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PURSUANT TO THE DOCTRINE OF LACHES, THE DEFENDANT CITY WAS NOT ENTITLED TO THE LOWER 5.76% INTEREST RATE ON THE MULTIMILLION DOLLAR JUDGMENT; THE TRIAL JUDGE PROPERLY IMPOSED THE 9% INTEREST RATE PURSUANT TO CPLR 5004 (FIRST DEPT).

The First Department reduced the multimillion dollar damages award in this lawsuit by a student severely burned during a chemistry demonstration at his public high school. The trial judge properly imposed a 9% interest rate on the judgment because the defendant city was late (laches) in seeking the lower interest rate (5.75%) authorized by law:

[The judgment] awarding the principal sums of $29,585,000 million for past pain and suffering and $29,585,000 for future pain and suffering over 54 years, plus 9% interest, unanimously modified, on the facts, to vacate the awards … , and remand for a new trial of those issues, unless plaintiff stipulates … to reduce the awards for past pain and suffering to $12,000,000 and for future pain and suffering to $17,000,000 … . * * *

… [D]efendants … should have formally moved to compute interest on the verdict at a lower rate than 9% … . This way, plaintiff would have had the opportunity to submit proof to the contrary, and the court could have ordered a hearing if necessary … . Given defendants’ laches in seeking to avail themselves of a lower interest rate authorized by law, Supreme Court providently declined to depart from CPLR 5004’s presumptive 9% interest rate … . Yvonne Y. v City of New York, 2021 NY Slip Op 06468, First Dept 11-18-21

 

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THE COMPLAINT SUFFICIENTTLY ALLEGED A BREACH OF THE COVENANT OF GOOD FAITH CAUSE OF ACTION IN THIS INSURANCE COVERAGE DISPUTE; THE “IMPLIED COVENANT” CAUSE OF ACTION ALLEGED CONDUCT DIFFERENT FROM THE BREACH OF CONTRACT CAUSE OF ACTION AND WAS THEREFORE NOT DUPLICATIVE; SUPREME COURT IMPROPERLY REDUCED THE ATTORNEYS’ FEES AWARDS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the breach of the implied covenant of good faith and fair dealing cause of action in this insurance coverage dispute should not have been dismissed. The court noted that the “breach of the implied covenant” cause of action was not based on the same conduct as the breach of the insurance policy cause of action and therefore was not “duplicative.” The court also found Supreme Court improperly reduced the attorneys’ fees awards:

This appeal arises out of an insurance coverage dispute between the plaintiff and its insurer, the defendant, in connection with a School Board Legal Liability Policy … (hereinafter the policy). While the policy was in effect, a putative class action entitled Montesa v Schwartz (hereinafter the underlying action) was commenced … in … the Southern District of New York against … the plaintiff and its current and former school board members, alleging various constitutional violations, school segregation, breach of fiduciary duty, and fraud. … [P]laintiff timely submitted a notice of claim to the defendant regarding the underlying action and requested coverage under the policy, and the defendant denied coverage to the plaintiff and its board members. * * *

The plain language of the complaint reflects the plaintiff’s allegation that the defendant breached the implied covenant of good faith and fair dealing. The complaint alleged … that the defendant failed to investigate in good faith the claims in the underlying action, denied coverage to the plaintiff based upon a manufactured and/or “nonexistent” assertion, deviated from industry practices by denying coverage to the plaintiff where “[n]o reasonable insurer would have denied [such] coverage,” and “[disclaimed] coverage with gross disregard for the facts and applicable law” … . In determining the defendant’s motion to dismiss, the court was required to accept as true the facts alleged in the complaint, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged by the plaintiff fit within any cognizable legal theory … . …

… [W]here, as here, the cause of action to recover damages for breach of the policy and the cause of action to recover damages for breach of the implied covenant of good faith and fair dealing allege different conduct on the part of the defendant and seek different categories and/or types of damages, the cause of action seeking damages for breach of the implied covenant of good faith and fair dealing should not be dismissed as “duplicative” of the cause of action alleging breach of contract … . East Ramapo Cent. Sch. Dist. v New York Schs. Ins. Reciprocal, 2021 NY Slip Op 06341, Second Dept 11-17-21

 

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PLAINTIFF HAD NO MEMORY OF EVENTS BEYOND WALKING TOWARD THE BUS AT A BUS STOP; SHE SUFFERED A CRUSHED FOOT; THE MOTION TO SET ASIDE THE PLAINTIFF’S VERDICT SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the motion to set aside the plaintiff’s verdict in this pedestrian-bus accident case should have been granted. Plaintiff had no memory of the incident beyond walking a couple of feet toward the bus at a bus stop. She suffered a crushed foot. But there was simply no evidence of negligence on the part of the bus driver:

“A motion pursuant to CPLR 4404(a) to set aside a jury verdict and for judgment as [*2]a matter of law will be granted where there is no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusions reached by the jury on the basis of the evidence presented at trial” … . In determining such a motion, a court must accept the plaintiff’s evidence as true and accord the plaintiff the benefit of every favorable inference which can reasonably be drawn from the evidence presented at trial … . However, “[a] jury verdict must be based on more than mere speculation or guesswork” …

Here, there was no rational process by which the jury could find in favor of the plaintiff and against the defendants on the issue of liability. Even if the circumstantial evidence sufficiently supported a conclusion that the plaintiff was injured due to an impact with a bus, the mere fact that the plaintiff was struck by a bus did not prove the defendants’ negligence … . In addition to establishing the fact of the accident, it was the plaintiff’s burden to demonstrate what actually happened at the time of the accident so as to enable the jury to find that the defendants were negligent and that their negligence was a proximate cause of the accident … . Kirwan v New York City Tr. Auth., 2021 NY Slip Op 06350, Second Dept 11-17-21

 

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THE STATE PROPERLY APPROVED THE CONSTRUCTION OF ELECTICITY-GENERATING WIND TURBINES IN WESTERN NEW YORK (FOURTH DEPT).

The Fourth Department, affirming the approval of the construction of wind turbines for generating electricity by the NYS Board on Electric Generation Siting and the Environment (Board), determined: (1) the correct local wind-turbine law for the Town of Freedom was considered by the Board; (2) the Board correctly refused to consider a local wind-turbine law for the Town of Farmersville enacted after the evidentiary phase of the project was complete; (3) the Board properly considered the climate-change effects of the project and the effects on wild life and the land; and (4) the coalition contesting the Board ruling did not have standing to represent the First Amendment rights of the Amish community:

… [T]he Board must determine … whether a proposed electric generating facility “is a beneficial addition to or substitution for the electric generation capacity of the state” and whether “the adverse environmental effects of the construction and operation of the facility will be minimized or avoided to the maximum extent practicable” (Public Service Law § 168 [3] [a], [c]), and the Board must consider … “the impact on community character” and any additional “social, economic, visual or other aesthetic, environmental and other conditions” deemed pertinent by the Board … . “[T]he Board was created to provide for an expeditious review process and ‘to balance, in a single proceeding, the people’s need for electricity and their environmental concerns’ ” … . Furthermore, it is settled that “[t]his [C]ourt’s scope of review is limited to whether the decision and opinion of the [B]oard, inter alia, are . . . supported by substantial evidence in the record and matters of judicial notice properly considered and applied in the opinion . . . , are made in accordance with proper procedure . . . and are not arbitrary, capricious or an abuse of discretion” … . “The task of weighing conflicting evidence . . . is properly left to the . . . Board” … . Matter of Coalition of Concerned Citizens v New York State Bd. On Elec. Generation Siting & The Envt. & Alle-Catt Wind Energy, LLC, 2021 NY Slip Op 06221, Fourth Dept 11-12-21

 

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NOTING THE SPLIT OF AUTHORITY BETWEEN THE 2ND AND 4TH DEPARTMENTS, THE 3RD DEPARTMENT SIDED WITH THE 2ND AND HELD THAT, WHERE THE PROPERTY OWNER IS DECEASED, JURISDICTION OVER THE PERSONAL REPRESENTATIVE OF THE DECEDENT IS REQUIRED FOR AN IN REM TAX FORECLOSURE PROCEEDING (THIRD DEPT).

The Third Department, in a complex tax foreclosure case involving many other parties and many other issues, in a full-fledged opinion by Justice Lynch, over a dissent, determined the city could not proceed against property owned by a deceased party without jurisdiction over the personal representative of the decedent’s estate. The court noted a split of authority between the Second and Fourth Departments. The Fourth Department held that a tax foreclosure is an in rem proceeding (against the property) and the death of the owner is therefore irrelevant. The Third Department sided with the contrary ruling by the Second Department(requiring jurisdiction over the personal representative). The two-justice dissent argued the Fourth Department’s approach is the correct one:

Supreme Court properly granted Paul’s motion to vacate the default judgment. Paul is the adult son of Paywantie Allicock (hereinafter decedent), who purchased the property at 82 James Street in the City of Schenectady, Schenectady County (hereinafter the property) in 2004 and resided there with her son until she passed away in May 2015. Paul continues to reside at the premises. At issue is whether petitioner duly acquired jurisdiction over the property for purposes of this RPTL article 11 in rem foreclosure proceeding, commenced in April 2019. Pertinent here, there is a split between the Second and Fourth Departments as to whether a tax foreclosure proceeding may include a parcel where the owner is deceased at the time the action is commenced (compare Matter of Foreclosure of Tax Liens, 165 AD3d at 1116, with Hetelekides v County of Ontario, 193 AD3d 1414, 1419-1420 [2021]). We ascribe to the viewpoint expressed by the Second Department that such a proceeding may not be commenced until such time as the petitioner first acquires jurisdiction over the personal representative of the decedent’s estate … . Matter of City of Schenectady, 2021 NY Slip Op 06120, Third Dept 11-10-21

 

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THE AIDING AND ABETTING FRAUD AND JUDICIARY LAW CAUSES OF ACTION WERE PRECLUDED BY THE NOERR-PENNINGTON DOCTRINE; THE FRAUDULENT INDUCEMENT CAUSE OF ACTION DID NOT ALLEGE RELIANCE (SECOND DEPT).

The Second Department determined the aiding and abetting fraud and Judiciary Law 487 causes of action were barred by the Noerr-Pennington doctrine (see Mine Workers v Pennington, 381 US 657; Eastern Railroad Presidents Conference v Noerr Motor Freight, Inc., 365 US 127), and the complaint did not state a cause of action for fraudulent inducement:

“The Noerr-Pennington doctrine protects the right under the First Amendment to the United States Constitution to petition the government for governmental action, including through litigation and activity incidental to litigation” … . …

… Supreme Court properly concluded that the causes of action alleging that the defendants aided and abetted fraud and violated Judiciary Law § 487 were barred by the Noerr-Pennington doctrine. The Noerr-Pennington doctrine applied to these causes of action insofar as they were based upon litigation and activities that were incidental to litigation, and the pertinent allegations did not fit within either the “sham” or the “corruption” exceptions to the Noerr-Pennington doctrine … . …

Where a cause of action is based upon misrepresentation or fraud, “the circumstances constituting the wrong shall be stated in detail” (CPLR 3016[b]). Here, the allegations in the complaint failed to sufficiently allege justifiable reliance, and therefore failed to state a cause of action for fraudulent inducement … . Louie’s Seafood Rest., LLC v Brown, 2021 NY Slip Op 06167, Second Dept 11-10-21

 

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ALTHOUGH THE ISSUES ON APPEAL COULD HAVE BEEN RAISED IN AN APPEAL WHICH WAS DISMISSED FOR FAILURE TO PROSECUTE, THE COURT EXERCISED ITS JURISDICTION TO CONSIDER THE INSTANT APPEAL; THE MOTION FOR A JUDGMENT AS A MATTER OF LAW WAS BROUGHT BEFORE PLAINTIFF CLOSED HER CASE AND THEREFORE SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing the defense judgment as a matter of law in this medical malpractice case, determined: (1) although the issues could have been raised in the appeal of the original judgment which was dismissed for failure to prosecute, the Second Department exercised its jurisdiction to consider the issues in this appeal from the denial of the motion to reargue; (2) the motion for a judgment as a matter of law was premature (made before plaintiff closed her case) and therefore should not have been granted:

… [A]s a general rule we do not consider any issue raised on a subsequent appeal that was raised, or could have been raised, in an earlier appeal that was dismissed for lack of prosecution, we have the inherent jurisdiction to do so … . Here, the plaintiff appealed from the March 29, 2018 judgment entered in favor of the defendants, and that appeal was dismissed for lack of prosecution. Nevertheless, under the circumstances, including that the appeal from the judgment was still pending at the time the notice of appeal was filed from the subject order made upon reargument, we exercise our jurisdiction to review the issues properly raised on the appeal from the order … . …

“A motion for judgment as a matter of law is to be made at the close of an opposing party’s case or at any time on the basis of admissions (see CPLR 4401), and the grant of such a motion prior to the close of the opposing party’s case generally will be reversed as premature even if the ultimate success of the opposing party in the action is improbable” … . Here, the defendants’ motions for judgment as a matter of law dismissing the complaint were made before the close of the plaintiff’s case, and were not based upon admissions by the plaintiff. Fuchs v Long Beach Med. Ctr., 2021 NY Slip Op 06153, Second Dept 11-10-21

 

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THE JUDGE SHOULD NOT HAVE DISMISSED THE COMPLAINT SUA SPONTE; ALTHOUGH DEFENDANT WAS NOT SERVED, DEFENDANT’S APPEARANCE PRO SE WAIVED ANY LACK-OF-JURISDICTION ARGUMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judge should not have, sua sponte, dismissed the complaint and noted that a party (Taddeo) who has not been served, but who appears in the action pro se, has waived a lack-of-jurisdiction argument:

“A court’s power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal” … . Moreover, a ministerial dismissal, made without notice and without benefit of further judicial review, is erroneous … . Under such circumstances, the court should direct the parties to show cause why the complaint should not be dismissed, and enter a formal order of dismissal on notice to the parties… .

Here, the Supreme Court never ordered the plaintiff to show cause why its failure to serve [defendant] should not result in the dismissal of the complaint. The court had only directed the plaintiff to provide certain information, and the plaintiff did so.

The Supreme Court also erred in concluding that the failure to serve [defendant] constituted a jurisdictional defect. “An appearance by a defendant in an action is deemed to be the equivalent of personal service of a summons upon him [or her], and therefore confers personal jurisdiction over him [or her], unless he [or she] asserts an objection to jurisdiction either by way of motion or in his [or her] answer” . Here, by filing a pro se answer that did not include an objection to jurisdiction, Taddeo waived any argument that the court lacked personal jurisdiction over him … . Bayview Loan Servicing, LLC v Taddeo, 2021 NY Slip Op 06147, Second Dept 11-10-21

 

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A NOTICE OF CLAIM IS NOT A PLEADING AND THEREFORE NEED NOT BE ANNEXED TO A SUMMARY JUDGMENT MOTION; ALTHOUGH PLAINTIFF IN THIS LABOR LAW 240 (1) AND 241 (6) ACTION ESTABLISHED HE FELL FROM A SCAFFOLD, HE DID NOT ESTABLISH THE FALL WAS DUE TO INADEQUATE SAFETY EQUIPMENT; HIS MOTION FOR SUMMARY JUDGMENT WAS PROPERLY DENIED ON THAT GROUND (SECOND DEPT).

The Second Department determined plaintiff’s motion for summary judgment in this Labor Law 240 (1) and 2411 (6) scaffold-fall case was properly denied on evidentiary grounds, but it was not properly denied because the notice of claim was not included with the motion papers. Although the pleadings must be annexed to a summary judgment motion, a notice of claim is not a pleading. The motion was properly denied on evidentiary grounds because it was not demonstrated the fall was the result of a failure to provide adequate safety equipment:

While the defendant correctly contends that CPLR 3212(b) requires that motions for summary judgment be supported by a copy of the pleadings, a notice of claim is not a pleading … . …

… [T]he plaintiff relies solely on his General Municipal Law § 50-h hearing testimony and his deposition testimony, which merely established that he fell from a scaffold. The plaintiff failed to address whether there were scaffold rails, possible tie off points for a harness, or some alternative fall protection. Without more, the plaintiff’s testimony that he “moved [his] foot” to the left, causing him to step off of the scaffold and into an “empty space,” and that “there was nothing there because [he] stepped on it and . . . thought it was something solid” are insufficient … . Torres v New York City Hous. Auth., 2021 NY Slip Op 06207, Second Dept 11-10-21

 

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THE ISSUE WHETHER THE STATUTORY REQUIREMENT THAT OBJECTIONS TO CHILD SUPPORT ORDERS BE RULED ON WITHIN 15 DAYS WAS CONSIDERED ON APPEAL AS AN EXCEPTION TO THE MOOTNESS DOCTRINE; THE 15-DAY RULE IS MANDATORY AND MUST BE ENFORCED; THE MOTHER WAS ENTITLED TO ATTORNEY’S FEES UNDER THE EQUAL ACCESS TO JUSTICE ACT BECAUSE HER ACTION WAS THE CATALYST FOR THIS DECISION (FIRST DEPT).

The First Department, reversing Family Court, in a full-fledged opinion by Justice Mazzarelli, determined: (1) the issue whether objections to child support rulings must be ruled on within 15 days (Family Court Act 439(a)) will be considered on appeal as an exception to the mootness doctrine; (2) under the Equal Access to Justice Act (EAJA) (CPLR 8600, et seq) mother-petitioner was entitled to attorney’s fees because her action served as a catalyst to this decision enforcing the 15-day rule:

The mother has established that this is not the first time in this case that the issue has arisen. Further, the issue is not likely to be resolved without application of the exception, because the Family Court can so easily obviate it by issuing a decision on the objections, albeit after the expiration of the 15 days. Courts have applied the exception under similar circumstances … . * * *

The statute is mandatory insofar as it plainly states that the court “shall,” within 15 days of an objection to a support award being fully submitted, issue a ruling on it … . * * *

Because the CAJ [Chief Administrative Judge, NYC Family Court] responded to the mother’s petition by assigning a Family Court judge to rule on her objections, and because the CAJ offers no substantial justification for not having enforced Family Court Act § 439(e) before the petition was filed, the matter should be remanded for an assessment of the mother’s attorneys’ fees under the State EAJA. Matter of Liu v Ruiz, 2021 NY Slip Op 06089, First Dept 11-9-21

 

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