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Remedy When Referee Exceeds Authority

The Second Department explained the effect of a referee’s exceeding his or her authority:

“A referee derives his or her authority from an order of reference by the court” …. The scope of a referee’s duties are defined by the order of reference (see CPLR 4311;…). A referee “who attempts to determine matters not referred to him [or her] by the order of reference acts beyond and in excess of his [or her] jurisdiction” …. Here, the Supreme Court directed the referee to hear and report on the issues of whether the plaintiff complied with the terms of the loan reinstatement agreement …. Instead of making findings of fact and reporting them to the Supreme Court, the referee exceeded his authority by making a determination that the loan should be reinstated … . Since the referee had no authority to do so, the Supreme Court should have rejected his report in its entirety … . Furman v Wells Fargo Home Mtge Inc, 2013 NY Slip Op 02374, 2011-10281, 2011-10284, Index No 25616/09, 2nd Dept, 4-10-13

 

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Plaintiffs Entitled to Return of Down Payment When Mortgage Application Denied, In Spite of Failure to Apply for “No Income Check” Mortgage

The Second Department determined that it would have been futile for the plaintiffs to apply for a no-income-check mortgage so their failure to do so did not allow the defendants to hang on to the plaintiffs’ down payment:

Here, the plaintiffs made a prima facie showing of their entitlement to judgment as a matter of law on their cause of action for return of their down payment by submitting evidentiary proof demonstrating that they applied to an institutional lender for a mortgage three days before the contract to purchase the defendants’ property was fully executed, that their application was denied through no fault of their own, and that they gave the defendants timely notice that they were exercising their right to cancel the contract pursuant to the mortgage contingency clause … . Under the circumstances of this case, the plaintiffs’ failure to additionally apply for a no-income-check mortgage, as required by a rider to the subject contract, did not raise an issue of fact as to whether they made a good faith effort to secure mortgage financing. The plaintiffs’ mortgage application was already pending as of the date of the contract, and the plaintiffs’ evidentiary submissions demonstrated that it would have been futile for them to additionally apply for a no-income-check mortgage in view of the lender’s determination that, based on their credit history, they were not eligible for a mortgage of any kind … . Etienne v Hochman, 2013 NY Slip Op 02373, 2011-08896, Index No 23466/08, 2nd Dept, 4-10-13

 

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Use Variance Criteria

The Second Department explained the criteria for a use variance as follows:

“[A] landowner who seeks a use variance must demonstrate factually, by dollars and cents proof, an inability to realize a reasonable return under existing permissible uses” …. Here, [the property owner] failed to show, based on competent financial evidence, that it cannot yield a reasonable rate of return absent the requested variance. Therefore, the ZBA’s [Zoning Board of Appeals’] determination to grant a use variance for parking in the BB residence district must be annulled. Matter of Hejna v Board of Appeals…, 2013 NY Slip Op 02395, 2011-08146, Index No 29063/07, 2nd Dept 4-10-13

 

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Failure to Comply With Lease Option Can Be Forgiven if Certain Criteria Met 

The Second Department explained that the failure to strictly comply with the terms of a lease option (here involving notice to the landlord of the exercise of an option to terminate the lease) can be forgiven if certain criteria are met:

An optionee must exercise the option in accordance with its terms, within the time and in the manner specified in the option …. The defendant failed to strictly comply with the language in the option in purporting to exercise it. However, equity will intervene to relieve an optionee of the consequences of a failure to exercise an option in accordance with its terms where (1) the optionee’s failure to properly exercise the option resulted from an honest mistake or inadvertence, (2) refusal to recognize the exercise of the option would result in a substantial forfeiture by the optionee, and (3) the optionor would not suffer prejudice as a result … .  Pacific Dean Realty, LLC v Specific St, LLC, 2013 NY Slip Op 02385, 2011-10324, Index No 21508/10, 2nd Dept 4-10-13

 

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Fraud Cause of Action in Legal Malpractice Case Sufficiently Pled

In a legal malpractice action, the Second Department determined the cause of action for fraud should not have been dismissed:

…[T]he Supreme Court erred in granting that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the causes of action alleging fraud. “To properly plead a cause of action to recover damages for fraud, the plaintiff must allege that (1) the defendant made a false representation of fact, (2) the defendant had knowledge of the falsity, (3) the misrepresentation was made in order to induce the plaintiff’s reliance, (4) there was justifiable reliance on the part of the plaintiff, and (5) the plaintiff was injured by the reliance” …. Here, the complaint alleged that the defendants committed fraud by misrepresenting that they “made a motion for a default judgment” when they “never made, filed, or drafted” such a motion, that the plaintiff relied on the misrepresentation, and that the defendants billed the plaintiff for drafting the motion. Those allegations were sufficient to state a cause of action to recover damages for fraud …. Vermont Mut Ins Co v McCabe & Mack, LLP, 2013 NY Slip Op 02392, 2012-00566, Index No 4510/10, 2nd Dept, 4-10-13

 

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Guilty Plea Forfeits All Ineffective Assistance Claims Except those Relating to Plea Bargain

The Second Department noted that a guilty plea forfeits all ineffective assistance claims except those related to the plea-bargaining:
…[T]o the extent that the defendant’s claim of ineffective assistance of counsel does not directly involve the plea-bargaining process, it was forfeited upon his plea of guilty …. ​People v Barrett, 2013 NY Slip Op 02410, 2011-04637, Ind No 1727/10, 2nd Dept 4-10-13

 

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Criteria for Preemption by Martin Act

The Second Department noted the criteria for preemption of state law by the Martin Act:

…[T]he Supreme Court properly denied that branch of the defendant’s prior motion which was for summary judgment dismissing the complaint on the ground that it is preempted by the Martin Act (see General Business Law art 23-A). Since the plaintiff’s common-law causes of action to recover damages for breach of contract and derivative declaratory judgment causes of action are not “predicated solely on a violation of the Martin Act or its implementing regulations,” they are not preempted by the Martin Act … .  Meadowbrook Farms Homeowners Assn, Inc v JZG Resources Inc, 2013 NY Slip Op 02381, 2011-089/10, Index No 839/10, 2nd Dept 4-10-13

 

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Award of Sole Custody to Mother Without a Hearing Reversed—Reliance on Expert Recommendations Not Sufficient

In reversing the Family Court’s award of sole custody to the mother without a hearing, the Second Department wrote:

Here, the Family Court did not possess adequate relevant information to enable it to make an informed and provident determination as to the children’s best interest so as to render a hearing unnecessary. Indeed, the court was not involved when the parties agreed to the existing custody and parenting agreement, and only became involved in this proceeding after the prior Family Court Judge in this matter retired. Furthermore, although the court had the recommendations of an expert before it, the recommendations of experts are but one factor to be considered …, and “are not determinative and do not usurp the judgment of the trial judge” …. Accordingly, the Family Court erred in denying the father’s petition and, inter alia, awarding sole physical custody to the mother without first holding an evidentiary hearing on the issue of physical custody and visitation so that it could make an independent determination as to the best interests of the children on the basis of the evidence presented at such a hearing ….  Matter of Schyberg v Peterson, 2013 NY Slip Op 02406, 2011-1113, 2nd Dept, 4-10-12

 

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Grant of Visitation to Mother of Deceased Father (Grandmother) Reversed​

In reversing Family Court’s grant of visitation to the children’s grandmother, the Second Department wrote:

A court determining a petition for grandparent visitation under Domestic Relations Law § 72(1), must undertake a two-part inquiry. First, it must determine whether the grandparent has standing to petition for visitation rights based on the death of a parent or equitable circumstances …. If the court concludes that the grandparent has established the right to be heard, then it must determine if visitation is in the best interests of the child … . “[T]he courts should not lightly intrude on the family relationship against a fit parent’s wishes” … . “Indeed, it is strongly presumed that a fit parent’s decisions are in the child’s best interests” … .

In this case, the Family Court should have denied the grandmother’s petition for visitation. The death of the children’s father provided the grandmother with automatic standing to seek visitation (see Domestic Relations Law § 72[1]…). Nevertheless, the Family Court improvidently exercised its discretion in granting the petition. The evidence in the record … established that visitation was not in the best interests of the children at the time the Family Court granted the petition … . Moreover, we note that on this appeal, the attorney for the children supports the denial of visitation. Matter of Pinsky v Botnick, 2012 NY Slip Op 02402, 2012-03338 2012-07576, 2nd Dept, 4-10-13​

 

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Out-of-Pocket Expenses Must Be Alleged in Claim Based on Alleged Failure to Detect Child’s Medical Condition In Utero

In dismissing a medical malpractice action which was based upon a physician’s alleged failure to detect a medical condition from the review of a sonogram, a condition which may have caused the parents to terminate the pregnancy, the Second Department reviewed the available damages in such an action. Ultimately the Second Department determined that the plaintiffs’ failure to raise a question of fact about future expenses they will incur for care of the child (currently paid for by Medicaid) required dismissal of the complaint:

Although a child with a disability may not maintain a wrongful life cause of action, the child’s parents may, under certain circumstances, maintain a cause of action on their own behalf to recover the extraordinary costs incurred in raising the child … . To succeed on such a cause of action, which “sound[s] essentially in negligence or medical malpractice,” the plaintiffs “must demonstrate the existence of a duty, the breach of which may be considered the proximate cause of the damages suffered by” them … . Specifically, the parents must establish that malpractice by a defendant physician deprived them of the opportunity to terminate the pregnancy within the legally permissible time period, or that the child would not have been conceived but for the defendant’s malpractice … . Further, the claimed damages cannot be based on mere speculation, conjecture, or surmise, and, when sought in the form of extraordinary expenses related to caring for a disabled child, must be necessitated by and causally connected to the child’s condition …. The “parents’ legally cognizable injury’ is the increased financial obligation arising from the extraordinary medical treatment rendered the child during minority’” … . Since the parents’ recovery is limited to their personal pecuniary loss, expenses covered by other sources such as private insurance or public programs are not recoverable ….  Mayzel v Moretti, 2013 NY Slip Op 02379, 2011-11393, Index No 102307/09, 2nd Dept, 4-10-13

 

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