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PETITIONER CARE FACILITY WAS ENTITLED TO THE UNDERLYING DATA USED BY THE OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES TO CALCULATE MEDICAID REIMBURSEMENT RATES; MATTER REMITTED FOR RECALCULATION WITH AN EXPLANATION OF THE FACTORS CONSIDERED (THIRD DEPT). ​

The Third Department, reversing the Office for People with Developmental Disabilities, determined petitioner care facility was entitled to the underlying data used by the respondent to calculate the Medicaid reimbursement rate:

… [P]etitioner contends that the acuity factor utilized by respondents in calculating its rate determination is not transparent or verifiable, and that respondents’ refusal to disclose the data necessary to identify the factors in the regression analysis render the rate determination arbitrary and capricious. We agree. * * * The statutes demand empirical data in order to confirm the mathematical validity of the formula produced by the regression analysis in determining these rates, not simply blind reliance on an unknowable formula … .

Moreover, respondents’ wholehearted reliance on the consultant’s regression analysis, without confirmation of empirical data supporting the analysis, is inconsistent with the statutory scheme pertaining to state and federal statutes which require that the methodologies underlying the establishment of the rates and the justification for the rates be provided to petitioner (see 42 USC § 1396a [a] [13] [A]; Public Health Law § 2807 [3]). * * *

[R]espondents are directed to recalculate petitioner’s 2017-2018 and 2020-2021 reimbursement rates with appropriate explanation of the factors considered. Matter of Richmond Children’s Ctr., Inc. v Delaney, 2024 NY Slip Op 06406, Third Dept 12-19-24

Practice Point: Care facilities paid by Medicaid through the Office for People with Developmental Disabilities are entitled to an explanation of the factors considered in calculating the Medicaid reimbursement rate.

 

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THE ZONING BOARD’S DENIAL OF A USE VARIANCE FOR CONSTRUCTION OF A SOLAR ENERGY GENERATION FACILITY WAS “ARBITRARY AND CAPRICIOUS;” MATTER REMITTED FOR ISSUANCE OF THE VARIANCE (THIRD DEPT).

The Third Department, reversing Supreme Court, in a full-fledged opinion by Justice Pritzker, determined petitioners were entitled to a use variance for the construction of a solar energy generation facility, finding the denial of the variance “arbitrary and capricious:”

… [R]espondent erred in failing to afford petitioners a reduced showing relative to their application as a public utility because of the project’s minimal impact … . That the project will have a minimal impact was not only recognized by Supreme Court, but also is fully supported by the evidence in the record, including the unanimous State Environmental Quality Review Act (see ECL art 8 [hereinafter SEQRA]) determination which found no significant environmental impacts … . * * *

… [O]ne cannot quarrel with the premise that New York State’s goal of transitioning to renewable energy is designed to benefit the public at large, and this project is in line with that goal … . * * *

… [P]etitioners’ submissions to respondent establish ” ‘that there are compelling reasons, economic or otherwise, which make it more feasible to [grant a use variance]’ ” than to use an alternative site … . Matter of Freepoint Solar LLC v Town of Athens Zoning Bd. of Appeals, 2024 NY Slip Op 06409, Third Dept 12-19-24

Practice Point: Consult this opinion for a rare rejection of an administrative finding as “arbitrary and capricious.” In light of the minimal environmental impact of a solar energy facility and the state policy supporting the transition to clean energy, the zoning board’s reasons for denying the use variance were deemed untenable.

 

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ALTHOUGH PLAINTIFF ALLEGED FRAUDULENT INDUCEMENT, THE ESSENCE OF THE LAWSUIT IS THE ALLEGED BREACH OF THE CONTRACTS; THIS IS NOT A CASE WHERE IT IS ALLEGED THE FRAUDULENT INDUCEMENT NULLIFIED THE CONTRACTS; THEREFORE THE JURY-TRIAL WAIVER PROVISIONS REMAIN ENFORCEABLE (FIRST DEPT). ​

The First Department, in a full-fledged opinion by Justice Kapnick, determined the “fraudulent inducement” claim in this breach of contract action was covered by the contractual waiver of a jury trial. The First Department distinguished this case, which is in essence a “breach of contract” action, from cases where fraudulent inducement is alleged to have nullified the entire agreement. The contracts here involved the manufacture of semiconductor chips by defendant GlobalFoundries for plaintiff IBM:

From 2013 to June 2015, plaintiff International Business Machines Corporation (IBM) and defendant GlobalFoundries U.S. Inc., a manufacturer of semiconductors, engaged in discussions concerning a collaborative venture whereby IBM would transfer its microelectronics business, including technology, engineers and employees, to GlobalFoundries, along with a sum of $1.5 billion, and GlobalFoundries would develop, manufacture and supply next generation 14nm and 10nm high performance semiconductor chips for IBM. * * *

… [W]here a claim of fraudulent inducement challenges the validity of the agreement, a provision waiving the right to a jury trial in litigation arising out of the agreement may not apply … . This Court has taken care to distinguish between actions where the primary claim is fraudulent inducement and the validity of the entire contract is clearly being challenged … , and actions that do not challenge the validity of the contract but rather seek to enforce the underlying contract by obtaining damages for fraudulent inducement … . The present case falls into the latter category. * * *

It is clear from IBM’s complaint that its primary claim is not fraudulent inducement but rather breach of the agreements. International Business Machs. Corp. v GlobalFoundries U.S. Inc., 2024 NY Slip Op 06425, First Dept 12-19-24

Practice Point: It is possible that fraudulent inducement can nullify an underlying contract rendering all of the contract provisions unenforceable. Here however, although fraudulent inducement was alleged, the essence of the suit is the alleged breach of the underlying contracts. Therefore, the jury-trial waiver provisions remain enforceable.

 

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IN THIS JUVENILE DELINQUENCY PROCEEDING, THE JUVENILE’S BEHAVIOR—LOOKING AT THE UNDERCOVER VEHICLE AND TURNING HIS BICYCLE AROUND—DID NOT PROVIDE THE POLICE WITH REASONABLE SUSPICION JUSTIFYING THE STREET STOP (FIRST DEPT). ​

The First Department, reversing Family Court’s finding there was reasonable suspicion justifying the street stop of the juvenile, determined the officers’ observation of the juvenile’s “look[ing] in the direction of one of the unmarked vehicles, back pedal[ing], duck[ing], turn[ing] the bicycle around and rid[ing] in the opposite direction” was not sufficient. The police had been alerted to a gunshot in the area. A handgun was retrieved from the juvenile:

… [T]he totality of the circumstances did not support Family Court’s finding that the officer had reasonable suspicion to justify the stop, and his detention was unlawful because appellant’s “equivocal or innocuous behavior” was “susceptible of an innocent as well as a culpable interpretation” … . Police, in two unmarked vehicles, while canvassing the area in response to a “Shotspotter” sensor report of shots fired, observed appellant riding a bicycle on the sidewalk. An officer observed appellant look in the direction of one of the unmarked vehicles, back pedal, duck, turn the bicycle around and ride in the opposite direction. The officer found appellant’s actions suspicious, exited the vehicle, approached appellant, ordered him to stop, grabbed him by both wrists and pushed him against the wall. While appellant was detained another officer observed a bulge in appellant’s pocket, squeezed the pocket area and retrieved a firearm.

Although an officer observed an L-shaped object in appellant’s pocket during the detention, there is no evidence or any reasonable inference that the officer “was in a position to view the contraband absent the unlawful detention” … . Matter of W.P., 2024 NY Slip Op 06426, First Dept 12-19-24

Practice Point: Here the police were canvassing the area after a report of a gunshot. They stopped the juvenile after observing him look at their undercover vehicle and turn his bicycle around. A handgun was retrieved during the stop. The First Department held the observations did not provide the police with “reasonable suspicion” and the street stop was therefore not justified.

 

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A WAIVER OF APPEAL DOES NOT PRECLUDE A CHALLENGE TO A PROBATION CONDITION REQUIRING CONSENT TO WARRANTLESS SEARCHES; IN THE PLEA PROCEEDINGS, DEFENDANT ADMITTED PUNCHING THE VICTIM; THE PROBATION CONDITION ALLOWING SEARCHES FOR DRUGS AND WEAPONS HAD NO CONNECTION TO THE UNDERLYING OFFENSE (FIRST DEPT).

The First Department, reversing Supreme Court, determined (1) a waiver of appeal does not preclude challenging a condition of probation requiring warrantless searches, and (2) there was no basis for requiring defendant to consent to warrantless searches:

… [D]efendant’s challenge to the condition of probation requiring that he consent to warrantless searches survives even a valid waiver … . Here, during the plea proceedings, defendant admitted that he intentionally caused injury to the victim by punching him with a closed fist. The Department of Probation recommended that, as a condition of probation, defendant consent to warrantless searches for illegal drugs and weapons to help ensure the safety of the public and probation officers. We find that the condition of probation was not reasonably related to defendant’s rehabilitation, given that defendant’s conviction did not involve the use of a weapon and did not appear connected to the sale or use of drugs … . People v Thomas, 2024 NY Slip Op 06427, First Dept 12-19-24

Practice Point: A waiver of appeal does not preclude a challenge to a probation condition requiring consent to warrantless searches.

Practice Point: The probation condition requiring consent to warrantless searches must have some connection to the underlying offense. Searches for drugs and weapons had no connection to the underlying offense in this case where defendant admitted punching the victim with his fist.

 

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HERE THE PROVISIONS IN THE LETTER AGREEMENT DID NOT GIVE PLAINTIFF THE EXCLUSIVE RIGHT TO SELL THE PROPERTY (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the letter agreement did not give plaintiff an exclusive right to sell the property:

Plaintiff’s argument that the parties’ letter agreement gave it an exclusive right to sell is unavailing. To create an exclusive right to sell, a contract “must clearly and expressly provide that a commission is due upon sale by the owner or exclude the owner from independently negotiating a sale” … . The agreement here lacks express language excluding a direct conveyance by defendants, nor is that a necessary implication of its terms … . The agreement’s language requiring defendants to “inform” plaintiff if contacted about potential transactions is insufficient to create an exclusive right to sell … . Moreover, plaintiff fails to show that the agreement’s tail provision, entitling plaintiff to a fee for efforts at procuring a transaction during its engagement even if the transaction were completed only after the termination of that engagement, necessarily implied that the parties intended to create an exclusive right to sell. Cantor Fitzgerald & Co. v ObvioHealth Pte Ltd., 2024 NY Slip Op 06421, First Dept 12-19-24

Practice Point: This decision gives some insight into the criteria for conferring the exclusive right to sell property.

 

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PLAINTIFF BANK WAS NOT ENTITLED TO SUMMARY JUDGMENT IN THIS REFORECLOSURE ACTION; THERE WAS A QUESTION OF FACT WHETHER WILLFUL NEGLECT BY PLAINTIFF BANK OR ITS PREDECESSOR IN INTEREST RESULTED IN THE DEFECT IN THE ORIGINAL FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank was not entitled to summary judgment in this reforeclosure action:

Where the interest of a necessary party has not been foreclosed upon in a judgment of foreclosure and sale, the purchaser of the foreclosed property has two potential remedies: a strict foreclosure action pursuant to RPAPL 1352, or a reforeclosure action pursuant to RPAPL 1503. RPAPL 1503 provides … that, when real property has been sold at a foreclosure sale ‘and it appears from the public records or from the allegations of the complaint that such judgment, sale or conveyance was or may have been, for any reason, void or voidable as against any person, including an owner of the real property mortgaged, the purchaser . . . may maintain an action as provided in this article to determine the right of any person to set aside such judgment, sale or conveyance or to enforce an equity of redemption or to recover possession of the property, or the right of any junior mortgagee to foreclose a mortgage'” … . “[T]o prevail in a reforeclosure action, the plaintiff must demonstrate that the defect in the original foreclosure action ‘was not due to fraud or wilful neglect of the [foreclosure] plaintiff and that the defendant or the person under whom he [or she] claims was not actually prejudiced thereby'” … .

Here, US Bank’s [plaintiff’s] predecessor in interest allowed the notice of pendency in the foreclosure action to lapse. During that lapse, Wilkshire obtained and recorded title to the property by a referee’s deed pursuant to the foreclosure of a lien for unpaid homeowners association dues. Subsequently, US Bank filed a new notice of pendency, which was not served upon Wilkshire. Thereafter, US Bank obtained an order and judgment of foreclosure and sale in the foreclosure action. On its motion for summary judgment in the instant action, US Bank failed to submit any evidence to establish, prima facie, that the defect in the foreclosure action was not due to willful neglect by itself or by its predecessors in interest. Thus, US Bank failed to establish its entitlement to judgment as a matter of law … . U.S. Bank N.A. v 18 Wilkshire Circle, LLC, 2024 NY Slip Op 06372, Second Dept 12-18-24

Practice Point: Consult this decision for some discussion of the remedies of “strict foreclosure” and “reforeclosure” under the Real Property Actions and Proceedings Law (RPAPL) where there was some defect in the original foreclosure proceedings.

 

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WHERE A MOTION TO RENEW IS NOT BASED UPON A CHANGE IN THE LAW, THERE IS NO TIME LIMIT FOR BRINGING THE MOTION (SECOND DEPT),

The Second Department, reversing Supreme Court, noted that there was no time limit for bringing a motion to renew:

Contrary to the court’s determination, “[e]xcept where a motion to renew is based upon a change in the law, which is not the case here, CPLR 2221 does not impose a time limit for making a motion for leave to renew” … . Since the plaintiff’s prior motion had been denied with leave to renew, the plaintiff was not required to demonstrate a reasonable justification for his failure to submit the new facts on the prior motion … . Smith v Realty on Fox Croft Corp., 2024 NY Slip Op 06371, Second Dept 12-18-24

Practice Point: If a motion to renew is not based upon a change in the law, there is no time limit for bringing the motion.

 

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A PERMANENT INJUNCTION IS NOT APPROPRIATE WHERE PLAINTIFFS DO NOT ALLEGE ANY NONECONOMIC DAMAGES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the issuance of a permanent injunction was error because the injury can be adequately compensated by money damages:

“‘A permanent injunction is a drastic remedy which may be granted only where the plaintiff demonstrates that it will suffer irreparable harm absent the injunction'” …  To establish prima facie entitlement to a permanent injunction, a plaintiff must demonstrate: (a) that there was a violation of a right presently occurring, or threatened and imminent; (b) that he or she has no adequate remedy at law; (c) that serious and irreparable harm will result absent the injunction; and (d) that the equities are balanced in his or her favor … . Further, irreparable injury, for the purposes of equity, means any injury for which money damages are insufficient … . In contrast, where an injury can be adequately compensated by money damages, injunctive relief is inappropriate … .

Here, the plaintiffs failed to allege any noneconomic damages. Rockefeller v Leon, 2024 NY Slip Op 06370, Second Dept 12-18-24

Practice Point: If plaintiffs do not allege any noneconomic damages, a permanent injunction is not an appropriate remedy.

 

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THE ALLEGED INCAPACITATED PERSON (AIP) MUST BE GIVEN THE OPPORTUNITY TO BE PRESENT AT GUARDIANSHIP PROCEEDINGS PURSUANT TO THE MENTAL HYIGIENE LAW (SECOND DEPT).

The Second Department, reversing Supreme Court, determined an alleged incapacitated person (AIP) must be given the opportunity to be present during guardianship proceedings:

The petitioner commenced this proceeding pursuant to Mental Hygiene Law article 81 to appoint a guardian of the person and property of her adult daughter Nima B. R., an alleged incapacitated person (hereinafter the AIP). At a hearing on the petition, which was conducted virtually due to the COVID-19 pandemic, the AIP was not present. Although the AIP had indicated to her counsel that she intended to appear, she advised her counsel that she was not feeling well and needed an extra hour to get to the courthouse, and subsequently advised her counsel that she did not feel well and would not be attending. The Supreme Court conducted the hearing in the AIP’s absence, finding that she had “voluntarily absented herself” and noting that she was represented by counsel, had no burden of proof, and was not required to testify. …

Guardianship proceedings, as a drastic intervention in a person’s liberty, must adhere to proper procedural standards … . Mental Hygiene Law § 81.11(c) provides that a hearing to determine whether the appointment of a guardian is necessary for an alleged incapacitated person “must be conducted in the presence of the person alleged to be incapacitated,” including at the alleged incapacitated person’s place of residence if necessary … . “There is an ‘overarching value in a court having the opportunity to observe, firsthand, the allegedly incapacitated person'” … . Accordingly, we remit the matter … for a new hearing at which the AIP shall be afforded an opportunity to be present and a new determination thereafter. Matter of Nima B.R. (Rae-Garwood), 2024 NY Slip Op 06347, Second Dept 12-18-24

Practice Point: An alleged incapacitated person (AIP) has the right to be present at a guardianship proceeding pursuant to the Mental Hygiene Law. Here the AIP said she was not feeling well and would not attend. The matter was remitted for a new hearing after affording the AIP the opportunity to attend.

 

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