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IN THIS SUIT BY YELLOW CAB MEDALLION OWNERS AGAINST THE NYC TAXI AND LIMOUSINE COMMISSION, PLAINTIFFS DID NOT STATE A CLAIM FOR BREACH OF AN IMPLIED COVENANT OF GOOD FAITH OR DECEPTIVE BUSINESS PRACTICES; PLAINTIFFS’ CLAIMS WERE BASED UPON DEFENDANTS’ ALLEGED FAILURE TO REGULATE COMPETING SERVICES LIKE UBER AND LYFT (CT APP).

The Court of Appeals determined the lawsuit against the NYC Taxi and Limousine Commission (TLC) and New York City by taxi services which purchased yellow cab medallions at an auction in 2013 failed to state a claim. The plaintiffs argued defendants breached an implied covenant of good faith by failing to regulate competing services like Uber and Lyft and engaged in deceptive business practices under General Business Law 349:

… [T]he covenant cannot be used to “imply obligations inconsistent with other terms of the contractual relationship,” and encompasses only those “promises which a reasonable person in the position of the promisee would be justified in understanding were included” … . * * *

… [P]laintiffs acknowledged in the bid forms that defendants made no representations or warranties “as to the present or future value of a taxicab medallion.” As plaintiffs concede on this appeal, that language is flatly inconsistent with any suggestion that defendants guaranteed the value of their medallions. …

… [P]laintiffs acknowledged in the bid forms that defendants made no representations or warranties “as to the present or future application or provisions of the rules of the [TLC] or applicable law.” The plain language of that disclaimer put plaintiffs on notice that they—not defendants—bore the risk that either TLC’s rules or its “application” thereof might change after the sale of the medallions. * * *

Section 349 prohibits “[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state” (General Business Law § 349 [a] …). …. [T]he government’s issuance of a taxicab license is not a consumer-oriented transaction protected by section 349 … . Singh v City of New York, 2023 NY Slip Op 02141, CtApp 4-25-23

Practice Point: Yellow cab medallion holders, when the purchased the medallions at auction, agreed the bid included disclaimers stating the future value of the medallions was not guaranteed. Therefore the breach-of-a-covenant-of-good-faith cause of action failed. In addition, the deceptive business practices (General Business Law 349) cause of action the purchase of yellow cab medallions is not a consumer-oriented transaction subject to the statute.

 

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MEDICAL RECORDS DEMONSTRATED THE NEGLIGENT FAILURE TO DIAGNOSE A SEVERED NERVE; THEREFORE THE MEDICAL FACILITY WAS DEEMED TO HAVE HAD TIMELY NOTICE OF THE NATURE OF THE MALPRACTICE CLAIM; THE PETITION FOR LEAVE TO FILE AND SERVE A LATE NOTICE OF CLAIM SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the petition to file a late notice of claim in this medical malpractice action should have been granted. The medical facilities’ (NHCC’S) failure to diagnose a severed nerve was apparent from the medical records. Therefore NHCC had timely notice of the nature of the claim:

Medical records can establish actual knowledge of the essential facts constituting a claim where they “evince that the medical staff, by its acts or omissions, inflicted an[ ] injury on plaintiff” … . “While expert opinion may be helpful to this showing, it is not required where ‘the basic facts underlying the malpractice claims [can] be gleaned from the . . . medical records'” … . Here, NHCC acquired actual knowledge of the essential facts constituting the petitioners’ claim, since its employees participated in the acts or omissions giving rise to the claim and prepared medical records from which it could be readily inferred that NHCC negligently failed to timely diagnose and treat the injured petitioner’s nerve injury … .

Further, under the circumstances of this case, the petitioners demonstrated a reasonable excuse for the delay in serving a notice of claim based upon, inter alia, the injured petitioner not learning of the nerve injury until his surgery on March 11, 2021, followed by his recovery time from the surgery and inability to consult with an attorney until after he was fully vaccinated for COVID-19 due to preexisting health conditions … .

Moreover, the petitioners presented a “plausible argument” that NHCC could conduct an adequate investigation of the claim despite the delay, and thus, NHCC would not be substantially prejudiced by the late notice of claim … . Matter of Cleary v Nassau Health Care Corp., 2023 NY Slip Op 02121, Second Dept 4-26-23

Practice Point: Here the medical records were deemed to have provided the medical facility with timely knowledge of the negligent failure to diagnose a severed nerve. Therefore the petition for leave to file and serve a late notice of claim should have been granted.

 

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​ A FIRE DISTRICT CANNOT BE HELD VICARIOUSLY LIABLE UNDER A NEGLIGENCE STANDARD FOR THE ACTIONS OF A VOLUNTEER FIREFIGHTER DRIVING A FIRE TRUCK WHERE THE DRIVER DOES NOT VIOLATE THE RECKLESS-DISREGARD STANDARD FOR EMERGENCY VEHICLES (CT APP). ​

The Court of Appeals, reversing the appellate division, over a two-judge dissent, in a full-fledged opinion by Judge Cannataro, determined a municipality cannot be held vicariously liable under a negligence standard for the actions of a volunteer firefighter driving a firetruck where the driver is protected by the higher reckless-disregard standard for emergency vehicles under the Vehicle and Traffic Law:

Based on undisputed testimony that the firefighter was responding to an alarm of fire, had activated the fire truck’s lights and sirens, stopped the fire truck before entering the intersection, and proceeded slowly through the red light, Supreme Court held that the firefighter had “established prima facie entitlement to the exemption in Vehicle and Traffic Law § 1104,” and that plaintiff had failed to raise a triable issue in opposition as to whether the firefighter acted with reckless disregard. The court therefore granted summary judgment to the firefighter. However, the court reached a different result with respect to the vicarious liability of the District. Relying on General Municipal Law § 205-b, “which states, in part, that ‘fire districts created pursuant to law shall be liable for the negligence of volunteer firefighters,'” the court concluded that questions of fact existed regarding whether the firefighter “was negligent in failing to see plaintiff’s vehicle approaching,” and, thus, the District was not entitled to summary judgment. * * *

… [S]ection 1104 does more than simply immunize firefighters from negligence liability for otherwise privileged conduct … . It modifies their underlying duties in the defined contexts by (i) permitting categories of conduct which would violate other drivers’ ordinary duty of care, (ii) specifying particular safety precautions which must be observed when engaging in such conduct, and (iii) requiring emergency vehicle drivers to avoid recklessness even when engaged in the privileged conduct. When a volunteer firefighter’s actions satisfy all of these conditions and thus are privileged, there is simply no breach of duty or negligence which can be imputed to a fire district under General Municipal Law § 205-b. Anderson v Commack Fire Dist., 2023 NY Slip Op 02028, CtApp 4-20-23

Practice Point: If the volunteer firefighter driving a firetruck does not violate the reckless disregard standard for emergency vehicles, the fire district cannot be held vicariously liable under a negligence standard.

 

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PETITIONER DID NOT DEMONSTRATE THE COUNTY HAD TIMELY KNOWLEDGE OF THE FACTS UNDERLYING THE FALSE IMPRISONMENT AND MALICIOUS PROSECUTION CAUSES OF ACTION; THEREFORE PETITIONER SHOULD NOT HAVE BEEN GRANTED LEAVE TO FILE A LATE NOTICE OF CLAIM (SECOND DEPT).

The Second Department, reversing Supreme Court, determined petitioner should not have been granted leave to serve a late notice of claim in this false imprisonment/malicious prosecution action because petitioner did not demonstrate the municipality had timely notice of the potential lawsuit:

… [T]he petitioner failed to establish that the respondents acquired actual knowledge of the essential facts constituting his claims within 90 day after the claims arose or a reasonable time thereafter … . Moreover, the petitioner’s ignorance of the law was not a reasonable excuse for his failure to serve a timely notice of claim … . Finally, the petitioner failed to come forward with “some evidence or plausible argument” that the respondents will not be substantially prejudiced in maintaining a defense … . The conclusory assertion of the petitioner’s counsel in an affirmation in support of the petition that the respondents were “not prejudiced in any manner by this delay” was inadequate to satisfy the petitioner’s minimal initial burden with respect to this factor … . Matter of Pil-Yong Yoo v County of Suffolk, 2023 NY Slip Op 02008, Second Dept 4-19-23

Practice Point: Here the petitioner did not demonstrate the county had timely knowledge of the facts underlying the false imprisonment and malicious prosecution causes of action. Therefore petitioner should not have been granted leave to file a late notice of claim.

 

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PLAINTIFFS COULD NOT DEMONSTRATE RELIANCE UPON THE INFLATED RENTS DESCRIBED IN THE FILED REGISTRATION STATEMENTS; THEREFORE THE COMPLAINT ALLEGING A FRAUDULENT SCHEME TO DEREGULATE APARTMENTS SHOULD HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Friedman, determined defendant landlord’s motion to dismiss the complaint alleging a fraudulent scheme to deregulate apartments should have been granted. The court found that the plaintiffs did not demonstrate the “reliance” element of fraud:

The primary question on this appeal is whether plaintiffs, who allege that the predecessor in interest of defendant 75-25 153rd Street, LLC initially registered an unlawfully inflated “legal regulated rent” for each of their apartments in 2007, have sufficiently alleged, in this action commenced in 2020, the perpetration of “a fraudulent scheme to deregulate” so as to avoid the bar of the four-year lookback rule and to allow recalculation of the legal rent on the base date (in 2016), utilizing the default formula referenced in Regina [35 NY3d 332], as a basis for overcharge damages. We hold that plaintiffs have failed to allege such a fraudulent scheme because neither plaintiffs nor their predecessors in interest could have reasonably relied upon the inflated legal regulated rents on the registration statements. As the Court of Appeals recognized in Regina [35 NY3d 332], reasonable reliance is as much an element of fraud in this context as in others (see id. at 356 n 7 [“Fraud consists of evidence of a representation of material fact, falsity, scienter, reliance and injury”] [emphasis added, internal quotation marks and brackets omitted]). As more fully explained below, the inflation of the legal regulated rents set forth on the publicly filed registration statements was evident from the registration statements themselves, negating the element of reliance as a matter of law. Burrows v 75-25 153rd St., LLC, 2023 NY Slip Op 01940, First Dept 4-13-23

Practice Point: In this action alleging the fraudulent deregulation of apartments, plaintiffs were unable to demonstrate reliance upon the inflated rents described in the registration statements. Therefore the complaint alleging a fraudulent scheme to deregulate apartments should have been dismissed.

 

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THE ATTORNEY AFFIDAVIT SUBMITTED IN SUPPORT OF THE SUMMARY JUDGMENT MOTION WAS WITHOUT EVIDENTIARY VALUE; THE DEFICIENCIES IN THE ORIGINAL SUBMISSION CANNOT BE CURED IN REPLY; FAILURE TO REGISTER AN APARTMENT WITH THE CITY DHCR AND INCREASING THE RENT DO NOT DEMONSTRATE A FRAUDULENT SCHEME TO DEREGULATE (FIRST DEPT). ​

The First Department, reversing Supreme court, determined: (1) the summary judgment motion should have been supported by plaintiff’s affidavit, not the attorney’s affidavit; (2) papers submitted in reply cannot be used to remedy deficiencies in the original submission; and (3), to demonstrate a fraudulent scheme to deregulate an apartment, it is not enough to show the landlord did not register the apartment with the NYC Division of Housing and Community Renewal (DHCR) and increased the rent:

CPLR 3212(b) states, “A motion for summary judgment shall be supported by affidavit . . . The affidavit shall be by a person having knowledge of the facts.” Plaintiff failed to submit an affidavit. While he submitted his attorney’s affirmation, “[s]uch an affirmation . . . is without evidentiary value” … . Although plaintiff submitted his complaint, it is not verified, so it cannot be used in lieu of an affidavit (see CPLR 105[u] …).

… [I]n Ampim v 160 E. 48th St. Owner II LLC (208 AD3d 1085 [1st Dept 2022]), [we] said, “an increase in rent and failure to register [an] apartment with . . . DHCR . . ., standing alone, are insufficient to establish a colorable claim of a fraudulent scheme to deregulate the apartment” … .

… Plaintiff failed to demonstrate an increase in rent, or that landlord misrepresented the legal regulated rent … .

Plaintiff did show an increase in rent through documents submitted in reply. However, a movant may not use reply papers “to remedy . . . basic deficiencies in [his] prima facie showing” … . Tribbs v 326-338 E 100th LLC, 2023 NY Slip Op 01950, First Dept 4-13-23

Practice Point: The attorney affidavit submitted in support of the summary judgment motion was not based on first-hand knowledge and therefore had no evidentiary value.

Practice Point: Re: a summary judgment motion, deficiencies in the original submissions cannot be cured in reply.

Practice Point: Failure to register an apartment with the NYC DHCR coupled with raising the rent do not demonstrate a fraudulent scheme to deregulate.

 

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UNDER THE NEW YORK CITY HUMAN RIGHTS LAW, PLAINTIFF NEED NOT DEMONSTRATE AN ADVERSE EMPLOYMENT ACTION TO RECOVER FOR GENDER DISCRIMINATION (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s gender discrimination action under the NYC Human Rights Law (City HRL) should not have been dismissed:

Since “[t]he City HRL does not differentiate between sexual harassment and other forms of gender discrimination, but requires that sexual harassment be viewed as one species of sex- or gender-based discrimination” … , it was error to grant summary judgment dismissing plaintiff’s gender discrimination claim, while denying the motion with respect to the hostile work environment and sexual harassment claim. Moreover, plaintiff need not show an adverse employment action in order to establish a prima facie case of gender discrimination under the City HRL … . On this motion for summary judgment dismissing a claim under the City HRL, defendant bore the burden of showing that, based on the record evidence and drawing all reasonable inferences in plaintiff’s favor, no jury could find defendant liable for gender-based discrimination … . Here, plaintiff submits sufficient evidence to support her assertions that, after she rejected her supervisor’s sexual advances, she was unjustifiably criticized for her work product and attendance by her supervisors and was stripped of her assignments, which permits a finding that she was treated “less well” based on her gender … . Bond v New York City Health & Hosps. Corp., 2023 NY Slip Op 01939, First Dept 4-13-23

Practice Point: Under the New York City Human Rights Law a plaintiff need only show she was treated “less well” based on her gender. No adverse employment action is required.

 

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ALTHOUGH PLAINTIFF SIGNED A RELEASE AND WAIVER OF LIABILITY BEFORE ATTENDING THE DEMOLITION DERBY, PLAINTIFF RAISED A QUESTION OF FACT WHETHER DEFENDANT UNREASONABLY INCREASED THE RISK BY FAILING TO INSTALL SUFFICIENT BARRIERS TO PROTECT SPECTATORS FROM THE VEHICLES IN THE DERBY (THIRD DEPT).

The Third Department, reversing Supreme Court, determined plaintiff raised a question of fact whether defendant unreasonably increased the risk of injury at a demolition derby by failing to install sufficient barriers to protect the public from injury. Here one of the cars in the derby pushed through the concrete barriers and injured the plaintiff:

The issue … distills to whether plaintiff’s submissions “demonstrate[d] facts from which it could be concluded that defendant unreasonably enhanced the danger or created conditions which were unique or above those inherent in the activity” … . To that end, in his opposition to the motion, plaintiff submitted an affidavit averring that he was not warned that there was a risk that participating vehicles could break through the barricade and strike spectators. Plaintiff also proffered the expert affidavit of Russell E. Darnell, a licensed engineering contractor and certified National Institute of Automotive Service Excellence master technician who holds several racing licenses. … Darnell opined, among other things, that these barriers “were not up to the standard of the industry and are not generally accepted within the demolition derby community which requires sturdy, immovable barricades in a protective ring.” Waite v County of Clinton, N.Y., 2023 NY Slip Op 01831, Third Dept 4-6-23

Practice Point: The assumption-of-the-risk doctrine will not apply if the defendant unreasonably increased the risks associated with the activity. Here plaintiff raised a question fact whether the risk to spectators at a demolition derby was increased by the failure to install sufficient barriers between the spectators and the derby vehicles.

 

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COURTS HAVE ONLY A LIMITED POWER TO REVIEW AN ARBITRATOR’S RULING; HERE SUPREME COURT SHOULD NOT HAVE FOUND THE ARBITRATOR EXCEEDED HER AUTHORITY BY ORDERING BACK PAY FOR A REINSTATED COUNTY EMPLOYEE (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, determined the arbitrator in this employment dispute did not exceed her authority when she ordered that the employee be reinstated with back pay. The employee had been absent from work and the employer (the county) the absence a voluntary resignation. Supreme Court had affirmed the employee’s reinstatement but found the arbitrator had exceeded her authority by ordering the back pay:

… “[J]udicial review of arbitral awards is extremely limited. Pursuant to CPLR 7511 (b) (1), a court may vacate an award when it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator’s power” … . “Outside of these narrowly circumscribed exceptions, courts lack authority to review arbitral decisions, even where an arbitrator has made an error of law or fact” … . “[I]t is well settled that an arbitrator has broad discretion to determine a dispute and fix a remedy, and that any contractual limitation on that discretion must be contained, either explicitly or incorporated by reference, in the arbitration clause itself” … .

We discern no basis to vacate the arbitrator’s award as to back pay and benefits. Notably, the CBA [collective bargaining agreement] does not contain “a specifically enumerated limitation on the arbitrator’s power” … . In fact, it does not explicitly limit the arbitrator’s authority in any way other than stating that the arbitrator does not have the power to “amend, modify or delete any provision of the CBA,” which does not set any limitations on the arbitrator’s power to order the remedy that he or she sees fit … . Matter of County of Albany (Civil Serv. Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Albany County Local 801), 2023 NY Slip Op 01828, Third Dept 4-6-23

Practice Point: Here the arbitrator ordered a county employee reinstated with back pay. Supreme Court held the arbitrator exceeded her powers by ordering back pay. The Third Department noted the courts’ limited review powers re: arbitration rulings and found no basis for concluding the arbitrator had exceeded her powers.

 

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ALTHOUGH THE VILLAGE ENGINEER SENT A LETTER TO THE ABUTTING PROPERTY OWNERS REQUIRING REPAIR OF THE SIDEWALK DEFECT WHERE PLAINTIFF SLIPPED AND FELL, THE MAJORITY CONCLUDED PLAINTIFF DID NOT DEMONSTRATE THE VILLAGE HAD WRITTEN NOTICE OF THE DEFECT; THE DISSENT DISAGREED (SECOND DEPT).

The Second Department, over a dissent, determined the village demonstrated it did not have written notice of the sidewalk defect where plaintiff allegedly slipped and fell. The village code requires that the board of trustees be given written notice of the defect in order to hold the village liable. Here there was a letter from the town engineer to the abutting homeowners notifying them of the sidewalk defect and requiring repair within 30 days. The majority held that letter did not meet the written notice requirements in the code, which must be strictly construed. the dissent disagreed:

Where … a municipality has enacted a prior written notice law, neither actual nor constructive notice of a condition satisfies the prior written notice requirement … . Records generated by other agencies of the Village, outside of the strict construction of Code of the Village of Garden City § 132-2, fail to satisfy the requirements of the relevant prior written notice law … .. On this record, the plaintiffs failed to raise a triable issue of fact as to whether any documents to or from other municipal employees found their way to the Village Board of Trustees so as to cognizably qualify as prior written notice under the terms of the Village Code.

Our learned dissenting colleague concludes that the plaintiffs, through the submission of a letter on the Village’s letterhead dated May 11, 2015, from the Village Engineer to the defendant homeowners, raised a triable issue of fact as to whether the Village Board of Trustees had prior written notice of the alleged sidewalk defects. … The letter … states … that a recent inspection of the sidewalk and/or driveway apron adjacent to the defendant homeowners’ property indicated that concrete was in need of repair or replacement. The letter continues, stating that it was necessary to repair or replace a defective sidewalk and/or driveway apron for safety reasons and to reduce the likelihood of lawsuits against the property owners and the Village. For these reasons … the Village Board of Trustees had adopted a resolution … providing that property owners are required to repair or replace defective or damaged sidewalks and/or driveway aprons fronting their property within 30 days of receiving notice of such defects. Strictly construing the terms of the Village’s prior written notice law, as we must … that letter from the Village Engineer to the defendant homeowners does not constitute the giving of prior written notice to the Village Board of Trustees. … . Kolenda v Incorporated Vil. of Garden City, 2023 NY Slip Op 01783, Second Dept 4-5-23

Practice Point: Here the village code required that written notice of a sidewalk defect be provided to the board of trustees. A letter from the village engineer to the abutting homeowners requiring repair of the defect did not meet the code’s written-notice requirements, which must be strictly construed. Therefore the village cannot be held liable for the slip and fall.

 

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