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Criteria for Respondeat Superior (Scope of Employment) Liability Succinctly Explained

The Second Department determined summary judgment was properly denied to the defendant employer.  The employee was test driving a competitor’s car in connection with his job at a Mercedes dealership when the employee was involved in an accident.  The Second Department determined the employer failed to demonstrate the employee was not acting within the scope of his employment at the time of the accident.  The court explained the relevant law:

Under the doctrine of respondeat superior, an employer can be held vicariously liable for the torts committed by an employee acting within the scope of the employment” … . “An act is considered to be within the scope of employment if it is performed while the employee is engaged generally in the business of his [or her] employer, or if his [or her] act may be reasonably said to be necessary or incidental to such employment” … . “An employer, however, cannot be held vicariously liable for its employee’s alleged tortious conduct if the employee was acting solely for personal motives unrelated to the furtherance of the employer’s business at the time of the incident … . Zwibel v Midway Automotive Group, 2015 NY Slip Op 03154, 2nd Dept 4-15-15

 

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Owners of Single Family Residence Not Liable for Defects in Abutting Sidewalk

In affirming the grant of summary judgment to the defendants who owned a single family residence abutting the allegedly defective sidewalk where plaintiff fell, the Second Department explained the relevant New York City law:

[Defendants] demonstrated that they were exempt from liability pursuant to Administrative Code of the City of New York § 7-210(b) for their alleged failure to maintain the sidewalk abutting their property by establishing that the subject property was a single-family residence, that it was owner occupied, and that it was used solely for residential purposes (see Administrative Code of City of N.Y. § 7-210[b]…).  Further, they established, prima facie, that they could not be held liable for the plaintiff’s alleged injuries under common-law principles. ‘Absent the liability imposed by statute or ordinance, an abutting landowner is not liable to a passerby on a public sidewalk for injuries resulting from defects in the sidewalk unless the landowner either created the defect or caused it to occur by special use’… . Shneider v City of New York, 2015 NY Slip Op 03148, 1st Dept 4-15-15

 

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In an Appeal from an Order Made Upon Appellant’s Default, Only Matters Contested Below Can Be Heard—Here the Only Matter Contested Below Was Appellants’ Request for an Adjournment to Obtain New Counsel—Relevant Review Criteria Explained

The Second Department noted that in an appeal from an order made upon the appellant’s default, the only issues which can be reviewed are those which were contested below.  Here only appellants’ request for an adjournment to obtain new counsel was contested, therefore that was the only issue the appellate court could consider.  The court determined the denial of the adjournment request was not an abuse of discretion.  “In deciding whether to grant an adjournment, the court must engage in a balanced consideration of numerous relevant factors, including the merit or lack of merit of the action, the extent of the delay, the number of adjournments granted, the lack of intent to deliberately default or abandon the action, and the length of the pendency of the proceeding … .” The court noted the appellants’ lack of cooperation with their second counsel and their consent to second counsel’s being relieved:

Where, as here, the order appealed from was made upon the appellants’ default, “review is limited to matters which were the subject of contest below” … . Accordingly, in this case, review is limited to the denial of the appellants’ request for an adjournment … .

The granting of an adjournment for any purpose rests within the sound discretion of the court … , and its determination will not be disturbed absent an improvident exercise of that discretion … . In deciding whether to grant an adjournment, the court must engage in a balanced consideration of numerous relevant factors, including the merit or lack of merit of the action, the extent of the delay, the number of adjournments granted, the lack of intent to deliberately default or abandon the action, and the length of the pendency of the proceeding … .

Applying these principles here, the Supreme Court did not improvidently exercise its discretion in denying the appellants’ request for an adjournment to obtain new counsel after their second counsel was relieved, as second counsel requested that the appellants permit it to be relieved of the obligation of representation, based on the appellants’ lack of cooperation with second counsel, and the appellants thereupon voluntarily consented to second counsel’s request … . Hawes v Lewis, 2015 NY Slip Op 03127, 2nd Dept 4-15-15

 

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CIVIL PROCEDURE A Stay Which Was to Last “45 Days from the Service” of an Order Never Expired Because the Order Was Never Served/Argument that the Stay Never Started Because the Order Was Not Served Rejected

While defendant’s motion for summary judgment was pending, plaintiff’s counsel moved to withdraw. The motion was granted and the court ordered the case stayed “for 45 days from the service…” of the order dismissing plaintiff’s attorney.  Plaintiff was not served with the order and defendant’s summary judgment motion was subsequently granted in plaintiff’s absence.  The First Department determined that the orders issued pursuant to the summary judgment motion were a nullity.  The 45 day stay never expired because the order granting the stay was never served on the plaintiff.  The defendant’s argument that the stay never started because the order was not served was rejected:

After his former counsel was granted leave to withdraw, the action was stayed by court order and operation of CPLR 321(c). Because Plaintiff was never served with the order dismissing his attorney, the 45 day stay never expired. Defendant cannot avoid the stay by arguing that it did not go into effect until served on plaintiff, since the failure to serve the order cannot accrue to defendant’s benefit.  Matos v City of New York, 2015 NY Slip Op 03074, 1st Dept 4-14-15

 

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Although the Agreements at Issue Set Up an Investment Fund (Targeting Brazil) in the Cayman Islands, the Fact that the Agreements Were Negotiated, Drafted and Executed in New York Conferred Personal Jurisdiction Over the Defendant Fund

The First Department, in a full-fledged opinion by Justice Acosta, over a partial dissent, determined that the complaint should not have been dismissed for lack of personal jurisdiction over the defendant investment fund.  Although the agreements in question set up the investment fund in the Cayman Islands, targeting investments in Brazil, the agreements were negotiated, drawn up and executed in New York.  Because the claims arose “from defendants’ transaction of business in New York, CPLR 302(a)(1) confer[red] personal jurisdiction over defendants.” The court explained that “[d]etermining whether long-arm jurisdiction exists under the “transacts business” provision of CPLR 302(a)(1) … is a two-pronged inquiry: “a court must decide (1) whether the defendant transacts any business in New York and, if so, (2) whether [the] cause of action aris[es] from such a business transaction” … . [In addition] [t]he assertion of personal jurisdiction must … be predicated on a defendant’s “minimal contacts” with New York to comport with due process … :”

Under New York’s long-arm jurisdiction statute, “a court may exercise personal jurisdiction over any non-domiciliary . . . who . . . transacts any business within the state” (CPLR 302[a][1]). “By this single act statute . . . proof of one transaction in New York is sufficient to invoke jurisdiction . . . so long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted” … . Determining whether long-arm jurisdiction exists under the “transacts business” provision of CPLR 302(a)(1), therefore, is a two-pronged inquiry: “a court must decide (1) whether the defendant transacts any business in New York and, if so, (2) whether [the] cause of action aris[es] from such a business transaction” … . “In effect, the arise-from’ prong limits the broader transaction-of-business’ prong to confer jurisdiction only over those claims in some way arguably connected to the transaction” … .

The assertion of personal jurisdiction must also be predicated on a defendant’s “minimal contacts” with New York to comport with due process … . This requires an examination of the “quality and the nature of the defendant’s activity” and a finding of “some act by which the defendant purposefully avails itself of the privilege of conducting activities within [New York], thus invoking the benefits and protection of its laws” … . * * *

… [P]laintiff alleges that Citibank’s lawyers drafted the documents in New York. … “[T]he nature and purpose of a solitary business meeting conducted for a single day in New York may supply the minimum contacts necessary to subject a nonresident participant to the jurisdiction of our courts” … . [The drafting of the agreements] was not a “purely ministerial” act of merely executing a contract in New York that had been negotiated elsewhere, which would likely be insufficient to confer personal jurisdiction … . * * *

Finding that New York courts have personal jurisdiction over defendants in this case also comports with due process. “So long as a party avails itself of the benefits of the forum, has sufficient minimum contacts with it, and should reasonably expect to defend its actions there, due process is not offended if that party is subjected to jurisdiction . . . …. . Such is the case before us. Defendants had sufficient minimum contacts with New York by purposefully entering the state to negotiate and execute contracts … . Wilson v Dantas, 2015 NY Slip Op 03088, 1st Dept 4-14-15

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A Party Alleging Fraudulent Inducement to Enter a Contract May Both Seek to Avoid Terms of the Contract (Here a Jury-Waiver Clause) and Rely on the Contract in Defense of Breach of Contract Allegations/Criteria for Negligent Misrepresentation Cause of Action Explained in Some Depth (Criteria Not Met Here)

The First Department, over a dissent, determined a party claiming it was fraudulently induced to enter a contract is entitled to a jury trial despite the jury-trial waiver in the contract. Because a party alleging fraudulent inducement can either seek rescission or stand on the contract and seek damages, the party may both seek to avoid terms in the contract (here the jury-waiver clause) and rely on the contract as a defense to breach of contract allegations. The court also found that the counterclaim for negligent misrepresentation was properly dismissed because the existence of a confidential or fiduciary or other special relationship (approaching privity), which would justify reliance on representations, was not demonstrated.  The criteria for negligent misrepresentation was described in some depth:

…[A]contractual jury waiver provision is inapplicable to a fraudulent inducement cause of action that challenges the validity of the underlying agreement … . …  In cases where the fraudulent inducement allegations, if proved, would void the agreement, including the jury waiver clause, the party is entitled to a jury trial on the claim … .

…”[A] defrauded party to a contract may elect to either disaffirm the contract by a prompt rescission or stand on the contract and thereafter maintain an action at law for damages attributable to the fraud” … . As a result, a party alleging fraudulent inducement that elects to bring an action for damages, as opposed to opting for rescission may, under certain circumstances, still challenge the validity of the agreement … .

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“A claim for negligent misrepresentation requires the plaintiff to demonstrate (1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information” … . In commercial cases “a duty to speak with care exists when the relationship of the parties, arising out of contract or otherwise, [is] such than in morals and good conscience the one has the right to rely upon the other for information” … . Reliance on the statements must be justifiable, and “not all representations made by a seller of goods or a provider of services will give rise to a duty to speak with care” (id.). “Rather, liability for negligent misrepresentation has been imposed only on those persons who possess unique or specialized expertise, or who are in a special position of confidence and trust with the injured party such that reliance on the negligent misrepresentation is justified” (id.). In order to impose tort liability in a commercial case, “there must be some identifiable source of a special duty of care” … . …[A] special duty will be found “if the record supports a relationship so close as to approach that of privity” … . Generally, however, an arm’s-length business relationship between sophisticated parties will not give rise to a confidential or fiduciary relationship that would support a cause of action for negligent misrepresentation … . J.P. Morgan Sec. Inc. v Ader, 2015 NY Slip Op 03071, 1st Dept 4-14-15

 

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Failure to Empanel the First Six Jurors Chosen by the Parties Justified Setting Aside the Verdict

The Third Department upheld Supreme Court’s setting aside the verdict in a medical malpractice case after the jury had found “no cause for action.”  A rule in the Third Judicial District allowed the clerk to randomly select the jurors and alternates.  The plaintiff moved to set aside the verdict because the first six jurors chosen by the parties were not empanelled by the clerk, as required by CPLR 4105.  Under the CPLR jurors 1 through 6 should have constituted the jury and jurors 7 and 8 should have been designated the alternate jurors. The clerk selected jurors 1, 2, 3, 4, 5 and 8.  The Third Department perceived no abuse of discretion in setting aside the verdict:

After having determined that its application of the Third Judicial District rule contravened plaintiff’s substantial right to empanel the first six jurors that had been selected by the parties, pursuant to the “mandatory procedure” set forth in CPLR 4105, Supreme Court exercised its discretion and granted plaintiff’s motion to set aside the verdict and order a new trial in the interest of justice. In the absence of evidence that the court abused such discretion, we will not disturb Supreme Court’s determination in that regard … . Piacente v Bernstein, 2015 NY Slip Op 03009, 3rd Dept 4-9-15

 

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Venue Was Not Proper—However, Because the Party Seeking the Change of Venue Did Not Comply With the Statutory Procedure, Whether to Grant a Change of Venue Was Discretionary—In the Exercise of Discretion, Change of Venue Was Properly Denied

Respondent law firm filed a default judgment prematurely (re: attorney’s fees) and immediately took steps freeze petitioner’s assets. Petitioner started the instant proceeding in Ulster County pursuant to CPLR 5240 seeking a protective order and vacation of all the enforcement devices used by the law firm.  The law firm made a cross-motion for a change of venue. Supreme Court denied the cross-motion, found that the law firm had engaged in frivolous conduct, directed the law firm to pay petitioner costs and counsel fees, and ordered the managing attorney of the law firm to complete eight hours of continuing legal education (CLE) in civil practice.  The Third Department affirmed Supreme Court, with the exception of the CLE sanction, which Supreme Court did not have the authority to order. The bulk of the decision is devoted to a discussion of the law surrounding a change of venue.  Supreme Court denied the change of venue cross-motion “as of right,” finding that Ulster County was the proper venue for the CPLR 5240 proceeding brought by the petitioner.  The Third Department disagreed, ruling that Ulster County was not the proper venue because the law firm, the respondent in the proceeding, did not have an office in Ulster County as required by the relevant provisions of the CPLR. But, after an extensive analysis, the Third Department concluded the cross-motion to change venue was properly denied as an exercise of discretion. Because the respondent did not follow the statutory procedure (CPLR 511) for seeking a change of venue (no demand for such relief was served before the cross-motion was made), the cross-motion was addressed to Supreme Court’s discretion. CPLR 510 allows a change of venue where “(1) the designated county is not a proper county, (2) “there is reason to believe that an impartial trial cannot be had in the proper county” or (3) “the convenience of material witnesses and the ends of justice will be promoted by the change”… .  Although the first criterium was met, the other two were not. Denial of the cross-motion was a proper exercise of discretion:

By failing to comply with the statutory procedure for changing venue, respondent was not entitled to a change of venue as of right. Where a respondent believes that a petitioner has chosen an improper venue, the respondent shall serve, with or before service of the answer, a written demand on the petitioner that venue be changed to a county that the respondent specifies as proper (see CPLR 511 [a], [b]). The petitioner has five days after service of the demand to serve a written consent to change venue (see CPLR 511 [b]). If no such consent is served by the petitioner, the respondent must move to change venue within 15 days of service of the demand (see CPLR 511 [b]). If a respondent fails to comply with these procedures and time limits, the respondent is not entitled to have the motion granted as of right, even if the venue was improper; the motion instead becomes one addressed to the court’s discretion… ). Here, respondent served a cross motion seeking to change venue without having first served a demand for such relief. Accordingly, the motion was addressed to Supreme Court’s discretion… . * * *

Petitioners commenced this proceeding in Ulster County pursuant to CPLR 5240, which provides that “[t]he court may at any time, on . . . the motion of any interested person, . . . make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure.” If a judgment that is sought to be enforced was entered in Supreme Court anywhere in New York, “a special proceeding authorized by [CPLR article 52] shall be commenced, either in the supreme court or a county court, in a county in which the respondent resides or is regularly employed or has a place for the regular transaction of business in person,” if such a county exists in the state (CPLR 5221 [a] [4]). CPLR 5240 is found within CPLR article 52, and the Court of Appeals has stated that a request for court action under CPLR 5240 is properly commenced as a “special proceeding” … . Respondent, by its very designation in the caption, is the “respondent” as mentioned in CPLR 5221 (a). Respondent is a law firm with its main office in Oswego County, which is considered its residence (see CPLR 503 [c]), and no office or place of business in Ulster County. Under a plain reading of CPLR 5221 (a), the instant special proceeding was required to be commenced in Oswego County (or another county in New York where respondent has an office where it regularly transacts business), rather than Ulster County.* * *

Thus, as Oswego County, rather than Ulster County, is the proper venue under either subdivision of CPLR 5221, the first ground under CPLR 510 could support respondent’s discretionary motion to change venue.

The second ground for discretionary change of venue does not support a change, as the record contains no information that an impartial trial would be difficult to obtain in Oswego County. As for the third ground, petitioners asserted that they are residents of Ulster County and the banks that were served the restraining notices and information subpoenas are all in or around Ulster County, so numerous material witnesses appear to be located in that county. Additionally, it appears that the ends of justice would not be promoted by changing venue. In sum, the first ground would support changing venue, while the second and third grounds do not. Although Supreme Court erred in denying respondent’s cross motion as of right, in the exercise of our discretion we reach the same conclusion. Matter of Aaron v The Steele Law Firm, P.C., 2015 NY Slip Op 03018, 3rd Dept 4-9-15

 

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Law of the Case Doctrine Should Not Have Been Invoked—Criteria Explained

In a breach of contract action, Supreme Court ruled on a summary judgment motion, finding it premature.  When a second summary judgment motion was made before a different judge, the new judge granted summary judgment to the plaintiff on liability for breach of contract and noted that the first order required the ruling because it was the “law of the case.” Although the Third Department ultimately upheld the breach of contract finding, the appellate court explained that the “law of the case” doctrine did not apply because the first order merely found there were issues of fact concerning the amount owed plaintiff and did not determine there was a breach of contract. The court explained that the doctrine of “law of the case” only applies to a ruling upon a “question of law that is essential to the determination of the matter”… :

…[W]e reject plaintiff’s contention that Supreme Court was required to rule that defendants were liable for breaching the Agreement by the doctrine of the law of the case, which bars courts from reconsidering “pre-judgment rulings made by courts of coordinate jurisdiction” in the same case … . The doctrine applies only when the prior ruling directly passed upon a question of law that is essential to the determination of the matter …. . Here, the only determination made in the 2012 order was that material issues of fact existed as to the amount owed. Although additional remarks were made in that order, these were merely dicta, and did not constitute a legal determination as to whether defendants breached the Agreement by deducting expenses — an issue that was not directly addressed by the 2012 order … . Karol v Polsinello, 2015 NY Slip Op 03024, 3rd Dept 4-9-15

 

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Acclaimed Photographer’s Surreptitious Taking of Photographs of Plaintiffs Through Apartment Windows Did Not Violate Plaintiffs’ Right to Privacy as Codified in Civil Rights Law 50 and 51–Art Is Exempt from the Reach of Those Statutes

The First Department, in a full-fledged opinion by Justice Renwick, determined that defendant’s surreptitious taking of photographs of plaintiffs through the windows of plaintiffs’ apartment did not violate the plaintiffs’ right to privacy codified in Civil Rights Law sections 50 and 51.  The critically acclaimed photographer assembled the photographs, which were for sale, in an exhibition called “Neighbors” and put them up on his website. The court explained that the “newsworthy and public interest” exemption from the prohibitions of Civil Rights Law 50 and 51 has been extended to works of art by some courts, although the New York Court of Appeals has yet to consider the issue.  The court wrote:  “[We are constrained to conclude] works of art fall outside the prohibitions of the privacy statute under the newsworthy and public concerns exemption. … [U]nder this exemption, the press is given broad leeway. This is because the informational value of the ideas conveyed by the art work is seen as a matter of public interest. We recognize that the public, as a whole, has an equally strong interest in the dissemination of images, aesthetic values and symbols contained in the art work. In our view, artistic expression in the form of art work must therefore be given the same leeway extended to the press under the newsworthy and public concern exemption to the statutory tort of invasion of privacy:”

Applying the newsworthy and public concern exemption to the complaint herein, we conclude that the allegations do not sufficiently plead a cause of action under the statutory tort of invasion of privacy. As detailed above, plaintiffs essentially allege that defendant used their images in local and national media to promote “The Neighbors,” an exhibition that included photographs of individuals taken under the same circumstances as those featuring plaintiffs. Plaintiffs further allege that the photographs were for sale at the exhibit and on a commercial website.

Accepting, as we must, plaintiffs’ allegations as true …, they do not sufficiently allege that defendant used the photographs in question for the purpose of advertising or for purpose of trade within the meaning of the privacy statute. Defendant’s use of the photos falls within the ambit of constitutionally protected conduct in the form of a work of art. Foster v Svenson, 2015 NY Slip Op 03068, 1st Dept 4-9-15

 

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