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HEARSAY IS ADMISSIBLE IN ADMINISTRATIVE PROCEEDINGS AND MAY CONSTITUTE THE SOLE BASIS FOR A DETERMINATION (SECOND DEPT).

The Second Department, in upholding a fine imposed upon a bar by the NYS Liquor Authority relating to an altercation, the court explained the use of hearsay in an administrative proceeding:

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“Judicial review of an administrative determination made after a hearing required by law, and at which evidence was taken, 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” … . It is “[m]ore than seeming or imaginary, it is less than a preponderance of the evidence, overwhelming evidence or evidence beyond a reasonable doubt” … . ” The standard demands only that a given inference is reasonable and plausible, not necessarily the most probable'” … . The strict rules of evidence do not apply to administrative proceedings and hearsay evidence is admissible… . Hearsay evidence may constitute substantial evidence if sufficiently relevant and probative and may, under appropriate circumstances, form the sole basis for an agency’s determination, unless it is seriously controverted … . Matter of Bracco’s Clam & Oyster Bar, Inc. v New York State Liq. Auth., 2017 NY Slip Op 08516, Second Dept 12-6-17

 

ADMINISTRATIVE LAW (HEARSAY, HEARSAY IS ADMISSIBLE IN ADMINISTRATIVE PROCEEDINGS AND MAY CONSTITUTE THE SOLE BASIS FOR A DETERMINATION (SECOND DEPT))/EVIDENCE (ADMINISTRATIVE LAW, HEARSAY IS ADMISSIBLE IN ADMINISTRATIVE PROCEEDINGS AND MAY CONSTITUTE THE SOLE BASIS FOR A DETERMINATION (SECOND DEPT))/HEARSAY (ADMINISTRATIVE LAW, HEARSAY IS ADMISSIBLE IN ADMINISTRATIVE PROCEEDINGS AND MAY CONSTITUTE THE SOLE BASIS FOR A DETERMINATION (SECOND DEPT))

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QUESTION FACT ABOUT THE APPLICABILITY OF THE RES IPSA LOQUITUR DOCTRINE IN THIS ELEVATOR ACCIDENT CASE (FIRST DEPT).

The First Department determined defendant’s motion for summary judgment in this elevator accident case was properly denied. The elevator fell from the 20th to the 11th floor. Although defendant demonstrate a lack of notice, there was a question of fact under the doctrine of res ipsa loquitur:

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Plaintiff submitted evidence to support each of the elements of res ipsa loquitur, namely “(1) that the occurrence would not ordinarily occur in the absence of negligence, (2) that the injury was caused by an agent or instrumentality within the exclusive control of defendant, and (3) that no act or negligence on the plaintiff’s part contributed to the happening of the event” … .

The testimony of plaintiff, together with that of a witness who was in the elevator with her when the elevator allegedly dropped, is sufficient to raise an issue of fact as to whether the elevator did in fact drop suddenly … . A free-fall or sudden drop of an elevator does not ordinarily happen in the absence of negligence … . We reject, as we have previously, defendant’s argument that it lacked exclusive control of the elevator because a passenger in the elevator activated the emergency stop button and jumped to try to stop the free fall once the elevator suddenly dropped … . Although it is not necessary to consider the affidavit of plaintiff’s expert witness, we note that plaintiff’s testimony is also supported by the opinion of her expert, who explained how the accident could have occurred as plaintiff described. The expert affidavit is properly part of the appellate record since it was submitted by defendant and expressly incorporated by plaintiff into her opposition papers. Colon v New York City Hous. Auth., 2017 NY Slip Op 08463, First Dept 12-5-17

 

NEGLIGENCE (QUESTION FACT ABOUT THE APPLICABILITY OF THE RES IPSA LOQUITUR DOCTRINE IN THIS ELEVATOR ACCIDENT CASE (FIRST DEPT))/RES IPSA LOQUITUR (ELEVATOR ACCIDENT, QUESTION FACT ABOUT THE APPLICABILITY OF THE RES IPSA LOQUITUR DOCTRINE IN THIS ELEVATOR ACCIDENT CASE (FIRST DEPT))/ELEVATOR ACCIDENTS (RES IPSA LOQUITUR, QUESTION FACT ABOUT THE APPLICABILITY OF THE RES IPSA LOQUITUR DOCTRINE IN THIS ELEVATOR ACCIDENT CASE (FIRST DEPT))

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PLAINTIFF ENTITLED TO SUMMARY JUDGMENT ON HIS LABOR LAW 240 (1) CAUSE OF ACTION, HEAVY ROLL OF WIRE FELL BECAUSE OF ABSENCE OF A SAFETY DEVICE (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff was entitled to summary judgment on his Labor Law 240 (1) cause of action. Plaintiff was injured when a heavy roll of wire fell as it was being moved up a ramp made of planks in a loading area:

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Plaintiff established entitlement to judgment as a matter of law on the issue of liability where he was injured during the course of his employment when a reel of electrical wire weighing 500 to 1,000 pounds fell and struck his foot. Workers were rolling the reel up two wooden planks for loading onto a van when it fell, and although there are questions as to whether plaintiff was actually involved in moving the reel, plaintiff demonstrated that he sustained injuries from the falling reel due to absence of an adequate safety device… .

Defendants and third-party defendants (collectively defendants) fail to raise a triable issue of fact. They contend that issues exist as to whether a forklift was available onsite, and whether plaintiff was a recalcitrant worker for failing to use it despite being aware of it… . However, even if a forklift was available and plaintiff was aware of it, defendants have not offered evidence showing that he was actually instructed to use it… . Rather, it is undisputed that plaintiff’s foreman had instructed the workers to move the reel as they did, and to the extent defendants rely on the testimony of plaintiff’s employer that plaintiff was not to blindly follow the foreman’s instructions, such overlooks the realities of construction work … .

Nor is there a triable issue as to whether plaintiff was the sole proximate cause of the accident. Even assuming that plaintiff did assist in moving the reel and in the course of doing so, removed his hand from the reel, such was not the sole proximate cause of the accident, as he was not provided with an adequate safety device to hoist the reel in the first instance … .

The contention that Labor Law § 240(1) is inapplicable because the loading of the reel did not fall within the scope of construction work, is unavailing. Although it was not actual construction work, and occurred in the loading area of the construction site, it was still part of the construction project … . Gutierrez v 451 Lexington Realty LLC, 2017 NY Slip Op 08475, First Dept 12-5-17

 

LABOR LAW-CONSTRUCTION LAW (PLAINTIFF ENTITLED TO SUMMARY JUDGMENT ON HIS LABOR LAW 240 (1) CAUSE OF ACTION, HEAVY ROLL OF WIRE FELL BECAUSE OF ABSENCE OF A SAFETY DEVICE (FIRST DEPT))

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QUESTION OF FACT WHETHER BRICKS WHICH STRUCK PLAINTIFF WERE DELIBERATELY DROPPED, WHICH WOULD NOT BE COVERED BY LABOR LAW 240 (1) (FIRST DEPT).

The First Department determined a question of fact precluded summary judgment on the Labor Law 240 (1) cause of action. Plaintiff was struck by falling bricks outside a building. If the bricks fell accidentally, Labor Law 240 (1) would cover the injury, if the bricks were deliberately dropped, Labor Law 240 (1) would not cover the injury. In addition, the Labor Law 241 (6) cause of action was deemed properly dismissed because the incident occurred outside the building:

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Plaintiff was allegedly struck by falling bricks while working near one of four connected buildings on a construction site. The motion court correctly denied both plaintiff’s motion for partial summary judgment on his Labor Law § 240(1) claim and defendants’ motion for summary judgment dismissing that claim, as there are issues of fact about whether the bricks fell accidently or were deliberately dropped by demolition workers. If the latter, then the bricks did not constitute falling objects pursuant to Labor Law § 240(1) … . …

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The motion court correctly dismissed the Labor Law § 241(6) claim predicated on an alleged violation of Industrial Code (12 NYCRR) § 23-3.3(g), based on plaintiff’s testimony that his accident occurred outside rather than “within [a] building” (12 NYCRR 23-3.3[g]). Torres v Love Lane Mews, LLC, 2017 NY Slip Op 08467, First Dept 12-5-17

 

LABOR LAW-CONSTRUCTION LAW (QUESTION OF FACT WHETHER BRICKS WHICH STRUCK PLAINTIFF WERE DELIBERATELY DROPPED, WHICH WOULD NOT BE COVERED BY LABOR LAW 240 (1) (FIRST DEPT))/FALLING OBJECTS (LABOR LAW-CONSTRUCTION LAW, QUESTION OF FACT WHETHER BRICKS WHICH STRUCK PLAINTIFF WERE DELIBERATELY DROPPED, WHICH WOULD NOT BE COVERED BY LABOR LAW 240 (1) (FIRST DEPT))

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SUBSTANTIAL PAIN ELEMENT OF ASSAULT THIRD EXPLAINED (FIRST DEPT).

The First Department determined the proof of the “substantial pain” element of assault third was sufficient to support conviction:

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The verdict was supported by legally sufficient evidence and was not against the weight of the evidence … . There is no basis for disturbing the jury’s credibility determinations. The jury reasonably believed that defendant intended to forcibly take the victim’s property when he hit the victim in the head and immediately grabbed at his pocket … .

There was also ample proof of physical injury, because the victim testified that due to the severe pain in his mouth, it was difficult for him to open his mouth for two days, and he could not eat during that time… .. The statutory element of “substantial pain” may be satisfied by relatively minor injuries causing moderate, but “more than slight or trivial pain”…, even in the absence of any medical treatment … . People v Cordero, 2017 NY Slip Op 08466, First Dept 12-5-17

 

CRIMINAL LAW (ASSAULT, SUBSTANTIAL PAIN ELEMENT OF ASSAULT THIRD EXPLAINED (FIRST DEPT))/ASSAULT (CRIMINAL LAW, SUBSTANTIAL PAIN, SUBSTANTIAL PAIN ELEMENT OF ASSAULT THIRD EXPLAINED (FIRST DEPT))/SUBSTANTIAL PAIN (ASSAULT THIRD, SUBSTANTIAL PAIN ELEMENT OF ASSAULT THIRD EXPLAINED (FIRST DEPT))/EVIDENCE (CRIMINAL LAW, ASSAULT, SUBSTANTIAL PAIN ELEMENT OF ASSAULT THIRD EXPLAINED (FIRST DEPT))

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DEFENSE COUNSEL REPRESENTED BOTH DEFENDANT AND A WITNESS AGAINST DEFENDANT, CONFLICT OF INTEREST REQUIRED A NEW TRIAL, EVIDENCE ELICITED CAN NOT BE USED AT SECOND TRIAL (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Gesmer, determined defendant’s attorney’s conflict of interest deprived defendant of effective assistance of counsel and, upon retrial, the testimony which resulted from the conflict can not be presented:

 

In this observation drug sale case, defendant, an alleged seller, was appointed the same attorney at his Criminal Court arraignment as Edward Jones, one of the alleged buyers. During the course of counsel’s simultaneous representation of defendant and Jones, Jones accepted a plea that required him to allocute to a description of one of the drug sellers. Jones allocuted to a description fitting defendant, and testified consistently with the allocution as a prosecution witness at trial. Since we find that counsel’s simultaneous representation of defendant at the time of Jones’s plea constituted an actual conflict, we reverse and remand for a new trial. In addition, because Jones’s testimony is interwoven with a violation of defendant’s New York State and Federal right to the effective assistance of counsel, we preclude the People from using Jones’s testimony at any retrial. * * *

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During cross-examination, Jones admitted that he did tell the Assistant District Attorney, in his office, that defendant did not sell him crack cocaine. During redirect, Jones explained that he believed he did not have to tell the prosecutor the truth in his office, but that, now that he was under oath, he was “not going to perjure [him]self. . . .” * * *

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Here, defendant’s right to the effective assistance of counsel was infringed by an actual conflict. At the time of their simultaneous representation and Jones’s plea, the interests of defendant and Jones were clearly opposed. Jones had an interest in avoiding a criminal conviction by allocuting to identify defendant as one of the people who had sold him drugs. Defendant had an interest in not being so identified. Counsel was thus placed in the “very awkward position of a lawyer subject to conflicting demands” … . Indeed, despite defendant’s right to representation by an attorney single-mindedly devoted to his best interests, counsel pursued a strategy in Jones’s case directly at odds with defending defendant from the drug sale charges that he faced … .. After swearing to a description of one of the sellers that fit defendant, Jones became unavailable to defendant as a trial witness and his strength as a prosecution witness was enhanced … . Counsel’s actions with respect to Jones were inconsistent with representing defendant in the best way possible, so defendant was denied the “right to receive advice and assistance from an attorney whose paramount responsibility is to that defendant alone” … . People v Peters, 2017 NY Slip Op 08497, First Dept 12-5-17

 

CRIMINAL LAW (ATTORNEYS, EVIDENCE, DEFENSE COUNSEL REPRESENTED BOTH DEFENDANT AND A WITNESS AGAINST DEFENDANT, CONFLICT OF INTEREST REQUIRED A NEW TRIAL, EVIDENCE ELICITED CAN NOT BE USED AT SECOND TRIAL (FIRST DEPT))/ATTORNEYS (CRIMINAL LAW, CONFLICT, INEFFECTIVE ASSISTANCE,  DEFENSE COUNSEL REPRESENTED BOTH DEFENDANT AND A WITNESS AGAINST DEFENDANT, CONFLICT OF INTEREST REQUIRED A NEW TRIAL, EVIDENCE ELICITED CAN NOT BE USED AT SECOND TRIAL (FIRST DEPT))/EVIDENCE (CRIMINAL LAW, ATTORNEYS, CONFLICT, DEFENSE COUNSEL REPRESENTED BOTH DEFENDANT AND A WITNESS AGAINST DEFENDANT, CONFLICT OF INTEREST REQUIRED A NEW TRIAL, EVIDENCE ELICITED CAN NOT BE USED AT SECOND TRIAL (FIRST DEPT))/INEFFECTIVE ASSISTANCE (CONFLICT OF INTEREST, CRIMINAL LAW (ATTORNEYS, EVIDENCE, DEFENSE COUNSEL REPRESENTED BOTH DEFENDANT AND A WITNESS AGAINST DEFENDANT, CONFLICT OF INTEREST REQUIRED A NEW TRIAL, EVIDENCE ELICITED CAN NOT BE USED AT SECOND TRIAL (FIRST DEPT))/CONFLICT OF INTEREST (ATTORNEYS, CRIMINAL LAW, INEFFECTIVE ASSISTANCE, DEFENSE COUNSEL REPRESENTED BOTH DEFENDANT AND A WITNESS AGAINST DEFENDANT, CONFLICT OF INTEREST REQUIRED A NEW TRIAL, EVIDENCE ELICITED CAN NOT BE USED AT SECOND TRIAL (FIRST DEPT))

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BREACH OF CONTRACT ACTION BY CALIFORNIA TRUSTEE OF MORTGAGE-BACKED-SECURITIES TRUSTS IS CONTROLLED BY NEW YORK’S BORROWING STATUTE AND MUST BE TIMELY UNDER BOTH CALIFORNIA AND NEW YORK LAW, SUIT WAS UNTIMELY UNDER CALIFORNIA LAW (FIRST DEPT).

The First Department determined this breach of contract action stemming from a mortgage-backed-securities trust, brought by a California plaintiff (trustee) ,and concerning California lenders must be timely under both California and New York law. The action, although timely in New York, was not timely under California law, which has a four-year statute of limitations. The New York choice-of-law provisions in the agreements did not expressing incorporate the NY statute of limitations:

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CPLR 202 requires that an action brought by a nonresident plaintiff, “based upon a cause of action accruing without the state,” be timely under the respective statutes of limitations of both New York and “the place without the state where the cause of action accrued.” In Global Fin. Corp. v Triarc Corp. (93 NY2d 525, 529-530 [1999]), the Court of Appeals set forth the general rule that, in cases where (as here) the alleged injury is purely economic, a cause of action is deemed, for purposes of CPLR 202, to have accrued in the jurisdiction of the plaintiff’s residence. …

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it is undisputed that the domiciles of the trust beneficiaries, which are in various jurisdictions, do not provide a workable basis for determining the place of accrual. As to the New York choice-of-law clauses of the relevant agreements, because these provisions do not expressly incorporate the New York statute of limitations, they “cannot be read to encompass that limitation period” … . By contrast, the subject trust in each action comprises a pool of mortgage loans, originated by California lenders and encumbering California properties, either exclusively … or predominantly ,,,, and … administered in California by plaintiff, a California-based trustee …. Further, it is undisputed that the relevant pooling and servicing agreement (PSA) for each trust contemplates the payment of state taxes, if any, in California … . To the extent the physical location of the notes memorializing the securitized mortgage loans has relevance to the analysis, each trust’s PSA contemplates that the notes may be maintained in California, but neither contemplates maintaining the notes in New York … . ​Deutsche Bank Natl. Trust Co. v Barclays Bank PLC, 2017 NY Slip Op 08459, First Dept 12-5-17

 

CIVIL PROCEDURE (BORROWING STATUTE, CONTRACT LAW, BREACH OF CONTRACT ACTION BY CALIFORNIA TRUSTEE OF MORTGAGE-BACKED-SECURITIES TRUSTS IS CONTROLLED BY NEW YORK’S BORROWING STATUTE AND MUST BE TIMELY UNDER BOTH CALIFORNIA AND NEW YORK LAW, SUIT WAS UNTIMELY UNDER CALIFORNIA LAW (FIRST DEPT))/BORROWING STATUTE (CIVIL PROCEDURE, BREACH OF CONTRACT ACTION BY CALIFORNIA TRUSTEE OF MORTGAGE-BACKED-SECURITIES TRUSTS IS CONTROLLED BY NEW YORK’S BORROWING STATUTE AND MUST BE TIMELY UNDER BOTH CALIFORNIA AND NEW YORK LAW, SUIT WAS UNTIMELY UNDER CALIFORNIA LAW (FIRST DEPT))/CONTRACT LAW (CIVIL PROCEDURE, BORROWING STATUTE, STATUTE OF LIMITATIONS, BREACH OF CONTRACT ACTION BY CALIFORNIA TRUSTEE OF MORTGAGE-BACKED-SECURITIES TRUSTS IS CONTROLLED BY NEW YORK’S BORROWING STATUTE AND MUST BE TIMELY UNDER BOTH CALIFORNIA AND NEW YORK LAW, SUIT WAS UNTIMELY UNDER CALIFORNIA LAW (FIRST DEPT))/SECURITIES (MORTGAGE-BACKED SECURITIES, CONTRACT LAW, CIVIL PROCEDURE, BORROWING STATUTE, BREACH OF CONTRACT ACTION BY CALIFORNIA TRUSTEE OF MORTGAGE-BACKED-SECURITIES TRUSTS IS CONTROLLED BY NEW YORK’S BORROWING STATUTE AND MUST BE TIMELY UNDER BOTH CALIFORNIA AND NEW YORK LAW, SUIT WAS UNTIMELY UNDER CALIFORNIA LAW (FIRST DEPT))/TRUSTS AND ESTATES (MORTGAGE-BACKED SECURITIES TRUST, BREACH OF CONTRACT, CIVIL PROCEDURE, BORROWING STATUTE, BREACH OF CONTRACT ACTION BY CALIFORNIA TRUSTEE OF MORTGAGE-BACKED-SECURITIES TRUSTS IS CONTROLLED BY NEW YORK’S BORROWING STATUTE AND MUST BE TIMELY UNDER BOTH CALIFORNIA AND NEW YORK LAW, SUIT WAS UNTIMELY UNDER CALIFORNIA LAW (FIRST DEPT))

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SCHOOLS ARE NOT IMMUNE FROM ZONING REGULATIONS, ZONING BOARD PROPERLY DENIED SCHOOL DISTRICT’S VARIANCE APPLICATION FOR AN ELECTRONIC SIGN (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice McCarthy, rejected the school’s argument that it was immune from zoning restrictions. The school had erected an electronic sign which violated the zoning code and the zoning board had denied the school’s application for a variance:

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… [T]he Court of Appeals noted that “… general rules . . . were interpreted by some courts to demand a full exemption from zoning rules for all educational and church uses” — an interpretation that “is mandated neither by the case law of our [s]tate nor common sense” … . The Court clarified that it never intended to “render municipalities powerless in the face of a religious or educational institution’s proposed expansion, no matter how offensive, overpowering or unsafe to a residential neighborhood the use might be,” and renewed its rejection of the existence of “any conclusive presumption of an entitlement to an exemption from zoning ordinances” for schools … . The Court thus concluded that “there are many instances in which a particular educational or religious use may actually detract from the public’s health, safety, welfare or morals [and, i]n those instances, the institution may be properly denied” … . Accordingly, the Court held that the presumed beneficial effects of schools and churches “may be rebutted with evidence of a significant impact on traffic congestion, property values, municipal services and the like,” because the “inherent beneficial effects . . . must be weighed against their potential for harming the community” … . * * *

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Because petitioner was not immune from and was, therefore, subject to the Town’s zoning ordinances, we must address whether the ZBA [zoning board of appeals] properly denied petitioner’s application for a variance. The Town and the ZBA did not refuse petitioner the opportunity to install any sign. Rather, the ZBA rejected an application for permission to install an electronic message center sign, which is prohibited in the Town and which also failed to comply with at least three additional size and location requirements of the signage provisions of the Town’s zoning ordinance. The ZBA provided rational reasons for its determination, including a concern for traffic safety due to the sign’s brightness and potential to be more distracting and hazardous to passing motorists than an ordinary sign … . That determination was not arbitrary or capricious. Matter of Ravena- Coeymans-Selkirk Cent. Sch. Dist. v Town of Bethlehem, 2017 NY Slip Op 08428, Third Dept 11-30-17

 

ZONING (SCHOOLS ARE NOT IMMUNE FROM ZONING REGULATIONS, ZONING BOARD PROPERLY DENIED SCHOOL DISTRICT’S VARIANCE APPLICATION FOR AN ELECTRONIC SIGN (THIRD DEPT))/EDUCATION-SCHOOL LAW (ZONING, SCHOOLS ARE NOT IMMUNE FROM ZONING REGULATIONS, ZONING BOARD PROPERLY DENIED SCHOOL DISTRICT’S VARIANCE APPLICATION FOR AN ELECTRONIC SIGN (THIRD DEPT))/VARIANCES (SCHOOLS, SIGNS, SCHOOLS ARE NOT IMMUNE FROM ZONING REGULATIONS, ZONING BOARD PROPERLY DENIED SCHOOL DISTRICT’S VARIANCE APPLICATION FOR AN ELECTRONIC SIGN (THIRD DEPT))/SIGNS (ZONING, VARIANCES, SCHOOLS ARE NOT IMMUNE FROM ZONING REGULATIONS, ZONING BOARD PROPERLY DENIED SCHOOL DISTRICT’S VARIANCE APPLICATION FOR AN ELECTRONIC SIGN (THIRD DEPT))

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NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT).

The Third Department determined several motions to dismiss were properly denied in this action concerning an insolvent workers’ compensation trust. Defendant Regnier provided actuarial services and prepared certain actuarial reports on an annual basis for the trust. In addition to many other causes of action not summarized here, the Third Department held that the negligence and gross negligence causes of action properly survived:

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We reject Regnier’s assertion that the negligence and gross negligence claims should have been dismissed in their entirety because plaintiff failed to allege that it owed the trust a duty of care. “[A]n actuary, possessing special knowledge, can be held liable for the negligent performance of its services” … . The second amended complaint alleged that Regnier held itself out as a skilled and competent actuary, that Regnier prepared actuarial reports to the trust, and that Regnier failed to provide competent actuarial services. More critically, the second amended complaint further alleged that Regnier knew that the trust would be relying on the accuracy of such reports and that Regnier was aware that its services were employed to represent the trust’s finances. Under these circumstances and viewing the allegations in a light most favorable to plaintiff, we conclude that there were sufficient allegations of near privity to survive a motion to dismiss with respect to the negligence and gross negligence claims … . New York State Workers’ Compensation Bd. v Program Risk Mgt., Inc., 2017 NY Slip Op 08426, Third Dept 11-30-17

 

WORKERS’ COMPENSATION LAW (WORKERS’ COMPENSATION TRUST, NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))/WORKERS’ COMPENSATION TRUSTS (NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))/NEGLIGENCE (ACTUARY, WORKERS’ COMPENSATION TRUST, NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))/ACTUARY (NEGLIGENCE, WORKERS’ COMPENSATION TRUST, NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))

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HOTEL NOT ENTITLED TO CREDIT FOR SALES TAX FOR CONTINENTAL BREAKFASTS PURCHASED FROM A THIRD PARTY, CONTINENTAL BREAKFASTS WERE INCLUDED IN THE ROOM RENTAL AND WERE NOT PURCHASED FOR RESALE (THIRD DEPT).

The Third Department determined the hotel (Washington Square) which included continental breakfast in its room rental was not entitled to a credit for sales tax paid by the hotel for the purchase of the continental breakfasts (from Cafe C-III):

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Generally, sales tax must be paid upon the sale of all tangible personal property … . However, “[c]ertain purchases which are made for resale are not subject to sales tax” … . As such, a reseller may claim a tax credit for sales tax it paid upon purchases of personal property that will be resold … . “Where the question is whether certain purchases are entitled to the resale exemption, the purchaser must show, to avoid imposition of the sales tax on the entire transaction, that each of the items was purchased for one and only one purpose: resale” … . * * *

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We conclude that Washington Square failed to satisfy its burden of establishing its entitlement to the benefit of the resale tax exemption … . According to the hearing testimony of Washington Square’s chief executive officer, Washington Square purchased continental breakfasts from Cafe C-III and such breakfasts were included in the hotel rental fee paid by the guests. Washington Square paid Cafe C-III regardless of whether a guest consumed the continental breakfast. More critically, the chief executive officer also stated that hotel guests would not be separately billed for the continental breakfasts … . …

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Nor do we find any merit in Washington Square’s equitable estoppel argument. “[T]he doctrine of estoppel does not apply in tax cases unless unusual circumstances support a finding of manifest injustice” … . The fact that Washington Square, in a prior audit, was not imposed an additional tax assessment where it sought the same tax credit as in this case does not rise to the level of a manifest injustice especially in light of the auditor’s testimony that each audit stands on its own and does not bind a future audit … .  Washington Square’s reliance on an audit of Cafe C-III is likewise unavailing. Matter of Washington Sq. Hotel LLC v Tax Appeals Trib. of The State of New York, 2017 NY Slip Op 08422, Third Dept 11-30-17

 

TAX LAW (SALES TAX, HOTEL NOT ENTITLED TO CREDIT FOR SALES TAX FOR CONTINENTAL BREAKFASTS PURCHASED FROM A THIRD PARTY, CONTINENTAL BREAKFASTS WERE INCLUDED IN THE ROOM RENTAL AND WERE NOT PURCHASED FOR RESALE (THIRD DEPT))/SALES TAX (SALES TAX, HOTEL NOT ENTITLED TO CREDIT FOR SALES TAX FOR CONTINENTAL BREAKFASTS PURCHASED FROM A THIRD PARTY, CONTINENTAL BREAKFASTS WERE INCLUDED IN THE ROOM RENTAL AND WERE NOT PURCHASED FOR RESALE (THIRD DEPT))

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