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Liquor Authority Properly Complied with the Requirements for Issuing a Liquor License When Three or More Licensed Premises Are Located Within 500 Feet

The First Department, in a full-fledged opinion by Justice Acosta, determined a petition to annul the NYS Liquor Authority’s conditional approval of a liquor license was properly denied.  The Liquor Authority properly considered the factors associated with the “500-foot-rule” requiring good cause for the issuance of a license when there are three or more licensed premises within 500 feet:

Ordinarily, applications for licenses to sell liquor for consumption on premises “shall be issued to all applicants except for good cause shown” (ABCL § 64[1]); however, no such license shall be granted for any premises within 500 feet of three or more existing licensed and operating premises, unless the Authority “determines that granting such license would be in the public interest” (ABCL § 64[7][b], [f]). In determining whether the granting of a license will promote the public interest, the Authority may consider:

“(a) The number, classes and character of licenses in proximity to the location and in the particular municipality or subdivision thereof.

“(b) Evidence that all necessary licenses and permits have been obtained from the state and all other governing bodies.

“(c) Effect of the grant of the license on vehicular traffic and parking in proximity to the location.

“(d) The existing noise level at the location and any increase in noise level that would be generated by the proposed premises.

“(e) The history of liquor violations and reported criminal activity at the proposed premises.

“(f) Any other factors specified by law or regulation that are relevant to determine the public convenience and advantage and public interest of the community” (ABCL § 64[6-a]).

These factors are intended to guide the Authority “in assuring that appropriate factors are taken into consideration which relate to the business and the impact it has . . . [and] to assure that quality of life impacts are fully incorporated into the responsible state decision-making apparatus” … .

In cases implicating this 500-foot rule, “[b]efore it may issue any such license, the [A]uthority shall conduct a hearing, upon notice to the applicant and the municipality or community board, and shall state and file in its office its reasons therefor” (ABCL § 64[7][f]).

“A reviewing court is not entitled to interfere in the exercise of discretion by an administrative agency unless there is no rational basis for the exercise, or the action complained of is arbitrary and capricious” … . Courts look to whether the determination “is without sound basis in reason and is generally without regard to the facts” … .

Regarding the substance of the reasons stated by the Authority, this Court has held that something more than a “perfunctory recitation” is needed to comply with the requirement that the Authority state its reasons for concluding that issuance of a license would be in the public interest … .

Here, the Authority’s written statement sets forth detailed, concrete reasons for its determination, made after a hearing, that issuance of a liquor license … would be in the public interest (ABCL § 64[7][b], [f]). Matter of BarFreeBedford v New York State Liq. Auth., 2015 NY Slip Op 05428, 1st Dept 6-23-15

 

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Frivolous Lawsuit Warranted Sanctions and the Award of Attorney’s Fees

The First Department determined sanctions and the award of attorney’s fees were appropriate for a frivolous lawsuit brought by an attorney who had represented himself in a related divorce proceeding.  The lawsuit sought $27,000 allegedly loaned to the defendant-wife by plaintiff. However, the $27,000 claim was made in the divorce proceedings and, although the lower court did not directly rule on the loan, the claim was effectively rejected by the court in a “catch-all” provision denying all relief not specifically addressed:

A court may, in its discretion, award to any party costs in the form of reimbursement for expenses reasonably incurred and reasonable attorneys’ fees resulting from “frivolous conduct,” which includes: (1) conduct completely without merit in law, which cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) conduct undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; and (3) the assertion of material factual statements that are false (22 NYCRR 130-1.1[a], [c][3]). The court may also award financial sanctions on the same grounds (22 NYCRR 130-1.1[b]).

In determining whether conduct is frivolous, the court shall consider “the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel” (22 NYCRR 130-1.1[c]).

Here, the husband made a claim in the divorce action for repayment of the $27,000 “loan,” and Supreme Court rejected it. He then failed to challenge that finding on direct appeal. Any argument that Supreme Court did not actually decide the issue of the “loan” because it did not specifically address it is rejected, since the court included the “catch-all” language that any claims not discussed were denied. In any event, the husband could have sought clarification from the court if he felt that the claim related to the “loan” had escaped the court’s attention. Indeed, it would have behooved him to do so, as it is well settled that “res judicata bars a subsequent plenary action concerning an issue of marital property which could have been, but was not, raised in the prior matrimonial action” … . Again, we are required to consider “the circumstances under which the conduct took place” when reviewing a sanctions motion (22 NYCRR 130-1.1[c]). Here, the circumstances are that the husband, an experienced divorce lawyer, ignored a long-standing principle of matrimonial jurisprudence. Thus, his decision to commence an action that he knew, or should have known, was futile from its inception, weighs heavily in favor of a finding that his conduct was intended solely to harass the wife.  Borstein v Henneberry, 2015 NY Slip Op 05390, 1st Dept 6-23-15

 

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Defendant’s Waiver of 12-Person Jury Upheld

The First Department determined defendant had validly waived his right to be tried in front of a 12-person jury. During defendant’s trial, after the court had been closed for several days due to Hurricane Sandy, one of the jurors informed the court he was leaving town. The defendant, against the advice of his lawyer, was insistent that he wanted the trial to continue with 11 jurors:

The court noted on the record that the excused juror had informed the court that he had a flight scheduled for that day, and that the court had called the juror that morning but could not reach him. Defense counsel objected to the court’s discharge of the juror without first consulting with counsel. Counsel informed the court that, against her advice, defendant wanted deliberations to continue with the remaining 11 jurors. Defense counsel stated that she had told defendant “a number of times that I do not think we should go forward with 11,” but defendant was “extremely insistent,” was “tired of this process,” and did “not want to retry the case.” The court confirmed with defendant on the record that he wanted to continue with 11 jurors, and defendant executed a written waiver of a 12-person jury. Defense counsel also signed the written waiver.

Although the court should have given defense counsel an opportunity to be heard before it excused the juror (see CPL 270.35[2][b]), defendant entered a knowing, voluntary, and intelligent waiver of his right to a 12-person jury … . Defense counsel stated that she had discussed with defendant the possibility of a retrial, and that defendant rejected that option … . The court questioned defendant on the record and confirmed that he had discussed his decision with counsel, and that he understood but rejected counsel’s advice. As defense counsel stated, defendant was insistent that deliberations continue with an 11-person jury. Defendant “must accept the decision he knowingly, voluntarily and intelligently made” … . People v Perry, 2015 NY Slip Op 05394, 1st Dept 6-23-15

 

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Notice of Claim Timely Served by an Unauthorized Method Deemed Valid/Motion to Renew Based Upon Information Known at the Time of the Original Motion Properly Heard in Exercise of Discretion

The First Department determined the savings provision of General Municipal Law 50-e applied and a notice of claim which was timely served by an unauthorized method was valid.  The court noted that a motion court can exercise its discretion to hear a motion to renew which relies on information known but not raised at the time the original motion was made:

Although the motion was based on information that was available to plaintiff earlier, “courts have discretion to consider such evidence in the interest of justice” … .

Defendant moved for summary judgment on the ground that plaintiff’s notice of claim was not served within the 90-day period set forth in General Municipal Law § 50-e, and plaintiff had not timely moved for an extension of time to serve. Plaintiff contended that she qualified under either or both prongs of the “savings provision” under General Municipal Law § 50-e(3)(c), which provides that “[i]f the notice is served within the period specified by this section, but in a manner not in compliance with the provisions of this subdivision, the service shall be valid if the public corporation against which the claim is made demands that the claimant. . .be examined in regard to it, or if the notice is actually received by a proper person within the time specified by this section, and the public corporation fails to return the notice, specifying the defect in the manner of service, within thirty days after the notice is received.”

Moreover, “[t]he purpose of a notice of claim is to allow the municipal defendant to make a prompt investigation of the facts and preserve the relevant evidence. The applicable statute should be applies flexibly so as to balance two countervailing interests: on the hand, protecting municipal defendants from stale or frivolous claims, and on the other hand, ensuring that a meritorious case is not dismissed for a ministerial error. General Municipal Law § 50-e was not meant as a sword to cut down honest claims, but merely as a shield to protect municipalities against spurious ones” … .

Here, the record shows that plaintiff served a notice of claim on defendant on December 8, 2011 via regular mail, which did not comply with the requirement that service be completed in person or via registered or certified mail. However, defendant subsequently demanded that plaintiff appear for examinations pursuant to General Municipal Law § 50-h with regard to her claim. Under such circumstances, plaintiff’s service of the notice of claim is valid under the first prong of General Municipal Law § 50-e(3)(c). Person v New York City Hous. Auth., 2015 NY Slip Op 05417, 1st Dept 6-23-15

 

 

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Criteria for Liability for Acts of Independent Contractor and for Negligent Hiring of an Independent Contractor Explained (Criteria Not Met Here)

Plaintiff, who was working for the roofing contractor on a building damaged by fire, was asked by a salvager to help move a refrigerator. Plaintiff agreed and was injured while moving the refrigerator down some stairs.  The salvager was allowed to go through the building and pick out the items the salvager wanted (which included the refrigerator). Plaintiff sued the building owner (E & M). In finding the plaintiff did not have a cause of action against E & M, the First Department explained the relevant law with respect to liability for the acts of an independent contractor (the salvager) and negligent hiring of an independent contractor:

E & M established that even if it hired the salvager as an independent contractor, there is no basis to impose liability on it. “As a general rule, a principal is not liable for the acts of an independent contractor because, unlike the master-servant relationship, principals cannot control the manner in which independent contractors perform their work” … . Although “liability will attach where the employer is negligent in selecting, instructing or supervising the contractor, where the contractor is employed to do work that is inherently dangerous or where the employer bears a specific nondelegable duty'” …, these exceptions are inapplicable… . * * *

Plaintiff’s contention that issues of fact exist as to whether E & M or its principal were negligent in selecting the salvager, i.e. whether they failed to exercise reasonable care in ascertaining whether he was qualified to move a refrigerator down a flight of stairs, is also unavailing. “[A]n employer has the right to rely on the supposed qualifications and good character of the contractor, and is not bound to anticipate misconduct on the contractor’s part….” … . Thus, an employer “is not liable on the ground of his having employed an incompetent or otherwise unsuitable contractor unless it also appears that the employer either knew, or in the exercise of reasonable care might have ascertained, that the contractor was not properly qualified to undertake the work” … . “Cases finding employers liable for negligent hiring have done so only in very specific circumstances” … not present here. There is no competent proof that E & M knew or should have known of any propensity on the part of the salvager or his helper to engage in the conduct that allegedly caused the accident … . Furthermore, plaintiff has not shown that E & M had any reason to question the qualifications of the salvager, who E & M knew had been used by its plumber on a prior occasion, to move a refrigerator … . Moreover, there was no reason for E & M to suspect that the salvager would enlist an employee of the roofing contractor to assist him. Nelson v E&M 2710 Clarendon LLC, 2015 NY Slip Op 05391, 1st Dept 6-23-15

 

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Question of Fact Whether Landlord Entitled to Pass On Increased Real Estate Taxes (Pursuant to a Tax Escalation Clause)—Increase Cannot Be Tied to Improvements Which Solely Benefit the Landlord

The First Department determined the landlord should not have been granted summary judgment.  Plaintiff-tenant sought a declaration that it was not responsible for increased real estate taxes related to improvements to the building which benefitted only the landlord and not the tenant. The matter was sent back for a determination whether and to what extent the improvements benefitted only the landlord:

The Court of Appeals has made clear that “[i]t is not the aim of . . . a [tax escalation] clause . . . to impose upon the tenant responsibility for increases in real estate taxes resulting from improvements on the property redounding solely to the benefit of the landlord” … .

The motion court incorrectly found that this principle was limited to circumstances where the improvement involved a vertical or horizontal enlargement of the building. … The improvement at issue is a renovation solely of the residential aspects of the building. Plaintiff is a commercial tenant. Our declaration here simply states the well settled principle regarding tax escalation clauses.  Enchantments Inc. v 424 E. 9th LLC2015 NY Slip Op 05409, 1st Dept 6-23-15

 

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Ordinance Imposing a Duty Upon Abutting Property Owners to Keep Sidewalks in Good Repair Raised a Question of Fact whether a Defect Caused by a Tree Root Should Have Been Repaired by the Defendant—The Defect Was Not So Significant As to Allow a Determination of Defendant’s Liability as a Matter of Law

The Fourth Department determined the existence of an ordinance imposing upon abutting property owners the duty to maintain the sidewalk created a question of fact whether defendant breached that duty. Apparently the defect was caused by a root from a tree on village property which defendant alleged he had no authority to disturb. The ordinance, however did not include any exceptions to the duty to repair.  The defect was not of such significance that summary judgment on liability as a matter of law was warranted:

… “[I]t is well established that, as an abutting landowner, [defendant] is not liable for injuries sustained as the result of a defect in the sidewalk unless[, inter alia,] . . . there is a local ordinance charging [defendant] with the duty to maintain and repair the sidewalk and imposing liability for injuries resulting from [defendant’s] failure to do so” … . Here, in opposition to the motion, plaintiff submitted relevant portions of the General Code of the Village of Hamburg (Village), which charges landowners such as defendant with the duty to “repair, keep safe and maintain any sidewalk abutting [the landowner’s] premises,” and imposes liability on the landowner “for any injury or damage by reason of omission or failure to repair, keep safe, and maintain such sidewalk” (Village of Hamburg General Code § 203-26 [B]; see § 203-28 [A] [2]).

We conclude that, by submitting that local ordinance, plaintiff raised an issue of fact whether defendant breached the duty imposed on it to maintain the sidewalk abutting its property. Although defendant contends that the alleged defect in the sidewalk was created by a tree root that it had no authority to disturb because it originated from a tree on property owned and maintained by the Village, we note that the local ordinance contains no exceptions to the duty imposed on abutting landowners to maintain the sidewalk, even if the allegedly dangerous condition was created by a root extending from Village property. In any event, it cannot be said as a matter of law that defendant could not have repaired the alleged defect in the sidewalk without cutting the tree root that purportedly created it … .

We agree with defendant, however, that the court erred in granting that part of plaintiff’s cross motion for partial summary judgment on the issue of negligence against defendant, and we therefore modify the order accordingly. “Generally, a sidewalk defect presents an issue of fact for a jury . . . , unless . . . the defect is so trivial as to warrant disposition [in defendant’s favor] on summary judgment” … . Here, we cannot conclude that the alleged defect, as depicted in photographs included in the record, is of such significance that defendant may be held liable as a matter of law … . Shatzel v 152 Buffalo St., Ltd., 2015 NY Slip Op 05333, 4th Dept 6-19-15

 

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Town Board’s Terminating, Without Notice, Plaintiff’s Construction Project Violated Plaintiff’s Right to Substantive Due Process/Town Was Not Entitled to Qualified Immunity

The plaintiff had cleared the way for building on land which included wetlands by obtaining the necessary permits and waivers from the Environmental Protection Agency (EPA) and the Army Corps of Engineers (ACE) when, without notice, the town board passed a resolution rescinding a previously issued sewer tap-in waiver and terminating the construction project. Among other theories, plaintiff sued under 42 USC 1983 (deprivation of property without due process of law) and won. On appeal the due process violation verdict was upheld. The Fourth Department explained the criteria for the due process cause of action and noted that the defendant town was not entitled to qualified immunity because the town board’s actions violated plaintiff’s constitutional rights:

… [W]e note that the Court of Appeals has set forth a two-part test for substantive due process violations: “[f]irst, [a plaintiff] must establish a cognizable property interest, meaning a vested property interest, or more than a mere expectation or hope to retain the permit and continue their improvements; they must show that pursuant to State or local law, they had a legitimate claim of entitlement to continue construction’ . . . Second, [a plaintiff] must show that the governmental action was wholly without legal justification” … . Under the first prong, “a legitimate claim of entitlement to a permit can exist only where there is either a certainty or a very strong likelihood’ that an application for approval would have been granted” … . “Where an issuing authority has discretion in approving or denying a permit, a clear entitlement can exist only when that discretion is so narrowly circumscribed that approval of a proper application is virtually assured’ “… . * * *

We reject defendant’s contention that the state constitutional claims should be dismissed because defendant is entitled to qualified immunity. ” A government official is entitled to qualified immunity provided his or her conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known’ ” … . Defendant failed to establish that it was objectively reasonable for the Town Board to believe that its conduct in withdrawing the sewer tap-in waiver request on … was appropriate … . Instead, the evidence established that the Town Board members acted without knowing the history of the project and acted knowing that only the Planning Board had to take action, i.e., to give site plan approval for the property. Despite the existence of plaintiff’s constitutionally protected property interest in the … tap-in waiver request, the Town Board acted … to withdraw that waiver request, which was a violation of plaintiff’s constitutional rights. As such, defendant is not entitled to qualified immunity. Acquest Wehrle, LLC v Town of Amherst, 2015 NY Slip Op 05346, 4th Dept 6-19-15

 

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Parties’ Agreement to “Litigate” Their Entitlement to Interest on a judgment Did Not Constitute a Waiver of the Relevant Insurance Policy’s Arbitration Clause—The Arbitrability of the Claims Must Be Determined by the Arbitrator Not the Courts

The Fourth Department determined an agreement to litigate the parties’ entitlement to interest on a judgment did not constitute a waiver of the relevant insurance policy’s arbitration clause. The issue whether the parties’ claims are arbitrable, therefore, must be determined by the arbitrator, not the courts:

“Once the parties to a broad arbitration clause have made a valid choice of forum, as here, all questions with respect to the validity and effect of subsequent documents purporting to work a modification or termination of the substantive provisions of their original agreement are to be resolved by the arbitrator” … . This is not a situation in which the parties engaged in litigation to such an extent that they “manifested a preference clearly inconsistent with [a] later claim that the parties were obligated to settle their differences by arbitration’ ” … . Nor is this a situation in which the entire contract containing the arbitration provision has been cancelled or terminated, such that “the designation of the arbitration forum for the resolution of disputes is no longer binding upon the parties” … . We thus conclude that the determination of the arbitrability of the parties’ claims under the Policy should be made by an arbitrator. Town of Amherst v Granite State Ins. Co., Inc., 2015 NY Slip Op 05352, 4th Dept 6-19-15

 

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No Survivorship Language in Joint Bank Account Documents/Evidence the Joint Account Was Created as a Matter of Convenience/Summary Judgment Should Not Have Been Granted Awarding Plaintiff Half the Funds in the Account Upon the Death of the Other Person Named on the Account

The Fourth Department noted that Supreme Court erred in concluding a joint bank account was a joint tenancy with right of survivorship and granting the aspect of plaintiff’s motion for summary judgment seeking half the funds in the account upon the death of the other party named on the account. There was no survivorship language in the account documents, and there was evidence tending to rebut any statutory presumption of a joint tenancy (i.e., evidence the account was created as a matter of convenience):

Contrary to the court’s determination, we conclude that the statutory presumption of joint tenancy set forth in Banking Law § 675 does not apply to the joint account inasmuch as “the account documents do not contain the necessary survivorship language” … .

We note in any event that the statutory presumption may be rebutted “by providing direct proof that no joint tenancy was intended or substantial circumstantial proof that the joint account[s] had been opened for convenience only” … . Even assuming, arguendo, that the statutory presumption of joint tenancy applies to the joint accounts, we conclude that defendant submitted evidence tending to rebut the statutory presumption that is sufficient to raise a triable issue of fact whether, “at the time the accounts were created, the accounts were opened as a matter of convenience” … . In particular, defendant submitted evidence establishing, inter alia, that decedent was the sole depositor of the joint accounts, and that plaintiff never withdrew funds from the joint accounts during decedent’s lifetime … . In addition, defendant submitted evidence establishing that decedent’s creation of a joint tenancy with the right of survivorship in the joint accounts “would represent a substantial deviation from [her] previously expressed testamentary plan” … , Harrington v Brunson, 2015 NY Slip Op 05309, 4th Dept 6-19-15

 

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