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CLASS ACTION CERTIFICATION FOR EMPLOYEES ALLEGING DEFENDANT’S FAILURE TO PAY THE PREVAILING WAGE SHOULD NOT HAVE BEEN DENIED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined class certification under CPLR 901 for employees alleging defendant did not pay prevailing wages required by article I, § 17 of the New York Constitution and section 220 (3) of the Labor Law:

… [T]he court erred in determining that plaintiffs failed to establish the first and second CPLR 901 prerequisites, numerosity and commonality. Plaintiffs established the numerosity prerequisite by submitting evidence of approximately 350 class members at a minimum … . Plaintiffs established the commonality prerequisite because one common legal issue dominates the claims of all putative class members, i.e., whether similarly situated employees who worked on public projects were deprived of the prevailing wages to which they were entitled… . Contrary to defendant’s contention, the fact that the amount of damages will vary among the putative class members does not prevent this lawsuit from going forward as a class action … . Vandee v Suit-Kote Corp., 2018 NY Slip Op 04456, Fourth Dept 6-15-18

​CIVIL PROCEDURE (CLASS ACTIONS, CLASS ACTION CERTIFICATION FOR EMPLOYEES ALLEGING DEFENDANT’S FAILURE TO PAY THE PREVAILING WAGE SHOULD NOT HAVE BEEN DENIED (FOURTH DEPT))/CPLR 901 (CLASS ACTIONS, CLASS ACTION CERTIFICATION FOR EMPLOYEES ALLEGING DEFENDANT’S FAILURE TO PAY THE PREVAILING WAGE SHOULD NOT HAVE BEEN DENIED (FOURTH DEPT))/CLASS ACTION (CLASS ACTION CERTIFICATION FOR EMPLOYEES ALLEGING DEFENDANT’S FAILURE TO PAY THE PREVAILING WAGE SHOULD NOT HAVE BEEN DENIED (FOURTH DEPT))/EMPLOYMENT LAW (CLASS ACTIONS, CLASS ACTION CERTIFICATION FOR EMPLOYEES ALLEGING DEFENDANT’S FAILURE TO PAY THE PREVAILING WAGE SHOULD NOT HAVE BEEN DENIED (FOURTH DEPT))/LABOR LAW (CLASS ACTIONS, CLASS ACTION CERTIFICATION FOR EMPLOYEES ALLEGING DEFENDANT’S FAILURE TO PAY THE PREVAILING WAGE SHOULD NOT HAVE BEEN DENIED (FOURTH DEPT))

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ALTHOUGH THE INSURER COULD DISCLAIM COVERAGE FOR ANY INJURIES CAUSED BY THE INSURED ASSAILANT’S INTENTIONAL CRIMINAL ACTS UNDER THE DOCTRINE OF COLLATERAL ESTOPPEL, THE INSURER COULD NOT DISCLAIM COVERAGE FOR ANY SUBSEQUENT INJURIES THAT MAY HAVE BEEN CAUSED BY THE ASSAILANT’S NEGLIGENCE (THIRD DEPT).

The Third Department determined plaintiff insurer could not completely disclaim coverage of injuries suffered by the defendant at the insured home (owned by the McCabe’s). McCabe was convicted of assaulting and strangling the defendant. Defendant alleges that after McCabe assaulted her she fell over a tripping hazard in the McCabe home and was injured in the fall. Although the insurer can properly disclaim coverage for any injuries inflicted by McCabe’s intentional criminal conduct under the collateral estoppel doctrine, the insurer could not, at this early stage, disclaim coverage for any injuries that might have been caused by McCabe’s negligence (tripping hazard, failure to seek medical care, etc.):

Plaintiff asserts that, to convict McCabe, the criminal jury must have disbelieved his version of events. It is possible, however, that the jury disbelieved only some portions of his testimony … . The jury may have found it incredible that all of defendant’s facial and head injuries were caused when she tried to walk on her own, fell over a raised threshold in the doorway and hit her head on a cinder block wall during that fall. It is also possible that the jury believed that McCabe slammed defendant’s head into the ground or a wall, thereby causing some of her injuries, but the jury did not render any findings regarding what happened after the choking and slamming, such as whether defendant then got up, tried to walk and fell. To establish the convictions, it was unnecessary for the jury to have made findings regarding whether McCabe created a tripping hazard, allowed defendant to walk on her own after he had rendered her partially incapacitated or failed to seek medical help for her after the criminal assault. Hence, the issues as to insurance coverage and exclusions are not identical to the issues decided in McCabe’s criminal trial, and defendants here did not have a full and fair opportunity in the criminal trial to address some of the issues regarding McCabe’s negligence allegedly committed before and after the criminal assault. Plaintiff failed to demonstrate that there was no possible factual or legal basis to support a finding that some of defendant’s injuries were unintended by McCabe, so as to bar coverage under the policy exclusion … . Accordingly, collateral estoppel does not apply here, except as to the more narrow issues necessarily decided in the criminal trial, and plaintiff was not entitled to summary judgment or a declaratory judgment at this early stage of this coverage action … . State Farm Fire & Cas. Co. v Chauncey McCabe, 2018 NY Slip Op 04416, Third Dept 6-14-18

​INSURANCE LAW (ALTHOUGH THE INSURER COULD DISCLAIM COVERAGE FOR ANY INJURIES CAUSED BY THE INSURED ASSAILANT’S INTENTIONAL CRIMINAL ACTS UNDER THE DOCTRINE OF COLLATERAL ESTOPPEL, THE INSURER COULD NOT DISCLAIM COVERAGE FOR ANY SUBSEQUENT INJURIES THAT MAY HAVE BEEN CAUSED BY THE ASSAILANT’S NEGLIGENCE (THIRD DEPT))/CIVIL PROCEDURE (INSURANCE LAW, COLLATERAL ESTOPPEL, ALTHOUGH THE INSURER COULD DISCLAIM COVERAGE FOR ANY INJURIES CAUSED BY THE INSURED ASSAILANT’S INTENTIONAL CRIMINAL ACTS UNDER THE DOCTRINE OF COLLATERAL ESTOPPEL, THE INSURER COULD NOT DISCLAIM COVERAGE FOR ANY SUBSEQUENT INJURIES THAT MAY HAVE BEEN CAUSED BY THE ASSAILANT’S NEGLIGENCE (THIRD DEPT))/COLLATERAL ESTOPPEL (INSURANCE LAW, ALTHOUGH THE INSURER COULD DISCLAIM COVERAGE FOR ANY INJURIES CAUSED BY THE INSURED ASSAILANT’S INTENTIONAL CRIMINAL ACTS UNDER THE DOCTRINE OF COLLATERAL ESTOPPEL, THE INSURER COULD NOT DISCLAIM COVERAGE FOR ANY SUBSEQUENT INJURIES THAT MAY HAVE BEEN CAUSED BY THE ASSAILANT’S NEGLIGENCE (THIRD DEPT))/CRIMINAL LAW (INSURANCE LAW, COLLATERAL ESTOPPEL, ALTHOUGH THE INSURER COULD DISCLAIM COVERAGE FOR ANY INJURIES CAUSED BY THE INSURED ASSAILANT’S INTENTIONAL CRIMINAL ACTS UNDER THE DOCTRINE OF COLLATERAL ESTOPPEL, THE INSURER COULD NOT DISCLAIM COVERAGE FOR ANY SUBSEQUENT INJURIES THAT MAY HAVE BEEN CAUSED BY THE ASSAILANT’S NEGLIGENCE (THIRD DEPT))/NEGLIGENCE (INSURANCE LAW, CRIMINAL LAW, COLLATERAL ESTOPPEL, ALTHOUGH THE INSURER COULD DISCLAIM COVERAGE FOR ANY INJURIES CAUSED BY THE INSURED ASSAILANT’S INTENTIONAL CRIMINAL ACTS UNDER THE DOCTRINE OF COLLATERAL ESTOPPEL, THE INSURER COULD NOT DISCLAIM COVERAGE FOR ANY SUBSEQUENT INJURIES THAT MAY HAVE BEEN CAUSED BY THE ASSAILANT’S NEGLIGENCE (THIRD DEPT))

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SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT).

The Second Department determined plaintiff’s action for conversion and breach of a fiduciary duty was timely. Plaintiff was the beneficiary of a structured settlement with payments which were to begin in 1998 and continue for the rest of his life. Defendant, who was the custodian of the structured settlement while plaintiff was minor, did not inform the plaintiff of the settlement and used the funds for her own purposes. The Second Department held that conversion sounds in fraud. Therefore the six-year statute of limitations applied and the statute did not begin to run until plaintiff became aware of fraud in 2013:

Contrary to the defendant’s contentions, since the cause of action for conversion is based upon fraud, it is governed by the statute of limitations period for fraud set forth in CPLR 213(8) … . The limitations period for fraud under CPLR 213(8) also applies to the breach of fiduciary duty causes of action inasmuch as the allegations of fraud are essential to those claims … .

Pursuant to CPLR 213(8), “the time within which the action must be commenced shall be the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it.” “A cause of action based upon fraud accrues, for statute of limitations purposes, at the time the plaintiff possesses knowledge of facts from which the fraud could have been discovered with reasonable diligence'” … .

Here, the plaintiff established that he could not, with reasonable diligence, have discovered the fraud until 2013, when he learned for the first time that he was the beneficiary of a structured settlement from which he was entitled to receive millions of dollars in monthly and periodic lump-sum payments. Monteleone v Monteleone, 2018 NY Slip Op 04317, Second Dept 6-13-18

​FRAUD (STATUTE OF LIMITATIONS, SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT))/CONVERSION  (STATUTE OF LIMITATIONS, SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT))/CIVIL PROCEDURE (STATUTE OF LIMITATIONS, FRAUD, CONVERSION, SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT))/STATUTE OF LIMITATIONS (FRAUD, CONVERSION, SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT))/FRAUD (STATUTE OF LIMITATIONS, CONVERSION, SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT))/CONVERSION (STATUTE OF LIMITATIONS, FRAUD,  SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT))/CPLR 213 (STATUTE OF LIMITATIONS, FRAUD, CONVERSION, SIX YEAR STATUTE OF LIMITATIONS FOR FRAUD APPLIES TO A CONVERSION ACTION, ALTHOUGH THE FRAUD BEGAN IN 1998 PLAINTIFF COULD NOT HAVE BECOME AWARE OF IT UNTIL 2013, PLAINTIFF’S ACTION IS TIMELY (SECOND DEPT))

ABSENCE OF A TRANSLATOR’S AFFIDAVIT CONTRIBUTED TO DEFENDANT’S FAILURE TO MAKE OUT A PRIMA FACIE CASE FOR SUMMARY JUDGMENT (SECOND DEPT).

The Second Department determined the defendant’s motion for summary judgment was properly denied because the errata sheets attached to the deposition were not accompanied by a translator’s affidavit. The defendant testified through a Spanish language interpreter:

… [T]he defendant testified at her deposition through a Spanish language interpreter. However, the errata sheets annexed to the transcript of the defendant’s deposition testimony and the defendant’s affidavit, which were both written in English, were not accompanied by a translator’s affidavit executed in compliance with CPLR 2101(b). Therefore, those evidentiary submissions were facially defective and inadmissible … . While the defendant submitted a translator’s affidavit with her reply papers, that affidavit was unnotarized, and thus was not in admissible form … . The defendant’s remaining evidentiary submissions were insufficient to establish her prima facie entitlement to judgment as a matter of law on the applicability of the homeowner’s exemption under the Labor Law …  . Gonzalez v Abreu, 2018 NY Slip Op 04309, Second Dept 6-13-18

CIVIL PROCEDURE (ABSENCE OF A TRANSLATOR’S AFFIDAVIT CONTRIBUTED TO DEFENDANT’S FAILURE TO MAKE OUT A PRIMA FACIE CASE FOR SUMMARY JUDGMENT (SECOND DEPT))/CPLR 2101 (ABSENCE OF A TRANSLATOR’S AFFIDAVIT CONTRIBUTED TO DEFENDANT’S FAILURE TO MAKE OUT A PRIMA FACIE CASE FOR SUMMARY JUDGMENT (SECOND DEPT))/TRANSLATOR’S AFFIDAVIT (ABSENCE OF A TRANSLATOR’S AFFIDAVIT CONTRIBUTED TO DEFENDANT’S FAILURE TO MAKE OUT A PRIMA FACIE CASE FOR SUMMARY JUDGMENT (SECOND DEPT))

PLAINTIFF DID NOT DEMONSTRATE DILIGENT EFFORTS TO SERVE DEFENDANT BEFORE USING THE AFFIX AND MAIL PROCEDURE, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant’s motion to dismiss the complaint for failure to obtain personal jurisdiction should have been granted. Plaintiff used the affix and mail procedure and did not demonstrate that diligent efforts were made to serve by other means:

Affix and mail service pursuant to CPLR 308(4) is only valid where service under CPLR 308(1) by personal delivery or CPLR 308(2) by delivery to a person of suitable age and discretion “cannot be made with due diligence” … . This requirement must be ” strictly observed, given the reduced likelihood that a summons served pursuant to that section will be received'”… . Whether due diligence has been satisfied must be “determined on a case-by-case basis, focusing not on the quantity of the attempts at personal delivery, but on their quality” … . Specifically, “it must be shown that the process server made genuine inquiries about the defendant’s whereabouts and place of employment” … .

Here, the submissions in support of the plaintiff’s motion contained numerous inconsistent dates regarding when service was attempted and made upon the defendant. Even accepting the dates of attempted service claimed by the plaintiff, those attempts were “made on weekdays during hours when it reasonably could have been expected that [the defendant] was either working or in transit to work”… . Moreover, there is no indication that the process server made any attempt to locate the defendant’s place of employment so he could attempt to effectuate service there … . Under these circumstances, the plaintiff failed to establish that he exercised due diligence in attempting to effectuate service pursuant to CPLR 308(1) or (2) before resorting to service pursuant to CPLR 308(4) … . Faruk v Dawn, 2018 NY Slip Op 04307, Second Dept 6-13-18

CIVIL PROCEDURE (SERVICE OF PROCESS, PLAINTIFF DID NOT DEMONSTRATE DILIGENT EFFORTS TO SERVE DEFENDANT BEFORE USING THE AFFIX AND MAIL PROCEDURE, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))/SERVICE OF PROCESS (PLAINTIFF DID NOT DEMONSTRATE DILIGENT EFFORTS TO SERVE DEFENDANT BEFORE USING THE AFFIX AND MAIL PROCEDURE, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))/CPLR 308 (SERVICE OF PROCESS, PLAINTIFF DID NOT DEMONSTRATE DILIGENT EFFORTS TO SERVE DEFENDANT BEFORE USING THE AFFIX AND MAIL PROCEDURE, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))/AFFIX AND MAIL  (SERVICE OF PROCESS, PLAINTIFF DID NOT DEMONSTRATE DILIGENT EFFORTS TO SERVE DEFENDANT BEFORE USING THE AFFIX AND MAIL PROCEDURE, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))/JURISDICTION  (SERVICE OF PROCESS, PLAINTIFF DID NOT DEMONSTRATE DILIGENT EFFORTS TO SERVE DEFENDANT BEFORE USING THE AFFIX AND MAIL PROCEDURE, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED (SECOND DEPT))

MOTION TO EXTEND THE TIME TO SERVE THE SUMMONS AND COMPLAINT PROPERLY GRANTED, DIFFERENCE BETWEEN ‘GOOD CAUSE’ AND ‘INTEREST OF JUSTICE’ CRITERIA EXPLAINED (SECOND DEPT).

The Second Department determined plaintiff’s cross motion to extend the time to serve the summons and complaint was properly granted. Defendant doctor had retired and was no longer working at the place of business where the medical malpractice summons and complaint was served:

… [A]n attempt at service that later proves defective cannot be the basis for a “good cause” extension of time to serve process pursuant to CPLR 306-b… . However, 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 … . Indeed, the court may consider diligence or lack thereof, along with any other relevant factor, in making its determination, including expiration of the statute of limitations, the potentially meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff’s request for the extension of time, and prejudice to defendant … .

Here, several factors weighed in favor of granting the plaintiff’s cross motion. The action was timely commenced, and the statute of limitations with respect to one of the two causes of action had expired when the plaintiff cross-moved for relief  … . The appellant also had actual notice of this action within 120 days after its commencement … . Furthermore, an extension of time to serve the summons and complaint under CPLR 306-b in the interest of justice is available where, as here, “service is timely made within the 120-day period but is subsequently found to have been defective” … .Finally, we note that whether a plaintiff has demonstrated that he or she has a potentially meritorious cause of action is but one factor to be considered by a court in determining a CPLR 306-b motion … . Estate of Fernandez v Wyckoff Hgts. Med. Ctr., 2018 NY Slip Op 04306, Second Dept 6-13-18

CIVIL PROCEDURE (MOTION TO EXTEND THE TIME TO SERVE THE SUMMONS AND COMPLAINT PROPERLY GRANTED, DIFFERENCE BETWEEN ‘GOOD CAUSE’ AND ‘INTEREST OF JUSTICE’ CRITERIA EXPLAINED (SECOND DEPT))/CPLR 306-b  (MOTION TO EXTEND THE TIME TO SERVE THE SUMMONS AND COMPLAINT PROPERLY GRANTED, DIFFERENCE BETWEEN ‘GOOD CAUSE’ AND ‘INTEREST OF JUSTICE’ CRITERIA EXPLAINED (SECOND DEPT))/SERVICE OF PROCESS  (MOTION TO EXTEND THE TIME TO SERVE THE SUMMONS AND COMPLAINT PROPERLY GRANTED, DIFFERENCE BETWEEN ‘GOOD CAUSE’ AND ‘INTEREST OF JUSTICE’ CRITERIA EXPLAINED (SECOND DEPT))/EXTEND TIME, MOTION TO (SERVICE OF PROCESS, MOTION TO EXTEND THE TIME TO SERVE THE SUMMONS AND COMPLAINT PROPERLY GRANTED, DIFFERENCE BETWEEN ‘GOOD CAUSE’ AND ‘INTEREST OF JUSTICE’ CRITERIA EXPLAINED (SECOND DEPT))

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DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Rivera, over a two-judge dissent, determined that a damages award in a negligence suit brought by a police officer receiving accident disability retirement (ADR) benefits must be offset by those benefits as a collateral source pursuant to CPLR 4545:

The … question presented … is whether a retired New York City police officer’s accident disability retirement (ADR) benefits are a collateral source that a court must offset against the injured retiree’s jury award for future lost earnings and pension. We hold that ADR benefits operate to replace earnings during the period when the retiree could have been employed, absent the disabling injury, and then serve as pension allotments, and so a court must offset a retiree’s projected ADR benefits against the jury award for both categories of economic loss. * * *

The statutory and regulatory scheme governing ADR benefits, and the text and legislative intent of CPLR 4545 … provide the basis for our conclusion that ADR benefits operate sequentially as payment for future lost earnings and pension benefits. Accordingly, on a motion pursuant to CPLR 4545, a court must apply ADR benefits, dollar-for-dollar, to offset the jury award for future lost earnings during the period they represent lost earnings, and future lost pension during the period they represent lost pension. Andino v Mills, 2018 NY Slip Op 04273, CtApp, 6-12-18

NEGLIGENCE (DAMAGES, COLLATERAL SOURCE, DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP))/CIVIL PROCEDURE (NEGLIGENCE, MUNICIPAL LAW, DAMAGES, COLLATERAL SOURCE,  DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP))/DAMAGES (COLLATERAL SOURCE, DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP))/COLLATERAL SOURCE (DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP))/CPLR 4545 (DAMAGES, COLLATERAL SOURCE,  DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP))/ACCIDENTAL DISABILITY RETIREMENT BENEFITS (DAMAGES, COLLATERAL SOURCE, DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP))/POLICE OFFICERS  (DAMAGES, COLLATERAL SOURCE, DAMAGES AWARD IN A NEGLIGENCE SUIT BROUGHT BY A POLICE OFFICER RECEIVING ACCIDENTAL RETIREMENT DISABILITY BENEFITS MUST BE OFFSET BY THOSE BENEFITS AS A COLLATERAL SOURCE PURSUANT TO CPLR 4545 (CT APP))

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NEW YORK’S BORROWING STATUTE APPLIED TO THE CONTRACT WITH A CANADIAN COMPANY WHICH CALLED FOR THE CONTRACT TO BE ‘ENFORCED’ ACCORDING TO NEW YORK LAW, ONTARIO’S TWO-YEAR STATUTE OF LIMITATIONS RENDERED THE ACTION UNTIMELY (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, determined New York’s borrowing statute, CPLR 202, applied to a contract with a Canadian company in which the parties agreed the contract would be “enforced” according to New York law. The borrowing statute required that Ontario’s two-year statute of limitations controlled and the action was untimely:

The [agreement] contained the following choice-of-law provision: “This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York.” * * *

​CPLR 202 provides: “An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.” * * *

​Plaintiff argues that because the contract in this case specified that it would be “enforced” according to New York law, the parties intended to apply New York’s procedural law except for its statutory choice-of-law provisions, which, plaintiff alleges, includes CPLR 202. We conclude, however, that the mere addition of the word “enforced” to the [agreement’s] choice-of-law provision does not demonstrate the intent of the contracting parties to apply solely New York’s six-year statute of limitations in CPLR 213 (2) to the exclusion of CPLR 202. Rather, the parties have agreed that the use of the word “enforced” evinces the parties’ intent to apply New York’s procedural law. CPLR 202 is part of that procedural law, and the statute therefore applies here. 2138747 Ontario, Inc. v Samsung C&T Corp., 2018 NY Slip Op 04274, CtApp 6-12-18

CIVIL PROCEDURE (NEW YORK’S  BORROWING STATUTE APPLIED TO THE CONTRACT WITH A CANADIAN COMPANY WHICH CALLED FOR THE CONTRACT TO BE ‘ENFORCED’ ACCORDING TO NEW YORK LAW, ONTARIO’S TWO-YEAR STATUTE OF LIMITATIONS RENDERED THE ACTION UNTIMELY (CT APP))/CPLR 202 (NEW YORK’S  BORROWING STATUTE APPLIED TO THE CONTRACT WITH A CANADIAN COMPANY WHICH CALLED FOR THE CONTRACT TO BE ‘ENFORCED’ ACCORDING TO NEW YORK LAW, ONTARIO’S TWO-YEAR STATUTE OF LIMITATIONS RENDERED THE ACTION UNTIMELY (CT APP))/CONTRACT (CHOICE OF LAW, NEW YORK’S  BORROWING STATUTE APPLIED TO THE CONTRACT WITH A CANADIAN COMPANY WHICH CALLED FOR THE CONTRACT TO BE ‘ENFORCED’ ACCORDING TO NEW YORK LAW, ONTARIO’S TWO-YEAR STATUTE OF LIMITATIONS RENDERED THE ACTION UNTIMELY (CT APP))/CHOICE OF LAW (CONTRACT LAW, (NEW YORK’S  BORROWING STATUTE APPLIED TO THE CONTRACT WITH A CANADIAN COMPANY WHICH CALLED FOR THE CONTRACT TO BE ‘ENFORCED’ ACCORDING TO NEW YORK LAW, ONTARIO’S TWO-YEAR STATUTE OF LIMITATIONS RENDERED THE ACTION UNTIMELY (CT APP))/BORROWING STATUTE (CIVIL PROCEDURE, CIVIL PROCEDURE (NEW YORK’S  BORROWING STATUTE APPLIED TO THE CONTRACT WITH A CANADIAN COMPANY WHICH CALLED FOR THE CONTRACT TO BE ‘ENFORCED’ ACCORDING TO NEW YORK LAW, ONTARIO’S TWO-YEAR STATUTE OF LIMITATIONS RENDERED THE ACTION UNTIMELY (CT APP))/STATUTE OF LIMITATIONS  (NEW YORK’S  BORROWING STATUTE APPLIED TO THE CONTRACT WITH A CANADIAN COMPANY WHICH CALLED FOR THE CONTRACT TO BE ‘ENFORCED’ ACCORDING TO NEW YORK LAW, ONTARIO’S TWO-YEAR STATUTE OF LIMITATIONS RENDERED THE ACTION UNTIMELY (CT APP))

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THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over an extensive two-judge concurring opinion and an extensive dissent, determined that some of the claims in this deceptive-practices/fraud action involving residential mortgage backed securities may not be time-barred. The Appellate Division had held both the General Business Law (Martin Act) and Executive Law claims were subject to the three-year statute of limitations for statutory violations and were therefore untimely. The Court of Appeals agreed the Martin Act claims were time-barred but ruled the Executive Law claims may not be time-barred if they are based entirely on the elements of common law fraud subject to a six-year statute of limitations:

… [T]he Martin Act imposes numerous obligations — or “liabilities” — that did not exist at common law, justifying the imposition of a three-year statute of limitations under CPLR 214(2). The broad definition of “fraudulent practices,” as repeatedly amended by the Legislature and interpreted by the courts, encompasses “wrongs” not cognizable under the common law and dispenses, among other things, with any requirement that the Attorney General prove scienter or justifiable reliance on the part of investors. * * *

… [W]hile the lower courts concluded that a six-year statute of limitations applied to defendants’ Executive Law § 63(12) claim — regardless of whether the specific elements of common law fraud had been made out — that holding was not correct. Rather, it is necessary to examine whether the conduct underlying the Executive Law § 63(12) claim amounts to a type of fraud recognized in the common law and, if so, the action will be governed by a six-year statute of limitations … . Although the parties raised various arguments with respect to this question, not all the issues were addressed or resolved by the lower courts. A remittal — which permits consideration of the question in the current procedural posture — is therefore appropriate. If it is determined that the prima facie elements of a common law cause of action were made out in this case, the Attorney General will be obliged to demonstrate each such element at the proof stage or the claim will be subject to dismissal as time-barred. People v Credit Suisse Sec. (USA) LLC, 2018 NY Slip Op 04272, Ct App 6-12-18

CIVIL PROCEDURE (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/STATUTE OF LIMITATIONS (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/SECURITIES  (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/RESIDENTIAL MORTGAGE BACKED SECURITIES  (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))FRAUD (RESIDENTIAL MORTGAGE BACKED SECURITIES, STATUTE OF LIMITATIONS, THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/CPLR 213  (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/CPLR 214 (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/GENERAL BUSINESS LAW (MARTIN ACT, THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/EXECUTIVE LAW (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))/MARTIN ACT  (THE MARTIN ACT CLAIMS IN THIS DECEPTIVE PRACTICES ACTION INVOLVING RESIDENTIAL MORTGAGE BACKED SECURITIES ARE TIME-BARRED UNDER THE THREE-YEAR STATUTE OF LIMITATIONS FOR STATUTORY VIOLATIONS, BUT THE EXECUTIVE LAW CLAIMS MAY NOT BE TIME-BARRED IF THEY ARE BASED SOLELY ON THE ELEMENTS OF COMMON LAW FRAUD SUBJECT TO THE SIX-YEAR STATUTE OF LIMITATIONS (CT APP))

,

BAD FAITH DISCLAIMER ACTION BROUGHT AFTER INJURED PLAINTIFFS WERE ASSIGNED THE INSURED’S RIGHTS UNDER THE POLICY NOT BARRED BY RES JUDICATA, PLAINTIFFS DID NOT HAVE STANDING TO BRING THE BAD FAITH ACTION UNTIL THE RIGHTS WERE ASSIGNED (FOURTH DEPT). ​

The Fourth Department determined plaintiffs’ bad faith action against the insurer was not barred by res judicata. Plaintiffs successfully sued the insured in this accidental shooting case and recovered the policy limits. Plaintiffs then were assigned the insured’s rights against the insurer and sued for the insurer for disclaiming coverage in bad faith. Because plaintiffs could not have brought the bad faith action until the assignment of rights, plaintiffs had standing to bring the current action. The Fourth Department noted that the 1st Department had come to the opposite conclusion under similar facts:

… [U]nder Insurance Law § 3420 (a) (2) and (b) (1), an injured party’s standing to bring an action against an insurer is limited to recovering only the policy limits of the insured’s insurance policy. … [I]f an injured party/judgment creditor seeks to recover from the insurer an amount above the insured’s policy limits on a theory of liability beyond that created by Insurance Law § 3420 (a) (2), the statute does not confer standing to do so. However, if the insured assigns his or her rights under the insurance contract to the injured party/judgment creditor, then the injured party/judgment creditor may simultaneously bring a direct action against the insurer pursuant to Insurance Law § 3420 (a) (2) along with any other appropriate claim, including a bad faith claim, seeking a judgment in a total amount beyond the insured’s policy limits.

Here, when [plaintiffs] commenced the prior action pursuant to Insurance Law § 3420 (a) (2) … , the [insured] had not yet assigned their rights under the insurance contract … . As a result, [plaintiffs] did not have standing to bring a bad faith claim against defendant … . Thus, because [plaintiffs] lacked standing to bring a bad faith claim against defendant at the time [they] brought the Insurance Law § 3420 (a) (2) action, we conclude that the doctrine of res judicata does not bar this action … . Corle v Allstate Ins. Co., 2018 NY Slip Op 04135, Fourth Dept 6-8-18​

INSURANCE LAW (BAD FAITH DISCLAIMER ACTION BROUGHT AFTER INJURED PLAINTIFFS WERE ASSIGNED THE INSURED’S RIGHTS UNDER THE POLICY NOT BARRED BY RES JUDICATA, PLAINTIFFS DID NOT HAVE STANDING TO BRING THE BAD FAITH ACTION UNTIL THE RIGHTS WERE ASSIGNED (FOURTH DEPT))/CIVIL PROCEDURE (RES JUDICATA, INSURANCE LAW, BAD FAITH DISCLAIMER ACTION BROUGHT AFTER INJURED PLAINTIFFS WERE ASSIGNED THE INSURED’S RIGHTS UNDER THE POLICY NOT BARRED BY RES JUDICATA, PLAINTIFFS DID NOT HAVE STANDING TO BRING THE BAD FAITH ACTION UNTIL THE RIGHTS WERE ASSIGNED (FOURTH DEPT))/BAD FAITH (INSURANCE LAW, (BAD FAITH DISCLAIMER ACTION BROUGHT AFTER INJURED PLAINTIFFS WERE ASSIGNED THE INSURED’S RIGHTS UNDER THE POLICY NOT BARRED BY RES JUDICATA, PLAINTIFFS DID NOT HAVE STANDING TO BRING THE BAD FAITH ACTION UNTIL THE RIGHTS WERE ASSIGNED (FOURTH DEPT))/DISCLAIMER (INSURANCE LAW, BAD FAITH DISCLAIMER ACTION BROUGHT AFTER INJURED PLAINTIFFS WERE ASSIGNED THE INSURED’S RIGHTS UNDER THE POLICY NOT BARRED BY RES JUDICATA, PLAINTIFFS DID NOT HAVE STANDING TO BRING THE BAD FAITH ACTION UNTIL THE RIGHTS WERE ASSIGNED (FOURTH DEPT))/RES JUDICATA (INSURANCE LAW, BAD FAITH DISCLAIMER ACTION BROUGHT AFTER INJURED PLAINTIFFS WERE ASSIGNED THE INSURED’S RIGHTS UNDER THE POLICY NOT BARRED BY RES JUDICATA, PLAINTIFFS DID NOT HAVE STANDING TO BRING THE BAD FAITH ACTION UNTIL THE RIGHTS WERE ASSIGNED (FOURTH DEPT))

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