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FAILURE TO OBJECT TO DISCOVERY DEMANDS REQUIRED THAT THE COURT GRANT THE MOTION TO COMPEL DISCOVERY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant’s failure to object to plaintiff’s discovery demands required the court to grant plaintiff’s motion to compel discovery:

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A defendant’s failure to make a timely challenge to a plaintiff’s document demand pursuant to CPLR 3122(a)(1) forecloses inquiry into the propriety of the information sought except with regard to material that is privileged pursuant to CPLR 3101 or requests that are palpably improper … . Here, the defendant City of New York did not object to the plaintiff’s requests for discovery dated February 4, 2014, and February 12, 2015, respectively, within the required time period, and it failed to either asserted a valid privilege or establish that the demands were palpably improper.

Accordingly, the Supreme Court erred in denying the plaintiff’s motion to compel the City to comply with those requests for discovery.  Recine v City of New York, 2017 NY Slip Op 08870, Second Dept 12-20-17

 

CIVIL PROCEDURE (DISCOVERY, FAILURE TO OBJECT TO DISCOVERY DEMANDS REQUIRED THAT THE COURT GRANT THE MOTION TO COMPEL DISCOVERY (SECOND DEPT))/DISCOVERY (MOTION TO COMPEL, FAILURE TO OBJECT TO DISCOVERY DEMANDS REQUIRED THAT THE COURT GRANT THE MOTION TO COMPEL DISCOVERY (SECOND DEPT))/CPLR 3122 (DISCOVERY, FAILURE TO OBJECT TO DISCOVERY DEMANDS REQUIRED THAT THE COURT GRANT THE MOTION TO COMPEL DISCOVERY (SECOND DEPT))

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COURT HAS DISCRETION TO ACCEPT UNAUTHORIZED SURREPLIES (SECOND DEPT).

The Second Department noted that a judge has the discretion to control motion practice and may accept substantive surreplies:

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While unauthorized surreplies containing new arguments generally should not be considered, the Supreme Court has the authority to regulate the motion practice before it, as well as the discretion to determine whether to accept late papers or even surreply papers for “good cause” (CPLR 2214[c] …). Here, the Supreme Court did not improvidently exercise its discretion in determining that it would consider the supplemental evidence sought to be submitted by the plaintiff. The plaintiff proferred a valid excuse, the delay was minimal, and there was no prejudice as the court also determined that it would give the defendant a full opportunity to respond to, and submit further evidence addressing, the plaintiff’s submissions … . U.S. Bank Trust, N.A. v Rudick, 2017 NY Slip Op 08874, Second Dept 12-20-17

CIVIL PROCEDURE (MOTION PRACTICE, COURT HAS DISCRETION TO ACCEPT UNAUTHORIZED SUBSTANTIVE SURREPLIES (SECOND DEPT))/SURREPLIES (CIVIL PROCEDURE, COURT HAS DISCRETION TO ACCEPT UNAUTHORIZED SUBSTANTIVE SURREPLIES (SECOND DEPT))/MOTION PRACTICE (SURREPLIES,  COURT HAS DISCRETION TO ACCEPT UNAUTHORIZED SUBSTANTIVE SURREPLIES (SECOND DEPT))

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ATTORNEY WHO HIRED AN ASSOCIATE WHO PREVIOUSLY WORKED AS A PARALEGAL AT THE FIRM REPRESENTING DEFENDANTS SHOULD HAVE BEEN DISQUALIFIED (SECOND DEPT).

The Second Department, reversing Supreme Court determined the disqualification of plaintiffs’ counsel, D’Agostino, was required based on his hiring of an associate, Monteleon, who previously worked as a paralegal in the firm representing defendants. Even if Monteleon had not acquired client confidences, there existed the appearance of impropriety:

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The Supreme Court should have granted the defendants’ motions to disqualify D’Agostino as the plaintiffs’ counsel in the instant actions. A party seeking to disqualify an attorney or a law firm for an opposing party on the ground of conflict of interest has the burden of demonstrating (1) the existence of a prior attorney-client relationship between the moving party and opposing counsel, (2) that the matters involved in both representations are substantially related, and (3) that the interests of the present client and former client are materially adverse … . When the moving party is able to demonstrate each of these factors, an irrebuttable presumption of disqualification follows … . The defendants established that there is an irrebuttable presumption that Monteleon, who was a paralegal and subsequently D’Agostino’s associate, is subject to disqualification from representing the plaintiffs in these actions due to his prior employment.

Where one attorney is disqualified as a result of having acquired confidential client information in his former employment (see Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.9), there is a rebuttable presumption that the entirety of the attorney’s current firm must be disqualified … . … There is a rebuttable presumption here that D’Agostino, who employed Monteleon as a paralegal and subsequently an associate in his solo practice, is disqualified from representing the plaintiffs. That presumption has not been rebutted by the plaintiffs, as they failed to disprove that Monteleon had the opportunity to acquire confidential information in his former employment.  …

Even assuming that the irrebuttable presumption in favor of disqualification did not attach to Monteleon, disqualification of D’Agostino nonetheless is warranted. … Any doubts as to the existence of a conflict of interest must be resolved in favor of disqualification … . Moray v UFS Indus., Inc., 2017 NY Slip Op 08822, Second Dept 12-20-17

 

ATTORNEYS (CONFLICT OF INTEREST, ATTORNEY WHO HIRED AN ASSOCIATE WHO PREVIOUSLY WORKED AS A PARALEGAL AT THE FIRM REPRESENTING DEFENDANTS SHOULD HAVE BEEN DISQUALIFIED (SECOND DEPT))/CONFLICT OF INTEREST (ATTORNEY WHO HIRED AN ASSOCIATE WHO PREVIOUSLY WORKED AS A PARALEGAL AT THE FIRM REPRESENTING DEFENDANTS SHOULD HAVE BEEN DISQUALIFIED (SECOND DEPT))/IMPROPRIETY, APPEARANCE OF (ATTORNEY WHO HIRED AN ASSOCIATE WHO PREVIOUSLY WORKED AS A PARALEGAL AT THE FIRM REPRESENTING DEFENDANTS SHOULD HAVE BEEN DISQUALIFIED (SECOND DEPT))/DISQUALIFICATION (ATTORNEYS, CONFLICT OF INTEREST, ATTORNEY WHO HIRED AN ASSOCIATE WHO PREVIOUSLY WORKED AS A PARALEGAL AT THE FIRM REPRESENTING DEFENDANTS SHOULD HAVE BEEN DISQUALIFIED (SECOND DEPT))

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EVEN WHERE AN INJURED WORKER SETTLES WITH A THIRD-PARTY BEFORE THE WORKERS’ COMPENSATION SCHEDULE LOSS OF USE IS DETERMINED, THE EMPLOYER’S CARRIER MUST SHARE IN THE LITIGATION COSTS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Wilson, reversing the appellate division, determined the employer’s workers’ compensation carrier  must share in the litigation costs incurred by an injured worker, even where the worker’s settlement with a third-party precedes the workers’ compensation schedule loss of use is determined:

Joseph Terranova, a foreman employed by the Lehr Construction Company, injured his right knee on a raised floor tile at a job site. He sought both workers’ compensation benefits from Lehr’s carrier, the New Hampshire Insurance Company (NHIC), and damages from the third-party contractor responsible for the defective tile. At the time of Mr. Terranova’s settlement with the third party — to which NHIC consented in a letter — he had received $21,495.99 in workers’ compensation payments and was litigating the extent of his schedule loss of use before a workers’ compensation law judge. Proceedings before that judge continued after the third-party settlement and ultimately resulted in a finding that Mr. Terranova suffered a ten percent schedule loss of use of the right leg that entitled him to 28.8 weeks of benefits, or an additional $9,960. Despite Mr. Terranova’s arguments to the contrary, the judge — as well as the Board and the Appellate Division — concluded that because his ultimate award was of a type we had indicated had an ascertainable present value, he was not entitled to the post-settlement apportionment of the litigation expenses contemplated for other types of awards in Burns v Varriale (9 NY3d 207 [2007]). * * *

Neither Kelly [60 NY2d 131] nor Burns contemplated the sequence involved here, in which a third-party settlement was consummated before an award was determined. Here, although the Board ultimately recognized the inequity of its initial determination, it first misinterpreted Kelly and Burns as requiring that litigation costs apportioned against all schedule loss of use awards be either assigned at the time of the third-party settlement or not at all. …

When, as here, the present value of the loss of use or other benefits is not finalized at the time of the claimant’s recovery in the third-party matter, the carrier must pay its fair share once the present value is determined. Matter of Terranova v Lehr Constr. Co., 2017 NY Slip Op 08799, CtApp 12-19-17

WORKERS’ COMPENSATION LAW (EVEN WHERE AN INJURED WORKER SETTLES WITH A THIRD-PARTY BEFORE THE WORKERS’ COMPENSATION SCHEDULE LOSS OF USE IS DETERMINED, THE EMPLOYER’S CARRIER MUST SHARE IN THE LITIGATION COSTS (CT APP))/LITIGATION COSTS (WORKERS’ COMPENSATION LAW, EVEN WHERE AN INJURED WORKER SETTLES WITH A THIRD-PARTY BEFORE THE WORKERS’ COMPENSATION SCHEDULE LOSS OF USE IS DETERMINED, THE EMPLOYER’S CARRIER MUST SHARE IN THE LITIGATION COSTS (CT APP))

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NYC WATER BOARD’S RATE HIKE AND BILL CREDIT WERE NOT IRRATIONAL. ARBITRARY OR CAPRICIOUS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, over a two-judge dissent, reversing the appellate division, determined the rate hike imposed by the NYC Water Board was not arbitrary and capricious. The board imposed a 2.1% rate increase, a bill credit, and assistance programs and low-consumption rate freeze. Petitioners — various landlords not eligible for the bill credit and a landlords’ not-for-profit association — … assert that the Water Board’s determinations were irrational, arbitrary and capricious, and exceeded the Board’s authority:

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Our case law holds that a utility has “unfettered discretion to fix [rates] as it will so long as invidious illicit discriminations are not practiced and differentials are not utterly arbitrary and unsupported by economic or public policy goals, as it reasonably conceives them”… . A petitioner’s task in demonstrating that the rate-setting agency’s determination is unreasonable is appropriately described as a “heavy burden” … .

It is clear from the governing statutes that water and sewer rates may be determined in accordance with public policy goals, and not only economic goals. The Water Board “may take into consideration the views and policies of any elected official or body, or other person” and ultimately “appl[ies] independent judgment in the best interest of the authority, its mission and the public” … . Moreover, the statutory scheme gives the Board leeway to charge more than the bare minimum necessary for revenue recovery, by stating that the rates are to generate “revenues which, together with other revenues available to the board, if any, shall be at least sufficient at all times so that such system or systems shall be placed on a self-sustaining basis” … . In short, New York City’s “Water Board is granted broad authority to set rates for water usage” … .

Here, we cannot say that respondents’ actions were “utterly arbitrary and unsupported by economic or public policy goals, as it reasonably conceives them” … . Matter of Prometheus Realty Corp. v New York City Water Bd., 2017 NY Slip Op 08801, CtApp 12-19-17

 

MUNICIPAL LAW (NYC WATER BOARD’S RATE HIKE AND BILL CREDIT WERE NOT IRRATIONAL, ARBITRARY OR CAPRICIOUS (CT APP))/ADMINISTRATIVE LAW (NYC WATER BOARD’S RATE HIKE AND BILL CREDIT WERE NOT IRRATIONAL, ARBITRARY OR CAPRICIOUS (CT APP))/WATER BOARD (NYC WATER BOARD’S RATE HIKE AND BILL CREDIT WERE NOT IRRATIONAL, ARBITRARY OR CAPRICIOUS (CT APP))

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FAMILY COURT MAINTAINED JURISDICTION TO ISSUE A FINAL ORDER OF PROTECTION FOR VIOLATION OF A TEMPORARY ORDER OF PROTECTION AFTER THE FAMILY OFFENSES, WHICH LED TO THE TEMPORARY VIOLATION OF PROTECTION, HAD BEEN DISMISSED (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Stein, over a two-judge dissent, determined that Family Court had jurisdiction to issue a final order of protection, based upon the violation of a temporary order of protection, after the underlying family offense petition (which led to the temporary order of protection) had been dismissed:

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Petitioner Lisa T. filed a family offense petition against respondent King E.T., who is her husband and the father of her child. Petitioner requested and received a temporary order of protection, ex parte, at her first appearance in Family Court. The temporary order of protection directed respondent to refrain from all communications with petitioner except those relating to visitation arrangements and emergencies regarding the child. It is undisputed that respondent was served with, and had knowledge of, this order. Throughout a series of subsequent court appearances concerning the family offense petition — at which respondent was present with one exception — the temporary order of protection was extended. While the family offense proceeding remained pending, petitioner filed two violation petitions, later consolidated into a single petition, alleging that respondent had contacted her in contravention of the temporary orders of protection.

Family Court held a combined hearing on the family offense and consolidated violation petitions. … Family Court dismissed the family offense petition, but sustained the violation petition and issued a one-year final order of protection precluding respondent from, among other things, communicating with petitioner except as necessary to make arrangements for respondent’s visitation with the child.

Family Court Act §§ 846 and 846-a contain no language tying Family Court’s authority to impose specific penalties for the willful violation of a temporary order of protection to the court’s determination of whether or not the family offense petition, itself, should be sustained … . Significantly, there is no basis in the statutory text upon which we may draw any distinction between Family Court’s jurisdiction over violations of final orders of protection entered after a finding of a family offense, on the one hand, and violations of temporary orders of protection entered during the pendency of the family offense proceeding, on the other. Further, the statutory scheme makes clear that conduct constituting a violation of the order of protection need not necessarily constitute a separate family offense in order for the court to have jurisdiction over the violation. Indeed, section 846-a contains no such requirement. Matter of Lisa T. v King E.T., 2017 NY Slip Op 08800, CtApp 12-19-17

 

FAMILY LAW (FAMILY COURT MAINTAINED JURISDICTION TO ISSUE A FINAL ORDER OF PROTECTION FOR VIOLATION OF A TEMPORARY ORDER OF PROTECTION AFTER THE FAMILY OFFENSES, WHICH LED TO THE TEMPORARY VIOLATION OF PROTECTION, HAD BEEN DISMISSED (CT APP))/JURISDICTION  (FAMILY COURT MAINTAINED JURISDICTION TO ISSUE A FINAL ORDER OF PROTECTION FOR VIOLATION OF A TEMPORARY ORDER OF PROTECTION AFTER THE FAMILY OFFENSES, WHICH LED TO THE TEMPORARY VIOLATION OF PROTECTION, HAD BEEN DISMISSED (CT APP))/ORDER OF PROTECTION (FAMILY COURT MAINTAINED JURISDICTION TO ISSUE A FINAL ORDER OF PROTECTION FOR VIOLATION OF A TEMPORARY ORDER OF PROTECTION AFTER THE FAMILY OFFENSES, WHICH LED TO THE TEMPORARY VIOLATION OF PROTECTION, HAD BEEN DISMISSED (CT APP))/FAMILY OFFENSES (FAMILY COURT MAINTAINED JURISDICTION TO ISSUE A FINAL ORDER OF PROTECTION FOR VIOLATION OF A TEMPORARY ORDER OF PROTECTION AFTER THE FAMILY OFFENSES, WHICH LED TO THE TEMPORARY VIOLATION OF PROTECTION, HAD BEEN DISMISSED (CT APP))

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DETERMINATION OF MOTION TO TAKE A BUCCAL SWAB FOR DNA TESTING IS A CRITICAL STAGE OF THE PROCEEDINGS REQUIRING REPRESENTATION BY COUNSEL, BECAUSE DEFENSE COUNSEL HAD BEEN RELIEVED, DEFENDANT’S GUILTY PLEAS MUST BE VACATED (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Rivera, over an extensive three-judge dissent, determined defendant was deprived of counsel at a critical stage of the prosecution, i.e., when the People made a motion to take a buccal swap for DNA testing. The appellate division properly vacated defendant’s pleas, but should not have dismissed the indictment:

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Here, the People filed their motion to compel the DNA test and served the motion on retained counsel in court. As the Appellate Division found, the trial court — in defendant’s absence — subsequently granted both the retained defense counsel’s motion to be relieved from representing defendant for failure to pay his fee and the People’s DNA discovery motion, which it granted based on the “putative consent” it inferred from retained counsel’s silence. Later the same day that counsel was relieved, defendant appeared in court. Knowing defendant was unrepresented, the court, rather than remain neutral, proceeded to act in place of counsel throughout an extensive colloquy, telling defendant that there were no bases on which to challenge the DNA sample order. In response to the court, defendant stated that he had not spoken with his attorney about the prosecution’s motion and did not wish to consent to giving a sample. Notwithstanding defendant’s entreaties, the court rejected his repeated requests for an attorney to advise him regarding the motion. Instead, the court told defendant “an attorney [was] not going to be able to help,” and that there was “no basis for fighting [the test].” When defendant said he did not “know the law,” the judge responded “I know the law.” On these facts, the Appellate Division correctly determined that “the pretrial proceedings concerning the DNA test were ‘critical’ within the meaning of the law … . Accordingly, defendant was deprived his right to counsel.

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We reject the dissent’s conclusion that defendant was not denied counsel during a critical stage of the proceeding, as that determination is contrary to law and would require that we distort the factual record. As the People concede, there was no express consent to their request for the DNA sample, either by defendant or by retained counsel. Nor was there any affirmative conduct or errant statement by defendant or counsel from which implied consent could be inferred. Instead, as the People acknowledge, the court issued its order based only on retained counsel’s failure to reply to the People’s motion to compel the buccal swab. Under the circumstances here, that is not a proper basis for finding defendant’s consent … . Further, as the record unambiguously shows, shortly after the court granted retained counsel’s request to withdraw — leaving defendant unrepresented — defendant appeared in court, expressly denied consent, and repeatedly stated he wanted counsel to assist him in responding to the People’s motion [FN5]. Yet, rather than appointing counsel, the court told defendant there was no basis to oppose the motion. Notwithstanding these facts, the dissent believes defendant was represented on the motion for the DNA sample; we do not. People v Smith, 2017 NY Slip Op 08798, CtApp 12-19-17

 

 

CRIMINAL LAW (DETERMINATION OF MOTION TO TAKE A BUCCAL SWAB FOR DNA TESTING IS A CRITICAL STAGE OF THE PROCEEDINGS REQUIRING REPRESENTATION BY COUNSEL, BECAUSE DEFENSE COUNSEL HAD BEEN RELIEVED, DEFENDANT’S GUILTY PLEAS MUST BE VACATED (CT APP))/ATTORNEYS (CRIMINAL LAW, DETERMINATION OF MOTION TO TAKE A BUCCAL SWAB FOR DNA TESTING IS A CRITICAL STAGE OF THE PROCEEDINGS REQUIRING REPRESENTATION BY COUNSEL, BECAUSE DEFENSE COUNSEL HAD BEEN RELIEVED, DEFENDANT’S GUILTY PLEAS MUST BE VACATED (CT APP))/DNA TESTING (CRIMINAL LAW, DETERMINATION OF MOTION TO TAKE A BUCCAL SWAB FOR DNA TESTING IS A CRITICAL STAGE OF THE PROCEEDINGS REQUIRING REPRESENTATION BY COUNSEL, BECAUSE DEFENSE COUNSEL HAD BEEN RELIEVED, DEFENDANT’S GUILTY PLEAS MUST BE VACATED (CT APP))

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WHERE THE DEFENDANT AND THE IDENTIFYING WITNESS APPEAR TO BELONG TO DIFFERENT RACIAL GROUPS, THE DEFENDANT, UPON REQUEST, IS ENTITLED TO A CROSS-RACIAL IDENTIFICATION JURY INSTRUCTION, IRRESPECTIVE OF WHETHER THE ISSUE WAS RAISED AT TRIAL (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, over a two-judge concurring opinion, determined that, in a case where there is a question whether defendant and the identifying witness belong to different racial groups, upon request, a defendant is entitled to a so-called cross-racial identification jury instruction. The issue need not have come up at trial either during cross-examination of the identifying witness or by the presentation of expert opinion evidence:

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In light … the cross-race effect, which has been accepted by a near consensus in the relevant scientific community of cognitive and social psychologists, and recognizing the very significant part that inaccurate identifications play in wrongful convictions, we reach the following holding: in a case in which a witness’s identification of the defendant is at issue, and the identifying witness and defendant appear to be of different races, a trial court is required to give, upon request, during final instructions, a jury charge on the cross-race effect, instructing (1) that the jury should consider whether there is a difference in race between the defendant and the witness who identified the defendant, and (2) that, if so, the jury should consider (a) that some people have greater difficulty in accurately identifying members of a different race than in accurately identifying members of their own race and (b) whether the difference in race affected the accuracy of the witness’s identification. The instruction would not be required when there is no dispute about the identity of the perpetrator nor would it be obligatory when no party asks for the charge … . People v Boone, 2017 NY Slip Op 08713, CtApp 12-14-17

 

CRIMINAL LAW (JURY INSTRUCTIONS, IDENTIFICATION, WHERE THE DEFENDANT AND THE IDENTIFYING WITNESS APPEAR TO BELONG TO DIFFERENT RACIAL GROUPS, THE DEFENDANT, UPON REQUEST, IS ENTITLED TO A CROSS-RACIAL IDENTIFICATION JURY INSTRUCTION, IRRESPECTIVE OF WHETHER THE ISSUE WAS RAISED AT TRIAL (CT APP))/IDENTIFICATION (CRIMINAL LAW, JURY INSTRUCTIONS, IDENTIFICATION, WHERE THE DEFENDANT AND THE IDENTIFYING WITNESS APPEAR TO BELONG TO DIFFERENT RACIAL GROUPS, THE DEFENDANT, UPON REQUEST, IS ENTITLED TO A CROSS-RACIAL IDENTIFICATION JURY INSTRUCTION, IRRESPECTIVE OF WHETHER THE ISSUE WAS RAISED AT TRIAL (CT APP))/JURY INSTRUCTIONS (CRIMINAL LAW, CROSS-RACIAL IDENTIFICATION,  WHERE THE DEFENDANT AND THE IDENTIFYING WITNESS APPEAR TO BELONG TO DIFFERENT RACIAL GROUPS, THE DEFENDANT, UPON REQUEST, IS ENTITLED TO A CROSS-RACIAL IDENTIFICATION JURY INSTRUCTION, IRRESPECTIVE OF WHETHER THE ISSUE WAS RAISED AT TRIAL (CT APP))/CROSS-RACIAL IDENTIFICATION (CRIMINAL LAW, JURY INSTRUCTIONS, WHERE THE DEFENDANT AND THE IDENTIFYING WITNESS APPEAR TO BELONG TO DIFFERENT RACIAL GROUPS, THE DEFENDANT, UPON REQUEST, IS ENTITLED TO A CROSS-RACIAL IDENTIFICATION JURY INSTRUCTION, IRRESPECTIVE OF WHETHER THE ISSUE WAS RAISED AT TRIAL (CT APP))

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CLAIMANT, WHO HAD RETIRED, BUT CLAIMS TO HAVE REATTACHED TO THE LABOR MARKET, DID NOT DEMONSTRATE HIS INABILITY TO FIND COMPARABLE WORK WAS RELATED TO HIS ASBESTOS-CAUSED DISABILITY, MATTER REMITTED (THIRD DEPT).

The Third Department, reversing the Workers’ Compensation Board, determined the claimant, who had retired but claimed to have reattached to the labor market, had not demonstrated his inability to find comparable work was related to his asbestos-caused disability:

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We agree with the employer that the Board failed to address its argument that claimant had not satisfied his burden of establishing that his inability to find work, and the related loss of earnings, was causally related to his disability. In order to be entitled to benefits, a claimant who has previously voluntarily retired but claims to have subsequently reattached to the labor market must demonstrate that his or her “earning capacity and his [or her] ability to find comparable employment had been adversely affected by his [or her] disability” … . This burden requires a claimant to demonstrate “that other factors totally unrelated to his [or her] disability did not [cause the] adverse affect on his [or her] earning capacity” … . Despite the employer arguing that claimant had failed to meet his burden in this regard, the Board did not discuss or make findings as to whether claimant had established a relevant nexus between his work-related disability and his unsuccessful job search. As the Board failed to engage in its fact-finding role and deprived the employer of consideration of the merits of the issue, we must reverse the Board’s decision in order to allow that review to occur … . Matter of Pontillo v Consolidated Edison of N.Y., Inc., 2017 NY Slip Op 08760, Second Dept 12-14-17

 

WORKERS’ COMPENSATION LAW (CLAIMANT, WHO HAD RETIRED, BUT CLAIMS TO HAVE REATTACHED TO THE WORK FORCE, DID NOT DEMONSTRATE HIS INABILITY TO FIND WORK WAS RELATED TO HIS ASBESTOS-CAUSED DISABILITY, MATTER REMITTED (THIRD DEPT))

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UNDER THE TERMS OF THE LIMITED LIABILITY AGREEMENT, THE ESTATE OF A DECEASED MEMBER OF THE LIMITED LIABILITY COMPANY (LLC) WAS NOT A MEMBER OF THE LLC AND THEREFORE COULD NOT PARTICIPATE IN THE RUNNING OF THE LLC OR INSPECT ITS BOOKS AND WAS NOT OWED A FIDUCIARY DUTY (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kapnick, determined the limited liability agreement controlled in this action by the estate of a member of the limited liability company (LLC) against the LLC.  Under the terms of the agreement the estate of the deceased member (Alex) was not a member of the LLC and therefore could not participate in the running of the company, could not demand to inspect the LLC’s books, and was not owed a fiduciary duty:

Ultimately, the parties disagree on the Estate’s rights and status under the LLC Agreement … . The Estate contends that it stepped into Alex’s shoes upon his death, and that it possesses all of his rights and privileges as a Member under the LLC Agreement. Defendants, on the other hand, contend that under the terms of the LLC Agreement, the Estate is considered the successor in interest of a Withdrawing Member (Alex) with rights only to potential distributions, and no rights to control or participate in the running of the company. Estate of Calderwood v ACE Group Intl. LLC, 2017 NY Slip Op 08750, First Dept 12-14-17

TRUSTS AND ESTATES (DEATH OF MEMBER OF LLC, UNDER THE TERMS OF THE LIMITED LIABILITY AGREEMENT, THE ESTATE OF A DECEASED MEMBER OF THE LIMITED LIABILITY COMPANY (LLC) WAS NOT A MEMBER OF THE LLC AND THEREFORE COULD NOT PARTICIPATE IN THE RUNNING OF THE LLC OR INSPECT ITS BOOKS AND WAS NOT OWED A FIDUCIARY DUTY (FIRST DEPT))/LIMITED LIABILITY COMPANY (TRUSTS AND ESTATES, DEATH OF A MEMBER, UNDER THE TERMS OF THE LIMITED LIABILITY AGREEMENT, THE ESTATE OF A DECEASED MEMBER OF THE LIMITED LIABILITY COMPANY (LLC) WAS NOT A MEMBER OF THE LLC AND THEREFORE COULD NOT PARTICIPATE IN THE RUNNING OF THE LLC OR INSPECT ITS BOOKS AND WAS NOT OWED A FIDUCIARY DUTY (FIRST DEPT))/CORPORATION LAW (LIMITED LIABILITY COMPANY, DEATH OF A MEMBER, UNDER THE TERMS OF THE LIMITED LIABILITY AGREEMENT, THE ESTATE OF A DECEASED MEMBER OF THE LIMITED LIABILITY COMPANY (LLC) WAS NOT A MEMBER OF THE LLC AND THEREFORE COULD NOT PARTICIPATE IN THE RUNNING OF THE LLC OR INSPECT ITS BOOKS AND WAS NOT OWED A FIDUCIARY DUTY (FIRST DEPT))

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