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Deposit of Separate Funds in a Joint Account for One Month Converted the Separate Funds to Marital Property

The First Department interpreted a prenuptial agreement using standard contract-interpretation rules. The court determined that the terms of the agreement allowed the husband a separate property credit for each property to which he contributed $1 million of his separate funds. The court noted that the husband was not entitled to a separate property credit for $8.5 million paid for a Park Avenue apartment because the funds were first deposited in a joint account, converting them to marital property:

The husband is not entitled to a credit for the $8.5 million paid from the parties’ joint account at closing on the Park Avenue apartment. Although those funds were previously his separate property, they became marital property when he transferred them into the joint account. Since the husband’s transfer of separate funds into a joint account transformed those funds into marital property for all purposes, when funds from that joint account were then used for the purchase of the parties’ apartment, there was no use of separate property for the acquisition of the apartment. In any event, there is no evidence that the joint account was established only for convenience, or that the fund transfer was merely transitory, since the funds remained in the joint account for a month … .  Babbio v Babbio, 2014 NY Slip Op 05365, 1st Dept 7-17-14

 

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Plaintiff’s Decedent Fell to His Death in a Gorge on Property Owned by Cornell University—Questions of Fact Re: Whether Plaintiff’s Decedent Was “Hiking” within the Meaning of the General Obligations Law (which Would Relieve the University of Liability) and Whether the Dangerous Condition Was Open and Obvious

The Third Department determined questions of fact had been raised about whether plaintiff’s decedent was “hiking” within the meaning of the General Obligations Law when he fell into a gorge to his death on property owned by defendant Cornell University in Ithaca.  The court also determined there was a question of fact whether the dangerous condition was open and obvious:

Defendant maintains that it is shielded from liability by General Obligations Law § 9-103 (1) (a), which, as pertinent here, “grants a special immunity to owners . . . from the usual duty to keep places safe” when individuals use their property for specified recreational activities, including hiking … . The enumerated activities covered under the statute “are essentially self-explanatory” …. “Hiking” has been described as “traveling through the woods on foot” … and as “traversing land ‘by foot or snowshoe for the purpose of pleasure or exercise'” … . Comparatively, this Court recently determined that a person walking her dogs on a paved walkway was not engaged in “hiking” under the statute …. With one exception not applicable here, a person engaged in one of the enumerated activities is “presumed to be doing so for recreational purposes” without regard to his or her subjective intent ….

The critical determination is whether decedent’s activity constituted “hiking” under the statute. As described, he ran down the gorge trail and, in that literal sense, was “traveling through the woods on foot,” or “hiking,” as defined in Sega v State of New York … . The statute, however, speaks to specified recreational categories reflecting the intent of the Legislature “to allow or encourage more people to use more accessible land for recreational enjoyment” … . Viewing the facts in the light most favorable to plaintiffs, the nonmoving party, we agree with Supreme Court that, under the distinctive fact pattern presented, defendant did not establish, as a matter of law, that decedent was “hiking” within the embrace of General Obligations Law § 9-103 (1) (a) at the time of his death … .  * * *

…[A] question of fact remains as to whether the cliff’s edge was visible and obvious or presented a latent, dangerous condition necessitating an appropriate warning… . King v Cornell Univ, 2014 NY Slip Op 05393, 3rd Dept 7-17-14

 

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Question of Fact Whether Tenants Entitled to Equitable Renewal of Lease

The Second Department determined issues of fact were raised concerning whether the tenants should be allowed to remain in the leased premises.  Although the written option to renew the lease was never executed. the tenants alleged that oral assurances the tenants could remain were made by the landlord:

Although the documentary evidence conclusively established that the [tenants] failed to exercise the option to renew in accordance with the express terms of the lease …., contrary to [the landlord’s] contention, that evidence failed to conclusively establish that the [tenants] were not entitled to equitable renewal of the lease. Equity will intervene to relieve a commercial tenant’s failure to timely exercise an option to renew in accordance with the terms of the lease where “(1) the tenant’s failure to exercise the option in a timely fashion resulted from an honest mistake or inadvertence, (2) the nonrenewal of the lease would result in a substantial forfeiture by the tenant, and (3) the landlord would not be prejudiced by the renewal” … .

Here, the record reveals the existence of issues of fact as to whether the [tenants’] failure to exercise the option in accordance with the terms of the lease resulted from their mistaken belief that alleged discussions with [tenant’s agent] were sufficient to exercise the option, whether nonrenewal of the lease would result in the [tenants’] substantial forfeiture of a benefit as a result of the loss of valuable goodwill that they established at the present location, and whether [the landlord]  would suffer prejudice if the lease were renewed… . Waterfalls Italian Cuisine Inc v Tamarin, 2014 NY Slip Op 05323, 2nd Dept 7-16-14

 

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Action Against Broker for Failure to Procure Correct Coverage Should Not Have Been Dismissed/Question of Injured Worker’s Employment Status Must First Be Determined by the Workers’ Compensation Board

The Second Department determined that a cause of action alleging the insurance broker (Crystal) failed to purchase adequate insurance in response to a request from the insured (Mariani) should not have been dismissed.  The insured’s worker was injured on the job and the insurer disclaimed coverage because the policy did not cover subcontractors.  The Second Department also determined that it was up to the Workers’ Compensation Board to first determine the injured worker’s employment status and Supreme Court should not inject itself into that question until the Board acts:

“An insurance agent or broker . . . may be held liable under theories of breach of contract or negligence for failing to procure insurance . . . An insured must show that the agent or broker failed to discharge the duties imposed by the agreement to obtain insurance, either by proof that it breached the agreement or because it failed to exercise due care in the transaction” … . Crystal was not entitled to judgment as a matter of law because it failed to establish, prima facie, that it procured the adequate coverage that Mariani had engaged it to procure … . Siekkeli v Mark Mariani Inc, 2014 Slip Op 05319, 2nd Dept 7-16-14

 

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Police Did Not Have Sufficient Information to Justify Request that 12-Year-Old Lift His Shirt–Weapon Recovered After Juvenile’s Refusal (and a Police Pursuit) Should Have Been Suppressed

The Second Department determined the police did not have sufficient information to justify a request that appellant, who was 12 years old, to lift his shirt.  The weapon found on the appellant’s person should have been suppressed:

At issue here is whether the officers could ask the appellant to lift his shirt, even after he refused, and then pursue him as he fled the scene. Based upon a founded suspicion that criminal activity is afoot, the subject may be asked to produce identification …, may be asked whether he has weapons, and may be asked to remove his hands from his pockets … . However, asking a person to open his or her coat is an “intrusive step” which requires sufficient evidence of criminal activity to permit more than an inquiry by the police … . Here, the police acknowledge they did not see an object until they took their “intrusive step” of demanding that the appellant lift up the front of his shirt after he refused to do so, whereupon a police officer pursued him with his gun drawn.

The appellant had the “right to be let alone” … . The police may lawfully pursue an individual if they have a reasonable suspicion that he or she has committed or is about to commit a crime … . However, in this case, the police only acquired a basis to pursue the appellant after they took the intrusive step of demanding that he raise the front of his shirt and saw the butt of a gun. Since the pursuit of the appellant was unlawful, the gun which he abandoned in response to the pursuit should have been suppressed… . Matter of Shakir J, 2014 NY Slip Op 05336, 2nd Dept 7-16-14

 

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Riser In Church Was Not an Actionable Condition

The Second Department determined a riser, upon which plaintiff allegedly tripped, was an open and obvious and not inherently dangerous:

The injured plaintiff allegedly tripped and fell over a 5½-inch-high, single-step riser while exiting a church pew. * * *

While a landowner has a duty to maintain its premises in a reasonably safe manner …, a landowner has no duty to protect or warn against an open and obvious condition which, as a matter of law, is not inherently dangerous … . Here, the defendant established its entitlement to judgment as a matter of law by submitting evidence that the subject riser was open and obvious and not inherently dangerous … . The evidence presented by the plaintiffs in opposition, including the affidavit of their expert, failed to raise a triable issue of fact … . Coppola v Cure of Ars RC Church, 2014 NY Slip Op 05297, 2nd Dept 7-16-17

 

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Ambiguity About the Timing of a Final Decision from an Administrative Agency Precluded Dismissal Based Upon the Statute of Limitations Defense

In the course of a decision finding the Commissioner of Health had properly determined Medicaid reimbursement rates for residential health care facilities, the Third Department determined ambiguity about when a final decision had been made precluded dismissal based on the statute of limitations defense:

“[W]hen an administrative body itself creates ambiguity and uncertainty” concerning the finality of a determination, however, “affected [parties] should not have to risk dismissal for prematurity or untimeliness by necessarily guessing when a final and binding determination has or has not been made. Under these circumstances, ‘the courts should resolve any ambiguity created by the public body against it in order to reach a determination on the merits and not deny a party his [or her] day in court'”… . Matter of Adirondack Med Center-Uihlein v Daines, 2014 NY Slip Op 05386, 2nd Dept 7-16-14

 

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Triable Issues of Fact Re: Whether Property Owner Liable for Allowing Third Parties to Operate Remote Control Cars On Its Parking Lot—Motorcyclist Injured When Attempting to Avoid a Remote Controlled Car

The Second Department determined summary judgment was properly denied to the property owner (Farmingdale) which was aware its  parking lot was being used for radio remote control cars.  Plaintiff alleged he was injured when he tried to avoid a remote control car while riding his motorcycle:

“A property owner, or one in possession or control of property, has a duty to take reasonable measures to control the foreseeable conduct of third parties on the property to prevent them from intentionally harming or creating an unreasonable risk of harm to others” … . However, “[t]his duty [only] arises when there is an ability and opportunity to control such conduct, and an awareness of the need to do so” … . A property owner cannot be held to a duty to take protective measures unless it is shown that he either knows or has reason to know from past experience ” that there is a likelihood of conduct on the part of third persons . . . which is likely to endanger the safety of the visitor'” … .

Under the circumstances here, Farmingdale failed to eliminate all triable issues of fact as to whether it had the knowledge, authority, or opportunity to control the conduct of the third parties operating the radio remote control cars in the subject parking lot, and as to whether the conduct of the third parties in the parking lot posed a reasonably foreseeable risk of harm to others … . Tiranno v Warthog Inc, 2014 NY Slip Op 05322, 2nd Dept 7-16-14

 

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Black Letter Law Re: Rear-End Collisions and Premature Summary Judgment Motions Explained

In affirming the grant of summary judgment to the plaintiff in a rear-end collision case, the Second Department provided the black letter law on rear-end collisions and on whether a summary judgment motion is premature:

When the driver of an automobile approaches another automobile from the rear, he or she is bound to maintain a reasonably safe rate of speed and control over his or her vehicle, and to exercise reasonable care to avoid colliding with the other vehicle … . Drivers have a duty to see what should be seen and to exercise reasonable care under the circumstances to avoid an accident … . “A rear-end collision with a stopped or stopping vehicle creates a prima facie case of negligence against the operator of the rear vehicle, thereby requiring that operator to rebut the inference of negligence by providing a nonnegligent explanation for the collision” … . * * *

CPLR 3212(f) provides, in relevant part, that a court may deny a motion for summary judgment “[s]hould it appear from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated” (CPLR 3212[f]…). ” This is especially so where the opposing party has not had a reasonable opportunity for disclosure prior to the making of the motion’ ” … . A party who contends that a summary judgment motion is premature is required to demonstrate that discovery might lead to relevant evidence or that the facts essential to justify opposition to the motion were exclusively within the knowledge and control of the movant (see CPLR 3212[f]…). “The mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered during the discovery process is insufficient to deny the motion” … . Singh v Avis Rent A Car Sys Inc, 2014 NY Slip Op 05320, 2nd Dept 7-16-14

 

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Purchaser of Mortgage Was Not a “Bona Fide Encumbrancer”—Another Previously Filed Mortgage Was the Operative Mortgage

The Second Department determined Deutsche Bank did not “win the race” to the recording office (so as to cut off another filed mortgage) and was not a “bona fide encumbrancer” because the person living in the mortgaged premises and paying taxes on the property was not consistent with Deutsche Bank’s mortgage:

“[T]o cut off a prior lien, such as a mortgage, the purchaser must have no knowledge of the outstanding lien and win the race to the recording office” … . * * *

” [W]here a purchaser has knowledge of any fact, sufficient to put him on inquiry as to the existence of some right or title in conflict with [what] he is about to purchase, he is presumed either to have made the inquiry, and ascertained the extent of such prior right, or to have been guilty of a degree of negligence equally fatal to his claim, to be considered as a bona fide purchaser'” … . “Similarly, a mortgagee is under a duty to make an inquiry where it is aware of facts that would lead a reasonable, prudent lender to make inquiries of the circumstances of the transaction at issue'” … . ” Actual possession of real estate is sufficient notice to a person proposing to take a mortgage on the property, and to all the world of the existence of any right which the person in possession is able to establish'” … . Mortgage Elec Registration Sys Inc v Pagan, 2014 NY Slip Op 05309, 2nd Dept 7-16-14

 

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