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THE CHOICE OF FORUM CLAUSE (ARIZONA) IN THE CONTRACT IS ENFORCEABLE AND IS NOT AFFECTED BY AN ARGUMENT QUESTIONING THE VALIDITY OF A CHOICE OF LAW CLAUSE; THE FACT THAT THE NEW YORK PLAINTIFF WILL HAVE TO TRAVEL TO ARIZONA DOES NOT AFFECT THE ENFORCEABILITY OF THE CHOICE OF FORUM CLAUSE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined defendant’s motion to dismiss the New York complaint based upon the choice of forum clause (Arizona) in the contract should have been granted. Plaintiff argued the contract was illegal under New York law. But a choice of forum clause is independent from a choice of law clause:

The contract between the parties provided that Arizona law would govern “the rights and obligations” of the parties under the contract. It further provided that all disputes arising out of the contract “shall be subject to the exclusive jurisdiction and venue of the state or federal courts sitting in Maricopa County, Arizona.” That forum selection clause is prima facie valid and enforceable unless shown by plaintiff to be ” ‘unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court’ ” … .

In opposition to the motion, plaintiff argued that the contract’s “pay-if-paid” provision, together with a provision prohibiting plaintiff from contacting clients of defendant, rendered the contract void as against public policy of New York. Plaintiff’s argument, however, “is misdirected [inasmuch as t]he issue [it] raise[s] is really one of choice of law, not choice of forum” … . ” ‘[O]bjections to a choice of law clause are not a warrant for failure to enforce a choice of forum clause’ ” … . Plaintiff has not shown that enforcement of the forum selection clause contravenes New York public policy … . Nor has plaintiff shown that enforcement would be unreasonable or unjust or alleged that the clause was the result of fraud or overreaching … . Plaintiff’s further argument in opposition to the motion—i.e., that it would be a hardship for plaintiff’s owner to go to Arizona to litigate this dispute—is an insufficient basis on which to deny the motion … . The fact that New York may be a more convenient forum is immaterial inasmuch as defendant’s motion is based on the parties’ contract and not on the doctrine of forum non conveniens … . Prestige Lawn Care of WNY, LLC v Facilitysource, LLC, 2024 NY Slip Op 06483, Fourth Dept 12-20-24

Practice Point: Consult this decision for a discussion of a choice of forum clause versus a choice of law clause versus the doctrine of forum non conveniens.

 

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PLAINTIFFS WERE PREJUDICED BY THE JURY SELECTION PROCESS WHICH DID NOT ALTERNATE THE PEREMPTORY CHALLENGES; THE FIRST QUESTION POSED TO THE JURY EFFECTIVELY PRECLUDED THE JURORS FROM CONSIDERING THE APPROPRIATE LEGAL ISSUE, I.E., WHETHER THE PLAINTIFF SUFFERED A “SERIOUS INJURY” WITHIN THE MEANING OF THE INSURANCE LAW (THIRD DEPT).

The Third Department, reversing the jury verdict and ordering a new trial in this Insurance Law 5102(d) “serious injury” case, determined the plaintiffs were prejudiced by the jury selection method used the trial judge, and the first question on the verdict sheet was improper because it effectively precluded the jury from considering the relevant question, whether plaintiff suffered a “serious injury:”

The court’s failure to alternate the peremptory challenge process … placed plaintiffs in the untenable position of having to utilize a peremptory challenge for a prospective juror that may not have been necessary had defendants been required to go first. This error compromised the fairness of the jury selection process.

Plaintiffs further contend that Supreme Court erred by including the first question on the verdict sheet — i.e., “[h]ave the plaintiffs . . . established that the incident . . . was a substantial factor in causing [Mormile’s] injuries?” We agree.  The specific issue for the jury to resolve was whether, as a result of the subject accident, Mormile sustained a “serious injury” as set forth in question 2 on the verdict sheet (did Mormile “sustain a significant limitation of use of a body function or system”); question 3 (did Mormile “sustain a permanent consequential limitation of use of a body organ or member”); question 4 (did Mormile “sustain a injury that resulted in a significant disfigurement”); and question 5 (did Mormile “suffer a medically determined injury or impairment of a non-permanent nature . . . that prevented him from performing all of the material acts that constituted his usual and customary daily activities for not less than 90 days during the 180 days immediately following the accident?”).

The first question effectively only asks whether there was probable cause to establish that Mormile’s injuries resulted from the accident (see PJI 2:70). Having answered “No” to that global question, the jury did not answer questions 2 through 5. In effect, the jury did not resolve the appropriate legal issue, i.e., whether Mormile sustained a “serious injury” in the accident, as defined under each of the four distinct categories at issue … . Mormile v Marshall, 2024 NY Slip Op 06390, Third Dept 12-19-24

Practice Point: Failure to alternate the peremptory challenges compromised the fairness of the jury selection process.

Practice Point: The first question on the verdict sheet effectively precluded the jury from considering the appropriate legal issue, i.e., whether plaintiff suffered a “serious injury” within the meaning of the Insurance Law.

 

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THE FORECLOSURE ACTION WAS TIMELY COMMENCED WHEN THE SUMMONS AND COMPLAINT WERE FILED IN 2013; THE COURT ERRED IN DEEMING THE ACTION COMMENCED WHEN THE SUMMONS AND COMPLAINT WERE SERVED IN 2022 (THIRD DEPT). ​

The Third Department, reversing Supreme Court, determined the foreclosure action was timely, noting that the time the foreclosure action was commenced was when the summons and complaint were filed, not when they were served:

The sole issue this Court is tasked with addressing is whether the action was timely commenced. “An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213 [4]), which begins to run from the due date of each unpaid installment, from the date the mortgagee is entitled to demand full payment, or from the date the mortgage debt has been accelerated” … . Acceleration occurs when, among other things, a lender demands payment in full by commencing a foreclosure action … . The operative date for determining whether a claim was interposed within the limitations period is the date of commencement, and “an action is commenced upon the filing of the summons and complaint, not service” … .

Supreme Court incorrectly determined that plaintiff’s claim was interposed upon [defendant] Coppola when she was served with process in January 2022, rather than upon the filing of the summons and complaint in September 2013 … . Deutsche Bank Trust Co. Ams. v DiGioia, 2024 NY Slip Op 06403, Third Dept 12-19-24

Practice Point: The foreclosure action was commenced when the summons and complaint were filed in 2013, not when they were served in 2022.

 

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PLAINTIFF BANK WAS NOT ENTITLED TO SUMMARY JUDGMENT IN THIS REFORECLOSURE ACTION; THERE WAS A QUESTION OF FACT WHETHER WILLFUL NEGLECT BY PLAINTIFF BANK OR ITS PREDECESSOR IN INTEREST RESULTED IN THE DEFECT IN THE ORIGINAL FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank was not entitled to summary judgment in this reforeclosure action:

Where the interest of a necessary party has not been foreclosed upon in a judgment of foreclosure and sale, the purchaser of the foreclosed property has two potential remedies: a strict foreclosure action pursuant to RPAPL 1352, or a reforeclosure action pursuant to RPAPL 1503. RPAPL 1503 provides … that, when real property has been sold at a foreclosure sale ‘and it appears from the public records or from the allegations of the complaint that such judgment, sale or conveyance was or may have been, for any reason, void or voidable as against any person, including an owner of the real property mortgaged, the purchaser . . . may maintain an action as provided in this article to determine the right of any person to set aside such judgment, sale or conveyance or to enforce an equity of redemption or to recover possession of the property, or the right of any junior mortgagee to foreclose a mortgage'” … . “[T]o prevail in a reforeclosure action, the plaintiff must demonstrate that the defect in the original foreclosure action ‘was not due to fraud or wilful neglect of the [foreclosure] plaintiff and that the defendant or the person under whom he [or she] claims was not actually prejudiced thereby'” … .

Here, US Bank’s [plaintiff’s] predecessor in interest allowed the notice of pendency in the foreclosure action to lapse. During that lapse, Wilkshire obtained and recorded title to the property by a referee’s deed pursuant to the foreclosure of a lien for unpaid homeowners association dues. Subsequently, US Bank filed a new notice of pendency, which was not served upon Wilkshire. Thereafter, US Bank obtained an order and judgment of foreclosure and sale in the foreclosure action. On its motion for summary judgment in the instant action, US Bank failed to submit any evidence to establish, prima facie, that the defect in the foreclosure action was not due to willful neglect by itself or by its predecessors in interest. Thus, US Bank failed to establish its entitlement to judgment as a matter of law … . U.S. Bank N.A. v 18 Wilkshire Circle, LLC, 2024 NY Slip Op 06372, Second Dept 12-18-24

Practice Point: Consult this decision for some discussion of the remedies of “strict foreclosure” and “reforeclosure” under the Real Property Actions and Proceedings Law (RPAPL) where there was some defect in the original foreclosure proceedings.

 

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WHERE A MOTION TO RENEW IS NOT BASED UPON A CHANGE IN THE LAW, THERE IS NO TIME LIMIT FOR BRINGING THE MOTION (SECOND DEPT),

The Second Department, reversing Supreme Court, noted that there was no time limit for bringing a motion to renew:

Contrary to the court’s determination, “[e]xcept where a motion to renew is based upon a change in the law, which is not the case here, CPLR 2221 does not impose a time limit for making a motion for leave to renew” … . Since the plaintiff’s prior motion had been denied with leave to renew, the plaintiff was not required to demonstrate a reasonable justification for his failure to submit the new facts on the prior motion … . Smith v Realty on Fox Croft Corp., 2024 NY Slip Op 06371, Second Dept 12-18-24

Practice Point: If a motion to renew is not based upon a change in the law, there is no time limit for bringing the motion.

 

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A PERMANENT INJUNCTION IS NOT APPROPRIATE WHERE PLAINTIFFS DO NOT ALLEGE ANY NONECONOMIC DAMAGES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the issuance of a permanent injunction was error because the injury can be adequately compensated by money damages:

“‘A permanent injunction is a drastic remedy which may be granted only where the plaintiff demonstrates that it will suffer irreparable harm absent the injunction'” …  To establish prima facie entitlement to a permanent injunction, a plaintiff must demonstrate: (a) that there was a violation of a right presently occurring, or threatened and imminent; (b) that he or she has no adequate remedy at law; (c) that serious and irreparable harm will result absent the injunction; and (d) that the equities are balanced in his or her favor … . Further, irreparable injury, for the purposes of equity, means any injury for which money damages are insufficient … . In contrast, where an injury can be adequately compensated by money damages, injunctive relief is inappropriate … .

Here, the plaintiffs failed to allege any noneconomic damages. Rockefeller v Leon, 2024 NY Slip Op 06370, Second Dept 12-18-24

Practice Point: If plaintiffs do not allege any noneconomic damages, a permanent injunction is not an appropriate remedy.

 

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ABSENT SUBSTANTIAL PREJUDICE OR OTHER IMPROPER RESULTS, A MOTION FOR LEAVE TO DISCONTINUE THE ACTION WITHOUT PREJUDICE SHOULD BE GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the motion for leave to discontinue the action without prejudice should have been granted:

The plaintiff and the defendants own abutting real properties located in Brooklyn. In 2019, the plaintiff commenced this action against the defendants, inter alia, for injunctive relief, alleging that the defendants, among other things, erected a concrete wall and planted grass and trees on portions of the plaintiff’s property without the plaintiff’s permission. The defendants, inter alia, asserted a counterclaim for adverse possession of the disputed portions of the plaintiff’s property. Thereafter, the plaintiff moved pursuant to CPLR 3217(b) for leave to discontinue the action without prejudice. In an order dated November 17, 2022, the Supreme Court denied the plaintiff’s motion. …

The Supreme Court should have granted the plaintiff’s motion pursuant to CPLR 3217(b) for leave to discontinue the action without prejudice. The determination of a motion pursuant to CPLR 3217(b) for leave to discontinue an action without prejudice is within the sound discretion of the court … . “Generally such motions should be granted unless the discontinuance would prejudice a substantial right of another party, circumvent an order of the court, avoid the consequences of a potentially adverse determination, or produce other improper results” … . Here, the court improvidently exercised its discretion in denying the plaintiff’s motion, as there was no showing of substantial prejudice or other improper results … . KNG Realty NY Co., LLC v Halpern, 2024 NY Slip Op 06329, Second Dept 12-18-24

Practice Point: If there is no showing of substantial prejudice, a motion for leave to discontinue an action without prejudice should be granted.​

 

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UNLIKE THE APPELLATE DIVISION, THE COURT OF APPEALS CANNOT CONSIDER UNPRESERVED ISSUES IN THE INTEREST OF JUSTICE; THE FAILURE TO RAISE THE ISSUE IN THE TRIAL COURT PRECLUDED REVIEW BY THE COURT OF APPEALS (CT APP). ​

The Court of Appeals, over a three-judge dissent, determined the preservation requirement precluded consideration of the appeal. The underlying question concerned when the period for calculation of prejudgment interest should begin to run:

“As we have many times repeated, this Court with rare exception does not review questions raised for the first time on appeal. Unlike the Appellate Division, we lack jurisdiction to review unpreserved issues in the interest of justice” … . “To demonstrate that a question of law is preserved for this Court’s review, a party must show that it raised the specific argument in [the trial court] and asked the court to conduct that analysis in the first instance” … . …

Among the many salutary reasons for our preservation rule is that “in making and shaping the common law . . . this Court best serves the litigants and the law by limiting its review to issues that have first been presented to and carefully considered by the trial and intermediate appellate courts” … . In considering whether to disturb well-settled Appellate Division precedent, this Court should only act where it has the benefit of a full record, including a reasoned trial court decision

As it relates to the proceedings below, claimant never raised the question of the accrual date of prejudgment interest in the trial court. Further, when a party objects to a provision contained in a judgment, they generally have the ability to seek relief pursuant to CPLR 5015 and 5019, as plaintiff was invited to do here. Had plaintiff made such a motion, arguments in favor of and against earlier accrual of prejudgment interest could have been made, thereby providing a fully developed record for appeal, an essential step for parties seeking review from the Court of Appeals. But, plaintiff did not preserve an objection to the imposition of prejudgment interest on the record before the trial court. As plaintiff had an opportunity to raise his objections in the trial court but failed to do so, the issue is unreviewable on appeal to this Court. Sabine v State of New York, 2024 NY Slip Op 06288, CtApp 12-17-24

Practice Point: Unlike the Appellate Division, the Court of Appeals cannot consider an unpreserved issue “in the interest of justice.” If the issue was not raised and preserved in the trial court, the Court of Appeals will not consider it.​

 

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A CONDITIONAL ORDER OF DISMISSAL PURSUANT TO CPLR 3216 WHICH DOES NOT STATE THE FAILURE TO FILE A NOTE OF ISSUE WITHIN 90 DAYS WOULD BE THE BASIS OF A MOTION TO DISMISS THE COMPLAINT IS INEFFECTIVE AND CAN BE VACATED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the conditional order of dismissal should have be vacated because it did not indicate that plaintiff’s failure to file a note of issue within 90 days would be the basis for a motion to dismiss:

“‘CPLR 3216 permits a court, on its own initiative, to dismiss an action for want of prosecution where certain conditions precedent have been complied with'” … . Pursuant to CPLR 3216(b), an action cannot be dismissed pursuant to CPLR 3216(a) “‘unless a written demand is served upon the party against whom such relief is sought in accordance with the statutory requirements, along with a statement that the default by the party upon whom such notice is served in complying with such demand within said ninety day period will serve as a basis for a motion by the party serving said demand for dismissal as against him for unreasonably neglecting to proceed'” … .

Here, the conditional dismissal order did not contain the requisite language advising that the failure to file a note of issue would be the basis for a motion to dismiss … . Under these circumstances, the action should have been restored to the active calendar without considering whether the plaintiff had a reasonable excuse for its delay in moving to vacate the conditional dismissal order … . Wells Fargo Bank v Wasersztrom, 2024 NY Slip Op 06231, Second Dept 12-11-24

Practice Point: A conditional order of dismissal for want of prosecution pursuant to CPLR must include a statement that the failure to file a note of issue within 90 days would be the basis for a motion to dismiss the complaint. If that language is not in the conditional order, the order may be vacated.​

 

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DEFENDANT BOUGHT THE FORECLOSED PROPERTY WITHOUT KNOWLEDGE THE JUDGMENT OF FORECLOSURE AND SALE HAD BEEN APPEALED; DEFENDANT WAS A PURCHASER IN GOOD FAITH AND FOR VALUE AND WAS THEREFORE INSULATED FROM THE EFFECTS OF THE APPELLATE REVERSAL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant (Bartlett) was a purchaser in good faith and for value of the foreclosed property. The foreclosure was reversed on appeal. Defendant, as the fee owner of the property, was insulated from the effects of the reversal:

Where a judgment of foreclosure and sale is reversed on appeal, the successful appellant may seek restitution of the real property lost by the judgment (see CPLR 5015[d]; 5523). However, where the real property was sold pursuant to the judgment of foreclosure and sale, and the title is held by “a purchaser in good faith and for value,” recovery is limited to the value of the real property (id. § 5523). In the absence of a stay of the sale or an outstanding notice of pendency, title of the purchaser in good faith and for value “is . . . insulate[d] . . . from the effects of an appellate reversal” … .

Here, in support of its cross-motion, Bartlett established, through an affidavit of its member, that Bartlett acquired title to the property subsequent to a foreclosure sale, without actual knowledge of a successful appeal by the plaintiffs in the underlying action that resulted in a vacatur of the judgment of foreclosure and sale … . The affidavit also demonstrated that the plaintiffs had not obtained a stay of the foreclosure sale in the underlying action. Under these circumstances, Bartlett established … that it was a purchaser in good faith and for value entitled to the protection of CPLR 5523 … . Puretz v Mae, 2024 NY Slip Op 06227, Second Dept 12-11-24

Practice Point: A buyer of foreclosed property who had no knowledge the judgment of foreclosure had been appealed is insulated from the effects of a reversal on appeal. The buyer, as a purchaser in good faith for value, is the fee owner of the property.

 

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