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PLAINTIFF, UNDER NEW JERSEY LAW, SUFFICIENTLY PLED A SPECIAL RELATIONSHIP WITH DEFENDANT BANK GIVING RISE TO A DUTY TO ENFORCE ITS ANTI-FRAUD PROCEDURES; PLAINTIFF WIRED $300,000 TO AN ACCOUNT WHICH HAD BEEN SET UP TO DEFRAUD PLAINTIFF (FIRST DEPT).

The First Department, over a comprehensive dissent, determined defendant JPMorgan Chase Bank owed a duty to plaintiff based upon its anti-fraud polices advertised on the bank’s website. Defendant David Tate opened an account at a New Jersey Chase bank in the name of his business, Alchemy. Tate did not provide any personal identification or any corporate documentation to the bank. Plaintiff, thinking she was investing in Alchemy, wired $300,000 to the Alchemy account which was appropriated by Tate:

Under New Jersey law, a bank and its depositor have an arm’s-length, debtor-creditor relationship … . Banks do not have a duty to protect depositors from the wrongful conduct of third parties with whom the bank has done business .. .

Nonetheless, a bank may have a duty of care “where a special relationship has been established from which a duty can be deemed to flow” … . A special relationship may be formed “by agreement, undertaking or contact” … . As pertinent here, an “undertaking” is “the willing assumption of an obligation by one party with respect to another or a pledge to take or refrain from taking particular action” … .

Crediting plaintiff’s factual allegations, construing the complaint liberally, and according it the benefit of every possible favorable inference …, we find that the complaint adequately pleaded that Chase assumed a duty to abide by the anti-fraud procedures that it publicized.

… [P]laintiff has adequately pleaded the existence of a special relationship with Chase, giving rise to a duty to plaintiff to enforce its anti-fraud procedures … . Plaintiff has likewise stated a claim against Chase in negligence, based on its alleged failure to abide by these safeguards when Tate opened Alchemy’s account with Chase … . Ben-Dor v Alchemy Consultant LLC, 2024 NY Slip Op 03797, Second Dept 7-11-24

Practice Point: In New Jersey, to sue a bank for the wrongful conduct of a third party, here the use of a bank account to defraud plaintiff, the bank must owe plaintiff a special duty. The majority held the anti-fraud policies on the bank’s website may be the basis for such a special duty. There was an extensive and comprehensive dissent.

 

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“UNITED METHODIST CHURCH” IS NOT A JURAL ENTITY WHICH CAN BE SUED IN THIS CHILD VICTIMS ACT LAWSUIT (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Wan, reversing (modifying) Supreme Court, determined the “United Methodist Church” is not a jural entity which can be sued. In this Child Victims Act proceeding, the complaint alleged plaintiff was abused by an employee of the defendants United Methodist Church General Conference … , United Methodist Church Northeastern Jurisdiction New York-Connecticut District, New York Annual Conference of the United Methodist Church, United Methodist Church Long Island East District, Long Island East District of the New York Annual Conference of the United Methodist Church, … United Methodist Church of Woodbury New York. [and the] United Methodist Church … . The complaint alleged … United Methodist Church “is a not-for profit religious association and/or organization conducting business in the State of New York and organized and existing under the laws of the State of New York with its principal place of business located at c/o GFCA, 1 Music Circle North Nashville, Tennessee 37203.”

… [A]pplying neutral principles of law, we determine … the defendants established that United Methodist Church is not a jural entity with the capacity to be sued. Dismissal pursuant to CPLR 3211(a)(8) for lack of personal jurisdiction is warranted where a named defendant is not a legal entity amenable to suit … . New York law recognizes that “[a]n action or special proceeding may be maintained, against the president or treasurer” of an “unincorporated association” “upon any cause of action, for or upon which the plaintiff may maintain such an action or special proceeding, against all the associates, by reason of their interest or ownership, or claim of ownership therein, either jointly or in common, or their liability therefor, either jointly or severally” (General Associations Law § 13; see CPLR 1025 [“Two or more persons conducting a business as a partnership may sue or be sued in the partnership name, and actions may be brought by or against the president or treasurer of an unincorporated association on behalf of the association in accordance with the provisions of the general associations law”]). Although the term “unincorporated association” is not further defined by statute, New York courts have determined that “[i]t is only when a partnership has a President or a Treasurer that it is deemed an association within the meaning of” General Associations Law § 13 … . As such, “[a]n unincorporated association . . . has ‘no legal existence separate and apart from its individual members'” … .

* * * [W]e conclude that the defendants established that United Methodist Church … is a religious denomination with a single purpose—”to make disciples for Jesus Christ for the transformation of the world”—and not a jural entity amenable to suit as an unincorporated association. It is undisputed that United Methodist Church does not have a principal place of business, does not have its own offices or employees, and does not and cannot hold title to property, and there is no proof in the record that United Methodist Church has incorporated or held itself out as a jural entity in any other jurisdiction. Moreover, the defendants demonstrated at the hearing that United Methodist Church, as such, does not have any involvement in the staffing or the removal of clergy or staff at the local church level. Chestnut v United Methodist Church, 2024 NY Slip Op 03726, Second Dept 7-11-24

Practice Point: Here the “United Methodist Church” was deemed a nonjural entity which cannot be sued in New York–criteria explained in depth.

 

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A MUNICIPALITY CANNOT BE SUED FOR NEGLIGENT HIRING, RETENTION, TRAINING AND SUPERVISION BASED UPON EMPLOYEES’ ACTIONS ALLEGED TO HAVE BEEN WITHIN THE SCOPE OF THEIR EMPLOYMENT; THE PROPER THEORY IS RESPONDEAT SUPERIOR (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, determined that a municipality cannot be sued for negligent hiring, retention, training and supervision based upon actions taken by employees within the scope of their employment. In that case, the municipality can only be sued under a respondeat superior theory. Here plaintiff sued the City of Buffalo and police officers for actions relating to plaintiff’s arrest:

We agree with defendants that the court erred in denying their motion with respect to the … causes of action against the City of Buffalo, sounding in negligent hiring, negligent retention, and negligent training and supervision … . … [I]n those causes of action plaintiff alleges that the City of Buffalo was negligent in the hiring, retention and training and supervision of [officers] Moriarity and Bridgett, and plaintiff further alleges that Moriarity and Bridgett were acting in their capacities as employees of the City of Buffalo. It is well settled … that “where an employee is acting within the scope of [their] employment, the employer is liable for the employee’s negligence under a theory of respondeat superior and no claim may proceed against the employer for negligent hiring, retention, supervision, or training” … . Taylor, 2024 NY Slip Op 03632, Fourth Dept 7-3-24

Practice Point: A municipality cannot be sued for negligent hiring, retention, training and supervision when the employees’ actions are alleged to have been within the scope of their employment. The municipality should be sued under a respondeat superior theory.

 

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A TEACHER’S ALLEGED STATEMENT TO THE PLAINTIFF THAT HE WAS AWARE OF THE SEXUAL ABUSE OF THE PLAINTIFF BY ANOTHER TEACHER OCCURRING REPEATEDLY AT SCHOOL WAS DEEMED AN ADMISSION ATTRIBUTABLE TO THE SCHOOL DISTRICT RAISING A QUESTION OF FACT WHETHER THE SEXUAL ABUSE WAS FORESEEABLE BY THE SCHOOL DISTRICT (FOURTH DEPT).

The Fourth Department, over a concurrence disagreeing with the majority ruling that a teacher’s alleged statement was admissible against the school district as an admission, affirmed the denial of the school district’s motion for summary judgment in this Child Victims Act negligent supervision case. Plaintiff, who was a student in the late 60’s, alleged repeated abuse by a teacher in a back room at the school. Another teacher was alleged to have overheard the abuse and allegedly threatened plaintiff with revealing it in an attempt to sexually abuse plaintiff himself. That statement was deemed an admission which raised a question of fact whether the abuse was foreseeable by the school district:

… [P]laintiff testified that the orchestra teacher offered her a ride home from a bus stop after an evening event at the school. Instead of taking her home, however, the orchestra teacher took her to a park where, according to plaintiff, he told her “that he knew what was going on because he could hear through the walls from the orchestra room into that back room [where Fleming’s office was located] and that [plaintiff] didn’t want it to get out — [plaintiff] wouldn’t want it to come out, so [she] should be nice to him.” When plaintiff responded that she did not know what the orchestra teacher was talking about, he attempted to kiss her. * * *

The court determined that the entirety of the statement attributed to the orchestra teacher was admissible as a vicarious party admission of defendant under CPLR 4549 and therefore properly considered when evaluating defendant’s motion for summary judgment, because the orchestra teacher was employed by defendant and “[r]ecognizing and responding to the abuse of students while on school grounds certainly falls within the scope of the duties of a teacher employed by [defendant].” * * *

We conclude that it is within the scope of a teacher’s employment relationship to identify and assist a student who they believe is being sexually abused, and that the orchestra teacher’s statement indicating awareness of the abuse of plaintiff was therefore “on a matter within the scope of [the employment] relationship” … . We further conclude that the orchestra teacher’s statement professing knowledge of the abuse occurred “during the existence of” the employment relationship, within the meaning of CPLR 4549, inasmuch as it is undisputed that he was employed by defendant at the time the statement was made. Therefore, we agree with the court that the statement is admissible pursuant to CPLR 4549. Bl Doe 5, 2024 NY Slip Op 03608, Fourth Dept 7-3-24

Practice Point: In a negligent supervision action against a school district, is a statement allegedly made by a teacher to a student indicating the teacher’s awareness of repeated sexual abuse of the student by another teacher, taking place at school, admissible against the school district as an admission of its awareness of the abuse? Here the court answered “yes” over a concurrence which disagreed.

 

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THE DEFENSE EXPERT SHOULD NOT HAVE BEEN PRECLUDED FROM TESTIFYING IN THIS CEILING-COLLAPSE CASE; THE MOTION TO SET ASIDE THE VERDICT SHOULD HAVE BEEN GRANTED; NEW TRIAL ORDERED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined defendants landlord and property manager were entitled to have the liability verdict set aside in the interest of justice because the judge should not have precluded testimony by defendants’ expert. Plaintiff-tenants were injured when their apartment ceiling collapsed. The defendant expert would have testified there would have been no visible signs that the ceiling was about to collapse. The court noted that plaintiffs’ request for a Frye hearing was properly denied because the expert would have testified based upon his personal training and experience:

“[E]xpert opinion is proper when it would help to clarify an issue calling for professional or technical knowledge, possessed by the expert and beyond the ken of the typical juror” … . The expert must possess “the requisite skill, training, education, knowledge or experience from which it can be assumed that the information imparted or the opinion rendered is reliable” … . “The expert’s opinion, taken as a whole, must also reflect an acceptable level of certainty in order to be admissible” … .

Here, the defendants’ CPLR 3101(d) disclosure indicated that Yarmus [the defense expert], a professional engineer with experience in construction management and building and safety code compliance, would testify, inter alia, as to the materials and manner of construction of the ceiling at issue, as well as the manner in which ceilings so constructed may detach and collapse, allegedly, without a defect that is detectable so as to give notice of a dangerous condition. Contrary to the plaintiffs’ contention, Yarmus’s proposed testimony was neither so conclusory or speculative, nor without basis in the record, as to render it inadmissible … .

… “[T]he long-recognized rule of Frye . . . is that expert testimony based on scientific principles or procedures is admissible but only after a principle or procedure has ‘gained general acceptance’ in its specified field … . An expert opinion based on personal training and experience is not subject to a Frye analysis … . Ghazala v Shore Haven Apt. Del, LLC, 2024 NY Slip Op 03681, Second Dept 7-3-24

Practice Point; If a judge makes a mistake by precluding admissible testimony, here testimony by the defense expert, the judge has the power to set aside the verdict in the interest of justice. The Appellate Division reversed the denial of the motion to set aside the verdict.

 

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LABOR LAW 193 PROHIBITS AN EMPLOYER FROM REDUCING AN EMPLOYEE’S PAY TO COMPENSATE FOR THE EMPLOYEE’S ALLEGEDLY POOR PERFORMANCE; HERE THE EMPLOYER REDUCED PLAINTIFF’S PAY TO RECOUP COSTS ASSOCIATED WITH PLAINTFF’S TRAFFIC ACCIDENT WITH A COMPANY TRUCK (SECOND DEPT).

The Second Department, reversing Supreme Court, determined Labor Law section 193 prohibited plaintiff-truck-driver’s employer from reducing plaintiff’s pay to recoup costs associated with a traffic accident alleged to have been the result of plaintiff’s negligence:

Labor Law § 193 “prohibits an employer from making any deduction from an employee’s wages unless permitted by law or authorized by the employee for certain purposes” … . To allow an employer to recover the return of paid wages based upon an employee’s alleged lack of performance “would be permitting [that employer] to do indirectly and retroactively that which the law specifically prohibits it from doing directly” … . This principle applies equally whether the cause of action sounds in negligence or in contract, as an employee may not waive the protections of Labor Law § 193 … .

… [T]he defendants’ counterclaims are explicit attempts to recoup costs for their business allegedly arising out of the plaintiff’s negligence or poor performance. Because such causes of action are barred by the Labor Law, the Supreme Court erred in denying the plaintiff’s motion pursuant to CPLR 3211(a)(7) to dismiss the defendants’ counterclaims. Craig v Fastex Logistics Transp., LLC, 2024 NY Slip Op 03678, Second Dept 7-3-24

Practice Point: Here plaintiff-truck-driver’s employer reduced his pay to recoup costs associated with plaintiff’s traffic accident with a company truck. Such a pay reduction is prohibited by Labor Law section 193.

 

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PLAINTIFF FELL FROM AN A-FRAME LADDER OWNED BY A CONTRACTOR, DAL, HE DID NOT WORK FOR; BASED ON DISPUTED EVIDENCE THE LADDER WAS DEFECTIVE, DAL’S MOTION FOR SUMMARY JUDGMENT ON THE LABOR LAW 200 AND COMMON LAW NEGLIGENCE CAUSES OF ACTION WAS DENIED BY SUPREME COURT; THE FIRST DEPARTMENT, OVER A DISSENT, REVERSED, FINDING DAL DID NOT OWE PLAINTIFF A DUTY OF CARE (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, in a full-fledged opinion by Justice Oing, over a dissenting opinion, determined defendant contractor, DAL, did not owe a duty of care to plaintiff who fell from an A-frame ladder owned by DAL. Plaintiff had finished his measuring work using a ladder and scaffold which he had removed from the area. Plaintiff was then asked to confirm his measurements. He returned to the area and used an A-frame ladder that was already set up there. The ladder wobbled and he fell. It turned out the ladder was owned by DAL, with which plaintiff had no connection. There was disputed evidence the ladder was defective and DAL was alleged to have created a dangerous condition. Supreme Court found there was a question of fact supporting plaintiff’s Labor Law 200 and common-law negligence causes of action. The majority reversed, finding DAL did not owe plaintiff a duty of care:

Because DAL was not an owner, a general contractor, or a statutory agent of an owner or general contractor, the Labor Law § 200 claim against it could not stand … . * * *

… [G]iven that DAL did not enter into a contract with plaintiff or his employer, a duty of care to plaintiff cannot arise out of a contractual relationship … . Any contractual obligations DAL may have had to its employees or to JRM, the general contractor, did not extend to plaintiff … . The question that remains is whether DAL may still owe a duty of care to plaintiff. Generally, a contracting party does not owe a duty of care to a noncontracting third party … . There are three well-settled exceptions to this general rule: (1) where the contracting party, in failing to exercise reasonable care in the performance of his or her duties, launches a force or instrument of harm; (2) where the plaintiff detrimentally relies on the continued performance of the contracting party’s duties; and (3) where the contracting party has entirely displaced the other party’s duty to maintain the premises safely … . * * *

… [T]he record establishes that the DAL ladder was left by a DAL employee in the fifth-floor pantry at some point in the late morning on the day of accident, and that plaintiff saw the unattended ladder when he returned to the fifth-floor pantry to review his measurements from earlier that morning. Plaintiff did not know or ascertain who owned the ladder … . … [P]laintiff did not obtain permission to use the ladder, … DAL did not supply or provide plaintiff with the ladder for use to complete his tasks, … DAL had no duty to provide plaintiff with a safe or adequate ladder, and … DAL did not supervise, direct or control plaintiff’s work. … DAL did not launch a force or instrument of harm. Thus, under Espinal, DAL did not owe a duty of care to plaintiff, and plaintiff’s common-law negligence claim against it cannot stand. Dibrino v Rockefeller Ctr. North, Inc., 2024 NY Slip Op 03558, First Dept 7-2-24

Practice Point: Here plaintiff fell from an allegedly defective ladder belonging to a contractor he did not work for. Because none of the Espinal factors applied, the contractor did not owe plaintiff a duty of care. There was a dissenting opinion.​

 

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ALTHOUGH SUCCESSIVE SUMMARY JUDGMENT MOTIONS ARE DISFAVORED; HERE THE ISSUES IN EACH MOTION DID NOT OVERLAP AND APPELLANTS OFFERED A SUFFICIENT REASON. I.E. THE FIRST MOTION PRECEDED DEFENDANT’S DEPOSITION IN WHICH HE ADMITTED SWERVING INTO APPELLANTS’ VEHICLE (FIRST DEPT).

The First Department, reversing Supreme Court, determined appellants’ second summary judgment motion in this traffic accident case did not violate the prohibition of successive motions. The first motion dealt with whether plaintiff suffered a serious injury within the meaning of the Insurance Law. The second motion addressed defendant’s liability. Appellants demonstrated a sufficient reason for the failure to include both issues in a single motion, i.e., the first motion was made before defendant was deposed and admitted swerving into appellants’ vehicle:

… [A]ppellants’ first motion for summary judgment was on the issue of serious injury. Their second motion was on the issue of liability. The issue of whether plaintiff sustained a serious injury within the meaning of the Insurance Law, “is a threshold matter separate from the issue of fault” and which must, therefore, be determined separately … . “[S]erious injury is quintessentially an issue of damages, not liability” … . Under the facts presented, appellants’ failure to raise the issue of liability in their first motion for summary judgment does not run afoul of the general disfavor of successive motions since the issue of serious injury was not germane to the issue of liability … .

Appellants have also established the existence of sufficient cause … . Here, the record indicates that the first motion for summary judgment was filed prior to the deposition testimony of defendant-respondent Phanor. In his testimony Phanor admitted that he swerved into appellant’s vehicle in order to avoid another unidentified vehicle. Priester v Phanor, 2024 NY Slip Op 03554, First Dept 6-27-24

Practice Point: Here the fact that successive summary judgment motions are generally prohibited was overlooked. The issues in the two motions did not overlap (one dealt with plaintiff’s damages, the other with defendant’s liability). And the first motion was brought before the deposition in which defendant admitted swerving into appellants’ vehicle.

 

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DEBRIS LEFT BEHIND AFTER WORK ON ANOTHER PROJECT WAS NOT “INTEGRAL” TO THE WORK PLAINTIFF WAS PERFORMING WHEN HE TRIPPED AND FELL; PLAINTIFF WAS ENTITLED TO SUMMARY JUDGMENT ON CERTAIN LABOR LAW 241(6) CAUSES OF ACTION BASED UPON INDUSTRIAL CODE VIOLATIONS; IN ADDITION THE CITY DID NOT DEMONSTRATE A LACK OF CONSTRUCTIVE NOTICE OF THE DEBRIS; THEREFORE THE LABOR LAW 200 AND COMMMON-LAW NEGLIGENCE CAUSES OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined plaintiff was entitled to summary judgment on certain Labor Law 241(6) causes of action and the city’s motion to dismiss the Labor Law 200 and common-law negligence claims should not have been granted. Plaintiff tripped on discarded plastic and rock debris from prior sidewalk demolition and construction. Plaintiff was working on reconstruction of a sidewalk bridge when he fell. Therefore the plastic and rock debris did not constitute material integral to the work plaintiff was performing as Supreme Court had held. In addition, although the city did not exercise supervisory control over the work, the Labor Law 200 and common-law negligence causes of action should not have been dismissed because the city did not demonstrate a lack of constructive notice of the dangerous condition created by the debris:

The plastic and the rock were not integral to the work performed by plaintiff or his coworkers because it constituted an accumulation of debris from previous work that was left in a “passageway” or “working area” which should have been kept free of debris ​… . * * *​

The “task at hand” did not involve demolition. It is uncontested that plaintiff and his coworkers were dismantling and rebuilding a sidewalk bridge at a new location and that plaintiff fell when he slipped and tripped while manually transporting a heavy beam to the new location. While it is undisputed that Padilla was a general contractor that did demolition work, the court’s overly broad view of the integral to the work defense reads [Industrial Code] sections 23-1.7(e)(1) and (2) out of existence. Lourenco v City of New York, 2024 NY Slip Op 03540, First Dept 6-27-24

Practice Point: Debris left over from another job was not “integral” to the work being performed at the time of plaintiff’s fall, therefore the presence of the debris violated certain provisions of the Industrial Code.​

Practice Point: Although the city did not exercise supervisory control over the work, it did not demonstrate a lack of constructive notice of the dangerous condition. Therefore the Labor Law 200 and common-law negligence causes of action should not have been dismissed.

 

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PLAINTIFFS’ ALLEGATION THAT THE WATER MAIN ON DEFENDANTS’ NEIGHBORING PROPERTY BROKE CAUSING WATER TO ENTER PLAINTIFFS’ BASEMENT STATED A NEGLIGENCE CAUSE OF ACTION UNDER THE RES-IPSA-LOQUITUR THEORY (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the allegation that defendants’ water main broke causing water to enter plaintiffs’ basement supported a negligence action based on the res-ipsa-loquitur theory. The trespass and private nuisance causes of action should have been dismissed because there was no evidence of defendants’ intentional conduct:

… [D]efendants failed to establish their prima facie entitlement to judgment as a matter of law on so much of the cause of action alleging negligence as was based on the doctrine of res ipsa loquitur. “For the doctrine of res ipsa loquitur to apply, a plaintiff must establish three conditions: ‘[f]irst, the event must be of a kind that ordinarily does not occur in the absence of someone’s negligence; second, it must be caused by an agency or instrumentality within the exclusive control of the defendant; and third, it must not have been due to any voluntary action or contribution on the part of the plaintiff'” … . “The doctrine has been applied to water main breaks and this type of event has frequently been cited as a typical example of a case where the doctrine is commonly applicable” … . … Because the defendants did not establish their prima facie entitlement to judgment as a matter of law on so much of the cause of action alleging negligence as was based on the doctrine of res ipsa loquitur, the burden did not shift to the plaintiffs to raise a triable issue of fact in that regard … . Huang v Fort Greene Partnership Homes Condominium, 2024 NY Slip Op 03471, Second Dept 6-26-24

Practice Point: A water main break on defendant’s property causing water to enter the neighboring plaintiff’s basement states a negligence cause of action under the res-ipsa-loquitur theory.

 

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