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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

 

ALTHOUGH THE INITIAL COMPLAINT WAS FILED BUT NEVER SERVED, THE CAUSES OF ACTION IN THE COMPLAINT WERE TIMELY INTERPOSED AND THERE WAS NO NEED TO APPLY THE RELATION-BACK DOCTRINE TO THE AMENDED COMPLAINT (CT APP).

The Court of Appeals, over an extensive dissenting opinion, held, in a brief memorandum, that the claims were timely asserted in a complaint which was filed but never served. The amended complaint included the same claims. Therefore the relation-back doctrine did not apply. The claims should not have been dismissed under CPLR 306-b because the defendants waived that objection:

… [W]e … conclude that plaintiff’s first and second causes of action should be reinstated. Those claims, asserted in identical form in both the original and amended complaints, were timely interposed when plaintiff filed the original summons and complaint, i.e., “when the action [was] commenced” (see CPLR 203 [c]; 304 [a]). The relation-back doctrine is therefore inapplicable (see CPLR 203 [f]). Although plaintiff failed to serve the original complaint, on this record, the claims should not have been dismissed under CPLR 306-b because defendants did not properly raise such an objection and thus waived it (see CPLR 320 [b]; 3211 [e]).

From the dissent:

Defendants each moved to dismiss the complaint—referring to the amended complaint—under CPLR 3211 (a) (5) and (7), claiming, amongst other things, that the first and second causes of action are untimely … . Plaintiff opposed the motion, asserting that these causes of action were timely interposed based on the filing of the unserved complaint. In its reply, the [defendant] requested dismissal of the unserved complaint pursuant to CPLR 306-b for lack of service within the statutory time period.

… [P]laintiff responded by filing a motion under CPLR 306-b to extend the time to file the unserved complaint and deem it timely served nunc pro tunc. * * *

Supreme Court,  … denied plaintiff’s CPLR 306-b motion, and … granted defendants’ motions to dismiss and dismissed “the complaint” with prejudice. The Appellate Division affirmed … .. The dispositive point of contention … was whether the first two causes of action were timely … . Vanyo v Buffalo Police Benevolent Assn., Inc., 2019 NY Slip Op 08980, CtApp 12-17-19

 

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CPLR 3122 DOES NOT REQUIRE THE STATE COMPTROLLER TO ACQUIRE PATIENT AUTHORIZATIONS BEFORE SUBMITTING SUBPOENAS FOR MEDICAL RECORDS IN CONNECTION WITH AUDITS OF PRIVATE HEALTHCARE PROVIDERS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, determined that the Comptroller of the State of New York, in auditing private health care providers, has the power to subpoena medical records without patient authorizations:

The Comptroller of the State of New York has a constitutional and statutory duty to audit payments of state money, including payments to private companies that provide health care to beneficiaries of a state insurance program. Here, the Comptroller carried out that obligation by means of investigatory subpoenas duces tecum directed to a medical provider, seeking patients’ records. We hold that CPLR 3122 (a) (2) does not require that the Comptroller’s subpoenas be accompanied by written patient authorizations, as the requirements set out in that paragraph apply only to subpoenas duces tecum served after commencement of an action. Matter of Plastic Surgery Group, P.C. v Comptroller of the State of N.Y., 2019 NY Slip Op 08979, CtApp 12-17-19

 

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TESTIMONY OF A DEFENSE WITNESS WHO IDENTIFIED PLAINTIFF AS THE PERSON FLEEING THE SCENE OF A CRIME SHOULD NOT HAVE BEEN PRECLUDED IN THIS FALSE ARREST AND MALICIOUS PROSECUTION ACTION; THE JURY WAS NOT INSTRUCTED ON THE CRITERIA FOR A TERRY STOP; PLAINTIFF’S JUDGMENT VACATED AND NEW TRIAL ORDERED (FIRST DEPT).

The First Department, vacating the plaintiff’s judgment and ordering a new trial in this false arrest and malicious prosecution action, determined that the testimony of the defense witness who identified plaintiff as fleeing the scene of a crime should not have been precluded. The name and address of the witness had been provided to plaintiff four years before the trial and the fact that she had since moved and did not want to disclose her new address to any party was not something the defense could control. In addition, the jury was given no guidance on the criteria for an alleged wrongful stop of the plaintiff by police (reasonable suspicion, not probable cause), despite the questions concerning the stop on the special verdict sheet:

The trial court improvidently exercised its discretion in precluding testimony from the witness who identified plaintiff to the police as an individual she had seen fleeing the scene of a crime. Defendants satisfied their discovery obligation by providing the witness’s last known address and telephone number during discovery, more than four years before trial. Thus, there could have been no surprise or prejudice warranting the preclusion … . While the witness subsequently moved, she declined to disclose her new address to any parties to the suit, a factor defendants could not control … . As defendants did not know her new address, they had no obligation under CPLR 3101(h). Nor should defendants have been sanctioned for the fact that the wtness did not wish to discuss the case with plaintiff’s counsel when counsel called her. Notably, plaintiff’s counsel did not attempt to contact the witness until two months before trial and did not attempt to obtain a nonparty deposition of the witness during discovery. Defendant offered to have the witness further confirm these facts, under oath and outside the presence of the jury. Under these circumstances, the trial court improvidently exercised its discretion in ordering a hearing at which defendants’ trial attorney would be subject to questioning by plaintiff’s trial attorney, and precluding the witness’s testimony when defense counsel declined to participate in such a hearing. Given that the witness would have offered highly relevant and non-cumulative trial testimony, the error was not harmless … .

It was error to include on the special verdict sheet a questions as to a wrongful stop (Terry v Ohio, 392 US 1 [1968]), because there was no charge given instructing the jury on the legal standard that must be applied in resolving those claims. The jury was never told that a stop is improper if the detaining officer does not have “reasonable suspicion” that the detainee committed a crime, which is less demanding than the “probable cause” standard applicable to the malicious prosecution claims … . That the jury sent a note requesting clarification on the question indicated its awareness of the lack of guidance …. .  Onilude v City of New York, 2019 NY Slip Op 08925, First Dept 12-12-19

 

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