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BANK’S PROOF OF DEFAULT DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THE PROOF OF MAILING OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW (RPAPL) 1304 NOTICE WAS DEFICIENT, BANK’S SUMMARY JUDGMENT MOTION IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank’s motion for summary judgment in this foreclosure action should not have been granted. The proof of default did not meet the requirements of the business records exception to the hearsay rule. And the proof mailing in accordance with Real Property Actions and Proceedings Law (RPAPL) 1304 was deficient:

… [T]he plaintiff’s submissions, including the affidavit of Daphne Proctor, a “Document Execution Specialist” employed by the loan servicer, failed to lay a proper foundation for the admission of the business records relied on by the plaintiff to establish the defendant’s default in repayment of the subject loan … . Notably, to the extent that Proctor’s “purported knowledge of [the defendant’s] default was based upon her review of unidentified business records created and maintained by [the loan servicer], her affidavit constituted inadmissible hearsay and lacked probative value” … .

Moreover, the plaintiff failed to establish, prima facie, its strict compliance with RPAPL 1304. The record contains a single 90-day notice with no clear indication as to whether the mailing was made by registered or certified mail, or by first-class mail  … . Furthermore, Proctor, who asserted that the notices required under RPAPL 1304 were mailed, did not aver in her affidavit that she was familiar with the loan servicer’s mailing practices and procedures, and therefore did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed … , nor did she aver that she had mailed the notices herself. Wells Fargo Bank, N.A. v Kohli, 2019 NY Slip Op 04751, Second Dept 6-12-19

 

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NOTE: THIS CASE WAS REVERSED BY THE US SUPREME COURT ON JANUARY 20, 2022, BASED UPON A VIOLATION OF THE CONFRONTATION CLAUSE; IN AN EXHAUSTIVE DECISION WHICH DISCUSSED ONLY THE CONVOLUTED FACTS OF THIS MURDER CASE, THE MAJORITY AFFIRMED THE CONVICTION, OVER A DISSENT WHICH CALLED INTO QUESTION THE IDENTIFICATION OF THE DEFENDANT AS THE SHOOTER (FIRST DEPT).

The First Department, in an extensive, detailed, exhaustive rendition of the convoluted facts in this murder case, over a dissent, affirmed defendant’s conviction, finding the evidence legally sufficient. The victim was a two-year-old child in a van who was struck by a stray bullet. Major issues were whether the accomplice testimony was sufficiently corroborated and whether the jury was made aware that one of the eyewitnesses had identified a person other than the defendant, Morris, as the shooter. Morris was initially charged with the murder and went to trial which ended in a mistrial. He then pled guilty, against his attorney’s advice, to an apparently unrelated possession of a weapon charge. The shooting took place in 2006. Defendant was arrested and indicted in 2013 and went to trial in 2015. The majority appeared to rely heavily on evidence of consciousness of guilt (the defendant gave up a business in New York and fled to North Carolina). People v Hemphill, 2019 NY Slip Op 04646, First Dept 6-11-19

In an important opinion from the United States Supreme Court released January 20, 2022, and revised January 21, 2022, Hemphill’s conviction was reversed on the ground his right to confront Morris, who was not available to testify, had been violated by allowing the Morris’s plea allocution to be introduced in evidence. The stray bullet came from a 9mm weapon. The defense argued Morris was the shooter. After Morris’s murder trial ended in a mistrial, Morris pled guilty to possession of a .357 revolver. The plea allocution was allowed in evidence to “correct” the defense’s “misleading” argument that Morris was the shooter. Hemphill’s conviction was affirmed by the New York State Court of Appeals, over a dissent by Judge Fahey. People v Hemphill, 2020 NY Slip Op 03567, 35 NY3d 1035 CtApp 6-20-20

The violation of the Confrontation Clause warranted reversal by the US Supreme Court. 1/20/22 20-637 Hemphill v. New York

 

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THE FEDERAL FAIR HOUSING AMENDMENTS ACT AND THE NEW YORK CITY HOUSING AUTHORITY’S RULES REQUIRED THAT THE HEARING OFFICER CONSIDER PETITIONER-TENANT’S ACCOMMODATION REQUEST TO KEEP AN EMOTIONAL SUPPORT DOG IN HIS APARTMENT, THE HEARING OFFICER HAD RULED THE DOG WAS VICIOUS AND MUST BE REMOVED WITHOUT CONSIDERING THE ACCOMMODATION REQUEST, THE MATTER WAS SENT BACK (FIRST DEPT).

The First Department sent the matter back for a determination by the New York City Housing Authority (NYCHA) of petitioner’s accommodation request to keep an emotional support dog in his apartment. The dog had apparently bitten a NYCHA employee and the NYCHA alleged the presence of “vicious” dog violated the lease. Before the hearing, petitioner, who suffers from schizophrenia, requested that he be permitted to register the dog, Onyx, as an emotional support dog. The Hearing Officer ruled that petitioner could not keep the dog, but did not reach the accommodation request:

Under the Fair Housing Amendments Act (FHAA), it is unlawful discrimination for a housing provider to “refus[e] to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling” (42 USC § 3604[f][3][B]). Federal regulations exempt “animals that assist, support, or provide service to persons with disabilities” from public housing authority pet rules (24 CFR § 960.705[a]). Accordingly, respondent is obligated by both federal law and its own rules to accommodate petitioner’s request to maintain his emotional support animal, Onyx, so long as petitioner meets his burden of showing that his dog assists him with aspects of his disability. …

Federal regulations provide that a housing provider can only invoke the direct threat exception after conducting an individualized and objective assessment of the relevant factors, including (1) the nature, duration, and severity of the risk; (2) the probability that the potential [*3]injury will actually occur; and (3) whether any reasonable accommodations will mitigate the risk (24 CFR § 9.131[c]). The “direct threat” analysis has been applied to cases in which a person with a disability is seeking to maintain an emotional support pet as a reasonable accommodation … . Matter of Washington v Olatoye, 2019 NY Slip Op 04644, First Dept 6-11-19

 

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INSURERS MAY PROPERLY REFUSE NO-FAULT INSURANCE PAYMENTS TO A PROFESSIONAL MEDICAL SERVICE CORPORATION WHICH IS EFFECTIVELY OWNED AND CONTROLLED BY NONPHYSICIANS, THERE IS NO NEED TO DEMONSTRATE FRAUDULENT INTENT OR CONDUCT TANTAMOUNT TO FRAUD ON THE PART OF THE PROFESSIONAL CORPORATION; ANY ERROR IN ALLOWING THE JURY TO HEAR NONPARTY DEPOSITION TESTIMONY IN WHICH THE NONPARTIES REPEATEDLY ASSERTED THE FIFTH AMENDMENT PRIVILEGE AGAINST SELF-INCRIMINATION WAS HARMLESS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, determined that the defendant insurers properly refused to make no-fault insurance payments to plaintiff professional corporation because the corporation was owned and controlled by nonphysicians. The court specifically held that fraudulent intent or conduct “tantamount to fraud” need not be demonstrated. The court noted that allowing in evidence the deposition testimony of two nonparties (nonphysicians who allegedly controlled the professional corporation), in which the Fifth Amendment privilege against self-incrimination was repeatedly asserted, if it was error (not determined), was harmless:

… [A]n insurance carrier, seeking to demonstrate that a professional service corporation engaged in corporate practices that violate Business Corporation Law § 1507, Business Corporation Law § 1508, or Education Law § 6507 (4) (c), [need not] show that the professional service corporation or its managers engaged in common-law fraud. … A corporate practice that shows “willful and material failure to abide by” licensing and incorporation statutes … may support a finding that the provider is not an eligible recipient of reimbursement under 11 NYCRR 65-3.16 (a) (12) without meeting the traditional elements of common-law fraud. * * *

While the Fifth Amendment accords an individual the privilege not to answer questions in a civil proceeding if the answers might incriminate the person in future criminal proceedings … , a witness who asserts this Fifth Amendment privilege in a civil trial is not necessarily protected from consequences in the same manner as in a criminal trial. This Court has held that, in a civil case, failure to answer questions by a witness who is a party “may be considered by a jury in assessing the strength of evidence offered by the opposite party on the issue which the witness was in a position to controvert” … . In a civil trial, “an unfavorable inference may be drawn against a party from the exercise of the privilege against self-incrimination” … . We have not previously decided whether a nonparty’s invocation of the Fifth Amendment may trigger an adverse inference instruction against a party in a civil case, and we have no occasion to do so here because any error by the trial court was harmless … . Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 2019 NY Slip Op 04643, CtApp 6-11-19

 

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PLAINTIFF WAS INJURED USING A GRINDER WHICH DID NOT HAVE A SAFETY GUARD, THE LABOR LAW 241 (6) CAUSE OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s Labor Law 241 (6) cause of action should not have been dismissed. Plaintiff was injured using a grinder that did not have a safety guard:

Industrial Code (12 NYCRR) § 23-1.5(c)(3), which provides that “[a]ll safety devices, safeguards and equipment in use shall be kept sound and operable, and shall be immediately repaired or restored or immediately removed from the job site if damaged,” applies to the instant action and is sufficiently specific to support a section 241(6) claim … . Here, plaintiff testified that he was given a hand-held grinder from which the safety guard had been removed by his employer to install an over-sized disc blade. Plaintiff was then instructed to use this grinder to cut concrete, over his objections, and was injured when the grinder got stuck, kicked back, knocked him to the ground, and cut into his foot. This testimony raises a triable issue of fact as to whether defendant breached its nondelegable duty “to provide reasonable and adequate protection and safety” to plaintiff … . Contreras v 3335 Decatur Ave. Corp., 2019 NY Slip Op 04663, First Dept 6-11-13

 

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ANY BRADY VIOLATIONS WERE NOT “MATERIAL” IN THAT THERE WAS NO REASONABLE POSSIBILITY THE EVIDENCE WOULD HAVE CHANGED THE JURY’S VERDICT, DEFENDANT’S MOTION TO VACATE HIS CONVICTION SHOULD NOT HAVE BEEN GRANTED (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over a dissent, reversing the Appellate Division, determined defendant’s motion to vacate his conviction based upon the People’s failure to turn over Brady material relevant to the impeachment of a key prosecution witness (JA), and the prosecutor’s failure to correct that witness’s testimony, should not have been granted. The opinion includes a detailed recitation of the evidence which can not be fairly summarized here. In a nutshell, the Court of Appeals held that any Brady violation that might have occurred, in light of the extensive impeachment evidence forcefully used by defense counsel, the violation was not “material” in that it could not have affected the verdict:

… [D]efendant brought [a] CPL 440.10 motion to vacate his conviction … . … [D]efendant asserted that the People had violated their Brady obligation by failing to turn over evidence that there was an agreement to confer a benefit on JA in exchange for his testimony at defendant’s murder trial. In addition, defendant asserted that the trial prosecutor personally intervened in JA’s burglary case by procuring his release without bail during the June 13th drug court appearance, failed to correct JA’s trial testimony to specify that she was the “DA” who participated on June 13th, and failed to correct his characterization of his performance as ‘good’ in the drug treatment program … . * * *

“To make out a successful Brady claim, a defendant must show that (1) the evidence is favorable to the defendant because it is either exculpatory or impeaching in nature; (2) the evidence was suppressed by the prosecution; and (3) prejudice arose because the suppressed evidence was material” … . In New York, where a defendant made a specific discovery request for a document, and the information was not disclosed, we measure the third prong of the materiality of the suppressed Brady material by considering whether there is a reasonable possibility that disclosure of the evidence would have changed the result of the proceedings … . In the absence of a specific request by defendant, materiality is established if there is a “reasonable probability” that the result would have been different if the evidence had been disclosed — meaning ” a probability sufficient to undermine the court’s confidence in the outcome of the trial’ ” … . * * *

In determining that a Brady violation occurred, the Appellate Division failed to do the required materiality analysis as to the suppressed information. * * *

… [T]o say that there was ample impeachment evidence at trial against the witness on multiple levels is an understatement. … [T]here is no reasonable possibility that the knowledge that the trial prosecutor was the specific ADA who stood up for the People at the June 13th appearance and that JA was still in a drug program despite additional program violations — leaving treatment and bringing cigarettes into a facility — would have changed the jury’s verdict. People v Giuca, 2019 NY Slip Op 04642, CtApp 6-11-19

 

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THE STATUTORY TIMELY-DISCLAIMER REQUIREMENT OF INSURANCE LAW 3420(d)(2) DOES NOT APPLY TO OUT-OF-STATE RISK RETENTION GROUPS (RRG’S), DEFENDANT RRG, WHICH DID NOT ISSUE A TIMELY DISCLAIMER OF COVERAGE IN THE UNDERLYING PERSONAL INJURY ACTION, IS NOT BARRED FROM PRESENTING DEFENSES TO COVERAGE (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Rivera, over an extensive dissenting opinion by Judge Wilson, determined that the statutory timely disclaimer requirement of Insurance Law  3420 (d) (2) does not apply to defendant PCIC, an out-of-state risk retention group (RRG). Therefore PCIC’s failure to make a timely disclaimer of coverage in the underlying personal injury action did not bar PCIC’s coverage defenses. The central issue was one of statutory interpretation. The Court of Appeals rejected the argument that Insurance Law 2601 (a) (6), which applies to RRG’s and requires prompt “disclosure” of coverage, also requires timely “disclaimer” of coverage:

Whether PCIC’s disclaimer is regulated by the Insurance Law turns on whether the reference to an insurer’s failure “to promptly disclose coverage” in section 2601 (a) (6) includes the timely disclaimer requirement of section 3420 (d) (2). Nadkos [plaintiff] argues that section 2601 (a) (6) cites to section 3420 (d) without limitation, and thus encompasses both paragraphs (d) (1) and (d) (2). According to Nadkos, if the Legislature intended to limit section 2601 (a) (6) to a specific subparagraph of section 3420 (d), it knew how to do so … .

We reject the interpretation advocated by Nadkos, and adopted by the dissent, because the prohibition on an unfair claim settlement practice based on a failure to promptly disclose coverage encompasses the mandates of section 3420 (d) (1), not (d) (2). Nadkos, Inc. v Preferred Contrs. Ins. Co. Risk Retention Group LLC, 2019 NY Slip Op 04641, CtApp 6-11-18

 

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DEFENDANT DID NOT DEMONSTRATE AS A MATTER OF LAW THAT COKE OVENS USED IN THE MANUFACTURE OF STEEL WERE NOT PRODUCTS TRIGGERING THE DUTY TO WARN OF THE HAZARDS OF BREATHING EMISSIONS FROM THE OVENS, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Stein, over a two-judge dissent, reversing the Appellate Division, determined the defendant (Wilputte), which sold coke ovens for steel production, did not demonstrate, as a matter of law, the ovens were not “products” triggering the duty to warn. Therefore defendant’s motion for summary judgment should not have been granted (by the Appellate Division). Plaintiff’s decedent worked on top of the coke ovens and alleged breathing the toxic substances caused lung cancer. Plaintiffs alleged defendant had a duty to warn plaintiff’s decedent to use a respirator when working on the ovens. The Appellate Division had determined the coke ovens, housed in so-called “batteries,” were akin to buildings and construction of the buildings was a service, not a product:

… [D]efendant has not met its burden in showing that the coke ovens at issue are not products as a matter of law. Regardless of the alterations Bethlehem [the steel manufacturer] may have made to the scale and specifications of the battery at large, the ovens themselves served one function: the production of coke. This process was standard across all variations of coke ovens that Wilputte sold, ultimately placing the hazardous thing at issue squarely within the category of products to which liability has attached in the failure-to-warn context. …

… Wilputte was responsible for placing the ovens into the stream of commerce and that it derived financial benefit from its role in the production process. Indeed, by the time decedent began working for Bethlehem, Wilputte had sold hundreds of coke ovens to plants … . Wilputte also marketed its ovens with informational brochures showing the completed ovens and their functionality, indicating that Wilputte, not Bethlehem, was the commercial source of the product. … Although the ovens were largely assembled and completed on-site, that merely speaks to the logistical realties of the market of which Wilputte had a considerable share. …

… [T]he record supports Supreme Court’s conclusion that Wilputte was in the best position to assess the safety of the coke ovens because of its superior knowledge regarding the ovens’ intended functionality … . “A major determinant of the existence of a duty to warn” is an assessment of “whether the manufacturer is in a superior position to know of and warn against those hazards” inherent to its product … . Matter of Eighth Jud. Dist. Asbestos Litig., 2019 NY Slip Op 04640, CtApp 6-11-19

 

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COURTS HAVE THE DISCRETION TO DECLINE TO IMPUTE INCOME TO A PARENT WHO HAS VOLUNTARILY REDUCED HIS OR HER INCOME FOR A COMPELLING REASON, HERE, ALTHOUGH FATHER TOOK A LOWER PAYING JOB IN NORTH CAROLINA BECAUSE HIS WIFE TOOK A HIGHER PAYING JOB IN NORTH CAROLINA, FATHER’S CHILD SUPPORT OBLIGATION WAS NOT REDUCED, RATHER THE COURT IMPUTED A PORTION OF THE WIFE’S NEW HIGHER INCOME TO KEEP FATHER’S OBLIGATION AT THE SAME LEVEL (FOURTH DEPT).

The Fourth Department determined the court had the discretion to reduce father’s child support payments, even though father voluntarily took a lower paying job in North Carolina where his wife had found a job which increased her income by $30,000. The court’s conclusion it did not have the authority to reduce father’s child support obligation in this circumstance was itself deemed an abuse of discretion by the Fourth Department. However the Fourth Department didn’t change father’s obligation, rather it imputed some of the wife’s new higher income to the father:

… [C]ourts may decline to impute income when a parent has a voluntary reduction in income and a legitimate and reasonable basis for such a reduction … . Indeed, the general rule that “a parent who voluntarily quits a job will not be deemed without fault in losing such employment . . . should not be inflexibly applied where a parent quits a job for a sufficiently compelling reason” … . …

We thus agree with the father that the court erred when it stated that it was not permitted to reduce the father’s child support obligation even if his decision to take a lower-paying job was reasonable. …

It was undisputed that the entire reason the father left his higher-paying job in New York was so that his wife could accept a higher-salaried position in North Carolina, which resulted in a net increase in the income of his new family unit. Inasmuch as the father’s voluntary decision to leave his lucrative position for a lesser-paying position “unquestionably improved [his overall] financial condition” … , we conclude that we may impute some portion of the wife’s higher salary to the father … . Matter of Montgomery v List, 2019 NY Slip Op 04560, Fourth Dept 6-7-19

 

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THE QUALIFIED DOMESTIC RELATIONS ORDER (QDRO) OBTAINED BY STIPULATION OF SETTLEMENT MUST BE ENFORCED AS WRITTEN, BECAUSE NO PROVISION WAS MADE FOR GAINS OR LOSSES AFTER THE DIVORCE PROCEEDINGS COMMENCED, SUPREME COURT SHOULD NOT HAVE TRANSFERRED THE AGREED AMOUNT PLUS THE GAINS THAT HAD ACCRUED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the qualified domestic relations order (QDRO) obtained pursuant to a stipulation of settlement must be enforced as written. Because the stipulation made no provision for the transfer of gains which accrued after the divorce action started, Supreme Court erred by transferring the agreed amount plus the gains:

“A QDRO obtained pursuant to a [stipulation of settlement] can convey only those rights which the parties [agreed to] as a basis for the judgment’ ” … . Thus, “a court errs in granting a domestic relations order encompassing rights not provided in the underlying stipulation” … . A stipulation of settlement that is incorporated, but not merged, into the judgment of divorce ” is a contract subject to the principles of contract construction and interpretation’ ” … . If the stipulation of settlement is ” complete, clear, and unambiguous on its face[, it] must be enforced according to the plain meaning of its terms’ ” … . Here, the stipulation of settlement clearly and unambiguously made no provision for plaintiff to receive gains or losses on the amount that the stipulation of settlement specified would be transferred to her. Thus, plaintiff is not entitled to any gains on that amount that accrued after the divorce action commenced … . Reber v Reber, 2019 NY Slip Op 04557, Fourth Dept 6-7-19

 

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