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Pleading Requirements for Aiding and Abetting Fraud and Fraud Explained—Requirements Not Met Here

In finding that the cause of action for aiding and abetting fraud should have been dismissed, the Second Department explained the pleading requirements:

To plead a cause of action to recover damages for aiding and abetting fraud, a complaint must allege the existence of an 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 … . Here, the complaint failed to adequately allege the existence of an underlying fraud. A plaintiff asserting a cause of action alleging fraud must plead all of the following elements: (1) a material misrepresentation or a material omission of fact which was false and which the defendant knew to be false, (2) made for the purpose of inducing the plaintiff to rely upon it, (3) the plaintiff’s justifiable reliance on the misrepresentation or material omission, and (4) injury … . In addition, in any action based upon fraud, “the circumstances constituting the wrong shall be stated in detail” (… see CPLR 3016[b]). “[A]n essential element of any fraud [claim] is that there must be reasonable reliance, to a party’s detriment, upon the representations made” by the defendant against whom the fraud claimed has been asserted … . The plaintiff must show a belief in the truth of the representation and a change of position in reliance on that belief… .  Nabatkhorian v Nabatkhorian, 2015 NY Slip Op 03335, 2nd Dept 4-22-15

 

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Under the Facts, Family Court Should Not Have Terminated Father’s Parental Rights—No Showing that Termination Would Increase Likelihood of Adoption

The Second Department determined Family Court should not have terminated father’s parental rights. Father had made progress in strengthening his bond with his children and there was no showing terminating his rights would increase the likelihood of adoption:

The record indicates that the father made sufficient progress toward strengthening his relationship with the subject children … . Furthermore, the older child is residing at a residential treatment center for children with emotional and behavioral issues, and there is no indication that he has any prospects for foster placement or adoption. Although the younger child resides with a foster family, the foster parents have indicated that they do not wish to adopt him out of concern that they could not handle him. Thus, on this record, there is no indication that termination of the father’s parental rights would increase the subject children’s opportunities for adoptive placement … .

Under these circumstances, the Family Court’s termination of the father’s parental rights was not in the best interests of the children and, instead, the court should have suspended judgment for one year… . Matter of Javon J. (Antoine J.), 2015 NY Slip Op 03363, 2nd Dept 4-22-15

 

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Insurer Did Not Demonstrate, as a Matter of Law, the Denials of Claims Were Timely and Properly Mailed—Summary Judgment In Favor of Insurer Should Not Have Been Granted

Supreme Court granted plaintiff insurer’s motion for summary judgment, declaring that the plaintiff was not obligated to pay no-fault claims submitted by the defendant because the defendant was unable to verify the validity of the claims. The Second Department reversed, finding that the plaintiff did not demonstrate, as a matter of law, that the denials had been timely and properly mailed to the defendant. The relevant proof requirements were described:

Generally, “proof that an item was properly mailed gives rise to a rebuttable presumption that the item was received by the addressee” … . ” The presumption may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed'” … . However, in order for the presumption to arise, office practice must be geared so as to ensure the likelihood that a denial of claim is always properly addressed and mailed … . “Denial of receipt by the insured[ ], standing alone, is insufficient to rebut the presumption” … .

Here, the plaintiffs failed to establish, prima facie, that they timely and properly mailed the denial of claim forms to the defendant. The affidavit of Joseph M. Andre … asserted that … all items were mailed through an automated system, and explained how documents were identified. However, Andre did not state, in his affidavit, how the envelopes were addressed so as to ensure that the address was correct or whether the envelope was addressed by the automated system or by an employee. He also did not state how and when the envelopes, once sealed, weighed, and affixed with postage using the automated system, were transferred to the care and custody of the United States Postal Service or some other carrier or messenger service to be delivered. Therefore, Andre’s affidavit was insufficient to establish, as a matter of law, that the denial of claim forms were timely and properly mailed to the defendant… . Progressive Cas. Ins. Co. v Infinite Ortho Prods., Inc., 2015 NY Slip Op 03340, 2nd Dept 4-22-15

 

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Strictly Construing the Policy, Falling Through a Defective Manhole (Located in the Parking Lot) Into the Building’s Septic System Was Not Subject to the “Parking Lot” Exclusion from Coverage—The Claim Did Not Arise from the “Ownership, Maintenance or Use” of the Parking Lot, But Rather Arose from the “Operations Necessary or Incidental” to the Insured Building

The Second Department determined that the exclusion of a parking lot from a bodily injury insurance policy did not apply to the failure of a manhole cover in the parking lot.  Plaintiff’s decedent drowned in the leaching pool below the manhole. The leaching pool and manhole cover were deemed to be part of the building’s septic system.  Therefore the claim arose from operations necessary or incidental to the building, and not out of the “ownership, maintenance or use” of the parking lot:

The policy provided coverage for bodily injury “arising out of . . . [t]he ownership, maintenance or use of the premises . . . and operations necessary or incidental to those premises.” The policy excluded coverage for claims “arising out of . . . [t]he ownership, maintenance or use of [a specified parking lot] or any property located on these premises; [or] Operations . . . necessary or incidental to the ownership, maintenance or use of those premises” (hereinafter the parking lot exclusion). * * *

Exclusions to coverage must be strictly construed and read narrowly, with any ambiguity construed against the insurer … . “[T]o negate coverage by virtue of an exclusion, an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case'” … . …

Since the allegedly defective manhole cover and leaching pool into which the decedent fell were part of the building’s septic system, the decedent’s claim arose out of operations necessary or incidental to the building, and not out of the “ownership, maintenance or use” of the rear parking lot. Thus, strictly construing the parking lot exclusion and reading it narrowly, it does not apply … . Lancer Indem. Co. v JKH Realty Group, LLC, 2015 NY Slip Op 03331, 2nd Dept 4-22-15

 

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Lessee Who Has Authority to Control the Work Is Liable Under the Labor Law

The Second Department reversed Supreme Court finding that plaintiff was entitled to summary judgment on his Labor Law 240 (1) claim. Plaintiff alleged that a ladder twisted out from under him when he was carrying materials to the roof and defendant (Sigma) did not raise a question of fact whether plaintiff’s conduct was the sole proximate cause of his injuries. The court explained the circumstances under which a tenant, the defendant (Sigma) here, is liable under the Labor Law:

Labor Law § 240(1) applies to owners, contractors, and their agents (see Labor Law § 240[1]…). A party is deemed to be an agent of an owner or contractor under the Labor Law when it has the ” ability to control the activity which brought about the injury'” … . A lessee of real property that hires a contractor and has the right to control the work at the property is considered to be an owner within the meaning of the law … . Moreover, a lessee of property may be liable as an “owner” when it “has the right or authority to control the work site, even if the lessee did not hire the general contractor” … . The key question is whether the defendant had the right to insist that proper safety practices were followed … . Here, the evidence established that Sigma was the lessee of the premises where the accident occurred and that the president of Sigma hired the injured plaintiff to perform the work and controlled his work. Seferovic v Atlantic Real Estate Holdings, LLC, 2015 NY Slip Op 03343, 2nd Dept 4-22-15

 

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Failure to Give the “Missing Witness” Jury Instruction Required Reversal of Defense Verdict—Criteria Explained

The Second Department reversed a defense verdict in a slip and fall case. Chinsamy, the owner and operator of the defendant business which abutted the sidewalk where plaintiff slipped and fell, did not testify at trial.  He had given a deposition about his knowledge of the condition of the sidewalk, which was read to the jury by plaintiff’s counsel.  Plaintiff’s request for the missing witness jury instruction should not have been denied.  Plaintiff was entitled to the instruction even though Chinsamy’s deposition testimony was placed in evidence. The court explained the relevant “missing witness charge” criteria:

A missing witness charge “instructs a jury that it may draw an adverse inference based on the failure of a party to call a witness who would normally be expected to support that party’s version of events. . . The preconditions for this charge, applicable to both criminal and civil trials, may be set out as follows: (1) the witness’s knowledge is material to the trial; (2) the witness is expected to give noncumulative testimony; (3) the witness is under the control’ of the party against whom the charge is sought, so that the witness would be expected to testify in that party’s favor; and (4) the witness is available to that party” … .

Under the circumstances, and considering Chinsamy’s unexplained failure to appear and testify at trial, the Supreme Court should have granted the plaintiff’s request for a missing witness charge … . In this regard, we note that the plaintiff’s use of Chinsamy’s deposition testimony does not constitute a waiver of her right to request a missing witness charge… . Alli v Full Serv. Auto Repair, LLC, 2015 NY Slip Op 03308, 2nd Dept 4-22-15

 

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Admissions In Hospital Records Which Contradicted Plaintiff’s Trial Testimony Properly Admitted/Seat Belt Defense Should Not Have Been Submitted to the Jury—Insufficient Foundation/”Missing Witness” Jury-Instruction Request Not Supported by a Showing the Testimony Would Be “Material” and “Noncumulative”

The Second Department determined the plaintiff’s admission, contained in the hospital records, that he was not wearing a seat belt at the time of the collision was properly admitted at trial.  Although the statement was not relevant to diagnosis or treatment, it was admissible because it contradicted plaintiff’s trial testimony (plaintiff testified he was wearing a seat belt at the time of the accident). However, Supreme Court should not have submitted the seat belt defense to the jury because there was no foundational testimony explaining precisely how wearing a seat belt would have minimized plaintiff’s injuries.  The Second Department also noted plaintiff’s request for a missing witness jury instruction was properly denied because there was no showing the witness would have provided material, noncumulative testimony:

A hearsay entry in a hospital record is admissible under the business records exception to the hearsay rule only if the entry is germane to the diagnosis or treatment of the patient … . However, if the entry is inconsistent with a position taken by a party at trial, it is admissible as an admission by that party, even if it is not germane to diagnosis or treatment, as long as there is “evidence connecting the party to the entry” … . At trial, the plaintiff testified that he was using a seat belt at the time of the accident. The hospital records containing the challenged entries clearly indicated that the plaintiff was the source of the information contained therein … . Accordingly, the challenged entries were properly admitted into evidence.

Although the Supreme Court properly declined to redact the hospital record as requested by the plaintiff, the court nonetheless erred in submitting the seat belt defense to the jury, since the defendants failed to demonstrate, by competent evidence, that the plaintiff’s injuries would have been minimized had he been wearing a seat belt at the time of the accident … . At trial, both of the plaintiff’s treating physicians testified in general terms that use of a seat belt can reduce the risk of injury. This evidence was insufficient to satisfy the defendants’ burden of proof … . Robles v Polytemp, Inc., 2015 NY Slip Op 03341, 2nd Dept 4-22-15

 

 

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Landlord Failed to Demonstrate Assault on Tenant Was Not Foreseeable—Landlord’s Summary Judgment Motion Properly Denied

The Second Department determined Supreme Court properly denied landlord’s motion for summary judgment in an action stemming from an assault on a tenant at the landlord’s premises.  The assault took place when the lone security guard took his regular lunch break, leaving the premises unguarded. The defendant did not demonstrate a lack of notice of the same or similar criminal conduct and therefore failed to demonstrate the assault was not foreseeable:

A landlord is not the insurer of the safety of its tenants … . Nevertheless, landlords have a duty to take reasonable precautions to protect tenants and visitors from foreseeable harm, including foreseeable criminal conduct by third parties … . To establish that criminal acts were foreseeable, the criminal conduct at issue must be shown to be reasonably predictable based on the prior occurrence of the same or similar criminal activity at a location sufficiently proximate to the subject location … .

Here, on its motion for summary judgment, [the landlord] failed to establish, prima facie, that it lacked notice of the same or similar criminal activity occurring on the premises. Karim v 89th Jamaica Realty Co., L.P., 2015 NY Slip Op 03329, 2nd Dept 4-22-15

 

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Declaratory Judgment Action Is the Appropriate Vehicle for Challenging a County Law—The Legislative Body Which Enacted the Law Is a Necessary Party

In the course of determining an Article 78 petition which, in part, alleged that the Westchester County Human Rights Law violated state law, the Second Department noted that the challenge must be made in a declaratory judgment proceeding.  The court could not convert the proceeding to one for a declaratory judgment because it did not have jurisdiction over all of the necessary parties—specifically the legislative body which enacted the challenged law:

…[T]he petitioners are, in effect, seeking a declaration that certain sections of the Westchester County Human Rights Law violate State law. However, the petitioners are not entitled to such relief. “A declaratory judgment action is the proper vehicle for challenging the validity of a legislative enactment” … . Pursuant to CPLR 103(c), this Court has the power to convert a proceeding into an action. However, that power is conditioned upon this Court having jurisdiction over all of the necessary parties … . “In a declaratory judgment action challenging a local law or ordinance, the legislative body that enacted the challenged local law or ordinance is a necessary party” … . Since the Westchester County Board of Legislators was not named as a party or joined in this proceeding, this Court cannot exercise its authority pursuant to CPLR 103(c) … . Matter of Hoffmann Invs. Corp. v Ruderman, 2015 NY Slip Op 03361, 2nd Dept 4-22-15

 

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Hospital Employees, Working With a Non-Employee Attending Physician, Were Not Independently Negligent and Were Not Asked to Follow Orders Which Were Contrary to Normal Practice—Summary Judgment Dismissing Complaint Against Hospital Should Have Been Granted

The Second Department determined defendant hospital (Good Samaritan) was entitled to summary judgment dismissing the complaint. The hospital was not concurrently liable re: conduct of a non-employee attending physician (Schneider) because there was no showing hospital employees acted negligently independently or followed orders made by the attending physician which were contrary to normal practice:

“In general, a hospital may not be held vicariously liable for the malpractice of a private attending physician who is not an employee, and may not be held concurrently liable unless its employees committed independent acts of negligence” … . “However, a hospital can be held concurrently liable with a private attending physician if its employees commit independent acts of negligence or the attending physician’s orders are contraindicated by normal practice” … . Here, the evidence submitted by Good Samaritan established, prima facie, that there were no independent acts of medical judgment on the part of Good Samaritan or its employees apart from following the orders of Schneider, who was the plaintiff’s private attending physician. Nor were Schneider’s orders contraindicated by normal practice, such that ordinary prudence required inquiry into the correctness of those orders. Tomeo v Beccia, 2015 NY Slip Op 03350, 2nd Dept 4-22-15

 

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