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Town Board’s “Adverse Effects” Findings Annulled as Inconsistent with Final Environmental Impact Statement (FEIS)

The Second Department determined Supreme Court properly annulled the town board’s findings that a project would have adverse environmental effects because the board’s findings were not consistent with the Final Environmental Impact Statement (FEIS). The court explained the board’s obligations and the courts’ review powers in this context:

Judicial review of an agency determination under SEQRA [State Environmental Quality Review Act] is limited to whether the agency procedures were lawful and “whether the agency identified the relevant areas of environmental concern, took a hard look’ at them, and made a reasoned elaboration’ of the basis for its determination” … . “In a statutory scheme whose purpose is that the agency decision-makers focus attention on environmental concerns, it is not the role of the courts to weigh the desirability of any action or choose among alternatives, but to assure that the agency itself has satisfied SEQRA, procedurally and substantively” … . The agency decision should be annulled only if it is arbitrary, capricious, or unsupported by the evidence … .

“The purpose of an environmental impact statement is to provide detailed information about the effect which a proposed action is likely to have on the environment, to list ways in which any adverse effects of such an action might be minimized, and to suggest alternatives to such an action so as to form the basis for a decision whether or not to undertake or approve such action” (ECL 8-0109[2]). In a findings statement, the lead agency “considers the relevant environmental impacts presented in an EIS, weighs and balances them with social, economic and other essential considerations, provides a rationale for the agency’s decision and certifies that the SEQRA requirements have been met” (6 NYCRR 617.2[p]…). Agencies have considerable latitude in evaluating environmental effects and choosing between alternatives … .

While an agency’s ultimate conclusion is within the discretion of the agency, it must be based upon factual evidence in the record and not generalized, speculative community objections … . “While an EIS does not require a public agency to act in any particular manner, it constitutes evidence which must be considered by the public agency along with other evidence which may be presented to such agency” … .

Here, the Supreme Court properly annulled the Board’s findings statement as unsupported by the evidence. The Board was required to render its conclusions regarding the sufficiency of mitigation measures, the propriety of permit approvals, and a balancing of considerations, based on the evidence contained in the environmental review. The Board’s conclusions in the findings statement were based, at least in part, on factual findings which were contradicted by the scientific and technical analyses included in the FEIS and not otherwise supported by empirical evidence in the record … .

The findings statement also failed to give sufficient consideration to the various alternative plans reviewed in the FEIS … . Matter of Falcon Group Ltd. Liab. Co. v Town/Village of Harrison Planning Bd., 2015 NY Slip Op 07025, 2nd Dept 9-30-15

 

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Pleading Requirements for “Fraud” and “Aiding and Abetting Fraud” Causes of Action Succinctly Described

The Second Department, in affirming the denial of a motion to dismiss “fraud” and “aiding and abetting fraud” causes of action, explained the elements which must be alleged in the complaint:

To state a cause of action sounding in fraud, a plaintiff must allege that “(1) the defendant made a representation or a material omission of fact which was false and the defendant knew to be false, (2) the misrepresentation was made for the purpose of inducing the plaintiff to rely upon it, (3) there was justifiable reliance on the misrepresentation or material omission, and (4) injury” … . To plead a cause of action to recover damages for aiding and abetting fraud, the complaint “must allege the existence of [the] underlying fraud, knowledge of the fraud by the aider and abettor, and substantial assistance by the aider and abettor in the achievement of the fraud”. Moreover, pursuant to CPLR 3016(b), where a cause of action is based upon fraud or aiding and abetting fraud, the “circumstances constituting the wrong” must be “stated in detail.” Caravello v One Mgt. Group, LLC, 2015 NY Slip Op 07000, 2nd Dept 9-30-15

 

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Question Whether Loan At Issue Was a “Home Loan” Requiring a Settlement Conference, Hearing Ordered

The Second Department found that a hearing was required to determine whether the loan at issue was a “home loan” such that a settlement conference pursuant to CPLR 3408 was required. The court explained the analytical factors:

“CPLR 3408 does not apply to every residential foreclosure action” … . CPLR 3408 only mandates a settlement conference in a residential foreclosure action involving a “home loan” as that term is defined by RPAPL 1304, and when the “defendant is a resident of the property subject to foreclosure” (see CPLR 3408…).

RPAPL 1304(5)(a)(i)-(iv) defines a qualifying home loan as one in which, inter alia, the borrower is a natural person; the borrower incurs the debt primarily for personal, family, or household purposes; and the loan is secured by a mortgage on real property in this state “used or occupied, or intended to be used or occupied wholly or partly, as the home or [the] residence of one or more persons and which is or will be occupied by the borrower as the borrower’s principal dwelling” … .

Here, the conflicting affidavits submitted by the parties reveal a sharp factual dispute, inter alia, as to whether the subject loan was made for the defendant’s personal, family, or household use, and whether the mortgaged premises was to be occupied as the defendant’s principal dwelling. Richlew Real Estate Venture v Grant, 2015 NY Slip Op 07018, 2nd Dept 9-30-15

 

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Substantial Evidence Did Not Support Department of Health’s Finding that Property Transfers Rendered Petitioner Ineligible for Medicaid Benefits

The Second Department annulled the Department of Health’s (DOH’s) finding that petitioner was ineligible for Medicaid benefits based on transfers of property made well before she exhibited signs of dementia. The court explained the analytical criteria:

In reviewing a Medicaid eligibility determination made after a fair hearing, the court must review the record as a whole to determine if the agency’s decisions are supported by substantial evidence and are not affected by an error of law … . Substantial evidence has been defined as “such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact” … . While the level of proof is less than a preponderance of the evidence, substantial evidence does not arise from bare surmise, conjecture, speculation, or rumor (see id. at 180), or from the absence of evidence supporting a contrary conclusion … . When determining Medicaid eligibility, an agency is required to “look back” for a period of 60 months immediately preceding the first date the applicant was both “institutionalized” and had applied for Medicaid benefits to determine if any asset transfers were uncompensated or made for less than fair market value (42 USC § 1396p[c][1][A], [B]; Social Services Law § 366[5][e][1][vi]). If such a transfer was made during that period, the applicant may become ineligible for Medicaid benefits for a specified period of time (see 42 USC § 1396p[c][1][A], [E]; Social Services Law § 366[5][e][3]), unless there is a “satisfactory showing” that, inter alia, the assets were transferred exclusively for a purpose other than to qualify for medical assistance (42 USC § 1396p[c][2][C][i], [iii]; Social Services Law § 366[5][e][4][iii]). It is the petitioner’s burden to rebut the presumption that the transfer of funds was motivated, in part if not in whole, by anticipation of a future need to qualify for medical assistance … .

Here, the evidence at the fair hearing showed that the latest of the subject transfers was made approximately two years before the petitioner started to exhibit signs of dementia. At the time of the transfers and in the years preceding her need for nursing home care, the petitioner was in good health and living independently. She was driving, cooking, exercising, and paying her own bills. The transfers themselves constituted gifts to her relatives, and the petitioner still had more than $250,000, not including Social Security benefits, following the transfers. Under these circumstances, the petitioner met her burden of rebutting the presumption that the subject transfers were motivated by the anticipation of a future need to qualify for medical assistance … . Matter of Sandoval v Shah, 2015 NY Slip Op 07034, 2nd Dept 9-30-15

 

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Forum Selection Clause in a “Release of Liability” Form Is Enforceable

The Second Department determined the forum selection clause in an “Equipment Rental Form and Release of Liability” signed by plaintiff prior to taking snowboarding lessons at defendant ski resort was enforceable. Plaintiff alleged injury caused by improper instruction and argued the form was an invalid contract of adhesion:

Contrary to the plaintiff’s contentions, the “Equipment Rental Form and Release of Liability” was not an unenforceable contract of adhesion, and enforcement of the forum selection clause contained therein does not contravene public policy … . Karlsberg v Hunter Mtn. Ski Bowl, Inc., 2015 NY Slip Op 06890, 2nd Dept 9-23-15

 

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Unlike a “State Human Rights Law” Cause of Action, a “New York City Human Rights Law” Cause of Action Is Supported If Racial Bias Played “Any Role” (As Opposed to a “Motivating and Substantial Role”) In the Discriminatory Action

The plaintiff alleged he was terminated from employment due to racial bias and sued under the Executive Law (New York State Human Rights Law) and under New York City Human Rights Law. Plaintiff acknowledged that he was sleeping on the job, a legitimate reason for termination. Plaintiff’s New York State Human Rights Law cause of action was dismissed because plaintiff could not show that racial bias played a “motivating or substantial role” in the termination. But, because the criteria for a cause of action under the New York City Human Rights Law are broader, the New York City Human Rights Law cause of action survived summary judgment. Under the New York City Human Rights Law, if termination was motivated “in part” by racial bias, even though there was a legitimate reason for termination, the termination is actionable:

The Court of Appeals has recognized that the New York City Human Rights Law must be construed “broadly in favor of discrimination plaintiffs, to the extent that such a construction is reasonably possible” … . Thus, the New York City Human Rights Law is to be more broadly interpreted than similarly worded federal or State antidiscrimination provisions … . The Appellate Division, First Department, has interpreted the New York City Human Rights Law as requiring that unlawful discrimination play ” no role'” in an employment decision … . Our Court has expressed general agreement with the First Department’s interpretation of the New York City Human Rights Law … . Thus, under the broadly worded and broadly interpreted New York City Human Rights Law, if the supervisor’s decision to report the plaintiff was motivated by racial or ethnic animus, even in part, the defendant may be held liable.

The evidence undisputedly established that the plaintiff’s employment was terminated by the defendant because the plaintiff was found to be asleep while on duty, in violation of its rules. Additionally, there was evidence that the defendant had a zero-tolerance policy with respect to violations of that rule. Further, it is also not disputed that the defendant’s no-tolerance policy regarding the termination of the employment of employees found sleeping while on duty is a legitimate policy. Nevertheless, the plaintiff presented evidence that his supervisor reported him to the defendant’s management in part out of racial animus, and did not report other, non-Indian employees who were found sleeping while on duty. Thus, the plaintiff raised a triable issue of fact as to whether his supervisor’s unlawful discrimination, which is to be imputed to the defendant, played a role in the termination of the plaintiff’s employment. Accordingly, the Supreme Court erred in granting that branch of the defendant’s motion which was for summary judgment dismissing the cause of action alleging a violation of the New York City Human Rights Law … . Singh v Covenant Aviation Sec., LLC, 2015 NY Slip Op 06911, 2nd Dept 9-23-15

 

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Rare Example of Sufficiently Pled Cause of Action for Prima Facie Tort—Elements of Tortious Interference with a Contract Outlined

The Second Department determined plaintiff had stated a cause of action for prima facie tort and tortious interference with a contract. The complaint alleged the defendant set up websites and organized public protests accusing plaintiff of child abuse and had communicated with plaintiff’s employer, causing plaintiff to be terminated without cause. The decision is noteworthy because it demonstrates the extreme nature of allegations deemed sufficient to support a prima facie tort cause of action. With respect to the tortious interference with contract cause of action, the court explained:

The elements of tortious interference with a contract are: “(1) the existence of a contract between plaintiff and a third party; (2) defendant’s knowledge of the contract; (3) defendant’s intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to plaintiff” … . The amended complaint sufficiently sets forth a cause of action based on tortious interference with a contract, alleging, in pertinent part, that [defendant’s] intentional interference with the subject employment contract rendered performance impossible. Hersh v Cohen, 2015 NY Slip Op 06888, 2nd Dept 9-23-15

 

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Town Has Duty to Defend Former Town Clerk Accused of Sexual Harassment Within the Scope of Employment

The Second Department determined the Town Law required the town to pay for the defense of the former town clerk accused of sexual harassment within the scope of his employment:

The duty to defend is broader than the duty to indemnify …, and it is triggered if the civil complaint includes allegations that the employee was acting within the scope of his or her employment at the time of the alleged wrongdoing … . Here, the underlying federal complaint specifically alleges, among other things, that the petitioner committed sexual harassment while acting in the scope of his employment as the Town Clerk, the Town facilitated a hostile work environment, and the Town failed to prevent workplace harassment. Contrary to the Town’s contention, the Supreme Court correctly determined that the allegations in the federal complaint were sufficient to trigger the Town’s broad duty to defend the petitioner … . Matter of Bonilla v Town of Hempstead, 2015 NY Slip Op 06916, 2nd Dept 9-23-15

 

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Relation Back Doctrine Did Not Apply to Causes of Action in Amended Complaint—Amendment Should Not Have Been Allowed

The Second Department determined Supreme Court should not have allowed the amendment of a medical malpractice complaint to add causes of action for negligent hiring and supervision. The negligent hiring and supervision allegations were time barred and were different from the medical malpractice allegations such that the relation back doctrine did not apply:

Pursuant to CPLR 203(f), claims asserted in an amended complaint are “deemed to have been interposed at the time the claims in the original pleading were interposed, unless the original pleading does not give notice of the transactions, occurrences, or series of transactions or occurrences, to be proved pursuant to the amended pleading” (CPLR 203[f]). Thus, when the nature of a newly asserted cause of action is distinct from the causes of action asserted in the original complaint, and requires different factual allegations as to the underlying conduct than were contained in the original complaint, the new claims will not “relate back” in time to the interposition of the causes of action in the original complaint … . Here, the Supreme Court erred in determining that the allegations in the original complaint in support of the causes of action alleging medical malpractice and lack of informed consent gave [defendant] notice of the “transactions, occurrences, or series of transactions or occurrences, to be proved” with respect to the claims of negligent hiring and supervision … . The causes of action alleging medical malpractice and lack of informed consent are distinct not only as to the conduct alleged, but also as to the dates on which the conduct occurred and who engaged in it … . The mere reference to “negligence” in the original complaint did not give [defendant] notice of the transactions, occurrences, or series of transactions or occurrences, to be proved with respect to the proposed causes of action alleging negligent hiring and negligent supervision. Thus, those proposed causes of action could not be deemed to relate back to the interposition of the causes of action in the original complaint … . Calamari v Panos, 2015 NY Slip Op 06875, 2nd Dept 9-23-15

 

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Trustees Were Not Required by Town Law to Turn Over to the Town Board Trust Revenues Generated by Water Management in the Town of Southampton

In a detailed decision which traces the history of a trust and statutes governing town finances in the Town of Southampton from pre-colonial times to the present, the Second Department determined that the “Trustees of the Freeholders and Commonality of the Town of Southampton” (Trustees) were not obligated by Town Law to turn over trust revenues from water management to the Town Board:

For nearly 400 years, the Trustees of the Freeholders and Commonalty of the Town of Southampton (hereinafter the Trustees or the Trust) have had the right, derived from royal land grants and patents, to control and manage the waters of the town. In the present day, the Trustees raise revenue from issuing licenses for activities including commercial fishing, charging permit fees for seasonal boat docking, dock and bulkhead construction, and dredging, and selling sand excavated from Mecox Bay. The Trustees deposit their revenues into several bank accounts, which, at the time this action was commenced, had an aggregate balance of close to $1 million. On this appeal, we are called upon to determine whether Town Law § 64(1) requires the Trustees to turn over control of their revenues to the Town Board of the Town of Southampton (hereinafter the Town Board) and whether the expenditure of such revenues must therefore comply with the same statutes which govern town finances and expenditures. We conclude that Town Law § 64(1) does not require the Trustees to turn over control of their revenues to the Town Board, and that the statutes governing town finances and expenditures relied upon by the plaintiffs are inapplicable to the Trust. Gessin v Throne-Holst, 2015 NY Slip Op 06885, 2nd Dept 9-23-15

 

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