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CPLR 5015 Power to Vacate a Final Judgment after Reversal of a Companion Case Is Discretionary

The Court of Appeals, in a full-fledged opinion by Judge Pigott (with a dissent), determined that Supreme Court had the discretion to vacate a final $4.4 million judgment against Port Authority based upon the subsequent Court of Appeals reversal of a companion case (Ruiz) holding Port Authority immune from lawsuits stemming from the 1993 bombing of the World Trade Center.  Supreme Court had vacated the judgment, but appeared to do so under the assumption the vacation was mandated by statute (CPLR 5015).  The Court of Appeals sent the matter back to Supreme Court, explaining that the court had the power to exercise its discretion:

Although a court determination from which an appeal has not been taken should “remain inviolate,” that rule applies “[a]bsent the sort of circumstances mentioned in CPLR 5015” ….  Moreover, as Professor Siegel has observed, “[i]f a judgment for which preclusive effect is sought is itself based on an earlier judgment . . ., and the earlier one has been vacated or reversed or otherwise undone, it is of course divested of its finality and the remedy to cancel the second judgment is a motion to vacate it on the ground of the undoing of the first” (Siegel, NY Prac § 444 at 776 [5th ed 2011] [emphasis supplied], citing CPLR 5015 [a] [5]).  Subdivision 5 of section 5015 (a) is applicable where the reversed, modified or vacated judgment or order is the basis for a later judgment – not where it merely compelled the result as a matter of collateral estoppel or stare decisis, but where it was actually entered in the same lawsuit as, and led directly to, the later judgment.  Thus, section 5015 (a) (5) applies in a case like this one where a joint trial on liability results in a single order entered in two cases, and where, after a separate trial on damages in one of the cases, that order is reversed on appeal.  * * *

Here, Supreme Court’s only finding was that this Court’s decision in Ruiz “eviscerate[d] any judgment, holding or finding of tortious liability on behalf of the Port Authority,” and therefore “require[d]” Supreme Court to find the Port Authority insulated from tortious liability pursuant to CPLR 5015 (a) (5).  It also appeared to believe that once the Port Authority had demonstrated that the Ruiz holding reversed the earlier liability determination to which Nash was a party, Supreme Court had no choice but to grant the Port Authority’s vacatur motion.  That was error. Nash v Port Authority, 238, CtApp 11-26-13

 

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Department of Homeless Services’ New Eligibility Procedure Triggered the Notice and Hearing Requirements of the City Administrative Procedure Act

The Court of Appeals, in a full-fledged opinion by Judge Graffeo, determined that the NYC Department of Homeless Services’ (DHS’s) adoption of a new Eligibility Procedure for temporary housing assistance triggered the notice and hearing requirements of the City Administrative Procedure Act (CAPA).  The failure to comply with the act prohibited implementation of the new rules.  In explaining that the Eligibility Procedure met the definition of a rule or regulation, the Court wrote:

DHS argues that the Eligibility Procedure is not a rule because DHS workers exercise some measure of discretion in resolving certain issues relevant to eligibility, such as whether an applicant has provided adequate cooperation during the need assessment process.  But the procedure itself is mandatory — all intake workers must follow it, regardless of the circumstances presented by an individual applicant — and many of the standards articulated in it are mandatory in the sense that their application will dictate whether an individual will or will not receive benefits.  For example, applicants are required to produce documentation pertaining to prior housing, financial resources and mental or physical impairment (which may necessitate the signing of a medical release) and if they fail to do so without a valid reason (mental or physical impairment), this “constitutes a failure to cooperate” mandating denial of benefits.  Similarly, the procedure specifies that a single adult who has $2,000 of on-hand assets “must utilize his/her resources to reduce or eliminate his/her need for emergency shelter” prior to being eligible for benefits.  Another section directs that “if an applicant has tenancy rights at any housing option, that residence will be deemed the viable housing option and the applicant will be found ineligible, provided there is no imminent threat to health or safety.”  These concrete provisions substantially curtail, if not eliminate, an intake worker’s discretion to grant THA (temporary housing assistance) benefits.  In fact, there are several specific directives in the Eligibility Procedure that appear to compel intake workers to deny benefits based on the presence or absence of a single factor, regardless of other circumstances that might support a determination of eligibility.  The procedure, which is itself mandatory, requires the application of standards that are dispositive of the outcome.  Matter of the Council of the City of New York v The Department of Homeless Services of the City of New York, 193, CtApp 11-26-13

 

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Invocation of Fifth Amendment Privilege Against Self-Incrimination by Both Attesting Witnesses Did Not Require Dismissal of Petition to Admit Will to Probate

The Third Department determined that Surrogate’s Court properly denied the motion to dismiss the petition.  Dismissal was sought because both attesting witnesses invoked their Fifth Amendment right against self-incrimination:

To establish that the will was duly executed, petitioner was required to produce the attesting witnesses for examination unless the law permitted the court to dispense with their testimony (see SCPA 1404 [1]).  The applicable statutes do not address the invocation of the privilege against self-incrimination by attesting witnesses, but this Court has found that such an invocation is akin to a failure to recall the events surrounding a will’s execution and, thus, that a will may be admitted to probate pursuant to SCPA 1405 (3) when one witness invokes the privilege, based on the testimony of the other witness or witnesses and sufficient other proof … .

Respondents contend that, as both attesting witnesses invoked the privilege here, the requirement in SCPA 1405 (3) for the testimony of “at least [one] other attesting witness” was not satisfied.   However, the Court of Appeals has held that SCPA 1405 (3) was not intended to “revolutionize[] prior practice” by requiring at least one attesting witness to testify in favor of a will … .  Instead, in holding that a will may be admitted to probate under SCPA 1405 (3) when no attesting witness recalls its execution, the Court found that – consistent with prior law – the statute requires attesting witnesses to be “examined, and all relevant testimony elicited” … but does not impose requirements upon the substance of their testimony.  * * * The issue thus distills to whether there was sufficient other evidence to establish a prima facie case of due execution, and we find that there was. Matter of Estate of Buchting…, 516257, 3rd Dept 11-21-13

 

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Property Owned by Religious Group Entitled to Real Property Tax Exemption

The Third Department reversed Supreme Court and determined a religious group (Cybeline Revival) had demonstrated its property was used primarily for religious and charitable purposes, and, therefore, the group was entitled to a real property tax exemption:

…[P]etitioner met its burden to demonstrate that it uses the property primarily for its religious and charitable purposes … .  In accord with Supreme Court’s determination, respondents contend that the property was used primarily to provide cooperative housing because, in essence, the few adherents of the Cybeline Revival have in effect just continued the property’s former residential use… .  However, these arguments contend that there is some threshold amount of activity and public benefit that must be demonstrated, which confuses the standard that is simply whether the property was used primarily for religious and charitable purposes … .  The testimony established that the Cybeline Revival stresses communal living among its adherents, as well as providing hospitality and charity to those in need, and the members consider this property the home of their faith … .  They also conduct religious and charitable activities throughout the property on a regular basis.  Accordingly, petitioner has satisfied the legal requirements in order to receive a real property tax exemption for 2009, 2010 and 2011 … .  Matter of Maetreum of Cybele, Magna Mater Inc v McCoy…, 515598, 3rd Dept 11-21-13

 

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Questions of Fact Existed About Whether Mortgage Lender Was Aware of Underlying “Foreclosure Rescue Scam”

In a full-fledged opinion by Justice Acosta, the First Department determined questions of fact existed about whether a mortgage loan (to Henry) was issued (by “Accredited”) with knowledge of fraud underlying the transaction.  Accredited alleged it was an “encumbrancer for value.”  After noting Accredited failed to submit evidence of its alleged “encumbrancer for value” status in admissible form (no official or certified title search was submitted), the First Department addressed evidence of Accredited’s knowledge of the underlying fraud:

Even assuming that defendants had established bona fide encumbrancer status, they would not be entitled to summary judgment because plaintiff has set forth evidence that defendants had notice of the underlying fraud.  * * *

…Accredited approved a $500,000 loan to Henry—a “buyer” who had no intention of purchasing a home and appears to have been coerced into attending the closing—without any proof that he had an ability to repay it. Indeed, the record is devoid of evidence to suggest that Accredited examined Henry’s paystubs, tax returns, or credit history before approving his loan application. These suspicious aspects of the transaction present issues of fact pertaining to Accredited’s knowledge of the foreclosure rescue scam.

The faulty appraisal also raises an inference that Accredited had notice of the underlying fraud. Although Accredited reduced the loan amount after becoming aware of the overstated appraisal, the fact that the initial appraisal was overstated would lead a reasonably prudent lender to investigate further to determine whether the prospective borrower was involved in a transaction free of fraud.  * * * Miller-Francis v Smith-Jackson, 2013 NY Slip Op 07821, 1st Dept 11-21-13

 

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Court Should Have Instructed Jury on Plaintiff’s Comparative Fault in this Legal Malpractice Action

The Third Department determined Supreme Court should have charged the jury on comparative fault in a legal malpractice action.  The client’s first priority security interest in equipment and vehicles had not been protected. The client alleged the attorney’s failure to file a UCC-1 and DMV liens constituted malpractice. With respect to the requested comparative-fault jury instruction, the Third Department explained:

 We agree with defendants’ contention that Supreme Court erred in refusing to charge the jury regarding plaintiff’s comparative fault.  The culpable conduct of a plaintiff client may be asserted as an affirmative defense in a legal malpractice action in mitigation of damages (see CPLR 1411, 1412…).  Here, the evidence was sufficient to support a finding that plaintiff could reasonably have been expected to understand the underlying obligations and formalities… .  Hattem v Smith, 516183, 3rd Dept 11-21-13

 

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Because the Statute Relied Upon by the State Police to Deny a FOIL Request Did Not Pertain to the Sought Documents, the Request Should Have Been Granted/Court Cannot Substitute Another Ground for Denial

The Third Department determined an inmate’s FOIL request for lab reports, raw data, logbook entries, chain of custody forms and other documentation relating to the taking of blood samples should have been granted:

Courts reviewing administrative determinations may only rely on the grounds invoked by the agency, and if those grounds are improper, the courts may not substitute what they deem a legitimate or more appropriate basis … . Respondent relied on the portion of Executive Law § 995-c that states, “DNA records contained in the state DNA identification index shall be released” for only limited purposes, one of which is “for criminal defense purposes, to a defendant or his or her representative, who shall also have access to samples and analyses performed in connection with the case in which such defendant is charged” (Executive Law § 995-c [6] [b]).  For purposes of that statute, a DNA record is defined as “DNA identification information prepared by a forensic DNA laboratory and stored in the state DNA identification index for purposes of establishing identification in connection with law enforcement investigations or supporting statistical interpretation of the results of DNA analysis.  A DNA record is the objective form of the results of a DNA analysis sample” (Executive Law § 995 [8]).

Petitioner seeks lab reports, raw data, logbook entries, chain of custody forms and other documentation related to the taking of the blood sample and transporting of the sample and results.  He acknowledges that he has already received the actual DNA results from the Division of Criminal Justice Services. Aside from the lab reports that he has already received from another source, it does not appear that these documents are kept in the State’s DNA identification index, so they do not fall within the definition of DNA records.  Thus, Executive Law § 995c (6), which only applies to DNA records, does not apply to the majority of petitioner’s request.  As respondent failed to prove that the only ground it invoked for denial would exempt the requested documents – aside from the lab reports of DNA results that petitioner has already received and is not seeking on appeal – petitioner is entitled to receive those other documents… . Matter of Karimzada v O’Mara, 515412, 3rd Dept 11-21-13

 

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School District Attorney Was “Employee” Not “Independent Contractor”

The Third Department reversed the Comptroller’s finding that an attorney for a school district was an independent contractor, not an employee, requiring the attorney to refund retirement benefits already paid.  In explaining the criteria for an “employee” who provides professional services, the Third Department wrote:

Where professional services are involved, the absence of direct control is not dispositive of the existence of an employer-employee relationship … .  Rather, such an employment relationship may be evidenced by “control over important aspects of the services performed other than results or means” …, i.e., “over-all control is sufficient to establish the employee relationship where [professional] work is concerned” … .  In our view, the Comptroller’s determination that petitioner was not an employee of the school district is not supported by substantial evidence.

Here, both the school board president and the assistant superintendent testified that the school board routinely engaged in discussions about whether to retain petitioner’s services as an employee or an independent contractor, and the board continually chose the former because it was more cost effective for the school district.  The testimony also indicated that, although there was no written contract with petitioner, the board and the assistant superintendent directed petitioner as to what work needed to be completed and when services were to be performed, the assistant superintendent and board reviewed petitioner’s work for its sufficiency and the president monitored petitioner’s performance and conducted annual performance evaluations.  Additionally, both the testimony and documentary evidence indicated that petitioner was a salaried employee paid every two weeks by paycheck, from which income taxes, Social Security, Medicare and health insurance premiums were deducted, and petitioner received a W-2 form annually.  Further, petitioner’s appointment as an employee of the school district was recognized by the County Department of Civil Service as a “School Attorney” – an exempt position – at a salary in 1974 of $3,400 per year.  Matter of Mowry v DiNapoli, 516295, 3rd Dept 11-21-13

 

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ARTICLE 10 PROCEEDINGS ARE CIVIL IN NATURE, HOWEVER THE COURT ANALYZED WHETHER RESPONDENT COULD REPRESENT HIMSELF AND WHETHER HE WAS AFFORDED EFFECTIVE ASSISTANCE USING THE CRIMINAL LAW STANDARDS (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice McCarthy, determined that Article 10 sex-offender commitment proceedings are civil in nature, but analyzed respondent’s request to represent himself and whether respondent received ineffective assistance under the criminal-law standards:

Supreme Court did not err in denying respondent’s request to proceed pro se. Assuming, without deciding, that a respondent in a Mental Hygiene Law article 10 proceeding has the same right of self-representation as a criminal defendant …, respondent’s request here was denied based on his failure to meet two prongs of the three-prong test:

“A defendant in a criminal case may invoke the right to defend pro se provided: (1) the request is unequivocal and timely asserted, (2) there has been a knowing and intelligent waiver of the right to counsel, and (3) the defendant has not engaged in conduct which would prevent the fair and orderly exposition of the issues” … .

Respondent made his request to proceed pro se only two business days before the second trial was scheduled to begin, which the court properly found untimely … . …The court properly denied his request based on … comments indicating that he would attempt to disrupt or prevent the orderly conduct of the trial …, along with the untimeliness of the request. …

Respondent was not deprived of the effective assistance of counsel. Initially, we hold that while Mental Hygiene Law article 10 proceedings are civil rather than criminal, and that ineffective assistance of counsel may only be considered in civil litigation if extraordinary circumstances are present, the indefinite and involuntary nature of confinement that may result in this type of proceeding constitutes such an extraordinary circumstance … .

Applying the criminal standard, we must determine whether “the evidence, the law, and the circumstances of [the] particular case, viewed in totality and as of the time of the representation, reveal that the attorney provided meaningful representation” … . Matter of State of New York v Timothy BB., 2013 NY Slip Op 07774 [113 AD3d 18], Third Dept 11-21-13

 

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Supreme Court Properly Declined to Give Husband Credit for Separate Property Contributions to Marital Residence—Husband Subsequently Conveyed Property to the Parties Jointly

The Third Department determined that Supreme Court properly declined to credit the husband with separate property contributions to the acquisition of the marital residence:

Although the residence was purchased prior to the marriage and the husband’s separate funds were used for the down payment and premarital mortgage payments, the husband conveyed the property to the parties jointly in 1998, creating a presumption that it then became marital property in its entirety … .  Under these circumstances, whether to grant the husband a credit for the contribution of separate property to the acquisition of this marital asset was within Supreme Court’s discretion …, and we find no abuse of that discretion here. Alecca v Alecca, 516659, 3rd Dept 11-21-13

 

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