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COURT OF APPEALS 2009 RULING THAT LANDLORDS RECEIVING J-51 TAX BENEFITS CANNOT DEREGULATE NEW YORK CITY APARTMENTS APPLIES RETROACTIVELY IN THIS CLASS ACTION FOR RENT OVERCHARGES BROUGHT BY TENANTS; THE CLASS, HOWEVER, SHOULD NOT HAVE BEEN EXPANDED AFTER THE ACTION WAS COMMENCED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Richter too comprehensive to fairly summarize here, modifying Supreme Court, determined that the class action by tenants in defendant’s large housing complex properly sought repayment of rent overcharges. The complaint alleged the landlord, under New York City rent control and stabilization law, and pursuant to a 2009 Court of Appeals case (Roberts v Tishman, 13 NY3d 270), could not deregulate apartments while receiving so-called “J-51” tax benefits. The landlord argued unsuccessfully that the Roberts decision did not apply retroactively. The First Department remanded the case for recalculation of the overcharges and further held that Supreme Court should not have expanded the class. With regard to the expansion of the class, the court wrote:

CPLR 902 provides that a class action “may be altered or amended before the decision on the merits.” However, that provision also states that “[an] action may be maintained as a class action only if the court finds that the prerequisites under [CPLR] 901 have been satisfied.” Those requirements are generally referred to as “numerosity, commonality, typicality, adequacy of representation and superiority” (City of New York v Maul, 14 NY3d 499, 508 [2010]). CPLR 902 further requires the court to consider a range of factors before certifying a class.

Here, the motion court improvidently exercised its discretion in expanding the class. The court’s order failed to analyze whether class action status was warranted based on the criteria set forth in CPLR 901 and CPLR 902. Conducting that analysis ourselves, we find that the redefined class represents such a fundamental change in the theory of plaintiffs’ case that expansion of the class would be improper. When the class was originally certified, plaintiffs maintained, and the court agreed, that its members were tenants who received deregulated leases while the complex was receiving J-51 benefits. The expanded class, however, would include tenants who never lived in the complex during defendant’s receipt of J-51 benefits, and who received regulated leases for their tenancies. Thus, the legal issues for this group of tenants are separate and distinct from those of the original class. Dugan v London Terrace Gardens, L.P., 2019 NY Slip Op 06578, First Dept 9-17-19

 

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A PRIVILEGE UNDER WISCONSIN INSURANCE LAW APPLIED IN THIS NEW YORK ACTION CONCERNING INSURANCE CLAIMS STEMMING FROM THE ISSUANCE OF RESIDENTIAL MORTGAGE-BACKED SECURITIES (FIRST DEPT).

The First Department determined a privilege under Wisconsin Law protected certain emails and documents generated in a Wisconsin action by the Wisconsin Commissioner of Insurance concerning the payment of insurance claims stemming from the issuance of residential mortgage-backed securities, The decision doesn’t explain the underlying facts:

The Commissioner appointed a Special Deputy Commissioner (SDC) to oversee all activities … from Ambac’s [plaintiffs’] New York offices, and, at the SDC’s direction, plaintiffs commenced this action in New York, asserting claims of fraudulent inducement and breach of contract in connection with the policies Ambac issued on the securitizations sponsored by defendant. When defendant demanded the production of certain emails and other documents maintained by the SDC, plaintiffs responded by claiming the statutory privilege held by the Wisconsin Office of the Commissioner of Insurance (OCI) under Wisconsin law (see Wis Stat § 601.465). Defendant argued that New York law should be applied because, in adjudicating privilege issues, New York courts must apply the law of the place where the evidence will be introduced at trial or where the discovery proceeding is located. Supreme Court, after engaging in an interest-balancing analysis, determined that the Wisconsin statutory privilege was applicable, and denied defendant’s motion to compel. We affirm.

New York courts “routinely apply the law of the place where the evidence in question will be introduced at trial or the location of the discovery proceeding when deciding privilege issues” … . However, there are circumstances in which an interest-balancing analysis is properly undertaken to decide whether another state’s law should govern the evidentiary privilege … .  This is a case that presents such circumstances … . Ambac Assur. Corp. v Nomura Credit & Capital, Inc., 2019 NY Slip Op 06574, First Dept 9-17-19

 

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DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED ON THE GROUND THAT PLAINTIFF’S DEPOSITION TESTIMONY CONTRADICTED THE CONCLUSIONS OF PLAINTIFF’S EXPERT (CT APP). ​

The Court of Appeals, reversing the Appellate Division, over two dissents, determined summary judgment should not have been granted to defendants in this personal injury case stemming from a potholder catching fire. The Appellate Division had reversed because plaintiff’s deposition testimony conflicted with the conclusions of plaintiff’s expert. The facts were not discussed:

The courts below erred in granting defendants’ motions for summary judgment on the basis that plaintiff failed to raise a triable issue of fact sufficient to defeat the motions. Although the plaintiff’s deposition testimony partially contradicted the factual conclusions reached by her expert witnesses, the expert opinions were based upon other record evidence and were neither speculative nor conclusory. Insofar as plaintiff raised genuine issues of fact on the element of causation, summary judgment should not have been granted on that ground … . We remit for Supreme Court to consider the alternative grounds for summary judgment defendants raised in their motions and neither Supreme Court nor the Appellate Division reached.

… Judges ]Rivera, Stein, Fahey and Wilson concur. Chief Judge DiFiore and Judges Garcia and Feinman dissent and vote to affirm for reasons stated in the Appellate Division memorandum decision (Salinas v World Houseware Producing Co., Ltd., 166 AD3d 493 [1st Dept 2018]). Salinas v World Houseware Producing Co., 2019 NY Slip Op 06537, CtApp 9-12-19

 

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EVIDENCE OF THE CHILD VICTIM’S REPUTATION FOR UNTRUTHFULNESS SHOULD HAVE BEEN ADMITTED IN THIS SEXUAL OFFENSES CASE; THE RELIABILITY OF THE EVIDENCE, A QUESTION OF LAW, WAS ESTABLISHED, THE CREDIBILITY OF THE EVIDENCE IS A JURY QUESTION (THIRD DEPT).

The Third Department, reversing defendant’s conviction of predatory sexual assault against a child, criminal sexual act in the first degree and endangering the welfare of a child, determined defendant should have been allowed to present evidence of the child-victim’s reputation for untruthfulness. The court noted the two-pronged analysis for such character evidence: (1) the reliability of the evidence (a question of law); and (2) the credibility of the evidence (a question of fact):

“Once the party seeking admission of reputation evidence has laid the proper foundation, it is for the jury to evaluate the credibility of the character witnesses who testify, and to decide how much weight to give the views reported in their testimony. While a reasonable assurance of reliability is necessary for a proper foundation, such reasonable assurance exists where the testifying witnesses report the views of a sufficient number of people, and those views are based on sufficient experience with the person whose character is in question. Reputation evidence may be reliable . . ., but still questionable from a credibility standpoint. This possibility, however, is not a proper basis for exclusion of reputation evidence. Reliability — whether a character witness has established a proper basis for knowing a key opposing witness’ general reputation for truth and veracity — is a question of law for the court. By contrast, the credibility of such character witness — whether that witness is worthy or unworthy of belief or is motivated by bias — is a factual question for the jury. We caution that a trial court should not use reliability as a ground for excluding evidence it believes is not credible” … .

… [D]efendant proffered a proposed witness who was prepared to testify that she had known the victim since birth, that they were members of the same large extended family and that many members of the extended family knew the victim. Further, the proposed witness was prepared to testify that she was aware of the victim’s bad reputation for truthfulness among the extended family. …

County Court erred when it determined that the proposed testimony failed to establish a proper foundation for admission of testimony regarding the victim’s bad reputation for truthfulness; in fact, the offer of proof contained each element required by People v Fernandez (17 NY3d at 76-77). People v Youngs, 2019 NY Slip Op 06540, Third Dept 9-12-19

 

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THE PEOPLE’S APPEAL FROM THE DENIAL OF ITS MOTION FOR RECONSIDERATION OF COUNTY COURT’S DISMISSAL OF THE INDICTMENT WAS NOT AUTHORIZED BY STATUTE AND MUST THEREFORE BE DISMISSED (THIRD DEPT). ​

The Third Department determined the People’s appeal from dismissal of the indictment and the denial of their motion for reconsideration, which was not authorized by statute, must be dismissed. County Court had determined the victim’s testimony at the grand jury was unsworn and could not be considered. The People then made a motion for reconsideration with proof the victim had been properly sworn:

… [D]efendant, an inmate at Greene County Correctional Facility, was charged by indictment with aggravated harassment of an employee by an inmate, stemming from an April 2016 incident wherein defendant was transported to Columbia Memorial Hospital for medical treatment and thereafter allegedly drank his own urine and spat it in the face of a correction officer (hereinafter the victim). The parties thereafter entered into a stipulation in lieu of motions and, pursuant thereto, County Court reviewed, among other things, the grand jury minutes to determine whether there was legally sufficient evidence to support the indictment. In December 2016, County Court dismissed the indictment, determining that the evidence before the grand jury was legally insufficient inasmuch as the People’s sole witness — the victim — had not been administered the correct oath and, as such, had presented unsworn testimony to the grand jury. The People thereafter moved for reconsideration, averring that the court reporter had erroneously omitted reference to the correct oath which had, in fact, been appropriately given by the jury foreperson to the victim, and the People affixed to the motion a corrected copy of the grand jury minutes reflecting same.

… [I]t is well settled that “no appeal lies from a determination made in a criminal [action] unless specifically provided for by statute” … . Here, the People’s underlying motion purports to be one for “reconsideration”; however, even construing such motion as a motion to reargue and/or renew, there is no statute authorizing the People to appeal from the denial of such a motion in a criminal action … . People v Overbaugh, 2019 NY Slip Op 06546, Third Dept 9-12-19

 

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SUSPENSION OF COLLEGE STUDENT FOR THREE YEARS BASED UPON A FINDING THE STUDENT WAS RESPONSIBLE FOR SEXUAL VIOLENCE AS DEFINED IN THE STUDENT CONDUCT MANUAL UPHELD (THIRD DEPT).

The Third Department upheld the college’s finding that petitioner was responsible for sexual violence within meaning of the provisions of the Student Conduct Manual and was properly suspended from the State University of New York (SUNY) at Plattsburgh for three years. The charges were based upon the female student’s inability to consent or her lack of consent to sexual intercourse:

SUNY’s determination was based upon its finding that the reporting individual could not affirmatively consent to sexual activity with petitioner because she was asleep or unconscious and, therefore, “incapacitated during the time period in question.” In that respect, the reporting individual stated that, over a roughly four-hour period, she had consumed three or four 24-ounce cans of malt liquor, as well as an unknown quantity of alcohol from a friend’s drink. Statements made by petitioner, both at the hearing and during an interview conducted by respondent Butterfly Blaise, SUNY’s Title IX Coordinator, as reflected in a written summary of that interview, corroborated the reporting individual’s account that she had been drinking prior to and during her encounter with petitioner. In fact, as reflected in the interview summary, petitioner recalled observing the reporting individual stumbling in the hallway and mumbling her words. Additionally, the reporting individual asserted that she had significant gaps in her memory regarding her encounter with petitioner, stating that she remembered certain parts but that “other parts fe[lt] ‘black’.” Matter of Jacobson v Blaise, 2019 NY Slip Op 06549, Third Dept 9-12-19

 

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QUESTIONS OF FACT WHETHER NEGLIGENT SUPERVISION OF PLAINTIFF KINDERGARTEN STUDENT IN GYM CLASS WAS THE PROXIMATE CAUSE OF HER INJURY (THIRD DEPT).

The Third Department determined there were questions of fact whether the school was negligent in supervision plaintiff kindergarten student in gym class. Infant plaintiff was instructed to jump but her feet did not leave the ground and she fell forward on her arm. Infant plaintiff had an individualized accommodation plan (504 plan) of which the gym teacher was aware:

Defendant submitted evidence demonstrating that the gym teacher was aware of the infant’s 504 plan and that there were no specific accommodations therein for physical education. The physical therapist who worked with the infant testified that she did not have any safety concerns for the infant regarding physical education. Defendant’s expert stated in an affidavit that defendant provided a safe environment for the students, and the gym teacher explained the safety rules and taught proper techniques to the students. The expert thus opined that the infant’s alleged injuries were not proximately caused by any inadequate supervision by defendant.

Meanwhile, the infant gave conflicting accounts as to whether a mat was located on the floor where she landed after jumping. The infant also testified in her hearing pursuant to General Municipal Law § 50-h that she explained to the gym teacher how she jumped at the time of the accident and, when the teacher told her that her explanation was incorrect, the infant responded that she jumped how she was instructed to do so by him. Plaintiff’s expert stated in an affidavit that the infant’s physical limitations impaired her ability to function in class and engage in physical education activities. The expert opined that, when taking into account the class size and the activities performed, defendant negligently supervised the infant by allowing her to jump without having a teacher in close proximity to her. Jaquin v Canastota Cent. Sch. Dist., 2019 NY Slip Op 06555, Third Dept 9-12-19

 

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PATIENT ADVOCATES WHO ACCOMPANY THE CLIENTS OF PERSONAL INJURY LAW FIRMS TO INDEPENDENT MEDICAL EXAMINATIONS ARE EMPLOYEES ENTITLED TO UNEMPLOYMENT INSURANCE BENEFITS (THIRD DEPT).

The Third Department determined claimants were employees of IME, which paid claimants (patient advocates) to accompany clients of personal injury law firms during independent medical examinations. Therefore claimants were entitled to unemployment insurance benefits:

IME advertised for patient advocates, who were required to submit resumÉs and to be interviewed. IME then imposed very specific requirements governing nearly every aspect of the work of the patient advocates that it hired. An official handbook set forth detailed instructions specifying the procedures that advocates were expected to follow during patient examinations, including instructions to immediately call the IME office upon arrival or if the examining physician required intake paperwork. The handbook also contained a script that advocates were expected to read to physicians at the beginning of every examination and specified the precise content of the reports that were required to be prepared. IME exercised control over work assignments by determining which patient advocates would be offered the opportunity to attend any particular examination, by assigning specific patient advocates in response to customer requests and by arranging for replacements when a patient advocate was unable to report to an assigned examination. IME staff reviewed all reports that were submitted. In response to complaints that it had received from customers, IME sent a memorandum to patient advocates describing common errors and admonishing them to follow the prescribed protocol and thereafter conducted a mandatory meeting regarding the required content and format of the reports. Matter of Bloomfield (IME Watchdog, Inc.), 2019 NY Slip Op 06556, Third Dept 9-12-19

 

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DEFENDANT’S AFFIRMATIVE DEFENSES SHOULD HAVE BEEN CONSIDERED IN ITS MOTION FOR SUMMARY JUDGMENT; PLAINTIFF’S ACTION AGAINST DEFENDANT BASED UPON HER DISMISSAL FROM A NURSING PROGRAM SHOULD HAVE BEEN BROUGHT IN AN ARTICLE 78 PROCEEDING AND WAS THEREFORE TIME-BARRED (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the court should have considered defendant’s affirmative defenses, including the statute of limitations defense, in determining defendant’s summary judgment motion. Plaintiff brought fraud, breach of contract and prima facie tort causes of action against defendant. Plaintiff was enrolled in defendant’s licensed practical nurse (LPN) program and was dismissed by defendant based upon plaintiff’s performance in a clinical setting. The Third Department held that the action should have been brought in an Article 78 proceeding and was time-barred:

Supreme Court should have considered defendant’s affirmative defenses on the summary judgment motion. Although the notice of motion did not cite CPLR 3211 (a), it did seek dismissal of the complaint in its entirety, as well as “such other and further relief” as the court deemed just and proper, and defendant’s memorandum of law, submitted with the motion, addressed dismissal based on the statute of limitations and failure to exhaust administrative remedies, thereby providing plaintiff with adequate notice of these bases for the motion. … A defendant may raise an affirmative defense listed in CPLR 3211 (a) in a pre-answer motion to dismiss or, for most of those grounds, “may instead choose to raise that defense in its answer, and either move on that ground later in a motion for summary judgment, or wait until trial to have it determined” … . * * *

Plaintiff’s separate causes of action sounding in breach of contract, fraud and prima facie tort are all, at their core, challenges to defendant’s actions in dismissing her from the LPN program in a manner that allegedly was not in good faith and was without a sound factual basis, rendering her dismissal arbitrary and capricious. Thus, she should have brought her challenge in a CPLR article 78 proceeding. Although courts generally possess the authority to convert a plenary action to a CPLR article 78 proceeding if jurisdiction of the parties has been obtained (see CPLR 103 [c]), conversion is not appropriate where the claims are barred by the four-month statute of limitations governing CPLR article 78 proceedings … . Meisner v Hamilton, Fulton, Montgomery Bd. of Coop. Educ. Servs., 2019 NY Slip Op 06558, Third Dept 9-12-19

 

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OUT-OF-POSSESSION LANDLORD NOT LIABLE FOR A SLIP AND FALL ON ICE ON THE RENTAL PROPERTY, SUPREME COURT REVERSED (THIRD DEPT).

The Third Department, reversing Supreme Court, determined defendant out-of-possession landlord did not have a contractual duty to remove ice and snow and did not have actual or constructive notice of the icy condition on the rental property in this slip and fall case:

“As a general rule, an out-of-possession landlord is not responsible for dangerous conditions existing upon leased premises after possession of the premises has been transferred to the tenant. Exceptions to this rule include situations where the landlord retains control of the premises, has specifically contracted to repair or maintain the property, has through a course of conduct assumed a responsibility to maintain or repair the property or has affirmatively created a dangerous condition thereon” … . “[W]hen a landowner and one in actual possession have committed their rights and obligations with regard to the property to a writing, [courts] look not only to the terms of the agreement but to the parties’ course of conduct . . . to determine whether the landowner in fact surrendered control over the property such that the landowner’s duty is extinguished as a matter of law” … . However, the fact that a landlord “retain[s] the right to visit the premises, or even to approve alterations, additions or improvements, is insufficient to establish the requisite degree of control necessary for the imposition of liability with respect to an out-of-possession landlord” … .

… “[W]ithout notice of a specific dangerous condition, an out-of-possession landlord cannot be faulted for failing to repair or otherwise rectify it” … . “Accordingly, the [ultimate] burden is on the plaintiff to prove actual or constructive notice and a reasonable opportunity to repair or remedy the dangerous condition” … . Rose v Kozak, 2019 NY Slip Op 06559, Third Dept 9-12-19

 

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