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THE CONTENTS OF A SAFE DEPOSIT BOX CONSTITUTED THE PROPERTY OF JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP, THEREFORE THE CONTENTS ARE AVAILABLE TO SATISFY A JUDGMENT AGAINST ONLY ONE OF THE JOINT TENANTS (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Gische, in a matter of first impression, determined the presumption of joint tenancy with rights of survivorship applied to the contents of a safe deposit box. The judgment debtor NYCB was owed $11 million by one of two persons (Rachel and Ari) who signed rental agreements for a safe deposit box. The First Department held that Supreme Court properly ordered the safe deposit box opened and the contents turned over to satisfy the judgment against Ari:

CPLR 5225(b) provides for an expedited special proceeding by which a judgment creditor can recover “money or other personal property” belonging to a judgment debtor “against a person in possession or custody of money or other personal property in which the judgment debtor has an interest” in order to satisfy a judgment … . When two or more persons open a bank account, making a deposit of cash, securities, or other property, a presumption of joint tenancy with right of survivorship arises (Banking Law § 675[b] …). If the presumption is applied, each named tenant “is possessed of the whole of the account so as to make the account vulnerable to the levy of a money judgment by the judgment creditor of one of the joint tenants” … .

By relying on the terms of the rental agreement, NYCB met its burden of establishing Ari and Rachel as joint tenants with rights of survivorship of the safe deposit box account. The safe deposit box is controlled by each of them, each of them has access to the box at all times, and each of them can deposit property into the box or remove property from it without each other’s permission. Should either one of them die, the survivor would have access to the box and could remove all its contents … . Matter of New York Community Bank v Bank of Am., N.A., 2019 NY Slip Op 00544, First Dept 1-24-19

 

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MOTION TO COMPEL ACCESS TO PLAINTIFF’S DEVICES, EMAIL ACCOUNTS AND SOCIAL MEDIA ACCOUNTS TO OBTAIN EVIDENCE OF PLAINTIFF’S PHYSICAL ACTIVITIES SINCE THE TRAFFIC ACCIDENT SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined that the motion to compel “access by a third-party data mining company to plaintiff’s devices, email accounts, and social media accounts, so as to obtain photographs and other evidence of plaintiff engaging in physical activities” should have been granted:

Private social media information can be discoverable to the extent it “contradicts or conflicts with [a] plaintiff’s alleged restrictions, disabilities, and losses, and other claims” … . Here, plaintiff, who at one time was a semi-professional basketball player, claims that he has become disabled as the result of the automobile accident at issue, such that he can no longer play basketball. Although plaintiff testified that pictures depicting him playing basketball, which were posted on social media after the accident, were in games played before the accident, defendant is entitled to discovery to rebut such claims and defend against plaintiff’s claims of injury. That plaintiff did not take the pictures himself is of no import. He was “tagged,” thus allowing him access to them, and others were sent to his phone. Plaintiff’s response to prior court orders, which consisted of a HIPAA authorization refused by Facebook, some obviously immaterial postings, and a vague affidavit claiming to no longer have the photographs, did not comply with his discovery obligations. The access to plaintiff’s accounts and devices, however, is appropriately limited in time, i.e., only those items posted or sent after the accident, and in subject matter, i.e., those items discussing or showing defendant engaging in basketball or other similar physical activities … . Vasquez-Santos v Mathew, 2019 NY Slip Op 00541, First Dept 1-24-19

 

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NEW YORK CITY HOUSING AUTHORITY COULD NOT AVOID DISCLOSURE OF RELEVANT DOCUMENTS BY RELYING ON ATTORNEY-CLIENT PRIVILEGE BECAUSE IT HAD PLACED THE KNOWLEDGE OF ITS LAW DEPARTMENT AT ISSUE, MOTION TO COMPEL WAS PROPERLY GRANTED, MONETARY SANCTIONS WERE PROPERLY ORDERED, WILLFUL AND CONTUMACIOUS BEHAVIOR NEED NOT BE SHOWN UNLESS A DRASTIC REMEDY LIKE STRIKING THE PLEADINGS IS IMPOSED (FIRST DEPT).

The First Department, over a dissent, determined Supreme Court properly sanctioned the defendant, the New York City Housing Authority (NYCHA), for failure to turn over documents in the discovery phase of a contract action. NYCHA alleged that third party defendants “engaged in [a]conspiracy to defraud NYCHA by submitting fraudulent certifications attesting that plaintiff’s former owners had not been charged or convicted of a crime. … Third-party defendants maintain that they informed NYCHA that the charges … had been terminated with a conditional discharge based upon the payment of less than $200 in court costs. They assert that NYCHA extended all three of the contracts … while having full knowledge of these facts.” NYCHA alleged the contested documents were protected by attorney-client privilege:

[Supreme Court] granted plaintiff and third-party defendants’ motion to compel [NYCHA] to comply with discovery orders to the extent of ordering NYCHA to produce discovery material previously redacted on the ground of attorney-client privilege … and … to pay $3,000 as a sanction for its behavior during discovery and for violation of prior court orders, and to certify that it did not possess additional documents responsive to the discovery demands or court orders … . * * *

The court correctly found that having placed the knowledge of its law department at issue, NYCHA waived attorney-client privilege with respect to the subject documents. NYCHA cannot seek to prevent the disclosure of evidence showing that its attorneys — the very individuals who performed the bid review function for NYCHA — recommended that NYCHA award the contracts to plaintiff despite knowledge of the operative facts … .

Further, NYCHA may not rely on attorney-client privilege while selectively disclosing other self-serving privileged communications … .

The motion court providently exercised its discretion in finding that NYCHA’s conduct during discovery warranted sanctions. …

… [I]t is unnecessary to demonstrate willful and contumacious behavior in order to impose a sanction like a monetary sanction or preclusion, as opposed to a more drastic sanction such as the striking of a pleading … . Metropolitan Bridge & Scaffolds Corp. v New York City Hous. Auth., 2019 NY Slip Op 00526, First Dept 1-24-19

 

 

DEFENDANT SHOULD NOT HAVE BEEN ARRAIGNED ON A SPECIAL INFORMATION CONCERNING A PRIOR CONVICTION PRIOR TO JURY SELECTION, THE STATUTE REQUIRES ARRAIGNMENT AFTER JURY SELECTION, THE ERROR WAS DEEMED HARMLESS HOWEVER (FIRST DEPT).

The First Department, over a dissent, determined defendant should not have been arraigned on a special information pursuant to Criminal Procedure Law 200,60 before jury selection. The procedure avoids the presentation of proof of a prior conviction at trial. The error was deemed harmless by the majority. The dissent argued the error was not harmless and would have ordered a new trial:

A court cannot disregard plain statutory language simply because it concludes that an alternate procedure would be consonant with the policy underlying the statute. Courts do not possess the power to ignore the legislature … . It may well be that the legislature’s general purpose in enacting CPL 200.60 was to avoid the prejudicial effect of having the prior offense proven before the jury. However, such a purpose does not support reading the timing requirement out of the statute. Allowing a defendant to wait until after the commencement of the trial ensures that he will have as much information as possible when forced to make the choice of admitting his prior conviction and relieving the People of its burden to prove it beyond a reasonable doubt; or denying the conviction and allowing the jury to learn about it. …

Despite the court’s error, however, we are obliged to affirm because defendant has not shown any prejudice arising from the fact that he was required to decide whether to contest the prior conviction earlier than necessary. Defendant does not assert that he would have contested the conviction if he had been asked after jury selection. Thus, defendant’s claims of prejudice are speculative. People v Alston, 2019 NY Slip Op 00410, First Dept 1-22-19

 

PRIOR FLORIDA CONVICTION WAS NOT THE EQUIVALENT OF A NEW YORK FELONY, DEFENDANT SHOULD NOT HAVE BEEN SENTENCED AS A SECOND FELONY OFFENDER (FIRST DEPT).

The First Department determined defendant should not have been sentenced as a second felony offender because the prior Florida conviction was not the equivalent of a New York felony. The defendant was convicted of attempted murder and attempted robbery:

The knowledge element of the Florida statute at the time of defendant’s Florida offense was that a defendant “knew of the illicit nature of the items in his possession” … . This was broader than the knowledge requirement under Penal Law § 220.16, which demands proof of “knowledge that the item at issue was, in fact, the controlled substance the defendant is charged with selling or possessing” … . Contrary to the trial court’s analysis, the dispositive difference between the knowledge requirements of the Florida and New York statutes was in place at the time of defendant’s 1998 Florida conviction. Florida’s alteration of its knowledge requirement in 2002 (see Fla Stat Ann § 893.101) has no bearing on our analysis. People v Muhammad, 2019 NY Slip Op 00386, First Dept 1-22-19

 

DEFENDANT’S UNATTENDED TOW TRUCK MOVED BACKWARDS INTO PLAINTIFF’S CAR, PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN GRANTED (FIRST DEPT),

The First Department, reversing Supreme Court, determined plaintiff’s motion for summary judgment in this traffic accident case should have been granted. Defendant’s tow truck was left running and unattended when it moved backwards into plaintiff’s car:

Plaintiff established entitlement to judgment as a matter of law in this action where he was injured when defendants’ tow truck was left unattended by its driver, defendant Millar, and rolled backwards into plaintiff’s car, which was stopped behind the tow truck. When a driver fails to secure an unattended vehicle sufficiently to prevent it from starting to move on its own, the driver is negligent …

In opposition, defendants did not raise a triable issue of fact as they failed to offer a non-negligent explanation for the collision… . Defendants’ speculation that, even though Millar left the gear in “park” before exiting the tow truck, the gear must have slipped into reverse on its own due to some mechanical failure is insufficient to raise an issue of fact … . Defendants present no evidence of any type of mechanical failure or defect in the tow truck, which Millar was able to drive back to the depot after the accident without incident. Franco v City of New York, 2019 NY Slip Op 00377, First Dept 1-22-19

 

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THE LANDOWNER AND THE TENANT TAXI COMPANY HAD THE SAME PRINCIPAL, A HOSE WAS USED BY INDEPENDENT CONTRACTORS TO WASH THE TAXIS, PLAINTIFF ALLEGEDLY SLIPPED ON THE WATER FROM THE HOSE WHICH FROZE, THE LANDOWNER DID NOT ESTABLISH IT WAS AN OUT OF POSSESSION LANDLORD, THE LANDOWNER’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, over a dissent, reversing Supreme Court, determined the landowner was not entitled to summary judgment in this slip and fall case. The principal of the property owner, 514 West, is also the principal of the tenant, Style, a taxi company. Independent contractors used a hose to wash the cars. Water from the hose froze and plaintiff allegedly slipped and fell on the ice. The First Department noted the close connection between 514 West and Style and found that 514 West did not establish it was on out-of-possession landlord:

514 West, which owns the building adjacent to the roadway in which plaintiff slipped and fell on ice, failed to make a prima facie showing of its entitlement to summary judgment, since the evidence it submitted raises genuine issues of fact about whether it created the dangerous condition … . For example, its principal, who is also the principal of codefendant Style Management Co., Inc. (Style), the taxi company housed at the building owned by 514 West, admitted that there is a hose attached to the building, which the independent contractors who work for the taxi company would use to wash the cars. It is water from this hose, which pooled in the street and then froze, that plaintiff allegedly slipped on. “It is . . . a general rule that an abutting owner is liable if, by artificial means . . . water from the property is permitted to flow onto the public sidewalk where it freezes”… . 514 West asserts that Style operated the hose, not it, thus absolving it of liability. However, 514 West fails to establish that it is an out-of-possession landlord; indeed, given the very close connection between 514 West and Style, which, again, have the same principal, it is not possible on this record to determine, as a matter of law, that the former is without liability as a landowner. Malik v Style Mgt. Co. Inc., 2019 NY Slip Op 00372, First Dept 1-22-19

 

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APPELLATE DIVISION REDUCED DEFENDANT’S SENTENCE USING ITS PLENARY POWER, DESPITE THE FACTS THAT (1) THE SENTENCE WAS WITHIN PERMISSIBLE LIMITS, (2) THE SENTENCING COURT DID NOT ABUSE ITS DISCRETION, AND (3) DEFENDANT HAD AN EXTENSIVE CRIMINAL HISTORY (FIRST DEPT).

The First Department, over a dissent, exercised its power to modify an unduly harsh or severe sentence that is within the permissible range. Defendant, who was homeless, attempted to buy toothpaste with a counterfeit $20 bill. The sentence was reduced from 4 to 8 years to 3 to 6 years:

The Appellate Division has “broad plenary power to modify a sentence that is unduly harsh or severe under the circumstances, even though the sentence may be within the permissible statutory range” … . A trial court need not abuse its discretion for the Appellate Division to substitute its own discretion … . We may “reduce a sentence in the interests of justice, taking into account factors such as defendant’s age, physical and mental health, and remorse” … .

The immediate object of defendant’s crime was to purchase basic human necessities, including food and toothpaste. In consideration of the fact that he was a 53 year-old, unemployed homeless man, with longstanding medical and substance abuse issues, a reduction of his sentence to 3 to 6 years is appropriate.

Defendant’s extensive criminal history does not preclude a determination that his sentence is excessive … . People v Mitchell, 2019 NY Slip Op 00371, First Dept 1-22-19

 

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ALTHOUGH THERE WAS PROBABLE CAUSE TO ARREST PLAINTIFF ON A SUBWAY FOR A TRANSIT VIOLATION, THE CONCURRENCE CALLED INTO QUESTION THE ‘TRANSIT DATABASE’ WHICH PROBABLY INCLUDES PERSONS WHOSE CRIMINAL CHARGES WERE SEALED AND DISMISSED, THE DATABASE DOES NOT PROVIDE A DISTINCT BASIS FOR ARREST (FIRST DEPT).

The First Department, over a concurrence, determined that there was probable cause to arrest the plaintiff based on the transit offense of passing between two subway cars on a moving train. Because there was probable cause, the majority did not reach the issue of the fairness or constitutionality of a so-called “transit database” which encompasses so-called “transit recidivists.” The concurrence made it clear that plaintiff’s designation as a “transit recidivist” did not provide the police with a separate basis to arrest plaintiff:

From the concurrence:

It must be said that plaintiff’s designation as a transit recidivist did not give the officers a separate basis to arrest plaintiff … . The definition of “transit recidivist” at the time of plaintiff’s arrest encompassed not only persons convicted of crimes, but those with prior arrests in the transit system or prior felony arrests within New York City … . This overbroad classification subverted the presumption of innocence and likely violated state sealing laws. …

… [T]he database was likely contaminated by sealed arrests and summons histories and, as such, ran afoul of provisions of the Criminal Procedure Law that require that the records of any criminal prosecution terminating in a person’s favor or by way of noncriminal conviction be sealed …  Statistics … indicate that in 2016 alone, over 50% of all criminal cases arraigned in New York City Criminal Court were terminated in favor of the accused, and accordingly entitled to sealing … . From 2007 through 2015 an average of 23% of all criminal summonses were dismissed for facial insufficiency … . Unless otherwise permitted by law, no one, including a private or public agency, can access a sealed record, except with a court order upon a showing that justice so requires.

The presence of arrest and summons data in the database also undercut the presumption of innocence insofar as persons were threatened with punishment on account of allegations that may have been unsubstantiated or dismissed.

…[T]his is not the first NYPD database to have included unlawfully broad data. NYPD previously recorded the name of every individual stopped and frisked as recently as 2010, until forced by a federal lawsuit to discontinue the practice.

Finally, there is little doubt that the “transit recidivist” database had a disproportionately negative effect on black and Hispanic communities, perpetuating this City’s history of overpolicing communities of color. Vargas v City of New York, 2019 NY Slip Op 00370, First Dept 1-22-19

 

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IN THIS ACTION STEMMING FROM WORTHLESS RESIDENTIAL MORTGAGE BACKED SECURITIES, THE COMPLAINT SUFFICIENTLY PLED THAT GROSS NEGLIGENCE PRECLUDED ENFORCEMENT OF THE ‘SOLE REMEDIES’ CLAUSES AND THE DEMANDS FOR PUNITIVE DAMAGES AND ATTORNEY’S FEES SHOULD NOT HAVE BEEN DISMISSED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kahn, reversing Supreme Court, determined that the complaint in this residential mortgage backed securities (RMBS) action sufficiently pled that gross negligence precluded enforcement of the “sole remedies” clauses in the contracts and that the demands for punitive damages and attorney’s fees should not have been dismissed:

On this appeal, which arises from the securitization and sale of residential mortgages, plaintiff, Deutsche Bank National Trust Company (Trustee), as trustee of the Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 (Trust), challenges the motion court’s pre-answer dismissal of the Trustee’s cause of action for breach of contract to the extent that it included a demand for compensatory damages. The motion court dismissed the Trustee’s compensatory damages demand on the ground that the “sole remedies” clauses in the underlying securitization agreements precluded the Trustee from seeking such relief. The Trustee maintains, however, that it sufficiently pleaded gross negligence on the part of defendants Morgan Stanley Mortgage Capital Holdings LLC (MSMCH) and Morgan Stanley ABS Capital I Inc. (MSAC) to render the “sole remedies” clauses unenforceable. On that issue, we hold, consistent with our decision in Morgan Stanley Mortgage Mtge. Loan Trust 2006-13ARX v Morgan Stanley Mtge. Capital Holdings LLC (143 AD3d 1 [1st Dept 2016]), that the complaint’s allegations of gross negligence in this case are sufficient to render the “sole remedies” clauses unenforceable. We are also called upon to decide whether the motion court properly dismissed the Trustee’s demands for punitive damages and attorneys’ fees. As to those issues, for the reasons that follow, we hold that those demands should not have been dismissed.

Specifically, this action arises from the securitization of subprime mortgages by Morgan Stanley & Co., Inc. in 2007, shortly before the housing market collapsed. The Trustee, as trustee of the Trust, seeks damages for the numerous loan defaults that occurred, rendering the residential mortgage backed securities (RMBS) it sold to outside investors virtually worthless. Matter of Part 60 Put-Back Litig., 2019 NY Slip Op 00368, First Dept 1-17-19

 

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