Civil Procedure – Page 289 – New York Appellate Digest

CORRESPONDENCE ESTABLISHED AN ENFORCEABLE SETTLEMENT AGREEMENT.

The Second Department determined a letter from counsel, together with other correspondence, established an enforceable settlement agreement of a real property dispute:

CPLR 2104 governs the enforceability of settlement agreements … . Pursuant to CPLR 2104, a settlement agreement is binding upon a party if it is in a writing subscribed either by the party or by his or her attorney. To be enforceable, a settlement agreement must set forth all material terms, and there must be clear mutual accord between the parties … .

Here, the material terms of the settlement agreement were set forth in a letter by the plaintiff's then attorney, who had apparent authority to settle the case on her behalf based on the plaintiff's actions … . The exchange of correspondence between the attorneys for the parties, in conjunction with the defendants' completion of the tasks demanded in the settlement without any objection by the plaintiff, was sufficient to constitute an enforceable settlement agreement between the parties … . Martin v Harrington, 2016 NY Slip Op 04027, 2nd Dept 5-25-16

CIVIL PROCEDURE (CORRESPONDENCE ESTABLISHED AN ENFORCEABLE SETTLEMENT AGREEMENT)/CONTRACT LAW (CORRESPONDENCE ESTABLISHED AN ENFORCEABLE SETTLEMENT AGREEMENT)

May 25, 2016

Civil Procedure, Contract Law, Real Estate

ERROR TO IMPOSE PRE-JUDGMENT INTEREST AT THE STATUTORY RATE WHEN CONTRACT PROVIDED THAT THE INTEREST-BEARING DOWNPAYMENT WAS THE EXCLUSIVE REMEDY FOR BREACH.

The First Department determined the down payment bearing interest at the rate agreed to in the (real estate) contract was the exclusive remedy. The court should not have awarded interest at the statutory rate:

The contract's terms, requiring that the down payment be placed in an interest-bearing account, so that the party entitled to the down payment would receive compensation for the deprivation of its use of the money in the form of accrued interest, were sufficiently clear to establish that interest paid at the statutory rate was not contemplated by the parties at the time the contract was formed and that the amount escrowed, including interest earned, should be the exclusive remedy to the wronged party … . Ithilien Realty Corp. v 176 Ludlow, LLC, 2016 NY Slip Op 04002, 1st Dept 5-24-16

CIVIL PROCEDURE (ERROR TO IMPOSE PRE-JUDGMENT INTEREST AT THE STATUTORY RATE WHEN CONTRACT PROVIDED THAT THE INTEREST-BEARING DOWNPAYMENT WAS THE EXCLUSIVE REMEDY FOR BREACH)/CONTRACT LAW (ERROR TO IMPOSE PRE-JUDGMENT INTEREST AT THE STATUTORY RATE WHEN CONTRACT PROVIDED THAT THE INTEREST-BEARING DOWNPAYMENT WAS THE EXCLUSIVE REMEDY FOR BREACH)/REAL ESTATE (ERROR TO IMPOSE PRE-JUDGMENT INTEREST AT THE STATUTORY RATE WHEN CONTRACT PROVIDED THAT THE INTEREST-BEARING DOWNPAYMENT WAS THE EXCLUSIVE REMEDY FOR BREACH)

May 24, 2016

Civil Procedure

COURT OF CLAIMS LACKS JURISDICTION WHERE MONEY DAMAGES ARE MERELY INCIDENTAL TO THE CLAIM.

The Third Department determined a prisoner's lawsuit alleging false imprisonment based upon mistakes in sentencing was properly dismissed because the Court of Claims lacked jurisdiction:

“While jurisdiction reposes in the Court of Claims where the essential nature of the claim against defendant is to recover money, it does not lie where monetary relief is incidental to the primary claim” … . Here, we agree with the Court of Claims that it lacks subject matter jurisdiction on claimant's false imprisonment claim, inasmuch as his primary argument is that he is currently being confined unlawfully due to errors in resentencing and that any claim for related damages is incidental to this primary argument. Therefore, the claim for false imprisonment was properly dismissed for lack of jurisdiction. Jackson v State of New York, 2016 NY Slip Op 03938, 3rd Dept 5-19-16

CIVIL PROCEDURE (COURT OF CLAIMS LACKS JURISDICTION WHERE MONEY DAMAGES ARE MERELY INCIDENTAL TO THE CLAIM)/COURT OF CLAIMS (COURT OF CLAIMS LACKS JURISDICTION WHERE MONEY DAMAGES ARE MERELY INCIDENTAL TO THE CLAIM)

May 19, 2016

Civil Procedure, Evidence

EVIDENCE SUBMITTED IN SUPPORT OF MOTION TO DISMISS DID NOT CONSTITUTE DOCUMENTARY EVIDENCE WITHIN THE MEANING OF CPLR 3211(a)(1).

The Second Department determined the evidence submitted by defendant law firm in support of a motion to dismiss the malpractice complaint based on documentary evidence was properly denied. The letters and affirmation did not constitute “documentary evidence” and did not utterly refute plaintiff's allegations:

“The evidence submitted in support of a [CPLR 3211(a)(1)] motion must be documentary' or the motion must be denied” … . To qualify as documentary evidence, the evidence “must be unambiguous and of undisputed authenticity” … . “[J]udicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable,' would qualify as documentary evidence' in the proper case” … . Affidavits and letters “were not the types of documents contemplated by the Legislature when it enacted this provision”… .

Here, the letters … did not constitute documentary evidence for the purpose of a motion pursuant to CPLR 3211(a)(1)… , Similarly, the affirmation of one of [the law firm's] members was not documentary evidence for the purpose of this motion … . Anderson v Armentano, 2016 NY Slip Op 03690, 2nd Dept 5-11-16

CIVIL PROCEDURE (EVIDENCE SUBMITTED IN SUPPORT OF MOTION TO DISMISS DID NOT CONSTITUTE DOCUMENTARY EVIDENCE WITHIN THE MEANING OF CPLR 3211(a)(1))/EVIDENCE (CIVIL MOTION TO DISMISS, EVIDENCE SUBMITTED IN SUPPORT OF MOTION TO DISMISS DID NOT CONSTITUTE DOCUMENTARY EVIDENCE WITHIN THE MEANING OF CPLR 3211(a)(1))/DOCUMENTARY EVIDENCE (CIVIL MOTION TO DISMISS, EVIDENCE SUBMITTED IN SUPPORT OF MOTION TO DISMISS DID NOT CONSTITUTE DOCUMENTARY EVIDENCE WITHIN THE MEANING OF CPLR 3211(a)(1))/DISMISS, MOTION TO (CIVIL MOTION TO DISMISS, EVIDENCE SUBMITTED IN SUPPORT OF MOTION TO DISMISS DID NOT CONSTITUTE DOCUMENTARY EVIDENCE WITHIN THE MEANING OF CPLR 3211(a)(1)

May 11, 2016

Civil Procedure, Negligence, Toxic Torts

DEFENDANT BUILDING OWNER NOT ENTITLED TO SUMMARY JUDGMENT IN TOXIC TORT (MOLD EXPOSURE) ACTION ON STATUTE OF LIMITATIONS GROUNDS.

The Third Department, reversing Supreme Court, determined defendant was not entitled to summary judgment dismissing plaintiff's toxic tort action on statute of limitations grounds. Plaintiff alleged injury caused by mold in a building owned by defendant:

… [D]efendant was required to show, at a minimum, that plaintiff's alleged exposure to a toxic substance did not occur within three years of the commencement of the action … . If defendant exposed or continued to expose plaintiff to a toxic substance within three years of the commencement of the action, plaintiff could not have discovered any resulting injuries from such exposure at a time that would be barred by CPLR 214-c (2). Given that a plaintiff cannot discover the injurious effects of exposure to a toxic substance prior to that exposure occurring, and considering defendant's concession that plaintiff continued to be exposed to the mold at a time less than three years prior to the commencement of the action, defendant is not entitled to summary judgment dismissing the complaint on statute of limitations grounds.

Turning to the allegedly injurious exposure taking place more than three years prior to the commencement of the action, we find that defendant did not prove as a matter of law that plaintiff should have discovered his allergy and asthma conditions at a time that is barred by CPLR 214-c (2). Although plaintiff exhibited some symptoms, including skin and eye irritation and tightness in the throat, in the spring and summer of 2002, plaintiff also explained that such symptoms ceased when he would leave the building at the end of his shifts. Further, plaintiff averred that he did not seek medical treatment for these symptoms, miss work as a result of the symptoms or file a workers' compensation claim until late October 2002. Viewing the evidence in the light most favorable to plaintiff, the symptoms that plaintiff exhibited more than three years prior to the commencement of the action were too intermittent and inconsequential to trigger the running of the statute of limitations pursuant to CPLR 214-c (2) … . Malone v Court W. Developers, Inc., 2016 NY Slip Op 03571, 3rd Dept 5-5-16

NEGLIGENCE (DEFENDANT BUILDING OWNER NOT ENTITLED TO SUMMARY JUDGMENT IN TOXIC TORT (MOLD EXPOSURE) ACTION ON STATUTE OF LIMITATIONS GROUNDS)/TOXIC TORTS (DEFENDANT BUILDING OWNER NOT ENTITLED TO SUMMARY JUDGMENT IN TOXIC TORT (MOLD EXPOSURE) ACTION ON STATUTE OF LIMITATIONS GROUNDS)/MOLD (TOXIC TORTS, DEFENDANT BUILDING OWNER NOT ENTITLED TO SUMMARY JUDGMENT IN TOXIC TORT (MOLD EXPOSURE) ACTION ON STATUTE OF LIMITATIONS GROUNDS)/CIVIL PROCEDURE (TOXIC TORTS DEFENDANT BUILDING OWNER NOT ENTITLED TO SUMMARY JUDGMENT IN TOXIC TORT (MOLD EXPOSURE) ACTION ON STATUTE OF LIMITATIONS GROUNDS)/STATUTE OF LIMITATIONS (TOXIC TORTS DEFENDANT BUILDING OWNER NOT ENTITLED TO SUMMARY JUDGMENT IN TOXIC TORT (MOLD EXPOSURE) ACTION ON STATUTE OF LIMITATIONS GROUNDS)

May 5, 2016

Civil Procedure, Corporation Law

COURT PROPERLY REFUSED TO APPROVE CLASS ACTION SETTLEMENT WHICH DID NOT GIVE OUT OF STATE SHAREHOLDERS THE RIGHT TO OPT OUT.

The Court of Appeals, in a full-fledged opinion by Judge Pigott, determined Supreme Court properly refused to approve a settlement in a class action challenging a corporate merger because there was no opt-out provision for out-of-state shareholders. Because the suit included claims for damages, effectively prohibiting out-of-state shareholders from bringing actions in other jurisdictions would deprive them of a property right:

While the complaint seeks predominately equitable relief, the settlement would also release any damage claims relating to the merger by out-of-state class members. The broad release encompassed in the agreement bars the right of those class members to pursue claims not equitable in nature, which … are constitutionally protected property rights. Jiannaras v Alfant, 2016 NY Slip Op 03548, CtApp 5-5-16

CIVIL PROCEDURE (COURT PROPERLY REFUSED TO APPROVE CLASS ACTION SETTLEMENT WHICH DID NOT GIVE OUT OF STATE SHAREHOLDERS THE RIGHT TO OPT OUT)/CLASS ACTIONS (COURT PROPERLY REFUSED TO APPROVE CLASS ACTION SETTLEMENT WHICH DID NOT GIVE OUT OF STATE SHAREHOLDERS THE RIGHT TO OPT OUT)/CORPORATION LAW (SHAREHOLDER CLASS ACTION, (COURT PROPERLY REFUSED TO APPROVE CLASS ACTION SETTLEMENT WHICH DID NOT GIVE OUT OF STATE SHAREHOLDERS THE RIGHT TO OPT OUT)/SHAREHOLDER ACTIONS (SHAREHOLDER CLASS ACTION, (COURT PROPERLY REFUSED TO APPROVE CLASS ACTION SETTLEMENT WHICH DID NOT GIVE OUT OF STATE SHAREHOLDERS THE RIGHT TO OPT OUT)

May 5, 2016

Civil Procedure, Contract Law, Negligence

DEFENDANT, WHICH INSTALLED CHRISTMAS DISPLAYS AT A MALL, DID NOT OWE A DUTY TO PLAINTIFF STEMMING FROM ITS CONTRACT WITH THE MALL; SINCE PLAINTIFF ALLEGED ONLY ONE ESPINAL EXCEPTION TO SUPPORT LIABILITY STEMMING FROM THE CONTRACT, DEFENDANT NEED ONLY ADDRESS THAT ONE EXCEPTION IN ITS MOTION FOR SUMMARY JUDGMENT.

The Second Department, reversing Supreme Court, determined defendant American Christmas did not owe a duty to plaintiff in this trip and fall case. American Christmas contracted with a shopping mall to install Christmas displays. After the installation contract was completed, plaintiff allegedly tripped over electrical wires taped to the floor. There was evidence American Christmas put up stanchions to prevent people from crossing over the cords. Plaintiff alleged American Christmas was liable in tort arising from the contract with the mall because it launched an instrument of harm. The court noted that because plaintiff only alleged one of the three possible criteria for liability to third persons arising from a contract, the defendant was only required to address that single theory in its motion for summary judgment:

Here, American Christmas demonstrated its prima facie entitlement to judgment as a matter of law by offering proof that the plaintiff was not a party to its holiday display contracts with the Mall Owner, and that it thus owed no duty of care to the plaintiff. American Christmas also established, prima facie, that the one Espinal exception alleged by the plaintiff that would give rise to a duty of care does not apply in this case (see Espinal v Melville Snow Contrs., 98 NY2d at 141-142). …

Inasmuch as the plaintiff did not allege facts that would establish the possible applicability of the second or third [Espinal] exception, American Christmas was not required to affirmatively demonstrate that these exceptions did not apply in order to establish its prima facie entitlement to judgment as a matter of law … . Parrinello v Walt Whitman Mall, LLC, 2016 NY Slip Op 03481, 2nd Dept 3-4-16

NEGLIGENCE (DEFENDANT, WHICH INSTALLED CHRISTMAS DISPLAYS AT A MALL, DID NOT OWE A DUTY TO PLAINTIFF STEMMING FROM ITS CONTRACT WITH MALL; SINCE PLAINTIFF ALLEGED ONLY ONE ESPINAL EXCEPTION TO SUPPORT LIABILITY STEMMING FROM THE CONTRACT, DEFENDANT NEED ONLY ADDRESS THAT ONE EXCEPTION IN ITS MOTION FOR SUMMARY JUDGMENT)/CONTRACT LAW (DEFENDANT, WHICH INSTALLED CHRISTMAS DISPLAYS AT A MALL, DID NOT OWE A DUTY TO PLAINTIFF STEMMING FROM ITS CONTRACT WITH MALL; SINCE PLAINTIFF ALLEGED ONLY ONE ESPINAL EXCEPTION TO SUPPORT LIABILITY STEMMING FROM THE CONTRACT, DEFENDANT NEED ONLY ADDRESS THAT ONE EXCEPTION IN ITS MOTION FOR SUMMARY JUDGMENT)/CIVIL PROCEDURE (DEFENDANT, WHICH INSTALLED CHRISTMAS DISPLAYS AT A MALL, DID NOT OWE A DUTY TO PLAINTIFF STEMMING FROM ITS CONTRACT WITH MALL; SINCE PLAINTIFF ALLEGED ONLY ONE ESPINAL EXCEPTION TO SUPPORT LIABILITY STEMMING FROM THE CONTRACT, DEFENDANT NEED ONLY ADDRESS THAT ONE EXCEPTION IN ITS MOTION FOR SUMMARY JUDGMENT)/ESPINAL EXCEPTIONS (DEFENDANT, WHICH INSTALLED CHRISTMAS DISPLAYS AT A MALL, DID NOT OWE A DUTY TO PLAINTIFF STEMMING FROM ITS CONTRACT WITH MALL; SINCE PLAINTIFF ALLEGED ONLY ONE ESPINAL EXCEPTION TO SUPPORT LIABILITY STEMMING FROM THE CONTRACT, DEFENDANT NEED ONLY ADDRESS THAT ONE EXCEPTION IN ITS MOTION FOR SUMMARY JUDGMENT)

May 4, 2016

Civil Procedure, Employment Law

CLASS ACTION SUIT AGAINST EMPLOYER ALLEGING EMPLOYEES WERE ROUTINELY UNDERPAID ALLOWED TO GO FORWARD.

The First Department determined plaintiffs, former and current non-managerial employees of defendant Jenny Craig (weight-loss centers), established commonality (CPLR 901(a)(2)) such that their class action suit could proceed. 751 class members alleged they were regularly underpaid because 30 minutes of pay was routinely deducted for breaks which the employees did not take:

Where, as here, “the same types of subterfuge [were] allegedly employed to pay lower wages,” commonality of the claims will be found to predominate, even though the putative class members have “different levels of damages” … . Class action is an appropriate method of adjudicating wage claims arising from an employer's alleged practice of underpaying employees, given that “the damages allegedly suffered by an individual class member are likely to be insignificant, and the costs of prosecuting individual actions would result in the class members having no realistic day in court … . Weinstein v Jenny Craig Operations, Inc., 2016 NY Slip Op 02932, 1st Dept 4-19-16

April 19, 2016

Civil Procedure, Contract Law, Evidence

MOTION TO AMEND PLEADINGS BASED ON TRIAL EVIDENCE OF MUTUAL MISTAKE PROPERLY GRANTED, CRITERIA EXPLAINED.

The Third Department determined Supreme Court properly allowed the pleadings to be amended to conform to the evidence at trial. The trial evidence indicated the contract at issue was based upon mutual mistake rather than deliberate misrepresentation. The motion to amend the pleadings to allege mutual mistake was properly granted and the contract was properly rescinded on that ground:

The burden was upon defendant, as the party opposing plaintiff's motion, to establish that it was “hindered in the preparation of [its] case or . . . prevented from taking some measure in support of [its] position” … . That burden cannot be met when the difference between the original pleading and the evidence results from “proof admitted at the instance or with the acquiescence of [the opposing] party” .. . Here, the proof upon which plaintiff's motion was based was the testimony of defendant's president that she acted mistakenly in providing the wrong sales figures … . Given this testimony, defendant cannot have been surprised or unduly prejudiced by plaintiff's assertion of the theory of mutual mistake; thus, leave to conform the pleadings to the proof was properly granted … . Lakshmi Grocery & Gas, Inc. v GRJH, Inc., 2016 NY Slip Op 02891, 3rd Dept 4-14-16

April 14, 2016

Civil Procedure, Malicious Prosecution, Municipal Law

TRIAL COURT SHOULD NOT HAVE SET ASIDE VERDICT IN MALICIOUS PROSECUTION ACTION.

The First Department, in a full-fledged opinion by Justice Kapnick, reversing Supreme Court, reinstated plaintiff's malicious prosecution, 42 USC 1983, punitive damages and attorneys' fees claims. The claims had been dismissed pursuant to defendants' motion to set aside the $4 million jury verdict. Plaintiff had been injured during an arrest which took place just outside plaintiff's residence after he was approached by two police officers, ostensibly for his holding an open can of beer. Plaintiff was ultimately charged only with disorderly conduct which was dismissed at trial at the close of the People's case. The opinion includes an in-depth discussion of the elements of malicious prosecution, including the distinct “lack of probable cause to arrest” and “malice” elements. The court noted that the trial court improperly substituted its own factual judgments for the jury's. The court explained:

The actual malice element “does not require a plaintiff to prove that the defendant was motivated by spite or hatred, although it will of course be satisfied by such proof” … . Since “[a]ctual malice is seldom established by direct evidence of an ulterior motive” … , it “may be proven by circumstantial evidence” … , and depends “upon inferences to be reasonably drawn from the surrounding facts and circumstances” … . Actual malice may also be inferred from a total lack of probable cause … or from defendant's intentionally providing false information to law enforcement authorities … . It is important to note that the lack of probable cause and actual malice elements are independent, and “a jury may, but is not required to, infer the existence of actual malice from the fact that there was no probable cause to initiate the proceeding” … . As a result, it is advisable to separate the questions of probable cause and malice on a verdict sheet … . Here, however, while there was only one question, the trial court did charge the jury on both the elements of probable cause and malice, and instructed the jury that only if they found that “plaintiff [] prove[d] both that the defendants did not have probable cause and that they acted maliciously” (emphasis added) should they move on to consider damages, which they did.

Based on the foregoing, and contrary to the trial court's finding, the jury's verdict on malicious prosecution was improperly set aside as insufficient as a matter of law. It cannot be said that there was no valid line of reasoning that could possibly have led rational people to the conclusion reached by the jury on the basis of the evidence at trial. Moreover, the court impermissibly usurped the jury's role and made factual determinations. The court's statement that the plaintiff “refus[ed] to submit to the authority of the police” is a clear example of the court substituting its judgment for that of the jury. When the facts give rise to conflicting inferences, as they do here, it is for the jury, not the court, to resolve those conflicts. Cardoza v City of New York, 2016 NY Slip Op 02766, 1st Dept 4-12-16

April 12, 2016