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VACATING A NOTE OF ISSUE IS NOT THE SAME AS MARKING A CASE OFF PURSUANT TO CPLR 3404; WHEN A NOTE OF ISSUE IS VACATED, THE ACTION REVERTS TO A PRE-NOTE OF ISSUE STATUS AND CAN BE RESTORED TO THE ACTIVE CALENDAR WITHOUT MEETING THE STRINGENT CPLR 3404 REQUIREMENTS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s motion to restore the action to the active calendar should have been granted. The note of issue had been vacated but the action had not been marked off pursuant to CPLR 3404. Therefore the criteria for restoring an action that had been marked off for more than a year did not apply:

Pursuant to CPLR 3404, “[a] case . . . marked ‘off’ or struck from the calendar . . . and not restored within one year thereafter, shall be deemed abandoned and shall be dismissed without costs for neglect to prosecute.” “A plaintiff seeking to restore a case to the trial calendar more than one year after it has been marked ‘off,’ and after the case has been dismissed pursuant to CPLR 3404, must demonstrate a [potentially] meritorious cause of action, a reasonable excuse for the delay in prosecuting the action, a lack of intent to abandon the action, and a lack of prejudice to the defendant” … .

Here, the order … vacating the note of issue was not equivalent to an order marking “off” or striking the case from the calendar pursuant to CPLR 3404 … . Thus, CPLR 3404 did not apply “because the case reverted to its pre-note of issue status once the note of issue was vacated” … As it is undisputed that there was neither a 90-day demand served upon the plaintiff pursuant to CPLR 3216 nor an order directing dismissal of the complaint pursuant to 22 NYCRR 202.27, and that discovery is complete, the Supreme Court should have granted the plaintiff’s motion to restore the action to the active calendar … . Carrero v Pena, 2023 NY Slip Op 03448, Second Dept 6-28-23

Practice Point: Restoring an action to the calendar after it has been marked off pursuant to CPLR 3404 for more than a year is subject to the stringent requirements of CPLR 3404. But vacating a note of issue, as opposed to marking off the case, restores the action to pre-note of issue status and the action can be restored without meeting the CPLR 3404 requirements because CPLR 3404 is not applicable.

 

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BEFORE SUING A TORTFEASOR’S INSURER, PLAINTIFF MUST OBTAIN A JUDGMENT AGAINST THE TORTFEASOR (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant insurer’s motion to dismiss the complaint in this personal injury action should have been granted. The injured plaintiff sued the tortfeasor’s insurer before obtaining a judgment against the tortfeasor (the insured):

Insurance Law § 3420 “grants an injured party a right to sue the tortfeasor’s insurer, but only under limited circumstances—the injured party must first obtain a judgment against the tortfeasor, serve the insurance company with a copy of the judgment and await payment for 30 days” … . Here, the defendants established, prima facie, that the plaintiff lacked standing to commence this action by submitting the complaint, which alleged that the underlying action against [the tortfeasor] “is currently pending.” The complaint is evidence that the plaintiff has not established the condition precedent to maintain a direct action against the defendants (see Insurance Law § 3420[a][2] …). Sizova v Union Mut. Fire Ins. Co., 2023 NY Slip Op 03502, Second Dept 6-28-23

Practice Point: A plaintiff must obtain a judgment against the tortfeasor before the tortfeasor’s insurer can be sued.

 

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IN THIS SIDEWALK SLIP AND FALL CASE, THE DEFENDANT PROPERTY OWNERS HAD DIED AT THE TIME THE ACTION AGAINST THEM WAS COMMENCED; THAT ACTION WAS A NULLITY; THEREFORE THE MOTION TO AMEND THE COMPLAINT TO SUBSTITUTE THE EXECUTOR SHOULD HAVE BEEN DENIED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the sidewalk slip and fall action brought against defendant property owners was a nullity because the property owners had died before the suit was commenced. Because the action was a nullity, the motion to amend the complaint to substitute the executor as a party should not have been granted:

“A party may not commence a legal action or proceeding against a dead person” … . The deaths of Leon Chain and Hanka Chain (hereinafter together the decedents) prior to the commencement of this action rendered the action, insofar as asserted against them, a legal nullity from its inception. The plaintiff was instead required to commence an action against the personal representative of the decedents’ estates … . Moreover, even assuming that Ziv was the duly appointed executor of each of the decedents’ estates, the decedents were never a party to the action since they died before the commencement of the action, and the decedents’ estates could not be brought into the action by substitution or by amendment of the caption (see CPLR 1015[a]; 1021 …). The plaintiff’s attempt to amend the complaint to designate the purported executor of the decedents’ estates as a defendant in the place of the decedents was invalid and ineffective to retroactively render the action properly commenced against the decedents’ estates … . Hussain v Chain, 2023 NY Slip Op 03455, Second Dept 6-28-23

Similar issues and result in a foreclosure action: Waterfall Victoria Master Fund, Ltd. v Estate of Dennis F. Creese, 2023 NY Slip Op 03497, Second Dept 6-28-23

Practice Point: Here the defendants had died at the time the action was commenced. That action was therefore a nullity. The complaint could not be amended to substitute the executor as a party.

 

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SURGERY, EVEN AFTER A DEFENSE REQUEST FOR A PRE-SURGERY PHYSICAL EXAM, IS NOT SPOLIATION OF EVIDENCE AND DOES NOT WARRANT SANCTIONS (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice LaSalle, determined plaintiff’s surgery, even after a defense request for a pre-surgical physical exam, is not spoliation of evidence and does not trigger sanctions. In this traffic accident case, plaintiff underwent surgery before the action was commenced and again after a defense demand for a pre-surgery medical exam:

… [T]he First Department has recently rejected the proposition that a spoliation analysis can apply in such a situation. In Gilliam v Uni Holdings, LLC (201 AD3d 83), the First Department held “that the condition of one’s body is not the type of evidence that is subject to a spoliation analysis” … . After noting that “[s]poliation analysis has long been applied to a party’s destruction of inanimate evidence,” the First Department concluded that the “state of one’s body is fundamentally different from inanimate evidence, and medical treatment, including surgery, is entirely distinct from the destruction of documents or tangible evidence which spoliation sanctions attempt to ameliorate. To find that a person has an ‘obligation,’ to preserve his or her body in an injured state so that a defendant may conduct [a medical examination], is antithetical to our belief in personal liberty and control over our own bodies” … . * * *

We agree with the First Department’s conclusion in this regard, for the reasons stated in its opinion. It is not reasonable to require a plaintiff to delay medical treatment, and potentially prolong his or her suffering, solely to allow a defendant to examine the plaintiff’s body in a presurgical state. Under these circumstances, the plaintiff has not “refuse[d] to obey an order for disclosure or wilfully fail[ed] to disclose information which . . . ought to have been disclosed” (CPLR 3126). Fadeau v Corona Indus. Corp., 2023 NY Slip Op 03453, Second Dept 6-28-23

Practice Point: Here in this traffic accident case, plaintiff underwent surgery before the action was commenced and again after the defense demand for a pre-surgery physical exam. Joining the First Department, the Second Department held that surgery is not spoliation of evidence and does not trigger sanctions.

 

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UNDER THE 2022 FORECLOSURE ABUSE PREVENTION ACT BANKS CAN NO LONGER STOP THE RUNNING OF THE STATUTE OF LIMITATIONS BY VOLUNTARILY DISCONTINUING A FORECLOSURE ACTION (SECOND DEPT).

​The Second Department, reversing Supreme Court, determined the foreclosure action was time-barred noting that the 2022 Foreclosure Abuse Prevention Act prohibited banks from stopping the running of the statute of limitations by voluntarily discontinuing the action:

… [T]he voluntary discontinuance of the 2010 foreclosure action did not serve to reset the statute of limitations. Under the Foreclosure Abuse Prevention Act (L 2022, ch 821, § 8 [eff Dec. 30, 2022]), the voluntary discontinuance of the 2010 foreclosure action did not “in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period to commence an action and to interpose a claim, unless expressly prescribed by statute” (CPLR 3217[e] …).  ARCPE 1, LLC v DeBrosse, 2023 NY Slip Op 03498, Second Dept 6-28-23

Practice Point: Under the 2022 Foreclosure Abuse Prevention Act banks can no longer stop the running of the statute of limitations by voluntarily discontinuing the foreclosure action.

 

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THE BANK DID NOT DEMONSTRATE IT HAD STANDING TO FORECLOSE; THERE WAS INSUFFICIENT PROOF THE ALLONGE WAS FIRMLY AFFIXED TO THE NOTE AS REQUIRED BY UCC 3-202 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank in this foreclosure action did not prove it had standing to bring the action:

A plaintiff has standing to commence a mortgage foreclosure action when it is the holder or assignee of the underlying note at the time the action is commenced … . The plaintiff can establish standing by attaching a properly endorsed note to the complaint when commencing the action … . However, where an endorsement is on an allonge to the note, the plaintiff must establish that the allonge was “so firmly affixed to the note so as to become a part thereof” pursuant to UCC 3-202(2) at the time the action was commenced … . “Where there is no allonge or note that is either endorsed in blank or specially endorsed to the plaintiff, mere physical possession of a note at the commencement of a foreclosure action is insufficient to confer standing or to make a plaintiff the lawful holder of a negotiable instrument for the purposes of enforcing the note” … .

Here, the plaintiff’s submissions failed to eliminate triable issues of fact as to whether the allonges were so firmly affixed to the note as to become a part thereof … . [The bank vice president’s] affidavit did not clarify whether the allonges were firmly affixed to the note … . U.S. Bank N.A. v Duvivier, 2023 NY Slip Op 03496, Second Dept 6-28-23

Practice Point: If the endorsement is on an allonge to the note, the allonge must be firmly affixed to the note (UCC 3-202). If the bank does not prove the endorsed allonge is firmly affixed to the note, it has not proved standing to foreclose.

 

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DEFENDANT IN THIS TRAFFIC ACCIDENT CASE SHOULD HAVE BEEN ALLOWED TO AMEND HIS ANSWER TO ASSERT A GRAVES AMENDMENT AFFIRMATIVE DEFENSE (AVAILABLE TO THE LESSOR OF A VEHICLE); PLAINTIFF WAS NOT PREJUDICED BY THE LATENESS OF THE MOTION (FIRST DEPT). ​

The Second Department, reversing Supreme Court, determined the defendant’s (Lubman;s) motion to amend his answer in this traffic accident case should have been granted. The lateness of the motion to amend did not cause sufficient prejudice to plaintiff to justify denial:

… [T]he court … improperly determined that the Graves Amendment is inapplicable here. Although Lubman did not clearly establish that he was a commercial lessor of motor vehicles … , he proffered sufficient evidence to create a question of fact as to the Graves Amendment’s applicability. He submitted evidence that he owned between four and seven cars that he rented fifty-nine times over a nine-month period through Turo, a peer-to-peer car sharing service. This volume of rental activity, which involved several vehicles, demonstrated more than a casual or occasional endeavor. The fact that Lubman operated under his own name rather than a corporate entity was not determinative. The Graves Amendment defines “owner” as “a person,” which it defines, in part, as “any individual” as well as a “corporation, company . . . or any other entity” … . Thus, by its own terms, the Graves Amendment is intended to cover both individuals and corporate entities.

Supreme Court should have granted Lubman’s motion for leave to amend his answer to assert a Graves Amendment affirmative defense. Lubman demonstrated that his proposed amended answer was not palpably insufficient or clearly devoid of merit …  Although plaintiff … claimed that they would be prejudiced by the amendment because Lubman waited ten months after his deposition before seeking leave to amend his answer, such delay was not significant prejudice that hindered their case preparation or prevented them from acting in support of their position … , as the note of issue had not yet been filed and Lubman could have been deposed further on the limited issue of the Graves Amendment affirmative defense. Ventura v Lubman, 2023 NY Slip Op 03444, First Dept 6-27-23

Practice Point: Although the motion to amend the answer was made 10 months after depositions, the note of issue had not been filed and defendant could be deposed further. The delay therefore did not prejudice plaintiff sufficiently to warrant denial of the motion.

Practice Point: The Graves Amendment limits the liability of a lessor of a vehicle involved in an accident to negligent maintenance or repair. The affirmative defense is available to individuals as well as business entities.

 

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NO APPEAL LIES FROM AN ORDER ISSUED ON DEFAULT, A MOTION TO VACATE IS THE ONLY REMEDY; NO APPEAL LIES FROM AN ORDER ISSUED ON CONSENT (FIRST DEPT).

The First Department, dismissing the appeal in this custody case, determined (1) no appeal lies from an order issued on mother’s default, and (2) no  appeal lies from an order entered with mother’s consent:

Because the fact-finding order was issued on the mother’s default, it is not appealable as of right and her remedy was to move to vacate (CPLR 5511 …). Although the mother appeared on the final date of the inquest after petitioner’s witnesses had testified, she was not present during the majority of the fact-finding hearing, and her counsel was not authorized to proceed in her absence … . The mother also did not offer any evidence or seek to testify.

Furthermore, no appeal lies from the dispositional order, as it was entered on the mother’s consent and she is therefore not an aggrieved party under CPLR 5511 … .  Matter of P. A. (Joseph M.), 2023 NY Slip Op 03432, First Dept 6-27-23

Practice Point: No appeal lies from an order issued on default. The only available remedy is a motion to vacate the default.

Practice Point: No appeal lies from an order issued on consent because the consenting party is not “aggrieved.”

 

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PLAINTIFF’S DECEDENT WAS SHOT IN A DARK AREA OF DEFENDANT NEW YORK CITY HOUSING AUTHORITY’S (NYCHA’S) APARTMENT COMPLEX; THE NOTICE OF CLAIM ALLEGED THE LACK OF LIGHTING CONSTITUTED NEGLIGENT SECURITY; THE ADDITIONAL ALLEGATIONS OF SECURITY-RELATED NEGLIGENCE IN THE BILL OF PARTICULARS SHOULD HAVE BEEN STRUCK (SECOND DEPT).

​The Second Department, reversing Supreme Court, determined certain allegations of negligence in the bill of particulars should have been struck because the notice of claim did not provide notice of them. The appellate division interpreted the notice of claim to allege that the lack of security at defendant’s apartment complex stemmed from inadequate lighting. Plaintiff’s decedent was shot and killed in an area which, allegedly, was completely dark. The additional claims of negligence in the bill of particulars were struck:

… [T]he crux of the notice of claim is that [defendant] NYCHA was negligent in failing to provide adequate security by failing to provide adequate lighting at the location where the decedent was shot and killed … .

… [T]he notice of claim did not directly or indirectly reference those allegations raised in … the bill of particulars that concern NYCHA’s failure to protect tenants from criminal activities and criminal intrusions, NYCHA’s failure to remove alleged known criminals from its premises in violation of its Permanent Exclusion Policy and Real Property Law § 231(2), NYCHA’s failure to install CCTV cameras, and the alleged sale of drugs on NYCHA premises. These allegations go beyond mere amplification of the inadequate lighting allegation and are instead new, distinct, and independent theories of liability that cannot be corrected pursuant to General Municipal Law § 50-e(6) … .Mosley v City of New York, 2023 NY Slip Op 03345, Second Dept 6-21-23

Practice Point: The General Municipal Law section 50-e(6) allows mistakes or omissions from a notice of claim to be overlooked where the defendant is not prejudiced. Here the appellate division interpreted the notice of claim to allege the defendant housing authority’s only negligence was the failure to provide adequate lighting in the area where plaintiff’s decedent was shot. Therefore the additional allegations of negligent security in the bill of particulars (“failure to protect tenants from criminal activities and criminal intrusions, NYCHA’s failure to remove alleged known criminals from its premises in violation of its Permanent Exclusion Policy and Real Property Law § 231(2), NYCHA’s failure to install CCTV cameras, and the alleged sale of drugs on NYCHA premises“) should have been struck.

 

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THE APPLICABLE STATUTES OF LIMITATIONS FOR DECLARATORY-JUDGMENT CAUSES OF ACTION DEPEND ON THE NATURE OF THE UNDERLYING ALLEGATIONS; HERE THE ALLEGATIONS SOUNDED IN FRAUD, UNJUST ENRICHMENT AND VIOLATIONS OF THE REAL PROPERTY LAW; ALL WERE TIME-BARRED (SECOND DEPT).

​The Second Department, revering Supreme Court, determined the declaratory judgment causes of action were time-barred according to the statutes of limitations applicable to the underlying allegations, i.e., fraud, unjust enrichment, Real Property Law (RPL) and Real Property Actions and Proceedings Law (RPAPL) causes of action:

“Actions for declaratory judgments are not ascribed a certain limitations period. The nature of the relief sought in a declaratory judgment action dictates the applicable limitations period. Thus, if the action for a declaratory judgment could have been brought in a different form asserting a particular cause of action, the limitations period applicable to the particular cause of action will apply” … . Here, the cause of action for declaratory relief could have been, and previously was, brought in the form of causes of action to recover damages for fraud and intentional misrepresentation. Since the instant action was commenced more than six years after the plaintiff allegedly was fraudulently induced to convey title to the property and more than two years from the discovery of the alleged fraud, the cause of action for declaratory relief was time-barred … .

… [T]he second cause of action … seeks to void the defendant’s title to the property by virtue of the plaintiff’s claim that the plaintiff was fraudulently induced into conveying title to the defendant. Accordingly, this cause of action is governed by the six-year statute of limitations governing actions based upon fraud and, therefore, was untimely.

… [T]he cause of action to recover damages for unjust enrichment accrued … when the deed conveying title to the defendant was executed, and, therefore, this cause of action was also time-barred.

… [T]he cause of action alleging a violation of Real Property Law § 265-a was time-barred since it was commenced more than two years after recordation of the subject deed and more than six years after the alleged fraudulently induced conveyance. Mahabir v Snyder Realty Group, Inc., 2023 NY Slip Op 03342, Second Dept 6-21-23

Practice Point: The applicable statutes of limitations for declaratory-judgment causes of action depend on the nature of the underlying allegations. Here the underlying allegations sounded in fraud, unjust enrichment and Real Property Law causes of action. All were time-barred.

 

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