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PLEADING REQUIREMENTS FOR A LAUNDRY LIST OF FRAUD-RELATED CAUSES OF ACTION SUCCINCTLY ILLUSTRATED.

The Second Department, in the context of motions to dismiss, motions for injunctions, and motions for sanctions, described the pleading requirements for the following causes of action: preliminary injunction, permanent injunction, breach of fiduciary duty, fraud, aiding and abetting fraud, constructive trust, conspiracy to commit a tort, fraudulent conveyance, unjust enrichment and conversion. Swartz v Swartz, 2016 NY Slip Op 08390, 2nd Dept 12-14-16

 

CIVIL PROCEDURE (PLEADING REQUIREMENTS FOR A LAUNDRY LIST OF FRAUD-RELATED CAUSES OF ACTION SUCCINCTLY ILLUSTRATED)/FRAUD PLEADING REQUIREMENTS FOR A LAUNDRY LIST OF FRAUD-RELATED CAUSES OF ACTION SUCCINCTLY ILLUSTRATED)

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ALTHOUGH NOT AN EMPLOYEE UNDER THE WORKERS’ COMPENSATION LAW, PLAINTIFF WAS AN EMPLOYEE UNDER THE LABOR LAW AND WAS ENTITLED TO SUMMARY JUDGMENT ON HIS LABOR LAW 240(1) CAUSE OF ACTION.

The First Department, over a dissent, determined plaintiff was entitled to summary judgment on his Labor Law 240(1) cause of action, despite the finding by the Workers’ Compensation Board that plaintiff was not an employee entitled to Workers’ Compensation benefits from the general contractor. Plaintiff was found to be an independent contractor legitimately working at the site. The definitions of employer and employee in the Labor Law and Workers’ Compensation Law are different:

The sole issue at the workers’ compensation hearing was whether plaintiff was an employee of [the general contractor] as to be entitled to workers’ compensation benefits. The sole finding made by the ALJ was that plaintiff was an “independent contractor” not entitled to receive workers’ compensation. The ALJ made no determination as to the scope of that work. … Plaintiff testified that he was injured when a scaffold collapsed underneath him while he was helping to load a container with construction debris.

[The owner] fails to point to any evidence demonstrating that plaintiff was not “employed” on the premises on the date of the accident, and therefore, fails to raise a triable issue of fact. Having established that he was “employed” within the meaning of the Labor Law, plaintiff is entitled to partial summary judgment on the issue of liability on his section 240(1) claim. Vera v Low Income Mktg. Corp., 2016 NY Slip Op 08318, 1st Dept 12-13-16

 

LABOR LAW-CONSTRUCTION LAW (ALTHOUGH NOT AN EMPLOYEE UNDER THE WORKERS’ COMPENSATION LAW, PLAINTIFF WAS AN EMPLOYEE UNDER THE LABOR LAW AND WAS ENTITLED TO SUMMARY JUDGMENT ON HIS LABOR LAW 240(1) CAUSE OF ACTION)/WORKERS’ COMPENSATION LAW (ALTHOUGH NOT AN EMPLOYEE UNDER THE WORKERS’ COMPENSATION LAW, PLAINTIFF WAS AN EMPLOYEE UNDER THE LABOR LAW AND WAS ENTITLED TO SUMMARY JUDGMENT ON HIS LABOR LAW 240(1) CAUSE OF ACTION)

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PLAINTIFF ENTITLED TO SUMMARY JUDGMENT ON LABOR LAW 240(1) AND 240(6) CAUSES OF ACTION, HEAVY MOTORIZED PALLET JACK SLID ON WATER ON A DESCENDING RAMP.

The First Department, in a full-fledged opinion by Justice Saxe, determined plaintiff was entitled to summary judgment on his Labor Law 240(1) and 241(6) causes of action. Plaintiff was guiding a heavy motorized pallet jack carrying concrete blocks down a ramp to a lower level of the building under construction. The ramp was wet and the pallet jack slid, running over plaintiff’s foot. The fact that the load was not being hoisted or secured at the time of the accident did not preclude recovery. The pallet itself was deemed a safety device that failed in an elevation-related accident:

Plaintiff’s testimony here established that his accident was proximately caused by the combination of the traction-reducing water condition and the slope, which caused the heavy, loaded pallet jack to slide downhill while the breaking [sic] mechanism was rendered useless. The jack, with its built-in braking mechanism, failed to provide him adequate protection against the gravity-related risk inherent in transporting the heavy load down the water-covered ramp. Therefore, defendants failed “to provide adequate protection against” the risk that was created in part by the ” significant elevation differential'” of the ramp … . Landi v SDS William St., LLC, 2016 NY Slip Op 08340, 1st Dept 12-13-16

LABOR LAW-CONSTRUCTION LAW (PLAINTIFF ENTITLED TO SUMMARY JUDGMENT ON LABOR LAW 240(1) AND 240(6) CAUSES OF ACTION, HEAVY MOTORIZED PALLET JACK SLID ON WATER ON A DESCENDING RAMP)/PALLET JACK (LABOR LAW-CONSTRUCTION LAW, PLAINTIFF ENTITLED TO SUMMARY JUDGMENT ON LABOR LAW 240(1) AND 240(6) CAUSES OF ACTION, HEAVY MOTORIZED PALLET JACK SLID ON WATER ON A DESCENDING RAMP)

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LABOR LAW 240(1) CAUSE OF ACTION PROPERLY DISMISSED, EVENT NOT RELATED TO THE FORCE OF GRAVITY.

The First Department determined summary judgment dismissing plaintiff’s Labor Law 240(1) cause of action was properly granted. Plaintiff was cutting a steel beam when it sprang up, striking him in the face. The event was not related to the force of gravity:

The Labor Law § 240(1) claim was correctly dismissed, because the record demonstrates that plaintiff’s injuries were not the result of a failure to provide proper protection against “the application of the force of gravity to an object or person” … , but rather the result of the propulsion of the vertical beam upward by “the kinetic energy of the sudden release of tensile stress in the [beam]” … . Quishpi v 80 WEA Owner, LLC, 2016 NY Slip Op 08324, 1st Dept 12-13-16

LABOR LAW-CONSTRUCTION LAW (LABOR LAW 240(1) CAUSE OF ACTION PROPERLY DISMISSED, EVENT NOT RELATED TO THE FORCE OF GRAVITY)

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QUESTION OF FACT WHETHER DEFENDANT EXERCISED SUFFICIENT CONTROL OVER THE WORK TO BE LIABLE UNDER LABOR LAW 200 AS AN AGENT OF THE OWNER AND GENERAL CONTRACTOR.

The First Department determined there were questions of fact whether defendant (Premiere) exercised sufficient control over the work to be liable as an agent of the owner and general contractor pursuant to Labor Law 200. Plaintiff, who worked for the building where the work was being done, tripped over a worker’s tool bag which had been left in the vicinity of a staircase. The decision gives some insight into the level of control and supervision necessary for Labor Law 200 liability:

Given its responsibilities regarding the construction work – responsibilities that resemble those of a construction manager – there are issues of fact as to whether Premiere was a statutory agent of the owner and general contractor, i.e., whether it exercised general control over the work site … , rather than the exclusive control that it claims on appeal. Premiere CEO Grimes’s testimony supports plaintiff’s claim that Premiere exercised general control over the work site. Not only did Grimes hire and schedule the repair people and oversee the quality of their work, but he also interacted with construction teams on a day-to-day basis, told them if he was displeased with work, made decisions about the work, and reminded the teams to move materials around to insure clear access to apartments and stairways. He was authorized to shut down the job “if there was a dangerous or unsafe condition,” and before plaintiff’s injury he and the superintendent spoke with … workers about not leaving tools and construction dust in the common areas. From theses facts, a jury could find that Premiere exercised general control. Burgos v Premiere Props., Inc., 2016 NY Slip Op 08317, 1st Dept 12-13-16

 

LABOR LAW-CONSTRUCTION LAW (QUESTION OF FACT WHETHER DEFENDANT EXERCISED SUFFICIENT CONTROL OVER THE WORK TO BE LIABLE UNDER LABOR LAW 200 AS AN AGENT OF THE OWNER AND GENERAL CONTRACTOR)

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SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63.

The First Department, over an extensive dissent, determined that fraud-related actions against defendant Credit Suisse (stemming from the sale of residential mortgage-backed securities [RMBS]) were governed by the six-year, not three-year statute of limitations. The actions were brought pursuant to the Martin Act and Executive Law 63(12). Those statutes were deemed to have codified common law causes of action. Therefore the six-year statute (CPLR 213), not the three-year statute (CPLR 214) applies:

Where claims are “to recover upon a liability . . . created or imposed by statute” (CPLR 214[2]), and the liability, although akin to common-law causes, “would not exist but for [the] statute” … , the three-year statute of limitations of CPLR 214(2) applies … . In contrast, where a statute “merely codifies and affords new remedies for what in essence is a common-law … claim[,]” CPLR 214(2) does not apply and “the Statute of Limitations for the statutory claim is that for the common-law cause of action which the statute codified or implemented”(id. at 208).

In the complaint, the Attorney General alleges, inter alia, that defendants’ fraud was their failure to abide by their representations that they had carefully evaluated and would continue to monitor the quality of the loans underlying their RMBS, and that they would encourage loan originators to implement sound origination practices. Instead, defendants routinely ignored defects discovered in their due diligence reviews and did not seek to influence originators to utilize appropriate origination practices, choosing instead to misuse their quality control process to obtain significant monetary settlements from originators, which defendants improperly kept for themselves. People v Credit Suisse Sec. (USA) LLC, 2016 NY Slip Op 08339, 1st Dept 12-13-16

 

CIVIL PROCEDURE (SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63)/SECURITIES (SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63)/FRAUD (SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63)/CRIMINAL LAW (SECURITIES FRAUD, SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63)/EXECUTIVE LAW 63 (SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63)/MARTIN ACT (SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63)/STATUTE OF LIMITATION (SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63),RESIDENTIAL MORTGAGE-BACKED SECURITIES (SIX YEAR STATUTE OF LIMITATIONS APPLIES TO FRAUD ACTIONS AGAINST DEFENDANT BANK RELATING TO THE SALE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES BROUGHT PURSUANT TO THE MARTIN ACT AND EXECUTIVE LAW 63)

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REDACTED DOCUMENTS AND A SEALED RECORD MUST BE UNREDACTED AND UNSEALED, CRITERIA AND PROCEDURE FOR REDACTION AND SEALING EXPLAINED.

The First Department, reversing Supreme Court, determined redacted documents filed in connection with one lawsuit, and the entirely sealed record of a second lawsuit should be fully disclosed and available to the media (the intervenors here):

This Court has previously held that there is a “broad presumption that the public is entitled to access to judicial proceedings and court records” … . The right of public access includes the right of the press to read and review court documents, unless those documents have been sealed pursuant to a statutory provision or by a properly issued sealing order. To allow them to assert their interests here, the proposed intervenors should be allowed to intervene in both actions for the limited purpose of obtaining access to court records … .

Furthermore, because confidentiality is the exception and not the rule … , “the party seeking to seal court records has the burden to demonstrate compelling circumstances to justify restricting public access” … . Having reviewed the record, we see no basis to seal the entire court record in the second action; therefore, we vacate the sealing order. It appears that the motion court sealed the second action because the parties stipulated to it. Before sealing, the motion court should have made its own written finding of good cause, as is required by the provisions of the Uniform Rules for Trial Courts (22 NYCRR) § 216.1(a) … . Maxim Inc. v Feifer, 2016 NY Slip Op 08319, 1st Dept 12-13-16

 

CIVIL PROCEDURE (REDACTED DOCUMENTS AND A SEALED RECORD MUST BE UNREDACTED AND UNSEALED, CRITERIA AND PROCEDURE FOR REDACTION AND SEALING EXPLAINED)/SEALING-REDACTION OF COURT RECORDS (CIVIL, REDACTED DOCUMENTS AND A SEALED RECORD MUST BE UNREDACTED AND UNSEALED, CRITERIA AND PROCEDURE FOR REDACTION AND SEALING EXPLAINED)

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SUPREME COURT CANNOT SUBSTITUTE ITS OWN JUDGMENT FOR THAT OF THE ZONING BOARD, EVEN IN AFFIRMING THE BOARD’S DETERMINATION, CRITERIA FOR ALLOWING THE CONTINUATION OF A NONCONFORMING USE EXPLAINED.

The Third Department upheld the zoning board’s (ZBA’s) determination that the application for the nonconforming use of the property as a boarding house was properly denied. There was evidence that the initial nonconforming use was a nursing home, not a boarding house. The court noted that Supreme Court, which affirmed on different grounds, should not have substituted its own judgment for that of the board. The court further explained the criteria for allowing nonconforming use of property:

Supreme Court, apparently rejecting the ZBA’s conclusion that the property was a nursing home at the time that the zoning law was enacted in 1963, independently determined that the property was used as a boarding house in 1963, but that its current use as a boarding house was nonetheless a nonconforming use because its “ownership, occupancy and usage . . . [was] far removed from what it was in 1963.” This was improper. A reviewing court cannot, as the court did here, “search the record for a rational basis to support [an administrative agency’s] determination, substitute its judgment for that of the [agency] or affirm the underlying determination upon a ground not invoked . . . in the first instance” … . …

In recognition of the “undue financial hardship that immediate elimination of nonconforming uses would cause to property owners,” nonconforming uses that predate the enactment of a zoning ordinance are constitutionally protected and will grudgingly be permitted to continue notwithstanding the contrary law of the ordinance … . However, “[t]he law . . . generally views nonconforming uses as detrimental to a zoning scheme, and the overriding public policy of zoning in New York State and elsewhere is aimed at their reasonable restriction and eventual elimination” … . A preexisting nonconforming use is “closely restricted” such that it cannot be restored after substantial damage or conversion to a different nonconforming use and may be deemed abandoned following substantial discontinuation … . Matter of Tri-Serendipity, LLC v City of Kingston, 2016 NY Slip Op 08292, 3rd Dept 12-8-16

 

ZONING (SUPREME COURT CANNOT SUBSTITUTE ITS OWN JUDGMENT FOR THAT OF THE ZONING BOARD, EVEN IN AFFIRMING THE BOARD’S DETERMINATION, CRITERIA FOR ALLOWING THE CONTINUATION OF A NONCONFORMING USE EXPLAINED)/NONCONFORMING USE (ZNONING, SUPREME COURT CANNOT SUBSTITUTE ITS OWN JUDGMENT FOR THAT OF THE ZONING BOARD, EVEN IN AFFIRMING THE BOARD’S DETERMINATION, CRITERIA FOR ALLOWING THE CONTINUATION OF A NONCONFORMING USE EXPLAINED)

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DEPOSITION OF TOWN ASSESSOR PROPERLY ALLOWED IN THIS SELECTIVE REASSESSMENT PROCEEDING.

The Third Department, affirming Supreme Court, determined the deposition of the town tax assessor was properly allowed in this proceeding challenging a tax assessment of a golf course as “selective reassessment:”

“A property owner may challenge an assessment pursuant to RPTL article 7 on several grounds, including that the assessment is excessive, unequal or unlawful” … . Furthermore, “[i]t is well settled that a system of selective reassessment that has no rational basis in law violates the equal protection provisions of the constitutions of the United States and the State of New York” … .

“[D]iscovery in a RPTL article 7 proceeding is governed by CPLR 408, pursuant to which trial courts have broad discretion in directing the disclosure of material and necessary information” … . The trial court’s decision to compel discovery is accorded deference on appeal and should not be disturbed absent an abuse of discretion as a matter of law … . Additionally, to obtain discovery, a party must submit an affirmation showing “a good faith effort to resolve the issues raised by the [discovery] motion” or indicating “good cause” why no communications occurred between the parties in this regard (22 NYCRR 202.7 [a] [2]; [c]…). Matter of City of Troy v Assessor of The Town of Brunswick, 2016 NY Slip Op 08280, 3rd Dept 12-8-16

REAL PROPERTY TAX LAW (DEPOSITION OF TOWN ASSESSOR PROPERLY ALLOWED IN THIS SELECTIVE REASSESSMENT PROCEEDING)/CIVIL PROCEDURE (REAL PROPERTY TAX LAW, DEPOSITION OF TOWN ASSESSOR PROPERLY ALLOWED IN THIS SELECTIVE REASSESSMENT PROCEEDING)

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DEFENDANTS’ ERRONEOUSLY DESCRIBED EASEMENT PROPERLY RELOCATED BY PLAINTIFF.

The Third Department affirmed Supreme Court’s determination that defendants had an easement over plaintiff’s land and, because the description of the easement erroneously placed it on another’s land, the easement was properly relocated by plaintiff:

“[I]n the absence of a claim for reformation, courts may as a matter of interpretation” transpose, reject or supply words in a contract or conveyance in order to effectuate the intent of the agreement if “some absurdity has been identified or the contract would otherwise be unenforceable either in whole or in part” … . Supreme Court did so here because the use of the metes and bounds description in the 1988 conveyance would have led to the absurd result of a right-of-way being granted over property that the grantor did not own, and preserved the stated intent of creating a right-of-way “for the purpose of ingress and egress” by jettisoning the defective description … . …

Defendants accordingly have a right-of-way over plaintiff’s property but, inasmuch as it lacks a specific metes and bounds description or other expression to the contrary, plaintiff is free to unilaterally relocate it “so long as the change does not frustrate the parties’ intent or object in creating the right of way, does not increase the burden on the easement holder, and does not significantly lessen the utility of the right of way”… . Anzalone v Costantino, 2016 NY Slip Op 08277, 3rd Dept 12-8-16

 

REAL PROPERTY (DEFENDANTS’ ERRONEOUSLY DESCRIBED EASEMENT PROPERLY RELOCATED BY PLAINTIFF)/EASEMENTS (DEFENDANTS’ ERRONEOUSLY DESCRIBED EASEMENT PROPERLY RELOCATED BY PLAINTIFF)

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