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CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR.

The Second Department, in an action stemming from a traffic accident, determined the complaint stated a cause of action for negligent hiring, retention and supervision for which punitive damages were sought. The facts were not discussed, but the court explained when a cause of action for negligent hiring seeking punitive damages is not precluded by the doctrine of respondeat superior:

Here, accepting the facts as alleged in the complaint as true and according the plaintiff the benefit of every possible favorable inference, the complaint sufficiently stated a demand for punitive damages insofar as asserted against the defendant driver. At this stage of the litigation, it is premature to conclude that the allegations in the complaint are insufficient to support the allegation that the defendant driver acted so recklessly or wantonly as to warrant an award of punitive damages … .

” Generally, where an employee is acting within the scope of his or her employment, the employer is liable for the employee’s negligence under a theory of respondeat superior and no claim may proceed against the employer for negligent hiring, retention, supervision or training'” … . However, “such a claim is permitted when punitive damages are sought based upon facts evincing gross negligence in the hiring or retention of an employee” … . Gipe v DBT Xpress, LLC, 2017 NY Slip Op 04258, 2nd Dept 5-31-17

 

NEGLIGENCE (EMPLOYER RESPONSIBLE FOR EMPLOYEE, CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR)/EMPLOYMENT LAW (NEGLIGENCE, EMPLOYER RESPONSIBLE FOR EMPLOYEE, CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR)/CIVIL PROCEDURE (PUNITIVE DAMAGES, EMPLOYER RESPONSIBLE FOR EMPLOYEE, CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR)/PUNITIVE DAMAGES (EMPLOYER RESPONSIBLE FOR EMPLOYEE, CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR)/RESPONDEAT SUPERIOR (PUNITIVE DAMAGES, EMPLOYER RESPONSIBLE FOR EMPLOYEE, CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR)/NEGLIGENT HIRING, RETENTION, SUPERVISION (PUNITIVE DAMAGES, EMPLOYER RESPONSIBLE FOR EMPLOYEE, CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR)/TRAFFIC ACCIDENTS  (EMPLOYER RESPONSIBLE FOR EMPLOYEE, CAUSE OF ACTION SEEKING PUNITIVE DAMAGES FOR NEGLIGENT HIRING, RETENTION AND SUPERVISION NOT PRECLUDED BY DOCTRINE OF RESPONDEAT SUPERIOR)

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MOTION TO RENEW PETITION FOR LEAVE TO FILE A LATE NOTICE OF CLAIM IN THIS WRONGFUL DEATH ACTION SHOULD HAVE BEEN GRANTED, LEAVE TO FILE A LATE NOTICE OF CLAIM SHOULD HAVE BEEN GRANTED.

The Second Department, reversing (modifying) Supreme Court, determined petitioner’s motion to renew the petition for leave to file a late notice of claim was erroneously deemed a motion to reargue (by Supreme Court) and was erroneously denied. Leave to file a late notice of claim should have been granted. The wrongful death action was brought on behalf of a county worker who was killed when he fell off the back of a dump truck after the truck allegedly struck a bump in the road. The Second Department noted: (1) the 90-day period for filing a notice of claim runs from the appointment of the administrator of decedent’s estate; (2) the motion presented new evidence which was not previously available and was therefore a motion to renew, not reargue; (3) the county had notice of the facts of the action within the 90-day period; (4) the county did not demonstrate prejudice related to the delay in filing the notice of claim (even though the road defect had been repaired):

The County acquired actual knowledge of the essential facts constituting the claim before a representative of the estate was appointed. The [police department] conducted an investigation, took photographs of, inter alia, the subject roadway condition, obtained a statement from the driver of the truck, and prepared a case report that detailed the nature and the alleged cause of the accident. In addition, … Inasmuch as the County acquired timely, actual knowledge of the essential facts of the claim and actually conducted an investigation, the petitioner made an initial showing that the County was not prejudiced by his delay in serving a notice of claim … . The County claims that it will nonetheless be prejudiced by the delay because the roadway where the accident occurred has been repaved and because it will be unable to locate witnesses. The County, however, had recognized the need for repairs of the roadway before the petitioner was appointed as administrator, and it issued work orders to repair the roadway only a few days after the petitioner was appointed. Thus, any prejudice resulting from the changed condition of the road was not caused by the petitioner’s delay in serving a notice of claim … . In any event, the County took photographs of the defect and inspected the location after the accident … . The County also failed to make a showing that any of the witnesses are unavailable. Thus, the County failed to respond to the petitioner’s initial showing as to lack of prejudice with a particularized showing that the petitioner’s delay in serving a notice of claim will prejudice it in its defense on the merits … . Matter of Kerner v County of Nassau, 2017 NY Slip Op 04277, 2nd Dept 5-31-17

MUNICIPAL LAW (MOTION TO RENEW PETITION FOR LEAVE TO FILE A LATE NOTICE OF CLAIM IN THIS WRONGFUL DEATH ACTION SHOULD HAVE BEEN GRANTED, LEAVE TO FILE A LATE NOTICE OF CLAIM SHOULD HAVE BEEN GRANTED)/NEGLIGENCE (MUNICIPAL LAW, NOTICE OF CLAIM, MOTION TO RENEW PETITION FOR LEAVE TO FILE A LATE NOTICE OF CLAIM IN THIS WRONGFUL DEATH ACTION SHOULD HAVE BEEN GRANTED, LEAVE TO FILE A LATE NOTICE OF CLAIM SHOULD HAVE BEEN GRANTED)/TRUSTS AND ESTATES (MUNICIPAL LAW, NOTICE OF CLAIM, MOTION TO RENEW PETITION FOR LEAVE TO FILE A LATE NOTICE OF CLAIM IN THIS WRONGFUL DEATH ACTION SHOULD HAVE BEEN GRANTED, LEAVE TO FILE A LATE NOTICE OF CLAIM SHOULD HAVE BEEN GRANTED)/CIVIL PROCEDURE (MOTION TO RENEW, MUNICIPAL LAW, NOTICE OF CLAIM, MOTION TO RENEW PETITION FOR LEAVE TO FILE A LATE NOTICE OF CLAIM IN THIS WRONGFUL DEATH ACTION SHOULD HAVE BEEN GRANTED, LEAVE TO FILE A LATE NOTICE OF CLAIM SHOULD HAVE BEEN GRANTED)/TRAFFIC ACCIDENTS  (MUNICIPAL LAW, NOTICE OF CLAIM, MOTION TO RENEW PETITION FOR LEAVE TO FILE A LATE NOTICE OF CLAIM IN THIS WRONGFUL DEATH ACTION SHOULD HAVE BEEN GRANTED, LEAVE TO FILE A LATE NOTICE OF CLAIM SHOULD HAVE BEEN GRANTED)

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NOTICE OF APPEARANCE FILED BY AN ATTORNEY WAIVES ANY DEFENSE BASED UPON LACK OF PERSONAL JURISDICTION, DEFENSE OF LACK OF STANDING IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN RAISED BY SUPREME COURT SUA SPONTE.

The Second Department, reversing Supreme Court, determined defendant’s motion to dismiss based upon a lack of personal jurisdiction in this foreclosure action should have been denied. Defendant had appeared by an attorney (notice of appearance) and thereby waived any “lack of personal jurisdiction” argument. The Second Department further noted that Supreme Court should not have raised the defendant’s lack of standing sua sponte:

… [T]he defendant waived any claim that the Supreme Court lacked jurisdiction over her. Pursuant to CPLR 320(a), “[t]he defendant appears by serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer.” Subject to certain exceptions not applicable here (see CPLR 320[c]), “an appearance of the defendant is equivalent to personal service of the summons upon him, unless an objection to jurisdiction under [CPLR 3211(a)(8)] is asserted by motion or in the answer as provided in [CPLR 3211]” (CPLR 320[b]). “By statute, a party may appear in an action by attorney (CPLR 321), and such an appearance constitutes an appearance by the party for purposes of conferring jurisdiction” … . Here, the defendant’s attorney appeared in the action on her behalf by filing a notice of appearance  … , and neither the defendant nor her attorney moved to dismiss the complaint on the ground of lack of personal jurisdiction at that time or asserted lack of personal jurisdiction in a responsive pleading … . Accordingly, the defendant waived any claim that the Supreme Court lacked personal jurisdiction over her in this action … . To the extent that prior decisions of this Court could be interpreted to require a different result … , they should no longer be followed. American Home Mtge. Servicing, Inc. v Arklis, 2017 NY Slip Op 04242, 2nd Dept 5-31-17

CIVIL PROCEDURE (NOTICE OF APPEARANCE FILED BY AN ATTORNEY WAIVES ANY DEFENSE BASED UPON LACK OF PERSONAL JURISDICTION)/JURISDICTION (CIVIL PROCEDURE, NOTICE OF APPEARANCE FILED BY AN ATTORNEY WAIVES ANY DEFENSE BASED UPON LACK OF PERSONAL JURISDICTION)/FORECLOSURE (STANDING, SUPREME COURT SHOULD NOT HAVE RAISED THE DEFENSE OF LACK OF STANDING SUA SPONTE)

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PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS.

The Second Department determined Supreme Court properly granted the petition for pre-action disclosure of the identity of the person or persons who widely distributed an intimate photo of a portion of a high school student’s (the potential plaintiff’s) body and identified the student depicted in the photo. The purpose of the disclosure was to identify potential defendants. The facts were sufficient to support an action for intentional infliction of emotional distress:

“Before an action is commenced, disclosure to aid in bringing an action, to preserve information or to aid in arbitration, may be obtained, but only by court order” (CPLR 3102[c]…). “[D]isclosure to aid in bringing an action’ (CPLR 3102 [c]) authorizes discovery to allow a plaintiff to frame a complaint and to obtain the identity of the prospective defendants”… .. However, pre-action disclosure “may not be used to determine whether the plaintiff has a cause of action” … . This limitation is “designed to prevent the initiation of troublesome and expensive procedures, based upon a mere suspicion, which may annoy and intrude upon an innocent party” … . “Where, however, the facts alleged state a cause of action, the protection of a party’s affairs is no longer the primary consideration and an examination to determine the identities of the parties and what form or forms the action should take is appropriate” … .  Accordingly, “[a] petition for pre-action discovery limited to obtaining the identity of prospective defendants should be granted where the petitioner has alleged facts fairly indicating that he or she has some cause of action” … . * * *

Under New York law, a cause of action alleging intentional infliction of emotional distress “has four elements: (i) extreme and outrageous conduct; (ii) intent to cause, or disregard of a substantial probability of causing, severe emotional distress; (iii) a causal connection between the conduct and injury; and (iv) severe emotional distress”… . . In support of its argument that the petition failed to allege facts that would constitute a cognizable cause of action against the unidentified individual, the school contends that the petition failed to adequately allege extreme and outrageous conduct.

The element of outrageous conduct “serves the dual function of filtering out petty and trivial complaints that do not belong in court, and assuring that plaintiff’s claim of severe emotional distress is genuine” … . ” Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community'” … .  Indeed, “where severe mental pain or anguish is inflicted through a deliberate and malicious campaign of harassment or intimidation, a remedy is available in the form of an action for the intentional infliction of emotional distress” … . Here, assuming the truth of the facts alleged in the petition, the acts complained of could be found by a trier of fact to amount to extreme and outrageous conduct which cannot be tolerated in a civilized community … . Matter of Leff v Our Lady of Mercy Academy, 2017 NY Slip Op 04280, 2nd Dept 5-31-17

 

CIVIL PROCEDURE (PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/EDUCATION-SCHOOL LAW (PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/INTENTIONAL TORTS (INFLICTION OF EMOTIONAL DISTRESS, CIVIL PROCEDURE, PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/EVIDENCE (CIVIL PROCEDURE, PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS (PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/OUTRAGEOUS CONDUCT (INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS, CIVIL PROCEDURE, PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/PHOTOGRAPHS (INTIMATE, INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS, PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/DISCLOSURE (PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)/PRE-ACTION DISCLOSURE (IDENTIFY DEFENDANTS, PRE-ACTION DISCLOSURE OF THE IDENTITY OF THE PERSON OR PERSONS WHO DISTRIBUTED AN INTIMATE PHOTO OF A PORTION OF A HIGH SCHOOL STUDENT’S BODY PROPERLY GRANTED, THE FACTS SUPPORTED A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS)

DEFENDANT DID NOT DEMONSTRATE AN ADEQUATE EXCUSE FOR FAILURE TO ANSWER THE COMPLAINT, CRITERIA EXPLAINED, MOTION FOR LEAVE TO FILE A DEFAULT JUDGMENT SHOULD HAVE BEEN GRANTED.

The Second Department, reversing Supreme Court, determined plaintiffs’ motion to for leave to file a default judgment should have been granted and defendant’s cross-motion to compel the acceptance of a late answer should have been denied:

To defeat the plaintiffs’ facially adequate CPLR 3215 motion and be relieved of its default in answering the complaint, the defendant had to show either that it did not default, or that it had a reasonable excuse for its default and a potentially meritorious defense to the action … . In order to compel the plaintiffs to accept service of its untimely answer, the defendant also had to provide a reasonable excuse for the delay in answering and demonstrate a potentially meritorious defense to the action (see CPLR 3012[d]… . “[S]uccessful opposition to a CPLR 3215 motion for leave to enter a default judgment requires the same showing as an affirmative motion for leave to extend the time to answer” … .

The Supreme Court improvidently exercised its discretion in granting the defendant’s cross motion to compel the acceptance of its late answer, as the defendant did not offer a reasonable excuse for its failure to serve a timely answer in this action. The defendant, through an affidavit of its paralegal manager in its Massachusetts office, acknowledged that it received the complaint as of November 3, 2015, but blamed its failure to answer on a clerical error in its Mitchel Field, New York, office, which resulted in the complaint never being assigned to a claims handler. The affidavit of the defendant’s paralegal manager failed to provide any details surrounding the bare claim that a clerical error, which purportedly occurred in an office in which she did not work, caused the failure of the defendant to timely answer … . Moreover, the paralegal manager did not address why the defendant did not take any action upon being served with the plaintiffs’ initial motion for leave to enter a default judgment against it or the resulting court order …. .

Since the defendant failed to provide a reasonable excuse for its failure to timely serve an answer, it is unnecessary to consider whether it demonstrated the existence of a potentially meritorious defense … . Clarke v Liberty Mut. Fire Ins. Co., 2017 NY Slip Op 04250, 2nd Dept 5-31-17

CIVIL PROCEDURE (DEFAULT JUDGMENT, DEFENDANT DID NOT DEMONSTRATE AN ADEQUATE EXCUSE FOR FAILURE TO ANSWER THE COMPLAINT, CRITERIA EXPLAINED, MOTION FOR LEAVE TO FILE A DEFAULT JUDGMENT SHOULD HAVE BEEN GRANTED)/DEFAULT JUDGMENT (CIVIL PROCEDURE, DEFENDANT DID NOT DEMONSTRATE AN ADEQUATE EXCUSE FOR FAILURE TO ANSWER THE COMPLAINT, CRITERIA EXPLAINED, MOTION FOR LEAVE TO FILE A DEFAULT JUDGMENT SHOULD HAVE BEEN GRANTED)

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SUPREME COURT SHOULD NOT HAVE RELIED ON AN AUTHORIZATION LETTER WHICH WAS NOT IN THE RECORD TO FIND THAT THE ADMINISTRATIVE LAW JUDGE WAS AUTHORIZED TO CONDUCT THE DISCIPLINARY PROCEEDING WHICH RESULTED IN THE TERMINATION OF A CORRECTIONS OFFICER.

The Second Department noted that the administrative law judge (ALJ) in this action which resulted in the termination of petitioner’s employment as a corrections officer must be authorized to conduct the disciplinary proceedings by the commissioner of corrections. The petitioner contested his termination on the ground the ALJ was not so authorized. Supreme Court relied upon a letter of authorization which was not in the record. The Second Department held that was error and remitted the matter to allow the respondent to submit an authorization letter:

Civil Service Law § 75, which governs the procedure applicable to the subject disciplinary proceeding, provides that “[t]he hearing upon such charges shall be held by the officer or body having the power to remove the person against whom such charges are preferred, or by a deputy or other person designated by such officer or body in writing for that purpose” (Civil Service Law § 75[2]). In the absence of a written designation, the removing body or hearing officer has no jurisdiction to recommend the discipline of an employee and any disposition flowing from such a proceeding will be void … . This jurisdictional defect is not waived by a petitioner’s failure to object at a disciplinary hearing … .

Here, in denying the petition and dismissing the CPLR article 78 proceeding, the Supreme Court erred in considering and relying upon the 1992 letter as a written designation pursuant to Civil Service Law § 75(2) since that letter was outside the record, and was not relied upon by the respondents, whose papers were rejected by the court … .

Moreover, the Supreme Court also erred in not considering the respondents’ cross motion to dismiss the petition. Pursuant to CPLR 404(a), the respondents were permitted to raise objections in point of law by a motion to dismiss the petition. Given the improper rejection of the respondents’ papers and the particular circumstances of this case, the court should have afforded the respondents an opportunity to submit a designation letter conferring jurisdiction upon the ALJ who conducted the subject disciplinary hearing prior to determining the petition on the merits. Matter of Lindo v Ponte, 2017 NY Slip Op 04282, 2nd Dept 5-31-17

ADMINISTRATIVE LAW (SUPREME COURT SHOULD NOT HAVE RELIED ON AN AUTHORIZATION LETTER WHICH WAS NOT IN THE RECORD TO FIND THAT THE ADMINISTRATIVE LAW JUDGE WAS AUTHORIZED TO CONDUCT THE DISCIPLINARY PROCEEDING WHICH RESULTED IN THE TERMINATION OF A CORRECTIONS OFFICER)/EMPLOYMENT LAW (CIVIL SERVICE LAW, CORRECTIONS OFFICERS, SUPREME COURT SHOULD NOT HAVE RELIED ON AN AUTHORIZATION LETTER WHICH WAS NOT IN THE RECORD TO FIND THAT THE ADMINISTRATIVE LAW JUDGE WAS AUTHORIZED TO CONDUCT THE DISCIPLINARY PROCEEDING WHICH RESULTED IN THE TERMINATION OF A CORRECTIONS OFFICER)/CIVIL PROCEDURE (CIVIL SERVICE LAW, ADMINISTRATIVE LAW JUDGES, SUPREME COURT SHOULD NOT HAVE RELIED ON AN AUTHORIZATION LETTER WHICH WAS NOT IN THE RECORD TO FIND THAT THE ADMINISTRATIVE LAW JUDGE WAS AUTHORIZED TO CONDUCT THE DISCIPLINARY PROCEEDING WHICH RESULTED IN THE TERMINATION OF A CORRECTIONS OFFICER)/CORRECTIONS OFFICER (DISCIPLINARY PROCEEDINGS, SUPREME COURT SHOULD NOT HAVE RELIED ON AN AUTHORIZATION LETTER WHICH WAS NOT IN THE RECORD TO FIND THAT THE ADMINISTRATIVE LAW JUDGE WAS AUTHORIZED TO CONDUCT THE DISCIPLINARY PROCEEDING WHICH RESULTED IN THE TERMINATION OF A CORRECTIONS OFFICER)/ADMINISTRATIVE LAW JUDGES (CORRECTIONS OFFICERS, DISCIPLINARY PROCEEDINGS, SUPREME COURT SHOULD NOT HAVE RELIED ON AN AUTHORIZATION LETTER WHICH WAS NOT IN THE RECORD TO FIND THAT THE ADMINISTRATIVE LAW JUDGE WAS AUTHORIZED TO CONDUCT THE DISCIPLINARY PROCEEDING WHICH RESULTED IN THE TERMINATION OF A CORRECTIONS OFFICER)/CIVIL SERVICE LAW (EMPLOYMENT LAW, DISCIPLINARY PROCEEDINGS, CORRECTIONS OFFICERS, SUPREME COURT SHOULD NOT HAVE RELIED ON AN AUTHORIZATION LETTER WHICH WAS NOT IN THE RECORD TO FIND THAT THE ADMINISTRATIVE LAW JUDGE WAS AUTHORIZED TO CONDUCT THE DISCIPLINARY PROCEEDING WHICH RESULTED IN THE TERMINATION OF A CORRECTIONS OFFICER)

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PLAINTIFF, INTER ALIA, ALLEGED THE FLORIDA DEFENDANT IN THIS FRAUD-BASED ACTION DEPOSITED RELEVANT FUNDS IN A NEW YORK LAW FIRM ESCROW ACCOUNT AND CONVERTED THOSE FUNDS, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD NOT HAVE BEEN GRANTED.

The Second Department, reversing Supreme Court, determined the motion to dismiss the fraud-based complaint for lack of personal jurisdiction over defendant, whose domicile was Florida, should not have been granted. Relevant funds were deposited in the escrow account for defendant’s New York law firm and those funds were alleged to have been converted in New York:

… [T]he plaintiffs made a prima facie showing that the defendant, a Florida domiciliary, transacted business in New York and that the plaintiffs’ claims arose from those transactions so as to establish that jurisdiction was proper under CPLR 302(a)(1)… . Accepting the plaintiffs’ allegations as true and construing the allegations in the light most favorable to the plaintiffs, they demonstrated prima facie that the defendant purposefully availed himself “of the privilege of conducting activities” in New York, “thus invoking the benefits and protections of its laws” … . Contrary to the defendant’s contention, his alleged contacts with New York amounted to more than mere communications … . The defendant allegedly utilized Sommer & Schneider’s New York escrow account to further the alleged fraudulent investment scheme by directing the plaintiffs to deposit the funds for investment deals into the escrow account, by acting as the agent for the purported investment deals, and by using and allowing Joel to use the investment money deposited in the escrow account for personal expenses … . As to the second prong of the CPLR 302(a)(1) analysis, the plaintiffs’ allegations demonstrated prima facie that the defendant’s activities in New York had an articulable nexus or substantial relationship to the plaintiffs’ claims … . The plaintiffs’ claims against the defendant of fraud, conversion, breach of fiduciary duty, and unjust enrichment turned entirely on the defendant’s use of the New York escrow account to facilitate his fraudulent investment scheme … .

The plaintiffs also made a prima facie showing that the defendant committed tortious acts within New York, as the defendant is alleged to have converted funds held in New York … . Nick v Schneider, 2017 NY Slip Op 04285, 2nd Dept 5-30-17

 

CIVIL PROCEDURE (LONG ARM JURISDICTION, PLAINTIFF, INTER ALIA, ALLEGED THE FLORIDA DEFENDANT IN THIS FRAUD-BASED ACTION DEPOSITED RELEVANT FUNDS IN A NEW YORK LAW FIRM ESCROW ACCOUNT AND CONVERTED THOSE FUNDS, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD NOT HAVE BEEN GRANTED)/JURISDICTION (CIVIL PROCEDURE, LONG ARM JURISDICTION, PLAINTIFF, INTER ALIA, ALLEGED THE FLORIDA DEFENDANT IN THIS FRAUD-BASED ACTION DEPOSITED RELEVANT FUNDS IN A NEW YORK LAW FIRM ESCROW ACCOUNT AND CONVERTED THOSE FUNDS, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD NOT HAVE BEEN GRANTED)/LONG ARM JURISDICTION (FRAUD,  PLAINTIFF, INTER ALIA, ALLEGED THE FLORIDA DEFENDANT IN THIS FRAUD-BASED ACTION DEPOSITED RELEVANT FUNDS IN A NEW YORK LAW FIRM ESCROW ACCOUNT AND CONVERTED THOSE FUNDS, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD NOT HAVE BEEN GRANTED)/FRAUD (CIVIL PROCEDURE, LONG ARM JURISDICTION,  PLAINTIFF, INTER ALIA, ALLEGED THE FLORIDA DEFENDANT IN THIS FRAUD-BASED ACTION DEPOSITED RELEVANT FUNDS IN A NEW YORK LAW FIRM ESCROW ACCOUNT AND CONVERTED THOSE FUNDS, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD NOT HAVE BEEN GRANTED)/CONVERSION (CIVIL PROCEDURE, LONG ARM JURISDICTION, PLAINTIFF, INTER ALIA, ALLEGED THE FLORIDA DEFENDANT IN THIS FRAUD-BASED ACTION DEPOSITED RELEVANT FUNDS IN A NEW YORK LAW FIRM ESCROW ACCOUNT AND CONVERTED THOSE FUNDS, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD NOT HAVE BEEN GRANTED)/INTENTIONAL TORTS (CONVERSION, CIVIL PROCEDURE, LONG ARM JURISDICTION, PLAINTIFF, INTER ALIA, ALLEGED THE FLORIDA DEFENDANT IN THIS FRAUD-BASED ACTION DEPOSITED RELEVANT FUNDS IN A NEW YORK LAW FIRM ESCROW ACCOUNT AND CONVERTED THOSE FUNDS, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION SHOULD NOT HAVE BEEN GRANTED)

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DICTA IN A COURT ORDER WAS NOT A FINDING ON THE MERITS AND THEREFORE COULD NOT BE THE BASIS FOR A DISMISSAL FOUNDED UPON DOCUMENTARY EVIDENCE.

The Second Department, reversing Supreme Court, determined that a court order precluding evidence because of a failure to comply with discovery demands was not documentary evidence which utterly refuted the allegations of legal malpractice in the complaint. Therefore, defendants’ motion to dismiss should not have been granted. Although the order opined that the evidence, had it been produced would not have demonstrated legal malpractice, that portion of the order was dicta:

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… [T]he complaint alleges that the defendants, Anthony P. Gallo, P.C., and Anthony P. Gallo (hereinafter together Gallo), who represented the plaintiff in a prior legal malpractice action against the plaintiff’s former attorneys, Demartin & Rizzo, P.C., and Joseph N. Rizzo, Jr. (hereinafter together Rizzo), negligently failed to respond to certain discovery demands by Rizzo, which resulted in the Supreme Court … precluding the introduction of evidence in the plaintiff’s legal malpractice action against Rizzo (… hereinafter the Rizzo order). The complaint further alleges that, as a result of this evidence being precluded, the court which issued the Rizzo order found that the plaintiff had failed to meet its burden of proof as to the element of damages sustained as a result of Rizzo’s malpractice. * * *

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… [T]he Rizzo order does not utterly refute the allegations in the complaint, nor does it establish a defense as a matter of law. The order concludes, in part, that there was no proof of actual damages presented by the plaintiff, due to the plaintiff’s failure to respond to at least two of Rizzo’s discovery demands, which resulted in the preclusion of the damages evidence. The Rizzo order then states, referring to the precluded evidence, “[m]oreover, even if, arguendo the [c]ourt were to overlook that deficiency, its probative value is highly suspect” … . Contrary to the Supreme Court’s conclusion, this alternate holding, which constitutes dicta, was not a finding on the merits and did not utterly refute the allegations in the complaint against Gallo … . 4777 Food Servs. Corp. v Anthony P. Gallo, P.C., 2017 NY Slip Op 04086, 2nd Dept 5-24-17

 

CIVIL PROCEDURE (DICTA IN A COURT ORDER WAS NOT A FINDING ON THE MERITS AND THEREFORE COULD NOT BE THE BASIS FOR A DISMISSAL FOUNDED UPON DOCUMENTARY EVIDENCE)/EVIDENCE (CIVIL PROCEDURE, DICTA IN A COURT ORDER WAS NOT A FINDING ON THE MERITS AND THEREFORE COULD NOT BE THE BASIS FOR A DISMISSAL FOUNDED UPON DOCUMENTARY EVIDENCE)/DISMISS, MOTION TO (CIVIL PROCEDURE, (DICTA IN A COURT ORDER WAS NOT A FINDING ON THE MERITS AND THEREFORE COULD NOT BE THE BASIS FOR A DISMISSAL FOUNDED UPON DOCUMENTARY EVIDENCE)/DOCUMENTARY EVIDENCE (CIVIL PROCEDURE, MOTION TO DISMISS, DICTA IN A COURT ORDER WAS NOT A FINDING ON THE MERITS AND THEREFORE COULD NOT BE THE BASIS FOR A DISMISSAL FOUNDED UPON DOCUMENTARY EVIDENCE)

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IN THIS LEAD-PAINT EXPOSURE CASE, DISCOVERY SHOULD NOT HAVE BEEN LIMITED TO DOCUMENTS CONCERNING ONLY THE APARTMENTS INFANT PLAINTIFF SPENT TIME IN, THE CONDITION OF OTHER PORTIONS OF THE BUILDING MAY BE RELEVANT TO DEFENDANTS’ NOTICE.

The First Department determined Supreme Court should not have limited discovery in this lead-paint exposure case to documents relating solely to the apartments where infant plaintiff resided or spent time. The condition of other portions of the buildings may be relevant to defendants’ notice of the condition of the paint:

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The motion court should not have limited defendants’ production of records pertaining to lead-based paint exposure to the date of exposure and three years prior only in the subject apartments, namely, the apartment in which the infant plaintiff resided and the apartment, in a different building, where she attended day care. “While discovery determinations rest within the sound discretion of the trial court, the Appellate Division is vested with a corresponding power to substitute its own discretion for that of the trial court, even in the absence of abuse” … .

Plaintiffs allege in their complaint that defendants “knew, should have known, and/or had reason to know that there was deteriorated, defective, flaking, chipping and peeling paint in the Subject Premises [apartments] and the Subject Building,” which “could be harmful to children” … . Yet, despite this knowledge, the complaint alleges that defendants were negligent in performing repairs within the plaintiffs’ residence and the apartment where the infant plaintiff attended day care, and permitted the continued “emission, discharge[], spread and dissemination of lead based paint . . . thus causing the exposure of the infant plaintiff” to the hazardous conditions which were a contributing cause of her lead poisoning. Additionally, since plaintiffs had evidence from the New York City Department of Housing Preservation and Development (HPD), which showed numerous lead paint violations in the subject buildings, and since evidence of lead paint hazards in one part of a building may be relevant to the issues of defendants’ notice of the condition, duties and obligations to the plaintiffs … , plaintiffs’ demand for production of records for lead-based paint violations in the other apartments in the buildings was appropriate … . “Knowledge of a dangerous condition in one portion of the structure may have imposed upon the owners an obligation to examine’ other portions of the structure for defects arising from the same cause, and to ascertain what was ascertainable with the exercise of reasonable care” … . The fact that plaintiffs may have been able to access some evidence of lead paint violations in the building from HPD does not preclude plaintiffs from seeking these records directly from defendants in discovery … .  Z.D. v MP Mgt., LLC, 2017 NY Slip Op 04059, 1st Dept 5-23-17

 

NEGLIGENCE (IN THIS LEAD-PAINT EXPOSURE CASE, DISCOVERY SHOULD NOT HAVE BEEN LIMITED TO DOCUMENTS CONCERNING ONLY THE APARTMENTS INFANT PLAINTIFF SPENT TIME IN, THE CONDITION OF OTHER PORTIONS OF THE BUILDING MAY BE RELEVANT TO DEFENDANTS’ NOTICE)/TOXIC TORTS  (IN THIS LEAD-PAINT EXPOSURE CASE, DISCOVERY SHOULD NOT HAVE BEEN LIMITED TO DOCUMENTS CONCERNING ONLY THE APARTMENTS INFANT PLAINTIFF SPENT TIME IN, THE CONDITION OF OTHER PORTIONS OF THE BUILDING MAY BE RELEVANT TO DEFENDANTS’ NOTICE)/CIVIL PROCEDURE (DISCOVERY, IN THIS LEAD-PAINT EXPOSURE CASE, DISCOVERY SHOULD NOT HAVE BEEN LIMITED TO DOCUMENTS CONCERNING ONLY THE APARTMENTS INFANT PLAINTIFF SPENT TIME IN, THE CONDITION OF OTHER PORTIONS OF THE BUILDING MAY BE RELEVANT TO DEFENDANTS’ NOTICE)/DISCOVERY  (IN THIS LEAD-PAINT EXPOSURE CASE, DISCOVERY SHOULD NOT HAVE BEEN LIMITED TO DOCUMENTS CONCERNING ONLY THE APARTMENTS INFANT PLAINTIFF SPENT TIME IN, THE CONDITION OF OTHER PORTIONS OF THE BUILDING MAY BE RELEVANT TO DEFENDANTS’ NOTICE)/LEAD PAINT  (IN THIS LEAD-PAINT EXPOSURE CASE, DISCOVERY SHOULD NOT HAVE BEEN LIMITED TO DOCUMENTS CONCERNING ONLY THE APARTMENTS INFANT PLAINTIFF SPENT TIME IN, THE CONDITION OF OTHER PORTIONS OF THE BUILDING MAY BE RELEVANT TO DEFENDANTS’ NOTICE)

, ,

NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK.

The First Department determined New York law applies to discovery from PriceWaterhouseCoopers in New York’s suit against Exxon alleging fraud in connection with the company’s knowledge of the causes and effects of global warming. PriceWaterhouseCoopers argued Texas law applied. Texas has an accountant privilege, New York does not:

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In this proceeding arising from an underlying investigation by the NYAG [attorney general]into alleged fraud by respondent Exxon concerning its published climate change information, the motion court properly found that the New York law on privilege, rather than Texas law, applies, and that New York does not recognize an accountant-client privilege.

We reject Exxon’s argument that an interest-balancing analysis is required to decide which state’s choice of law should govern the evidentiary privilege. Our current case law requires that when we are deciding privilege issues, we apply the law of the place where the evidence will be introduced at trial, or the place where the discovery proceeding is located … . In light of our conclusion that New York law applies, we need not decide how this issue would be decided under Texas law. Matter of People of the State of New York v PriceWaterhouseCoopers, LLP, 2017 NY Slip Op 04071, 1st Dept 5-23-17

 

CIVIL PROCEDURE (NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/PRIVILEGE (ACCOUNTANT PRIVILEGE, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/DISCOVERY (CIVIL PROCEDURE, CHOICE OF LAW, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/PRIVILEGE (ACCOUNTANT PRIVILEGE, CHOICE OF LAW, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/ACCOUNTANT PRIVILEGE (NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/CHOICE OF LAW (ACCOUNTANT PRIVILEGE, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/ENVIRONMENTAL LAW  (EXXON, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/GLOBAL WARMING (EXXON, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)/EXXON (GLOBAL WARMING, NEW YORK LAW APPLIES TO DISCOVERY IN THIS SUIT BY THE ATTORNEY GENERAL AGAINST EXXON ALLEGING FRAUD IN CONNECTION WITH EXXON’S KNOWLEDGE OF THE CAUSES AND EFFECTS OF GLOBAL WARMING, NO ACCOUNTANT PRIVILEGE IN NEW YORK)

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