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THE INTERSTATE COMPACT FOR THE PLACEMENT OF CHILDREN (ICPC) APPLIES ONLY TO OUT-OF-STATE ADOPTION OR FOSTER CARE, NOT TO THE PLACEMENT OF A CHILD WITH AN OUT-OF-STATE PARENT; QUESTION CONSIDERED ON APPEAL AS AN EXCEPTION TO THE MOOTNESS DOCTRINE; REGULATION RELIED ON TO APPLY THE ICPC CONFLICTS WITH THE CONTROLLING STATUTE (FIRST DEPT).

The First Department, reversing Family Court, in a full-fledged opinion by Justice Webber, in a matter of first impression, and refusing to follow the 2nd Department, determined that the Interstate Compact for the Placement of Children (ICPC) applies only to children to be adopted or placed in foster care in another state, not, as here, to the placement of a child with the father in another state. The issue was considered on appeal as an exception to the mootness doctrine because it is likely to reoccur. The First Department held that the controlling statute, Social Services Law 374-a,  clearly states that the ICPC applies only to out of state foster care or adoption, and the regulation which states otherwise (Association of Administrators of the Interstate Compact on the Placement of Children. AAICPC, Regulation 3) improperly expands the statutory language:

There is no dispute that the ICPC was intended to provide children in need of foster and adoptive families with more possible placements across state lines. The purpose of the statute was twofold: to assure the placement would be in a child’s best interests, and to preclude the “sending State from exporting its foster care responsibilities to a receiving State” … . Thus the ICPC was enacted to provide children in need of foster and adoptive families with more options, while still paying heed to concerns about the children’s welfare.

There is also nothing in the language of the statute or the legislative history to indicate that the ICPC was ever intended to address any individual other than an out-of-state foster or adoptive parent. The language explicitly limits its applicability to out-of-state placements in foster care or as a preliminary to a possible adoption … . The limitation reflects the ICPC’s purpose which was to provide “a uniform legislative framework for the placement of children across state lines in foster and/or adoptive homes” … . Matter of Emmanuel B. (Lynette J.), 2019 NY Slip Op 05640, First Dept 7-18-19

 

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PLAINTIFF’S TESTIMONY ABOUT HOW THE TRAFFIC ACCIDENT HAPPENED FOUND INCREDIBLE AS A MATTER OF LAW AT THE SUMMARY JUDGMENT STAGE, DISSENT ARGUED THE TESTIMONY RAISED CLASSIC QUESTIONS OF FACT FOR THE JURY TO DETERMINE (FIRST DEPT). ​

The First Department, over an extensive dissent, determined the defendants’ motion for summary judgment in this traffic accident case was properly granted. The majority argued plaintiff’s testimony was incredible and therefore was properly disregarded. The dissent argued plaintiff’s testimony raised classic questions of fact about how the accident happened. The collision occurred when plaintiff was attempting to change lanes. The majority interpreted plaintiff’s testimony to mean that she was straddling two lanes and was not moving when the truck struck her SUV, which, based on photographic evidence, the majority found incredible as a matter of law:

The photographic evidence shows that plaintiff’s SUV struck the rear of defendants’ tractor-trailer as plaintiff was attempting to merge into defendants’ truck’s lane of traffic. Thus, plaintiff violated her “duty not to enter a lane of moving traffic until it was safe to do so” (… see Vehicle and Traffic Law § 1128[a] …), “and [her] failure to heed this duty constitutes negligence per se”. * * ^

… [I]n summary judgment analysis, we must discount the plaintiff’s testimony where the plaintiff has “relied solely on [her] own testimony, uncorroborated by any other witnesses or evidence,” and her testimony belied “common sense” … . As these circumstances are presented in this case, plaintiff’s testimony was properly “disregarded as being without evidentiary value” … . Thus, plaintiff’s testimony raised no triable issues of fact. Castro v Hatim, 2019 NY Slip Op 05639, First Dept 7-16-19

 

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HEIRS OF A JEWISH VIENNESE ART COLLECTOR, FRITZ GRUNDBAUM, KILLED BY THE NAZIS IN 1941, DEMONSTRATED THEY WERE ENTITLED TO POSSESSION OF CERTAIN ARTWORKS IN THE GRUNDBAUM COLLECTION WHICH WERE ALLEGEDLY LOOTED BY THE NAZIS (FIRST DEPT).

The First Department, in a comprehensive opinion by Justice Singh, determined that plaintiffs, heirs of Jewish Viennese art collector, Fritz Grunbaum, who was murdered by the Nazis in 1941, demonstrated they were entitled to certain artworks collected by Grundbaum and alleged to have been looted by the Nazis. The complex history leading to this lawsuit cannot be fairly summarized here:

” A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person’s right of possession'” … . “Two key elements of conversion are (1) plaintiff’s possessory right or interest in the property; and (2) defendant’s dominion over the property or interference with it, in derogation of plaintiff’s rights” … . Where a party’s interests in property have been sold, there can be no interference with their property rights and a conversion claim may not be maintained … .

To state a cause of action for replevin, a plaintiff must establish a superior possessory right to property in a defendant’s possession … .

Here, we find that plaintiffs have made a prima facie showing of superior title to the Artworks based on evidence that establishes the following: (1) Grunbaum owned the Artworks prior to World War II; and (2) Grunbaum never voluntarily relinquished the Artworks. Reif v Nagy, 2019 NY Slip Op 05504, First Dept 7-9-19

 

PASSING REFERENCE IN A CONTRACT TO A ‘TERMS AND CONDITIONS’ PAGE THAT WAS NOT PART OF THE CONTRACT REVIEWED BY PLAINTIFF DID NOT SERVE TO INCORPORATE THE PAGE INTO THE AGREEMENT (FIRST DEPT).

The First Department determined that a passing reference to a “Terms and Conditions” page which purported to require all contract disputes to be litigated in North Carolina did not incorporate that page into the document:

… [T]he Terms and Conditions section never appeared in the proposed agreement that plaintiff ultimately reviewed and signed, and it is undisputed that plaintiff never saw the Terms and Conditions page. Indeed, the final 29-page agreement, which did not include the “Terms and Conditions,” was paginated consecutively and signed on each page by both parties. Therefore, contrary to defendants’ suggestions, plaintiff had no reason to ask for any other documents.

Although documents may be incorporated by reference as part of an executed agreement … , the doctrine of incorporation by reference “is grounded on the premise that the material to be incorporated is so well known to the contracting parties that a mere reference to it is sufficient” … . The referenced material must be described in the contract such that it is identifiable beyond all reasonable doubt … . Here the agreement’s oblique reference to an otherwise unidentified Terms and Conditions page, which was never provided to plaintiff, is insufficient to meet this exacting standard … . Eshaghpour v Zepsa Indus., Inc., 2019 NY Slip Op 05490, First Dept 7-9-19

 

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DEFENDANT’S MOTION TO DISMISS THE COMPLAINT FOR LACK OF PERSONAL JURISDICTION SHOULD HAVE BEEN GRANTED, DEFENDANT’S ONLY CONNECTION TO THE CORPORATION WHICH HAD CONTACTS WITH NEW YORK WAS HIS SALARY; THEREFORE THE CORPORATION’S NEW YORK CONTACTS COULD NOT BE IMPUTED TO DEFENDANT (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant’s (Sprinkle’s) motion to dismiss the complaint for lack of personal jurisdiction should have been granted, noting that Sprinkle’s only connection with the corporation alleged to have breached the contract was his salary. The corporation’s contacts with New York could not, therefore, be imputed to Sprinkle:

The complaint fails to state a cause of action as against Sprinkle for tortious interference with contract, because there is no allegation that Sprinkle personally benefitted from the corporations’ alleged breach of contract; the only benefit he is alleged to have received is his salary from the corporations … .

Plaintiff failed to make a sufficient start on a showing of jurisdiction over Sprinkle to entitle it to jurisdictional discovery … . Because the conduct complained of involved the diversion of funds from outside New York to recipients outside New York, the “critical events,” and thus the situs of injury, were not in New York … . Moreover, plaintiff does not allege that Sprinkle received substantial revenue from interstate or international commerce (see CPLR 302[a][3][ii]). Because Sprinkle did not personally benefit from the breach of contract, the corporations’ contacts with New York cannot be imputed to him … .

Nor can Sprinkle be said to have “reasonably expected” his actions to have consequences in New York … as he neither did anything to avail himself of New York nor took any steps to project himself into New York. Given that Sprinkle had no contact with New York and did not purposefully avail himself of New York, the constitutional guarantee of due process bars New York courts from exercising personal jurisdiction over him. Greenbacker Residential Solar LLC v OneRoof Energy, Inc., 2019 NY Slip Op 05487, First Dept 7-9-19

 

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FRAUD CAUSE OF ACTION, AS ALLEGED, IS NOT DUPLICATIVE OF THE ACTION FOR BREACH OF A LOAN GUARANTEE AND SHOULD NOT HAVE BEEN DISMISSED ON THAT GROUND (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s fraud cause of action was not duplicative on the action for breach of a loan guarantee and should not have been dismissed:

Plaintiff alleges that, as CEO of nonparty Karmaloop, Inc., defendant Gregory Selkoe solicited from plaintiff a bridge loan in the amount of $2,040,000. Plaintiff agreed, on condition that Selkoe personally guarantee the loan. Selkoe provided the personal guarantee, and also represented to plaintiff that he had previously given only one other personal guarantee, and that Karmaloop had never defaulted on any loan payment. Both of these representations were false, in that, unbeknownst to plaintiff, Selkoe had previously guaranteed a loan issued to another Karmaloop executive, and Karmaloop had defaulted on that loan.

The foregoing states a claim for fraudulent inducement, which is not duplicative of plaintiff’s claim for breach of the guarantee. Plaintiff does not allege that Selkoe misrepresented the intent to perform on the guarantee and underlying promissory note, which would render the fraud claim duplicative, but rather alleges that Selkoe misrepresented his and Karmaloop’s ability to perform … .

At this early juncture, we find that plaintiff should be “permitted to plead in the alternative (see CPLR 3014),” and its claim “for fraud, should not be dismissed as duplicative of the breach-of-contract cause of action” … . Man Advisors, Inc. v Selkoe, 2019 NY Slip Op 05483, First Dept 7-9-19

 

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DEED MADE UNDER FALSE PRETENSES IS VOID AB INITIO RENDERING THE RELATED MORTGAGE INVALID; THE LAW OF THE CASE DOCTRINE DOES NOT PRECLUDE RECONSIDERING A MATTER WHERE THERE IS NEW EVIDENCE (FIRST DEPT).

The First Department, reversing Supreme Court, in this foreclosure action, determined a deed made under false pretenses was void ab initio and therefore the related mortgage was invalid. The court noted that the law of the case doctrine does not prohibit it from reconsidering a matter where there is subsequent evidence affecting the prior determination:

It is undisputed that nonparty Rapsil Corporation conveyed the same property to two different recipients, first, defendant Rafael Pantoja (who obtained a mortgage from CitiMortgage), and, second, a bona fide entity that transferred it to the Salazar defendants. Although the deed that conveyed the property from Rapsil to Pantoja was unacknowledged, which ordinarily would render it only voidable, because Pantoja controlled Rapsil, the deed was made under false pretenses and was therefore void ab initio … . Accordingly, the CitiMortgage mortgage was invalid as well (Weiss v Phillips, 157 AD3d 1, 10 [1st Dept 2017]).

This determination is not inconsistent with our prior related decisions … . In any event, the law of the case doctrine does not limit our power to reconsider issues “where there are extraordinary circumstances, such as subsequent evidence affecting the prior determination” … . CitiMortgage, Inc. v Pantoja, 2019 NY Slip Op 05481, First Dept 7-9-19

 

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USING A NEW YORK VIRTUAL LAW OFFICE PROGRAM (VLOP) ONLY AS A MAILING ADDRESS AND AS AN AGENT TO ACCEPT SERVICE DOES NOT SATISFY THE REQUIREMENT THAT AN ATTORNEY PRACTICING IN NEW YORK HAVE A PHYSICAL OFFICE IN NEW YORK, HOWEVER THE ACTION BROUGHT BY THE VLOP ATTORNEY IS NOT A NULLITY AND SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined using a Virtual Law Office Program (VLOP) only as a mailing address and as an agent to accept service in New York is not enough to satisfy the Judiciary Law requiring an attorney practicing in New York to have a physical office in New York. However the action started by the attorney with the virtual law office is not, as Supreme Court held, a nullity:

To the extent that counsel uses the VLOP only as a mailing address and an agent authorized to accept service of process, it is insufficient to meet the physical presence requirement of Schoenefeld. While the additional services VLOP provides may well satisfy physical presence, an attorney needs to actually take advantage of those services to meet the requirements of Judiciary Law § 470. At bar, counsel does not claim that he actually uses the VLOP for anything but the delivery of mail and packages and for service of process. Although office space and conference rooms may be available to him, there is no claim that he actually uses those services. …

Counsel’s correspondence and the papers served on his adversary and/or filed in court contradicted any physical presence in New York. …

Notwithstanding that we find that counsel is not authorized to maintain this action in New York State, we do not believe that it should have been dismissed. The Court of Appeals recently held that a nonresident attorney’s failure to comply with the requirement of Judiciary Law § 470 of maintaining a physical office in New York State at the time a complaint is filed does not render the filing a nullity and therefore that dismissal of the action is not required … . The party may cure the statutory violation with the appearance of compliant counsel or an application for admission pro hac vice by appropriate counsel … . Accordingly, we vacate the order and remand the matter to afford plaintiff an opportunity to cure the violation. Marina Dist. Dev. Co., LLC v Toledano, 2019 NY Slip Op 05480, First Dept 7-9-19

PLAINTIFF ALLEGED SHE FELL OVER A WORKER WHEN SHE ATTEMPTED TO STEP OFF AN ELLIPTICAL MACHINE, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant’s motion for summary judgment should not have been granted. Plaintiff was on an elliptical machine and allegedly fell over a worker who was working near the machine:

Summary judgment was not warranted in this action, because plaintiff’s deposition testimony that she felt “stuck” as she attempted to step off the elliptical machine, coupled with defendant’s maintenance worker’s testimony that his right leg was stretched out next to the elliptical machine on which plaintiff was exercising, cleaning the outlets in the area, and that plaintiff’s foot hit his foot, causing her to lose balance and fall, were together sufficient to raise a triable issue as to whether plaintiff’s injuries were caused by defendant’s negligence … . An incident report prepared by the manager consistently recounts that plaintiff fell over a worker. Ausch-Alteras v Equinox – 85th St., Inc., 2019 NY Slip Op 05478, First Dept 7-9-19

 

DEFENDANT GYM DID NOT DEMONSTRATE AN ACCUMULATION OF DUST ON THE BASKETBALL COURT FLOOR WAS INHERENT IN THE SPORT OR OPEN AND OBVIOUS, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT BASED ON THE ASSUMPTION OF THE RISK DOCTRINE SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined that the assumption of the risk doctrine did not entitle defendant gym to summary judgment. Plaintiff was playing basketball when he allegedly slipped and fell on an accumulation of dust on the indoor court:

An owner may not be held liable if the injury results from certain conditions inherent in a participant’s outdoor game of basketball  … . The same is true if a condition on an indoor basketball court is otherwise open and obvious … .

Here, defendant failed to establish that accumulated dust on an indoor basketball court is inherent in the sport of basketball. Nor did defendant establish that the alleged condition was an open and obvious one … . Samuels v Town Sports Intl., LLC, 2019 NY Slip Op 05477, First Dept 7-9-19

 

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