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ALTHOUGH THE BANK IN THIS FORECLOSURE ACTION INSPECTED THE VACANT PROPERTY AND MADE PERIODIC REPAIRS, IT WAS NOT A “MORTGAGEE IN POSSESSION” SUCH THAT THE STATUTE OF LIMITATIONS WAS TOLLED; IN ORDER TO BE DEEMED A “MORTGAGEE IN POSSESSION,” THE MORTGAGOR MUST CONSENT TO THE BANK’S POSSESSION OF THE PROPERTY (SECOND DEPT).

The Second Department, reversing Supreme Court, over a dissent, determined the statute of limitations had run on defendant bank’s foreclosure counterclaim. The bank argued that the statute of limitations had been tolled because it was a “mortgagee in possession,” in that it kept tabs on the property and made repairs. The majority held that, in order to be a “mortgagee in possession,” the mortgagor must consent to the possession. Such consent constitutes an acknowledgment of the debt. The mortgagor here did not consent to the mortgagee’s possession of the property:

We disagree with our dissenting colleague that determining whether a mortgagee qualifies as a mortgagee in possession for purposes of tolling the statute of limitations requires “an analysis of the actions taken by the mortgagee to secure the property financially and physically.” Rather, the determination only requires an analysis of whether the mortgagee took full possession of the property pursuant to an agreement with the mortgagor. Mardenborough v U.S. Bank N.A., 2022 NY Slip Op 00034, Second Dept 1-5-22

 

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THE CONDOMINIUM BOARD OF MANAGERS PROPERLY APPLIED THE BUSINESS JUDGMENT RULE WHEN IT AUTHORIZED CONSTRUCTION WHICH NARROWED PLAINTIFF’S BOAT SLIP; THE DISSENT ARGUED THE BOARD FAILED TO SHOW THAT IT ACTED IN ACCORDANCE WITH THE CONDOMINIUM BYLAWS, WHICH IS REQUIRED BY THE BUSINESS JUDGMENT RULE (SECOND DEPT).

The Second Department, over a dissent, determined the defendant condominium board of managers properly applied the business judgment rule when it authorized construction which narrowed the boat slip assigned to plaintiff when she purchased the condominium:

“Under the business judgment rule, the court’s inquiry is limited to whether the board acted within the scope of its authority under the bylaws (a necessary threshold inquiry) and whether the action was taken in good faith to further a legitimate interest of the condominium. Absent a showing of fraud, self-dealing or unconscionability, the court’s inquiry is so limited and it will not inquire as to the wisdom or soundness of the business decision” … .

From the dissent:

Under the business judgment rule, a necessary threshold inquiry is whether the board acted within the scope of its authority under the bylaws and whether the action was taken in good faith to further a legitimate interest of the condominium … . Here, as set forth below, the Board failed to show, prima facie, that it satisfied this first prong—that it acted pursuant to the bylaws. Katz v Board of Mgrs. of Stirling Cove Condominium Assn., 2022 NY Slip Op 00033, Second Dept 1-5-22

 

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ALTHOUGH THE MOTION TO DISMISS THE FORECLOSURE ACTION AS ABANDONED PURSUANT TO CPLR 3215 WAS DENIED ON A GROUND NOT RAISED BY THE PARTIES, THE ORDER WAS SELF-PRESERVED AND APPEALABLE; THE PRESENTATION OF AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFENDANT’S DEFAULT PRECLUDES A FINDING THAT THE ACTION WAS ABANDONED PURSUANT TO CPLR 3215, DESPITE THE MOTION COURT’S REJECTION OF THE ORDER AS INCOMPLETE (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, over a concurrence and an extensive two-justice dissent, determined; (1) the dismissal of the foreclosure complaint as abandoned pursuant to CPLR 3215 was appealable, even though it was dismissed, sua sponte, on a ground not raised by the parties; and (2) the fact that the plaintiff submitted an order, albeit an order which was rejected for incompleteness, within one year of defendant’s default rendered  the dismissal pursuant to CPLR 3215 unavailable as a remedy:

The [motion] court employed CPLR 3215(c) reasoning, never argued by the parties, to decide a CPLR 3215(c) motion, just as in Rosenblatt [119 AD3d 45],  the court employed reasoning under CPLR 3212, which was never argued by the parties, to decide a CPLR 3212 summary judgment motion. Under the authority of either Rosenblatt or Tirado [175 AD3d 153], the analysis and reasoning of the court, in the order appealed from, although sua sponte, self-preserved the issues for appellate review because it was pursuant to the same CPLR section within which the plaintiff’s motion was based and was dispositive to the action. * * *

… [T]he plaintiff presented a proposed ex parte order of reference within the one-year statutory period. The fact that the Supreme Court rejected the order of reference as defective is beside the point, as the mere presentment of it established the plaintiff’s intent to proceed toward the entry of judgment and not to abandon the action … . Citibank, N.A. v Kerszko, 2022 NY Slip Op 00032, Second Dept 1-5-22

 

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THE JUROR’S SIMULATION OF THE STABBING IN THE JURY ROOM DID NOT CONSTITUTE JUROR MISCONDUCT (FIRST DEPT).

The First Department determined a juror’s use of a piece of cardboard to simulate a stabbing motion with a knife (during deliberations) did not constitute juror misconduct:

… [T]he juror … used a piece of cardboard to simulate a knife and briefly made a stabbing motion in an effort to demonstrate or reenact the crime at issue. Based on the evidence adduced at the hearing, this conduct likewise did not constitute “improper conduct” within the meaning of CPL 330.30(2). “It is well recognized that jurors may conduct a jury room crime reenactment or demonstration provided it involves no more that the jurors’ application of everyday experiences, perceptions and common sense to the evidence” … . In light of the trial evidence and the nature of the demonstration, the juror did not become an unsworn witness, or introduce new facts into the deliberations … . Given the location, simplicity, and brief duration of the demonstration … , as well as the hearing testimony of the jurors who testified that the demonstration had no effect on their deliberations … , the demonstration did not prejudice a substantial right of defendant …. People v Hubbard, 2022 NY Slip Op 00017, First Dept 1-4-22

 

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THE DUCT ON THE FLOOR WAS AN INTEGRAL PART OF THE DEMOLITION WORK, THEREFORE LABOR LAW 241 (6) DID NOT APPLY; THE DEFENDANT DID NOT SUPERVISE OR CONTROL PLAINTIFF’S WORK, THEREFORE LABOR LAW 200 DID NOT APPLY (FIRST DEPT).

The First Department, reversing Supreme Court, determined the air duct which caused plaintiff’s fall was part of the demolition work plaintiff’s employer was hired to perform. Therefore Labor Law 241(6) was not applicable. In addition, Labor Law 200 did not apply to the defendant who did not supervise or control plaintiff’s work:

Plaintiff fell after trying to climb over an air duct that was left on the floor as part of the demolition work his employer was subcontracted to perform. Accordingly, the air duct constituted an integral part of the work, and 12 NYCRR 23-1.7(e)(2) as a predicate for the Labor Law § 241(6) claim is inapplicable … . Contrary to plaintiff’s contention, defendant properly raised its “integral part” argument in its moving papers.

Defendant cannot be held liable under Labor Law § 200, because the presence of the air duct on the floor was a condition created by the means and methods of the work performed by plaintiff or his employer, and the record demonstrates that defendant had only general supervisory authority over the construction site and did not control plaintiff’s work … . Plaintiff testified that he received instructions only from his employer’s foremen … . Mateo v Iannelli Constr. Co. Inc., 2022 NY Slip Op 00010, First Dept 1-4-22

 

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THE PRIVILEGE AFFORDED ATTORNEYS UNDER THE CIVIL RIGHTS LAW RE: ALLEGEDLY DEFAMATORY CLAIMS INCLUDED IN A COMPLAINT (WITH ONE EXCEPTION NOT APPLICABLE HERE) IS ABSOLUTE, EVEN IN THE FACE OF ALLEGATIONS OF MALICE AND BAD FAITH (FIRST DEPT).

The First Department determined the allegedly defamatory claims included in a complaint against plaintiff were absolutely privileged with respect to the attorneys who drafted the complaint.

… [T]here is no evidence to support a claim that defendant attorneys acted with malice against plaintiff, either in the commencement of this case or in the preparation of the papers as well as any dissemination of the papers, which are for public consumption to a reporter. … [T]here are no … issues of fact as to whether defendant attorneys instituted and sought to publicize a “sham” action containing defamatory allegations against plaintiff for the sole or primary purpose of disseminating those defamatory allegations while cloaking them in the privilege that attends certain statements made in connection with proceedings before a court (see Williams v Williams, 23 NY2d 592, 599 [1969]). …

In the absence of alleged facts supporting the Williams exception, the privilege under Civil Rights Law § 74 is absolute and applies even where the plaintiff alleges malice or bad faith … . Weeden v Lukezic, 2022 NY Slip Op 00026, First Dept 1-4-22

 

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RECENT CHANGES TO THE STATUTES: (1) REQUIRING A LANDLORD TO MITIGATE DAMAGES WHEN A TENANT ABANDONS A RESIDENTIAL APARTMENT BEFORE THE END OF THE LEASE; AND (2), APPLYNG A SECURITY DEPOSIT TO REPAIRS, INTERPRETED AND APPLIED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Gische, interpreted recent changes to Real Property Law 227-e and General Obligations law 7-108 regarding the landlord’s duty to mitigate damages (when a tenant abandons an apartment before the end of the lease), and the landlord’s use of a security deposit to make repairs:

Real Property Law § 227-e now clearly holds that the duty to mitigate damages applies to all residential leases in New York State. It also clarifies that the doctrine of mitigation of damages is not an affirmative defense to be asserted by a tenant, but rather the burden is on landlord to establish it took reasonable and customary actions to “render the injury as light as possible” … . * * *

Under General Obligations Law § 7-103(1), it is black letter law that money deposited or advanced by a tenant on a lease agreement “shall continue” to be tenant’s money and “shall” be held in trust for the benefit of tenant until the lease is terminated and it is repaid or applied. The deposit is meant to cover the costs of repairing damages to the apartment. …

General Obligations Law § 7-108 (1-a)(d) also newly added, provides a requirement that landlord provide tenant with written notice of a right to have and be present at an inspection of the premises upon moving out. * * *

The penalty of [a landlord’s] forfeiture [of the security deposit] is only mandated when landlord fails to provide an itemized statement of the repairs that it claims are required and justify retention of part or all of the security deposit … . 14 E. 4th St. Unit 509 LLC v Toporek, 2022 NY Slip Op 00002, First Dept 1-4-22

 

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PURSUANT TO A MOLINEUX ANALYSIS, THE WEAPON-POSSESSION COUNT SHOULD HAVE BEEN SEVERED FROM THE MENACING AND ASSAULT COUNTS, IN WHICH DISPLAY OF A WEAPON WAS ALLEGED; THE SIROIS HEARING DID NOT DEMONSTRATE THE DEFENDANT CAUSED THE VICTIM TO REFUSE TO TESTIFY, THEREFORE THE VICTIM’S GRAND JURY TESTIMONY WAS NOT ADMISSIBLE; NEW TRIAL ORDERED (THIRD DEPT).

The Third Department, reversing defendant’s conviction and ordering a new trial, over a partial dissent, determined: (1) the weapon-possession count should have been severed from the assault and menacing counts under a Molineux analysis; (2) the Sirois hearing did not demonstrate that the alleged victim refused to testify because of intimidation by the defendant, therefore the victim’s grand jury testimony should not have been read to the jury; and (3) under Molineux, evidence of the defendant’s possession of marijuana and defendant’s participation in a program related to the police department’s “Crime Analysis Center” should not have been admitted:

… [B]y refusing to sever the assault and menacing charges from the weapon charge, County Court permitted highly prejudicial evidence to be placed before the jury. Proof that a handgun was recovered from defendant’s residence could lend credence to the victim’s claim that a handgun — albeit a different one — was displayed during the course of the assault and menacing. Similarly, if the jury credited the victim’s grand jury testimony relative to defendant displaying a weapon during her encounter with him, the jury could be more likely to believe that the handgun recovered from defendant’s residence did indeed belong to him.  * * *

Although the proof adduced [at the Sirois hearing] certainly established that the victim felt threatened and did not wish to testify, such proof fell short of demonstrating, by clear and convincing evidence, that defendant — or someone acting at his behest — orchestrated the victim’s unavailability for trial. People v Bryant, 2021 NY Slip Op 07582, Third Dept 12-30-21

 

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FAMILY COURT DID NOT HAVE THE AUTHORITY TO, SUA SPONTE, ADD A PARTY TO THIS PATERNITY PROCEEDING; APPLICABLE LAW EXPLAINED (THIRD DEPT).

The Third Department, reversing Family Court, determined Family Court did not have the authority to, sua sponte, add a person with whom mother had had a relationship, Rory EE, as a party in the paternity proceeding. All involved agreed Rory EE had no involvement with the child and equitable estoppel was not an issue:

… [A] court cannot, on its own initiative, add or direct the addition of a party … . Rather, the court may only summon a person who should be joined, if the court has jurisdiction over the person; if jurisdiction over the person can be obtained only by his or her consent or appearance, the court must determine whether the proceeding should be permitted to proceed in that person’s absence (see CPLR 1001 [b] …).

Family Court plainly did not have the authority to make Rory EE. a named party to this proceeding. … Family Court has also failed to obtain jurisdiction over Rory EE. No petition or summons, or supplemental summons, was filed against or served upon him … , no party has moved to add him as a necessary party and there has been no stipulation to that end (see CPLR 1003 … ), and he has not appeared before Family Court or otherwise consented to the court’s jurisdiction (see CPLR 320 [b] …). … [W]e reverse and remit for further proceedings, at which time the parties remain free to move for or stipulate to Rory EE. being added as a necessary party, or not, and, absent such a motion or stipulation, and if his joinder is deemed to be necessary, the court is limited to directing that reasonable efforts be made to join him as a party or considering whether this matter should proceed in his absence (see CPLR 1001 …). Matter of Schenectady County Dept. of Social Servs. v Noah DD., 2021 NY Slip Op 07587, Third Dept 12-30-21

 

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THE NEW YORK STATE AND LOCAL RETIRMENT SYSTEM DID NOT REBUT THE “WORLD TRADE CENTER PRESUMPTION” THAT PETITIONER’S DEPRESSION WAS AGGRAVATED BY HIS EXPERIENCES ON 9-11; PETITIONER POLICE OFFICER WAS THEREFORE ENTITLED TO ACCIDENTAL DISABILITY RETIREMENT BENEFITS (THIRD DEPT).

The Third Department, reversing the Comptroller, determined that the respondent New York State and Local Retirement System did not rebut the “World Trade Center presumption” that petitioner’s depression was aggravated by his experiences on 9-11:

Recognizing that there is no objective laboratory test to diagnose a mental health disorder like depression, if Fayer [respondent’s expert] was going to assert as fact that there are definitive biological reasons for petitioner’s qualifying condition — and that his depression would have reached the point of disability no matter the circumstances — it was incumbent upon Fayer, or the Retirement System generally, to provide some support for that far-reaching conclusion … . “Although the [World Trade Center] presumption is not a per se rule mandating enhanced accidental disability retirement benefits for first responders in all cases” … . in our view, accepting Fayer’s generalized conclusions, on their own, as adequate to rebut the statutory presumption afforded to petitioner — that his depression was in fact aggravated by his experiences on 9/11 — renders the existence of the presumption illusory. We therefore reverse the Comptroller’s finding that the Retirement System rebutted the World Trade Center presumption … . As a result, petitioner’s application for World Trade Center accidental disability retirement benefits must be granted (see Retirement and Social Security Law § 363 [g] [1] [a]). Matter of Fragola v DiNapoli, 2021 NY Slip Op 07596, Third Dept 12-30-21

 

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