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SOPHISTICATED INVESTOR DID NOT STATE A CAUSE OF ACTION FOR FRAUD.

The First Department, in a full-fledged opinion by Justice Gische, recalling and vacating a prior decision and order dated May 31, 2016, determined plaintiff did not state a cause of action for fraud. Plaintiff, a sophisticated investor, procured a majority interest in DuCool, a manufacturer of heating and cooling equipment. The plaintiff, in a share purchase agreement, acknowledged the speculative nature of the investment. And plaintiff was given full access to DuCool’s records prior to the purchase:

Where a cause of action is based in fraud, “the complaint must allege misrepresentation or concealment of a material fact, falsity, scienter on the part of the wrongdoer, justifiable reliance and resulting injury” … . Furthermore, where the plaintiff is a sophisticated party, “if the facts represented are not matters peculiarly within the [defendant’s] knowledge, and the [plaintiff] has the means available to [it] of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation, [the plaintiff] must make use of those means, or [it] will not be heard to complain that [it] was induced to enter into the transaction by misrepresentations” … . Circumstances constituting fraud must be set forth in a complaint in detail (CPLR 3016[b]). MP Cool Invs. Ltd. v Forkosh, 2016 NY Slip Op 05944, 1st Dept 9-1-16

FRAUD (SOPHISTICATED INVESTOR DID NOT STATE A CAUSE OF ACTION FOR FRAUD)/SECURITIES (SOPHISTICATED INVESTOR DID NOT STATE A CAUSE OF ACTION FOR FRAUD)/CORPORATION LAW (SOPHISTICATED INVESTOR DID NOT STATE A CAUSE OF ACTION FOR FRAUD)

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NO PROOF DEFENDANT WAS THE PERSON WITH THE SAME NAME.

The Second Department reversed defendant’s drug conspiracy conviction. Although there was proof a person with defendant’s name was part of the conspiracy, there was no proof defendant was that person:

We find that defendant Mohammed’s conviction was not supported by legally sufficient evidence. In determining whether the jury’s verdict is supported by legally sufficient evidence, the reviewing court must decide “whether there is any valid line of reasoning and permissible inferences which could lead a rational person to the conclusion reached by the jury on the basis of the evidence at trial, and as a matter of law satisfy the proof and burden requirements for every element of the crime charged” … , including the identity of the defendant who committed the crime charged … . While there was sufficient evidence to show that a person by the name of Habiyb Mohammed took part in the conspiracy, the record is devoid of any identification of defendant Mohammed to be that same Habiyb Mohammed. People v Brown, 2016 NY Slip Op 05940, 1st Dept 9-1-16

CRIMINAL LAW (NO PROOF DEFENDANT WAS THE PERSON WITH THE SAME NAME)/EVIDENCE (CRIMINAL LAW, (NO PROOF DEFENDANT WAS THE PERSON WITH THE SAME NAME)

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ALLEGED DEPICTIONS OF PLAINTIFFS IN A VIDEO GAME NOT PROHIBITED BY THE CIVIL RIGHTS LAW.

The Second Department determined the Civil Rights Law did not apply to a video game which was alleged to have been based upon depictions of the plaintiffs Karen Gravano and Lindsay Lohan. The statute prohibits the unauthorized of one’s name, portrait or picture in advertising or trade:

Both Gravano’s and Lohan’s respective causes of action under Civil Rights Law § 51 “must fail because defendants did not use [plaintiffs’] name, portrait, or picture'” … . Despite Gravano’s contention that the video game depicts her, defendants never referred to Gravano by name or used her actual name in the video game, never used Gravano herself as an actor for the video game, and never used a photograph of her … . As to Lohan’s claim that an avatar in the video game is she and that her image is used in various images, defendants also never referred to Lohan by name or used her actual name in the video game, never used Lohan herself as an actor for the video game, and never used a photograph of Lohan … .

Even if we accept plaintiffs’ contentions that the video game depictions are close enough to be considered representations of the respective plaintiffs, plaintiffs’ claims should be dismissed because this video game does not fall under the statutory definitions of “advertising” or “trade” … . Gravano v Take-Two Interactive Software, Inc., 2016 NY Slip Op 05942, 1st Dept 9-1-16

CIVIL RIGHTS LAW (ALLEGED DEPICTIONS OF PLAINTIFFS IN A VIDEO GAME NOT PROHIBITED BY THE CIVIL RIGHTS LAW)/VIDEO GAMES (CIVIL RIGHTS LAW, ALLEGED DEPICTIONS OF PLAINTIFFS IN A VIDEO GAME NOT PROHIBITED BY THE CIVIL RIGHTS LAW)

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JUSTIFIABLE RELIANCE ON PLAINTIFF’S INACTION RE A FORGED DEED NOT DEMONSTRATED, CRITERIA FOR EQUITABLE ESTOPPEL THEREFORE NOT MET.

The Second Department determined defendant was not entitled to summary judgment in a quiet title action under the doctrine of equitable estoppel. Plaintiff alleged a deed which purported to transfer her title to the property was forged. Defendant, citing the delay in plaintiff’s taking action, sought dismissal of the complaint on equitable estoppel grounds. The Second Department determined the “justifiable reliance” element of equitable estoppel had not been demonstrated:

Although [defendant] made a prima facie showing that the plaintiff knew of the allegedly forged deed transferring title from her to Edward Wallace, unjustifiably delayed almost two years in commencing this action from the time she was advised to do so by the Kings County District Attorney’s Office, and intended her delay to be acted upon, and that [defendant] lacked knowledge of the allegedly forged deed and prejudicially changed its position … , [defendant] failed to establish, prima facie, that its reliance upon the plaintiff’s conduct was justified … . Wallace v BSD-M Realty, LLC, 2016 NY Slip Op 05917, 2nd Dept 8-31-16

REAL PROPERTY (JUSTIFIABLE RELIANCE ON PLAINTIFF’S INACTION RE A FORGED DEED NOT DEMONSTRATED, CRITERIA FOR EQUITABLE ESTOPPEL THEREFORE NOT MET)/EQUITABLE ESTOPPEL (JUSTIFIABLE RELIANCE ON PLAINTIFF’S INACTION RE A FORGED DEED NOT DEMONSTRATED, CRITERIA FOR EQUITABLE ESTOPPEL THEREFORE NOT MET)

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LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS.

In finding the out-of-possession landlord was entitled to summary judgment in this slip and fall case, the Second Department noted that the landlord’s reservation of a right to enter the property to inspect and make repairs does not impose a duty to make repairs. The plaintiff alleged she slipped on ice in the workplace parking lot:

Here, the plaintiff alleged that the defendant breached a common-law duty to keep the premises in a reasonably safe condition. The defendant established its prima facie entitlement to judgment as a matter of law by submitting proof that it was an out-of-possession landlord and, thus, had no duty to perform repairs or remove snow and ice from the premises … . In opposition, the plaintiff failed to raise a triable issue of fact as to whether the defendant had a duty to remove snow or ice under statute or regulation, the terms of the lease, or a course of conduct … . A landlord’s reservation of the right to enter property to inspect and make repairs does not in itself give rise to a duty to make repairs … . Keum Ok Han v Kemp, Pin & Ski, LLC, 2016 NY Slip Op 05908, 2nd Dept 8-31-16

NEGLIGENCE (SLIP AND FALL, LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS)/LANDLORD-TENANT (SLIP AND FALL, LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS)/SLIP AND FALL (LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS)

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FACT THAT PLAINTIFF SLIPPED AND FELL ON A MARBLE FLOOR DID NOT ESTABLISH THE CAUSE OF THE FALL, COMPLAINT SHOULD HAVE BEEN DISMISSED.

The Second Department, reversing Supreme Court, determined the slip and fall case should have been dismissed. Although plaintiff alleged she slipped on a marble floor, she did not know the cause of her fall:

The defendants established their prima facie entitlement to judgment as a matter of law by submitting evidence, including a transcript of the plaintiff’s deposition testimony, which demonstrated that the plaintiff was unable to identify the cause of her fall … . Scimone v LT Propco, LLC, 2016 NY Slip Op 05915, 2nd Dept 8-31-16

 

NEGLIGENCE (FACT THAT PLAINTIFF SLIPPED AND FELL ON A MARBLE FLOOR DID NOT ESTABLISH THE CAUSE OF THE FALL, COMPLAINT SHOULD HAVE BEEN DISMISSED)/SLIP AND FALL (FACT THAT PLAINTIFF SLIPPED AND FELL ON A MARBLE FLOOR DID NOT ESTABLISH THE CAUSE OF THE FALL, COMPLAINT SHOULD HAVE BEEN DISMISSED)

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USE OF ROADWAY BY PEDESTRIANS AND BICYCLISTS MAY SUFFICE TO SHOW A ROADWAY, NOT USED BY VEHICLES, HAS NOT BEEN ABANDONED WITHIN THE MEANING OF THE HIGHWAY LAW.

The Second Department, reversing Supreme Court, determined there was a question of whether a roadway had been abandoned under Highway Law 205. The court noted that the lack of use by vehicles does not necessarily render a roadway abandoned. Use by pedestrians and bicyclists may suffice. The plaintiff demonstrated such recreational use. The town raised a question of fact whether the roadway had been abandoned with proof portions of the roadway were impassable:

Once a highway exists, it is presumed to continue until the contrary is demonstrated … . “It will be deemed abandoned, however, if it is not traveled or used as a public highway for six years” … . To show use as a highway, there must be evidence that travel proceeds, in forms reasonably normal, along the lines of an existing street … . Automobile use is not determinative in assessing whether a road has been abandoned … . Indeed, evidence of frequent recreational activity may be sufficient to preclude a finding of abandonment … . Dandomar Co., LLC v Town of Pleasant Val. Town Bd., 2016 NY Slip Op 05905, 2nd Dept 8-31-16

MUNICIPAL LAW (USE OF ROADWAY BY PEDESTRIANS AND BICYCLISTS MAY SUFFICE TO SHOW A ROADWAY, NOT USED BY VEHICLES, HAS NOT BEEN ABANDONED WITHIN THE MEANING OF THE HIGHWAY LAW)/HIGHWAY LAW (USE OF ROADWAY BY PEDESTRIANS AND BICYCLISTS MAY SUFFICE TO SHOW A ROADWAY, NOT USED BY VEHICLES, HAS NOT BEEN ABANDONED WITHIN THE MEANING OF THE HIGHWAY LAW)/ABANDONMENT (HIGHWAY LAW, USE OF ROADWAY BY PEDESTRIANS AND BICYCLISTS MAY SUFFICE TO SHOW A ROADWAY, NOT USED BY VEHICLES, HAS NOT BEEN ABANDONED WITHIN THE MEANING OF THE HIGHWAY LAW)

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BANK’S PROOF OF STANDING DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE.

The Second Department determined the bank’s motion for summary judgment was properly denied because the bank did not submit sufficient proof of possession of the note and mortgage at the time the foreclosure action was commenced. The proof did not meet the requirements of the business records exception to the hearsay rule. That affiant did not attest she was personally familiar with the plaintiff-bank’s record-keeping practices and procedures:

Here, the plaintiff attempted to establish its standing by submitting the affidavit of Angela Frye, Vice President of Loan Documentation for Wells Fargo Bank, N.A. (hereinafter Wells Fargo), the servicer of the defendant’s loan on behalf of the plaintiff. Frye averred, in relevant part, that she “reviewed the books and records regularly maintained by Wells Fargo in the ordinary course of its business as servicer of Defendant’s loan for and on behalf of the Trust,” and that “Wells Fargo’s regularly maintained records reflect that both the original Note … and the Mortgage were physically delivered to the Trust prior to the commencement of this action.” The plaintiff failed to demonstrate that the records relied upon by Frye were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]) because Frye, an employee of Wells Fargo, did not attest that she was personally familiar with the plaintiff’s record-keeping practices and procedures … . Deutsche Bank Natl. Trust Co. v Brewton, 2016 NY Slip Op 05906, 2nd Dept 8-31-16

FORECLOSURE (BANK’S PROOF OF STANDING DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE)/EVIDENCE (FORECLOSURE, BANK’S PROOF OF STANDING DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE)/BUSINESS RECORDS (FORECLOSURE, BANK’S PROOF OF STANDING DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE)

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CONSTRUCTIVE TRUST PROPERLY IMPOSED UPON THE PROCEEDS OF LIFE INSURANCE TO COVER CHILD SUPPORT AND EDUCATION COSTS.

The Second Department determined, where father was ordered to procure life insurance to cover the children’s support and education costs, and where father died without complying with the order, a constructive trust on the proceeds of other life insurance policies was properly imposed in an amount sufficient to cover father’s support and education-expense obligations:

… [T]he Legislature has provided that a court may require a payor spouse to maintain life insurance to prevent that financial injury: “The court may also order a party to purchase, maintain or assign a policy of accident insurance or insurance on the life of either spouse, and to designate in the case of life insurance, either spouse or children of the marriage, or in the case of accident insurance, the insured spouse as irrevocable beneficiaries during a period of time fixed by the court. The obligation to provide such insurance shall cease upon the termination of the spouse’s duty to provide maintenance, child support or a distributive award” (Domestic Relations Law § 236[B][8][a]). The purpose of this provision is not to provide an alternative award of maintenance or child support, but solely to ensure that the spouse or children will receive the economic support for payments that would have been due had the payor spouse survived … . Accordingly, where life insurance is appropriate, it should be set in an amount sufficient to achieve that purpose … . It should not be in an amount that would provide a windfall … . Mayer v Mayer, 2016 NY Slip Op 05911, 2nd Dept 8-31-16

FAMILY LAW (CONSTRUCTIVE TRUST PROPERLY IMPOSED UPON THE PROCEEDS OF LIFE INSURANCE TO COVER CHILD SUPPORT AND EDUCATION COSTS)/INSURANCE LAW (CONSTRUCTIVE TRUST PROPERLY IMPOSED UPON THE PROCEEDS OF LIFE INSURANCE TO COVER CHILD SUPPORT AND EDUCATION COSTS)/CHILD SUPPORT (CONSTRUCTIVE TRUST PROPERLY IMPOSED UPON THE PROCEEDS OF LIFE INSURANCE TO COVER CHILD SUPPORT AND EDUCATION COSTS)/TRUSTS AND ESTATES (CONSTRUCTIVE TRUST PROPERLY IMPOSED UPON THE PROCEEDS OF LIFE INSURANCE TO COVER CHILD SUPPORT AND EDUCATION COSTS)

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UNDER STATE CONSTITUTIONAL STANDARDS, THE WARRANTLESS SEARCH OF A MESSENGER BAG AT THE TIME OF DEFENDANT’S ARREST WAS NOT JUSTIFIED BY EXIGENT CIRCUMSTANCES, CONVICTIONS REVERSED.

The Second Department, reversing defendant’s conviction, determined, under state constitutional standards, the warrantless search of a messenger bag on defendant’s person at the time of his arrest was not justified by exigent circumstances. The court also noted that the prosecutor’s characterizing the defense as “beyond absurd” and comments upon defendant’s pre-arrest silence were improper:

Here, the Supreme Court concluded that the defendant’s messenger bag was lawfully searched incident to his arrest for burglary. However, the proof adduced at the suppression hearing failed to establish the presence of exigent circumstances justifying the warrantless search. Initially, there was insufficient evidence to support a finding of exigent circumstances relating to the safety of the public and the arresting officer … . Although the police officer who testified at the suppression hearing stated that he had responded to the scene after receiving a report of an individual climbing into a building through a rear window, there was no indication that the individual was armed … . Nor did the officer testify as to any circumstances indicating the presence of a weapon … . Furthermore, the police officer did not express any concerns about his own safety, or the safety of the public, and the circumstances of the defendant’s arrest did not serve to establish an objectively reasonable inference of police apprehension. People v Anderson, 2016 NY Slip Op 05927, 2nd Dept 8-31-16

CRIMINAL LAW (UNDER STATE CONSTITUTIONAL STANDARDS, THE WARRANTLESS SEARCH OF A MESSENGER BAG AT THE TIME OF DEFENDANT’S ARREST WAS NOT JUSTIFIED BY EXIGENT CIRCUMSTANCES, CONVICTIONS REVERSED)/EVIDENCE (CRIMINAL LAW, UNDER STATE CONSTITUTIONAL STANDARDS, THE WARRANTLESS SEARCH OF A MESSENGER BAG AT THE TIME OF DEFENDANT’S ARREST WAS NOT JUSTIFIED BY EXIGENT CIRCUMSTANCES, CONVICTIONS REVERSED)/SEARCHES AND SEIZURES (UNDER STATE CONSTITUTIONAL STANDARDS, THE WARRANTLESS SEARCH OF A MESSENGER BAG AT THE TIME OF DEFENDANT’S ARREST WAS NOT JUSTIFIED BY EXIGENT CIRCUMSTANCES, CONVICTIONS REVERSED)/EXIGENT CIRCUMSTANCES (CRIMINAL LAW, UNDER STATE CONSTITUTIONAL STANDARDS, THE WARRANTLESS SEARCH OF A MESSENGER BAG AT THE TIME OF DEFENDANT’S ARREST WAS NOT JUSTIFIED BY EXIGENT CIRCUMSTANCES, CONVICTIONS REVERSED)/ATTORNEYS (CRIMINAL LAW, PROSECUTOR’S INFLAMMATORY REMARKS AND REFERENCE TO DEFENDANT’S PRE-ARREST SILENCE IMPROPER)

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