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VENUE FOR THIS HYBRID ARTICLE 78/DECLARATORY JUDGMENT ACTION SEEKING TO ANNUL A TOWN LOCAL LAW WHICH CREATED A WILDLIFE OVERLAY DISTRICT IS THE COUNTY IN WHICH THE TOWN IS LOCATED PURSUANT TO TOWN LAW SECTION 66 (1) (FOURTH DEPT).

The Fourth Department, in a full-fledged opinion by Justice DeJoseph, determined Supreme Court properly found that Orleans County, not Niagara County, was the correct venue for this hybrid Article 78/declaratory judgment action seeking to invalidate a Town of Shelby Local Law creating a wildlife refuge overlay district, and further seeking to annul the Town Board’s negative declaration under the State Environmental Quality Review Act (SEQRA). The legal analysis is too detailed to be fully summarized here:

The primary issue raised on this appeal involves the interplay between three statutory provisions concerning venue, i.e., CPLR 504 (2), CPLR 506 (b), and Town Law § 66 (1) and, ultimately, whether Supreme Court properly granted the motion of respondents-defendants (respondents) to transfer venue of this hybrid CPLR article 78 proceeding and declaratory judgment action from Niagara County to Orleans County. We conclude that the court properly transferred venue pursuant to Town Law § 66 (1). …

Town Law § 66 (1) provides that “[t]he place of trial of all actions and proceedings against a town or any of its officers or boards shall be the county in which the town is situated.”

We conclude that Town Law § 66 applies and, as such, the proper venue in the instant action is Orleans County rather than Niagara County. Matter of Zelazny Family Enters., LLC v Town of Shelby, 2019 NY Slip Op 09124, Fourth Dept 12-20-19

 

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AN ORDER ADDRESSING WHETHER DOCUMENTS SOUGHT IN DISCOVERY ARE PRIVILEGED IS APPEALABLE AS OF RIGHT (FOURTH DEPT).

The Fourth Department, reversing (modifying) an order concerning whether documents sought in discovery were privileged, noted that the order was appealable as of right:

During discovery, a dispute arose over allegedly privileged documents that plaintiff withheld or redacted. In its privilege logs, plaintiff asserted that many of the documents were protected from disclosure on three grounds, i.e., that they were material prepared in anticipation of litigation (see CPLR 3101 [d] [2]), attorney work product (see CPLR 3101 [c]), or protected by the attorney-client privilege (see CPLR 4503 [1]). Plaintiff asserted that a few documents were not discoverable on the sole basis that they were materials prepared in anticipation of litigation. Campany and the Travelers defendants separately moved, inter alia, to compel plaintiff’s disclosure of various documents or, in the alternative, for an in camera review of the documents. Plaintiff moved for, among other things, a protective order, contending that all communications involving attorneys or litigation experts on and after October 24, 2016 were presumptively privileged because the Travelers defendants and plaintiff contemplated litigation at that time. Supreme Court denied the Travelers defendants’ motion, denied in part Campany’s motion, and granted plaintiff’s motion by, as relevant here, ordering that all documents of plaintiff created on and after October 24, 2016 were not discoverable because they were material prepared in anticipation of litigation. Campany and the Travelers defendants appeal.

Initially, we reject plaintiff’s contention that the order is not appealable. CPLR 5701 (a) (2) (v) provides that, with limited exceptions, which are not applicable here, an appeal may be taken to this Court as of right from an order where the motion it decided was made upon notice and it “affects a substantial right.” An order granting a protective order and precluding discovery of numerous documents affects a substantial right of Campany and the Travelers defendants, and the order is thus appealable as of right … . John Mezzalingua Assoc., LLC v Travelers Indem. Co., 2019 NY Slip Op 09157, Fourth Dept 12-20-19

 

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CONTINUOUS REPRESENTATION DOCTRINE APPLIED TO AN ENGINEERING FIRM HIRED TO OVERSEE AN HVAC INSTALLATION PROJECT; THE THREE-YEAR NEGLIGENCE STATUTE OF LIMITATIONS WAS TOLLED BY THE CONTINUOUS REPRESENTATION DOCTRINE AND THE ACTION WAS TIMELY (FIRST DEPT).

The First Department determined the negligence action against Skyline, an engineering firm hired to inspect an on-going HVAC (heating, ventilation, air conditioning) installation, was not time-barred because the continuous representation doctrine applied to toll the accrual of the limitations period:

Plaintiff commenced this action in 2016 alleging that it retained Skyline, an engineering firm, to perform “special inspection” services for “Phase I” of an HVAC installation project, and that Skyline negligently performed those services and breached the contract. In support of its motion for summary judgment, Skyline demonstrated prima facie that it completed Phase I work under the contract in 2012 and that it was serving in a professional capacity as an engineering firm when it performed those services, so that the three-year limitations period applied (CPLR 214[6] … ). …

… [P]plaintiff demonstrated that the action is not time-barred because the continuous representation doctrine is applicable and tolled the accrual of the limitations period until 2014 … . Plaintiff submitted evidence showing Skyline provided special and progress inspection and testing services for “Remediation of Phase I” of the project, pursuant to a 2014 agreement. Although this work was completed under a separate agreement, Skyline rendered these services to correct the engineering and construction defects that it failed to identify during its Phase 1 inspection in 2012. Since Skyline continued to provide services in connection with Phase I in 2014, the action commenced in 2016 is timely under CPLR 214(6) … . Mutual Redevelopment Houses, Inc. v Skyline Eng’g, L.L.C, 2019 NY Slip Op 09112, First Dept 12-19-19

 

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ALTHOUGH THE JUDGMENTS WERE DOCKETED, THE DEBTOR’S NAME WAS MISSPELLED RENDERING THE LIEN INVALID; ALTHOUGH THE ISSUE WAS NOT RAISED BELOW, THE APPELLATE COURT CAN CONSIDER AN ISSUE OF LAW WHICH COULD NOT BE AVOIDED IF IT HAD BEEN RAISED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judgment creditor, Fischer, was not entitled to priority over the respondent wife, Mayrav, who had been awarded real property owned with her husband, Julius, in divorce proceedings. Although Fisher’s judgments were docketed, Julius’s surname was spelled incorrectly, rendering the lien invalid. Although this issue had not been raised below, the appellate court can address it because it is a question of law which could not have been avoided if it had been raised:

“CPLR 5203(a) gives priority to a judgment creditor over subsequent transferees with regard to the debtor’s real property in a county where the judgment has been docketed with the clerk of that county” ( … see CPLR 5203[a]). Pursuant to CPLR 5018(c), a judgment is docketed when the clerk makes an entry “under the surname of the judgment debtor . . . consist[ing] of . . . the name and last known address of [the] judgment debtor” … . “A judgment is not docketed against any particular property, but solely against a name” … . ” Once docketed, a judgment becomes a lien on the real property of the debtor in that county'” … .

… [I]t is undisputed that when the judgments were docketed, Julius’s surname was spelled incorrectly. Because the judgments were not docketed under the correct surname, no valid lien against Julius’s interest in the subject property was created … . Therefore, Fischer was not entitled to a determination that his interest in the subject property was superior to that of Mayrav, whose interest “vest[ed] upon the judgment of divorce” … . Although Mayrav failed to argue in the Supreme Court that Fischer did not have a valid lien on the subject property in light of the undisputed fact that Julius’s surname was misspelled, that issue can be raised for the first time on appeal because it is one of law which appears on the face of the record and could not have been avoided if it had been raised at the proper juncture … . Accordingly, that branch of the petition which sought a determination that Fischer’s interest in the subject property was superior to that of Mayrav should have been denied. Matter of Fischer v Chabbott, 2019 NY Slip Op 09002, Second Dept 12-18-19

 

PLAINTIFF WAS ENTITLED TO A SECOND EXTENSION OF TIME TO SERVE THE SUMMONS AND COMPLAINT IN THE INTEREST OF JUSTICE; DEFENDANT WAS ESTOPPED FROM CLAIMING HE RESIDED AT AN ADDRESS DIFFERENT FROM THE ADDRESS ON FILE WITH THE DEPARTMENT OF MOTOR VEHICLES (SECOND DEPT).

The Second Department determined plaintiff was properly granted a second extension of time, in the interest of justice, to serve the summons and complaint. The court noted that defendant Ewing was estopped from contending his address was different from the address indicated in the Department of Motor Vehicles; (DMV’s) records:

Ewing maintains that he should have been served at an address which differed from the Strauss Street address listed on the police report, as well as the Atlantic Avenue address and the Georgia address. However, a search of the DMV records conducted on June 23, 2017, more than six weeks after the traverse hearing, reflected that the Atlantic Avenue address, where the plaintiff had attempted to effectuate service, was the current documented address for Ewing. Since the record demonstrates that Ewing failed to notify the DMV of his change of residence, as required by Vehicle and Traffic Law § 505(5), he was estopped from raising a claim of defective service … .

Furthermore, we note that “the more flexible interest of justice’ standard accommodates late service that might be due to mistake, confusion, or oversight, so long as there is no prejudice to the defendant” …  Here, the plaintiff demonstrated that there was no demonstrable prejudice to Ewing, particularly in light of evidence that he had actual notice of the action … . Indeed, the record indicates that Ewing served an answer to the complaint in April 2015, shortly after the expiration of the 120-day period for service … . Mighty v Deshommes, 2019 NY Slip Op 08996, Second Dept 12-18-19

 

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THE INSURER IN THIS PERSONAL INJURY CASE DID NOT MEET ITS HEAVY BURDEN TO DEMONSTRATE ITS INSURED’S NON-COOPERATION SUCH THAT THE INSURER WAS NOT OBLIGATED TO INDEMNIFY THE INSURED; CRITERIA EXPLAINED (SECOND DEPT).

The Second Department determined the defendant insurer, Utica. did not meet its heavy burden to demonstrate its insured’s (J & R’s) non-cooperation such that the insurer was entitled to a default judgment declaring that it is not obligated to indemnify J & R in the underlying personal injury action in which the injured plaintiff was awarded nearly $700,000. Despite numerous scheduled depositions, J & R’s principal, Singh, never appeared to be deposed and his answer was ultimately stricken:

“To effectively deny coverage based upon lack of cooperation, an insurance carrier must demonstrate (1) that it acted diligently in seeking to bring about the insured’s cooperation, (2) that the efforts employed by the insured were reasonably calculated to obtain the insured’s cooperation, and (3) that the attitude of the insured, after his or her cooperation was sought, was one of willful and avowed obstruction” … . ” [M]ere efforts by the insurer and mere inaction on the part of the insured, without more, are insufficient to establish non-cooperation'” … .

Here, Utica failed to meet its “heavy” burden of demonstrating J & R’s non-cooperatin … . In support of its motion, Utica established that between January 2009 and April 2009, more than one year before J & R’s answer was stricken, it made diligent efforts, through written correspondence, numerous telephone calls, and visits to Singh’s home, that were reasonably calculated to bring about J & R’s cooperation. Utica’s submissions, however, failed to demonstrate that the conduct of J & R constituted “willful and avowed obstruction” … . Foddrell v Utica First Ins. Co., 2019 NY Slip Op 08991, Second Dept 12-18-19

 

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THE CRITERIA FOR PRE-ANSWER DISMISSAL OF THE COMPLAINT BASED UPON DOCUMENTARY EVIDENCE AND IN THE INTEREST OF JUDICIAL ECONOMY WERE NOT MET (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant’s pre-answer motion to dismiss the complaint alleging the breach of a letter of intent (LOI) should not have been granted. The evidence submitted by the defendant was not “documentary” evidence within the meaning of CPLR 3211 and the defendant did not demonstrate the complaint should be dismissed in the interest of judicial economy:

… [T]he emails and the unsigned documents relied on by the Supreme Court to conclude that the LOI was an unenforceable agreement to agree were not essentially undeniable, and did not constitute documentary evidence … . Furthermore, the LOI itself contained all the essential elements of a lease, including the area to be leased, the duration of the lease, and the price to be paid … . Moreover, nothing in the LOI stated that it was not binding, and its language did not conclusively establish that the parties did not intend to be bound by it … . Accordingly, the court should have denied that branch of the defendant’s motion which was pursuant to CPLR 3211(a)(1) to dismiss the complaint.

… A court is permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7), and then the question becomes whether the plaintiff has a cause of action, not simply whether a cause of action is stated … . Unless the defendant can demonstrate that there is no factual issue as claimed by the plaintiff, the motion to dismiss should be denied … . Here, the defendant failed to demonstrate that there was no factual issue regarding whether the LOI can be construed as a binding contract. Accordingly, that branch of the defendant’s motion which was to dismiss the complaint pursuant to CPLR 3211(a)(7) should have been denied. S & J Serv. Ctr., Inc. v Commerce Commercial Group, Inc., 2019 NY Slip Op 09049, Second Dept 12-18-19

 

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PLAINTIFF WAS ASSAULTED BY ANOTHER PATIENT IN DEFENDANT LONG-TERM CARE FACILITY; THE MEDICAL RECORDS OF THE ASSAILANT, WHO WAS NOT A PARTY, WERE PRIVILEGED AND NOT DISCOVERABLE; THE INCIDENT REPORTS PERTAINING TO THE ASSAULT WERE NOT SHOWN BY THE DEFENDANT TO BE PRIVILEGED PURSUANT TO THE PUBLIC HEALTH LAW AND WERE THEREFORE DISCOVERABLE (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that the assailant’s medical records were privileged, but any incident reports pertaining to the assault were not. Plaintiff alleged she was attacked while a long-term resident of defendant long-term health care facility. The assailant in this third-party assault action was not made a party:

We agree with the Supreme Court’s determination denying that branch of the plaintiffs’ motion which sought disclosure of the assailant’s admission chart. The assailant is not a party to the action, his medical records were subject to the physician-patient privilege, and he has not waived that privilege … .

However, the Supreme Court should have granted that branch of the plaintiffs’ motion which sought disclosure of all incident reports related to the assault. Pursuant to Education Law § 6527(3), certain documents generated in connection with the “performance of a medical or a quality assurance review function,” or which are “required by the Department of Health pursuant to Public Health Law § 2805-l,” are generally not discoverable … . The defendant, as the party seeking to invoke the privilege, has the burden of demonstrating that the documents sought were prepared in accordance with the relevant statutes … . Here, the defendant merely asserted that a privilege applied to the requested documents without making any showing as to why the privilege attached. Accordingly, the incident reports related to the assault were subject to disclosure. DeLeon v Nassau Health Care Corp., 2019 NY Slip Op 08989, Second Dept 12-18-19

 

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THE INSURANCE LAW REQUIRED SUBMITTING THE DISPUTE BETWEEN TWO CARRIERS TO ARBITRATION; THEREFORE SUPREME COURT DID NOT HAVE SUBJECT MATTER JURISDICTION OVER THE MATTER; THE LACK OF SUBJECT MATTER JURISDICTION CAN BE RAISED AT ANYTIME (SECOND DEPT).

The Second Department, reversing Supreme Court in this traffic accident case, determined the Insurance Law required that the matter involving a coverage dispute between two insurance carriers (Repwest and Hereford) be submitted to arbitration. Therefore Supreme Court did not have subject matter jurisdiction:

The defendants … were passengers in the livery vehicle and no-fault benefits were paid on their behalf by Hereford. Repwest alleged that there is no coverage for the subject incident because it was not an accident, but rather the result of an intentional act/fraudulent scheme. Thereafter, Hereford interposed an answer to the complaint and asserted a counterclaim against Repwest, among others, for loss transfer pursuant to Insurance Law § 5105(a) … .

Pursuant to Insurance Law § 5105(b), “[t]he sole remedy of any insurer or compensation provider to recover on a claim arising pursuant to subsection (a) hereof, shall be the submission of the controversy to mandatory arbitration pursuant to procedures promulgated or approved by the superintendent” … . Contrary to Hereford’s contention, since its counterclaim is for loss transfer pursuant to section 5105(a), the counterclaim is subject to mandatory arbitration and the Supreme Court had no subject matter jurisdiction over the counterclaim … .

Although Repwest did not seek dismissal of the counterclaim in the Supreme Court, “a court’s lack of subject matter jurisdiction is not waivable, but may be [raised] at any stage of the action, and the court may, ex mero motu [on its own motion], at any time, when its attention is called to the facts, refuse to proceed further and dismiss the action” … . Repwest Ins. Co. v Hanif, 2019 NY Slip Op 09047, Second Dept 12-18-19

 

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NEW YORK COURTS DO NOT HAVE THE AUTHORITY TO ENJOIN A TENNESSEE MORTGAGE FORECLOSURE ACTION (FIRST DEPT).

The First Department, reversing Supreme Court, determined New York did not have the authority to decide issues affecting title to real property in another state, here Tennessee:

Plaintiff financed its purchase of the property in 2007 with a note secured by a deed of trust. In 2015, plaintiff and defendant trustee entered into a loan modification agreement (LMA) that, inter alia, bifurcated the original loan and allowed Note B to be forgiven if a subsequent sale or refinancing was insufficient to pay the principal and interest thereon. The LMA is governed by Tennessee law but requires plaintiff to submit to the jurisdiction of the courts of this State. It does not similarly require defendant-appellants to submit to the jurisdiction of this State.

Defendant trustee advertised a nonjudicial foreclosure sale (Tenn Code Ann 35-5-101) based on plaintiff’s apparent failure to pay the entire amount due upon maturity, and its failure to cause all rents to be deposited into a lockbox. Plaintiff sued, alleging, among other things, breach of the LMA provision prohibiting the trustee from unreasonably withholding consent to refinancing.

“[T]he courts of one State may not decide issues directly affecting title to real property located in another State” … . Although a court with personal jurisdiction over the parties may adjudicate their rights with respect to foreign realty … , plaintiffs cite no authority allowing an out-of-state foreclosure sale to be enjoined … . Contrary to plaintiff’s argument, its one-sided agreement to submit to personal jurisdiction in New York does not confer upon the New York courts a contractual right to enjoin an out-of-state foreclosure sale. Clark Tower, LLC v Wells Fargo Bank, N.A., 2019 NY Slip Op 08975, First Dept 12-17-19

 

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