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November Page I

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


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Criteria for "Substantial Evidence" Review of an Administrative Determination After a Hearing Explained


In annulling the ruling of the Housing Authority because it was not supported by substantial evidence, the Second Department explained its role in reviewing an administrative ruling after a hearing:


"Judicial review of an administrative determination made after a hearing required by law is limited to whether that determination is supported by substantial evidence" ... . Substantial evidence has been defined as "such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact"... . While the level of proof is less than a preponderance of the evidence, substantial evidence does not arise from bare surmise, conjecture, speculation, or rumor ..., or from the absence of evidence supporting a contrary conclusion ... .


Here, the Housing Authority's determination that the petitioner allowed her father to reside with her without notice to or approval from the Housing Authority in violation of the rules and regulations of the Section 8 Housing Choice Voucher Program was not supported by substantial evidence. Matter of Harrison v Palumbo, 2014 NY Slip OP 07510, 2nd Dept 11-5-14





Trial Court Properly Amended Pleadings Sua Sponte and Properly Allowed Plaintiff to Reopen the Case to Present Additional Evidence of Damages


The Second Department held that Supreme Court properly amended the pleadings sua sponte and properly allowed the plaintiff to reopen its case to present additional proof:


A court may amend pleadings before or after judgment to conform them to the evidence (see CPLR 3025[c]). Where no prejudice is shown, an amendment may be allowed during or even after trial ... . Furthermore, an application for a continuance or adjournment is addressed to the sound discretion of the trial court, and the grant or denial thereof will be upheld on appellate review if the trial court providently exercised its discretion ... . A trial court, in the exercise of discretion and for sufficient reasons, may allow a party to reopen his or her case, and supplement the evidence to cure any defects in the evidence that have inadvertently occurred ... .


Here, under the circumstances of this case, the Supreme Court providently exercised its discretion in, sua sponte, amending the pleadings, continuing the trial, and permitting the plaintiff to reopen its case to present additional proof of damages ... . MRI Enters Inc v Comprehensive Med Care of NY PC, 2014 NY Slip Op 07482, 2nd Dept 11-5-14





Motion to Dismiss Pursuant to CPLR 3211 (a)(1) [Documentary Evidence] Should Not Have Been Granted---Plaintiff Rebutted the Presumption of Validity of the Forum Selection Clause of the Relevant Contract


The Second Department determined Supreme Court should not have granted defendants' motion to dismiss based upon the forum selection clause in the relevant contract.  Plaintiff rebutted the presumption of the validity of the clause:


A party seeking dismissal of a complaint under CPLR 3211(a)(1) must submit documentary evidence that " conclusively establishes a defense to the asserted claims as a matter of law'" ... . A contract provision may constitute documentary evidence under CPLR 3211(a)(1) ..., and a forum selection clause contained in a contract may provide a proper basis for dismissal of a complaint under CPLR 3211(a)(1) ... . A forum selection clause is "prima facie valid and enforceable unless it is shown by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court" ... . Accordingly, a forum selection clause will be given effect in the absence of a " strong showing'" that it should be set aside ... .


Here, the plaintiff has made the requisite strong showing that the forum selection clause in the nondisclosure agreement was "unreasonable." Specifically, the plaintiff has contended, without contradiction, that neither the parties nor the agreement has any connection to the State of Delaware: none of the parties is located in Delaware, the nondisclosure agreement was not executed in Delaware, and performance of the agreement was not to take place in Delaware ... . Accordingly, the prima facie enforceability and validity of the forum selection clause has been rebutted and, therefore, that clause does not "conclusively establish[ ] a defense to the asserted claims as a matter of law"... . US Mdse Inc v L & R Distribs Inc, 2014 NY Slip Op 07495, 2nd Dept 11-5-14





Non-Party Attorneys Properly Held in Civil Contempt for Starting a Class Action Suit In Violation of 

Anti-Suit Injunctive Order


In a proceeding to liquidate the Executive Life Insurance Company of New York, non-party attorneys for objectors to the liquidation filed a class action lawsuit in federal court in violation of anti-suit injunctive orders issued by Supreme Court.  In affirming Supreme Court's finding the non-party attorneys in contempt, the Second Department explained the criteria:


To prevail on a motion to punish for civil contempt, the movant must demonstrate that the alleged contemnor violated a clear and unequivocal court order, of which the alleged contemnor had knowledge, thereby prejudicing a right of a party to the litigation (see Judiciary Law § 753[A][3]...). "To satisfy the prejudice element, it is sufficient to allege and prove that the contemnor's actions were calculated to or actually did defeat, impair, impede, or prejudice the rights or remedies of a party" ... .


* * * The commencement of the class action violated the anti-suit injunctive provisions set forth in three court orders entered in this rehabilitation proceeding commenced pursuant to Insurance Law article 74, that was later converted into a liquidation proceeding ... . An order of the court must be obeyed until that order is set aside, either by appeal or otherwise, where, as here, the court that issued the order had jurisdiction to issue it ... . The petitioner also demonstrated that the commencement of the class action prejudiced its rights ... . Matter of Executive Life Ins Co of NY, 2014 NY Slip Op 07506, 2nd Dept 11-5-14





Criteria for Allowing Late Claim Described


The Second Department determined the Court of Claims should have granted claimant's request to file a late claim:


Court of Claims Act § 10(6) permits a court, in its discretion, upon consideration of the enumerated factors, to allow a claimant to file a late claim ... . "No one factor is deemed controlling, nor is the presence or absence of any one factor determinative" ... .


Here, the Court of Claims improvidently exercised its discretion in denying that branch of the claimants' motion which was for leave to file a late claim on behalf of the claimant ... . It is undisputed that the State received actual notice of the essential facts constituting the claim within 90 days after the claimant['s] ...  accident, and there is no indication that the State would suffer substantial prejudice if the claimants were permitted to file a late claim ... . Furthermore, notwithstanding the existence of a factual issue as to which governmental entity bears responsibility for maintenance of the roadway and guardrail where the accident occurred, the claimants' submissions were sufficient, at this point, to demonstrate that there appears to be merit to their claim within the meaning of Court of Claims Act § 10(6) ... . Tucholski v State of New York, 2014 NY Slip Op 07494, 2nd Dept 11-5-14



Insufficient Break Between Unwarned Statement and Subsequent Warned Statement---All Statements Suppressed/Appellate Court Cannot Consider Argument Not Raised by the People at Trial and Not Considered by the Trial Court


The Second Department, over a dissent, determined that there was not a sufficient break between the unwarned portion of defendant's statement and the subsequent warned statements to remove the taint of the initial failure to give the Miranda warnings.  The court noted that it was precluded from considering any theory supporting the admissibility of subsequent warned statements because the theory was not presented to the trial court by the People and was not considered by the trial court:


"[W]here an improper, unwarned statement gives rise to a subsequent Mirandized statement as part of a single continuous chain of events, there is inadequate assurance that the Miranda warnings were effective in protecting a defendant's rights, and the warned statement must also be suppressed" ... . On this record ..., it is clear that defendant's two written statements, although produced after she had been Mirandized, were "part of a single continuous chain of events" that included the detective's initial pre-warning inquiries and statement, defendant's pre-warning acknowledgment that she knew why she had been brought in, and her pre-warning statement that she and the other alleged perpetrator had asked to use the victim's phone outside the latter's house. There was no time differential between the Miranda violation and the Mirandized interview that immediately followed, giving rise to the two written statements; the same police personnel were involved before and after the warnings; there was no change in the location or nature of the interrogation; and defendant had never indicated a willingness to speak to the police before the Miranda violation. Further, although the pre-warning exchange was very brief and did not include any admission by defendant of criminal conduct, her unwarned statements plainly tended to incriminate her by acknowledging that she knew something about the murder of an elderly woman and by placing herself at the scene of the crime with the victim and the other alleged perpetrator ... .


Under the foregoing circumstances established by the record, it cannot be said that there was, between the Miranda violation and the making of the subsequent Mirandized written statements, such a "definite, pronounced break in the interrogation to dissipate the taint from the Miranda violation" ... by "return[ing] [defendant], in effect, to the status of one who is not under the influence of questioning" ... . * * *


We note that we are precluded from considering whether the break of at least 2 hours and 45 minutes between the completion of defendant's second written statement and the commencement of her videotaped statement (which began with renewed Miranda warnings administered by the assistant district attorney) sufficed to attenuate any taint from the commencement of the questioning before she was initially Mirandized and, therefore, to render the videotaped statement admissible. The hearing court's decision denying suppression did not consider any such theory, which had not been raised by the People in opposition to the motion seeking suppression of all three recorded statements. Accordingly, under CPL 470.15(1), we are without power to affirm on the ground that the videotaped statement was admissible and that its admission rendered harmless the error in admitting the written statements ... . People v Daniel, 2014 NY Slip Op 07568, 1st Dept 11-6-14




Formal Training Not Necessarily Required to Qualify an Expert


In affirming the conviction, the Second Department explained the discretionary criteria for qualifying an expert at trial, which does not necessarily depend upon formal training:


The qualification of a witness to testify as an expert is a matter that rests in the sound discretion of the trial court, and the court's determination should not be disturbed on appeal in the absence of a serious mistake, an error of law, or an improvident exercise of discretion ... . "The competence of an expert in a particular subject may derive from long observation and real world experience, and is not dependent upon formal training or attainment of an academic degree in the subject" ... . People v Dorvilier, 2014 NY Slip Op 07517, 2nd Dept, 11-5-14





Unexcused Late Disclaimer of Coverage Invalid and Unenforceable


The Third Department determined the insurer's disclaimer of coverage was invalid and uneforceable because it was inexcusably late.  The court noted that a "reservation of rights letter" does not constitute a disclaimer:


An insurer's decision to disclaim liability insurance coverage must be given to the insured, in writing, as soon as is reasonably practicable, "failing which the disclaimer or denial will be ineffective" (... see Insurance Law § 3420 [d] [2]...). While the timeliness of an insurer's notice of disclaimer generally raises an issue of fact for a jury to decide, where, as here, the basis for a disclaimer "was or should have been readily apparent before the onset of the delay," the delay will be found to be unreasonable as a matter of law ... . "Reasonableness of delay is measured from the time when the insurer learns of sufficient facts upon which to base the disclaimer" ... . * * *


Even after receiving the attorney's summary, which ostensibly equipped it with sufficient facts to issue a written disclaimer, plaintiff instead sent defendant a reservation of rights letter, which does not serve as "a substitute for the required notice of disclaimer" ... . Vermont Mut Ins Co v Mowery Constr Inc, 2014 NY Slip Op 07537, 3rd Dept 11-6-14





Damages for "Loss of Fetus" Under Insurance Law 5102 Are Not Available When the Baby Is Born Alive


The Second Department determined that the "loss of fetus" provision of Insurance Law 5102 did not apply to the birth of a live child allegedly induced by a car accident:


[Plaintiff] was pregnant at the time of the accident, and she alleges that she suffered a placental abruption which caused her son, the infant plaintiff, to be born prematurely and delivered by caesarean section. * * *


The defendants subsequently moved, inter alia, for summary judgment dismissing so much of the complaint as alleged that [plaintiff], individually, sustained a serious injury under the "loss of a fetus" category of Insurance Law § 5102(d) as a result of the subject accident * * *. ...[T]he Supreme Court concluded, in essence, that the phrase "loss of a fetus" encompassed any termination of a pregnancy caused by an accident, regardless of whether the fetus was born alive.


In cases involving statutory construction, legislative intent is the controlling principle ... . "The Court's threshold inquiry in this regard is how to discern the legislative intent. When an enactment displays a plain meaning, the courts construe the legislatively chosen words so as to give effect to that Branch's utterance" ... . Contrary to the Supreme Court's determination, the plain meaning of the term "loss of a fetus" does not include the premature birth of a living child. Rather, this category of damages is applicable where, as a result of an automobile accident, a viable pregnancy terminates with loss of the fetus ... . 


We note that this determination is consistent with legislative history, which reveals that the "loss of a fetus" category was added to Insurance Law § 5102(d) in 1984 in response to Raymond v Bartsch (84 AD2d 60). In that case, the Appellate Division, Third Department, held that Insurance Law § 5102(d), as then constituted, did not permit a woman, who was nine months pregnant at the time of her accident, to recover damages resulting from her delivery of a stillborn baby. The "loss of a fetus" category was added to the statute in recognition that "[a] woman who is involved in an automobile accident that results in the termination of her pregnancy has suffered a serious injury and should have the right to recover from a negligent operator for her non-economic loss" (Sponsor's Mem, Bill Jacket, L 1984, ch 143). The policy considerations underlying the 1984 amendment of Insurance Law § 5102(d) are not implicated when a child is born alive. Leach v Ocean Black Car Corp, 2014 NY Slip Op 07477, 2nd Dept 11-5-14





Electronic Documents Constitute "Tangible Personal Property" and Can Therefore Be the Subject of a Conversion Cause of Action


The Second Department determined Supreme Court properly denied a motion for summary judgment dismissing the conversion cause of action, finding that electronic documents constitute "identifiable tangible personal property" and therefor can be the subject of a conversion action:


The subject matter of a conversion cause of action " must constitute identifiable tangible personal property'; real property and interests in business opportunities will not suffice" ... . However, electronic documents stored on a computer may be the subject of a conversion claim just as printed versions of the documents may ... . On their cross motion, the defendants failed to demonstrate that the client accounts alleged to have been converted did not exist in tangible form, such as computerized or paper client lists. Accordingly, that branch of the cross motion which was for summary judgment dismissing the conversion cause of action was properly denied, regardless of the sufficiency of the plaintiff's opposing papers ... . Volodarsky v Moonlight Ambulette Serv Inc, 2014 NY Slip Op 07498, 2nd Dept 11-5-14






Dismissal of a Criminal Charge In the Interest of Justice Can Constitute a "Termination In Favor of the Accused" In the Context of a Malicious Prosecution Cause of Action


In affirming Supreme Court's finding the actions time-barred, the Second Department explained when the one-year statute of limitations starts to run in false arrest (release from confinement), false imprisonment (release from confinement), and intentional infliction of emotional distress (date of arrest) causes of action.  Supreme Court had also dismissed the malicious prosecution cause of action on the ground that the "interest of justice" dismissal of the accusatory instrument in the underlying criminal case was not a favorable termination of the criminal action.  The Second Department disagreed, reinstated that cause of action and described the relevant analysis:


Here, the Supreme Court concluded that the underlying criminal proceeding, in which the accusatory instrument was dismissed in the interest of justice ... , was not terminated in the plaintiff's favor. This conclusion is incorrect. "[A]ny termination of a criminal prosecution, such that the criminal charges may not be brought again, qualifies as a favorable termination, so long as the circumstances surrounding the termination are not inconsistent with the innocence of the accused" ... .


In Cantalino [96 NY2d 391], the Court of Appeals considered whether the dismissal of a criminal proceeding in the interest of justice was a " favorable termination'" for purposes of a malicious prosecution action ... . The Court explained that there was no "per se rule that a dismissal in the interest of justice can never constitute a favorable termination" ... . Rather, the Court set forth a "case-specific rule," whereby the courts are to determine whether, "under the circumstances of each case, the disposition was inconsistent with the innocence of the accused" ... . In the case before it, the Court of Appeals concluded that the interest-of-justice dismissal constituted a favorable termination, citing the Criminal Court's indication that it was dismissing the charges because they were unfounded ... . It contrasted the case before it with a prior case, Ward v Silverberg (85 NY2d 993), in which it had found that an interest-of-justice dismissal was not a favorable termination of the criminal proceeding. The Court explained that, in Ward, unlike in Cantalino, the Criminal Court had "recognized that [the] plaintiff had committed the charged conduct, [but] it did not believe a criminal sanction was appropriate" ... . Thus, "the criminal charges in Ward were dismissed out of mercy" ... . A dismissal out of mercy "is fundamentally inconsistent with the accused's innocence" ... .


In the present case, the criminal charges against the plaintiff were not dismissed out of mercy. Rather, they were dismissed based upon "the weakness of the proof of guilt" ... , a conclusion which is not inconsistent with the plaintiff's innocence ... . Bellissimo v Mitchell, 2014 NY 07464, 2nd Dept 11-5-14





Worker Struck by Falling Brick Entitled to Summary Judgment/Comparative Negligence Is Not a Defense to a Labor Law 240(1) Claim


The First Department determined that summary judgment pursuant to Labor Law 240(1) was properly granted to a worker struck by a falling brick.  The court noted that comparative negligence is not a defense to a Labor Law 240(1) action:


Plaintiff established his entitlement to judgment as a matter of law on the issue of liability on his Labor Law § 240(1) claim by submitting, among other things, his testimony that he was performing his assigned work of cleaning debris from the ground level, just outside the north side of the subject building under construction, when he was suddenly struck by a falling brick, in the absence of any overhead netting or other such protective devices ... . Defendants' witnesses further established their liability by confirming that the brick fell out of the hands of a masonry worker several stories above plaintiff, and that safety netting which had been installed on other sides of the building was absent from the north exterior. The lack of overhead protective devices was a proximate cause of plaintiff's injuries under any of the conflicting accounts ..., and plaintiff's comparative negligence is not a defense to a Labor Law § 240(1) claim... . Hill v Acies Group LLC, 2014 NY Slip Op 07601, 2nd Dept 11-6-14





Effects of Taking Property "As Is," the Implied Covenant of Fair Dealing, and Constructive Eviction Discussed


Plaintiff-tenant took possession of the leased premises "as is." Subsequently plaintiff stopped paying rent claiming that the condition of the elevator prevented the issuance of a certificate of occupancy.  In denying both parties' motions for summary judgment (because plaintiff failed to show the condition of the elevator was the reason for the denial of the certificate of occupancy; and because the defendants failed to show it properly maintained the elevator), the Second Department explained the relevant contract principles:


A court's fundamental objective in interpreting a contract is to determine the parties' intent from the language employed and to fulfill their reasonable expectations ... . "[A] written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" ... . Thus, "[i]t is the role of the courts to enforce the agreement made by the parties—not to add, excise or distort the meaning of the terms they chose to include, thereby creating a new contract under the guise of construction" ... .


Moreover, "[i]mplicit in every contract is a covenant of good faith and fair dealing, which encompasses any promise that a reasonable promisee would understand to be included" ... . "The implied covenant of good faith and fair dealing is breached when a party to a contract acts in a manner that, although not expressly forbidden by any contractual provision, would deprive the other party of the right to receive the benefits under their agreement" ... . * * *


...[T]he fact that the plaintiff agreed to take possession of the leased premises in "as-is" condition does not necessarily warrant the conclusion that the plaintiff intended to waive any claims with respect to the portions of the building that were not leased to him, or to waive the landlord's obligation to maintain the elevator. The defendants ... argued that the provision of the lease which required them to "maintain the current elevator services and maintain and repair the elevator in reasonable condition" only obligated them to prevent any deterioration in the elevator service existing on the date that the parties entered into the lease. However, in light of the implied covenant of good faith and fair dealing, a reasonable tenant could interpret that provision as obligating the landlord to maintain the elevator free from violations and to promptly perform repairs, particularly if failing to do so could prevent the tenant from obtaining a certificate of occupancy for the leased premises. ...


[Re: the defendants-landlords' motion for summary judgment to recover unpaid rent:] "The obligation of a commercial tenant to pay rent is not suspended if the tenant remains in possession of the leased premises, even if the landlord fails to provide essential services" ... . Before a tenant may withhold rent, the tenant must prove actual or constructive eviction ... . To demonstrate constructive eviction, then, a tenant must vacate the premises ... . Here, the defendants' submissions failed to demonstrate, prima facie, that the plaintiff remained in possession of the leased premises and thus, was not constructively evicted. Prakhin v Fulton Towers Realty Corp, 2014 NY Slip Op 07487, 2nd Dept 11-5-14





Malicious Prosecution Requires Something More than Merely Reporting an Alleged Incident to Authorities/Uncorroborated, Incredible, Allegations by Plaintiff Did Not Raise a Question of Fact


The First Department, in a full-fledged opinion by Justice Richter, determined summary judgment in favor of the defendants was properly granted for malicious prosecution and defamation causes of action.  Plaintiff, Moorhouse, had been charged with attempted rape of a hotel worker, G.P., and was acquitted.  He then brought a civil suit alleging, among other causes of action, malicious prosecution and defamation.  The First Department explained that plaintiff's uncorroborated, incredible version of events, contradicted by eyewitness testimony which corroborated the hotel worker's allegations, and the acquittal itself, did not raise a question of fact:


In the malicious prosecution cause of action, Moorhouse contends that G.P. initiated the criminal proceeding against him without probable cause and with malice ... . The Court of Appeals has imposed "stringent requirements" for bringing malicious prosecution claims ... . The Court explained that this is necessary "to effectuate the strong public policy of open access to the courts for all parties without fear of reprisal in the form of a retaliatory lawsuit" ... . To prevail on such a claim, a plaintiff has a "heavy burden" ..., and must establish the following four elements: "(1) the initiation of a criminal proceeding by the defendant against the plaintiff, (2) termination of the proceeding in favor of the accused, (3) lack of probable cause, and (4) malice" ... . A plaintiff's failure to prove any one of these elements will defeat the entire claim ... .


A civilian who simply provides information to law enforcement authorities, who are then free to exercise their own independent judgment as to whether an arrest should be made and criminal charges filed, will generally not be held liable for malicious prosecution ... . To establish the element of initiation of a criminal proceeding, it typically must be shown that the defendant did something "more than merely report a crime to the police and cooperate in its prosecution" ... . Instead "[t]he defendant must have affirmatively induced the officer to act, such [*5]as taking an active part in the arrest and procuring it to be made or showing active, officious and undue zeal, to the point where the officer is not acting of his own volition" ... . Moorhouse v Standard NY, 2014 NY Slip Op 07605, 1st Dept 11-6-14


















Plaintiff-Passenger's Injury In an Illegal Drag-Race Not Actionable---Under the Facts, Public Policy Precluded Plaintiff from Bringing Suit


The First Department, over a dissent, determined that a complaint brought by a passenger, who was a willing participate in illegal drag-racing, against the drivers and other passengers involved, was properly dismissed.  Plaintiff was injured when the car he was in crashed during the race:


"[A]s a matter of public policy, . . . where a plaintiff has engaged in unlawful conduct, the courts will not entertain suit if the plaintiff's conduct constitutes a serious violation of the law and the injuries for which the plaintiff seeks recovery are the direct result of that violation" ... . Plaintiff urges that this rule of law is inapplicable because he was merely a passenger and also because some of the defendants indicated during disclosure that they did not consider themselves to be racing. As for the latter argument, plaintiff controls the theory of his case and he has not wavered from his contention that a high-speed drag race was in progress — an allegation made in his complaint, bills of particulars, proposed amended complaint, affidavits submitted in the underlying motions and about which he testified in detail at his deposition. Supreme Court did not err in accepting plaintiff's admitted conduct in such regard ... .


The fact that a plaintiff's injuries occurred in the course of unlawful conduct does not mandate dismissal ..., but instead the violation of law must be "sufficiently serious" to support such an extreme result, and this determination necessarily implicates "due consideration of all the relevant facts and circumstances" ... . Here, plaintiff testified that he knew Eastman had been drinking beer all day, plaintiff participated in banter regarding racing and he vouched for Eastman's truck as the fastest. Plaintiff stated that he entered the truck knowing a race was about to start, the truck and the vehicle driven by Losaw revved engines at a starting point on the road with yelling back and forth, and plaintiff never suggested that Eastman not proceed to race. In fact, once the race started, he even made comments urging Eastman to go faster so as not to be defeated in the race. Shortly thereafter, Eastman lost control of the truck. Estimated speeds during the race exceeded 100 miles per hour. Plaintiff was very familiar with the road, acknowledged racing on it previously and described it as "pretty curvy," "surface isn't even," "potholes, bumps" and "not much shoulder."


Racing side by side at over 100 miles per hour in the dark on a two-lane rural road under the circumstances of this case constitutes the type of grossly reckless conduct that created a grave risk to the public ... . Hathaway v Eastman, 2014 NY Slip Op 07533, 3rd Dept 11-6-14





Doctrine of Primary Assumption of the Risk Does Not Apply to Game of "Manhunt" Played After Midnight on School Property


The Second Department determined that a game of "Manhunt" played on school premises after midnight was not the type of activity covered by the primary assumption of the risk doctrine:


...[T]he defendant failed to establish its prima facie entitlement to judgment as a matter of law on the ground that the action was barred by the doctrine of primary assumption of risk ... , the doctrine of primary assumption of risk is most persuasively justified for its utility in facilitating " free and vigorous participation in athletic activities'" ... . As the Court of Appeals explained in Trupia v Lake George Cent. School Dist. (14 NY3d 392), by placing the risk of participation on the participants themselves, rather than on the sponsor, the doctrine encourages sponsorship, which leads to more participation ... . The doctrine of primary assumption of risk is not applicable to the midnight game of manhunt at issue in this case. As with the "horseplay" at issue in Trupia, the game of manhunt at issue in this case is not the sort of "socially valuable voluntary activity" that the doctrine seeks to encourage ... . Therefore, the defendant did not establish that the doctrine of primary assumption of risk applies here ... . Wolfe v North Merrick Union Free School Dist, 2014 NY Slip Op 07499, 2nd Dept 11-5-14






Purchase of Property Encumbered by an Unsatisfied Mortgage Gave Rise to Negligence, Negligent Misrepresentation, Fraud, and Civil Conspiracy Causes of Action Against Title Insurance Company


Third-party plaintiff, Drummond, purchased property that was encumbered by an unsatisfied mortgage held by plaintiff bank. Drummond sued the title company, third-party defendant New York Land, as well as the company from which she procured her mortgage, Residential, and the bank to which the mortgage was transferred, Wells Fargo.  The third-party defendants brought CPLR 3211 motions to dismiss. The Second Department determined the causes of action against New York Land for negligence and negligent misrepresentation properly survived a motion to dismiss because the relationship between Drummond and New York Title was "so close as to approach privity," but no such relationship was demonstrated with Residential and Wells Fargo.  The Second Department further determined the fraud and civil conspiracy causes of action against New York Land should not have been dismissed, explaining the pleading requirements. In addition, the Second Department determined that the suit was not "consumer-related" and therefore the General Business Law 349 cause of action was properly dismissed:


Although there was no contract between Drummond and New York Land, affording the pleadings a liberal construction and accepting all facts alleged as true ..., the third-party complaint supports Drummond's contention that the relationship between these two parties was so close as to approach privity .. . Indeed, the pleading alleges that New York Land was aware that the abstract and title report that it prepared were to be used for the specific purpose of facilitating a sale or mortgage of the property, that New York Land knew that Drummond was a member of a definable class who would rely on the certification in furtherance of that purpose, and that there was conduct between New York Land and Drummond evincing New York Land's understanding of Drummond's reliance ... . Accordingly, the Supreme Court properly denied those branches of New York Land's motion which were to dismiss, for failure to state a cause of action, the third-party causes of action alleging negligence and negligent misrepresentation insofar as asserted against it. * * *


"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" ... . "All of the elements of a fraud claim must be supported by factual allegations containing the details constituting the wrong' in order to satisfy the pleading requirements of CPLR 3016(b)" ... . In certain circumstances, however, it may be "almost impossible to state in detail the circumstances constituting a fraud where those circumstances are peculiarly within the knowledge of [an adverse] party" ... . "Under such circumstances, the heightened pleading requirements of CPLR 3016(b) may be met when the material facts alleged in the complaint, in light of the surrounding circumstances, are sufficient to permit a reasonable inference of the alleged conduct' including the adverse party's knowledge of, or participation in, the fraudulent scheme" ... . Here, accepting all facts alleged as true ... , the third-party complaint contains sufficient allegations of fact from which it can be inferred that New York Land was aware of the alleged fraudulent scheme and intended to aid in the commission thereof ... . * * *


"Although New York does not recognize civil conspiracy to commit a tort . . . as an independent cause of action, a plaintiff may plead the existence of a conspiracy in order to connect the actions of the individual defendants with an actionable, underlying tort and establish that those actions were part of a common scheme" ... . Again, affording the third-party complaint a liberal construction, Drummond alleged sufficient facts from which it may be inferred that New York Land knowingly participated, with certain other third-party defendants, in the alleged fraudulent scheme ... . * * *


General Business Law § 349 is a broad consumer protection statute, which declares "deceptive acts or practices in the conduct of any business, trade or commerce" to be unlawful (General Business Law § 349[a]...). A party claiming the benefit of General Business Law § 349 must, as a threshold matter, " charge conduct that is consumer oriented'" ... . "The single shot transaction, which is tailored to meet the purchaser's wishes and requirements, does not, without more, constitute consumer-oriented conduct for the purposes of this statute" ... . Rather, the defendant's acts or practices "must have a broad impact on consumers at large" ... . Here, Drummond's General Business Law § 349 cause of action is predicated upon allegations that the third-party defendants fraudulently induced her to purchase the subject property and finance it with a mortgage loan from [Residential]. As the Supreme Court properly concluded, these factual allegations do not amount to conduct that has an impact on the public at large and, as such, do not state a cause of action for violation of General Business Law § 349 ... . JP Morgan Chase Bank NA v Hall, 2014 NY Slip Op 07475, 2nd Dept 11-5-14





Presumption Vehicle Was Operated with Owner's Consent Not Overcome---Defendant Not Entitled to Summary Judgment


The Second Department determined the defendant was not entitled to summary judgment on the ground that the unknown driver of defendant's vehicle did not have the defendant's consent to operate the vehicle:


Vehicle and Traffic Law § 388 creates a strong presumption that the driver of a vehicle is operating it with the owner's consent, which can only be rebutted by substantial evidence demonstrating that the vehicle was not operated with the owner's express or implied permission ... . The defendant, on its motion for summary judgment, has the burden of demonstrating its prima facie entitlement to judgment as a matter of law ... . Thus, to obtain summary judgment on its defense that the vehicle was used without its permission, the defendant was required to present substantial evidence that the vehicle was used without its permission ... . "The uncontradicted testimony of a vehicle owner that the vehicle was operated without his or her permission, does not, by itself, overcome the presumption of permissive use" ... . The question of consent is ordinarily one for the jury ... . Ultimately, "whether summary judgment is warranted depends on the strength and plausibility of the disavowals [of permission], and whether they leave room for doubts that are best left for the jury" ... 


Here, the defendant failed to sufficiently rebut the strong presumption that the driver was operating the subject vehicle with its permission. The deposition testimony of the defendant and some, but not all, of its employees that the driver only had permission to drive the vehicle for work-related purposes did not, by itself, overcome the presumption of permissive use ... . In addition, the defendant failed to establish that the vehicle was stolen ... . Han v BJ Laura & Son Inc, 2014 NY Slip Op 07480, 2nd Dept 11-5-14




Son of Sam Law Required Murderer's Police Pension Be Paid to Daughter and Estate of the Murder Victim


The Second Department determined that the "Son of Sam Law" required that the pension to which a convicted murderer was entitled be paid to the estate of the murder victim.  The plaintiff is the daughter of the murder victim.  The murderer is plaintiff's father. The father fraudulently transferred his pension rights to his second wife.  Plaintiff, individually and as the administrator of her mother's estate, procured a wrongful death judgment against her father. The court affirmed Supreme Court's ruling that the transfer of the pension to the father's second wife was fraudulent under Florida law (where the transfer was made) and the "Son of Sam Law" trumped the Retirement and Social Security Law such that the father's pension was payable to the plaintiff:


"Under the full faith and credit clause . . . , where collateral attack on the ground of fraud would be permitted in the courts of the foreign State in which the judgment had been rendered, our courts will entertain a similar challenge" ... . Here, Florida law permits a collateral attack on the defendant's transfer of his pension to [second wife] on the ground that it constituted a fraudulent transfer ... . * * *


Next, we reject [the second wife's] contention that the defendant's pension is not subject to execution or attachment by virtue of section 110(2) of the Retirement and Social Security Law or under certain provisions of the Administrative Code of the City of New York (see Administrative Code of City of NY §§ 13-181, 13-212, 13-264). As [the second wife] correctly contends, section 110(2) of the Retirement and Social Security Law provides that the right of a person to a pension "[s]hall not be subject to execution, garnishment, attachment, or any other process whatsoever" (Retirement and Social Security Law § 110[2]). In 2001, however, the Legislature amended the Son of Sam law to subject the "[f]unds of a convicted person" to an action for damages by a crime victim, a crime victim's representative, or certain other persons (L 2001, ch 62, § 1; see Executive Law § 632 a[1][a], [c], [d]; [3]). The phrase "funds of a convicted person" was broadly defined as "all funds and property received from any source" (Executive Law § 632 a[1][c] [emphasis added]).


We conclude, for the reasons stated by our colleagues in the Appellate Division, Third Department [97 AD3d 235]..., that the defendant's pension is subject to execution under the Son of Sam law. Both the clear statutory language and the legislative history of the 2001 amendments to the Son of Sam law evince the Legislature's intent to permit crime victims to recover assets from convicted persons, including pensions, regardless of the source of the convicted person's funds ... . As the Third Department concluded, a contrary holding would "directly thwart[ ] the Legislature's stated intent of holding convicted criminals financially ... . Kane v Galtiere, 2014 NY Slip Op 07476, 2nd Dept 11-5-14










Real Estate Broker Not an Employee of Commercial Real Estate Firm


The Third Department upheld the Unemployment Insurance Appeal Board's determination that claimant, a real estate broker, was not an employee of a commercial real estate firm (Optimal):


It is well settled that the existence of an employment relationship is a factual issue for the Board to decide and its determination will be upheld if supported by substantial evidence ... . The pertinent inquiry is whether the purported employer exercised control over the results produced or the means used to achieve those results, with control over the latter being more important ... .


Evidence was presented that claimant was paid a commission of 60% of the brokerage fee collected by Optimal, which she negotiated with Optimal's senior managing director. Moreover, claimant did not have an established work schedule or work location, independently maintained her own real estate license, carried her own business cards and was permitted to and did receive commissions on referrals from other parties. Notably, she was not required to report to anyone at Optimal nor was she required to accept leads that Optimal sent to her. In view of the foregoing, while we are unable to conclude, as a matter of law that no employment relationship exists (see Labor Law § 511 [19]), substantial evidence supports the Board's finding that Optimal did not exercise sufficient control over claimant's work to be deemed her employer ... . Matter of Spielberger..., 2014 Slip Op 07564, 3rd Dept 11-6-14





Where an Injured Worker Remains Attached to the Work Force After Injury, the Measure of Benefits Is the Difference Between Actual Earnings Before and After Injury and Cannot Be Based On Evidence of What the Worker Could Be Earning


The Third Department determined that the Workers' Compensation Board correctly calculated the benefits to which claimant was entitled based upon her actual earnings in her new job in a delicatessen, as opposed to the amount her employer argued she was capable of earning.  Claimant was a nurse's aid who injured her back while working in a nursing home:


Following a hearing, a Workers' Compensation Law Judge determined that she had a permanent partial disability and calculated her weekly compensation rate — i.e., two thirds of the difference between what her average weekly wage would be absent injury and her current wage-earning capacity (see Workers' Compensation Law § 15 [3] [w]), as measured by her degree of disability. Upon claimant's application for review, the Workers' Compensation Board increased claimant's degree of disability and concluded that her wage loss benefits should be based upon her actual reduced earnings from the delicatessen where she now works, as opposed to her degree of disability, and adjusted her weekly awards accordingly. ...


"[B]efore awarding wage replacement benefits in a nonschedule permanent partial disability case," the Board must determine "whether a claimant has maintained a sufficient attachment to the labor market" ... — i.e., that the claimant's "reduced earning capacity is due to the disability, not . . . factors unrelated to the disability" (id. [internal quotation marks and citations omitted]), such as "'age, [or] general economic conditions'" ... . Once it is determined that a claimant's reduced earning capacity remains involuntary and related to his or her permanent partial disability, "[t]he wage earning capacity of an injured employee . . . shall be determined by his [or her] actual earnings" while disabled (Workers' Compensation Law § 15 [5-a]...). In that regard, the Court of Appeals has repeatedly explained that, for claimants who have demonstrated that they remained attached to the labor market, "where actual earnings during the period of the disability are established, wage earning capacity must be determined exclusively by the actual earnings of the injured employee without evidence of capacity to earn more or less during such disability period"... . Matter of Gioia v Cattaraugus County Nursing Home, 2014 NY Slip Op 07535, 3rd Dept 11-6-14




Employer Took Responsibility for Transporting Claimant Home After Cancellation of Work Due to a Storm---Injury During Ride Home Compensable


The Third Department affirmed the Workers' Compensation Board's determination that plaintiff was injured on the job.  A snowstorm forced the cancellation of work and the employer took responsibility for getting the claimant home.  Because the van used to transport claimant had no seats, claimant injured her spine during the trip:


Generally, travel to and from the place of employment is not considered to be within the scope of employment and, thus, injuries sustained during that period are not compensable ... . However, an exception arises when the employer takes responsibility for transporting employees, particularly where the employer is in exclusive control of the means of conveyance ... . The key determination in establishing compensability is whether there is "some nexus between the accident and the employment" ... . Here, it is undisputed that the employer furnished the van for transportation, one of claimant's supervisors was the driver and, further, claimant's injuries were sustained during the course of that transportation while she was still on the clock and being paid. Inasmuch as the employer took responsibility for the inherent risks of transporting its employees from the work site and had exclusive control of the conveyance, we find no reason to disturb the Board's determination that claimant's injury arose out of and in the course of her employment ... . Matter of Noboa v International Shoppes Inc, 2014 NY Slip Op 07540, 3rd Dept 11-6-14

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