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CORPORATE SHAREHOLDERS AND OFFICERS MAY ONLY BE LIABLE FOR LABOR LAW (WAGE-PAYMENT-RELATED) VIOLATIONS IF THEY EXERCISE CONTROL OVER THE DAY-TO-DAY OPERATIONS OF THE CORPORATION, WHICH WAS ALLEGED HERE (SECOND DEPT).

The Second Department, reversing Supreme Court and reinstating defendants’ counterclaims alleging violations of the Labor Law, noted that corporate shareholders and officers can only be liable for Labor Law (wage-payment-related) violations if they exercise control of a corporation’s day-to-day operations, which was alleged here:

“[C]orporate shareholders and officers generally may not be subjected to civil liability for corporate violations of the Labor Law absent allegations that such persons exercised control of the corporation’s day-to-day operations by, for example, hiring and firing employees, supervising employee work schedules, and determining the method and rate of pay” … . Here, the defendants adequately alleged, inter alia, that the additional defendants controlled the day-to-day operations of the plaintiff, including the plaintiff’s payment practices. Interstate Home Loan Ctr., Inc. v United Mtge. Corp., 2022 NY Slip Op 03715, Second Dept 6-8-22

Practice Point: Corporate shareholders and officers may be liable for Labor Law (wage-payment-related) violations only if they exercise control over the day-to-day operations of the corporation.

 

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DEFENDANT DID NOT FILE A NOTICE OF CLAIM AGAINST PLAINTIFF VILLAGE IN THIS CONTRACT ACTION AS REQUIRED BY CPLR 9802; THEREFORE DEFENDANT’S ANTICIPATORY-REPUDIATION COUNTERCLAIM SHOULD HAVE BEEN DISMISSED; THE VILLAGE’S PARTICIPATION IN DISCOVERY WAS NOT DESIGNED TO MISLEAD THE DEFENDANT AND DID NOT TRIGGER THE ESTOPPEL DOCTRINE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant’s failure to file a notice of claim required dismissal of its counterclaim (anticipatory repudiation of contract) against the village:

Pursuant to CPLR 9802, “no action shall be maintained against the village upon or arising out of a contract of the village . . . unless a written verified claim shall have been filed with the village clerk within one year after the cause of action shall have accrued.” “‘[S]tatutory requirements conditioning suit [against a governmental entity] must be strictly construed'” … . This is true even when the municipality “‘had actual knowledge of the claim or failed to demonstrate actual prejudice'” … .  …

… [T]he plaintiff’s exchanging of discovery and participation in the depositions of witnesses did not estop it from raising a defense pursuant to CPLR 9802, as mere participation in litigation does not constitute action calculated to mislead or discourage the defendant from filing a notice of claim … . Incorporated Vil. of Freeport v Freeport Plaza W., LLC, 2022 NY Slip Op 03713, Second Dept 6-8-22

Practice Point: In a contract action against a municipality, here an anticipatory-repudiation-of-contract counterclaim, a notice of claim must be filed (CPLR 9802). No notice of claim was filed here and the counterclaim should have been dismissed. The fact that the municipality participated in discovery did not give rise to the estoppel doctrine because there was no intent to mislead the defendant with respect to the notice-of-claim requirement.

 

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AFTER THE FORECLOSURE SALE BUT BEFORE THE CLOSING, THE MORTGAGOR STARTED AN ACTION ALLEGING FRAUD IN THE FORECLOSURE PROCEEDINGS; THE FRAUD ACTION DID NOT RENDER THE TITLE UNMARKETABLE SUCH THAT THE PURCHASER COULD SET ASIDE THE FORECLOSURE SALE AND HAVE THE DOWN PAYMENT RETURNED (SECOND DEPT).

The Second Department determined the fact that the mortgagor, after the foreclosure sale but before the closing, started an action alleging fraud in the foreclosure proceeding did not render the title to the property unmarketable. Therefore the purchaser at the foreclosure auction did not have right to set aside the foreclosure sale and have the down payment returned:

“A marketable title is a title free from reasonable doubt, but not from every doubt” … . “[S]omething more than a mere assertion of a right is essential to create an unmarketable or doubtful title” … . Here, contrary to the purchaser’s contention, the mortgagor’s action did not render title unmarketable. Therefore, the Supreme Court properly denied those branches of the purchaser’s motion which were to set aside the foreclosure sale and to direct the plaintiff to return the down payment. DiTech Fin., LLC v Steplight, 2022 NY Slip Op 03710, Second Dept 6-8-22

Practice Point: The title to the property sold at the foreclosure auction was not rendered unmarketable by a subsequent action brought by the mortgagor alleging fraud in the foreclosure proceedings. Therefore the purchaser’s motion to set aside the foreclosure sale and return the down payment was properly denied.

 

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A FLATTENED CARDBOARD BOX ON THE FLOOR WAS NOT ACTIONABLE IN THIS SLIP AND FALL CASE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined a flattened cardboard box was not actionable in this slip and fall case;

The plaintiff commenced this action to recover damages for personal injuries after she slipped and fell on a flattened cardboard box that was lying on the floor in an aisle of the defendant’s grocery store. At her deposition, the plaintiff testified that she saw the cardboard box prior to the accident, as well as an employee of the defendant stocking shelves in the aisle close by. The plaintiff testified that, prior to her fall, it was her intention to step onto the cardboard in order to reach a product on a nearby shelf. …

While a possessor of real property has a duty to maintain that property in a reasonably safe condition … , “there is no duty to protect or warn against an open and obvious condition that, as a matter of law, is not inherently dangerous” … .

Here, the defendant established its prima facie entitlement to judgment as a matter of law dismissing the complaint by submitting evidence demonstrating that the flattened cardboard box, which was readily observable to the plaintiff prior to her fall, was open and obvious, and not inherently dangerous … . DiScalo v Mannix Family Mkt. @ Forest & Richmond Ave, LLC, 2022 NY Slip Op 03708, Second Dept 6-8-22

Practice Point: A flattened cardboard box on the floor was not actionable in this slip and fall case because it was “open and obvious.”

 

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HOMEOWNER’S EXEMPTION PRECLUDED THE LABOR LAW 240(1) AND 241(6) CAUSES OF ACTION AGAINST THE DEFENDANT PROPERTY OWNER, A RELIGIOUS ORGANIZATION; THE LABOR LAW 200 AND NEGLIGENCE CAUSES OF ACTION ALLEGING THE HOMEOWNER’S LADDER WAS DEFECTIVE PROPERLY SURVIVED SUMMARY JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the homeowner’s exemption applied to preclude plaintiff’s Labor Law 240(1) and 241(6) causes of action in this ladder-fall case. The Labor Law 200 and negligence causes of action (alleging defendant property-owners’ ladder was defective) properly survived summary judgment. The fact that the property-owner is a religious organization did not affect the applicability of the homeowner’s exemption:

The deposition transcripts of the plaintiff and of the defendant’s employee demonstrated that the defendant did not direct or control the plaintiff’s work. Additionally, the deposition transcript of the defendant’s employee and the affidavit of the defendant’s expert architect demonstrated that the defendant was the owner of a one-family dwelling to which the meditation room [which plaintiff was painting when he fell] was an accessory. Contrary to the plaintiff’s contention, the defendant is entitled to the protections of this exemption even though it is a religious organization … . …

The defendant failed to demonstrate, prima facie, that it lacked notice of the allegedly dangerous or defective condition with respect to the ladder … . Reinoso v Han Ma Um Zen Ctr. of N.Y., Inc., 2022 NY Slip Op 03755, Second Dept 6-8-22

Practice Point: The homeowner’s exemption precludes Labor Law 240(1) and 241(6) causes of action against a homeowner which/who does not direct plaintiff’s work, even if the homeowner is a religious organization. The homeowner’s exemption does not apply to Labor Law 200 or negligence causes of action, here based on allegations the homeowner’s ladder was defective.

 

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ALTHOUGH DEFENDANT’S MOTION TO AMEND ITS ANSWER (ADDING AFFIRMATIVE DEFENSES) WAS MADE AFTER A TWO-YEAR DELAY, THE DELAY ALONE DID NOT DEMONSTRATE THE PLAINTIFF WAS PREJUDICED; THE MOTION TO AMEND SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant’s motion to amend its answer to add additional affirmative defenses should have been granted. The two-year delay was not enough to show plaintiff was prejudiced. Discovery was ongoing:

The court should have granted defendant’s motion to amend its answer to add the four affirmative defenses of RPAPL 1951, adverse possession, mutual breach, and unclean hands, as leave to amend is freely given and plaintiff did not show that it would be prejudiced by the delay in asserting the defenses (CPLR 3025[b] …). While over two years had passed since defendant served its original answer, discovery was still ongoing … . Plaintiff’s claim of significant prejudice is unpersuasive, as all it points to is mere delay, which is insufficient to show prejudice … . Nor did plaintiff rebut defendant’s showing that the proffered amendment is not palpably insufficient or clearly devoid of merit … . Board of Mgrs. of the Porter House Condominium v Delshah 60 Ninth LLC, 2022 NY Slip Op 03680, First Dept 6-7-22

Practice Point: Here defendant moved to amend its answer by adding affirmative defenses two years after the answer was served. Discovery was still ongoing. The delay alone was not enough to demonstrate the plaintiff was prejudiced. The motion to amend should have been granted.

 

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THE LEVEL THREE STREET STOP WAS NOT JUSTIFIED BY THE VAGUE DESCRIPTION OF A ROBBERY SUSPECT WHICH DEFENDANT DID NOT MATCH; THAT THE DEFENDANT HID HIS FACE AND WALKED QUICKLY WHEN THE POLICE FOLLOWED HIM DID NOT PROVIDE THE POLICE WITH THE REQUISITE REASONABLE SUSPICION (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Manzanet-Daniels, over a dissent, determined the police did not have reasonable suspicion defendant had committed a crime and the level-three stop of the defendant was not justified. The suppression motion was granted and the indictment dismissed. The street stop was based upon a vague description of a robbery suspect which did not match the defendant. The fact that the defendant acted “suspiciously” when the police followed him was not enough to validate the stop:

The officers did not have reasonable suspicion to conduct a level three forcible stop and detention by ordering defendant to put his hands against a wall, grabbing his arms, and forcing him to the ground. Defendant matched the description only in that he was a black male. … That a defendant matches a vague, general description, such as the one the complainant gave of the perpetrator, is insufficient to give rise to reasonable suspicion, particularly where, as here, key parts of the description do not match … . …

Although defendant was walking at a fast pace and hiding his face from the officers, such equivocal behavior was just as susceptible to an innocent interpretation and may not increase the level of suspicion so as to justify a forcible stop … . Walking at a quick pace is not considered flight … . Defendant was under no obligation to walk more slowly or to show his face to the officers since he had a right to be let alone and refuse to respond to police inquiry … . Defendant’s desire not to make eye contact with the officers was equally consistent with an innocent desire as a black male to avoid interactions with the police. People v Thorne, 2022 NY Slip Op 03696, First Dept 6-7-22

Practice Point: Here the police conducted a level-three street stop based upon a vague description of a robbery suspect which the defendant did not match. The stop was not justified by defendant’s hiding his face and walking quickly when the police followed him.

 

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ALTHOUGH FATHER FAILED TO APPEAR, HIS COUNSEL APPEARED AND FATHER WAS THEREFORE NOT IN DEFAULT; BECAUSE FATHER WAS NOT IN DEFAULT, APPEAL IS NOT PRECLUDED (FOURTH DEPT).

The Fourth Department, vacating the portions of the order entered on default, determined father’s failure to appear was not a default because his counsel appeared. Because father was not in default, appeal is not precluded:

We agree with the father that Family Court erred in entering the order upon his default based on his failure to appear in court. The record establishes that the father “was represented by counsel, and we have previously determined that, [w]here a party fails to appear [in court on a scheduled date] but is represented by counsel, the order is not one entered upon the default of the aggrieved party and appeal is not precluded” … . Matter of Akol v Afet, 2022 NY Slip Op 03641, Fourth Dept 6-3-22

Practice Point: When counsel appears in Family Court, the party represented by counsel is not in default. An appeal is available to a party not in default.

 

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DEFENSE COUNSEL WAS INEFFECTIVE FOR FAILURE TO INTERVIEW A POTENTIALLY EXCULPATORY WITNESS; MOTION TO VACATE THE MURDER CONVICTION SHOULD HAVE BEEN GRANTED (FOURTH DEPT).

The Fourth Department, reversing County Court, determined defendant’s motion to vacate his conviction on ineffective assistance grounds should have been granted. Defense counsel did not interview a witness who, based on the witness’s testimony at the hearing on the motion to vacate, would have testified defendant was not at the scene of the shooting:

… [W]e conclude that defendant met his burden of establishing that defense counsel’s failure to interview the potentially exculpatory witness constituted ineffective assistance of counsel, inasmuch as the record before us reflects “the absence of strategic or other legitimate explanations for defense counsel’s allegedly deficient conduct” … . The failure by defendant’s trial counsel to interview the witness cannot be characterized as a legitimate strategic decision because, “without collecting that information, [defense] counsel could not make an informed decision as to whether the witness[‘s] evidence might be helpful at trial” … . To the extent that the defense team deemed the witness not credible due to his criminal record or history, that alone “does not excuse trial counsel’s failure to investigate since a witness’s unsavory background[ ] does not render his or her testimony incredible as a matter of law” … . Further, we conclude that, “even if the witness[‘s] criminal record[] provided a strategic basis for choosing not to present [his] testimony, it does not provide an excuse for [defense] counsel’s failure to investigate [him] as [a] possible witness[ ]” … . Moreover, the witness’s testimony at the CPL article 440 hearing was wholly consistent with the theory pursued by trial counsel, namely that defendant was not present at the shooting and that the crime was instead committed by an individual seeking to rob the victims’ residence, and the proposed witness would have provided the only eyewitness testimony at trial as to the shooting. People v Williams, 2022 NY Slip Op 03625, Fourth Dept 6-3-22

Practice Point: Here defense counsel was made aware of a potentially exculpatory witness and did not interview him. The fact that defense counsel felt the witness was not credible did not excuse the failure to investigate. Defendant’s motion to vacate his conviction on ineffective assistance grounds was granted by the appellate court.

 

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DEFENDANT PLED GUILTY TO ATTEMPTED GANG ASSAULT, WHICH IS A LEGAL IMPOSSIBILITY AT TRIAL; DEFENDANT WAS ENTITLED TO A HEARING ON WHETHER HIS PLEA WAS RENDERED INVOLUNTARY BY COUNSEL’S INACCURATE ADVICE ABOUT THE POSSIBILITY OF CONVICTION; MATTER REMITTED (FOURTH DEPT).

The Fourth Department determined there should be a hearing on whether defendant’s plea to attempted gang assault was involuntary. Defendant contended the plea was based on inaccurate advice from counsel. “Attempted gang assault” is a legal impossibility for trial purposes:

… [W]e agree with defendant that “attempted gang assault in the second degree is a legal impossibility for trial purposes. . . , as ‘there can be no attempt to commit a crime which makes the causing of a certain result criminal even though wholly unintended’ ” … . Based on that law and our review of the record, we further agree with defendant that the advice of defense counsel regarding the possibility of a conviction at trial of attempted gang assault in the second degree was erroneous.

Nevertheless, “[i]t is well settled that permission to withdraw a guilty plea rests largely within the court’s discretion” … . “Whether a plea was knowing, intelligent and voluntary is dependent upon a number of factors ‘including the nature and terms of the agreement, the reasonableness of the bargain, and the age and experience of the accused’ . . . That the defendant allegedly received inaccurate information regarding [the possibility of a conviction at trial and the resulting impact upon] his possible sentence exposure is another factor which must be considered by the court, but it is not, in and of itself, dispositive” … . “Where . . . the record raises a legitimate question as to the voluntariness of the plea, an evidentiary hearing is required” … . People v Davis, 2022 NY Slip Op 03610, Fourth Dept 6-3-22

Practice Point: “Attempted gang assault” is a legal impossibility at trial. Here defendant was entitled to a hearing on whether his plea to attempted gang assault was involuntary because of counsel’s inaccurate advice about the possibility of conviction at trial.

 

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