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THE BREACH OF THE IMPLIED COVENANT OF GOOD FAITH SHOULD HAVE BEEN DISMISSED AS DUPLICATIVE OF THE BREACH OF CONTRACT CAUSE OF ACTION (THIRD DEPT).

The Third Department, modifying Supreme Court, determined the breach of the implied covenant of good faith should have been dismissed as duplicative of the breach of contract action:

Supreme Court … erred by denying that part of defendants’ motion seeking dismissal of the cause of action alleging breach of the implied covenant of good faith and fair dealing. A review of the allegations in the amended complaint discloses that this cause of action is based upon the same set of facts and seeks similar damages as the breach of contract cause of action. In view of this, the breach of the implied covenant of good faith and fair dealing cause of action is duplicative of the breach of contract cause of action and, therefore, it should have been dismissed … . Shmaltz Brewing Co., LLC v Dog Cart Mgt. LLC, 2022 NY Slip Op 01086, Third Dept 2-17-22

 

NO ONE MOVED TO QUASH THE NONJUDICIAL SUBPOENA SERVED ON A NONPARTY; SUPREME COURT SHOULD HAVE GRANTED THE MOTION TO COMPEL THE NONPARTY’S APPEARANCE AT A DEPOSITION (SECOND DEPT).

The Second Department determined Supreme Court should have compelled the former Town Supervisor (St. Lawrence) to appear for depositions in this slip and fall case:

… [T]he plaintiff served nonparty Christopher St. Lawrence, former Town Supervisor for the Town, with a nonjudicial subpoena directing him to appear for a deposition. St. Lawrence failed to appear for the deposition as directed in the subpoena, and the plaintiff moved … to compel him to comply with that subpoena by appearing for a deposition … . … Supreme Court denied the motion, and the plaintiff appeals.

Since the Supreme Court found that the subpoena was proper, that no one had moved to quash it, and that St. Lawrence had failed to comply with it, the court should have directed St. Lawrence to comply with the subpoena (see CPLR 2308[b] …). … [T]he court should have granted that branch of the plaintiff’s motion which was to compel St. Lawrence to comply with the subpoena by directing him to appear for a deposition …  Thus, we remit the matter to the Supreme Court, Rockland County, to schedule the deposition in compliance with the subpoena and for further proceedings to compel compliance with the subpoena. Schiller v Town of Ramapo, 2022 NY Slip Op 01061, Second Dept 2-16-22

 

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PETITIONER’S NOTICE OF CLAIM DEMONSTRATED HE HAD SUFFICIENT INFORMATION TO FORMULATE A COMPLAINT IN THIS SLIP AND FALL CASE; HIS REQUEST FOR PRE-JOINDER DISCOVERY AND PRESERVATION OF THE ACCIDENT SCENE SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined pre-joinder discovery and preservation of the accident site was not necessary in this slip and fall case:

The petitioner alleges … he slipped and fell due to an accumulation of water leaking from the ceiling onto the landing at the top of an escalator in a subway station. The petitioner commenced this proceeding against the New York City Transit Authority (hereinafter the Transit Authority) seeking to direct the Transit Authority to preserve and produce any surveillance videos or records prepared in the regular course of business concerning the accident, or to provide an affidavit explaining the absence of any such videos or records. The petitioner also moved pursuant to CPLR 3102(c), in effect, to compel the Transit Authority to permit an inspection of the location of the accident upon certain conditions and to refrain from performing alterations or modifications to the location pending that inspection. …

CPLR 3102(c) provides, as relevant, that “[b]efore an action is commenced, disclosure to aid in bringing an action, to preserve information or to aid in arbitration, may be obtained, but only by court order.” Here, the petitioner’s notice of claim demonstrates that the petitioner possessed sufficient information to enable him to formulate his complaint and commence an action … . Therefore, under the circumstances, the only purpose of the pre-action discovery sought by the petitioner would be to “explore alternative theories of liability, which is not a proper basis for invoking CPLR 3102(c)” … . Moreover, considering, inter alia, the evidence already in the petitioner’s possession, the order directing the Transit Authority to preserve the condition of the site of the accident until completion of an inspection was unduly burdensome …”. Matter of Neham v New York City Tr. Auth., 2022 NY Slip Op 01026, Second Dept 2-16-22

 

THE DAMAGES AMOUNT ASSESSED AGAINST THE DEFAULTING DEFENDANT IN THE INQUEST WAS EXCESSIVE (SECOND DEPT). ​

The Second Department, reversing (modifying) Supreme Court, determined the amount of damages assessed against the defaulting defendant in the inquest was excessive:

Although this Court is not relieving the defendant of his default, this Court may consider whether excessive damages were awarded … . “An unwarranted and excessive award after inquest will not be sustained, as to do otherwise ‘would be tantamount to granting the plaintiffs an open season at the expense of a defaulting defendant'” … . Based upon the proof submitted at the inquest, an award of $25,000 constitutes reasonable compensation … . Kokolis v Wallace, 2022 NY Slip Op 01018, Second Dept 2-16-22

 

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THE PURPORTED STIPULATION OF DISCONTINUANCE OF THE FORECLOSURE ACTION AND THE PURPORTED NOTICE OF DISCONTINUANCE WERE INVALID; SUPREME COURT SHOULD NOT HAVE DETERMINED THE ACCELERATION OF THE MORTGAGE DEBT HAD BEEN REVOKED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined both the purported stipulation of discontinuance and the purported notice of discontinuance were invalid. Therefore the judge should not have determined the acceleration of the mortgage debt had been revoked:

…Supreme Court erred in discontinuing the action based upon a purported stipulation of discontinuance, and then interceding on the plaintiff’s behalf to declare the acceleration of the loan revoked. The stipulation was clearly ineffective as it was only signed by the attorney for the plaintiff (see CPLR 3217[a][2] …). Further, to the extent that the stipulation was construed as a notice of discontinuance, it was equally ineffective to discontinue the action, as it was not served upon the appellant (see CPLR 3217[a][1] …). HSBC Bank USA, N.A. v Rini, 2022 NY Slip Op 01016, Second Dept 2-16-22

 

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SUPREME COURT, IN THE CONTEXT OF A MOTION TO DISMISS, SHOULD NOT HAVE DETERMINED AS A MATTER OF LAW THAT THE DEFENDANTS WERE NOT “AFFILIATES” WITHIN THE MEANING OF THE LANGUAGE OF A RELEASE (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined Supreme Courts should have simply denied the motion to dismiss instead of deciding what parties were included in the term “affiliates” in the release at issue:

Supreme Court erred in finding, as a matter of law, that the word “affiliates” in the release entered into between plaintiffs and Siddiqui could not be read to include defendants Cernich and Huan Tseng … . The word “affiliates” may apply to individuals, and is “not commonly understood to apply only to entities” … . Furthermore, the arbitrator’s conclusion, in an earlier arbitration against different parties, that the release did not apply to nonparty Ming Dang does not serve as a conclusive basis for finding that the release did not apply to defendants. Accordingly, the scope of the release language with respect to Cernich and Tseng was ambiguous, and Supreme Court should have simply denied the motion to dismiss without determining the meaning of the release language as a matter of law. Apollo Mgt., Inc. v Cernich, 2022 NY Slip Op 00964, First Dept 2-15-22​

 

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PLAINTIFF, A DISSOLVED CORPORATION, PROPERLY PURSUED CLAIMS AND LIABILITIES WHICH AROSE PRIOR TO DISSOLUTION (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff-dissolved-corporation properly pursued claims and liabilities which arose prior to dissolution:

A dissolved corporation is permitted to pursue claims and liabilities that arose prior to dissolution as part of the winding up process (Business Corporation Law §§ 1005[a][1]; 1006[a][4]; [b] …). Plaintiff’s commencement of this litigation, as well as the settlement of other predissolution claims against defendant, and its use of settlement funds to satisfy its outstanding liabilities in the wage violations case, are expressly contemplated and authorized by Business Corporation Law § 1006(a)(4). Thus, it was error to find that plaintiff’s dissolution resulted in it lacking capacity to maintain this action against defendant for work performed before plaintiff was dissolved … .

Contrary to defendant’s contention, plaintiff’s winding up period has not been so extended as to be considered unreasonable … . TADCO Constr. Corp. v Dormitory Auth. of the State of N.Y., 2022 NY Slip Op 00990, First Dept 2-15-22

 

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ALTHOUGH THE FIRST FORECLOSURE ACTION COMMENCED IN 2009 WAS ADMINISTRATIVELY DISMISSED, IT WAS NEVER ABANDONED PURSANT TO CPLR 3216; THEREFORE THE STATUTE OF LIMITATIONS WAS NOT TRIGGERED AND THE MOTION TO RESTORE THE 2009 ACTION TO THE CALENDAR IN 2018, AFTER THE SECOND (2015) FORECLOSURE ACTION WAS DISMISSED AS TIME-BARRED, SHOULD HAVE BEEN GRANTED; TWO-JUSTICE DISSENT (SECOND DEPT).

The First Department, reversing Supreme Court, over a two-justice dissent, determined the first foreclosure action (commenced in 2009), which was “administratively dismissed,” was not abandoned because the criteria in CPLR 3216 were not met. Therefore, the administrative dismissal did not trigger the statute of limitations and the motion to restore that action to the calendar (after the second foreclosure action commenced 2015 was dismissed as time-barred) should have been granted:

… [T]he conditional order of dismissal, which, in effect, served as a 90-day notice pursuant to CPLR 3216, was defective in that it did not state that the plaintiff’s failure to comply with the demand would serve as a basis for the Supreme Court, on its own motion, to dismiss the action for failure to prosecute (see id. § 3216[b][3] …). * * *

We reject the defendant’s contention that the plaintiff effectively abandoned the instant action by commencing the 2015 action. * * *

… [T]he plaintiff was not required to move to restore the instant action to the calendar within any specified time frame … . “[A] motion pursuant to CPLR 2221(a) to vacate an order is not subject to any specific time limitation” … . The marking-off procedures of CPLR 3404 do not apply to pre-note of issue actions such as this one … . Bank of Am., N.A. v Ali, 2022 NY Slip Op 00838, Second Dept 2-9-22

 

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IN THIS FORECLOSURE ACTION, DEFENDANT DID NOT WAIVE THE LACK OF JURISDICTION DEFENSE BY PARTICIPATING IN THE MANDATORY SETTLEMENT CONFERENCE AND WAS ENTITLED TO A HEARING ON WHETHER SHE WAS PROPERLY SERVED WITH THE SUMMONS AND COMPLAINT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant in this foreclosure action did not waive the lack of jurisdiction defense and demonstrated entitlement to a hearing on whether she was properly served:

… [B]y participating in the mandatory settlement foreclosure conference and subsequently contacting the plaintiff for settlement purposes, the defendant did not demonstrate a clear intent to participate in the lawsuit on the merits, and therefore she did not formally or informally appear in the action … . …

… [D]efendant sufficiently rebutted the presumption of proper service. The defendant submitted her own sufficiently factually detailed sworn affidavit in which she, inter alia, denied receipt of service, denied residing at the subject address at the time service allegedly was made, and averred that she had not lived there since September 2011 and that she had moved to Georgia in November 2013. Under these circumstances, a hearing to determine whether the defendant was properly served pursuant to CPLR 308(2) was required … . Nationstar Mtge., LLC v Stroman, 2022 NY Slip Op 00869, Second Dept 2-9-22

 

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THE FLORIDA DEFENDANTS ADVERTISED THROUGH A NATIONWIDE WEBSITE; THE NEW YORK PLAINTIFFS SOLICITED THE CONTRACT WITH DEFENDANTS; PLAINTIFFS DID NOT MAKE OUT A PRIMA FACIE CASE OF EITHER GENERAL OR SPECIFIC (LONG-ARM) JURISDICTION OVER DEFENDANTS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiffs did not make out a prima facie case of general or specific (long-arm) jurisdiction over the Florida defendants in this breach of contract and fraud action. Through email correspondence the New York plaintiffs entered a contract for the creation of a “Dating App” for which plaintiffs allegedly paid $100,000. Plaintiff alleged defendants never provided the Dating App and sued in New York. The jurisdiction over the breach of contract action was analyzed under the general jurisdiction criteria, and jurisdiction over the fraud (tort) action was analyzed under the specific jurisdiction (long-arm) criteria:

In opposing the separate motions of [defendants], the plaintiffs asserted that jurisdiction over both defendants was proper pursuant to CPLR 301 and 302(a)(1) and (3). “Under modern jurisprudence, a court may assert general all-purpose jurisdiction or specific conduct-linked jurisdiction over a particular defendant”… . Contrary to the plaintiffs’ contention, they did not make a prima facie showing of personal jurisdiction … . The complaint itself establishes that [the individual defendant] is domiciled in Florida and that [the corporate defendant] was incorporated in and has its principal place of business in Florida … . Further, the facts alleged, even if established, do not support a conclusion that [defendant corporation’s] contacts with New York were so “continuous and systematic” …  as to render it “essentially at home” in New York … .

Specific jurisdiction over a defendant is obtained through New York’s long-arm statute, CPLR 302. * * *

“The CPLR 302(a)(1) jurisdictional inquiry is twofold: under the first prong the defendant must have conducted sufficient activities to have transacted business in the state, and under the second prong, the claims must arise from the transactions” … . …

The affidavits … establish that [the corporate defendant] advertises its services nationwide through a website that is not specifically directed toward New York residents or businesses. It is undisputed that the plaintiff … initiated the contact between the parties and solicited the defendants’ services in designing the Dating App. Contrary to the plaintiffs’ contention, [the corporate defendant’s] website does not constitute transacting business within the State. Fanelli v Latman, 2022 NY Slip Op 00849, Second Dept 2-9-22

 

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