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RE: DETERMINING THE CORRECT JURISDICTION FOR STATUTE-OF-LIMITATIONS PURPOSES, THE ACCRUAL OF A BREACH OF CONTRACT ACTION ALLEGING PURELY ECONOMIC INJURY IS USUALLY IN THE “PLACE OF INJURY,” WHICH IS USUALLY WHERE THE PLAINTIFF RESIDES (FIRST DEPT).

The First Department, in a decision too complex to fairly summarize here, noted that for breach of contract actions alleging purely economic injury the claims accrue in the “place of injury,” usually plaintiff’s residence:

… Supreme Court should not have found that the claims accrued in New York and were timely under New York’s six-year statute of limitations. In contract cases involving a purely economic injury, accrual is determined by the “place of injury,” which usually is determined by applying the “plaintiff-residence” rule; this rule asks where the plaintiff resides and where it feels the economic impact of the loss … . MLRN LLC v U.S. Bank, N.A., 2023 NY Slip Op 01748, First Dept 3-30-23

Practice Point: A breach of contract action alleging purely economic injury usually accrues in the “place of injury” which is usually where plaintiff resides.

 

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HERE THERE WAS A QUESTION OF FACT ABOUT WHEN THE PLAINTIFFS BECAME AWARE OF THE ALLEGED FRAUD; THEREFORE THE COMPLAINT SHOULD NOT HAVE BEEN DISMISSED AS TIME-BARRED (FIRST DEPT).

The First Department, reversing Supreme Court, determined there was a question of fact concerning when the plaintiffs became aware of the alleged fraud. Therefore the complaint should not have been dismissed as time-barred:

Fraud claims must be commenced within “the greater of six years from the date the cause of action accrued or two years from the time the plaintiff . . . discovered the fraud, or could with reasonable diligence have discovered it” (CPLR 213[8]). * * *

Assuming, arguendo, that defendants met their prima facie burden on the motion, an issue of fact exists as to whether plaintiffs were on inquiry notice of the fraud more than two years before they commenced the action … . Murray v Stone, 2023 NY Slip Op 01749, First Dept 3-30-23

Practice Point:  A fraud action must be brought within six years of accrual or two years of discovery of the fraud.

 

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WHEN A JUDGE MAKES A WRONG RULING WHICH CANNOT BE APPEALED BECAUSE IT WAS NOT PROMPTED BY A MOTION, A MOTION TO SET ASIDE THE ORDER PURSUANT TO CPLR 5015 IS AN APPROPRIATE REMEDY; THE DENIAL OF THE MOTION TO SET ASIDE CAN BE APPEALED, AS WAS SUCCESSFULLY DONE HERE (FIRST DEPT).

​The First Department, reversing Supreme Court, determined Supreme Court should not have dismissed the complaint pursuant to CPLR 3216 because no motion to dismiss had been made and plaintiff was not given any warning or an opportunity to respond. The court noted that when a judge makes a wrong ruling, here the dismissal of the complaint, the proper procedure is a motion to set aside the order pursuant to CPLR 5015. The motion to set aside should have been granted:

A trial court has inherent power, as well as statutory power under CPLR 5015, to set aside an order on appropriate grounds … . “Vacating the dismissal order is consistent with the public policy of this State to dispose of cases on their merits and upholds the principle that a trial court’s power to dismiss an action sua sponte should be used sparingly and only in extraordinary circumstances” … .

There were no extraordinary circumstances warranting the complaint’s dismissal. Wohnberger v Lucani, 2023 NY Slip Op 01758, First Dept 3-30-23

Practice Point: Here no motion to dismiss the complaint pursuant to CPLR 3216 was made, but the judge dismissed the complaint sua sponte. A motion to set aside the order dismissing the complaint pursuant CPLR 5015 was made and denied. The denial was then successfully appealed here. This is the appropriate remedy when no appeal lies from the original order because the order was not issued pursuant to a motion.

 

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PLAINTIFF’S MOTION TO AMEND ITS REPLY TO A COUNTERCLAIM TO ADD THE STATUTE OF LIMITATIONS DEFENSE SHOULD HAVE BEEN GRANTED; THE PROPOSED AMENDMENT WAS NOT PALPABLY IMPROPER AND DEFENDANT SHOWED THERE WAS NO PREJUDICE BY NOT OPPOSING THE MOTION TO AMEND (SECOND DEPT).

​The Second Department, reversing Supreme Court, determined plaintiff’s motion to amend a reply to a counterclaim to add the statute-of-limitations affirmative defense should have been granted, noting that mere lateness is not an adequate ground for denial of a motion to amend. The court also noted that defendant’s failure to oppose the motion demonstrated a lack of prejudice:

“In the absence of prejudice or surprise resulting directly from the delay in seeking leave, applications to amend or supplement a pleading ‘are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit'” (… see CPLR 3025[b]). “The burden of demonstrating prejudice or surprise, or that a proposed amendment is palpably insufficient or patently devoid of merit, falls upon the party opposing the motion” … . “The determination to permit or deny amendment is committed to the sound discretion of the trial court” … .

Here, the record reflects that the proposed amendment was neither palpably insufficient nor patently devoid of merit. Moreover, while the plaintiff’s motion pursuant to CPLR 3025(b) was made more than eight months after its original verified reply, “‘[m]ere lateness is not a barrier to the amendment. It must be lateness coupled with significant prejudice to the other side, the very elements of the laches doctrine'” … . In this case, having failed to oppose the motion, [defendant] failed to satisfy its burden of demonstrating any prejudice or surprise. Toiny, LLC v Rahim, 2023 NY Slip Op 01702, Second Dept 3-29-23

Practice Point: Motions to amend pleadings should rarely be denied. Mere lateness in moving to amend is not an adequate reason for denial.

 

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PLAINTIFF WAS NOT WEARING A HARD HAT AND WAS STRUCK IN THE HEAD BY DEBRIS DURING DEMOLITION WORK; PLAINTIFF ALLEGED THE FAILURE TO PROVIDE HEAD PROTECTION VIOLATED THE INDUSTRIAL CODE GIVING RISE TO A LABOR LAW 241(6) CAUSE OF ACTION; DEFENDANTS DID NOT DEMONSTRATE THE JOB WAS NOT A HARD HAT JOB; THEREFORE DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the Labor Law 241(6) cause of action should not have been dismissed. Plaintiff was struck in the head by falling debris. The Industrial Code regulation requiring a hard hat was not demonstrated to be inapplicable by the defendant:

… Supreme Court should have denied those branches of the defendants’ motions which were for summary judgment dismissing so much of the Labor Law § 241(6) cause of action as was predicated on a violation of 12 NYCRR 23-1.8(c)(1). “In order to prevail on a Labor Law § 241(6) cause of action premised upon a violation of 12 NYCRR 23-1.8(c)(1), the plaintiff must establish that the job was a ‘hard hat’ job, and that the plaintiff’s failure to wear a hard hat was a proximate cause of his [or her] injury” … . Here, the defendants failed to establish, prima facie, that the demolition work associated with the house renovation was not a hard hat job, and that the plaintiff’s lack of head protection did not play a role in the injuries he sustained when he was struck in the head by a piece of wood … .Reyes v Sligo Constr. Corp., 2023 NY Slip Op 01699, Second Dept 3-29-23

Practice Point: Failure to provide a worker with hard hat may support a Labor Law 241(6) cause of action.

 

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ALTHOUGH PLAINTIFF PEDESTRIAN WAS STRUCK CROSSING THE STREET WHERE THERE WAS NO CROSSWALK, THERE WAS A QUESTION OF FACT WHETHER DEFENDANT DRIVER FAILED TO SEE WHAT SHE SHOULD HAVE SEEN (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s summary judgment motion in this pedestrian-car accident case should not have been granted. Although plaintiff pedestrian violated the Vehicle and Traffic law by crossing the street where there was no crosswalk, plaintiff raised a question of fact about whether defendant-driver failed to see what she should have seen:

The defendant established her prima facie entitlement to judgment as a matter of law by submitting evidence that, under the circumstances of this case, the plaintiff’s own conduct in crossing the roadway outside of a crosswalk was the sole proximate cause of the accident, and that the defendant was not at fault in the happening of the accident … . However, in opposition, the plaintiff raised a triable issue of fact as to whether the defendant failed to exercise due care to avoid striking the plaintiff with her vehicle by failing to see that which, through the proper use of her senses, she should have seen (see Vehicle and Traffic Law § 1146[a] …). Davis v Khalil, 2023 NY Slip Op 01659, Second Dept 3-29-23

Practice Point: Plaintiff pedestrian was struck by defendant driver crossing a road where there was no crosswalk in violation of the Vehicle and Traffic Law. However, there was a question of fact whether defendant driver failed to see what she should have seen.

 

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THE COVID EXECUTIVE ORDERS TOLLING THE STATUTES OF LIMITATIONS APPLY TO THE TIME FOR ANSWERING A MOTION FOR SUMMARY JUDGMENT IN LIEU OF COMPLAINT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the COVID executive orders tolling the statute of limitations applied to the time to oppose a motion for summary judgment in lieu of complaint:

In Brash v Richards, this Court determined that Executive Order 202.8 and the subsequent executive orders acted to toll those specific time limits contained in the CPLR and listed in the executive orders … . Executive Order 202.8 and the subsequent executive orders “appear to apply to the service of the notice of appearance” … , but “do[ ] not expressly apply to toll the defendant’s time to serve an answer” … . However, given the hybrid nature of the “motion-action” under CPLR 3213, in which the filing of answering papers is akin to the service of a notice of appearance or an answer … , combined with the desire to preserve the status quo for litigants during the COVID-19 pandemic … , under Executive Order 202.8 and the subsequent executive orders, neither defendant was required to appear and file answering papers … . Blue Lagoon, LLC v Reisman, 2023 NY Slip Op 01657, Second Dept 3-29-23

Practice Point: COVID executive orders tolling statutes of limitations apply to the time to answer a motion for summary judgment in lieu of complaint.

 

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PLAINTIFF WAS INVOLVED IN A COLLISION WHICH PUSHED HIS CAR INTO DEFENDANT’S CAR WHICH WAS PARKED ALONG THE CURB IN VIOLATION OF PARKING REGULATIONS; THE LOCATION OF DEFENDANT’S CAR WAS NOT A PROXIMATE CAUSE OF THE ACCIDENT; DEFENDANT’S SUMMARY JUDGMENT MOTION SHOULD HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined defendant (Lopez) was entitled to summary judgment in this traffic accident case. Plaintiff was involved in a collision which pushed his car into defendant Lopez’s car, which was parked along the curb. The fact that the Lopez car was parked in violation of parking regulations was not controlling:

Even assuming, as the plaintiff alleges, that Lopez’s vehicle was parked in violation of applicable regulations, no triable issue of fact was raised as to whether the location of the parked vehicle was a proximate cause of the accident … . Indeed, the plaintiff admitted in an affidavit that it was the impact of Wilson’s vehicle striking his vehicle that caused his vehicle to come into contact with Lopez’s vehicle .Reeves v Wilson, 2023 NY Slip Op 01698, Second Dept 3-29-23

Practice Point: The fact that defendant’s car was illegally parked played no role in the collision which pushed plaintiff’s car into defendants. The location of defendant’s car was not a proximate cause of the accident. The fact that the car was illegally parked did not translate into liability.

 

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PLAINTIFF WAS ENTITLED TO SUMMARY JUDGMENT FINDING DEFENDANT BREACHED THE CONTRACT, BUT SUMMARY JUDGMENT ON THE AMOUNT OF DAMAGES SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the defendant in this breach of contract action did not demonstrate the alleged cost of correcting defendant’s defective work was fair and reasonable. Therefore summary judgment on the damages amount should not have been granted:

To recover damages for breach of contract, a plaintiff must demonstrate “the existence of a contract, the plaintiff’s performance pursuant to the contract, the defendant’s breach of its contractual obligations, and damages resulting from the breach” … . Here, the plaintiff demonstrated its prima facie entitlement to judgment as a matter of law on the issue of liability on the breach of contract cause of action. The plaintiff submitted evidence demonstrating that the defendant breached the agreement by not following the specifications provided by NYSTA [New York State Transit Authority]. … [T]he Supreme Court properly granted that branch of the plaintiff’s motion which was for summary judgment on the issue of liability on the breach of contract cause of action.

The Supreme Court erred, however, in granting that branch of the plaintiff’s motion which was for summary judgment on the issue of damages on the breach of contract cause of action. “In an action seeking damages for breach of a construction contract, the proper measure of damages is the fair and reasonable market price for correcting the defective installation” … . Here, the plaintiff failed to establish, prima facie, that the costs it incurred in correcting the defective work were fair and reasonable … . Ben Ciccone, Inc. v Naber Elec. Corp., 2023 NY Slip Op 01656, Second Dept 3-29-23

Practice Point: A plaintiff may be entitled to summary judgment on whether defendant breached a contract and still be denied summary judgment on the amount of damages.

 

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THE COURT’S INQUIRY ON MOTIONS TO DISMISS AN ARTICLE 78 PETITION, A COMPLAINT, AND/OR A REQUEST FOR A DECLARATORY JUDGMENT SHOULD RARELY GO BEYOND WHETHER, ASSUMING THE TRUTH OF THE ALLEGATIONS, A CAUSE OF ACTION HAS BEEN STATED (SECOND DEPT).

The Second Department, reversing Supreme Court, noted that the inquiry on motions to dismiss should rarely go beyond determining whether a cause of action has been stated. The action here alleged violations of the Sewage Pollution Right to Know Act (ECL 17-0825-a):

“On a motion pursuant to CPLR 7804(f) to dismiss a petition, only the petition is to be considered, all of its allegations are to be deemed true, and the petitioner is to be accorded the benefit of every possible inference” … , On a motion pursuant to CPLR 3211(a)(7), “[c]ourts may consider extrinsic evidence outside of the pleading’s four corners to help determine whether the pleading party has a cause of action, as distinguished from whether the pleading simply states a cause of action” … . However, affidavits submitted by a movant “will almost never warrant dismissal under CPLR 3211 unless they establish conclusively that [petitioner] has no [claim or] cause of action” … . …

The petition/complaint also states a viable cause of action for declaratory relief. A motion to dismiss the complaint in an action for a declaratory judgment “‘presents for consideration only the issue of whether a cause of action for declaratory relief is set forth, not the question of whether the plaintiff is entitled to a favorable declaration'” … . Matter of Riverkeeper, Inc. v New York City Dept. of Envtl. Protection, 2023 NY Slip Op 01679, Second Dept 3-29-23

Practice Point: A court’s inquiry on motions to dismiss an Article 78 petition, a complaint and/or a request for declaratory judgment should rarely go beyond whether a cause of action has been stated.

 

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