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THE APPLICATION TO TREAT THE NOTICE OF INTENTION TO FILE A CLAIM (NOI) AS A TIMELY FILED CLAIM IN THIS PRISON STABBING CASE SHOULD HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing the Court of Claims, determined the notice of intention to file a claim (NOI) in this negligent supervision case met the requirements of a claim. Therefore the application to treat the NOI as a timely filed claim should have been granted. Claimant, a prison inmate, was stabbed in the eye:

Court of Claims Act § 10(8)(a) provides that a court may grant an application to treat an NOI as a claim if, among other things, the NOI “was timely served, and contains facts sufficient to constitute a claim; and the granting of the application would not prejudice the defendant.” Court of Claims Act § 11(b) requires a claim to specify: (1) the nature of the claim; (2) the time when it arose; (3) the place where the claim arose; (4) the items of damage or injuries claimed; and (5) the total sum claimed … . While section 11(b) does not require “absolute exactness,” the “guiding principle informing” section 11(b) pleading requirements is whether the State is “able to investigate the claim promptly and to ascertain its liability under the circumstances” … . “In describing the general nature of the claim, . . . or a notice of intention to file a claim, . . . [it] ‘should provide an indication of the manner in which the claimant was injured and how the State was negligent, or enough information so that how the State was negligent can be reasonably inferred'” … .

Here … the claimant provided sufficient details to meet the requirements outlined in Court of Claims Act § 11(b), including the nature of the claim and the alleged act of negligence by the State … . Johnson v State of New York, 2024 NY Slip Op 04949, Second Dept 10-9-24

Practice Point: Where a notice of intention to file a claim (NOI) includes sufficient information about the nature of the claim and the alleged negligence by the state, an application to treat the NOI as a timely filed claim should be granted.

 

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THE FACT THAT A MORTGAGE IS MERELY INSURED BY HUD OR THE FHA DOES NOT MAKE THE BANK WHICH HOLDS THE MORTGAGE AN ASSIGNEE OF A FEDERAL AGENCY SUCH THAT NEW YORK’S STATUTE OF LIMITATIONS DOES NOT APPLY; A BANK IS NOT AN ASSIGNEE OF HUD OR THE FHA IF IT WAS NOT ASSIGNED THE AUTHORITY TO FORECLOSE THE INSURED MORTGAGE (SECOND DEPT).

The Second Department, affirming Supreme Court, in a full-fledged opinion by Justice Maltese, determined New York’s six-year statute of limitations applied to the foreclosure of a mortgage insured by the US Department of Housing and Urban Development (HUD). The bank argued that, as an assignee of a federal agency, it is immune from New York’s statute of limitations:

“‘There is no federal statute of limitations applicable to mortgage foreclosure actions brought by the United States or its federal agencies'” … . “That rule applies equally to an assignee of a federal agency, including a commercial lender, and includes the benefit of immunity from a state limitations period” … . * * *

The relevant distinction in this case is that between a loan that was merely insured by a federal agency and a loan that was held by a federal agency, such that the federal agency had a right to foreclose the mortgage, and then assigned to the plaintiff. A plaintiff seeking to foreclose a mortgage that was merely insured by a federal agency is not entitled to immunity. Allowing immunity in such instances would inappropriately expand its application and would be inconsistent with the purpose of “allow[ing] the government to maintain belated actions to enforce public rights,” where the government never had the ability to maintain such an action … . * * *

Although [the] evidence demonstrated that the loan at issue was insured by HUD and/or the FHA, the plaintiff failed to establish that either of those agencies ever had the right to foreclose the mortgage “unfettered by [the] statute of limitations” or that such a right was ever assigned to the plaintiff … . … [T]he plaintiff was not an assignee of a federal agency merely because the loan was insured by federal agencies. Bank of Am., N.A. v Reid, 2024 NY Slip Op 04942, Second Dept 10-9-24

Practice Point: An assignee of a federal agency is immune from New York’s statute of limitations. Here the bank which held the mortgage which was insured by HUD was not an assignee of the federal agency (HUD) because it was not assigned the authority to foreclose the insured mortgage.​

 

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THE CONTRACT PROVISIONS MANDATING ARBITRATION WERE PROPERLY ENFORCED BY SUPREME COURT (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Oing, affirming Supreme Court, determined the contract provisions compelling arbitration should be enforced in this complex dispute among the owners and operators of nursing homes in Arizona. The terms of the contracts and the history of the litigation are far too detailed to fairly summarize here. Matter of Fein v Langer, 2024 NY Slip Op 04906, First Dept 10-8-24

Practice Point: In this case, the proverb cited in the opinion—“be careful what you wish for”—-means the contract provisions compelling arbitration controlled and the court litigation which had been commenced was precluded.

 

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THE IDENTITIES OF THE SUBJECTS OF TWO SCHOLARLY ARTICLES LINKING TALCUM-POWDER PRODUCTS WITH MESOTHELIOMA SHOULD BE RELEASED; THE INFORMATION IS NOT PROTECTED BY HIPAA OR THE FEDERAL COMMON RULE; PRODUCTION OF THE INFORMATION WOULD NOT BE UNDULY BURDENSOME AND WOULD NOT DETER FUTURE RESEARCH (FIRST DEPT).

The First Department, reversing Supreme Court’s denial of a petition to enforce an out-of-state subpoena, determined the identities of the subjects of two scholarly articles linking cosmetic talcum powder products with mesothelioma were not protected by HIPAA’s privacy rule or the federal Common Rule:

The information sought by the subpoenas … is clearly relevant to the underlying New Jersey personal injury action. It goes directly to the credibility of these articles, which speak to the central issues in dispute and are relied on by three testifying experts, and whose author was to testify as an expert until she voluntarily withdrew … .

The information sought by the subpoenas is not protected from disclosure by HIPAA’s privacy rule, which does not apply where, as here, the health care providers did not provide physician services in connection with the articles and the subjects were never their patients … .

The information sought by the subpoenas is also not protected from disclosure by the federal Common Rule because the articles to which they relate fall within the exemption for secondary research based on publicly available identifiable private information or biospecimens … .The burden was on the party opposing the subpoenas to prove that this information was produced in the underlying litigations subject to a protective order … . Neither party opposing disclosure of the information has offered any such proof.

Production of the information sought by the subpoenas would not be unduly burdensome, nor is it likely to have a chilling effect on future medical research. The subject information consists of just a few pages, is easily located, does not concern ongoing research, and does not reveal the unpublished thought processes of the researchers. Moreover, the subjects never actually agreed to participate in any research, having released their information in connection with public litigation, and so it is unclear how allowing disclosure of their identities might deter future research participation … . Matter of Johnson & Johnson v Northwell Health Inc., 2024 NY Slip Op 04909, First Dept 10-8-24

Practice Point: The decision outlines the issues involved in seeking the identities of the subjects of two scholarly articles linking talcum-powder products with mesothelioma.

 

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FAILURE TO PRESERVE VIDEO SHOWING THE AREA WHERE PLAINTIFF SLIPPED AND FELL PRIOR TO THE FALL WARRANTED AN ADVERSE INFERENCE CHARGE; UNDER THE FACTS, STRIKING DEFENDANT’S ANSWER WAS TOO SEVERE A SANCTION (FIRST DEPT).

The First Department, reversing Supreme Court, determined striking defendant’s answer for destruction of video evidence in this slip and fall case was not warranted, an adverse inference jury instruction was a sufficient sanction. Defendant provided video of plaintiff’s fall in compliance with plaintiff’s attorney’s request. Nine months later plaintiff’s attorney requested video showing the area prior to the fall, but it had been overwritten by then:

Plaintiffs’ counsel sent defendants a preservation letter approximately seven days following the accident. Defendants responded by producing several minutes of video of the accident itself, which was reasonably compliant with plaintiffs’ request for video surveillance of “the incident.” However, there was no pre-fall video footage provided to aid plaintiffs in establishing defendants’ actual or constructive notice of the alleged hazardous condition on the floor. Defendants’ employee, who culled the video footage provided, was no longer in defendants’ employ and was not available to be deposed as to his or her reasons for selecting particular video footage. Plaintiff’s counsel did not alert defendants of a need for additional video footage depicting the pre-fall circumstances at the accident site until nine months after receipt of the initial video clip, which was well after the software that operated defendants’ surveillance cameras had overwritten the video surveillance from plaintiff’s accident date.

Plaintiff’s proof established that defendants had control over the relevant surveillance and preserved it to the extent requested, but absent deposition testimony from defendant’s former employee who prepared the video clip as to his reasons for selecting the footage he or she did, the culpability issue cannot be definitively resolved. Nevertheless, the destroyed evidence video compromised the fairness of the litigation so as to warrant an adverse inference sanction … . Lev v Eataly USA LLC, 2024 NY Slip Op 04910, First Dept 10-8-24

Practice Point: Plaintiff’s counsel requested video of “the incident” in this slip and fall case, which was provided. Nine months later plaintiff’s counsel requested video showing the area prior to the fall re: the issue of defendant’s notice of the condition. By that time the video had been overwritten. Plaintiff was entitled to an adverse inference jury instruction. Striking the defendant’s answer was deemed too severe a sanction.

 

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THE PARTY WHO BROUGHT THE WRONGFUL DEATH ACTION WAS NOT A PERSONAL REPRESENTATIVE OF DECEDENT’S ESTATE AND THEREFORE DID NOT HAVE STANDING; BECAUSE THE PARTY HAD NO RIGHT TO SUE, “SUBSTITUTION” OF THE EXECUTORS FOR THAT PARTY WAS NOT AVAILABLE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined (1) plaintiffs’ cross-motion to substitute the executors of decedent’s estate for plaintiffs should not have been granted, and (2) defendants’ motion to dismiss the complaint for lack of standing should have been granted. The plaintiff who purportedly brought the wrongful death action (a “proposed” executor) was not a “personal representative” under the Estates, Powers and Trusts Law (EPTL). Therefore, “substitution” of the executors for the plaintiff was not possible:

… [A]s a “[p]roposed” executor who had not obtained letters to administer decedent’s estate, plaintiff was not a personal representative within the meaning of the Estates, Powers and Trusts Law at the time the action was commenced and thus did not have standing to commence an action on behalf of decedent’s estate … . Thus, we agree with defendants that Supreme Court erred in granting plaintiff’s cross-motion to substitute as plaintiffs the executors of decedent’s estate inasmuch as “[s]ubstitution . . . is not an available mechanism for replacing a party . . . who had no right to sue with one who has such a right” … .

We … agree with defendants that the court erred in denying that part of their motion seeking to dismiss the complaint on the ground that the action was brought by a party without standing … . Cappola v Tennyson Ct., 2024 NY Slip Op 04672, Fourth Dept 9-27-24

Practice Point: Only a “personal representative” of a decedent’s estate has standing to sue on behalf of the decedent  Here the suit was brought by a party who had not obtained letters to administer the estate and therefore did not have standing. “Substitution” of the executors for a party without standing is not possible.

 

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IN THIS CHILD VICTIMS ACT CASE, LONG-ARM JURISDICTION WAS PROPERLY EXERCISED OVER AN OUT-OF-STATE CATHOLIC DIOCESE WHICH EMPLOYED DEFENDANT PRIEST WHO WAS ASSIGNED TO A NEW YORK PARISH (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the Diocese of Burlington (apparently an out-of-state party) has sufficient contact with New York to warrant the exercise of long-arm jurisdiction in this Child Victims Act case. It was alleged the Diocese of Burlington employed the defendant priest and assigned him to a parish in New York with actual knowledge of the priest’s history of sexually abusing children:

Accepting as true the facts alleged … , plaintiff has made a prima facie showing that Diocese of Burlington is subject to personal jurisdiction under CPLR 302(a)(1) … . Plaintiff alleges that Diocese of Burlington exercised supervision and control over the Priest, placing him on an indefinite, long-term assignment in New York to provide Catholic clergy services to parishioners in New York, including plaintiff even though it knew that he was a sexual predator. Plaintiff also alleges that during this period and in connection with those priestly duties, the Priest sexually assaulted plaintiff on multiple occasions. Therefore, plaintiff adequately alleges that Diocese of Burlington engaged in “purposeful activity” in New York, and that there is a “substantial relationship between the transaction and the claim asserted” …… .

Further, “the exercise of long-arm jurisdiction over defendants per CPLR 302(a)(1) comports with due process, as it must” … . For the reasons stated, “plaintiff adequately alleged Diocese of Burlington’s ‘minimum contacts’ with New York, in the form of their purposeful availment of the privilege of conducting activities here, thus invoking the protections and benefits of New York’s laws” … . Diocese of Burlington “failed to present a compelling case that some other consideration would render jurisdiction unreasonable” … .  V.Z. v Roman Catholic Diocese of Burlington, 2024 NY Slip Op 04631, First Dept 9-26-24

Practice Point: Here in this Child Victim’s Act case, an out-of-state Catholic Diocese employed a priest who was assigned to a New York parish. It was alleged the Diocese had actual knowledge of the priest’s history of sexually abusing children. The Diocese was subject to New York’s long-arm jurisdiction.

 

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A PRIVILEGE LOG WHICH IDENTIFIES WITHHELD DOCUMENTS BY CATEGORY INSTEAD OF INDIVIDUALLY VIOLATES CPLR 3122 (B) (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendants did not comply with the privilege-log requirements of CPLR 3122(b). The defendants did not identify each withheld document individually, instead identifying only categories of documents:

Pursuant to CPLR 3122(b), “[w]henever a person is required . . . to produce documents for inspection, and where such person withholds one or more documents that appear to be within the category of the documents required . . . to be produced, such person shall give notice to the party seeking the production and inspection of the documents that one or more such documents are being withheld. This notice shall indicate the legal ground for withholding each such document, and shall provide the following information as to each such document, unless the party withholding the document states that divulgence of such information would cause disclosure of the allegedly privileged information: (1) the type of document; (2) the general subject matter of the document; (3) the date of the document; and (4) such other information as is sufficient to identify the document.”

Here, the defendants did not comply with the requirements of CPLR 3122(b), as their privilege log failed to individually identify each type of document being withheld, the general subject matter of each document, and the date of each document … . Contrary to the defendants’ contention, Rules of the Commercial Division of the Supreme Court (22 NYCRR 202.70 [g]) rule 11-b(b) does not authorize the defendants’ unilateral use of categorical designations in their privilege log, absent an agreement by the parties to employ a categorical approach or the issuance of a protective order … . Joseph v Rassi, 2024 NY Slip Op 04548, Second Dept 9-25-24

Practice Point: Absent an agreement or a court order, a privilege log which identifies withheld documents by category rather than individually violates CPLR 3122 (b).

 

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THE SHORTER LIMITATIONS PERIOD IN THE FIRE INSURANCE POLICY WAS NOT FAIR AND REASONABLE; THE MOTION TO DISMISS IN THIS BREACH OF CONTRACT ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court in the fire-insurance breach of contract case, determined the contractual limitations period in the insurance policy was not fair and reasonable:

“Article 2 of the CPLR (‘Limitations of Time’), provides that ‘[a]n action . . . must be commenced within the time specified in this article unless . . . a shorter time is prescribed by written agreement'” … . “‘[A]n agreement which modifies the Statute of Limitations by specifying a shorter, but reasonable, period within which to commence an action is enforceable'” … . “‘[T]he period of time within which an action must be brought . . . should be fair and reasonable, in view of the circumstances of each particular case. . . . The circumstances, not the time, must be the determining factor'” … . “‘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'” … .

The Supreme Court should have denied that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the complaint. Contrary to the defendants’ contentions, the modified limitations period in the subject insurance policy was not fair and reasonable. The insurance policy provided that “[n]o action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss” and that “[w]e will pay no more than the actual cash value of the damage until actual repair or replacement is complete. Once actual repair or replacement is complete, we will settle the loss.” Here, the one-year limitation was unreasonable since the condition precedent, completion of actual repair or replacement, was not within the plaintiffs’ control and could not be met within that period … . “‘A “limitation period” that expires before suit can be brought is not really a limitation period at all, but simply a nullification of the claim'” … . Filasky v Andover Cos., 2024 NY Slip Op 04545, Second Dept 9-25-25

Practice Point: Parties can agree on shorter limitations periods. Here the limitations period in the subject fire insurance policy expired before suit could be brought rendering it unfair, unreasonable and unenforceable.

 

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THE MOTION TO INTERVENE BY A PARTY WHICH PURCHASED THE PROPERTY IN FORECLOSURE SHOULD HAVE BEEN GRANTED; THE BANK DID NOT PROVE THE BORROWER’S DEFAULT BECAUSE THE RELEVANT BUSINESS RECORDS WERE NOT ATTACHED TO THE VICE PRESIDENT’S AFFIDAVIT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined (1) the motion to intervene by a party (the LLC) which had purchased the property subject to foreclosure should have been granted, (2) noncompliance with the notice requirement of RPAPL 1304 and 1306 and the mortgage agreement cannot be raised by the intervenor, a stranger to the note and mortgage, and (3) the bank did not prove the borrower’s default because the relevant business records were not attached to the bank’s affidavit:

…. [T]he LLC established that the representation of its interest by the parties would be inadequate, that the action involved the disposition of title to real property, and that it would be bound and adversely affected by a judgment of foreclosure and sale (see CPLR 1012[a][2], [3]; 6501 …). …[T]he fact that the LLC obtained its interest in the premises after the action was commenced and the notice of pendency was filed does not definitively bar intervention … . * * *

… [The bank] failed to provide evidence in admissible form of the borrower’s default in payment of the note … . In his affidavit submitted in support of U.S. Bank’s motion, Bennett [vice president of the bank’s servicer] averred that he was personally familiar with Rushmore’s record-keeping practices and that, based on his review of Rushmore’s business records, the borrower “defaulted under the terms of the loan documents by failing to make the monthly installment due on January 1, 2015 and has remained in default to the present date.” However, Bennett’s assertion regarding the borrower’s alleged default constituted inadmissible hearsay, as he failed to annex to his affidavit the business records on which he relied … . U.S. Bank N.A. v Medina, 2024 NY Slip Op 04588, Second Dept 9-25-24

Practice Point: Here the party which purchased the property in foreclosure should have been allowed to intervene.

Practice Point: In foreclosure proceedings affidavits which purport to describe the contents of business records which are not attached constitute inadmissible hearsay.

 

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