safety provisions that may serve as predicates for defendant landlord's liability ... . It is therefore immaterial whether landlord had notice of the allegedly dangerous condition or retained a right to reenter ... . Podel v Glimmer Five LLC, 2014 NY Slip Op 03635, 1st Dept 5-20-14
Defendants Failed to Make Allegations Sufficient to Demonstrate a Lack of Constructive Notice of the Condition of a Floor Mat (Slip and Fall)---Summary Judgment Should Not Have Been Granted in Favor of Defendants
The Second Department determined the defendants' motion for summary judgment in a slip and fall case should have been denied. The defendants failed to make sufficient allegations demonstrating a lack of constructive notice of the condition of a floor mat:
To impose liability upon the laundromat defendants for the plaintiff's fall, there must be evidence tending to show that those defendants either created the condition or had actual or constructive notice of it and failed to remedy it within a reasonable time ... . To meet their initial burden on the issue of lack of constructive notice, the laundromat defendants must offer some evidence as to when the area in question was last cleaned or inspected relative to the time when the plaintiff fell ... .
Here, the laundromat defendants did not meet their initial burden of establishing their [*2]entitlement to judgment as a matter of law. The laundromat defendants failed to submit evidence sufficient to establish that they inspected the mat within a reasonable time prior to the accident. Thus, they failed to establish, prima facie, that they did not have constructive notice of the alleged hazardous condition of the mat ... . Francis v Super Clean Laundromat Inc, 2014 NY Slip Op 03650, 2nd Dept 5-21-14
Same issue and result in Maloney v Farris, 2014 NY Slip Op 03663, 2nd Dept 5-21-14
Same issue and result in Rogers v Bloomingdale's Inc, 2014 NY Slip Op 03675, 2nd Dept 5-21-14, noting that evidence of the store's general cleaning procedures without any specifics about when the area where the fall occurred was last inspected or cleaned does not raise a question of fact about a lack of constructive notice.
Question of Fact Raised Re: Negligent Supervision of Student by School in an Indoor Floor Hockey Game---Student Injured by Gym Teacher Who Was Participating in the Game
The Second Department determined plaintiff, a student playing supervised indoor floor hockey in school, stated a cause of action for negligent supervision:
"A school has a duty to exercise the same degree of care toward its students as would a reasonably prudent parent" ... . A school is under a duty to adequately supervise the students in its charge and will be held liable for foreseeable injuries proximately related to the absence of adequate supervision ... . "Whether a student is properly supervised depends largely on the circumstances attending the event'" ... . * * *
The defendants' submissions raised questions of fact as to whether the conduct of [the gym teacher], who was participating in the game during gym class and was involved in the contact which allegedly injured the plaintiff, constituted proper supervision, as well as whether the alleged negligent supervision was a proximate cause of the plaintiff's injuries ... . Godoy v Central Islip Union Free Sch Dist, 2014 NY Slip Op 03652, 2nd Dept 5-21-14
No Basis for Liability of Snow-Removal Contractor Re: Slip and Fall
The Second Department determined a snow-removal contractor was properly granted summary judgment in a slip and fall case. The plaintiff did not raise a question of fact about any of the three "Espinal" [98 NY2d 136] situations (which would allow recovery against a contractor with whom plaintiff does not have a contractual relationship):
The Court of Appeals has recognized three situations in which a party such as the defendant may be said to have assumed a duty of care, and thus potentially may be liable in tort to third persons such as the plaintiff: (1) where the contracting party, in failing to exercise reasonable care in the performance of his or her duties, launches a force or instrument of harm, (2) where the plaintiff detrimentally relies on the continued performance of the contracting party's duties, and (3) where the contracting party has entirely displaced another party's duty to maintain the premises safely ... . * * *
...[T]he plaintiff offered only speculation and conjecture in support of her contention that the defendant launched a force or instrument of harm by creating or exacerbating the ice patch that allegedly caused the plaintiff's fall ..., or that the subject snow removal contract was a comprehensive and exclusive agreement which displaced Communicar's duty to maintain the premises in a safe condition ... . Javid v Sclafmore Constr, 2014 NY Slip Op 03656, 2nd Dept 5-21-14
Party Who Was Both a Plaintiff and a Defendant in a Joint Trial of Two Actions Was Properly Allowed to Have Two Attorneys
The First Department determined a party who was a plaintiff in one case and a defendant in another was properly allowed to have two attorneys in the joint trial. Pimentel was involved in an automobile accident with Wong. Wong's car jumped the curb and crashed into a store, injuring plaintiff Newark. Newark sued Wong and Pimentel and Pimentel sued Wong. Pimentel was represented in each action by separate attorneys:
The trial court did not abuse its discretion in allowing Pimentel's interests as a plaintiff in his own action and as a defendant in this action to be represented by separate attorneys (see CPLR 4011...). The court promised to and did exert control over the nature of the dual representation, as necessary, and Pimentel's defense counsel, whose opening statement, summation, and questioning of witnesses were brief, played a limited role. In any event, in the absence of any evidence of an unfair advantage or prejudice, any error would be harmless. Newark v Hector R. Pimentel, 2014 NY Slip Op 03636, 1st Dept 5-20-14
Question of Fact About Whether Order Given by Private Attending Physician and Carried Out by Hospital Employee Was Contraindicated---Therefore Hospital's Motion to Dismiss Properly Denied
The Second Department noted that a hospital generally may not be held liable for the actions of a private attending physician (Simoncic) where the hospital employees merely carry out the orders of the private physician. Here, however, there was evidence the attending physician's order was contraindicated. Therefore the hospital's motion to dismiss was properly denied:
With regard to the Hospital's potential liability, a hospital may not be held liable for injuries suffered by a patient who is under the care of a private attending physician chosen by the patient where the resident physicians and nurses employed by the hospital merely carry out the orders of the private attending physician, unless the hospital staff commits "independent acts of negligence or the attending physician's orders are contraindicated by normal practice" (Cerny v Williams, 32 AD3d 881, 883; see Cham v St. Mary's Hosp. of Brooklyn, 72 AD3d 1003, 1004).
Here, the Hospital established, prima facie, that Simoncic was a private attending physician, and that its employees did not commit independent acts of negligence and that Simoncic's discharge order that [the patient] be given a prescription for Levaquin was not contraindicated by normal practice. However, in opposition, the plaintiff, through her opposing medical expert's affirmation, raised a triable issue of fact as to whether the prescribing of Levaquin was contraindicated by normal practice ... .
Accordingly, the Supreme Court correctly denied the Hospital's motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against it. Fink v DeAngelis, 2014 NY Slip Op 03648, 2nd Dept 5-21-14
REAL ESTATE/CONTRACT LAW
Broker's Complaint Stated Causes of Action for Breach of Implied Contract and Unjust Enrichment---Complaint Alleged Broker Was Entitled to a Commission Where Defendant Buyers Abandoned the Potential Purchase in which Broker Was Involved and 18 Months Later Purchased Nearly Identical Property from the Same Seller
The First Department, in a full-fledged opinion by Justice Acosta, determined a real estate broker (SPRE) had sufficiently stated causes of action for breach of implied contract and unjust enrichment. The complaint alleged that the broker introduced the defendants to the developer of condominium units (397 West) and found an architect. The defendants subsequently informed the broker they were no longer looking to buy. 18 months later the defendants purchased different but nearly identical condominium units from the same developer:
In this appeal, we must determine whether plaintiff broker has alleged facts sufficient to establish its entitlement to a commission on the sale of real estate, where it expended significant effort locating an apartment for buyers who abandoned the transaction and purchased another apartment in the same building 18 months later. In addition, we take this opportunity to clarify the standard by which a broker may be found to have been the "procuring cause" of a real estate transaction. We find that the complaint sufficiently alleges that plaintiff was a direct and proximate link between the introduction of defendant buyers and the seller and the consummation of the transaction to withstand defendants' motion to dismiss. * * *
"[I];n the absence of an agreement to the contrary, a real estate broker will be deemed to have earned his commission when he [or she]; produces a buyer who is ready, willing and able to purchase at the terms set by the seller" ... . A broker does not earn a commission merely by calling the property to the attention of the buyer ... . But this does not mean that the broker "must have been the dominant force in the conduct of the ensuing negotiations or in the completion of the sale" (id. at 206). Rather, the broker must be the "procuring cause" of the transaction, meaning that "there must be a direct and proximate link, as distinguished from one that is indirect and remote," between the introduction by the broker and the consummation of the transaction ... . * * *
In the present case, ... under the ... "direct and proximate link" standard, we find that the allegations in the complaint sufficiently state that SPRE was the procuring cause of defendants' purchase of the second duplex at 397 West. SPRE brought defendants to the building on several occasions; introduced defendants to the developer and attended several meetings between the developer and defendants; reviewed floor plans with defendants; negotiated favorable terms for defendants on the original units; prepared a deal sheet with defendants' preliminary offer terms on the first duplex for the developer's consideration; drafted a contract of sale; and connected defendants with a reputable architect whom SPRE specially selected to implement defendants' design plans. Affording these allegations a liberal construction, we find that they establish that SPRE's actions and efforts may have been a direct and proximate link between the introduction of defendants to the developer and defendants' purchase of the second duplex at 397 West. Whether SPRE was the procuring cause "is a question of fact to be decided on the evidence" ... . SPRE Realty Ltd v Dienst, 2014 NY Slip Op 03642, 1st Dept 5-20-14
TAX LAW/CORPORATION LAW
Sufficient Evidence Supported Finding that Sole Shareholder, Who Did Not Oversee the Day to Day Operations of a Corporation, Was a "Responsible Person" Who Could Be Held Personally Liable for the Failure to Pay Corporate Sales and Use Taxes
The Third Department determined that petitioner, who was the sole shareholder of a corporation, was a "responsible person" personally liable under Tax Law 1131 and 1133 for outstanding sales and use taxes. Petitioner did not oversee the day to day operations of the corporation, did not sign checks, hire or fire employees, or assist in the preparation of tax returns. However, she had the capacity to appoint officers and directors, had appointed her husband as the sole director, co-signed an alcoholic beverage license, , and alone signed an application for registration as a sales tax vendor:
Tax Law § 1133 (a) imposes personal liability on any person who is responsible for collecting tax under Tax Law article 28 ... . A person required to collect tax includes "any officer, director or employee of a corporation . . . who . . . is under a duty to act for such corporation . . . in complying with any requirement of [Tax Law article 28];" (Tax Law § 1131 ). Moreover, a person who is not an officer, director or employee of a corporation is required to collect tax if he or she "possessed all the indicia of control that would impose liability upon an officer, director or employee of a corporation" ... . Whether a person has a duty to act for a corporation and is responsible for collecting sales tax is a factual determination to be made on a case-by-case basis ... . Such determination turns on a variety of factors, including the status of a stockholder, the authority to hire and fire employees and responsibility for the corporation's management ... . In this regard, an important consideration is "petitioner's authority and responsibility to exercise control over the corporation, not his [or her]; actual assertion of such authority" ... . Matter of Luongo v Tax Appeals Trib of the State of New York, 2014 NY Slip Op 03714, 3rd Dept 5-22-14
TRUSTS AND ESTATES
EPTL 2-1.13, Which Required that Certain Formula Clauses in Trusts and Wills Be Calculated as if Federal Estate Taxes Were Paid in 2010 (When the Tax Had Expired) , Did Not Apply to the Grantor Retained Annuity Trusts at Issue Here
The First Department determined Surrogate's Court properly determined how to distribute two grantor retained annuity trusts (GRATs). The grantor died in 2010. Because the federal estate had expired in 2010, executors were permitted to pay no estate tax that year and the executors so elected in this case. A clause in the GRATs provided that whatever fraction of the assets in the GRATs is "includable in the Grantor's gross estate for Federal estate tax purposes" passes into the estate, and any remainder is distributed equally to the three children. The court held that EPTL 2-1.13, which required that, in 2010, certain formula clauses in trusts and wills be calculated as if the federal estate tax had been paid, did not apply. Therefore, all of the assets in the GRATs were to be distributed equally:
A review of the legislative history of EPTL 2-1.13(a)(1) reveals that its purposes were quite narrow and that it was primarily a legislative fix enacted to prevent the thwarting of the well-intentioned estate plans of those who, in good faith reliance on the existence of an estate tax in 2010, bequeathed significant portions of their estates to persons other than their spouses, so they could take full advantage of the spousal estate tax exemption. For people who died in 2010, the expiration of the estate tax not only nullified oft-utilized tax planning strategies, but threatened to leave their spouses with less money than they otherwise would have received, and with no concurrent benefit. The Legislature, by enacting EPTL 2-1.13(a)(1), saved these estate plans by permitting their creators to adopt the fiction that they paid an estate tax, even if they did not.
There is no evidence here that the GRATs at issue were created with the specific goal of taking advantage of spousal exemptions based on the federal estate tax, or were structured for similar purposes. Further, the Legislature did not contemplate that the repeal of the tax law would implicate the formula clause at issue here. The clause here references federal estate tax laws not to minimize tax liability, but to account for an uncertain value to include in the taxable estate upon death of the grantor, to be distributed in proportion to each of the beneficiaries' taxable share of the estate ... . Thus, contrary to petitioner's assertions, the GRATs' reference to the amount of trust property "includible in the Grantor's gross estate for Federal estate tax purposes" is not analogous to the "amount that can pass free of federal estate taxes, or that is otherwise based on a similar provision of federal estate tax," as EPTL 2-1.13(a)(1) recites. Matter of Kirschner v Fisher, 2014 NY Slip Op 03626, 1st Dept 5-20-14
Professional Photographer Deemed Employee of New York Post
The Third Department determined the claimant photographer demonstrated she was an employee of the New York Post, and therefore was entitled to unemployment benefits:
The existence of an employer-employee relationship presents a factual question for the Board to resolve ... . Where, as here, "professionals are involved, the relevant inquiry is whether the purported employer retains overall control of important aspects of the services performed" ... . Accordingly, "[a]; determination identifying professional workers as employees will be upheld if substantial evidence in the record demonstrates that the employer had control over important aspects of the services performed, even if the worker; retain[ed]; control over the; work product and the means of crafting it" ... .
Following an initial interview and completion of a trial photography session, which was designed "to see if she was good enough to receive assignments" from NYP, claimant consistently received assignments from NYP by telephone or email and worked a "pretty set schedule" of four days each week. According to an NYP representative, these assignments were distributed based upon NYP's "view of [claimant's]; suitability for a particular story or picture situation," and NYP set claimant's daily rate of pay. Claimant testified that she was given specific instructions for her assignments "most of the time," which on occasion included "really specific directions about what kind of picture [NYP]; wanted." Additionally, claimant was required to call in at the beginning and end of her assignments and "couldn't just go home" if she finished an assignment early. Although claimant admittedly provided her own equipment, NYP specified in a March 2006 memorandum the type of camera lens that claimant was required to use, as well as the quantity and selection of photographs that she was to submit. Similarly, while claimant retained the copyright to her photographs, she was precluded from granting rights to those pictures to any newspaper located within a 75-mile radius of New York City without NYP's prior express approval. Finally, NYP reimbursed claimant for certain of her expenses.
Such proof, in our view, supports the Board's finding of an employer-employee relationship as to claimant and others similarly situated ... . Matter of Nance..., 2014 NY Slip Op 03720, 3rd Dept 5-22-14
WORKERS' COMPENSATION/INSURANCE LAW
Workers' Compensation Carrier Which Consents to Settlement of Third Party Action Is Entitled to Exercise Its Credit Against the Settlement-Recovery Upon Its Consent
The Third Department determined, where the workers' compensation carrier has consented to claimant's settlement in a third-party action, the carrier is entitled to exercise its credit against the recovery when the consent is given:
When a workers' compensation carrier consents to the settlement of a claimant's third-party action, the carrier shall have a lien on the proceeds of the recovery equal to the amount of benefits already paid, and may also assert the right to offset future compensation benefits paid until the proceeds of the recovery are exhausted (see Workers' Compensation Law § 29 , ...). The issue before us again on this appeal is the point at which a carrier is entitled to exercise its credit. As we observed previously in this matter, "there is no reference in the statute as to when the credit shall commence" (104 AD3d at 1014; see Workers' Compensation Law § 29 ). Cognizant of the fact that the statute in question was enacted in substantial part to prevent a claimant from receiving a double recovery ..., we agree with the carrier that its right to exercise its credit must be available, if provided for in the consent letter, at the point at which the carrier provides its consent. To hold otherwise would result in payments made by the carrier that are not subject to either lien or credit rights, i.e., those payments made between the date of consent at which point the amount of the carrier's lien is fixed and the date of actual settlement. This resulting double payment to the claimant would be contrary to the intent of the statute. Matter of Williams v Lloyd Gunther El Serv Inc, 2014 NY Slip Op 03740, 3rd Dept 5-22-14