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PRODUCTION OF THE ORIGINAL NOTE AND ENDORSEMENTS WAS “MATERIAL AND NECESSARY” TO THE DETERMINATION WHETHER THE BANK HAS STANDING TO BRING THE FORECLOSURE ACTION, DEFENDANT’S MOTION TO COMPEL DISCOVERY SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s motion pursuant to CPLR 3124 to compel the bank in this foreclosure action to produce the original note and endorsements should have been granted. Defendant had challenged the bank’s standing to bring the foreclosure action and the production of the original note and endorsements was “material and necessary” to resolve the standing question:

It is undisputed that a copy of the underlying note was annexed to the complaint. However, it cannot be ascertained from the copy of the note provided by the plaintiff whether the separate page that bears the endorsement in blank was stamped on the back of the note, as alleged by the plaintiff, or on an allonge, and if on an allonge, whether the allonge was “so firmly affixed as to become a part thereof,” as required under UCC 3-202(2). Since the answers to these questions are “material and necessary” to the defense of lack of standing, the Supreme Court should have granted that branch of the defendant’s motion which was pursuant to CPLR 3124 to compel the plaintiff to produce the original note and endorsements … . Bayview Loan Servicing, LLC v Charleston, 2019 NY Slip Op 06463, Second Dept 9-11-19

 

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PROPERTY OWNER PROPERLY FOUND NEGLIGENT IN FAILING TO MOP UP TRACKED IN SNOW AND WATER IN THIS SLIP AND FALL CASE; DEFENDANT’S MOTION TO SET ASIDE THE VERDICT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department determined defendant property owner (a school) was properly found negligent in failing to mop up tracked in snow and water in this slip and fall case. Defendant’s motion to set aside the verdict should not have been granted:

Although a defendant is not required to “provide a constant remedy to the problem of water being tracked into a building during inclement weather, and has no obligation to cover all of its floors with mats or to continuously mop up all moisture resulting from tracked-in precipitation” … , a defendant may be held liable for an injury proximately caused by a dangerous condition created by water, snow, or ice tracked into a building if it either created the hazardous condition, or had actual or constructive notice of the condition and a reasonable time to undertake remedial action … . Here, evidence was presented at trial demonstrating that the defendant had actual notice of the wet condition in the area where the plaintiff fell approximately an hour before the accident, yet failed to remedy it. …

Accordingly, viewing the evidence in the light most favorable to the plaintiff, and affording her every favorable inference which may properly be drawn from the facts presented, there is a valid line of reasoning and permissible inferences could lead rational individuals to the jury’s conclusion that the defendant was negligent in failing to maintain the premises in a reasonably safe condition and that its negligence was a substantial factor in causing the plaintiff’s accident … .  Allen v Federation of Jewish Philanthropies of N.Y., 2019 NY Slip Op 06462, Second Dept 9-11-19

 

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THE PROCESS SERVER WAS AWARE DEFENDANT IN THIS FORECLOSURE ACTION WAS IN THE MILITARY; THE “AFFIX AND MAIL” METHOD OF SERVICE DID NOT OBTAIN JURISDICTION OVER DEFENDANT (SECOND DEPT).

The Second Department determined personal jurisdiction was not obtained over defendant in this foreclosure action. The process server, who used the “affix and mail” method of service, was aware defendant was in the military:

After the hearing, the Supreme Court determined that the plaintiff had not established personal jurisdiction over the defendant. Service pursuant to CPLR 308(4), known as “affix and mail” service, “may be used only where service under CPLR 308(1) or 308(2) cannot be made with due diligence'” … . “While the precise manner in which due diligence is to be accomplished is not rigidly prescribed, the requirement that due diligence be exercised must be strictly observed, given the reduced likelihood that a summons served pursuant to [CPLR 308(4)] will be received”… . A mere showing of several attempts at service at either a defendant’s residence or place of business may not satisfy the “due diligence” requirement before resort to affix and mail service … . ” [D]ue diligence’ may be satisfied with a few visits on different occasions and at different times to the defendant’s residence or place of business when the defendant could reasonably be expected to be found at such location at those times” … . …

According to the affidavit of service and the process server’s in-house work order sheet, however, the process server knew that the defendant was in active military service. Since the process server was aware that the defendant was engaged in active military service at the time the process server attempted service at the address, the process server’s four attempts at service prior to resorting to affix-and-mail service were not made when the defendant “could reasonably be expected to be found at such location” … . Mid-Island Mtge. Corp. v Drapal, 2019 NY Slip Op 06488, Second Dept 9-11-19

 

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JUDGE SHOULD NOT, SUA SPONTE, HAVE RAISED ISSUES ABOUT THE ADEQUACY OF SERVICE BY MAIL WHICH WERE NOT RAISED OR ADDRESSED BY THE PARTIES; DEFENDANTS’ MOTION TO DISMISS THE ORIGINAL COMPLAINT FOR LACK OF JURISDICTION SHOULD NOT HAVE BEEN GRANTED; AMENDED COMPLAINT, FOR WHICH LEAVE OF COURT WAS NOT SOUGHT, WAS A NULLITY (SECOND DEPT). ​

The Second Department, reversing (modifying) Supreme Court, determined that the judge should not have raised, sua sponte, issues not raised by the parties in granting defendants’ (the Wirths’) motion to dismiss the complaint for lack of personal jurisdiction. The process server filed an affidavit stating that the summons and complaint had been timely mailed to defendants. The affidavit did not state that the envelope was marked “personal and confidential” or that the envelope indicated it was from an attorney. There was no proof the envelope was not properly marked and the defendants had not raised these issues. The defendants merely asserted they never received the mailing. The Second Department also determined the amended complaint, adding additional parties, was a nullity because the court did not grant leave to amend:

Given that the Wirths argued that they did not receive the summons and complaint in the mail, the Supreme Court should not have determined, sua sponte, that jurisdiction was not acquired over the Wirths because the process server did not attest that the mailed copies of the summons and complaint were contained in an envelope bearing the legend “personal and confidential” and not indicating on the outside thereof that the communication is from an attorney or concerns an action against the person to be served (see CPLR 308[2] …). Courts are “not in the business of blindsiding litigants,” who expect the courts to decide issues on rationales advanced by the parties, not arguments that were never made … . By raising the CPLR 308(2) envelope requirement on its own, the court deprived the plaintiffs of the opportunity to show compliance with that requirement. …

CPLR 3025(a) provides that a “party may amend his [or her] pleading once without leave of court within twenty days after its service, or at any time before the period for responding to it expires, or within twenty days after service of a pleading responding to it.” A plaintiff’s failure to seek leave pursuant to CPLR 1003 to add a new defendant is a jurisdictional defect, and an amended complaint that is not filed in accordance with CPLR 1003 and 3025 is a legal nullity … . Hulse v Wirth, 2019 NY Slip Op 06483, Second Dept 9-11-19

 

DEFENDANT ALLEGED HE WAS NOT SERVED WITH THE SUMMONS AND COMPLAINT WITHIN 120 DAYS OF FILING AND PLAINTIFF DID NOT FILE AN AFFIDAVIT OF SERVICE WITH THE CLERK, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION PROPERLY GRANTED (SECOND DEPT).

The Second Department determined defendant’s motion to dismiss the complaint for lack of personal jurisdiction was properly granted. Defendant alleged he was not served with the summons and complaint within 120 days of filing and plaintiff had not filed an affidavit of service with the clerk of the court:

While the failure to timely file an affidavit of service with the clerk of the court as required by CPLR 308(4) may, in the absence of prejudice, be corrected by court order pursuant to CPLR 2004 … , in this case, the plaintiff failed to seek such relief, and the Supreme Court declined to extend this time sua sponte … . Accordingly, we agree with the court’s determination to grant that branch of his motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against him on the ground of lack of personal jurisdiction … . Zheleznyak v Gordon & Gordon, P.C., 2019 NY Slip Op 06536, Second Dept 9-11-19

 

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THE CONDITIONAL ORDER OF DISMISSAL WAS NOT AUTHORIZED BECAUSE ISSUE HAD NOT BEEN JOINED AT THE TIME THE ORDER WAS MADE; THE BANK’S MOTION TO VACATE THE CONDITIONAL ORDER IN THIS FORECLOSURE ACTION SHOULD HAVE BEEN GRANTED; AN UNAUTHORIZED SUPPLEMENTAL RECORD ON APPEAL TO WHICH THE PARTIES STIPULATED WAS NOT CONSIDERED (SECOND DEPT).

The Second Department determined the conditional order upon which dismissal of the complaint was based was not authorized because issue had not been joined at the time the order was made. Therefore the bank’s motion to vacate the conditional order in this foreclosure action should have been granted. However, because of the two year delay in moving to vacate the order, the bank is not entitled to interest, late charges, fees, costs and attorney’s fees incurred after the date of the 2014 conditional order. An unauthorized supplemental record on appeal, which was stipulated to by the parties, contained material that was not in the record and was not considered by the Second Department:

A pleading cannot be dismissed pursuant to CPLR 3216(a) “unless a written demand is served upon the party against whom such relief is sought’ in accordance with the statutory requirements, along with a statement that the default by the party upon whom such notice is served in complying with such demand within said ninety day period will serve as a basis for a motion by the party serving said demand for dismissal as against him for unreasonably neglecting to proceed'” … . While a conditional order of dismissal may have “the same effect as a valid 90-day notice pursuant to CPLR 3216” … , the conditional order here was defective in that it did not state that the plaintiff’s failure to comply with the notice will serve as a basis for a motion by the court to dismiss the complaint for failure to prosecute … . Additionally, it appears that the complaint was ministerially dismissed, without a motion, and without the entry of any formal order by the court dismissing the complaint … . U.S. Bank Natl. Assn. v Spence, 2019 NY Slip Op 06529, Second Dept 9-11-19

 

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HEARSAY STATEMENTS ATTRIBUTED TO PLAINTIFF’S DECEDENT IN THIS MEDICAL MALPRACTICE ACTION NOT ADMISSIBLE AS ADMISSIONS OR BUSINESS RECORDS; THE DEAD MAN’S STATUTE PROHIBITED TESTIMONY ABOUT THE HEARSAY STATEMENTS; DEFENSE VERDICT REVERSED, NEW TRIAL ORDERED (SECOND DEPT). ​

The Second Department, reversing the defense verdict in this medical malpractice case and ordering a new trial, determined that hearsay statements to the effect that plaintiff’s decedent had signed an “against medical advice [AMA]” form when he allegedly refused treatment at defendant hospital were not admissible under the Dead Man’s Statute or as statements against interest or admissions, or as business records:

“A hearsay entry in a hospital record is admissible under the business records exception to the hearsay rule if the entry is germane to the diagnosis or treatment of the patient” ( … see CPLR 4518[a]). Here, although the entries were germane to the decedent’s diagnosis and treatment, the defendants failed to offer foundational testimony under CPLR 4518(a) or certification under CPLR 4518(c) … . …

If an entry in the medical records “is inconsistent with a position taken by a party at trial, it is admissible as an admission by that party, even if it is not germane to the diagnosis or treatment, as long as there is evidence connecting the party to the entry'”  … . Here … the entry clearly states that the decedent’s primary care physician, not the decedent himself, was the source of the information … . …

Pursuant to CPLR 4519, otherwise known as the Dead Man’s Statute, “[u]pon the trial of an action . . . a party or a person interested in the event . . . shall not be examined as a witness in his [or her] own behalf or interest . . . against the executor, administrator or survivor of a deceased person or the committee of a mentally ill person . . . concerning a personal transaction or communication between the witness and the deceased person or mentally ill person, except where the executor, administrator, survivor, committee or person so deriving title or interest is examined in his [or her] own behalf, of the testimony of the mentally ill person or deceased person is given in evidence, concerning the same transaction or communication.” Here, both [witnesses] were defendants at the time they gave deposition testimony, making them interested parties under the statute … [and] they both testified to transactions or communications with the decedent and sought to offer that testimony against the decedent’s estate. …

The defendants argue that the plaintiff waived the protections of the Dead Man’s Statute by eliciting the communications at issue. However, “[t]he executor does not waive rights under the statute by taking the opponent’s deposition” … . … Contrary to the defendants’ contention, the declaration of the decedent did not fall within the declaration against interest exception to the hearsay rule because the defendants failed to establish that the subject statement was against the decedent’s interest when made … . Moreover, where the Dead Man’s Statute renders a witness’s testimony inadmissible, “the fact that the testimony would fall within an exception to the hearsay rule is simply irrelevant” … . Grechko v Maimonides Med. Ctr., 2019 NY Slip Op 06478, Second Dept 9-11-19

 

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THE 2008 FORECLOSURE ACTION WAS DISMISSED BECAUSE THE BANK DID NOT HAVE STANDING; THEREFORE THE DEBT WAS NOT ACCELERATED IN 2008 AND THE STATUTE OF LIMITATIONS FOR FORECLOSURE DID NOT START RUNNING; PLAINTIFF’S ACTION TO CANCEL AND DISCHARGE THE MORTGAGE PROPERLY DISMISSED (SECOND DEPT).

The Second Department determined plaintiff’s action to cancel and discharge a mortgage on the ground the statute of limitations for a foreclosure action had expired was properly dismissed. Although the bank had attempted to foreclose in 2008, that action was dismissed for lack of standing. Therefore the debt was not accelerated by the 2008 foreclosure proceedings:

Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real property at the time the action to cancel and discharge the mortgage was commenced … . An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]). “[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt” … . However, “an acceleration of a mortgaged debt, by either written notice or the commencement of an action, is only valid if the party making the acceleration had standing at that time to do so”  … .

Here, the evidence submitted in support of the defendants’ motion, including the order dated December 13, 2011, demonstrated that while CitiGroup purported to accelerate the mortgage debt in the complaint served in the action to foreclose the mortgage in January 2008, that acceleration was a nullity, inasmuch as CitiGroup lacked standing to commence that foreclosure action … . Therefore, the plaintiff’s allegation in this action that the statute of limitations to enforce the mortgage had expired was not a fact at all, and it can be said that no significant dispute exists regarding it … . Q & O Estates Corp. v US Bank Trust Nat’l Assoc., 2019 NY Slip Op 06524, Second Dept 9-11-19

 

FAILURE TO TIMELY MAIL THE SUMMONS AND COMPLAINT AFTER SERVICE AT DEFENDANT’S BUSINESS AS REQUIRED BY CPLR 308 (2) IS A JURISDICTIONAL DEFECT WHICH IS NOT CURED BY LATE MAILING (SECOND DEPT).

The Second Department determined plaintiff’s failure to timely mail a copy of the summons and complaint after serving the documents at defendant’s place of business was a jurisdictional defect which was not cured by late mailing:

A mailing sent within the wrong time frame, like a mailing sent by the wrong method , increases the likelihood that a party will not receive proper notice of a legal proceeding. The first 20-day window set forth in CPLR 308(2) serves an important function. If the delivery and mailing required …  that statute are not made within a short time of one another, there is a greater likelihood that one or both sets of pleadings will be mislaid, or, at the very least, that confusion will arise as to how much time the defendant has to respond—both of which appear to have occurred here. Further, the requirement that an affidavit of service be filed within 20 days of the delivery or mailing, whichever is effected later, also serves an important function. Timely filing of the affidavit of service is designed to give notice as to the plaintiff’s claim of service and permit the defendant to calculate the time to answer. Where the affidavit of service claims that delivery but not mailing occurred within the 20-day period, yet the plaintiff intends to later claim that a timely mailing did occur, additional confusion is created, a defendant may be prejudiced by reliance upon the publicly filed affidavit which only partially disclosed the plaintiff’s claim of service, and such prejudice may preclude the prospect that the failure to file the affidavit could be cured … . Estate of Norman Perlman v Kelley, 2019 NY Slip Op 06475, Second Dept 9-11-19

 

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THE DEPOSIT OF FULL PAYMENT OF JUDGMENTS IN A COURT MONITORED ESCROW ACCOUNT DID NOT STOP THE ACCRUAL OF POST-JUDGMENT INTEREST (FIRST DEPT).

The First Department determined the deposit of full payment of judgments placed in a court monitored escrow account were subject to the accrual of post-judgment interest:

Defendants’ deposit of full payment on the judgments entered against it to a court monitored escrow account (the Monitorship Account) was not unconditional, such that it did not stop the accrual of post-judgment interest … . Although the Monitorship Order expressly directed the Monitor to collect the judgment amounts and expressly provides for the collection of “pre- and post-judgment interest,” such funds could not be further transferred until further order of the court. Moreover, the Monitorship Order reflects that the parties were not waiving “any rights, defenses or claims not set forth in the agreed order” by stipulating to the appointment of such Monitor. Accordingly, defendants’ payment to the Monitorship Account was conditioned on defendants preserving both their defenses to plaintiff’s claims, and defendants’ direct claims to those funds.

Contrary to defendants’ arguments, the payment to the Monitorship Account was not a “deposit to the court,” as it was not “pursuant to an order of the court, made upon motion” (CPLR 5021[a][3]). Rather under the circumstances, the Monitorship Account functioned simply as an escrow account while the defendants continued to oppose plaintiff’s claims and pursue their own. Triadou SPV S.A. v CF 135 Flat LLC, 2019 NY Slip Op 06453, First Dept 9-10-19

 

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