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Statute of Limitations for Breach of Fiduciary Duty Tolled Until Fiduciary’s Roles Terminated

In an action against a fiduciary stemming from the distribution of an estate, Supreme Court determined the six-year statute of limitations applied to the breach of fiduciary duty cause of action and precluded any evidence from prior to 2007.  The Third Department agreed that the six-year statute was the correct one, but held that the statute never started running because the fiduciary’s roles were never terminated. Therefore pre-2007 evidence was not precluded:

Although “New York law does not provide a single statute of limitations for breach of fiduciary duty claims [and] the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks” …, the parties do not dispute that a six-year period applies to these two remaining causes of action. However, the statute of limitations for a claim alleging a breach of fiduciary duty is tolled until there has been an open repudiation by the fiduciary or the relationship has otherwise been clearly terminated … .

There is nothing in this record indicating that respondents’ relevant fiduciary roles have terminated. Although many of the actions about which petitioners complain were done openly, petitioners also allege that they were repeatedly assured that such actions were ultimately in their best interests. The amended petition alleges that respondents have not to date repudiated their positions as fiduciaries. That allegation is not denied in this pre-answer motion, which was supported only by an attorney’s affirmation and memorandum of law. Matter of Therm, Inc., 2015 NY Slip Op 07732, 3rd Dept 10-22-15

 

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Inadequate Pain and Suffering Damages Verdict Properly Set Aside

The Second Department determined the jury’s pain and suffering damages award in a slip and fall case was against the weight of the evidence and Supreme Court properly set the damages verdict aside:

After a trial on the issue of damages, the jury awarded the plaintiff the sum of $20,000 for past pain and suffering and $0 for future pain and suffering. The trial court correctly granted the plaintiff’s motion pursuant to CPLR 4404(a) to set aside the jury verdict on the issue of damages, as that verdict was contrary to the weight of the evidence. The jury’s determination that the plaintiff was not entitled to damages for future pain and suffering was inconsistent with the evidence that her shoulder injury was permanent in nature … . The award for past pain and suffering was also contrary to the weight of the evidence, as it could not have been reached on any fair interpretation of the evidence … . Santana v Western Beef Retail, Inc., 2015 NY Slip Op 07639, 2nd Dept 10-21-15

 

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Forum Selection and Time Limitation Clauses in Cruise Ship Ticket Enforceable

The Second Department, reversing Supreme Court, determined that the forum selection and time limitation clauses in a “Carnival” cruise ship ticket were enforceable. The passenger’s personal injury complaint was dismissed:

A contractual forum selection clause contained in a cruise passenger ticket is generally enforceable as long as it has been reasonably communicated to the passenger and does not violate notions of fundamental fairness, and the submission thereof constitutes documentary evidence that may provide a proper basis for dismissal of an action pursuant to CPLR 3211(a)(1) … . Here, Carnival’s submissions established that the plaintiffs’ contract of carriage included a clause requiring that any disputes between the parties “shall be litigated, if at all, before the United States District Court for the Southern District of Florida in Miami, or as to those lawsuits to which the Federal Courts of the United States lack subject matter jurisdiction, before a court located in Miami-Dade County, Florida, U.S.A. to the exclusion of the Courts of any other county, state or country.” Furthermore, the contract provided that an action to recover damages for personal injuries “shall not be maintainable unless filed within one year after the date of the injury.” Carnival also established that the plaintiffs had a reasonable opportunity to review their tickets, and there is no allegation of fraud or overreaching … . Fritsche v Carnival Corp., 2015 NY Slip Op 07618, 2nd Dept 10-21-15

 

Prejudice Which Would Preclude Amendment of an Answer Must Stem from a Right Lost in the Interim Between the Original Answer and the Application to Amend

The First Department, reversing Supreme Court, determined defendant (Environmental) should have been allowed to amend its answer to deny its employee (Tompkins) was acting within the scope of his employment when the accident at issue occurred. The court explained that plaintiff failed to demonstrate prejudice from the amendment, as the term “prejudice” is to be understood in this context:

A proper showing of prejudice must be “traceable not simply to the new matter sought to be added, but also to the fact that it is only now being added. There must be some special right lost in the interim, some change of position or some significant trouble or expense that could have been avoided had the original pleading contained what the amended one wants to add” … . Plaintiff has made no such showing. In her opposition before the motion court, plaintiff asserted that she would be prejudiced by the amendment because Environmental “would be vicariously liable for the acts of [Thomas] Tompkins,” if Tompkins was operating the vehicle within the scope of his employment. This is not the kind of significant prejudice necessary to deny an amendment to the pleading, as plaintiff would suffer the same “prejudice” if Environmental had raised its scope-of-employment defense in its initial answer. Williams v Tompkins, 2015 NY Slip Op 07598, 1st Dept 10-20-15

 

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Mandamus to Compel Judge to Decide Motions Proper

The Second Department determined mandamus was the proper vehicle to compel a judge to decide pending motions:

“Mandamus will lie to compel the determination of a motion” … . Under the particular circumstances of this case, the petitioner demonstrated a clear legal right to the relief sought … . Accordingly, the petition must be granted insofar as asserted against the respondent …, and that respondent is directed to issue written orders within 30 days of this decision and judgment determining the four fully submitted motions pending in the underlying action … . Matter of Liang v Hart, 2015 NY Slip Op 07502, 2nd Dept 10-14-15

 

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Appeal, Rather than a Motion to Vacate a Default Judgment, Is the Proper Remedy Where a Party Appears to Contest Motion to Enter a Default Judgment

The Second Department noted that the prohibition of an appeal from an ordered entered upon default does not apply when a party appears to contest a motion to enter a default judgment:

Although CPLR 5511 prohibits an appeal from an order entered upon default, that provision does not apply where, as here, a party appears and contests a motion for leave to enter a default judgment … . Under the circumstances [of this case], the proper remedies were either an appeal from the default order, a timely motion for reargument or renewal, or an appeal from a judgment entered after the inquest on damages, which would bring up for review the default order … . Thus, a motion to vacate the default order was procedurally improper and should not have been entertained … . Cole-Hatchard v Eggers, 2015 NY Slip Op 07466, 2nd Dept 10-14-15

 

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contract for the sale of busiwas not intertwined with the promissory note and personal guaranty

Reversing Supreme Court, the Second Department determined the contract for the sale of plaintiff’s one-half share of a business to defendant was not intertwined with the promissory note and personal guaranty executed by the defendant in connection with the sale. Therefore plaintiff was entitled to summary judgment in lieu of a complaint based upon defendant’s default:

The plaintiff made a prima facie showing of his entitlement to judgment as a matter of law by submitting the promissory note, which contained an unequivocal and unconditional obligation to pay, the personal guaranty, and proof of the defendants’ failure to make payments on the note according to its terms … .

In opposition, the defendants failed to raise a triable issue of fact as to a bona fide defense … . “[T]he general rule is that the breach of a related contract cannot defeat a motion for summary judgment on an instrument for money only unless it can be shown that the contract and the instrument are intertwined and that the defenses alleged to exist create material issues of triable fact” … .

Here, contrary to the Supreme Court’s determination, the evidence submitted by the defendants failed to establish that the agreement and the promissory note were intertwined, such that any breach of the related agreement by the plaintiff may create a defense to payment on the note. Chervinsky v Rezhets, 2015 NY Slip Op 07463, 2nd Dept 10-14-15

 

Criteria for “Interest of Justice” Extension of Time to Effect Service Explained

The Fourth Department determined Supreme Court properly allowed plaintiff an extension of time to effect service on defendant in the interest of justice.  An “interest of justice” analysis in this context does not require a showing of good cause for the extension:

Pursuant to CPLR 306-b, if service is not timely made, “the court, upon motion, shall dismiss the action without prejudice as to that defendant, or upon good cause shown or in the interest of justice, extend the time for service.” Even assuming, arguendo, that plaintiff failed to establish good cause for an extension, we conclude that the court properly granted plaintiff’s cross motion in the interest of justice. That standard “requires a careful judicial analysis of the factual setting of the case and a balancing of the competing interests presented by the parties. Unlike an extension request premised on good cause, a plaintiff need not establish reasonably diligent efforts at service as a threshold matter. However, the court may consider diligence, or lack thereof, along with any other relevant factor in making its determination, including expiration of the [s]tatute of [l]imitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff’s request for the extension of time, and prejudice to defendant” … .  Swaggard v Dagonese, 2015 NY Slip Op 07398, 4th Dept 10-9-15

 

Criteria for Class Certification Explained (Not Met Here)

The Fourth Department determined that an action by about 1900 patients who received insulin injections at defendant hospital was properly denied class certification. The patients were notified they may have been administered insulin by insulin pens shared by more than one patient and all were offered free testing for possible blood borne disease. No one tested positive for disease. The court concluded that whether a particular patient was actually exposed and whether exposure resulted in damages would have to be determined on a case by case basis. Therefore issues common to the class did not predominate:

“[A] class action may be maintained in New York only after the five prerequisites set forth in CPLR 901 (a) have been met, i.e., the class is so numerous that joinder of all members is impracticable, common questions of law or fact predominate over questions affecting only individual members, the claims or defenses of the representative parties are typical of the class as a whole, the representative parties will fairly and adequately protect the interests of the class, and a class action is superior to other available methods for the fair and efficient adjudication of the controversy” … . The class representative “bears the burden of establishing compliance with [*2]the requirements of both CPLR 901 and 902” … .

Where, as here, no plaintiff has tested positive for the blood-borne disease to which he or she allegedly was exposed as a result of defendant’s negligence, a prerequisite to recovery is proof of actual exposure to the blood-borne disease … . The issue of actual exposure will require individualized determinations with respect to each plaintiff. Further, even if members of the proposed class could establish such actual exposure, “the extent of the damages resulting therefrom [is a] question[] requiring individual investigation and separate proof as to each individual claim” … . Thus, we conclude that, “even if there are common issues in this case, those issues do not predominate” …, and “[t]he predominance of individualized factual questions . . . renders this case unsuitable for class treatment” … . Westfall v Olean Gen. Hosp., 2015 NY Slip Op 07396, 4th Dept 10-9-15

 

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Critieria for Amendement of a Notice of Claim Explained

The First Department determined Supreme Court should have granted plaintiff’s motion to amend the notice of claim to include mention of a defective handrail, despite plaintiff’s failure to invoke the proper statutory authority (General Municipla Law 50-e(5)). The court explained the criteria for an amendment:

Under GML § 50-e(5), a notice of claim may be amended within one year and ninety days of an accident to include new theories of liability … . Plaintiff’s cross motion was made eleven months after the accident, well within the one-year-and-ninety- day limitation period.

In determining whether an application for leave to serve a late notice of claim should be granted, a court shall consider “whether the public corporation . . . acquired actual knowledge of the essential facts constituting the claim within the time specified in subdivision one . . . or within a reasonable time thereafter” (GML § 50-e[5]). The court shall also consider “all other relevant facts and circumstances,” including whether the delay “substantially prejudiced the public corporation in maintaining its defense on the merits” (id.).

“In determining whether the city was prejudiced by any mistake, omission, irregularity or defect in the notice [of claim], the court may look to evidence adduced at a section 50-h hearing, and to such other evidence as is properly before the court'” … . * * *

We have previously held that prejudice will not be presumed … . Moreover, “[i]t may not be shown without evidence of an attempt to investigate the accident” … . Given defendant’s actual knowledge of the facts constituting the claim within a reasonable time after the accident, and the lack of evidence of an attempt to conduct an investigation either before or after it obtained knowledge of the issue concerning the handrail in this accident …, “conclusory assertions of prejudice, based solely on the delay in serving the notice of claim, are insufficient” … . Thomas v New York City Hous. Auth., 2015 NY Slip Op 07328, 1st Dept 10-8-15

 

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