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ALTHOUGH INSURANCE LAW 3420(d)(2) REQUIRING TIMELY NOTICE OF THE DISCLAIMER OF INSURANCE COVERAGE DOES NOT APPLY TO THIS BREACH OF CONTRACT (AS OPPOSED TO A PERSONAL INJURY) ACTION, THE DISCLAIMERS WERE UNTIMELY UNDER COMMON LAW WAIVER AND ESTOPPEL PRINCIPLES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant insurance companies’ disclaimers of coverage of damages associated with the insured’s breach of contract were not timely. The insured county was found to have breached a contract and was assessed nearly $11,000,000 in damages:

Contrary to the County’s contention, while Insurance Law § 3420(d)(2) imposes strict requirements on an insurer to give timely written notice if it is disclaiming liability or denying coverage for death or bodily injury arising out of an accident, “[w]here, as here, the underlying insurance claim does not arise out of an accident involving bodily injury or death, Insurance Law § 3420 and its heightened requirements do not apply” … . Instead, an insurer’s delay in disclaiming coverage “should be considered under common-law waiver and/or estoppel principles” … . …

Here, the County proffered evidence that * * * [the innsurers] did not respond [for] 6 months and 17 months, respectively, after they were notified of the subject loss. County of Suffolk v Ironshore Indem., Inc., 2020 NY Slip Op 06099, Second Dept 10-28-20

 

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PLAINTIFF BANK DID NOT DEMONSTRATE COMPLIANCE WITH RPAPL 1304 AND DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (THIRD DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not demonstrate it met the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304 and the bank did not demonstrate it had standing the bring the action:

… [T]he plaintiff failed to submit an affidavit of mailing or proof of first-class mailing by the United States Postal Service evidencing that it properly mailed notice to the defendant pursuant to RPAPL 1304. Instead, the plaintiff relied on an affidavit of Sherry Benight, who was employed as a document control officer for Select Portfolio Servicing, Inc. (hereinafter SPS), which began servicing the subject loan on the plaintiff’s behalf on July 15, 2015, as well as copies of the purported notices, dated July 22, 2013. Although one of the notices contained a first-class mail 10-digit barcode, the plaintiff submitted no evidence that the letter was actually sent by first-class mail more than 90 days prior to commencement of the action. In her affidavit, Benight stated that she could confirm that the notice was sent to the defendant on July 22, 2013. However, Benight did not have personal knowledge of the purported mailing. Further, since she did not aver that she was familiar with the mailing practices and procedures of Bank of America, N.A., the entity that purportedly sent the notices, she did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed … . To the extent that Benight relied upon a screenshot of a TrackRight Transaction Report, she failed to establish how or when the report was created, that it was made in the regular course of business, or that it was created soon after the notices were purportedly mailed to the defendant … . …

The plaintiff also attempted to establish standing through the submission of Benight’s affidavit, but this also was insufficient. Benight asserted that the original note was delivered to the plaintiff on September 7, 2004, and that the plaintiff had since remained in possession of the note. Benight, however, did not have personal knowledge of the plaintiff’s receipt of the note, did not attest that she had personal knowledge of the plaintiff’s business practices and procedures, and also did not submit any admissible business records to show that the plaintiff possessed the note at the time this action was commenced … . Bank of N.Y. Mellon v Porfert, 2020 NY Slip Op 06083, Second Dept 10-28-20

 

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THE JURY SHOULD HAVE BEEN INSTRUCTED ON THE JUSTIFICATION DEFENSE IN THIS ASSAULT AND RESISTING ARREST CASE; DEFENDANT KICKED AND FLAILED AS HE WAS SUBDUED BY MORE THAN EIGHT POLICE OFFICERS (FIRST DEPT).

The First Department, reversing defendant’s conviction, determined the jury should have been instructed on the justification defense:

Defendant’s request to charge justification, with regard to his kicking and flailing as officers tried to subdue and arrest him, should have been granted … . Penal Law § 35.27 permits a defendant to claim justification where there is a reasonable view of the evidence that he or she is the victim of excessive police force … . When a defendant requests such a charge, the trial court “must view the record in the light most favorable to the defendant and determine whether any reasonable view of the evidence would permit the factfinder to conclude that the defendant’s conduct was justified.” … Viewed in the light most favorable to the defense, the testimony and video evidence show that after defendant resisted police efforts to handcuff him, approximately eight additional officers joined in a struggle, punching and tazing defendant, and the police lieutenant used a baton to roll defendant’s Achilles tendon. These facts warranted a justification charge. People v Banyan, 2020 NY Slip Op 06060, First Dept 10-27-20

 

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DEFENSE COUNSEL WAS GIVEN NOTICE AND THE OPPORTUNITY TO BE HEARD BEFORE THE ISSUANCE OF THE WARRANT TO TAKE A DNA SAMPLE FROM THE DEFENDANT; DEFENSE COUNSEL WAS NOT ENTITLED TO DISCOVERY OF THE WARRANT APPLICATION PRIOR TO THE ISSUANCE OF THE WARRANT TO ASSESS PROBABLE CAUSE; A VIDEO DEPICTING DEFENDANT WAS PROPERLY AUTHENTICATED; APPELLATE DIVISION REVERSED (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over a concurrence and a two-judge dissent, reversing the Appellate Division, determined defendant was not entitled to review the application for the warrant to collect DNA evidence from the defendant’s person before the warrant was issued. Defense counsel was given notice and an opportunity to be heard on the application and did not contest the reasonableness of the bodily intrusion at that time. The Appellate Division held (1) the defense was entitled to review the search warrant application before the warrant was issued (to assess probable cause) and (2) a video depicting the defendant was not properly authenticated. The Court of Appeals reversed on both issues:

The [Appellate Division] held that Supreme Court erred in precluding defense counsel from reviewing the search warrant application and in denying counsel the opportunity to be heard on the issue of probable cause. The Court rejected the People’s argument that Abe A. [56 NY2d 288] requires notice only for the first level of intrusion—seizure of the person—and held that the due process requirement of notice and an opportunity to be heard is likewise required for the subsequent search and seizure of corporeal evidence. The Court also held that the People failed to adequately authenticate the YouTube video … . * * *

It is evident that Abe A.’s requirement of notice and an opportunity to be heard in the pre-execution stage of a warrant authorizing the seizure of evidence by bodily intrusion was satisfied in this case. Defense counsel, having received notice of the hearing on the warrant, was given an opportunity to be heard on the application, other than on the issue of probable cause. Counsel failed to direct any argument to the nature of the intrusion, the value of comparative DNA analysis evidence or the sufficiency of the safeguards preventing unwarranted disclosure of the results of his DNA testing, either at the hearing or in his motion to suppress. …  [T]he method and procedures employed in taking the saliva undoubtedly respected relevant Fourth Amendment standards of reasonableness, and defendant’s claim that the failure to provide him discovery of the extant probable cause and an adversarial hearing nonetheless warrants the invocation of the exclusionary rule is without constitutional basis.

[With respect to the video,] …defendant did not dispute that he was the individual who appeared in the video reciting certain words [and] the video contains distinctive identifying characteristics … . … [T]estimony … provided evidence pertinent to the timing of the making of the video—including defendant’s admission of his future intent to make the video the next morning … —and the video was uploaded to YouTube close in time to the homicide. … [T]he video was introduced for its relevance to defendant’s motive related to territorial gang activity—which is not an element of the offense—rather than specifically offered for its truth. People v Goldman, 2020 NY Slip Op 05977, Ct App 10-22-20

 

 

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STRICT FORECLOSURE AT THE DIRECTION OF THE MAJORITY BONDHOLDERS WHICH CANCELLED THE NOTES PRECLUDED RECOVERY BY THE PLAINTIFFS WHO PURCHASED SOME OF THE NOTES IN THE SECONDARY MARKET (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Garcia, reversing the Appellate Division, over a three-judge dissent, determined the strict foreclosure at the direction of the majority bondholders which cancelled the notes precluded plaintiffs from recovering on notes purchased in the secondary market. The decision is fact-specific, dependent on the wording of documents, and cannot be fairly summarized here:

After the issuer defaulted, plaintiffs, the holders of a minority in principal amount of senior secured debt, brought this lawsuit against the debtor and its guarantors to recover payment of principal and interest. We are called upon to determine whether plaintiffs’ right to sue for payment on the notes survived a strict foreclosure, undertaken by the trustee at the direction of a group of majority bondholders over plaintiffs’ objection, that purported to cancel the notes. We hold that it did … . …

In December 2005, defendant Cleveland Unlimited, Inc. (Cleveland Unlimited), a telecommunications company, issued $150 million of “senior secured” debt in the form of “Notes” pursuant to an indenture agreement (the Indenture). The Notes had a five-year term and required Cleveland Unlimited to pay interest to holders of the Notes (Noteholders or Holders) on a quarterly basis up to and including the maturity date, at which point the principal also became due. The Indenture named Cleveland Unlimited as the “Issuer” of the Notes, eighteen of Cleveland Unlimited’s subsidiaries and affiliates as the “Guarantors,” and U.S. Bank National Association (U.S. Bank) as the Indenture “Trustee.” At the same time the Indenture was executed, the Issuer, the Guarantors, and the Trustee executed a Collateral Trust Agreement and a Security Agreement (collectively, Indenture Documents) … . In April 2010, plaintiffs purchased approximately $5 million of the Notes in the secondary market, amounting to 3.33% of the outstanding principal value.

At issue in this case are certain provisions in the Indenture Documents governing the rights of the Noteholders to receive payment, the remedies available in the event of default, and the power of a majority of Noteholders to direct the Trustee’s choice of remedy. CNH Diversified Opportunities Master Account, L.P. v Cleveland Unlimited, Inc., 2020 NY Slip Op 05976, Ct App 10-20-20

 

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VETERINARY CLINIC MAY BE LIABLE IN NEGLIGENCE FOR INJURY CAUSED BY A DOG IN THE CLINIC’S WAITING ROOM, BUT THE CLINIC’S LIABILITY SHOULD NOT TURN ON WHETHER THE CLINIC WAS AWARE OF THE DOG’S VICIOUS PROPENSITIES, THE STRICT LIABILITY STANDARD IMPOSED ON DOG-OWNERS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Garcia, over a two-judge concurrence, determined that the defendant veterinary clinic (Palmer) should not have been awarded summary judgment in this dog-bite case. As a veterinarian was returning a dog (Vanilla) which had just been treated to the dog’s owner in the waiting room the dog slipped out of its collar and allegedly attacked plaintiff. The question was whether the liability theory requiring knowledge of a dog’s vicious propensities applied to the clinic as it does to a dog-owner. The clinic had been awarded summary judgment on the ground it had demonstrated it was not aware of the dog’s vicious propensities. The Court of Appeals held the case against the clinic should be analyzed under a standard negligence theory, not under the strict liability theory applicable to dog-owners:

The vicious propensity notice rule has been applied to animal owners who are held to a strict liability standard, as well as to certain non-pet-owners—such as landlords who rent to pet owners—under a negligence standard … . However, we have recognized that other competing policies and contemporary social expectations may be at play in certain instances where domestic animals cause injuries. For example, we held that the owner of a farm animal “may be liable under ordinary tort-law principles” when that farm animal is allowed to stray from the property on which it is kept … . …

It is undisputed that Palmer owed a duty of care to plaintiff—a client in its waiting room. Palmer is a veterinary clinic, whose agents have specialized knowledge relating to animal behavior and the treatment of animals who may be ill, injured, in pain, or otherwise distressed. An animal in a veterinary office may experience various stressors—in addition to illness or pain—including the potential absence of its owner and exposure to unfamiliar people, animals, and surroundings. Moreover, veterinarians or other agents of a veterinary practice may—either unavoidably in the course of treatment, or otherwise—create circumstances that give rise to a substantial risk of aggressive behavior. …

… [W]e conclude that Palmer does not need the protection afforded by the vicious propensities notice requirement, and the absence of such notice here does not warrant dismissal of plaintiff’s claim. To be sure, “[w]e do not intend to suggest that [Palmer] would be subject to the same strict liability” as the owner of a domestic animal … . However, we are  satisfied that, under the circumstances presented here, a negligence claim may lie despite Palmer’s lack of notice of Vanilla’s vicious propensities. Furthermore, viewing the record in the light most favorable to plaintiff, as we must … , questions of fact exist as to whether the alleged injury to plaintiff was foreseeable, and whether Palmer took reasonable steps to discharge its duty of care. Thus, neither party was entitled to summary judgment. Hewitt v Palmer Veterinary Clinic, PC, 2020 NY Slip Op 05975, Ct App 10-20-20

 

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IN A VEHICULAR MANSLAUGHTER CASE, THE STANDARD OF PROOF OF IMPAIRMENT FROM MARIJUANA IS THE SAME AS THE STANDARD OF PROOF OF IMPAIRMENT FROM ALCOHOL (THIRD DEPT).

The Third Department, in a comprehensive opinion by Justice Lynch, affirmed defendant’s conviction stemming from a collision with a motorcycle at a time when defendant was impaired by marijuana (THC). The decision, which lays out the law of vehicular manslaughter, carefully goes through evidence of impairment and causation. The opinion is too detailed to be fairly summarized here. It is worth noting that, on the issue of impairment, the opinion indicates a prior decision describing a different standard of proof of impairment for marijuana, as opposed to alcohol, should no longer be followed. The same standard of proof of impairment is applied to the drugs enumerated in Public Health Law 3306, including marijuana, as is applied to alcohol:

… [T]he degree of impairment necessary to convict a motorist of vehicular manslaughter in the second degree based upon a death that was caused while such motorist was under the influence of one of the drugs enumerated in Public Health Law § 3306 (which includes marihuana) is the same degree of impairment as would be necessary to sustain a conviction of driving while intoxicated by alcohol — namely, the People must prove that such motorist was “incapable of employing the physical and mental abilities which he [or she was] expected to possess in order to operate a vehicle as a reasonable and prudent driver” … . To the extent that this Court’s decision in People v Rossi (163 AD2d 660, 662 [1990], lv denied 76 NY2d 943 [1990]) can be read as holding that a conviction of vehicular manslaughter in second degree based upon a violation of Vehicle and Traffic Law § 1192 (4) only requires proof that the motorist was impaired “to any extent,” it should no longer be followed. People v Caden N., 2020 NY Slip Op 05979, Third Dept 10-22-20

 

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RESPONDENT WAS DENIED EFFECTIVE ASSISTANCE OF COUNSEL IN THE JULY 2015 MENTAL HYGIENE ARTICLE 10 TRIAL; COUNSEL WAS INEFFECTIVE IN NOT REQUESTING A FRYE HEARING ON THE VALIDITY OF THE OSPD DIAGNOSIS; MATTER REMITTED FOR A FRYE HEARING BASED UPON WHAT WAS KNOWN ABOUT THE DIAGNOSIS AT THE TIME OF THE 2015 TRIAL (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Mulvey, remitting the matter for a Frye hearing, determined respondent was deprived of effective assistance of counsel in the July 2015 Mental Hygiene Article 10 trial because counsel did not request a Frye hearing on the validity of the “other specific paraphilic disorder (nonconsent)” (OSPD) diagnosis. It was not until just after the July 2015 trial that courts recognized it was an abuse of discretion to deny a Frye hearing regarding OSPD, but there was a substantial amount of literature calling the diagnosis into question at the time of the trial:

When evaluating whether counsel’s failure to request a pretrial Frye hearing in this case constituted ineffective assistance, counsel’s posttrial motion practice sheds light on what counsel knew, or should have known, prior to trial about the acceptance of paraphilic disorders. Counsel filed a posttrial motion, apparently at respondent’s urging, to preclude from the dispositional hearing evidence of OSPD (nonconsent) and other paraphilic disorders by any name. In his motion papers, counsel not only cited to several of the foregoing trial court cases that had been recently issued, but also annexed several scientific articles from 2014, 2011 and 2008 that highlight the controversial nature and forensic misuse of paraphilic disorders generally or outright reject PNOS (nonconsent) or OSPD (nonconsent) as diagnoses reliable enough for the courtroom. At least one of these articles, as well as counsel’s cross-examination of [an expert] at trial, reveal that counsel was at least generally aware that defined nonconsent paraphilias or paraphilic disorders had been rejected for inclusion in various versions of the Diagnostic and Statistical Manual … . * * *

… [H]ad counsel been successful at a pretrial Frye hearing in precluding consideration of OSPD (nonconsent), it is possible that respondent could have had the petition dismissed before trial … . … In other words, counsel “had everything to gain and nothing to lose” by challenging OSPD (nonconsent) in a Frye hearing … . … [T]his single failing deprived respondent of the effective assistance of counsel … . Accordingly, we hold the appeal … in abeyance and remit the matter to Supreme Court for a posttrial Frye hearing to consider the reliability of OSPD (nonconsent) based on the information that was available prior to the July 2015 trial, and to report back on its findings … . Matter of State of New York v Kenneth II, 2020 NY Slip Op 05980, Third Dept 10-22-20

 

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THE 2008 FORECLOSURE COMPLAINT WAS SERVED ON A DECEASED DEFENDANT AND WAS THEREFORE A NULLITY WHICH DID NOT TRIGGER THE SIX-YEAR STATUTE OF LIMITATIONS; THE INSTANT FORECLOSURE ACTION, THEREFORE, IS NOT TIME-BARRED (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the foreclosure action was not time-barred. Although a foreclosure complaint was served in 2008, it named a deceased defendant and was therefore a nullity which did not accelerate the debt and start the statute of limitations running:

Plaintiff contends that Supreme Court erred in dismissing the action as untimely because the 2008 action was commenced only against the decedent borrower and was thus a legal nullity. We agree. “The six-year statute of limitations in a mortgage foreclosure action begins to run from the due date for each unpaid installment unless the debt has been accelerated; once the debt has been accelerated by a demand or commencement of an action, the entire sum becomes due and the statute of limitations begins to run on the entire mortgage” … . Accordingly, as a general rule, the commencement of a mortgage foreclosure action triggers the statute of limitations … . As pertinent here, however, “[a] party may not commence a legal action or proceeding against a dead person, but must instead name the personal representative of the decedent’s estate” … . Greenpoint [Mortgage Funding] served but did not substitute the executor of decedent’s estate as a party in the 2008 action (see CPLR 1015 [a]). As such, the court lacked jurisdiction over the 2008 action, and that action was a legal nullity from its inception … . It follows that the 2008 action, a legal nullity, did not trigger the statute of limitations. Since this action was commenced within six years of the 2013 acceleration letter, the action was timely. U.S. Bank Natl. Assn. v Stewart, 2020 NY Slip Op 05982, Third Dept 10-22-20

 

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