You are here: / Civil Procedure

LAW OFFICE FAILURE DEEMED A REASONABLE EXCUSE, DEFAULT JUDGMENT VACATED.

The First Department determined law office failure was a proper basis for vacating a default judgment (the underlying case was deemed meritorious):

Under certain circumstances, law office failure may provide a reasonable excuse for a default … . At oral argument, respondents essentially conceded that, in this e-filed case, their office failed to regularly check its email and, as a result, was unaware of the motion court’s order that gave rise to the default. Respondents’ excuse was sufficiently particularized and there is no evidence of wilful or contumacious conduct on their part … . Matter of Rivera v New York City Dept. of Sanitation, 2016 NY Slip Op 05837, 1st Dept 8-18-16

CIVIL PROCEDURE (LAW OFFICE FAILURE DEEMED A REASONABLE EXCUSE, DEFAULT JUDGMENT VACATED)/DEFAULT JUDGMENT (LAW OFFICE FAILURE DEEMED A REASONABLE EXCUSE, DEFAULT JUDGMENT VACATED)/LAW OFFICE FAILURE (LAW OFFICE FAILURE DEEMED A REASONABLE EXCUSE, DEFAULT JUDGMENT VACATED)

,

TEACHER’S PETITION TO REVIEW DEPARTMENT OF EDUCATION’S JOB PERFORMANCE RATING SHOULD NOT HAVE BEEN DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION, CRITERIA EXPLAINED.

The Second Department determined Supreme Court should not have dismissed the teacher’s Article 78 petition seeking review of the NYC Department of Education’s (DOE’s) job performance rating. The court explained the review criteria in the context of a motion to dismiss the petition for failure to state a cause of action:

“On a motion to dismiss a pleading pursuant to CPLR 3211(a)(7), all of the allegations in the petition are deemed true and the petitioner is afforded the benefit of every favorable inference” … . In determining such a motion, the sole criterion is whether the petition sets forth allegations [*2]sufficient to make out a claim that the determination sought to be reviewed was ” made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion” … . When evidentiary material outside the pleading’s four corners is considered, and the motion is not converted into one for summary judgment, the question becomes whether the pleader has a cause of action, not whether the pleader has stated one and, unless it has been shown that a material fact as claimed by the pleader is not a fact at all, and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate … .

Applying this standard, the petition and the documents annexed to it establish a cognizable claim that the respondents’ determination was made in violation of lawful procedure, or was arbitrary and capricious or an abuse of discretion. Contrary to the respondents’ contention, the petitioner’s claim is not a mere disagreement as to whether the rating of “unsatisfactory” was deserved. Rather, as set forth in the petition, the petitioner alleges that the process used by the respondents in arriving at the rating was based on a failure to observe her entire class lesson, faulty background knowledge, and unlawful procedure. Matter of Kunik v New York City Dept. of Educ., 2016 NY Slip Op 05812, 2nd Dept 8-17-16

 

EDUCATION-SCHOOL LAW (TEACHER’S PETITION TO REVIEW DEPARTMENT OF EDUCATION’S JOB PERFORMANCE RATING SHOULD NOT HAVE BEEN DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION, CRITERIA EXPLAINED)/CIVIL PROCEDURE (TEACHER’S PETITION TO REVIEW DEPARTMENT OF EDUCATION’S JOB PERFORMANCE RATING SHOULD NOT HAVE BEEN DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION, CRITERIA EXPLAINED)/TEACHERS (TEACHER’S PETITION TO REVIEW DEPARTMENT OF EDUCATION’S JOB PERFORMANCE RATING SHOULD NOT HAVE BEEN DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION, CRITERIA EXPLAINED)

PREJUDGMENT INTEREST NEED NOT BE PAID INTO THE COURT PURSUANT TO CPLR 2601 WHEN SUCH A PAYMENT IS MADE TO STOP THE ACCRUAL OF INTEREST.

The Second Department, reversing Supreme Court, determined defendant need not pay prejudgment interest when it paid the policy limits into the court pursuant to CPLR 2601 to stop the accrual of interest on that amount:

In this action to recover damages for medical malpractice, after a jury trial, a judgment was entered in favor of the plaintiffs and against, among others, the defendant New York Methodist Hospital (hereinafter NYMH) in the total present value sum of $13,815,290. In an order dated September 24, 2014, the Supreme Court granted NYMH’s motion pursuant to CPLR 2601, inter alia, for leave to pay the limits of its insurance policy, $7,500,000, into court in order to stop the accrual of interest on that amount. * * *

… CPLR 2601 does not mandate that any specific amount of money be paid into court or require that interest on the amount to be paid into court from the date of the verdict to the date of deposit be paid at or around the time of deposit. Therefore, NYMH was not required to pay into court an additional $619,520.55, which represented the accrued interest from the date of the verdict to the date of deposit. Accordingly, the order must be reversed. Sence v Atoynatan, 2016 NY Slip Op 05804, 2nd Dept 8-17-16

 

CIVIL PROCEDURE (PREJUDGMENT INTEREST NEED NOT BE PAID INTO THE COURT PURSUANT TO CPLR 2601 WHEN SUCH A PAYMENT IS MADE TO STOP THE ACCRUAL OF INTEREST)/PREJUDGMENT INTEREST (PREJUDGMENT INTEREST NEED NOT BE PAID INTO THE COURT PURSUANT TO CPLR 2601 WHEN SUCH A PAYMENT IS MADE TO STOP THE ACCRUAL OF INTEREST)/INTEREST (PREJUDGMENT INTEREST NEED NOT BE PAID INTO THE COURT PURSUANT TO CPLR 2601 WHEN SUCH A PAYMENT IS MADE TO STOP THE ACCRUAL OF INTEREST)

,

CONTRACT PROVISION WHICH PURPORTED TO EXTEND THE ACCRUAL OF BREACH OF CONTRACT CAUSES OF ACTION STEMMING FROM SALE OF RESIDENTIAL MORTGAGE BACKED SECURITIES DEEMED UNENFORCEABLE AS AGAINST PUBLIC POLICY; ACTION TIME-BARRED.

The First Department, in a full-fledged opinion by Justice Acosta, determined breach of contract causes of action stemming from contracts for the sale of defective residential mortgage backed securities were time-barred. The court rejected as against public policy contractual provisions which purported to extend the accrual of the causes of action:

In this appeal, we must decide whether the statute of limitations bars a breach of contract action that was brought more than six years after the seller made allegedly false representations and warranties as to loans underlying residential mortgage-backed securities (RMBS). We find that dismissal of the action is mandated by the Court of Appeals’ decision in ACE Sec. Corp., Home Equity Loan Trust, Series 2006-SL2 v DB Structured Prods., Inc. (25 NY3d 581 [2015]), which sets forth a clear rule that a breach of contract claim in an RMBS put-back action accrues on the date the allegedly false representations and warranties were made. Notwithstanding the parties’ sophistication and their assent to a contract provision specifying a set of conditions that would have delayed the cause of action’s accrual, we find that the accrual provision is unenforceable as against public policy, because it is tantamount to extending the statute of limitations based on an imprecise “discovery” rule, which the Court of Appeals has consistently rejected in the commercial sphere … . Moreover, the accrual provision does not compel defendant to undertake a promised future performance, separate from its obligations to cure or repurchase defective loans, so as to trigger the statute of limitations anew; nor does it contemplate a substantive condition precedent to defendant’s performance that would delay accrual of the breach of contract claim … . Deutsche Bank Natl. Trust Co. v Flagstar Capital Mkts. Corp., 2016 NY Slip Op 05780, 1st Dept 8-11-16

CIVIL PROCEDURE (STATUTE OF LIMITATIONS, CONTRACT PROVISION WHICH PURPORTED TO EXTEND THE ACCRUAL OF BREACH OF CONTRACT CAUSES OF ACTION STEMMING FROM SALE OF RESIDENTIAL MORTGAGE BACKED SECURITIES DEEMED UNENFORCEABLE AS AGAINST PUBLIC POLICY; ACTION TIME-BARRED)/STATUTE OF LIMITATIONS (CONTRACT PROVISION WHICH PURPORTED TO EXTEND THE ACCRUAL OF BREACH OF CONTRACT CAUSES OF ACTION STEMMING FROM SALE OF RESIDENTIAL MORTGAGE BACKED SECURITIES DEEMED UNENFORCEABLE AS AGAINST PUBLIC POLICY; ACTION TIME-BARRED)/SECURITIES (RESIDENTIAL MORTGAGE BACKED SECURITIES, CONTRACT PROVISION WHICH PURPORTED TO EXTEND THE ACCRUAL OF BREACH OF CONTRACT CAUSES OF ACTION STEMMING FROM SALE OF RESIDENTIAL MORTGAGE BACKED SECURITIES DEEMED UNENFORCEABLE AS AGAINST PUBLIC POLICY; ACTION TIME-BARRED)/RESIDENTIAL MORTGAGE BACKED SECURITIES (STATUTE OF LIMITATIONS, CONTRACT PROVISION WHICH PURPORTED TO EXTEND THE ACCRUAL OF BREACH OF CONTRACT CAUSES OF ACTION STEMMING FROM SALE OF RESIDENTIAL MORTGAGE BACKED SECURITIES DEEMED UNENFORCEABLE AS AGAINST PUBLIC POLICY; ACTION TIME-BARRED)

, , ,

CRITERIA FOR ATTORNEY WORK-PRODUCT PRIVILEGE, WILLFUL AND CONTUMACIOUS CONDUCT DURING DISCOVERY, AND SPOLIATION OF EVIDENCE CLEARLY EXPLAINED.

The Second Department determined: (1) information procured by an attorney’s freedom of information law requests was not protected by work-product privilege; (2) defendants’ conduct during discovery was not willful and contumacious; and (3) an adverse inference instruction was an appropriate sanction for spoliation of evidence. The Second Department offered detailed summaries of the criteria for work-product privilege, sanctions for conduct during discovery, and spoliation of evidence which are worth reading. With respect to attorney work-product privilege, the court wrote:

The CPLR exempts attorney work product from disclosure … . However, “the party asserting the privilege that material sought through discovery was prepared exclusively in anticipation of litigation or constitutes attorney work product bears the burden of demonstrating that the material it seeks to withhold is immune from discovery by identifying the particular material with respect to which the privilege is asserted and establishing with specificity that the material was prepared exclusively in anticipation of litigation” … . Furthermore, “[n]ot every manifestation of a lawyer’s labors enjoys the absolute immunity of work product. The exemption should be limited to those materials which are uniquely the product of a lawyer’s learning and professional skills, such as materials which reflect his [or her] legal research, analysis, conclusions, legal theory or strategy” … .

Here, the plaintiffs contend that materials obtained by their attorney via requests pursuant to state and federal freedom of information laws are privileged attorney work product. However, this material cannot be characterized as being “uniquely the product of [the plaintiffs’ counsel’s] learning and professional skills” or as reflecting his “legal research, analysis, conclusions, legal theory or strategy” … . Cioffi v S.M. Foods, Inc., 2016 NY Slip Op 05741, 2nd Dept 8-10-16

 

ATTORNEYS (CRITERIA FOR ATTORNEY WORK-PRODUCT PRIVILEGE, WILLFUL AND CONTUMACIOUS CONDUCT DURING DISCOVERY, AND SPOLIATION OF EVIDENCE CLEARLY EXPLAINED)/PRIVILEGE (ATTORNEY WORK PRODUCT PRIVILEGE CRITERIA EXPLAINED)/WORK PRODUCT (ATTORNEY WORK PRODUCT PRIVILEGE CRITERIA EXPLAINED)/CIVIL PROCEDURE (WILLFUL AND CONTUMACIOUS CONDUCT DURING DISCOVERY, AND SPOLIATION OF EVIDENCE CLEARLY EXPLAINED)/DISCOVERY (CIVIL, CRITERIA FOR FINDING WILLFUL AND CONTUMACIOUS CONDUCT DURING DISCOVERY CLEARLY EXPLAINED)/EVIDENCE (CIVIL, CRITERIA FOR SPOLIATION OF EVIDENCE CLEARLY EXPLAINED)/SPOLIATION (CRITERIA FOR SPOLIATION OF EVIDENCE CLEARLY EXPLAINED)

,

ALTHOUGH PLAINTIFF MADE OUT A PRIMA FACIE CASE ON HIS LABOR LAW CAUSES OF ACTION, THE MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN DISMISSED AS PREMATURE; PLAINTIFF NOT YET DEPOSED.

The Second Department determined summary judgment in this Labor Law 240(1) and 241(6) action should not have been awarded to plaintiff. Although plaintiff had made out a prima facie case against defendant YAM, the motion was premature in that plaintiff had not yet been deposed:

… [T]he plaintiff made a prima facie showing that YAM failed to provide him with adequate safety devices, as required by Labor Law § 240(1), and that this violation of the statute was a proximate cause of the accident … . The plaintiff also made a prima facie showing that he was injured while he was engaged in an activity covered under Labor Law § 241(6), that there was a violation of an applicable provision of the Industrial Code, and that the violation was a proximate cause of the accident … .

Nonetheless, the plaintiff’s motion for summary judgment on the issue of liability on the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) insofar as asserted against YAM was premature since there has been almost no discovery in the case and the plaintiff has not been deposed. In the absence of such discovery, YAM’s ability to defend is impaired, since it is limited to the plaintiff’s own unchallenged account of the accident, set forth in the affidavit he submitted in support of his motion for summary judgment, and YAM has not had an opportunity to explore potential defenses … . Churaman v C&B Elec., Plumbing & Heating, Inc., 2016 NY Slip Op 05703, 2nd Dept 8-3-16

CIVIL PROCEDURE (SUMMARY JUDGMENT, ALTHOUGH PLAINTIFF MADE OUT A PRIMA FACIE CASE ON HIS LABOR LAW CAUSES OF ACTION, THE MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN DISMISSED AS PREMATURE; PLAINTIFF NOT YET DEPOSED)/SUMMARY JUDGMENT (LABOR LAW-CONSTRUCTION LAW, ALTHOUGH PLAINTIFF MADE OUT A PRIMA FACIE CASE ON HIS LABOR LAW CAUSES OF ACTION, THE MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN DISMISSED AS PREMATURE; PLAINTIFF NOT YET DEPOSED)/LABOR LAW-CONSTRUCTION LAW (SUMMARY JUDGMENT, ALTHOUGH PLAINTIFF MADE OUT A PRIMA FACIE CASE ON HIS LABOR LAW CAUSES OF ACTION, THE MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN DISMISSED AS PREMATURE; PLAINTIFF NOT YET DEPOSED)

,

WHERE LIABILITY IS CONCEDED BY STIPULATION, PREJUDGMENT INTEREST RUNS FROM THE SUBSEQUENT DAMAGES VERDICT.

The Second Department, in a full-fledged opinion by Justice Balkin, determined, where liability is conceded by stipulation, prejudgment interest runs from the date of the subsequent damages verdict, not the date of the stipulation. Here the damages trial was held 2 1/2 years after the stipulation was entered. Had liability been determined by “verdict, report or decision,” interest would have run from the liability determination:

When the determinations of liability and damages are made together, the computation of prejudgment interest under CPLR 5002 is straightforward … . When, however, the determinations of liability and damages are bifurcated, the general rule is that prejudgment interest under CPLR 5002 runs from the date of the “verdict, report or decision” as to liability, rather than from the date of the “verdict, report or decision” as to damages … . * * *

Stipulations are different. They are not adjudications made by a third party, but voluntary agreements, or contracts, by which the opposing parties themselves chart their own course in a way that makes sense for them… . * * *

Clearly, the Legislature did not expressly include stipulations in CPLR 5002. Had the Legislature wished to include stipulations, it easily could have done so, as it has in other statutes… . Mahoney v Brockbank, 2016 NY Slip Op 05630, 2nd Dept 7-27-16

 

CIVIL PROCEDURE (WHERE LIABILITY IS CONCEDED BY STIPULATION, PREJUDGMENT INTEREST RUNS FROM THE SUBSEQUENT DAMAGES VERDICT)/NEGLIGENCE (PREJUDGMENT INTEREST, WHERE LIABILITY IS CONCEDED BY STIPULATION, PREJUDGMENT INTEREST RUNS FROM THE SUBSEQUENT DAMAGES VERDICT)/PREJUDGMENT INTEREST (WHERE LIABILITY IS CONCEDED BY STIPULATION, PREJUDGMENT INTEREST RUNS FROM THE SUBSEQUENT DAMAGES VERDICT)/INTEREST (PREJUDGMENT INTEREST, WHERE LIABILITY IS CONCEDED BY STIPULATION, PREJUDGMENT INTEREST RUNS FROM THE SUBSEQUENT DAMAGES VERDICT)/DAMAGES (PREJUDGMENT INTEREST, WHERE LIABILITY IS CONCEDED BY STIPULATION, PREJUDGMENT INTEREST RUNS FROM THE SUBSEQUENT DAMAGES VERDICT)

PROPER VENUE FOR CONSOLIDATED ACTIONS STARTED IN DIFFERENT COUNTIES IS THE COUNTY WHERE THE FIRST ACTION WAS STARTED.

The Second Department determined the proper venue for consolidated actions which had been started in different counties was the county in which the first action was started:

… [I]n the absence of special circumstances, where the actions have been commenced in different counties, venue should be placed in the county having jurisdiction over the action commenced first … . Since venue properly lies in Richmond County with respect to this action, the first of the three subject actions to be commenced, venue of the action commenced in the Supreme Court, Kings County, and venue of the action commenced in the Civil Court, Queens County, should have been transferred to Richmond County. Oboku v New York City Tr. Auth., 2016 NY Slip Op 05635, 2nd Dept 7-27-16

CIVIL PROCEDURE (PROPER VENUE FOR CONSOLIDATED ACTIONS STARTED IN DIFFERENT COUNTIES IS THE COUNTY WHERE THE FIRST ACTION WAS STARTED)/VENUE (PROPER VENUE FOR CONSOLIDATED ACTIONS STARTED IN DIFFERENT COUNTIES IS THE COUNTY WHERE THE FIRST ACTION WAS STARTED)

ISSUE WHICH WAS NOT RAISED IN THE PRIOR FEDERAL ACTION BUT WHICH CONSTITUTED A COMPLUSORY COUNTERCLAIM UNDER FEDERAL LAW BARRED IN SUBSEQUENT STATE ACTION UNDER DOCTRINE OF RES JUDICATA.

The First Department determined the doctrine of res judicata prohibited litigation in state court of an issue which was not raised but which constituted a compulsory counterclaim in the prior federal action:

 

… [T]he Court of Appeals has provided clear guidance on this issue in Gargiulo v Oppenheim (63 NY2d 843, 845 [1984]), stating in dicta, “For purposes of the disposition of this appeal we assume, without deciding, that under the procedural compulsory counterclaim rule in the Federal Courts (FRCP rule 13[a] [in 28 USC, Appendix]) claim and issue preclusion would extend to bar the later assertion in the present State court action of a contention which could have been raised by way of a counterclaim … . … [W]e conclude that the later assertion in a state court action of a contention that constituted a compulsory counterclaim (FRCP rule 13[a]) in a prior federal action between the same parties is barred under the doctrine of res judicata … . Paramount Pictures Corp. v Allianz Risk Transfer AG, 2016 NY Slip Op 05618, 1st Dept 7-21-16

CIVIL PROCEDURE (ISSUE WHICH WAS NOT RAISED IN THE PRIOR FEDERAL ACTION BUT WHICH CONSTITUTED A COMPLUSORY COUNTERCLAIM UNDER FEDERAL LAW BARRED IN SUBSEQUENT STATE ACTION UNDER DOCTRINE OF RES JUDICATA)/RES JUDICATA (ISSUE WHICH WAS NOT RAISED IN THE PRIOR FEDERAL ACTION BUT WHICH CONSTITUTED A COMPLUSORY COUNTERCLAIM UNDER FEDERAL LAW BARRED IN SUBSEQUENT STATE ACTION UNDER DOCTRINE OF RES JUDICATA)/COUNTERCLAIMS (RES JUDICATA, ISSUE WHICH WAS NOT RAISED IN THE PRIOR FEDERAL ACTION BUT WHICH CONSTITUTED A COMPLUSORY COUNTERCLAIM UNDER FEDERAL LAW BARRED IN SUBSEQUENT STATE ACTION UNDER DOCTRINE OF RES JUDICATA)

, ,

MEMBERSHIP IN LIMITED LIABILITY COMPANY CAN BE REACHED BY A JUDGMENT CREDITOR; CHARGING ORDER, RATHER THAN ASSIGNMENT OF THE MEMBERSHIP INTEREST TO THE CREDITOR, IS AN APPROPRIATE REMEDY.

The Second Department determined a debtor’s membership in a limited liability company can be reached by a judgment creditor. The court further determined that a remedy other than the assignment of the membership interest to the creditor was properly fashioned by Supreme Court:

In considering the remedies available to a judgment creditor such as the petitioner under CPLR article 52, the Supreme Court was not limited to considering the petitioner’s request for an order assigning to him [the debtor’s membership interest in the LLC. CPLR 5240, which was relied upon by the Supreme Court, provides, in pertinent part, that a court “may at any time, on its own initiative or the motion of any interested person, and upon such notice as it may require, make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure” … . This section grants the Supreme Court broad discretionary power to alter the use of procedures set forth in CPLR article 52 … . Limited Liability Company Law § 607 expressly provides that, on an application by a judgment creditor of a member of an LLC, “the court may charge” the debtor’s membership interest “with payment of the unsatisfied amount of the judgment with interest,” and “[t]o the extent so charged, the judgment creditor has only the rights of an assignee of the membership interest.” Thus, CPLR 5240 and Limited Liability Company Law § 607 give the court discretion, in an appropriate case, to issue a charging order instead of, inter alia, an order assigning or turning over the judgment debtor’s membership interest in an LLC to the judgment creditor … . Matter of Sirotkin v Jordan, LLC, 2016 NY Slip Op 05576, 2nd Dept 7-20-16

DEBTOR-CREDITOR (MEMBERSHIP IN LIMITED LIABILITY COMPANY CAN BE REACHED BY A JUDGMENT CREDITOR; CHARGING ORDER, RATHER THAN ASSIGNMENT OF THE MEMBERSHIP INTEREST TO THE CREDITOR, IS AN APPROPRIATE REMEDY)/CIVIL PROCEDURE (DEBTOR-CREDITOR, MEMBERSHIP IN LIMITED LIABILITY COMPANY CAN BE REACHED BY A JUDGMENT CREDITOR; CHARGING ORDER, RATHER THAN ASSIGNMENT OF THE MEMBERSHIP INTEREST TO THE CREDITOR, IS AN APPROPRIATE REMEDY)/LIMITED LIABILITY COMPANY (DEBTOR-CREDITOR, MEMBERSHIP IN LIMITED LIABILITY COMPANY CAN BE REACHED BY A JUDGMENT CREDITOR; CHARGING ORDER, RATHER THAN ASSIGNMENT OF THE MEMBERSHIP INTEREST TO THE CREDITOR, IS AN APPROPRIATE REMEDY)

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy