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Lateral Shift of Heavy Equipment, Which Pinned Plaintiff Against a Column, Not Gravity-Related—Not Covered Under Labor Law 240 (1)

The First Department determined Supreme Court should have dismissed plaintiff’s Labor Law 240 (1) cause of action because plaintiff’s injury was not caused by a falling object. Plaintiff was moving an 8000 pound piece of equipment across a flat platform when the equipment shifted laterally and pinned plaintiff against a column. Because the accident did not flow from the application of the force of gravity, it was not covered under Labor Law 240 (1):

Plaintiff and his coworkers were moving a piece of an 8,000-pound piece of equipment across a flat platform. The ultimate goal was to place the equipment onto the forks of a forklift. Plaintiff testified that because two wheels broke off, the workers were pushing and pulling the equipment when it pinned him against a column on the side of the platform. Plaintiff testified that they did not lift the equipment into the air, and that it did not fall. Nor did he know what caused the equipment to shift laterally towards his side. Plaintiff’s testimony established that the piece of equipment that pinned him to the column was not a “falling object” and that he was not a “falling worker,” and the accident did not otherwise flow from the application of the force of gravity. Thus, he was not covered by Labor Law § 240(1) under the current case law … . Martinez v 342 Prop. LLC, 2015 NY Slip Op 03770, 1st Dept 5-5-15

 

Res Ipsa Loquitur Doctrine Can Apply to an Elevator Maintenance Company Even Where there Is No Proof the Company Had Actual or Constructive Notice of Elevator Misleveling

The First Department, in a full-fledged opinion by Justice Gische, over a two-justice partial dissent, determined that an elevator maintenance company could be liable for a fall allegedly caused by misleveling of an elevator under the doctrine of res ipsa loquitur, even though there was no evidence the elevator maintenance company had actual or constructive notice of the problem. The plaintiff’s allegations of the misleveling, coupled with the settled principle that elevator misleveling does not occur in the absence of negligence, raised a question of fact under the res ipsa loquitur criteria:

Res ipsa loquitur permits a fact finder to infer negligence based upon the sheer occurrence of an event where a plaintiff proffers sufficient evidence that (1) the occurrence is not one which ordinarily occurs in the absence of negligence; (2) it is caused by an instrumentality or agency within the defendant’s exclusive control; and (3) it was not due to any voluntary action or contribution on the plaintiff’s part … . If a plaintiff establishes these elements, then the issue of negligence should be given to a jury to decide … .

Res ipsa loquitur does not create a presumption of negligence; rather it is a rule of circumstantial evidence that allows the jury to infer negligence … . A defendant is free to rebut the inference by presenting different facts or otherwise arguing that the jury should not apply the inference in a particular case … . Notice of a defect is inferred when the doctrine applies and the plaintiff need not offer evidence of actual or constructive notice in order to proceed … . Thus, while there is no proof of actual or constructive notice in this case, res ipsa loquitur can still support plaintiff’s claim … . Ezzard v One E. Riv. Place Realty Co., LLC, 2015 NY Slip Op 03791, 1st Dept 5-5-15

 

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Records of Pedigree Information Which Was Linked to the Defendant and Was Supplied by the Person Who Purchased a Prepaid Cell Phone Properly Admitted as Circumstantial Evidence Defendant Purchased the Phone

The First Department determined “[a]uthenticated records showing that the person who purchased a particular prepaid cell phone, which was linked to the crime, supplied pedigree information linked to defendant were properly admitted as circumstantial evidence of defendant’s identity as the purchaser of the phone. In the context of the case, the pedigree information did not constitute assertions of fact, but circumstantial evidence that the declarant was, in all likelihood, defendant … . Rather than being factual, the pedigree information was analogous to a fingerprint left on a document, tending to show the true identity of its author … . Although the purchaser of the phone was not under a business duty to provide the pedigree information, that requirement of the business records exception to the hearsay rule did not apply, because the initial declaration was independently admissible … . The possibility that the phone could have been purchased by an unknown person who had somehow acquired defendant’s pedigree information goes to weight, not admissibility.” People v Patterson, 2015 NY Slip Op 03788, 1st Dept 5-5-15

 

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Exclusion from Coverage of Claims Brought By or On Behalf of a Governmental Entity Applied to a Qui Tam Case Brought by a Private Party Pursuant to the Federal and State False Claims Acts Re: Medicare and Medicaid Over-Billing—the Private Party (“Relator”) Is Bringing the Action On Behalf of the Government, Which Is the Real Party In Interest

The First Department determined that the insurer’s motion for a declaration it was not obligated to pay for defendant’s defense in a lawsuit under the Federal False Claim Act alleging excessive Medicare and Medicaid billing.  As allowed under the Act, the suit was brought by a private party, called a “relator.”  The policy excluded coverage for any and claim “Brought by or on behalf of the Federal Trade Commission, the Federal Communications Commission, or any federal, state, local or foreign governmental entity, in such entity’s regulatory or official capacity.”  Supreme Court determined the exclusion did not apply because the suit was brought by a private party.  However, pursuant to the terms of the False Claim Act, the action brought on behalf of the government by the relator and the government is the real party in interest:

An action brought under the False Claims Act may be commenced in one of two ways. First, the federal government itself may bring a civil action against a defendant (31 USC § 3730[a]). Second, as is the case here, a private person, or “relator” may bring a qui tam action “for the person and for the United States Government,” against the defendant, “in the name of the Government” (id. at [b][1]). Under such circumstances, the government may elect to intervene, and if it recovers a judgment, the relator receives a percentage of the award (id. at [d][1]). If the government declines to intervene, as in the case here, the relator may pursue the action and may receive as much as 30 percent of any judgment rendered (see id. at [d][2]).

While relators indisputably have a stake in the outcome of False Claims Act qui tam cases that they initiate, “the Government remains the real party in interest in any such action” … . As the Second Circuit has explained:

“All of the acts that make a person liable under [the False Claims Act] focus on the use of fraud to secure payment from the government. It is the government that has been injured by the presentation of such claims; it is in the government’s name that the action must be brought; it is the government’s injury that provides the measure for the damages that are to be trebled; and it is the government that must receive the lion’s share-at least 70%-of any recovery.” Certain Underwriters at Lloyd’s London Subscribing to Policy No. QK0903325 v Huron Consulting Group, Inc., 2015 NY Slip Op 03608, 1st Dept 4-30-15

 

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Continuous Representation Doctrine Did Not Toll the Statute of Limitations for the Legal Malpractice Cause of Action/Fraud, Excessive Fees and Unjust Enrichment Causes of Actions Were Not Duplicative of the Legal Malpractice Cause of Action/Punitive Damages Claim Properly Pled

The First Department, in a full-fledged opinion by Justice Mazzarelli, in the context of a motion to dismiss for failure to state a cause of action, determined the continuous representation doctrine did not toll the statute of limitations for the legal malpractice cause of action, the fraud, excessive fees, and unjust enrichment causes of action were not duplicative of the legal malpractice action, and the demand for punitive damages properly survived dismissal. It was alleged that defendants-attorneys gave the plaintiffs bad advice re: a tax shelter and failed to inform plaintiffs of the close business ties between the attorneys and a firm which profited directly from the advice given plaintiffs. With regard to the continuous representation doctrine, the court explained that, in order to toll the statute, the representation must relate to the specific matter out of which the malpractice is alleged to have arisen—an on-going relationship on other matters does not toll the statute. The allegation that the defendants did not disclose their business relationship with the firm profiting from the legal advice was sufficient to support the fraud cause of action (as “non-duplicative”). The excessive fees and unjust enrichment causes of action were likewise not duplicative of the legal malpractice cause of action. The punitive damages claim was sufficiently pled because it alleged a wide-ranging scheme affecting many of defendants’ clients:

…[W]hile there was certainly the possibility that the need for future legal work would be required with respect to the tax strategy, plaintiffs could not have “acutely” anticipated the need for further counsel from defendants that would trigger the continuous representation toll. * * *

Defendants argue that, because the legal malpractice claim is time-barred, plaintiffs’ other claims arising out of the representation are also time-barred since they are merely duplicative of the malpractice cause of action. This contention derives from CPLR 214(6), which was enacted to prevent plaintiffs from circumventing the three-year statute of limitations for professional malpractice claims by characterizing a defendant’s failure to meet professional standards as something else, such as a breach of contract (for which there is a six-year statute of limitations) … . The key to determining whether a claim is duplicative of one for malpractice is discerning the essence of each claim … . * * *  Here, the essences of the fraud and malpractice claims are sufficiently distinct from one another that the court properly did not invoke the duplicative claims doctrine. * * *

The excessive fee and unjust enrichment claims are also not duplicative of the malpractice claim. The former is stated regardless of the quality of the work performed, so long as a plaintiff can reasonably allege that the fee bore no rational relationship to the product delivered … . Here, plaintiffs did so, since they asserted that defendants collected a $425,000 fee for a “cookie cutter” legal opinion. By the same logic, the unjust enrichment claim, which is predicated on the excessiveness of the $425,000 fee, also properly survived the motion to dismiss. * * *

…[P]laintiffs’ claim for punitive damages properly survived dismissal. Defendants’ conduct is alleged to have been directed at a wide swath of clients, and the first amended complaint sufficiently alleges intentional and malicious treatment of those clients as well as a “wanton dishonesty as to imply a criminal indifference to civil obligations” … .  Johnson v Proskauer Rose LLP, 2015 NY Slip Op 03626, 1st Dept 4-30-15

 

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The Fact that One of Four Men Approached for a Level One Street Inquiry Ran Did Not Provide the Police with Reasonable Suspicion that Defendant, Who Obeyed the Police Commands, Was Involved in a Crime

The First Department determined that the police did not have sufficient cause to detain four men, including the defendant, on the street. The fact that one of the four men subsequently ran did not provide any additional justification for detaining defendant. The police had enough information about a near-by robbery only to justify a “level one” street inquiry of the four men, not detention.  While detained without sufficient cause, defendant was asked by the police to lift up his shirt, revealing a gun.  Absent “reasonable suspicion” of involvement in a crime, the defendant should not have been detained to await the show-up. Absent an indication defendant posed a danger to the police officers, the defendant should not have been asked to lift his shirt:

…[T]he group of men was in a location to which a group of robbers had been reported to have fled only minutes earlier, giving the officers an articulable reason for inquiring into why the men were in the area … . The question, then, is whether the encounter ever escalated to a point that the police would have been justified in holding the men at the scene while the complainant was transported to it.

…[R]easonable suspicion is a necessary predicate to a detention for a showup identification … . Further, a person’s flight is sufficient to create the reasonable suspicion necessary to escalate a level one or level two encounter to a level three detention, so long as other circumstances are attendant, such as a high-crime location and activity suggesting, although not alone creating, reasonable suspicion that the person fleeing the scene may be engaged in criminal conduct … . In all of the cases which discuss flight as the determining factor in creating reasonable suspicion, however, the defendant is the person who fled. Here, of course, defendant did not flee; he obeyed the officers’ direction to stop and to submit to their questioning. People v Thompson, 2015 NY Slip Op 03605 1st Dept 4-30-15

 

Including “Statute of Limitations” in a Catch-All Paragraph Listing Many Affirmative Defenses Did Not Provide Plaintiff with Sufficient Notice—At a Bare Minimum, the Duration of the Relevant Statute of Limitations, Six Years Here, Should Be Pled

The First Department, in a full-fledged opinion by Justice Acosta, with an extensive concurrence, determined that the inclusion of the “statute of limitations” in a catch-all paragraph listing many affirmative defenses did not provide sufficient notice to the plaintiff.  In addition to failing to separately number and plead each affirmative defense (as required by the CPLR) the defendant failed to plead what the applicable statute of limitations (six years here) was. The court criticized a Court of Appeals case which said that simply mentioning the “statute of limitations” as an affirmative defense is sufficient notice—the First Department specifically suggested that the Court of Appeals revisit the issue. The court held that the plaintiff was prejudiced by the failure to plead the applicable (six-year) statute of limitations because the issue was not directly addressed during discovery as a result of the insufficient notice.  Supreme Court’s grant of summary judgment to the defendant was reversed on the merits (competing expert affidavits raised questions of fact). The defendant was allowed to replead the affirmative defense and the plaintiff was allowed further discovery on the issue:

The result of defendant’s failure to comply with CPLR 3014 is that its statute of limitations defense lay buried within a paragraph of mostly irrelevant, and conclusory, defenses. Although plaintiff could have moved to compel separate numbering …, it was not required to make such a motion because defendant’s answer did not necessitate a responsive pleading (see CPLR 3018; CPLR 3024). Thus, plaintiff cannot be forced to accept the defective answer simply because it declined to make a motion to compel separate numbering.

Further, we have no doubt that defendant was permitted to plead its affirmative defenses hypothetically — which it apparently attempted to do by “reserving” those defenses unto itself — but only insofar as those defenses were concise, separately numbered, and sufficiently stated (CPLR 3013; CPLR 3014). A permissive hypothetical pleading does not extend so far as to authorize a defendant to plead each and every affirmative defense that might exist without regard to its relevance to the cause(s) of action presented by the complaint. Permitting such conduct here would effectively sanction deception on the part of defendant, whether intentional or not, thereby avoiding the CPLR’s notice requirement. In other words, defendant’s formulation of its laundry list of defenses in hypothetical terms does not exempt it from the other requirements of CPLR 3014.

The question, therefore, becomes one of prejudice. That is, the CPLR directs us to construe a defendant’s answer liberally and disregard defects unless a substantial right of the plaintiff would be prejudiced (see CPLR 3026). This must be done in light of the overarching directive that the CPLR “be liberally construed to secure the just, speedy and inexpensive determination of every civil judicial proceeding” (CPLR 104). “[W]e must literally apply the mandate [to construe pleadings liberally] as directed and thus make the test of prejudice one of primary importance” … . * * *

It seems clear that a court cannot require a level of particularity beyond that outlined by the Official Forms; to do so would contravene CPLR 107’s command that pleadings that comply with the forms are sufficient as a matter of law … . Thus, the most that a court could require of a defendant pleading the statute of limitations is to state the applicable period of limitations, as set forth in Official Form 17. We acknowledge that Official Form 17 establishes a ceiling, not a floor. To be sure, a defendant whose answer pleads the “statute of limitations” and includes the applicable period of limitations will necessarily be in compliance with the official form, and courts must deem that pleading sufficient pursuant to CPLR 107 and CPLR 3013. Scholastic Inc. v Pace Plumbing Corp., 2015 NY Slip Op 03489, 1st Dept 4-28-15

 

Summary Judgment Motion Served Within 60 Days of the Filing of the Note of Issue but Filed on the 61st Day Deemed Untimely

The First Department, reversing Supreme Court, strictly enforced a Supreme Court “individual part rule” and deemed a summary judgment motion untimely.  The rule requires a motion for summary judgment to “filed” within 60 days of the filing of the note of issue.  Here the motion was served within the 60 days but was filed on the 61st day. Connolly v 129 E. 69th St. Corp., 2015 NY Slip Op 03450, 1st Dept 4-28-30

 

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“Pertinent to Litigation” Privilege for Statements Made by an Attorney Does Not Apply If the Relevant Litigation Is a “Sham”—Here Sufficient “Sham Litigation” Allegations Were Made—Slander Per Se Cause of Action Should Not Have Been Dismissed

In finding plaintiff had stated a cause of action for slander per se, the First Department explained that the privilege for statements made by an attorney which pertain to on-going litigation does not apply if the litigation is a “sham.”  The plaintiff, an attorney, sued Finkelstein, also an attorney, for statements alleged to have been made by Finkelstein to plaintiff’s former client, Harrison. Plaintiff alleged that Finkelstein told Harrison plaintiff had taken Harrison’s money and that Finkelstein was the source of the false allegations in Harrison’s complaint against plaintiff.  Disagreeing with Supreme Court, the First Department held that the complaint stated a cause of action because the complaint sufficiently alleged the lawsuit brought by Harrison was a “sham” to which the “statements pertinent to litigation” privilege would not apply:

… [A] statement that is pertinent to litigation is absolutely privileged and cannot form the basis of a defamation action. That principal of law was first stated by the Court of Appeals in Youmans v Smith (153 NY 214, 219 [1897]), and was recently reaffirmed by the Court in Front, Inc. v Khalil (24 NY3d 713 [2015]) . This Court has held that, where the privilege is invoked, “any doubts are to be resolved in favor of pertinence” … . Further, the test to determine whether a statement is pertinent to litigation is ” extremely liberal'” …, such that the offending statement, to be actionable, must have been “outrageously out of context” … .

This Court has recognized, however, that the privilege is capable of abuse and will not be conferred where the underlying lawsuit was a sham action brought solely to defame the defendant … , in which this Court declined to dismiss a defamation claim based on the pertinency privilege where the context in which the allegedly offending statement was made was a litigation that the plaintiffs filed but never prosecuted. The existence of this “sham litigation” exception has been confirmed (but not applied) in other cases in this Department… . Flomenhaft v Finkelstein, 2015 NY Slip Op 03468, 1st Dept 4-28-15

 

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Cross-Examination About the Omission of Exculpatory Information from a Statement Made to Police Is Not the Same as Cross-Examination About the Exercise of the Right to Remain Silent

The First Department noted that defendant was properly cross-examined about the omission of exculpatory information provided in his direct testimony from the statement he had given to police. “After receiving Miranda warnings, and agreeing to provide a statement to the police, defendant made statements that omitted significant exculpatory matter that he included in his trial testimony. Under the circumstances, this was an unnatural omission, and a permissible basis for impeachment…”.  People v Brown, 2015 NY Slip Op 03469, 1st Dept, 4-28-15

 

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