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TO PIERCE THE CORPORATE VEIL THE PLAINTIFF MUST DEMONSTRATE (1) THE OWNERS EXERCISED COMPLETE DOMINATION OF THE CORPORATION WITH RESPECT TO THE TRANSACTION AT ISSUE AND (2) THE DOMINATION WAS USED TO COMMIT A FRAUD OR WRONG AGAINST THE PLAINTIFF; HERE THERE WAS NO EVIDENCE THE TRANSACTION AT ISSUE WAS FRAUDULENT (CT APP).

The Court of Appeals, affirming the Appellate Division, over a three-judge concurrence, determined the complaint in this “pierce the corporate veil” action was properly dismissed because there was no evidence the recapitalization at issue was done to commit a fraud:

From the concurrence:

A court will disregard the corporate form and pierce the corporate veil when there is a showing by plaintiffs that: “(1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff’s injury” … . Because the use of the corporate form to limit liability of owners is a legal and beneficial principle of corporations, those who seek to pierce the corporate veil bear a heavy burden … .

Here, [the] attempts to pierce the corporate veil fail to raise a triable issue on prong two. The … defendants met their initial burden on summary judgment to demonstrate that they did not abuse the privilege of doing business in the corporate form to perpetrate a wrong or injustice, and [plaintiff] failed to raise a triable issue of material fact in opposition. [Plaintiff] points to no evidence in the record that supports its claim that the 2006 recapitalization at issue was fraudulent. Cortlandt St. Recovery Corp. v Bonderman, 2025 NY Slip Op 07078, CtApp 12-18-25

Practice Point: This decision illustrates the two prongs of proof required to pierce the corporate veil: the owners must completely dominate the corporation with respect to the transaction at issue; and the transaction at issue must be fraudulent or wrongful with respect to the plaintiff.

 

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SUBCONTRACTOR DAL HAD ENTERED CONTRACTS FOR THIS RENOVATION PROJECT WITH THE GENERAL CONTRACTOR, JRM, AND THE PROPERTY OWNER, ROCKEFELLER; PLAINTIFF, WHO DID NOT WORK FOR DAL, WITHOUT DAL’S PERMISSION, KNOWING THE LADDER WAS DEFECTIVE, USED A DEFECTIVE LADDER OWNED BY DAL; THE LADDER WOBBLED AND PLAINTIFF FELL; THE COURT OF APPEALS HELD THE INDEMNIFICATION CLAUSES IN DAL’S CONTRACTS WITH JRM AND ROCKEFELLER DID NOT APPLY TO PLAINTIFF’S INJURIES (CT APP). ​

The Court of Appeals, in a full-fledged opinion by Judge Wilson, over a two-judge dissent, determined that DAL, a subcontractor, was not contractually required to indemnify the general contractor, JRM, and the property owner, Rockefeller, for plaintiff’s injuries from a ladder-fall. The plaintiff, Dibrino, a carpenter working for a nonparty subcontractor, Jacobsen, had already completed his measurements using his employer’s A-frame ladder and a scaffold, which he had moved to his next work-area, when he was asked to redo the measurements. Plaintiff, knowing it was defective, used an A-frame ladder owned by DAL when he remeasured. The ladder wobbled, plaintiff fell; a tool on his belt impaled his abdomen. The ruling that DAL was not obligated to indemnify the general contractor (JAM) and the owner (Rockefeller) for plaintiff’s injuries is based on the contractual language:

Mr. Dibrino’s unauthorized use of an unattended ladder (which he knew was not furnished by his employer and knew he was not supposed to use) instead of using the scaffold and ladder supplied by Jacobson that he had used earlier that day in that same spot, to perform work squarely outside the scope of the agreement between DAL and JRM, is not reasonably construed as arising from performance DAL’s work. JRM and Rockefeller’s reading would mean DAL’s contractual duty to indemnify would be triggered by any event that could be traced to DAL through any path—even, for example, had DAL disposed of the defective ladder in a dumpster and Mr. Dibrino retrieved it. Such an expansive reading of these indemnity provisions is implausibly broad, … an indemnification provision “must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed” … . Dibrino v Rockefeller Ctr. N., Inc., 2025 NY Slip Op 07077, CtApp 12-18-25

Practice Point: Consult this opinion for insight into how indemnification clauses in contracts among a subcontractor, the general contractor and the owner should be interpreted under the Labor Law. Here the clauses did not apply to injuries suffered by a worker who (1) did not work for the subcontractor and (2) used the subcontractor’s ladder without the subcontractor’s permission, knowing that the ladder was defective.

 

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AN ARCH-SHAPED BOLLARD (A BARRIER TO PROTECT A TREE FROM VEHICLES USING A PARKING LOT) IS SUBJECT TO THE WRITTEN-NOTICE REQUIREMENT IN THE GENERAL MUNICIPAL LAW; HERE THE BOLLARD, WHICH FELL OVER WHEN A CHILD TRIED TO SWING ON IT, WAS INSTALLED 14 YEARS AGO; BECAUSE THERE WAS NO WRITTEN-NOTICE AND BECAUSE THE DANGEROUS CONDITION WAS NOT IMMEDIATELY APPARENT WHEN THE BOLLARD WAS INSTALLED, THE CITY WAS NOT LIABLE (CT APP). ​

The Court of Appeals, affirming the Appellate Division, determined an arch-shaped bollard (a barrier to protect a tree from damage by vehicles using a parking lot), which fell over when a child attempted to swing on it, was subject to the written-notice requirement in the General Municipal Law. Because the city did not have written notice of the dangerous condition it cannot be held not liable. The Court of Appeals noted that a parking lot is a “highway” within the meaning of the General Municipal Law section 50-e “written notice” requirement:

Prior written notice is not required “where the locality created the defect or hazard through an affirmative act of negligence” which “immediately results in the existence of a dangerous condition” … . The exception is meant to “address[] situations where a hazard was foreseeable, insofar as the municipality created it” as opposed to situations where there is “difficulty in determining, after the passage of time,” whether the municipality was initially negligent … .

Plaintiffs failed to meet their burden raising a triable issue of fact as to whether the City caused or created an immediately dangerous condition through an act of affirmative negligence … . Nor did the affidavit from plaintiffs’ expert create a triable issue of fact as to the City’s affirmative negligence because, among other things, it did not tend to establish that the City left behind an unsafe condition at the time it installed the bollard 14 years prior to the accident. Although the expert opined that the bollard was unsafe from “the moment” it was installed, they failed to explain this conclusory opinion through reliance on industry standards or empirical data, nor did they explain how their “professional experience in construction” supported their conclusion … . Rather, the summary judgment record suggests that, to the extent the installation method created a defect, any such defect resulted from the effects of environmental conditions over time. Gurbanova v City of Ithaca, 2025 NY Slip Op 07076, CtApp 12-18-25

Practice Point: A parking lot is a “highway” for purposes of the General Municipal Law 50-e “written notice” requirement.

Practice Point: A bollard (a post which serves as a vehicle-barrier in a parking lot) is subject to the “highway” “written-notice” requirement in the General Municipal Law.

 

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THE ADMINISTRATIVE LAW JUDGE WENT AHEAD WITH THE DRIVER’S LICENSE REVOCATION HEARING IN THE ABSENCE OF THE OFFICERS WHO ARRESTED THE DRIVER FOR DWI; THE DRIVER’S ARGUMENT HE WAS DENIED DUE PROCESS BECAUSE HE WAS UNABLE TO CROSS-EXAMINE THE OFFICERS WAS REJECTED; THE DRIVER HAD SUBPOENAED THE OFFICERS BUT CHOSE NOT TO USE THE CPLR 2308 PROCEDURE FOR ENFORCEMENT OF THE SUBPOENAS; THE AVAILABILITY OF THE ENFORCEMENT PROCEDURE WAS DEEMED “SUFFICIENT PROCESS” (CT APP).

The Court of Appeals, affirming the Appellate Division, in a full-fledged opinion by Judge Wilson, determined a driver, Monaghan, whose license was automatically suspended when he refused to submit to a chemical test at the time he was arrested for DWI, was not denied due process rights when the Department of Motor Vehicles (DMV) Administrative Law Judge (ALJ) revoked his license despite the arresting officers’ failure to appear at the revocation hearing. Monaghan had subpoenaed the officers and argued he was denied his right to cross-examine them. The Court of Appeal noted that Monaghan could have sought to enforce the subpoenas but chose not to. The Court found that the procedure for enforcement of subpoenas is not unduly burdensome. Therefore requiring Monaghan to use that procedure to exercise his right to cross-examine the officers does not amount to a denial of due process:

… [W]e reject the contention that Mr. Monaghan’s was deprived of his due process right to cross-examine the Troopers. His private interest in retaining his driver’s license and the government’s interest in public safety are both significant. The due process analysis, here, turns on the benefit and burden of requiring a motorist to seek judicial enforcement of a subpoena. Mr. Monaghan chose not to avail himself of the process set forth in CPLR 2308 (b). The process of applying to enforce a nonjudicial subpoena is not so unduly burdensome as to constitute a deprivation of due process of law. Our holding is consistent with appellate courts’ decisions rejecting due process challenges in other types of administrative proceedings where the petitioner has not attempted to enforce a subpoena … . It is undisputed that Mr. Monaghan did not seek enforcement, nor did he request an adjournment to do so. Matter of Monaghan v Schroeder, 2025 NY Slip Op 06959, CtApp 12-16-25

Practice Point: Here the officers who arrested the driver for DWI did not appear at the license revocation hearing. The driver argued his inability to cross-examine the officers deprived him of due process of law. However, the driver had subpoenaed the officers. He could have used the CPLR 2308 (b) procedure for enforcing the subpoenas but chose not to. The availability of the enforcement procedure was deemed sufficient process.

 

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PLAINTIFF, WHO WAS HIRED BY DEFENDANT TEMPLE AS A “FULL TIME JEWISH EDUCATOR,” WAS FIRED AFTER WRITING A BLOG POST CRITICIZING ISRAEL AND ZIONISM; PLAINTIFF SUED ALLEGING HER FIRING WAS A VIOLATION OF THE LABOR LAW; THE COURT DID NOT ADDRESS THE LABOR-LAW-VIOLATION THEORY FINDING THAT THE “MINISTERIAL EXCEPTION” PRECLUDED THE APPLICATION OF EMPLOYMENT DISCRIMINATION LAWS TO THE RELATIONSHIP BETWEEN A RELIGIOUS INSTITUTION AND ITS MINISTERS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Halligan, over two concurrences, determined the ministerial exception precluded this employment discrimination action brought by plaintiff, a “full time Jewish educator” employed by the Westchester Reform Temple. Plaintiff was fired after writing a blog post criticizing Israel and Zionism. She alleged her firing was a violation of Labor Law 201-d (2) which prohibits an employer from taking adverse action against an employee based on legal “recreational activities.” The court did not address the viability of the Labor-Law theory. The court held that plaintiff’s lawsuit was precluded by the ministerial exception, which precludes application of employment discrimination laws to relationships between a religious institution and its ministers:

We need not resolve today questions such as whether the [Labor Law 201-d (2)] covers blogging specifically or public expression generated during any protected activity, because the ministerial exception dispositively bars Plaintiff’s claim. That exception “precludes application of [employment discrimination] legislation to claims concerning the employment relationship between a religious institution and its ministers” … . Requiring a religious institution “to accept or retain an unwanted minister, or punishing [them] for failing to do so” both “infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments” and “violates the Establishment Clause, which prohibits government involvement in such ecclesiastical decisions” … . * * *

Defendants invoked the ministerial exception here as grounds for dismissal on a CPLR 3211 (a) (1) motion. Such a motion “may be appropriately granted only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law” … . Defendants rely on Plaintiff’s offer letter, which is appended as an exhibit to the motion to dismiss. It states that Plaintiff was responsible for guiding the development of programs such as “Shabbat, Havdalah, and other teen led events and initiatives”; planning, supporting, and attending “Confirmation” experiences; and supporting the “Rabbi’s Table initiative.” In her fifteen weekly hours of teaching, she was responsible for “Chevruta (1:1 tutoring for our learners),” “Pre-bimah tutoring,” and “Parsha of the week.” And she was responsible for furthering the Temple’s “mission,” including by “support[ing] the development of a strong Jewish identity” and “bringing Torah to life and inspiring Jewish dreams.” Sander v Westchester Reform Temple, 2025 NY Slip Op 06958, CtApp 12-16-25

Practice Point: The “ministerial exception” precludes the application of employment discrimination laws to the relationship between a religious institution and its ministers. Here the ministerial exception precluded a suit alleging plaintiff was fired from her teaching job at the defendant temple for a blog post criticizing Israel and Zionism.

 

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HERE THE TOWN PASSED A LOCAL LAW REQUIRING THE CLOSURE OF A LANDFILL OWNED AND OPERATED BY SMI; BECAUSE SMI’S PROPERTY IS THE VERY SUBJECT OF THE LOCAL LAW, SMI NEED NOT DEMONSTRATE “ENVIRONMENTAL HARM” AS AN ELEMENT OF STANDING TO CHALLENGE THE TOWN’S STATE ENVIRONMENTAL QUALITY REVIEW ACT (SEQRA) DECLARATION THAT THE CLOSURE OF THE LANDFILL WILL NOT HAVE A SIGNIFICANT ADVERSE ENVIRONMENTAL IMPACT; SMI HAS STANDING TO CHALLENGE THE TOWN’S NEGATIVE SEQRA DECLARATION ON THE GROUND THAT THE TOWN DID NOT TAKE THE REQUIRED “HARD LOOK” AT THE EVIDENCE BEFORE ISSUING THE NEGATIVE DECLARATION (CT APP). ​

The Court of Appeals, reversing the Appellate Division, in a full-fledged opinion by Judge Rivera, determined the petitioner-plaintiff Seneca Meadows, Inc. (SMI), the owner and operator of a landfill, had standing to challenge the town’s State Environmental Quality Review Act (SEQRA) finding that the closure of the landfill pursuant to a Local Law would not have a significant adverse environmental impact. SMI argued the town did not take the required “hard look” at the evidence before issuing its negative SEQRA declaration:

“SEQRA is designed to promote efforts which will prevent or eliminate damage to the environment and enhance human and community resources . . . by injecting environmental considerations directly into governmental decision making; thus the statute mandates that social, economic and environmental factors shall be considered together in reaching decisions on proposed activities” … . Standing to sue under SEQRA, as with other statutory causes of action, requires that the plaintiff establish an injury-in-fact and that the in-fact injury fall within the zone of interest that the statute protects … . Thus, to sue under SEQRA, a plaintiff must ordinarily show that their injury falls within the statute’s environmental zone of interest by “demonstrat[ing] that it will suffer an injury that is environmental and not solely economic in nature” … .

However, [Matter of Har Enters. v Town of Brookhaven (74 NY2d 524 [1989])] established that “no such specific allegation [of environmental harm] is necessary” when the petitioner’s property is “the very subject” of the government’s action … . That case involved a rezoning of the petitioner’s property from commercial to residential use … . As the Court explained, “[i]t seems evident that if any party should be held to have a sufficient interest to object—without having to allege some specific harm—it is an owner of property which is the subject of a contemplated rezoning” … . Following that ruling, a few years later, the Court held in [Gernatt Asphalt Prods. v Town of Sardinia (87 NY2d 668 [1996])] that a landowner whose potential mining operations would be eliminated by rezoning was directly impacted by the governmental land use regulation and thus had standing under Har to challenge the government’s lack of compliance with SEQRA … . Matter of Seneca Meadows, Inc. v Town of Seneca Falls, 2025 NY Slip Op 06961, CtApp 12-16-25

Practice Point: When the petitioner’s property is the subject of the government’s action, the petitioner need not demonstrate “environmental harm” to have standing to challenge the government’s SEQRA declaration. Here the town passed a local law requiring closure of petitioner’s landfill. Petitioner need not demonstrate “environmental harm” to have standing to challenge the town’s SEQRA negative declaration on the ground the town did not take the required “hard look” at the evidence before finding that the landfill closure would not have a significant adverse environmental impact.

 

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CERTAIN EMPLOYEES OF THE DEPARTMENT OF CORRECTIONS AND COMMUNITY SUPERVISION (DOCCS) WERE NOT ENTITLED TO “PANDEMIC UNEMPLOYMENT ASSISTANCE” DURING THE SUMMER OF 2020 PURSUANT TO THE “CORONAVIRUS AID, RELIEF AND ECONOMIC SECURITY (CARES) ACT;” THE COURT’S ANALYSIS IS TOO DETAILED TO FAIRLY SUMMARIZE HERE (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Singas, determined certain employees of the Department of Corrections and Community Supervision (DOCCS) who were not offered employment during the summer of 2020 because of the COVID-19 pandemic were not entitled to “pandemic unemployment assistance” under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The opinion has a detailed analysis of the federal and state unemployment insurance systems and how they interact with the COVID-related legislation. Matter of Klosterman v New York State Dept. of Corr. & Community Supervision, 2025 NY Slip Op 06960, CtApp 12-16-25

 

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THE TRIAL JUDGE PROPERLY HANDLED A JUROR’S CLAIM THAT OTHER JURORS HAD EXHIBITED RACIAL BIAS DURING DELIBERATIONS AND PROPERLY DENIED THE DEFENSE REQUEST FOR A MISTRIAL; THERE WAS A COMPREHENSIVE DISSENT (CT APP).

The Court of Appeals, in a full-fledged opinion by Justice Garcia, affirming the Appellate Division, over an extensive dissent, determined the trial judge properly assessed a juror’s claim that jurors exhibited racial bias during deliberations and properly denied defense counsel’s motion for a mistrial:

On appeal, the Appellate Division held that the trial judge did not abuse his discretion in denying a mistrial because the court made an “appropriate inquiry into this most serious charge” of racial bias by consulting with the parties and questioning relevant jurors, which ensured that “defendant’s right to an impartial verdict [was] properly balanced with the jury’s right to adjudicate ‘free from outside interference’ “… . In reviewing the actions of the trial judge, the Court concluded that ” ‘[i]n a probing and tactful inquiry, the [trial] court [did] evaluate the nature of what [juror No. 5] ha[d] seen, heard, or ha[d] acquired knowledge of, and assess[ed] its importance and its bearing on the case’ ” … . Two Justices dissented, asserting they were “unable to conclude on the record before us that the jury was not tainted by racial bias in their deliberations” … . … * * *

… [T]he judge was aware of the conduct of the jurors throughout the proceedings, observed the demeanor of the jurors as they were questioned on the issue of racial bias, evaluated their responses, and reasonably concluded on this record that what Juror 5 perceived as racial bias was in fact a discussion about the identification evidence, some of which, as the court noted in its post-trial decision denying the motion to set aside the verdict, may have been misinterpreted. As to the other unidentified jurors allegedly harboring some form of racial bias, defense counsel declined to request that the court question them individually (and, indeed, argued that the court should not do so), and therefore “the only asserted error preserved for appellate review was the denial of the motion for a mistrial” … . Our role is not to substitute our judgment as to the appropriate remedy for that of the trial judge. … On review of the record here, we hold that there was no abuse of discretion in the trial court’s denial of the motion for a mistrial. People v Jaylin Wiggins, 2025 NY Slip Op 06539, Ct App 11-25-25

Practice Point: Consult this opinion for insight into the issues raised by a juror’s claim that other jurors have exhibited racial bias during deliberations. Here the majority concluded the trial judge handled the inquiry properly and properly denied the defense request for a mistrial.

 

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PLAINTIFF WIRED $300,000 TO AN ACCOUNT IN DEFENDANT BANK WHICH HAD BEEN SET UP BY A FRAUDSTER TO DEFRAUD PLAINTIFF; PLAINTIFF FAILED TO PLEAD A SPECIAL RELATIONSHIP WITH DEFENDANT BANK WHICH IS REQUIRED BEFORE A DUTY (OWED TO PLAINTIFF) TO ENFORCE ITS ANTI-FRAUD PROCEDURES ARISES; THE COMPLAINT THEREFORE SHOULD HAVE BEEN DISMISSED (CT APP).

The Court of Appeals, in a one-sentence memorandum decision which adopted the reasoning of the Second Department dissent by Justice Higgitt, reversed the Second Department’s ruling that the complaint adequately pled a special relationship between the bank and plaintiff and held that the bank’s motion to dismiss the complaint should have been granted. There must have existed a special relationship between defendant JPMorgan Chase Bank and plaintiff before a duty (owed to plaintiff) to enforce the bank’s anti-fraud procedures arises. Defendant David Tate had 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. As Justice Higgitt wrote in his dissent:

On this appeal, which involves an individual who was swindled when she authorized a wire transfer to the account of a fraudster, we are asked to determine whether New Jersey law recognizes a common-law duty on the part of a bank to an existing customer to exercise reasonable care before permitting a potential customer to open an account. I find that a duty to exercise such care exists only when a bank has a “special relationship” with its existing customer from which that duty should be deemed to flow. The amended complaint, however, fails to allege facts suggesting that a special relationship existed between plaintiff and defendant Bank. Therefore, defendant Bank’s CPLR 3211 (a) (7) motion should have been granted. Ben-Dor v Alchemy Consultant LLC, 2024 NY Slip Op 03797, Second Dept 7-11-24; Ben-Dor v Alchemy Consultant LLC, 2025 NY Slip Op 06538 CtApp 11-25-25

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. Reversing the Second Department and adopting the reasoning of the dissent, the Court of Appeals held the complaint should have been dismissed because it did not adequately allege the existence of a special relationship between the bank and the plaintiff.

 

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THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) WAS PROPERLY APPLIED RETROACTIVELY IN THIS CASE; RETROACTIVE APPLICATION DOES NOT VIOLATE THE DUE PROCESS OR CONTRACT CLAUSES OF THE UNITED STATES CONSTITUTION (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Singas, determined the Foreclosure Prevention Abuse Act applied retroactively to the case before it. Retroactive application does not violate the Due Process or Contract Clauses of the United States Constitution:

We therefore hold that the provisions apply retroactively. Accordingly, because “a final judgment of foreclosure and sale has not been enforced” in this action … , FAPA §§ 4, 7, and 8 govern here by their terms. * * *

To comport with substantive due process, a statute’s retroactive application must be supported by “a legitimate legislative purpose furthered by rational means” … . That is, “the retroactive application of the legislation” must “itself [be] justified by a rational legislative purpose” … .

… FAPA’s legislative history identifies certain “abus[ive]” litigation practices engaged in by mortgage lenders and noteholders as the animating force behind FAPA’s enactment: the sponsors’ memoranda state “legislat[ive] find[ings]” to this effect … . In light of the legislature’s determination that these “abuses” should be curtailed, it is rational for FAPA to apply retroactively to shield as many borrowers as possible from those practices. Moreover, insofar as FAPA’s relevant provisions clarify or change the manner in which the six-year statute of limitations applies, FAPA’s retroactive application also rationally advances “the strong public policy favoring finality, predictability, fairness and repose” in human affairs … . Van Dyke v U.S. Bank, Natl. Assn., 2025 NY Slip Op 06537, CtApp 11-25-25

 

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