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MODE OF PROCEEDINGS ERROR TO PARAPHRASE SUBSTANTIVE JURY NOTE.

The First Department determined the trial judge’s paraphrasing a substantive jury note, rather than reading it into the record verbatim, was a mode of proceedings error requiring reversal:

By only paraphrasing some of the content of the third note, and failing to read the precise content of the that note into the record verbatim at any time, the court violated the procedures set forth in People v O’Rama (78 NY2d 270, 277-278 [1991]), more recently reiterated in People v Nealon ( __ NY3d __ , 2015 NY Slip Op 07781 [2015]) … ). A court does not satisfy its responsibility to provide counsel with meaningful notice of a jury’s substantive inquiry by summarizing the substance of the jurors’ note … . The … note, which was a substantive jury inquiry, should not have been paraphrased, but read in its entirety so that counsel had meaningful notice of its contents and, therefore, an opportunity to formulate a proposed response. Although counsel did not object to how the court handled the … note, the court’s failure to read this substantive note into the record verbatim, is a “mode of proceedings error,” and given this departure, counsel was not required to object to it in order to preserve any claim of error for appellate review … . People v Lane, 2015 NY Slip Op 08771, 1st Dept 12-1-15

CRIMINAL LAW (JURY NOTES, PARAPHRASING  JURY NOTE WAS A MODE OF PROCEEDINGS ERROR)/JURY NOTES (PARAPHRASING NOTE WAS A MODE OF PROCEEDINGS ERROR)/MODE OF PROCEEDINGS ERROR (PARAPHRASING JURY NOTE)

CONVICTION IN VIOLATION OF CATU CAN NOT BE USED AS PREDICATE FOR SENTENCING

The First Department determined the failure to mention the imposition of a period of postrelease supervision (PRS) in connection with a 2000 conviction precluded using that conviction as a predicate felony for sentencing purposes. The court noted that the 2005 Catu decision, which held defendants must be informed of PRS, applied retroactively:

CPL 400.15(7)(b) provides: “A previous conviction . . . which was obtained in violation of the rights of the defendant under the applicable provisions of the constitution of the United States must not be counted in determining whether the defendant has been subjected to a predicate violent felony conviction.” The People’s argument that a Catu error does not violate the United States Constitution is improperly raised for the first time in their reply brief, and is without merit in any event.

“[A] conviction obtained in violation of Catu implicates rights under the federal Constitution as well as the state constitution” … . Furthermore, although the Catu error in this case occurred in 2000, prior to the 2005 Catu decision, Catu applies retroactively … . People v Fagan, 2015 NY Slip Op 08782, 1st Dept 12-1-15

CRIMINAL LAW (SENTENCING, CATU ERROR PRECLUDES USE OF CONVICTION AS PREDICATE)/SENTENCING (CATU ERROR PRECLUDES USE OF CONVICTION AS PREDICATE)

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MOTION TO DISMISS BREACH OF WARRANTY ACTION PROPERLY DENIED; THE WARRANTY CONCERNED THE QUALITY OF MORTGAGES POOLED INTO RESIDENTIAL MORTGAGE-BACKED SECURITIES.

The First Department, in a full-fledged opinion by Justice Moskowitz, determined the motion to dismiss the breach of warranty action against JP Morgan Mortgage Acquisition Corporation (JPMMAC) was properly denied. The warranty required JPMMAC to buy back any defective mortgages which were pooled into residential mortgage-backed securities. The lawsuit was commenced because JPMMAC refused to do so when notified of the problem mortgages. JPMMAC argued that the language of the warranty narrowly restricted the time to which it applied (constituting a so-called “gap” or “bring-down” warranty). Under standard principles of contract interpretation, however, the First Department held that the warranty applied no matter when the material misstatements occurred during the warranty period:

A contractual provision that is clear on its face “must be enforced according to the plain meaning of its terms” … . This rule applies “with even greater force in commercial contracts negotiated at arm’s length by sophisticated, counseled businesspeople” … . In addition, “courts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing” … .

Plaintiff’s claim … states that “[w]ith respect to the period from [the] Whole Loan Sale Date to and including the Closing Date,” JPMMAC warrants that the representations in the Mortgage Loan Schedule and loan tape are correct. There is simply no language in this warranty addressing when the defects in the loans must arise for JPMMAC to be held liable for a misrepresentation on the Mortgage Loan Schedule or loan tape. Rather, the language … is straightforward: if false information — for example, information about a borrower’s income or the loan-to-value ratio of a mortgage — was on the Mortgage Loan Schedule and loan tape before October 30, 2006, it constitutes a breach of JPMMAC’s warranties as long as it remained on the Mortgage Loan Schedule or loan tape during the warranty period (that is, October 30, 2006 to December 20, 2006). Stated another way, JPMMAC warranted against the existence of any material misstatement during the warranty period, no matter when the misstatements first appeared on the Mortgage Loan Schedule or loan tape. Bank of N.Y. Mellon v WMC Mtge., LLC, 2015 NY Slip Op 08794, 1st Dept 12-1-15

CONTRACT LAW (BREACH OF WARRANTY, RESIDENTIAL MORTGAGE-BACKED SECURITIES)/WARRANTY, BREACH OF (RESIDENTIAL MORTGAGE-BACKED SECURITIES)/RESIDENTIAL MORTGAGE-BACKED SECURITIES (BREACH OF WARRANTY)

Evidence Supported Conviction of Police Officer for Divulging an Eavesdropping Warrant

The First Department determined the evidence supported the conviction of a police officer for divulging the existence of an eavesdropping warrant. The warrant was issued in connection with an investigation of corrupt police officers. Defendant warned police officers about the warrant and cautioned them to be careful on the phone:

Penal Law § 250.20 states as follows: “A person is guilty of divulging an eavesdropping warrant when, possessing information concerning the existence or content of an eavesdropping warrant . . . , he discloses such information to another person . . .” The trial court, prior to rendering its verdict, explained that “knowledge, actual knowledge, is required[,]” and rejected the People’s argument that mere rumor would be enough to satisfy the requirements for the divulging count. On appeal, viewing the evidence in the light most favorable to the People, the evidence was sufficient for the trial court to conclude that defendant divulged information concerning the existence and content of an eavesdropping warrant … , and we see no reason to set the verdict aside as against the weight of the evidence … . People v Cobb, 2015 NY Slip Op 08498, 1st Dept 11-19-15

 

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Because the Lease Authorized Landlord to Make Repairs, the Erection of Scaffolding Could Not Constitute a Partial Eviction; Occupant Not Named on the Lease Owes Rent Under a Quantum Meruit Theory

With respect to the lessee of a garage, the First Department determined the landlord’s erection of scaffolding to make repairs was allowed by the lease and, therefore, did not constitute a partial eviction. With respect to a party which occupied the premises but which was not a party to the lease, the First Department determined rent was owed to the landlord under a quantum meruit theory:

The … defendants’ argument that they were partially evicted from the garage is unavailing. “To be an eviction, constructive or actual, there must be a wrongful act by the landlord” … . Plaintiff’s installation of temporary scaffolding as part of its repairs to the garage’s facade was not wrongful because it was authorized by the lease … . … “[T]enants are well advised . . . to specify some limits to the exculpatory clause concerning repairs” … . * * *

A claim by a landlord against a nonlessee occupant for use and occupancy should not be foreclosed simply because there is a lease covering the premises. The obligations of the lessee arising under the lease are distinct from the obligations of an occupant of premises toward the owner of those premises.

Notwithstanding the general rule that “[t]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter” … , in the landlord-tenant context, the occupant of premises is liable to the owner of the property for use and occupancy irrespective of the existence of a lease in the name of another entity: “[t]he obligation to pay for use and occupancy does not arise from an underlying contract between the landlord and the occupant[,] [but] [r]ather, an occupant’s duty to pay the landlord for its use and occupancy of the premises is predicated upon the theory of quantum meruit, and is imposed by law for the purpose of bringing about justice without reference to the intention of the parties” … . Carlyle, LLC v Beekman Garage LLC, 2015 NY Slip Op 08499, 1st Dept 11-19-15

 

Question of Fact Whether ​”Intervening Criminal Act” at Homeless Facility Was Foreseeable

The First Department determined there was a question of fact whether an attack by one resident upon another resident of a facility for disabled homeless people was foreseeable:

Triable issues of fact exist as to whether defendants, the owner and operator of a transitional facility for disabled homeless people, breached their common-law duty to provide reasonable security measures to protect plaintiff’s decedent from foreseeable harm … . The fatal attack on decedent by a fellow resident was immediately preceded by two prior physical attacks, by the same resident, and police officers responding to the earlier attacks had told defendants’ staff members to keep the two residents apart.

In light of the conflicting testimony as to the perpetrator’s demeanor prior to the final attack and whether defendants were on notice of his alleged threat to continue the attack on decedent, it is for a jury to determine whether a further attack was foreseeable. The fact that defendants may not have been able to “anticipate the precise manner of the [attack] or the exact extent of injuries. . .does not preclude liability as a matter of law where the general risk and character of injuries are foreseeable” … . Furthermore, while unforeseeable and intentional criminal acts by third parties are supervening acts which sever the causal connection with any alleged negligence … , here, “the alleged intervening criminal act is itself the foreseeable harm that shapes the duty [of care sought to be] imposed” … . Corporan v Barrier Free Living Inc., 2015 NY Slip Op 08351, 1st Dept 11-17-15

 

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People Were Not Required to Disclose (Prior to Trial) Confession Made by Defendant to Health Care Worker

The First Department noted the People were not required to disclose, prior to trial, a confession defendant made to a health care worker (because the health care worker was not connected to law enforcement):

… [M]idway through their case, the People introduced a previously undisclosed confession that defendant made to a health care worker at a hospital where he was being treated for a suicide attempt. This statement tended to corroborate a similar confession that defendant made to a detective shortly thereafter. It is undisputed that the People had no statutory duty to disclose this statement, because it was not made to anyone connected with law enforcement (see CPL 240.20[1][a]), and because no Rosario material was involved. Defendant nevertheless complains that his due process right to a fair trial was violated by the timing of the disclosure, because he would have formulated a different defense had he known the People intended to introduce a confession to a civilian witness. However, we find no evidence of deceit or trickery on the part of the People, and defendant’s claim of prejudice is unpersuasive. … [T]here was no misrepresentation that the undisclosed evidence did not exist, and the trial had not progressed to the point where defendant could not have adjusted his defense, or requested less drastic relief than a mistrial.

Defense counsel did not object to the health care worker’s testimony on the ground of physician-patient privilege, and we decline to review this unpreserved claim in the interest of justice. People v Tayo, 2015 NY Slip Op 08353, 1st Dept 11-17-15

 

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Question of Fact Whether Real Estate Broker “Launched an Instrument of Harm” In an Apartment Being Shown to Plaintiff; Evidence of Custom Not Enough to Shift the Burden of Proof in Premises Liability Action

The First Department determined defendant real estate broker’s (Prudential/Leonhardt’s) motion for summary judgment in a personal injury case should not have been granted. As an apartment was being shown by the real estate broker, plaintiff tripped and fell when her foot became tangled in a drapery cord which was on the floor. The broker (Leonhardt) submitted evidence in support of the motion for summary judgment stating that she did not remember whether she opened the drapes on the day in question, and further stating that her habit was to hang the cord up when she did open the drapes. The court held the broker’s evidence was not sufficient to demonstrate, as a matter of law, that the broker did not “launch an instrument of harm,” i.e., cause the cord to be on the floor. Therefore, the contract between the broker and the owner of the apartment could have given rise to a duty of care owed by the broker to the plaintiff:

We thus turn to the … potential predicate for finding third-party tort liability, which rests on whether Prudential or Leonhardt launched an instrument of harm. Since they were the movants for summary judgment, Prudential and Leonhardt had the prima facie burden of demonstrating that there were no triable issues of fact and that they were entitled to judgment as a matter of law on the issue … . Leonhardt’s deposition testimony, and her affidavit in support of the motion, established that it was possible that she opened the drapes before the accident occurred, although she was not able to state with a reasonable degree of certainty that she did. If indeed she had opened the drapes, Leonhardt surmised, she would have wrapped the cord around the hook, because that is what she always did. However, evidence of a particular custom is insufficient to shift the burden in a premises liability case, because the defendant is required to proffer “specific evidence as to [her] activities on the day of the accident” … . Here, since Leonhardt had no specific recollection concerning the opening of the drapes on the day of the accident, she and Prudential were unable to eliminate the possibility that they were responsible for the hazardous placement of the cord on the floor. Accordingly, they failed to meet their prima facie burden, and the court should have denied their motion for summary judgment. Stimmel v Osherow, 2015 NY Slip Op 08340, 1st Dept 11-17-15

 

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Plaintiff Judgment-Creditor’s Action Under the Debtor Creditor Law to Recover Payment Made to a Limited Partner Time-Barred by Three-Year Statute of Limitations in the Revised Limited Partnership Act (RPLA)

In a detailed and fact-specified full-fledged opinion by Justice Acosta, in an action under the Debtor and Creditor Law (DCL), the First Department, determined plaintiff, a judgment creditor with an unpaid judgment against a partnership, could not reach a $425,000 payment made by the partnership to a limited partner. The court held the payment was not fraudulent, constituted a partnership distribution, and was subject to the three-year statute of limitations in the Revised Limited Partnership Act (RPLA), not the six-year statute of limitations in the Debtor and Creditor Law (DCL). Therefore, plaintiff’s action seeking the recover the payment was time-barred;

RLPA (Partnership Law) § 121-607 prohibits limited partnerships from making distributions “to a partner to the extent that, at the time of the distribution, after giving effect to the distribution, all liabilities of the limited partnership. . . exceed the fair market value of the assets of the limited partnership” (Partnership Law § 121-607[a]) … . A limited partner who knowingly receives a prohibited distribution is liable to the partnership in the amount of the distribution (§ 121-607[b]). However, “a limited partner who receives a wrongful distribution . . . shall have no liability under this article or other applicable law for the amount of the distribution after the expiration of three years from the date of the distribution” (§ 121-607[c]). … [T]he Limited Liability Company Law (LLCL) contains a similar limitation on distributions to members (LLCL §§ 102[i], 508[a]). Peckar & Abramson, P.C. v Lyford Holdings, Ltd., 2015 NY Slip Op 08363, 1st Dept 11-17-15

 

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Libel Action Based Upon Allegedly False Impressions Created by an Article in an Online News Publication, Including the Allegedly False Context of a Quotation of Plaintiff’s Own Words, Allowed to Go Forward; Pleading Requirements for Piercing the Corporate Veil Not Met.

The First Department, in a full-fledged opinion by Justice Kapnick, determined: (1) the complaint did not state a cause of action for libel per se (because extrinsic facts were necessary for a defamatory interpretation of the statement); (2) the libel cause action failed to sufficiently plead special damages (leave to replead granted); (3) the fact that one of the allegedly defamatory statements was in plaintiff’s “own words” did not warrant dismissal; and (4) the complaint did not adequately allege that the publisher of the statements (Daily Holdings) was the alter ego of Rupert Murdoch’s News Corporation. The opinion includes substantive discussions (which cannot be fairly summarized here) of defamation, falsity, libel per se, libel, special damages, the so-called “own words” defense, and the requirements for piercing the corporate veil. With respect to the plaintiff’s twitter post which allegedly was used in a false context, the court discussed the so-called “own words defense:”

It is true that courts across the country have extended the “truth defense” to include an “own words” defense (see e.g., Thomas v Pearl, 998 F2d 447, 452 [7th Cir 1993] [holding that “(a) party’s accurate quoting of another’s statement cannot defame the speaker’s reputation since the speaker is himself responsible for whatever harm the words might cause. . . . The fact that a statement is true, or in this case accurately quoted, is an absolute defense to a defamation action.”]; Van Buskirk v Cable News Network, Inc., 284 F3d 977, 981-982 [9th Cir 2002] [applying the “own words” defense despite “contextual discrepancies” between the plaintiff’s own words and the defendants’ quotation of those words]; Johnson v Overnite Transp. Co., 19 F3d 392, 392 n1 [8th Cir 1994] [recognizing the “general rule that a defamation claim arises only from a communication by someone other than the person defamed”]; Smith v School Dist. of Philadelphia, 112 F Supp 2d 417, 429 [ED Pa 2000] [noting that “(g)enerally, a plaintiff can not (sic) be defamed by the use of his own words”]). Although defendants cite to Thomas v Pearl (998 F2d 447) in their brief, the parties failed to specifically address whether the “own words” defense should be adopted by this Court; and we are aware of no authority, in either New York State jurisprudence or in the Second Circuit, which either expressly accepts or rejects the “own words” defense. We are aware of only one case in the State, albeit a federal district court case, that even mentions the defense: Fine v ESPN (11 F Supp 3d 209, 224 [ND NY 2014]), in a section titled ” Own Words’ Defense,” states that it cannot reach the issue because the records needed to compare the plaintiff’s and the defendant’s words were not properly before the court on a motion to dismiss. This highlights, however, the importance of a court’s need to compare the two statements as they appear in the actual writings before applying the “own words” defense to dismiss a defamation claim. This is also evident from the fact that the “own words” defense derives from the “truth defense.” Even if we were to adopt the “own words” defense, we find that it would not apply here where a comparison of the two statements reveals the potential for them to have different effects on the mind of the reader. Franklin v Daily Holdings, Inc., 2015 NY Slip Op 08139, 1st Dept 11-12-15

 

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