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Discovery of Name and Address of Nonparty Patient Alleged to Have Witnessed Negligence or Malpractice Prohibited Because Such Disclosure Would Reveal Privileged Information Re: the Nonparty Patient’s Diagnosis and Treatment (by Virtue of the Unit in Which the Nonparty Patient and Plaintiff’s Decedent Were Housed)

The Second Department determined plaintiff was not entitled to the name of a psychiatric patient who was a roommate of plaintiff’s decedent.  Generally, the name and address of a nonparty patient who is alleged to have observed negligence or malpractice are discoverable.  But CPLR 4505(a) prohibits revealing the nonparty patient’s name and address when, as here, the information will reveal privileged information concerning the nonparty patient’s diagnosis and treatment:

“As a general rule, disclosure of the name and address of a nonparty patient who may have been a witness to an alleged act of negligence or malpractice does not violate the patient’s privilege of confidentiality of treatment” … . However, where it is not possible to comply with a demand for the name and address of a patient without disclosing privileged information concerning diagnosis and treatment, discovery is prohibited pursuant to CPLR 4504(a) … .

Contrary to the plaintiff’s contention, the Supreme Court properly concluded that [*2]discovery of the decedent’s hospital roommate’s identifying information was prohibited under CPLR 4504(a). The decedent was housed in a unit of the [hospital] that was designated for patients ages 12 to 15 years old who suffered from certain psychiatric disorders. Since the roommate’s location in that unit of the Holliswood Hospital would, by simple deduction, reveal her medical status, disclosure was prohibited … . Kneisel v QPH Inc, 2015 NY Slip Op 00503, 2nd Dept 1-21-15

 

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Severity of Injuries Compared With the Absence of a Damages Award for Past and Future Economic and Non-Economic Loss Indicates an “Impermissible Compromise Verdict” Was Reached—New Trial on Liability and Damages Properly Ordered

The First Department determined the trial court had properly set aside the verdict because it represented an impermissible compromise.  Despite serious permanent brain and spinal cord injuries, the jury awarded no damages for past or future economic or non-economic loss. Plaintiff, a restaurant patron, was injured falling down a dangerous stairwell after opening a door which was usually locked. Plaintiff sued both the landlord and the tenant restaurant. In addition to the “impermissible compromise verdict” finding, the First Department noted that the danger posed by the stairwell supported a finding of liability re: both the landlord and the tenant.  With respect to the “impermissible compromise verdict,” the court wrote:

…[W]e … believe the trial court correctly set aside that verdict and ordered a new trial. The failure of the jury to award damages beyond reimbursement of medical expenses, despite the severity and permanency of plaintiff’s injuries, supported the trial court’s conclusion that the jury rendered an impermissible compromise verdict … . In cases involving seriously injured plaintiffs, where issues of liability are sharply contested, and the damages awarded are inexplicably low, the verdict is most likely the product of a jury compromise … . The crux of the prohibited trade off is that, “in addition to finding plaintiff partially responsible for the accident, the jury also compromised on liability and damages by finding the total amount for plaintiff’s injuries much too low” … . * * *

Since the extensiveness of plaintiff’s injuries cannot be reconciled with the absence of a damages award, the verdict reached by the jury was likely the outgrowth of a compromise, and a retrial is required … . Contrary to the alternate argument that any retrial should at most be limited to damages, we simply cannot know whether the compromise entailed the issue of liability, attribution of fault, the calculating of damages, or any combination thereof. … When there is a strong likelihood that the jury verdict resulted from some type of a trade off, retrial on all issues is mandated … . Nakasato v 331 W 51st Corp, 2015 NY Slip Op 00619, 1st Dept 1-26-15

 

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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

 

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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

 

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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

 

Time-Limit for Serving a Complaint Was Never Triggered Because the Summons with Notice Was Filed But Not Yet Served at the Time Defendants Served a Notice of Appearance and Demand for a Complaint

The Second Department reversed Supreme Court finding that the time-limit associated with a notice of appearance and a demand for a complaint was never triggered because the notice of appearance and demand for a complaint were made before defendants were served with the summons with notice (the summons with notice was filed but never served here):

The plaintiffs commenced this action by filing a summons with notice. It is undisputed that the summons with notice was never served on the defendants… . * * *

An action may be commenced “by filing a . . . summons with notice” (CPLR 304[a]…). “Service of the . . . summons with notice . . . shall be made within one hundred twenty days after the commencement of the action or proceeding” (CPLR 306-b…). “If the complaint is not served with the summons, the defendant may serve a written demand for the complaint” (CPLR 3012[b]). “Service of the complaint shall be made within twenty days after service of the demand” (id.). “If no demand is made, the complaint shall be served within twenty days after service of the notice of appearance” … . “The court upon motion may dismiss the action if service of the complaint is not made as provided in this subdivision” … .

As this Court has previously recognized, “[n]o provision is made for an appearance or a demand for a complaint before the summons is served” … . A demand for a complaint pursuant to CPLR 3012(b) prior to service of the summons is premature and does not invoke the time limitations of CPLR 3012(b) … .

Here, since the summons with notice had never been served, the notice of appearance and demand for a complaint was a nullity and the 20-day period within which the complaint had to be served pursuant to CPLR 3012(b) had not begun to run … . Accordingly, the Supreme Court did not have the authority to dismiss the action for failure to timely serve a complaint pursuant to CPLR 3012(b) … . Ryan v High Rock Dev LLC, 2015 NY Slip Op 00519, 2nd Dept 1-21-15

 

“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

 

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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

 

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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

 

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