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IN THIS ACTION TO CANCEL AND DISCHARGE A MORTGAGE BASED UPON THE RUNNING OF THE STATUTE OF LIMITATIONS FOR A FORECLOSURE ACTION, THE BANK RAISED A QUESTION OF FACT WHETHER THE BANK WHICH SERVED THE 2008 COMPLAINT SEEKING FORECLOSURE HAD STANDING AND, THEREFORE, WHETHER THE DEBT WAS ACCELERATED IN 2008 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank had raised a question of fact about whether the mortgage had been accelerated such that the six-year statute of limitations for bringing a foreclosure action had run:

Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real property at the time the action to cancel and discharge the mortgage was commenced … . An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4] ….). “[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt” … . …

The defendants raised a triable issue of fact as to whether Greenpoint had standing to commence the 2008 foreclosure action and, therefore, whether the service of the 2008 complaint was effective to constitute a valid exercise of the option to accelerate the debt … . The affidavits submitted by the defendants were sufficient to raise a triable issue of fact as to whether the note was physically delivered to the defendant U.S. Bank, National Association (hereinafter US Bank), on September 27, 2006, two years before US Bank’s assignor, Greenpoint, commenced the 2008 foreclosure action … . Halfon v U.S. Bank, Natl. Assn., 2019 NY Slip Op 00860, Second Dept 2-6-19

 

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COMPLAINT ALLEGING FRAUD AND RELATED CAUSES OF ACTION SHOULD NOT HAVE BEEN DISMISSED, CERTAIN CLAIMS WERE NOT TIME-BARRED AND PLAINTIFF’S RELIANCE UPON MISREPRESENTATIONS WAS SUFFICIENTLY ALLEGED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Singh, over a two-justice dissenting opinion, determined that the complaint alleging fraud and related causes of action should not have been dismissed. The lawsuit arose after a divorce. Wendy, the wife, was the executive director of Epiphany Community Nursery School, the plaintiff. The husband, defendant Hugh, an investment banker, handled certain financial transactions involving Epiphany:

There are two central issues on this appeal. The first involves the application of the statute of limitations. The second is whether plaintiff has pleaded the element of justifiable reliance to support its cause of action sounding in fraud pertaining to unauthorized bank transfers made by defendants between 2007 and 2013. We find the fraud claim relating to the bank transfers is not time-barred and that justifiable reliance has been sufficiently pleaded. Accordingly, we reinstate plaintiff’s fraud claims relating to the bank transfers. * * *

In determining whether justifiable reliance is sufficiently alleged, we consider two relevant circumstances: first, the existence of a relationship of trust or confidence and second, the superior knowledge or means of knowledge on the part of the person making the representation. …

… [T]he complaint alleges that Hugh went to great lengths to conceal the unauthorized transfers and therefore, Epiphany – and Wendy, in her capacity as Executive Director of Epiphany – could not have discovered the alleged fraud with reasonable due diligence … . In particular, Hugh “caused [Epiphany’s] bank statements to be diverted to the offices of Gruppo Levy and GLH” so that his fraudulent scheme would not be discovered. He also allegedly initiated these transfers at meetings with the employees of Gruppo Levy and GLH, not Epiphany. Additionally, he recorded the transfers as loans on the books and records, before offsetting them by services that were allegedly not provided so that Epiphany would not be alerted to the transfers. The complaint alleges that Hugh and Davie Kaplan’s actions prevented the public and government regulators from uncovering the fraud. Epiphany Community Nursery Sch. v Levey, 2019 NY Slip Op 00842, First Dept 2-5-19

 

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DETECTIVE’S TESTIMONY DEMONSTRATED THE WITNESS’S IDENTIFICATION OF DEFENDANT WAS CONFIRMATORY, HEARSAY IS ADMISSIBLE AT A RODRIGUEZ HEARING (FIRST DEPT).

The First Department determined that the detective’s testimony at the Rodriguez hearing established that the witness’s identification of defendant was confirmatory and noted that the witness need not testify at the hearing because hearsay is admissible:

At a Rodriguez hearing (see People v Rodriguez, 79 NY2d 445 [1992]), a detective’s testimony established that a witness was sufficiently familiar with defendant so that his identification of defendant was confirmatory. The People were not obligated to call the identifying witness … , because the detective gave detailed testimony about the witness’s relationship with defendant. The witness knew defendant, a frequent customer in the witness’s store, by his first name, and saw him several times a week over a period of three years.

Defendant’s request that the witness testify at the Rodriguez hearing was insufficient to preserve his present claim that such testimony was constitutionally required under the Confrontation Clause, and we decline to review it in the interest of justice. As an alternative holding, we reject this claim on the merits, in light of the fundamental difference between a suppression hearing, where hearsay is generally admissible, and a trial … . People v Lee, 2019 NY Slip Op 00824, First Dept 2-5-19

 

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PLAINTIFF WAS DEFENDANT’S SPECIAL EMPLOYEE WHEN INJURED, PLAINTIFF’S SOLE REMEDY IS WORKERS’ COMPENSATION (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined that defendant demonstrated plaintiff was its special employee. Therefore plaintiff’s sole remedy for his on the job injury is workers’ compensation:

It is well settled that “a general employee of one employer may also be in the special employ of another, notwithstanding the general employer’s responsibility for payment of wages and for maintaining workers’ compensation and other employee benefits” … . “[A] person’s categorization as a special employee is usually a question of fact”; however, a “determination of special employment status may be made as a matter of law where the particular, undisputed critical facts compel that conclusion and present no triable issue of fact” … . Here, defendant demonstrated that it exercised “complete and exclusive control over the manner, details and ultimate results of plaintiff’s work” … ; that Remedy [plaintiff’s usual employer] “was not present at the job site and had no right to direct, supervise or control plaintiff’s work’’ … ; that defendant provided plaintiff with all the training and materials necessary for plaintiff to perform his job … ; and that defendant “had the authority to fire plaintiff with respect to his employment at its job site” … . Ferguson v National Gypsum Servs. Co., 2019 NY Slip Op 00709, Fourth Dept 2-1-19

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THE TERMS OF THE PURCHASE CONTRACT INDICATED BUYER, WHO PURCHASED THE PROPERTY KNOWING IT WAS CONTAMINATED BY OIL, WOULD INDEMNIFY SELLER FOR COSTS RELATED TO THE ENVIRONMENTAL CONDITIONS, QUESTION OF FACT WHETHER BUYER, WHO SIGNED THE CONTRACT ‘ON BEHALF OF AN ENTITY TO BE FORMED,’ WAS INDIVIDUALLY LIABLE (FOURTH DEPT).

The Fourth Department determined that the terms of the purchase contract for property contaminated by oil indicated the buyer would indemnify the seller for costs associated with the condition of the property. The Fourth Department further held there was a question of fact whether the buyer signed the contract in his individual capacity in that he signed “on behalf of an entity to be formed:”

The purchase contract provided that a “Phase One Environmental report” had been completed on the property and that Marks, the “Buyer” of the property, was in receipt of the environmental report and “approve[d] of same.” The contract further provided that Atkin was the “Seller,” the property “was not in compliance with federal, state and/or local laws/ordinances,” the Buyer agreed to purchase the property “as is,” the “Buyer accept[ed] the property as is, with no representations or warranties as to environmental conditions” of the property, and the Buyer “release[d] and indemnifie[d] Seller with respect to any claims as to environmental conditions on or related to the property.” Thus, the terms of the contract establish that, prior to entering into the contract, both Atkin and Marks were generally aware of the property’s historical environmental contamination by the Exxon defendants and their predecessor, and the language in the indemnification provision, considered in light of the contract as a whole and the circumstances of the sale of the property, clearly and unambiguously expresses the intent of the parties that the Buyer would indemnify the Seller with respect to any claims regarding environmental conditions related to the property … . …

Although it is well settled that “[a]n individual who acts on behalf of a nonexistent corporation can be held personally liable” … , the determination “[w]hether a person is personally obligated on a preincorporation transaction depends on the intention of the parties” … . One Flint St., LLC v Exxon Mobil Corp., 2019 NY Slip Op 00752, Fourth Dept 2-1-19

 

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EXPERT TESTIMONY PROPERLY PRECLUDED BECAUSE OF LATE NOTICE, NEW TRIAL REQUIRED BECAUSE JURY WAS NOT INSTRUCTED ON MITIGATION OF DAMAGES (FOURTH DEPT).

The Fourth Department determined defendants in this Labor Law 240 (1) action were properly precluded from offering expert testimony because of late notice. The Fourth Department further determined that the jury should have been instructed on mitigation of damages, requiring a new trial:

… [T]he court determined that there was a willful failure to disclose because, prior to jury selection, defendants’ attorneys knew that they intended to present testimony from the psychiatric expert, but they did not disclose the expert until the day after jury selection began, which violated the court’s directive that defendants disclose an expert as soon as they knew of said expert. Although the record establishes that plaintiff was aware of the possibility that defendants would call an expert psychiatrist, he was prejudiced by the tardiness of the disclosure both because it impaired his ability to discuss the relevant issues during jury selection and because it hamstrung his opportunity to retain an expert psychiatrist of his own. Thus, based on the evidence in the record supporting the court’s determination that defendants had engaged in purposeful gamesmanship by withholding the information, and the resulting prejudice to plaintiff, we conclude that the court did not abuse its discretion in precluding the proposed expert testimony … .

We agree with defendants that the court erred in failing to instruct the jury on mitigation of damages insofar as it applied to past and future lost wages… . Here, plaintiff’s physicians unanimously agreed that he was capable of working in a light duty or sedentary setting and, although he did obtain work shortly after being advised by a doctor to seek job training, there is a question, under the circumstances, of whether the part-time job that he took was a reasonable mitigation of his damages. Flowers v Harborcenter Dev., LLC, 2019 NY Slip Op 00749, Fourth Dept 2-1-19

 

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STATEMENTS MADE BY THE COUNTY EXECUTIVE CONCERNING HER DECISION TO FIRE PLAINTIFF, THE EXECUTIVE DIRECTOR OF THE MONROE COMMUNITY HOSPITAL, WERE EITHER ABSOLUTELY OR QUALIFIEDLY PRIVILEGED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined statements made to the press by the county executive (Brooks) concerning her decision to terminate plaintiff (the executive director of the Monroe Community Hospital (MCH)) were either absolutely or qualifiedly privileged:

The absolute privilege defense affords complete immunity from liability for defamation to ” an official [who] is a principal executive of State or local government’ . . . with respect to statements made during the discharge of those responsibilities about matters which come within the ambit of those duties” …  “The first prong of that test . . . [requires an examination of] the personal position or status of the speaker,” and “the second prong . . . requires an examination of the subject matter of the statement and the forum in which it is made in the light of the speaker’s public duties” … . We conclude that absolute privilege applies here because Brooks was the Monroe County Executive (see id.) and her statements with respect to plaintiff’s termination concerned matters involving her official duties. Furthermore, because the investigation and the underlying actions of plaintiff became a matter of public attention and controversy, Brooks’s form of communication, i.e., statements to the press, was warranted … .

Even assuming, arguendo, that the statements were not covered by absolute privilege, we conclude that the defense of qualified privilege applies. “Generally, a statement is subject to a qualified privilege when it is fairly made by a person in the discharge of some public or private duty, legal or moral, or in the conduct of his [or her] own affairs, in a matter where his [or her] interest is concerned” … . Here, defendants satisfied their initial burden by establishing that Brooks made the relevant statements in her role as the Monroe County Executive, thereby discharging her responsibility to keep the public informed regarding a sensitive issue that had obtained extensive media attention … , and thus “the burden shifted to plaintiff[] to raise a triable issue of fact whether the statements were motivated solely by malice” … . Spring v County of Monroe, 2019 NY Slip Op 00747, Fourth Dept 2-1-19

 

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SUPPORT MAGISTRATE DID NOT HAVE JURISDICTION TO REDUCE FATHER’S CHILD SUPPORT BY DISTRIBUTING A TAX REFUND (FOURTH DEPT).

The Fourth Department determined the Support Magistrate did not have jurisdiction to reduce father’s child support by distributing a tax refund:

We agree with the mother, however, that the court erred in denying her … objection to that part of the Support Magistrate’s order that, in effect, distributed half of the parties’ tax refund to the father by reducing his child support obligation by that amount. We have previously stated that “the jurisdiction of Family Court is generally limited to matters pertaining to child support and custody . . . , and tax deductions or exemptions are not an element of support”… . “[T]he father’s entitlement to claim the child[ren] as [] dependent[s] for income tax purposes is not an element of support set forth in Family Court Act article 4, and thus the court lacks jurisdiction” to distribute the parties’ tax refund … . Therefore, … we remit the matter to Family Court to recalculate the father’s child support obligation without regard to the parties’ income tax refund. Matter of Bashir v Brunner, 2019 NY Slip Op 00746, Fourth Dept 2-1-19

 

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QUESTIONS OF FACT WHETHER THE CONTINUOUS TREATMENT DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS MEDICAL MALPRACTICE ACTION, REQUESTING MEDICAL RECORDS AND MEETING WITH AN ATTORNEY TO EXPLORE A MALPRACTICE ACTION DID NOT NECESSARILY INDICATE THE TERMINATION OF TREATMENT (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the medical malpractice action should not have been dismissed as untimely. Plaintiff raised questions of fact supporting the application of the continuous-treatment toll of the statute of limitations. The court noted the fact plaintiff may have considered bringing a malpractice action did not signal the termination of treatment. Although the lawsuit named the surgeon, Kates, who did the hip replacement, the suit encompassed treatment by others at the clinic, treatment that was well-within the statute of limitations:

… [A]lthough plaintiff requested her medical records and consulted with attorneys in 2010, the mere consultation with an attorney to explore a potential malpractice claim does not, by itself, terminate a course of treatment … . Furthermore, on January 26, 2011, Kates ordered an ultrasound for plaintiff and, on July 27, 2011, plaintiff was seen in the clinic by another physician to evaluate the results of the ultrasound. That physician recommended to plaintiff that she see Kates to discuss those results, and plaintiff testified in her deposition that she was expecting to see Kates after the ultrasound to discuss whether corrective hip revision surgery was necessary. That testimony further indicates that plaintiff expected her doctor-patient relationship with Kates to continue … . Thus, even though plaintiff was somewhat disaffected with Kates, the record does not conclusively establish that either plaintiff or Kates regarded the gap in treatment or plaintiff’s consultation with counsel as the end of their treatment relationship, and we therefore cannot conclude that the continuous treatment doctrine no longer applied as a matter of law after January 14, 2009 … . …

[A]lthough the court did not reach this issue, we … conclude that questions of fact exist regarding whether, for purposes of the continuous treatment doctrine, plaintiff’s treatment by various other physicians in the clinic should be imputed to Kates … . Clifford v Kates, 2019 NY Slip Op 00744, Fourth Dept 2-1-19

 

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A NEGATIVE INFERENCE SHOULD NOT HAVE BEEN DRAWN BASED UPON MOTHER’S FAILURE TO TESTIFY, SHE HAD NO FIRST-HAND KNOWLEDGE OF THE FACTS UNDERLYING FATHER’S PETITION TO MODIFY VISITATION, FATHER DID NOT DEMONSTRATE A CHANGE IN CIRCUMSTANCES AND DID NOT DEMONSTRATE MODIFICATION WOULD BE IN THE BEST INTERESTS OF THE CHILDREN, JUDGE DID NOT MAKE THE REQUIRED FACTUAL FINDINGS, FATHER’S PETITION SHOULD NOT HAVE BEEN GRANTED (FOURTH DEPT).

The Fourth Department, reversing Family Court, determined father did not demonstrate a change in circumstances that warranted visitation in his home, supervised by his new wife. The modified visitation was not demonstrated to be in the best interests of the children. The existing visitation arrangement, supervised by grandmother, was long-standing and was working well. In addition, the Fourth Department held that the fact that mother did not testify should not have been the basis of a negative inference. Mother had no knowledge of the circumstances underlying father’s petition:

Family Court erred in drawing a negative inference against [mother] based on her failure to testify at the hearing. The mother had no relevant testimony to offer inasmuch as she had no personal knowledge of the allegations in the modification petition … . Thus, we conclude that a negative inference against the mother was unwarranted because she did not “withhold[] evidence in [her] possession or control that would be likely to support [her] version of the case” … . …

Although the court correctly identified in its decision the applicable standard for modification of an existing custody and visitation order and referenced several circumstances that generally may support a court’s finding of a sufficient change in circumstances, the court failed to make express findings relative to the change in circumstances alleged by the father in his petition. Notwithstanding that failure, “we have the authority to review the record to ascertain whether the requisite change in circumstances existed’ ” … . …

Although the father’s marriage, new home, and diagnosis with sleep apnea are changes that have occurred since the time of the stipulation, those changes to the father’s personal circumstances do not ” reflect[] a real need for change to ensure the best interest[s] of the child[ren]’ ” … . …

… [T]there is no sound and substantial basis in the record to support the court’s determination that the children’s best interests warranted replacing the visitation supervisor, their grandmother, with the father’s new wife and permitting the father to select any location for his visits with the children … . Matter of William F.G. v Lisa M.B., 2019 NY Slip Op 00774, Fourth Dept 2-1-19

 

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