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A Request for an Admission Which Goes to the Heart of the Litigation Is Improper—Defendant Should Have Been Allowed to Withdraw Its Admission that Its Employee Was Acting Within the Scope of His Employment When a Vehicle Accident Occurred

The Second Department determined Supreme Court should have allowed defendant to withdraw admissions made in response to a notice to admit. Plaintiff was involved in an accident with a vehicle driven by an employee of defendant, Islip Pizza.  In response to a notice to admit, the defendant stated that the employee was acting in the scope of his employment at the time of the collision. Because defendant’s liability, under the doctrine of respondeat superior, depended entirely on whether the employee was acting within the scope of his employment, the admission went to the heart of the matters at issue. A request for an admission which deals with an ultimate conclusion is improper (CPLR 3123 (a)). Defendant should have been allowed to withdraw it (CPLR 3123 (b)):

Under CPLR 3123(a), a party may serve upon another party a written request that it admit, among other things, “the truth of any matters of fact set forth in the request, as to which the party requesting the admission reasonably believes there can be no substantial dispute at the trial and which are within the knowledge of such other party or can be ascertained by him upon reasonable inquiry” (CPLR 3123[a]). The legislative policy underlying CPLR 3123(a) is to promote efficiency in the litigation process by “eliminat[ing] from the issues in litigation matters which will not be in dispute at trial. It is not intended to cover ultimate conclusions, which can only be made after a full and complete trial. A notice to admit which goes to the heart of the matters at issue is improper” … . Furthermore, under CPLR 3123(b), a court may at any time permit a party to amend or withdraw any admission “on such terms as may be just” (CPLR 3123[b]…).  Altman v Kelly, 2015 NY Slip Op 04076, 2nd Dept 5-13-15

 

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Corporate Officer May Be Personally Liable for Torts Committed in the Performance of Corporate Duties/Criteria for Determining a Motion to Dismiss for Failure to State a Cause of Action (Where Documentary Evidence Is Submitted) Explained

The Second Department determined defendant’s motion to dismiss for failure to state a cause of action was properly denied.  Plaintiff alleged he tripped and fell over a hole left when a for sale sign was removed. The defendant moved to dismiss alleging the property was owned by the corporation of which defendant was the sole shareholder.  The Second Department noted that an officer of a corporation may be personally liable for torts committed in the performance of corporate duties. The court explained its role in determining a motion to dismiss for failure to state a cause of action where documentary evidence is submitted: “When a defendant submits evidence in support of a motion to dismiss pursuant to CPLR 3211(a)(7), and the motion has not been converted into one for summary judgment, the criterion is whether the plaintiff has a cause of action, not whether he or she has stated one … . “[U]nless it has been shown that a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, . . . dismissal should not eventuate… ‘. [quotations omitted] Orlando v New York Homes By J & J Corp., 2015 NY Slip Op 04104, 2nd Dept 5-13-15

 

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Criteria for Setting Aside a Verdict as Against the Weight of the Evidence Explained

The Second Department determined plaintiff’s motion to set aside the defense verdict as against the weight of the evidence was properly denied.  Plaintiff, a bicyclist, was injured when he struck the open door of defendant’s (Roche’s) vehicle.  Defendant testified the door was ajar, not fully open: “A jury verdict should be set aside as contrary to the weight of the evidence only if the jury could not have reached the verdict by any fair interpretation of the evidence … .  A jury’s finding that a party was at fault but that such fault was not a proximate cause of the accident is inconsistent and against the weight of the evidence only when the issues are so inextricably interwoven as to make it logically impossible to find negligence without also finding proximate cause … . [W]here there is a reasonable view of the evidence under which it is not logically impossible to reconcile a finding of negligence but no proximate cause, it will be presumed that, in returning such a verdict, the jury adopted that view… . However, where a jury verdict with respect to negligence and proximate causation is irreconcilably inconsistent, because the only reasonable view of the evidence is that a defendant’s negligence was a proximate cause of the plaintiff’s injuries, that verdict must be set aside as contrary to the weight of the evidence … . In this case, it was within the jury’s province to credit Roche’s testimony that she did not open her car door into the plaintiff’s path. The jury reasonably could have concluded that Roche was negligent in some other respect—such as the positioning of her car or her act of leaving the door “slightly ajar”—but that, despite such negligence, the plaintiff should have been able to avoid the collision and, thus, his conduct was the sole proximate cause of the accident.” [quotations omitted] Membreno v Roche, 2015 NY Slip Op 04102, 2nd Dept 5-13-15

 

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Mortgagee in Possession Has a Duty to Care for the Property/Criteria for Determining a Motion to Dismiss for Failure to State a Cause of Action, Where Documentary Evidence Is Submitted, Explained

In the context of a motion to dismiss for failure to state a cause of action (where documentary evidence was submitted), the Second Department determined a mortgagee in possession of property (here because the property owner went bankrupt) has a duty to care for the property which is identical a property owner’s duty.  Here plaintiffs alleged the property, which had been damaged by fire, was allowed to deteriorate to the extent that plaintiffs’ neighboring property was damaged. The causes of action for nuisance, negligence and trespass survived the motion to dismiss.  The court noted its role when documentary evidence is submitted in support of a motion to dismiss for failure to state a cause of action:

A motion to dismiss pursuant to CPLR 3211(a)(1) may be appropriately granted “only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” … . While the documentary evidence submitted by One West established that it did not own the defendants’ property at any relevant time … , that evidence did not “utterly refute” the plaintiffs’ contention that One West had a duty based on its status as a mortgagee in possession. In fact, the documents, which establish ownership, did not address the plaintiffs’ contention regarding One West’s alleged status as a mortgagee in possession … . Accordingly the Supreme Court erred in granting the motion insofar as it sought dismissal of the complaint pursuant to CPLR 3211(a)(1).

In considering a motion to dismiss pursuant to CPLR 3211(a)(7), the court should accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” … . “Where, as here, evidentiary material is submitted and considered on a motion pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact claimed by the plaintiff to be one is not a fact at all, and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate” … .

The plaintiffs’ contention that [defendant] was a mortgagee in possession has not been shown to be “not a fact at all” … . If [defendant] were, in fact, a mortgagee in possession, it was “bound to employ the same care and supervision over the mortgaged premises that a reasonably prudent owner would exercise in relation to his [or her] own property; he [or she] is bound to make reasonable and needed repairs, and is responsible for any loss or damage occasioned by his willful default or gross neglect in this regard” … . Thus, the complaint, as augmented by the affidavit of the plaintiff Emeta Allen, which was submitted in opposition to the motion to dismiss …, properly set forth causes of action alleging nuisance, negligence, and trespass, and the plaintiffs have causes of action sounding in nuisance, negligence, and trespass. Allen v Echeverria, 2015 NY Slip Op 04075, 2nd Dept 5-13-15

 

Court Should Not Have Dismissed for “Neglect to Proceed”—Criteria Explained

Noting that CPLR 3216 is extremely forgiving and never requires dismissal based on “neglect to proceed,” the Second Department determined Supreme Court, under the facts, should not have dismissed the action.  A dual showing of a justifiable excuse for the delay and a meritorious cause of action is not strictly necessary to avoid dismissal:

While generally, the Supreme Court is prohibited from dismissing an action based on neglect to proceed whenever the plaintiff has shown a justifiable excuse for the delay in the prosecution of the action and a potentially meritorious cause of action (see CPLR 3216[e]…) , such a dual showing is not strictly necessary to avoid dismissal of the action … .

Under the circumstances of this case, including the minimal 4-day delay in filing the note of issue, the fact that the defendants demanded additional discovery subsequent to the court’s certification order containing the 90-day demand, the absence of any claim of prejudice, and the lack of evidence of a pattern of persistent neglect and delay in prosecuting the action or of any intent to abandon the action, the Supreme Court improvidently exercised its discretion in declining to excuse the plaintiffs’ failure to meet the deadline for filing the note of issue … . Rossi v Scheinbach, 2015 NY Slip Op 04110, 2nd Dept 5-13-15

 

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Admissions in Pleadings, Including the Failure to Deny an Allegation, Are Always In Evidence for All Purposes in a Trial

In a trial stemming from an automobile accident, during deliberations the jury asked if there was any evidence a defendant, Kahn, was the driver of one of the vehicles.  The judge responded “no.”  Ultimately the jury found in favor of the defendant.  The Second Department determined the judge’s telling the jury there was no evidence the defendant was the driver was reversible error. The defendant’s answer to the complaint included admissions re: operation.  The court noted that the failure to deny an allegation in a complaint is an admission. Pleadings “are always in evidence for all purposes of the trial of an action:”

The Supreme Court committed reversible error when it advised the jury that there was no evidence in this case that would answer its question of whether Khan was the driver of the taxicab in which the plaintiff was a passenger. The failure to deny an allegation in a complaint constitutes an admission to the truth of that allegation (see CPLR 3018[a]…). “Facts admitted in a party’s pleadings constitute formal judicial admissions, and are conclusive of the facts admitted in the action in which they are made” … . Moreover, “admissions . . . in pleadings are always in evidence for all the purposes of the trial of [an] action” … . In response to the jury’s inquiry about whether Khan was the driver, the court should have informed the jury of Khan’s and Ali’s admissions in their answer concerning their operation and ownership of a certain vehicle which was involved in an accident … on the same date as the plaintiff’s accident and at the same location, so that the jury could draw its own inferences on this question. DeSouza v Khan, 2015 NY Slip Op 04085, 2nd Dept 5-13-15

 

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“Lack of Capacity to Sue” Defense Waived If Not Raised in Pleadings/Court Should Not Have Decided Summary Judgment Motion by Searching the Record and Ruling On Issues Not Raised by Anyone

In the context of a suit alleging conversion stemming from the handling of an estate, the Second Department determined the “lack of capacity to sue” defense had been waived because it was not raised by defendant in his pleadings.  The court further determined Surrogate’s Court exceeded its powers when it went beyond the issues placed before it plaintiff’s summary judgment motion, searched the record and decided the motion in defendant’s favor on grounds not raised by anyone:

[The defendant] waived the defense of lack of capacity by failing to raise such defense in a pre-answer motion to dismiss or in his answer to the amended complaint in the action (see CPLR 3211[e]…).

… [O]n a motion for summary judgment, the court is limited to the issues or defenses that are the subject of the motion before the court … . “A motion for summary judgment on one claim or defense does not provide a basis for searching the record and granting summary judgment on an unrelated claim or defense” … .

The Surrogate’s Court improperly searched the record and awarded summary judgment to [defendant] dismissing objections 1(i) and 9. [Plaintiff] moved for summary judgment on these objections solely on the grounds that he established that [defendant] converted funds from the father’s estate and failed to account for funds that the estate owed to [plaintiff]. [Defendant] did not cross-move for summary judgment dismissing those objections on the basis of the statute of limitations, nor did he argue it in opposition. In view of the limited scope of [plaintiff’s] motion, it was not appropriate to search the record and award summary judgment to [defendant] dismissing these objections upon arguments that were not raised … . Matter of Ray C., 2015 NY Slip Op 04134, 2nd Dept 5-13-15

 

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A Conditional Judgment May Be Rendered On the Issue of Contractual Indemnity—The Party Seeking Contractual Indemnity Must Be Free from Negligence

Plaintiff was injured at a construction site when he fell from a ladder. The construction manager commenced a third-party action against the general contractor seeking contractual indemnification in the event the construction manager is liable to the plaintiff,. The Second Department noted that a ” ‘court may render a conditional judgment on the issue of contractual indemnity, pending determination of the primary action so that the indemnitee may obtain the earliest possible determination as to the extent to which he or she may expect to be reimbursed’ … . The party seeking contractual indemnification must establish that it was free from negligence and that it may be held liable solely by virtue of statutory or vicarious liability …”. Arriola v City of New York, 2015 NY Slip Op 04079, 2nd Dept 5-13-15

 

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A Forged Deed Is Void Ab Initio and Any Encumbrance on Real Property Based Upon a Forged Deed Is Null and Void—Action Based Upon a Forged Deed Is Not Therefore Subject to the Six-Year Statute of Limitations for Fraud

The Court of Appeals, in a full-fledged opinion by Judge Rivera, over a three-judge dissent, determined that a forged deed is void ab initio and neither a forged deed nor a mortgage interest based upon a forged deed is valid at any time.  Therefore, the six-year statute of limitations for fraud does not apply and the action was not time-barred: “The legal question raised in this appeal is whether plaintiff … is time-barred under CPLR 213 (8) from seeking to set aside and cancel, as null and void, defendant Bank of America's mortgage interest in real property conveyed on the authority of a forged deed. Under our prior case law it is well-settled that a forged deed is void ab initio, meaning a legal nullity at its inception. As such, any encumbrance upon real property based on a forged deed is null and void. Therefore, the statute of limitations set forth in CPLR 213 (8) does not foreclose plaintiff's claim against defendant. ” Faison v Lewis. 2015 NY Slip Op 04026, CtApp 5-12-15

 

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Triggering Event for the Statute of Limitations Re: a Challenge of the Termination of Section 8 Rent Subsidies Is the Sending of the So-Called T-3 Letter-Notification, Irrespective of Whether the Two Prior Required Letter-Notifications Were Sent

The Court of Appeals, in a full-fledged opinion by Judge Stein, over a three-judge dissent, determined that the so-called T-3 letter to tenants from the New York City Housing Authority (NYCHA), which notifies tenants of the termination of their Section 8 rent subsidies, is the triggering event for the four-month statute of limitations for challenging the termination. The applicable “Williams consent judgment” mandates a three-step procedure for termination of the rent subsidies, essentially three notifications to tenants, of which the T-3 letter is the last. The issue before the court was whether the NYCHA’s inability to show the first two notifications were properly sent prevented the statute of limitations from running when the T-3 letter was sent.  The Court of Appeals held that, although the failure to follow the three-step procedure is a defense to the termination of the subsidies, the statute of limitations for any challenge properly runs from the sending of the T-3 letter:

The plain language of the Williams consent judgment draws a distinction between what is required to commence the limitations period for a challenge to a termination of Section 8 benefits, on the one hand, and what is required for NYCHA to establish the merit of such a termination — including NYCHA’s full compliance with the notice requirements — on the other hand. Matter of Banos v Rhea, 2015 NY Slip Op 04029, CtApp 5-12-15