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Preclusion Proper Remedy for Failure to Comply with Discovery Deadlines and Requests

The Second Department determined the failure to comply with discovery deadlines and provide good faith responses to discovery requests justified the preclusion of evidence:

“The failure to comply with deadlines and provide good-faith responses to discovery demands impairs the efficient functioning of the courts and the adjudication of claims’”… . The nature and degree of the penalty to be imposed pursuant to CPLR 3126 lies within the sound discretion of the trial court…. Here, the plaintiff made a clear showing that the defendants failed to comply with the compliance conference order …. Which required them to respond to certain requests made in the plaintiff’s supplemental notice of demand for production of documents …, since the defendants did not provide meaningful responses to those demands (see CPLR 3126[3];…). Further, the defendants’ willful and contumacious conduct in failing to meaningfully respond to those demands was reasonably inferred from the defendants’ repeated failures to respond to the plaintiff’s demands and the court’s compliance conference order without a reasonable excuse…. Accordingly, the Supreme Court providently exercised its discretion in granting that branch of the plaintiff’s cross motion which was pursuant to CPLR 3126 to preclude the defendants from presenting evidence at trial with respect to those items … .  HR Prince, Inc v Elite Envtl Sys, Inc, 2013 NY Slip Op 04576, 2nd Dept, 6-19-13

 

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Appellate Court Recognized Prior Decision Was “Clearly Erroneous” and Did Not Hold Trial Court to It

The Fourth Department noted that a trial court is bound by an appellate decision, even if the decision is wrong.  However, in this case, the Fourth Department upheld the trial court’s modification, acknowledging that its prior decision should not be followed:

It is well settled that, until a decision of this Court is “ ‘modified or reversed by a higher court, . . . the trial court is bound by our decision’ ”…, regardless of whether our decision was correctly decided….  We thus conclude that the Surrogate erred in failing to comply with our prior decision. Nevertheless, this Court is not likewise required to follow our prior decision under the doctrine of law of the case.    Indeed, for the reasons that follow, we conclude that we should not apply the doctrine of law of the case herein, and we therefore affirm the modified decree … .“As the doctrine of . . . law of the case is not one of inflexible law, but permits a reasoned exercise of a certain degree of discretion in its application, the better rule is that the doctrine should not be utilized to accomplish an obvious injustice, or applied where the former appellate decision was clearly, palpably, or manifestly erroneous or unjust . . . [T]he effect of a prior ruling by an appellate court in a later appeal before that court, or in a subsequent stage of the same appeal before that court, presents the problem of balancing the interest in foreclosing reconsideration of the prior decision with the desire for a just result . . .  We recognize that our earlier decision was “clearly erroneous”…, as “shown by contrary authority emanating from [the Court of Appeals,] whose rulings . . . are controlling”…. We also conclude that “correction of the error made on the former appeal [will] create no injustice or hardship, [inasmuch as] no change has been made in the status of the parties in reliance upon the ruling in the former appeal” ….  Matter of Ladelfa, 580, 4th Dept, 6-14-13

 

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Court Is Powerless After Release Signed and Filed

The Fourth Department noted that a court loses jurisdiction over a case after a release has been signed and filed:

Supreme Court erred in granting the motion of … (defendant) to compel plaintiff to comply with the release agreement between plaintiff and defendants. Defendant brought his motion after the related third-party action was settled and an unconditional stipulation of discontinuation as to him with respect to this action was signed by the attorneys for plaintiff and defendant and filed. Although a trial court has the power “to exercise supervisory control over all phases of pending actions an proceedings”…, it lacks jurisdiction to entertain a motion after the action has been “unequivocally terminated . . . [by the execution of] an express, unconditional stipulation of discontinuance”….  Cambridge Integrated Services Group, Inc v Johnson…, 723, 4th Dept, 6-14-13

 

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Plaintiff’s Lack of Knowledge About Contract Breaches Did Not Toll Statute of Limitations

The Second Department determined plaintiff’s lack of knowledge about alleged annual breaches of contract by the village for which he served as police commissioner was not the result of fraud and, therefore, the 18-month statute of limitations for each breach was not tolled:

Pursuant to CPLR 9802, “no action shall be maintained against the village upon or arising out of a contract of the village unless the same shall be commenced within eighteen months after the cause of action therefor shall have accrued, nor unless a written verified claim shall have been filed with the village clerk within one year after the cause of action shall have accrued.” Where the claim is for the payment of a sum of money allegedly owed pursuant to a contract, the cause of action accrues when the plaintiff possesses a legal right to demand payment…. Here, as the Village correctly contends, the causes of action alleging breach of contract accrued at the end of each year that the plaintiff allegedly was not paid in accordance with his contract…. Since this action was not commenced until September 28, 2011, the Village established, prima facie, that the action was time-barred to the extent that the plaintiff sought to recover damages accruing prior to March 28, 2010, that is, 18 months prior to the commencement of the action…. In opposition, the plaintiff failed to raise a question of fact as to whether the statute of limitations had been tolled or was otherwise inapplicable, or whether he actually commenced the action within the applicable limitations periods…. Contrary to the plaintiff’s contention, his lack of knowledge that the several breaches had occurred did not toll the running of the limitations period… Reid v Incorporated Vil of Flora Park, 2013 NY Slip Op 04321, 2nd Dept, 6-12-13

 

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Family Court Should Have Granted Father’s Motion to Vacate a Fact-Finding Order

In an abuse and neglect proceeding, the Second Department reversed Family Court’s denial of father’s motion to vacate a fact-finding order after a hearing at which father was not present:

If a parent is not present, the court may proceed to hear a petition pursuant to Family Court Act article 10 if the child is represented by counsel (see Family Ct Act § 1042). However, a timely motion to vacate the resulting fact-finding order shall be granted upon an affidavit showing, inter alia, a potentially meritorious defense to the petition unless the court finds that the parent willfully refused to appear at the hearing….  Under the circumstances presented, the appellant adequately demonstrated that his failure to appear was not willful…. Moreover, the father demonstrated a potentially meritorious defense to the petitions …. Matter of Mark W, 2013 NY Slip Op 04347, 2nd Dept, 6-12-13

 

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Doctrine of Collateral Estoppel Re: Related Criminal Convictions Properly Applied

The Second Department determined Family Court properly applied the doctrine of collateral estoppel in an abuse proceeding based upon father’s criminal convictions:

The Family Court properly granted that branch of the motion of the ACS which was for summary judgment on the issue of the father’s derivative abuse. The ACS met its prima facie burden of showing that the doctrine of collateral estoppel is applicable…. “A determination in a criminal action may be given collateral estoppel effect in a Family Court proceeding where the identical issue has been resolved, and the defendant in the criminal action had a full and fair opportunity to litigate the issue of his or her criminal conduct”…. The father’s convictions of course of sexual conduct against a child in the first degree, course of sexual conduct against a child in the second degree, rape in the second degree, and endangering the welfare of a child were based upon the same acts alleged to constitute sexual abuse as set forth in Family Court Act article 10 petitions (see Family Ct Act § 1012[e][iii]).  Matter of Angelica M, 2013 NY Slip Op 04339, 2nd Dept, 6-12-13

 

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Supreme Court’s Grant of Defendants’ Motion to Set Aside Verdict Reversed

The First Department, over a substantial dissent, reversed Supreme Court’s grant of defendants’ motion to set aside the verdict in a medical malpractice action:

“The question of whether a verdict is against the weight of the evidence is discretion-laden, and the critical inquiry is whether the verdict rested on a fair interpretation of the evidence”…. On this record, we conclude that the Supreme Court erred in setting aside the verdict as against the weight of the evidence, because it cannot be said that the jury could not have reached its verdict upon any fair interpretation of the evidence…. The jury was entitled to resolve in plaintiff’s favor the conflict between the decedent’s and Dr. Conte’s testimony as to the nature and timing of her complaints and whether he later made referrals for CT scans that she declined.  Rose v Conte, 2013 NY Slip Op 04297, 1st Dept, 6-11-13

 

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Bear Stearns Complaint Stated a Cause of Action for Indemnification and Should Not Have Been Dismissed

In a full-fledged opinion by Judge Graffeo, the Court of Appeals reversed the Appellate Division and allowed a suit by Bear Stearns against its insurers (which had denied coverage) to go forward.  In response to a Security and Exchange Commission (SEC) investigation into late trading and market timing activities, Bear Stearns agreed to pay a 160-million-dollar disgorgement fee.  Bear Stearns then sought indemnification from the defendant insurance companies.  The complaint, which had been dismissed, alleged that 140 of the 160 million constituted profits that flowed to Bear Stearns’ customers, not funds improperly acquired by Bear Stearns. The Court of Appeals determined that it could not be discerned from the SEC order alone whether or not the funds were deemed improperly acquired by Bear Stearns.  Therefore the complaint stated a cause of action:

In the context of these dismissal motions, we must assume Bear Stearns’ allegations to be true unless conclusively refuted by the relevant documentary evidence, in this case, the SEC order. Contrary to the Insurers’ position, the SEC order does not establish that the $160 million disgorgement payment was predicated on moneys that Bear Stearns itself improperly earned as a result of its securities violations. Rather, the SEC order recites that Bear Stearns’ misconduct enabled its “customers to generate hundreds of millions of dollars in profits.” Hence, at this CPLR 3211 stage, the documentary evidence does not decisively repudiate Bear Stearns’ allegation that the SEC disgorgement payment amount was calculated in large measure on the profits of others.  JP Morgan Securities, Inc v Vigilant Insurance Company, No 113, CtApp 6-11-13

 

Nature of Declaratory Judgment and Doctrine of Ripeness Explained

In affirming the result in an Article 78/declaratory judgment proceeding which unsuccessfully challenged the Department of Environmental Conservation’s finding that petitioner had violated statutory and regulatory provisions relating to the application of pesticide, the Fourth Department explained the principles underlying a declaratory judgment action and the doctrine of ripeness:

Petitioners sought a declaration of the rights of the parties with respect to a 2002 consent order, and also sought further declarations that petitioners had the right to obtain waivers of the right to notification of the approximate dates upon which petitioners would apply products to the property of other customers. Pursuant to CPLR 3001, “[t]he supreme court may render a declaratory judgment . .. as to the rights and other legal relations of the parties to a justiciable controversy.” “A declaratory judgment action thus ‘requires an actual controversy between genuine disputants with a stake in the outcome,’ and may not be used as ‘a vehicle for an advisory opinion’ ” … . Here, the court, with the consent of the DEC, dismissed all charges related to alleged violations of the 2002 consent order, and thus no active controversy remained with respect to it.  *  *  *

The test for ripeness is well settled, to wit, a determination must be final before it is subject to judicial review (see CPLR 7801 [1]). “In order to determine whether an agency determination is final, a two-part test is applied. ‘First, the agency must have reached a definitive position on the issue that inflicts actual, concrete injury and[,] second, the injury inflicted may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party’ ” … .  Matter of Green Thumb Lawn Care, Inc v Iwanowicz…, 372, 4th Dept, 6-7-13

 

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