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Ambiguous Termination Notice Will Not Trigger Four-Month Article 78 Statute of Limitations

The First Department explained that when a notice of termination of an at-will employee is ambiguous with respect to finality, the ambiguity is construed against the employer and the four-month statute of limitations for an Article 78 proceeding is not triggered:

Ordinarily, where the employment of an at-will employee, like petitioner, is terminated, the four-month statute of limitations applicable in article 78 proceedings (CPLR 217) begins to run from the date of the termination, notwithstanding the availability of optional administrative review proceedings … . However, where an administrative agency “create[s]; []; ambiguity and [the]; impression of nonfinality,” that ambiguity regarding finality is to be resolved against the agency … .

* * * We find that, notwithstanding the fact that the letter otherwise conveyed the concrete impact ordinarily associated with finality for statute of limitations purposes …, respondent created sufficient ambiguity as to finality such that the language must be construed against it and the petition must be deemed timely. Matter of Burch v New York City Health & Hosp Corp, 2014 NY Slip Op 04060, 1st Dept 6-5-14

 

Mechanics of a Motion to Change Venue Explained

In finding the moving party, Schwartz, had not complied with the relevant statutes conceerning a discretionary venue change, the Second Department explained some of the mechanics of a motion to change venue:

That branch of Schwartz’s motion which was to change venue pursuant to CPLR 510(3) based on discretionary grounds was improperly made in the Supreme Court, Richmond County. A motion to change venue on discretionary grounds, unlike motions made as of right, must be made in the county in which the action is pending, or in any county in that judicial district, or in any adjoining county (see CPLR 2212[a]…). Schwartz was therefore required to make a motion pursuant to CPLR 510(3) in Nassau County, where the action was pending, in another county in the 10th Judicial District, or in a county contiguous to Nassau County … . Since Nassau County and Richmond County are not contiguous, and Richmond County is not in the 10th Judicial District, the Supreme Court, Richmond County, erred in granting that branch of the motion which was pursuant to CPLR 510(3)

Furthermore, that branch of Schwartz’s motion which was pursuant to CPLR 510(1) to change venue based on an allegedly improper county was untimely made, as it was not served within 15 days after service of his demand for a change of venue (see CPLR 511[b]…). In addition, in response to Schwartz’s demand for a change of venue, the appellant served a timely affirmation with supporting proof that was, prima facie, sufficient to support its choice of venue as of right in the Supreme Court, Nassau County (see CPLR 503[c]; 511[b]; 2103[b];[2]; 2106…). Accordingly, that branch of Schwartz’s motion which was pursuant to CPLR 510(1) also should have been made in the Supreme Court, Nassau County, where the action was pending, and the Supreme Court, Richmond County, erred in granting that branch of the motion as well… . Schwartz v Yellowbook Inc, 2014 NY Slip Op 04000, 2nd Dept 6-4-14

 

Under the Circumstances, Court Properly Considered New Information Presented in a Surreply

The Second Department explained when the court may consider evidence submitted for the first time in a surreply:

While it is true that unauthorized surreplies containing new arguments generally should not be considered by the court … , the procedural history in this case is analogous to circumstances in which arguments are raised for the first time in reply. Arguments raised for the first time in reply may be considered if the original movant is given the opportunity to respond and submits papers in surreply… . Here, while the motion was fully briefed by its return date, the court granted the defendants’ application for an adjournment to February 8, 2013, in order to respond to the plaintiff’s reply. The defendants submitted the surreply containing the Nolie affidavit dated January 28, 2013, and the plaintiff responded to it on February 7, 2013. In addition, oral argument was held on February 8, 2013. Consequently, the plaintiff had adequate opportunity to address the new arguments raised in the defendants’ surreply, and the Supreme Court properly considered it. Gluck v New York City Tr Auth, 2014 NY Slip Op 03977, 2nd Dept 6-4-14

 

Courts Will Not Intercede to Resolve a Dispute Between Two Wrongdoers—“In Pari Delicto”

The Second Department explained the doctrine of in pari delicto, where a court will not resolve a dispute between two wrongdoers:

“The doctrine of in pari delicto mandates that the courts will not intercede to resolve a dispute between two wrongdoers. The doctrine survives because it serves important public policy purposes. First, denying judicial relief to an admitted wrongdoer deters illegality. Second, in pari delicto avoids entangling courts in disputes between wrongdoers” … . The evidence established that the plaintiff knew that the defendants were offering to sell what amounted to a franchise as defined by General Business Law § 681(3), to multiple persons at the same time that the plaintiff and the defendants entered into their agreement, and that the plaintiff was both aware of and complicit in the defendants’ violation of the Franchise Sales Act. Under the circumstances, the court properly applied the doctrine of in pari delicto, “not to favor [the]; defendant, but as a matter of public policy” … . Burgers Bar Five Towns LLC v Burger Holdings Corp, 2014 NY Slip Op 03870, 2nd Dept 6-4-14

 

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State and City Human Rights Law Retaliation Claims Were Not Precluded by Dismissal of Federal Retaliation Claims Pursuant to the Family and Medical Leave Act—Different Protected Activities Involved

The First Department, in a full-fledged opinion by Justice Richter, determined plaintiff’s state and city human rights law retaliation claims against her employer were not precluded by the dismissal of her federal action under the Family and Medical Leave Act (FMLA):

Under the doctrine of collateral estoppel, a party is precluded from relitigating in a subsequent action an issue clearly raised and decided against that party in a prior action … . To successfully invoke this doctrine, two requirements must be met. First, the issue in the second action must be identical to an issue which was raised, necessarily decided and material in the first action. Second, the party to be precluded must have had a full and fair opportunity to litigate the issue in the earlier action … . Where a federal court declines to exercise jurisdiction over a plaintiff’s state law claims, collateral estoppel can still bar those claims provided that the federal court decided issues identical to those raised by the plaintiff’s state claims … . The party seeking to invoke collateral estoppel bears the burden of establishing identity of issue … . Applying these principles, we conclude that defendants have not met their burden of showing that plaintiff’s state and city claims of retaliatory termination are barred by collateral estoppel. The retaliation claims asserted here are entirely distinct from those raised and decided in the federal action. There, the court only decided whether plaintiff was retaliated against for exercising her FMLA rights. Here, however, plaintiff does not claim retaliation based on her exercise of FMLA rights, but instead alleges retaliation, under the State and City Human Rights Laws, based on entirely different instances of protected activity. Specifically, plaintiff alleges she was discharged for filing a written complaint about her reprimand for allegedly reading a book during work hours, and for verbally complaining about an alleged inappropriate comment. Because the federal court’s decision did not address either of these claimed bases for retaliation, it cannot be said that the federal action “necessarily decided” the same issues raised by the State and City retaliation claims, and thus collateral estoppel does not apply… .  Ji Sun Jennifer Kim v Goldberg, Weprin, Finkel, Goldstein, LLP, 2014 NY Slip Op 03961, 1st Dept 5-3-14

 

Motion to Compel Discovery in Class Action Suit Erroneously Denied—“Full Disclosure” Criteria Explained

The First Department determined the motion court erred when it denied plaintiffs-intervenors' motion to compel the defendants to disclose documents in a class action suit.  The suit was brought on behalf of children with developmental disabilities against the NYC Administration for Children's Services and the Office for People with Developmental Disabilities.  Any privacy-related issues could be handled by redaction:

Under CPLR 3101(a), “full disclosure” is required for “all matter material and necessary in the prosecution or defense of an action.” The Court of Appeals has held that “material and necessary” is “to be interpreted liberally,” and that the test of whether matter should be disclosed is “one of usefulness and reason” … . City of New York  Maul, 2014 NY Slip Op 03941, 1st Dept 6-3-14

 

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In this Shareholder Derivative Lawsuit, Causes of Action Not Subject to the “Internal Affairs” Doctrine Should Not Have Been Dismissed

The First Department determined many of the causes of action in this shareholder derivative suit were not governed by Bermuda law under the “internal affairs” doctrine and, therefore, should not have been dismissed:

Plaintiffs — minority shareholders of Culligan Ltd. — bring this derivative action on behalf of that entity, a Bermuda company that does business in New York. Supreme Court granted the motion to dismiss upon finding that Bermuda law applied to the case pursuant to the “internal affairs” doctrine. That doctrine “recognizes that only one State should have the authority to regulate a corporation’s internal affairs — matters peculiar to the relationships among or between the corporation and its current officers, directors, and shareholders”  Since the internal affairs doctrine does not apply to those defendants who are not current officers, directors, and shareholders of Culligan Ltd. … Bermuda law does not apply to claims asserted against them.

Nor does the internal affairs doctrine apply to claims based on sections of the Business Corporation Law (BCL) enumerated in BCL §§ 1317 and 1319. BCL § 1319(a)(1) expressly provides that BCL § 626 (shareholders’ derivative action) shall apply to a foreign corporation doing business in New York. Thus, the issue of plaintiffs’ standing to bring a shareholder derivative action is governed by New York law, not Bermuda law … . …

Pursuant to German-American Coffee Co. v Diehl (216 NY 57, 62-64 [1915]) and BCL §§ 1319(a)(1), 719(a)(1), and 510, New York law applies to the second cause of action, which alleges that the directors of Culligan Ltd. declared illegal dividends.

To the extent plaintiffs allege violations of BCL § 720 (e.g. waste and unlawful conveyance), which is made applicable to foreign corporations doing business in New York by BCL § 1317(a)(2), those claims are also governed by New York law … . However, to the extent plaintiffs allege a violation of a section of the Business Corporation Law not enumerated in BCL § 1317 (e.g. § 717, which is part of plaintiffs’ breach of fiduciary duty claim), New York law does not apply … . Those claims are governed by Bermuda law …, and were thus correctly dismissed. Culligan Soft Water Co v Clayton Dubilier & Rice LLC, 2014 NY Slip Op 03955, 1st Dept 6-3-14

 

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Lack of Standing Defense Waived By Absence from Answer—Objections to Authority to Sign Lease Waived by Ratification of the Signed Documents

The Third Department, in a dispute over what was due and owing under a lease agreement, determined the “lack of standing” defense had been waived by the failure to raise it in the answer, and allegedly unauthorized execution of relevant documents had been ratified:

Initially, defendant claims that plaintiff lacks standing to enforce any obligations created by the lease or confirmation agreement, as it was not a party to either document. We agree with Supreme Court that this claim was waived by defendant’s failure to assert it in the answer (see CPLR 3211 [a]; [3]; [e]…).. Defendant further argues that the confirmation agreement is not legally valid, as it was not signed by plaintiff and … PDC [the original lessor, Provident Development Corporation] had transferred the building to plaintiff prior to executing the confirmation agreement. However, “[a];n unauthorized execution of an instrument affecting the title to land or an interest therein may be ratified by the owner of the land or interest so as to be binding upon him [or her];” … . Such a ratification may be shown by the owner’s failure to timely repudiate the unauthorized actions, or by conduct consistent with an intent to be bound … . Here, plaintiff has never repudiated PDC’s execution of the confirmation agreement; on the contrary, the record reveals that, beginning on the commencement date established by the agreement and continuing through 2011, plaintiff regularly invoiced defendant for payments due at the intervals and in the amounts specified in that agreement and accepted defendant’s resulting payments — thus ratifying the confirmation agreement by accepting benefits due thereunder … . Provident Bay Rd LLC v NYSARC Inc, 2014 NY Slip Op 03895, 3rd Dept 5-29-14

 

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Claim Re: Ownership of Real Property Precluded by Laches Defense

The Second Department determined a counterclaim was properly dismissed pursuant to the laches defense.  The counterclaim alleged that a mortgage was void because the property passed by operation of law to the defendants upon the death of the property owner in 1988.  The defense of laches in this context was explained as follows:

“The essence of the equitable defense of laches is prejudicial delay in the assertion of rights” … . ” To establish laches, a party must show: (1) conduct by an offending party giving rise to the situation complained of, (2) delay by the complainant in asserting his or her claim for relief despite the opportunity to do so, (3) lack of knowledge or notice on the part of the offending party that the complainant would assert his or her claim for relief, and (4) injury or prejudice to the offending party in the event that relief is accorded the complainant'” … . “In order for laches to apply to the failure of an owner of real property to assert his or her interest, it must be shown that [the]; plaintiff inexcusably failed to act when [he or]; she knew, or should have known, that there was a problem with [his or]; her title to the property. In other words, for there to be laches, there must be present elements to create an equitable estoppel'” … . ” Equitable estoppel arises when a property owner stands by without objection while an opposing party asserts an ownership interest in the property and incurs expense in reliance on that belief. The property owner must inexcusably delay in asserting a claim to the property, knowing that the opposing party has changed . . . position to his [or her ]; irreversible detriment'” … . “Moreover, as the effect of delay may be critical to an adverse party, delays of even less than one year have been sufficient to warrant the application of the defense” … . Deutsche Bank Natl Trust Co v Joseph, 2014 NY Slip Op 03794, 2nd Dept 5-28-14

 

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English Judgment Enforceable by New York Courts Without Demonstration of Subject Matter Jurisdiction or Ownership of Property in New York

The First Department determined a judgment rendered in England was enforceable by New York courts without any need to demonstrate subject matter jurisdiction over the underlying matter or the ownership of property in New York.  In addition, the court noted that the imposition of post-judgment interest on the foreign judgment by New York courts was found appropriate:

…New York adopted the Uniform Foreign Country Money-Judgments Recognition Act as CPLR article 53 …, which was intended to codify and clarify existing case law applicable to the recognition of foreign country money judgments based on principles of international comity, “and, more importantly, to promote the efficient enforcement of New York judgments abroad by assuring foreign jurisdictions that their judgments would receive streamlined enforcement here” … .

Generally, a foreign country judgment is “conclusive between the parties to the extent that it grants or denies recovery of a sum of money” (CPLR 5303), “unless a ground for nonrecognition under CPLR 5304 is applicable” … . CPLR 5304(a) provides that “[a]; foreign country judgment is not conclusive if the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law” (subd [1]) or “the foreign court did not have personal jurisdiction over the defendant” (subd [2]). CPLR 5304(b) permits nonrecognition on eight other grounds. Significantly, “in proceeding under article 53, the judgment creditor does not seek any new relief against the judgment debtor, but instead merely asks the court to perform its ministerial function of recognizing the foreign country money judgment and converting it into a New York judgment” … . Abu Dhabi Commercial Bank PJSC v Saad Trading, 2014 NY Slip Op 03767, 1st Dept 5-27-14

 

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