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THE SOLE REMEDY PROVISION OF THE CONTRACT IN THIS RESIDENTIAL MORTGAGE BACKED SECURITIES CASE, WHICH REQUIRED THAT THE DEFENDANT BE NOTIFIED AND GIVEN THE OPPORTUNITY TO REPURCHASE DEFECTIVE MORTGAGES, WAS NOT COMPLIED WITH PRIOR TO THE RUNNING OF THE STATUTE OF LIMITATIONS, PLAINTIFF’S TIMELY COMPLAINT WAS PROPERLY DISMISSED WITHOUT PREJUDICE, DESPITE THE FAILURE TO COMPLY WITH THE SOLE REMEDY PROVISION, ALLOWING PLAINTIFF TO REFILE THE COMPLAINT WITHIN SIX MONTHS PURSUANT TO CPLR 205 (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Rivera, determined that the trustee’s breach of contract action in the residential-mortgage-backed-securities (RMBS) case was properly dismissed without prejudice, allowing plaintiff to refile pursuant to CPLR 205 (which allows a suit to be refiled within six months of a dismissal that is not on the merits). The contractual sole remedy provision, which requires that the defendant (DLJ) be notified and given the opportunity to repurchase any mortgages deemed defective, was not be complied with and the timely complaint was dismissed for that reason:

As a general rule, under CPLR 205 (a) a subsequent action may be filed within six months of a non-merits dismissal of the initial timely-filed matter. Here, we conclude that CPLR 205 (a) applies to an RMBS trustee’s second action when its timely first action is dismissed for failure to comply with a contractual condition precedent. * * *

The difference between a procedural and substantive condition precedent is well-established. A condition precedent is substantive when it “describe[s] acts or events which must occur before a party is obliged to perform a promise made pursuant to an existing contract”… . In other words, the condition is “part of the cause of action and necessary to be alleged and proven, and without this no cause of action exist[s]” … , RMBS notice and sole remedy provisions are not substantive elements of the cause of action, but instead limitations on the remedy for a breach of the mortgage loan representations and warranties … . They serve as a precondition, “a procedural prerequisite to suit,” not a separate undertaking by the trustee … . Since notice and sole remedy provisions “do[] not create a substantive condition precedent” … , they do not affect when the statute of limitations commences because the limitations clock begins to run when the contract is executed.

Nevertheless, DLJ argues that the Trustee had to fulfill the procedural condition precedent before the limitations period expired, and its failure to do so rendered the original action untimely, such that a new action cannot be commenced pursuant to CPLR 205 (a). DLJ’s argument cannot be reconciled with our case law that a suit may be refiled pursuant to CPLR 205 (a) despite a plaintiff’s failure to comply with a condition precedent prior to the expiration of the statute of limitations. U.S. Bank Natl. Assn. v DLJ Mtge. Capital, Inc., 2019 NY Slip Op 01169, CtApp 2-19-19

 

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TRUSTEE’S BREACH OF CONTRACT ACTION IN THIS RESIDENTIAL MORTGAGE BACKED SECURITIES CASE WAS TIME-BARRED, THE ACTION COULD NOT RELATE BACK PURSUANT TO CPLR 203 BECAUSE THE TIMELY ACTION BY ANOTHER PARTY WAS PRECLUDED BY THE CONTRACT, THE COURT OF APPEALS COULD NOT CONSIDER WHETHER THE ACTION WAS TIMELY PURSUANT TO CPLR 205, EVEN THOUGH THE ISSUE WAS ADDRESSED BY THE APPELLATE DIVISION, BECAUSE THE ISSUE WAS NOT FULLY ADDRESSED IN SUPREME COURT (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Rivera, determined that the trustee’s breach of contract action in this residential-mortgage-backed-securities securities case was time-barred. A certificate holder had filed a timely action, but the relevant contract precluded the action by the certificate holder. Therefore the trustee’s action could not be deemed to relate-back to it (CPLR 203). The Court of Appeals could not consider whether the trustee’s action was timely under CPLR 205, despite the fact that the Appellate Division addressed the issue, because the issue was not fully addressed by the parties in Supreme Court and the Court of Appeals does not have interest of justice jurisdiction:

CPLR 203 (f) has no application here because the certificate holder’s pre-existing action was not valid. The lower courts concluded that under the no action clause, the certificate holder could not bring the action on behalf of itself, any other certificate holder, or the Trustee. Those conclusions are not at issue in this Court. Thus, the certificate holder’s action was subject to dismissal, and there is no valid pre-existing action to which a claim in a subsequent amended pleading may relate back. The Trustee’s contention that it may use the relation-back doctrine of CPLR 203 (f) to cure the certificate holder’s lack of a right to sue, and that it may therefore avoid any problem with the identity of the plaintiff upon re-filing pursuant to CPLR 205 (a), is without merit. U.S. Bank Natl. Assn. v DLJ Mtge. Capital, Inc., 2019 NY Slip Op 01168, CtApp 2-19-19

 

WHERE A DEFENDANT HAS BEEN RESENTENCED BECAUSE THE ORIGINAL SENTENCE WAS ILLEGAL, THE DATE OF THE ORIGINAL SENTENCE CONTROLS FOR DETERMINATION OF PREDICATE FELONY STATUS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Stein, over a three-judge dissent, reversing the Appellate Division, determined that, where a defendant has been resentenced because the original sentence was illegal, the date of the original sentence, not the subsequent resentence, controls for the purpose of determining predicate felony status:

… [D]efendant’s proffered interpretation of Penal Law § 70.06 is not supported by the plain language of that provision, its well-established legislative purpose, or our precedent. Therefore, because the original sentences on defendant’s 1989 convictions were imposed before commission of the present felony, the sequentiality requirement of the predicate felony statute was satisfied, and defendant was properly sentenced as a second felony offender. People v Thomas, 2019 NY Slip Op 01167, CtApp 2-19-19

 

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COURT RECORDS RELATED TO PROCEEDINGS FOR THE COMMITMENT AND RETENTION OF DANGEROUS MENTALLY ILL ACQUITTEES ARE NOT CLINICAL RECORDS AND THEREFORE ARE NOT SUBJECT TO THE AUTOMATIC SEALING REQUIREMENT IN THE MENTAL HYGIENE LAW (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, determined that the records of Criminal Procedure Law 330.20 proceedings related to the commitment and retention of insanity acquittees (suffering from a dangerous mental disorder) are not “clinical records” within the meaning of the Mental Hygiene Law and, therefore, are not subject to the automatic sealing requirement:

The plain text of Mental Hygiene Law § 33.13 … cuts against defendant’s interpretation that the term “clinical record” includes the entire record of court proceedings or dictates to a court how to manage its own records. * * *

Throughout our history, “the institutional value” of open judicial proceedings has fostered “an appearance of fairness” … and ensured “the public interest in having proceedings of courts of justice public, not secret, for the greater security thus given for the proper administration of justice” … . Interpreting Mental Hygiene Law § 33.13, despite the absence of any supporting statutory language, to provide a blanket sealing requirement of an entire court record that is automatically conferred disregards that tradition. In balancing the privacy rights of a defendant with the public’s right to know how dangerous mentally ill acquittees are managed by the courts, the legislature eschewed an automatic sealing requirement of the court record. We refuse to disturb that balance today. Here, defendant demanded an automatic seal in stark contrast to a case specific analysis that demands a court to find good cause sufficient to rebut the legislative presumption of public access for any sealing, in part or whole, upon due consideration of the competing and compelling interests of the public and the parties … . Matter of James Q. (Commissioner of the Off. for People with Dev. Disabilities), 2019 NY Slip Op 01166, CtApp 2-19-19

 

ACTIONS TAKEN BY A NEW YORK ATTORNEY WHO IS NOT IN COMPLIANCE JUDICIARY LAW 470, WHICH REQUIRES AN OFFICE IN NEW YORK, ARE NOT A NULLITY (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Garcia, reversing the Appellate Division, determined that actions taken by an attorney who is admitted to practice in New York but is not in compliance with New York office requirement are not a nullity:

We … hold that a violation of Judiciary Law § 470 [requiring a New York office] does not render the actions taken by the attorney involved a nullity. Instead, the party may cure the section 470 violation with the appearance of compliant counsel or an application for admission pro hac vice by appropriate counsel … . Where further relief is warranted, the trial court has discretion to consider any resulting prejudice and fashion an appropriate remedy  and the individual attorney may face disciplinary action for failure to comply with the statute … . This approach ensures that violations are appropriately addressed without disproportionately punishing an unwitting client for an attorney’s failure to comply with section 470. Arrowhead Capital Fin., Ltd. v Cheyne Specialty Fin. Fund L.P., 2019 NY Slip Op 01124, CtApp 2-14-19

 

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MENTAL HEALTH LEGAL SERVICES DOES NOT HAVE STANDING TO SEEK A WRIT OF MANDAMUS TO COMPEL A HOSPITAL TO COMPLY WITH THE MENTAL HYGIENE LAW PROCEDURE WHEN A PATIENT REQUESTS AN ADMISSION OR RETENTION HEARING (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over a three-judge dissenting opinion, reversing the Appellate Division, determined Mental Hygiene Legal Services did not have standing to seek a writ of mandamus to compel a hospital to comply with Mental Hygiene Law 9.31 (b) “which sets forth the procedure that must be followed after a patient requests an admission or retention hearing:

MHLS alleges that, in early 2016, it “began to notice problems with the medical charts offered into evidence by BPC [Bronx Psychiatric Center]” because “documents contained in the chart had been added or removed just prior to the hearing.” MHLS filed this CPLR article 78 petition in the nature of mandamus, in its own name — and separate from any specific client or proceeding — seeking an order compelling BPC to provide copies of a patient’s entire clinical chart when it provides notice of a request for an admission or retention hearing, arguing the clinical chart is part of the “record of the patient” under Mental Hygiene Law § 9.31. Matter of Mental Hygiene Legal Serv. v Daniels, 2019 NY Slip Op 01123, CtApp 2-14-19

 

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OFFICE OF MENTAL HEALTH IS NOT REQUIRED TO ALLOW COUNSEL FROM MENTAL HEALTH LEGAL SERVICES TO PARTICIPATE IN TREATMENT PLANNING FOR A SEX OFFENDER (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Stein, over a dissenting opinion, determined that a Mental Hygiene Legal Services (MHLS) attorney need not be granted permission to attend a treatment planning session for a client in the Sex Offender Treatment Program:

We hold that MHLS counsel is not entitled to be given an interview and an opportunity to participate in treatment planning simply by virtue of an attorney-client relationship with an article 10 respondent. * * *

… [T]he statutory language of Mental Hygiene Law §§ 10.10 (b) and 29.13 (b), as well as the relevant legislative history, support the conclusion that MHLS counsel was not intended to be included, as a matter of law, within the terms “authorized representative” or “significant individual.” Thus, OMH [Office of Mental Health] is not required, upon the respondent’s request, to provide an interview and an opportunity to participate in treatment planning to MHLS counsel who has only a professional, attorney-client relationship with an article 10 respondent. However, as OMH concedes, a facility has the discretion to permit MHLS counsel to participate in treatment planning and, in a particular case, it is possible that counsel could develop and demonstrate a sufficient personal relationship with a patient such that counsel would qualify as a “significant individual . . . otherwise concerned with the welfare of the patient,” entitled to participate therein. Matter of Mental Hygiene Legal Serv. v Sullivan, 2019 NY Slip Op 01122, CtApp 2-14-19

 

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COUNTY COURT SHOULD NOT HAVE IMPANELED AN ANONYMOUS JURY (CT APP).

The Court of Appeals affirmed the appellate division, holding that County Court should not have empaneled an anonymous jury:

The trial court committed reversible error by empaneling an anonymous jury. Assuming that trial courts may, under certain circumstances, anonymize jurors, here County Court acted without any factual predicate for the extraordinary procedure. Indeed, the trial court expressly based its decision to empanel an anonymous jury on anecdotal accounts from jurors in unrelated cases and, then, exacerbated the error by taking “no steps to lessen the potential prejudice” to defendants … . People v Flores, 2018 NY Slip Op 08540, CtApp 12-13-18

 

LARGE CELLULAR DATA TRANSMISSION EQUIPMENT OWNED BY T-MOBILE IS TAXABLE REAL PROPERTY SUBJECT TO REAL PROPERTY TAX LAW 102 (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, determined that certain large cellular data transmission equipment owned by T-Moblle is taxable real property subject to Real Property Tax Law (RPTL) 102 (12) (i):

T-Mobile owns large cellular data transmission equipment that it has installed on the exterior of buildings in Mount Vernon. The installations — which are large enough to require the use of “stealth walls” that shield them from view — consist of multiple pieces of interconnected equipment, including base transceiver stations (essentially cabinets housing wiring and providing battery power); antennas that transmit and receive the signals; and coaxial, T-1, and fiber optic cables running amongst the other components. T-Mobile enters multi-year leases with the owners of the buildings to enable it to occupy the exterior space on the buildings for installation of the equipment. * * *

Under the RPTL, all “real property within the state” is subject to real property taxation unless otherwise exempt by law (see RPTL 300). “Real property” is defined under subdivision (12) of RPTL 102. Under RPTL 102(12)(i), that term includes: “When owned by other than a telephone company as such term is defined in paragraph (d) hereof, all lines, wires, poles, supports and inclosures for electrical conductors upon, above and underground used in connection with the transmission or switching of electromagnetic voice, video and data signals between different entities separated by air, street or other public domain . . . .” … . …

The plain language of paragraph i encompasses each component of T-Mobile’s data transmission equipment, which consists of base transceiver stations; antennas; and coaxial, T-1, and fiber optic cables. The base transceiver stations are essentially cabinets that house cables and other electrical components and provide battery power, so they qualify as “inclosures for electrical conductors.” The large rectangular antennas are part of the base transceiver stations and, thus, also “inclosures for electrical conductors.” The various cables in the installations are “lines” and/or “wires” under the plain text of the statute. Because the primary function of the equipment installations is to transmit cellular data, the components are “used in connection with the transmission or switching of electromagnetic voice, video and data signals between different entities separated by air, street or other public domain,” as required by the statute. Thus, although ambiguities in tax statutes are generally resolved in favor of the taxpayer (… , that doctrine is not implicated here because the plain text of RPTL 102(12)(i) unambiguously indicates that T-Mobile’s equipment installations are taxable real property. Matter of T-Mobile Northeast, LLC v DeBellis, 2018 NY Slip Op 08539, CtApp 12-13-18

CELL PHONE COMPANIES, CELL TOWERS

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A SENTENCING COURT MAY REQUIRE A DEFENDANT, AS A CONDITION OF PROBATION, TO PAY FOR ELECTRONIC MONITORING, IF A DEFENDANT CLAIMS AN INABILITY TO PAY, A HEARING MUST BE HELD TO DETERMINE WHETHER ANOTHER ALTERNATIVE TO INCARCERATION IS APPROPRIATE AND, IF NOT, THE DEFENDANT MAY BE SENTENCED TO PRISON (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Feinman, over a dissenting opinion, determined that the sentencing court, as a condition of probation, may require a defendant to pay for a Secure Continuous Remote Alcohol Monitoring (SCRAM) bracelet. Defendant, who had pled guilty to felony driving while intoxicated, made several monthly payments for the bracelet but then stopped paying and the monitoring company removed the bracelet. County Court then sentenced defendant to prison. The 3rd Department held that the sentence was illegal because the court cannot require a defendant to pay the cost of electronic monitoring:

Were we to hold that any monetary component of a condition that must be borne by a defendant per se invalidated said condition, sentencing courts would be divested of their broad authority to impose a myriad of probationary requirements, and consequently, would, in many instances, no longer view release into the community as a viable alternative to incarceration. In light of this, the requirement that defendant wear and pay for a SCRAM bracelet was well within County Court’s statutory authority under Penal Law § 65.10 (4).

This is not to say that requiring a defendant to wear and pay for an electronic monitoring device will always be reasonable. Courts cannot impose a condition of probation that includes costs a particular defendant cannot feasibly meet. Nor can courts incarcerate a defendant who has initially agreed to meet a condition requiring a payment, but who subsequently becomes unable to do so. * * *

… [I]f, at the imposition of the sentence or during the course of probation, a defendant asserts that they are unable to meet the financial obligations attendant to a certain condition, the sentencing court must hold a hearing on the matter … . The defendant must be given the opportunity to be heard in person, present witnesses, and offer documentary evidence establishing that they made sufficient bona fide efforts to pay … . If, after such inquiry, the sentencing court determines that the defendant has adequately demonstrated an inability to pay the costs associated with a particular condition despite bona fide efforts to do so, the court must attempt to fashion a reasonable alternative to incarceration … . Conversely, if the sentencing court determines, by a preponderance of the evidence … , that “a probationer has willfully refused to pay . . . when [that defendant] can pay, the [court] is justified in revoking probation and using imprisonment as an appropriate penalty for the offense” … . People v Hakes, 2018 NY Slip Op 08538, CtApp 12-13-18

 

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