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Default for Failure to File Note of Issue Within 90 Days of Demand Properly Excused

In affirming Supreme Court’s denial of defendants’ motion to dismiss for failure to file and note of issue after a 90-day demand, the Second Department noted the court’s discretion in this area:

Where, as here, a plaintiff has been served with a 90-day demand pursuant to CPLR 3216(b)(3), that plaintiff must comply with the demand by filing a note of issue or by moving, before the default date, either to vacate the demand or to extend the 90-day period … . Here, the plaintiff failed to do either within the 90-day period. Therefore, in order to excuse his default, the plaintiff was required to demonstrate a justifiable excuse for his failure to timely file the note of issue or move to either vacate the demand or extend the 90-day period, as well as a potentially meritorious cause of action … . The determination of what constitutes a reasonable excuse lies within the discretion of the motion court … .

Nevertheless, CPLR 3216 is “extremely forgiving” …, in that it “never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff’s action based on the plaintiff’s unreasonable neglect to proceed” … . Thus, “the statute prohibits the Supreme Court from dismissing a complaint based on failure to prosecute whenever the plaintiff has shown a justifiable excuse for the delay, and potentially a meritorious cause of action” …, but depending on the circumstances, a plaintiff is not always required to establish both a justifiable excuse and a potentially meritorious cause of action to avoid such a dismissal … .

In this case, the plaintiff demonstrated that he did not intend to abandon the action and that there were ongoing discovery proceedings conducted during the time period involved. Belson v Dix Hills AC Inc, 2014 NY Slip Op 05144, 2nd Dept 7-9-14

 

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Affidavits, Deposition Testimony, and Letters Are Not Considered “Documentary Evidence” Within the Meaning of CPLR 3211(a)(1)

The Second Department described the types of documents which will not support a motion to dismiss pursuant to CPLR 3211(a)(1):

“A motion to dismiss pursuant to CPLR 3211(a)(1) will be granted only if the documentary evidence resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff’s claim'” … . “Neither affidavits, deposition testimony, nor letters are considered documentary evidence within the intendment of CPLR 3211(a)(1)”… . Contrary to the defendant’s contention, an affidavit by a … project manager did not constitute documentary evidence with the intendment of CPLR 3211(a)(1) … . JA Lee Elec Inc v City of New York, 2014 NY Slip Op 05159, 2nd Dept 7-9-14

 

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Criteria for Discovery from Non-Party Explained/Criteria for Discovery of Trade Secrets Explained

The Second Department explained the criteria for discovery demanded of a non-party [Morgan Stanley] and described the relevant considerations when discovery is opposed on the ground that the material requested constitutes trade secrets.  The court concluded Morgan Stanley had demonstrated certain of the discovery requests related to protected trade secrets:

Pursuant to CPLR 3101(a)(4), a party may obtain discovery from a nonparty in possession of material and necessary evidence, so long as the nonparty is apprised of the “circumstances or reasons” requiring disclosure. Pursuant to the Court of Appeals' recent decision in Matter of Kapon v Koch ( ____ NY3d ____, 2014 NY Slip Op 02327 [2014]), disclosure from a nonparty requires no more than a showing that the requested information is “material and necessary,” i.e. relevant to the prosecution or defense of an action (id., *1). However, “the subpoenaing party must first sufficiently state the circumstances or reasons' underlying the subpoena (either on the face of the subpoena itself or in a notice accompanying it), and the witness, in moving to quash, must establish either that the discovery sought is utterly irrelevant' to the action or that the futility of the process to uncover anything legitimate is inevitable or obvious'” (id.). Should the nonparty witness meet this burden, “the subpoenaing party must then establish that the discovery sought is material and necessary' to the prosecution or defense of an action, i.e., that it is relevant” (id.). * * *

Notwithstanding New York's policy of liberal discovery (see id., * 4-5), a party seeking disclosure of trade secrets must show that such information is “indispensable to the ascertainment of truth and cannot be acquired in any other way” … . A witness who objects to disclosure on the ground that the requested information constitutes a trade secret bears only a minimal initial burden of demonstrating the existence of a trade secret … . Contrary to [plaintiff's] contention, Morgan Stanley met its minimal initial burden of showing that the documents requested in paragraphs 11 through 19 in the section of the subpoena duces tecum entitled “Requests for Production” contained trade secrets … . Thus, the burden shifted to [plaintiff] to demonstrate that the information contained in those documents was indispensable to the ascertainment of truth, and could not be acquired in any other way … . Ferolito v Arizona Beverages USA LLC, 2014 NY Slip Op 05153, 2nd Dept 7-9-14

 

Rationale for Allowing a Late Motion for Summary Judgment When It Is Identical in Substance to a Timely Motion for Summary Judgment Made by Another Party Explained

The Second Department determined an untimely motion for summary judgment should not have been granted.  The court explained that an untimely motion may be entertained when it is identical in substance to a timely summary judgment motion made by another party in the action.  But that was not the case here.  The timely motion made by the MTA defendants, who were deemed not liable, did not determine the liability of the LIPA defendants.  Therefore, plaintiff’s untimely motion for summary judgment against the LIPA defendants could not “rely” on the motion made by the MTA defendants:

The plaintiff’s motion for summary judgment on the issue of liability was made more than 90 days after the filing of the note of issue, in violation of the terms of a certification order requiring motions for summary judgment to be filed within 90 days of the filing of a note of issue (see CPLR 3212[a]…). Although an untimely motion or cross motion for summary judgment may be considered by the court, in the exercise of its discretion, where a timely motion for summary judgment was made on nearly identical grounds …, that rule did not apply here. The reason why an untimely motion for summary judgment may be considered if another party made a motion on nearly identical grounds is that, pursuant to CPLR 3212(b), the court has the authority, on a motion for summary judgment, to search the record and award relief to a nonmoving party … . In the instant case, the MTA defendants, the original movants, established as a matter of law that they were not at fault in the happening of the accident. However, the fact that the MTA defendants were not at fault in the happening of the accident did not mean that the LIPA defendants were at fault and, therefore, that the plaintiff was entitled to summary judgment against the LIPA defendants. Accordingly, the plaintiff’s motion for summary judgment on the issue of liability against the LIPA defendants should have been denied as untimely.  Williams v Wright, 2014 NY Slip Op 05172, 2nd Dept 7-9-14

 

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

 

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Capacity to Sue Does Not Go to the Jurisdiction of the Court—Court Can Not Dismiss a Complaint Sua Sponte On that Ground—Capacity to Sue Must Be Raised as a Defense in the Answer or in a Pre-Answer Motion

The Third Department determined Supreme Court did not have the authority to dismiss a complaint sua sponte based upon the plaintiff’s capacity to sue.  The capacity to sue is not jurisdictional and must be raised as a defense:

“The issue of lack of capacity to sue does not go to the jurisdiction of the court . . . . Rather, lack of capacity to sue is a ground for dismissal which must be raised by [pre-answer] motion [or in the answer] and is otherwise waived” … . Here, plaintiff’s capacity to sue was not raised by pre-answer motion or in defendant’s answer. Consequently, Supreme Court erred in raising the issue sua sponte and dismissing the complaint on that basis (see CPLR 3211 [e]). As such, the order must be reversed and the complaint reinstated. Town of Delhi v Telian, 2014 NY Slip Op 05008, 3rd Dept 7-3-14

 

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Service Requirements of Business Corporation Law Trumped CPLR

The Third Department determined the service requirements of the Business Corporation Law trumped the CPLR:

It is well settled that the CPLR “govern[s] the procedure in civil judicial proceedings . . . except where the procedure is regulated by inconsistent statute” (CPLR 101…). As is relevant here, the procedure for the judicial dissolution of corporations is governed by Business Corporation Law article 11. Business Corporation Law § 1106 in particular provides that an order to show cause is to be served upon, among others, “the corporation[s] and upon each person named in the petition” (Business Corporation Law § 1106 [c]), while the petition need only be filed with the county clerk (see Business Corporation Law § 1106 [d]). As this is inconsistent with the requirements of CPLR 406 (b), the specific requirements of Business Corporation Law § 1106 control in this circumstance … . Matter of Gould Erectors & Rigging Inc, 2014 NY Slip Op 05004, 3rd Dept 7-3-14

 

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