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MOTION TO VOLUNTARILY DISCONTINUE THE FORECLOSURE ACTION WAS PROPERLY GRANTED WITHOUT PREJUDICE (THIRD DEPT).

he Third Department determined plaintiff’s motion to voluntarily discontinue the foreclosure action (CPLR 3217(b)) was properly granted without prejudice. The litigation was still in the early stages and, although defendant had interposed a counterclaim, defendant did not move for a default judgment within a year and thereby abandoned the counterclaim:

Although this action had been pending for approximately three years at the time of the motion, the litigation itself remained in its early stages. In addition, the record confirms that defendant never sought default nor moved to compel discovery. Furthermore, the parties had not yet participated in the mandatory settlement conference (see CPLR 3408). Indeed, determination of plaintiff’s motion was the first occasion where Supreme Court was called upon to intervene in this action. Although defendant alleged that she would sustain prejudice if her discovery went unanswered, Supreme Court correctly determined that there was no evidence of prejudice to defendant or other improper consequences flowing from the discontinuance, as the parties can engage in necessary discovery in a subsequent foreclosure action … . …

… [T]he interposition of a counterclaim in and of itself is not dispositive with respect to the discontinuance. The discontinuance must work a particular prejudice against a defendant. Here, defendant is not prejudiced, as she will be able to assert her counterclaim in a subsequent foreclosure action. Although defendant argues that “one’s home is an interest that is unquantifiable,” she will be able to continue to reside in the mortgaged premises pending another action and will have the same rights available to her as were in the discontinued action … . Green Tree Servicing LLC v Shiow Fei Ju, 2020 NY Slip Op 02307, Third Dept 4-16-20

 

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RESPONDENT WAIVED HIS RIGHT TO ARBITRATE HIS TERMINATION PURSUANT TO THE COLLECTIVE BARGAINING AGREEMENT BY BRINGING A BREACH OF CONTRACT ACTION SEEKING THE SAME RELIEF ON THE SAME GROUNDS, AS WELL AS DAMAGES (THIRD DEPT).

The Third Department, reversing Supreme Court, determined respondent (Ferreira) had waived his right to arbitrate his discharge from employment as a teacher pursuant to the collective bargaining agreement (CBA) because he sought an action at law seeking the same relief on the same grounds, as well as damages:

“Generally, when addressing waiver, courts should consider the amount of litigation that has occurred, the length of time between the start of the litigation and the arbitration request, and whether prejudice has been established” … . Moreover, the Court of Appeals has found no waiver where the ultimate objective of multiple procedures is the same, but the grounds urged for relief are discrete … .

Here, Ferreira waived his right to arbitrate because he chose to pursue an action at law asserting virtually the same grounds for relief and remedies sought in the arbitration. His notice of claim, alleging breach of contract, was filed approximately three months prior to his request for arbitration. An action was thereafter commenced, which was still pending at the time of oral argument, and, “[b]y commencing an action at law involving arbitrable issues, [Ferreira] waived whatever right [he] had to arbitration” … . Although use of litigation to preserve the status quo while awaiting arbitration does not effectuate waiver, Ferreira did not merely seek an equitable relief; rather, he sought monetary damages and other affirmative relief as a result of the termination of his employment and petitioner’s alleged violation of the CBA … . Matter of New Roots Charter Sch. (Ferreira), 2020 NY Slip Op 02223, Third Dept 4-9-20

 

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PETITIONER HAD THE BURDEN TO PROVE RESPONDENT WAS SERVED; THE SUPPORT MAGISTRATE REVERSED THE BURDEN OF PROOF; NEW HEARING ORDERED (SECOND DEPT).

The Second Department, ordering a new hearing, determined the Support Magistrate did not apply the correct standard to whether respondent (father) was served with the petition seeking an order of filiation and child support. The burden of proof of proper service was on mother:

The Support Magistrate did not apply the correct standard in weighing the evidence adduced at the hearing. “It is well established that it is the plaintiff [or the petitioner] who bears the ultimate burden of proving by preponderating evidence that jurisdiction over the defendant [or the respondent] was obtained” … . The plaintiff or the petitioner may sustain that burden, inter alia, by introducing the affidavit of service and the testimony of the process server, or evidence demonstrating that the process server is unavailable or that diligent efforts were made to locate the process server to no avail … . Here, the mother, as the party who commenced this proceeding, was the party who bore the burden of proving that jurisdiction was obtained over the father. At the conclusion of the hearing, however, the Support Magistrate denied that branch of the father’s motion which was pursuant to CPLR 5015(a)(4) to vacate the order of support, finding that he failed to credibly meet his burden of proving that he was not served with the petition … . Matter of Kathleen T.K. v Eric C.S., 2020 NY Slip Op 02266, Second Dept 4-9-20

 

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FAMILY COURT SHOULD HAVE REOPENED THE NEGLECT HEARING WHEN MOTHER ARRIVED AT COURT SHORTLY AFTER SUMMATIONS (SECOND DEPT).

The Second Department, reversing Family Court, determined Family Court should have reopened the neglect hearing when mother arrived just after summations:

The Family Court conducted a fact-finding hearing over the course of several days, during which the mother was present, and the maternal grandmother and a DSS caseworker testified. On the fifth day of the hearing, the mother was late in arriving to court because she allegedly was traveling by bus from Georgia to New York, and the bus was delayed. The mother’s counsel notified the court of the mother’s transportation issue, and of her intention to testify, and requested an adjournment. The court denied the adjournment request and directed that the hearing proceed as scheduled. The mother arrived shortly after summations, but the court did not reopen the hearing to afford the mother the opportunity to testify.

Following the hearing, the Family Court found that the mother neglected the child. …

A finding of neglect constitutes “a permanent and significant stigma” which might indirectly affect the mother’s status in future proceedings … . The Family Court has the authority to reopen a Family Court Act article 10 proceeding to allow a party to present additional testimony at a fact-finding hearing … .

Under the circumstances of this case, the Family Court should have exercised its discretion to reopen the fact-finding hearing to afford the mother the opportunity to present her case. Matter of Katie P.H. (Latoya M.), 2020 NY Slip Op 02265, Second Dept 4-9-20

 

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BECAUSE MOTHER’S ATTORNEY APPEARED MOTHER WAS NOT IN DEFAULT; FAMILY COURT’S REFUSAL TO ADMIT DOCUMENTARY EVIDENCE OFFERED BY MOTHER’S ATTORNEY DEPRIVED MOTHER OF DUE PROCESS (SECOND DEPT).

The Second Department, reversing Family Court, determined mother was not in default because her attorney appeared and the court’s refusing to admit documentary evidence offered by mother’s attorney deprived mother of her right to due process of law:

The mother failed to appear … when continued fact-finding on the permanent neglect petition was scheduled, and an adjournment was granted. When the mother failed to appear on the next hearing date, … the mother’s counsel stated that she would be participating in the proceeding on the mother’s behalf and sought to admit into evidence certain documents. … [T]he mother was, therefore, not in default with respect to the fact-finding hearing … .

The Family Court’s refusal to permit the mother’s counsel to admit into evidence the documentary evidence on behalf of the mother based upon the mother’s failure to appear … , violated the mother’s right to due process. ” A parent has a right to be heard on matters concerning her [or his] child and the parent’s rights are not to be disregarded absent a convincing showing of waiver'” … . Matter of Amira W.H. (Tamara T.H.), 2020 NY Slip Op 02264, Second Dept 4-9-20

 

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GENERAL BUSINESS LAW 349 DECEPTIVE BUSINESS PRACTICES CAUSE OF ACTION IN THE CONTEXT OF A RENT STABILIZATION LAW (RSL) RENT-OVERCHARGE SUIT WAS PROPERLY DISMISSED (CT APP).

The Court of Appeals, over a partial dissent, determined the General Business Law 349 cause of action alleging deceptive business practices in the context of the Rent Stabilization Law (RSL) rent-overcharge suit was properly dismissed:

… General Business Law … , section 349 prohibits “deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state” … . We have held that this statute “cannot fairly be understood to mean that everyone who acts unlawfully, and does not admit the transgression, is being deceptive'” within the meaning of section 349 … . For purposes of this appeal, we assume without deciding that a claim may lie under General Business Law § 349 based upon a landlord’s alleged misrepresentation to the public that an apartment was exempt from rent regulation following deregulation in violation of the Rent Stabilization Law. Here, however, plaintiffs alleged only that defendants failed to admit that they violated the Rent Stabilization Law in deregulating plaintiffs’ apartments—three of which were, in fact, never deregulated—rather than any affirmative conduct that would tend to deceive consumers. Inasmuch as plaintiffs failed to allege more than “bare legal conclusions” … regarding the existence of consumer-oriented, deceptive acts … , their General Business Law claim was properly dismissed. Collazo v Netherland Prop. Assets LLC, 2020 NY Slip Op 02128, CtApp 4-2-20

 

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WHETHER THE SCHOOL PRINCIPAL RECEIVED COMPETENT REPRESENTATION AT HER DISCIPLINARY PROCEEDINGS BEFORE THE NYC DEPARTMENT OF EDUCATION WAS RELEVANT TO HER DECERTIFICATION PROCEEDINGS BEFORE THE NYS DEPARTMENT OF EDUCATION; THEREFORE THE MOTION TO QUASH THE SUBPOENA SEEKING THE ATTORNEY’S TESTIMONY SHOULD NOT HAVE BEEN GRANTED (THIRD DEPT).

The Third Department, reversing Supreme Court, determined that the motion to quash a subpoena seeking an attorney’s (Guerra’s) testimony in a teacher decertification proceeding should not have been granted. The attorney was seeking employment with the NYC Department of Education (NYCDOE) at the time she was representing the respondent school principal (Klingsberg) in disciplinary proceedings brought by the NYCDOE. The issue of whether respondent received competent representation in the disciplinary proceedings was relevant to whether those proceedings should be given collateral estoppel effect in the New York State Department of Education (SED) teacher decertification proceedings:

“[A] subpoena will be quashed only where the futility of the process to uncover anything legitimate is inevitable or obvious or where the information sought is utterly irrelevant to any proper inquiry” … . The party moving to quash bears “the burden of establishing that the subpoena should be [quashed] under such circumstances” … . * * *

… [W]hether Klingsberg was competently represented at that prior proceeding so as to warrant giving preclusive effect to its factual findings is very much in issue in this decertification proceeding and, given that Guerra has firsthand knowledge regarding her representation of Klingsberg at that prior proceeding, it cannot be said that “the information sought [from Guerra] is utterly irrelevant” to the decertification inquiry … . Rather, Guerra’s testimony is highly relevant to whether collateral estoppel will be applied in the pending decertification proceeding. For this reason, petitioners have not satisfied their burden of proof on their motion to quash the subpoena … . Matter of Board of Educ. of the City Sch. Dist. of the City of N.Y. v New York State Dept. of Educ., 2020 NY Slip Op 02140, Third Dept 4-2-20

 

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THE TORTIOUS INTERFERENCE WITH CONTRACT AND DEFAMATION CAUSES OF ACTION WERE NOT REFUTED BY DOCUMENTARY EVIDENCE AND WERE ADEQUATELY PLED (THIRD DEPT). ​

The Third Department, reversing (modifying) Supreme Court, determined that plaintiff had stated causes of action for tortious interference with contract and defamation and the actions should not have been dismissed on either the “documentary evidence” or “failure to state a cause of action” ground:

Turning first to CPLR 3211 (a) (1), a motion to dismiss pursuant to this provision “will be granted only if the documentary evidence resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff’s claim” … . What may be deemed “documentary evidence” for purposes of this subsection is quite limited. “Materials that clearly qualify as documentary evidence include documents . . . such as mortgages, deed[s], contracts, and any other papers, the contents of which are essentially undeniable” … . Here, Supreme Court relied upon the statements taken during defendant’s investigation, as well as its non-harassment policy. As plaintiff argues, even sworn affidavits have been held inadequate to meet this statutory standard, and defendant’s submissions here do not qualify as documentary evidence … . …

The grounds for dismissal under CPLR 3211 (a) (7) are also strictly limited; the court is not allowed to render a determination upon a thorough review of the relevant facts adduced by both parties, but rather is substantially more constrained in its review, examining only the plaintiff’s pleadings and affidavits … . …

To establish a claim for tortious interference with a contract, the plaintiff must allege “the existence of [his or her] valid contract with a third party, [the] defendant’s knowledge of that contract, [the] defendant’s intentional and improper procuring of a breach, and damages” … . Here, plaintiff’s complaint alleged that a valid contract existed between plaintiff and the distributor, that defendant intentionally spread “false, specious and salacious accusations against [p]laintiff,” and that such conduct “had no good faith or justifiable cause” and did not “protect an economic interest.” Liberally construing these allegations, as we must, taking all of the alleged facts as true, and giving plaintiff every favorable inference … , they do not fail to state a claim.

The defamation claim will ultimately require “proof that the defendant made ‘a false statement, published that statement to a third party without privilege, with fault measured by at least a negligence standard, and the statement caused special damages or constituted defamation per se'” … . Here, the complaint sets forth the particular words complained of and the damages plaintiff allegedly sustained … . Carr v Wegmans Food Mkts., Inc., 2020 NY Slip Op 02141, Third Dept 4-2-20

 

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PLAINTIFF BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304 AND DID NOT PRESENT NON-HEARSAY EVIDENCE OF STANDING IN THIS FORECLOSURE ACTION, CRITERIA EXPLAINED IN SOME DETAIL (SECOND DEPT).

The Second Department, in an extensive decision explaining the relevant issues and analysis in some depth, determined plaintiff bank did not demonstrate compliance with the notice requirements of Real Property Actions and Proceedings Law (RPAPL) 1304  did not demonstrate standing to bring the foreclosure action:

… [T]he plaintiff failed to submit an affidavit of mailing or proof of mailing by the United States Postal Service evidencing that it properly mailed notice to the defendant pursuant to RPAPL 1304. Instead, the plaintiff relied on an affidavit of Rashad Blanchard, who was employed as a loan analyst by the parent company of the plaintiff’s loan servicer, and copies of the purported notices. The plaintiff submitted only one letter that purported to constitute the statutorily required 90-day notice of default … . Although the letter contained the statement “sent via certified mail,” with a 20-digit number below it, no receipt or corresponding document issued by the United States Postal Service was submitted proving that the letter was actually sent by certified mail more than 90 days prior to commencement of the action. The plaintiff also failed to submit any documentary evidence that notice was sent by first-class mail. Further, Blanchard did not aver that the notice was sent in the manner required pursuant to RPAPL 1304, i.e., by certified mail and first-class mail. Moreover, since he did not aver that he personally mailed the notice, or that he was familiar with the mailing practices and procedures of American Home Mortgage Servicing, Inc., the entity that purportedly sent the notices, he did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed … . * * *

[Vice President] Reyes’s affidavit failed to establish a sufficient foundation for the admission of a business record pursuant to CPLR 4518(a) because, although he recited that the records upon which he relied were “regularly maintained by [the plaintiff] in the ordinary course of its business,” he “did not indicate that they were made by their author (or authors, whoever they might be) pursuant to an established procedure for the routine, habitual, systematic making of records that would qualify them as trustworthy accounts,” or that they “were the records regularly relied on in the business” … . Reyes also failed to indicate “that the record [was] made at or about the time of the event being recorded—essentially, that recollection [was] fairly accurate and the habit or routine of making the entries assured” … . …

… .[T]o the extent that Reyes’s purported knowledge of the date the plaintiff received the original note was based upon his review of unidentified business records maintained by the plaintiff, “[his] affidavit constituted inadmissible hearsay and lacked probative value” … . Deutsche Bank Natl. Trust Co. v Dennis, 2020 NY Slip Op 02039, Second Dept 3-25-20

 

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PLAINTIFF’S MOTION FOR A DIRECTED VERDICT SHOULD NOT HAVE BEEN GRANTED, CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s motion for a directed verdict should not have been granted and explained the criteria:

” A motion for judgment as a matter of law pursuant to CPLR 4401 may be granted where the trial court determines that, upon the evidence presented, there is no rational process by which the [trier of fact] could base a finding in favor of the nonmoving party'” … . “In considering such a motion, the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in light most favorable to the nonmovant'” … .

Here, the Supreme Court, in announcing its decision, stated that it expressly considered and relied on the defendants’ evidence. This was error, as it was improper for the court to consider, on a motion for a directed verdict made before the moving party had rested and the opposing party had an opportunity to present rebuttal evidence, the evidence introduced by the moving party … .

Thus, in the context of a motion for a directed verdict, the Supreme Court should not have accorded the defendants’ expert’s testimony more weight than that of the plaintiff’s expert. In determining a motion for a directed verdict, the trial court “must not engage in a weighing of the evidence, nor may it direct a verdict where the facts are in dispute, or where different inferences may be drawn or the credibility of witnesses is in question” … . Boriello v Loconte, 2020 NY Slip Op 02035, Second Dept 3-25-20

 

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