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PLAINTIFF STARTED AN ACTION AGAINST DEFENDANT IN NEW YORK; THEN DEFENDANT STARTED AN ACTION AGAINST PLAINTIFF IN ROMANIA; THE RESULTS OF THE ROMANIAN ACTION MAY BE DISPOSITIVE IN THE NEW YORK ACTION; THE NEW YORK ACTION SHOULD HAVE BEEN STAYED PENDING THE OUTCOME OF THE ROMANIAN ACTION, EVEN THOUGH THE NEW YORK ACTION WAS COMMENCED FIRST (FIRST DEPT).

The First Department, reversing Supreme Count, stayed the New York action pending the resolution of a related action brought by the defendant in Romania. the fact that the New York action was commenced first didn’t matter:

In March 2021, plaintiff brought this action to recover on a personal guaranty executed by defendant as consideration for a loan by plaintiff to two Romanian companies partly owned by defendant. Two months later, defendant brought suit against the instant plaintiff in Romania, seeking a declaration that the companies’ payment obligations under the underlying loan agreements were not enforceable.

… [T]he issues to be decided in the Romanian action are potentially dispositive of this action … . …

Although this action was filed first, chronology is not dispositive, “particularly where both actions are at the earliest stages of litigation” … . “[T]he practice of determining priorities between pending actions on the basis of dates of filing is a general rule, not to be applied in a mechanical way, regardless of other considerations” … . Here, both actions are in the early stages and were commenced reasonably close in time and the later-filed action is more “comprehensive” and involves more parties … . E D & F Man Sugar Ltd. v Gellert, 2022 NY Slip Op 00813, first Dept 2-8-22

 

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ALTHOUGH THE PRELIMINARY INJUNCTION IN THIS BREACH OF CONTRACT ACTION WAS PROPERLY IMPOSED, SUPREME COURT SHOULD HAVE REQUIRED THE POSTING OF AN UNDERTAKING (FOURTH DEPT).

The Fourth Department, modifying Supreme Court, determined that, although the preliminary injunction in this breach of contract action was properly imposed, Supreme Court should have provided for an undertaking:

… [T]he court erred in granting the preliminary injunction without providing for an undertaking. With certain exceptions that are not applicable here, prior to the court granting a preliminary injunction, a plaintiff must post an undertaking in an amount fixed by the court (see CPLR 6312 [b] … ), and that requirement may not be waived … . TDA, LLC v Lacey, 2022 NY Slip Op 00779. Fourth Dept 2-4-22

 

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COMPLAINT ALLEGATIONS OF A FRAUDULENT CONVEYANCE MADE “UPON INFORMATION AND BELIEF” DO NOT STATE A CAUSE OF ACTION (FIRST DEPT).

The First Department, reversing Supreme Court, determined “upon information and belief” complaint allegations of a fraudulent conveyance did not state a cause of action:

The complaint fails to state a cause of action for constructive fraudulent conveyance under former Debtor and Creditor Law §§ 273 and 274 … . Defendants are members of S. Land Development LLC (S. Land), which previously held title to real property and against which plaintiff obtained a money judgment in 2019 in a related action. Plaintiff alleges that defendants transferred or otherwise encumbered S. Land’s assets, rendering it insolvent and precluding plaintiff from being able to collect on the judgment. However, since the allegations are made “upon information and belief,” the complaint does not sufficiently allege that any transfers were made without fair consideration or rendered S. Land insolvent … . L&M 353 Franklyn Ave. LLC v Steinman, 2022 NY Slip Op 00724, First Dept 2-3-22

 

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THE PROCESS SERVER IN THIS FORECLOSURE ACTION WAS TOLD BY DEFENDANT’S DAUGHTER THAT HE HAD THE RIGHT ADDRESS; BUT, IN FACT, DEFENDANT DID NOT RESIDE AT THAT ADDRESS; SERVICE WAS INVALID (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Dillon, in a matter of first impression, determined the service of process in this foreclosure action was invalid. A relative of a defendant (daughter) told the process service that the address where service was made was proper, but, in fact, the defendant did not reside at that address:

This appeal presents a simple question that has not previously arisen: whether an affirmative misrepresentation by a relative of a defendant at a residential address that the address is proper, which is relied upon by a process server, may establish that service was valid, if evidence establishes that the address is not, in fact, the defendant’s actual dwelling place or usual place of abode. We hold that, under the circumstances of this action, service of process upon the defendant at an address that was not actually his dwelling place or usual place of abode was defective, notwithstanding information provided to the process server at the doorstep. * * *

For a defendant to be estopped from raising a claim of defective service, the conduct misleading the process server must be the defendant’s conduct, as distinguished from conduct of a third party … . Everbank v Kelly, 2022 NY Slip Op 00651, Second Dept 2-2-22

 

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QUESTION OF FACT WHETHER THE CONTINUOUS TREATMENT DOCTRINE RENDERED THIS DENTAL MALPRACTICE ACTION TIMELY; PLAINTIFF STATED A CAUSE OF ACTION FOR BREACH OF CONTRACT BASED ON THE PROMISED OUTCOME OF THE DENTAL WORK (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined: (1) there was a question of fact whether the continuous treatment doctrine applied making this dental malpractice action timely; and (2) plaintiff’s breach of contract action against defendant dentist (Irlin) should not have been dismissed:

… [T]he plaintiff submitted an affirmation of her current treating dentist, who opined that the plaintiff initially sought treatment from Irlin in order to obtain a permanent prosthetic replacement for the missing teeth in her upper jaw. The plaintiff’s dentist further opined that the numerous surgeries that the plaintiff underwent on her upper jaw to repair and replace implants and prostheses were related to Irlin’s initial alleged malpractice in failing to diagnose the bone condition that caused the implants and prostheses to become loose and need replacement. The record otherwise presents questions of fact as to whether the plaintiff timely initiated return visits to complain and seek corrective treatment from Irlin … . …

… [T]he individual defendants’ own submissions, which included the transcript of the plaintiff’s deposition testimony and numerous signed consent forms written in English, demonstrated that the plaintiff has a cause of action to recover damages for breach of contract against Irlin. The plaintiff testified at her deposition that she agreed to the installation of dental implants and a permanent prosthetic device in her upper jaw because Irlin verbally promised her that it would “last a lifetime,” that she would “treat [the prosthesis] as if” it was her “own teeth,” and that she would only need follow-up appointments for cleanings once every 6 to 12 months, among other things. The individual defendants’ evidence could support the conclusion that the treatment Irlin rendered did not achieve these allegedly promised results. Chvetsova v Family Smile Dental, 2022 NY Slip Op 00650, Second Dept 2-2-22

 

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THE DOCTRINE OF COLLATERAL ESTOPPEL DID NOT PRECLUDE THIS ACTION TO DETERMINE THE VALIDITY OF THE PURPORTED 2017 ELECTION OF THE BOARD OF DIRECTORS; THE PRIOR ACTION CONCERNED ONLY THE VALIDITY OF THE PURPORTED 2019 ELECTION OF THE BOARD OF DIRECTORS (THIRD DEPT).

The Third Department, reversing Supreme Court, held the doctrine of collateral estoppel did not preclude this Sullivan County action, which sought to determine whether a 2017 election of the board of dIrectors of plaintiff religious corporation was valid. A prior action in Kings County determined a 2019 election of the board of directors of the same corporation was a nullity:

As defendants’ amended petition and the order of Supreme Court … in the Kings County proceeding reflect, the issue to be determined therein was the validity of the 2019 election, not the validity of the 2017 election. Defendants sought in that proceeding to declare the 2019 election a nullity and, as a result, enjoin the individual plaintiffs, purportedly elected in 2019, from acting as the board of directors. Indeed, the court went out of its way during oral argument in that matter to so limit the issue when it stated that it “want[ed] to be very clear that [it was] making no determination in this case as to whether [defendants] have any right to control the corporation by virtue of any acts that predated the [June 2019 election.]” The court further clarified “that [it] take[s] no position on the validity of any actions that [defendants] claim[] to have taken in 2017 and thereafter,” and added that the allegations relating to the 2017 election was part of “[t]he Sullivan County matter” which “is not before [it],” and that the proceeding “has nothing to do with the Sullivan County matter.” More importantly, the order signed by the court was so circumscribed, and granted the amended petition “to the sole extent that it [sought] to invalidate” the 2019 election. Congregation Machne Ger v Berliner, 2022 NY Slip Op 00483, Third Dept 1-27-22

 

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DEFENDANTS ARGUED PLAINTIFF WAS NOT AN EMPLOYEE IN THE WORKERS’ COMPENSATION PROCEEDING; HERE THE DEFENDANTS ARGUED PLAINTIFF WAS AN EMPLOYEE AND HIS REMEDY WAS LIMITED TO WORKERS’ COMPENSATION; THE DOCTRINE OF JUDICIAL ESTOPPEL PRECLUDED THE WORKERS’ COMPENSATION AFFIRMATIVE DEFENSE IN THIS ACTION (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, over a dissent, determined the judicial estoppel doctrine applied and plaintiff’s motion to dismiss the workers’ compensation affirmative defense in this personal injury action should have been granted. Plaintiff was injured on the job. In the Workers’ Compensation proceeding defendants argued plaintiff was an not an employee. In this action defendants argued he was an employee and his recovery is limited to Workers’ Compensation:

… [T]he record makes clear that defendants, through Old Republic [insurance company], consistently advanced in the Workers’ Compensation Law proceeding the theory that plaintiff was not its employee. Old Republic, as the workers’ compensation carrier for defendants, was subsequently discharged from this proceeding. As such, defendants achieved its desired result after asserting the lack of an employer-employee relationship. Although the record is not explicit as to the basis for the discharge of Old Republic from the Workers’ Compensation Law proceeding, “[t]he policy behind judicial estoppel would not be served by limiting its application to cases where the legal position at issue was ruled upon in the context of a judgment” … .

In this action … defendants have taken a contrary position — i.e., plaintiff was employed by defendants as a special employee and, therefore, his sole remedy for compensation was to pursue workers’ compensation benefits. Allowing defendants to argue in this action that plaintiff was their employee, after they had disavowed an employer-employee relationship in the Workers’ Compensation Law proceeding and received a benefit from this position, would subvert the equitable policy behind the doctrine of judicial estoppel … . Walker v GlaxoSmithKline, LLC, 2022 NY Slip Op 00484, Third Dept 1-27-22

 

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THE TRIAL JUDGE SHOULD HAVE GIVEN THE ADVERSE INFERENCE CHARGE WHICH HAD BEEN ORDERED AS A DISCOVERY SANCTION RE: A MISSING SURVEILLANCE TAPE; JURY VERDICT SET ASIDE (FIRST DEPT). ​

The First Department, reversing Supreme Court and setting aside the verdict, determined the trial judge should have given the adverse inference charge with respect to a missing video surveillance tape:

… [T]he court erred in declining to give an adverse inference charge with respect to a missing video surveillance tape. An order stating that plaintiff was entitled to such a charge had been issued during discovery upon plaintiff’s motion for sanctions pursuant to CPLR 3126. Thus, the adverse inference charge was a discovery sanction, not a prospective evidentiary ruling … . While the verdict is supported by sufficient evidence, that error was not harmless. Hegbeli v TJX Cos., Inc., 2022 NY Slip Op 00502, First Dept 1-27-22

 

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A PRE-JOINDER MOTION FOR SUMMARY JUDGMENT MUST BE DENIED (FIRST DEPT).

The First Department, reversing Supreme Court, noted that a pre-joinder motion for summary judgment must be denied:

The Court of Appeals has noted that the rule barring a pre-joinder motion for summary judgment is strictly applied (City of Rochester v Chiarella, 65 NY2d 92, 101 [1985]). While CPLR 3211(c) permits the court, on notice to the parties, to treat a motion to dismiss as a motion for summary judgment before issue is joined, that is not the case here, where [plaintiff] moved directly for summary judgment; thus, a motion for summary judgment brought before a defendant has answered the complaint is premature and must be denied … . SHG Resources, LLC v SYTR Real Estate Holdings LLC, 2022 NY Slip Op 00525, First Dept 1-27-22

 

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DEFENDANT HAD WITHHELD PAYMENT ON THE CONTRACT AS AN OFFSET FOR THE LIQUIDATED DAMAGES PROVISION OF THE CONTRACT; THE AWARD OF LIQUIDATED DAMAGES TO THE DEFENDANT THEREFORE CONSTITUTED A DOUBLE RECOVERY (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined defendant should not have been awarded summary judgment on the liquidated damages counterclaim because defendant had withheld payment on the contract as an offset to the liquidated damages:

Supreme Court should have denied summary judgment in defendant’s favor on the liquidated damages counterclaim. To be sure, the liquidated damages provision of the contract, providing for damages of $100 for each day that plaintiff failed to timely respond to a request for repairs or to complete repairs already begun and $100 for failing to timely provide a written estimate, was not an unenforceable penalty … . However, to the extent defendant has withheld payment from plaintiff for work performed to offset liquidated damages, the award of liquidated damages constitutes a double recovery. Summit Rest. Repairs & Sales, Inc. v New York City Dept. of Educ., 2022 NY Slip Op 00526, First Dept 1-27-22

 

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