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Bank Did Not Negotiate a Mortgage Modification in Good Faith as Required by CPLR 3408—Applicable “Good Faith” Standard Determined and Explained

The Second Department, in a full-fledged opinion by Justice Leventhal, determined that Supreme Court had properly found that plaintiff bank did not negotiate in good faith a mortgage modification pursuant to the Home Affordable Mortgage Program (HAMP) (CPLR 3408).  In the course of the opinion, the court described the applicable “good faith” standard:

…[W]e hold that the issue of whether a party failed to negotiate in “good faith” within the meaning of CPLR 3408(f) should be determined by considering whether the totality of the circumstances demonstrates that the party’s conduct did not constitute a meaningful effort at reaching a resolution. We reject the plaintiff’s contention that, in order to establish a party’s lack of good faith pursuant to CPLR 3408(f), there must be a showing of gross disregard of, or conscious or knowing indifference to, another’s rights. Such a determination would permit a party to obfuscate, delay, and prevent CPLR 3408 settlement negotiations by acting negligently, but just short of deliberately, e.g., by carelessly providing misinformation and contradictory responses to inquiries, and by losing documentation. Our determination is consistent with the purpose of the statute, which provides that parties must negotiate in “good faith” in an effort to resolve the action, and that such resolution could include, “if possible,” a loan modification (CPLR 3408[f]…).

Where a plaintiff fails to expeditiously review submitted financial information, sends inconsistent and contradictory communications, and denies requests for a loan modification without adequate grounds, or, conversely, where a defendant fails to provide requested financial information or provides incomplete or misleading financial information, such conduct could constitute the failure to negotiate in good faith to reach a mutually agreeable resolution.

In this case, the totality of the circumstances supports the Supreme Court’s determination that the plaintiff failed to act in good faith, as the plaintiff thwarted any reasonable opportunities to settle the action, thus contravening the purpose and intent of CPLR 3408. US Bank NA v Sarmiento, 2014 NY Slip Op 05533, 2nd Dept 7-30-14

 

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Defendant’s Failure to Comply with Discovery Orders Warranted Striking the Answer

The Second Department determined defendant’s answer was properly struck due to defendant’s failure to comply with the court’s orders concerning discovery:

“[A] trial court is given broad discretion to oversee the discovery process” … . When a party fails to comply with a court order and frustrates the disclosure scheme set forth in the CPLR, it is within the court’s discretion to strike the “pleadings or parts thereof” (CPLR 3126[3]) as a sanction against such party … . However, public policy favors the resolution of cases on the merits … . Accordingly, “the drastic remedy’ of striking a pleading pursuant to CPLR 3126 should not be imposed unless the failure to comply with discovery demands or orders is clearly willful and contumacious” … . “Willful and contumacious conduct may be inferred from a party’s repeated failure to comply with court-ordered discovery, coupled with inadequate explanations for the failures to comply or a failure to comply . . . with court-ordered discovery over an extended period of time” … .

Here, the plaintiff moved to strike the answer insofar as asserted by the defendant Roger Powell (hereinafter the defendant) almost three years after commencing this action. At that time, the defendant still had not appeared for a deposition, despite numerous “so-ordered” extensions entered into between counsel for the parties, and in violation of a court order directing him to appear for such deposition. In opposition to the motion, defense counsel’s investigator stated that he had been unable to locate the defendant. Under these circumstances, the Supreme Court providently exercised its discretion in granting that branch of the plaintiff’s motion which was to strike the answer insofar as asserted by the defendant and to direct an inquest against him … . Stone v Zinoukhova, 2014 NY Slip Op 05532, 2nd Dept 7-30-14

 

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Law Firm Representing Wife in a Divorce Proceeding Entitled to Charging Lien Pursuant to Judiciary Law 475 But Not Entitled to Money Judgment with Interest

In reversing Supreme Court, the Second Department determined the law firm which represented the wife in a divorce was entitled to a charging lien for outstanding legal fees (to be paid from the proceeds of the upcoming sale of the marital residence).  However, in the absence of a plenary action, the law firm was not entitled to enter a money judgment with interest (Judiciary Law 475):

Judiciary Law § 475 provides that, from the commencement of an action in any court, the attorney who appears for a party has a lien upon his client’s cause of action, claim, or counterclaim, which attaches to a verdict, report, determination, decision, judgment, or final order in his client’s favor, and the proceeds thereof. “A charging lien is a security interest in the favorable result of litigation, giving the attorney equitable ownership interest in the client’s cause of action and ensuring that the attorney can collect his fee from the fund he has created for that purpose on behalf of the client” … . ” Where an attorney’s representation terminates upon mutual consent, and there has been no misconduct, no discharge for just cause, and no unjustified abandonment by the attorney, the attorney maintains his or her right to enforce the statutory lien'” … . In a matrimonial action, a charging lien will be available ” to the extent that an equitable distribution award reflects the creation of a new fund by an attorney greater than the value of the interest already held by the client'” … . Wasserman v Wasserman, 2014 NY Slip Op 05535, 2nd Dept 7-30-14

 

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Costs Properly Assessed Against Carrier for Instituting Proceedings Without Reasonable Ground

The Third Department affirmed the Workers’ Compensation Board’s assessment of costs against the carrier for instituting proceedings without reasonable ground:

Workers’ Compensation Law § 114-a (3) (i) permits the Board to assess costs against a party who has “instituted or continued [a proceeding before the Board] without reasonable ground.” Here, the carrier previously had been warned that counsel’s failure to respond to its request for an updated work search history — standing alone — would be insufficient to reopen the underlying claim and, more to the point, was apprised “in very clear terms of the requirements for [the] supporting evidence necessary to reopen this claim on the question of whether . . . claimant ha[d] voluntarily removed herself from or [wa]s no longer attached to the labor market.” Despite that express directive, the carrier nonetheless made a second request to reopen premised solely upon counsel’s failure to respond to the carrier’s request for additional information. Under these circumstances, we discern no abuse of discretion in the Board’s decision to assess costs against the carrier … . Matter of Bailey v Achieve Rehab & Nursing, 2014 NY Slip Op 05475, 3rd Dept 7-24-14

 

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Successive Summary Judgment Motions OK Based On Evidence Learned in Discovery

The Third Department noted that successive summary judgment motions are allowed where discovery turns up new evidence.  In this case summary judgment was granted to the defendants who were struck by plaintiff’s decedent’s vehicle which had crossed over into on-coming traffic:

Although successive summary judgment motions are generally discouraged absent “‘a showing of newly discovered evidence or other sufficient cause'” …, where, as here, evidence produced from additional discovery places the motion court “in a far better position to determine” a legally dispositive issue, the court should not be precluded from exercising its discretion to consider the merits of a subsequent motion … . Foster v Kelly, 2014 NY Slip Op 05472, 3rd Dept 7-24-14

 

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Clause in Appeal-Waiver Agreement Which Purported to Vacate Plea and Sentence Upon the Filing of a Notice of Appeal Unenforceable

The First Department determined defendant’s waiver of his right to appeal was not adequately explained by the sentencing court and further determined a clause in the waiver agreement is unenforceable.  The Clause purported to vacate the plea and sentence if a notice of appeal is filed:

,,,[W]e agree with defendant that the clause in the waiver agreement that purportedly treats the filing of a notice of appeal by defendant as a motion to vacate the judgment to be unenforceable. Specifically, the waiver form included the following clause:

“If the defendant or the defendant’s attorney files a notice of appeal that is not limited by a statement to the effect that the appeal is solely with respect to a constitutional speedy trial claim or legality of the sentence, they agree that the District Attorney and or Court may deemed such filing to be a motion by the defendant to vacate the conviction and sentence, and will result, upon the application and consent of the District Attorney, in the plea and sentence being vacated and this indictment being restored to its pre-pleading status.”

This clause is unenforceable because there is no statutory authority to vacate a judgment under these circumstances (CPL 440.10,,,).

Further, this language discourages defendants from filing notices of appeal even when they have claims that cannot be waived, such as one concerning the lawfulness of the waiver or the plea agreement itself. “[A]n agreement to waive appeal does not foreclose appellate review in all situations” … . If the agreement to waive were itself sufficient to foreclose appellate review, “the court would then be deprived of the very jurisdictional predicate it needs as a vehicle for reviewing the issues that survive the waiver” … . The language in the written waiver, in essence, purports to prevent appellate claims that have been found by the courts to be “unwaivable” precisely because of their constitutional import … . People v Santiago 2014 NY Slip Op 05493, 1st Dept 7-24-14

 

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People Failed to Demonstrate Seizure of Heroin from Defendant’s Impounded Vehicle Was Pursuant to a Standard Inventory Search—Heroin Should Have Been Suppressed

The Third Department, over a dissent, determined that heroin seized from inside defendant’s vehicle after a stop for speeding should have been suppressed.  The defendant was arrested at the scene of the stop based upon an outstanding warrant. The People failed to demonstrate the heroin was found pursuant to a standard inventory search of the impounded vehicle:

Following a lawful arrest of the driver of a vehicle, “the police may impound the car, and conduct an inventory search, where they act pursuant to ‘reasonable police regulations relating to inventory procedures administered in good faith'” … . To this end, “courts have insisted that an inventory search be conducted according to a familiar routine procedure and that the procedure meet two standards of reasonableness” … . Specifically, the procedures must be “designed to meet the legitimate objectives of the search while limiting the discretion of the officer in the field” … .

Here, the transcript of the … suppression hearing fails to support a determination that the conduct of the police was reasonable. Although not fatal to their argument against suppression …, the People failed to offer a copy of the State Police procedure manual into evidence. Additionally, the People also failed to ask any substantive questions of their witnesses so as to otherwise establish (1) that the State Police had a standardized procedure, (2) that such procedure was reasonable, and (3) that it was followed here. People v Leonard, 2014 NY Slip Op 05468, 3rd Dept 7-24-14

 

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Mother Could Not Maintain a Cause of Action for Emotional Harm Based Upon the Death of Her Baby—Although the Baby Was “Pre-Viable” and Unconscious, the Baby Was Born Alive and the Mother Suffered No Independent Injury

The First Department determined mother could not bring a cause of action for emotional harm as a result of the death of her premature baby.  Although the baby was “pre-viable,” the baby was born alive and the mother suffered no independent injury.

The mother’s argument that the fact that the baby was “pre-viable” unconscious and lived for only a few hours distinguished this case from the controlling cases was rejected:

Plaintiff argues that the rationale of Mendez v Bhattacharya (15 Misc 3d 974) should be applied to this case. In Mendez, the infant had an Apgar score of one at one minute and zero at five minutes (15 Misc 3d at 981). It was uncontroverted that “even if there was a technical sign of life due to the lingering heartbeat, the child was not viable, since there was no other sign of life besides the momentary heartbeat” (id. at 982). The infant had no respiration and efforts to resuscitate by mechanical ventilation and CPR were unsuccessful (id. at 981). The court found that under those facts, the presence of a “momentary heartbeat” did not rise to the level of a live birth within the purview of the Broadnax and Sheppard-Mobley decisions, and therefore the plaintiff mother had a viable cause of action for emotional distress (id. at 983).

That is clearly not the situation before us. To accept plaintiff’s contention that, where there is a live birth but the infant never attains consciousness, a mother should be permitted to maintain a cause of action for emotional distress would impermissibly expand the narrow holdings in Broadnax and Sheppard-Mobley. Plaintiff was entitled to bring a wrongful death action on behalf of the estate of the person who was injured, i.e., the infant who survived, albeit briefly … . Levin v New York City Health & Hosps Corp…, 2014 NY Slip Op 05492, 1st Dept 7-24-14

 

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Parole Board’s Role and Court’s Review Role Explained in Depth

The Third Department, in an extensive and detailed decision, over a dissent, determined petitioner had been properly denied parole, despite his extraordinary achievements in prison, including his earning bachelor’s and master’s degrees.  The petitioner was convicted of felony murder in connection with the death of a police officer:

[T]he record establishes that the Board acknowledged petitioner’s extensive rehabilitative success along with the additional statutory factors, but placed greater emphasis on the seriousness of petitioner’s crime in its determination that release would be incompatible with the welfare of society and so deprecate the seriousness of the crime as to undermine respect for the law, as it is “entitled” to do … . We are thus constrained to affirm — to do otherwise is to implicitly overrule the decades of our well-settled jurisprudence set forth above … . Matter of Hamilton v New York State Div of Parole, 2014 NY Slip Op 05487, 3rd Dept 7-24-14

 

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Water Tracked In from Sidewalk Cleaning Raised Question of Fact About Creation of a Dangerous Condition in a Slip and Fall Case—Open and Obvious Condition Relieves Owner of Duty to Warn But Not Duty to Keep Premises Safe

The First Department determined there were questions of fact about whether the independent contractor which cleaned the sidewalks adjacent to defendants’ office building created the dangerous condition.  The sidewalks were cleaned by hosing them down.  It was alleged that water tracked in from the sidewalks created a slippery condition, causing plaintiff’s fall.  The court noted that an open and obvious condition relieves the owner of a duty to warn, but does not the duty to maintain the premises in a reasonably safe condition:

In this case a jury could reasonably conclude that the defendants created a dangerous condition in the course of cleaning the sidewalk by hosing down the perimeter of the building without taking precautions to keep water from being tracked onto the marble lobby floor. Slippery conditions created by defendants in the course of cleaning a premises can give rise to liability … . Tracked-in water that creates a slippery floor can be a dangerous condition … . While reasonable care does not require an owner to completely cover a lobby floor with mats to prevent injury from tracked-in water …, it may require the placement of at least some mats … . Since there is evidence supporting a conclusion that there were no mats on the floor near the entrance, there is an issue for the jury concerning whether the defendants exercised reasonable care, including whether they took reasonable precautions against foreseeable risks of an accident while cleaning the sidewalk during a busy work morning.

Defendants’ contention that the water on the sidewalk was open and obvious does not warrant summary judgment dismissing the complaint. An open and obvious condition relieves the owner of a duty to warn about the danger, but not of the duty to maintain the premises in a reasonably safe condition … . DiVetri v ABM Janitorial Serv Inc, 2014 NY Slip Op 05494, 1st Dept 7-24-14

 

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