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SECURITY DEPOSIT CANNOT BE USED BY THE LANDLORD AS AN OFFSET AGAINST UNPAID RENT, BUT CAN BE USED BY THE TENANT TO REDUCE AMOUNT OWED TO THE LANDLORD.

In finding the special referee exceeded the scope of the reference from Supreme Court, the First Department explained the consequences of a landlord’s failure to place a security deposit in a separate account pursuant to General Obligations Law 7-103:

Section 7-103 prohibits landlords from commingling security deposits with their own funds. Violation of the statute gives rise to an action in conversion and the right to immediate return of the funds … . A landlord who violates Section 7-103 of the General Obligations Law cannot use the security as an offset against unpaid rents. This is so because a landlord is considered to be a trustee with respect to those funds deposited as security. To allow the landlord to set off the rent against the deposit would be to treat the deposit as a debt and the landlord as a debtor, the situation the statute was enacted to change … .The same logic does not pertain where a tenant seeks to apply the security deposit to reduce amounts found owing to the landlord.  23 E. 39th St. Mgt. Corp. v 23 E. 39th St. Dev., LLC, 2015 NY Slip Op 09605, 1st Dept 12-29-15

LANDLORD-TENANT (SECURITY DEPOSIT CANNOT BE USED AS OFFSET AGAINST UNPAID RENT)/LANDLORD-TENANT (SECURITY DEPOSIT CAN BE USED TO REDUCE AMOUNT TENANT OWES LANDLORD)/SECURITY DEPOSIT (LANDLORD CANNOT USE AS OFFSET AGAINST UNPAID RENT)/SECURITY DEPOSIT (CAN BE USED TO REDUCE AMOUNT OWED LANDLORD BY TENANT)

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FAILURE TO NAME INDIVIDUAL POLICE OFFICERS, OR JOHN DOE OFFICERS, IN A NOTICE OF CLAIM PRECLUDED SUIT AGAINST THE POLICE OFFICERS SUBSEQUENTLY NAMED IN THE COMPLAINTS.

The First Department affirmed the lower court’s dismissal of an action against the police department and several named individual police officers because the notice of claim named only the New York City Police Department as a defendant and did not name any individual officers or any “john doe” officers. Justice Sweeney explained his reasoning for affirming in a concurring memorandum. Two justices dissented in a memorandum by Justice Manzanet-Daniels. Justice Sweeney argued that the underlying purpose of a notice of claim is to allow the municipality to make a timely investigation into the allegations. By failing to name individual officers, the municipality was not given sufficient notice. The dissent argued that the General Municipal Law does not require the naming (in a notice of claim) of individual employees of a municipality to state a valid claim against employees of a municipality:

Plaintiffs here did not put the City on notice that it would seek to impose liability upon specific employees of the NYPD. Indeed, as the action progressed, more and more police officers were added as individual defendants, the last of which over three years removed from the incident in question, thus rendering a timely investigation into and assessment of the claims impossible. To permit such a result raises questions of fundamental fairness for the individual defendants, since they were not put on notice, even in a generic way by way of “Police Officer John Doe” or similar language, that they were going to become defendants. Moreover, the prejudice accruing to both the municipal and individual defendants from such a delay is obvious, since memories fade over time, records that could have easily been obtained early on may have been archived, lost or discarded, and witnesses may have relocated, just to name a few of the potential obstacles. Delay in investigating and evaluating a claim defeats the purpose of GML § 50-e. Alvarez v City of New York, 2015 NY Slip Op 09601, 1st Dept 12-29-15

MUNICIPAL LAW (NOTICE OF CLAIM, FAILURE TO NAME POLICE OFFICERS OR JOHN DOE OFFICERS PRECLUDED SUIT AGAINST OFFICERS SUBSEQUENTLY NAMED)/NOTICE OF CLAIM (FAILURE TO NAME POLICE OFFICERS OR JOHN DOE OFFICERS PRECLUDED SUIT AGAINST OFFICERS SUBSEQUENTLY NAMED)/POLICE OFFICERS (NOTICE OF CLAIM, FAILURE TO NAME POLICE OFFICERS OR JOHN DOE OFFICERS PRECLUDED SUIT AGAINST OFFICERS SUBSEQUENTLY NAMED)

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PHARMACEUTICALS COURIERS WERE EMPLOYEES.

The Third Department determined couriers for a pharmaceuticals warehouse (SDS) were employees entitled to unemployment insurance benefits:

Here, SDS advertised for couriers and screened interested parties. Couriers are assigned routes by SDS, set up geographically by SDS’s clients, worked an agreed upon set weekly schedule at a pay rate negotiated between the couriers and SDS and were required to either pick the pharmaceuticals up at an SDS warehouse or at the SDS client’s location. SDS would have an on-site coordinator present when pickups were made at the client’s location. Couriers were provided a daily manifest bearing SDS’s name that identifies the stops for their routes. Couriers were required to obtain proof of delivery signatures on the manifests and return a copy of them to SDS. Couriers also provided invoices to SDS in order to get paid and SDS would bill its clients, and couriers were paid whether or not SDS was paid by its clients … . Couriers were required to wear SDS uniforms and were provided badges identifying themselves as being contracted through SDS. SDS also provided scanners to couriers to be used in order to electronically track their pickups and deliveries. Matter of Gill (Strategic Delivery Solutions LLC–Commissioner of Labor), 2015 NY Slip Op 09576, 3rd Dept 12-24-15

UNEMPLOYMENT INSURANCE (PHARMACEUTICALS COURIERS WERE EMPLOYEES)

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ALTHOUGH THERE WAS A STORM IN PROGRESS WHEN PLAINTIFF FELL, PLAINTIFFS RAISED A QUESTION OF FACT WHETHER PREEXISTING SNOW AND ICE WAS THE CAUSE OF THE FALL.

The Second Department determined the defendant met his burden of demonstrating a storm was in progress when plaintiff slipped and fell, but plaintiff then raised a question of fact whether snow and ice which was there prior to the storm was the cause of the fall:

The evidence submitted by the defendant in support of its motion for summary judgment, including certified climatological data, a report from the plaintiffs’ own expert meteorologist, and the transcripts of the deposition testimony of the parties, demonstrated, prima facie, that a storm was in progress at the time of the subject accident … . The plaintiffs do not contend otherwise.

Accordingly, the burden shifted to the plaintiffs to raise a triable issue of fact as to whether the injured plaintiff’s fall was caused by something other than precipitation from the storm in progress … . In order to do so, the plaintiffs were “required to raise a triable issue of fact as to whether the accident was caused by a slippery condition at the location where the [injured] plaintiff fell that existed prior to the storm, as opposed to precipitation from the storm in progress, and that the defendant had actual or constructive notice of the preexisting condition” … . The plaintiffs raised a triable issue of fact in this regard. The evidence relied upon by the plaintiffs in opposition to the defendant’s motion, which included the report of their expert meteorologist, certified climatological data, and the affidavits of the injured plaintiff and two nonparty witnesses, raised a triable issue of fact as to whether the injured plaintiff slipped and fell on old snow and ice that was the product of a prior storm, as opposed to precipitation from the storm in progress, and as to whether the defendant had constructive notice of the preexisting condition… . Burniston v Ranric Enters. Corp., 2015 NY Slip Op 09395, 2nd Dept 12-23-15

NEGLIGENCE (DESPITE STORM IN PROGRESS, QUESTION OF FACT RAISED WHETHER PREEXISTING ICE AND SNOW WAS THE CAUSE OF THE FALL)/SLIP AND FALL (DESPITE STORM IN PROGRESS, QUESTION OF FACT RAISED WHETHER PREEXISTING ICE AND SNOW WAS THE CAUSE OF THE FALL)/STORM IN PROGRESS (QUESTION OF FACT WHETHER PREEXISTING ICE AND SNOW WAS CAUSE OF FALL)

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QUESTION OF FACT WHETHER DOCTRINE OF EQUITABLE ESTOPPEL PRECLUDED STATUTE OF LIMITATIONS DEFENSE, CRITERIA EXPLAINED.

The Second Department determined plaintiff raised a question of fact whether the doctrine of equitable estoppel precluded defendants’ statute of limitations defense. The court explained the criteria:

The doctrine of equitable estoppel will preclude a defendant from asserting the statute of limitations as a defense ” where it is the defendant’s affirmative wrongdoing . . . which produced the long delay between the accrual of the cause of action and the institution of the legal proceeding'” … . A plaintiff seeking to invoke the doctrine of equitable estoppel must “establish that subsequent and specific actions by defendants somehow kept [the plaintiff] from timely bringing suit” … . “Equitable estoppel is appropriate where the plaintiff is prevented from filing an action within the applicable statute of limitations due to his or her reasonable reliance on deception, fraud or misrepresentations by the defendant” … . Where the defendant has a fiduciary duty to the plaintiff, the doctrine of equitable estoppel may be invoked based on the defendant’s failure to disclose facts underlying the claim … . North Coast Outfitters, Ltd. v Darling, 2015 NY Slip Op 09409, 2nd Dept 12-23-15

CIVIL PROCEDURE (EQUITABLE ESTOPPEL DOCTRINE EXPLAINED)/EQUITABLE ESTOPPEL (CRITERIA EXPLAINED)

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NAMING THE PRESIDENT OF AN UNINCORPORATED ASSOCIATION AS A DEFENDANT PROPERLY JOINED THE ASSOCIATION.

The Second Department determined an association was properly sued by naming the president as a defendant. An unincorporated association cannot sue or be sued solely in the association name:

An unincorporated association such as the Condominium has “no legal existence separate and apart from its individual members” (Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C1025:2 at 341). “Unlike a partnership, an unincorporated association may not sue or be sued solely in the association name” … . General Associations Law § 13 provides:

“An action or special proceeding may be maintained, against the president or treasurer of such an association, to recover any property, or upon any cause of action, for or upon which the plaintiff may maintain such an action or special proceeding, against all the associates, by reason of their interest or ownership, or claim of ownership therein, either jointly or in common, or their liability therefor, either jointly or severally.”

Thus, by commencing the action against Fogarty, as president of the Condominium, the plaintiffs joined the Condominium … . Pascual v Rustic Woods Homeowners Assn., Inc., 2015 NY Slip Op 09415, 2nd Dept 12-23-15

CIVIL PROCEDURE (UNINCORPORATED ASSOCIATION PROPERLY JOINED BY NAMING PRESIDENT AS DEFENDANT)/ASSOCIATIONS (UNINCORPORATED ASSOCIATION PROPERLY JOINED BY NAMING PRESIDENT AS DEFENDANT)

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JUDGE’S IMPROPER COMMENTS CONCERNING PLAINTIFF’S EXPERT WARRANTED A NEW TRIAL ON DAMAGES.

In finding a motion to set aside the verdict in a personal injury case should have been granted, the Second Department determined the plaintiff was entitled to a new trial on damages (in part) because of the improper comments made by the judge. The judge cast doubt on the plaintiff’s expert’s testimony:

A motion pursuant to CPLR 4404(a) to set aside a verdict and for a new trial in the interest of justice may be granted where improper comments by the trial court deprive a party of a fair trial … . “[L]itigants are entitled, as a matter of law, to a fair trial free from improper comments by counsel or the trial court” … . A trial court “has broad authority to control the courtroom, rule on the admission of evidence, elicit and clarify testimony, expedite the proceedings and to admonish counsel and witnesses when necessary” … . Nevertheless, “[a] trial judge should at all times maintain an impartial attitude and exercise a high degree of patience and forebearance. A trial judge may not so far inject himself [or herself] into the proceedings that the jury could not review the case in the calm and untrammeled spirit necessary to effect justice” … .

Here, at the trial on the issue of damages, the plaintiff presented the expert testimony of an orthopedic surgeon who examined the injured plaintiff. Before that examining physician testified, the trial court directed plaintiffs’ counsel to ask questions in hypothetical form as to the physician’s opinion regarding prognosis and the need for future medical care, and during the physician’s direct testimony, defense counsel made a number of objections to those questions. In responding to those objections, the trial court gratuitously and repeatedly emphasized that the physician was an examining rather than treating physician and that he was only “assuming” that the injured plaintiff would need future medical care that was causally related to the accident. The record reflects that, with these repeated comments, “[t]he court conveyed an impression of incredulity” toward the physician’s opinions … . The cumulative effect of the court’s comments deprived the plaintiffs of a fair trial on the issue of damages … . Ioffe v Seruya, 2015 NY Slip Op 09407, 2nd Dept 12-23-15

CIVIL PROCEDURE (MOTION TO SET ASIDE VERDICT SHOULD HAVE BEEN GRANTED BASED ON JUDGE’S IMPROPER COMMENTS)/MOTION TO SET ASIDE VERDICT (JUDGE’S IMPROPER COMMENTS)/JUDGES (IMPROPER COMMENTS WARRANTED SETTING ASIDE DAMAGES VERDICT)

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53-MONTH PRE-INDICTMENT DELAY DID NOT DENY DEFENDANT DUE PROCESS.

The Fourth Department determined a 53-month delay between the incident and indictment did not constitute a denial of due process. Defendant was charged with burglary, robbery and criminal possession of a weapon. He was convicted of criminal possession of a weapon. The court explained the analytical criteria re: speedy trial/due process and went through the facts in support of each of the criteria:

“A defendant’s right to a speedy trial is guaranteed by both the Constitution … and by statute … . A defendant may also challenge, on due process grounds, preindictment delay …, and “the factors utilized to determine if a defendant’s rights have been abridged are the same whether the right asserted is a speedy trial right or the due process right to prompt prosecution” … . The inquiry involves weighing the factors enunciated in Taranovich: “(1) the extent of the delay; (2) the reason for the delay; (3) the nature of the underlying charge; (4) whether or not there has been an extended period of pretrial incarceration; and (5) whether or not there is any indication that the defense has been impaired by reason of the delay” (Taranovich, 37 NY2d at 445…). “Generally when there has been a protracted delay, certainly over a period of years, the burden is on the prosecution to establish good cause” … . People v Johnson, 2015 NY Slip Op 09449, 4th Dept 12-23-15

CRIMINAL LAW (53-MONTH PRE-INDICTMENT DELAY DID NOT DENY DEFENDANT DUE PROCESS)/SPEEDY TRIAL (53-MONTH PRE-INDICTMENT DELAY DID NOT DENY DEFENDANT DUE PROCESS)/PRE-INDICTMENT DELAY (53-MONTH DELAY DID NOT DENY DEFENDANT DUE PROCESS)

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PRINCIPAL OFFICE OF A FOREIGN LIMITED LIABILITY COMPANY, AS LISTED ON THE DEPARTMENT OF STATE APPLICATION FOR AUTHORITY TO CONDUCT BUSINESS, IS THE CONTROLLING LOCATION FOR VENUE PURPOSES.

The Second Department, reversing Supreme Court, determined that appellant’s motion for a change of venue should have been granted. Appellants demonstrated that the foreign limited liability company’s application for authority to conduct business in New York listed a principal office in New York County. Plaintiff brought the action in Queens County, alleging appellant’s principal place of business is in Queens County.  The principal office in New York County, pursuant to Limited Liability Company Law 102[s], was the controlling location for venue purposes:

Pursuant to CPLR 503(a), the venue of an action is properly placed in the county in which any of the parties resided at the time of commencement … . In support of their motion, the appellants established that QPS was a resident of New York County at the time of commencement by producing a certified copy of QPS’s application for authority to conduct business filed with the New York State Department of State, which listed New York as the county in which its principal office was located … . The plaintiff did not dispute the fact that the application for authority designated New York County as the location of QPS’s principal office, but claimed that QPS is a resident of Queens County because that is the location of its principal place of business. However, the sole residence of a foreign corporation or a foreign limited liability company for venue purposes is the county where its principal office is located as designated in its application for authority to conduct business filed with the New York State Department of State, regardless of where it transacts business or maintains its actual principal office or facility (see CPLR 503[c]…). Such office need not be a place where business activities are conducted by the limited liability company … . Carlton Group, Ltd. v Property Mkts. Group, Inc., 2015 NY Slip Op 09423, 2nd Dept 12-23-15

CIVIL PROCEDURE (VENUE, PRINCIPAL OFFICE ON DEPARTMENT OF STATE APPLICATION IS THE CONTROLLING LOCATION OF A FOREIGN LIMITED LIABILITY COMPANY FOR VENUE PURPOSES)/VENUE (FOREIGN LIMITED LIABILITY COMPANY, LOCATION OF PRINCIPAL OFFICE AS LISTED ON DEPARTMENT OF STATE APPLICATION)/LIMITED LIABILITY COMPANY, FOREIGN (FOR VENUE PURPOSES, LOCATION OF PRINCIPAL OFFICE AS LISTED ON DEPARTMENT OF STATE APPLICATION IS CONTROLLING LOCATION)

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ANALYTICAL CRITERIA FOR MOTION TO DISMISS FOR FAILURE TO STATE A CAUSE OF ACTION, WHERE DEFENDANT SUBMITS EVIDENCE, CLEARLY EXPLAINED; PLAINTIFF IS NOT PENALIZED FOR NOT SUBMITTING EVIDENCE IN OPPOSITION; BURDEN NEVER SHIFTS TO PLAINTIFF.

The Second Department determined the complaint stated a cause of action for specific performance of a real estate contract. The court offered a clear explanation of the analytical criteria to be used when defendant submits evidence in support of a motion to dismiss for failure to state a cause of action. Here, the fact that plaintiff submitted no evidence in opposition was of no consequence. The evidence submitted by defendant was not sufficient to demonstrate, as a matter of law, the complaint did not state a cause of action:

In considering a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), “the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” … . “Whether a plaintiff can ultimately establish its allegations is not part of the calculus” … .

“A court is . . . permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7)” … . However, “on a motion made pursuant to CPLR 3211(a)(7), the burden never shifts to the nonmoving party to rebut a defense asserted by the moving party” …, and a plaintiff “will not be penalized because he [or she] has not made an evidentiary showing in support of his [or her] complaint” … . When evidentiary material is considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion has not been converted to one for summary judgment, “the criterion is whether the [plaintiff] has a cause of action, not whether he [or she] has stated one, and, unless it has been shown that a material fact as claimed by the [plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it . . . dismissal should not eventuate” … .

Contrary to the defendant’s contention, the complaint adequately alleged a cause of action for specific performance of a contract for the sale of real property. E & D Group, LLC v Vialet, 2015 NY Slip Op 09400, 2nd Dept 12-23-15

CIVIL PROCEDURE (MOTION TO DISMISS FOR FAILURE TO STATE A CAUSE OF ACTION, BURDEN NEVER SHIFTS TO PLAINTIFF EVEN IF DEFENDANT SUBMITS EVIDENCE)/MOTION TO DISMISS FOR FAILURE TO STATE A CAUSE OF ACTION (BURDEN NEVER SHIFTS TO PLAINTIFF EVEN IF DEFENDANT SUBMITS EVIDENCE)

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