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Business Connections to New York Insufficient to Confer Jurisdiction Under CPLR 301 or 302, Criteria Explained

The Second Department determined the defendants-respondents were properly granted summary judgment dismissing the complaint based upon the court’s lack of jurisdiction over a foreign corporation and individual non-domiciliary (insufficient business connection with New York). The court explained the business-related jurisdiction requirements under CPLR 301 and 302:

“Jurisdiction under CPLR 301 may be acquired over a foreign corporation only if that corporation does business here not occasionally or casually, but with a fair measure of permanence and continuity’ so as to warrant a finding of its presence’ in this jurisdiction” … . Furthermore, “[a]n individual cannot be subject to jurisdiction under CPLR 301 unless he [or she] is doing business in New York as an individual rather than on behalf of a corporation” … . Here, the respondents were not doing business in this State … .

Pursuant to CPLR 302(a)(1), “a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . transacts any business within the state or contracts anywhere to supply goods or services in the state” (CPLR 302[a][1]). “Whether a defendant has transacted business within New York is determined under the totality of the circumstances, and rests on whether the defendant, by some act or acts, has purposefully avail[ed] itself of the privilege of conducting activities within [New York]”‘ … . “Purposeful activities are those with which a defendant, through volitional acts, avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws'” … . “CPLR 302(a)(1) jurisdiction is proper even though the defendant never enters New York, so long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted'” … .

Here, the respondents established, prima facie, that they did not conduct any purposeful activities in New York which bore a substantial relationship to the subject matter of this action, so as to avail themselves of the benefits and protections of this State’s laws. Okeke v Momah, 2015 NY Slip Op 07252, 2nd Dept 10-7-15

 

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In Opposing a Motion to Dismiss for Failure to Timely File a Note of Issue, No Need to Show Potentially Meritorious Cause of Action Where Defendant Contributed to the Delay

The Second Department determined that defendants’ motion to dismiss for failure to prosecute should not have been granted. The court noted that one of the defendants contributed to the delay in filing the note of issue by not showing up for a deposition. Because of the defendant’s contribution to the delay, the plaintiff did not have to demonstrate a potentially meritorious cause of action:

CPLR 3216 is “extremely forgiving” in that it “never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff’s action based on the plaintiff’s unreasonable neglect to proceed” … . When served with a 90-day demand pursuant to CPLR 3216, it is incumbent upon a plaintiff to comply with the demand by filing a note of issue or by moving, before the default date, either to vacate the demand or extend the 90-day period … . In general, if a plaintiff fails to comply with the demand, to avoid the sanction of dismissal, the plaintiff is required to demonstrate a justifiable excuse for the delay and the existence of a potentially meritorious cause of action (see CPLR 3216[e]…).

Here, although the plaintiff did not file a note of issue within the 90-day demand period, her conduct negated any inference that she intended to abandon the action … . In opposition to the defendants’ separate motions, the plaintiff promptly cross-moved to strike the answer of … defendant …Sarab for his willful failure to appear for a court-ordered deposition. The plaintiff established that, due to an unresolved discovery dispute, she was unable to timely file a note of issue … . Furthermore, since Sarab contributed to the plaintiff’s inability to file a timely note of issue in the proper form, the plaintiff was not required to demonstrate a potentially meritorious cause of action … . Lee v Rad, 2015 NY Slip Op 07248, 2nd Dept 10-7-15

 

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Forum Selection Clause in Nursing Home Admission Agreement Enforceable

The Second Department determined defendant nursing home’s motion to change venue based upon a forum selection clause in the admission agreement should have been granted. After her mother (a resident of defendant nursing home) died, plaintiff brought this action for medical malpractice in a county other than that designated in the admission agreement:

” A contractual forum selection clause is prima facie valid and enforceable unless it is shown by the challenging party to be unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court'” … . Here, the plaintiff failed to show that enforcement of the forum selection clause would be unreasonable, unjust, or in contravention of public policy, or that the inclusion of the forum selection clause in the agreement was the result of fraud or overreaching … . Moreover, the plaintiff failed to demonstrate that a trial in Suffolk County would be so gravely difficult that, for all practical purposes, she would be deprived of her day in court … . Puleo v Shore View Ctr. for Rehabilitation & Health Care, 2015 NY Slip Op 07255, 2nd Dept 10-7-15

 

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Petitioner-Employee Did Not Demonstrate the Union Breached Its Duty of Fair Representation, Therefore Petitioner Did Not Demonstrate an Exception to the “Exhaustion of Remedies” Pre-Requisite for an Article 78 Proceeding

The Second Department determined petitioner’s Article 78 action should have been dismissed because petitioner did not demonstrate an exception to the requirement that she exhaust all the grievance remedies provided by the collective bargaining agreement. Petitioner was terminated from her employment at a county community college:

Generally, an employee covered by a collective bargaining agreement which provides for a grievance procedure must exhaust administrative remedies prior to seeking judicial remedies … . However, the failure to exhaust administrative remedies may be excused where the employee can prove that the union breached its duty of fair representation in the handling of the employee’s grievance … . Breach of the duty of fair representation occurs only when a union’s conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith … . Here, the petitioner did not allege that the union’s conduct was arbitrary, discriminatory, or made in bad faith, and the record does not support such a conclusion … . Accordingly, as the petitioner failed to establish that an exception to the exhaustion doctrine was applicable, the Supreme Court should have denied the petition and dismissed the proceeding on the merits. Matter of McLaughlin v Hankin, 2015 NY Slip Op 07272, 2nd Dept 10-7-15

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Family Court Has the Statutory Authority to Impose a Jail Term for Willful Violation of a Child Support Obligations

Reversing the support magistrate, the Second Department determined Family Court does have the authority to impose a jail term for willful violation of child support obligations:

The Family Court is a court of limited jurisdiction and cannot exercise powers beyond those which are granted to it by statute … . However, Family Court Act § 451(1) specifically provides the Family Court with continuing plenary and supervisory jurisdiction over a support proceeding until its judgment is completely satisfied … .

Family Court Act § 460(1)(e) provides that, where a party has defaulted in paying any sum of money due as required by an order directing such payment, the court shall make an order directing the entry of a judgment for the amount of child support arrears, “unless the defaulting party shows good cause for failure to make application for relief from the judgment or order directing such payment prior to the accrual of such arrears.” However, Family Court Act § 460(3) also makes clear that the entry of a money judgment is a form of relief mandated “in addition to any and every other remedy which may be provided under the law including, but not limited to, the remedies provided under the provisions of section four hundred fifty-four of this act” (Family Ct Act § 460[3]). The remedies provided by Family Court Act § 454 include a provision authorizing the court to commit a respondent to jail for a term not exceeding six months upon a finding that the respondent has willfully failed to obey any lawful order of support (see Family Ct Act § 454[3][a]). Matter of Damadeo v Keller, 2015 NY Slip Op 07267, 2nd Dept 10-7-15

 

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No “Special Relationship” Between Plaintiff and City, City Not Liable for Shooting of the Plaintiff by a Civilian as Police Were Leaving the Scene of a Disturbance

The Second Department determined the city was properly granted summary judgment in an action by the victim of a (civilian) shooting. Plaintiff was involved in some sort of an altercation. The police arrived and ordered the group to disperse. As the police were leaving, plaintiff was shot in the back. The court explained that the city could not be held liable for performance of a governmental function (police protection) unless there was a “special duty” owed plaintiff. No “special duty” was demonstrated here:

“Liability for a claim that a municipality negligently exercised a governmental function turns upon the existence of a special duty to the injured person, in contrast to a general duty owed to the public'” … . The provision of police protection is a “classic” governmental function, and a municipality’s general duty to furnish police protection “does not create a duty of care running to a specific individual sufficient to support a negligence claim, unless the facts demonstrate that a special duty was created” … . A special duty—”a duty to exercise reasonable care toward the plaintiff”—is “born of a special relationship between the plaintiff and the governmental entity” … . As relevant here, a special relationship can be formed when the following elements are present: “(1) an assumption by the municipality, through promises or actions, of an affirmative duty to act on behalf of the party who was injured; (2) knowledge on the part of the municipality’s agents that inaction could lead to harm; (3) some form of direct contact between the municipality’s agents and the injured party; and (4) that party’s justifiable reliance on the municipality’s affirmative undertaking” … .

Here, the City defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that no special relationship was created through the voluntary assumption of a duty to the injured plaintiff, either individually or as a member of a specific class … . Even if there had been a duty here, the evidence submitted by the City defendants established that the injured plaintiff did not justifiably rely upon an affirmative undertaking by the City defendants … . Moore v City of New York, 2015 NY Slip Op 07249, 2nd Dept 10-7-15

 

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Question of Fact Whether Abutting Landowners Owned to the Centerline of the Roadway Bed, Relevant Law Explained

Reversing Supreme Court, the Second Department determined there was a question of fact whether abutting landowners owned to the centerline of a roadway bed, or whether defendants had acquired title to the roadway bed. The court explained the relevant analytical criteria:

” [W]hen an owner of property sells a lot with reference to a map, and the map shows that the lot abuts upon a street, the conveyance presumptively conveys fee ownership to the center of the street on which the lot abuts, subject to the rights of other lot owners and their invitees to use the entire area of the street for highway purposes'” … .

“The presumption is not, however, inflexible and will yield to a showing in the deed of a contrary intent to exclude from the grant the bed of the street” … . Indeed, the presumption can be rebutted ” by determining the intent of the parties gathered from the description of the premises [conveyed] read in connection with the other parts of the deed, and by reference to the situation of the lands and the condition and relation of the parties to those lands and other lands in the vicinity'” … . Thus, the presumption can be rebutted by a showing in the deed of a contrary intent to exclude from the grant the bed of the street … . Stanley Acker Family L.P. v DePaulis Enters. V, Ltd., 2015 NY Slip Op 07259, 2nd Dept 10-7-15

 

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Elements of Causes of Action for (1) Misappropriation of (a) Trade Secrets, (b) Business Ideas, and (c) Labor, Skills and Expenditures, (2) Breach of Fiduciary Duty (Delaware Law), (3) Aiding and Abetting Breach of Fiduciary Duty (Delaware Law), (4) Unjust Enrichment, and (5) Promissory Estoppel Described in Some Detail

The First Department, in a full-fledged opinion by Justice Richter, determined the complaint stated causes of action against the Cohen defendants for essentially stealing plaintiffs’ ideas for a website. Defendant Cohen, an investor, eventually served as chairman and CEO of a company formed by plaintiffs to develop the website. The complaint alleged that Cohen caused a strain among the partners which stalled the project. Cohen circulated a liquidation agreement which was never addressed by the other partners. Then, the complaint alleged, Cohen took the plaintiffs’ ideas and website-development work to the founders of Pinterest, which, the complaint alleged, was formed based upon the ideas Cohen misappropriated from plaintiffs. The plaintiffs sued the Cohen defendants and Pinterest. All the causes of action against Pinterest were dismissed by Supreme Court. The First Department held the complaint stated causes of action against the Cohen defendants for (1) breach of fiduciary duty (under Delaware Law), (2) misappropriation of trade secrets, (3) misappropriation of ideas, (4) and misappropriation of labor, skill and expenditures. (Apparently the unjust enrichment cause of action, which Supreme Court dismissed only re: Pinterest, was not a subject of the appeal.) The First Department found that all the causes of action against Pinterest were properly dismissed.   The opinion includes detailed descriptions of the elements of breach of fiduciary duty (Delaware law), aiding and abetting breach of fiduciary duty, unjust enrichment, misappropriation of trade secrets, misappropriation of ideas, misappropriation of labor, skills and expenditures, and promissory estoppel. The discussions are too extensive to be fairly summarized here.  Schroeder v Pinterest Inc., 2015 NY Slip Op 07232. 1st Dept 10-6-15

 

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Courts’ Limited Review Powers Re: Administrative Rulings Clearly Illustrated

The Fourth Department, in a dispute about whether fiber optic cables were taxable by the city and the school district under the Real Property Tax Law, determined Supreme Court was powerless to rule on the matter on grounds not used by the administrative agencies which initially heard it. The Fourth Department succinctly explained the relevant review powers:

We agree with petitioners that the court erred in dismissing the petition on grounds different from those on which respondents relied in denying the applications. It is well settled that “[a] reviewing court, in dealing with a determination . . . which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency. If those grounds are inadequate or improper, the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis” … . Thus, the court was without power to uphold the administrative determinations on a different basis, no matter how sound that basis may be.

Contrary to petitioners’ further contention, however, we may not grant the ultimate affirmative relief requested in the petition, i.e., removal of the subject properties from the tax rolls and a refund of the taxes paid. The Court of Appeals has noted that courts “regularly defer to the governmental agency charged with the responsibility for administration of [a] statute’ in those cases where interpretation or application involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom,’ and the agency’s interpretation is not irrational or unreasonable’ ” … . We conclude that “this case involves a question concerning the specific application of a broad statutory term, . . . and therefore is one in which the agency which administers the statute must determine it initially” … , because in such a situation, ” the reviewing court’s function is limited’ ” … . Matter of Level 3 Communications, LLC v Erie County, 2015 NY Slip Op 07104, 4th Dept 10-2-15

 

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Absence of Corroboration of Confession to Attempted Robbery Required Dismissal of Attempted Robbery Count—However Dismissal of the First Degree Murder and Felony Murder Counts, Both of Which Were Based Upon the Attempted Robbery, Was Not Required—The Death Itself Provided the Requisite Corroboration

The Fourth Department, in a detailed decision addressing several substantive issues not summarized here, found there was no proof of the attempted robbery count except defendant’s confession. The absence of corroboration required reversal of the attempted robbery count. However, with respect to the first degree murder and felony murder counts (for which attempted robbery was the underlying felony) the death itself provided sufficient corroboration:

“A person may not be convicted of any offense solely upon evidence of a confession or admission made by him [or her] without additional proof that the offense charged has been committed” (CPL 60.50…). With respect to the counts of murder in the first degree and felony murder, it is well settled that “CPL 60.50 does not require corroboration of defendant’s confession to the underlying predicate felony” to sustain a conviction of murder in the first degree or felony murder, when the charge is based on a murder committed in the course of and in furtherance of one of many enumerated felonies … . “The effect of the confession corroboration statute is to require proof of the corpus delicti” … . With felony murder and murder in the first degree, the corpus delicti is a death resulting from someone’s criminality, i.e., a death that did not occur by suicide, disease or accident … . The fact that the victim was found dead as the result of a gunshot wound is sufficient corroboration … .

The same analysis does not apply to the underlying felony itself. Where, as here, there is no corroboration of a defendant’s confession with respect to the underlying felony, that count of the indictment charging the defendant with the underlying felony must be dismissed … . People v Harper, 2015 NY Slip Op 07064, 4th Dept 10-2-15

 

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