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Fraud Action Based Upon Statements of Opinion Properly Pled/Negligent Misrepresentation Not Properly Pled–No Allegation of Privity or Privity-Like Relationship

In an action stemming from defendant-investment-ratings-agency’s high rating of worthless residential-mortgage-backed securities, the Fourth Department determined the complaint properly pled a fraud cause of action, even though based upon statements of opinion. The court further determined the negligent misrepresentation cause of action was deficient in that privity or a privity-like relationship was not alleged:

Although statements of opinion generally are not actionable in a fraud cause of action …, defendant correctly recognizes that statements of opinion may nevertheless be actionable as fraud if the plaintiff can plead and prove that the holder of the opinion did not subjectively believe the opinion at the time it was made and made the statement with the intent to deceive … . As one court has explained, a fraud claim based on an expression of opinion “is actionable in an appropriate case not because the opinion is objectively’ wrong. Rather, in an appropriate case it is actionable because the speaker either did not in fact hold the opinion stated or because the speaker subjectively was aware that there was no reasonable basis for it . . . In the first instance, the speaker will have lied as to his or her subjective mental state. In the second, he or she implicitly would have represented that there was a reasonable basis for the statement of opinion, knowing that the implicit representation was false” … . Here, we agree with defendant that its credit ratings were statements of opinion, not fact … , but we conclude that plaintiff adequately pleaded that defendant did not believe its opinions when it issued the ratings. Plaintiff set forth in detail the reasons why defendant was aware that the ratings were inflated, including its allegation that defendant failed to follow its own policies and procedures in determining the ratings. * * *

To establish a claim for negligent misrepresentation based on the allegedly inaccurate credit ratings, plaintiff must allege that “(1) the [defendant] must have been aware that the [ratings] were to be used for a particular purpose or purposes; (2) in the furtherance of which a known party . . . was intended to rely; and (3) there must have been some conduct on the part of the [defendant] linking [it] to that party . . . , which evinces the [defendant’s] understanding of that party[‘s] . . . reliance” … . “The indicia, while distinct, are interrelated and collectively require a third party claiming harm to demonstrate a relationship or bond with the once-removed [defendant] sufficiently approaching privity’ based on some conduct on the part of the [defendant]’ ” … .

The complaints here failed to plead that a special or privity-like relationship existed between plaintiff and defendant … . M&T Bank Corp. v McGraw-Hill Cos., Inc., 2015 NY Slip Op 02372, 4th Dept 3-20-15

 

“Wheel Stop” Is Open and Obvious

The First Department determined a “wheel stop” in a parking lot, over which plaintiff tripped, was open and obvious:

Defendants established their entitlement to judgment as a matter of law in this action where plaintiff was injured when she tripped and fell over a wheel stop in defendants’ parking lot in the early evening. Defendants submitted evidence showing that the wheel stop was an open and obvious condition and not inherently dangerous … . The evidence demonstrated that the wheel stop’s placement had been approved by the local zoning board, the parking lot lights had been set to turn on at 4:00 p.m., the lights were inspected daily and found to be in good condition on the following day, and there had been no prior complaints about the wheel stop or inadequate lighting.

In opposition, plaintiff failed to raise a triable issue of fact. Her claim that an optical illusion created by inadequate lighting made the wheel stop less visible is insufficient to raise a triable issue of fact, as her testimony established that she was looking toward her car at the time of the accident … . Moreover, a photograph marked at her deposition reveals that the portion of the curb on which plaintiff allegedly tripped was near a light post … . Plaintiff’s affidavit in which she claimed to have been unable to see the surface of the parking lot and wheel stop directly contradicts her earlier testimony and raises only a feigned issue of fact … . Abraido v 2001 Marcus Ave., LLC, 2015 NY Slip Op 02204, 1st Dept 3-19-15

 

Question of Fact Whether Nonowner Occupied and Controlled Premises Where Plaintiff Fell

The Third Department determined there were questions of fact whether a nonowner of a premises, 68 Weibel Avenue, occupied and controlled the premises such that a duty to use reasonable care re: the condition of the premises arose. The owner of the property (third-party defendant) is the father of two sisters who operate defendant business across the street at 75 Weibel Avenue.  There was testimony that defendant business also occupied and controlled the area where plaintiff slipped on ice at 68 Weibel Avenue:

A nonowner who occupies or controls premises has a duty to exercise reasonable care regarding the condition of the premises … . The boundaries of occupancy and extent of control are typically addressed in a written agreement, and may also be established or modified by a course of conduct … . The absence of a written agreement creates a situation ripe for factual issues regarding relevant rights and responsibilities to the premises … .

Here, there was no written agreement between defendant and third-party defendant regarding the premises. Defendant and third-party defendant had a close familial relationship, and it does not appear from the record that there was even an oral agreement specifically delineating their rights and responsibilities. In light of the absence of any agreement, defendant’s conduct regarding the premises is particularly pertinent. Plaintiff testified that, although defendant had a retail store across the road at 75 Weibel Avenue, he was directed by defendant to make deliveries at the 68 Weibel Avenue shop. He recalled that an owner or an employee of defendant was always present at such address when he made a delivery. While there were other businesses that used the parking lot at 68 Weibel Avenue, plaintiff stated that there were never vehicles directly in front of defendant’s shop other than a vehicle of an employee/owner of defendant. He parked at such location in front of the shop when making deliveries and was so parked on the date of his accident. A freestanding sign for defendant’s business was located outside the building at 68 Weibel Avenue and in the vicinity where plaintiff parked. We agree with Supreme Court that, under the circumstances, there are triable issues of fact as to whether defendant exercised control over the pertinent part of the 68 Weibel Avenue premises. Contreras v Randi’s Enter., LLC, 2015 NY Slip Op 02165, 3rd Dept 3-19-15

 

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Sufficient Factual Allegations of Malpractice Not Made/Denial of Motion to Reargue Appealable as of Right Because the Merits Were Dealt with By the Motion Court

The Third Department, in affirming the dismissal of a legal malpractice complaint, determined that the fact that the motion court dealt with the merits of a motion to reargue while denying it rendered the denial appealable as of right:

As a general proposition, “no appeal lies from the denial of a motion to reargue” … . Where, however, the court actually addresses the merits of the moving party’s motion, we will deem the court to have granted reargument and adhered to its prior decision — notwithstanding language in the order indicating that reargument was denied … . Accordingly, Supreme Court’s April 2013 order is appealable as of right (see CPLR 5701 [a] [2] [viii]…). * * *

To survive defendants’ motion to dismiss, it was incumbent upon plaintiff to, among other things, “plead specific factual allegations establishing that but for counsel’s deficient representation, there would have been a more favorable outcome to the underlying matter” … , i.e., an earlier — and successful — award of partial summary judgment on the issue of liability. This plaintiff failed to do. Rodriguez v Jacoby & Meyers, LLP, 2015 NY Slip Op 02151, 3rd Dept 3-19-15

 

 

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Abutting-Property-Owners Not Responsible for Defects in Sidewalk Tree Wells/City Did Not Have Written Notice of Defect in Tree Well Where Plaintiff Fell

The Second Department noted that NYC abutting-property-owners are not liable for the condition of tree wells within the sidewalk.  Here the city had not received notice of a defect in the tree well where plaintiff fell, therefore summary judgment was granted to the city:

A tree well does not fall within the applicable Administrative Code definition of “sidewalk” and, thus, “section 7-210 does not impose civil liability on property owners for injuries that occur in city-owned tree wells” … . * * *

“A municipality that has adopted a prior written notice law’ cannot be held liable for a defect within the scope of the law absent the requisite written notice, unless an exception to the requirement applies” … . The Court of Appeals has recognized two exceptions to this rule: (1) where the locality created the defect or hazard through an affirmative act of negligence; and (2) where a special use confers a special benefit upon the locality … . The affirmative creation exception is “limited to work by the City that immediately results in the existence of a dangerous condition” … .

In order to hold the City liable for injuries resulting from defects in tree wells in City-owned sidewalks, a plaintiff must demonstrate that the City has received prior written notice of the defect or that an exception to the prior written notice requirement applies (see Administrative Code of City of NY § 7-201[c][2]…). Donadio v City of New York, 2015 NY Slip Op 02093, 2nd Dept 3-18-15

 

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Plaintiff Could Not Demonstrate Cause of Her Fall Without Resorting to Speculation

The Second Department determined summary judgment was properly granted to the defendant in a slip and fall case because the plaintiff could not identify the case of her fall:

“Ordinarily, a defendant moving for summary judgment in a trip-and-fall case has the burden of establishing that it did not create the hazardous condition that allegedly caused the fall, and did not have actual or constructive notice of that condition for a sufficient length of time to discover and remedy it. However, a defendant can make its prima facie showing of entitlement to judgment as a matter of law by establishing that the plaintiff cannot identify the cause of his or her fall without engaging in speculation” … .

“[A] plaintiff’s inability to identify the cause of the fall is fatal to the cause of action, because a finding that the defendant’s negligence, if any, proximately caused the plaintiff’s injuries would be based on speculation” … . “Where it is just as likely that some other factor, such as a misstep or a loss of balance, could have caused a slip and fall accident, any determination by the trier of fact as to causation would be based upon sheer conjecture” … .

Here, the defendants established their prima facie entitlement to judgment as a matter of law by submitting a transcript of the plaintiff’s deposition testimony, which demonstrated that the plaintiff could not identify the cause of her fall without resorting to speculation … . Mitgang v PJ Venture HG, LLC, 2015 NY Slip Op 02101, 2nd Dept 3-18-15

 

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The Jury Should Have Been Instructed on the Res Ipsa Loquitur Doctrine—Infection Developed After Injection

The Second Department determined plaintiff’s motion to set aside the verdict should have been granted because the jury should have been instructed on the res ipsa loquitur doctrine.  Plaintiff developed an infection after a cortisone injection.  There was expert testimony that such an infection would not develop if standard procedures had been followed:

Under appropriate circumstances, the evidentiary doctrine of res ipsa loquitur may be invoked to allow the factfinder to infer negligence from the mere happening of an event (see Restatement [Second] of Torts § 328D). “Res ipsa loquitur, a doctrine of ancient origin …, derives from the understanding that some events ordinarily do not occur in the absence of negligence” … . “In addition to this first prerequisite, plaintiff must establish, second, that the injury was caused by an agent or instrumentality within the exclusive control of defendant and, third, that no act or negligence on the plaintiff’s part contributed to the happening of the event … . Once plaintiff satisfies the burden of proof on these three elements, the res ipsa loquitur doctrine permits the jury to infer negligence from the mere fact of the occurrence” … . Moreover, “expert testimony may be properly used to help the jury bridge the gap’ between its own common knowledge, which does not encompass the specialized knowledge and experience necessary to reach a conclusion that the occurrence would not normally take place in the absence of negligence, and the common knowledge of physicians, which does .. .

Here, the plaintiff presented expert testimony that a MRSA infection from an injection does not occur if the podiatrist adheres to the accepted standard of care. Bernard v Bernstein, 2015 NY Slip Op 02084, 2nd Dept 3-18-15

 

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Out-of-Possession Landlord Not Liable—Criteria Described

The Second Department determined summary judgment should have been granted to the out-of-possession landlords and explained the applicable law. Plaintiff’s leg went through the roof of landlords’ building:

“An out-of-possession landlord can be held liable for injuries that occur on its premises only if the landlord has retained control over the premises and if the landlord is contractually or statutorily obligated to repair or maintain the premises or has assumed a duty to repair or maintain the premises by virtue of a course of conduct” … . Here, the building defendants established, prima facie, that I Bldg and Surfside were out-of-possession landlords with no contractual obligation by submitting the lease, which obligated the tenant to maintain the premises and make all structural and nonstructural repairs … . Although I Bldg and Surfside retained a right to enter the premises, the plaintiff failed to raise a triable issue of fact as to whether the allegedly dangerous condition on the premises violated an applicable statutory provision sufficient to impose liability upon them … . The plaintiff did not contend that the building defendants assumed a duty to repair the premises by virtue of a course of conduct. Martin v I Bldg Co., Inc., 2015 NY Slip Op 02100, 2nd Dept 3-18-15

 

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Failure to Link Specific Monetary Loss to Acts or Omissions of the Attorneys Required Dismissal

The Second Department determined plaintiff’s legal malpractice action should have been dismissed because the plaintiff did not demonstrate a specific monetary loss was proximately caused by the negligence of the attorneys. Plaintiff alleged the attorneys failed to ensure that a note, guarantee and mortgage were enforceable against Nina, who disaffirmed liability on the ground of legal incapacity:

In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney’s breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages … . To establish causation, the plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, “but for the attorney’s negligence” … .

…The plaintiff failed to demonstrate the amount it could or would have collected if the note, the guaranty, and mortgage had been enforceable against Nina … . In addition, the plaintiff failed to demonstrate that it was unable to recover the amounts due under the note by other legal means available to it under the terms of the note and guaranty, or that it was unable to obtain equitable relief from Nina even after she disaffirmed liability on the ground of legal incapacity (see Restatement [Second] of Contracts § 14, Comments b, c; see also Restatement of Restitution § 139). Since the plaintiff failed to demonstrate the extent to which it would have been unable to enforce the note and the guaranty after it was disavowed by Nina, and the precise extent to which it would have been able to recover had the note, the guaranty, and the mortgage been enforceable against her, the plaintiff failed to establish, prima facie, that any negligence on the part of [the attorneys] was a proximate cause of actual and ascertainable damages … . Quantum Corporate Funding, Ltd. v Ellis, 2015 NY Slip Op 02104, 2nd Dept 3-18-15

 

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Proof of General Cleaning Procedures Not Sufficient for Summary Judgment to Defendant in a Slip and Fall Case

In a slip and fall case, reversing Supreme Court, the Second Department explained (once again) that proof of general cleaning procedures (as opposed to proof when the area in question was last inspected or cleaned) is not sufficient to warrant summary judgment to the defendant:

A defendant who moves for summary judgment in a slip-and-fall case has the initial burden of making a prima facie showing that it did not create the hazardous condition which allegedly caused the fall, and did not have actual or constructive notice of that condition for a sufficient length of time to discover and remedy it … . To meet their burden on the issue of lack of constructive notice, the defendants were required to offer some evidence as to when the accident site was last cleaned or inspected prior to the injured plaintiff’s fall … . “Mere reference to general cleaning practices, with no evidence regarding any specific cleaning or inspection of the area in question, is insufficient to establish a lack of constructive notice” … . Here, the affidavit of the Safety and Security Manager for the subject IKEA store, which was submitted in support of the defendants’ motion, only provided information about the store’s general cleaning and inspection procedures concerning the promenade, and did not show when the subject area had last been inspected or cleaned prior to the happening of the accident … . Thus, the defendants failed to establish, prima facie, that they lacked constructive notice of the allegedly dangerous condition … . Furthermore, the defendants failed to establish, prima facie, that the alleged condition was too trivial to be actionable, or was open and obvious and not inherently dangerous as a matter of law. Barris v One Beard St., LLC, 2015 NY Slip Op 02083, 2nd Dept 3-18-15

 

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