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ATTORNEY’S INACTION NOT IMPUTED TO THE CLIENT, DEFAULT ORDER AND JUDGMENT PROPERLY VACATED (THIRD DEPT).

The Third Department determined Supreme Court properly vacated the default order and judgment which were issued because of plaintiff’s attorney’s failure to meet discovery deadlines and attend scheduled conferences. Plaintiff, upon learning of the default, promptly hired new counsel and moved to vacate the default order and judgment. The Third Department noted that an attorney’s misconduct is not necessarily to be imputed to the represented party:

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“A motion to vacate a prior judgment or order is addressed to the court’s sound discretion, subject to reversal only where there has been a clear abuse of that discretion”… . Further, “[c]ourts are not limited to vacating a judgment pursuant to the enumerated grounds set forth in CPLR 5015 . . ., as they retain inherent discretionary power to vacate their own judgments for sufficient reason and in the interests of substantial justice”… .

Here, even applying the arguably more exacting standard set forth in CPLR 5015 (a) (1), we do not find that Supreme Court abused its discretion in granting [plaintiff’s] motion. While there indeed may be instances where counsel’s inaction or dilatory conduct may be imputed to the client … , a review of [plaintiff’s] affidavit — together with the supporting documentation annexed thereto — reveals that she never intended to abandon either the pursuit of action No. 1 or the defense of action No. 2 … but, rather, reasonably believed that [her attorney] was actively pursuing and properly defending [plaintiff’s] interests in the context thereof … . Inwald Enters., LLC v Aloha Energy, 2017 NY Slip Op 06031, Third Dept 8-3-17

 

CIVIL PROCEDURE (DEFAULT, ATTORNEY’S INACTION NOT IMPUTED TO THE CLIENT, DEFAULT ORDER AND JUDGMENT PROPERLY VACATED (THIRD DEPT))/ATTORNEYS (DEFAULT,  ATTORNEY’S INACTION NOT IMPUTED TO THE CLIENT, DEFAULT ORDER AND JUDGMENT PROPERLY VACATED (THIRD DEPT))

PLAINTIFF’S ATTEMPT TO AMEND THE COMPLAINT TO ADD A PARTY INITIALLY NAMED AS JOHN DOE TIME-BARRED (THIRD DEPT).

The Third Department determined plaintiff’s attempt to file an amended complaint naming a defendant (Rytec) which had been identified as John Doe was time-barred. The initial complaint was filed three days before the statute of limitations expired and the John Doe designation did not toll the statute:

The statutory provision allowing commencement of an action against unknown parties does not toll the statute of limitations (see CPLR 1024… ). As Supreme Court held, plaintiff was required to serve all parties within 120 days of filing, or seek leave to extend the time for service “upon good cause shown or in the interest of justice” (CPLR 306-b… ). Here, plaintiff failed to seek leave to extend the time for service prior to expiration of the statutory limitations period.

Further, a party seeking to apply the relation-back doctrine under CPLR 1024 carries the burden “of establishing that diligent efforts were made to ascertain the unknown party’s identity prior to the expiration of the statute of limitations” … .

Plaintiff’s third amended complaint was filed nearly 10 months after the statute of limitations expired, with the delay essentially unexplained but for a statement that Rytec’s identity could not be ascertained until the door was inspected in May 2015. There was no effort to explain any basis for the precommencement delay, and no discussion relative to any of the potential additional discovery efforts that might or could have been undertaken prior to the expiration of the limitations period… .

Accordingly, we find that Supreme Court properly granted Rytec’s motion to dismiss the third amended complaint against it, as it was barred by the statute of limitations … . Walker v Hormann Flexon, LLC, 2017 NY Slip Op 06023, Third Dept 8-3-17

CIVIL PROCEDURE (UNKNOWN PARTIES, PLAINTIFF’S ATTEMPT TO AMEND THE COMPLAINT TO ADD A PARTY INITIALLY NAMED AS JOHN DOE TIME-BARRED (THIRD DEPT))/UNKNOWN PARTIES (CIVIL PROCEDURE, PLAINTIFF’S ATTEMPT TO AMEND THE COMPLAINT TO ADD A PARTY INITIALLY NAMED AS JOHN DOE TIME-BARRED (THIRD DEPT))/JOHN DOES (CIVIL PROCEDURE, PLAINTIFF’S ATTEMPT TO AMEND THE COMPLAINT TO ADD A PARTY INITIALLY NAMED AS JOHN DOE TIME-BARRED (THIRD DEPT))

MOTION TO EXTEND TIME FOR SERVICE SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiffs’ motion to extend the time for service of the summons and complaint should have been granted. The action had been timely commenced but the statute of limitations had expired when the defect in service was discovered:

The denial of the plaintiffs’ renewed motion pursuant to CPLR 306-b to extend the time to serve the defendants with the summons and complaint was an improvident exercise of discretion … . While the action was timely commenced, the statute of limitations had expired when the plaintiffs first moved for relief, the timely service of process was subsequently found to have been defective, and the defendants had actual notice of the action within 120 days of commencement of the action… . Furthermore, the plaintiffs demonstrated a potentially meritorious cause of action, and there was no prejudice to the defendants attributable to the delay in service … . Singh v Trahan, 2017 NY Slip Op 06395, Second Dept 8-30-17

CIVIL PROCEDURE (MOTION TO EXTEND TIME FOR SERVICE SHOULD HAVE BEEN GRANTED (SECOND DEPT))/SERVICE OF PROCESS (MOTION TO EXTEND TIME FOR SERVICE SHOULD HAVE BEEN GRANTED (SECOND DEPT))

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INJURIES STEMMING FROM FAILURE TO RESTRAIN A PATIENT WITH DEMENTIA FALL UNDER THE MEDICAL MALPRACTICE, NOT NEGLIGENCE, STATUTE OF LIMITATIONS, PLAINTIFF’S ACTION IS TIME-BARRED (SECOND DEPT).

The Second Department determined the medical malpractice (2 1/2 year) rather than the negligence (3 year) statute of limitations applied to this action stemming from the alleged failure to restrain a patient (plaintiff’s decedent) with dementia. The patient was injured when she fell. The court held the action was governed by the medical malpractice limitations period and was therefore untimely:

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“The distinction between ordinary negligence and malpractice turns on whether the acts or omissions complained of involve a matter of medical science or art requiring special skills not ordinarily possessed by lay persons or whether the conduct complained of can instead be assessed on the basis of the common everyday experience of the trier of the facts” … . Generally, a claim will be deemed to sound in medical malpractice “when the challenged conduct constitutes medical treatment or bears a substantial relationship to the rendition of medical treatment by a licensed physician'” … . Thus, when the complaint challenges a medical facility’s performance of functions that are “an integral part of the process of rendering medical treatment” and diagnosis to a patient, such as taking a medical history and determining the need for restraints, the action sounds in medical malpractice… .

… The defendants’ evidence showed that on April 12, 2009, the plaintiff’s decedent, Ruby Bell (hereinafter the decedent), was admitted to New Island Hospital with a history of dementia, and placed on “Fall Prevention Protocol.” After the decedent was found standing at her bedside trying to remove her foley catheter, a physician ordered that she be restrained with a vest and wrist restraints. On the morning of April 18, 2009, the decedent was discovered sitting on the floor next to her bed. The bed’s side rails were up and the decedent was not aware of how she came to be on the floor. She had apparently fallen while trying to climb out of her bed. Thereafter, the decedent was diagnosed with a distal radius fracture of the right forearm. The plaintiff alleged that this incident arose out of the failure of the defendants’ staff to follow the physician’s order to restrain her … .

In opposition to the defendants’ prima facie showing of entitlement to judgment as a matter of law, the plaintiff failed to raise a triable issue of fact. Contrary to the plaintiff’s contentions, the allegations at issue essentially challenged the defendants’ assessment of the decedent’s supervisory and treatment needs … . Bell v WSNCHS N., Inc., 2017 NY Slip Op 05937, 2nd Dept 8-2-17

 

NEGLIGENCE (MEDICAL MALPRACTICE, CIVIL PROCEDURE, INJURIES STEMMING FROM FAILURE TO RESTRAIN A PATIENT WITH DEMENTIA FALL UNDER THE MEDICAL MALPRACTICE, NOT NEGLIGENCE, STATUTE OF LIMITATIONS, PLAINTIFF’S ACTION IS TIME-BARRED (SECOND DEPT))/MEDICAL MALPRACTICE (CIVIL PROCEDURE, INJURIES STEMMING FROM FAILURE TO RESTRAIN A PATIENT WITH DEMENTIA FALL UNDER THE MEDICAL MALPRACTICE, NOT NEGLIGENCE, STATUTE OF LIMITATIONS, PLAINTIFF’S ACTION IS TIME-BARRED (SECOND DEPT))/CIVIL PROCEDURE (MEDICAL MALPRACTICE, INJURIES STEMMING FROM FAILURE TO RESTRAIN A PATIENT WITH DEMENTIA FALL UNDER THE MEDICAL MALPRACTICE, NOT NEGLIGENCE, STATUTE OF LIMITATIONS, PLAINTIFF’S ACTION IS TIME-BARRED (SECOND DEPT))

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PRE-LITIGATION INVESTIGATION BY THE INSURER’S LAW FIRM INTO WHETHER TO REJECT OR PAY AN INSURANCE CLAIM IS NOT PRIVILEGED AND IS DISCOVERABLE, THE ATTORNEY WHO CONDUCTED THE INVESTIGATION WAS PROPERLY DISQUALIFIED FROM THE UNDERLYING LITIGATION, BUT HER LAW FIRM SHOULD NOT HAVE BEEN DISQUALIFIED (SECOND DEPT).

The Second Department determined the file for a pre-litigation investigation of a fire insurance claim done by a law firm hired by the insurer was discoverable.  The court further found the attorney who conducted the investigation was properly disqualified because she may be a fact witness in the underlying litigation, but her law firm should not have been disqualified because her testimony would not be prejudicial to the client’s case:

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CPLR 3101(a) entitles parties to “full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof.” Discovery determinations should be evaluated on a case-by-case basis “with due regard for the strong policy supporting open disclosure” … .

“[T]he payment or rejection of claims is a part of the regular business of an insurance company. Consequently, reports which aid it in the process of deciding [whether to pay or reject a claim] are made in the regular course of its business” … . Reports prepared by insurance investigators, adjusters, or attorneys before the decision is made to pay or reject a claim are not privileged and are discoverable, even when those reports are mixed/multi-purpose reports, motivated in part by the potential for litigation with the insured … .

Here, the Supreme Court properly compelled disclosure, as the material … was prepared by [the law firm] as part of [the insurer’s] investigation into the claim, and was not primarily and predominantly of a legal character … . …

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The Supreme Court providently exercised its discretion in disqualifying … the attorney who conducted the investigation … since she was likely to be a witness on a significant issue of fact … . However, it improvidently exercised its discretion in disqualifying [the law firm] itself …. Pursuant to Rule 3.7(b)(1) of the Rules of Professional Conduct, “[a] lawyer may not act as [an] advocate before a tribunal in a matter if . . . another lawyer in the lawyer’s firm is likely to be called as a witness on a significant issue other than on behalf of the client, and it is apparent that the testimony may be prejudicial to the client”… . Here, there was no showing that [the attorney’s] testimony may be prejudicial to [the client’s] case … . Advanced Chimney, Inc. v Graziano, 2017 NY Slip Op 05927, Second Dept 8-2-17

 

INSURANCE LAW (DISCOVERY, ATTORNEYS, PRE-LITIGATION INVESTIGATION BY THE INSURER’S LAW FIRM INTO WHETHER TO REJECT OR PAY AN INSURANCE CLAIM IS NOT PRIVILEGED AND IS DISCOVERABLE, THE ATTORNEY WHO CONDUCTED THE INVESTIGATION WAS PROPERLY DISQUALIFIED FROM THE UNDERLYING LITIGATION, BUT HER LAW FIRM SHOULD NOT HAVE BEEN DISQUALIFIED (SECOND DEPT))/CIVIL PROCEDURE (INSURANCE LAW, ATTORNEYS, PRE-LITIGATION INVESTIGATION BY THE INSURER’S LAW FIRM INTO WHETHER TO REJECT OR PAY AN INSURANCE CLAIM IS NOT PRIVILEGED AND IS DISCOVERABLE, THE ATTORNEY WHO CONDUCTED THE INVESTIGATION WAS PROPERLY DISQUALIFIED FROM THE UNDERLYING LITIGATION, BUT HER LAW FIRM SHOULD NOT HAVE BEEN DISQUALIFIED (SECOND DEPT))/ATTORNEYS (INSURANCE LAW, PRE-LITIGATION INVESTIGATION BY THE INSURER’S LAW FIRM INTO WHETHER TO REJECT OR PAY AN INSURANCE CLAIM IS NOT PRIVILEGED AND IS DISCOVERABLE, THE ATTORNEY WHO CONDUCTED THE INVESTIGATION WAS PROPERLY DISQUALIFIED FROM THE UNDERLYING LITIGATION, BUT HER LAW FIRM SHOULD NOT HAVE BEEN DISQUALIFIED (SECOND DEPT))

SUPREME COURT SHOULD HAVE GRANTED PLAINTIFF MORE TIME TO FILE PAPERS OPPOSING DEFENDANT’S MOTION TO DISMISS, PLAINTIFF DEMONSTRATED GOOD CAUSE FOR THE DELAY, THE LACK OF PREJUDICE AND MERITORIOUS DEFENSES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the court should not have rejected plaintiff’s request for more time to file opposition papers. On the return date for the motion to dismiss, plaintiff tried to file a stipulation signed by defendant’s (NCAA’s) counsel which allowed plaintiff to adjourn the motion and granted plaintiff more time in which to file the papers. The court rejected the stipulation and marked the motion unopposed. That same evening, plaintiff e-filed the opposing papers:

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CPLR 2004 provides that, “[e]xcept where otherwise expressly prescribed by law, the court may extend the time fixed by any statute, rule or order for doing any act, upon such terms as may be just and upon good cause shown, whether the application for extension is made before or after the expiration of the time fixed.” In considering a motion for an extension of time, “the court may properly consider factors such as the length of the delay, whether the opposing party has been prejudiced by the delay, the reason given for the delay, whether the moving party was in default before seeking the extension, and, if so, the presence or absence of an affidavit of merit” … .

Here, the plaintiff established good cause for an extension of his time to submit opposition papers to the NCAA’s motion given the brief and unintentional delay, the lack of prejudice to the NCAA, the existence of potentially meritorious defenses to the NCAA’s motion, and “the policy favoring the resolution of cases on their merits” … . Calderone v Molloy Coll., 2017 NY Slip Op 05932, Second Dept 8-2-17

CIVIL PROCEDURE (CPLR 2004, SUPREME COURT SHOULD HAVE GRANTED PLAINTIFF MORE TIME TO FILE PAPERS OPPOSING DEFENDANT’S MOTION TO DISMISS, PLAINTIFF DEMONSTRATED GOOD CAUSE FOR THE DELAY, THE LACK OF PREJUDICE AND MERITORIOUS DEFENSES (SECOND DEPT))/CPLR 2004 (SUPREME COURT SHOULD HAVE GRANTED PLAINTIFF MORE TIME TO FILE PAPERS OPPOSING DEFENDANT’S MOTION TO DISMISS, PLAINTIFF DEMONSTRATED GOOD CAUSE FOR THE DELAY, THE LACK OF PREJUDICE AND MERITORIOUS DEFENSES (SECOND DEPT))

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CPLR 5003-A, WHICH MANDATES PROMPT PAYMENT OF A SETTLEMENT TO THE PLAINTIFF, DOES NOT APPLY TO PAYMENTS TO THIRD PARTIES REQUIRED BY THE SETTLEMENT AGREEMENT 3RD DEPT.

The Third Department, in a full-fledged opinion by Justice Peters, determined CPLR 5003-a, which requires the prompt payment of a settlement to the plaintiff, does not apply to payments owed to a third-party, even though the settlement agreement requires that the third party be paid. Here the settlement agreement required defendant to pay a Worker’s Compensation lien:

… [W]e conclude that CPLR 5003-a applies only to the nonpayment of settlement monies owed directly to a settling plaintiff pursuant to a settlement agreement. This construction is not only in accord with the plain language of the prompt payment mandate itself, but is also supported by the language of the statutory enforcement mechanism set forth in subdivision (e). CPLR 5003-a (e), the teeth that effectuate subdivision (a)’s prompt payment directive, authorizes an “unpaid plaintiff” to enter judgment inclusive of interest, costs and disbursements against the nonpaying settling defendant … . Simply put, plaintiff here is not “unpaid” — all sums required to be paid to him pursuant to the parties’ settlement agreement (i.e., $3.25 million) were paid by defendant within the statutorily-prescribed 21-day time period. Had the Legislature intended to extend the reach of CPLR 5003-a to a settling defendant’s failure to promptly pay all valuable consideration due a settling plaintiff pursuant to the parties’ settlement agreement, it could have easily said so. It did not, and “‘a court cannot amend a statute by inserting words that are not there'” … . Ronkese v Tilcon N.Y., Inc., 2017 NY Slip Op 05905, 3rd Dept 7-27-17

CIVIL PROCEDURE (SETTLEMENTS, CPLR 5003-A, WHICH MANDATES PROMPT PAYMENT OF A SETTLEMENT TO THE PLAINTIFF, DOES NOT APPLY TO PAYMENTS TO THIRD PARTIES REQUIRED BY THE SETTLEMENT AGREEMENT 3RD DEPT)/SETTLEMENTS (CPLR 5003-A, WHICH MANDATES PROMPT PAYMENT OF A SETTLEMENT TO THE PLAINTIFF, DOES NOT APPLY TO PAYMENTS TO THIRD PARTIES REQUIRED BY THE SETTLEMENT AGREEMENT 3RD DEPT)

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QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT.

The Second Department, reversing Supreme Court, determined plaintiff had raised a question of fact whether the golf-course sprinkler-valve-hole, which caused plaintiff’s decedent to trip and fall, was concealed or unreasonably increased the risks inherent in the golf course, thereby overcoming the assumption of risk doctrine. Supreme Court should not have excluded the photographs of the area where plaintiff fell. Contrary to Supreme Court’s reasoning, the person who authenticated the photographs was a not a notice witness who should have been named prior to the filing of the note of issue:

… [P]laintiff raised a triable issue of fact as to whether the subject condition was concealed or unreasonably increased the risks inherent in the golf course … In this regard, the Supreme Court erred in rejecting the affidavits and photographic evidence submitted by the plaintiff in opposition to the motion. Contrary to the court’s determination, the plaintiff was not required to identify John Flower as a notice witness prior to filing the note of issue. The disclosure requirements of CPLR 3101 include the obligation to disclose the names of witnesses “if they are material and necessary to the prosecution or defense of the action” … . Here, Flower did not possess information material and necessary to the prosecution or defense of the action. In his affidavit, Flower merely authenticated certain photographs, most of which had been submitted by the decedent with his notice of claim prior to his death. Consequently, the court should not have rejected Flower’s affidavit and the attendant photographs on the ground that the plaintiff had failed to identify Flower as a notice witness prior to the filing of the note of issue. As a related matter, the court improperly rejected the affidavit of the plaintiff’s expert on the ground that he relied upon the photographs. Further, the court should not have rejected the two remaining affidavits from individuals who were disclosed to the defendant prior to the filing of the note of issue. MacIsaac v Nassau County, 2017 NY Slip Op 05814, 2nd Dept 7-25-17

NEGLIGENCE (ASSUMPTION OF RISK, QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT)CIVIL PROCEDURE (NOTICE WITNESS, QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT)/EVIDENCE (NOTICE WITNESS, QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT)/ASSUMPTION OF RISK (GOLF, QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT)/GOLF (ASSUMPTION OF RISK, QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT)/PHOTOGRAPHS (EVIDENCE, QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT)/NOTICE WITNESS (CIVIL PROCEDURE, QUESTION OF FACT WHETHER HOLE IN GOLF COURSE UNREASONABLY INCREASED THE INHERENT RISKS, PERSON WHO AUTHENTICATED PHOTOGRAPHS WAS NOT A NOTICE WITNESS 2ND DEPT)

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PETITIONER, WHO WAS ADMITTED TO THE PRISON NURSERY PROGRAM AFTER STARTING AN ARTICLE 78 PROCEEDING CONTESTING THE WITHDRAWAL OF ADMISSION, WAS NOT A PREVAILING PARTY WITHIN THE MEANING OF THE EQUAL ACCESS TO JUSTICE ACT, SHE WAS NOT, THEREFORE, ENTITLED TO ATTORNEY’S FEES 2ND DEPT.

The Second Department determined petitioner, an inmate who sought admission to the prison nursery program for her and her child, was not entitled to attorney’s fees under the Equal Access to Justice Act (EAJA). Petitioner’s admission to the program had been withdrawn by the prison superintendent (Kaplan) so petitioner brought an Article 78 proceeding with an order to show cause. The judge signed the order to show cause and allowed petitioner’s admission to the program pending a hearing. Before the hearing, the superintendent reversed her prior ruling and allowed petitioner to stay in the program. The Second Department held that petitioner was not a “prevailing party” within the meaning of the EAJA, and, even if she had been a prevailing party, the superintendent’s actions were justified:

We conclude that the Supreme Court properly determined that the petitioner was not a “prevailing party” under CPLR 8601(a) and 8602(f), albeit for a different reason. Contrary to the petitioner’s contention, the stipulation entered into between the parties …, which was so-ordered by the court, did not reflect a material change in the legal relationship between the parties because the petitioner’s claims had already been rendered moot by Kaplan’s voluntary decision on December 30, 2014, to vacate her earlier decision removing the petitioner from the Nursery Program … . Furthermore, the petitioner did not achieve prevailing party status by obtaining a temporary restraining order and a preliminary injunction from the court directing the respondents to admit the [*2]petitioner to the Nursery Program pending the outcome of the proceeding … . Matter of Gonzalez v New York State Dept. of Corr. & Community Supervision, 2017 NY Slip Op 05724, 2nd Dept 7-19-17

CIVIL PROCEDURE (EQUAL ACCESS TO JUSTICE ACT, INMATES, PETITIONER, WHO WAS ADMITTED TO THE PRISON NURSERY PROGRAM AFTER STARTING AN ARTICLE 78 PROCEEDING CONTESTING THE DENIAL OF PERMISSION, WAS NOT A PREVAILING PARTY WITHIN THE MEANING OF THE EQUAL ACCESS TO JUSTICE ACT, SHE WAS NOT, THEREFORE, ENTITLED TO ATTORNEY’S FEES 2ND DEPT)/ATTORNEYS  (EQUAL ACCESS TO JUSTICE ACT, INMATES, PETITIONER, WHO WAS ADMITTED TO THE PRISON NURSERY PROGRAM AFTER STARTING AN ARTICLE 78 PROCEEDING CONTESTING THE DENIAL OF PERMISSION, WAS NOT A PREVAILING PARTY WITHIN THE MEANING OF THE EQUAL ACCESS TO JUSTICE ACT, SHE WAS NOT, THEREFORE, ENTITLED TO ATTORNEY’S FEES 2ND DEPT)/EQUAL ACCESS TO JUSTICE ACT (ATTORNEY’S FEES, INMATES, PETITIONER, WHO WAS ADMITTED TO THE PRISON NURSERY PROGRAM AFTER STARTING AN ARTICLE 78 PROCEEDING CONTESTING THE DENIAL OF PERMISSION, WAS NOT A PREVAILING PARTY WITHIN THE MEANING OF THE EQUAL ACCESS TO JUSTICE ACT, SHE WAS NOT, THEREFORE, ENTITLED TO ATTORNEY’S FEES 2ND DEPT)/INMATES (EQUAL ACCESS TO JUSTICE ACT, ATTORNEY’S FEES, PETITIONER, WHO WAS ADMITTED TO THE PRISON NURSERY PROGRAM AFTER STARTING AN ARTICLE 78 PROCEEDING CONTESTING THE DENIAL OF PERMISSION, WAS NOT A PREVAILING PARTY WITHIN THE MEANING OF THE EQUAL ACCESS TO JUSTICE ACT, SHE WAS NOT, THEREFORE, ENTITLED TO ATTORNEY’S FEES 2ND DEPT)

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A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT.

The First Department, modifying Supreme Court, in a full-fledged opinion by Justice Moskowitz, over a two-justice dissenting opinion, determined an arbitration provision in plaintiff insurance agent’s employment contract was unenforceable with respect to collective actions, here a class action concerning wage and hour claims:

… [W]e conclude … that arbitration provisions such as the one in [plaintiff’s] contract, which prohibit class, collective, or representative claims, violate the National Labor Relations Act (NLRA) and thus, that those provisions are unenforceable.

In reaching this conclusion, we agree with the reasoning in Lewis v Epic Sys. Corp. (823 F3d 1147 [7th Cir 2016], cert granted __ US __, 137 S Ct 809 [2017]), the recent case from the United States Court of Appeals for the Seventh Circuit, which addressed the enforceability of arbitration agreements prohibiting collective actions. In Lewis, the plaintiff employee agreed to an arbitration agreement mandating that wage and hour claims could be brought only through]individual arbitration and requiring employees to waive “the right to participate in or receive money or any other relief from any class, collective, or representative proceeding” … . The arbitration agreement also included a clause stating that if the waiver were unenforceable, “any claim brought on a class, collective, or representative action basis must be filed in a court of competent jurisdiction” … .

… The plaintiff [in Lewis] argued that the arbitration clause violated the NLRA because it interfered with employees’ right to engage in concerted activities for mutual aid and protection, and was therefore unenforceable … .

The Seventh Circuit denied the employer’s motion to proceed under the arbitration clause, declining to enforce a clause that precluded employees from “seeking any class, collective, or representative remedies to wage-and-hour disputes” because the clause “violate[d] Sections 7 and 8 of the NLRA” (id. at 1161). According to the Court, section 7 of the NLRA provided that employees have the right to engage in concerted activities, and concerted activities “have long been held to include resort to . . . judicial forums” (id. at 1152) [internal quotation marks omitted]. The Seventh Circuit also found that a lawsuit filed “by a group of employees to achieve more favorable terms or conditions of employment” is considered to constitute “concerted activity” under section 7 of the NLRA (id.) [internal quotation marks omitted). Accordingly, the Court held, contracts such as the one at issue were unenforceable under the NLRA because they “stipulate away employees’ [s]ection 7 rights or otherwise require actions unlawful under the NRLA” (id. at 1155). Gold v New York Life Ins. Co., 2017 NY Slip Op 05695, 1st Dept 7-18-17

CIVIL PROCEDURE (CLASS ACTIONS, EMPLOYMENT LAW, A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/CLASS ACTIONS (EMPLOYMENT LAW,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/EMPLOYMENT LAW (CLASS ACTIONS, ARBITRATION,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/ARBITRATION (EMPLOYMENT LAW, CLASS ACTIONS,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/CONTRACT LAW (EMPLOYMENT LAW, ARBITRATION,  A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)/INSURANCE LAW (EMPLOYMENT LAW, ARBITRATION, A CLAUSE IN AN EMPLOYMENT CONTRACT PURPORTING TO WAIVE THE RIGHT TO BRING A CLASS ACTION SUIT AND SUBMIT COLLECTIVE CLAIMS TO ARBITRATION VIOLATED THE NATIONAL LABOR RELATIONS ACT AND IS UNENFORCEABLE 1ST DEPT)

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