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FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT.

In another lawsuit stemming from the collapse of mortgage-backed securities, the First Department determined fraud causes of action by Aozora Bank against Deutsche Bank were properly dismissed as untimely. Investigations, including a Congressional investigation, into the relevant actions of Deutsche Bank were well-known more than two years before the suit was brought:

The parties do not dispute that plaintiff's fraud causes of action were not timely under New York's six-year limitations period and, to be timely, must have been commenced within two years from the time plaintiff discovered the fraud, or with reasonable diligence could have discovered it (CPLR 213[8]). * * *

… [O]ne of the most significant sources of public information putting plaintiff on notice of its fraud claims is the Senate Report and its associated emails, which actually form the centerpiece of plaintiff's complaint. In fact, the Senate Report contains a 45-page section on Deutsche Bank entitled “Running the CDO Machine: Case Study of Deutsche Bank.” Taken with all the other information available in the public domain, the Senate Report is more than sufficient to have placed Aozora on inquiry notice of possible fraud by April 2011 at the latest … . Aozora Bank, Ltd. v Deutsche Bank Sec. Inc., 2016 NY Slip Op 02511, 1st Dept 3-31-16

FRAUD (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)/SECURITIES (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)/MORTGAGE-BACKED SECURITIES (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)/CIVIL PROCEDURE (FRAUD CAUSES OF ACTION AGAINST DEUTSCHE BANK STEMMING FROM THE COLLAPSE OF MORTGAGE-BACKED SECURITIES DISMISSED AS UNTIMELY, ACCUSATIONS AGAINST DEUTSCHE BANK WERE WELL-KNOWN MORE THAN TWO YEARS BEFORE THE SUIT WAS BROUGHT)

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ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT.

The Third Department, reversing Supreme Court, determined the lawsuit against the employer, Ross, by three former employees should have been dismissed. The allegations made by the three employees were not sufficient to make out a prima facie case of a hostile work environment due to sexual harassment:

While Ross' alleged conduct was certainly offensive and grossly unprofessional, those aspects of it that were sexually harassing were not severe or pervasive enough to render any plaintiff's work environment objectively hostile and abusive as these terms are construed under the Human Rights Law.

In order to establish the existence of a sexually hostile work environment, an individual plaintiff must show that his or her workplace was “'permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of [his or her] employment and create an abusive working environment'” … . All of the circumstances must be considered, including “the frequency of the discriminatory conduct; its severity; whether it [was] physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interfere[d] with [the plaintiff's] work performance” … . Moreover, the workplace must be both subjectively and objectively hostile. That is, a plaintiff must not only perceive that the conditions of his or her employment were altered because of discriminatory conduct, but the conduct also must have created an environment that a reasonable person would find to be hostile or abusive … . Pawson v Ross, 2016 NY Slip Op 02502, 3rd Dept 3-31-16

EMPLOYMENT LAW (ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)/HUMAN RIGHTS LAW (ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)/HOSTILE WORK ENVIRONMENT (ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)/SEXUAL HARASSMENT (EMPLOYMENT LAW, ALLEGATIONS BY THREE FORMER EMPLOYEES DID NOT MAKE OUT A PRIMA FACIE CASE OF A HOSTILE WORK ENVIRONMENT DUE TO SEXUAL HARASSMENT)

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TRIAL JUDGE GAVE TOO MUCH ADVICE TO THE PROSECUTOR ON THE ADMISSION AND USE OF EVIDENCE, NEW TRIAL ORDERED.

The Third Department reversed defendant's conviction because the trial judge gave excessive procedural advice to the prosecutor (ADA). During several sidebars, the judge explained to the ADA how to lay a proper foundation for the admission of evidence and how to use evidence to refresh a witness's recollection. The judge's well-intentioned assistance was deemed to have created the perception the prosecution received a tactical advantage:

During the course of the trial, the ADA in question demonstrated difficulty in laying the proper foundation for the admission into evidence of certain photographs and bank records and in utilizing a particular document to refresh a witness's recollection. In response, County Court conducted various sidebars, during the course of which the court, among other things, explained the nature of defense counsel's objections, outlined the questions that the ADA needed to ask of the testifying witnesses, referred the ADA to a certain evidentiary treatise and afforded him a recess in order to consult and review the appropriate section thereof. Without further belaboring the point, suffice it to say that our review of the record confirms what County Court itself acknowledged — namely, that in attempting to “explain[] some of the law” and in an effort to avoid portraying defense counsel as “obstructionist,” it “explained one thing too many, in all fairness.” As County Court's assistance in this regard — although well-intentioned — arguably created the perception that the People were receiving an unfair tactical advantage, we are persuaded that this matter should be remitted for a new trial … . People v Kocsis, 2016 NY Slip Op 02480, 3rd Dept 3-31-16

CRIMINAL LAW (TRIAL JUDGE GAVE TOO MUCH ADVICE TO THE PROSECUTOR ON THE ADMISSION AND USE OF EVIDENCE, NEW TRIAL ORDERED)/JUDGES (CRIMINAL LAW, TRIAL JUDGE GAVE TOO MUCH ADVICE TO THE PROSECUTOR ON THE ADMISSION AND USE OF EVIDENCE, NEW TRIAL ORDERED)

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DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED.

The First Department determined a derivative suit against the board of directors of JP Morgan Chase stemming from subprime mortgage-backed securities was properly dismissed for failure to demonstrate the futility of a presuit demand upon the board. The decision includes particularly clear explanations of what must be alleged to sufficiently demonstrate futility under Delaware law pursuant to the “Aronson” and “Rales” tests. With regard to one of the two “Aronson” tests, the court wrote:

Plaintiffs contend that the board's action, including the adoption of the January 2007 resolution delegating authority to a management committee, was not a valid exercise of business judgment. However, this factual assertion examines the board's course of action in hindsight and hinges on certain warning signs that plaintiff alleges the board failed to heed, including some losses that reverted back to JPMorgan's balance sheet by September 2008. Delaware law presumes that in making a business decision the board of directors acts in good faith and in the honest belief that the action is taken in the best interests of the company … . In order to satisfy the second prong of the Aronson test, plaintiffs are required to plead particularized facts sufficient to raise a reason to doubt that [1] the action was taken honestly and in good faith or [2] the board was adequately informed in making the decision … . These facts do not rebut the presumption of regularity of the board's decision making process … . Although risky, the conduct plaintiff challenges, the board's authorization of the securitization and sale of investments, involves “legal business decisions that were firmly within management's judgment to pursue” … . The fact that investors later sued or made repurchase demands does not raise a reasonable doubt that the decision to engage in such transactions was not a valid exercise of business judgment … . Asbestos Workers Phila. Pension Fund v Bell, 2016 NY Slip Op 02510, 1st Dept 3-31-16

CORPORATION LAW (DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED)/MORTGAGE-BACKED SECURITIES (DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED)/SHAREHOLDERS' DERIVATIVE ACTION (DERIVATIVE SUIT AGAINST JP MORGAN CHASE STEMMING FROM SUBPRIME MORTGAGE-BACKED SECURITIES DISMISSED)

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LIABILITY UNDER CONTRACT CAN ARISE IN THE ABSENCE OF PRIVITY WHERE A PARTY IS A JOINT VENTURER OR PARTNER WITH A SIGNATORY TO THE CONTRACT.

The Third Department, reversing Supreme Court, determined there was a question of fact whether defendant Rock Solid was in a joint venture with defendant Catamount at the time Catamount entered a contract with plaintiffs. Plaintiffs sought specific performance of the contract. Supreme Court had dismissed the action against Rock Solid finding that Rock Solid was not in privity of contract with plaintiffs. However, because plaintiffs alleged Rock Solid and Catamount were joint venturers, and because Rock Solid did not address that issue in its motion for summary judgment, the motion should not have been granted:

Liability under a contract can arise in the absence of privity where it is established that the defendant is in a joint venture or partnership with a signatory to the contract (see Partnership Law § 28…). “A joint venture is an association of two or more persons to carry out a single business enterprise for profit, for which purpose they combine their property, money, effects, skill and knowledge” … . “The essential elements of a joint venture are an agreement manifesting the intent of the parties to be associated as joint venturers, a contribution by the coventurers to the joint undertaking (i.e., a combination of property, financial resources, effort, skill or knowledge), some degree of joint proprietorship and control over the enterprise; and a provision for the sharing of profits and losses” … .

Here, Supreme Court concluded that Rock Solid established its prima facie entitlement to summary judgment as a matter of law by demonstrating that it was not a party to the 2005 agreement … . … [T]he court failed to address whether Rock Solid satisfied its additional burden to refute plaintiffs' assertions in the complaint that Rock Solid was Catamount's joint venturer or partner. Alper Rest., Inc. v Catamount Dev. Corp., 2016 NY Slip Op 02509, 3rd Dept 3-31-16

CONTRACT LAW (LIABILITY UNDER CONTRACT CAN ARISE IN THE ABSENCE OF PRIVITY WHERE A PARTY IS A JOINT VENTURER OR PARTNER WITH A SIGNATORY TO THE CONTRACT)/JOINT VENTURES (LIABILITY UNDER CONTRACT CAN ARISE IN THE ABSENCE OF PRIVITY WHERE A PARTY IS A JOINT VENTURER OR PARTNER WITH A SIGNATORY TO THE CONTRACT)

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FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS’ CONSTRUCTION OF A TALLER NEIGHBORING BUILDING.

The First Department, in a full-fledged opinion by Justice Tom, determined defendants' failure to give notice to plaintiff of their intent to increase the height of a neighboring building did not toll the statute of limitations. The suit concerned two provisions of the Administrative Code of the City of New York. One provision required notice to neighboring property owners of construction to increase the height of a building. The other required the owner of the newly constructed building to increase the height of the chimneys of surrounding buildings to bring them back into conformance with the Administrative Code. Plaintiff was seeking to recover the cost of modifying its chimney which was rendered noncompliant by defendants' now taller neighboring building. The new construction was completed in 2007. The court held defendants' failure to notify plaintiff of the new construction did not excuse plaintiff's failure to bring an action within three years of the completion of the new construction:

Pursuant to the statutory language, plaintiff's claim accrued when defendants' building (1) was erected; (2) was sited within 100 feet of plaintiff's chimney; and (3) was increased in height so that it exceeded the height of plaintiff's chimney vent. Here, all the factual circumstances required to establish a right of action occurred by January 2007, when the work on the building had been substantially completed. The January 22, 2007 temporary certificate of occupancy (CO), issued by the Department of Buildings (DOB), certified that defendants' building was 20 stories tall and “conform[ed] substantially to the approved plans and specifications[,] and to the requirements of all applicable laws, rules and regulations for the uses and occupancies specified” for the project. The approved condominium offering plan stated that the Arts Tower would consist of a cellar level and 20 additional stories. This documentary evidence is prima facie proof that as of January 20, 2007, the building was erected to a height that was 10 stories taller than plaintiff's chimney, and sited within 100 feet of the chimney, thus triggering the three-year limitations period on plaintiff's claim that defendants failed to comply with Administrative Code § 27-860(a). Moreover, plaintiff concedes that it was aware of the building's height by the time construction was substantially completed in 2007. Accordingly plaintiff's claim accrued on January 20, 2007, and this action, commenced in March 2014, is thus time-barred … . West Chelsea Bldg. LLC v Guttman, 2016 NY Slip Op 02548, 1st Dept 3-31-16

CIVIL PROCEDURE (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)/ADMINSTRATIVE CODE OF THE CITY OF NEW YORK (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)/BUILDING HEIGHT (NYC) (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)/CHIMNEY HEIGHT (NYC) (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)

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BREACH OF PHYSICIAN-PATIENT CONFIDENTIALITY CAUSE OF ACTION ALLOWED TO PROCEED AGAINST HOSPITAL AND TREATING PHYSICIAN, PLAINTIFFS’ DECEDENT’S TREATMENT AND DEATH IN THE EMERGENCY ROOM WERE FILMED WITHOUT CONSENT; ALLEGATIONS OF OUTRAGEOUS CONDUCT NOT SUFFICIENT TO SUPPORT INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS CAUSE OF ACTION.

The Court of Appeals, in a full-fledged opinion by Judge Stein, determined plaintiffs had stated a cause of action against the hospital and treating physician for breach of physician-patient confidentiality. At the time plaintiffs' decedent was admitted to the emergency room, a television crew was filming. Without decedent's consent, his treatment and death were recorded and subsequently aired. Although the breach of confidentiality cause of action was allowed to go forward, the intentional infliction of emotional distress cause of action was not. The allegations were deemed not to meet the requirements of the “extreme and outrageous conduct” element of the tort. With respect to the breach of confidentiality, the court explained:

The elements of a cause of action for breach of physician-patient confidentiality are: (1) the existence of a physician-patient relationship; (2) the physician's acquisition of information relating to the patient's treatment or diagnosis; (3) the disclosure of such confidential information to a person not connected with the patient's medical treatment, in a manner that allows the patient to be identified; (4) lack of consent for that disclosure; and (5) damages … .  Here, the complaint alleges that decedent was a patient at the Hospital and that Schubl was his treating physician. In the complaint's fourth cause of action, decedent's estate alleges “[t]hat defendants[] unnecessarily, recklessly, willfully, maliciously and in conscious disregard of [decedent's] rights disclosed and discussed his medical condition with cast members of [the television crew] and allowed them to videotape said conversations and videotape his medical treatment for broadcast and dissemination to the public in an episode of that television show.” Asserting that the public does not have any legitimate interest in this information, the complaint states that “[d]efendants' disclosure of [decedent's] medical information constitutes a violation of physician[-]patient confidentiality and an invasion of his privacy and is a violation of State and Federal statutes protecting the privacy of medical records and information.” The complaint seeks damages for injuries and loss as determined at trial. Chanko v American Broadcasting Cos. Inc., 2016 NY Slip Op 02478, CtApp 3-31-16

PHYSICIAN-PATIENT CONFIDENTIALITY, BREACH OF BREACH OF (PHYSICIAN-PATIENT CONFIDENTIALITY CAUSE OF ACTION ALLOWED TO PROCEED AGAINST HOSPITAL AND TREATING PHYSICIAN, PLAINTIFFS' DECEDENT'S TREATMENT AND DEATH IN THE EMERGENCY ROOM WERE FILMED WITHOUT CONSENT)/INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS (ALLEGATIONS OF OUTRAGEOUS CONDUCT NOT SUFFICIENT TO SUPPORT INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS CAUSE OF ACTION, PLAINTIFFS' DECEDENT'S MEDICAL TREATMENT AND DEATH WERE FILMED AND AIRED WITHOUT CONSENT)

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OFFICE-BASED SURGERY CENTERS, UNLIKE HOSPITALS AND AMBULATORY SURGERY CENTERS, ARE NOT ENTITLED TO REIMBURSEMENT FOR FACILITY FEES UNDER THE NO-FAULT LAW.

The Court of Appeals, in a full-fledged opinion by Judge Rivera, determined an office-based surgery (OBS) center, unlike hospitals and ambulatory surgery centers (ASC), are not entitled to reimbursement for “facility fees” under the no-fault insurance law and the related regulations. The fees at issue in this case amounted to $1.3 million:

As the statutory language illustrates, the legislature capped total payments for basic economic loss, and delegated the determination of fee rates to the Chair and the Superintendent. Neither administrator has chosen to include OBS facility fees in the regulatory schedules. It is not for this Court to decide, contrary to [the OBS's] contention, whether this is a “good idea” or if it would be better for patients covered by no-fault insurance, and for the efficient management of our health care system, to require reimbursement of OBS facility fees as a means to ensure that OBS facilities continue to be viable options for patients. “These policy determinations are beyond our authority and instead best left for the legislature” … . Government Empls. Ins. Co. v Avanguard Med. Group, PLLC, 2016 NY Slip Op 02473, CtApp 3-31-16

INSURANCE LAW (OFFICE-BASED SURGERY CENTERS, UNLIKE HOSPITALS AND AMBULATORY SURGERY CENTERS, ARE NOT ENTITLED TO REIMBURSEMENT FOR FACILITY FEES UNDER THE NO-FAULT LAW)/NO-FAULT INSURANCE (OFFICE-BASED SURGERY CENTERS, UNLIKE HOSPITALS AND AMBULATORY SURGERY CENTERS, ARE NOT ENTITLED TO REIMBURSEMENT FOR FACILITY FEES UNDER THE NO-FAULT LAW)/OFFICE-BASED SURGERY CENTERS (NO-FAULT INSURANCE, OFFICE-BASED SURGERY CENTERS, UNLIKE HOSPITALS AND AMBULATORY SURGERY CENTERS, ARE NOT ENTITLED TO REIMBURSEMENT FOR FACILITY FEES UNDER THE NO-FAULT LAW)

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FIDUCIARY EXCEPTION TO THE USUAL BURDEN OF PROOF IN A CONSTRUCTIVE FRAUD ACTION DID NOT APPLY, FIDUCIARIES WERE NOT PARTIES TO THE RELEVANT DOCUMENTS AND DID NOT STAND TO BENEFIT FROM THE PROVISIONS OF THE DOCUMENTS.

The Court of Appeals, in a full-fledged opinion by Judge Pigott, over a two-judge dissenting opinion, determined an affirmative defense alleging constructive fraud on the part of attorneys who drafted irrevocable releases of powers of appointment of trust assets was properly dismissed by the Appellate Division. The Benihana Protective Trust (BPT) was formed by Rocky, the founder of the Benihana restaurant chain. The irrevocable releases of powers of appointment allowed disposition of the trust assets only to Rocky's descendants. However, irrespective of the releases, Rocky's will attempted to pass trust assets to his wife. Rocky indicated in a deposition that he would not have signed the releases had he known they would prohibit the disposition of trust assets to his wife. Upon Rocky's death, Rocky's wife sought to have the releases declared invalid under a fiduciary constructive-fraud theory. Rocky's wife argued that the fiduciary exception to the usual constructive fraud proof requirements shifted the burden to the trust beneficiaries to prove the releases were not procured by fraud. Rejecting the applicability of the fiduciary exception, the court affirmed the Appellate Division's grant of summary judgment in favor of the trust beneficiaries:

It is a well-settled rule that “'fraud vitiates all contracts, but as a general thing it is not presumed but must be proved by the party seeking to [be] relieve[d] . . . from an obligation on that ground'” … . However, an exception to that general rule provides that where a fiduciary relationship exists between the parties, the law of constructive fraud will operate to shift the burden to the party seeking to uphold the transaction to demonstrate the absence of fraud … . * * *

[The attorneys who drafted the Releases] were clearly Rocky's fiduciaries. But that is only one part of the equation. The critical inquiry is whether they were either parties to the Releases or stood to directly benefit from their execution, such that the burden shifted to [trust beneficiaries] to demonstrate that the Releases were not procured by fraud.

Here, the only individuals who stood to benefit from Rocky's execution of the Releases were his descendants. [The attorneys] were [not] parties to the Releases [and did not] to directly benefit from their execution … . If anything, the execution of the Releases all but ensured that [the attorneys] would have no interest in, nor would receive any benefit from, the trust assets. Therefore, the Appellate Division correctly determined that, because the fiduciary exception does not apply in this case, the Surrogate had improperly shifted the burden of proof to [the trust beneficiaries] to demonstrate that the Releases were not procured by fraud. Matter of Aoki v Aoki, 2016 NY Slip Op 02474, CtApp 3-31-16

FRAUD (FIDUCIARY EXCEPTION TO THE USUAL BURDEN OF PROOF IN A CONSTRUCTIVE FRAUD ACTION DID NOT APPLY, FIDUCIARIES WERE NOT PARTIES TO THE RELEVANT DOCUMENTS AND DID NOT STAND TO BENEFIT FROM THE PROVISIONS OF THE DOCUMENTS)/ATTORNEYS (FIDUCIARY EXCEPTION TO THE USUAL BURDEN OF PROOF IN A CONSTRUCTIVE FRAUD ACTION DID NOT APPLY, ATTORNEYS WHO DRAFTED THE RELEVANT DOCUMENTS WERE NOT PARTIES AND DID NOT STAND TO BENEFIT FROM THE PROVISIONS OF THE DOCUMENTS)/TRUSTS AND ESTATES  (FIDUCIARY EXCEPTION TO THE USUAL BURDEN OF PROOF IN A CONSTRUCTIVE FRAUD ACTION DID NOT APPLY, ATTORNEYS WHO DRAFTED RELEASES OF POWERS OF APPOINTMENT WERE NOT PARTIES TO THE RELEASES AND DID NOT STAND TO BENEFIT FROM THE RELEASES)/POWERS OF APPOINTMENT  (FIDUCIARY EXCEPTION TO THE USUAL BURDEN OF PROOF IN A CONSTRUCTIVE FRAUD ACTION DID NOT APPLY, ATTORNEYS WHO DRAFTED RELEASES OF POWERS OF APPOINTMENT WERE NOT PARTIES TO THE RELEASES AND DID NOT STAND TO BENEFIT FROM THE RELEASES)

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TOWN’S ISSUANCE OF A POSITIVE DECLARATION WITH THE REQUIREMENT THAT THE LANDOWNER SUBMIT A DRAFT ENVIRONMENTAL IMPACT STATEMENT DID NOT RAISE A JUSTICIABLE CONTROVERY WHICH COULD BE REVIEWED BY A COURT.

The Court of Appeals, in a full-fledged opinion by Judge Rivera, determined the town board's issuing a positive declaration under the State Environmental Quality Review Act (SEQRA) and imposing a DEIS (draft environmental impact statement) requirement on a landowner seeking a nonconforming use did not raise a justiciable controversy.   Although the creation of a DEIS imposes a financial cost on the landowner, it is only the initial step in the SEQRA review process and is not, therefore, ripe for review. The landowner relied on Matter of Gordon v Rush, 100 NY2d 236, to argue review was appropriate. The court explained why Gordon did not apply:

This Court [in Gordon] concluded that the Board's administrative action was ripe for judicial review because the Board's SEQRA declaration imposed an obligation on the petitioners to prepare and submit a DEIS, after they “had already been through the coordinated review process and a negative declaration had been issued by the DEC as lead agency,” and where no apparent further proceedings would remedy the injury caused by the unnecessary and unauthorized expenditures associated with conducting a DEIS … . Thus, Gordon's analysis and its import must be considered in light of the Court's recognition that the administrative action in that case was potentially unauthorized because “the Board may not have had jurisdiction to conduct its own SEQRA review,” given the existence of a prior negative declaration by a facially appropriate lead agency … . Matter of Ranco Sand & Stone Corp. v Vecchio, 2016 NY Slip Op 02477, CtApp 3-31-16

ENVIRONMENTAL LAW (TOWN'S ISSUANCE OF A POSITIVE DECLARATION WITH THE REQUIREMENT THAT THE LANDOWNER SUBMIT A DRAFT ENVIRONMENTAL IMPACT STATEMENT DID NOT RAISE A JUSTICIABLE CONTROVERSY WHICH COULD BE REVIEWED BY A COURT)/LAND USE (TOWN'S ISSUANCE OF A POSITIVE DECLARATION WITH THE REQUIREMENT THAT THE LANDOWNER SUBMIT A DRAFT ENVIRONMENTAL IMPACT STATEMENT DID NOT RAISE A JUSTICIABLE CONTROVERSY WHICH COULD BE REVIEWED BY A COURT)/ADMINISTRATIVE LAW (STATE ENVIRONMENTAL QUALITY REVIEW ACT, TOWN'S ISSUANCE OF A POSITIVE DECLARATION WITH THE REQUIREMENT THAT THE LANDOWNER SUBMIT A DRAFT ENVIRONMENTAL IMPACT STATEMENT DID NOT RAISE A JUSTICIABLE CONTROVERSY WHICH COULD BE REVIEWED BY A COURT)/STATE ENVIRONMENTAL QUALITY REVIEW ACT (SEQRA) (TOWN'S ISSUANCE OF A POSITIVE DECLARATION WITH THE REQUIREMENT THAT THE LANDOWNER SUBMIT A DRAFT ENVIRONMENTAL IMPACT STATEMENT DID NOT RAISE A JUSTICIABLE CONTROVERSY WHICH COULD BE REVIEWED BY A COURT)/ENVIRONMENTAL IMPACT STATEMENT (TOWN'S ISSUANCE OF A POSITIVE DECLARATION WITH THE REQUIREMENT THAT THE LANDOWNER SUBMIT A DRAFT ENVIRONMENTAL IMPACT STATEMENT DID NOT RAISE A JUSTICIABLE CONTROVERSY WHICH COULD BE REVIEWED BY A COURT)

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