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Prior Court Ruling Can Not Be Altered Even If Erroneous

In reversing the trial court’s termination of the plaintiff-husband’s obligation to provide defendant-wife with medical coverage, the Fourth Department explained that it must apply the doctrine of res judicata, even where  the prior ruling had been erroneously decided:

We agree with defendant that the court erred in terminating plaintiff’s obligation to provide her with medical insurance coverage inasmuch as our prior order requires plaintiff to provide her with that coverage. As a general rule, the doctrine of res judicata bars relitigation of previously adjudicated disputes “even where further investigation of the law or facts indicates that the controversy has been erroneously decided, whether due to oversight by the parties or error by the courts” … .As relevant here, “a final judgment of divorce settles the parties’ rights pertaining not only to those issues that were actually litigated, but also to those that could have been litigated” … .“[A]bsent unusual circumstances or explicit statutory authorization, the provisions of [such a] judgment are final and binding on the parties, and may be modified only upon direct challenge” … .Here, plaintiff did not take an appeal from our prior order, seek reargument of that order, or make a proper application to modify it. He is therefore foreclosed from collaterally attacking it in the context of this action … . Lomaglio v Lomaglio, 142, CA 12-01317, 4th Dept. 3-15-13

 

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Counsel for Nonparty Witness Cannot Participate in Deposition

The Fourth Department determined that counsel for a nonparty witness cannot object, i.e., participate, in a deposition of that witness.  The Court wrote:

…“[C]ounsel for a nonparty witness does not have a right to object during or otherwise to participate in a pretrial deposition.CPLR 3113 (c) provides that the examination and cross-examination of deposition witnesses ‘shall proceed as permitted in the trial of actions in open court’ ” (id. [emphasis added]), and it is axiomatic that counsel for a nonparty witness is not permitted to object or otherwise participate in a trial (see e.g. id.).We recognize that 22 NYCRR 221.2 and 221.3 may be viewed as being in conflict with CPLR 3113 (c) inasmuch as sections 221.2 and 221.3 provide that an “attorney” may not interrupt a deposition except in specified circumstances.Nevertheless, it is well established that, in the event of a conflict between a statute and a regulation, the statute controls (seeMatter of Hellner v Board of Educ. of Wilson Cent. School Dist., 78 AD3d 1649, 1651).  Justices Fahey and Martoche dissented in a memorandum. Sciara v Surgical Associates of Western New York, P.C., et al, 1466, CA 12-00809, 4th Dept. 3-15-13

 

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No Appeal Lies from Direction to Settle Judgment on Notice

After denying a motion to set aside a verdict, the trial court directed the parties to settle judgment on notice.  The appeal of ruling was dismissed.  The Second Department explained: “[N]o appeal lies from a decision, or an appealed paper directing the settlement of a judgment (see CPLR 5512[a]; … . Moreover, plaintiff’s right to a direct appeal from any order denying a motion to set aside the verdict terminated with the entry of a judgment (see CPLR 5501…).”  Ryals v New York City Tr. Auth., 2013 NY Slip Op 01630, 9544 21244/04, 1st Dept. 3-14-13

 

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From the Point When a Director’s Position Becomes Adverse to the Corporation, the Director Is Not Entitled to Discovery of the Corporation’s Attorney-Client Communications

Plaintiff was both a shareholder in and a director of defendant corporation. In her role as a shareholder, plaintiff brought a special proceeding to compel the corporation to pay the fair market value of her shares pursuant to Business Corporation Law section 623.  The special proceeding was prompted by the corporation’s sale of a 65% interest in the business to a third-party investor—a sale to which plaintiff objected.  During the course of discovery, the defendant corporation’s lawyers turned over thousands of documents to the plaintiff.  Included in those documents were attorney-client communications which took place after plaintiff had voiced her strong objection to the sale of the 65% interest in the business. The motion court determined that the plaintiff, as a director, was a corporate insider by definition, and was therefore entitled to all the corporation’s attorney-client communications, even those communications which took place after she voiced her opposition to the sale.  The First Department reversed.  The Court determined that, once plaintiff objected to the sale and hired her own attorney, her interests became “adverse” to those of the corporation, and she was not entitled to the attorney-client communications made after that point. [There is a long dissent arguing that, pursuant to CPLR 5511, the appellants were not aggrieved by the ruling appealed from and, therefore, the First Department did not have jurisdiction to entertain the appeal.] Barasch v Williams Real Estate Co. 2013 NY Slip Op 01613, 7405, 500054/09, 1st Dept. 3-14-13

 

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Doctrine of Equitable Mootness for Bankruptcy Ruling ​

In this contract action, the issue at the heart of the case before the Second Department was the preclusive effect of a bankruptcy court ruling and the doctrine of “equitable mootness” which prohibits disturbing a bankruptcy plan already implemented.  The easiest way to convey the nature of the legal issues in the case is to quote the relevant discussions in the Second Department’s decision:

In light of authority holding that a court should apply the rules of res judicata followed in the jurisdiction that rendered the earlier decision …, we apply federal res judicata law in determining whether the doctrine of res judicata bars this action … .

Under federal res judicata law, subsequent litigation is prohibited if a prior court ruling ” was (1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving the same cause of action” … . This rule applies with full force to matters decided by the bankruptcy courts, including those concerning Chapter 11 reorganization … . Moreover, in the bankruptcy context, the court must also consider whether an independent judgment in a separate proceeding would ” impair, destroy, challenge, or invalidate the enforceability or effectiveness'” of the reorganization plan … .

The plaintiffs contend that there was no final judgment on the merits because the appeal from the 2009 New York bankruptcy court order was dismissed on the ground of equitable mootness. Equitable mootness is invoked to avoid disturbing a reorganization plan once implemented …. When a plan has been substantially consummated, an appeal should be dismissed unless several requirements, the most important of which is that the appellant sought a stay of confirmation, are satisfied … .

Here, the District Court dismissed the appeal from the 2009 New York bankruptcy court order because the Kmart reorganization plan had been implemented and RM 18 had failed to seek a stay of the confirmation. Once the appeal was dismissed as moot, the 2009 New York bankruptcy court order became final …. Since there was no vacatur of the 2009 New York bankruptcy court order, it has preclusive effect … . …[T]he plaintiffs may not maintain the present litigation, which challenges [the] final adjudication by a court of competent jurisdiction … .  RM 18 Corp. v Bank of NY Mellon Trust Co., N.A., 2013 NY Slip Op 01541, 2011-o9112, Index No 15992/10, 2nd Dept. 3-13-13

 

 

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Procedure for Extending Real Property Lien Based on Money Judgment

The procedure for extending a real property lien which is based on a New York money judgment was explained by the Second Department:

Although a New York money judgment is enforceable for 20 years (see CPLR 211[b]), a real property lien resulting from the judgment is viable for only 10 years (see CPLR 5203[a]). For this reason, the Legislature enacted CPLR 5014 to give a judgment creditor an opportunity to extend the life of the lien by commencing an action for a renewal judgment … . “Pursuant to CPLR 5014(1), an action upon a money judgment may be maintained between the original parties where ten years have elapsed since the judgment was originally docketed” … . “An action may be commenced under subdivision one of this section during the year prior to the expiration of ten years since the first docketing of the judgment” (CPLR 5014). The plaintiff here established her prima facie entitlement to judgment as a matter of law awarding her a renewal judgment pursuant to CPLR 5014(1) by demonstrating the existence of the prior judgment, that the defendant was the judgment debtor, that the judgment was docketed at least nine years prior to the commencement of this action, and that the judgment remains partially or completely unsatisfied …. . Rose v Gulizia, 2013 NY Slip Op 01542, 2011-08302, Index No 40635/15, 2nd Dept. 3-13-13

 

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Supreme Court Has the Power to Appoint a Temporary Representative to Substitute for a Defendant in a Personal Injury Action

One of the defendants in a personal injury action died.  The plaintiff moved pursuant to CPLR 1015 to have Supreme Court appoint a temporary representative of the estate, and to have the temporary representative substituted for the deceased defendant. The defendants opposed the motion arguing that Surrogate’s Court was the appropriate forum for the appointment of a temporary administrator. In finding that Supreme Court could make the appointment, the Second Department wrote:

“In most instances the personal representative of the decedent’s estate should be substituted in the action” …. However, in the event no such representative exists, an appropriate appointment should be made and that individual should be substituted in place of the decedent … . “In determining who shall be substituted for the decedent, conflict of interest questions may be raised” … .

The Second Department, however, determined that the person Supreme Court appointed, the attorney for the insurance company defending the action, had a conflict of interest because the insurance company had disclaimed coverage for the subject accident.  The matter was remitted for the appointment of a different temporary administrator.  Dieye v Royal Blue Services, Inc., 2012 NY Slip Op 01527, 2012-03428, Index No 3392/09, 2nd Dept. 3-13-13

 

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“Aid of the Court No Longer Required” in Neglect Proceeding

The grandmother and mother of a seven-month-old were found to have neglected the child by briefly leaving the child unattended in the kitchen sink with the water running when the hot water “spiked” causing burns.  The mother and grandmother moved to dismiss the petition pursuant to Family Court Act 1051 (c) on the ground aid of the court was not required.  The Second Department noted that the facts were sufficient to sustain the petition, but determined the petition should be dismissed because the aid of the court was not required.  Following the incident the mother completed all the programs required by children’s services, the grandmother attended parenting classes with the mother voluntarily, the child was returned to the mother 18 months before the hearing, home visits confirmed the child was not left unattended and was bathed properly, and the hot water “spikes” had been eliminated. The Second Department wrote:  “The foregoing demonstrates that the incident on which the petition was based was an isolated one, that the mother and grandmother have been rehabilitated, and that the child is no longer at risk of being neglected …”.  Matter of Kayden H., 2013 NY Slip Op 01549, 2011-09702, 2011-09704, Docket No N-22472-09, 2nd Dept. 3-13-13

 

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Lack of Standing Argument Waived

In this foreclosure action, the Third Department determined failure to raise plaintiff’s lack of standing in either the answer or the pre-answer motion to dismiss the complaint constituted a waiver of the defendant’s standing argument.  HSBC Bank USA v Ashley, 513730, Third Dept. 3-7-13

 

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Herniated Disc not “Serious Injury”—Insufficient Proof of Physical Limitations.

The Second Department reversed the trial court’s denial of a motion pursuant to CPLR 4404 to set aside the jury verdict.  The issue was whether the plaintiff had proven he sustained “serious injury” within the meaning of Insurance Law 5102(d).  The plaintiff had a bulging or herniated disk but did not provide objective proof of the extent or degree of the alleged physical limitations caused by the disc injury. In describing the criteria for analysis, the Court wrote:  “ ‘A motion pursuant to CPLR 4404(a) to set aside a jury verdict and for judgment as a matter of law will be granted where there is no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusions reached by the jury on the basis of the evidence presented at trial…’ “.  Bacon v Bostany, 2011-08654, 2012-07634, Index No 997/08, Second Dept. 3-6-13

 

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