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A PLAINTIFF BRINGING A SUMMARY JUDGMENT MOTION MUST ADDRESS AFFIRMATIVE DEFENSES RAISED IN THE ANSWER; HERE IN THIS TRAFFIC ACCIDENT CASE THE GRAVES AMENDMENT, WHICH PROVIDES THAT THE OWNER OF A LEASED CAR IS NOT LIABLE FOR THE NEGLIGENCE OF THE DRIVER, WAS RAISED AS AN AFFIRMATIVE DEFENSE; BECAUSE PLAINTIFF DID NOT ADDRESS THAT ISSUE IN THE SUMMARY JUDGMENT MOTION, THE MOTION SHOULD HAVE BEEN DENIED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff in this traffic accidence case did not demonstrate the owner of defendants’ vehicle, PV Holding, was vicariously liable for the negligence of the driver of the vehicle. Therefore plaintiff’s summary judgment motion with respect to PV Holding should not have been granted. Defendants apparently raised the affirmative defense that the vehicle was leased from PV Holding and therefore was not liable under the Graves Amendment. Because that defense was not addressed in plaintiff’s summary judgment papers, the motion should have been denied:

… [I]n 2005, Congress enacted the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. That act included the Graves Amendment (49 USC § 30106), which provides that the owner of a leased or rented motor vehicle cannot be held liable for personal injuries resulting from the use of such vehicle if the owner (1) is engaged in the trade or business of renting or leasing motor vehicles, and (2) engaged in no negligence or criminal wrongdoing contributing to the accident … .* * *

“CPLR 3212(b) requires the proponent of a motion for summary judgment to demonstrate the absence of genuine issues of material fact on every relevant issue raised by the pleadings, including any affirmative defenses” … . Pierrelouis v Kuten, 2022 NY Slip Op 04314, Second Dept 7-6-22

Practice Point: A plaintiff bringing a motion for summary judgment must address affirmative defenses raised in the answer. Failure to do so requires denial of the motion. Here the Graves Amendment was raised as an affirmative defense in this traffic accident case. The Graver Amendment provides that companies in the business of leasing cars are not vicariously liable for the negligence of the drivers. Plaintiff did not address that defense in the motion for summary judgment.

 

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IN THIS “CHILD VICTIMS ACT” ACTION ALLEGING SEXUAL ABUSE IN THE 1950’S BY EMPLOYEES OF THE NOW DISSOLVED YMCA NIAGARA FALLS, THERE ARE QUESTIONS OF FACT WHETHER THE DE FACTO MERGER DOCTRINE APPLIES RENDERING YMCA BUFFALO LIABLE FOR THE TORTS OF YMCA NIAGARA FALLS (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined this “Child Victims Act” action against YMCA Buffalo, alleging sexual abuse in the 1950’s by employees at the now dissolved YMCA Niagara Falls, should not have been dismissed. The decision is comprehensive and cannot be fairly summarized here. There exist triable issues of fact whether the de facto merger doctrine applies rendering YMCA Buffalo liable for the torts of YMCA Niagara Falls:

… [A]s a general rule, “a corporation which acquires the assets of another is not liable for the torts of its predecessor” ,,, . There are exceptions, however, and thus “[a] corporation may be held liable for the torts of its predecessor if (1) it expressly or impliedly assumed the predecessor’s tort liability, (2) there was a consolidation or merger of seller and purchaser, (3) the purchasing corporation was a mere continuation of the selling corporation, or (4) the transaction is entered into fraudulently to escape such obligations” … . Plaintiff relies exclusively on the second exception, which implicates the de facto merger doctrine … . The de facto merger doctrine is “based on the concept that a successor that effectively takes over a [corporation] in its entirety should carry the predecessor’s liabilities as a concomitant to the benefits it derives from the good will purchased,” which “is consistent with the desire to ensure that a source remains to pay for the victim’s injuries” … . Dutton v Young Men’s Christian Assn. of Buffalo Niagara, 2022 NY Slip Op 04238, Fourth Dept 7-1-22

Practice Point: In this Child Victims Act action alleging sexual abuse in the 1950’s by employees of the now dissolved YMCA Niagara Falls, there are questions of fact about whether the de facto merger doctrine makes defendant YMCA Buffalo liable for the torts of YMCA Niagara Falls. The decision is comprehensive and discusses every conceivable aspect of the de facto merger doctrine as it applies to not-for-profit corporations.

 

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PLAINTIFF’S TWO SEPARATE TRAFFIC ACCIDENTS SHOULD BE TRIED TOGETHER BECAUSE PLAINTIFF ALLEGED THE INJURIES FROM THE FIRST ACCIDENT WERE EXACERBATED BY THE SECOND ACCIDENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s two separate traffic accidents should be tried jointly because plaintiff claimed the second accident exacerbated the injuries from the first accident:

… [I]n view of the plaintiff’s allegations that certain injuries which he sustained in the first automobile accident were exacerbated by the second automobile accident, in the interest of justice and judicial economy, and to avoid inconsistent verdicts, the two actions should be tried jointly … . The respondents failed to demonstrate prejudice to a substantial right if the actions are tried jointly … . Although the plaintiff moved to consolidate the two actions, the appropriate procedure is a joint trial, particularly since the actions involve different defendants … . Frank v Y. Mommy Taxi, Inc., 2022 NY Slip Op 04151, Second Dept 6-29-22

Practice Point: Here two separate traffic accidents should be tried together because plaintiff alleged the second accident exacerbated his injuries from the first accident.

 

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PLAINTIFF SERVED THE COMPLAINT ON NOVEMBER 27, 2018; DEFENDANT ATTEMPTED TO SERVE AN ANSWER, WHICH WAS REJECTED, ON JANUARY 9, 2019; DEFENDANT’S EXCUSE WAS “THE DELAY WAS CAUSED BY THE INSURANCE CARRIER;” THAT EXCUSE WAS INSUFFICIENT AND DEFENDANT’S MOTION TO COMPEL PLAINTIFF TO ACCEPT THE ANSWER SHOULD HAVE BEEN DENIED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant did not offer a reasonable excuse for serving a late answer (which was rejected) in this slip and fall case. Therefore, defendant’s motion to compel plaintiff to accept the answer should not have been granted. Defendant was served with the complaint on November 27, 2018, and defendant attempted to serve the answer on January 9, 2019:

The bare allegation by the defendant’s attorney that the delay was caused by the defendant’s insurance carrier is insufficient to excuse the delay in answering the complaint … . The absence of a reasonable excuse for the defendant’s default renders it unnecessary to determine whether she demonstrated the existence of a potentially meritorious defense … . Goldstein v Ilaz, 2022 NY Slip Op 04154, Second Dept 6-29-22

Practice Point: Here the defendant attempted to serve an answer, which was rejected, about a month and a half after plaintiff served the complaint. Defendant moved to compel the plaintiff to accept the answer. Defendant’s excuse was that the “delay was caused by the insurance carrier” with no further explanation. The Second Department deemed the excuse insufficient and ruled that the motion to compel acceptance of the answer should not have been granted.

 

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THE RELATIONSHIP BETWEEN PETITIONER AND RESPONDENT IN THIS FAMILY OFFENSE PROCEEDING MET THE DEFINITION OF “INTIMATE RELATIONSHIP” SUCH THAT FAMILY COURT HAD SUBJECT MATTER JURISDICTION (SECOND DEPT). ​

The Second Department, reversing Family Court, determined the family-offense petition should not have been dismissed for lack of subject matter jurisdiction. The Second Department determined the respondent met the “intimate relationship” criteria which provided Family Court with subject matter jurisdiction:

“[T]he determination as to whether persons are or have been in an ‘intimate relationship’ within the meaning of Family Court Act § 812(1)(e) is a fact-specific determination which may require a hearing” … . Although Family Court Act § 812(1)(e) expressly excludes a “casual acquaintance” and “ordinary fraternization between two individuals in business or social contexts” from the definition of “intimate relationship,” “the legislature left it to the courts to determine on a case-by-case basis what qualifies as an intimate relationship within the meaning of Family Court Act § 812(1)(e) based upon consideration of factors such as ‘the nature or type of relationship, regardless of whether the relationship is sexual in nature; the frequency of interaction between the persons; and the duration of the relationship'” …. .

… [T]he record demonstrated that the petitioner knew the respondent for more than 20 years, and the respondent and the petitioner’s sister held themselves out as husband and wife. During that period of time, the petitioner and the respondent engaged in general social activities at each other’s homes, attended holiday and birthday celebrations together, and traveled together. The petitioner’s sister and the respondent had a daughter together who identified the petitioner as her aunt. The petitioner resided in one of the units of a three-family home. The petitioner’s sister, the respondent, and their daughter, who was approximately 18 years old at the time of the hearing, resided in one of the other units of that three-family home. The home was owned by the mother of the petitioner and the petitioner’s sister. Under the circumstances, the Family Court should have denied the respondent’s application to dismiss the petition for lack of subject matter jurisdiction (see Family Ct Act § 812[1]). Matter of Charter v Allen, 2022 NY Slip Op 04167, Second Dept 6-29-22

Practice Point: This case demonstrates that an “intimate relationship” which gives Family Court subject matter jurisdiction in a family offense proceeding need not be a sexual relationship.

 

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QUESTIONS OF FACT ABOUT WHETHER THE INCAPACITATED PERSON (IP) WAS “INSANE” WITHIN THE MEANING OF THE CPLR WHEN HE WAS REPRESENTED BY THE DEFENDANT ATTORNEY MUST BE DETERMINED AT THE LEGAL MALPRACTICE TRIAL; IF THE IP WAS INSANE, THE MALPRACTICE STATUTE OF LIMITATIONS WILL BE TOLLED; IF NOT THE MALPRACTICE ACTION IS UNTIMELY (FIRST DEPT).

The First Department determined questions about the incapacitated person’s (IP’s) sanity should be part of the legal malpractice trial. If the IP is determined to have been “insane” at the time he was represented by defendant attorney, the statute of limitations for the legal malpractice action would have been tolled, if not, the action was not timely:

The parties do not dispute that [defendant attorney] established prima facie that this action asserting breach of fiduciary duty and related causes of action (the malpractice action) was commenced after the applicable statutes of limitations had expired. However, plaintiff raised an issue of fact whether the statutes of limitations were tolled for “insanity” (… CPLR 208[a]). Viewed in the light most favorable to plaintiff, the record presents issues of fact as to the IP’s ability to protect his legal rights and his overall ability to function in society at the time his claims against [defendant attorney] accrued … . Matter of Verdugo v Smiley & Smiley, LLP, 2022 NY Slip Op 04138, First Dept 6-28-22

Practice Point: There is an “insanity” statute-of -imitations toll in the CPLR. Here there a question of fact whether an incapacitated person was insane when he was represented by defendant attorney such that the legal malpractice statute of limitations was tolled.

 

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PLAINTIFF’S ATTORNEY WAS NOT AWARE OF COVID-RELATED PROCEDURAL CHANGES FOR CONDUCTING COMPLIANCE CONFERENCES; PLAINTIFF’S MOTION TO VACATE DISMISSAL OF THE ACTION SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the COVID-related law office failure was an adequate excuse and plaintiff’s motion to vacate the dismissal of the action should have been granted:

Supreme Court improvidently exercised its discretion in denying plaintiffs’ motion to vacate the dismissal, as plaintiffs showed both a reasonable excuse for their default and a meritorious cause of action (see CPLR 2005 …). Under the circumstances, law office failure constitutes a reasonable excuse for the default, since plaintiffs’ counsel was unaware that procedures for conducting compliance conferences had changed during the COVID-19 pandemic and, as a result, inadvertently failed to submit stipulations before a scheduled conference … .. Furthermore, plaintiffs demonstrated a meritorious cause of action by submitting the complaint, a bill of particulars, and the injured plaintiff’s deposition testimony … . Defendants also were not prejudiced by plaintiffs’ failure to appear, and indeed, did not oppose the motion to vacate … . Willner v S Norsel Realties LLC, 2022 NY Slip Op 04111, First Dept 6-23-22

Practice Point: Plaintiff’s attorney was not aware of procedural changes related to COVID and the action was dismissed because counsel did not submit stipulations before the scheduled compliance conference. This “law office failure” was a “reasonable excuse.” Plaintiff’s motion to vacate the dismissal of the action should have been granted.

 

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THERE ARE SUBSTANTIVE QUESTIONS OF FACT ABOUT THE NATURE OF THE AGREEMENTS BETWEEN PLAINTIFF EMPLOYER AND DEFENDANT EMPLOYEE RE: THE SALE OF DEFENDANT’S TAX PREPARATION BUSINESS TO PLAINTIFF AND WHETHER DEFENDANT SOLD HER CLIENT LIST TO PLAINTIFF; PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION ENFORCING THE RESTRICTIVE COVENANT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff-employer’s motion for a preliminary injunction in this violation-of-a-restrictive-covenant case should not have been granted. There were too many issues of fact about the nature of the parties’ agreement re: plaintiff’s purchase of defendant’s tax preparation business, including whether defendant turned over her client list to the plaintiff:

… [T]he plaintiff commenced this action against the defendant, its former employee, to recover damages for breach of contract. The plaintiff alleged … the parties entered into three agreements: a purchase agreement whereby the plaintiff purchased the defendant’s tax preparation business, including her client list; an agreement whereby the plaintiff employed the defendant as a tax preparer; and a confidentiality, nonsolicit, and noncompete agreement which, inter alia, contained restrictive covenants that, among other things, prohibited the defendant from soliciting the plaintiff’s clients. …

… [T]he plaintiff failed to demonstrate a clear right to relief and, thus, did not demonstrate a likelihood of success on the merits. “‘[A] restrictive covenant will only be subject to specific enforcement to the extent that it is reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee'” … . An employer’s interests justifying a restrictive covenant are limited “to the protection against misappropriation of the employer’s trade secrets or of confidential customer lists, or protection from competition by a former employee whose services are unique or extraordinary” … . Here, there are issues of fact as to what the parties agreed to, including whether the plaintiff purchased the rights to the defendant’s clients pursuant to the parties’ agreements and whether the plaintiff breached its own obligations pursuant to those agreements. Since these issues of fact exist, the plaintiff did not show a likelihood of success on the merits and, thus, failed to establish a clear right to preliminary injunctive relief … . R&G Brenner Income Tax Consultants v Fonts, 2022 NY Slip Op 04039, Second Dept 6-22-22

Practice Point: Where there are substantive questions of fact, a preliminary injunction should not be granted because a likelihood of success on the merits has not been demonstrated.

 

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IN ACCORDANCE WITH THE NURSING HOME REFORM ACT (NHRA), THE ADMISSION AGREEMENT SIGNED BY THE NURSING-HOME RESIDENT’S GRANDDAUGHTER DID NOT IMPOSE PERSONAL LIABILITY UPON THE GRANDDAUGHTER FOR PAYMENT OF THE COSTS OF THE RESIDENT’S CARE; THE GRANDDAUGHTER’S MOTION TO VACATE THE DEFAULT JUDGMENT SHOULD HAVE BEEN GRANTED AND THE BREACH-OF-CONTRACT COMPLAINT SHOULD HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the admission agreement signed by the nursing-home resident’s granddaughter (who was appointed guardian of her grandfather’s property) did not impose personal liability upon the granddaughter for payment of the cost of her resident’s care (provided by the plaintiff facility). Therefore, plaintiff should not have seized the granddaughter’s personal funds. The default judgment in favor of plaintiff should have been vacated, and the breach-of-contract complaint should have been dismissed:

… [t]he admission agreement in this case is subject to the Nursing Home Reform Act (hereinafter the NHRA). As relevant here, the NHRA provides that “[w]ith respect to admissions practices, a nursing facility must . . . not require a third party guarantee of payment to the facility as a condition of admission (or expedited admission) to, or continued stay in, the facility” … . However, that prohibition “shall not be construed as preventing a facility from requiring an individual, who has legal access to a resident’s income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident’s income or resources for such care” … .

The admissions agreement set forth the relevant contractual obligations of the granddaughter, and the admissions agreement demonstrates as a matter of law that it did not render the granddaughter a “third party guarantee of payment” … .”The admission[s] agreement merely required the [granddaughter] to facilitate payment from the . . . resident’s available income and resources, and only to the extent that the [granddaughter] had access to such income and resources and only if [the granddaughter] could do so without incurring any personal financial liability” … . …

.. [T]he plaintiff failed to adequately allege a breach of the granddaughter’s contractual obligation to facilitate payment to the plaintiff from the resident’s “income or resources” … . Nassau Operating Co., LLC v DeSimone, 2022 NY Slip Op 04029, Second Dept 6-22-22

Practice Point: The Nursing Home Reform Act (NHRA) prohibits holding a third-party who signs an admission agreement personally liable for the costs of a resident’s care. The agreement may only obligate the third party to pay the costs from the resident’s assets (over which the third party exercises control).

 

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DEFENDANT’S MOTION TO COMPEL PLANTIFF TO APPEAR FOR A PSYCHIATRIC EXAMINATION (INDEPENDENT MEDICAL EXAMINATION [IME]) SHOULD HAVE BEEN GRANTED BECAUSE PLAINTIFF HAD PLACED HER MENTAL CONDITION IN CONTROVERSY; DEFENDANT’S MOTION TO VACATE THE NOTE OF ISSUE SHOULD HAVE BEEN GRANTED BECAUSE DISCOVERY WAS NOT COMPLETE (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined defendant’s motions to compel plaintiff to appear for an independent medical examination (IME) and to vacate the note of issue should have been granted:

We find that plaintiff’s mental condition is, in fact, in controversy. Plaintiff requests compensatory damages only for her alleged emotional distress, and she has testified that she experienced depression, anxiety, and dizziness, as well as headaches brought on by severe mental anguish (CPLR 3121[a]). As a result, a mental examination by a psychiatrist is warranted to enable defendants to rebut plaintiff’s causes of action for emotional distress … .

… [W]e grant defendants’ motion to vacate the note of issue. Contrary to the certificate of readiness, discovery had not been completed, as plaintiff had not yet complied with the court’s directive to submit a Jackson affidavit detailing the process she had undertaken to search her social media post … . Lopez v Bendell, 2022 NY Slip Op 03990, First Dept 6-21-22

Practice Point: Plaintiff had placed her mental condition in controversy by testifying about depression, anxiety, dizziness and headaches caused by mental anguish. Defendant was therefore entitled to compel a psychiatric exam (an independent medical examination [IME]). Here defendant’s motion to vacate the note of issue should have been granted because defendant’s discovery was not complete.

 

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