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Invoices Together with Purchase Orders Created an Agreement to a Reduced Sales-Contract Statute of Limitations

The Second Department determined the sales-contract statute of limitations was validly reduced from four years to one year by the terms of invoices:

While UCC 2-725(1) generally provides that a cause of action alleging breach of a sales contract must be commenced within four years after it has accrued, that provision also allows the parties to a sales contract to “reduce the period of limitation to not less than one year” (UCC 2-725[1]…). Here, the defendants met their initial burden by demonstrating that their invoices containing the one-year limitation period constituted an acceptance that, together with the plaintiff’s purchase order, was effective in forming a contract, and that the one-year limitation period, an additional term set forth in the invoices, was presumed to have become part of this contract between the parties unless one of the three exceptions in UCC 2-207(2) applied (see UCC 2-207[1], [2]…). It is undisputed that the plaintiff’s action was not commenced within one year from the alleged breach, as required by the additional term. The burden then shifted to the plaintiff, as the party opposing the inclusion of the additional term, to raise a question of fact as to whether one of the three exceptions under UCC 2-207(2) was applicable … . The plaintiff failed to satisfy its burden.

Contrary to the plaintiff’s contention, the abbreviated period of limitation was not against public policy (see CPLR 201; UCC 2-725[1]…). ” Absent proof that the contract is one of adhesion or the product of overreaching, or that [the] altered period is unreasonably short, the abbreviated period of limitation will be enforced'” … . ” Where the party against which an abbreviated Statute of Limitations is sought to be enforced does not demonstrate duress, fraud, or misrepresentations in regard to its agreement to the shortened period, it is assumed that the term was voluntarily agreed to'” … . State of Narrow Fabric, Inc. v UNIFI, Inc., 2015 NY Slip Op 02110, 2nd Dept 3-18-15

 

When the One-Year Statute of Limitations Begins to Run for False Arrest, Malicious Prosecution and Assault and Battery Causes of Action Explained/Elements of False Arrest and Malicious Prosecution Explained

The Second Department explained when the one-year statute of limitations begins to run for false arrest, malicious prosecution and assault and battery causes of action.  The court further explained the elements of false arrest and malicious prosecution:

“Causes of action based on false arrest . . . accrue upon the subject’s release[ ] from confinement’ and are governed by a one-year statute of limitations” … . “The one-year statute of limitations applicable to a cause of action for malicious prosecution (see CPLR 215[3]) does not begin to run until favorable termination of the underlying criminal proceeding” … . * * *

…Supreme Court erred in denying that branch of the … defendants’ motion which was for summary judgment dismissing the third cause of action, which alleged assault and battery, insofar as asserted against them as time-barred. That cause of action is also governed by the one-year statute of limitations set forth in CPLR 215 (see CPLR 215[3]…). It is undisputed that the alleged assault and battery occurred more than one year prior to the commencement of this action. * * *

“A civilian defendant who merely furnishes information to law enforcement authorities, who are then free to exercise their own independent judgment as to whether an arrest will be made and criminal charges filed, will not be held liable for false arrest or malicious prosecution” … . To be held liable for false arrest, “the defendant must have affirmatively induced the officer to act, such as taking an active part in the arrest and procuring it to be made or showing active, officious and undue zeal, to the point where the officer is not acting of his [or her] own volition'” … . Similarly, in order for a civilian defendant to be considered to have initiated the criminal proceeding so as to support a cause of action based on malicious prosecution, ” it must be shown that defendant played an active role in the prosecution, such as giving advice and encouragement or importuning the authorities to act'” … . “Merely giving false information to the authorities does not constitute initiation of the proceeding without an additional allegation or showing that, at the time the information was provided, the defendant knew it to be false, yet still gave it to the police or District Attorney… . Williams v CVS Pharmacy, Inc., 2015 NY Slip Op 02115, 2nd Dept 3-18-15

 

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The Jury Should Have Been Instructed on the Res Ipsa Loquitur Doctrine—Infection Developed After Injection

The Second Department determined plaintiff’s motion to set aside the verdict should have been granted because the jury should have been instructed on the res ipsa loquitur doctrine.  Plaintiff developed an infection after a cortisone injection.  There was expert testimony that such an infection would not develop if standard procedures had been followed:

Under appropriate circumstances, the evidentiary doctrine of res ipsa loquitur may be invoked to allow the factfinder to infer negligence from the mere happening of an event (see Restatement [Second] of Torts § 328D). “Res ipsa loquitur, a doctrine of ancient origin …, derives from the understanding that some events ordinarily do not occur in the absence of negligence” … . “In addition to this first prerequisite, plaintiff must establish, second, that the injury was caused by an agent or instrumentality within the exclusive control of defendant and, third, that no act or negligence on the plaintiff’s part contributed to the happening of the event … . Once plaintiff satisfies the burden of proof on these three elements, the res ipsa loquitur doctrine permits the jury to infer negligence from the mere fact of the occurrence” … . Moreover, “expert testimony may be properly used to help the jury bridge the gap’ between its own common knowledge, which does not encompass the specialized knowledge and experience necessary to reach a conclusion that the occurrence would not normally take place in the absence of negligence, and the common knowledge of physicians, which does .. .

Here, the plaintiff presented expert testimony that a MRSA infection from an injection does not occur if the podiatrist adheres to the accepted standard of care. Bernard v Bernstein, 2015 NY Slip Op 02084, 2nd Dept 3-18-15

 

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Stipulation of Settlement Not Enforceable/All Material Terms Not Included

The Second Department determined the purported stipulation of settlement did not meet the standards set forth in CPLR 2104:

Absent the formalities required by statute, a stipulation of settlement is not enforceable (see CPLR 2104…). Pursuant to CPLR 2104, “[a]n agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered.” The stipulation must be “definite and complete” … , and all material terms must be included … .

In this case, the alleged written stipulation of settlement …, entitled “Agreement in Principle,” was not signed by all the parties to the litigation, and the agreement did not state that the two signatories to the agreement intended to bind all the parties to the agreement’s terms. Further, as a material term of the agreement at issue was contingent upon the parties’ executing a formal agreement, the agreement constituted a mere agreement to agree, which is unenforceable … . De Well Container Shipping Corp. v Mingwei Guo, 2015 NY Slip Op 02090, 2nd Dept 3-18-15

 

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Sua Sponte Dismissal of Complaint Not Justified/Lack of Standing Not a Jurisdictional Defect

In a foreclosure action, the Second Department noted that Supreme Court did not have the authority to, sua sponte, dismiss the complaint, even if the plaintiff did not have standing, which is not a jurisdictional defect.  (The Second Department determined the plaintiff did in fact have standing.):

The Supreme Court also erred in, sua sponte, directing dismissal of the complaint. “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, the Supreme Court was not presented with extraordinary circumstances warranting sua sponte dismissal of the complaint. Even if the plaintiff had lacked standing it would not have constituted a jurisdictional defect and would not warrant a sua sponte dismissal of the complaint … . Citimortgage, Inc. v Chow Ming Tung, 2015 NY Slip Op 02087, 2nd Dept 3-18-15

 

Amendment of Summons and Complaint after the Statute of Limitations Has Run

In affirming the amendment of a summons and complaint, (apparently) after the running of the statute of limitations, the Second Department explained the relevant law:

CPLR 305(c) authorizes the court, in its discretion, to “allow any summons or proof of service of a summons to be amended, if a substantial right of a party against whom the summons issued is not prejudiced.” Where the motion is to cure “a misnomer in the description of a party defendant,” it should be granted even after the statute of limitations has run where “(1) there is evidence that the correct defendant (misnamed in the original process) has in fact been properly served, and (2) the correct defendant would not be prejudiced by granting the amendment sought” … . “Such amendments are permitted where the correct party defendant has been served with process, but under a misnomer, and where the misnomer could not possibly have misled the defendant concerning who it was that the plaintiff was in fact seeking to sue” … . “However, while CPLR 305(c) may be utilized to correct the name of an existing defendant . . . it cannot be used by a party as a device to add or substitute a party defendant'” … , and it may not be used “to proceed against an entirely new defendant, who was not served, after the expiration of the statute of limitations” … . Sanders v 230fa, LLC, 2015 NY Slip Op 02107, 2nd Dept 3-18-15

 

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Corporation Is a Proper Respondent in an Article 78/Mandamus to Compel Proceeding

The Third Department determined that respondent corporation (CGFNS), which contracted with the state to provide credential verification services to the Department of Education for foreign-trained nurses, was a proper respondent in an Article 78/mandamus to compel proceeding.  The proceeding was brought by the foreign nursing school after CGFNS indicated it could not verify the school’s credentials:

CGFNS argues that it is not a “body or officer” subject to CPLR article 78 (CPLR 7802 [a]) and that it did not make a “determination” reviewable in this proceeding (CPLR 7803 [3]). CPLR 7802 (a) defines a “body or officer” against whom a CPLR article 78 proceeding may be instituted to include, as relevant here, “every court, tribunal, board, [or] corporation” (emphasis added). CGFNS is a not-for-profit corporation. Courts have recognized that corporations, both public and private, may be subject to CPLR article 78 as quasi-governmental bodies because they are “beholden to the [s]tate for their franchise or charter or the exercise of their functions” (… Siegel, NY Prac § 558 at 989; § 564 at 1001-1002 [5th ed 2011]). As a corporate entity, CGFNS is a “body or officer” subject to a writ of mandamus under CPLR article 78 (CPLR 7802 [a]; see CPLR 7803 [1], [3]…). Matter of American Univ. of Antigua v CGFNS Intl., 2015 NY Slip Op 02028, 3rd Dept 3-12-15

 

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Criteria for Balancing the Need for a Public Trial and First Amendment Rights (Freedom of the Press) With the Defendant’s Right to a Fair Trial Discussed in Some Detail—Here the Court’s Sealing of Some Records and Closures of the Courtroom Reflected a Proper Discretionary Balance

The First Department, in a detailed decision, determined Supreme Court had properly balanced the requirement that a criminal trial be open to the public and the defendant’s right to a fair trial.  Because the court properly used its discretion to balance the two concerns neither mandamus nor prohibition was an available remedy.  The decision is worth reading—many of the issues discussed are not noted here:

The First Amendment guarantees the public and the press a qualified right of access to criminal trials … . This right must be kept in balance with the compelling interest of the defendant’s Sixth Amendment right to a fair trial and the right to privacy of prospective jurors … . The public’s right of access may be limited where there is a compelling governmental interest and closure is narrowly tailored to serve that interest … .

New York’s approach to courtroom closure is “comparable to the federal analysis” … . The press is not imbued with any special right of access, and while it possesses “the same right of access as the public,” it has no right to information about a trial that is “greater” or “superior” to that of the general public … . A ” trial judge has an affirmative constitutional duty to minimize the effects of prejudicial pretrial publicity'” … . Decisions to seal or disclose records fall within the inherent power of the court to control the records of its own proceedings … . While a court must guarantee that the defendant receives a fair trial, it must do so in a manner that balances the interests of “the defendant, jurors, witnesses, attorneys and the public at large” … . Matter of Daily News, L.P. v Wiley, 2015 NY Slip Op 02010, 3rd Dept 3-12-15

 

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Engineer/Engineering Firm Did Not Have Standing to Contest Variance

The Third Department determined the petitioner, Klein, an engineer who claimed to be representing neighbors opposed to a variance granted by the town zoning board, did not have standing to contest the variance:

The Town Code permits appeals by “any person aggrieved” by, among other things, the zoning administrator’s decisions (Code of the Town of Queensbury § 179-14-040 [C]). As the Town Code does not define the quoted phrase, it must be interpreted according to its plain meaning … . This language seems to be taken directly from Town Law § 267-a (4). This same phrase in that statute has been consistently interpreted to mean a person who “has sustained special damage, different in kind and degree from the community generally” … . Even without establishing an injury in fact, a person is presumed to have standing if he or she falls within the statute’s zone of interests and his or her property is sufficiently proximate to the property at issue … .

The notice of appeal to the ZBA [Zoning Board of Appeals] listed Klein’s engineering firm as the appellant and Klein as the appellant’s agent. Klein and his firm did not exhibit any specialized harm and do not own property near the Kitchens’ property. Thus, Klein does not have standing in his individual capacity or as an agent for his firm. Klein asserts that at the public hearings and in letters he identified himself as appearing on behalf of neighbors. While this is true, at no point up until the day before the hearing on his appeal did he identify who his clients were. The other petitioners involved in this appeal, who later claimed that Klein was their agent, were not listed on the notice of appeal and did not file a formal designation form naming him as their agent — as the Town generally requires — prior to the expiration of the statute of limitations for appealing an administrative determination. Under the circumstances, the ZBA did not err in finding that Klein was not a duly authorized agent of an aggrieved party during the requisite limitations period for the appeal and was not himself aggrieved, so he had no standing … . Matter of Fund for Lake George, Inc. v Town of Queensbury Zoning Bd. of Appeals, 2015 NY Slip Op 518831, 3rd Dept 3-12-15

 

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Statutes of Limitations for Actions Stemming from the Alleged Fraudulent Transfer of Real Property Explained

The Second Department determined plaintiff’s actions, which stemmed from the allegation defendant had acquired a deed to his property by fraud, were timely. The court explained the statutes of limitations for actual and constructive fraud, breach of fiduciary duty, actions to quiet title, conversion by fraud, money had and received, and constructive trust. In essence, actions which have an equitable component are governed by a six-year statute of limitations:

The statute of limitations for a cause of action alleging a breach of fiduciary duty does not begin to run until the fiduciary has openly repudiated his or her obligation or the relationship has been otherwise terminated … . * * *

The statute of limitations for a cause of action sounding in breach of fiduciary duty is dependent on the relief sought. The Court of Appeals ruled in IDT Corp. v Morgan Stanley Deal Witter & Co. (12 NY3d at 139):

“New York law does not provide a single statute of limitations for breach of fiduciary duty claims. Rather, the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks. Where the remedy sought is purely monetary in nature, courts construe the suit as alleging injury to property’ within the meaning of CPLR 214(4), which has a three-year limitations period. Where, however, the relief sought is equitable in nature, the six-year limitations period of CPLR 213(1) applies. Moreover, where an allegation of fraud is essential to a breach of fiduciary duty claim, courts have applied a six-year statute of limitations under CPLR 213(8)” (citations omitted).

Since the plaintiff’s right to the subject property is in issue, awarding damages would not be adequate. Therefore, the six-year statute of limitations for causes of action sounding in equity should be applied … . Since the second and third causes of action accrued in 2006, when the defendants allegedly acted contrary to their fiduciary obligations, to the plaintiff’s detriment, those causes of action, interposed four years later in 2010, are not time-barred.

The first cause of action, to quiet title pursuant to RPAPL article 15, is not time-barred, since the plaintiff was seized or possessed of the premises within 10 years before the commencement of the action and is in essence seeking a determination that the quitclaim deed which he executed in 2003 was part of a mortgage transaction, and not a conveyance of title (see CPLR 212[a]; Real Property Law § 320…).

The fourth cause of action, alleging conversion based upon fraud, is not time-barred, since it is governed by the statute of limitations set forth in CPLR 213(8) … .

The fifth cause of action, seeking damages for money had and received …, is equitable in nature and, therefore, the applicable statute of limitations is six years … . Since the defendants’ receipt of money occurred in 2006, and the action was commenced in 2010, the cause of action is not time-barred. Similarly, the sixth cause of action, sounding in unjust enrichment, is equitable in nature, and is not time-barred … .

The seventh cause of action alleging a constructive trust is equitable in nature and governed by a six-year statute of limitations … . The elements of a cause of action to impose a constructive trust are (1) a confidential or fiduciary relationship, (2) a promise, (3) a transfer in reliance thereon, and (4) unjust enrichment … . The cause of action accrued on the date of the “wrongful transfer” of the subject property … . Loeuis v Grushin. 2015 NY Slip Op 01926, 2nd Dept 3-11-15

 

 

 

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