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FRAUD CAUSE OF ACTION PROPERLY DISMISSED BECAUSE (1) IT WAS DUPLICATIVE OF THE BREACH OF CONTRACT CAUSE OF ACTION AND (2) PLAINTIFF, AS A SOPHISTICATED BUSINESS ENTITY, COULD NOT ARGUE IT RELIED ON ORAL REPRESENTATIONS WHICH CONTRADICTED THE WRITTEN CONTRACT; STRICT REQUIREMENTS FOR ATTACHMENT NOT MET.

The Third Department, affirming Supreme Court, determined plaintiff’s fraud cause of action was properly dismissed because (1) it was duplicative of the breach of contract cause of action, and (2), plaintiff, a sophisticated business entity,  could not be heard to rely upon alleged oral representations which contradicted the written contract.  In addition, the Third Department determined the requirements for attachment pursuant to CPLR 6201 (3) were not met by plaintiff. There was insufficient proof defendant was secreting assets of frustrate a potential judgment:

A cause of action for fraud does not exist where the alleged fraudulent act is premised upon a breach of a contractual obligation … . * * * … [A] sophisticated business entity cannot justifiably rely on oral representations when it thereafter enters into a contract containing terms that directly contradict those oral representations … . Accordingly, plaintiff’s fraud cause of action is subject to dismissal, either as duplicative of the contract cause of action or, in the alternative, based on plaintiff’s own allegations that it relied on oral representations that were contradicted by the terms of the contract that it thereafter entered into. Northeast United Corp. v Lewis, 2016 NY Slip Op 01713, 3rd Dept 3-10-16

CONTRACT LAW (SOPHISTICATED BUSINESS ENTITY CAN NOT ARGUE IT RELIED ON ORAL MISREPRESENTATIONS WHICH CONTRADICTED THE WRITTEN CONTRACT)/FRAUD (FRAUD CAUSE OF ACTION PROPERLY DISMISSED AS DUPLICATIVE OF BREACH OF CONTRACT CAUSE OF ACTION AND BECAUSE PLAINTIFF, A SOPHISTICATED BUSINESS ENTITY, COULD NOT BE HEARID TO HAVE RELIED UPON ORAL MISREPRESENTATIONS WHICH CONTRADICTED THE WRITTEN CONTRACT)/ATTACHMENT (STRICT REQUIREMENTS FOR ATTACHMENT PURSUANT TO CPLR 6201 (3) NOT MET)/CIVIL PROCEDURE (STRICT REQUIREMENTS FOR ATTACHMENT PURSUANT TO CPLR 6201 (3) NOT MET)

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COMMUNICATION BETWEEN SPOUSES DOES NOT CONSTITUTE PUBLICATION IN A DEFAMATIOIN ACTION; MOTION TO SET ASIDE PLAINTIFF’S VERDICT SHOULD HAVE BEEN GRANTED.

The Second Department determined defendants' oral motion to set aside the verdict in a defamation case should have been granted. Plaintiff alleged statements made by defendants (husband and wife) caused specified pecuniary loss. Because the defendants are spouses, communication between them did not constitute publication. The plaintiff was unable to demonstrate any statements made to third parties caused special harm:

“A motion for judgment as a matter of law pursuant to CPLR 4401 or 4404 may be granted only when the trial court determines that, upon the evidence presented, there is no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusion reached by the jury upon the evidence presented at trial, and no rational process by which the jury could find in favor of the nonmoving party” … . “In considering such a motion, the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant” … .

Applying this standard here, we conclude that there was no valid line of reasoning and permissible inferences which could have led the jury to find that the plaintiff established his cause of action alleging defamation. “The elements of a cause of action [to recover damages] for defamation are a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and it must either cause special harm or constitute defamation per se” … . Here, because it is undisputed that the defendants are spouses, the communications between the defendants do not constitute publication … . … [T]o the extent that the plaintiff's defamation claim alleged that [defendants] communicated the [statement] to third parties, the plaintiff failed to prove that he suffered special harm, i.e., the loss of something having economic or pecuniary value, as a result of those statements .. . Gaccione v Scarpinato, 2016 NY Slip Op 01640, 2nd Dept 3-9-16

DEFAMATION (COMMUNICATION BETWEEN SPOUSES DOES NOT CONSTITUTE PUBLICATION)/CIVIL PROCEDURE (MOTION TO SET ASIDE VERDICT IN DEFAMATION ACTION SHOULD HAVE BEEN GRANTED)/VERDICT, MOTION TO SET ASIDE (DEFAMATION ACTION, MOTION TO SET ASIDE PLAINTIFF'S VERDICT SHOULD HAVE BEEN GRANTED)

MOTION TO RENEW BASED UPON LAW OFFICE FAILURE PROPERLY GRANTED; CRITERIA FOR GRANTING A MOTION TO RENEW IS FLEXIBLE.

The Second Department determined that law office failure was properly deemed an adequate ground for a motion to renew based on evidence which could have been presented to support the original motion. The Second Department further determined that, upon renewal, the denial of defendant’s motion to dismiss for failure to timely file a complaint after service of the demand for a complaint was proper. The court noted the criteria for granting a motion to renew is flexible:

 

“Although a motion for leave to renew generally must be based on newly-discovered facts, this requirement is a flexible one, and a court has the discretion to grant renewal upon facts known to the movant at the time of the original motion, provided that the movant offers a reasonable justification for the failure to submit the additional facts on the original motion” … . What is considered a “reasonable justification” is within the Supreme Court’s discretion … . “Law office failure can be accepted as a reasonable excuse in the exercise of the court’s sound discretion” … .

Here … the Supreme Court did not improvidently exercise its discretion in granting that branch of the plaintiff’s motion which was for leave to renew his opposition to her motion, as the excuse of law office failure presented by the plaintiff was reasonable under the circumstances … .

Furthermore, upon renewal, considering all the circumstances of this case, the Supreme Court providently exercised its discretion in denying the appellant’s motion pursuant to CPLR 3012(b) to dismiss the complaint insofar as asserted against her for failure to serve a timely complaint. The plaintiff proffered a reasonable excuse for his delay in serving the complaint after being served by the appellant with a notice of appearance and demand for a complaint, and established that he had a potentially meritorious cause of action against the appellant … . Castor v Cuevas, 2016 NY Slip Op 01456, 2nd Dept 3-2-16

CIVIL PROCEDURE (LAW OFFICE FAILURE DEEMED ADEQUATE EXCUSE FOR GRANTING A MOTION TO RENEW)/CIVIL PROCEDURE (CRITERIA FOR A MOTION TO RENEW IS FLEXIBLE)/LAW OFFICE FAILURE (MOTION TO RENEW BASED UPON LAW OFFICE FAILURE PROPERLY GRANTED)/RENEW, MOTION TO (CRITERIA FOR GRANTING IS FLEXIBLE)/RENEW, MOTION TO (LAW OFFICE FAILURE DEEMED ADEQUATE GROUND FOR MOTION)

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STAND-ALONE EXECUTIVE LAW 63 (12) CAUSE OF ACTION FOR FRAUD REINSTATED AGAINST DONALD TRUMP ET AL.

In an action by the Attorney General against Donald Trump, alleging fraud in connection with the operation of Trump University, the First Department, overruling its own precedent, determined Executive law 63 (12) authorized a stand-alone fraud cause of action. The court further held that the three-year statute of imitations for causes of action created by statute did not apply because Executive Law 63 (12) did not create a cause of action which did not exist at common law, rather it merely authorized the Attorney General to bring a fraud cause of action. Applying the six-year statute of limitations, the First Department reinstated the Executive Law 63 (12) cause of action, and concluded questions of fact precluded summary judgment on both the statutory and common law fraud claims:

… [L]ike similar statutes that authorize causes of action, § 63(12) defines the fraudulent conduct that it prohibits, authorizes the Attorney General to commence an action or proceeding to foreclose that conduct, and specifies the relief, including equitable relief, that the Attorney General may seek. Indeed, the language of § 63(12) parallels the language of the Martin Act, under which the Attorney General is undisputedly authorized to bring a standalone cause of action for fraudulent conduct in the securities context … . * * *

… [W]e find … that the fraud claim under § 63(12) is not subject to the three-year statute of limitations imposed by CPLR 214(2), but rather, is subject to the residual six-year statute of limitations in CPLR 213(1) … . … § 63(12) does not create any liability nonexistent at common law, at least under the court’s equitable powers. … § 63(12) does not encompass a significantly wider range of fraudulent activities than were legally cognizable before the section’s enactment … .

Nevertheless, petitioner is not entitled to summary determination of its fraud claims, under either the common law or the statute, because material issues of fact exist as to those claims. Matter of People of the State of N.Y. by Eric T. Schneiderman v Trump Entrepreneur Initiative LLC, 2016 NY Slip Op 01430, 1st Dept 3-1-16

 

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LEVEL OF SUPERVISORY CONTROL NEEDED TO SUPPORT A LABOR LAW 200 CAUSE OF ACTION AND THE CRITERIA FOR SETTING ASIDE A VERDICT AS AGAINST THE WEIGHT OF THE EVIDENCE EXPLAINED.

The Second Department determined defendants’ motions to set aside the verdict in this Labor Law 200/common law negligence action were properly denied. The court explained the level of supervision required to hold gas station subtenants liable for a forklift injury, and the criteria for setting aside a verdict:

 

“To be held liable under Labor Law § 200 for injuries arising from the manner in which work is performed, a defendant must have the authority to exercise supervision and control over the work” … . “A defendant has the authority to supervise or control the work for purposes of Labor Law § 200 when [the] defendant bears the responsibility for the manner in which the work [was] performed” … . “[M]ere general supervisory authority at a work site for the purpose of overseeing the progress of the work and inspecting the work product is insufficient to impose liability under Labor Law § 200” … . “If the challenged means and methods of the work are those of a subcontractor, and the owner or contractor exercises no supervisory control over the work, no liability attaches under Labor Law § 200 or the common law” … .

… “To be awarded judgment as a matter of law pursuant to CPLR 4401, a defendant must show that there is no rational process by which the jury could find for the plaintiff against the moving defendant” … . In considering a motion for judgment as a matter of law, “the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant” … . “In making this determination, a court must not engage in a weighing of the evidence,’ nor may it direct a verdict where the facts are in dispute, or where different inferences may be drawn or the credibility of witnesses is in question'” … . …

“[A] jury verdict should not be set aside as contrary to the weight of the evidence unless the jury could not have reached the verdict by any fair interpretation of the evidence” … . “Whether a jury verdict should be set aside as contrary to the weight of the evidence does not involve a question of law, but rather requires a discretionary balancing of many factors” … . The apportionment of fault among the parties is generally an issue of fact for the jury … , and the jury’s apportionment of fault should not be set aside unless it could not have been reached based upon a fair interpretation of the evidence … . Hernandez v Pappco Holding Co., Ltd., 2016 NY Slip Op 01295, 2nd Dept 2-24-16

 

LABOR LAW (LEVEL OF SUPERVISORY CONTROL NEEDED TO SUPPORT A LABOR LAW 200 CAUSE OF ACTION)/NEGLIGENCE (LEVEL OF SUPERVISORY CONTROL NEEDED TO SUPPORT A LABOR LAW 200 CAUSE OF ACTION)/CIVIL PROCEDURE (CRITERIA FOR SETTING ASIDE A VERDICT AS AGAINST THE WEIGHT OF THE EVIDENCE)/VERDICT, MOTION TO SET ASIDE (CRITERIA FOR SETTING ASIDE A VERDICT AS AGAINST THE WEIGHT OF THE EVIDENCE)

STATUTE OF LIMITATIONS DEFENSE MAY BE RAISED FOR THE FIRST TIME IN AN ANSWER TO AN AMENDED COMPLAINT; RELATION-BACK DOCTRINE NOT APPLICABLE TO ORAL-CONTRACT ACTION WHERE ORIGINAL ACTION WAS BASED SOLELY ON A WRITTEN CONTRACT.

The Second Department, reversing Supreme Court determined defendant did not waive the statute of limitations defense not raised in the answer to the original complaint, but raised in the answer to the amended complaint. The court further concluded a subsequent action based upon an alleged oral agreement did not relate back to the original action based upon a written agreement and was therefore time-barred:

 

Generally, a defense based upon the statute of limitations is waived unless raised by pre-answer motion or in the defendant’s answer (see CPLR 3211[e]). A defendant, however, may assert a statute of limitations defense for the first time in an answer served in response to a plaintiff’s amended complaint … . Moreover, a party may amend its pleading once without leave of court, among other circumstances, within 20 days after service of that pleading (see CPLR 3025[a]). An amended answer, made as a matter of right pursuant to CPLR 3025(a), may include a statute of limitations defense previously omitted … . * * *

The relation-back doctrine permits a plaintiff to interpose a claim or cause of action which would otherwise be time-barred, where the allegations of the original complaint gave notice of the transactions or occurrences to be proven and the cause of action would have been timely interposed if asserted in the original complaint … . The relation-back doctrine is inapplicable where the original allegations did not provide the defendant notice of the need to defend against the allegations of the amended complaint … . Moezinia v Ashkenazi, 2016 NY Slip Op 01300, 2nd Dept 2-24-16

 

CIVIL PROCEDURE (STATUTE OF LIMITATIONS DEFENSE MAY BE RAISED FOR THE FIRST TIME IN AN ANSWER TO AN AMENDED COMPLAINT)/CIVIL PROCEDURE (RELATION-BACK DOCTRINE NOT APPLICABLE TO ORAL CONTRACT WHERE ORIGINAL COMPLAINT CONCERNED A WRITTEN CONTRACT)/STATUTE OF LIMITATIONS (DEFENSE MAY BE RAISED FOR THE FIRST TIME IN ANSWER TO AN AMENDED COMPLAINT)/RELATION-BACK DOCTRINE (RELATION-BACK DOCTRINE NOT APPLICABLE TO ORAL CONTRACT WHERE ORIGINAL COMPLAINT CONCERNED A WRITTEN CONTRACT)

CRITERIA FOR A MOTION TO RENEW IS FLEXIBLE; HERE MOTION SHOULD HAVE BEEN GRANTED EVEN THOUGH MOVANT SHOULD HAVE BEEN AWARE OF THE “NEW” EVIDENCE.

The Second Department, reversing Supreme Court, determined plaintiff’s motion to renew an application for an order of reference in a mortgage foreclosure action should have been granted. The court noted that the criteria for a motion to renew is flexible, there is no time-limit for bringing the motion, and the motion can be granted even when movant should have been aware of the “new” evidence:

 

Generally, “a motion for leave to renew is intended to bring to the court’s attention new or additional facts which were in existence at the time the original motion was made, but unknown to the movant” … . However, the requirement that a motion for leave to renew be based upon new or additional facts unknown to the movant at the time of the original motion is a flexible one and the court, in its discretion, may also grant renewal, in the interest of justice, upon facts which were known to the movant at the time the original motion was made … . Except where a motion to renew is based upon a change in the law, which is not the case here, CPLR 2221 does not impose a time limit for making a motion for leave to renew … . Here, the plaintiff established its entitlement to an order of reference, as it submitted documentary proof that the defendants failed to answer the complaint within the time allowed, that it was the holder of the note and mortgage, that the defendants defaulted, “and that, as a preliminary step in obtaining a judgment of foreclosure, the appointment of a referee to compute the amount due on the . . . mortgage would be proper” … . Although the plaintiff should have been aware of the durable power of attorney at the time it initially sought an order of reference, the Supreme Court, under the circumstances, improvidently exercised its discretion in denying the plaintiff’s motion for leave to renew, where the plaintiff, having otherwise established its entitlement to an order of reference, submitted, inter alia, the durable power of attorney in support of its renewal motion and the motion was unopposed. Citimortgage, Inc. v Espinal, 2016 NY Slip Op 01148, 2nd Dept 2-17-16

 

CIVIL PROCEDURE (MOTION TO RENEW, FLEXIBLE CRITERIA, NO TIME-LIMIT, MOTION SHOULD HAVE BEEN GRANTED EVEN THOUGH MOVANT SHOULD HAVE BEEN AWARE OF THE NEWLY PROFERRED EVIDENCE)/MOTION TO RENEW (FLEXIBLE CRITERIA, NO TIME-LIMIT, SHOULD HAVE BEEN GRANTED EVEN THOUGH MOVANT SHOULD HAVE BEEN AWARE OF THE NEWLY PROFERRED EVIDENCE)

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POLICE OFFICER’S CAUSES OF ACTION FOR DISABILITY DISCRIMINATION SHOULD HAVE SURVIVED THE MOTION TO DISMISS.

The Fourth Department determined plaintiff police officer had stated causes of action for unlawful discrimination based upon a disability under the Human Rights Law and the federal Rehabilitation Act. Plaintiff was arrested for DWI and entered a rehabilitation program where he was diagnosed as suffering from post-traumatic stress disorder stemming from his work in New York City after the 9-11 attack. Plaintiff was terminated upon completion of the rehabilitation program. The city argued his termination was based on the DWI, but plaintiff alleged other officers, who were not disabled, were not terminated after committing a criminal offense. The Fourth Department noted that when the plaintiff’s and defendant’s arguments are equally supported, plaintiff must prevail in a motion to dismiss:

 

Plaintiff sufficiently stated a cause of action for disability discrimination under the Human Rights Law by alleging that: he has a disability and is therefore a member of a protected class; he is qualified for his position; he suffered an adverse employment action, i.e., termination of his employment; and the termination occurred under circumstances giving rise to an inference of discrimination … . Similarly, plaintiff sufficiently stated a cause of action for discriminatory termination under the Rehabilitation Act by alleging that: “(1) he has a disability; (2) he is otherwise qualified to perform the job; (3) he was terminated solely because of his disability; and (4) the program or activity receives federal funds” … . …

In support of those causes of action, plaintiff alleged that the City did not terminate the employment of two nondisabled employees after they were arrested for criminal misconduct, thus raising an inference that his termination was based upon his disability. The court stated in its decision that plaintiff’s allegations “equally support” the conclusions that those two employees and plaintiff were similarly situated, and that they were not similarly situated. On the motion to dismiss pursuant to CPLR 3211 (a) (7), however, facts that equally support opposing inferences must be resolved in plaintiff’s favor … . Regan v City of Geneva, 2016 NY Slip Op 01101, 4th Dept 2-11-16

 

EMPLOYMENT LAW (DISABILITY [PTSD] DISCRIMINATION CAUSES OF ACTION SHOULD HAVE SURVIVED MOTION TO DISMISS)/HUMAN RIGHTS LAW (DISABILITY [PTSD] DISCRIMINATION CAUSES OF ACTION SHOULD HAVE SURVIVED MOTION TO DISMISS)/REHABILITATION ACT (DISABILITY [PTSD] DISCRIMINATION CAUSES OF ACTION SHOULD HAVE SURVIVED MOTION TO DISMISS)/CIVIL PROCEDURE (WHEN THE ALLEGATIONS OF BOTH SIDES ARE EQUALLY SUPPORTED, PLAINTIFF MUST PREVAIL IN A MOTION TO DISMISS)/MUNICIPAL LAW (POLICE OFFICERS CAUSES OF ACTION FOR DISABILITY [PTSD] DISCRIMINATION SHOULD HAVE SURVIVED MOTION TO DISMISS)POLICE OFFICERS (OFFICER’S CAUSES OF ACTION FOR DISABILITY [PTSD] DISCRIMINATION SHOULD HAVE SURVIVED MOTION TO DISMISS)

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COURT SHOULD HAVE ALLOWED SUBSTITUTION OF AN AFFIDAVIT OF MERIT PURSUANT TO CPLR 2001; SUA SPONTE DISMISSAL OF COMPLAINT NOT WARRANTED.

The Fourth Department determined Supreme Court should have granted plaintiff’s motion to substitute nunc pro tunc an affidavit of merit and amount due in a foreclosure proceeding. Plaintiff could not confirm the proper execution of the original affidavit (a requirement of an administrative order of the chief administrative judge) and sought to substitute the original with an identical affidavit, the proper execution of which could be confirmed. Supreme Court denied the motion and dismissed the complaint sua sponte. The Fourth Department held that the dismissal was not warranted and CPLR 2001 permitted the substitution:

 

” A court’s power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal’ ” … . Here, we conclude that “[t]he fact that . . . plaintiff’s [new] attorney[s] attempted to comply, in good faith, with an Administrative Order of the Chief Administrative Judge that did not exist at the time that the action was commenced, or at the time [the judgment of foreclosure and sale was granted], does not qualify as such an extraordinary circumstance’ ” that would support a sua sponte dismissal … . Indeed, “[n]othing in the Administrative Order[] requires the dismissal of an action merely because the plaintiff’s attorney[s] discover[] that there was some irregularity or defect in a prior submission” … . Thus, contrary to the court’s determination, we conclude that plaintiff is not “effectively required to commence an entirely new action” … .

We further conclude that the court erred in denying that part of plaintiff’s motion seeking to substitute the affidavit of merit and amount due. “CPLR 2001 permits a court, at any stage of an action, to disregard a party’s mistake, omission, defect, or irregularity if a substantial right of a party is not prejudiced” … . In addition, “[p]ursuant to CPLR 5019 (a), a trial court has the discretion to correct an order or judgment which contains a mistake, defect, or irregularity not affecting a substantial right of a party” … . Here, we conclude that the substitution of the original affidavit of merit and amount due with a new, substantively identical affidavit of merit and amount due was a ministerial amendment permitted by CPLR 2001 and CPLR 5019 (a) inasmuch as the change affected only plaintiff’s ability to comply with the Administrative Order, and “[t]he attorney affirmation is not itself substantive evidence” … . We further conclude that “[n]o substantial right of [defendant .. .would] be affected by the court’s substitution” … . Indeed, that defendant did not reside in the subject property when plaintiff commenced the mortgage foreclosure action and the property was vacant at that time, and he never joined this action nor made any effort to contest the foreclosure. Wells Fargo Bank, N.A. v Watanabe, 2016 NY Slip Op 01096, 4th Dept 2-11-16

 

CIVIL PROCEDURE (SUA SPONTE DISMISSAL OF FORECLOSURE COMPLAINT NOT WARRANTED, SUBSTITUTE AFFIDAVIT OF MERIT ALLOWED BY CPLR 2001)/FORECLOSURE (SUA SPONTE DISMISSAL OF FORECLOSURE COMPLAINT NOT WARRANTED, SUBSTITUTE AFFIDAVIT OF MERIT ALLOWED BY CPLR 2001)/AFFIDAVIT OF MERIT AND AMOUNT DUE (SUA SPONTE DISMISSAL OF FORECLOSURE COMPLAINT NOT WARRANTED, SUBSTITUTE AFFIDAVIT OF MERIT ALLOWED BY CPLR 2001)

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ORDER ENTERED ON CONSENT IS NOT APPEALABLE; ONLY REMEDY IS MOTION TO VACATE.

In a Family Court matter, the Fourth Department noted that no appeal lies from an order entered by consent. The correct remedy is a motion to vacate the order:

 

Respondent mother appeals from an order denying her motion to vacate an order of fact-finding and disposition, which was entered on the consent of the parties. We agree with the mother that Family Court erred in denying the motion on the sole ground that a direct appeal from that order was pending. It is well settled that “[n]o appeal lies from an order entered upon the parties’ consent” … and, indeed, we dismissed the mother’s appeal from the consent order for that very reason … . Thus, contrary to the court’s determination, the mother’s sole remedy was ” to move in Family Court to vacate the order, at which time [she] [could] present proof in support of [her] allegations of duress, proof which is completely absent from this record’ ” … . Matter of Annabella B.C. (Sandra L.C.), 2016 NY Slip Op 01064, 4th Dept 2-11-16

 

APPEAL (NO APPEAL LIES FROM A CONSENT ORDER)/CIVIL PROCEDURE (NO APPEAL LIES FROM A CONSENT ORDER, ONLY REMEDY IS MOTION TO VACATE)/FAMILY LAW (NO APPEAL LIES FROM A CONSENT ORDER OF FACT-FINDING AND DISPOSITION, ONLY REMEDY IS MOTION TO VACATE)

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