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PAYMENT GUARANTEES NOT ENTITLED TO EXPEDITED TREATMENT PURSUANT TO CPLR 3213 AS INSTRUMENTS FOR THE PAYMENT OF MONEY ONLY, REFERENCE TO OTHER DOCUMENTS WAS NEEDED.

The First Department held determination of the meaning of the payment guarantees at issue required reference to other documents. Therefore the guarantees were not entitled to expedited treatment pursuant to CPLR 3213 as instruments for the payment of money only:

“The prototypical example of an instrument within the ambit of [CPLR 3213] is of course a negotiable instrument for the payment of money—an unconditional promise to pay a sum certain, signed by the maker and due on demand or at a definite time” … . CPLR 3213 is generally used to enforce “some variety of commercial paper in which the party to be charged has formally and explicitly acknowledged an indebtedness,” so that “a prima facie case would be made out by the instrument and a failure to make the payments called for by its terms” … . A document does not qualify for CPLR 3213 treatment if the court must consult other materials besides the bare document and proof of nonpayment, or if it must make a more than de minimis deviation from the face of the document … . PDL Biopharma, Inc. v Wohlstadter, 2017 NY Slip Op 01151, 1st Dept 2-14-17

CIVIL PROCEDURE (PAYMENT GUARANTEES NOT ENTITLED TO EXPEDITED TREATMENT PURSUANT TO CPLR 3213 AS INSTRUMENTS FOR THE PAYMENT OF MONEY ONLY, REFERENCE TO OTHER DOCUMENTS WAS NEEDED)/DEBTOR-CREDITOR (PAYMENT GUARANTEES NOT ENTITLED TO EXPEDITED TREATMENT PURSUANT TO CPLR 3213 AS INSTRUMENTS FOR THE PAYMENT OF MONEY ONLY, REFERENCE TO OTHER DOCUMENTS WAS NEEDED)/GUARANTEES (CPLR 3213, PAYMENT GUARANTEES NOT ENTITLED TO EXPEDITED TREATMENT PURSUANT TO CPLR 3213 AS INSTRUMENTS FOR THE PAYMENT OF MONEY ONLY, REFERENCE TO OTHER DOCUMENTS WAS NEEDED)/INSTRUMENTS FOR THE PAYMENT OF MONEY ONLY (PAYMENT GUARANTEES NOT ENTITLED TO EXPEDITED TREATMENT PURSUANT TO CPLR 3213 AS INSTRUMENTS FOR THE PAYMENT OF MONEY ONLY, REFERENCE TO OTHER DOCUMENTS WAS NEEDED)/CPLR 3213 (PAYMENT GUARANTEES NOT ENTITLED TO EXPEDITED TREATMENT PURSUANT TO CPLR 3213 AS INSTRUMENTS FOR THE PAYMENT OF MONEY ONLY, REFERENCE TO OTHER DOCUMENTS WAS NEEDED)

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CPLR 1601 DOES NOT ALLOW DAMAGES TO BE APPORTIONED AGAINST THE NON-PARTY STATE IN A NEGLIGENCE ACTION IN SUPREME COURT.

The Court of Appeals, reversing the Appellate Division, in a full-fledged opinion by Judge Stein, over a two-judge dissent, determined damages could not be apportioned against the (non-party) state in a negligence action in Supreme Court. The plaintiffs alleged a tree branch fell on plaintiffs’ car as plaintiffs were driving on a public street. The plaintiffs sued the property owner, but also filed a claim against the state alleging the state was negligent. The state can only be sued in the Court of Claims. Although, by statute (CPLR 1601], damages can be apportioned against a non-party defendant in the Court of Claims, the Court of Appeals held the statute does not allow damages to be apportioned against the non-party state in Supreme Court:

The statutory language permitting the State to seek apportionment in the Court of Claims against a private defendant if the claimant could have sued that defendant in any court of this State was specifically requested by the office of the Attorney General … . Pursuant to that language, as long as a claimant in the Court of Claims could have commenced an action against a private tortfeasor in any court in the State of New York, then the tortfeasor’s culpable conduct can be considered by the Court of Claims in determining the State’s equitable share of the total liability … . The statute does not, however, contain similar, express enabling language to allow apportionment against the state in a Supreme Court action … .

Plaintiffs, along with the State, argue that the inclusion of unambiguous language permitting the Court of Claims to consider the liability of a nonparty tortfeasor — while, at the same time, omitting language to allow the factfinder in Supreme Court to consider the liability of the State — demonstrates the Legislature’s intent not to allow apportionment of the State’s liability in Supreme Court. Moreover, even apart from the absence of language permitting apportionment against the State in Supreme Court, CPLR 1601 (1) provides that a nonparty tortfeasor’s relative culpability must not be considered in apportioning fault “if the claimant . . . with due diligence . . . was unable to obtain jurisdiction over such person in said action” … . Artibee v Home Place Corp., 2017 NY Slip Op 01145, CtApp 2-14-17

 

CIVIL PROCEDURE (NEGLIGENCE, CPLR 1601 DOES NOT ALLOW DAMAGES TO BE APPORTIONED AGAINST THE NON-PARTY STATE IN A NEGLIGENCE ACTION IN SUPREME COURT)/NEGLIGENCE (DAMAGES,  CPLR 1601 DOES NOT ALLOW DAMAGES TO BE APPORTIONED AGAINST THE NON-PARTY STATE IN A NEGLIGENCE ACTION IN SUPREME COURT)/DAMAGES (NEGLIGENCE, CPLR 1601 DOES NOT ALLOW DAMAGES TO BE APPORTIONED AGAINST THE NON-PARTY STATE IN A NEGLIGENCE ACTION IN SUPREME COURT)/IMMUNITY (NEGLIGENCE, CPLR 1601 DOES NOT ALLOW DAMAGES TO BE APPORTIONED AGAINST THE NON-PARTY STATE IN A NEGLIGENCE ACTION IN SUPREME COURT)

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CPLR 205 (a), WHICH ALLOWS SIX MONTHS FOR RECOMMENCING AN ACTION AFTER DISMISSAL, APPLIES TO FORECLOSURE PROCEEDINGS, EVEN WHEN THE CURRENT HOLDER OF THE NOTE IS A SUCCESSOR IN INTEREST TO THE PARTY WHICH STARTED THE FORECLOSURE ACTION.

The Second Department, in a full-fledged opinion by Justice Maltese, determined the six-month extension of a statute of limitations provided by CPLR 205 (a) applied in this foreclosure action. The court summarized the rulings as follows:

Under certain conditions, CPLR 205(a) provides an additional six months in which to recommence a prior action that has been dismissed on grounds other than voluntary discontinuance, lack of personal jurisdiction, neglect to prosecute, or a final judgment on the merits. The first question in this case is whether a prior action to foreclose the same mortgage was dismissed for neglect to prosecute, a category of dismissal that renders CPLR 205(a) inapplicable. We answer this question in the negative, concluding that the prior action was not dismissed for neglect to prosecute.

The second question is more novel. We must determine whether the plaintiff in this mortgage foreclosure action, which was assigned the note and mortgage during the pendency of the prior foreclosure action, is entitled to the savings provision—or grace period—of CPLR 205(a) even though the prior action was commenced by a prior holder of the note. … [W]e conclude that a plaintiff in a mortgage foreclosure action which meets all of the other requirements of the statute is entitled to the benefit of CPLR 205(a) where, as here, it is the successor in interest as the current holder of the note. Wells Fargo Bank, N.A. v Eitani, 2017 NY Slip Op 01015, 2nd Dept 2-8-17

 

CIVIL PROCEDURE (CPLR 205 (a), WHICH ALLOWS SIX MONTHS FOR RECOMMENCING AN ACTION AFTER DISMISSAL, APPLIES TO FORECLOSURE PROCEEDINGS, EVEN WHEN THE CURRENT HOLDER OF THE NOTE IS A SUCCESSOR IN INTEREST TO THE PARTY WHICH STARTED THE FORECLOSURE ACTION)/FORECLOSURE (CPLR 205 (a), WHICH ALLOWS SIX MONTHS FOR RECOMMENCING AN ACTION AFTER DISMISSAL, APPLIES TO FORECLOSURE PROCEEDINGS, EVEN WHEN THE CURRENT HOLDER OF THE NOTE IS A SUCCESSOR IN INTEREST TO THE PARTY WHICH STARTED THE FORECLOSURE ACTION)

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TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY; MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR.

The Fourth Department determined a citizen taxpayer’s declaratory judgment action against the state, claiming that the transfer of land to a trust pursuant to the Oneida Settlement Agreement ceded the state’s taxation authority, was properly rejected. The court noted that when a motion to dismiss a declaratory judgment action is made, the court will treat it as a motion for a declaration in the defendant’s favor:

Plaintiff alleges that Section VI B (1-5) of the Agreement violates article XVI of the State Constitution, which prohibits the State from surrendering, suspending or contracting away its power of taxation. Section VI B (1-5) provides that the State will not oppose a future application by the Oneida Indian Nation (Nation) to transfer to the United States up to 12,366 acres of land to be held in trust pursuant to 25 USC § 5108 (formerly § 465). The land at issue was formerly part of the 300,000-acre reservation, which was established in the 1788 Treaty of Fort Schuyler (see City of Sherrill, N.Y. v Oneida Indian Nation of N.Y., 544 US 197, 203), and which the Nation has reacquired through open-market transactions (see id. at 211). In 2008, the United States Secretary of the Interior accepted the transfer into trust of 13,004 acres of reacquired land owned by the Nation, over defendant’s objection. We conclude that the court properly declared that Section VI B (1-5) does not violate the State constitutional provision prohibiting defendant from surrendering or contracting away its power of taxation. * * *

To the extent that plaintiff contends that Executive Law § 11 and Indian Law § 16 violate article XVI of the State Constitution, we reject that contention. Kaplan v State of New York. 2017 NY Slip Op 00766, 4th Dept 2-3-17

 

CONSTITUTIONAL LAW (STATE) (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)/INDIAN LAW (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)/CIVIL PROCEDURE (DECLARATORY JUDGMENT, (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)/DECLARATORY JUDGMENT (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)

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NO JUSTICIABLE CONTROVERY BETWEEN LAW SCHOOL AND AN ALLEGED DIPLOMA MILL, DECLARATORY JUDGMENT ACTION PROPERLY DISMISSED.

The First Department determined there was no ‘justiciable controversy” between Touro College (law school) and Novus University (law school). The declaratory judgment action was therefore properly dismissed. Touro, after admitting a Novus graduate into its LLM program, was sued by the Novus graduate when Touro refused to grant the LLM degree upon his successful completion of the program. The Novus graduate had misrepresented Novus as a foreign law school. Touro had successfully defended the lawsuit brought by the Novus graduate:

Touro, an institute of higher education, accredited by the American Bar Association (ABA), alleges that it and similarly-situated institutions have been harmed by Novus in that individuals who have received degrees from Novus, an online, non-ABA accredited law school, have applied to Masters of Law programs at law schools, including Touro, while falsely representing that Novus was a foreign institution. Touro maintains that there is a justiciable controversy between Touro and Novus warranting declaratory relief (CPLR 3001), since Touro was forced to defend against “meritless” litigation instituted by a Novus graduate who was denied a Touro LLM, after he was admitted to the program based on such a misrepresentation … .

A declaratory judgment is intended “to declare the respective legal rights of the parties based on a given set of facts, not to declare findings of fact” … . The general purpose of a “declaratory judgment is to serve some practical end in quieting or stabilizing an uncertain or disputed jural relation either as to present or prospective obligations” … . Thus, a declaratory judgment requires a “justiciable controversy,” in which not only does the plaintiff “have an interest sufficient to constitute standing to maintain the action but also that the controversy involve present, rather than hypothetical, contingent or remote, prejudice to plaintiffs” … . Touro’s allegations fail to identify any present controversy or disputed jural relationship between the parties to this action that would be resolved by issuance of the requested declaration. Touro Coll. v Novus Univ. Corp., 2017 NY Slip Op 00546, 1st Dept 1-26-17

 

CIVIL PROCEDURE (DECLARATORY JUDGMENT, NO JUSTICIABLE CONTROVERY BETWEEN LAW SCHOOL AND AN ALLEGED DIPLOMA MILL, DECLARATORY JUDGMENT ACTION PROPERLY DISMISSED)/DECLARATORY JUDGMENT (NO JUSTICIABLE CONTROVERY BETWEEN LAW SCHOOL AND AN ALLEGED DIPLOMA MILL, DECLARATORY JUDGMENT ACTION PROPERLY DISMISSED)/JUSTICIABLE CONTROVERSY (DECLARATORY JUDGMENT, NO JUSTICIABLE CONTROVERY BETWEEN LAW SCHOOL AND AN ALLEGED DIPLOMA MILL, DECLARATORY JUDGMENT ACTION PROPERLY DISMISSED)

PLAINTIFF DID NOT SUFFICIENTLY DEMONSTRATE ​DEFENDANT’S AGENTS TRANSACTED BUSINESS IN NEW YORK, NEW YORK DID NOT HAVE LONG-ARM JURISDICTION.

The First Department, over a substantial partial dissent, determined plaintiff did not demonstrate the transaction of business in New York by agents of the defendant. Therefore, New York could not exercise long-arm jurisdiction over the defendant and defendant’s motion to dismiss was properly granted:

Pursuant to CPLR 302(a)(1) a New York court may exercise personal jurisdiction over a nondomiciliary if the nondomiciliary has purposefully transacted business within the state and there is “a substantial relationship between the transaction and the claim asserted” … . “Purposeful activities are volitional acts by which the non-domiciliary avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws” … . “More than limited contacts are required for purposeful activities sufficient to establish that the non-domiciliary transacted business in New York” … . * * *

To establish that a defendant acted through an agent, a plaintiff must “convince the court that [the New York actors] engaged in purposeful activities in this State in relation to [the] transaction for the benefit of and with the knowledge and consent of [the defendant] and that [the defendant] exercised some control over [the New York actors]” … . “[T]]o make a prima facie showing of control, a plaintiff’s allegations must sufficiently detail the defendant’s conduct so as to persuade a court that the defendant was a primary actor’ in the specific matter in question; control cannot be shown based merely upon a defendant’s title or position within the corporation, or upon conclusory allegations that the defendant controls the corporation” … . Coast to Coast Energy, Inc. v Gasarch, 2017 NY Slip Op 00532, 1st Dept 1-26-17

 

CIVIL PROCEDURE (PLAINTIFF DID NOT SUFFICIENTLY DEMONSTRATE ​DEFENDANT’S AGENTS TRANSACTED BUSINESS IN NEW YORK, NEW YORK DID NOT HAVE LONG-ARM JURISDICTION)/JURISDICTION (LONG-ARM JURISDICTION, PLAINTIFF DID NOT SUFFICIENTLY DEMONSTRATE ​DEFENDANT’S AGENTS TRANSACTED BUSINESS IN NEW YORK, NEW YORK DID NOT HAVE LONG-ARM JURISDICTION)/LONG-ARM JURISDICTION (PLAINTIFF DID NOT SUFFICIENTLY DEMONSTRATE ​DEFENDANT’S AGENTS TRANSACTED BUSINESS IN NEW YORK, NEW YORK DID NOT HAVE LONG-ARM JURISDICTION)/AGENTS (LONG-ARM JURISDICTION, PLAINTIFF DID NOT SUFFICIENTLY DEMONSTRATE ​DEFENDANT’S AGENTS TRANSACTED BUSINESS IN NEW YORK, NEW YORK DID NOT HAVE LONG-ARM JURISDICTION)/TRANSACTION OF BUSINESS (LONG-ARM JURISDICTION, PLAINTIFF DID NOT SUFFICIENTLY DEMONSTRATE ​DEFENDANT’S AGENTS TRANSACTED BUSINESS IN NEW YORK, NEW YORK DID NOT HAVE LONG-ARM JURISDICTION)

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APPELLATE COURT NEED NOT REVIEW ISSUES NOT SUPPORTED BY DOCUMENTS IN THE APPENDIX; COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL; FAITHLESS SERVANT DOCTRINE FORFEITED PLAINTIFF’S RIGHT TO A STOCK OPTION.

The Second Department determined (1) certain issues in plaintiff’s appeal could not be addressed because the necessary documents were not included in the appendix provided to the appellate court, (2) the faithless servant doctrine applied to plaintiff who, by his disloyalty, forfeited his contractual right to a stock option, and (3) the plaintiff waived his right to a jury trial in this declaratory judgment action:

This Court is not obligated to determine an issue where the appendix submitted to it is inadequate to permit review … . * * *

Where a plaintiff joins an equitable claim for specific performance to a legal claim for damages, the plaintiff waives the right to a jury trial … . “[A] declaratory judgment action . . . can be legal or equitable in nature, and to determine whether a party is entitled to a jury trial, it is necessary to examine which of the traditional actions would most likely have been used to present the instant claim had the declaratory judgment action not been created'” … .

Here, the Supreme Court correctly determined that the plaintiff’s declaratory judgment cause of action was in the nature of a prayer for specific performance … . Accordingly, the court correctly determined that the plaintiff had waived his right to a jury trial … .  * * *

… [T]he court properly applied the faithless servant doctrine and determined that, pursuant to that doctrine, the plaintiff forfeited the right to exercise the stock option … . Trimarco v Data Treasury Corp., 2017 NY Slip Op 00503, 2nd Dept 1-25-17

 

EMPLOYMENT LAW (FAITHLESS SERVANT DOCTRINE FORFEITED PLAINTIFF’S RIGHT TO A STOCK OPTION)/FAITHLESS SERVANT DOCTRINE (FAITHLESS SERVANT DOCTRINE FORFEITED PLAINTIFF’S RIGHT TO A STOCK OPTION)/CIVIL PROCEDURE (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/DECLARATORY JUDGMENT (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/SPECIFIC PERFORMANCE (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/CONTRACT LAW (COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/JURY TRIAL (CIVIL, COUPLING DECLARATORY JUDGMENT WITH SPECIFIC PERFORMANCE WAIVED RIGHT TO JURY TRIAL)/APPEALS (APPELLATE COURT NEED NOT REVIEW ISSUES NOT SUPPORTED BY DOCUMENTS IN THE APPENDIX)

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CAUSES OF ACTION AGAINST ACCOUNTANTS STEMMING FROM A WORKERS’ COMPENSATION TRUST FOUND TO BE $8 MILLION IN DEBT SURVIVED MOTIONS TO DISMISS, SIX YEAR STATUTE OF LIMITATIONS APPLIES TO INTENTIONAL (AS OPPOSED TO NEGLIGENT) CONDUCT.

The Third Department determined Supreme Court should not have dismissed the breach of fiduciary duty cause of action against defendant accountants (Fuller) stemming from a workers’ compensation trust found to be more than $8 million in debt. The 2nd Department also found Supreme Court properly applied the six year statute of limitations to the allegedly intentional acts by the defendant accountants (designed to conceal the debt). The defendant accountants unsuccessfully argued the three-year (negligence/malpractice) statute of limitations should apply. Regarding the breach of fiduciary duty cause of action, the 2nd Department explained:

Although the duty owed by an accountant is generally not fiduciary in nature … , a fiduciary relationship exists where the accountant is “under a duty to act for or to give advice for the benefit of [the client] upon matters within the scope of the relation” … . This inquiry is “necessarily fact-specific” … , and the dispositive factor is whether there is “confidence on one side and resulting superiority and influence on the other” … . Plaintiff alleged that Fuller held itself out to have the requisite skill and expertise to maintain the trust’s financial records, provide auditing services and — importantly — provide advice to the trust regarding the trust’s financial status. According to plaintiff, Fuller breached its fiduciary duty by knowingly and consistently concealing the trust’s true financial condition and failing to properly advise the trust regarding its solvency, causing over $8 million in damages. Accepting these allegations as true and giving plaintiff the benefit of every favorable inference … , we find that plaintiff’s cause of action for breach of fiduciary duty is sufficiently stated to survive Fuller’s motion to dismiss … .  New York State Workers’ Compensation Bd. v Fuller & LaFiura, CPAs, P.C., 2017 NY Slip Op 00225, 3rd Dept 1-12-17

 

WORKERS’ COMPENSATION LAW (CAUSES OF ACTION AGAINST ACCOUNTANTS STEMMING FROM A WORKERS’ COMPENSATION TRUST FOUND TO BE $8 MILLION IN DEBT SURVIVED MOTIONS TO DISMISS)/FRAUD (CAUSES OF ACTION AGAINST ACCOUNTANTS STEMMING FROM A WORKERS’ COMPENSATION TRUST FOUND TO BE $8 MILLION IN DEBT SURVIVED MOTIONS TO DISMISS)/CIVIL PROCEDURE (SIX YEAR STATUTE OF LIMITATIONS APPLIED TO INTENTIONAL ACTS BY ACCOUNTANTS, CAUSES OF ACTION AGAINST ACCOUNTANTS STEMMING FROM A WORKERS’ COMPENSATION TRUST FOUND TO BE $8 MILLION IN DEBT SURVIVED MOTIONS TO DISMISS)/FIDUCIARY DUTY (BREACH OF FIDUCIARY DUTY CAUSE OF ACTION AGAINST ACCOUNTANTS STEMMING FROM A WORKERS’ COMPENSATION TRUST FOUND TO BE $8 MILLION IN DEBT SHOULD HAVE SURVIVED MOTION TO DISMISS)/ACCOUNTANTS (CAUSES OF ACTION AGAINST ACCOUNTANTS STEMMING FROM A WORKERS’ COMPENSATION TRUST FOUND TO BE $8 MILLION IN DEBT SURVIVED MOTIONS TO DISMISS, SIX YEAR STATUTE OF LIMITATIONS APPLIED TO INTENTIONAL ACTS BY ACCOUNTANTS)/STATUTE OF LIMITATIONS CAUSES OF ACTION AGAINST ACCOUNTANTS STEMMING FROM A WORKERS’ COMPENSATION TRUST FOUND TO BE $8 MILLION IN DEBT SURVIVED MOTIONS TO DISMISS, SIX YEAR STATUTE OF LIMITATIONS APPLIED TO INTENTIONAL ACTS BY ACCOUNTANTS)

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DEFENDANT’S SUMMARY JUDGMENT MOTION WAS PREMATURE, PIERCING THE CORPORATE VEIL MIGHT BE AN ISSUE DETERMINING WHETHER WORKERS’ COMPENSATION IS THE SOLE REMEDY, FURTHER DISCOVERY NEEDED.

The Third Department determined defendant’s summary judgment motion in this wrongful death action should have been denied as premature. Plaintiff’s decedent was killed in a workplace accident and workers’ compensation death benefits were paid out. In addition to arguing that workers’ compensation was plaintiff’s sole remedy, defendant argued the corporation plaintiff sued had been dissolved and assets transferred to another corporation. Because piercing the corporate veil might be an issue, the Third Department held that plaintiff was entitled to discovery to flesh out the relationship among plaintiff’s decedent and the two corporations:

“[A] summary judgment motion is properly denied as premature when the nonmoving party has not been given reasonable time and opportunity to conduct disclosure relative to pertinent evidence that is within the exclusive knowledge of the movant or a codefendant” … . Although we have held that, “in certain situations, . . . more than one entity may be considered a plaintiff’s employer for purposes of workers’ compensation” … , defendant’s submissions fall far short of establishing that premise as a matter of law. A determination as to whether two entities are alter egos of each other requires a far more detailed record than is present here … . Pringle v AC Bodyworks & Sons, LLC, 2016 NY Slip Op 08924, 3rd Dept 12-29-16

CIVIL PROCEDURE (DEFENDANT’S SUMMARY JUDGMENT MOTION WAS PREMATURE, PIERCING THE CORPORATE VEIL MIGHT BE AN ISSUE, FURTHER DISCOVERY NEEDED)/CORPORATION LAW (DEFENDANT’S SUMMARY JUDGMENT MOTION WAS PREMATURE, PIERCING THE CORPORATE VEIL MIGHT BE AN ISSUE, FURTHER DISCOVERY NEEDED)/WORKERS’ COMPENSATION LAW (DEFENDANT’S SUMMARY JUDGMENT MOTION WAS PREMATURE, PIERCING THE CORPORATE VEIL MIGHT BE AN ISSUE TO DETERMINE WHETHER WORKERS’ COMPENSATION IS THE SOLE REMEDY, FURTHER DISCOVERY NEEDED)/NEGLIGENCE (DEFENDANT’S SUMMARY JUDGMENT MOTION WAS PREMATURE, PIERCING THE CORPORATE VEIL MIGHT BE AN ISSUE TO DETERMINE WHETHER WORKERS’ COMPENSATION IS THE SOLE REMEDY, FURTHER DISCOVERY NEEDED)/WRONGFUL DEATH (DEFENDANT’S SUMMARY JUDGMENT MOTION WAS PREMATURE, PIERCING THE CORPORATE VEIL MIGHT BE AN ISSUE TO DETERMINE WHETHER WORKERS’ COMPENSATION IS THE SOLE REMEDY, FURTHER DISCOVERY NEEDED)

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DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS.

In an action against a veterinary clinic stemming from an alleged attack by a dog in the waiting room, the Third Department determined the clinic did not demonstrate documents sought by plaintiff’s discovery demands were entitled to conditional immunity as documents prepared for litigation. The matter was remitted for court review of the documents:

Inasmuch as “[t]he purpose of liability insurance is the defense and settlement of claims . . . once an accident has arisen,” documents contained in the insurance adjuster’s file are generally protected by “a conditional immunity . . . as material prepared for litigation” … . Accident reports that are prepared with “a mixed purpose and result at least in part from the internal operations of the defendant’s business” are not, however, exempt from disclosure … . It is therefore incumbent upon “the party resisting disclosure to[, in the first instance,] show that the materials sought were prepared solely for litigation and this burden cannot be satisfied with wholly conclusory allegations” … . Hewitt v Palmer Veterinary Clinic, PC, 2016 NY Slip Op 08926, 3rd Dept 12-29-16

INSURANCE LAW (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/NEGLIGENCE (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/CIVIL PROCEDURE (DISCOVERY, CONDITIONAL IMMUNITY, DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/CONDITIONAL IMMUNITY (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/PRIVILEGE (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)/ACCIDENT REPORTS (DEFENDANT DID NOT DEMONSTRATE DOCUMENTS SOUGHT BY A DISCOVERY DEMAND WERE ENTITLED TO CONDITIONAL IMMUNITY AS DOCUMENTS PREPARED IN ANTICIPATION OF LITIGATION, MATTER REMITTED FOR COURT REVIEW OF THE DOCUMENTS)

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