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Plaintiff Sufficiently Demonstrated the Possibility of Long-Arm Jurisdiction to Warrant Discovery

The Third Department determined Supreme Court should not have dismissed an attorney’s suit for fees on lack-of-personal-jurisdiction grounds. The underlying action was brought by a New York resident (Swanson) injured in Massachusetts.  In explaining the general principles of long-arm jurisdiction, the court noted that some discovery may be necessary to determine the jurisdiction issue:

New York courts “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] [1]). Inasmuch as CPLR 302 (a) (1) is a “single act statute . . . proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted” … . With respect to the requirement of a substantial relationship, “the existence of some articulable nexus between the business transacted and the cause of action sued upon” is “[e]ssential to the maintenance of a suit against a non-domiciliary under CPLR 302 [(a) (1)]” … . Although plaintiff bears the burden of proof as the party seeking to assert jurisdiction, that burden “does not entail making a prima facie showing of personal jurisdiction; rather, plaintiff need only demonstrate that it made a ‘sufficient start’ to warrant further discovery” … . In that regard, we note that the issue of whether long-arm jurisdiction exists often presents complex questions; “[d]iscovery is, therefore, desirable, [*3]indeed may be essential, and should quite probably lead to a more accurate judgment than one made solely on the basis of inconclusive preliminary affidavits” … .

In our view, plaintiff has made a “sufficient start” and demonstrated that additional facts establishing personal jurisdiction “may exist” but are within defendants’ exclusive control … . Specifically, plaintiff raised questions of fact regarding whether defendants interjected themselves into Swanson’s New York workers’ compensation proceeding, ultimately negotiating the workers’ compensation lien on the settlement proceeds from Swanson’s personal injury action. Gottlieb v Merrigan, 2014 NY Slip Op 05011, 3rd Dept 7-3-14

 

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Motion to Quash Subpoena for Billing Records Re: the Insurance Company’s Examining Physician Properly Denied

The Fourth Department determined a motion to quash a subpoena duces tecum was properly denied, even though the billing documents for the insurance company’s (State Farm’s) examining physician were sought for cross-examination and impeachment purposes:

State Farm moved to quash the subpoena pursuant to CPLR 2304 on the ground that it was plaintiff’s intent to use the subpoenaed materials to impeach the examining physician’s general credibility. Plaintiff opposed the motion on the ground that she intended to use the subpoenaed documents to cross-examine the examining physician at trial with respect to his bias or interest. Supreme Court denied the motion, and we affirm.

“It is . . . well settled that a motion to quash a subpoena duces tecum should be granted only where the materials sought are utterly irrelevant to any proper inquiry” … . “Moreover, the burden of establishing that the requested documents and records are utterly irrelevant is on the person being subpoenaed” … . It is “proper to allow cross-examination of a physician regarding the fact that the defendant’s insurance company retained him to examine the plaintiff in order to show bias or interest on the part of the witness” … . Questions concerning the bias, motive or interest of a witness are relevant and should be “freely permitted and answered” …  and, thus, plaintiff is entitled to discovery materials that will assist her in preparing such questions. In light of the foregoing, we conclude that the court did not abuse its discretion in denying the motion. Dominici v Ford, 2014 NY Slip Op 05081, 4th Dept 7-3-14

 

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Possible Error of Law Committed by Judge Did Not Warrant a Prohibition Action

The Fourth Department determined the prosecutor’s prohibition action against a judge should have been dismissed.  The judge had ordered a competency hearing to determine if the complainant in a criminal case was competent to testify in light of her intoxication:

Here, petitioner argued — and Supreme Court agreed — that respondent acted in excess of her authority in ordering a competency hearing because a witness’ level of intoxication at the time of the incident in question and its effect on his or her ability to recall the events has no bearing on whether such witness is competent to testify at trial. It is manifest, however, that a trial court has the authority to make a preliminary inquiry as to a witness’ competency to testify at trial (see CPL 60.20 [1]…). As such, any error in respondent’s decision to hold a competency hearing would, at most, amount to a mere substantive error of law that does not justify the invocation of this extraordinary remedy. “[P]rohibition will not lie as a means of seeking collateral review of mere trial errors of substantive law or procedure, however egregious the error may be, and however cleverly the error may be characterized by counsel as an excess of jurisdiction or power” … . Matter of Getman, 2014 NY Slip Op 05012, 3rd Dept 7-3-14

 

Two Asbestos Cases Properly Consolidated

The First Department, in a full-fledged opinion by Justice Mazzarelli, over a two-justice dissent, determined Supreme Court properly consolidated two cases alleging injury related to asbestos exposure.  One case involved a worker injured by asbestos dust from drywall sanding at a construction site.  The other involved a navy boiler technician who maintained steam valves containing asbestos.  The court determined that the cases had more commonality than differences:

Consolidation of cases is authorized by CPLR 602(a), which provides:

“When actions involving a common question of law or fact are pending before a court, the court, upon motion, may order a joint trial of any or all the matters in issue, may order the actions consolidated, and may make such other orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.”

As the statutory language suggests, joining cases together is designed to “reduce the cost of litigation, make more economical use of the trial court’s time, and speed the disposition of cases” … . Further, “[g]reat deference is to be accorded to the motion court’s discretion” in joining cases together … .

Malcolm v National Gypsum Co. (995 F2d 346 [2d Cir 1993]) is the seminal case concerning consolidation in asbestos cases. There, the Second Circuit endorsed “[a standard set of] criteria . . . as a guideline in determining whether to consolidate asbestos exposure cases[, including]: (1) common worksite; (2) similar occupation; (3) similar time of exposure; (4) type of disease; (5) whether plaintiffs were living or deceased; (6) status of discovery in each case; (7) whether all plaintiffs were represented by the same counsel; and (8) type of cancer alleged” … .

The court entertaining a consolidation motion is further required to take into consideration the number of separate cases (id. at 352). This Court has applied the Malcolm factors to asbestos cases … . Not all of the factors need be present; consolidation is appropriate so long as “individual issues do not predominate over the common questions of law and fact” (id.). However, in asbestos cases, it has been “routine” to join cases together for a single trial … . Matter of New York City Asbestos Litig, 2014 NY Slip Op 05054, 1st Dept 7-3-14

 

Cause of Action Accruing Outside New York Brought by a Nonresident Deemed Untimely—Relevant Law Explained

In finding an action brought by a nonresident based upon a cause of action which accrued outside New York untimely, the Second Department explained the applicable law:

” [W]hen a nonresident sues on a cause of action accruing outside New York, CPLR 202 requires the cause of action to be timely under the limitation periods of both New York and the jurisdiction where the cause of action accrued'” … . When borrowing the foreign jurisdiction’s statute of limitations, its tolling provisions are also borrowed … .

Here, it is undisputed that the applicable limitations period is three years under either New York law or Kazakh law (see CPLR 214[2]; Kazakh Civil Code Article 178). In general, “the applicable Statute of Limitations is triggered once a cause of action accrues” … . “A cause of action accrues, for the purpose of measuring the period of limitations, when all of the facts necessary to the cause of action have occurred so that the party would be entitled to obtain relief in court'” …. An action to recover for a liability created or imposed by statute must be instituted “according to the language of the statute generating the liability” … . Grynberg v Giffen, 2014 NY Slip Op 04901, 2nd Dept 7-2-14

 

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Appeal Rendered Academic by Failure to Move for a Preliminary Injunction Pending Appeal

The Second Department determined the appeal had been rendered academic because the appellant did not move for a preliminary injunction pending appeal and the related development project had been completed:

In order to preserve the status quo pending the determination of this appeal, the petitioner/plaintiff was required to move in this Court pursuant to CPLR 5518 for a preliminary injunction pending appeal, prohibiting the development of the subject real property. Since the petitioner/plaintiff failed to do so, it failed to preserve its rights pending appellate review. In the absence of a preliminary injunction issued pursuant to CPLR 5518, nonparty 405 Hotel, LLC, purchased and redeveloped the subject property, and a hotel is now operated thereon. By virtue of this change in the underlying circumstances, this Court has been prevented “from rendering a decision that would effectively determine an actual controversy” … .  Matter of Yeshiva Gedolah Academy of Beth Aaron Synogogue v City of Long Beach, 2014 NY Slip Op 04502, 2nd Dept 6-18-14

 

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Accelerated Relief Pursuant to CPLR 3213 (Judgment In Lieu of Complaint) Should Not Have Been Granted—the Document at Issue Did Not Include a Promise to Pay On Demand or at a Definite Time

The Second Department determined Supreme Court should not have granted accelerated relief pursuant to CPLR 3213 because the document describing the loan did not include a provision requiring payment on demand or at a definite time:

Pursuant to CPLR 3213, a party may obtain accelerated relief by moving for summary judgment in lieu of complaint, provided that the action is “based upon an instrument for the payment of money only or upon any judgment” (CPLR 3213…). “A promissory note is an instrument for the payment of money only, provided that it contains an unconditional promise by the borrower to pay the lender over a stated period of time” … . An instrument does not qualify for accelerated relief under CPLR 3213 “if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document” … .

Therefore, a plaintiff makes a prima facie showing of entitlement to judgment as a matter of law pursuant to CPLR 3213 by showing that the defendant executed the subject instrument, the instrument contains an unconditional promise to repay the plaintiff upon demand or at a definite time, and the defendant failed to pay in accordance with the instrument’s terms … .

Here, the record does not support the Supreme Court’s determination that the Document reflects the defendant’s unconditional promise to repay the borrowed sum upon demand or at definite time … . Von Fricken v Schaefer, 2014 NY Slip Op 04479, 2nd Dept 6-18-14

 

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Constructive Trust Cause of Action Sufficiently Pled/Dismissal “With Prejudice” Not Allowed—Doctrine of Res Judicata Does Not Apply—a Dismissal for Failure to State a Cause of Action Is Not On the Merits

The Second Department determined Supreme Court should not have dismissed the constructive trust cause of action.  The court further determined that the conversion, constructive fraud and breach of contract causes of action were properly dismissed for failure to state a cause of action, but should not have been dismissed “with prejudice.”  With respect to the constructive trust and the dismissal with prejudice, the court wrote:

The equitable remedy of a constructive trust may be imposed ” [w]hen property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest'” … . “The elements of a cause of action to impose a constructive trust are (1) the existence of a confidential or fiduciary relationship, (2) a promise, (3) a transfer in reliance thereon, and (4) unjust enrichment” … . “To achieve equity and avoid unjust enrichment, the courts apply these factors flexibly rather than rigidly” … .

Here, the plaintiff sufficiently alleged the existence of a confidential or fiduciary relationship with the defendants. The parties were related through marriage, and the plaintiff and Atanasio, along with their respective spouses, pooled their resources in order to purchase the residential property and the boat … . Further, the plaintiff sufficiently pleaded the elements of a promise and a transfer in reliance on the promise. He alleged that, before he sold the defendants his interest in the property in November 2005, the defendants promised to reimburse him for the expenditures he made for the property and boat as long as he continued making those payments for one year after the sale of his interest. In reliance on this alleged promise and his confidential relationship with the defendants, he transferred his interest in the property to the defendants, and thereafter continued to make expenditures in connection with the property and boat. Finally, his allegations that he made all expenditures for the property and boat during a period of 7½ years, and that the defendants refused to reimburse him, despite being co-owners of the property and boat and notwithstanding their promise, were sufficient to plead the unjust enrichment element necessary to the imposition of a constructive … .

…Supreme Court, upon dismissing the second, third, and fourth causes of action, improperly did so “with prejudice.” A dismissal for failure to state a cause of action based on the insufficiency of the allegations in the pleading is not a dismissal on the merits, and does not bar the adequate repleading of the claim in a subsequent action… . Canzona v Atanasio, 2014 NY Slip Op 04458, 2nd Dept 6-18-14

In a related case, the Second Department noted that, because a dismissal for failure to state a cause of action is not on the merits, the doctrine of res judicata does not apply.  Canzona v Atanasio, 2014 NY Slip Op 04459, 2nd Dept 6-18-14

 

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New York Courts Do Not Have Jurisdiction Over Intra-Tribal Matters

The First Department determined New York courts do not have subject matter jurisdiction over an election dispute concerning competing tribal councils.  The court also addressed the waiver of sovereignty by a Native American tribe and noted that the jurisdiction of a New York court conveyed by 25 USC 233 does not extend beyond the borders of the state (tribe was located in California):

New York courts do not have subject matter jurisdiction over the internal affairs of Indian tribes” … . “[A]n election dispute concerning competing tribal councils” is a “non-justiciable intra-tribal matter” … . Appellants seek a declaration that defendant Chukchansi Economic Development Authority (CEDA) is lawfully governed by a board composed of seven named individuals; however, appellants themselves allege in their counterclaim and cross claims that the members of the CEDA Board are the same as the members of defendant Tribal Council of the Tribe of Picayune Rancheria of the Chukchansi Indians. Wells Fargo Bank NA v Chukchansi Economic Dev Auth, 2014 NY Slip Op 04437, 1st Dept 6-17-14

 

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Internally Inconsistent Verdict Properly Set Aside

The Fourth Department determined Supreme Court properly set aside the verdict and ordered a new trial.  The jury had found that plaintiff’s negligence was not a substantial factor in causing her injuries but attributed 30% of the fault to the plaintiff:

…[W]e conclude that the verdict was internally inconsistent inasmuch as the jury found that plaintiff’s negligence was not a substantial factor in causing her injuries, but also attributed 30% of the fault to plaintiff … . Such an internal inconsistency in a verdict can be remedied “only . . . upon further consideration by the jury . . . or by a new trial” … . Here, of course, the jury had been discharged by the time of plaintiff’s motion, and thus it was too late to require the jury to reconsider its answers to the interrogatories on the verdict sheet.

Although plaintiff failed to object to the inconsistency in the verdict before the jury was discharged …, we conclude that, under the circumstances of this case, the court did not abuse its discretion in setting aside the verdict and ordering a new trial … . Allen v Lowczus, 2014 NY Slip Op 04288, 4th Dept 6-13-14

 

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