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QUESTION OF FACT WHETHER BOARDS OR MASONITE WERE SCATTERED DEBRIS OR DELIBERATELY PLACED AS AN INTEGRAL PART OF THE RENOVATION WORK; PLAINTIFF’S SUMMARY JUDGMENT MOTION ON HIS LABOR 241(6) CAUSE OF SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined there was a question of fact whether boards/Masonite on the floor of a passageway were placed there as an integral part of the renovation project or were scattered debris constituting a tripping hazard in violation of the Industrial Code (12 NYCRR 23-1.7(e)(1) or (e)(2)). The court held there was a question of fact on that issue and plaintiff’s motion for summary judgment on his Labor Law 241(6) cause of action should not have been granted. The court noted that its decision to the contrary in Singh v 1221 Holdings, LLC (127 AD3d 607 [1st Dept 2015]) should no longer be followed:

Plaintiff claims that the boards were a tripping hazard and a violation of Industrial Code § 23-1.7 (e)(1) because defendants failed to provide him with a passageway free of obstructions. Defendants argue, however, that there is no liability because the boards were Masonite, not scattered materials or debris, and because they were purposefully laid out upon the floor each day, this being “integral to” the renovation work being performed.

At the outset, these arguments require us to address whether the “integral-to-the work” defense raised by defendants, but rejected by Supreme Court, equally applies to Industrial Code § 23-1.7(e)(1), as well as § 23-1.7(e)(2). We hold that it does. * * *

[The facts] raise a triable issue of fact regarding whether the boards were a “protective covering [that] had been purposefully installed on the floor as an integral part of the renovation project” … . … [S]ummary judgment in favor of plaintiff was improper because it was based on the mistaken supposition that the “integral-to-work” defense means integral to plaintiff’s specific task. The defense applies to things and conditions that are an integral part of the construction, not just to the specific task a plaintiff may be performing at the time of the accident … . Krzyzanowski v City of New York, 2020 NY Slip Op 00232, First Dept 1-14-20

 

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SANCTIONS IMPOSED FOR A DELAYED RESPONSE TO DISCOVERY DEMANDS WERE TOO SEVERE, EFFECTIVELY PRECLUDING PROOF OF COUNTERCLAIMS CENTRAL TO THE DEFENSE; NEW TRIAL ORDERED (FIRST DEPT).

The First Department, reversing the verdict in favor of plaintiff employees, determined the sanctions imposed upon the employer (appellants) for a delayed response to discovery demands were too severe and ordered a new trial. The plaintiffs alleged appellants breached oral employment contracts. The appellants in their counterclaims alleged plaintiffs breached their fiduciary duty by violating Securities and Exchange Commission (SEC) regulations and destroying and replacing handwritten notes about conversations with one of the appellants. The sanctions effectively prevented the appellants from demonstrating plaintiffs’ violation of SEC violations and destruction of evidence:

Pursuant to CPLR 3126, if a party “refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed . . . , the court may make such orders with regard to the failure or refusal as are just.” Although “[i]t is within the trial court’s discretion to determine the nature and degree of the penalty,” “[t]he sanction should be commensurate with the particular disobedience it is designed to punish, and go no further than that” … . Further, “the drastic remedy of striking a party’s pleading . . . for failure to comply with a discovery order is appropriate only where [it is] conclusively demonstrate[d] that the non-disclosure was willful, contumacious or due to bad faith” … .

Although the court here did not strike a pleading, its ruling could fairly be viewed as having done so, since the precluded evidence was critical to the fiduciary duty claims. Moreover, the court’s drastic sanctions were disproportionate to the alleged discovery malfeasance. It is unclear why a short continuance to give plaintiffs time to review the newly-produced documents would not have been a viable option, or why further curative instructions would not have sufficed. The record as a whole does not support a finding of willfulness or bad faith so as to justify the severe sanctions imposed … . No basis exists to indicate that this was anything other than a disagreement over the scope of discovery. Indeed, the court at trial stated that the alleged discovery omissions “appear[] not to have been in bad faith.” Beach v Touradji Capital Mgt., LP, 2020 NY Slip Op 00230, First Dept 1-14-20

 

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DEFENDANTS’ ATTORNEYS HAD APPARENT AUTHORITY TO BIND DEFENDANTS TO THE OPEN-COURT STIPULATED SETTLEMENT OF $8,875,000; IN ADDITION, DEFENDANTS RATIFIED THE STIPULATION BY FAILING TO TIMELY OBJECT TO IT (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Acosta, determined that defendants (the Infiniti defendants) were bound by an open-court stipulated settlement of $8,875,000 in this personal injury case. The attorneys had apparent authority to bind the defendants. And the defendants ratified the stipulation by failing to timely object to it:

I write to highlight the fundamental principle that parties are bound by stipulations signed in open court by their attorneys. The issue arose in the context of a negligence case, where plaintiff was seriously injured when she was struck by a motor vehicle while standing on a sidewalk median in Brooklyn. The vehicle was owned by defendant Infiniti of Manhattan, Inc. and driven by defendant Massamba Seck (the Infiniti defendants). Plaintiff suffered serious injuries and required extensive hospitalization and multiple surgeries. At issue in this case is whether the Infiniti defendants are bound by a settlement agreement entered into by their attorneys. We find that the Infiniti defendants are bound, because their attorneys had apparent authority to bind them to the $8,875,000 judgment. Significantly, there is no affidavit or testimony by Infiniti stating that Infiniti, or any of its employees, was unaware of the settlement or that Infiniti did not authorize the settlement. The only ones making this claim are the lawyers from the firm that was hired by the insurance companies to defend the Infiniti defendants. The fact that one of the insurers is now unable to pay its intended $5 million portion does not inure to the Infiniti defendants’ benefit. Rather, the Infiniti defendants are responsible for the portion of the agreed-upon amounts that the insurers do not pay. To accept their position would alter the way litigation is conducted in New York State. Courts would have to conduct colloquies in every case to make sure that the parties, notwithstanding their attorneys’ actions in appearing for them on numerous occasions and signing stipulations, acquiesced in the terms of the stipulations. That is unacceptable, especially here, where the Infiniti defendants never objected to the stipulation until the filing of the instant order to show cause more than a year and six months after the stipulation was signed in open court. Pruss v Infiniti of Manhattan, Inc., 2020 NY Slip Op 00229, First Dept 1-9-20

 

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PLAINTIFF ALLEGED DEFENDANT’S EMPLOYEE, A SECURITY GUARD, ATTACKED HER; DEFENDANT’S EMPLOYEE ALLEGED PLAINTIFF ATTACKED HIM AND HE ACTED IN SELF DEFENSE; THE EMPLOYER WOULD NOT BE LIABLE UNDER EITHER SCENARIO; THE EMPLOYER’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the security guard’s employer’s (SEB’s) motion for summary judgment in this third-party assault case should have been granted. Plaintiff alleged the security guard attacked her without provocation. The security guard alleged he acted in self defense after plaintiff and others attacked him. The employer would not be liable in either scenario:

Plaintiff Gregory testified that SEB’s employee, a security guard who was then working at a movie theater, attacked her with a box cutter and slashed her face and body with it after she tapped him on the shoulder and told him she had enjoyed the movie she had just seen. The security guard gave a different version of events and claimed that he was acting in self defense after plaintiffs and others attacked him with box cutters. However, neither version of events would give rise to liability on the part of SEB. Under plaintiff’s version of events, SEB could not be held liable because SEB’s employee’s unprovoked assault on Gregory with a box cutter was not within the scope of any duties he may have had as a security guard and was not done in furtherance of SEB’s business interests … . Under the security guard’s version of events, even assuming for purposes of this appeal that his actions were within the scope of his duties as a security guard and were done in furtherance of SEB’s business interests, SEB would not be held liable because the security guard’s actions were taken in self-defense after being attacked by patrons of the movie theater. Gregory v National Amusements, Inc., 2020 NY Slip Op 00223, First Dept 1-9-20

 

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AMENDMENT TO SOCIAL SERVICES LAW EXTENDING SUBSIDIES FOR CHILDREN CARED FOR BY A GUARDIAN UNTIL AGE 21 SHOULD HAVE BEEN APPLIED RETROACTIVELY; THE MATTER IS APPEALABLE AS OF RIGHT (FIRST DEPT).

The First Department, reversing Family Court, determined the amendment to Social Services Law 458-b allowing monthly subsidies for children cared for by guardians to be extended to age 21 (from 18) should be applied retroactively. The matter was deemed appealable as of right:

… [T]he order is appealable as of right, because it is an order of disposition that terminates the children’s guardianship placement once the children reach the age of 18 and terminates the proceeding itself … . In any event, this Court can deem a notice of appeal from the denial of the motion a request for permission to appeal and we would grant that request … . …

A review of the legislative history supports the conclusion that the amended statute is remedial in nature. … [W]e can discern from the legislative history that the intent was to remove the disparity created between foster/adoptive parents and guardians since foster/adoptive parents are able to obtain subsidies notwithstanding the age of the child at the time of fostering or adoption.

The mere fact that the amended statute is remedial in nature is not determinative as to whether it should be applied retroactively … . … [A] remedial amendment will only be applied retroactively if it does not impair vested rights … .

… [T]he amendment does not create a new entitlement; rather it expands “existing benefits to a class of persons arbitrarily denied those benefits by the original legislation” … . There is no dispute that had the children been adopted by the grandmother and remained with her under the auspices of foster care, or had the grandmother proceeded with guardianship after they turned 16, they would have been entitled to subsidies until the children turned 21. Matter of Jaquan L. (Pearl L.), 2020 NY Slip Op 00213, First Dept 1-9-20

 

DEFENDANT PROPERTY OWNER/MANAGER’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED; DEFENDANTS DEMONSTRATED THEY DID NOT HAVE NOTICE OF ANY PROBLEMS WITH A DOOR WHICH ALLEGEDLY MALFUNCTIONED CAUSING PLAINTIFF’S DECEDENT TO FALL OUT OF A WHEELCHAIR LIFT (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendants’ [property owner/manager’s ?] motion for summary judgment should have been granted. Plaintiff alleged the door to a wheelchair lift on the exterior of the building where plaintiffs lived malfunctioned causing plaintiff’s decedent to fall out of the lift. The defendants presented evidence they did not have notice of any problems with the door:

Defendants established prima facie entitlement to judgment as a matter of law in this action where plaintiff’s decedent was injured when the door to the wheelchair lift on the exterior of the building in which they lived malfunctioned causing him to fall out of the lift. Defendants submitted evidence demonstrating that they did not have notice of any malfunction in the subject door through service records showing no issues related to the door opening prematurely … .

In opposition, plaintiff failed to raise a triable issue of fact. Plaintiff did not submit any evidence that complaints about the lift were similar in nature or caused by similar contributing factors … . Nor is the doctrine of res ipsa loquitur applicable under the circumstances presented … . Pui Kum Ng Lee v Chatham Green, Inc., 2020 NY Slip Op 00069, First Dept 1-7-20

 

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MOTION TO VACATE DEFENDANT’S JUDGMENT OF CONVICTION SHOULD NOT HAVE BEEN DENIED WITHOUT A HEARING; SUPREME COURT MAY HAVE IMPROPERLY RELIED ON CPL 440.30 (d) WHICH ONLY APPLIES IF THE MOTION IS BASED SOLELY ON AN ALLEGATION BY THE DEFENDANT (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant’s motion to vacate his judgment of conviction should not have been denied without a hearing. There was a question of fact whether defense counsel was aware he could call an expert to testify defendant, who had ingested drugs, did not have the required mental state (depraved indifference). The First Department noted Supreme Court may have improperly relied on Criminal Procedure Law (CPL) 440.30 (d) which applies only if the motion is based solely on an allegation by the defendant (not the case here):

While the motion court had a sound basis for its conclusion that there was “no reasonable possibility” that defendant’s trial counsel “was unaware that he could call an expert to testify about the defendant’s state of mind,” we find that this was not an adequate basis for denying the motion without a hearing in these circumstances. First, to the extent the court may have been relying on CPL 440.30(d), that section permits summary denial when “there is no reasonable possibility that such an allegation is true,” but it applies only when the allegation “is made solely by the defendant.” That is not the case here, where the allegation at issue regarding trial counsel’s statements was made by defendant’s motion counsel based on his own knowledge.

Nor do we believe that this is a case such as People v Samandarov (13 NY3d 433 [2009]), where the lack of merit of a CPL 440.10 motion could be determined on the parties’ submissions, despite it being “theoretically possible that a hearing could show otherwise” (id. at 440). Here, while the court’s perception may well be borne out, there are issues of fact sufficient to warrant a hearing … . People v Martin, 2020 NY Slip Op 00067, First Dept 1-7-20

 

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THIRD-PARTY PLAINTIFFS WERE NOT REQUIRED TO AND DID NOT PARTICIPATE IN THE WORKERS’ COMPENSATION PROCEEDINGS; THEREFORE THE WORKERS’ COMPENSATION BOARD’S FINDING THAT THIRD-PARTY DEFENDANT WAS PLAINTIFF’S EMPLOYER WAS NOT BINDING ON THE THIRD-PARTY PLAINTIFFS (FIRST DEPT).

The First Department, reversing Supreme Court, determined the Workers’ Compensation Board’s finding that third-party defendant I & G Group was plaintiff’s employer was not binding on the third-party plaintiffs because the third-party plaintiffs did not participate in the Workers’ Compensation proceedings. Therefore the matter has to be litigated and I & G Group’s motion for summary judgment should should not have been granted:

The Court of Appeals has … recognized that a decision by the worker’s compensation board may not be binding on parties who do not participate in its hearings. * * * “[U]nless the Legislature expands the definition of parties in interest, the unfortunate result will be that a duplicative proceeding must be held and the issue of compensability adjudicated anew because defendants never had a full and fair opportunity’ to litigate the question” … .

Here, because it is undisputed that appellants [third-party plaintiffs] were not given notice of the worker’s compensation hearing, and were not afforded the opportunity to present evidence or cross-examine witnesses, their third-party claims, in which they challenge the identity of plaintiff’s employer, should not have been dismissed as precluded by the board’s prior determination of that issue … . Martinez v 250 W. 43 Owner, LLC, 2020 NY Slip Op 00058, First Dept 1-7-20

 

HUSBAND DID NOT DEMONSTRATE ENTITLEMENT TO 50% OF THE APPRECIATION OF WIFE’S SEPARATE PROPERTY IN THIS DIVORCE ACTION (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court in this divorce action, determined 50% of the appreciation of the wife’s separate property should not have been distributed to the husband:

The court improperly distributed 50% of the appreciation of the wife’s separate real property because the husband failed to establish his entitlement to it. The husband argues that he is entitled to 50% of the appreciation of the property on the ground that he actively contributed toward the renovations of the property. However, the husband fails to provide any nexus between his alleged contributions and the property’s appreciation in value. The husband relies on the testimony of a city tax assessor, who testified only as to the property’s passive appreciation, specifically, that the property appreciated in value based on comparative sales in the area, and did not testify that any appreciation in value was due to the renovations done to the property. Indeed, the assessor could not have testified as to whether the property appreciated due to the renovations because he never entered the property to view any of the renovations and he did not take such renovations into account when making his assessment. Gordon v Anderson, 2020 NY Slip Op 00034, First Dept 1-2-20

 

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RESPONDENT, THE PREVAILING PARTY IN AN ARBITRATION, WAS ENTITLED TO ATTORNEY’S FEES FOR THE SUBSEQUENT ARTICLE 75 PROCEEDING TO VACATE THE AWARD AND FOR THE APPEAL TO THE APPELLATE DIVISION (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the respondent, who prevailed in an arbitration proceeding, was entitled to attorney’s fees for the subsequent Article 75 proceedings and appeal to the Appellate Division:

Judgment … awarding respondent attorney’s fees in the sum total of $980 in connection with a no-fault arbitration award … [remanded] to Supreme Court for a determination of respondent’s reasonable attorney’s fees incurred in the article 75 proceeding brought by petitioner to vacate the arbitration award and on this appeal … .

“The attorney’s fee for services rendered … in a court appeal from a master arbitration award and any further appeals, shall be fixed by the court adjudicating the matter” (11 NYCRR § 65-4.10[j][4]). The term “court appeal” applies to a proceeding taken pursuant to CPLR article 75 to vacate or confirm a master arbitration award … . Accordingly, respondent TC Acupuncture, as a prevailing applicant for payment by petitioner insurer of attorney’s fees in an article 75 proceeding reviewing an arbitration award, is entitled to an additional award of attorney’s fees, as fixed by the court, for its motion to modify the order, in a 2015 article 75 proceeding denying Countrywide’s petition to vacate the arbitration award, to include a ruling confirming the arbitration and its opposition to Countrywide’s motion to reargue that order. Supreme Court erred in failing to award these additional fees.

Respondent is also entitled to the attorney’s fees incurred in this appeal to this Court of the order issued in the article 75 proceeding, to be fixed by the court, upon remand, pursuant to 11 NYCRR § 65-4.10(j)(4) … . Matter of Country-Wide Ins. Co. v TC Acupuncture P.C., 2020 NY Slip Op 00048, First Dept 1-2-20

 

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