, ,

IN A FORECLOSURE ACTION, ANY DEFICIENCIES IN PLAINTIFF’S COUNSEL’S CERTIFICATE OF MERIT (CPLR 3012-B) CAN NOT BE THE BASIS FOR DEFENDANT’S MOTION TO DISMISS ALLEGING PLAINTIFF’S LACK OF STANDING (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, over a partial dissent, determined deficiencies in the certificate of merit filed by plaintiff’s counsel in this foreclosure action (pursuant to CPLR 3012-b) cannot be the basis for defendants’ motion to dismiss alleging plaintiff’s lack of standing:

This appeal implicates the extent to which there is interplay between a CPLR 3211(a) motion to dismiss in the context of a residential mortgage foreclosure action, the attorney certification requirements of CPLR 3012-b, and the moving party’s burden of proof. For reasons analyzed below, we hold that a defendant moving to dismiss a complaint on the ground of the plaintiff’s lack of standing does not meet the affirmative burden of proof by merely relying upon any defects that might exist with the certificate of merit submitted by the plaintiff’s attorney under CPLR 3012-b, or otherwise, if the certificate of merit fails to address all potential aspects of standing. * * *

… [I]n a mortgage foreclosure action, a motion to dismiss pursuant to CPLR 3211(a) on the ground of the plaintiff’s lack of standing is not necessarily determined based on the adequacy or inadequacy of the certificate of merit filed by the plaintiff’s counsel pursuant to CPLR 3012-b. … The complaint serves the legal purpose of giving notice to defendants of the transactions, occurrences, or series of transactions or occurrences intended to be proved, and the material elements of each cause of action … . The certificate of merit serves the ministerial and ethical purpose of requiring counsel to take good faith steps to assure that the action has merit, and to certify to the best of counsel’s knowledge, information, and belief that a reasonable basis exists for commencing the action and that the plaintiff has standing to recover on the note underlying the action.

Counsel’s reasonable beliefs contained in a certificate of merit are irrelevant to whether defendants, in moving to dismiss a complaint under CPLR 3211(a), establish their own defined burden of proof for the dispositive relief of dismissal. Wilmington Sav. Fund Socy., FSB v Matamoro, 2021 NY Slip Op 05741, Second Dept 10-20-21

 

, ,

ALTHOUGH DEFENDANT DOCTOR PRACTICED IN THE BRONX FOR PART OF EACH WEEK, THE PRINCIPAL OFFICE OF HIS BUSINESS AND HIS RESIDENCE WERE IN WESTCHESTER COUNTY, WHERE PLAINTIFF WAS TREATED; SUPREME COURT PROPERLY GRANTED DEFENDANTS’ MOTION TO CHANGE THE VENUE FROM BRONX TO WESTCHESTER COUNTY (CT APP).

The Court of Appeals, reversing the Appellate Division, over an extensive two-judge dissent, determined Supreme Court had properly granted defendants’ motion for a change of venue from Bronx County to Westchester County in this medical malpractice action. The defendant doctor (Goldstein) was described by plaintiff as an “individually-owned business” with a “principal office” in Bronx County. Dr. Goldstein treats some patients in Bronx County. But plaintiff was treated by Dr. Goldstein in Westchester County, where defendant business (Westmed) is located and where Dr. Goldstein resides:

Under CPLR 503(d), “[a] partnership or an individually-owned business shall be deemed a resident of any county in which it has its principal office, as well as the county in which the partner or individual owner suing or being sued actually resides.” * * *

While … registration documents confirmed … that Dr. Goldstein also worked in the Bronx, the venue statute does not deem an individually-owned business a resident of every county where it has an office or transacts business. To conclude otherwise would read the phrase “principal office” out of the statute. Lividini v Goldstein, 2021 NY Slip Op 05618, CtApp 10-14-21

 

, ,

SUPREME COURT DID NOT HAVE SUBJECT MATTER JURISDICTION OVER PLAINTIFF’S HOSTILE WORK ENVIRONMENT CLAIMS; THE CONDUCT OCCURRED WHEN PLAINTIFF WAS NOT PHYSICALLY IN NEW YORK AND DID NOT HAVE ANY IMPACT ON THE TERMS, CONDITIONS OR EXTENT OF HER EMPLOYMENT WITHIN NEW YORK; THE FACTS WERE NOT DESCRIBED (FIRST DEPT).

​The First Department, reversing Supreme Court, determined the court did not have subject matter jurisdiction over the hostile work environment claims under the Human Rights Law. The facts were not explained. The conduct occurred when plaintiff was “physically situated outside of New York” and did not have any impact on the “terms, conditions or extent of her employment” within New York:

Supreme Court lacks subject matter jurisdiction over the Human Rights Law claims … . Defendants’ alleged conduct occurred while plaintiff was “physically situated outside of New York” … , and did not have “any impact on the terms, conditions or extent of her employment . . . within the boundaries of New York” … . “The fact that the alleged discriminatory acts . . . occurred in New York is insufficient to plead impact in New York” … . Jarusauskaite v Almod Diamonds, Ltd., 2021 NY Slip Op 05460, First Dept 10-12-21

 

, , , ,

AN AFFIDAVIT WITH A PARTY STATEMENT AND A NON-PARTY AFFIDAVIT WHICH WERE NOT DISCLOSED SHOULD HAVE BEEN CONSIDERED IN OPPOSTION TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT IN THIS DOG-BITE CASE (FOURTH DEPT)

The Fourth Department, reversing Supreme Court and reinstating the complaint in this dog-bite case, determined an affidavit which should have been disclosed because it contained the statement of a party was admissible in opposition to defendant’s motion for summary judgment (the Davis affidavit). In addition, the affidavit of a non-party witness should have been considered by the court (the Cheetham affidavit). Even if the discovery demands are read to include the non-party affidavit, the affidavit was privileged as material prepared for litigation and therefore not discoverable. Supreme Court had precluded both affidavits on the ground they had not been disclosed:

… [W]e agree with the court that the affidavit of Davis, insofar as it contained a party statement of defendant, should have been disclosed. CPLR 3101 (e) “enables a party to unconditionally obtain a copy of his or her own statement[,] creating an exception to the rule that material prepared for litigation is ordinarily not discoverable” … . We nevertheless agree with plaintiff that the court abused its discretion in precluding Davis’s affidavit from consideration in opposition to the motion … . Defendant knew of Davis as a person of interest, which is why counsel sought to depose her approximately four months prior to making the motion, and defendant did not seek the assistance of the court to compel Davis’s production … . Inasmuch as plaintiff is not precluded from relying on Davis’s affidavit to oppose summary judgment, Davis is not precluded from testifying at trial … .

We also conclude that the court abused its discretion in precluding the Cheetham affidavit from consideration. Cheetham was listed as a witness in discovery and was deposed. Cheetham is not a party to this action, and his affidavit did not include any statements of a party. Even assuming that Cheetham’s statement was discoverable, we note that defendant’s discovery demands did not include a demand for nonparty witness statements. Assuming further that defendant’s discovery demands could be read to include a request for the statement of a nonparty witness, i.e., Cheetham, we conclude that Cheetham’s statement was conditionally privileged as material prepared in anticipation of litigation (see CPLR 3101 [d] [2 …). Defendant would be unable to show any substantial need for Cheetham’s statement inasmuch as Cheetham was deposed and therefore provided the substantial equivalent of the material contained in the statement … . Vikki-lynn A. v Zewin, 2021 NY Slip Op 05412, Fourth Dept 10-8-21

 

,

PLAINTIFF AND HIS ATTORNEY SENT 75 LETTERS TO HARASS DEFENDANTS; SANCTIONS FOR FRIVOLOUS CONDUCT SHOULD HAVE BEEN IMPOSED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiff should have been sanctioned for harassing defendants:

In 2015, the plaintiff commenced this shareholder’s derivative action. After the action was commenced, the plaintiff and his attorney sent approximately 75 letters to various defendants, as well as those defendants’ family members, clergy, and attorneys. Therein, the plaintiff made disturbing references, among other things, to plagues, repentance, imprisonment, and punishment by the Internal Revenue Service for tax fraud. …

Pursuant to 22 NYCRR 130-1.1, sanctions may be imposed against a party or the party’s attorney for frivolous conduct. Conduct is “frivolous if: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false” (22 NYCRR 130-1.1[c]). “A party seeking the imposition of a sanction or an award of an attorney’s fee pursuant to 22 NYCRR 130-1.1(c) has the burden of proof” … .

… [T]he defendants established that the plaintiff’s conduct in sending the subject letters was calculated to harass the defendants … . Glaubach v Slifkin, 2021 NY Slip Op 05323, Second Dept 10-7-21

 

, ,

PLAINTIFF DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the plaintiff in this foreclosure action did not demonstrate standing to bring the action. Therefore the lack-of-standing affirmative defense should not have been struck:

… [A] plaintiff may demonstrate its standing in a foreclosure action through evidence that it was in possession of the subject note endorsed in blank, or the subject note and a firmly affixed allonge endorsed in blank, at the time of the commencement of the action (see UCC 3-202[2] …).

… The plaintiff attempted to demonstrate that it was the holder of the underlying note by attaching to the complaint a copy of the note with an allonge. The purported allonge contains an endorsement in blank, has no pagination, is undated, and contains no writing in any way to demonstrate its connection to the note or that it was firmly affixed thereto. An affirmation of the plaintiff’s counsel and an affidavit of a representative of the plaintiff’s loan servicer, submitted in support of the plaintiff’s motion, also failed to indicate that the purported allonge is connected to the note or that it was firmly affixed thereto. Therefore, the plaintiff failed to establish that the purported allonge was so firmly attached to the note as to become a part thereof, and thus failed to establish, prima facie, its standing to commence this foreclosure action … . Federal Natl. Mtge. Assn. v Hollien, 2021 NY Slip Op 05321, Second Dept 10-7-21

 

,

A FOREIGN CORPORATION WHICH REGISTERS TO DO BUSINESS IN NEW YORK CONSENTS TO THE SERVICE OF PROCESS IN NEW YORK BUT DOES NOT CONSENT TO THE GENERAL JURISDICTION OF NEW YORK (CT APP). ​

The Court of Appeals, in a full-fledged opinion by Judge Singas, over a two-judge dissent, determined that a corporation registered to do business in New York consents to the service of process in New York, but not to general jurisdiction in New York. The underlying lawsuit stemmed from a car accident in Virginia. Both Ford and Goodyear were sued. Neither the car or the tire were made or sold in New York:

Aybar [the New York resident who drove the car] purchased the vehicle in New York from a third party. Ford did not sell the vehicle in this state in the first instance, nor did Ford design or manufacture the vehicle here. Similarly, Goodyear designed, manufactured, and initially sold the tire in other states. It is undisputed that Ford was incorporated in Delaware and maintains its principal place of business in Michigan and that Goodyear was incorporated and has its principal place of business in Ohio. At all relevant times, Ford and Goodyear were registered with the New York Secretary of State as foreign corporations authorized to do business in this state and had appointed in-state agents for service of process in accordance with the Business Corporation Law. * * *

We have never conflated statutory consent to service with consent to general jurisdiction, and the fact remains that, under existing New York law, a foreign corporation does not consent to general jurisdiction in this state merely by complying with the Business Corporation Law’s registration provisions. Aybar v Aybar, 2021 NY Slip Op 05393, Ct App 10-7-21

 

, ,

SUPREME COURT ERRONEOUSLY PRECLUDED PLAINTIFF’S TREATING PHYSICIAN’S TESTIMONY AND THE ADMISSION OF MEDICAL RECORDS IN THIS TRAFFIC ACCIDENT CASE; PLAINTIFF’S MOTION TO SET ASIDE THE DEFENSE VERDICT SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s motion to set aside the defense verdict in this traffic accident case should have been granted. The trial court had erroneously precluded some of the testimony of one of plaintiff’s treating physicians and the admission of another treating physician’s medical records. The defendant had waived any objection to the records by failing to object after service of plaintiff’s notice of intention to enter the documents:

At the trial on the issue of damages, the plaintiff called one of her treating physicians, Irving Friedman, as a witness. The Supreme Court erred in granting the defendant’s application to preclude Friedman’s testimony concerning the cervical and thoracic regions of the plaintiff’s spine based upon a conceded error Friedman made wherein he misidentified the MRI of the plaintiff’s spine … . Under the circumstances of this case, any defects in Friedman’s opinions or the foundations on which those opinions are based “should go to the weight to be accorded that evidence by the trier of fact, not to its admissibility in the first instance” … .

In addition, the Supreme Court erred in precluding Friedman’s testimony regarding future treatment and possible need for future surgery, as Friedman had addressed these issues in his medical reports … .

… [T]he Supreme Court erred in precluding the admission of the medical records of another of the plaintiff’s treating physicians, Rubin Ingber, under the business records exception to the hearsay rule. The defendant waived his right to any objection to the admission of the records as business records, as he failed to timely object after having been served with the plaintiff’s notice of her intention to enter the documents into evidence pursuant to CPLR 3122- … . Benguigui v Racer, 2021 NY Slip Op 05318, Second Dept 10-6-21

 

, ,

THERE WAS A QUESTION OF FACT WHETHER THE PLAINTIFF’S FAILURE TO INCLUDE DEFENDANT IN THE ORIGINAL FORECLOSURE PROCEEDING WAS THE RESULT OF “WILFUL NEGLECT;” THEREFORE, PURSUANT TO RPAPL 1523, DEFENDANT’S “WILFUL-NEGLECT” AFFIRMATIVE DEFENSE IN THIS REFORECLOSURE ACTION SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s affirmative defense to the reforeclosure should not have been dismissed. Plaintiff had not named defendant in its original foreclosure action, apparently because a quitclaim deed adding defendant to the title was not discovered in the title search. Defendant demonstrated there had been a prior foreclosure action in which defendant had been named as a party. Therefore, there was a question of fact whether the failure to name defendant in the original foreclosure action was the result of “wilful neglect:”

To prevail in a reforeclosure action, the plaintiff must demonstrate that the defect in the original foreclosure action “was not due to fraud or wilful neglect of the plaintiff and that the defendant or the person under whom he claims was not actually prejudiced thereby” (RPAPL 1523[2] [emphasis added]).

Pursuant to the language of RPAPL 1523 … the plaintiff had the burden of demonstrating … both that the defect in the underlying foreclosure action was not the result of fraud or the wilful neglect of the foreclosure plaintiff, and that the defect did not prejudice the defendant (see RPAPL 1523[1], [2]). * * *

Contrary to the plaintiff’s contention, the evidence of the prior foreclosure action in which the defendant was named as a party raised a triable issue of fact as to whether the plaintiff’s failure to name her as a defendant in the underlying foreclosure action was the result of “wilful neglect” (RPAPL 1523[2] …). U.S. Bank N.A. v Lomuto, 2021 NY Slip Op 05363, Second Dept 10-6-21

 

,

DEFENDANT TENANT CLOSED ITS BUSINESS AND ABANDONED THE LEASED PROPERTY DUE TO THE COVID PANDEMIC; PLAINTIFF LANDLORD TOOK POSSESSION OF THE PROPERTY AND CHANGED THE LOCKS; DEFENDANT WAS ENTITLED TO DISCOVERY TO DETERMINE WHETHER PLAINTIFF ACCEPTED SURRENDER OF THE PREMISES AND THE APPROPRIATE AMOUNT OF DAMAGES (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined defendant was entitled to discovery in this action on a commercial lease. Defendant closed its furniture business due to the COVID pandemic and abandoned the leased property. Plaintiff took possession of the property and changed the locks. Therefore questions remained concerning whether plaintiff accepted surrender of the property and whether the accelerated rent amounted to a penalty:

Generally, a tenant is relieved of its obligation to pay full rent due under a lease where it surrenders the premises before expiration of the term and the landlord accepts its surrender … . A surrender by operation of law may be inferred from the conduct of the parties where “the parties to a lease both do some act so inconsistent with the landlord-tenant relationship that it indicates their intent to deem their lease terminated” … . “Such a surrender and acceptance severs the relationship between the parties upon the creation of an estate inconsistent with the prior tenant’s rights under the lease” … . Further, “conduct by the landlord which [falls] short of an actual reletting but which indicate[s] the landlord’s intent to terminate the lease and use the premises for his [or her] own benefit” may evince an intent to accept a tenant’s surrender of the premises … .

… [W]hile plaintiff had no duty to mitigate damages …, any actions it may have taken to offset the rent owed by defendants are relevant to determining the amount of damages … . Thus … the discovery sought by defendants is relevant to the issues presented in plaintiff’s motion for summary judgment … . … [B]ecause plaintiff seeks accelerated rent constituting liquidated damages … , defendants should have been afforded an opportunity to obtain information regarding whether the undiscounted accelerated rent amount was disproportionate to plaintiff’s actual losses and thus an enforceable penalty … . University Sq. San Antonio, Tx. LLC v Mega Furniture Dezavala, LLC, 2021 NY Slip Op 05192, Fourth Dept 10-1-21