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PLAINTIFF DID NOT SUFFICIENTLY ALLEGE THAT NEW YORK’S PROPERTY TAX SYSTEM DISCRIMINATES AGAINST PROPERTY OWNERS IN “MAJORITY-MINORITY” NEIGHBORHOODS; COMPLAINT SHOULD HAVE BEEN DISMISSED IN ITS ENTIRETY (FIRST DEPT).

The First Department, in a comprehensive opinion by Justice Kern, reversing (modifying) Supreme Court, determined the complaint alleging the New York property tax system is unconstitutional should have been dismissed in its entirety for failure to state a cause of action. The opinion is too detailed to fairly summarize here. With respect to the allegations the property tax system discriminates against property owners in “majority-minority” neighborhoods, the court wrote:

… [P]laintiff does not adequately allege a causal connection between the property tax system and any racial disparities in the availability of housing. Plaintiff has failed to allege sufficient concrete facts or produce statistical evidence showing that the application of the property tax system, as opposed to other factors, causes financial barriers that inhibit the ability of minority residents to own homes. Additionally, plaintiff does not allege sufficient concrete facts or produce statistical evidence showing how the current property tax system contributes to higher rates of foreclosure or discourages the production of rental units in majority-minority communities. …

… [P]laintiff has failed to meet its burden “to allege facts at the pleading stage or produce statistical evidence demonstrating a causal connection” between the property tax system and the continued segregation of New York City neighborhoods sufficient to “make out a prima facie case of disparate impact” … . …

… [P]laintiff argues that the terms and conditions of all home, condominium and cooperative sales and apartment rentals include the transfer of an illegal tax burden that make purchasing or renting a dwelling more expensive in affected communities. The portion of the FHA [Fair Housing Act] upon which plaintiff relies makes it unlawful to “discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling . . . because of race, color, religion, sex, familial status, or national origin” … . However, in the context of taxation, defendants are not involved in the terms and conditions of the sale or rental of property … . Tax Equity Now NY LLC v City of New York, 2020 NY Slip Op 01401, First Dept 2-27-20

 

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ALTHOUGH MOVING MONEY THROUGH A NEW YORK BANK IS ENOUGH TO CONFER PERSONAL JURISDICTION ON OUT-OF-STATE PARTIES, SUPREME COURT CORRECTLY HELD IT WAS NOT ENOUGH TO MAKE NEW YORK A CONVENIENT FORUM (FIRST DEPT).

The First Department determined that, although using a New York bank for an allegedly fraudulent transaction is sufficient to acquire personal jurisdiction over out-of-state parties, it does not necessarily follow that New York is a convenient forum. Supreme Court properly found New York was not a convenient forum in these actions involving individuals and corporations in Saudi Arabia and the United Arab Emirates, as well as a Swiss bank:

… [T]he court properly considered the following matters, among others: (1) none of the parties to either action is a New York citizen or resident or (if an entity) is formed under New York law or has its principal place of business in New York; … (2) the alleged conduct at issue primarily occurred in the UAE, Saudi Arabia and Switzerland, with the sole New York connection being the fleeting presence of the bribery funds at a nonparty New York correspondent bank while en route from the UAE to Switzerland; (3) the bulk of the relevant documentary evidence is located in the UAE, Saudi Arabia, Switzerland and BVI, and most witnesses are located outside New York and beyond New York’s subpoena power; (4) there is a likelihood that foreign substantive law will govern; (5) there are alternative fora available (Switzerland and the UAE) with greater connection to the subject matter; and (6) in the Pictet [bank] action, Switzerland has an interest in regulating the conduct of a bank operating within its borders … . …

As Supreme Court correctly recognized … “[o]ur state’s interest in the integrity of its banks . . . is not significantly threatened every time one foreign national, effecting what is alleged to be a fraudulent transaction, moves dollars through a bank in New York. . . . New York’s interest in its banking system is not a trump to be played whenever a party to such a transaction seeks to use our courts for a lawsuit with little or no apparent contact with New York” (Mashreqbank PSC v Ahmed Hamad Al Gosaibi & Bros. Co., 23 NY3d 129, 137 [2014] … ).

In accordance with Mashreqbank, this Court has declined to disturb the motion court’s discretionary determination that New York is not a convenient forum in cases where the sole connection to New York was the passage of wired funds through a correspondent bank in the state … . Al Rushaid Parker Drilling Ltd. v Byrne Modular Bldgs. L.L.C., 2020 NY Slip Op 01277, First Dept 2-25-20

 

THE RECORD DID NOT DEMONSTRATE A SELECTED UNSWORN JUROR COULD NOT RENDER AN IMPARTIAL VERDICT BECAUSE OF AN OUT-OF-TOWN MEETING ON THE DAY BEFORE THE TRIAL WAS LIKELY TO CONCLUDE, THE PEOPLE’S FOR CAUSE CHALLENGE SHOULD NOT HAVE BEEN GRANTED, NEW TRIAL ORDERED (FIRST DEPT).

The First Department, reversing defendant’s conviction, determined the judge should not have granted the People’s for cause challenge to a selected by unsworn juror. Although the juror had an important out-of-town meeting on the day before the trial was to conclude, the record did not demonstrate the juror could not render an impartial verdict on that ground:

The record did not justify the court’s discharge for cause of a selected but unsworn juror. Both defendant and the People initially declined to challenge the juror peremptorily or for cause. However, the prosecutor challenged the juror for cause, over defense objection, after the court, concerned about an important out-of-town meeting that the prospective juror was scheduled to attend on a day before the anticipated conclusion of the trial, announced that it would grant such a challenge. Although subsequent questioning demonstrated that rescheduling the meeting would be inconvenient for the juror, it did not establish that the juror, who never directly asked to be excused for hardship or otherwise, had “a state of mind that [was] likely to preclude him from rendering an impartial verdict based on the evidence adduced at the trial” … . By way of contrast, in People v Williams (44 AD3d 326, 326 [1st Dept 2007], lv denied 9 NY3d 1010]), we found that the selected but unsworn juror at issue was unfit for service because her scheduling conflict involving a funeral “would make it difficult for her to focus on the trial.” Here, the juror’s responses did not establish a sufficient basis to sustain a challenge for cause, which was the only issue presented to and ruled upon by the court. People v Manning, 2020 NY Slip Op 01308, First Dept 2-25-20

 

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THERE WAS EVIDENCE THE WATER ON THE FLOOR WAS A RECURRENT DANGEROUS CONDITION; PLAINTIFF SHOULD HAVE BEEN ALLOWED TO PRESENT AS A WITNESS DEFENDANT’S EMPLOYEE, THE BUILDING SUPERINTENDENT AT THE TIME OF THE SLIP AND FALL, DESPITE LATE NOTIFICATION; THE DIRECTED VERDICT WAS REVERSED (FIRST DEPT).

The First Department, reversing the directed verdict, determined the proof demonstrated water leaking from the ceiling onto the floor was a recurrent dangerous condition which was not addressed by the landlord. The First Department also held that a witness for the plaintiff, who was defendant’s employee at the time of the accident, should have been allowed to testify:

Plaintiff’s trial evidence established prima facie that defendant had constructive notice of the water on the floor of the lobby of its building on which plaintiff allegedly slipped and fell … . Plaintiff testified that at least four times before his accident, every few months, he observed water leaking from the ceiling onto the floor below in the area where he fell. His former girlfriend, with whom he lived in the building, testified that before the date of the accident “there were leaks and then afterward it was leaking again.” This testimony established that “an ongoing and recurrent dangerous condition existed in the area of the accident that was routinely left unaddressed by the landlord” … . Issues of credibility were for the jury.

The trial court improvidently exercised its discretion in precluding the testimony of Henry Soto, defendant’s building superintendent at the time of the accident, on the ground that it was prejudicial to defendant. Defendant could not have been prejudiced or surprised by plaintiff’s disclosure of Soto as a witness on the eve of trial, since Soto was defendant’s employee at the time of the accident … . Monzac v 1141 Elder Towers LLC, 2020 NY Slip Op 01243, First Dept 2-20-20

 

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RESPONDENT WAS A CUSTOMER OF PETITIONER SECURITIES CORPORATION WITHIN THE MEANING OF FINANCIAL INDUSTRY REGULATORY AUTHORITY (FIRA) RULES AND THEREFORE COULD COMPEL ARBITRATION (FIRST DEPT). ​

The First Department, reversing Supreme Court, over an extensive dissent, determined respondent was a customer of petitioner (LekUS) and therefore could compel FINRA (Financial Industry Regulatory Authority) arbitration. Petitioner had been sued by FINRA in connection with shares of Cannibis Science, Inc. (CBIS) purchased by respondent and held by petitioner for trading:

The record establishes that respondent was a customer of nonparty Lek Securities UK, Ltd. (LekUK), where he had his account, and was also a client of petitioner Lek Securities Corp. (LekUS), with which he had a series of direct agreements. Under those agreements, LekUS conditioned its provision of depository and execution services for certain trades on respondent’s providing certain representations and an indemnity … .

Specifically, respondent purchased shares of Cannabis Science, Inc. (CBIS) in a series of transactions in 2015 and 2016 that required that the shares be held and sold in the United States. For each transaction, respondent executed an agreement (Deposit Agreement) directly with LekUS pursuant to which LekUS deposited the shares in its account at the Depository Trust & Clearing Corporation (DTCC). In each Deposit Agreement, (1) respondent represented that his answers to certain questions were true and acknowledged that LekUS would rely on those representations; (2) LekUS agreed to act as the “Processing Broker” to provide the services of depositing and reselling the shares; and (3) LekUS accepted respondent’s “Deposit Securities Request” on certain conditions, including that any claims by respondent or disputes arising from respondent’s representations in the Deposit Agreement “shall be governed by New York law and subject to the exclusive venue and jurisdiction of the courts and arbitration forums in the City and State of New York,” and that respondent would indemnify LekUS in connection with claims arising from respondent’s representations in the Deposit Agreement or from “the deposit process or the subsequent sale of the securities.”

When respondent sought to trade the CBIS shares deposited with LekUS, he communicated with Michael Mainwald, who was located at the office of LekUS, had a LekUS phone number and email address, and was registered with FINRA as the “principal operating officer” of LekUS.

… LekUS notified respondent that it had been sued by FINRA in connection with CBIS transactions and that LekUS sought indemnification by defendant pursuant to the Deposit Agreements. …

… [R]espondent was a “customer” of LekUS within the meaning of FINRA Rule 12200, and was therefore entitled to demand arbitration. Matter of LEK Sec. Corp. v Elek, 2020 NY Slip Op 01134, First Dept 2-18-20

 

PLAINTIFF WAS INJURED WHEN THE CEILING COLLAPSED WHILE HE WAS TAKING OUT WALLS, THE LABOR LAW 240(1), 241(6) AND 200 CAUSES OF ACTION SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined that plaintiff’s Labor Law 240(1) ,241(6) and 200 causes of action should not have been dismissed. Plaintiff was in the process of taking down two bathroom walls when the ceiling collapsed:

To prevail on a Labor Law § 240(1) claim based on an injury resulting from the failure of a completed and permanent building structure (in this case, the collapse of a ceiling), a plaintiff must show that the failure of the structure in question was a foreseeable risk of the task he was performing, creating a need for protective devices of the kind enumerated in the statute … .

Here, there are issues of fact as to whether the ceiling was in such an advanced state of disrepair due to water damage that plaintiff’s work on the bathroom walls exposed him to a foreseeable risk of injury from an elevation-related hazard, the fall of the ceiling, and whether the absence of a type of protective device enumerated under Labor Law § 240(1) was a proximate cause of his injuries. Because the evidence of water stains on the bathroom ceiling could provide constructive notice of a dangerous condition, summary judgment dismissing plaintiff’s common-law negligence and Labor Law § 200 claims was also improperly granted. …

Defendants failed to show that plaintiff was not engaged in demolition work to trigger Labor Law § 241(6). His task was part of a larger project that included the demolition of interior walls, “which altered the structural integrity of the building'”( … Industrial Code § 23-1.4[b][16]). Issues of fact exist as to whether Industrial Code § 23-3.3(b)(3) and (c), pertaining to demolition, were violated or whether any such violation was a proximate cause of plaintiff’s injuries. Clemente v 205 W. 103 Owners Corp., 2020 NY Slip Op 01117, First Dept 2-18-20

 

UNDERCOVER OFFICER’S DISTRESS SIGNAL, A GROUP OF MEN NEAR THE UNDERCOVER OFFICER YELLING, DEFENDANT’S STRUGGLING WITH THE UNDERCOVER OFFICER, DEFENDANT’S BREAKING FREE OF AN OFFICER’S RESTRAINT AND RUNNING, DEFENDANT’S FORCIBLY TAKING PROPERTY FROM THE UNDERCOVER OFFICER, AND THE FELLOW OFFICER RULE, COMBINED TO JUSTIFY THE SEIZURE AND SEARCH OF DEFENDANT; THE MOTION COURT PROPERLY REOPENED THE SUPPRESSION HEARING TO ALLOW THE PEOPLE TO SUBMIT ADDITIONAL TESTIMONY (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Webber, determined that the police had probable cause to arrest defendant at the time defendant was seized and searched. Therefore defendant’s suppression motion was properly denied. The court noted that the distress signal made by the undercover officer together with the observation by Officer Regina of a group of men near the undercover officer yelling provided reasonable suspicion. Seeing defendant struggling with the undercover officer and the defendant’s breaking free and running when an officer attempted to restrain him provided probable cause for arrest. The First Department further determined the suppression hearing was properly reopened to allow the People to present additional testimony. The evidence at the reopened hearing provided another lawful basis for defendant’s arrest (the defendant had forcibly taken property from the undercover officer–probable cause imputed to the arresting officer by the fellow officer rule):

While Regina’s testimony established the requisite probable cause to arrest defendant, the court providently exercised its discretion in granting the People’s motion to reopen the suppression hearing before rendering a decision in order to permit the People to call an officer with additional information tending to establish reasonable suspicion … .The court had not made any ruling, and the circumstances did not pose a risk of tailored testimony.

Upon granting the People’s motion to present additional evidence, the court expressly stated that it had not yet rendered a decision … . Despite defendant’s arguments to the contrary, there is nothing in the hearing transcript to suggest that the court previously forecasted its decision or provided guidance to the People. The court’s very brief remark at the end of the initial hearing about an aspect of the facts cannot be viewed as “direction from the court” … , and was highly unlikely to result in tailored testimony … .

The evidence adduced at the reopened hearing established another lawful basis for defendant’s arrest. The undercover officer testified that, as he was attempting to buy drugs from another person, defendant interfered and forcibly took property from the officer. This gave the undercover officer probable cause to arrest defendant for robbery, which may be imputed to the arresting officer by way of the fellow officer rule … . The combination of the undercover officer’s distress signal, the field team officers’ observation of defendant in a struggle with the undercover officer, and the undercover officer’s act of chasing defendant satisfied the requirement that the arresting officer act on “direction of” or “communication with” a fellow officer … . The court’s general finding of probable cause can be reasonably interpreted as encompassing this theory … . People v Fraser, 2020 NY Slip Op 01037, First Dept 2-13-20

 

DEFENDANT’S FAMILY MEMBERS SHOULD NOT HAVE BEEN EXCLUDED FROM THE COURTROOM DURING THE TESTIMONY BY THE UNDERCOVER OFFICERS, CONVICTIONS REVERSED (FIRST DEPT).

The First Department, reversing defendant’s conviction, determined the trial court should not have excluded defendant’s family members from the trial during the testimony of the undercover officers:

Following a Hinton hearing at which there was no testimony that defendant or any member of his family threatened or otherwise posed a threat to either of two testifying undercover officers, defense counsel requested that family members be permitted to attend the officers’ trial testimony. Although the prosecutor made no argument in opposition to this application, the court denied it, without making any supporting findings. This was error. “[A]n order of closure that does not make an exception for family members will be considered overbroad, unless the prosecution can show specific reasons why the family members must be excluded” … . We reject the People’s argument that the defense was obligated to identify specific family members who might attend the proceedings, in the absence of any request by the prosecutor or the court that it do so, as incompatible with the “presumption of openness” that applies in this context … . Moreover the court did not ask any questions to clarify which family members wanted to attend before issuing the closure order. People v Rivera, 2020 NY Slip Op 01035, First Dept 2-13-20

 

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QUESTION OF FACT WHETHER THE DOCTRINE OF RES IPSA LOQUITUR APPLIES IN THIS MEDICAL MALPRACTICE CASE; QUESTION OF FACT WHETHER THE MEDICAL CENTER IS LIABLE UNDER THE OSTENSIBLE AGENCY DOCTRINE (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined: (1) there is a question of fact whether the doctrine of res ipsa loquitur applied in this medical malpractice action; (2) the lack of informed consent cause of action should be reinstated; (3) there is a question of fact whether the medical center (NYU Langone) is liable for the anesthesiologist (Coopersmith) who performed the pre-surgery nerve block pursuant to the doctrine of ostensible agency; and (4) the action against the doctor who assisted Dr. Coopersmith was properly dismissed because she didn’t exercise any independent judgment in the procedure:

… [W]e agree with plaintiff that she sufficiently established that the doctrine of res ipsa loquitur applies to her cause of action for medical malpractice. The parties’ experts disagreed as to whether plaintiff’s injury ordinarily occurs in the absence of negligence, raising an issue of fact on that point … . Plaintiff also established that defendants were in control of all instruments used in the nerve block, and plaintiff’s actions did not contribute to her injuries … . To the extent that defendants’ expert opined that post-operative symptoms and image studies were not consistent with needle trauma to a nerve, that opinion did not refute plaintiff’s assertion of res ipsa loquitur because it failed to identify any other possible cause of plaintiff’s plexopathy, let alone a more probable cause … . Moreover, defendants’ expert did not dispute that plaintiff sus tained nerve damage and did not opine that the nerve damage pre-existed the surgery. …

We agree with defendants that they were entitled to a determination that no actual agency existed between NYU Langone and Dr. Coopersmith because NYU Langone did not employ or otherwise control Dr. Coopersmith. However, we find that an issue of fact exists as to whether NYU Langone could be held liable for Dr. Coopersmith’s actions in his treatment of plaintiff through ostensible agency. It is undisputed that plaintiff was treated by Dr. Feldman [the surgeon] because she sought out his care. However, Dr. Feldman testified that he did not choose which anesthesiologist at NYU Langone would perform the nerve block on plaintiff, instead an anesthesiologist was assigned by the Department of Anesthesia. A jury could reasonably infer from this testimony that Dr. Coopersmith was provided by NYU Langone and that plaintiff reasonably believed that Dr. Coopersmith was acting on NYU Langone’s behalf … . Sklarova v Coopersmith, 2020 NY Slip Op 01033, First Dept 2-13-20

 

INJURY CAUSED BY CEMENT BOARDS FALLING FROM AN A-FRAME CART COVERED UNDER LABOR LAW 240 (1) (FIRST DEPT).

The First Department determined injury caused by cement boards falling from an A-frame cart was covered under Labor Law 240 (1):

The evidence shows that plaintiff and his coworkers were moving an A-frame cart, loaded with approximately 16 cement boards measuring 4′ x 8′ in dimension and weighing approximately 100 pounds each, when its wheel became stuck and the cart would not move. Plaintiff and his coworkers then pushed and pulled the cart to free it, and, in the process, the cart and the boards suddenly tipped, with the boards landing on plaintiff’s left leg. Given the weight and height of the cement boards on the A-frame cart, the elevation differential was within the purview of the statute … . Touray v HFZ 11 Beach St. LLC, 2020 NY Slip Op 01029, First Dept 2-13-20

 

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