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Eliot Spitzer, Former New York Attorney General, Was a Necessary Party in FOIL Proceeding Seeking His Private Emails In Connection With Civil Enforcement Action against AIG Chief Financial Officer

Petitioner, former Chief Financial Officer of AIG, was the subject of a civil enforcement action against him brought in 2005 by then Attorney General Eliot Spitzer.  Supreme Court granted petitioner’s Freedom of Information Law (FOIL) request for access to private emails of Spitzer.  The Third Department determined that, given the nature of the documents requested, and Spitzer’s current status as a private person, he was a necessary party to the action:

Since at this juncture the object of this proceeding is Spitzer’s private email account(s), and the outcome of this appeal could be a directive to respondent to gain access to and review those private accounts, Spitzer would certainly be “inequitably affected by a judgment in th[is] [proceeding]” and “ought to be [a] part[y] if complete relief is to be accorded between the persons who are parties to [this proceeding]” (CPLR 1001 [a]).  As such, Spitzer is a necessary party herein … .  While not raised directly by the parties, “the court may at any stage of a case and on its own motion determine whether there is a nonjoinder of necessary parties” … .  “The rule . . . insures fairness to third parties who ought not to be prejudiced or ’embarrassed by judgments purporting to bind their rights or interest where they have had no opportunity to be heard'” … .

In this matter, resolution of the disputed FOIL demand directly impacts the personal property of Spitzer, now a private citizen who is not before this Court and whose significant private rights and property cannot be said to be protected by the current respondent, which admittedly does not represent Spitzer’s private interests.  However, “[t]his [C]ourt has previously held that a court may not, on its own initiative, add or direct the addition of a party” (…see CPLR 1003).  Accordingly, the matter must be remitted to Supreme Court to order Spitzer to be joined if he is subject to the jurisdiction of the court and, if not, to permit Spitzer’s joinder by stipulation, motion or otherwise and, “if joinder cannot be effectuated, the court must then determine whether the [proceeding] should be permitted to proceed in the absence of necessary parties”… .  Matter of Smith v NYS Office of the Attorney General, 515758, 3rd Dept 10-17-13

 

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Stay During Appellate Process Expires Five Days After Court of Appeals Denies Leave to Appeal

A police officer was dismissed from the force just before his retirement pension vested. The dismissal was vacated by Supreme Court because of flaws in serving the officer with notice of the charges.  The First Department affirmed and the Court of Appeals denied leave to appeal.  The First Department noted that the stay of the proceedings which was in effect during the appeals process (CPLR 5519(a)) terminated five days after the Court of Appeals denied leave (CPLR 5519(e)(ii)).  The commissioner’s failure to hold a new hearing and issue a new dismissal order within thirty days of the denial of leave resulted in the automatic vesting of the officer’s pension. Matter of Toolasprashad v Kelly, 2013 NY Slip Op 06772, 1st Dept 10-17-13

 

Second Summary Judgment Motion Properly Denied—Not Based on Newly Discovered Evidence

The Second Department affirmed Supreme Court’s denial of a motion for summary judgment because it was the second such motion and, although it included new deposition testimony, it did not include evidence that met the definition of “newly discovered:”

“Generally, successive motions for summary judgment should not be entertained, absent a showing of newly discovered evidence or other sufficient cause” … . Although, in this context, newly discovered evidence may consist of “deposition testimony which was not elicited until after the date of a prior order denying an earlier motion for summary judgment” …, such evidence is not “newly discovered” simply because it was not submitted on the previous motion …. Rather, the evidence that was not submitted in support of the previous summary judgment motion must be used to establish facts that were not available to the party at the time it made its initial motion for summary judgment and which could not have been established through alternative evidentiary means… . Vinar v Litman, 2013 NY Slip Op 06675, 2nd Dept 10-16-13

 

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Ad on Internet, Together With Communications With Florida Medical Group, Did Not Confer Long-Arm Jurisdiction Over the Group in a Malpractice Action Based On Surgery Done in Florida

In a full-fledged opinion by Justice Sgroi, over two dissenters, the Second Department determined that an ad on the Internet by a Florida medical group (LSI) and the group’s website, together with communications between the New York plaintiff and the Florida group, were insufficient to provide New York with long-arm jurisdiction over a medical malpractice case brought by the plaintiff who had undergone surgery in Florida:

…[I]t is not the number of contacts which is determinative of whether a defendant purposely availed itself of the benefits and privileges of conducting business in New York. Each jurisdictional inquiry pursuant to CPLR 302(a)(1) will turn upon the examination of the particular facts of the case, “[a]nd although determining what facts constitute purposeful availment’ is an objective inquiry, it always requires a court to closely examine the defendant’s contacts for their quality” .. . “Purposeful activities are those with which a defendant, through volitional acts avails itself of the privilege of conducting activities with the forum State, thus invoking the benefits and protections of its laws” … . “Whether a non-domiciliary has engaged in sufficient purposeful activity to confer jurisdiction in New York requires an examination of the totality of the circumstances” … .

In the case at bar, the “totality of circumstances” does not provide the plaintiff with a basis for imposing long-arm jurisdiction over the defendants. Initially, we note that personal jurisdiction cannot be based upon LSI’s website, since, as far as the record reveals, this website was informational only and, thus, “passive” in nature. There is no indication that the website permitted a user thereof to purchase any goods or services from LSI, that it contained any online form application process, or that it allowed any interaction through the site … . “When a website is passive . . . plaintiffs may have to prove something more’ to justify the exercise of personal jurisdiction–that is, plaintiffs must show that defendant purposefully (albeit electronically) directed his activity in an substantial way to the forum state'” … .

This Court has also recently held that such a passive website, without more, cannot be used as the basis for the assertion of long-arm personal jurisdiction. Paterno v Laser Spine Inst, 2013 NY Slip Op 06669, 2nd Dept 10-16-13

 

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Erasure of Audio Recording Constituted Negligent Spoliation of Evidence Under New York Common Law—No Need to Turn to Federal Law Re: Preservation of Electronically Stored Information

In a full-fledged opinion by Justice Saxe, the First Department determined the City’s erasure of an audio recording related to a police chase that resulted in injuries to plaintiffs constituted negligent spoliation under New York common law and there was no need to rely on federal authority re: the spoliation of electronically stored information [ESI]:

…[P]laintiffs’ spoliation claim can be fully addressed under New York’s common-law spoliation doctrine. However, because plaintiffs rely exclusively on the [federal] Zubulake IV rule that “[o]nce a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold'” to preserve evidence (220 FRD at 218), we briefly address the question of whether we need to import Zubulake’s rules into the established New York common-law rules as to spoliation of non-ESI evidence.

The cases in which this Court has explicitly adopted the Zubulake rulings have involved ESI discovery … . The usefulness of the Zubulake standard in the e-discovery arena, is … that it “provides litigants with sufficient certainty as to the nature of their obligations in the electronic discovery context and when those obligations are triggered” (93 AD3d at 36). At the same time, … Zubulake “is harmonious with New York precedent in the traditional discovery context” … . This is an area that did not need greater certainty or clarification. * * *

We … conclude that reliance on the federal standard is unnecessary in this context. Zubulake interpreted federal rules and earlier federal case law to adapt those rules to the context of ESI discovery. However, the erasure of, and the obligation to preserve, relevant audiotapes and videotapes, can be, and has been, fully addressed without reference to the federal rules and standards. Strong v City of New York, 2013 NY Slip Op 06655, 1st Dept 10-15-13

 

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Registered Voter Could Not Intervene In Suit to Determine Constitutionality of Local Term-Limit Law

The Second Department affirmed Supreme Court’s denial of a “registered voter’s” [Nichol’s] motion to intervene in an action to determine the constitutionality of a local law concerning term limits for public offices.  The court explained:

Upon a timely motion, a person is permitted to intervene in an action as of right when, among other things, “the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment” (CPLR 1012[a][2]…). Additionally, the court, in its discretion, may permit a person to intervene, inter alia, “when the person’s claim or defense and the main action have a common question of law or fact” (CPLR 1013). ” However, it has been held under liberal rules of construction that whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013 is of little practical significance [and that] intervention should be permitted where the intervenor has a real and substantial interest in the outcome of the proceedings'” … .

Here, contrary to Nichols’s contention, the Supreme Court properly denied his motion for leave to intervene in the action as a defendant. Although Nichols, who describes himself as a “registered voter in the County of Suffolk and an active supporter of [his] constitutional right to pass and enforce term limit legislation,” may indeed be interested in defending the local law in question, he failed to demonstrate that he has a “real and substantial interest” in the action … . Moreover, as the Supreme Court appropriately noted, he failed to show that any interest he did have would not be adequately represented by the defendant … . Accordingly, the court properly denied Nichols’s motion for leave to intervene. Spota v County of Suffolk, 2013 NY Slip Op 06558, 2nd Dept 10-9-13

 

Similar Pending Lawsuit Properly Dismissed—Two Lawsuits Sought Declaratory Judgment Re: Duty to Defend and Indemnify

The Second Department determined Supreme Court properly dismissed an action for a declaratory judgment re: an insurance company’s duty to defend and indemnify because of its similarity to another pending action:

Where there is a substantial identity of the parties, the two actions are sufficiently similar, and the relief sought is substantially the same, a court has broad discretion in determining whether an action should be dismissed pursuant to CPLR 3211(a)(4) on the ground that there is another action pending … . “The critical element is that both suits arise out of the same subject matter or series of alleged wrongs” … . Under the circumstances of this case, upon the record that existed at the time the Supreme Court issued the order appealed from, the court providently exercised its discretion in granting that branch of the defendants’ motion which was to dismiss the complaint pursuant to CPLR 3211(a)(4) … . Scottsdale Ins Co v Indemnity Ins Corp RRG, 2013 NY Slip Op 06557, 2nd Dept 10-9-13

 

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Plaintiff Should Have Been Allowed to Amend Complaint to Allege City Had Notice of Sidewalk Defect

In a slip and fall case, the plaintiff did not allege the city had notice of the defect and sought to amend the complaint to add the allegation.  The Second Department determined plaintiff should have been allowed to amend:

… [T]he Supreme Court erroneously granted that branch of the City’s motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint on the ground that the plaintiff had failed to plead prior written notice of the alleged sidewalk defect. Instead, under the facts of this case, the Supreme Court should have granted the plaintiff’s cross motion and permitted him to amend the pleadings and the notice of claim to add an allegation that the City received prior written notice of the alleged sidewalk defect where, as here, the amendment would not prejudice or surprise the City (see CPLR 3025; General Municipal Law § 50-e[6]…).  Perez v City of New York, 2013 NY Slip Op 06553, 2nd Dept 10-9-13

 

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Ineffective Electronic Filing Can Be Corrected Pursuant to CPLR 2001 After Statute of Limitations Expired

In a full-fledged opinion by Justice Dillon, the Second Department reversed Supreme Court’s denial of plaintiff’s motion, pursuant to CPLR 2001, to allow the filing and serving of a summons and complaint after the statute of limitations had expired. Plaintiff had timely attempted to file the summons and complaint using a new electronic filing system in Westchester County. It turned out that plaintiff’s counsel had mistakenly used a “practice” filing system designed to familiarize users with electronic filing and the summons and complaint was never actually filed in time.  The Second Department determined plaintiff’s motion to be allowed to cure the mistake under CPLR 2001 should have been granted after explaining that, in this case, CPLR 2001 should be to correct an error without concern for whether the defendant would be prejudiced by the correction:

The defendant argues that the plaintiff’s e-filing error cannot be corrected, as doing so would prejudice the defendant by depriving her of a viable statute of limitations defense. However, we conclude that under a proper reading of CPLR 2001, the issue of prejudice to the defendant need not be reached.

More specifically, we believe that many reported cases in New York reflect a misreading of the language of CPLR 2001. Judicial discretion and the absence of prejudice are not requirements that must be applied in a combined fashion. Rather, a close reading of the statute reveals that CPLR 2001 recognizes two separate forms of potential relief to address mistakes, omissions, defects, or irregularities in the filing of papers. The statute distinguishes between the “correction” of mistakes and the “disregarding” of mistakes, and each invokes a different test. Courts may “correct[ ]” mistakes “upon such terms as may be just” (CPLR 2001). The statute then says, set off by an “or,” that mistakes may be “disregarded” if a substantial right of a party is not prejudiced … . Thus, a “correction” of a mistake appears to be subject to a broader degree of judicial discretion without necessary regard to prejudice, whereas a complete “disregarding” of a mistake must not prejudice an opposing party. … The distinction between simply correcting a mistake and overlooking a mistake makes sense, as a party seeking to wholly disregard a filing mistake may understandably be expected to bear a higher burden than a party seeking a mere correction.

A secondary inquiry, therefore, is whether the plaintiff’s request for a nunc pro tunc recognition of his filing in the NYSCEF “practice” system amounts to a mere correction that may be permitted upon terms that may be just, or whether it constitutes a full-scale disregard of the filing error that, in order to be permitted, requires a showing that the defendant will not be prejudiced by the disregard.

… [Here] [t]he “filing” was performed in a mistaken manner and method, which courts are permitted to correct on terms that may be just … . Therefore, the plaintiff was under no burden to demonstrate an absence of prejudice to the defendant. In contrast, excusing a clearly untimely filing would constitute the disregarding of an error, which could not be permitted because it would be prejudicial to a defendant to deprive it of a legitimate statute of limitations defense. Grskovic v Holmes, 2013 NY Slip Op 06545, 2nd Dept 10-9-13

 

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Concept of an Equitable Mortgage Explained, Affirmative Defenses Left Out of Original Answer (Waived) Can Be Included in Amended Answer

The Second Department explained the concept of an “equitable mortgage” and noted that affirmative defenses waived pursuant to CPLR 3211(e) can be included in an answer amended by leave of court:

New York law allows the imposition of an equitable lien if there is an express or implied agreement that there shall be a lien on specific property … . “While [a] court will impose an equitable mortgage where the facts surrounding a transaction evidence that the parties intended that a specific piece of property is to be held or transferred to secure an obligation, it is necessary that an intention to create such a charge clearly appear from the language and the attendant circumstances” … .
Here, the defendant initially did not raise in his answer a defense based upon lack of personal jurisdiction, lack of standing or a capacity to sue, or the statute of limitations. Hence, those affirmative defenses were waived at that point (see CPLR 3211[e]). However, defenses waived under CPLR 3211(e) can nevertheless be interposed in an answer amended by leave of court pursuant to CPLR 3025(b) so long as the amendment does not cause the other party prejudice or surprise resulting directly from the delay and is not palpably insufficient or patently devoid of merit (see CPLR 3025[b]…). ” Mere lateness is not a barrier to the amendment. It must be lateness coupled with significant prejudice to the other side, the very elements of the laches doctrine'”… .  Deutsche Bank Trust Co Ams v Cox, 2013 NY slip Op 06543, 2nd Dept 10-9-13

 

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