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PLAINTIFF LAW FIRM SHOULD HAVE BEEN ALLOWED TO REPRESENT ITSELF IN ITS SUIT FOR ATTORNEY’S FEES AGAINST A FORMER CLIENT; ALTHOUGH THE ATTORNEYS DIRECTLY INVOLVED WITH THE FORMER CLIENT WERE DISQUALIFIED, DEFENDANT DID NOT DEMONSTRATE THE TESTIMONY OF THE DISQUALIFIED ATTORNEYS WOULD PREJUDICE PLAINTIFF LAW FIRM SUCH THAT DISQUALICATION OF THE ENTIRE FIRM WAS WARRANTED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined that plaintiff law firm, HoganWillig, could represent itself in a suit seeking payment from defendant volunteer fire company (SFC), a former client. The attorneys who were directly involved in representing the fire company were disqualified from this suit. The defendant argued the testimony of the disqualified attorneys would be prejudicial to HoganWillig, a violation of Rules of Professional Conduct rule 3.7[b][1]:

… [W]e agree with HoganWillig that SFC failed to establish that “it is apparent that the testimony [of the disqualified attorneys] may be prejudicial to [HoganWillig]” (Rules of Professional Conduct [22 NYCRR 1200.0] rule 3.7 [b] [1] … ). “The word ‘apparent’ means that prejudice to the client must be visible, as opposed to merely speculative, conceivable, or imaginable,” i.e., the prejudice “has to be a real possibility, not just a theoretical possibility” … . Consistent therewith, a movant’s “vague and conclusory” assertions are insufficient to establish that an attorney’s testimony may be prejudicial to the client … . * * *

Here, the court erred in failing to “consider such factors as [HoganWillig’s] valued right to choose its own counsel, and the fairness and effect in the particular factual setting of granting disqualification” … . “Disqualification denies a party’s right to representation by the attorney of its choice,” and we conclude under the circumstances of this case that depriving HoganWillig of its right to represent itself in the present action is particularly unwarranted given that counsel and client are one and the same … . As the court properly determined when it first considered the original motion, whether HoganWillig thinks it is desirable, despite the disqualification of three of its attorneys, to continue representing itself is a strategic decision that should be left to HoganWillig. Hoganwillig, PLLC v Swormville Fire Co., Inc., 2022 NY Slip Op 06331, Fourth Dept 11-10-22

Practice Point: Here the plaintiff law firm should have been allowed to represent itself in a suit to recover attorney’s fees from a former client. The fact that the attorneys directly involved in the former client’s case were disqualified did not require disqualification of the law firm itself. It was the defendant’s burden to demonstrate the testimony of the disqualified attorneys would prejudice the law firm (that was the basis for Supreme Court’s disqualification of the entire firm). The defendant was not able show such prejudice.

 

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PLAINTIFF ALLEGED DEFENDANT CORPORATION’S REGISTRATION STATEMENT CONTAINED FALSE AND MISLEADING CLAIMS WHICH INDUCED PLAINTIFF TO BUY STOCK IN DEFENDANT’S CORPORATION; THE CLAIMS IN DEFENDANT’S REGISTRATION STATEMENT WERE MERE PUFFERY AND WERE NOT ACTIONABLE VIOLATIONS OF THE SECURITES ACT OF 1933 (FIRST DEPT).

he First Department, reversing Supreme Court, determined the complaint alleging several violations of the Securities Act of 1933 should have been dismissed. The complaint alleged that it was induced to buy stock by defendant’s registration statement. The First Department concluded the statements not false or misleading and therefore were not actionable:

The … registration statement … includes the following statements: “We believe we have created a financially strong company built upon a foundation of three thriving, independent brands with significant global growth potential.” “New product development is a key driver of the long-term success of our brands. We believe the development of new products can drive traffic by expanding our customer base.” “We face intense competition in our markets, which could negatively impact our business. . . Our ability to compete will depend on the success of our plans to improve existing products, to develop and roll-out new products, [and] to effectively respond to consumer preferences.” * * *

… [T]he statements were nonactionable immaterial puffery and/or nonactionable opinion … .

The statements did not become misleading by omission as a result of a failure to disclose a slight decline in “same-store sales” for a single quarter’s sales … . City of Warwick Mun. Empls. Pension Fund v Restaurant Brands Intl. Inc., 2022 NY Slip Op 06315, First Dept 11-10-22

Practice Point: Statements which are mere puffery are not actionable violations of the Securities Act of 1933. Here plaintiff alleged false and misleading claims in defendant corporation’s registration statement induced plaintiff to buy defendant corporation’s stock. Supreme Court should have granted defendant’s motion to dismiss the complaint.

 

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BG, AN ADOLESCENT OFFENDER (AO) WITHIN THE MEANING OF THE “RAISE THE AGE ACT,” ASSAULTED A MAN AND THREW HIM ON THE SUBWAY TRACKS; A BYSTANDER JUMPED DOWN TO HELP THE ASSAULT VICTIM; THE BYSTANDER WAS KILLED BY A SUBWAY TRAIN WHICH STOPPED BEFORE REACHING THE ASSAULT VICTIM; THE JUDGE RULED THE MATTER SHOULD BE TRANSFERRED TO FAMILY COURT; THE PEOPLE SOUGHT A WRIT OF PROHIBITION WHICH WAS DENIED (FIRST DEPT).

The First Department denied the People’s request for a writ of prohibition to prevent respondent judge from sending a criminal case involving an adolescent offender (AO) to Family Court pursuant to the “Raise the Age Law.” In criminal matters involving AO’s the Raise the Age Law allows judges to decide whether the matter should heard in Family Court. Here BG, the AO, assaulted the victim  in a subway station and threw the victim on the tracks. A bystander jumped down to try to help the victim. The train was able to stop before reaching the assault victim, but the bystander who tried to help the victim was killed by the train:

Justice Semaj rejected the People’s argument that BG engaged in “heinous” conduct by pushing the surviving victim onto the tracks and leaving him there unconscious, observing that this argument was “rebutted by the video footage offered by the People,” which showed that the surviving victim “was conscious at the time he was pushed on to the tracks and even if he became unconscious once on the tracks, [BG] and another young person are seen going into the tracks and seemingly moving [him], possibly inadvertently, but . . . out of harm’s way.” The court further noted that Hueston [the bystander] chose to jump onto the train tracks, and that BG left after he “was told to leave by [Hueston].” … . * * *

“A writ of prohibition against a judge may be issued only when a court acts or threatens to act without jurisdiction in a matter of which it has no power over the subject matter or where it exceeds its authorized powers in a proceeding over which it has jurisdiction” … . “Prohibition cannot be used merely to correct errors of law, however egregious and however unreviewable” … . The Court of Appeals has stressed that, in the context of criminal proceedings, the writ should be issued “only when a court exceeds its jurisdiction or authorized power in such a manner as to implicate the legality of the entire proceeding, as for example, the prosecution of a crime committed beyond the county’s geographic jurisdiction” … . “Although the distinction between legal errors and actions in excess of power is not always easily made, abuses of power may be identified by their impact upon the entire proceeding as distinguished from an error in a proceeding itself” … . Matter of Clark v Boyle, 2022 NY Slip Op 06316, First Dept 11-10-22

Practice Point: Pursuant to the “Raise the Age Law” criminal cases involving adolescent offenders (AO’s) are reviewed by a judge who can chose to have the case heard in Family Court. The AO in this case assaulted a man and threw him onto subway tracks. The man survived but a bystander who tried to help him was killed by the train. The People sought a writ of prohibition to prevent the transfer to Family Court. The First Department laid out the strict criteria for a writ of prohibition and denied it.

 

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PETITIONER NYC FIREFIGHTER WAS DENIED ACCIDENTAL DISABILITY RETIREMENT (ADR) BENEFITS WITHOUT ANY EXPLANATION IN THE MEDICAL BOARD’S FINDINGS; THE MATTER WAS REMITTED FOR A NEW DETERMINATION BASED ON A RECORD ADEQUATE FOR REVIEW (FIRST DEPT).

The First Department, annulling the denial of accidental disability retirement (ADR) benefits in this firefighter-disability case, determined that the Medical Board’s failure to explain the reasons for its conclusion there was no accident and the injuries were not debilitating required remittal to the Medical Board and a new determination by the Board of Trustees with a record adequate for review:

… [T]he Medical Board found petitioner to be disabled on account of the left shoulder injuries he sustained on March 22, 2018. However, citing “inconsistencies” and a “lack of witnessed accounts . . . that would suggest . . . an accident,” the Board denied petitioner an ADR benefit. When the insufficient explanation was raised before the Board of Trustees, they acknowledged that a witness statement was not necessary, and stated that they did not understand what the Medical Board was referring to with regard to inconsistencies in the manner of petitioner’s injuries. Nevertheless, when the Board of Trustees reconsidered the matter, it simply took a vote on petitioner’s application without any deliberation or indication as to why he had been denied an ADR benefit, issuing a conclusory denial without any explanation as to why they had adopted the Medical Board’s unsupported statements about alleged inconsistencies concerning the nature of petitioner’s injuries.

The Medical Board failed to provide any factual basis concerning the alleged inconsistencies and why it did not believe petitioner’s injuries to be accidental. Further, the determination of the Medical Board was devoid of any articulated basis for its conclusion that the limitations of petitioner’s cervical and lumbar spine were not a debilitating or incapacitating condition for performing the duties of a firefighter. The failure to set forth an adequate statement of the factual basis for the determination forecloses the possibility of fair judicial review … . Matter of Reynolds v New York City Fire Pension Fund, 2022 NY Slip Op 06330, First Dept 11-10-22

Practice Point: Here the injured NYC firefighter was denied accidental disability retirement (ADR) but the Medical Board did not give any reasons for its conclusion. The findings were annulled and the matter remitted for a new determination and the creation of an adequate record for review.

 

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CONTRARY TO SUPREME COURT’S RULING, THE REAL ESTATE PURCHASE AGREEMENT, BY ITS TERMS, DECLARED THE CONTRACT CANCELLED IF THE INSPECTION REVEALED PROBLEMS AND THE PARTIES DID NOT AGREE ON HOW TO ADDRESS THOSE PROBLEMS WITHIN TEN DAYS; THE INSPECTION IN FACT REVEALED PROBLEMS AND NO AGREEMENT ON RESOLUTION WAS MADE WITHIN THE ALOTTED TEN DAYS (THIRD DEPT). ​

The Third Department, reversing Supreme Court, determined that the real estate purchase agreement was canceled in accordance with its own terms:

… [P]laintiff’s transmission of the form contract and rider constituted an offer, and the sellers counteroffered by signing and returning to plaintiff only the form contract without the rider. Plaintiff then accepted the counteroffer by proceeding with the inspections, as “a counteroffer may be accepted by conduct” … . We also agree with the court that plaintiff’s counsel’s May 18, 2020 letter did not constitute attorney disapproval of the contract under the attorney approval contingency. This letter merely acknowledged receipt of the signed contract and inquired as to the rider and other documents; in no way did it signal disapproval.

… Plaintiff’s attorney, in his letter of June 17, 2020, notified the sellers’ attorney that the property had failed multiple inspections, and provided a copy of the relevant inspection report. This conduct, in accordance with the language set forth in the inspection contingency, rendered the contract “cancelled, null and void” unless plaintiff chose to defer cancellation for 10 days. Given that the letter from plaintiff’s attorney also set forth potential ways in which the inspection issues could be resolved, we are satisfied that the 10-day option was exercised. That said, the parties did not reach a written agreement on these issues within 10 days as was expressly required pursuant to the inspection contingency … . Savignano v Play, 2022 NY Slip Op 06307, Third Dept 11-10-22

Practice Point: In reversing Supreme Court, the Third Department simply read the real estate purchase agreement and enforced the term deeming the contract cancelled if the parties did not agree on the resolution of problems revealed by inspection within ten days. No such agreement was reached.

 

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ALTHOUGH DEFENDANT WAS A VOLUNTEER AMBULANCE DRIVER AND WAS RESPONDING TO A CALL AT THE TIME OF THE TRAFFIC ACCIDENT, DEFENDANT WAS DRIVING HIS OWN PERSONAL PICKUP TRUCK, WHICH WAS NOT AN AUTHORIZED EMERGENCY VEHICLE; THEREFORE THE “RECKLESS DISREGARD” STANDARD OF CARE DID NOT APPLY TO DEFENDANT (FOURTH DEPT). ​

The Fourth Department, reversing (modifying) Supreme Court, determined that, although defendant driver was a volunteer ambulance driver responding to a call at the time of the accident, defendant was driving his own personal pickup truck which did not qualify as an emergency vehicle. Therefore the ordinary negligence, not the “reckless disregard,” standard applied to the defendant:

We agree with plaintiff, however, that he met his initial burden on his cross motion of establishing that defendant was not operating an “authorized emergency vehicle” at the time of the accident and thus that the reckless disregard standard of care does not apply. ” ‘[T]he reckless disregard standard of care in Vehicle and Traffic Law § 1104 (e) . . . applies when a driver of an authorized emergency vehicle involved in an emergency operation engages in the specific conduct exempted from the rules of the road by Vehicle and Traffic Law § 1104 (b)’ ” … . …

… [A]t the time of the accident, defendant was driving his personally-owned vehicle, which was not affiliated with Eden Emergency … . The vehicle also did not comply with Vehicle and Traffic Law § 1104 (c), which requires authorized emergency vehicles to be equipped with “at least one red light.” Moreover, at the time of the accident, defendant’s vehicle was not being “operated by” Eden Emergency because, while defendant was a volunteer with Eden Emergency, he was not on call at the time of the incident … . Further, defendant did not qualify as an ambulance service. Defendant was not an “individual . . . engaged in providing emergency medical care and the transportation of sick or injured persons” (Public Health Law § 3001 [2]). We also note that defendant was not an emergency medical technician … . Spence v Kitchens, 2022 NY Slip Op 06355, Fourth Dept 11-10-22

Practice Point: Here defendant was a volunteer ambulance driver who was responding to a call when the traffic accident occurred. Defendant was driving his own pickup truck, was not “on call” for the ambulance service, was not engaged in emergency care and was not a medical technician. Defendant’s truck was not an “authorized emergency vehicle.” Therefore the “reckless disregard” standard of care for emergency vehicles did not apply.

 

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THE FOIL REQUEST FOR THE DISCIPLINARY RECORDS OF POLICE OFFICERS SHOULD NOT HAVE BEEN CATEGORICALLY DENIED PURSUANT TO THE PERSONAL PRIVACY EXEMPTION; RATHER THE RECORDS MUST BE REVIEWED AND ANY DENIALS OR REDACTIONS EXPLAINED (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined the request for the disciplinary records of police officers should not have categorically denied pursuant to the personal privacy exemption. The decision encompasses several important issues not summarized here and therefore should be consulted:

… [T]he personal privacy exemption “does not . . . categorically exempt . . . documents from disclosure”, even in the case where a FOIL request concerns release of unsubstantiated allegations or complaints of professional misconduct. In order to invoke the personal privacy exemption here, respondents must review each record responsive to petitioner’s FOIL request and determine whether any portion of the specific record is exempt as an invasion of personal privacy and, to the extent that any portion of a law enforcement disciplinary record concerning an open or unsubstantiated complaint of SPD [Syracuse Police Department] officer misconduct can be disclosed without resulting in an unwarranted invasion of personal privacy, respondents must release the non-exempt, i.e., properly redacted, portion of the record to petitioner … .

Inasmuch as respondents withheld the requested law enforcement disciplinary records concerning open and unsubstantiated claims of SPD officer misconduct in their entirety and did not articulate any particularized and specific justification for withholding any of the records, we conclude that respondents did not meet their burden of establishing that the personal privacy exemption applies … . Respondents further failed to establish that “identifying details” in the law enforcement disciplinary records concerning open and unsubstantiated claims of SPD officer misconduct “could not be redacted so as to not constitute an unwarranted invasion of personal privacy” … . Thus, the court erred in granting that part of respondents’ motion seeking to dismiss petitioner’s request for law enforcement disciplinary records concerning open or unsubstantiated claims of SPD officer misconduct in reliance on the personal privacy exemption under Public Officers Law § 87 (2) (b).  Matter of New York Civ. Liberties Union v City of Syracuse, 2022 NY Slip Op 06348, Fourth Dept 11-10-22

Similar issues in: Matter of New York Civ. Liberties Union v City of Rochester, 2022 NY Slip Op 06346, Fourth Dept 11-10-22

Practice Point: A FOIL request for the disciplinary records of police officers cannot be categorically rejected pursuant to the personal privacy exemption. Rather the records must be reviewed and any denials an redactions explained.

 

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THE $40,000 PAID BY DECEDENT TO HER CAREGIVERS SHORTLY BEFORE DECEDENT ENTERED A NURSING HOME WAS PAYMENT FOR PAST SERVICES RENDERED PURSUANT TO A PERSONAL SERVICE AGREEMENT (PSA); IT WAS NOT AN “UNCOMPENSATED TRANSFER” SUBJECT TO THE 60-MONTH LOOKBACK FOR MEDICAID ELIGIBILITY (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined the $40,000 paid to decedent’s caregivers shortly before decedent entered a nursing home was pursuant to a valid personal service agreement (PSA) for past services rendered. Therefore the payment was not an “uncompensated transfer” to which the Medicaid 60-month lookback applied:

“In determining the medical assistance eligibility of an institutionalized individual, any transfer of an asset by the individual . . . for less than fair market value made within or after the look-back period shall render the individual ineligible for nursing facility services” for a certain penalty period (Social Services Law § 366 [5] [d] [3]). The look-back period is the “[60]-month period[] immediately preceding the date that an [applicant] is both institutionalized and has applied for medical assistance” … . When such a transfer has occurred, a presumption arises that the transfer “was motivated, in part if not in whole, by . . . anticipation of a future need to qualify for medical assistance,” and it is the applicant’s burden to establish his or her eligibility for Medicaid by rebutting the presumption … . As pertinent here, “an applicant may do so by demonstrating that he or she intended to receive fair consideration for the transfers or that the transfers were made exclusively for purposes other than qualifying for Medicaid” … .

Here, petitioner submitted documentary proof of the PSA, which was entered into in 2015, more than three years before decedent entered the nursing home. As noted above, while the PSA contemplated monthly payments for the personal care services, it also contemplated that decedent may make payments in advance. In addition, petitioner submitted bank statements demonstrating that decedent did not have money to pay for the services until after she received cash value for the insurance policies. Petitioner also submitted a monthly calendar that documented the care provided to decedent during the relevant time period. While the calendar did not provide the number of hours spent on each task, “a daily log of hours worked and services rendered is not necessarily required” … . Matter of Boldt v New York State Off. of Temporary & Disability Assistance, 2022 NY Slip Op 06344, Fourth Dept 11-10-22

Practice Point: Here decedent entered a personal care agreement (PSA) in which she agreed to pay her caregivers $2500 per month. Shortly before decedent was admitted to a nursing home she paid $40,000 to the caregivers. It was demonstrated that the $40,000 was for past care rendered pursuant to the PSA. The $40,000 payment, therefore, was not an “uncompensated transfer” subject to the 60-month lookback for Medicaid eligibility.

 

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THE SIX-MONTH PERIOD FOR REFILING A COMPLAINT AFTER DISMISSAL (CPLR 205(A)) BEGAN TO RUN ONLY WHEN THE APPEAL OF THE DENIAL OF THE MOTION TO VACATE THE DISMISSAL WAS EXHAUSTED (FOURTH DEPT).

​The Fourth Department, reversing Supreme Court, determined the six-month period for filing a new complaint after dismissal started to run when the appeal of the denial of the motion to vacate the dismissal was exhausted:

Where a plaintiff has sought to appeal as of right from the denial of a motion to vacate the dismissal of its action, the action terminates for purposes of CPLR 205 (a) when the appeal “is truly ‘exhausted,’ either by a determination on the merits or by dismissal of the appeal, even if the appeal is dismissed as abandoned … . “Here, the dismissal of the 2012 action “did not constitute a final termination of that action within the meaning of CPLR 205 (a) because plaintiff’s predecessor in interest was statutorily authorized to file a motion to vacate [the dismissal] and to appeal from the denial of that motion” … . The 2012 action thus terminated for purposes of CPLR 205 (a) on November 30, 2018, when this Court dismissed the appeal and plaintiff’s predecessor in interest thereby exhausted its right of appeal … . Inasmuch as the instant action was commenced within six months of November 30, 2018, we conclude that it was timely commenced. MTGLQ Invs., LP v Zaveri, 2022 NY Slip Op 06335, Fourth Dept 11-10-22

Practice Point: The six-month period for refiling a complaint after dismissal (CPLR 208(a)) begins to run only after the appeal from the denial of a motion to vacate the dismissal is exhausted.

 

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THE NOTE REQUIRED THE APPLICATION OF FLORIDA SUBSTANTIVE AND PROCEDURAL LAW TO THE “TERMS OF THE DOCUMENTS” BUT SPECIFICALLY CONTEMPLATED A SUIT IN EITHER NEW YORK OR FLORIDA; THEREFORE SUPREME COURT SHOULD NOT HAVE INTERPRETED THE CHOICE OF LAW PROVISIONS TO RULE OUT A NEW YORK LAWSUIT (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined that the terms of the note which required the application of Florida law did not preclude bringing the action in New York. The language in the note indicated the parties intended suit to be brought either in New York or Florida:

[Supreme Court] stated in its decision that, “having elected to have the ‘procedur[al] laws of the State of Florida’ apply exclusively in this action, the [p]laintiff could not rely on any of the provisions of New York’s Civil Practice Law and Rules in prosecuting this action.” The court relied on CPLR 101, which the court quoted in its decision as providing, in pertinent part, that ” ‘[t]he civil practice law and rules shall govern the procedure in civil judicial proceedings in all courts of the state and before all judges, except where the procedure is regulated by inconsistent statute’ ” … . The court … concluded that, due to the perceived conflict between the contractual choice-of-law provisions and CPLR 101, it could not grant the [plaintiff’s summary judgment] motion. * * *

“Contractual ‘[c]hoice of law provisions typically apply to only substantive issues’ ” … , although parties can agree otherwise. Here, the note provides that “[t]he terms” of the documents are to be governed by the substantive and procedural rules of Florida, but that does not establish that the rules of Florida were intended to govern the procedures of the New York State court system, which would effectively preclude any action on the note in New York. Indeed, the note itself provides that venue for any action related to the note may be in either “Onondaga County, New York or Broward County, Florida.” Thus, the parties anticipated that New York courts could and would be able to handle a judicial action related to the note … . Bankers Healthcare Group, LLC v Pasumbal, 2022 NY Slip Op 06334, Fourth Dept 11-10-22

Practice Point: The choice of law provisions in the note required the application of Florida substantive and procedural law to the “terms of the documents” and also stated suit could be brought in either New York or Florida. Supreme Court should not have interpreted the choice of law provisions to rule out a New York lawsuit.

 

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