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THE ADDITIONAL NOTICE REQUIREMENT IN CPLR 3215(G)(4) DOES NOT APPLY TO SERVICE UPON A LIMITED LIABILITY COMPANY, AS OPPOSED TO A CORPORATION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff was not required to comply with the additional notice requirement in CPLR 3215(g)(4) which does not apply to service upon a limited liability company (the defendant here), as opposed to corporations:

The court [in denying plaintiff’s motion for a default judgment] determined that the plaintiff had failed to comply with CPLR 3215(g)(4) and that the respondent had a reasonable excuse for failing to answer the complaint in that it had not been served with process. …

Contrary to the Supreme Court’s determination, the plaintiff was not required to demonstrate compliance with the additional notice requirement of CPLR 3215(g)(4) … . “By its express terms, the notice requirement is limited to situations where a default judgment is sought against a ‘domestic or authorized foreign corporation’ which has been served pursuant to Business Corporation Law § 306(b), and does not pertain to a limited liability company” … . Mitchell v Kingsbrook Jewish Med. Ctr., 2022 NY Slip Op 06477, Second Dept 11-16-22

Practice Point: The additional notice requirement for a default judgment pursuant to CPLR 3215(g)(4) does not apply to service on a limited liability company, as opposed to a corporation.

 

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THE BANK IN THIS FORECLOSURE ACTION FAILED TO LAY A FOUNDATION FOR THE BUSINESS RECORDS REQUIRED TO SHOW STANDING TO BRING THE ACTION AND DID NOT SUBMIT SUFFICIENT PROOF OF COMPLIANCE WITH THE NOTICE-OF-DEFAULT MAILING REQUIREMENTS OF RPAPL 1304 (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank in this foreclosure did not demonstrate standing the bring the action and compliance with the notice-of-default mailing requirement of RPAPL 1304:

A plaintiff has standing to maintain a mortgage foreclosure action where it is the holder or assignee of the underlying note at the time the action is commenced … . Here, in support of its motion, the plaintiff submitted the affidavit of Shamona Marisa Truesdale, a vice president of loan documentation for Wells Fargo Bank, N.A. (hereinafter Wells Fargo), the plaintiff’s loan servicer. Truesdale stated that she was familiar with Wells Fargo’s records and record-keeping practices. She further stated that the plaintiff was in possession of the note on October 8, 2009, the date this action was commenced. Truesdale’s statement that the plaintiff had possession of the note at the time this action was commenced was inadmissible hearsay. Although Truesdale stated that she was familiar with the records and record-keeping practices of Wells Fargo, the plaintiff’s loan servicer, she failed to state that she was familiar with the records and record-keeping practices of the plaintiff itself. Thus, Truesdale failed to lay a proper foundation for the admission of any of the plaintiff’s business records … . * * *

The plaintiff can establish strict compliance with RPAPL 1304 by submitting domestic return receipts, proof of a standard office procedure designed to ensure that items are properly addressed and mailed, or an affidavit from someone with personal knowledge that the mailing of the RPAPL 1304 notice actually happened … .

Here, the plaintiff relied on the affidavit of Jack Whitmarsh, a vice president of loan documentation for Wells Fargo, who averred that, based on his review of Wells Fargo’s records, the required notice was sent by both certified mail and first-class mail. The plaintiff also submitted a copy of the RPAPL 1304 notice, which was sent to the defendants at the mortgaged premises, and which was stamped with a certified mailing number, as well as a printout of a record purportedly evidencing certified mailing of the notice. However, these documents were insufficient to prove the mailing of the notice by certified mail actually occurred … . Moreover, the plaintiff failed to submit any evidence that the notice was mailed by first-class mail … . Further, Whitmarsh did not aver that he had personal knowledge of the mailing and did not describe any standard office procedure designed to ensure that the notices are mailed … . HSBC Bank USA, N.A. v Gordon, 2022 NY Slip Op 06473, Second Dept 11-16-22

Practice Point: Here the bank apparently submitted the business records necessary to demonstrate the bank’s standing to bring the foreclosure action but the accompanying affidavit did not lay a proper foundation for admitting them. In addition the bank failed to demonstrate compliance with the notice-of-default mailing requirements of RPAPL 1304.

 

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IF A TRIAL JUDGE DECIDES THE DAMAGES AWARDED BY THE JURY ARE EXCESSIVE, THE PROPER PROCEDURE IS TO ORDER A NEW TRIAL UNLESS PLAINTIFF STIPULATES TO THE REDUCED AWARD (SECOND DEPT).

The Second Department agreed with the trial judge’s reduction of damages awarded by the jury in this wrongful death case but noted that the judge should have ordered a new trial unless plaintiff stipulated to the lower damages amount:

… [W]hile the 21-year-old Bohdan [plaintiff’s decedent], who worked in the family business, lived with his parents, and cared for his younger sibling, was described as a wonderful, loving son who was especially helpful around the home, based on the record, the Supreme Court properly concluded that the jury awards for past pecuniary loss and future pecuniary loss were excessive. … . … [I]t was procedurally improper for the court to reduce the awards of damages for past pecuniary loss and future pecuniary loss without granting a new trial on those issues unless the plaintiff stipulated to reduce the verdict … . Vitenko v City of New York, 2022 NY Slip Op 06515, Second Dept 11-16-22

Practice Point: If the trial judge decides the damages awarded by the jury are excessive, the proper procedure is to order a new trial unless the plaintiff stipulates to the reduced amount.

 

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THE THREE-YEAR STATUTE OF LIMITATIONS FOR AGE DISCRIMINATION CLAIMS UNDER THE NYS AND NYC HUMAN RIGHTS LAW IS TOLLED BY FILING A CHARGE FOR AGE DISCRIMINATION WITH THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION (EEOC) (FIRST DEPT).

The First Department, reversing Supreme Court, determined the age discrimination claims under the NYS and NYC Human Rights Law were timely brought because the three-year statute of limitations was tolled when plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC):

Plaintiff’s action, asserting claims of age discrimination under the New York State Human Rights Law (Executive Law § 296[1][a]) and the New York City Human Rights Law (Administrative Code § 8-107), was timely commenced, as the three-year statute of limitations was tolled by her filing of a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) … . The filing of an EEOC charge constitutes a simultaneous and automatic filing with the New York State Division of Human Rights (SDHR) due to a work-sharing agreement between the two agencies … .

Moreover, Administrative Code § 8-502(d) provides, “[u]pon the filing of a complaint with the city commission on human rights or the state division of human rights and during the pendency of such complaint and any court proceeding for review of the dismissal of such complaint, such three-year limitations shall be tolled.” The interplay between the EEOC/SDHR work-sharing agreement and the tolling provision in § 8-502(d) “indicates that a charge filed with the EEOC would also toll the statute of limitations period for [City HRL] claims” … . Gabin v Greenwich House, Inc., 2022 NY Slip Op 06428, First Dept 11-15-22

Practice Point: Filing an age discrimination charge with the Equal Employment Opportunity Commission (EEOC) tolls the three-year statute of limitation for filing age discrimination claims pursuant the NYS and NYC Human Rights Law.

 

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BG, AN ADOLESCENT OFFENDER (AO) WITHIN THE MEANING OF THE “RAISE THE AGE ACT,” ASSAULTED A MAN AND THREW HIM ON THE SUBWAY TRACKS; A BYSTANDER JUMPED DOWN TO HELP THE ASSAULT VICTIM; THE BYSTANDER WAS KILLED BY A SUBWAY TRAIN WHICH STOPPED BEFORE REACHING THE ASSAULT VICTIM; THE JUDGE RULED THE MATTER SHOULD BE TRANSFERRED TO FAMILY COURT; THE PEOPLE SOUGHT A WRIT OF PROHIBITION WHICH WAS DENIED (FIRST DEPT).

The First Department denied the People’s request for a writ of prohibition to prevent respondent judge from sending a criminal case involving an adolescent offender (AO) to Family Court pursuant to the “Raise the Age Law.” In criminal matters involving AO’s the Raise the Age Law allows judges to decide whether the matter should heard in Family Court. Here BG, the AO, assaulted the victim  in a subway station and threw the victim on the tracks. A bystander jumped down to try to help the victim. The train was able to stop before reaching the assault victim, but the bystander who tried to help the victim was killed by the train:

Justice Semaj rejected the People’s argument that BG engaged in “heinous” conduct by pushing the surviving victim onto the tracks and leaving him there unconscious, observing that this argument was “rebutted by the video footage offered by the People,” which showed that the surviving victim “was conscious at the time he was pushed on to the tracks and even if he became unconscious once on the tracks, [BG] and another young person are seen going into the tracks and seemingly moving [him], possibly inadvertently, but . . . out of harm’s way.” The court further noted that Hueston [the bystander] chose to jump onto the train tracks, and that BG left after he “was told to leave by [Hueston].” … . * * *

“A writ of prohibition against a judge may be issued only when a court acts or threatens to act without jurisdiction in a matter of which it has no power over the subject matter or where it exceeds its authorized powers in a proceeding over which it has jurisdiction” … . “Prohibition cannot be used merely to correct errors of law, however egregious and however unreviewable” … . The Court of Appeals has stressed that, in the context of criminal proceedings, the writ should be issued “only when a court exceeds its jurisdiction or authorized power in such a manner as to implicate the legality of the entire proceeding, as for example, the prosecution of a crime committed beyond the county’s geographic jurisdiction” … . “Although the distinction between legal errors and actions in excess of power is not always easily made, abuses of power may be identified by their impact upon the entire proceeding as distinguished from an error in a proceeding itself” … . Matter of Clark v Boyle, 2022 NY Slip Op 06316, First Dept 11-10-22

Practice Point: Pursuant to the “Raise the Age Law” criminal cases involving adolescent offenders (AO’s) are reviewed by a judge who can chose to have the case heard in Family Court. The AO in this case assaulted a man and threw him onto subway tracks. The man survived but a bystander who tried to help him was killed by the train. The People sought a writ of prohibition to prevent the transfer to Family Court. The First Department laid out the strict criteria for a writ of prohibition and denied it.

 

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THE SIX-MONTH PERIOD FOR REFILING A COMPLAINT AFTER DISMISSAL (CPLR 205(A)) BEGAN TO RUN ONLY WHEN THE APPEAL OF THE DENIAL OF THE MOTION TO VACATE THE DISMISSAL WAS EXHAUSTED (FOURTH DEPT).

​The Fourth Department, reversing Supreme Court, determined the six-month period for filing a new complaint after dismissal started to run when the appeal of the denial of the motion to vacate the dismissal was exhausted:

Where a plaintiff has sought to appeal as of right from the denial of a motion to vacate the dismissal of its action, the action terminates for purposes of CPLR 205 (a) when the appeal “is truly ‘exhausted,’ either by a determination on the merits or by dismissal of the appeal, even if the appeal is dismissed as abandoned … . “Here, the dismissal of the 2012 action “did not constitute a final termination of that action within the meaning of CPLR 205 (a) because plaintiff’s predecessor in interest was statutorily authorized to file a motion to vacate [the dismissal] and to appeal from the denial of that motion” … . The 2012 action thus terminated for purposes of CPLR 205 (a) on November 30, 2018, when this Court dismissed the appeal and plaintiff’s predecessor in interest thereby exhausted its right of appeal … . Inasmuch as the instant action was commenced within six months of November 30, 2018, we conclude that it was timely commenced. MTGLQ Invs., LP v Zaveri, 2022 NY Slip Op 06335, Fourth Dept 11-10-22

Practice Point: The six-month period for refiling a complaint after dismissal (CPLR 208(a)) begins to run only after the appeal from the denial of a motion to vacate the dismissal is exhausted.

 

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THE NOTE REQUIRED THE APPLICATION OF FLORIDA SUBSTANTIVE AND PROCEDURAL LAW TO THE “TERMS OF THE DOCUMENTS” BUT SPECIFICALLY CONTEMPLATED A SUIT IN EITHER NEW YORK OR FLORIDA; THEREFORE SUPREME COURT SHOULD NOT HAVE INTERPRETED THE CHOICE OF LAW PROVISIONS TO RULE OUT A NEW YORK LAWSUIT (FOURTH DEPT). ​

The Fourth Department, reversing Supreme Court, determined that the terms of the note which required the application of Florida law did not preclude bringing the action in New York. The language in the note indicated the parties intended suit to be brought either in New York or Florida:

[Supreme Court] stated in its decision that, “having elected to have the ‘procedur[al] laws of the State of Florida’ apply exclusively in this action, the [p]laintiff could not rely on any of the provisions of New York’s Civil Practice Law and Rules in prosecuting this action.” The court relied on CPLR 101, which the court quoted in its decision as providing, in pertinent part, that ” ‘[t]he civil practice law and rules shall govern the procedure in civil judicial proceedings in all courts of the state and before all judges, except where the procedure is regulated by inconsistent statute’ ” … . The court … concluded that, due to the perceived conflict between the contractual choice-of-law provisions and CPLR 101, it could not grant the [plaintiff’s summary judgment] motion. * * *

“Contractual ‘[c]hoice of law provisions typically apply to only substantive issues’ ” … , although parties can agree otherwise. Here, the note provides that “[t]he terms” of the documents are to be governed by the substantive and procedural rules of Florida, but that does not establish that the rules of Florida were intended to govern the procedures of the New York State court system, which would effectively preclude any action on the note in New York. Indeed, the note itself provides that venue for any action related to the note may be in either “Onondaga County, New York or Broward County, Florida.” Thus, the parties anticipated that New York courts could and would be able to handle a judicial action related to the note … . Bankers Healthcare Group, LLC v Pasumbal, 2022 NY Slip Op 06334, Fourth Dept 11-10-22

Practice Point: The choice of law provisions in the note required the application of Florida substantive and procedural law to the “terms of the documents” and also stated suit could be brought in either New York or Florida. Supreme Court should not have interpreted the choice of law provisions to rule out a New York lawsuit.

 

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​ IN THIS FORECLOSURE ACTION, THE BANK FAILED TO PROVE DEFENDANT’S DEFAULT (EVIDENCE SUBMITTED IN REPLY NOT CONSIDERED) AND THE BANK FAILED TO DEMONSTRATE IT NOTIFIED A TENANT OF THE FORECLOSURE AS REQUIRED BY RPAPL 1303 (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiff bank (Merrill Lynch) in this foreclosure action failed to prove defendant’s default and failed to notify a tenant on the property of the foreclosure. The bank’s attempt to prove the default in reply papers was rejected:

Merrill Lynch failed to submit admissible evidence establishing the defendant’s default. In support of its motion, Merrill Lynch submitted, inter alia, the affidavit of Theresia Ang, the vice president of its loan servicer and attorney-in-fact. However, Ang failed to attach the business records on which she relied, and thus, her averment to the defendant’s default was hearsay lacking in probative value … . Although Merrill Lynch attempted to submit evidence of the defendant’s default in reply, a moving party “cannot meet its prima facie burden by submitting evidence for the first time in reply” … .

… RPAPL 1303 requires, inter alia, the party foreclosing a mortgage on residential property to provide the notice prescribed by the statute to any tenant of the property by certified mail, if the identity of the tenant is known to the foreclosing party (see id. § 1303[1][b]; [4]). Proper service of an RPAPL 1303 notice is a condition precedent to commencing a foreclosure action, and the “‘foreclosing party has the burden of showing compliance therewith'” … .

Here, Merrill Lynch failed to submit any evidence that it served any tenant of the subject property with the notices required by RPAPL 1303 by certified mail, or that it was not aware of any tenant’s identity. In contrast, the defendant’s affidavit and the affidavit of Richard Nicholson, submitted in opposition to Merrill Lynch’s motion, established that Richard Nicholson resided at the subject property, that he paid rent, and that the mortgage loan servicer was aware that he resided at the subject property. Merrill Lynch Credit Corp. v Nicholson, 2022 NY Slip Op 06239, Second Dept 11-9-22

Practice Point: The bank in this foreclosure action failed to submit sufficient evidence of defendant’s default and was not allowed to cure the defect in reply papers.

Practice Point: The bank in this foreclosure action did not demonstrate it notified a tenant of the foreclosure as required by RPAPL 1303.

 

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REPEATED FAILURES TO COMPLY WITH DISCOVERY ORDERS WITH NO EXCUSE WARRANTED STRIKING DEFENDANTS’ ANSWER (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendants’ failure to comply with discovery orders justified striking the answer:

Supreme Court improvidently exercised its discretion in denying that branch of the plaintiffs’ motion which was pursuant to CPLR 3126 to strike the defendants’ answer. The defendants’ willful and contumacious conduct can be inferred from their repeated failures, over an extended period of time, to comply with the plaintiffs’ discovery demands and the court’s discovery orders without an adequate excuse … . L.K. v City of New York, 2022 NY Slip Op 06236, Second Dept 11-9-22

Practice Point: Here the defendants offered no excuse for their failure to comply with discovery orders and the appellate court struck their answer.

 

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THE BANK DID NOT DEMONSTRATE THE ALLONGE, A SEPARATE PAPER, WAS FIRMLY ATTACHED TO THE NOTE, AS REQUIRED BY THE UCC; THEREFORE THE BANK DID NOT DEMONSTRATE IT HAD STANDING TO BRING THE FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank did not demonstrate standing to bring the foreclosure action:

… [T]he plaintiff failed to establish, prima facie, that it had standing to commence the action based on its annexation of the note to the summons and complaint, since the plaintiff did not demonstrate that the purported allonge, which was on a piece of paper completely separate from the note, was “so firmly affixed thereto as to become a part thereof,” as required by UCC 3-202(2) … . Hudson City Sav. Bank v Ellia, 2022 NY Slip Op 06235, Second Dept 11-9-22

Practice Point: When a defendant contests the bank’s standing to bring a foreclosure action, the bank must prove the allonge (a separate paper) was “firmly attached” to the note as required by UCC 3-202(2).

 

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