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RESPONDENT WAS A CUSTOMER OF PETITIONER SECURITIES CORPORATION WITHIN THE MEANING OF FINANCIAL INDUSTRY REGULATORY AUTHORITY (FIRA) RULES AND THEREFORE COULD COMPEL ARBITRATION (FIRST DEPT). ​

The First Department, reversing Supreme Court, over an extensive dissent, determined respondent was a customer of petitioner (LekUS) and therefore could compel FINRA (Financial Industry Regulatory Authority) arbitration. Petitioner had been sued by FINRA in connection with shares of Cannibis Science, Inc. (CBIS) purchased by respondent and held by petitioner for trading:

The record establishes that respondent was a customer of nonparty Lek Securities UK, Ltd. (LekUK), where he had his account, and was also a client of petitioner Lek Securities Corp. (LekUS), with which he had a series of direct agreements. Under those agreements, LekUS conditioned its provision of depository and execution services for certain trades on respondent’s providing certain representations and an indemnity … .

Specifically, respondent purchased shares of Cannabis Science, Inc. (CBIS) in a series of transactions in 2015 and 2016 that required that the shares be held and sold in the United States. For each transaction, respondent executed an agreement (Deposit Agreement) directly with LekUS pursuant to which LekUS deposited the shares in its account at the Depository Trust & Clearing Corporation (DTCC). In each Deposit Agreement, (1) respondent represented that his answers to certain questions were true and acknowledged that LekUS would rely on those representations; (2) LekUS agreed to act as the “Processing Broker” to provide the services of depositing and reselling the shares; and (3) LekUS accepted respondent’s “Deposit Securities Request” on certain conditions, including that any claims by respondent or disputes arising from respondent’s representations in the Deposit Agreement “shall be governed by New York law and subject to the exclusive venue and jurisdiction of the courts and arbitration forums in the City and State of New York,” and that respondent would indemnify LekUS in connection with claims arising from respondent’s representations in the Deposit Agreement or from “the deposit process or the subsequent sale of the securities.”

When respondent sought to trade the CBIS shares deposited with LekUS, he communicated with Michael Mainwald, who was located at the office of LekUS, had a LekUS phone number and email address, and was registered with FINRA as the “principal operating officer” of LekUS.

… LekUS notified respondent that it had been sued by FINRA in connection with CBIS transactions and that LekUS sought indemnification by defendant pursuant to the Deposit Agreements. …

… [R]espondent was a “customer” of LekUS within the meaning of FINRA Rule 12200, and was therefore entitled to demand arbitration. Matter of LEK Sec. Corp. v Elek, 2020 NY Slip Op 01134, First Dept 2-18-20

 

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PLAINTIFF WAS INJURED WHEN THE CEILING COLLAPSED WHILE HE WAS TAKING OUT WALLS, THE LABOR LAW 240(1), 241(6) AND 200 CAUSES OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined that plaintiff’s Labor Law 240(1) ,241(6) and 200 causes of action should not have been dismissed. Plaintiff was in the process of taking down two bathroom walls when the ceiling collapsed:

To prevail on a Labor Law § 240(1) claim based on an injury resulting from the failure of a completed and permanent building structure (in this case, the collapse of a ceiling), a plaintiff must show that the failure of the structure in question was a foreseeable risk of the task he was performing, creating a need for protective devices of the kind enumerated in the statute … .

Here, there are issues of fact as to whether the ceiling was in such an advanced state of disrepair due to water damage that plaintiff’s work on the bathroom walls exposed him to a foreseeable risk of injury from an elevation-related hazard, the fall of the ceiling, and whether the absence of a type of protective device enumerated under Labor Law § 240(1) was a proximate cause of his injuries. Because the evidence of water stains on the bathroom ceiling could provide constructive notice of a dangerous condition, summary judgment dismissing plaintiff’s common-law negligence and Labor Law § 200 claims was also improperly granted. …

Defendants failed to show that plaintiff was not engaged in demolition work to trigger Labor Law § 241(6). His task was part of a larger project that included the demolition of interior walls, “which altered the structural integrity of the building'”( … Industrial Code § 23-1.4[b][16]). Issues of fact exist as to whether Industrial Code § 23-3.3(b)(3) and (c), pertaining to demolition, were violated or whether any such violation was a proximate cause of plaintiff’s injuries. Clemente v 205 W. 103 Owners Corp., 2020 NY Slip Op 01117, First Dept 2-18-20

 

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PLAINTIFF WAS INJURED ATTEMPTING TO ENTER A BUILDING FROM A SCAFFOLD THROUGH A WINDOW CUT-OUT; THERE WAS A QUESTION OF FACT WHETHER PLAINTIFF WAS AWARE THAT METHOD OF ENTERING THE BUILDING WAS PROHIBITED BY DEFENDANTS; THE LABOR LAW 240(1) CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED (CT APP).

The Court of Appeals, reversing (modifying) the Appellate Division, over a three-judge dissent, determined defendants’ motion for summary judgment should not have been granted in this Labor Law 240(1) action. Plaintiff was injured when he fell attempting to enter a building from a scaffold through a window cut-out. Although there was evidence of a standing order prohibiting use of that method for entering the building, other workers used that method:

A defendant has no liability under Labor Law § 240 (1) when plaintiffs: (1) “had adequate safety devices available,” (2) “knew both that” the safety devices “were available and that [they were] expected to use them,” (3) “chose for no good reason not to do so,” and (4) would not have been injured had they “not made that choice” … . Here, a triable issue of fact exists as to whether plaintiff knew he was expected to use the safety devices provided to him, despite the apparent accepted practice of entering the building through the window cut-outs from the scaffolding. Indeed, as the Appellate Division dissent concluded, the Appellate Division majority (and the dissent here) “ignore[] the evidence in the record that workers on this job site used the scaffold to go through window cut-outs to enter the interior of the building and that the scaffold was clearly inadequate for that purpose” … .

Given defendants’ purported acquiescence to this alleged practice, the general contractor’s standing order directing workers not to enter the building through the cut-outs is insufficient to entitle defendants to summary judgment … . Further, the accepted practice could have negated the normal and logical inclination to use the scaffold, stairs, or hoist instead of the cut-outs … . Finally, in context and given the other conflicting evidence in the record, a factfinder should determine whether plaintiff’s statement that he “wasn’t supposed to pass through there” unambiguously establishes that he knew he was expected to use the safety devices. Biaca-Neto v Boston Rd. II Hous. Dev. Fund Corp., 2020 NY Slip Op 01116, CtApp 2-18-20

 

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‘RELIABLE HEARSAY’ IN A PRESENTENCE INVESTIGATION (PSI) REPORT IS A SUFFICIENT BASIS FOR A FINDING DEFENDANT USED VIOLENCE IN THE COMMISSION OF A SEX OFFENSE; LEVEL TWO RISK ASSESSMENT UPHELD (CT APP).

The Court of Appeals, over an extensive two-judge dissent, determined documentary evidence of “reliable hearsay” was sufficient for a finding defendant used violence to coerce the child victim in this “course of sexual conduct against a child” case, Therefore defendant was properly adjudicated a level two risk of reoffense:

At a SORA hearing conducted as defendant was nearing completion of his prison sentence, he was adjudicated a level two risk of reoffense due, in part, to the assessment of ten points under risk factor one, use of violence. That finding was based on information in the Presentence Investigation (PSI) report prepared in connection with the offense stating that “[o]n one or more occasions, he used physical force to coerce the victim into cooperation,” information also included in the case summary prepared by the Board of Examiners of Sex Offenders. Defendant argues that this evidence was insufficient to supply evidence of use of violence because it constituted hearsay and did not more specifically describe his conduct. …

SORA adjudications, by design, are typically based on documentary evidence under the statute’s “reliable hearsay” standard. Case summaries and PSI reports meet that standard … , meaning they can provide sufficient evidence to support the imposition of points. PSI reports are prepared by probation officers who investigate the circumstances surrounding the commission of the offense, defendant’s record of delinquency or criminality, family situation and social, employment, economic, educational and personal history, analyzing that data to provide a sentencing recommendation (see CPL 390.30[1]). Their primary function is to assist a criminal court in determining the appropriate sentence for the particular defendant based on the specific offense. Defendants have a right to review the report prior to sentencing (see CPL 390.50[2][a]) and may challenge the accuracy of any facts contained therein at that time (see CPL 400.10). * * *

Because there is record support for the imposition of points under risk factor one, there is no basis to disturb the Appellate Division order. People v Diaz, 2020 NY Slip Op 01114, CtApp 2-18-20

 

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THE ERRONEOUSLY UNSEALED RECORD OF A CRIMINAL PROCEEDING TERMINATED IN FAVOR OF THE DEFENDANT SHOULD NOT HAVE BEEN CONSIDERED BY THE SENTENCING COURT, MATTER REMITTED FOR RESENTENCING (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Rivera, reversing the Appellate Division, over a three-judge dissenting opinion, determined the sentencing court should not have considered the erroneously unsealed records of a prior criminal action which was terminated in favor of the defendant. The matter was sent back for resentencing. “A court is without authority to consider for sentencing purposes erroneously unsealed official records of a prior criminal action or proceeding terminated in favor of the defendant. Where violation of the sealing mandate of CPL 160.50 impacts the ultimate sentence, the error warrants appropriate correction. Such is the case here, where the court imposed on defendant a higher sentence than promised at his plea, based on its finding that the unsealed trial record—which the court mistakenly believed it could consider—established defendant’s violation of a pre-sentence condition of his plea:”

Before sentencing, defendant was arrested and prosecuted for a crime allegedly committed after entering his plea. At defendant’s request, the sentencing court agreed to adjourn defendant’s sentencing pending resolution of the matter. The jury acquitted defendant of the new charge and the official record, including the trial transcript, was sealed in accordance with CPL 160.50.

The day following that acquittal, the prosecutor informed the court which had accepted defendant’s criminal possession plea that the People would be requesting an enhanced sentence on the criminal possession conviction because defendant violated a pre-sentence condition of the plea by engaging in criminal conduct during the sentencing adjournment, as made clear by defendant’s trial testimony in the other case. The prosecutor then moved to unseal the records in the prior criminal action terminated by acquittal, arguing “justice requires” unsealing because the trial testimony was relevant to defendant’s request to be sentenced under the terms of his plea. The court granted the motion. People v Anonymous, 2020 NY Slip Op 01113, CtApp 2-18-20

 

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UNDERCOVER OFFICER’S DISTRESS SIGNAL, A GROUP OF MEN NEAR THE UNDERCOVER OFFICER YELLING, DEFENDANT’S STRUGGLING WITH THE UNDERCOVER OFFICER, DEFENDANT’S BREAKING FREE OF AN OFFICER’S RESTRAINT AND RUNNING, DEFENDANT’S FORCIBLY TAKING PROPERTY FROM THE UNDERCOVER OFFICER, AND THE FELLOW OFFICER RULE, COMBINED TO JUSTIFY THE SEIZURE AND SEARCH OF DEFENDANT; THE MOTION COURT PROPERLY REOPENED THE SUPPRESSION HEARING TO ALLOW THE PEOPLE TO SUBMIT ADDITIONAL TESTIMONY (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Webber, determined that the police had probable cause to arrest defendant at the time defendant was seized and searched. Therefore defendant’s suppression motion was properly denied. The court noted that the distress signal made by the undercover officer together with the observation by Officer Regina of a group of men near the undercover officer yelling provided reasonable suspicion. Seeing defendant struggling with the undercover officer and the defendant’s breaking free and running when an officer attempted to restrain him provided probable cause for arrest. The First Department further determined the suppression hearing was properly reopened to allow the People to present additional testimony. The evidence at the reopened hearing provided another lawful basis for defendant’s arrest (the defendant had forcibly taken property from the undercover officer–probable cause imputed to the arresting officer by the fellow officer rule):

While Regina’s testimony established the requisite probable cause to arrest defendant, the court providently exercised its discretion in granting the People’s motion to reopen the suppression hearing before rendering a decision in order to permit the People to call an officer with additional information tending to establish reasonable suspicion … .The court had not made any ruling, and the circumstances did not pose a risk of tailored testimony.

Upon granting the People’s motion to present additional evidence, the court expressly stated that it had not yet rendered a decision … . Despite defendant’s arguments to the contrary, there is nothing in the hearing transcript to suggest that the court previously forecasted its decision or provided guidance to the People. The court’s very brief remark at the end of the initial hearing about an aspect of the facts cannot be viewed as “direction from the court” … , and was highly unlikely to result in tailored testimony … .

The evidence adduced at the reopened hearing established another lawful basis for defendant’s arrest. The undercover officer testified that, as he was attempting to buy drugs from another person, defendant interfered and forcibly took property from the officer. This gave the undercover officer probable cause to arrest defendant for robbery, which may be imputed to the arresting officer by way of the fellow officer rule … . The combination of the undercover officer’s distress signal, the field team officers’ observation of defendant in a struggle with the undercover officer, and the undercover officer’s act of chasing defendant satisfied the requirement that the arresting officer act on “direction of” or “communication with” a fellow officer … . The court’s general finding of probable cause can be reasonably interpreted as encompassing this theory … . People v Fraser, 2020 NY Slip Op 01037, First Dept 2-13-20

 

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DEFENDANT’S FAMILY MEMBERS SHOULD NOT HAVE BEEN EXCLUDED FROM THE COURTROOM DURING THE TESTIMONY BY THE UNDERCOVER OFFICERS, CONVICTIONS REVERSED (FIRST DEPT).

The First Department, reversing defendant’s conviction, determined the trial court should not have excluded defendant’s family members from the trial during the testimony of the undercover officers:

Following a Hinton hearing at which there was no testimony that defendant or any member of his family threatened or otherwise posed a threat to either of two testifying undercover officers, defense counsel requested that family members be permitted to attend the officers’ trial testimony. Although the prosecutor made no argument in opposition to this application, the court denied it, without making any supporting findings. This was error. “[A]n order of closure that does not make an exception for family members will be considered overbroad, unless the prosecution can show specific reasons why the family members must be excluded” … . We reject the People’s argument that the defense was obligated to identify specific family members who might attend the proceedings, in the absence of any request by the prosecutor or the court that it do so, as incompatible with the “presumption of openness” that applies in this context … . Moreover the court did not ask any questions to clarify which family members wanted to attend before issuing the closure order. People v Rivera, 2020 NY Slip Op 01035, First Dept 2-13-20

 

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QUESTION OF FACT WHETHER THE DOCTRINE OF RES IPSA LOQUITUR APPLIES IN THIS MEDICAL MALPRACTICE CASE; QUESTION OF FACT WHETHER THE MEDICAL CENTER IS LIABLE UNDER THE OSTENSIBLE AGENCY DOCTRINE (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined: (1) there is a question of fact whether the doctrine of res ipsa loquitur applied in this medical malpractice action; (2) the lack of informed consent cause of action should be reinstated; (3) there is a question of fact whether the medical center (NYU Langone) is liable for the anesthesiologist (Coopersmith) who performed the pre-surgery nerve block pursuant to the doctrine of ostensible agency; and (4) the action against the doctor who assisted Dr. Coopersmith was properly dismissed because she didn’t exercise any independent judgment in the procedure:

… [W]e agree with plaintiff that she sufficiently established that the doctrine of res ipsa loquitur applies to her cause of action for medical malpractice. The parties’ experts disagreed as to whether plaintiff’s injury ordinarily occurs in the absence of negligence, raising an issue of fact on that point … . Plaintiff also established that defendants were in control of all instruments used in the nerve block, and plaintiff’s actions did not contribute to her injuries … . To the extent that defendants’ expert opined that post-operative symptoms and image studies were not consistent with needle trauma to a nerve, that opinion did not refute plaintiff’s assertion of res ipsa loquitur because it failed to identify any other possible cause of plaintiff’s plexopathy, let alone a more probable cause … . Moreover, defendants’ expert did not dispute that plaintiff sus tained nerve damage and did not opine that the nerve damage pre-existed the surgery. …

We agree with defendants that they were entitled to a determination that no actual agency existed between NYU Langone and Dr. Coopersmith because NYU Langone did not employ or otherwise control Dr. Coopersmith. However, we find that an issue of fact exists as to whether NYU Langone could be held liable for Dr. Coopersmith’s actions in his treatment of plaintiff through ostensible agency. It is undisputed that plaintiff was treated by Dr. Feldman [the surgeon] because she sought out his care. However, Dr. Feldman testified that he did not choose which anesthesiologist at NYU Langone would perform the nerve block on plaintiff, instead an anesthesiologist was assigned by the Department of Anesthesia. A jury could reasonably infer from this testimony that Dr. Coopersmith was provided by NYU Langone and that plaintiff reasonably believed that Dr. Coopersmith was acting on NYU Langone’s behalf … . Sklarova v Coopersmith, 2020 NY Slip Op 01033, First Dept 2-13-20

 

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NEW YORK DOES NOT RECOGNIZE SPOLIATION OF EVIDENCE AS AN INDEPENDENT TORT, THE COMPLAINT SHOULD HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s complaint should have been dismissed for failure to state a cause of action. Plaintiff was injured falling off a forklift platform. Plaintiff alleged defendants negligently destroyed or failed to preserve the forklift platform, thereby making it impossible to sue the manufacturer. The Second Department held that there is no such tort:

Here, the plaintiff’s sole purported cause of action seeks to recover for the negligent impairment of an employee’s right to sue, which is, in effect, an allegation of spoliation … , and New York does not recognize spoliation of evidence as an independent tort. Lopez-Lobo v U.S. Nonwovens Corp., 2020 NY Slip Op 01053, Second Dept 2-13-20

 

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INJURY CAUSED BY CEMENT BOARDS FALLING FROM AN A-FRAME CART COVERED UNDER LABOR LAW 240 (1) (FIRST DEPT).

The First Department determined injury caused by cement boards falling from an A-frame cart was covered under Labor Law 240 (1):

The evidence shows that plaintiff and his coworkers were moving an A-frame cart, loaded with approximately 16 cement boards measuring 4′ x 8′ in dimension and weighing approximately 100 pounds each, when its wheel became stuck and the cart would not move. Plaintiff and his coworkers then pushed and pulled the cart to free it, and, in the process, the cart and the boards suddenly tipped, with the boards landing on plaintiff’s left leg. Given the weight and height of the cement boards on the A-frame cart, the elevation differential was within the purview of the statute … . Touray v HFZ 11 Beach St. LLC, 2020 NY Slip Op 01029, First Dept 2-13-20

 

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