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FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS’ CONSTRUCTION OF A TALLER NEIGHBORING BUILDING.

The First Department, in a full-fledged opinion by Justice Tom, determined defendants' failure to give notice to plaintiff of their intent to increase the height of a neighboring building did not toll the statute of limitations. The suit concerned two provisions of the Administrative Code of the City of New York. One provision required notice to neighboring property owners of construction to increase the height of a building. The other required the owner of the newly constructed building to increase the height of the chimneys of surrounding buildings to bring them back into conformance with the Administrative Code. Plaintiff was seeking to recover the cost of modifying its chimney which was rendered noncompliant by defendants' now taller neighboring building. The new construction was completed in 2007. The court held defendants' failure to notify plaintiff of the new construction did not excuse plaintiff's failure to bring an action within three years of the completion of the new construction:

Pursuant to the statutory language, plaintiff's claim accrued when defendants' building (1) was erected; (2) was sited within 100 feet of plaintiff's chimney; and (3) was increased in height so that it exceeded the height of plaintiff's chimney vent. Here, all the factual circumstances required to establish a right of action occurred by January 2007, when the work on the building had been substantially completed. The January 22, 2007 temporary certificate of occupancy (CO), issued by the Department of Buildings (DOB), certified that defendants' building was 20 stories tall and “conform[ed] substantially to the approved plans and specifications[,] and to the requirements of all applicable laws, rules and regulations for the uses and occupancies specified” for the project. The approved condominium offering plan stated that the Arts Tower would consist of a cellar level and 20 additional stories. This documentary evidence is prima facie proof that as of January 20, 2007, the building was erected to a height that was 10 stories taller than plaintiff's chimney, and sited within 100 feet of the chimney, thus triggering the three-year limitations period on plaintiff's claim that defendants failed to comply with Administrative Code § 27-860(a). Moreover, plaintiff concedes that it was aware of the building's height by the time construction was substantially completed in 2007. Accordingly plaintiff's claim accrued on January 20, 2007, and this action, commenced in March 2014, is thus time-barred … . West Chelsea Bldg. LLC v Guttman, 2016 NY Slip Op 02548, 1st Dept 3-31-16

CIVIL PROCEDURE (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)/ADMINSTRATIVE CODE OF THE CITY OF NEW YORK (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)/BUILDING HEIGHT (NYC) (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)/CHIMNEY HEIGHT (NYC) (FAILURE TO COMPLY WITH NOTICE PROVISION OF NYC ADMINISTRATIVE CODE DID NOT TOLL STATUTE OF LIMITATIONS RE: AN ACTION SEEKING TO RECOVER THE COST OF BUILDING MODIFICATIONS REQUIRED BY THE CODE AFTER DEFENDANTS' CONSTRUCTION OF A TALLER NEIGHBORING BUILDING)

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FINANCIAL ADVISOR IS NOT A PROFESSIONAL WHO CAN BE HELD LIABLE IN TORT BASED UPON A CONTRACTUAL RELATIONSHIP.

The First Department noted that a “financial advisor” is not a professional who may be liable in tort based upon a contract:

While “[p]rofessionals … may be subject to tort liability for failure to exercise reasonable care, irrespective of their contractual duties” … , a financial advisor … is not a “professional” … . Thus, any duty owed by the … defendants to render financial advisory services to plaintiff in a competent manner must arise out of a contract. Indeed, the complaint alleges that plaintiff “retained” the … defendants and that [defendant] “agreed to act as [his] financial advisor” … . However, “claims based on negligent or grossly negligent performance of a contract are not cognizable” … . Starr v Fuoco Group LLP, 2016 NY Slip Op 02143, 1st Dept 3-24-16

NEGLIGENCE (FINANCIAL ADVISOR IS NOT A PROFESSIONAL WHO CAN BE HELD LIABLE IN TORT BASED UPON A CONTRACTUAL RELATIONSHIP)/CONTRACT LAW (FINANCIAL ADVISOR IS NOT A PROFESSIONAL WHO CAN BE HELD LIABLE IN TORT BASED UPON A CONTRACTUAL RELATIONSHIP)/FINANCIAL ADVISOR (FINANCIAL ADVISOR IS NOT A PROFESSIONAL WHO CAN BE HELD LIABLE IN TORT BASED UPON A CONTRACTUAL RELATIONSHIP)/PROFESSIONAL LIABILITY (FINANCIAL ADVISOR IS NOT A PROFESSIONAL WHO CAN BE HELD LIABLE IN TORT BASED UPON A CONTRACTUAL RELATIONSHIP)

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SUIT ALLEGING BREACH OF FIDUCIARY DUTY IN CONNECTION WITH THE SALE OF AN ASSET OWNED NEARLY ENTIRELY BY BANKRUPT LEHMAN BROTHERS DISMISSED.

The First Department dismissed a complaint alleging, inter alia, breach of a limited partnership agreement and breach of fiduciary duty in connection of the sale of a fund (Archstone) nearly entirely owned by bankrupt Lehman Brothers. Plaintiff, who had purchased a 1% interest in the fund for $20 million, alleged the sale will generate enough to pay only the preferred interests and will “wipe out” the minority interests (including plaintiff). Plaintiff further alleged the sale was motivated by Lehman's desire to pay creditors relating to its 2008 bankruptcy. In dismissing the breach of fiduciary duty cause of action, the court explained the analytical criteria, including an “entire fairness” analysis:

Even under the heightened entire fairness standard advocated by plaintiff, the claim is insufficient. An “entire fairness” analysis focuses on two entwined considerations: fair dealing and fair price … . Plaintiff fails to allege facts demonstrating the absence of fairness, or that it did not “receive the substantial equivalent in value of what [it] had before” … . Conclusory assertions that amounts paid were “unfair” are insufficient … . Plaintiff concedes that the $16 billion transaction price attained Archstone's current value at the time of the transaction. Plaintiff also admits that the transaction “represented a premium of approximately 15% over the implied purchase price of Lehman's combined acquisitions of the interests of the other [s]ponsor [b]anks' interests earlier in 2012.” Plaintiff identifies no alternative transactions, let alone one that would have achieved more value for the Fund. Fiduciaries are “not required to abandon [a] transaction simply because a better deal might have become available in the future” … . Cambridge Capital Real Estate Invs., LLC v Archstone Enter. LP, 2016 NY Slip Op 02017, 1st Dept 3-22-16

PARTNERSHIP LAW (BREACH OF FIDUCIARY DUTY CAUSE OF ACTION BY MINORITY INTEREST HOLDER DISMISSED)/FIDUCIARY DUTY, BREACH OF (PARTNERSHIP LAW, BREACH OF FIDUCIARY DUTY CAUSE OF ACTION BY MINORITY INTEREST HOLDER DISMISSED)

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HEARSAY OFFERED IN OPPOSITION TO SUMMARY JUDGMENT PROPERLY CONSIDERED.

The First Department determined defendants, including defendant SSA, had made a prima facie showing of entitlement to summary judgment in this slip and fall case, but the plaintiff raised a question of fact whether an identified defect in the sidewalk caused her fall. The court noted that hearsay evidence supplied in opposition to the motion was properly considered because it was not the only evidence submitted in opposition. The case is a rare example of each side submitting evidence of all the required “slip and fall” elements:

Defendants made a prima showing of their entitlement to summary judgment, by submitting deposition testimony and an affidavit from SSA's managing member stating that SSA never did any work on the sidewalk where plaintiff fell, that he never received complaints about the sidewalk or curb prior to plaintiff's accident, and that he never observed the alleged hazardous curb and sidewalk condition while making his regular, twice-weekly inspections of the strip mall … .

In opposition, plaintiff raised triable issues of fact. Plaintiff testified that she fell when her left foot stepped into a hole-like depression in the curb/sidewalk, and she marked photographs to show where she fell. Plaintiff also submitted her daughter's affidavit, wherein she averred that after receiving a call about her mother's fall, she responded quickly to the scene of the accident and found her mother on the sidewalk. According to the daughter, her mother pointed to a broken and cracked curb/sidewalk condition and stated that the defective condition caused her to fall. This hearsay statement may be relied upon to defeat summary judgment where, as here, it is not the only evidence submitted in opposition to the motion … . The daughter added that the photographs taken of the sidewalk/curb seven months after the accident, and the area of the photographs her mother marked, accurately depicted the broken condition of the curb/sidewalk as it appeared on the date of the accident. The photographs show a broken curb/sidewalk. Taken together, the evidence raises triable issues of fact whether the broken sidewalk/curb caused plaintiff's fall, and whether the defective condition existed for a sufficient period of time prior to the accident for defendants to have discovered and remedied it … . Uncyk v Cedarhurst Prop. Mgt., LLC, 2016 NY Slip Op 02037, 1st Dept 3-22-16

NEGLIGENCE (HEARSAY OFFERED IN OPPOSITION TO SUMMARY JUDGMENT PROPERLY CONSIDERED)/EVIDENCE (HEARSAY OFFERED IN OPPOSITION TO SUMMARY JUDGMENT PROPERLY CONSIDERED) HEARSAY (HEARSAY OFFERED IN OPPOSITION TO SUMMARY JUDGMENT PROPERLY CONSIDERED)/SLIP AND FALL (ALL REQUIRED ELEMENTS OF SLIP AND FALL ADDRESSED BY BOTH SIDES IN SUMMARY JUDGMENT MOTION)

PRENUPTIAL AGREEMENT INTERPRETED TO WAIVE TEMPORARY MAINTENANCE DESPITE ABSENCE OF THE PRECISE TERM.

The First Department, over an extensive dissent, determined the prenuptial agreement waived both parties' entitlement to temporary maintenance during the divorce proceedings. The majority gleaned the intent to waive temporary maintenance from various provisions of the agreement, even though the terms “temporary maintenance” and “interim spousal support” were not used. The dissent argued that the waiver of “maintenance” in the agreement should not be interpreted to waive “temporary maintenance:”

Although the dissent acknowledges that “no particular catechism is required to waive temporary maintenance claims,” it nevertheless finds the agreement ambiguous and suggests that the parties may only have intended to waive a final award of maintenance. No fair reading of the agreement supports that conclusion. When read as a whole, the agreement contains no ambiguity as to whether the parties intended to waive temporary maintenance. As noted, the agreement waives “any and all” maintenance claims, “now and in the future.” Contrary to the dissent's view, there is nothing imprecise about the phrase “any and all.” Indeed, this Court has repeatedly found the use of that phrase to be “clear”… . Further, although minimized by the dissent, the agreement explicitly states that the parties are “fully capable of being self supporting,” which is another indicia that neither intended to seek any kind of maintenance. Anonymous v Anonymous, 2016 NY Slip Op 02016, 1st Dept 3-22-16

FAMILY LAW (PRENUPTIAL AGREEMENT INTERPRETED TO WAIVE TEMPORARY MAINTENANCE DESPITE ABSENCE OF PRECISE TERM)/MAINTENANCE (PRENUPTIAL AGREEMENT INTERPRETED TO WAIVE TEMPORARY MAINTENANCE DESPITE ABSENCE OF PRECISE TERM)/PRENUPTIAL AGREEMENT (PRENUPTIAL AGREEMENT INTERPRETED TO WAIVE TEMPORARY MAINTENANCE DESPITE ABSENCE OF PRECISE TERM)

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OMISSIONS FROM COMPLAINT SUPPLIED BY AFFIDAVIT IN OPPOSITION TO MOTION TO DISMISS, COMPLAINT SHOULD NOT HAVE BEEN DISMISSED.

The First Department, reversing Supreme Court, determined the omissions from the complaint against defendant insurance company were remedied by an affidavit submitted in opposition to the motion to dismiss:

A complaint must “be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions” that form the basis of the complaint and “the material elements of each cause of action” (CPLR 3013). The factual allegations of the complaint are accepted as true, and afforded “every possible favorable inference” … . “[A] court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint and the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one … . When such affidavits are considered, dismissal should not result unless “a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it” … .

Here, the complaint standing alone failed to apprise defendant insurance companies of basic pertinent information to put them on notice of the claims against them, such as the patients treated and the insurance policies issued by defendant, under which plaintiff submitted claims for treatment rendered. However, in opposition to defendant insurance companies' motion to dismiss, plaintiff submitted an affidavit from its principal with an exhibit attached providing such information. Thus, the complaint and affidavit submitted in opposition sufficiently apprise defendant insurance companies of the “transactions, occurrences, or series of transactions” that form the basis of the complaint (CPLR 3013). High Definition MRI, P.C. v Travelers Cos., Inc., 2016 NY Slip Op 02027, 1st Dept 3-22-16

CIVIL PROCEDURE (OMISSIONS FROM COMPLAINT SUPPLIED BY AFFIDAVIT IN OPPOSITION TO MOTION TO DISMISS, COMPLAINT SHOULD NOT HAVE BEEN DISMISSED)/COMPLAINTS (OMISSIONS FROM COMPLAINT SUPPLIED BY AFFIDAVIT IN OPPOSITION TO MOTION TO DISMISS, COMPLAINT SHOULD NOT HAVE BEEN DISMISSED)

VERDICT FINDING PLAINTIFF WAS NEGLIGENT BUT HER NEGLIGENCE WAS NOT THE PROXIMATE CAUSE OF HER INJURY WAS INCONSISTENT AND AGAINST THE WEIGHT OF THE EVIDENCE.

The First Department determined a new trial on liability was required. The plaintiff fractured her ankle walking over cobblestones to board a bus which had parked five feet from the curb. The jury found plaintiff was negligent but her negligence was not the proximate cause of her injury. The First Department concluded the verdict was inconsistent and against the weight of the evidence:

The jury's finding that plaintiff was negligent, but that such negligence was not the proximate cause of her injuries, is inconsistent and against the weight of the evidence. The issues “are so inextricably interwoven as to make it logically impossible to find negligence without also finding proximate cause” … . McKenzie v New York City Tr. Auth., 2016 NY Slip Op 01918, 1st Dept 3-17-16

NEGLIGENCE (VERDICT FINDING PLAINTIFF WAS NEGLIGENT BUT HER NEGLIGENCE WAS NOT THE PROXIMATE CAUSE OF HER INJURY WAS INCONSISTENT AND AGAINST THE WEIGHT OF THE EVIDENCE)/VERDICTS (NEGLIGENCE, VERDICT FINDING PLAINTIFF WAS NEGLIGENT BUT HER NEGLIGENCE WAS NOT THE PROXIMATE CAUSE OF HER INJURY WAS INCONSISTENT AND AGAINST THE WEIGHT OF THE EVIDENCE)/SLIP AND FALL (VERDICT FINDING PLAINTIFF WAS NEGLIGENT BUT HER NEGLIGENCE WAS NOT THE PROXIMATE CAUSE OF HER INJURY WAS INCONSISTENT AND AGAINST THE WEIGHT OF THE EVIDENCE)

THE INDUSTRIAL CODE REQUIRED A GUARD ON THE SAW WHICH INJURED PLAINTIFF; DEFENDANT WAS NOT ENTITLED TO SUMMARY JUDGMENT BASED ON THE ALLEGATION THERE WAS NO PLACE TO INSTALL A GUARD ON THE SAW.

The plaintiff was injured when he was struck by part of a saw blade which broke off from the hand-held reciprocating saw he was using. A provision of the Industrial Code, with a couple of exceptions not relevant to this case, requires guards on hand-held saws. The saw used by plaintiff did not have any guards. Defendant alleged there was no place to attach such a guard on the saw and the plaintiff testified he had never seen a reciprocating saw with a guard. The First Department upheld the motion court's finding that the Industrial Code applied to the saw in question as a matter of law. Therefore defendant's motion for summary judgment was properly denied:

We agree with the motion court that defendant failed to satisfy its burden of establishing that section 23-1.12(c) does not apply to this case. “[T]o support a claim under Labor Law § 241(6) . . . the particular [Industrial Code] provision relied upon by a plaintiff must mandate compliance with concrete specifications and not simply declare general safety standards or reiterate common-law principles” … . “The interpretation of an Industrial Code regulation and determination as to whether a particular condition is within the scope of the regulation present questions of law for the court” … .

Industrial Code § 23-1.12(c)(1) is sufficiently specific to support a Labor Law § 241(6) claim and is applicable because plaintiff was using a “power-driven, hand-operated saw” at the time of his accident. Defendant sought to use plaintiff's deposition testimony that he had never seen a blade cover or guard on that type of saw as expert testimony to establish that the reciprocating saw plaintiff was given was not covered by the Industrial Code provision in question … . Defendant, however, cannot avoid its duty to comply with section 23-1.12(c)(1) by asserting that the saw used by plaintiff had no base plate and could not accommodate a self adjusting guard. Section 23-1.12(c)(1) obligated defendant to ensure that the “power-driven, hand-operated saw” provided to plaintiff to perform his job was secured with guard plates to cover the saw blade. As the motion court observed, “[T]o interpret the regulation in any other manner [] would be to ineffectualize the regulation because employers, owners and contractors would only use tools that would minimize their liability.” Accordingly, we find that Industrial Code (12 NYCRR) § 23-1.12(c)(1)) is applicable to this case as a matter of law. Kelmendi v 157 Hudson St., LLC, 2016 NY Slip Op 01903, 1st Dept 3-17-16

LABOR LAW (INDUSTRIAL CODE REQUIRED A GUARD ON THE SAW WHICH INJURED PLAINTIFF, DEFENDANT NOT ENTITLED TO SUMMARY JUDGMENT BASED ON THE CLAIM THERE WAS NO PLACE TO INSTALL A GUARD ON THE SAW)/INDUSTRIAL CODE (LABOR LAW, INDUSTRIAL CODE REQUIRED A GUARD ON THE SAW WHICH INJURED PLAINTIFF, DEFENDANT NOT ENTITLED TO SUMMARY JUDGMENT BASED ON THE CLAIM THERE WAS NO PLACE TO INSTALL A GUARD ON THE SAW)

PLAINTIFF NEED NOT SHOW LADDER WHICH FELL WAS DEFECTIVE TO BE ENTITLED TO SUMMARY JUDGMENT ON LABOR LAW 240 (1) CAUSE OF ACTION.

The First Department determined plaintiff need not show the ladder which fell was defective to be entitled to summary judgment on his Labor Law 240 (1) cause of action:

Plaintiff made a prima facie showing of his entitlement to summary judgment as to liability on his Labor Law § 240(1) cause of action, by submitting his own testimony that the ladder upon which he was standing to perform his work wobbled, and that both he and the ladder fell to the ground as he descended it to figure out why it had wobbled … . Plaintiff was not required to offer proof that the ladder was defective … .

In opposition, defendant failed to show that plaintiff's conduct was the sole proximate cause of the accident … and that it had provided plaintiff with adequate safety devices to prevent his fall … . Ocana v Quasar Realty Partners L.P., 2016 NY Slip Op 01902, 1st Dept 3-17-16

LABOR LAW (NO NEED TO SHOW LADDER WHICH FELL WAS DEFECTIVE TO BE ENTITLED TO SUMMARY JUDGMENT ON LABOR LAW 240 (1) CAUSE OF ACTION)

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BAILEE CANNOT, PURSUANT TO THE UCC, CONTRACT AWAY LIABILITY FOR LACK OF CARE IN STORING GOODS, PURPORTED WAIVER OF SUBROGATION UNENFORCEABLE.

The First Department determined the relationship between the fine art dealer (Chowalski) and the defendant warehouse was that of bailor/bailee with respect to stored artworks.  Under the UCC the bailee (warehouse) cannot contract away liability for damage caused by lack of due care. Therefore, the waiver of subrogation in the bailment agreement was not enforceable. There was a question of fact whether the failure to move the stored artworks as Hurricane Sandy approached constituted a failure to exercise the level of care mandated by the UCC:

UCC 7-204(a) provides that a “warehouse is liable for damages for loss of or injury to the goods caused by its failure to exercise care with regard to the goods that a reasonably careful person would exercise under similar circumstances” and “is not liable for damages that could not have been avoided by the exercise of that care.” UCC 7-204(b) provides that “[d]amages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage beyond which the warehouse is not liable.” However, such limitations on liability are limited by UCC 7-202(c), which provides that such terms must not “impair its . . . duty of care under Section 7-204. Any contrary provision is ineffective.”

Here there is a question of fact concerning whether defendant, in failing to move Chowaiki's goods to either another floor, or to a location above ground level on the floor they were on, was reasonable under the circumstances. If the trier of fact finds that defendant did not act reasonably, then defendant may be liable for damages to Chowaiki's goods .

… [T]he court erred in finding that the waiver of subrogation contained in the agreement's loss/damage waiver is enforceable and bars this action.

Provisions purporting to exempt the bailee from liability for damage to stored goods from perils against which the bailor had secured insurance, even when caused by the bailee's negligence have been held to run afoul of the statutory scheme of UCC Article 7. XL Specialty Ins. Co. v Christie's Fine Art Stor. Servs., Inc., 2016 NY Slip Op 01901, 1st Dept 3-17-16

INSURANCE LAW (BAILEE CANNOT, UNDER THE UCC, CONTRACT AWAY LIABILITY FOR LACK OF CARE IN STORING GOODS, WAIVER OF SUBROGATION UNENFORCEABLE)/UCC (BAILEE CANNOT, UNDER THE UCC, CONTRACT AWAY LIABILITY FOR LACK OF CARE IN STORING GOODS, WAIVER OF SUBROGATION UNENFORCEABLE)/CONTRACT LAW (BAILEE CANNOT, UNDER THE UCC, CONTRACT AWAY LIABILITY FOR LACK OF CARE IN STORING GOODS, WAIVER OF SUBROGATION UNENFORCEABLE)/BAILMENT   (BAILEE CANNOT, UNDER THE UCC, CONTRACT AWAY LIABILITY FOR LACK OF CARE IN STORING GOODS, WAIVER OF SUBROGATION UNENFORCEABLE)/SUBROGATION  (BAILEE CANNOT, UNDER THE UCC, CONTRACT AWAY LIABILITY FOR LACK OF CARE IN STORING GOODS, WAIVER OF SUBROGATION UNENFORCEABLE)

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