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A PRIOR FORECLOSURE ACTION DISMISSED FOR LACK OF STANDING DID NOT ACCELERATE THE MORTGAGE DEBT, THE STATUTE OF LIMITATIONS, THEREFORE, DID NOT START TO RUN (SECOND DEPT).

The Second Department noted that the prior foreclosure action, which was dismissed on the ground the plaintiff lacked standing, did not accelerate the mortgage debt. Therefore the statute of limitations was not triggered by the dismissed action:

[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” … . Acceleration occurs, inter alia, “when a creditor commences an action to foreclose upon a note and mortgage and seeks, in the complaint, payment of the full balance due” … . “[A]n 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” … .

Auguste contends that the commencement of the prior action in 2007 accelerated the debt, and that the commencement of the instant action, seven years later, was beyond the statute of limitations. Where, as here, the prior action is dismissed on the ground that the plaintiff lacked standing, the purported acceleration is a nullity, and the statute of limitations does not begin to run at the time of the purported acceleration … . U.S. Bank N.A. v Auguste, 2019 NY Slip Op 04747, Second Dept 6-12-19

 

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THE FACT THAT THE NOTICE OF CLAIM WAS NOT VERIFIED PROPERLY OVERLOOKED (SECOND DEPT).

The Second Department determined the fact that the notice of claim was not verified was properly overlooked:

By notice of motion dated January 6, 2016, the claimants sought leave to amend their notice of intention to file a claim, nunc pro tunc, or, alternatively, for leave to file a late notice of claim. A proposed amended notice of intention to file a claim was included with the motion, and it included the verification which was missing from the original. In the order appealed from, the Court of Claims granted the claimants’ motion for leave to amend their notice of intention to file a claim, nunc pro tunc.

Pursuant to Court of Claims Act § 11(b), a “notice of intention to file a claim shall be verified in the same manner as a complaint in an action in the supreme court.” The Court of Appeals has held that “there is no basis for treating an unverified or defectively verified claim or notice of intention any differently than an unverified or defectively verified complaint is treated under the CPLR in Supreme Court” … . Here, as the Court of Claims found, the defendant was not prejudiced by the omission of a verification. Moreover, the court noted that CPLR 2001 permits an omission or defect to be corrected, upon such terms as may be just … . Ordentlich v State of New York, 2019 NY Slip Op 04710, Second Dept 6-12-19

 

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SCHOOL EMPLOYEE’S NEGLIGENCE ACTION AGAINST THE DEPARTMENT OF EDUCATION IS NOT GOVERNED BY THE COLLECTIVE BARGAINING AGREEMENT (CBA), NO NEED TO EXHAUST ADMINISTRATIVE REMEDIES; DENIAL OF MEDICAL LEAVE DID NOT HAVE RES JUDICATA OR COLLATERAL ESTOPPEL EFFECT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined an employee’s personal injury complaint against the NYC Department of Education (DOE), stemming from an elevator accident, should not have been dismissed. The plaintiff-employee first applied to the DOE for line of duty injury paid medical leave pursuant to the collective bargaining agreement (CBA) and was denied. Plaintiff then commenced the personal injury action. The DOE argued that plaintiff had failed to exhaust the administrative remedies required by the CBA and, in the alternative, the denial of the line of duty pay should be given res judicata or collateral estoppel effect. Supreme Court decided plaintiff had failed to exhaust the administrative remedies. The Second Department held that her injury and the resulting negligence action were not covered by the CBA:

An employee covered by a collective bargaining agreement which provides for a grievance procedure must exhaust administrative remedies prior to seeking judicial remedies … or face dismissal of the action …. Here, however, the plaintiff seeks to recover damages against the defendants for pain and suffering based upon a negligence theory of liability which is outside the scope of, and is not governed by, the CBA’s “line of duty injury” paid leave grievance provisions… . There is no need to exhaust administrative remedies when the cause of action by the plaintiff is not governed by the CBA … .

The defendants’ contention that dismissal is also warranted on the basis of collateral estoppel and res judicata is without merit … . Collateral estoppel is inapplicable, as the defendants failed to demonstrate that the issue that the plaintiff seeks to pursue here was necessarily decided by the DOE when it denied the plaintiff’s “line of duty injury” paid leave application … . Likewise, the doctrine of res judicata, or claim preclusion, also is inapplicable to the plaintiff’s complaint because the relief she seeks could not have been awarded within the context of the prior administrative proceeding … . Shortt v City of New York, 2019 NY Slip Op 04745, Second Dept 6-12-19

 

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THE NEW JERSEY TRAFFIC ACCIDENT INVOLVED NEW YORK RESIDENTS (PLAINTIFFS), A TRUCK LEASED BY DEFENDANT NEW JERSEY CORPORATION AND THE DEFENDANT TRUCK DRIVER FROM PENNSYLVANIA; NO GENERAL PERSONAL JURISDICTION OVER THE CORPORATION OR THE DRIVER; POSSIBLE LONG-ARM JURISDICTION OVER THE CORPORATION, BUT NOT THE DRIVER, BASED UPON BUSINESS CONDUCTED IN NEW YORK (SECOND DEPT).

The Second Department determined Supreme Court properly denied all but one of the defendants’ motions to dismiss premised on lack of personal jurisdiction, pending further discovery. The traffic accident happened in New Jersey. The plaintiffs’ van was struck from behind by a freight truck leased by Finkle (a New Jersey corporation) from Ryder Truck Rental and driven by defendant Larios, a resident of Pennsylvania. All the plaintiffs were residents of New York. The Second Department found that there was no general jurisdiction under CPLR 301, and no long-arm jurisdiction under CPLR 302 (a])(3) (tortious act outside the state causing injury within the state). However there may jurisdiction against Finkle pursuant to CPLR 302 (a) (1) (conducting business within the state):

… [Plaintiffs] have not alleged facts in opposition which would support the exercise of personal jurisdiction under New York’s general jurisdiction statute, CPLR 301, over Larios, who was not domiciled in New York, or over Finkle, which was not incorporated in New York and did not have its principal place of business in New York … . …

Under CPLR 302(a)(3), “[t]he situs of the injury is the location of the original event which caused the injury, not the location where the resultant damages are subsequently felt by the plaintiff” … . Here, since the accident which caused the injuries occurred in New Jersey, CPLR 302(a)(3) does not provide a basis for personal jurisdiction over these defendants in New York … .

… .Finkle asserted that it is a New Jersey corporation with its business address in New Jersey, and Larios stated that, at the time of the accident, he was transporting a load for the United States Postal Service within the State of New Jersey. However, Finkle admitted that it had terminals at four New York locations at which it parked its vehicles. Based upon these facts, and given Finkle’s failure to submit trip logs, manifests, or other documentary evidence to support its assertion that the load Larios was transporting was being shipped within the State of New Jersey and had no relationship to Finkle’s New York business, we agree with the Supreme Court’s determination to deny as premature that branch of the appellants’ motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against Finkle, with leave to renew upon completion of discovery. Qudsi v Larios, 2019 NY Slip Op 04742, Second Dept 6-12-19

 

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PLAINTIFF’S DISCOVERY REQUEST FOR INSPECTION AND EXPERT EXAMINATION OF DEFENDANTS’ PROPERTY IN THIS SLIP AND FALL CASE SHOULD HAVE BEEN GRANTED, PLAINTIFF ALLEGED DEFENDANTS DIVERTED WATER ONTO A PUBLIC ROAD WHICH FORMED A PATCH OF BLACK ICE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that plaintiff’s request to enter the Rizzetta defendants’ property to allow inspection and expert examination of the alleged diversion of water from the property onto a public road should have been granted. Plaintiff was injured riding his bicycle when he hit a patch of black ice, slipped and fell:

CPLR 3120(1)(ii) provides that a party may serve another party with notice “to permit entry upon designated land or other property in the possession, custody or control of the party served for the purpose of inspecting, measuring, surveying, sampling, testing, photographing or recording by motion pictures or otherwise the property or any specifically designated object or operation thereon.” Motions seeking such discovery “are routinely granted when a central issue in the case is the condition of the real property under inspection” … . …

Here, the Supreme Court improvidently exercised its discretion in denying the plaintiff’s motion. A central issue in this litigation is the source of the water which allegedly caused the injury-producing ice condition. An owner of private land abutting a public roadway may be liable for injuries sustained from a fall on ice on the public roadway, if the “ice condition was caused and created by the artificial diversion of naturally flowing water from the private landowner’s property onto the public roadway” … . The plaintiff’s theory of the Rizzetta defendants’ liability is premised upon the Rizzetta defendants’ alleged diversion of water from their property onto the public roadway. Although the probative value of the inspection may be weakened by the passage of time since the accident occurred, such delay is not a basis for denying the plaintiff’s discovery request where, as here, the inspection may still aid the parties in preparation for trial … . Zupnick v City of New Rochelle, 2019 NY Slip Op 04754, Second Dept 6-12-19

 

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PORTIONS OF THE RESPONDENTS’ APPRAISAL REPORT IN THIS CONDEMNATION PROCEEDING SHOULD NOT HAVE BEEN STRUCK BECAUSE THE PROPER VALUATION METHOD WAS USED; THE EVIDENTIARY RULING ON THE MOTION IN LIMINE IS APPEALABLE BECAUSE THE RULING AFFECTS THE SCOPE OF THE TRIAL ISSUES (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined that the portions of motion in limine seeking to strike parts of respondents’ appraisal report in this condemnation proceeding should not have been granted. The court noted that the evidentiary ruling was appealable because it limited the scope of the trial issues. The court further noted that the proof of valuation offered at trial must be limited to the valuation method(s) described in the appraisal report:

Where, as here, “the highest and best use is the one the property presently serves and that use is income-producing, then the capitalization of income is a proper method of valuation” … . In our view, the stricken portion of respondents’ appraisal report, although titled “investment valuation,” applied an income capitalization approach using the standard income capitalization formula, i.e., value equals net income divided by a capitalization rate … , and applied factors that, according to respondents’ appraiser, accurately reflect the property’s value and would make the property more appealing to prospective purchasers. To the extent that petitioner contends that certain factors considered by respondents’ appraiser in valuing the property do not accurately reflect market value, “[t]he fact that some aspects of the valuation methodology [of respondents’ appraiser] may be subject to question goes to the weight to be accorded the appraisal[],” not its admissibility … . … Matter of Rochester Genesee Regional Transp. Auth. v Stensrud, 2019 NY Slip Op 04612, Fourth Dept 6-7-19

 

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NOTE OF ISSUE AND CERTIFICATE OF READINESS CONTAINING INCORRECT INFORMATION (I.E., DISCOVERY WAS COMPLETE) SHOULD HAVE BEEN VACATED; STIPULATION OF CONFIDENTIALITY WAS SUFFICIENT TO PROTECT TRADE SECRETS (FOURTH DEPT).

The Fourth Department determined the motion to vacate the note of issue and a certificate of readiness because the information therein was not correct (discovery was not complete). The court further determined that the confidentiality stipulation was sufficient to protect trade secrets during discovery:

… [C]ontrary to the statements on the certificate of readiness, discovery was incomplete when the note of issue and certificate of readiness were filed. Thus, “a material fact in the certificate of readiness [was] incorrect,” and the note of issue and certificate of readiness must be vacated … . …

… [D]efendants requested that the court issue a protective order that included the designation of a third-party neutral expert and an “attorney and expert eyes only” designation for disclosure. The court denied defendants’ request, and directed the parties to execute a confidentiality stipulation and order and to proceed with discovery pursuant to Rule 11-g of the Rules of the Commercial Division of the Supreme Court (see 22 NYCRR 202.70). The confidentiality stipulation and order provides, inter alia, that “Confidential Information shall be utilized by the Receiving Party and its Counsel only for purposes of this litigation and for no other purposes. Any violation of this Stipulation and Order may be enforced as a contempt of Court.” We conclude that the court provided defendants with adequate protection of their intellectual property and trade secrets. Backer & Assoc., LLC v PPB Eng’g & Sys. Design, Inc., 2019 NY Slip Op 04541, Fourth Dept 6-7-19

 

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DEFENDANTS DID NOT DEMONSTRATE WHEN THE CAUSE OF ACTION FOR LEAD-PAINT EXPOSURE ACCRUED, THEREFORE THE SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED ON THE GROUND THAT THE STATUTE OF LIMITATIONS HAD EXPIRED (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined that defendant’s failed to demonstrate when the lead-paint-exposure cause of action accrued. Therefore the motion for summary judgment on the ground that the statute of limitations had passed should not have been granted:

In moving to dismiss the complaint on statute of limitations grounds, each defendant had “the initial burden of establishing prima facie that the time in which to sue ha[d] expired . . . and thus was required to establish, inter alia, when the plaintiff[s’] cause of action accrued” …  Here, neither defendant established the relevant accrual date of plaintiffs’ claims for injury caused by the latent effects of lead paint exposure and, in the absence of such evidence, neither defendant made a prima facie showing that the applicable limitations period had expired on those claims … . Supreme Court thus erred in granting defendants’ respective motions to that extent. We note that, at oral argument in these appeals, plaintiffs conceded that their claims for patent injuries arising from such exposure were properly dismissed as time-barred. Chaplin v Tompkins, 2019 NY Slip Op 04562, Fourth Dept 6-7-19

 

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JUDGE SHOULD NOT HAVE, SUA SPONTE, DISMISSED THE COMPLAINT AND VACATED THE DEFAULT JUDGMENT, ALTHOUGH A SUA SPONTE ORDER IS NOT APPEALABLE AS OF RIGHT, THE NOTICE OF APPEAL WAS DEEMED A MOTION FOR LEAVE TO APPEAL (FIRST DEPT). ​

The First Department, reversing Supreme Court, held that Supreme Court should not have, sua sponte, dismissed plaintiff’s complaint and vacated the default judgment as untimely, Plaintiff had timely moved for a default judgment. Although sua sponte orders are not appealable as of right, the First Department deemed the notice of appeal as a motion for leave to appeal:

An order issued sua sponte is not appealable as of right (see Sholes v Meagher, 100 NY2d 333, 335 [2003]). However, given the nature of the motion court’s sua sponte relief in dismissing the complaint pursuant to CPLR 3215(c), we deem the notice of appeal to be a motion for leave to appeal, and grant such leave (…CPLR 5701[c]).

The record is clear that plaintiff had moved for a default judgment within one year, and thus, the motion court’s sua sponte vacature of the judgment and dismissal of the complaint as untimely was in error … . In view of this decision, the merits of defendant’s motion to vacate the default judgment are no longer moot and it is remanded back to the trial court for consideration on the merits. New Globaltex Co., Ltd. v Zhe Lin, 2019 NY Slip Op 04456, First Dept 6-6-19

 

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PLAINTIFF DID NOT SUBMIT SUFFICIENT PROOF OF COMPLIANCE WITH THE SERVICE OF PROCESS REQUIREMENTS OF THE LIMITED LIABILITY COMPANY LAW (SERVICE UPON THE SECRETARY OF STATE) (THIRD DEPT).

The Third Department, reversing Supreme Court, determined plaintiffs did not demonstrate compliance with the service of process requirements of the Limited Liability Company Law:

“The plaintiff bears the ultimate burden of proving by a preponderance of the evidence that jurisdiction over the defendant was obtained by proper service of process” … . Proof of service, often in the form of an affidavit of service (see CPLR 306 [d]), must include “the papers served, the person who was served and the date, time [and] address [of such service], . . . and set forth facts showing that the service was made by an authorized person and in an authorized manner” … . Additionally, “[b]ecause service of process is necessary to obtain personal jurisdiction over defendants, courts require strict compliance with the statutory methods of service” … . As relevant here, “[s]ervice of process on the secretary of state as agent of a domestic limited liability company . . . shall be made by personally delivering to and leaving with the secretary of state or his or her deputy, or with any person authorized by the secretary of state to receive such service, . . . duplicate copies of such process together with the statutory fee” … . …

Although plaintiffs proffered an unsigned receipt of service purportedly generated by the Office of the Secretary of State, that receipt did not set forth the papers served, whether duplicate copies of those papers were delivered to the Secretary of State, the time of service or facts showing that service was made by an authorized person (see Limited Liability Company Law § 303 [a]; CPLR 306 [a], [d]). Cedar Run Homeowners’ Assn., Inc. v Adirondack Dev. Group, LLC, 2019 NY Slip Op 04528, Third Dept 6-6-19

 

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