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THE NOTICES OF CLAIM NOTIFIED THE MUNICIPAL DEFENDANTS ONLY OF THE DAMAGES RELATING TO PLAINTIFF’S DECEDENT, PLAINTIFF’S MOTHER’S MOTION TO AMEND THE COMPLAINT TO ADD HER DERIVATIVE CAUSES OF ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the complaint against the municipal defendants could not be amended to assert a derivative cause of action by plaintiff’s decedent’s mother:

In September 2015, the decedent commenced this action against the City, the Port Authority, and another defendant, alleging common-law negligence and violations of the Labor Law. The decedent died on August 7, 2016. Subsequently, the decedent’s mother, Marilyn Conn (hereinafter Marilyn), as administrator of the decedent’s estate and individually, moved for leave to substitute herself as the plaintiff in place of the decedent. She also moved for leave to amend the complaint to add a cause of action to recover damages for wrongful death on behalf of the decedent’s estate and, in effect, a derivative cause of action to recover damages for loss of services on her own behalf, in her individual capacity. …

… [T]he notices of claim filed against the City and the Port Authority were limited to allegations that, as a result of the accident, the decedent was caused to sustain damages related to his “personal injuries, loss of earnings, pain and suffering and medical expenses.” Marilyn was not identified as a claimant in the caption of the notices of claim, she was not mentioned in the text of the notices of claim, and there were no allegations that she, individually, sustained any damages for which compensation was sought from the City or the Port Authority … .

Accordingly, the Supreme Court should have denied that branch of Marilyn’s motion which was, in effect, for leave to amend the complaint to assert a derivative cause of action to recover damages for loss of services on her own behalf, in her individual capacity, against the City and the Port Authority. Since the City and the Port Authority were not given timely notice of Marilyn’s derivative claim, the court should not have allowed it to be asserted against them.  Conn v Tutor Perini Corp., 2019 NY Slip Op 05643, Second Dept 7-17-19

 

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EMAILS INADVERTENTLY PROVIDED TO PLAINTIFF WERE NOT PROTECTED BY ATTORNEY-CLIENT PRIVILEGE, SUPREME COURT SHOULD NOT HAVE ISSUED A PROTECTIVE ORDER (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that emails which had inadvertently been provided to the plaintiff were not protected by attorney-client privilege. Therefore Supreme Court should not have granted a protective order pursuant to CPLR 3101 (b):

… [T]he defendants failed to meet their burden of establishing a right to protection of the subject emails … . The communications relate to the business of the defendants, rather than legal issues … , and nothing stated by in-house counsel in the emails sets him apart as a legal advisor in the discussion. The affidavits of the defendants’ CEO and in-house counsel, submitted in support of the cross motion, merely state in a conclusory manner that the communications were confidential and privileged. The defendants point to no particular communication in which in-house counsel gave legal advice, or in which the defendants’ other employees sought legal advice from in-house counsel. Saran v Chelsea GCA Realty Partnership, L.P., 2019 NY Slip Op 05710, Second Dept 7-17-19

 

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IN THIS EMPLOYEE-EMPLOYER DISPUTE ABOUT A HEALTH INSURANCE PREMIUM CONTRIBUTION, THE CONTINUING WRONG DOCTRINE DID NOT APPLY TO TOLL THE STATUTE OF LIMITATIONS, EACH PAYCHECK WITH THE PREMIUM DEDUCTION WAS NOT AN INDEPENDENT WRONG (SECOND DEPT).

The Second Department determined the continuing wrong doctrine did not toll the statute of limitations in this employee-employer dispute about a health insurance premium contribution. The petitioner unsuccessfully argued each paycheck with the premium deduction was an independent wrong which tolled the statute of limitations:

A challenge to an administrative determination must be commenced within four months of the time the determination is “final and binding upon the petitioner” (CPLR 217[1]). “A challenged determination is final and binding when it has its impact’ upon the petitioner who is thereby aggrieved” … . An administrative determination regarding payment of salary or pay adjustments is final and binding, and a challenge thereto accrues, when the petitioner receives a check or salary payment reflecting the administrative determination … .

Contrary to the petitioner’s contention, the continuing wrong doctrine does not apply here to toll the statute of limitations … . The doctrine “may only be predicated on continuing unlawful acts and not on the continuing effects of earlier unlawful conduct” … . “The distinction is between a single wrong that has continuing effects and a series of independent, distinct wrongs” … . Here, the Town made the determination to classify the petitioner as an employee hired after December 31, 2014, subject to a 15% health insurance premium contribution requirement, as reflected in her first paycheck issued in April 2015, more than two years prior to the commencement of this proceeding. Each subsequent paycheck deduction “represent[ed] the consequences of [that allegedly] wrongful act[ ] in the form of continuing damages,” and was not an independent wrong in itself … . Matter of Salomon v Town of Wallkill, 2019 NY Slip Op 05671, Second Dept 7-17-19

 

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PLAINTIFF’S TESTIMONY ABOUT HOW THE TRAFFIC ACCIDENT HAPPENED FOUND INCREDIBLE AS A MATTER OF LAW AT THE SUMMARY JUDGMENT STAGE, DISSENT ARGUED THE TESTIMONY RAISED CLASSIC QUESTIONS OF FACT FOR THE JURY TO DETERMINE (FIRST DEPT). ​

The First Department, over an extensive dissent, determined the defendants’ motion for summary judgment in this traffic accident case was properly granted. The majority argued plaintiff’s testimony was incredible and therefore was properly disregarded. The dissent argued plaintiff’s testimony raised classic questions of fact about how the accident happened. The collision occurred when plaintiff was attempting to change lanes. The majority interpreted plaintiff’s testimony to mean that she was straddling two lanes and was not moving when the truck struck her SUV, which, based on photographic evidence, the majority found incredible as a matter of law:

The photographic evidence shows that plaintiff’s SUV struck the rear of defendants’ tractor-trailer as plaintiff was attempting to merge into defendants’ truck’s lane of traffic. Thus, plaintiff violated her “duty not to enter a lane of moving traffic until it was safe to do so” (… see Vehicle and Traffic Law § 1128[a] …), “and [her] failure to heed this duty constitutes negligence per se”. * * ^

… [I]n summary judgment analysis, we must discount the plaintiff’s testimony where the plaintiff has “relied solely on [her] own testimony, uncorroborated by any other witnesses or evidence,” and her testimony belied “common sense” … . As these circumstances are presented in this case, plaintiff’s testimony was properly “disregarded as being without evidentiary value” … . Thus, plaintiff’s testimony raised no triable issues of fact. Castro v Hatim, 2019 NY Slip Op 05639, First Dept 7-16-19

 

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THE DENIAL OF DEFENDANT’S MOTION TO LIMIT THE EXPERT TESTIMONY PLAINTIFF COULD OFFER AT TRIAL DID NOT LIMIT THE ISSUES TO BE TRIED; THEREFORE ANY APPEAL MUST AWAIT THE CONCLUSION OF THE TRIAL; APPEAL DISMISSED (THIRD DEPT).

The Third Department determined defendant doctor could not appeal the denial of defendant’s motion to limit the expert testimony which plaintiff could offer at trial in this medical malpractice action. The motion court’s ruling did not limit the issues to be tried. Therefore an appeal must be brought after trial:

It is well settled that “an order which merely determines the admissibility of evidence, even when made in advance of trial on motion papers, constitutes, at best, an advisory opinion which is neither appealable as of right nor by permission” … . Here, Supreme Court’s decision merely permits the infant to offer various testimony of his expert witnesses and does not limit the scope of issues to be tried … . Therefore, appellate review of the court’s ruling “must await the conclusion of a trial so that the relevance of the proffered evidence, and the effect of [the court’s] ruling with respect thereto, can be assessed in the context of the record as a whole” … . Accordingly, this appeal must be dismissed … . C.H. v Dolkart, 2019 NY Slip Op 05614, Third Dept 7-11-19

 

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ARTICLE 78 ACTION SEEKING TO PROHIBIT THE TRIAL JUDGE IN A CRIMINAL CASE FROM EXCLUDING TESTIMONY AS PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE DISMISSED AS INAPPROPRIATE; MATTER CONSIDERED AS AN EXCEPTION TO THE MOOTNESS DOCTRINE (THIRD DEPT).

The Third Department determined the Article 78 proceeding brought by the district attorney against the trial judge in a criminal case seeking prohibition should have been dismissed. The trial judge had ruled that the conversations between an attorney and the defendant at the scene of the crime were protected by attorney-client privilege. The Article 78 action sought to prohibit the trial judge from adhering to that ruling. At the time of this Article 78 proceeding the criminal trial was over and defendant had been convicted. The matter was considered as an exception to the mootness doctrine:

Prohibition is an extraordinary remedy and, in cases involving the exercise of judicial authority, “is available only where there is a clear legal right, and then only when a court . . . acts or threatens to act either without jurisdiction or in excess of its authorized powers” … . Respondent had jurisdiction over the criminal action against Mercer … and was empowered to preclude Doyle from testifying about matters protected by the attorney-client privilege … . Petitioner’s core complaint is that respondent erred in determining the scope of that privilege, and she may be correct … . Nevertheless, “prohibition will not lie as a means of seeking collateral review of mere trial errors of substantive law or procedure, however egregious the error may be, and however cleverly the error may be characterized by counsel as an excess of jurisdiction or power” … . To allow review of such matters would have an array of negative impacts, encouraging gamesmanship, “erect[ing] an additional avenue of judicial scrutiny in a collateral proceeding and . . . frustrat[ing] the statutory or even constitutional limits on review” … . Thus, inasmuch as petitioner does not point to “an unlawful use or abuse of the entire action or proceeding,” but rather “an unlawful procedure or error in the action or proceeding itself related to the proper purpose of the action or proceeding,” prohibition will not lie … . Matter of Heggen v Sise, 2019 NY Slip Op 05620, Third Dept 7-10-19

 

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DEFENDANT’S MOTION TO DISMISS THE COMPLAINT FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED, DEFENDANT’S ONLY CONNECTION TO THE CORPORATION WHICH HAD CONTACTS WITH NEW YORK WAS HIS SALARY; THEREFORE THE CORPORATION’S NEW YORK CONTACTS COULD NOT BE IMPUTED TO DEFENDANT (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant’s (Sprinkle’s) motion to dismiss the complaint for lack of personal jurisdiction should have been granted, noting that Sprinkle’s only connection with the corporation alleged to have breached the contract was his salary. The corporation’s contacts with New York could not, therefore, be imputed to Sprinkle:

The complaint fails to state a cause of action as against Sprinkle for tortious interference with contract, because there is no allegation that Sprinkle personally benefitted from the corporations’ alleged breach of contract; the only benefit he is alleged to have received is his salary from the corporations … .

Plaintiff failed to make a sufficient start on a showing of jurisdiction over Sprinkle to entitle it to jurisdictional discovery … . Because the conduct complained of involved the diversion of funds from outside New York to recipients outside New York, the “critical events,” and thus the situs of injury, were not in New York … . Moreover, plaintiff does not allege that Sprinkle received substantial revenue from interstate or international commerce (see CPLR 302[a][3][ii]). Because Sprinkle did not personally benefit from the breach of contract, the corporations’ contacts with New York cannot be imputed to him … .

Nor can Sprinkle be said to have “reasonably expected” his actions to have consequences in New York … as he neither did anything to avail himself of New York nor took any steps to project himself into New York. Given that Sprinkle had no contact with New York and did not purposefully avail himself of New York, the constitutional guarantee of due process bars New York courts from exercising personal jurisdiction over him. Greenbacker Residential Solar LLC v OneRoof Energy, Inc., 2019 NY Slip Op 05487, First Dept 7-9-19

 

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FRAUD CAUSE OF ACTION, AS ALLEGED, IS NOT DUPLICATIVE OF THE ACTION FOR BREACH OF A LOAN GUARANTEE AND SHOULD NOT HAVE BEEN DISMISSED ON THAT GROUND (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s fraud cause of action was not duplicative on the action for breach of a loan guarantee and should not have been dismissed:

Plaintiff alleges that, as CEO of nonparty Karmaloop, Inc., defendant Gregory Selkoe solicited from plaintiff a bridge loan in the amount of $2,040,000. Plaintiff agreed, on condition that Selkoe personally guarantee the loan. Selkoe provided the personal guarantee, and also represented to plaintiff that he had previously given only one other personal guarantee, and that Karmaloop had never defaulted on any loan payment. Both of these representations were false, in that, unbeknownst to plaintiff, Selkoe had previously guaranteed a loan issued to another Karmaloop executive, and Karmaloop had defaulted on that loan.

The foregoing states a claim for fraudulent inducement, which is not duplicative of plaintiff’s claim for breach of the guarantee. Plaintiff does not allege that Selkoe misrepresented the intent to perform on the guarantee and underlying promissory note, which would render the fraud claim duplicative, but rather alleges that Selkoe misrepresented his and Karmaloop’s ability to perform … .

At this early juncture, we find that plaintiff should be “permitted to plead in the alternative (see CPLR 3014),” and its claim “for fraud, should not be dismissed as duplicative of the breach-of-contract cause of action” … . Man Advisors, Inc. v Selkoe, 2019 NY Slip Op 05483, First Dept 7-9-19

 

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DEED MADE UNDER FALSE PRETENSES IS VOID AB INITIO RENDERING THE RELATED MORTGAGE INVALID; THE LAW OF THE CASE DOCTRINE DOES NOT PRECLUDE RECONSIDERING A MATTER WHERE THERE IS NEW EVIDENCE (FIRST DEPT).

The First Department, reversing Supreme Court, in this foreclosure action, determined a deed made under false pretenses was void ab initio and therefore the related mortgage was invalid. The court noted that the law of the case doctrine does not prohibit it from reconsidering a matter where there is subsequent evidence affecting the prior determination:

It is undisputed that nonparty Rapsil Corporation conveyed the same property to two different recipients, first, defendant Rafael Pantoja (who obtained a mortgage from CitiMortgage), and, second, a bona fide entity that transferred it to the Salazar defendants. Although the deed that conveyed the property from Rapsil to Pantoja was unacknowledged, which ordinarily would render it only voidable, because Pantoja controlled Rapsil, the deed was made under false pretenses and was therefore void ab initio … . Accordingly, the CitiMortgage mortgage was invalid as well (Weiss v Phillips, 157 AD3d 1, 10 [1st Dept 2017]).

This determination is not inconsistent with our prior related decisions … . In any event, the law of the case doctrine does not limit our power to reconsider issues “where there are extraordinary circumstances, such as subsequent evidence affecting the prior determination” … . CitiMortgage, Inc. v Pantoja, 2019 NY Slip Op 05481, First Dept 7-9-19

 

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USING A NEW YORK VIRTUAL LAW OFFICE PROGRAM (VLOP) ONLY AS A MAILING ADDRESS AND AS AN AGENT TO ACCEPT SERVICE DOES NOT SATISFY THE REQUIREMENT THAT AN ATTORNEY PRACTICING IN NEW YORK HAVE A PHYSICAL OFFICE IN NEW YORK, HOWEVER THE ACTION BROUGHT BY THE VLOP ATTORNEY IS NOT A NULLITY AND SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined using a Virtual Law Office Program (VLOP) only as a mailing address and as an agent to accept service in New York is not enough to satisfy the Judiciary Law requiring an attorney practicing in New York to have a physical office in New York. However the action started by the attorney with the virtual law office is not, as Supreme Court held, a nullity:

To the extent that counsel uses the VLOP only as a mailing address and an agent authorized to accept service of process, it is insufficient to meet the physical presence requirement of Schoenefeld. While the additional services VLOP provides may well satisfy physical presence, an attorney needs to actually take advantage of those services to meet the requirements of Judiciary Law § 470. At bar, counsel does not claim that he actually uses the VLOP for anything but the delivery of mail and packages and for service of process. Although office space and conference rooms may be available to him, there is no claim that he actually uses those services. …

Counsel’s correspondence and the papers served on his adversary and/or filed in court contradicted any physical presence in New York. …

Notwithstanding that we find that counsel is not authorized to maintain this action in New York State, we do not believe that it should have been dismissed. The Court of Appeals recently held that a nonresident attorney’s failure to comply with the requirement of Judiciary Law § 470 of maintaining a physical office in New York State at the time a complaint is filed does not render the filing a nullity and therefore that dismissal of the action is not required … . The party may cure the statutory violation with the appearance of compliant counsel or an application for admission pro hac vice by appropriate counsel … . Accordingly, we vacate the order and remand the matter to afford plaintiff an opportunity to cure the violation. Marina Dist. Dev. Co., LLC v Toledano, 2019 NY Slip Op 05480, First Dept 7-9-19

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