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Statutory Provision that the Gaming Commission “Shall” Render a Determination Within 30 Days After a Hearing Is “Directory” Not “Mandatory”—A Late Determination Will Not Be Annulled Absent Prejudice

The Third Department determined Supreme Court erred when it annulled the suspension of petitioner’s license to train and own horses because the NYS Gaming Commission did not render a determination within 30 days of the hearing as required by Racing, Pari-Mutuel Wagering and Breeding Law 321.  The Third Department determined the 30-day time-limit was not mandatory and petitioner could only seek relief for a violation of section 321 if he could show prejudice related to the delay:

Racing, Pari-Mutuel Wagering and Breeding Law § 321 provides that, when respondent suspends a harness racing participant’s license, the licensee may demand a hearing and, “[w]ithin thirty days after the conclusion of such hearing, [respondent] shall make a final order in writing.” The use of “shall” is not conclusive, however, inasmuch as the statute does not impose any limitation on respondent’s power to act or provide for any consequences for the failure to comply with the time limit … . Nor has petitioner cited any legislative history, and we are not aware of any, suggesting that the 30-day provision in the statute was intended to be mandatory. Rather, at the time this provision was enacted, similar language in the Alcoholic Beverage Control Law had been judicially determined to be directory … , yet the Legislature imposed no additional language limiting respondent’s power to act when it later enacted Racing, Pari-Mutuel Wagering and Breeding Law § 321.

Where, as here, an agency fails to follow a procedural provision that is merely directory, the subsequent determination should only be judicially annulled when the challenger can “show that substantial prejudice resulted from the agency’s noncompliance” … . Matter of Pena v New York State Gaming Commn., 2015 NY Slip Op 02821, 3rd Dept 4-2-15

 

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Elements of Intentional Infliction of Emotional Distress and Prima Facie Tort Described

In finding the counterclaims for intentional infliction of emotional distress and prima facie tort were properly dismissed, the Third Department described the elements of those causes of action:

…[W]ith respect to the counterclaim for intentional infliction of emotional distress [,] … [defendant] was required to plead “extreme and outrageous conduct, the intentional or reckless nature of such conduct, a causal relationship between the conduct and the resulting injury, and severe emotional distress” … . Notably, the alleged conduct must be “so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency . . . and [be] utterly intolerable in a civilized community” … . Here, [defendant] alleged that, during the course of their professional relationship, plaintiff sent unwanted gifts and letters, engaged in suggestive conversations and made threats of future conduct toward him. Even reading the allegations liberally and accepting them as true, we find that the alleged conduct, while undeniably inappropriate, did not rise to the level of being “so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency” … . …

As for [defendant’s] counterclaim for prima facie tort, there can be no recovery under this theory “unless malevolence is the sole motive for [plaintiff’s] otherwise lawful act or, in [other words], unless [plaintiff] acts from disinterested malevolence” … . Stated another way, the act “must be a malicious one unmixed with any other and exclusively directed to injury and damage of another” … . Hyman v Schwartz, 2015 NY Slip Op 02819, 3rd Dept 4-2-15

 

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Denial of Application for Renewal of General Contractor’s Registration Based Upon a Conviction Which Preceded a Prior Renewal Was Arbitrary and Capricious

The First Department determined the denial of petitioner’s application for renewal of his general contractor’s registration, based upon a conviction which preceded a prior renewal, was arbitrary and capricious.  The court noted that the presumption derived from petitioner’s certificate of relief from disabilities was not rebutted:

Respondent’s determination lacked a rational basis (see CPLR 7803[3]…). Respondent arbitrarily concluded that petitioner’s prior conviction for filing false documents bore a direct relationship to the duties and responsibilities attendant to the general contractor registration, the license for which he sought renewal (see Correction Law §§ 752[1], 750[3]…). * * *

Respondent’s failure to rebut the presumption of rehabilitation deriving from petitioner’s certificate of relief from disabilities also renders its determination arbitrary and capricious … . Matter of Jakubiak v New York City Dept. of Bldgs., 2015 NY Slip Op 02858, 1st Dept 4-2-15

 

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A Stipulation Cannot Bind an Insurer to Nonexistent Coverage

In finding that a hearing was required to determine if respondent was entitled to supplemental uninsured/underinsured motorist (SUM) coverage, the Third Department noted that a stipulation, which implied the existence of such coverage, could not bind the insurer:

Supreme Court erred in concluding that the parties’ stipulation waived the issue of respondent’s entitlement to SUM coverage. Although the stipulation stated that, “[u]pon the completion of [certain] discovery set forth [in the stipulation, petitioner] agrees to proceed to arbitration,” a stipulation cannot create coverage of an individual, nor the obligation to arbitrate the issue of coverage, where the individual does not meet the relevant contractual prerequisites for coverage … . Stated differently, the stipulation cannot independently bind petitioner to supply coverage where no such coverage exists under the policy. Matter of Preferred Mut. Ins. Co. (Fisher), 2015 NY Slip Op 02837, 3rd Dept 4-2-15

 

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Emails Can Suffice as “Documentary Evidence” to Support a Motion to Dismiss—Here the Documentary Evidence About Aspects of an Employment Agreement that Were In Contention Did Not Utterly Refute the Allegation that an Employment Contract Had Already Been Entered

The First Department, in a full-fledged opinion by Justice Renwick, over a dissent, determined the documentary evidence submitted by the defendant, which dealt with several aspects of an employment agreement that were in contention, did not utterly refute plaintiff’s allegation that an employment contract had already been entered.  Therefore defendant’s motion to dismiss the breach of contract cause of action was properly denied.  The opinion is long and detailed, as is the dissent, and cannot fairly be summarized here.  With respect to what constitutes documentary evidence in this context, the court wrote:

On a motion to dismiss pursuant to CPLR 3211(a)(1), a court is obliged “to accept the complaint’s factual allegations as true, according to plaintiff the benefit of every possible favorable inference, and determining only whether the facts as alleged fit within any cognizable legal theory” … . Moreover, dismissal pursuant to CPLR 3211(a)(1) is warranted only if the documentary evidence submitted “utterly refutes plaintiff’s factual allegations” … . If the documentary proof disproves an essential allegation of the complaint, dismissal pursuant to CPLR 3211(a)(1) is warranted even if the allegations, standing alone, could withstand a motion to dismiss for failure to state a cause of action … . * * *

Preliminarily, we reject Supreme Court’s conclusion that correspondence such as the emails here do not suffice as documentary evidence for purposes of CPLR 3211(a)(1). This Court has consistently held otherwise. For example, in Schutty v Speiser Krause P.C. (86 AD3d 484, 484-485 [1st Dept 2011]), this Court found drafts of an agreement and correspondence sufficient for purposes of establishing a defense under the statute. Similarly, in Langer v Dadabhoy (44 AD3d 425, 426 [1st Dept 2007], lv denied 10 NY3d 712 [2008]), this Court found “documentary evidence in the form of emails” to be sufficient to carry the day for a defendant on a CPLR 3211(a)(1) motion. Likewise, in WFB Telecom. v NYNEX Corp. (188 AD2d 257, 259 [1st Dept 1992], lv denied 81 NY2d 709 [1993]), this Court granted a CPLR 3211(a)(1) motion on the basis of a letter from the plaintiff’s counsel that contradicted the complaint. Therefore, there is no blanket rule by which email is to be excluded from consideration as documentary evidence under the statute. Kolchins v Evolution Mkts., Inc., 2015 NY Slip Op 02863, 1st Dept 4-2-15

 

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Summary Judgment Properly Granted to Hospital—Criteria for Hospital Liability for Treatment by a Non-Employee Explained

The Third Department determined summary judgment was properly granted to the hospital (AOMC) because plaintiff (Hoad) was treated by her private physician (Dolkart) and there was no indication hospital staff was negligent in following the doctor’s orders:

…[G]enerally, a hospital is not liable for the negligence of independent physicians except on a theory of ostensible or apparent agency … . Put differently, a hospital may be liable “where the hospital’s words or conduct communicated to a third-party patient give rise to the appearance and belief that the agent-independent physician possesses authority to act on behalf of the hospital” … . As the proponent of summary judgment, AOMC “bore the initial burden of establishing that [Hoad] sought care from a specific physician rather than from [AOMC] generally” … . Here, AOMC’s Vice President of Medical Affairs submitted an affidavit wherein he explained that Dolkart was not an employee, but a tenant with admitting privileges at AOMC. The record confirms that when Hoad was transferred from the emergency room, she consented to a transfer into Dolkart’s care at AOMC, not to AOMC generally. In response, no facts or admissible evidence were presented to establish that Hoad reasonably believed that Dolkart was AOMC’s employee. We therefore discern no basis for imposing liability based upon a theory of ostensible agency … .

We further find no basis for the infant’s claims against AOMC based on the actions of its professional staff. Generally, a hospital is insulated from liability “when its professional staff follows the orders of private physicians selected by the patient” … . An exception to this general rule exists “where the hospital staff knows that the doctor’s orders are so clearly contraindicated by normal practice that ordinary prudence requires inquiry into the correctness of the orders” … . Here, AOMC met its burden through the submission of an affirmation by … an obstetrician. Hoad v Dolkart, 2015 NY Slip Op 02831, 3rd Dept 4-2-15

 

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“Intrinsic” Versus “Extrinsic” Fraud as the Basis of a Motion to Open a Default Judgment/Lack of Standing Not a Jurisdictional Defect

In the context of a mortgage foreclosure, the defendant made a motion pursuant to CPLR 5015(a)(3) to open a default judgment.  The Second Department determined the motion was properly denied and explained the difference between allegations of “intrinsic” and “extrinsic” fraud as the basis of the motion.  The court noted that a lack of standing is not a jurisdictional defect:

The defendant alleged, pursuant to CPLR 5015(a)(3), that the plaintiff committed “intrinsic fraud,” by submitting fraudulent documents in support of its claim for a judgment of foreclosure and sale … . She did not allege “extrinsic fraud,” which is “a fraud practiced in obtaining a judgment such that a party may have been prevented from fully and fairly litigating the matter” … . Therefore, the defendant was required to show a reasonable excuse for her default … . However, she failed to offer any excuse for her default … . U.S. Bank, N.A. v Peters, 2015 NY Slip Op 02757, 2nd Dept 4-1-15

 

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City Immune from Liability for Actions of Police Engaged in a Governmental Function–No Special Relationship with Plaintiff

The Second Department determined the police officers were engaged in a governmental function and there was no special relationship between the city and the plaintiff. The city was therefore immune from liability.  Plaintiff called the police when he saw someone (Moran) enter a residence.  When the police arrived plaintiff accompanied them to the residence.  Moran ran from the house and punched plaintiff. Plaintiff’s lawsuit alleged the police failed to protect him:

…[T]he officers’ conduct during the incident constituted a governmental function … . “Under the public duty rule, although a municipality owes a general duty to the public at large to furnish police protection, this does not create a duty of care running to a specific individual sufficient to support a negligence claim, unless the facts demonstrate that a special duty was created” … . Therefore, the City cannot be held liable unless there existed a special relationship between it and the plaintiff … . “The elements of this special relationship are: (1) an assumption by the municipality, through promises or actions, of an affirmative duty to act on behalf of the party who was injured; (2) knowledge on the part of the municipality’s agents that inaction could lead to harm; (3) some form of direct contact between the municipality’s agents and the injured party; and (4) that party’s justifiable reliance on the municipality’s affirmative undertaking” … . Here, the City made a prima facie showing of entitlement to judgment as a matter of law by demonstrating that no such special relationship existed which would give rise to a duty of care to the plaintiff individually … . The evidence submitted by the City demonstrated that the police officers were performing their general duty to the public at large by responding to a call regarding a completed crime, and in the course of the investigation, made no promises to the plaintiff, in word or action, that gave rise to an affirmative duty of care running to the plaintiff personally. In opposition, the plaintiff failed to raise a triable issue of fact. Philip v Moran, 2015 NY Slip Op 02742, 2nd Dept 4-1-15

 

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Concise Description of the Application of the DeBour Street-Encounter Criteria Leading to the Seizure of a Weapon

The Second Department, in finding the seizure of a gun from the defendant proper, provided a concise application of the DeBour street encounter factors:

The arresting officer testified that he saw, from a distance of “[l]ess than a foot” away, “what looked to be” “two to three inches” of “the butt of a firearm” that was “pulling down” the defendant’s rear pants pocket. These observations gave the officer an objective, credible reason to approach the defendant … . Upon seeing the officer, the defendant immediately turned sideways to obscure his rear pants pockets from the officer’s view, giving the officer a “founded suspicion that criminal activity [was] afoot,” justifying greater intrusion to conduct an inquiry … . At that point, when the defendant lowered his hands in the direction of his waist area, the officer had reason to suspect that he was in danger of physical injury and was authorized to conduct a protective frisk (see CPL 140.50[3]…). Probable cause for the defendant’s arrest arose after the officer grabbed the defendant’s hands for his own safety and, upon “wrestling” with the defendant, saw that the item in the defendant’s back pocket was, in fact, a firearm … . Thus, the record establishes that the officer’s conduct was justified at its inception and reasonably related in scope and intensity to the circumstances of the encounter as it developed … . Moreover, given the legality of the officer’s actions, the defendant’s claim that his post-arrest statement to police should be suppressed as the product of an illegal search or seizure is without merit… . People v Owens, 2015 NY Slip Op 02790, 2nd Dept 4-1-15

 

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Criteria for Liability for Lead Paint Exposure Described

Reversing Supreme Court, the Second Department determined defendants in a lead paint case failed to demonstrate they did not have notice of the dangerous condition.  The court explained the relevant criteria:

Under New York common law, a landowner “has a duty to maintain his or her premises in a reasonably safe condition” … . “[I]n order for a landlord to be held liable for injuries resulting from a defective condition upon the premises, the plaintiff must establish that the landlord had actual or constructive notice of the condition for such a period of time that, in the exercise of reasonable care, it should have been corrected” … . Constructive notice of a hazardous lead-based paint condition may be established by proof “that the landlord (1) retained a right of entry to the premises and assumed a duty to make repairs, (2) knew that the apartment was constructed at a time before lead-based interior paint was banned, (3) was aware that paint was peeling on the premises, (4) knew of the hazards of lead-based paint to young children, and (5) knew that a young child lived in the apartment” … . Greene v Mullen, 2015 NY Slip Op 02729, 2nd Dept 4-1-15

 

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