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PLAINTIFF’S CLAIMS OF DISCRIMINATORY NON-PROMOTION AND TERMINATION PURSUANT TO THE NYC AND NYS HUMAN RIGHTS LAW WERE SUFFICIENT AT THE PLEADING STAGE AND SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the plaintiff’s claims of discriminatory non-promotion and termination pursuant to the NYS and NYC Human Rights Law were sufficient for the pleading stage and should not have been dismissed:

Plaintiff’s allegation that he, an African American, was terminated from his job by defendant, his employer, after making one mistake while two of his white coworkers who made similar mistakes were neither reprimanded nor terminated was sufficient to state a claim for discriminatory termination under the broad protections of the State and City HRLs … . Plaintiff specifically alleged that one of the white coworkers was an IT Help Desk Technician, the same position he held, and that the coworker performed substantially similar work under similar working conditions. He further alleged that he helped fix some of the mistakes that this coworker had made in the past. These allegations were sufficient at the pleading stage … .

In support of his cause of action for failure to promote, plaintiff alleges that his coworker was promoted to a job that he was already performing, and that the position was not posted prior to it being filled. These allegations are sufficient to meet plaintiff’s pleading burden as this Court has previously held that it is unnecessary for a plaintiff to allege that he applied for a promotion where he has alleged that promotions were typically made unannounced and unsolicited (id.) or where defendant failed to advertise the position … . Altidor v Medical Knowledge Group LLC, 2026 NY Slip Op 00870, First Dept 2-17-26

Practice Point: Consult this decision for insight into the pleading requirements for claims of discriminatory non-promotion and termination pursuant to the NYS and NYC Human Rights Law.

 

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IN A SMALL CLAIMS ASSESSMENT REVIEW (SCAR) CHALLENGING A REAL PROPERTY ASSESSMENT FOR TAX PURPOSES, HOMEOWNERS HAVE STANDING TO CHALLENGE THE RESIDENTIAL ASSESSMENT RATIO (RAR) WHICH IS SET BY THE NYS OFFICE OF REAL PROPERTY TAX SERVICES (ORPTS) (SECOND DEPT). ​

The Second Department, in a full-fledged opinion by Justice Genovesi, determined that a residential assessment ratio (RAR) can be challenged by a residential property owner in a small claims assessment review (SCAR). In a SCAR a property owner can challenge the assessed value of the property as an “excessive assessment” and/or as an “unequal assessment:”

A class ratio refers to an assessment ratio that can apply to various types of properties. The residential assessment ratio (hereinafter RAR) is a specific class ratio used to determine the level of assessment for residential properties. It is a measurement of the overall ratio of the total assessed value of residential property in the municipality compared to the full market value … . * * *

It is the opinion of this Court that to conduct the proceedings in a manner that does substantial justice between the parties, RPTL article 7, title 1-A must be interpreted as conferring homeowners with standing to challenge the RAR … or to mount a “collateral attack” on the RAR by providing their own ratio study with an alternative ratio, within the limited context of that SCAR proceeding. To hold otherwise would frustrate the purpose of the statute, which is to provide property owners with an efficient, inexpensive, and simple alternative to the complex and formal tax certiorari proceeding. Matter of Yeung v Assessor of the Vil. of Great Neck Estates, 2026 NY Slip Op 00784, Second Dept 2-11-26

Practice Point: In a small claims assessment review (SCAR) a homeowner can challenge the tax assessment of the property. The question in this case was whether, at a SCAR, the homeowner can challenge the residential assessment ratio (RAR) which is set by New York State. The Second Department held that a homeowner can challenge the RAR in a SCAR.

 

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PLAINTIFF ALLEGED SHE WAS COVERED AS AN ADDITIONAL INSURED UNDER THE POLICY AND ATTACHED A CERTIFICATE OF INSURANCE TO HER COMPLAINT; A CERTIFICATE OF INSURANCE IS NOT SUFFICIENT PROOF OF THE EXISTENCE OF AN INSURANCE CONTRACT; PLAINTIFF’S COMPLAINT SHOULD HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the complaint alleging plaintiff was an additional insured based upon the certificate of insurance should have been dismissed. A certificate of insurance does not prove the existence of an insurance contract:

Only those named as an insured or additional insured on an insurance policy are entitled to coverage … . As the party claiming coverage, plaintiff bears the burden of showing that the policy covers her … .

Supreme Court should have granted [the insurer’s] motion to dismiss the complaint because plaintiff failed to plead facts showing that she was covered under the policy. The certificate of liability insurance is insufficient to prove that plaintiff was an additional insured because “[a] certificate of insurance is only evidence of a carrier’s intent to provide coverage but is not a contract to insure the designated party nor is it conclusive proof, standing alone, that such a contract exists” … . Furthermore, the certificate contains a disclaimer stating that it was “issued as a matter of information only and confers no rights upon the certificate holder” … . Itzhak v Briarwood Ins. Servs. Inc., 2026 NY Slip Op 00616, First Dept 2-10-26

Practice Point: A certificate of insurance is not proof of the existence of an underlying insurance contract. Here plaintiff relied solely on a certificate of insurance to allege she was covered under the policy as an additional insured. That was not enough to state a cause of action.

 

THE E-MAIL SERVICE OF A NOTICE OF ENTRY BY THE NEW YORK STATE ELECTRONIC FILING SYSTEM (NYSCEF) “SHALL NOT CONSTITUTE SERVICE OF ENTRY BY ANY PARTY;” BECAUSE PLAINTIFF DID NOT SERVE THE NOTICE OF ENTRY ON DEFENDANTS AFTER REMAND BY THE APPELLATE COURT, THE DEFENDANTS’ TIME TO ANSWER NEVER STARTED RUNNING; THE DEFAULT JUDGMENT WAS VACATED (FIRST DEPT).

The First Department, reversing the default judgment, held that defendants’ time to answer after remand by the appellate court never started running because plaintiff never served the notice of entry. The New York State Courts Electronic Filing system’s (NYSCEF’s) transmission of notification of entry to e-mail service addresses “shall not constitute service of entry by any party:” Adago v Sy, 2026 NY Slip Op 00571, First Dept 2-5-26

 

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ONE DEFENDANT PROVED HE DID NOT RESIDE AT THE ADDRESS WHERE SERVICE OF PROCESS WAS MADE; AND PLAINTIFF FAILED TO PROVE THE PROCESS SERVER EXERCISED “DUE DILIGENCE” IN ATTEMPTING TO SERVE THE OTHER DEFENDANT BEFORE RESORTING TO NAIL AND MAIL; DEFAULT JUDGMENT VACATED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the default judgments against De La Cruz-Ramos and Mosquea should have been vacated. De La Cruz-Ramos proved he did not reside at the address where service of process was made. And plaintiff did not prove the process server exercised due diligence in serving Mosquea before resorting to “nail and mail.” The attempts to serve Mosquea were all made during working hours:

De La Cruz-Ramos [submitted] his own affidavit averring that he had moved from the address where service was made, as well as a lease confirming that he had moved before the date of service … . * * *

Mosquea contends that the service was defective because the process server did not exercise “due diligence” in seeking to effectuate service on defendant before resorting to nail-and-mail service (CPLR 308[4]). Generally, a plaintiff can establish diligence by providing an affidavit of service indicating efforts to serve the defendant at her residence on three different occasions, at different times of day … . As Mosquea argues, however, all of the dates of attempted personal service upon him were during the work week and during normal business hours in the same afternoon window. Thus, plaintiff did not establish the due diligence necessary to resort to nail and mail service … . Unitrin Safeguard Ins. Co. v Della-Noce, 2026 NY Slip Op 00601, First Dept 2-5-26

Practice Point: Here the process server made three attempts to serve a defendant at the same time of day, during work hours. The process server, therefore, did not exercise “due diligence” before resorting to nail and mail.

 

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DEFENDANTS-ATTORNEYS WAIVED A DEFENSE WITHOUT THEIR CLIENTS’ CONSENT; THE LEGAL MALPRACTICE COMPLAINT SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the motion to dismiss the legal malpractice complaint should not have been granted. Defendants-attorneys represented Park West. A driver working for Park West was in an accident and both Park West and the driver were sued. The contract between the driver and Park West indicated the driver was an independent contractor. The attorneys, however, conceded the driver was an employee and Park West settled. The essence of the legal malpractice action was the attorneys’ failure to raise the independent-contractor-defense to Park West’s liability. The First Department noted that the evidence indicated the driver may in fact have been Park West’s employee, but that cannot be decided at the motion-to-dismiss stage. The only relevant question for the motion to dismiss is whether the complaint stated a cause of action for legal malpractice:

The motion court improperly held that plaintiffs failed to state a cause of action for legal malpractice against defendants. To state a claim for legal malpractice, a “plaintiff must show that (1) the attorney was negligent; (2) the attorney’s negligence was a proximate cause of plaintiff’s losses; and (3) plaintiff suffered actual damages” … . Moreover, an “attorney’s conduct or inaction is the proximate cause of a plaintiff’s damages if but for the attorney’s negligence the plaintiff would have succeeded on the merits of the underlying action or would not have sustained actual and ascertainable damages” … .

Here, plaintiffs argue that but for defendants’ negligence in waiving Park West’s independent contractor defense in the underlying action, without their consent and without disclosing conflicts in their representation of several defendants in the action, they would not have been compelled to settle the action, and they would not have been held vicariously liable for [the driver’s] negligence. Park W. Exec. Servs., Inc. v Gallo Vitucci & Klar, LLP, 2026 NY Slip Op 00428, First Dept 1-29-26

Practice Point: The question at the motion-to-dismiss stage is whether the complaint states a cause of action, not whether the elements of the cause of action can be proven. Here the defendants-attorneys’ waiver of a defense without their client’s consent stated a cause of action for legal malpractice. Whether that defense would hold up at trial is not relevant to a dismissal for failure state a cause of action.​

 

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ONCE THE JUDGE DETERMINED THERE WERE NECESSARY PARTIES WHICH WERE NOT JOINED, THE JUDGE SHOULD NOT HAVE DECIDED THE MOTION FOR A DEFAULT JUDGMENT; THE NECESSARY PARTIES SHOULD HAVE BEEN IDENTIFIED AND SUMMONED IF POSSIBLE; MATTER REMITTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judge should not have ruled on the motion for a default judgment without first identifying the necessary parties to the action (after concluding there in fact were necessary parties who were not joined):

“[N]ecessary parties are persons who might be inequitably affected by a judgment in the action and must be made plaintiffs or defendants” … . “CPLR 1001(b) requires the court to order the necessary party or parties summoned, where they are subject to the court’s jurisdiction, and ‘[i]f jurisdiction over such necessary parties can be obtained only by their consent or appearance, the court is to determine, in accordance with CPLR 1001(b), whether justice requires that the action proceed in their absence'” … . “The nonjoinder of necessary parties may be raised at any stage of the proceedings, by any party or by the court on its own motion, including for the first time on appeal” … .

Here, it was premature for the Supreme Court to make a determination on the plaintiff’s motion, among other things, for leave to enter a default judgment against the defendants without first identifying the necessary parties to the action … . After the court concluded that there existed necessary parties to the action, the court … should have ascertained the identity of those parties, whether they can be joined, and, if not, whether the action should proceed in the absence of any necessary parties pursuant to CPLR 1001(b) … . Under the circumstances of this case, “‘the questions of whether there are any . . . necessary parties who should be joined in this action and, if so, the appropriate procedural disposition for effecting joinder should not be determined by this court in the first instance'” … . Accordingly, we remit the matter to the Supreme Court, Queens County, to hold a hearing to determine whether there are any necessary parties who should be joined in this action and, if so, to compel their joinder, subject to any affirmative defenses, and if joinder cannot be effectuated, to determine, pursuant to CPLR 1001(b), whether the action should proceed in the absence of any necessary parties. Hossain v Rahman, 2026 NY Slip Op 00352, Second Dept 1-28-26

Practice Point: Consult this decision for insight into to proper procedure which should be followed by a judge when there are necessary parties which have not been joined.

 

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THE FOUR-MONTH STATUTE OF LIMITATIONS FOR BRINGING AN ARTICLE 78 PETITION CHALLENGING TERMINATION OF SECTION 8 RENT-SUBSIDY BENEFITS STARTS WHEN THE TENANT BECOMES AWARE OF THE TERMINATION; THE PETITION WAS TIME-BARRED (FIRST DEPT).

The First Department, reversing Supreme Court, determined petitioner became aware that the Section 8 rent subsidy benefits were terminated in December 2019 triggering the four-month statute of limitations for challenging the termination. Therefore petitioner’s 2024 article 78 petition was time-barred:

The four-month statute of limitations applies to proceedings terminating Section 8 benefits, and it begins to run upon tenant’s receipt of the T3 letter advising the tenant of that termination (see CPLR 217[1] …). The statute of limitations may be triggered in the absence of actual notice where, as here, the party knew or should have known about the determination … . The record shows petitioner had actual notice in December 2019, so the statutory limitation period to challenge termination of her subsidy started no later than December 31, 2019, and expired on April 30, 2020, well before she commenced the instant proceeding. Matter of Cruz v New York City Hous. Auth. (NYCHA), 2026 NY Slip Op 00420, First Dept 1-29-26

Practice Point: The statute of limitations for bringing an article 78 petition challenging the termination of section 8 rent-subsidy benefits starts when the tenant receives the T3 letter or when the tenant knew or should have known about the termination.

 

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HERE THE PURPORTED TRANSFER BY DEED OF AN INTEREST IN REAL PROPERTY TO A LIMITED LIABILTY COMPANY WAS NULL AND VOID FROM THE OUTSET BECAUSE THE LLC DID NOT EXIST WHEN THE DEED WAS EXECUTED; THEREFORE THE STATUTE OF LIMITATIONS FOR REFORMATION OF THE DEED NEVER STARTED RUNNING; PLAINTIFF WAS ENTITLED TO A DECLARATORY JUDGMENT THAT THE TRANSFER TO THE LLC WAS NULL AND VOID (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the action seeking a declaratory judgment that a deed is null and void should not have been dismissed as time-barred. The deed was void from the outset because the limited liability company listed as a property owner did not not exist at the time the deed was executed. Because the deed was void (re; the LLC) at the time of execution, the statute of limitations for a reformation of the deed never started running:

“‘A cause of action seeking reformation of an instrument on the ground of mistake is governed by the six-year statute of limitations pursuant to CPLR 213(6), which begins to run on the date the mistake was made'” … . Here, however, the deed, insofar as it purported to convey an interest in the property from Gold to the LLC, was void at its inception, since it is undisputed that the LLC did not exist at the time the deed was executed … . Since “a statute of limitations cannot validate what is void at its inception,” the statute of limitations cannot act as a bar to the cause of action for a judgment declaring the LLC’s purported interest in the property null and void … . J​PMorgan Chase Bank, N.A. v Katz, 2026 NY Slip Op 00359, Second Dept 1-28-26

Practice Point: A statute of limitations cannot be used to validate a purported transfer of property that was void at its inception. Here the statute of limitations for a judgment declaring a purported transfer of property by deed to an LLC which did not exist when the deed was executed should not have been invoked to bar reformation of the deed.​

 

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MEASUREMENT OF THE SIX-MONTH GRACE PERIOD FOR THE FILING OF A NEW ACTION AFTER DISMISSAL (WHICH WOULD OTHERWISE BE TIME-BARRED) PURSUANT TO CPLR 205(A) AND CPLR 205-A CLARIFIED IN AN OPINION (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, clarified how the six-month grace period for filing a new action after dismissal (CPLR 205(a) and 205-a) is measured:

This appeal provides our Court with an occasion to resolve some inconsistencies in decisional authority regarding the timing of the termination event from which the six-month grace period under CPLR 205(a) and 205-a are measured. Under certain circumstances, both statutes permit the plaintiff a six-month window to recommence an action that otherwise would be untimely, measured from the “termination” of a prior action. Is the termination of the prior action the date an order of dismissal is executed by the court, the date the order of dismissal is entered with the clerk, or the date that the order of dismissal is served upon other parties with notice of entry? Is the termination of the prior action delayed 30 days for the potential filing of a notice of appeal pursuant to CPLR 5513(a) or a motion for leave to reargue pursuant to CPLR 2221(d), and further delayed by the appellate process when an actual appeal is undertaken, or is there no termination of the prior action until a final judgment is entered or served with notice of entry? The answer to these questions may make a crucial mathematical difference to the timeliness or untimeliness of actions commenced within or without the six-month grace periods under CPLR 205-a and 205(a). We conclude, for reasons stated below, that when no appeal is taken by a party from an order of dismissal, the six-month period for recommencing an action under CPLR 205-a, and by extension under CPLR 205(a), begins to run once 30 days have elapsed following service of the order of dismissal with notice of entry. HSBC Bank USA, N.A. v Hillaire, 2026 NY Slip Op 00353, Second Dept 1-28-26

Practice Point: Consult this opinion for a definitive discussion of how the six-month grace periods for the filing of a new otherwise time-barred action after dismissal pursuant to CPLR 205(a) and 205-a are measured.​

 

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