Court Has Discretion to Deny a Motion to Dismiss for Failure to Prosecute Pursuant to CPLR 3216 Even in the Absence of an Adequate Excuse and a Showing of a Potentially Meritorious Cause of Action

In finding plaintiff did not intend to abandon the action, the Second Department explained the “extremely forgiving” nature of CPLR 3216:

Where a 90-day demand to resume prosecution of an action pursuant to CPLR 3216(b)(3) has been properly served, a plaintiff may avoid dismissal, as a matter of law, by either timely filing a note of issue or moving, before the default date, to vacate the notice or to extend the 90-day period (see CPLR 3216[c]…). Even where a plaintiff has failed to pursue either of these options, however, “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 the existence of a potentially meritorious cause of action” … .

Moreover, CPLR 3216 is an “extremely forgiving” statute …, which “never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff’s action based on the plaintiff’s unreasonable neglect to proceed” … . Under the plain language of CPLR 3216, a court retains some “residual discretion” to deny a motion to dismiss, even when a plaintiff fails to comply with the 90-day requirement and additionally fails to proffer an adequate excuse for the delay or a potentially meritorious cause of action … . Thus, while 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 the existence of a potentially meritorious cause of action (see CPLR 3216[e]…), “such a dual showing is not strictly necessary in order for the plaintiff to escape such a dismissal” … .

Here, the record demonstrates affirmative steps taken by the plaintiff to continue the prosecution of this action that are inconsistent with an intent to abandon it. Ramon v Zangari, 2014 NY Slip Op 02420, 2nd Dept 4-9-14

 

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A Union Is Not an Entity Separate from Its Members—A Union, Therefore, Can Not Be Sued By a Member Unless Every Member Participated In the Action Which Gave Rise to the Suit

The Court of Appeals, in a full-fledged opinion by Judge Abdus-Salaam, over a dissent, upheld the so-called “Martin” rule (Martin v Curran, 303 NY 276 [1951]) which prohibits a suit against an unincorporated association, here a union, unless the suit can be maintained against every member of the association.  The executive board of the union decided against taking plaintiff’s grievance to arbitration. Because only the executive board participated in the decision, plaintiff’s suit against the union was prohibited by statute:

In a 4-3 decision authored by Judge Desmond, this Court held in Martin that a voluntary unincorporated association “is neither a partnership nor a corporation. It is not an artificial person, and has no existence independent of its members” (303 NY at 280). The Court determined that “for better or worse, wisely or otherwise, the Legislature has limited . . . suits against association officers, whether for breaches of agreements or for tortious wrongs, to cases where the individual liability of every single member can be alleged and proven” (id. at 282). Although there were policy considerations that might suggest a different result, the Martin Court was “under the command of a plainly stated, plainly applicable statute, uniformly held by this court, for many years, to require pleading and proof of authorization or ratification by all the members of the group” (id. at 280). That statute, General Associations Law § 13, is entitled “Action or proceeding against unincorporated association” and provides:”An action or special proceeding may be maintained, against the president or treasurer of such an association, to recover any property, or upon any cause of action, for or upon which the plaintiff may maintain such an action or special proceeding, against all the associates, by reason of their interest or ownership, or claim of ownership therein, either jointly or in common, or their liability therefor, either jointly or severally. Any partnership, or other company of persons, which has a president or treasurer, is deemed an association within the meaning of this section.”The Martin Court also noted that McCabe v Longfellow (133 NY 89 [1892]), the leading case on the right to maintain an action against an unincorporated association, held that a plaintiff could not maintain an action against the officer of an unincorporated association “unless the debt which he seeks to recover is one upon which he could maintain an action against all the associates by reason of their liability therefor” (303 NY at 281…), and that there had been a “line of consistent decisions to that effect” since McCabe. Ultimately, the Martin Court concluded that, because a labor union is a voluntary unincorporated association, the plaintiff was required to plead and prove that each member of the union authorized or ratified the alleged wrongful conduct.  Palladino v CNY Centro Inc, 2014 NY Slip Po 02378, CtApp 4-8-14

 

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Despite the Absence of a Motion to Dismiss on Forum Non Conveniens Grounds, the Court Properly Dismssed the Action on that Ground (After Briefing by the Parties)/The Fact that the Underlying Transaction Was to Be In American Dollars Was Not Enough to Justify Bringing the Action (Involving Foreign Banks and Parties) in New York State

The Court of Appeals, in a full-fledged opinion by Judge Smith, determined Supreme Court properly dismissed the action on “forum non conveniens” grounds, even though no motion to dismiss on that ground had been made.  Although Supreme Court raised the issue, the court asked to parties to brief it.  In addition, the Court of Appeals noted that, although the underlying dispute involved millions of dollars, the fact that American dollars were involved was not enough to hold the case in New York State.  The dispute was between a bank in Dubai and a partnership (AHAB) in Saudi Arabia.  The third-party defendant, Al-Sanea, was a citizen of Saudi Arabia, and another third-party defendant, Awal Bank BSC, was headquartered in Bahrain:

We held in VSL Corp. v Dunes Hotels & Casinos, Inc. (70 NY2d 948 [1988]) that it was error for the Appellate Division to dismiss a complaint sua sponte on forum non conveniens grounds, adding that such a dismissal may occur “only upon the motion of a party” (id. at 949). Here, though no party formally moved to dismiss plaintiff’s complaint because of the inconvenience of the forum, the issue was briefed and argued at Supreme Court. We hold that VSL did not bar the court from dismissing the complaint under these circumstances. We also hold that, on this record, Supreme Court was correct as a matter of law in dismissing both the complaint and the third-party complaint. *  *  *

While the idea of dismissing the main complaint on forum non conveniens grounds was first mentioned by the Supreme Court Justice, he gave the parties a full opportunity to address the issue — indeed, he asked them to do so. Al-Sanea argued in favor of dismissing the complaint on forum non conveniens grounds, though he did not serve motion papers seeking that relief. We see no reason to read CPLR 327(a) as prohibiting a forum non conveniens dismissal where only the formality of a document labeled “notice of motion” was lacking, and where AHAB, the only party opposed to dismissal, neither objected to nor was prejudiced by the omission of that formality. * * *

Our State’s interest in the integrity of its banks is indeed compelling, but it is not significantly threatened every time one foreign national, effecting what is alleged to be a fraudulent transaction, moves dollars through a bank in New York. Indeed, the parties here agree that, as a practical matter, any dollar transaction comparable in size to the one now at issue must go through New York … . That does not mean that every major fraud case in the world in which dollars are involved belongs in the New York courts. New York’s interest in its banking system “is not a trump to be played whenever a party to such a transaction seeks to use our courts for a lawsuit with little or no apparent contact with New York” … . Mashreqbank PSC v Ahmed Hamad Al Gosaib i & Bros Co, 2014 NY Slip Op 02381, CtApp 4-8-14

 

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Alleged Discriminatory Acts Did Not Have an “Impact” in New York—Therefore the Lawsuit Could Not Be Maintained Under the New York City and New York State Human Rights Law

The First Department determined a lawsuit based on alleged violations of  New York State and New York City Human Rights Law could not be maintained because the defendants were out-of-state residents and because the discriminatory actions complained of took place outside the United States, despite plaintiff’s being employed in New York:

The State and City Human Rights Laws do not apply to acts of discrimination against New York residents committed outside their respective boundaries by foreign defendants … . In analyzing where the discrimination occurred, “courts look to the location of the impact of the offensive conduct” … . A non-New York City resident cannot avail him or herself of the protections of the City Human Rights Law unless he or she can demonstrate that the alleged discriminatory act had an impact within the City’s boundaries … . Although plaintiff does not reside in New York City, she resides within the state and is employed by the NBA which is based in New York City. However, the order on appeal addresses plaintiff’s claims against [defendants], none of which are residents of this state. Thus, the focus is on whether the actions these defendants are alleged to have committed had an impact within the respective boundaries of the City and State of New York, in order for the court to exercise jurisdiction over them. Plaintiff contends that the decision to reassign her and later reduce her responsibilities took place within the City boundaries and, therefore, her place of employment is where the impact of the alleged discriminatory acts occurred. However, it is the place where the impact of the alleged discriminatory conduct is felt that controls whether the Human Rights Laws apply, not where the decision is made … . This standard applies whether the claim is made under the City or State Human Rights Laws … . Without more, plaintiff’s mere employment in New York does not satisfy the “impact” requirement. Hardwick v Auriemma, 2014 NY Slip Op 02383, 1st Dept 4-8-14

 

Notice Requirements for a Nonparty Subpoena Pursuant to CPLR 3101(a)(4) Explained/Criteria for a Motion to Quash and Opposition to the Motion to Quash Explained

In a full-fledged opinion by Judge Pigott, the Court of Appeals determined the nature of the notice requirements for subpoenaing a nonparty pursuant to CPLR 3101 (a)(4), and the criteria for determining a motion to quash the subpoena:

We conclude that 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.” Should the 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. Matter of Kapon v Koch, 2014 NY Slip Op 02327, CtApp 4-3-14

 

Pre-Deposition Motion for Summary Judgment Should Not Have Been Granted

The Second Department determined a pre-deposition motion for summary judgment was premature and should not have been granted:

“A party opposing summary judgment is entitled to obtain further discovery when it appears that facts supporting the opposing party’s position may exist but cannot then be stated” … . This is especially so where the motion for summary judgment was made prior to the parties conducting depositions … .Here, an award of summary judgment would be premature at this stage of the action. The plaintiff’s motion for summary judgment was made prior to the deposition of the plaintiff. In light of the fact that the plaintiff was the sole witness to the accident, and that his account of the accident has been placed in issue, the defendant should have been afforded the opportunity to conduct his deposition … . Schlichting v Elliquence Realty LLC, 2014 NY Slip Op 02281, 2nd Dept 4-2-14

 

Motion for Voluntary Discontinuance Should Not Have Been Granted “With Prejudice”

The Second Department determined a motion for the voluntary discontinuance of an action should not have been granted “with prejudice:”

In general, absent a showing of special circumstances, including prejudice to a substantial right of the defendant or other improper consequences, a motion for a voluntary discontinuance should be granted without prejudice (see CPLR 3217[c]…).  Here, there was no showing of any such special circumstances. Contrary to the respondents’ contention, there is no evidence in the record that the action was settled, discontinued, or dismissed on the merits … . Rather, it is undisputed that the settlement reached by the parties was a forbearance agreement. Accordingly, the action should have been discontinued without prejudice. New York Mtge Trust Inc v Dasdemir, 2014 NY Slip Op, 2nd Dept 4-2-14

 

Lawsuit Properly Dismissed on “Forum Non Conveniens” Grounds

The Second Department determined that a lawsuit stemming from an accident in Canada in which New York’s only connection was the residence of the plaintiff should be dismissed on the ground of forum non conveniens upon the condition the defendant waive any jurisdictional or statute of limitations defenses:

The doctrine of forum non conveniens permits a court to stay or dismiss an action when, although it may have jurisdiction over the action, the court determines that “in the interest of substantial justice the action should be heard in another forum” (CPLR 327[a]… ). On a motion to dismiss the complaint on the ground of forum non conveniens, the defendant bears the burden of demonstrating “relevant private or public interest factors which militate against accepting the litigation” … . “On such a motion, the Supreme Court is to weigh the parties’ residencies, the location of the witnesses and any hardship caused by the choice of forum, the availability of an alternative forum, the situs of the action, and the burden on the New York court system” … . “No one factor is dispositive” … . “The Supreme Court’s determination should not be disturbed unless the court improvidently exercised its discretion or failed to consider the relevant factors … .

Here, the plaintiff is a resident of Canada and the defendant is a resident of Richmond County. The incident complained of occurred in Canada. The location of the defendant’s residence is the sole connection in this case to the State of New York. Under the circumstances of this case and considering all of the relevant factors, including the fact that many of the witnesses, including law enforcement officials, emergency responders, medical personnel, and the owner of the hunting lodge who assigned the plaintiff to act as a hunting guide, are in Canada, the Supreme Court providently exercised its discretion in granting the defendant’s motion to dismiss the complaint pursuant to CPLR 327(a) on the ground of forum non conveniens … . Koop v Guskind, 2014 NY Slip Op 02266, 2nd Dept 4-2-14

 

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Action for Attorney Deceit Originated in New York Common Law, Not Statutory Law—Six-Year “Catch All” Statute of Limitations Applies

The Court of Appeals, in a full-fledged opinion Judge Read, determined that an action for attorney deceit (Judiciary Law 487) was governed by the six-year “catch-all” statute of limitations (CPLR 213(1)), not the three-year statute (CPLR 214(2)). The question came down to whether the attorney-deceit action stemmed from a statute or from the common law. The Court noted that the statutory law of England was incorporated into New York’s common law before the first New York statute dealing with attorney deceit was was enacted.  Therefore the “catch-all” six-year statute applied:

A cause of action for attorney deceit … existed as part of New York’s common law before the first New York statute governing attorney deceit was enacted in 1787 … . The 1787 statute enhanced the penalties for attorney deceit by adding an award for treble damages, but did not create the cause of action … .Thus, even if a claim for attorney deceit originated in the first Statute of Westminster rather than preexisting English common law …, liability for attorney deceit existed at New York common law prior to 1787. As a result, claims for attorney deceit are subject to the six-year statute of limitations in CPLR 213 (1). Melcher v Greenberg Traurig LLP, 2014 NY Slip Op 02213, CtApp 4-1-14

 

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Owners of Land Slated for Development Had Standing to Challenge Procedures Used by the NYS Department of Environmental Conservation to Amend Regulations Affecting Endangered Species/The Land In Question Was Home to Two Endangered Species/Therefore the Amendments Affected the Land Owners Differently from the Public at Large

The Court of Appeals, in a full-fledged opinion by Judge Lippman, determined that the petitioners (land owners) had standing to raise claims that the NYS Department of Environmental Conservation failed to adhere to certain procedural requirements before adopting amendments aimed at protecting endangered species.  The land, which was designated for economic development, was home to two endangered species.  The Court explained why the petitioners had alleged a unique “injury,” different from injury to the public at large, which comported standing to raise the procedural claims:

Standing is a threshold determination, resting in part on policy considerations, that a person should be allowed access to the courts to adjudicate the merits of a particular dispute that satisfies the other justiciability criteria” … . Petitioner has the burden of establishing both an injury in fact and that the asserted injury is within the zone of interests sought to be protected by the statute alleged to have been violated … . In land use matters, moreover, petitioner “must show that it would suffer direct harm, injury that is in some way different from that of the public at large” … . These requirements ensure that the courts are adjudicating actual controversies for parties that have a genuine stake in the litigation … . * * *

Petitioners, governmental entities titled to land for the purpose of redevelopment, whose property is subject to the amended regulations, have alleged a sufficient injury in fact for these purposes. We do not, and need not, decide whether land ownership, by itself, could satisfy the injury requirement. As the United States Supreme Court has recognized, a litigant’s ” some day’ intentions -— without any description of concrete plans, or indeed even any specification of when the some day will be —- do not support a finding of the actual or imminent’ injury that our cases require” … . Here, however, there is more than an amorphous allegation of potential future injury. Petitioners have asserted a concrete interest in the matter the agency is regulating, and a concrete injury from the agency’s failure to follow procedure. Moreover, in connection with [a] prior proposal to subdivide the land at issue, DEC provided them with an outline for a comprehensive habitat protection plan and indicated its intention to serve as lead agency for the purposes of SEQRA (State Environment Quality Review Act) review. Petitioners’ allegations are sufficient to satisfy the requirements that they have an actual stake in the litigation and suffer a harm that is different from that of the public at large… .

Petitioners further allege that the violation of these procedural statutes deprived them of an adequate “airing” of the relevant issues and impacts of the proposed amendments, as well as an accurate assessment of the projected costs involved. The asserted statutory provisions set forth certain procedural steps to be followed when promulgating rules or regulations. The alleged violations, including the deprivation of an opportunity to be heard, constitute injuries to petitioners within the zone of interests sought to be protected by the statutes. Most significantly, to deny petitioners standing in this case would have the effect of insulating these amendments from timely procedural challenge — a result that is contrary to the public interest … . Given the compressed four-month statute of limitations (see SAPA 202 [8]), we would be erecting an “impenetrable barrier” to any review of this facet of the administrative action… .  Matter of Association for a Better Long Is Inc v New York State Dept of Envtl Conservation 2014 NY Slip Op 02216, CtApp 4-1-14