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THE THIRD DEPT EXERCISED ITS INTEREST OF JUSTICE JURISDICTION AND VACATED DEFENDANT’S PLEA BECAUSE HE WAS NOT ADEQUATELY INFORMED OF THE RIGHTS HE WAS GIVING UP BY PLEADING GUILTY, TWO JUSTICE DISSENT (THIRD DEPT).

The Third Department, vacating defendant’s guilty plea, exercising its interest of justice jurisdiction, over a two-justice dissent, determined defendant was not adequately informed of the rights he was giving up by pleading guilty:

Defendant contends that his plea was not knowing, voluntary and intelligent because County Court failed to advise him of the constitutional rights he was waiving by pleading guilty. Although defendant failed to preserve this contention for our review through an appropriate postallocution motion … , we nonetheless exercise our interest of justice jurisdiction to take corrective action and reverse the judgment … . …

… [D]uring the abbreviated plea colloquy, County Court briefly advised defendant that, if he were to plead guilty, he would be giving up his “right to a trial, . . . the right to testify at that trial, to call witnesses and to cross-examine the People’s witnesses.” Significantly, County Court did not advise defendant that he had a right to a jury trial or that he would be waiving the privilege against self-incrimination by entering a guilty plea … . Further, the court failed to obtain any assurance that defendant had discussed with counsel the trial-related rights that are automatically forfeited by pleading guilty or the constitutional implications of a guilty plea … .

From the dissent:

… .[W]e do not think that the unpreserved error cited by the majority, standing alone, necessitates this Court exercising its interest of justice jurisdiction to reverse the judgment of conviction as there is nothing compelling about this case that “cries out for fundamental justice beyond the confines of conventional considerations” … . People v Demkovich, 2019 NY Slip Op 00326, Third Dept 1-17-19

 

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IN THIS ACTION STEMMING FROM WORTHLESS RESIDENTIAL MORTGAGE BACKED SECURITIES, THE COMPLAINT SUFFICIENTLY PLED THAT GROSS NEGLIGENCE PRECLUDED ENFORCEMENT OF THE ‘SOLE REMEDIES’ CLAUSES AND THE DEMANDS FOR PUNITIVE DAMAGES AND ATTORNEY’S FEES SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kahn, reversing Supreme Court, determined that the complaint in this residential mortgage backed securities (RMBS) action sufficiently pled that gross negligence precluded enforcement of the “sole remedies” clauses in the contracts and that the demands for punitive damages and attorney’s fees should not have been dismissed:

On this appeal, which arises from the securitization and sale of residential mortgages, plaintiff, Deutsche Bank National Trust Company (Trustee), as trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 (Trust), challenges the motion court’s pre-answer dismissal of the Trustee’s cause of action for breach of contract to the extent that it included a demand for compensatory damages. The motion court dismissed the Trustee’s compensatory damages demand on the ground that the “sole remedies” clauses in the underlying securitization agreements precluded the Trustee from seeking such relief. The Trustee maintains, however, that it sufficiently pleaded gross negligence on the part of defendants Morgan Stanley Mortgage Capital Holdings LLC (MSMCH) and Morgan Stanley ABS Capital I Inc. (MSAC) to render the “sole remedies” clauses unenforceable. On that issue, we hold, consistent with our decision in Morgan Stanley Mortgage Mtge. Loan Trust 2006-13ARX v Morgan Stanley Mtge. Capital Holdings LLC (143 AD3d 1 [1st Dept 2016]), that the complaint’s allegations of gross negligence in this case are sufficient to render the “sole remedies” clauses unenforceable. We are also called upon to decide whether the motion court properly dismissed the Trustee’s demands for punitive damages and attorneys’ fees. As to those issues, for the reasons that follow, we hold that those demands should not have been dismissed.

Specifically, this action arises from the securitization of subprime mortgages by Morgan Stanley & Co., Inc. in 2007, shortly before the housing market collapsed. The Trustee, as trustee of the Trust, seeks damages for the numerous loan defaults that occurred, rendering the residential mortgage backed securities (RMBS) it sold to outside investors virtually worthless. Matter of Part 60 Put-Back Litig., 2019 NY Slip Op 00368, First Dept 1-17-19

 

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THERE IS NO HEIGHTENED PLEADING REQUIREMENT FOR CONSEQUENTIAL DAMAGES STEMMING FROM A BREACH OF AN INSURANCE CONTRACT, PLAINTIFF ALLEGED THE INSURER’S DELAY IN PAYING THE CLAIM FOR DAMAGE TO PLAINTIFF’S BUILDING, WHICH SHIFTED WHEN WORK WAS DONE ON AN ADJOINING BUILDING, RESULTED IN AN ARRAY OF CONSEQUENTIAL DAMAGES, THE CONSEQUENTIAL DAMAGES ASPECT OF THE COMPLAINT SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff had sufficiently alleged consequential damages stemming from the insurer’s alleged delay in paying a claim for damage to plaintiff’s building which shifted after work on an adjoining building. The First Department noted that there is no heightened pleading requirement for consequential damages stemming from a breach of contract. The consequential damages aspect of the  complaint should not have been dismissed:

The complaint alleges that rather than pay the claim, defendant has made unreasonable and increasingly burdensome information demands throughout the three year period since the property damage occurred. Plaintiff contends that this was a tactic by defendant to make the claim so expensive to pursue that plaintiff would abandon it altogether. Plaintiff contends defendant’s investigatory process has taken so long and become so attenuated that the structural damage to the building has worsened. Among the consequential damages alleged are engineering costs, painting, repairs, monitoring equipment, and moisture abatement to address water intrusion, loss of rents, and other expenses attributable to mitigating further damage to the property. …

A plaintiff may sue for consequential damages resulting from an insurer’s failure to provide coverage if such damages (“risks”) were foreseen or should have been foreseen when the contract was made … . … [T]he inquiry is not whether plaintiff will be able to establish its claim, but whether plaintiff has stated a claim.

Here, plaintiff’s allegations meet the pleading requirements of the CPLR with respect to consequential damages, whether in connection with the first cause of action or the second cause of action for breach of the covenant of good faith and fair dealing in the context of an insurance contract … . … [T]here is no heightened pleading standard requiring plaintiff to explain or describe how and why the “specific” categories of consequential damages alleged were reasonable and forseeable at the time of contract. There is no heightened pleading requirement for consequential damages …. Furthermore, an insured’s obligation to “take all reasonable steps to protect the covered property from further damage by a covered cause of loss” supports plaintiff’s allegation that some or all the alleged damages were forseeable … . D.K. Prop., Inc. v National Union Fire Ins. Co. of Pittsburgh, Pa., 2019 NY Slip Op 00347, First Dept 1-21-19

 

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THIRD DEPT DECLINED TO EXERCISE ITS INTEREST OF JUSTICE JURISDICTION TO REVIEW WHETHER DEFENDANT WAS ADEQUATELY INFORMED OF THE RIGHTS SHE WAS GIVING UP BY PLEADING GUILTY, TWO JUSTICE DISSENT (THIRD DEPT).

The Third Department, over a two-justice dissent, declined to exercise its interest of justice jurisdiction to review whether defendant was adequately informed of the rights she was giving up by pleading guilty:

… [W]e find that this is not a proper matter for the exercise of our interest of justice jurisdiction. Defendant has a lengthy criminal history and admitted at the time of the plea that she was guilty of possessing heroin with the intent to sell it. Defendant was represented by counsel and entered into a plea agreement with a favorable sentence. Although defendant later filed a motion to withdraw her plea, she elected to withdraw the motion after being granted an adjournment and conferring with counsel. Significantly, defendant has since served her negotiated sentence and been released from custody; however, if this conviction is reversed, defendant once again faces prosecution for the original charge, which, if convicted, carries a greater sentencing range … . …

From the dissent:

Our review of the plea colloquy reveals that County Court engaged in an extremely limited exchange with defendant, advising her only that, by pleading guilty, she would forever relinquish her “right to go to trial, the right to testify, to call witnesses, [and to] cross-examine the People’s witness[es].” Critically, there was no discussion of the privilege against self-incrimination, the right to be tried by a jury or whether defendant had conferred with counsel and understood the constitutional rights that she was automatically waiving by pleading guilty … . People v Glover, 2019 NY Slip Op 00325, Third Dept 1-17-19

 

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DEFENDANT WAS REQUIRED TO WEAR AN ALCOHOL MONITORING DEVICE AS A CONDITION OF PROBATION BUT WAS UNABLE TO PAY FOR IT, THE PEOPLE DID NOT DEMONSTRATE DEFENDANT’S FAILURE TO PAY WAS WILLFUL, THEREFORE COUNTY COURT WAS OBLIGATED TO CONSIDER PUNISHMENT OTHER THAN INCARCERATION (THIRD DEPT).

The Third Department, reversing County Court, determined the People did not make a sufficient showing that defendant willfully failed to pay for the alcohol monitoring device (SCRAM bracelet). Wearing the bracelet, which cost $11 per day, was a requirement of defendant’s probation. County Court was obligated to consider punishment other than imprisonment because the evidence supported defendant’s inability to pay:

We agree with defendant that County Court erred in finding that the People established by a preponderance of the evidence that defendant violated the terms and conditions of his probation by willfully refusing to pay or failing to make sufficient good faith efforts to pay the cost of the SCRAM monitoring. …

… .[T]he record lacks a basis to substantiate a finding that defendant willfully refused to make the required payments. Moreover, the hearing testimony establishes that defendant made sufficient bona fide efforts to acquire the fiscal resources to pay the costs associated with SCRAM monitoring and that he could not do so as a result of his indigence, which resulted, at least in part, from the serious injuries that he sustained in August 2013. In our view, County Court was therefore required to “consider alternate measures of punishment other than imprisonment” and erred in failing to do so … . People v Hakes, 2019 NY Slip Op 00324, Third Dept 1-17-19

 

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MOTHER’S MOTION TO AMEND FAMILY COURT’S FINDINGS TO ALLOW THE CHILD TO PETITION FOR SPECIAL IMMIGRANT JUVENILE STATUS AFTER THE UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES NOTIFIED THE CHILD THAT THE FINDINGS DID NOT ADDRESS THE CHILD’S MEMBERSHIP IN THE MS-13 GANG SHOULD NOT HAVE BEEN DENIED WITHOUT A HEARING (SECOND DEPT).

The Second Department, reversing Family Court, determined mother’s motion to amend the findings made to allow the child to petition for special immigrant juvenile status (SIJS) should not have been denied without a hearing to address the merits. After Family Court had made the required findings, the child submitted an I-360 petition for special immigrant juvenile status to the United States Citizenship and Immigration Services (USCIS). USCIS notified the child the petition would be denied because of deficiencies in Family Court’s findings, including the failure to consider the child’s alleged involvement with the MS-13 gang. Mother then made a motion to amend the findings but Family Court denied the motion stating that mother failed to state a sufficient reason for the requested amendments:

Given USCIS’s determination, the Family Court, having granted the mother’s guardianship petition in the first instance, should have considered the merits of the subject motion as to whether an amendment of the specific findings order was appropriate, and, if so, amended the specific findings order. Although “[t]his Court’s power to review the evidence is as broad as that of the hearing court, and where . . . the record is sufficiently complete to make our own factual determinations, we may do so” … , here, the record is insufficient to determine whether the Family Court considered the child’s alleged involvement with the MS-13 gang, which would not necessarily preclude a finding that it is not in the child’s best interests to be returned to El Salvador. Consequently, the matter must be remitted to the Family Court … for a hearing on that issue and a new determination thereafter of the mother’s motion, inter alia, to amend the specific findings order … . Matter of Jose S.J. (Veronica E.J.), 2019 NY Slip Op 00275, Second Dept 1-16-19

 

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PETITION SEEKING FINDINGS ALLOWING THE CHILD TO APPLY FOR SPECIAL IMMIGRANT JUVENILE STATUS (SIJS) SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Family Court, determined the petition for findings to enable the child to petition for special immigrant juvenile status (SIJS) should have been granted:

… [R]eunification of the child with her father is not viable due to parental neglect … . The petitioner testified that after the father came to the United States with the child, they lived in the petitioner’s home, during which time the father would “drink every day,” and that the father eventually returned to El Salvador on his own. The petitioner stated in his affidavit in support of his motion that the father’s drinking caused him to become “aggressive,” “[h]e hit doors, walls, and started to yell at all times of the night,” and that the child became “scared of [the father].” Further, the child stated in her affidavit that the father “[drank] to the point that he could not walk,” and testified in court that she did not believe she could live with the father if she returned to El Salvador due to his excessive drinking. Thus, the record demonstrates that the father repeatedly misused alcoholic beverages to the extent of producing a state of intoxication or a “substantial manifestation of irrationality,” triggering a presumption that the child was neglected by the father … . Since the presumption of neglect was not rebutted, the Family Court should have found that reunification of the child with the father was not viable due to parental neglect. The record also supports a finding that it would not be in the child’s best interests to be returned to El Salvador, where gang members had threatened the father in the presence of the child, made the father “complete tasks and favors for them,” and murdered the child’s cousin … . Matter of Agustin E. v Luis A.E.S., 2019 NY Slip Op 00273, Second Dept 1-16-19

 

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THE EVIDENCE PROVIDED BY THE THERAPIST THAT THE CHILDREN SUFFERED FROM PTSD, EXPERIENCED TRAUMA, AND EXPRESSED THEIR DESIRE TO STOP SEEING THEIR FATHER, COUPLED WITH THE CHILDREN’S STATEMENTS THAT THEY WITNESSED ABUSE, WARRANTED TERMINATION OF PARENTAL ACCESS WITH FATHER, FAMILY COURT REVERSED (SECOND DEPT).

The Second Department, reversing Family Court, determined the evidence demonstrated supervised parental access with father should have been terminated:

According to [Family Court], there was no legal authority to suspend the father’s parental access with the children premised solely on their therapists’ belief that the children witnessed domestic violence and were sexually abused by the father, when no such transgressions had been alleged in the petitions or proven.

A parent’s parental access, even supervised, should not be suspended unless there is substantial evidence that the parental access would be detrimental to the welfare of the child … . The determination to suspend a parent’s parental access is within the sound discretion of the Family Court based upon the best interests of the child, and its determination will not be set aside unless it lacks a sound and substantial basis in the record … .

Here, the Family Court’s determination lacks a sound and substantial basis in the record, which shows that parental access with the father, even if supervised, would not be in the children’s best interests. The uncontroverted evidence established that the children suffered from PTSD, experienced both physical and mental manifestations of trauma when having parental access with the father, and expressed their desire to cease parental access with him. In addition, each child corroborated the other’s statements regarding the abuse they witnessed in the home. Matter of Mia C. (Misael C.), 2019 NY Slip Op 00270, Second Dept 1-16-19

 

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TIMELINESS OF A MOTION SEEKING CLASS CERTIFICATION IS MEASURED BY THE INITIAL MOTION, NOT A SUBSEQUENT MOTION TO RENEW AFTER DENIAL WITHOUT PREJUDICE, DEFENDANTS WERE EFFECTIVELY PREVENTING PLAINTIFFS FROM RENEWING THE CLASS CERTIFICATION MOTION BY REFUSING TO TURN OVER PAYROLL DATA TO WHICH THE PLAINTIFFS WERE ENTITLED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendants’ motion to dismiss the class action allegations of the complaint should not have been granted and plaintiffs’ motion to compel the production of payroll data should have been granted. Plaintiffs are home health aides employed by defendants. Plaintiffs sought class certification for their Labor Law underpayment claims. Their initial motion for class certification was denied without prejudice. The defendants subsequently moved to dismiss alleging the plaintiffs did not timely move to renew their motion for class certification. The Second Department held that it is the initial motion for class certification which determines timeliness, not any subsequent motion to renew. The court further held that defendants were effectively preventing plaintiffs from renewing their motion by refusing to turn over the payroll data:

The time limitation to file a motion for class certification “applies only to a motion for the initial certification of the class” … . Here, the plaintiffs’ initial motion for class certification was timely made. Moreover, while the defendants contend that the plaintiffs failed to timely renew their motion, the defendants refused to provide material sought by the plaintiffs which was needed to determine whether the prerequisites of a class action set forth in CPLR 901(a) could be satisfied and to address the considerations set forth in CPLR 902 for determining whether the matter may proceed as a class action … . The items of discovery sought are material and necessary to the determination of whether the plaintiffs “will fairly and adequately protect the interests of the class”… , and the evaluation of whether prosecuting or defending separate actions would be impractical or inefficient and any “difficulties likely to be encountered in the management of a class action” … . Melamed v Americare Certified Special Servs., Inc., 2019 NY Slip Op 00268, Second Dept 1-16-19

 

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DEFENDANT GRANDFATHER DID NOT HAVE A DUTY TO CONTROL HIS COLLEGE-AGE GRANDSON IN THIS ROAD RAGE INCIDENT, THEREFORE THE NEGLIGENCE ACTION WAS PROPERLY DISMISSED, HOWEVER THE AIDING-AND-ABETTING ASSAULT CAUSE OF ACTION AGAINST DEFENDANT GRANDFATHER SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department determined defendant Mancuso’s motion for summary judgment on the negligence cause of action was properly granted, but the motion for summary judgment on the aiding-and-abetting-assault cause of action should not have been granted. The action stemmed from a road rage incident. Defendant Mancuso was driving and his college-age grandson, Vaccaro, was a passenger. The grandson got out of the car and hit plaintiff in the face:

Mancuso established, prima facie, that he did not owe a duty to the plaintiff by virtue of the relationship Mancuso had with Vaccaro. The fact that Mancuso could have exercised control over Vaccaro, his college-aged grandson, did not create a duty to do so … . In addition, the mere fact that Vaccaro was a passenger in Mancuso’s vehicle did not create a duty on the part of Mancuso to control Vaccaro’s conduct … . …

To be liable for an assault under an aiding and abetting theory, a defendant must have committed some overt act, either by words or conduct, in furtherance of the assault … . Here, Mancuso established, prima facie, that he did not commit an overt act in furtherance of Vaccaro’s assault on the plaintiff … . In opposition, however, the plaintiff raised a triable issue of fact as to whether Mancuso’s actions preceding the assault constituted an overt act in furtherance of the assault … . McKiernan v Vaccaro, 2019 NY Slip Op 00267, Second Dept 1-16-19

 

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