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THE BANK DID NOT PROVE COMPLIANCE WITH THE NOTICE AND MAILING REQUIREMENTS OF RPAPL 1304 IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank in this foreclosure action did not demonstrate compliance with the notice requirements of RPAPL 1304:

… [P]laintiff failed to establish its strict compliance with RPAPL 1304. The plaintiff relied upon the affidavit of Summer Young, a vice president of the plaintiff’s purported loan servicer. The affidavit was based upon Young’s review of her employer’s records, which were attached thereto. Young did not aver that she had personal knowledge of the mailing, and her affidavit did not contain proof of the standard office mailing procedure at the time the RPAPL 1304 notice allegedly was sent … . Nor did the annexed records demonstrate, prima facie, that the requisite RPAPL 1304 mailings were completed … . Because the plaintiff “failed to provide proof of the actual mailing, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure, the plaintiff failed to establish its strict compliance with RPAPL 1304,” and therefore failed to establish, prima facie, its entitlement to judgment as a matter of law …  The plaintiff also failed to establish, prima facie, that it complied with the notice of default requirement of the mortgage agreement … . HSBC Bank USA, N.A. v Michalczyk, 2022 NY Slip Op 07222, Second Dept 12-21-22

Practice Point: the bank in this foreclosure action did not present sufficient evidence of compliance with the notice and mailing requirements of RPAPL 1304.

 

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PLAINTIFF IN THIS NON-JURY TRIAL DID NOT DEMONSTRATE COMPLIANCE WITH RPAPL 1303; JUDGMENT OF FORECLOSURE AND SALE REVERSED (SECOND DEPT). ​

The Second Department, reversing the judgment (after a non-jury trial) of foreclosure and sale, determined plaintiff did not demonstrate compliance with RPAPL 1303:

RPAPL 1303 requires that a notice titled “Help for Homeowners in Foreclosure” be delivered to the mortgagor along with the summons and complaint in residential foreclosure actions involving owner-occupied, one- to four-family dwellings … . “The statute mandates that the notice be in bold, 14-point type and printed on colored paper that is other than the color of the summons and complaint, and that the title of the notice be in bold, 20-point type” … . “Proper service of an RPAPL 1303 notice is a condition precedent to the commencement of a foreclosure action, and noncompliance mandates dismissal of the complaint” … . The foreclosing party bears the burden of establishing compliance with RPAPL 1303 … .

Here, it is undisputed that the plaintiff did not offer any evidence at trial establishing that it complied with the specific requirements of RPAPL 1303, or that it delivered such notice to Nodumehlezi [defendant] at all. Contrary to the plaintiff’s contention, the Supreme Court’s reliance, in a posttrial decision, on documents that had been previously e-filed to establish the plaintiff’s compliance with RPAPL 1303 was improper, since Nodumehlezi had no opportunity to rebut the previously filed affidavit of service and the related documents … . 21st Mtge. Corp. v Nodumehlezi, 2022 NY Slip Op 07212, Second Dept 12-21-22

Practice Point: Here there was a non-jury trial and plaintiff did not prove compliance with RPAPL 1303. The judgment of foreclosure and sale was reversed.

 

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DEFENDANT’S COUNSEL MISCALENDARED THE RETURN DATE FOR THE MOTION FOR SUMMARY JUDGMENT; THE MOTION TO VACATE THE JUDGMENT DUE TO LAW OFFICE FAILURE SHOULD HAVE BEEN GRANTED (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined defendant’s motion to vacate the judgment due to law office failure should have been granted. Plaintiff’s unopposed motion for summary judgment had been granted:

The law office failure of miscalendaring dates has been deemed a reasonable excuse … . Here, defendant’s counsel miscalendared the return date of plaintiff’s summary judgment motion for July 1, 2021 rather than June 1, 2021. Counsel explained that it is his regular practice to calendar motion dates once a return date is set; to review his calendar daily and on or about the first of each month; and that he had been working part-time at home with a less robust system compared to his office … . Accordingly, defendant proffered a reasonable excuse in the form of law office failure and should not be deprived of its day in court for counsel’s error … .  First Am. Tit. Ins. Co. v Successful Abstract, LLC, 2022 NY Slip Op 07186, First Dept 12-20-22

Practice Point: Miscalendaring the return date for the motion for summary judgment was deemed a reasonable excuse for the default (law office failure).

 

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DEFENDANT DID NOT UPDATE ITS ADDRESS FILED WITH THE SECRETARY OF STATE FOR SERVICE OF PROCESS AND DID NOT HAVE A REASONABLE EXCUSE FOR DEFAULT IN THIS SLIP AND FALL CASE; HOWEVER, NO REASONABLE EXCUSE NEED BE SHOWN IN A MOTION TO VACATE A DEFAULT PURSUANT TO CPLR 317; DEFAULT VACATED (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant property-owner’s (St. Andrews’) motion to vacate the default judgment in this slip and fall case should have been granted. St. Andrews had not updated its address with the Secretary of State and did not have a reasonable excuse. However a reasonable excuse is not required by CPLR 317:

St. Andrews’s principal demonstrated that he had received a letter notification of plaintiff’s accident before commencement of the action which he forwarded to his insurance broker, but that he never received any further notice until he received the information subpoena. The principal of DP Realty [designated by St. Andrews to receive service of process] also averred that he was unaware of the summons and complaint ever having been received, and therefore it would not have forwarded any papers to St. Andrews. That evidence was sufficient under CPLR 317 to establish St. Andrews’s lack of personal notice of the summons in time to defend. St. Andrews also demonstrated a meritorious defense in that the Yonkers City Code “does not expressly make the landowner liable for failure to perform” the duty to clean snow and ice from the sidewalk, and an abutting landowner is not liable in the absence of such a statute for failure to clear snow, ice and dirt … .

… [P]laintiff demonstrated that St. Andrews never updated its address with the Secretary of State, and thus could not show a reasonable excuse for its default under CPLR 5015(a)(1). However, no showing of a reasonable excuse is required under CPLR 317 … , and it cannot be inferred solely from the failure to update defendant’s address with the Secretary of State that defendant was deliberately avoiding receiving notice … . In light of the strong public policy favoring resolution of cases on their merits … , we find that St. Andrews demonstrated entitlement to vacatur under CPLR 317… . Gomez v Karyes Realty Corp., 2022 NY Slip Op 07187, First Dept 12-20-22

Practice Point: No reasonable excuse for a default need be shown in a motion the vacate the default pursuant to CPLR 317, Here the defendant’s failure to update its address for the service of process with the Secretary of State was not an attempt to avoid service. The motion to vacate the default should have been granted.

 

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THE ELECTRONIC LEGAL RESEARCH (LEXISNEXIS) CONTRACT SIGNED BY PLAINTIFF ATTORNEY WAS NOT PROCEDURALLY OR SUBSTANTIVELY UNCONSCIONABLE (FIRST DEPT).

The First Department, reversing Supreme Court, determined the legal research contract (LexisNexis) signed by plaintiff-attorney was not procedurally or substantively unconscionable:

A determination of unconscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made, namely, some showing of “an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party” … . Procedural unconscionability examines the circumstances at the time an agreement was entered into, including the commercial setting, whether deceptive or high-pressured tactics were employed, whether a party had a reasonable opportunity to understand the terms of the contract, which party drafted the contract, whether fine print was used in an agreement as to material terms, whether there was an alternative supply for the goods or services in question, the experience and education of the party claiming unconscionability, whether there was disparity in the bargaining power, and whether a contract of adhesion is at issue … . Whether a contract is procedurally unconscionable presents a question of law for the court although it is a fact-based determination … .

… Plaintiff is an attorney, who did not assert any mental deficiencies, but only alleged duress from defendants’ conduct in pursuing his signature on the 2020 Agreement. The urgency underlying plaintiff’s signing the 2020 Agreement, without reading it, apart from promised lower service rates, is unclear. Plaintiff has not demonstrated how there is inequality in the bargaining power in this instance. Plaintiff is on equal footing with the defendants in understanding contract law, as well as the consequences of signing a contract. Moreover, the terms in the 2020 Agreement were similar to the majority of the material terms in the parties’ 2019 Agreement, which plaintiff does not claim was unconscionable. Kaufman v Relx Inc., 2022 NY Slip Op 07192, First Dept 12-20-22

Practice Point: Here the plaintiff-attorney alleged the electronic legal research contract he signed with LexisNexis was unconscionable. The decision explains procedural and substantive unconscionability and held plaintiff, as an attorney, was on equal footing in negotiating the contract.

 

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THE LETTER CRITICIZING THE FORMER DEAN OF THE FASHION INSTITUTE OF TECHNOLOGY WAS NOT DEFAMATORY ON ITS FACE, BUT THE COMPLAINT STATED A CAUSE OF ACTION FOR DEFAMATION BY IMPLICATION (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined plaintiff’s defamation-by-implication complaint should not have been dismissed:

… [P]laintiff, the former Dean of Graduate Studies at defendant Fashion Institute of Technology (FIT), was placed on leave following criticisms over culturally insensitive accessories presented in an FIT-sponsored alumni fashion show. Plaintiff alleges that a letter published by defendants contained defamatory remarks on its face, implied, or both, and impugned plaintiff’s reputation…. .

… [T]he letter implies that plaintiff was responsible for the show and failed to recognize the accessories as insensitive, even though she took no part in managing, directing, or approving the show. The complaint contains references to publications from other sources that interpret the letter as placing the blame on plaintiff and deeming her leadership inexcusable and irresponsible … . On a CPLR 3211 (a)(7) motion to dismiss, denial is warranted if taking the words used both in their ordinary meaning and in context make them susceptible to a defamatory connotation as occurs in this case … . The letter also contains statements of mixed opinion, “While a pure opinion cannot be the subject of a defamation claim, an opinion that ‘implies that it is based upon facts which justify the opinion but are unknown to those reading or hearing it, . . . is a ‘mixed opinion’ and is actionable'” … .

The letter omitted plaintiff’s nonparticipation in the production, direction, and management of the fashion show; her unawareness as to the accessories the designers planned to present; the FIT policy precluding academic deans from evaluating, censoring, or approving student and alumni work; and plaintiff’s prompt response to student concerns and her proactive approach to address those concerns; and implied that plaintiff was responsible for the show, was aware of the accessories, could approve them, and failed to respond to student concerns. Davis v Brown, 2022 NY Slip Op 07147, First Dept 12-15-22

Practice Point: Here the writing was not defamatory on its face. But the complaint stated a cause of action for defamation by implication. The letter included actionable statements of “mixed opinion” and omitted important facts which relieved plaintiff of responsibility for the claimed misconduct.

 

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DEFENDANT’S STATEMENT PLAINTIFFS WERE FACING SUSPENSION OF THEIR LICENSE TO PRACTICE LAW WAS NOT PROTECTED AS FAIR AND TRUE LEGAL REPORTING PURSUANT TO CIVIL RIGHTS LAW 74; THE COMPLAINT STATED CAUSES OF ACTION FOR DEFAMATION PER SE, DISPARAGEMENT AND VIOLATIONS OF THE LANHAM ACT AND GENERAL BUSINESS LAW 349 (FIRST DEPT).

The Fist Department, reversing Supreme Court, determined Civil Rights Law 74 did not protect the statements in defendant’s online ad claiming that plaintiffs were facing suspension of their license to practice law because the litigation referred to in the ad did not mention anything about plaintiffs’ law license. Civil Rights Law 74 protects only “fair and true” reports on judicial proceedings. The complaint stated causes of action for defamation per se, disparagement and violations of the Lanham Act and General Business Law 349:

Civil Rights Law § 74 did not apply to the challenged statements in defendant’s online ads that, in linking to a news article about pending litigation against plaintiffs by a former client in California, asserted that plaintiffs were facing suspension of their license to practice law. The news article did not mention that plaintiffs’ law license was at risk nor did the complaint against plaintiffs seek suspension of their law license. Accordingly, this statement was not shielded from liability as defendant failed to demonstrate that it was a “fair and true” report of a judicial proceeding … . …

Based on defendant’s allegedly false statement that plaintiffs were facing a suspension of their license, plaintiffs sufficiently pleaded a cause of action for defamation per se … . …

… [T]he factual allegations in the complaint were sufficient to sustain causes of action for disparagement, and violations under the federal Lanham Act and General Business Law § 349, at the pleading stage … . Luo & Assoc. v NYIS Law Firm, A.P.C., 2022 NY Slip Op 07154, First Dept 12-15-22

Practice Point: Civil Rights Law 74 protects only “fair and true” reports on judicial proceedings. Here the statements plaintiffs were facing the suspension of their license to practice law was not mentioned in the article referencing the judicial proceedings, so the statements were actionable as defamation per se, disparagement and violations of the Lanham Act and General Business Law 349.

 

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PLAINTIFFS WERE ENTITLED TO LIQUIDATED DAMAGES OF $1000 PER DAY FOR THE TIME PLAINTIFFS WERE UNABLE TO LIVE IN THEIR TOWNHOUSE BECAUSE OF THE DEFENDANTS’ RENOVATIONS NEXT DOOR (FIRST DEPT).

The First Department, in a decision addressing many issues not summarized here, determined the plaintiffs were entitled to liquidated damages of $1000 per day for the time plaintiffs were unable to live in their townhouse because of the renovation work undertaken by the defendants next door:

On May 2, 2013, after intensive negotiations guided by legal counsel, Mr. Seymour [plaintiff] and the Hovnanians [defendants] executed a license agreement. The purpose of the license agreement was to grant the Hovnanians 18 months of access to the Seymours’ property while simultaneously protecting the Seymours’ property from further harm during construction. The license agreement contained a liquidated damages clause providing that if the “Project Owner failed to obtain a temporary certificate of occupancy (TCO) within Eighteen (18) months from the date of this Agreement, he shall pay liquidated damages to the Adjacent Owner of $1,000 per day for every day thereafter until the TCO is issued.” The Hovnanians never obtained a temporary certificate of occupancy but, 318 days after the expiration of the 18-month license term, they obtained a certificate of occupancy. …

The court correctly awarded plaintiffs $318,000 in liquidated damages, plus interest, comprised of $1,000 per day for the period of November 2, 2014 to September 15, 2015. “Liquidated damages constitute the compensation which, the parties have agreed, should be paid in order to satisfy any loss or injury flowing from a breach of their contract” … . These provisions “have value in those situations where it would be difficult, if not actually impossible, to calculate the amount of actual damage” … . Liquidated damages will be sustained if, at the time of the contract, “the amount liquidated bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation” … . Seymour v Hovnanian, 2022 NY Slip Op 07172, First Dept 12-15-22

Practice Point: Here the license agreement properly required liquidated damages of $1000 per day for the time plaintiffs were not able to live in their townhouse because of defendants’ renovations next door.

 

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YESHIVA UNIVERSITY NO LONGER HAS THE REQUISITE CONNECTION TO RELIGION AND THEREFORE IS NOT EXEMPT FROM THE DISCRIMINATION PROHIBITIONS IN THE NYC HUMAN RIGHTS LAW; THE PRIDE ALLIANCE WAS ENTITLED TO RECOGNITION AS AN OFFICIAL STUDENT ORGANIZATION (FIRST DEPT).

The First Department determined a student group (Pride Alliance) at Yeshiva University was entitled to summary judgment pursuant to the NYC Human Rights Law (City HRL)on its claims asserting gender, sexual orientation, and association discrimination. In addition Pride Alliance was entitled to a permanent injunction requiring Yeshiva to recognize the group as an official student organization. Essentially, Yeshiva argued the university was exempt from the requirements of the City HRL as a religious corporation or institution, but the university no longer had the requisite connection to religion: Yeshiva’s constitutional arguments (free exercise of religion, freedom of expression and association) were rejected:

Yeshiva was originally chartered in 1897 under the Membership Corporations Law as the Rabbi Isaac Elchanan Theological Seminary Association (RIETS), with the stated purpose to “promote the study of Talmud” and prepare Orthodox Jewish rabbis for ministry. Over several decades, the charter was amended to allow numerous secular degrees to be awarded and to change the name of the institution, while RIETS remained part of Yeshiva. In 1967, Yeshiva amended its charter to become incorporated under the Education Law. Two years later it amended the charter to drop Hebrew Literature and Religious Education degrees, since RIETS was being spun off as its own corporation offering those degrees, and to “clarify the corporate status of the University as a non-denominational institution of higher learning.” While Yeshiva is now comprised of three undergraduate colleges and seven graduate schools, RIETS remains a separate corporate entity housed on one of Yeshiva’s campuses. YU Pride Alliance v Yeshiva Univ., 2022 NY Slip Op 07175, First Dept 12-13-22

Practice Point: Yeshiva University was not entitled to exemption from the discrimination prohibitions in the NYC Human Rights Law because the university no longer has the requisite connection to religion. Therefore the “Pride Alliance” was entitled to recognition as an official student group.

 

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DECEDENT’S WIFE’S CLAIM FOR DEATH BENEFITS BASED UPON DECEDENT’S WORK AT THE WORLD TRADE CENTER AFTER 9-11 IS SUBJECT TO THE TWO-YEAR DEADLINE FOR NOTICE IN WORKERS’ COMPENSATION LAW 28; BECAUSE THE NOTICE REQUIREMENT WAS NOT COMPLIED WITH, THE DEATH BENEFITS CLAIM WAS PROPERLY DENIED; THERE WAS A DISSENT (THIRD DEPT). ​

The Third Department, over a dissent, determined the claim by decedent’s wife for death benefits pursuant to Workers’ Compensation Law Article 8-a (re: disability due to work at the World Trade Center after 9-11) was properly denied because the two-year notice requirement in Worker’s Compensation Law 28 applies and was not complied with:

… [G]iven that decedent, not claimant, was a participant within the meaning of Workers’ Compensation Law § 161, it was decedent who was entitled to file a claim for benefits outside of the period allowed by Workers’ Compensation Law § 28. Claimant cannot piggyback upon that entitlement, as her claim for death benefits “accrue[d] at the time of [decedent’s] death and ‘is a separate and distinct legal proceeding’ from [decedent’s] original disability claim” … .The language of the … statutory provisions … clearly reflects that claimant cannot avail herself of the exception to the two-year filing requirement created by Workers’ Compensation Law § 168. Matter of Garcia v WTC Volunteer, 2022 NY Slip Op 07110 Third Dept 12-15-22

Practice Point: Here decedent’s wife sough death benefits stemming from decedent’s work at the World Trade Center after 9-11. The claim was deemed subject to the two-year notice deadline in Workers’ Compensation Law 28 and properly denied.

 

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