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BECAUSE THE PRIOR FORECLOSURE ACTION WAS DISMISSED FOR LACK OF STANDING, THE PRIOR ACTION DID NOT ACCELERATE THE DEBT; THEREFORE DEFENDANT DID NOT DEMONSTRATE THE INSTANT ACTION WAS TIME-BARRED (SECOND DEPT).

The Second Department noted that the defendant in this foreclosure action did not demonstrate the foreclosure action was time barred. The initial foreclosure action was dismissed for lack of standing. Therefore the debt was not accelerated by the prior action:

Since the prior action was dismissed for lack of standing, [defendant] failed to establish that the plaintiff had the authority to accelerate the debt through the complaint filed in the prior action … . Wells Fargo Bank, N.A. v Rutty, 2022 NY Slip Op 03926, Second Dept 6-15-22

Practice Point: If a prior foreclosure action was dismissed for lack of standing that action will not be deemed to have accelerated the debt. The prior action, therefore, will not have started the statute-of-limitations clock..

 

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AFTER THE TRIAL HAD BEGUN AND WITNESSES HAD TESTIFIED, THE JUDGE BECAME ILL AND SOUGHT A COVID TEST; AFTER THE NEGATIVE TEST-RESULT, THE JUDGE, SUA SPONTE, WITHOUT DEFENDANT’S CONSENT, DECLARED A MISTRIAL; THE JUDGE’S FAILURE TO CONSIDER A CONTINUANCE OR THE SUBSTITUTION OF ANOTHER JUDGE WAS AN ABUSE OF DISCRETION; THE DOUBLE-JEOPARDY PROHIBITION PRECLUDED RETRIAL (FOURTH DEPT).

The Fourth Department granted defendant’s petition for a writ of prohibition barring retrial on the ground of double jeopardy. A jury was selected and three witnesses had testified when the trial judge became ill and scheduled a COVID test (which came back negative). The judge ultimately, sua sponte, declared a mistrial without defendant’s consent. Because there were alternatives to a mistrial, a continuance, for example, the double-jeopardy prohibition precluded retrial:

… [T]here was no manifest necessity for the mistrial, and the court therefore abused its discretion in granting it sua sponte … . The record establishes that the court did not consider the alternatives to a mistrial, such as a continuance … or substitution of another judge … . “[I]f the judge acts so abruptly as to not permit consideration of the alternatives . . . or otherwise acts irrationally or irresponsibly . . . or solely for convenience of the court and jury . . . , retrial will be barred” … . “The court has the duty to consider alternatives to a mistrial and to obtain enough information so that it is clear that a mistrial is actually necessary” … . Matter of McNair v McNamara, 2022 NY Slip Op 03825, Fourth Dept 6-9-22

Practice Point: Here the judge became ill after the trial had begun and declared a mistrial without defendant’s consent and without considering a continuance or the substitution of another judge. There was no manifest necessity for the mistrial. The double-jeopardy prohibition therefore precluded retrial.

 

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DEFENDANT DID NOT FILE A NOTICE OF CLAIM AGAINST PLAINTIFF VILLAGE IN THIS CONTRACT ACTION AS REQUIRED BY CPLR 9802; THEREFORE DEFENDANT’S ANTICIPATORY-REPUDIATION COUNTERCLAIM SHOULD HAVE BEEN DISMISSED; THE VILLAGE’S PARTICIPATION IN DISCOVERY WAS NOT DESIGNED TO MISLEAD THE DEFENDANT AND DID NOT TRIGGER THE ESTOPPEL DOCTRINE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant’s failure to file a notice of claim required dismissal of its counterclaim (anticipatory repudiation of contract) against the village:

Pursuant to CPLR 9802, “no action shall be maintained against the village upon or arising out of a contract of the village . . . unless a written verified claim shall have been filed with the village clerk within one year after the cause of action shall have accrued.” “‘[S]tatutory requirements conditioning suit [against a governmental entity] must be strictly construed'” … . This is true even when the municipality “‘had actual knowledge of the claim or failed to demonstrate actual prejudice'” … .  …

… [T]he plaintiff’s exchanging of discovery and participation in the depositions of witnesses did not estop it from raising a defense pursuant to CPLR 9802, as mere participation in litigation does not constitute action calculated to mislead or discourage the defendant from filing a notice of claim … . Incorporated Vil. of Freeport v Freeport Plaza W., LLC, 2022 NY Slip Op 03713, Second Dept 6-8-22

Practice Point: In a contract action against a municipality, here an anticipatory-repudiation-of-contract counterclaim, a notice of claim must be filed (CPLR 9802). No notice of claim was filed here and the counterclaim should have been dismissed. The fact that the municipality participated in discovery did not give rise to the estoppel doctrine because there was no intent to mislead the defendant with respect to the notice-of-claim requirement.

 

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ALTHOUGH DEFENDANT’S MOTION TO AMEND ITS ANSWER (ADDING AFFIRMATIVE DEFENSES) WAS MADE AFTER A TWO-YEAR DELAY, THE DELAY ALONE DID NOT DEMONSTRATE THE PLAINTIFF WAS PREJUDICED; THE MOTION TO AMEND SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant’s motion to amend its answer to add additional affirmative defenses should have been granted. The two-year delay was not enough to show plaintiff was prejudiced. Discovery was ongoing:

The court should have granted defendant’s motion to amend its answer to add the four affirmative defenses of RPAPL 1951, adverse possession, mutual breach, and unclean hands, as leave to amend is freely given and plaintiff did not show that it would be prejudiced by the delay in asserting the defenses (CPLR 3025[b] …). While over two years had passed since defendant served its original answer, discovery was still ongoing … . Plaintiff’s claim of significant prejudice is unpersuasive, as all it points to is mere delay, which is insufficient to show prejudice … . Nor did plaintiff rebut defendant’s showing that the proffered amendment is not palpably insufficient or clearly devoid of merit … . Board of Mgrs. of the Porter House Condominium v Delshah 60 Ninth LLC, 2022 NY Slip Op 03680, First Dept 6-7-22

Practice Point: Here defendant moved to amend its answer by adding affirmative defenses two years after the answer was served. Discovery was still ongoing. The delay alone was not enough to demonstrate the plaintiff was prejudiced. The motion to amend should have been granted.

 

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PLAINTIFF WAS SEEKING THE PROCEEDS OF A JOINT VENTURE, WHICH, UNDER PARTNERSHIP LAW, INVOLVES PERSONAL PROPERTY, NOT REAL PROPERTY; PLAINTIFF HAD NO INTEREST IN THE REAL PROPERTY WHICH WAS TO BE USED AS AN INN OPERATED AS A JOINT VENTURE; THERFORE THE LIS PENDENS FILED BY PLAINTIFF SHOULD HAVE BEEN CANCELLED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined there was no relationship between plaintiff’s action seeking the assets of a joint venture and the ownership of the real property associated with the joint venture (to be used as an inn). Therefore defendants’ motion to cancel the lis pendens should have been granted:

“A notice of pendency may be filed in any action in a court of the state or of the United States in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property” (CPLR 6501). Because the provisional remedy of a notice of pendency is an ” ‘extraordinary privilege’ ” … , the Court of Appeals has held that to be entitled to that remedy, there must be a “direct relationship” between the relief sought in the complaint and the title to or possession of the disputed property … . In making that determination, a court must use “a narrow interpretation,” and its “analysis is to be limited to the pleading’s face” … . …

Supreme Court erred in denying their motion insofar as it sought to cancel the notice of pendency because there was no direct relationship between title to or possession of the property and the relief sought by plaintiff. We therefore modify the order accordingly. Reviewing the complaint on its face, we conclude that plaintiff seeks merely to enforce her purported 50% share in the joint venture and does not assert an interest in the property itself. Indeed, the complaint alleges that title to the property was, at all relevant times, held by Properties LLC, of which plaintiff was not a member. It is well settled that ” ‘the legal consequences of a joint venture are equivalent to those of a partnership’ ” … , and thus a joint venturer’s interest in a joint venture constitutes an interest in only personal property, not real property, thereby precluding recourse to a notice of pendency … . Renfro v Herrald, 2022 NY Slip Op 03593, Fourth Dept 6-3-22

Practice Point: Partnership law applies to joint ventures. Here the joint venture was the operation of an inn. Plaintiff sought the assets of the joint venture, which involves only personal property, not real property. Plaintiff had no interest in the real property (the inn). Therefore the lis pendens filed by the plaintiff should have been cancelled.

 

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IF GERMANY WAS DECEDENT’S DOMICILE, NEW YORK MAY RECOGNIZE THE GERMAN HOLOGRAPHIC WILL; MATTER SENT BACK TO SURROGATE’S COURT TO DEVELOP A RECORD ON THE DOMICILE ISSUE (THIRD DEPT). ​

The Third Department, reversing Surrogate’s Court, determined a hearing should be held to determine decedent’s domicile. Decedent was a world traveler who owned property in Germany and executed a holographic will in Germany. If Germany was his domicile, New York may recognize the holographic will:

… [D]ecedent was initially domiciled in New Jersey before he left the United States in 2014 … . Since decedent’s domicile had been established, “unlike mere physical residency, [domicile] is presumed to continue until a new one is acquired and is controlled by the subjective intent of the party claiming domicile” … . This determination generally involves questions of both fact and law “and is based upon ‘conduct manifesting an intent to establish a permanent home with permanent associations in a given location'” … . Where there are particularly unique facts, like here with decedent being a perpetual world traveler, domicile is often “a question of fact rather than law, and it frequently depends upon a variety of circumstances, which differ as widely as the peculiarities of individuals” … .

Domicile is particularly important where, like here, there is a petition to probate a holographic will. Although there are limited circumstances where a holographic will may be validly executed in New York (see EPTL 3-2.2), New York courts may nevertheless accept holographic wills that are “executed and attested in accordance with the local law of . . . [t]he jurisdiction in which the testator was domiciled, either at the time of execution or of death” (EPTL 3-5.1 [c] [3] …). In doing so, New York courts may take judicial notice of the laws of other countries and, as a matter of comity, may accept the findings of foreign courts (see CPLR 4511 [b] …).

… [T]he record was incomplete and must be further developed as it relates to the proceedings in Germany. Specifically, we are concerned over the omission of the certificate of inheritance — which petitioner argues established decedent’s domicile in Germany — as such document may, if afforded comity, be dispositive … . Matter of Noichl, 2022 NY Slip Op 03558, Third Dept 6-2-22

Practice Point: Determination of a person’s domicile is a question of law and fact, depending in part on the person’s intent. Here, if Germany was decedent’s domicile at the time the holographic German will was executed, or at the time of death, New York may recognize the German holographic will. Matter sent back to develop a factual record on the domicile issue.

 

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CLAIMANT’S ATTORNEY WAS NOT AWARE OF THE THIRD DEPARTMENT’S UNIQUE REQUIREMENT OF FULL EXPERT-WITNESS DISCLOSURE FOR A TREATING PHYSICIAN; THAT WAS AN ADEQUATE EXCUSE FOR AN UNTIMELY DISCLOSURE (THIRD DEPT). ​

The Third Department, reversing Supreme Court, determined claimant’s treating physician (Hopson) in this personal injury case should have been allowed to testify as an expert, despite the failure to comply with full expert disclosure pursuant to CPLR 3101. The Third Department is the only department which requires such full expert disclosure by a treating physician and claimant’s attorney had not practiced in the Third Department:

There is no dispute that claimant failed to comply with the expert disclosure requirements of CPLR 3101 (d) (1) (i) in identifying Hopson as a witness. Nevertheless, we disagree with the Court of Claims’ finding that claimant’s excuse was unreasonable. The situation here mirrors that in Schmitt v Oneonta City Sch. Dist. (151 AD3d 1254), where we accepted the explanation of the plaintiffs’ attorney that he was “unaware of this Court’s interpretation of CPLR 3101 (d) (1) (i) and the corresponding need to file an expert disclosure for a treating physician, and the record [was] otherwise devoid of any indication that counsel’s failure to file such disclosure was willful” … . The same holds true here, as claimant’s attorney revealed that she practices law in a different judicial department and candidly conceded that she was unaware of this Court’s interpretation that the statute requires expert disclosure for treating physicians. There is nothing in the record calling into question the veracity of counsel’s representations and no basis to conclude that the noncompliance with CPLR 3101 (d) (1) (i) was willful. As such, the court erred in precluding Hopson’s testimony as an expert witness…. . Freeman v State of New York, 2022 NY Slip Op 03559, Third Dept 6-2-22

Practice Point: Only the Third Department requires full expert-witness disclosure for a treating physician.

 

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PLAINTIFF, A TEXAS RESIDENT WHO WAS A FLIGHT ATTENDANT FOR 30 YEARS WITH MONTHLY STAY-OVERS IN NEW YORK, DEMONSTRATED NEW YORK HAD LONG-ARM JURISDICTION OVER THE NEW JERSEY COMPANY WHICH MANUFACTURED AND DISTRIBUTED TALCUM POWDER PLAINTIFF USED; THE TALCUM POWDER ALLEGEDLY CAUSED PLAINTIFF’S MESOTHELIOMA (FIRST DEPT).

The First Department determined New York had specific long-arm jurisdiction of defendant Shulton, the manufacturer and distributor of talcum powder alleged to have cause plaintiff’s peritoneal mesothelioma. Plaintiff (English) was a flight attendant for 30 years who used the talcum powder when she stayed in New York. Shulton has its principal place of business in New Jersey but has an office in New York and markets the product in New York:

English, a Texas resident, was employed as a flight attendant for 33 years, from 1966 to 1999. During a substantial part of that time, she used Desert Flower on a daily basis after showering. From 1966 to 1984, English was regularly assigned to flights into New York and flew into this state two to four times a month. She usually remained in New York on two- or three-day layovers. When English travelled, she packed Desert Flower in her luggage, so she would have it available for use when she showered. There is no claim that the Desert Flower English used in New York was purchased in New York.

Shulton is incorporated in New Jersey, where it had its principal place of business during the time that English claims to have used Desert Flower. Shulton never manufactured Desert Flower in New York, and in the mid-1970s the manufacture of its talc products shifted from Tennessee to New Jersey. Desert Flower was marketed nationally, including in New York. During the relevant period of time, Shulton maintained a New York office from which it conducted its marketing activities for its Cosmetics and Toiletries Division. The New York office was also headquarters for its International Division. * * * Shulton’s maintenance of its own New York office satisfies the first prong under CPLR 302(a)(1). * * * Desert Flower was marketed and sold nationally, and English used Desert Flower when she travelled to and while she stayed in New York. Shulton’s activities and contacts with New York and the allegedly hazardous talcum powder used by English are sufficient to support an assertion of specific jurisdiction over Shulton…. . English v Avon Prods., Inc., 2022 NY Slip Op 03571, First Dept 6-2-22

Practice Point: Even though plaintiff was a Texas resident and the company she was suing was based in New Jersey, she was able to sue using New York courts. Plaintiff was a flight attendant for 30 years with monthly stay-overs in New York. Defendant had an office in New York and marketed the talcum powder which allegedly cause plaintiff’s mesothelioma nationwide.

 

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PLAINTIFFS’ ACTION ALLEGING THE LOBBYING ACT IS UNCONSTITUTIONAL AS APPLIED TO THEM SHOULD HAVE BEEN ALLOWED TO PROCEED; PLAINTIFFS ENGAGED IN “GRASSROOTS LOBBYING” IN SUPPORT OF PASSAGE OF THE CHILD VICTIMS ACT (CVA) (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, in a full-fledged opinion by Justice Pritzker, determined plaintiffs’ action alleging the Lobbying Act was unconstitutional as applied to them (First Amendment) should have been allowed to proceed. The opinion is too comprehensive to fairly summarize here. Plaintiffs engaged in publicity aimed at passage of the Child Victims Act (CVA), which extends the statute of limitations for civil and criminal actions stemming from the sexual abuse of children. Although the NYS Joint Commission of Public Ethics (JCOPE) did not end up enforcing the registration and reporting requirements of the Lobbying Act with respect to the plaintiffs’ past activities, it indicated future enforcement if plaintiffs continued with their “grassroots lobbying” efforts:

Plaintiff Katherine C. Sullivan, a resident of Florida, supported the CVA and expressed that support, among other ways, through a website that explained that Sullivan was a survivor of child sexual assault that she was subjected to while attending a school in the City of Troy, Rensselaer County, but that she was barred from seeking legal recourse by then-applicable statutes of limitations. A list of state senators who opposed the CVA was provided, along with a script and postcard template for website visitors to contact state senators to voice support for the CVA. Sullivan also rented digital billboard space in this state that displayed a rotating set of screens, one of which purportedly read, “NY Pass the Child Victims Act,” and another that displayed photographs of state senators next to text asking why they did not support the CVA. Some of the screens also purportedly displayed Sullivan’s website address; all of the screens indicated that they were paid for by plaintiff Kat Sullivan LLC (hereinafter the LLC). Sullivan later arranged for an airplane to circle the Capitol and the school in Troy towing banners that displayed, among other things, the address of her aforementioned website and the hashtag #NYPASSCVA. Sullivan v New York State Joint Commn. on Pub. Ethics, 2022 NY Slip Op 03553, Third Dept 6-2-22

Practice Point: Here the plaintiffs challenged whether the Lobbying Act, which requires lobbyists to register and report, was constitutional as applied to their “grassroots” efforts to garner support for the passage of the Child Victims Act. Supreme Court had dismissed the action. The Third Department partially reinstated it.

 

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PLAINTIFF’S CLAIM FOR PUNITIVE DAMAGES IN THIS BREACH OF AN INSURANCE CONTRACT ACTION SHOULD HAVE BEEN DISMISSED, CRITERIA EXPLAINED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the punitive damages claim against defendant insurer should have been dismissed. Plaintiff was struck by a vehicle when she was in a cross-walk. She settled with the driver’s insurer, with her insurer’s consent, for $25,000. She the brought this breach of contract action against defendant insurer for $225,000, plus punitive damages for a bad-faith breach of the insurance contract:

The elements required to state a claim for punitive damages when the claim arises from a breach of contract are: (1) the defendant’s conduct must be actionable as an independent tort; (2) the tortious conduct must be of the egregious nature set forth in Walker v Sheldon [10 NY2d 401]; (3) the egregious conduct must be directed to the plaintiff; and (4) it must be part of a pattern directed at the public generally. Where a lawsuit has its genesis in the contractual relationship between the parties, the threshold task for a court considering a defendant’s motion to dismiss a demand for punitive damages is to identify a tort independent of the contract … .

… [T]he plaintiff failed to allege an independent tort. There is no separate tort for bad faith refusal to comply with an insurance contract … . While an insurer may be held liable for damages to its insured for the bad faith refusal of a settlement offer … , the plaintiff here failed to state such a cause of action. …

The plaintiff has not alleged any facts from which an inference can be drawn that the defendant’s conduct constituted a gross disregard of the plaintiff’s interests. …

The plaintiff failed to allege any facts from which an inference can be drawn that the defendant’s conduct was of an egregious nature as set forth in Walker v Sheldon, such that it was morally reprehensible and of such wanton dishonesty as to imply a criminal indifference to civil obligations … . Schlusselberg v New York Cent. Mut. Fire Ins. Co., 2022 NY Slip Op 03539, Second Dept 6-1-22

Practice Point: The criteria for punitive damages for breach of contract are difficult to meet. The defendant’s conduct must amount to an independent tort, be morally reprehensible, wantonly dishonest, and criminally indifferent to civil obligations. Here, those criteria were not met by the allegations of breach of an insurance contract.