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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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The Availability of Pre-Suit Discovery in a Shareholder Derivative Action is a Substantive, Not a Procedural, Issue—The Law in the State Where the Corporation Is Chartered Controls

The First Department, in a full-fledged opinion by Justice Moskowitz, determined the law surrounding a corporation’s refusal to answer a pre-suit discovery demand in a purported shareholder derivative action is a matter of substantive law, not procedural law.  Therefore, under New York choice of law rules, the law of Delaware, where the corporation was chartered, applied.  Under Delaware law “plaintiffs in a derivative sure are not entitled to discovery to assist their compliance with the particularized pleading requirement … in the case of a demand refusal.”  The motion to compel discovery was properly denied and the motion to dismiss the amended complaint was properly granted.   Lerner v Prince, 2014 NY Slip Op 03763, 1st Dept 5-22-14

 

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Expert Testimony Should Not Have Been Precluded Based Upon the Timing of the Disclosure—Short Adjournment Would Have Eliminated Prejudice—New Trial Ordered

The Second Department determined Supreme Court should not have precluded expert testimony based upon the timing of the expert disclosure:

“CPLR 3101(d)(1)(i) does not require a party to respond to a demand for expert witness information at any specific time nor does it mandate that a party be precluded from proffering expert testimony merely because of noncompliance with the statute, unless there is evidence of intentional or willful failure to disclose and a showing of prejudice by the opposing party'”… .

The defendants did not establish that the plaintiffs willfully or intentionally violated a court directive regarding expert disclosure … . Moreover, any prejudice to the defendants from late disclosure would have been limited, inasmuch as the defendants’ own engineer was present when the plaintiffs’ engineer conducted his inspection (\… . A short adjournment of this nonjury trial could have eliminated prejudice entirely … . Under these circumstances, the Supreme Court improvidently exercised its discretion in granting the defendants’ application for preclusion of the plaintiffs’ experts (see id.). Accordingly, a new trial is warranted. Arcamone-Makinano v Britton Prop Inc, 2014 NY Slip Op 03644, 2nd Dept 5-21-14

 

Burdens of Proof Re: Collateral Estoppel Explained

The Second Department reversed Supreme Court, finding that the injunctive relief sought by defendants was barred by the doctrine of collateral estoppel. The issues had been decided in a prior appeal of a related but separate action.  The court explained the respective burdens of proof as follows:

“The doctrine of collateral estoppel bars relitigation of an issue which has necessarily been decided in a prior action and is determinative of the issues disputed in the present action, provided that there was a full and fair opportunity to contest the decision now alleged to be controlling” … . “The party seeking the benefit of collateral estoppel bears the burden of proving that the identical issue was necessarily decided in the prior proceeding, and is decisive of the present action” … . “The party against whom preclusion is sought bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination” … . Zanani v Schvimmer, 2014 NY Slip Op 03680, 2nd Dept 5-21-14

 

Rule Against Successive Summary Judgment Motions Does Not Apply to Issue Rejected as Not Properly Before the Court (Raised for the First Time in Reply Papers) in the Original Motion

The Second Department noted that the rule barring successive summary judgment motions does not apply where the issue in the second motion was not properly before the court in the first motion.  Here the defendants had raised the issue the first time in their Reply papers and the court refused to consider it:

We note that the general proscription against successive motions for summary judgment would not bar the defendants from moving for summary judgment dismissing the consolidated complaint because their arguments in support of dismissal … were not properly before the Supreme Court on their original motion … . Vaughn v Veolia Transp Inc, 2014 NY Slip Op 03679, 2nd Dept 5-21-14

 

Difference Between Law of the Case and Issue and Claim Preclusion Explained

The Second Department explained the difference between  the doctrines of law of the case and issue and claim and issue preclusion:

“[L];aw of the case rests on a foundation that . . . distinguishes it from issue and claim preclusion. Whereas the latter concepts are rigid rules of limitation, law of the case is a judicially crafted policy that expresses the practice of courts generally to refuse to reopen what has been decided, [and is]; not a limit to their power. As such, law of the case is necessarily amorphous in that it directs a court’s discretion, but does not restrict its authority”… . Matter of Mazur Bros Realty LLC v State of New York, 2014 NY Slip Op 03687, 2nd Dept 5-21-14

 

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Collateral Estoppel Doctrine Will Not Be Invoked Unless there Has Been at Least One Full Hearing on the Issues Involved

The Second Department, in determining collateral estoppel did not apply to a Notice of Determination that plaintiff was not entitled to unemployment insurance benefits, explained that the collateral estoppel doctrine will not be invoked  unless there has been at least one full hearing on the issues involved:

Pursuant to the doctrine of collateral estoppel, which is otherwise known as issue preclusion, a party may be barred from relitigating an issue which has been decided in another proceeding by a court or in a quasi-judicial administrative forum … . In addition, … “[a];s the consequences of a determination that a party is collaterally estopped from litigating a particular issue are great, strict requirements for application of the doctrine must be satisfied to insure that a party not be precluded from obtaining at least one full hearing on his or her claim” … .

Here, the record does not demonstrate that the Notice of Determination was rendered after a hearing or that it otherwise constitutes a quasi-judicial determination … . Twaddell v Drop & Lock Stor Co Inc, 2014 NY Slip Op 03678, 2nd Dept 5-21-14

 

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Party Who Was Both a Plaintiff and a Defendant in a Joint Trial of Two Actions Was Properly Allowed to Have Two Attorneys

The First Department determined a party who was a plaintiff in one case and a defendant in another was properly allowed to have two attorneys in the joint trial.  Pimentel was involved in an automobile accident with Wong.  Wong’s car jumped the curb and crashed into a store, injuring plaintiff Newark. Newark sued Wong and Pimentel and Pimentel sued Wong.  Pimentel was represented in each action by separate attorneys:

The trial court did not abuse its discretion in allowing Pimentel’s interests as a plaintiff in his own action and as a defendant in this action to be represented by separate attorneys (see CPLR 4011…). The court promised to and did exert control over the nature of the dual representation, as necessary, and Pimentel’s defense counsel, whose opening statement, summation, and questioning of witnesses were brief, played a limited role. In any event, in the absence of any evidence of an unfair advantage or prejudice, any error would be harmless. Newark v Hector R. Pimentel, 2014 NY Slip Op 03636, 1st Dept 5-20-14

 

Plaintiffs’ Failure to Attend Depositions Warranted Dismissal of Complaint

The Second Department determined the motion to dismiss plaintiffs’ complaint because of plaintiffs failure to attend depositions should have been granted:

A court may, inter alia, issue an order “prohibiting the disobedient party . . . from producing in evidence . . . items of testimony” or “striking out pleadings” as a sanction against a party who “refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed” (CPLR 3126[2], [3]). Before a court invokes the drastic remedy of striking a pleading or the alternative remedy of precluding evidence, there must be a clear showing that the failure to comply with court-ordered discovery was willful and contumacious … . While the nature and degree of the penalty to be imposed on a motion pursuant to CPLR 3126 is a matter generally left to the discretion of the Supreme Court … , the Appellate Division is vested with its own discretion and corresponding power to substitute its own discretion for that of the trial court, even in the absence of abuse … .

Here, in opposition to the appellants’ motion to dismiss the complaint, the plaintiffs’ counsel asserted that the infant plaintiff resides in Georgia and was unable to travel to New York on his own. The plaintiffs’ counsel did not proffer any excuse as to why the remaining plaintiffs could not appear for court-ordered depositions. The willful and contumacious character of the plaintiffs’ conduct can be inferred from their failures to comply with several court orders over a period of one year and five months directing them to appear for depositions, and the lack of a reasonable excuse for those failures … . That the infant plaintiff and his parents had made themselves unavailable does not preclude the dismissal of the complaint … . Harris v City of New York, 2014 NY Slip Op 03486, 2nd Dept 5-14-14