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NO OUT-OF-POCKET LOSS ALLEGED, FRAUDULENT INDUCEMENT CAUSE OF ACTION PROPERLY DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION.

The Court of Appeals, in a full-fledged opinion by Judge Rivera, determined plaintiff chef’s failure to allege out-of-pocket loss in this fraudulent inducement action required dismissal of the complaint for failure to state a cause of action. Plaintiff was hired by defendant restaurant (Chipotle) to develop a ramen restaurant chain. Plaintiff was an at will employee by the terms of his contract. All went well until plaintiff was told defendant had contracted with another chef for the same service, the deal had fallen apart, and the other chef would sue upon the opening of the ramen restaurant. Plaintiff was fired after confronting defendant about the deal with the other chef. Plaintiff alleged he was fraudulently induced to contract with Chipotle in that he never would have entered the agreement had he been informed of the failed deal with the other chef:

In New York, as in multiple other states, “‘[t]he true measure of damage is indemnity for the actual pecuniary loss sustained as the direct result of the wrong’ or what is known as the ‘out-of-pocket’ rule” … . Under that rule, “[d]amages are to be calculated to compensate plaintiffs for what they lost because of the fraud, not to compensate them for what they might have gained . . . . [T]here can be no recovery of profits which would have been realized in the absence of fraud” … . Moreover, this Court has “consistent[ly] refus[ed] to allow damages for fraud based on the loss of a contractual bargain, the extent, and indeed . . . the very existence of which is completely undeterminable and speculative” … . Connaughton v Chipotle Mexican Grill, Inc., 2017 NY Slip Op 03445, CtApp 5-2-17

FRAUD (NO OUT-OF-POCKET LOSS ALLEGED, FRAUDULENT INDUCEMENT CAUSE OF ACTION PROPERLY DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION)/CONTRACT LAW (FRAUDULENT INDUCEMENT, NO OUT-OF-POCKET LOSS ALLEGED, FRAUDULENT INDUCEMENT CAUSE OF ACTION PROPERLY DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION)/FRAUDULENT INDUCEMENT (CONTRACT LAW, NO OUT-OF-POCKET LOSS ALLEGED, FRAUDULENT INDUCEMENT CAUSE OF ACTION PROPERLY DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION)/EMPLOYMENT LAW (FRAUDULENT INDUCEMENT, CONTRACT LAW, NO OUT-OF-POCKET LOSS ALLEGED, FRAUDULENT INDUCEMENT CAUSE OF ACTION PROPERLY DISMISSED FOR FAILURE TO STATE A CAUSE OF ACTION)

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PHOTOGRAPHER WAS AN INDEPENDENT CONTRACTOR NOT AN EMPLOYEE, NO VICARIOUS LIABILITY FOR INJURY CAUSED BY PHOTOGRAPHER.

The Second Department determined a wedding photographer (Kataiev) was an independent contractor and the company which hired him (HR) could not be vicariously liable for injuries to plaintiff allegedly caused by the photographer:

“The general rule is that an employer who hires an independent contractor is not liable for the independent contractor’s negligent acts” … . “The determination of whether an employer-employee relationship exists turns on whether the alleged employer exercises control over the results produced, or the means used to achieve the results. Control over the means is the more important consideration” … . “Factors relevant to assessing control include whether the worker (1) worked at his own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer’s payroll and (5) was on a fixed schedule” … . ” [I]ncidental control over the results produced without further indicia of control over the means employed to achieve the results will not constitute substantial evidence of an employer-employee relationship'”… .

Here, HR demonstrated, prima facie, that Kataiev was hired as an independent contractor. The transcripts of the deposition testimony submitted in support of HR’s motion established that HR hired Kataiev only for the wedding, that HR did not provide Kataiev with health insurance, that HR did not provide Kataiev with a W-2 form, that Kataiev used his own equipment at the wedding, that HR paid Kataiev in cash, and that HR did not withhold Social Security taxes or employment taxes from the money paid to Kataiev … . Additionally, the evidence submitted by HR demonstrated, prima facie, that HR exercised only minimal or incidental control over Kataiev’s work … . Weinfeld v HR Photography, Inc., 2017 NY Slip Op 03038, 2nd Dept 4-19-17

EMPLOYMENT LAW (VICARIOUS LIABILITY, PHOTOGRAPHER WAS AN INDEPENDENT CONTRACTOR NOT AN EMPLOYEE, NO VICARIOUS LIABILITY FOR INJURY CAUSED BY PHOTOGRAPHER)/NEGLIGENCE (EMPLOYMENT LAW, PHOTOGRAPHER WAS AN INDEPENDENT CONTRACTOR NOT AN EMPLOYEE, NO VICARIOUS LIABILITY FOR INJURY CAUSED BY PHOTOGRAPHER)/VICARIOUS LIABILITY (EMPLOYMENT LAW, PHOTOGRAPHER WAS AN INDEPENDENT CONTRACTOR NOT AN EMPLOYEE, NO VICARIOUS LIABILITY FOR INJURY CAUSED BY PHOTOGRAPHER)

BAR NOT LIABLE FOR ASSAULT BY SECURITY GUARD WHO WAS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE.

The First Department determined defendant bar (BR Guest’s) was not vicariously liable for an assault on plaintiff by a security guard (DiPaola), who was an independent contractor:

The record establishes that DiPaola, a security guard, was an independent contractor when the incident occurred … . The evidence shows that DiPaola was not on BR Guest’s payroll, did not receive health insurance or other fringe benefits, and that BR Guest contracted for his services as a security guard from defendant Presidium, LLC … .

The record reveals nothing more than general supervisory control, which cannot form the basis for imposing liability against BR Guest or Hanson, who was the vice president of BR Guest Inc., for plaintiff’s injuries sustained as a result of DiPaola’s assault … . The fact that BR Guest decided the number of security guards needed on a particular night and where on the premises the guards should be posted at any given time, and gave them instructions relating to the manner in which they performed their work does not render the security guards working at the premises special employees … . McLaughlan v BR Guest, Inc., 2017 NY Slip Op 02906, 1st Dept 4-13-17

 

INTENTIONAL TORTS (BAR NOT LIABLE FOR ASSAULT BY SECURITY GUARD WHO WAS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE)/ASSAULT (INTENTIONAL TORT, BAR NOT LIABLE FOR ASSAULT BY SECURITY GUARD WHO WAS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE)/EMPLOYMENT LAW (INTENTIONAL TORT, BAR NOT LIABLE FOR ASSAULT BY SECURITY GUARD WHO WAS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE)/ASSAULT (INTENTIONAL TORT, BAR NOT LIABLE FOR ASSAULT BY SECURITY GUARD WHO WAS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE)/SECURITY GUARDS  (INTENTIONAL TORT, BAR NOT LIABLE FOR ASSAULT BY SECURITY GUARD WHO WAS AN INDEPENDENT CONTRACTOR, NOT AN EMPLOYEE)

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PLAINTIFF PROPERLY OPTED TO SUE EMPLOYER FOR WORKPLACE INJURY, EMPLOYER DID NOT CARRY WORKERS’ COMPENSATION INSURANCE.

The Second Department determined plaintiff’s personal injury action against his employer (Montalvo) should not have been dismissed. The employer did not have Workers’ Compensation insurance and plaintiff properly opted to sue:

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Generally, “Workers’ Compensation benefits are [t]he sole and exclusive remedy of an employee against his employer for injuries in the course of employment” … . “This precludes suits against an employer for injuries in the course of employment” … . Here, however, the plaintiff properly elected his remedy of pursuing this action against Montalvo under Workers’ Compensation Law §§ 11 and 50, since Montalvo did not carry Workers’ Compensation coverage at the time of the accident … , a fact conceded by Montalvo’s counsel in a statement that constituted a judicial admission … . Accordingly, the trial court should not have granted Montalvo’s trial motion pursuant to CPLR 3211(a)(7). Rosario v Montalvo & Son Auto Repair Ctr., Ltd., 2017 NY Slip Op 02837, 2nd Dept 4-12-17

WORKERS’S COMPENSATION LAW (PLAINTIFF PROPERLY OPTED TO SUE EMPLOYER FOR WORKPLACE INJURY, EMPLOYER DID NOT CARRY WORKERS’ COMPENSATION INSURANCE)/EMPLOYMENT LAW (PLAINTIFF PROPERLY OPTED TO SUE EMPLOYER FOR WORKPLACE INJURY, EMPLOYER DID NOT CARRY WORKERS’ COMPENSATION INSURANCE)

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DISCRIMINATION AND RETALIATION CAUSES ACTION, AS WELL AS A FAMILY AND MEDICAL LEAVE ACT CAUSE OF ACTION, SHOULD NOT HAVE BEEN DISMISSED.

The Second Department, modifying Supreme Court determined the discrimination and retaliation causes of action under the New York State Human Rights Law (NYSHRL) and the New York City Human Rights Law (NYCHRL) should not have been dismissed. In addition, the court determined the Family and Medical Leave Act (FMLA) cause of action should not have been dismissed on the ground the defendant companies had less than 50 employees because there was question of fact whether single or joint employer doctrine should apply:

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Here, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the first and second causes of action insofar as they alleged discrimination and retaliation in violation of the NYSHRL and the NYCHRL, and the third cause of action pursuant to the NYSHRL and the NYCHRL, by proffering, among other things, a legitimate, nondiscriminatory reason for the plaintiff’s termination. The defendants cited, among other things, the plaintiff’s disciplinary record, which included numerous infractions. The plaintiff, however, raised triable issues of fact, inter alia, on the issue of pretext, by referring to his good disciplinary record for the first three years of his employment, followed by frequent citations for disciplinary issues which commenced only after he allegedly began complaining of discriminatory treatment on the basis of association, ancestry, and religion. Under these circumstances, the Supreme Court erred in determining that the plaintiff failed to raise triable issues of fact regarding so much of his first through third causes of action as alleged discrimination and retaliation in violation of the NYSHRL and NYCHRL.  Macchio v Michaels Elec. Supply Corp., 2017 NY Slip Op 02636, 2nd Dept 4-5-17

EMPLOYMENT LAW (DISCRIMINATION AND RETALIATION CAUSES ACTION, AS WELL AS A FAMILY AND MEDICAL LEAVE ACT CAUSE OF ACTION, SHOULD NOT HAVE BEEN DISMISSED)/HUMAN RIGHTS LAW (EMPLOYMENT LAW, DISCRIMINATION AND RETALIATION CAUSES ACTION, AS WELL AS A FAMILY AND MEDICAL LEAVE ACT CAUSE OF ACTION, SHOULD NOT HAVE BEEN DISMISSED)/DISCRIMINATION (EMPLOYMENT LAW, DISCRIMINATION AND RETALIATION CAUSES ACTION, AS WELL AS A FAMILY AND MEDICAL LEAVE ACT CAUSE OF ACTION, SHOULD NOT HAVE BEEN DISMISSED)/FAMILY AND MEDICAL LEAVE ACT (EMPLOYMENT LAW, DISCRIMINATION AND RETALIATION CAUSES ACTION, AS WELL AS A FAMILY AND MEDICAL LEAVE ACT CAUSE OF ACTION, SHOULD NOT HAVE BEEN DISMISSED)

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TERMINATION OF OUT OF WORK SCHOOL DISTRICT EMPLOYEE PURSUANT TO THE CIVIL SERVICE LAW IS NOT ARBITRABLE, PETITION TO STAY ARBITRATION SHOULD HAVE BEEN GRANTED.

The Second Department determined the school district’s petition to stay arbitration should have been granted. A school district employee, Turco, was injured on the job and was out of work on Workers’ Compensation leave for more than a year. The district terminated his employment pursuant to Civil Service Law 71. Turco filed a grievance with his union alleging the termination violated the collective bargaining agreement. The Second Department held that the matter was not arbitrable because of the conflict between the agreement and the statute:

Despite the general policy favoring the resolution of disputes by arbitration, some matters, because of competing considerations of public policy, cannot be heard by an arbitrator. “If there is some statute, decisional law or public policy that prohibits arbitration of the subject matter of dispute, . . . the claim is not arbitrable'” … . Indeed, the public policy exception can be invoked as a threshold issue to preclude arbitration pursuant to CPLR 7503 … . “Preemptive judicial intervention in the arbitration process is warranted where the arbitrator [cannot] grant any relief without violating public policy” … . * * *

Here, the district terminated Turco’s employment pursuant to Civil Service Law § 71. Section 71 provides that a public employer may terminate an employee who is absent due to an occupational disability for a cumulative period of one year if the employee remains physically or mentally unable to return to work … . Matter of Enlarged City Sch. Dist. of Middletown N.Y. v Civil Serv. Empls. Assn., Inc., 2017 NY Slip Op 02421, 2nd Dept 3-29-17

 

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DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR.

The Second Department, reversing Supreme Court, determined defendants Tuapanta and Hanif (driver and owner of the car involved in an accident) were not employees of defendant car service, Church Ave. Therefore the car service was not liable to plaintiff passenger:

Here, Church Ave established, prima facie, that Tuapanta and Hanif were independent contractors, not its employees. The evidence submitted by Church Ave showed that it is a licensed livery base station in the business of dispatching for-hire vehicles. Specifically, Church Ave receives calls from customers seeking transportation services and then dispatches such calls to drivers of vehicles affiliated with it. Church Ave further demonstrated that it does not own the vehicles to which it dispatches calls and that it does not provide any services to drivers other than transmitting a customer’s request for transportation services. Drivers are responsible for their own schedules, choosing when to turn on their two-way radios and deciding which dispatches to accept. Drivers are free to provide their services to other car services and they retain all of the monies paid by the customers. Drivers pay Church Ave $100 per week to use the service. Church Ave does not provide a salary to the drivers, nor does it provide them with any tax forms. Drivers are also responsible for maintaining their own insurance. There were no written agreements or meetings between the drivers and Church Ave, nor did Church Ave provide any manuals, policies, or procedures for the drivers outside of establishing prices. Under these circumstances, Church Ave established, prima facie, that it did not exercise sufficient control to give rise to liability under the doctrine of respondeat superior … . Castro-Quesada v Tuapanta, 2017 NY Slip Op 02014, 2nd Dept 3-22-17

EMPLOYMENT LAW (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/RESPONDEAT SUPERIOR (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/INDEPENCENT CONTRACTOR (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/NEGLIGENCE (RESPONDEAT SUPERIOR, DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)

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DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR.

The Second Department, reversing Supreme Court, determined defendants Tuapanta and Hanif (driver and owner of the car involved in an accident) were not employees of defendant car service, Church Ave. Therefore the car service was not liable to plaintiff passenger:

Here, Church Ave established, prima facie, that Tuapanta and Hanif were independent contractors, not its employees. The evidence submitted by Church Ave showed that it is a licensed livery base station in the business of dispatching for-hire vehicles. Specifically, Church Ave receives calls from customers seeking transportation services and then dispatches such calls to drivers of vehicles affiliated with it. Church Ave further demonstrated that it does not own the vehicles to which it dispatches calls and that it does not provide any services to drivers other than transmitting a customer’s request for transportation services. Drivers are responsible for their own schedules, choosing when to turn on their two-way radios and deciding which dispatches to accept. Drivers are free to provide their services to other car services and they retain all of the monies paid by the customers. Drivers pay Church Ave $100 per week to use the service. Church Ave does not provide a salary to the drivers, nor does it provide them with any tax forms. Drivers are also responsible for maintaining their own insurance. There were no written agreements or meetings between the drivers and Church Ave, nor did Church Ave provide any manuals, policies, or procedures for the drivers outside of establishing prices. Under these circumstances, Church Ave established, prima facie, that it did not exercise sufficient control to give rise to liability under the doctrine of respondeat superior … . Castro-Quesada v Tuapanta, 2017 NY Slip Op 02014, 2nd Dept 3-22-17

EMPLOYMENT LAW (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/RESPONDEAT SUPERIOR (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/INDEPENCENT CONTRACTOR (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/NEGLIGENCE (RESPONDEAT SUPERIOR, DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)

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DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR.

The Second Department, reversing Supreme Court, determined defendants Tuapanta and Hanif (driver and owner of the car involved in an accident) were not employees of defendant car service, Church Ave. Therefore the car service was not liable to plaintiff passenger:

Here, Church Ave established, prima facie, that Tuapanta and Hanif were independent contractors, not its employees. The evidence submitted by Church Ave showed that it is a licensed livery base station in the business of dispatching for-hire vehicles. Specifically, Church Ave receives calls from customers seeking transportation services and then dispatches such calls to drivers of vehicles affiliated with it. Church Ave further demonstrated that it does not own the vehicles to which it dispatches calls and that it does not provide any services to drivers other than transmitting a customer’s request for transportation services. Drivers are responsible for their own schedules, choosing when to turn on their two-way radios and deciding which dispatches to accept. Drivers are free to provide their services to other car services and they retain all of the monies paid by the customers. Drivers pay Church Ave $100 per week to use the service. Church Ave does not provide a salary to the drivers, nor does it provide them with any tax forms. Drivers are also responsible for maintaining their own insurance. There were no written agreements or meetings between the drivers and Church Ave, nor did Church Ave provide any manuals, policies, or procedures for the drivers outside of establishing prices. Under these circumstances, Church Ave established, prima facie, that it did not exercise sufficient control to give rise to liability under the doctrine of respondeat superior … . Castro-Quesada v Tuapanta, 2017 NY Slip Op 02014, 2nd Dept 3-22-17

EMPLOYMENT LAW (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/RESPONDEAT SUPERIOR (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/INDEPENCENT CONTRACTOR (DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)/NEGLIGENCE (RESPONDEAT SUPERIOR, DRIVER AND CAR OWNER WERE NOT EMPLOYEES OF CAR SERVICE, CAR SERVICE THEREFORE NOT LIABLE FOR ACCIDENT UNDER DOCTRINE OF RESPONDEAT SUPERIOR)

QUESTION OF FACT WHETHER BOUNCER WAS ACTING WITHIN THE SCOPE OF HIS EMPLOYMENT WHEN HE THREW PLAINTIFF TO THE GROUND.

The First Department determined defendant bar’s motion for summary judgment dismissing plaintiff’s respondeat superior claim was properly denied. Plaintiff was thrown to the ground by the bar’s bouncer. There was a question of fact whether the bouncer was acting within the scope of his employment:

Plaintiff was assaulted by a security guard/bouncer in the employ of defendant after plaintiff, who had been denied admittance to defendant’s bar because of perceived intoxication, grabbed the baseball cap from the bouncer’s head. Less than 30 seconds elapsed between plaintiff taking the cap and the bouncer throwing plaintiff to the ground, which occurred approximately 10 feet from the entrance to defendant’s bar. On this record, it cannot be concluded, as a matter of law, that the bouncer was acting outside the scope of his employment at the time of the assault … . Salem v MacDougal Rest. Inc., 2017 NY Slip Op 01832, 1st Dept 3-15-17

EMPLOYMENT LAW (NEGLIGENCE, QUESTION OF FACT WHETHER BOUNCER WAS ACTING WITHIN THE SCOPE OF HIS EMPLOYMENT WHEN HE THREW PLAINTIFF TO THE GROUND)/RESPONDEAT SUPERIOR (NEGLIGENCE, QUESTION OF FACT WHETHER BOUNCER WAS ACTING WITHIN THE SCOPE OF HIS EMPLOYMENT WHEN HE THREW PLAINTIFF TO THE GROUND)

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