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THE WORKERS’ COMPENSATION BOARD RULED THE PLAINTIFF DID NOT HAVE “POST-CONCUSSION SYNDROME” OR A “CONCUSSION CONDITION;” PLAINTIFF WAS THEREFORE ESTOPPED FROM CLAIMING THOSE INJURIES IN THIS LABOR LAW ACTION (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined the ruling by the Workers’ Compensation Board that plaintiff did not have “post-concussion syndrome” or a “concussion condition” collaterally estopped plaintiff from claiming those injuries in this Labor Law action:

We agree with defendant that the court erred in denying its motion insofar as it effectively sought summary judgment dismissing plaintiff’s claims for damages related to PCS or a concussion condition as barred by the doctrine of collateral estoppel, but we conclude that plaintiff’s claims for damages related to headaches and the alleged concussion itself are not so barred. The quasi-judicial determinations of administrative agencies, such as the Workers’ Compensation Board (Board), “are entitled to collateral estoppel effect where the issue a party seeks to preclude in a subsequent civil action is identical to a material issue that was necessarily decided by the administrative tribunal and where there was a full and fair opportunity to litigate before that tribunal” … and a determination whether a plaintiff actually sustained a physical injury causally related to an accident … , the Board in this case specifically found that plaintiff did not have “post-concussion syndrome” or a “concussion condition” that were causally related to the second work accident. Szymkowiak v New York Power Auth., 2022 NY Slip Op 01702, Fourth Dept 3-11-22

Practice Point: Here the Workers’ Compensation Board’s ruling plaintiff did not have “post-concussion syndrome” or a “concussion condition” precluded claims for those injuries in the plaintiff’s Labor Law action pursuant to the doctrine of collateral estoppel.

 

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PLAINTIFF’S MOTION TO AMEND THE COMPLAINT SHOULD NOT HAVE BEEN GRANTED; THE WAS NO ALLEGATION THE PARTY TO BE ADDED AS A DEFENDANT HAD ANY INTEREST IN THE PROPERTY IN DISPUTE; AND THE CIVIL CONSPIRACY CAUSE OF ACTION PLAINTIFF SOUGHT TO ADD IS NOT RECOGNIZED IN NEW YORK; THEREFORE THE PROPOSED AMENDMENTS WERE PATENTLY DEVOID OF MERIT (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined the motion to amend the complaint to add a defendant (Fu) and a cause of action for civil conspiracy should not have been granted. Plaintiff did not allege that Fu had any interest in the property in dispute. And New York does not recognize civil conspiracy as a tort:

It is well settled that leave to amend a pleading shall be freely given, provided the amendment is not palpably insufficient, does not prejudice or surprise the opposing party, and is not patently devoid of merit . . . , and the decision to permit an amendment is within the sound discretion of the court” … . Initially, plaintiff clarified in the amended complaint that the first cause of action, which is asserted against all defendants and seeks to set aside the deed and mortgage, was brought under RPAPL article 15. Pursuant to RPAPL article 15, an action may be maintained against any “person [who] . . . may have an . . . interest in the real property which may in any manner be affected by the judgment” (RPAPL 1511 [2]). Here, plaintiff failed to allege in the amended complaint any interest that Fu may have in the property and, thus, she is not a proper party to that cause of action … . Furthermore, New York does not recognize civil conspiracy to commit a tort, such as fraud or conversion, as an independent cause of action … . Therefore, the proposed amendments with respect to Fu are patently devoid of merit. Landco H & L, Inc. v 377 Main Realty, Inc., 2022 NY Slip Op 01695, Fourth Dept 3-11-22

Practice Point: New York does not recognize civil conspiracy as a tort. This case is an example of what it means to find proposed amendments to a complaint “patently devoid of merit.”

 

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DEFENDANT NEVER PHYSICALLY POSSESSED THE NOTE UNDERLYING THE MORTGAGE AND WAS NEVER ASSIGNED THE NOTE; THEREFORE DEFENDANT DOES NOT HAVE STANDING TO FORECLOSE ON THE MORTGAGE; AN ATTORNEY’S FAILURE TO APPEAR AT A FULLY BRIEFED MOTION ARGUMENT IS NOT A DEFAULT (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined defendant does not own the note underlying the mortgage and therefore has no right to foreclose. The Fourth Department noted that an attorney’s failure to appear at a full briefed motion argument does not constitute a default:

… [D]efendant lacks noteholder standing because the promissory note upon which defendant relies is neither endorsed in blank nor specially endorsed to defendant … . … [E]ven had the note been endorsed in blank or specially endorsed to defendant, defendant’s admitted failure to physically possess the original note would independently preclude it from foreclosing as a noteholder … . …

Nor does defendant have assignee standing. The affidavits submitted on defendant’s behalf do not aver that the subject note was ever assigned to defendant … . …

… [A]n action to quiet title pursuant to RPAPL article 15 is a proper procedural vehicle for determining defendant’s standing to foreclose (see RPAPL 1501 [1], [5] … ). Hummel v Cilici, LLC, 2022 NY Slip Op 01690, Fourth Dept 3-11-22

Practice Point: An attorney’s failure to appear at a fully briefed motion argument is not a default.

Practice Point: A party who never physically possessed the note underlying the mortgage does not have standing to foreclose.

 

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ALTHOUGH THE APPELLANT WAS IN JAPAN, THE 1ST DEPARTMENT REFUSED TO DISMISS THE APPEAL PURSUANT TO THE FUGITIVE DISENTITLEMENT DOCTRINE IN THIS FAMILY COURT CIVIL-CONTEMPT MATTER; APPELLANT HAD APPEARED VIRTUALLY IN COURT PROCEEDINGS AND STATED HE WOULD RETURN TO NEW YORK TO COMPLY WITH ANY COURT ORDER (FIRST DEPT).

The First Department refused to dismiss the appeal of this Family Court civil contempt matter pursuant to the fugitive disentitlement doctrine (which authorizes the dismissal of an appeal if the appellant has left the jurisdiction). Here father was in Japan:

Although the father is in Japan, we decline to dismiss the appeal pursuant to the fugitive disentitlement doctrine. There is no “nexus” connecting the father’s fugitive status and these proceedings … . The father has continued to appear virtually in court, communicate with his counsel, and consent to relief sought by the mother. He has complied with the terms of his probation and submitted an affidavit stating that he will return to New York to comply with any court order. Under these circumstances, we find that the father has not “flout[ed] the judicial process,” frustrated the operation of the courts, or prejudiced the mother’s rights by leaving the jurisdiction to warrant dismissal of the appeal … .Matter of Hilary C. v Michael K., 2022 NY Slip Op 01512, First Dept 3-10-22

Practice Point: If an appellant leaves the court’s jurisdiction (here father went to Japan), the appeal may be dismissed pursuant to the fugitive disentitlement doctrine. The doctrine was not applied in this Family Court civil contempt case because father participated in court proceedings virtually and stated he would return to New York to comply with any court order.

 

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THE 2020 AMENDMENTS TO CIVIL RIGHTS LAW 70, THE ANTI-SLAPP LAW, DO NOT APPLY RETROACTIVELY TO THE PLAINTIFF’S PENDING DEFAMATION ACTION AGAINST DEFENDANT (FIRST DEPT).

The First Department, reversing Supreme Court, determined the 2020 amendments to the anti-strategic lawsuit against public participation (anti-SLAPP) law (Civil Rights Law section 70) should not be applied retroactively to cover plaintiff’s defamation claims against defendant. Therefore defendant’s motion for a ruling that the anti-SLAPP amendments applied retroactively should not have been granted:

… [T]here is insufficient evidence supporting the conclusion that the legislature intended its 2020 amendments to the anti-strategic lawsuit against public participation (anti-SLAPP) law (see Civil Rights Law § 70 et seq.) to apply retroactively to pending claims such as the defamation claims asserted by plaintiffs in this action.

The Court of Appeals has stated, in general terms, that “ameliorative or remedial legislation” should be given “retroactive effect in order to effectuate its beneficial purpose” … . * * * … “[C]lassifying a statute as remedial does not automatically overcome the strong presumption of prospectivity since the term may broadly encompass any attempt to supply some defect or abridge some superfluity in the former law” … . …

In light of …. the factual evidence that the amendments to New York’s anti-SLAPP law were intended to better advance the purposes of the legislation by correcting the narrow scope of the prior anti-SLAPP law, we find that the presumption of prospective application of the amendments has not been defeated. The legislature acted to broaden the scope of the law almost 30 years after the law was originally enacted, purportedly to advance an underlying remedial purpose that was not adequately addressed in the original legislative language. The legislature did not specify that the new legislation was to be applied retroactively. The fact that the amended statute is remedial, and that the legislature provided that the amendments shall take effect immediately, does not support the conclusion that the legislature intended retroactive application of the amendments. Gottwald v Sebert,  2022 NY Slip Op 01515, First Dept 3-10-22

Practice Point: The fact that a statute is deemed “remedial” in nature does not necessarily support a retroactive application of the statute. Here the 2020 amendments to the anti-SLAPP law, although “remedial,” were not applied retroactively to cover plaintiff’s pending defamation action against the defendant. The defendant’s motion for a ruling applying the amendments retroactively should not have been granted.

 

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SUPREME COURT SHOULD NOT HAVE DISMISSED AN ACTION TO ENFORCE A MONEY JUDGMENT OBTAINED IN THE PEOPLE’S REPUBLIC OF CHINA (PRC) ON THE IMPLICIT GROUND THE DEFENDANTS WERE NOT AFFORDED DUE PROCESS IN THE PRC; THE US STATE DEPARTMENT DOCUMENTS UPON WHICH SUPREME COURT’S RULING WAS BASED DO NOT CONSTITUTE DOCUMENTARY EVIDENCE; THE COMPLAINT SUFFICIENTLY ALLEGED DEFENDANTS HAD AN OPPORTUNITY TO BE HEARD, WERE REPRESENTED BY COUNSEL AND HAD THE OPPORTUNITY TO APPEAL IN THE PRC ACTION (FIRST DEPT).

The First Department, reversing Supreme Court, determined the complaint sufficiently alleged that the money judgment obtained by plaintiff in the People’s Republic of China (PRC) comported with the principles of due process. The complaint alleged the defendants had an opportunity to be heard, were represented by counsel, and had a right to appeal the underlying proceeding in the PRC. Plaintiff’s action to enforce the foreign judgment should not have been dismissed based upon US State Department reports alleging a lack of judicial independence in the PRC:

The court should not have dismissed the action on the ground that the U.S. State Department’s 2018 and 2019 Country Reports on Human Rights Practices (Country Reports) conclusively refuted plaintiff’s allegation that the PRC judgment was rendered under a system that comported with the requirements of due process. The Country Reports do not constitute “documentary evidence” under CPLR 3211(a)(1) … . In any event, the reports, which primarily discuss the lack of judicial independence in proceedings involving politically sensitive matters, do not utterly refute plaintiff’s allegation that the civil law system governing this breach of contract business dispute was fair. Shanghai Yongrun Inv. Mgt. Co., Ltd v Maodong Xu, 2022 NY Slip Op 01523, First Dept 3-10-22

Practice Point: Plaintiff obtained a money judgment in the People’s Republic of China (PRC) and sought to enforce it in New York. The complaint should not have been dismissed based upon US State Department reports alleging a lack of judicial independence in the PRC. The reports are not “documentary evidence” and the complaint adequately alleged defendants were afforded due process in the PRC.

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IN AN ACTION SEEKING TO ENFORCE A JUDGMENT AGAINST NON-DEBTORS PURSUANT TO CPLR ARTICLE 52, THE PETITIONERS ARE NOT ENTITLED TO A JURY TRIAL; THE ACTION IS EQUITABLE IN NATURE, DESPITE THE DEMAND FOR MONETARY DAMAGES (FIRST DEPT). ​

The First Department determined petitioner’s request for a jury trial in this action seeking to compel non-debtors to make assets accessible for execution should have been stricken. Even though money damages were demanded, the essence of the action is equitable:

Petitioners commenced a “turnover” special proceeding under CPLR article 52 and sought a judgment among other things, “seeking . . ‘turnover’ of [defendant] NYGFI assets to satisfy [p]etitioners’ judgment . . . compelling the non-debtor [r]espondents to disclose, bring within the jurisdiction, and make accessible for execution . . . all cash, income, distributions and funds . . . including all membership interests in limited lability companies . . . and shares in corporations and interests in partnerships . . . and granting the appointment of a CPLR [a]rticle 52 receiver.”

… “[A] [p]laintiff is not entitled to a jury trial . . . [when] he seeks to enforce a judgment against a party other than the judgment debtor, which is an equitable claim” … .

… “[T]he rule is fundamental that where a plaintiff seeks legal and equitable relief in respect of the same wrong, his right to trial by jury is lost” … . Moreover, “[i]nclusion of a demand for money damages in the [pleading] does not, in and of itself, guarantee entitlement to a jury trial. Rather, it must be determined whether the main thrust of the action is for legal damages or for equitable relief” … . Matter of Uni-Rty Corp. v New York Guangdong Fin., 2022 NY Slip Op 01525, First Dept 3-10-22

Practice Point: An action pursuant to CPLR Article 52 to enforce a judgment against non-debtors is equitable in nature. A jury trial is therefore not available. The demand for money damages (legal relief) did not alter the fact that petitioners are primarily seeking equitable relief.

 

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ALTHOUGH THIS SHAREHOLDERS’ DERIVATIVE ACTION AGAINST A SWISS CORPORATION REQUIRES THE APPLICATION OF SWISS LAW, NEW YORK IS THE PROPER FORUM; MOST ON THE BOARD OF DIRECTORS ARE RESIDENTS OF NEW YORK AND THE ALLEGATIONS IN THE COMPLAINT REFLECT A SUBSTANTIAL NEXUS TO NEW YORK (FIRST DEPT).

The First Department, reversing Supreme Court, determined New York, not Switzerland, was the proper forum for this shareholders’ derivative action against a Swiss corporation, despite the need to apply Swiss law:

Defendants did not establish that in the interest of substantial justice, this action should be heard in another forum, namely, Switzerland (see generally CPLR 327[a] …). Adjudication of plaintiffs’ claims, which are undisputedly governed by Swiss law, will not place an undue burden on New York courts … . New York courts are frequently called on to apply the laws of foreign jurisdictions and in this case, there is no indication that the relevant law, which is from only one foreign jurisdiction, is in dispute or is distinctly abstruse … . That plaintiffs seek certain nonmonetary relief that may not be available or enforceable in Switzerland does not cut in favor of dismissal because defendants can seek to limit the damages sought and plaintiffs are now willing to withdraw their requests for nonmonetary relief as against [defendant corporation].

Defendants do not claim that litigation in New York will cause them any hardship and although this matter could be litigated in Switzerland, Swiss courts do not permit trial by jury, which could pose some hardship to plaintiffs … . Moreover, most of defendant-board members are residents of New York and none are residents of Switzerland … . The allegations in the complaint make clear that this action has a substantial nexus to New York and at this point, it appears that the majority of the witnesses and evidence will be located in the United States, principally New York … . Wormwood Capital LLC v Mulleady, 2022 NY Slip Op 01526, First Dept 3-10-22

​Practice Point: Although this shareholders’ derivative action is against a Swiss corporation and requires the application of Swiss law, New York is the proper forum. Most of the directors live in New York, most of the witnesses are in the US and New York, most of the evidence is located in New York, and allegations in the complaint demonstrate a substantial nexus to New York. Defendants did not show they will suffer any prejudice if the suit is heard here.

 

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THE PETITION BROUGHT BY THE EXECUTOR PURSUANT TO SCPA 2103 SOUGHT DISCOVERY AND THE TURNOVER OF ANNUITY FUNDS WHICH HAD BEEN TRANSFERRED TO APPELLANT; THE SCPA 21O3 ACTION IS LIKE AN ACTION FOR CONVERSION OR REPLEVIN AND HAS A THREE-YEAR STATUTE OF LIMITATIONS; HERE THE MOTIONS TO AMEND THE ANSWERS TO ASSERT THE STATUTE OF LIMITATIONS DEFENSE AND FOR SUMMARY JUDGMENT ON THAT GROUND SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Surrogate’s Court, determined the appellant’s motion to amend their answers to assert the statute of limitations defense, and the summary judgment dismissing the petition on that ground should have been granted. The petition, brought by the executor pursuant to SCPA 2103, sought discovery and the turnover of funds from an annuity which had been distributed:

… [T]he Surrogate’s Court should have granted that branch of the appellants’ motion which was for leave to amend their answers to add the affirmative defense of the statute of limitations. The petitioner failed to demonstrate that she would be prejudiced or surprised by the proposed amendment. The petitioner also failed to demonstrate that the proposed amendment was palpably insufficient or patently devoid of merit.

“A discovery proceeding pursuant to SCPA article 21 has been likened to an action for conversion or replevin and a three-year statute of limitations has been applied” … . “A conversion cause of action accrues and the limitations period begins to run on the date the conversion allegedly occurred”… . Here, the appellants produced evidence … that the annuity funds at issue were withdrawn and deposited into a joint bank account … [and] then transferred into a personal account … on December 31, 2012, and January 3, 2013. Since the petition was not filed until June 23, 2016, the appellants demonstrated, prima facie, that the petitioner’s claim was time-barred.

… [T]he petition did not allege a cause of action sounding in fraud or breach of fiduciary duty. Moreover, even if the petition had alleged breach of fiduciary duty, the applicable statute of limitations would still be three years because the petition sought money damages only and fraud was not essential to the claim … . Matter of Chustckie, 2022 NY Slip Op 01452, Second Dept 3-9-22

Practice Point: An action by an executor of an estate pursuant to SCPA 2103 seeking the turnover of funds already distributed is in the nature of a conversion or replevin action and has a three-year statute of limitations.

 

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EVEN THOUGH PLAINTIFF DID NOT TIMELY FILE A NOTE OF ISSUE AND DID NOT COMPLY WITH A PRIOR DISCOVERY ORDER, THE JUDGE WAS WITHOUT AUTHORITY TO, SUA SPONTE, DISMISS THE COMPLAINT BECAUSE PLAINTIFF HAD NOT BEEN SERVED WITH A VAILD 90-DAY DEMAND TO FILE A NOTE OF ISSUE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judge should not have, sua sponte, dismissed the complaint on the ground plaintiff failed to timely file a note of issue and failed to comply with a prior discovery order because plaintiff had not been served with a valid 90-day notice:

The Supreme Court improperly, sua sponte, directed dismissal of the complaint on the ground that the plaintiff failed to timely file a note of issue and failed to comply with a prior discovery order of the court. Because the plaintiff was not served with a valid 90-day demand to file a note of issue pursuant to CPLR 3216(b)(3), the court had no authority to dismiss the complaint based on the failure to timely file a note of issue … . Further, the plaintiff’s alleged failure to comply with the discovery order did not constitute extraordinary circumstances warranting the sua sponte dismissal of the complaint … .Moreau v Cayton,, 2022 NY Slip Op 01450, Second Dept 3-9-22

Practice Point: The judge did not have the authority to, sua sponte, dismiss the complaint, even though plaintiff had not timely filed a note of issue and had not complied with a prior discovery order, because the plaintiff had not been served with a valid 90-day demand to file a note of issue.

 

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