You are here: / Civil Procedure

“Transacting Business” Criteria for Long-Arm Jurisdiction Met

The Second Department determined Supreme Court should not have granted the Connecticut defendant’s motion to dismiss for lack of personal jurisdiction.  Defendant had transacted business in New York within the meaning of the long-arm statute:

Under New York’s long-arm statute, “a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . transacts any business within the state or contracts anywhere to supply goods or services in the state” (CPLR 302[a]), regardless of whether that non-domiciliary has actually entered New York State … . Whether a defendant has transacted business within New York is determined under the totality of the circumstances, and rests on whether the defendant, by some act or acts, has “purposefully avail[ed] itself of the privilege of conducting activities within [New York]” … . “Purposeful activities are those with which a defendant, through volitional acts, avails itself of the privilege[s] of conducting activities within the forum State, thus invoking the benefits and protections of its laws'” … . Proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, as long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted … .

Here, the complaint asserts that the defendant, through its agent, solicited the plaintiff’s services while present in New York. The record indicates that the defendant’s agent traveled to New York for three meetings with the plaintiff before the parties finalized their agreement, and that the defendant’s agent subsequently traveled to New York in furtherance of the contract. Moreover, the parties engaged in numerous telephone and email communications regarding the contract. Under the totality of the circumstances, the defendant conducted sufficient purposeful activities in New York, which bore a substantial relationship to the subject matter of this action, so as to avail itself of the benefits and protections of New York’s laws … . Paradigm Mktg Consortium Inc v Yale New Haven Hospital Inc, 2015 NY Slip Op 00508, 2nd Dept 1-21-15

 

,

Supreme Court Should Not Have Ordered a Unified (Liability and Damages) Trial–Criteria Explained in Some Depth

The Second Department determined Supreme Court should not have granted plaintiff’s motion for a unified trial on liability and damages because the plaintiff had not demonstrated that the nature of his injuries had an important bearing on the issue of liability. Plaintiff, who was driving a golf cart,  was injured when he allegedly swerved to avoid defendant’s on-coming golf cart.  The court explained the relevant analytical criteria in some depth:

“In furtherance of convenience or to avoid prejudice [a] court . . . may order a separate trial of any claim, or of any separate issue” (CPLR 603). Furthermore, “[a] court may determine the sequence in which the issues shall be tried and otherwise regulate the conduct of the trial in order to achieve a speedy and unprejudiced disposition of the matters at issue” (CPLR 4011). These statutory provisions simply confirm that “the broad common-law powers of New York judges over conduct in their own courtrooms have been continued and have not been eliminated or impinged upon by any of the explicit CPLR provisions.”… .

“Judges are encouraged to order a bifurcated trial of the issues of liability and damages in any action for personal injury where it appears that bifurcation may assist in a clarification or simplification of issues and a fair and more expeditious resolution of the action” (22 NYCRR 202.42[a]…). “As a general rule, questions of liability and damages in a negligence action represent distinct and severable issues which should be tried and determined separately” … .

“The decision whether to conduct a bifurcated trial rests within the discretion of the trial court, and should not be disturbed absent an improvident exercise of discretion” (…see CPLR 603, 4011). Unified trials should only be held “where the nature of the injuries has an important bearing on the issue of liability” … . However, even where a trial is bifurcated, some evidence of injuries may nevertheless be admitted, in the trial court’s discretion, to establish liability at the liability phase of the trial, so long as such evidence is probative of liability and accompanied by “an appropriate limiting instruction” … .

Accordingly, when exercising its discretion in deciding whether to conduct a unified trial or a bifurcated trial, a court should determine whether the nature of the alleged injuries is probative of the issue of liability and, furthermore, should also evaluate the relative importance of such evidence to the parties’ dispute … . In addition, the probative value of such evidence to the issue of liability and its centrality to the parties’ dispute should be weighed against the degree to which the gravity of such injuries will likely engender sympathy for the plaintiff and thereby pose a risk of prejudice to the defendant … . Patino v County of Nassau, 2015 NY Slip Op 00509, 2nd Dept 1-21-15

 

, ,

Defendant’s Motion for a Judgment as a Matter of Law, Made Prior to the Close of Plaintiff’s Case, Was Premature and Should Not Have Been Granted Irrespective of the Improbability of Plaintiff’s Ultimate Success

The Second Department determined Supreme Court should not have granted defendant’s motion for a judgment as a matter of law, which was made (and granted) before plaintiff had completed putting in his case.  Plaintiff fell from a ladder at a work site and alleged a violation of Labor Law 200 and common-law negligence:

Prior to the close of the plaintiff’s case, the Supreme Court granted the defendants’ motion pursuant to CPLR 4401 for judgment as a matter of law dismissing the complaint, concluding that there was no evidence of a dangerous condition at the work site. The Supreme Court thereafter entered judgment in favor of the defendants and against the plaintiff dismissing the complaint. …

The Supreme Court should have denied the defendants’ motion pursuant to CPLR 4401 for judgment as a matter of law dismissing the complaint. “A motion for judgment as a matter of law is to be made at the close of an opposing party’s case or at any time on the basis of admissions (see CPLR 4401), and the grant of such a motion prior to the close of the opposing party’s case generally will be reversed as premature even if the ultimate success of the opposing party in the action is improbable” … . Schultz v Hi-Tech Constr & Mgt Serv Inc, 2015 NY Slip OP 00521, 2nd Dept 1-21-15

 

, ,

Petitioners, Who Did Not Represent a Majority of the Elected Board of Directors, Did Not Have Standing the Seek Dissolution of the Corporation Under Business Corporation Law 1102/Criteria for Common-Law Dissolution Not Met

The Second Department determined Supreme Court correctly found that the petitioners did not have standing to seek dissolution of the corporation pursuant to Business Corporation Law 1102.  However, the Second Department found Supreme Court erred when it granted the petition under a common-law dissolution theory, a ground not raised by the parties and not applicable under the facts:

…[T]he Supreme Court properly determined that [petitioners] lacked standing to seek dissolution of Candlewood pursuant to Business Law § 1102, since they do not represent a majority of the corporation’s duly elected board of directors … . However, as the appellants correctly contend, the court should have dismissed the petition rather than grant the petition for dissolution on a ground that was not raised by the petitioners and was inapplicable to the circumstances. “[T]he remedy of common-law dissolution is available only to minority shareholders who accuse the majority shareholders and/or the corporate officers or directors of looting the corporation and violating their fiduciary duty” … . The petitioners did not allege that a majority of shareholders, the directors, or the officers looted the corporation or breached a fiduciary duty to … a minority shareholder. Matter of Candlewood Holdings Inc …, 2015 NY Slip Op 00533, 2nd Dept 1-21-15

 

,

Criteria for Restarting the Statute of Limitations by Acknowledging a Debt Explained (Criteria Not Met Here)

Although the criteria was not met here. the Second Department explained when a writing will restart the statutory limitations period for collecting on a debt:

General Obligations Law § 17-101 effectively revives a time-barred claim when the debtor has signed a writing which validly acknowledges the debt” … . “To constitute an acknowledgment of a debt, a writing must recognize an existing debt and contain nothing inconsistent with an intention on the part of the debtor to pay it” … . Mosab Constr Corp v Prospect Park Yeshiva Inc, 2015 NY Slip Op 00505, 2nd Dept 1-21-15

 

Court Has the Discretion to Deny a Motion to Change Venue Where the Statutory Time-Limits for the Demand and Motion Are Not Met—Discretion Not Abused Here

The Second Department explained the rules associated with making a demand and motion for a change of venue.  If the demand and motion are not made within the statutory time-limits, granting the motion is a matter of discretion.  Denial of the motion was not an abuse of discretion here:

A demand to change venue based on the designation of an improper county (see CPLR 510[1]) “shall be served with the answer or before the answer is served” (CPLR 511[a]…). “Thereafter the defendant may move to change the place of trial within [15] days after service of the demand” (CPLR 511[b]). Since the appellants failed to serve a timely demand for a change of venue and failed to make a motion for that relief within the statutory time period, they were not entitled to a change of venue as of right, and their motion became one addressed to the court’s discretion … . Giddings v Century 21 Dept Stores LLC, 2015 NY Slip Op 00493, 2nd Dept 1-21-15

 

, ,

Twenty-Day Time-Limit for Making an Application to Stay Arbitration Starts When the Notice or Demand for Arbitration Is Received, Not When It Is Mailed/An Application for a Stay of Arbitration Is “Made” When It Is Filed/Appellate Court May Consider a Purely Legal Issue Raised for the First Time on Appeal

The First Department determined the twenty-day time-limit for an application to stay arbitration, when the notice or demand for arbitration is sent by mail, runs from the date the notice or demand is actually received.  The court further noted that it can rule on a purely legal question raised for the first time on appeal:

Even though CPLR 7503(c) says, “An application to stay arbitration must be made by the party served [with a notice or demand for arbitration] within twenty days after service upon him of the notice or demand” (emphasis added), case law establishes that, when the notice or demand is mailed — as it was in the case at bar — “[t]he notice to arbitrate does not start the time to respond until receipt”… . * * *

The issue of whether an application to stay arbitration is “made” (CPLR 7503[c]) when the petition is filed, as opposed to when it is served, is a purely legal one; hence, it “may properly be considered by this Court for the first time on appeal” … . In fact, an application is made when the petition is filed … . Matter of Travelers Prop Cas Co of Am v Archibald, 2015 NY Slip Op 00465, 1st Dept 1-20-15

 

Failure to Strictly Comply with the Service Instructions in the Court’s Order to Show Cause (Which Included Service by E-Mail and Text Message) Required Dismissal of the Petitions

The Third Department determined the failure to comply with the service instructions in Family Court’s order to show cause required the dismissal of the petitions:

Strict compliance with court-directed methods of service is necessary in order for the court to obtain personal jurisdiction over a respondent/defendant … . Here, petitioner’s counsel drafted and presented Family Court with a proposed order directing service pursuant to CPLR 308 (5). Specifically, the order required that the amended orders to show cause and petitions be served on two attorneys who had represented respondent in unrelated litigation and, further, that substituted service be completed as follows:

“2. By serving [respondent] at [two known] email addresses [and] by including with such emails copies of the [p]etitions, this [o]rder, and the [o]rders to show cause filed by [p]etitioner in support of the [p]etitions, in PDF format, each of such emails to be sent on or before April 28, 2014; and

3. By sending [respondent] an SMS/text message at [a known] subscriber number . . . advising her of the pendency of the two above-captioned proceedings and advising her to access her email addresses as set forth in paragraph 2 herein, to review this [o]rder and the contents of the attached PDF files and to contact her attorneys . . . for copies of the [o]rders to show cause and [p]etitions upon whom these papers have been served on her behalf, said text to be sent on or before April 28, 2014.”

Despite the fact that petitioner’s counsel created the terms upon which substituted service of process would be deemed sufficient, the record demonstrates that petitioner’s compliance with such terms was lacking. As to the email requirement, petitioner’s affidavit of service states that respondent was served on April 28, 2014 via two separate email addresses, as per Family Court’s order, and that both emails were returned as undeliverable. While neither dictates of due process nor Family Court’s order required proof that respondent actually received notice of the proceedings … , we observe that the affidavit of email service fails to state that the documents were, in fact, delivered to respondent in a PDF format.

Of greater concern, however, is the manner in which petitioner conducted service by text message. As to that particular mode of delivery, petitioner’s process server averred that, on April 28, 2014, he sent respondent a text message stating that “[p]aternity and custody petitions have been filed by [petitioner] regarding [the child]. Your court date in [Family Court] is May 21, 2014 at 9AM. Your failure to appear may result in a custody order and default. Contact [respondent’s attorneys] for copies of these documents.” Having neglected to state in the text message, as expressly required in Family Court’s order, that respondent should access her email accounts to review the documents that had been served in a PDF format by email and that the text message was being sent by virtue of Family Court’s order, we agree with Family Court’s determination that such substituted service was insufficient to confer personal jurisdiction over respondent … . Matter of Keith X v Kristin Y, 2015 NY Slip Op 00429, 3rd Dept 1-15-15

 

, ,

Father’s Recording of Defendant’s Berating and Threatening Father’s Child Admissible Under the “Vicarious Consent” Theory (Father Vicariously Consented, on Behalf of the Child, to the Recording)/Variance Between Jury Instruction and Charges in the Indictment Was Harmless Error–No Possibility Defendant Was Convicted of a Theory Not Encompassed by the Indictment

The Second Department applied a “vicarious consent” theory to reject the defendant’s argument that the father’s recording of the defendant berating and threatening the father’s child violated the eavesdropping statutes, Penal Law 250.05 and CPLR 4506. Father had called mother’s cell phone which mother answered without speaking. Father could hear the defendant speaking to the child over the phone and recorded the defendant’s words.  In addition to the “vicarious consent” discussion, he Second Department noted that a variance between the jury instructions and the charges in the indictment was harmless error because there was no possibility the guilty verdict was based upon a theory not in the indictment.  With respect to the “vicarious consent” to the recording, the court wrote:

While … Penal Law § 250.05 serves the strong public policy goal of protecting citizens from eavesdropping, we are not persuaded that the New York Legislature intended to subject parents to criminal penalties when, “out of concern for the bests interests of their minor child, they record that child’s conversations” … . Given the similarity between the federal wiretap statute and New York’s eavesdropping statute, and recognizing that the “vicarious consent” exemption is rooted on a parent’s need to act in the best interests of his or her child …, we deem it appropriate to adopt it as an exemption to Penal Law § 250.05.

Here, the People sufficiently demonstrated that the father had a “good faith, objectively reasonable basis to believe” that it was necessary for the welfare of the infant to record the conversation …, such that he could consent to the recording on the infant’s behalf … . Accordingly, the “vicarious consent” exemption applies, and admission of the subject recording was not barred by CPLR 4506. People v Badalamenti, 2015 NY Slip Op 00384, 2nd Dept 1-14-15

 

,

Supreme Court Properly Denied a Motion to Approve a Settlement of a Proposed Non-Opt-Out Class Action—Shareholders Who Objected to the Settlement Were Entitled to Opt Out to Preserve Their Damages Claims

The Second Department, over an extensive dissent, determined Supreme Court had properly denied defendant’s motion, made jointly with the plaintiff, to approve a settlement of a proposed non-opt-out class action.  The majority concluded that shareholders who objected to the settlement were entitled to “opt out” to preserve their damages claims, as the Court of Appeals held in Matter of Colt Indus Shareholder Litig, 77 NY2d 185.  The Second Department explained the facts of the case as follows:

The instant appeal arises from a merger between the defendant On2 Technologies, Inc. (hereinafter On2), a publicly held Delaware corporation that developed video compression technology, and Google, Inc. (hereinafter Google), the global technology conglomerate specializing in Internet-related services. On August 4, 2009, On2 entered into a merger agreement with Google and Oxide, Inc., a subsidiary of Google, pursuant to which Google agreed to acquire each share of On2 common stock in exchange for 60 cents worth of Google Class A common stock. At that time, the proposed transaction was valued at approximately $106.5 million.

On August 7, 2009, the plaintiff, on behalf of himself and other similarly situated shareholders of On2, commenced the instant action, alleging that On2’s board of directors breached its fiduciary duties to the shareholders by, inter alia, failing to ensure that the shareholders would receive maximum value for their shares. Among other things, the plaintiff sought certification of a class to prosecute the matter as a class action, a declaration that the merger agreement was unlawful and unenforceable, rescission of the merger agreement, and injunctive relief. In August 2009, other shareholders of On2 (hereinafter collectively the Delaware plaintiffs) commenced similar actions in the Delaware Court of Chancery.

On February 22, 2010, the parties to this action, as well as the Delaware plaintiffs, proposed a settlement, pursuant to which they agreed that “solely for the purpose of effectuating the [s]ettlement,” the instant action “may be maintained . . . as a non-opt out class action.” The settlement provided, inter alia, for dismissal of the New York and Delaware actions in their entirety, with prejudice, and a release of “any and all” merger-related claims. The proposed settlement class encompassed “all persons and entities who held shares of the common stock of On2 . . . at any time between August 4, 2009 and February 19, 2010.”

Upon notice of the proposed settlement to all record holders of On2 common stock, 226 of those shareholders filed objections to the proposed settlement. The objectors contested the proposed settlement, claiming that it contained “an astonishingly broad” release that would “unlawfully restrict” and “unduly burden” the rights of shareholders to pursue their own individual claims for damages. Following a fairness hearing, the Supreme Court denied approval of the settlement because it did not afford nonresident class members the opportunity to opt out of the settlement in order to preserve their right to assert claims for damages. We affirm.  Jinnaras v Alfant, 2015 NY Slip Op 00335, 2nd Dept 1-14-15

 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy