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ALTHOUGH PLAINTIFF’S COUNSEL HAD NOTIFIED ALL PARTIES HE WAS NO LONGER REPRESENTING PLAINTIFF, THE PROPER PROCEDURE FOR WITHDRAWAL OF AN ATTORNEY OF RECORD HAD NOT BEEN FOLLOWED, THEREFORE THE STIPULATION OF DISCONTINUANCE SIGNED BY PLAINTIFF PRO SE WAS NOT VALID.

The Second Department, reversing Supreme Court, determined plaintiff’s motion to vacate a stipulation of discontinuance should not have been denied. At the time plaintiff signed the discontinuance pro se, his attorney (Mulhern) had notified all parties he was no longer representing plaintiff, but the proper procedure for withdrawing as counsel had not been followed. Therefore the stipulation of discontinuance was not valid:

“Although a client may, as a matter of public policy, discharge an attorney at any time, with or without cause…,  an attorney of record in an action may only withdraw or be changed or discharged in the manner prescribed by statute”… . “Until an attorney of record withdraws or is changed or discharged in the manner prescribed by CPLR 321, his [or her] authority as attorney of record for his [or her] client continues, as to adverse parties, unabated” … .

Here, at the time that the plaintiff executed the stipulation of discontinuance, he and Mulhern had not signed and filed a consent to change attorney form or sought a court order permitting Mulhern to withdraw as the plaintiff’s counsel. Thus, as to the defendants, Mulhern still was the plaintiff’s attorney … , and the plaintiff was not permitted to act pro se without consent of the court … . Accordingly, the plaintiff’s motion to vacate the stipulation of discontinuance should have been granted. Garafalo v Mayoka, 2017 NY Slip Op 05201, 2nd Dept 6-28-17

 

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DEFENDANTS, OPERATORS OF A VIRGINIA HOTEL WHERE PLAINTIFF WAS INJURED IN A SHOWER, DEMONSTRATED THE ABSENCE OF BUSINESS TIES TO NEW YORK, THE FACT THAT NEW YORKERS CAN MAKE RESERVATIONS THROUGH A WEBSITE IS NOT ENOUGH.

The Second Department determined defendants’ hotel’s motion to dismiss based upon the lack of business ties to New York was properly granted. Plaintiff was injured in a shower in the hotel, which is located in Virginia. The defendants demonstrated they did not do business in New York. The fact that reservations could be made through a website (accessed in New York) was not enough. There was no showing the injury was linked to the use of the website:

… [T]he plaintiffs failed to demonstrate that the defendants purposefully availed themselves of the privilege of conducting business in New York. Moreover, accepting as true the plaintiffs’ allegation that the defendants were involved in maintaining or operating a website that permitted consumers in New York to make reservations at the subject hotel in Virginia, they failed to make a prima facie showing that there was a substantial relationship between the causes of action asserted in the complaint and any alleged transaction of business through that website … .

The plaintiffs also failed to make a prima facie showing that personal jurisdiction exists under CPLR 302(a)(4) based on ownership, use, or possession of any real property within the state … .

Furthermore, contrary to their contention, the plaintiffs have not made ” a sufficient start'” to warrant holding this branch of the defendants’ motion in abeyance while discovery is conducted on the issue of jurisdiction … . The plaintiffs have not alleged facts which would support personal jurisdiction under either CPLR 302(a)(1) or CPLR 302(a)(4), and thus have failed to indicate how further discovery might lead to evidence showing that personal jurisdiction exists here … . Leuthner v Homewood Suites by Hilton, 2017 NY Slip Op 05212, 2nd Dept 6-28-17

 

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SPRINT IS NOT A UTILITY AND THEREFORE IS NOT EXEMPT FROM THE UNINCORPORATED BUSINESS INCOME TAX.

The First Department, in a full-fledged opinion by Justice Sweeney, determined plaintiff (Sprint) was not a “utility” within the meaning of the relevant statutes and therefore was required to pay both the Utility Tax and the Unincorporated Business Income Tax (UBT). If Sprint were deemed a utility, as opposed to a vendor of utility services, it would have been exempt from the UBT:

The question in Cable & Wireless [Cable & Wireless v City of N.Y. Dept. of Fin. (190 Misc 2d 410, 416 [Sup Ct, NY County 2001])], as it is here, was whether the plaintiff telecommunications firm was a utility or a vendor of utility services. The plaintiff there argued, as plaintiff does here, that, under the plain statutory language, it was “supervised” by the PSC [Public Service Commission] and thus must be classified as a utility. In rejecting plaintiff’s argument, the court conducted an extensive review of the legislative history of the statutes and their amendments, including the history of the circumstances surrounding the statutes’ initial passage in 1933 and their amendments through the 1940s to more recent times. After holding that plaintiff had the burden of proving that it was a supervised utility and thus exempt from the tax at issue, the court held that “in using the words subject to the supervision of the [PSC],’ the City Council did not envision imposing the Utility Tax on gross income on entities such as [the plaintiff] which exhibit none of the characteristics of the monopolies to which the tax was intended to apply” … . The plaintiff was therefore not a utility and was not entitled to an exemption from the UBT.

We find the reasoning in Astoria [Matter of Astoria Gas Turbine Power, LLC v Tax Commn. of City of N.Y. (7 NY3d 451 [2006])] and Cable & Wireless to be equally applicable to the present case. By its own admission, plaintiff is “a competitive entity” that does not enjoy monopoly status. As a result, the “light regulation” by the PSC to which it is subject does not rise to the level of “supervision” necessary to classify it as a utility and thus warrant an exemption from the UBT. Sprint Communications Co., L.P. v City of N.Y. Dept. of Fin., 2017 NY Slip Op 05194, 1st Dept 6-27-17

 

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MOTION TO SET ASIDE THE VERDICT IN THIS SLIP AND FALL CASE SHOULD NOT HAVE BEEN GRANTED, PHOTOGRAPHS TAKEN TWO WEEKS AFTER THE ACCIDENT SHOULD NOT HAVE BEEN EXCLUDED, CONTRACT SPECIFICATIONS FOR WORK ON THE AREA OF THE FALL SHOULD NOT HAVE BEEN EXCLUDED, SUBPOENAS FOR WITNESSES WHO HAD NOT BEEN DEPOSED SHOULD NOT HAVE BEEN QUASHED.

The First Department determined the defendants’ motion to set aside the verdict in this slip and fall case should not have been granted. The First Department further held that photographs of the sinkhole where plaintiff fell (taken two weeks after the injury) and the contract specifications for repair of the sinkhole should not have been excluded from evidence. In addition plaintiff’s subpoenas for a city inspector and a principal of the contractor (Halcyon) which repaired the sinkhole should not have been quashed. The fact that those witnesses were not deposed did not preclude plaintiff’s calling them at trial:

… [T]he trial court erred in precluding pictures of the accident site … . Plaintiff authenticated the photographs at his deposition, and further testimony at trial could have explained how and why the scene depicted in the photos did or did not differed from the scene on the day of the accident … . Exclusion of the photographs meant that plaintiff was unable to show the jury the hole into which he allegedly fell.

Nor should the court have precluded the City’s specifications incorporated into its contract with Halcyon. The specifications were expressly incorporated into the contract between Halcyon and the City; thus, they applied not only to the City itself, but also to third parties. Therefore, they were admissible as potential evidence of defendants’ negligence… , and indeed, the City failed to show how the specifications transcended the duty of reasonable care. The trial court’s exclusion of this evidence regarding the specifications hobbled plaintiff’s ability to prove that the City had engaged in affirmative negligence — the very basis upon which the trial court granted the directed verdict.

Likewise, the court erred in quashing the subpoenas directed to the City’s onsite inspector and a principal of Halcyon … . Although plaintiff did not formally name the City’s onsite inspector and the principal of Halcyon as witnesses, nothing in the CPLR requires a party to generate a trial witness list, nor does the record indicate that the individual court rules required him to do so … . Indeed, there is no requirement that a party depose a witness in order to call him or her as a witness at trial. Gonzalez v City of New York, 2017 NY Slip Op 05180, 1st Dept 6-27-17

 

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INSURERS’ RESPONSES TO INSUREDS’ CLAIMS UNDER THE INSURANCE CONTRACTS AMOUNTED TO A DENIAL OF LIABILITY, INSUREDS NOT OBLIGATED TO COOPERATE OR OBTAIN CONSENT TO SETTLE. ​

The First Department determined the insurer’s responses to the insureds’ claims amounted to a denial of coverage. Therefore the insureds were not obligated to cooperate with the insurers or obtain the insurers’ consent to settle:

Defendants’ [insurers’] unreasonable delay in dealing with plaintiffs’ claims under the insurance contracts, consistently stated position that the various regulatory investigations and civil actions concerning plaintiffs’ alleged late trading and marketing-timing transactions did not constitute claims under the contracts, and insistence that in any event disgorgement payments such as those demanded by the regulators were not insurable as a matter of law constitute a denial of liability under the contracts that justifies plaintiffs’ settlement of those claims without defendants’ consent… . The record does not support defendants’ contention that plaintiffs breached their obligation to cooperate, but in any event defendants’ repudiation of liability for plaintiffs’ claims also excuses plaintiffs from performance of that obligation … . The “reservation of rights” language in defendants’ letters to plaintiffs does not change this result … .  J.P. Morgan Sec. Inc. v Vigilant Ins. Co., 2017 NY Slip Op 05181, 1st Dept 6-27-17

 

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THE SEARCH WAS NOT INCIDENT TO ARREST AS THE SUPPRESSION COURT RULED, CASE REMITTED FOR CONSIDERATION OF AN ALTERNATE GROUND FOR A VALID SEARCH WHICH WAS ARGUED BUT NOT RULED UPON BELOW. ​

The First Department determined the seizure of a knife from the defendant was not the result of a valid search incident to arrest. Because the People also argued the seizure was justified for officer safety, but the suppression court did not rule on that issue, the matter was remitted:

Although the record supports a finding that the officer had probable cause to arrest defendant for assault based on reliable information from the assault victim, the People failed to meet their burden … of demonstrating that the officer intended to arrest defendant for the assault at the time he recovered the knife … . The officer’s testimony, viewed as a whole, indicates that, when he noticed the knife upon approaching defendant and retrieved it from defendant’s pocket, the officer’s intent was to inquire about the assault in order to verify that defendant was indeed the man who had assaulted the victim. Further, it was not until after the officer had retrieved the knife and confirmed that it was a gravity knife that he asked about the assault.

The People argue, in the alternative, as they did at the hearing, that the officer’s act of taking the knife from defendant’s pocket, where the handle of the knife and its clip were in plain view, was permissible as a self-protective minimal intrusion … . . However, as the hearing court did not rule on this issue in denying the suppression motion, and therefore did not rule adversely against defendant on this point, we may not reach it on this appeal … . People v Simmons, 2017 NY Slip Op 05179, 1st Dept 6-27-17

 

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DEFENDANT DID NOT DEMONSTRATE HE WOULD NOT HAVE PLED GUILTY HAD THE COURT WARNED HIM OF THE DEPORTATION CONSEQUENCES OF THE PLEA.

The First Department determined defendant did not meet his burden of proof on his claim that he would not have pled guilty the court’s failure to warn him of the deportation consequences of the plea:

By pleading guilty, defendant received a lenient disposition, which included a sentence of probation if he complied with all plea conditions. Defendant faced extensive prison terms if convicted after trial of the crimes that led to his 2002 and 2005 pleas, and acquittal of any of those crimes was unlikely. One of the two drug sales involved in the case resulting in the 2002 plea carried a potential life sentence, and the strength of the People’s case regarding those sales was apparent from the felony complaint. The facts set forth in the complaint supported a compelling inference that, in both instances, defendant was a participant in a drug-selling operation. A defense that, on two separate days, defendant did nothing more than innocently direct the undercover buyer to a source of drugs offered little hope of success. Defendant failed to demonstrate that he had significant ties to the United States. The evidence showed that he had a daughter in the Dominican Republic, but no family in the United States, at the time of his 2002 plea. Defendant’s claim of an impending marriage to a United States citizen was undermined by the fact that he did not marry that person, despite ample opportunity to do so long before being incarcerated and deported.

Accordingly, we conclude that defendant failed to establish that he was prejudiced by the court’s failure to warn him of the immigration consequences of his plea at the 2002 proceeding, or by any misleading immigration-related remarks by his counsel at the 2005 proceeding, where defendant again received a lenient disposition involving yet another serious drug charge. People v Corporan, 2017 NY Slip Op 05178, 1st Dept 6-27-17

 

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LAWSUIT ALLEGING THE FAILURE TO PROVIDE SOUND BASIC EDUCATION CAN PROCEED, BUT ONLY WITH RESPECT TO SCHOOL DISTRICTS IN NEW YORK CITY AND SYRACUSE. ​

The Court of Appeals, in a full-fledged opinion by Judge Wilson, determined a lawsuit alleging school districts’ failure to provide the sound basic education guaranteed by the state constitution could proceed, but only with respect to school districts in New York City and Syracuse. The attempt to state causes of action statewide was rejected. The complaint must specifically allege the failure district by district. A second lawsuit, alleging failure to properly fund the schools in New York City, brought by different plaintiffs [Aristy-Farer], was dismissed in its entirety:

The NYSER [New Yorkers for Students’ Educational Rights] plaintiffs have sufficiently alleged deficient inputs and outputs with respect to New York City and, although in less detail, Syracuse, that give defendants adequate notice of what a potential remedy could require of them. In that regard, the NYSER complaint alleges deficient inputs (a lack of qualified teachers and principals, low levels of support staff, outdated curricula, unsuccessful English as a Second Language programs, overly large class sizes, lack of basic materials such as textbooks and chalk, a reduction in after-school and summer programs, and inadequate and unclean buildings and facilities) with respect to Syracuse and New York City, with some degree of specificity. The complaint further alleges deficient outputs with respect to those school districts (poor standardized test proficiency, high failure and drop-out rates, poor English proficiency, and inability to meet basic requirements to gain admission to gain admission to City or State colleges because their high schools do not offer basic course requirements).

The complaint also alleges a causal link between inadequate State funding and the failure of those two school districts to provide a sound basic education. … [G]oing forward, plaintiffs here will need to adduce evidence at trial proving, on the basis of current data, that the State has breached its constitutional obligation to provide a sound basic education to students in public schools. Should plaintiffs be successful, it will be up to the State to craft an appropriate response, subject to judicial review, because the courts have “neither the authority, nor the ability, nor the will, to micromanage education financing” … . Aristy-Farer v State of New York, 2017 NY Slip Op 05175, CtApp 6-27-17

 

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BAIL BONDSMAN IS NOT ENTITLED TO KEEP THE PREMIUM POSTED TO UNDERWRITE A BAIL BOND IF BAIL IS SUBSEQUENTLY DISAPPROVED AND THE ARRESTEE IS NOT RELEASED.

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, determined the defendant bail bondsman, Judelson, who agreed to underwrite a $2 million bail bond in return for a premium of $120,560, could not keep the premium when bail was disapproved and the arrestee, Bogoraz, was not released. The bond was posted, but bail was disapproved at the subsequent hearing:

The question before us ultimately turns on when a “premium” is earned. The use of the word “premium” in [Insurance Law] section 6804 (a) is significant because that term connotes a consideration paid to an insurer for assuming a risk … . Risk, when used “with reference to insurance, describes the liability assumed as specified on the face of the policy” … . Notably, in 1997, when the legislature amended section 6804 to increase premium rates to sureties, the sponsor justified the change as providing “an incentive to assume more risk by bonding agents” … .

When does a bail bond surety incur risk? In our view, the risk associated with the bail bond is that the principal admitted on bail will fail to appear and the bail bond will be forfeited … . If the posted collateral does not cover the bail bond, the surety may suffer a financial loss. The surety does not incur this risk when the principal is not released and so has no opportunity to jump bail … . While the surety assumes a binding obligation to pay the bail upon posting the bail bond, no risk attaches from this obligation alone. Risk is triggered only when the court takes additional steps following the posting — approving the bail bond and issuing a certificate authorizing the principal’s release … . When a hearing is ordered under CPL 520.30, the court approves or disapproves the bail bond after the hearing … . If the court disapproves the bail bond, the surety never runs the risk it contracted to insure. Gevorkyan v Judelson, 2017 NY Slip Op 05176, CtApp 6-27-17

 

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PHOTOGRAPH TAKEN FROM A WEBSITE NOT SUFFICIENTLY CONNECTED TO THE DEFENDANT, CONVICTION REVERSED.

The Court of Appeals, in a full-fledged opinion by Judge Stein, with a concurring opinion by Judge Rivera, reversing the Appellate Division, determined that a photograph taken from a website, allegedly depicting the defendant with a handgun similar to the handgun used in the robbery, was not adequately authenticated. The conviction was reversed. The evidence tying the defendant to the website was not strong enough. There was no showing defendant controlled the website, or that others did not have access to the website:

… [T]he evidence presented here of defendant’s connection to the website or the particular profile was exceedingly sparse … . For example, notably absent was any evidence regarding whether defendant was known to use an account on the website in question, whether he had ever communicated with anyone through the account, or whether the account could be traced to electronic devices owned by him. Nor did the People proffer any evidence indicating whether the account was password protected or accessible by others, whether non-account holders could post pictures to the account, or whether the website permitted defendant to remove pictures from his account if he objected to what was depicted therein. Without suggesting that all of the foregoing information would be required or sufficient in each case, or that different information might not be relevant in others, we are convinced that the authentication requirement cannot be satisfied solely by proof that defendant’s surname and picture appears on the profile page. Thus, even if we were to accept that the photograph could be authenticated through proof that the website on which it was found was attributable to defendant, the People’s proffered authentication evidence failed to actually demonstrate that defendant was aware of — let alone exercised dominion or control over — the profile page in question … . …

In sum, the People failed to demonstrate that the photograph was a fair and accurate representation of that which it purported to depict. Nor — assuming adoption of the test urged by the People (or some variation thereof) — did the People present sufficient evidence to establish that the website belonged to, and was controlled by, defendant. People v Price, 2017 NY Slip Op 05174, CtApp 6-27-17

 

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