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Insured Was Entitled to Settle with Tortfeasor 30 Days After Insured’s Notification of His Insurer of the Settlement Offer—Although Insurer Sent a Letter Responding to the Notification, It Was Sent to the Wrong Address and the Insured Never Received It

In determining the insurer’s (GEICO’s) motion to stay arbitration should have been denied, the Second Department explained the procedure where the insured has been offered a settlement by the tortfeasor for the full amount of the tortfeasor’s policy and permission to settle is sought from the insured’s carrier (GEICO here). The insured timely notified and requested permission to settle from GEICO, but GEICO sent its response to the wrong address and the insured never received it.  After the passage of 30 days, the insured accepted the settlement and served a demand for arbitration on GEICO re: the supplemental uninsured/underinsured motorist (SUM) benefits under the GEICO policy:

As a general rule, an insured who settles with a tortfeasor in violation of a policy condition requiring his or her insurer’s consent to settle, thereby prejudicing the insurer’s subrogation rights, is precluded from asserting a claim for SUM benefits under the policy … . However, the language set forth in 11 NYCRR 60-2.3(f), which must be included in all motor vehicle liability insurance policies in which SUM coverage has been purchased, creates an exception to this rule in situations where the insured advises the insurer of an offer to settle for the full amount of the tortfeasor’s policy, which obligates the insurer either to consent to the settlement or to advance the settlement amount to the insured and assume the prosecution of the tort action within 30 days … . In the event that the insurer does not timely respond in accordance with this condition, the insured may settle with the tortfeasor without the insurer’s consent, and without forfeiting his or her rights to SUM benefits (see 11 NYCRR 60-2.3[f]…).

Here, the burden was on GEICO to come forward with sufficient facts to establish justification for a stay of arbitration … . GEICO’s submission of its letter requesting additional documentation regarding the settlement, which was addressed to the wrong law firm at an address different from that of the law firm which had initially notified GEICO of the settlement offer, failed to sustain this burden. Matter of Government Empls. Ins. Co. v Arciello, 2015 NY Slip Op 05477, 2nd Dept 6-24-15

 

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Defendant Entitled to Summary Judgment–Activity (Routine Cleaning) Not Covered by Labor Law 240 (1)—Re: Labor Law 200 and Common Law Negligence: Equipment Provided by Defendant Not Defective; Defendant Did Not Have Authority to Control Plaintiff’s Work

The Second Department determined Supreme Court properly dismissed an action by plaintiff-janitor who fell from an A-frame ladder while cleaning the basketball backboard in a school gymnasium. The Labor Law 240 (1) cause of action was properly dismissed because cleaning the backboard was routine maintenance, not covered by Labor Law 240 (1).  The Labor Law 200 and common law negligence causes of action were properly dismissed because the defendant school demonstrated the ladder was not defective and it did not have the authority to control the manner in which plaintiff did his work:

… [T]he injured plaintiff’s work did not constitute “cleaning” within the meaning of Labor Law § 240(1). The defendant established that the injured plaintiff was performing routine maintenance of the basketball backboards, done regularly throughout the course of the basketball season, that did not require any specialized equipment, and was unrelated to any ongoing construction or renovation of the school. As such, it was not a covered activity under Labor Law § 240(1) … . …

Labor Law § 200 is a codification of the common-law duty of landowners and general contractors to provide workers with a reasonably safe place to work … . “To be held liable under Labor Law § 200 for injuries arising from the manner in which work is performed, a defendant must have authority to exercise supervision and control over the work'” … . Where a plaintiff’s injuries arise not from the manner in which the work was performed, but from a dangerous condition on the premises, a defendant may be liable under Labor Law § 200 if it ” either created the dangerous condition that caused the accident or had actual or constructive notice of the dangerous condition'” … . When an accident is alleged to involve defects in both the premises and the equipment used at the work site, a defendant moving for summary judgment with respect to causes of action alleging a violation of Labor Law § 200 is obligated to address the proof applicable to both liability standards … . A defendant moving for summary judgment in such a case may prevail “only when the evidence exonerates it as a matter of law for all potential concurrent causes of the plaintiff’s accident and injury, and when no triable issue of fact is raised in opposition as to either relevant liability standard” … .

To the extent that the plaintiffs allege that the accident was caused by a defect in the ladder, which was owned and provided by the defendant, a premises condition is at issue … . However, the defendant established, prima facie, that the ladder was not in a defective condition and that, in any event, it did not create or have actual or constructive notice of any defect in the ladder … . …

To the extent that the plaintiffs allege that the accident was caused by the manner in which the work was performed, the defendant established, prima facie, that it did not have the authority to supervise or control the means and methods of the injured plaintiff’s work … . Torres v St. Francis Coll., 2015 NY Slip Op 05466, 2nd Dept 6-24-15

 

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Police Officer Who Refused a Light-Duty Assignment Was Not Entitled to Disability Benefits Pursuant to General Municipal Law 207-c

The Second Department determined a police officer was not entitled to refuse a light duty assignment during the period his entitlement to disability benefits pursuant to General Municipal Law 207-c was being determined:

A disabled officer receiving General Municipal Law § 207-c benefits is entitled to a due process hearing before those benefits may be terminated when the officer submits medical evidence contesting the finding of a municipality’s appointed physician that the officer is fit for duty … . Once such evidence has been submitted, an “order to report for duty may not be enforced, or benefits terminated, pending resolution of an administrative hearing, which itself is subject to review under CPLR article 78” … . However, where the municipality’s physician is of the opinion that the officer is able “to perform specified types of light police duty,” payment of the full amount of salary or wages may be discontinued should the officer refuse to perform such light police duty if same “is available and offered to [the officer]” and enables him or her “to continue to be entitled to his [or her] regular salary or wages” (General Municipal Law § 207-c[3]…). If an officer who refuses to return to light duty fails to provide medical proof that he or she is unable to do so, the municipality may discontinue disability payments without a hearing … . Matter of Garvey v Sullivan, 2015 NY Slip Op 05476, 2nd Dept 6-24-15

 

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Elements of Negligence, General Business Law 349 and Tortious Interference with Contract Causes of Action Succinctly Described

The Second Department determined that Supreme Court properly dismissed (for failure to state a cause of action) the negligence cause of action, should not have dismissed the General Business Law 349 cause of action, and properly denied the motion to dismiss the tortious interference with contract cause of action. The court succinctly described the elements of the three causes of action (facts not described in the decision):

To prevail on a negligence cause of action, a plaintiff must establish the existence of a legal duty, a breach of that duty, proximate causation, and damages. “Absent a duty of care, there is no breach, and without breach there can be no liability” … . * * *

To state a cause of action under General Business Law § 349, the complaint must allege that ” a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice'” … . * * *

The elements of a cause of action to recover damages for tortious interference with contract are the existence of a valid contract between it and a third party, the defendant’s knowledge of that contract, the defendant’s intentional procurement of the third party’s breach of that contract without justification, and damages … . MVB Collision, Inc. v Allstate Ins. Co., 2015 NY Slip Op 05453, 2nd Dept 6-24-15

 

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Bus Company’s Duty of Care Did Not Include Keeping Steps to the Bus Dry and Free of Snow During a Snow Storm

Reversing Supreme Court, the Second Department determined the defendant bus company could not be held liable for a slip and fall on wet steps on a bus during a snow storm:

“[A] common carrier is subject to the same duty of care as any other potential tortfeasor—reasonable care under all of the circumstances of the particular case” … . Here, contrary to the Supreme Court’s determination, the defendant demonstrated its prima facie entitlement to judgment as a matter of law by showing that it did not breach any duty to the plaintiff under the circumstances that existed at the time of the accident … . Given the inclement weather conditions when the accident occurred, “it would be unreasonable to expect the [defendant] to constantly clean the steps of the subject bus” … . Batista v MTA Bus Co., 2015 NY Slip Op 05430, 2nd Dept 6-24-15

 

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Criteria for Intervention Described

In finding the motion for leave to intervene was properly denied, the Second Department explained the criteria:

Upon a timely motion, a person is permitted to intervene in an action as of right when, among other things, “the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment” (CPLR 1012[a][2]…). In addition, the court, in its discretion, may permit a person to intervene, inter alia, “when the person’s claim or defense and the main action have a common question of law or fact” (CPLR 1013…). ” However, it has been held under liberal rules of construction that whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013 is of little practical significance [and that] intervention should be permitted where the intervenor has a real and substantial interest in the outcome of the proceedings'” … . Trent v Jackson, 2015 NY Slip Op 05467, 2nd Dept 6-24-15

 

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Defendant Entitled to Summary Judgment–No Notice of Wet Condition Where Plaintiff Fell

Reversing Supreme Court, the Second Department determined the defendant was entitled to summary judgment in a slip and fall case.  The defendant demonstrated it did not have actual or constructive notice of the condition (wet floor). An affidavit by a member of the maintenance crew stated that the area where plaintiff fell had been inspected 10 to 15 minutes before the fall and there had been no complaints about a wet condition. The court explained the relevant law:

The owner or possessor of property has a duty to maintain his or her property “in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to others, the seriousness of the injury, and the burden of avoiding the risk” … . A defendant who moves for summary judgment in a slip-and-fall case has the initial burden of making a prima facie showing that it did not create the hazardous condition which allegedly caused the fall, and did not have actual or constructive notice of that condition for a sufficient length of time to discover and remedy it … . To meet its burden on the issue of lack of constructive notice, a defendant is required to offer some evidence as to when the accident site was last cleaned or inspected prior to the plaintiff’s fall … . “Mere reference to general cleaning practices, with no evidence regarding any specific cleaning or inspection of the area in question, is insufficient to establish a lack of constructive notice” … .

The defendant established its prima facie entitlement to judgment as a matter of law by submitting evidence demonstrating that it neither created nor had actual or constructive notice of the condition alleged by the plaintiff to have caused the accident. In support of its motion, the defendant relied upon, among other things, the affidavit of Charles Barber, a member of the maintenance crew at the subject store on the date of the accident. Barber averred that he had inspected the area where the plaintiff alleged that she fell approximately 10 to 15 minutes prior to the accident and observed no water in the area at that time. He further averred in his affidavit that at no point prior to the accident did he ever receive any complaints of any kind concerning the area where the plaintiff allegedly fell. Mehta v Stop & Shop Supermarket Co., LLC, 2015 NY Slip Op 05450, 2nd Dept 6-24-15

 

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Unsigned Deposition Transcripts and Party Admission in Police Report Admissible as Evidence in Support of Summary Judgment Motion

In reversing the grant of summary judgment to the defendant in a vehicle accident case, the Second Department noted the unsigned deposition transcripts of both plaintiff and defendant were admissible for purposes of the motion.  The court also noted that a party admission included in a police report was admissible, while the hearsay report itself was not:

“[T]he failure to submit an affidavit by a person with knowledge of the facts is not necessarily fatal to a motion where . . . the moving party submits other proof, such as deposition testimony … . Here, the defendant’s certified deposition transcript, although unsigned, was admissible since it was his own testimony that he was proffering in support of his motion and, in effect, he adopted it as accurate … . In addition, the transcript of the plaintiff’s deposition testimony, which was unsigned, was also admissible for the purpose of the defendant’s motion, since the transcript was certified by the reporter and the plaintiff did not challenge its accuracy … .

With respect to the police accident report submitted by the defendant in support of his motion, it was not certified as a business record and thus constituted inadmissible hearsay (see CPLR 4518[a]…), except for that portion of the report which contained a party admission by the plaintiff that she did not have a recollection of the accident … . Gezelter v Pecora, 2015 NY Slip Op 05440, 2nd Dept 6-24-15

 

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Purchasers Entitled to Return of Downpayment Under Terms of the Purchase Contract and Pursuant to General Obligations Law 5-1311—Home Damaged by Hurricane Sandy Before Appraisal by Lender

The Second Department determined Supreme Court should have granted the purchasers’ motion for summary judgment on the complaint seeking return of the downpayment.  The contract for sale of real property was contingent upon purchasers receiving a commitment for a loan.  The commitments received by the purchasers were contingent upon a property appraisal.  The house was damaged in Hurricane Sandy and the lender, based upon the post-Sandy appraisal, would not issue the loan. The Second Department determined the purchasers were entitled to a return of their downpayment under the terms of the contract and pursuant to General Obligations Law 5-1311:

“For more than a century it has been well settled in this State that a vendee who defaults on a real estate contract without lawful excuse, cannot recover the down payment” … . Where, however, the obligations of a purchaser under a contract of sale are contingent upon the issuance of a firm financing commitment by a lender, a purchaser may be entitled to recover the down payment if he or she was unable to secure a firm commitment in accordance with the terms of the contract … .

Here, the contract of sale was conditioned upon the issuance of a written commitment from an institutional lender. The contract of sale expressly provided that “a commitment conditioned on the Institutional Lender’s approval of an appraisal shall not be deemed a Commitment’ hereunder until an appraisal is approved.” Accordingly, the plaintiffs established their prima facie entitlement to judgment as a matter of law by demonstrating that they were unable to secure a firm commitment in accordance with the contract of sale, and that they were entitled to the return of their down payment pursuant to the terms of the contract … . In addition, the plaintiffs demonstrated, prima facie, that they were entitled to a return of their down payment by virtue of General Obligations Law § 5-1311, since a “material part” of the property was destroyed by Hurricane Sandy before legal title or possession of the property could be transferred (General Obligations Law § 5-1311[1][a][1]). Walsh v Catalano, 2015 NY Slip Op 05468, 2nd Dept 6-24-15

 

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Lost Profits Sufficiently Proven in Breach of Contract Action—Criteria Explained

In affirming the judgment, the Second Department explained the criteria for the award of lost profits as damages in a breach of contract action:

To prevail on a cause of action alleging breach of contract, the plaintiff must demonstrate that it sustained “actual damages as a natural and probable consequence” of the defendant’s breach … . Where the plaintiff seeks to recover damages for lost profits, such profits must also be “within the contemplation of the parties at the time the contract was entered into” and, even though required to be proven with reasonable certainty, damages “resulting from the loss of future profits are often an approximation” … . Here, contrary to the defendant’s contentions, the evidence and credible testimony adduced at trial demonstrated that the plaintiff incurred actual damages due to the defendant’s breach of the agreement … . The plaintiff’s witness testified that he determined the lost profits for the plaintiff by subtracting the expenses from the revenue, which would have been generated [if the contract had not been breached]. The evidence produced by the plaintiff provided a reasonably reliable foundation upon which to calculate the plaintiff’s damages … . Family Operating Corp. v Young Cab Corp., 2015 NY Slip Op 05437, 2nd Dept 6-24-15

 

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