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The Insurer Properly Reserved Its Rights to Disclaim Coverage When It Agreed to Defend a Legal Malpractice Action

The insurer agreed to defend an attorney in a legal malpractice action, but reserved its rights to disclaim coverage based upon the exclusion in the policy for actions arising from the conduct of a business owned by the attorney (as opposed to the law practice). The First Department rejected the argument that the insurer’s reservation of rights violated the policy:

The issuance of a reservation of rights allows the insurer the flexibility of fulfilling its obligation to provide its insured with a defense, while continuing to investigate the claim further. In fact, an insurance company’s failure to reserve the right to disclaim coverage may later result in the insurer being equitably estopped from doing so … . Thus, although plaintiffs are correct that the counterclaims, broadly construed, triggered defendants’ duty to provide them with a defense, defendants did not breach that duty by agreeing to do so, but with a reservation of rights to, among other things, later recoup their defense costs upon a determination of non-coverage … . Law Offs. of Zachary R. Greenhill P.C. v Liberty Ins. Underwriters, Inc., 2015 NY Slip Op 04382, 1st Dept 5-21-15

 

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Insanity Acquittee Not Entitled to Blanket Sealing of Record of a Recommitment Proceeding But Is Entitled to Sealing of His Clinical Record

The Third Department determined respondent, who is subject to Criminal Procedure Law 330.20 based on his acquittal of criminal charges by reason of mental disease or defect, was not entitled to a blanket sealing of the record of a recommitment proceeding pursuant to Mental Hygiene Law 9.31 (F), but was entitled to the sealing of his clinical record pursuant to Mental Hygiene Law 33.13:

Here, respondent was subject to CPL 330.20 based upon his acquittal of criminal charges by reason of mental disease or defect. A lack of responsibility for criminal conduct by reason of mental disease or defect is an affirmative defense that a defendant must raise and prove by a preponderance of the evidence (see Penal Law §§ 25.00 [2]; 40.15). By avoiding criminal penalties and becoming subject to CPL 330.20, “this places insanity acquittees in a significantly different posture than involuntarily committed civil patients” …, and “rational differences between procedures for commitment and release applicable to defendants found not responsible and persons involuntarily committed under the Mental Hygiene Law are justifiable” … . In light of this distinction, we agree with Supreme Court that the blanket sealing of the record that is specifically applicable to the involuntarily admission of civil patients under Mental Hygiene Law § 9.31 (f) is not applicable to respondent … .

We reach a different conclusion, however, regarding defendant’s clinical record. Pursuant to Mental Hygiene Law § 33.13, a clinical record for each patient or client shall be kept containing “information on all matters relating to the admission, legal status, care, and treatment of the patient or client and shall include all pertinent documents relating to the patient or client” (Mental Hygiene Law § 33.13 [a]) and “such information about patients or clients . . . shall not be a public record,” subject to certain exceptions (Mental Hygiene Law § 33.13 [c]). Although Supreme Court ruled that respondent’s clinical treatment records, related hospital records and unrelated medical records must be sealed, it is unclear if other information intended to be included in his clinical record under Mental Hygiene Law § 33.13 (a) would be made public. In our view, respondent is entitled to the full protection of Mental Hygiene Law § 33.13, and all information contained in his clinical record, as defined in Mental Hygiene Law § 33.13 (a), shall not be made public, subject to the statutory exceptions (see Mental Hygiene Law § 33.13 [c]). Matter of John Z. (John Z.), 2015 NY Slip Op 04361, 3rd Dept 5-21-15

 

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Driver of Street Sweeper Which Struck Plaintiff’s Car Entitled to Statutory Immunity

The Third Department determined the driver of a street sweeper was engaged in highway work (re: Vehicle and Traffic Law 1103) at the time the sweeper collided with plaintiff’s vehicle.  Therefore the “reckless disregard for the safety of others” standard of care applied to the sweeper driver. The driver was working on a highway and had to make several passes to clean up spilled gravel.  Because it was a divided highway, the sweeper driver had to make a u-turn and return on the opposite side of highway to make another pass.  The immunity afforded by Vehicle and Traffic Law 1103 applies only when actual work on the highway is being done, not when a worker is driving to or from the work site. The Third Department held that the statutory immunity was available here, even though the accident did not occur as the sweeper was engaged, because the driver was forced to use a circuitous route to complete the assigned task:

With exceptions not applicable here, the safety rules and regulations set forth in the Vehicle and Traffic Law do “not apply to persons . . . while actually engaged in work on a highway nor . . . to hazard vehicles while actually engaged in hazardous operation on or adjacent to a highway but shall apply to such persons and vehicles when traveling to or from such hazardous operation” (Vehicle and Traffic Law § 1103 [b]…). If the person is “actually engaged” in work or a hazardous operation, the applicable standard of care is “reckless disregard for the safety of others,” but the exception does not apply where the person is traveling to or from the hazardous operation … . Matsch v Chemung County Dept. of Pub. Works, 2015 NY Slip Op 04374, 3rd Dept 5-21-15

 

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Customer Service Representative Working from Home Properly Determined to Be an Employee

The Third Department determined there was substantial evidence to support the finding claimant was an employee of PRF.  Claimant worked from home booking reservations at off-site parking facilities near airports:

Although claimant and other representatives worked from home and were required to provide their own Internet service, PRF furnished them with special phones that utilized the voice over Internet protocol necessary to assist customers. In addition, PRF provided training on use of the phones as well as the services that it provided to its customers. Although PRF did not establish set hours and allowed the representatives to hold other jobs, it set up a schedule online that the representatives completed by selecting the hours that they wished to work, and PRF emailed them their final schedules. Claimant and the other representatives submitted invoices for hours worked that PRF would, in turn, check against their work schedules. Notably, PRF was able to monitor the representatives while they were assisting customers to verify that they were working and to ensure quality service. Moreover, PRF handled customer complaints and took corrective action where necessary. Matter of Aussicker (Park Ride Fly USA–Commissioner of Labor), 2015 NY Slip Op 04376, 3rd Dept 5-21-15

 

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Town Planning Board’s Approval of the Installation of Wind Turbines Should Not Have Been Reversed—Board Properly Considered All the Factors Mandated by the Land Use Ordinance and Supreme Court Did Not Have the Authority to Substitute Its Judgment for the Board’s

The Third Department, reversing Supreme Court, determined that the town planning board had properly issued a special use permit for the installation of wind turbines. The court noted that the burden of proof on the owner for seeking a special exception (special use permit) is lower than the burden for seeking a variance.  The court held that all of the analytical factors mandated by the land use ordinance had been properly considered by the board and Supreme Court did not have the authority to substitute its own judgment for the board’s:

The Land Use Ordinance permits specified uses in the area where the project is to be built and allows “[a]ll other uses” for which a special use permit is obtained. Contrary to petitioners’ assertion, while the project is not allowed as of right in the district, the fact that it is “permitted . . . is ‘tantamount to a legislative finding that [it] is in harmony with the general zoning plan and will not adversely affect the neighborhood'” … . As such, “the burden of proof on an owner seeking a special exception is lighter than that on an owner seeking a variance, [with] the former only being required to show compliance with any legislatively imposed conditions on an otherwise permitted use” … . The determination of the Board that those conditions had been met here will be upheld if it “has a rational basis and is supported by substantial evidence in the record” … .

The parties do not dispute upon this appeal, and we agree with Supreme Court, that the Board’s findings with regard to six of the eight conditions enumerated in the Land Use Ordinance are supported by substantial evidence. The first of the remaining two conditions requires that the “[l]ocation, use and size of structure, nature and intensity of operations involved, size of site in relation to it, and location of site with respect to existing or future streets giving access, are such that it will be in harmony with orderly development of the district.” The second requires that the “[l]ocation, nature and height of buildings, walls, fences and signs will not discourage the appropriate development and use of adjacent land and buildings or impair their value.”

With regard to those two conditions, the wind turbines are almost 500 feet tall when the rotor blades are fully vertical [FN2]. Notwithstanding their size, the Board pointed out that the turbines are located in an area where high-voltage electric transmission lines have already altered the landscape, and noted that other factors minimized the impact of the project upon the viewshed. The project will have minimal impact upon traffic after construction is completed and, given the economic benefits that will accrue to participating landowners, the Board found that it would help to preserve existing uses of the surrounding properties. Moreover, the Board cited a study in the record finding that property values would not be impacted by the project. The Board also pointed to proof that the applicant had entered into setback agreements with nonparticipating landowners who resided within 2,000 feet of the turbines, further ensuring that the project would not impair the use of nearby parcels or development in the zoning district. Supreme Court pointed to conflicting evidence submitted by petitioners with regard to both conditions but, even if that evidence was properly considered, “a court may not substitute its own judgment” where substantial evidence supports the determination of the Board … . Matter of Frigault v Town of Richfield Planning Bd., 2015 NY Slip Op 04355, 3rd Dept 5-21-15

 

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Circumstances Warranted Overcoming Physician-Patient Privilege—Substantive Explanation of the Privilege and Its Application (Including When a Court May Decline to Enforce It)

In a medical malpractice case, the plaintiff sought logs from the defendant-hospital which described the surgical procedures done by defendant surgeon during the times of plaintiff’s surgeries. The plaintiff sought to demonstrate the surgeon was doing too many procedures in too short a time to have properly performed them.  Although the hospital produced the logs, the information describing each procedure was redacted. Plaintiff’s motion to compel was denied by Supreme Court, which held the information about surgeries on non-party patients was privileged. The Second Department reversed.  Although the information was deemed privileged by the Second Department, the information could properly be discovered because it was “material and necessary” to the plaintiffs’ case and the privacy of the non-party patients could be protected by redaction.  The facts presented a situation where the court could properly decline to enforce the privilege. The Second Department provided a substantive explanation of the physician-patient privilege and its application:

… CPLR 4504(a) … provides that “[u]nless the patient waives the privilege, a person authorized to practice medicine . . . shall not be allowed to disclose any information which he [or she] acquired in attending a patient in a professional capacity, and which was necessary to enable him [or her] to act in that capacity” (CPLR 4504[a]…).

The enactment of the statutory physician-patient privilege “was based on the belief that fear of embarrassment or disgrace flowing from disclosure of communications made to a physician would deter people from seeking medical help and securing adequate diagnosis and treatment” … . “The privilege applies not only to information communicated orally by the patient, but also to information obtained from observation of the patient’s appearance and symptoms” …. “Moreover, the form in which the information is sought to be introduced is irrelevant, as the privilege operates whether the information is contained in a patient’s medical files or is sought to be introduced at trial in the form of expert testimony” … .

“That which the privilege seeks to protect, however, and thereby foster, are confidential communications, not the mere facts and incidents of a person’s medical history” … . The statute “is not intended to prohibit a person from testifying to such ordinary incidents and facts as are plain to the observation of any one without expert or professional knowledge” … . Accordingly, although the privilege protects a patient from the disclosure of a communication made to a doctor, “a witness may not refuse to answer questions regarding matters of fact . . . merely because those topics relate to events that required medical care or advice from a physician” … .

Furthermore, “where the application of a privilege will not serve to further the legitimate purposes for which it was created, there is little reason to permit its invocation” … . Accordingly, “courts may properly decline to enforce the physician-patient privilege where its invocation does not serve its policy objectives” … .

However, even where redaction of identifying information will ensure that the policy objectives of CPLR 4504(a) are not subverted, disclosure of otherwise privileged information should not be permitted where it is not “material and necessary in the prosecution or defense of [the] action” (CPLR 3101[a][1]…). Here, although the listing of each surgical procedure … was privileged under CPLR 4504(a) …, the plaintiff established that the subject information is indeed “material and necessary” (CPLR 3101[a]) in the prosecution of the action, and that the circumstances warrant overcoming the privilege … .Cole v Panos, 2015 NY Slip Op 04269, 2nd Dept 5-20-15

 

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“Special Errand” Exception to the “Going and Coming” Rule Applied—Workers’ Compensation Claim Is Plaintiff’s Sole Remedy

The Second Department determined plaintiff’s sole remedy against her employer (defendant Margaret Layton) was a Workers’ Compensation claim.  Plaintiff was asked by Layton to walk Layton’s dog because Layton was in court on a personal matter and could not walk the dog herself. Plaintiff fell down a staircase in Layton’s home, apparently in the course of walking the dog. The Second Department held that the walking of the dog “fell within the ‘special errand’ exception to the ‘going and coming’ rule of the Workers’ Compensation Law, thus making workers’ compensation the plaintiffs’ sole remedy” … In the usual case, injury incurred going to or coming from work is not within the ambit of the Workers’ Compensation Law . Curley v Layton, 2015 NY Slip Op 04270, 2nd Dept 5-20-15

 

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Sua Sponte Dismissal for Lack of Standing Improper—Defense Waived by Failure to Answer—Lack of Standing is Not a Jurisdictional Defect

The Second Department, in a mortgage foreclosure proceeding where defendants did not answer, determined the complaint should not have been dismissed sua sponte for lack of standing.  Because the complaint was not answered, the lack-of-standing defense was waived.  In addition, lack-of-standing is not a jurisdictional defect warranting sua sponte dismissal:

A court’s power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal'” … . Here, the Supreme Court was not presented with extraordinary circumstances warranting the sua sponte dismissal of the complaint and the cancellation of the notice of pendency. Since the defendants did not answer the complaint and did not make pre-answer motions to dismiss the complaint, they waived the defense of lack of standing … . In any event, a party’s lack of standing does not constitute a jurisdictional defect and does not warrant a sua sponte dismissal of the complaint by the court … . US Bank Natl. Assn. v Flowers, 2015 NY Slip Op 04308, 2nd Dept 5-20-15

 

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Foreign Corporation’s Sole Residence for Venue Purposes Is the County Designated In Its Filed Application to Conduct Business in New York State

In the context of a dispute over proper venue, the Second Department determined that plaintiff foreign corporation’s sole residence in New York State is the county designated in its application for authority to conduct business in New York State as filed with the State. Therefore plaintiff’s bringing the action in Nassau County, where it alleged its principal place of business is located, as opposed to New York County, the county designated in its filed application, was improper:

…[T]he law is clear that “[f]or purposes of venue, the sole residence of a foreign corporation is the county in which its principal office is located, as designated in its application for authority to conduct business filed with the State of New York” …, regardless of where it transacts business or maintains its actual principal office (see CPLR 503[c]; Business Corporation Law § 102[a][10]…). We note that, since the plaintiff’s response to the defendants’ demand to change venue failed to set forth factual averments that were prima facie sufficient to show that its designation of Nassau County for trial of the action was proper, the defendants were authorized to notice their motion to change venue to be heard in Saratoga County (see CPLR 511[b]…). Further, the defendants are not responsible for the delay occasioned by the denial of their motion by the Supreme Court, Saratoga County.

In view of the foregoing circumstances, the Supreme Court should have granted the defendants’ motion to change the venue of the action from Nassau County to Saratoga County, despite the fact that an order granting class certification had already been issued in the action. American Bldrs. & Contrs. Supply Co., Inc. v Capitaland Home Improvement Showroom, LLC, 2015 NY Slip Op 04262, 2nd Dept 5-20-15

 

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Despite the Fact that Defendant Entered Guilty Pleas in Two Counties, Only One SORA Disposition for the “Current Offenses” (Which Included the Offenses from Both Counties) Can Be Held

The Defendant was convicted (by guilty pleas) of sex offenses committed in two counties.  The two district attorney offices coordinated the defendant’s sentences to run concurrently.  Prior to defendant’s release a SORA hearing was held in one of the two counties, taking into account all of the offenses to which defendant pled guilty.  When defendant was notified the second county had scheduled a SORA hearing he filed a motion to dismiss the second proceeding, arguing it was unauthorized by SORA and barred by the doctrine of res judicata.  The Second Department agreed and dismissed the second proceeding.  The decision includes a substantive discussion of statutory interpretation and the purposes and application of the Sex Offender Registration Act:

…[T]he defendant pleaded guilty to charges contained in accusatory instruments filed in two different counties, two in Queens County and one in Richmond County. Nonetheless,… all of those offenses constituted “Current Offenses” for the purpose of determining the defendant’s risk level pursuant to SORA and, indeed, were considered as such by the Board of Examiners of Sex Offenders and the Supreme Court, Richmond County, in conducting their SORA assessment.

The only reasonable interpretation of the statute and Guidelines, and the one that most effectuates SORA’s purpose, is that only one SORA “disposition” may be made per “Current Offense,” or group of “Current Offenses.” Once a court has rendered “an order setting forth its determinations and the findings of fact and conclusions of law on which the determinations are based” and submitted such order to the Division (Correction Law § 168-d[3]), the Division has all the information it needs to create a file for the defendant and add it to the registry (see Correction Law § 168-b[1]). In this case, once the Division received the SORA order from Richmond County, it had the information it needed to serve SORA’s goal of “protect[ing] the public from” this particular sex offender … . People v Cook, 2015 NY Slip Op 04295, 2nd Dept 5-20-15

 

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