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Release Applied to Claims Unknown at the Time the Release Was Signed and to Claims Among Parties on the Same Side of the Underlying Lawsuit

The First Department determined the language of the release was broad enough to include claims not known to exist at the time the release was signed and claims among parties on the same side in the suit:

According to the language of the agreement, the release broadly barred “all and/or any” claims “arising from” or “resulting from” or “in connection with” “any act [etc.] concerning [the Fund].” This Court has actually construed similar broad language to bar fraud claims relating to the subject matter where the signatories to the agreement did not specifically refer to, or even know about, those fraud claims before executing their release … . Similarly, courts have given effect to releases even when the releasors are subjectively unaware of the precise claims they are releasing … .

* * *  … [T]he language in the release simply states that “each Party . . . irrevocably and fully releases and forever discharges each other Party.” Had the parties wanted to release only specific individuals or entities, the agreement provided the language by which the parties could have done so. Thus, the release here at issue makes clear that each individual party released each other individual party regardless of the position in which those parties stood at the time they signed the release. Long v O’Neill, 2015 NY Slip Op 01733, 1st Dept 3-3-15

 

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Tortious Interference with Contract and Unfair Competition Causes of Action Proven–Elements Explained—Punitive Damages Not Warranted–Purpose Explained

The First Department, in a full-fledged opinion by Justice Sweeney, determined that the trial judge (bench trial) properly found that JC Penney (JCP) had tortiously interfered with the exclusivity provision of a contract between Macy’s and Martha Stewart Living Omnimedia (MSLO), but that the trial judge had improperly dismissed the cause of action alleging tortious interference with the confidentiality provision of the contract and the cause of action for unfair competition. The First Department agreed with the trial judge that punitive damages were not warranted.  Macy’s had entered a contract with MSLO which gave Macy’s the exclusive right to manufacture and sell MSLO products. JCP was found to have knowingly and forcefully engaged in negotiations with MSLO which resulted in MSLO’s breaching both the exclusivity and confidentiality provisions of the Macy’s contract:

To sustain its claim of tortious interference with contract, Macy’s must prove (1) that it had a valid contract with MSLO; (2) that JCP had knowledge of Macy’s contract with MSLO; (3) that JCP intentionally induced MSLO to breach its contract with Macy’s; (4) that MSLO breached its contract with Macy’s; (5) that MSLO would not have breached its contract with Macy’s absent JCP’s conduct; and (6) that Macy’s sustained damages … .

* * * On the record before us, the evidence establishes that JCP had, as the court found, a “certainty” or “substantial certainty” that it actions would result in a breach, particularly in light of the unambiguous language of the contract requirement that all MSLO goods in the Exclusive Product Categories, including all such goods sold in any MSLO Store, had to be manufactured by Macy’s. * * *

… Macy’s alleges that JCP induced MSLO to disclose the terms of its agreement and confidential financial information. This was a violation of the confidentiality provision of the agreement. Macy’s sufficiently demonstrated that the material disclosed does not fall under any exception to the confidentiality provisions as required by law or legal processes. Further, Macy’s demonstrated that the scope of disclosure was not properly limited with respect to the information provided and the personnel receiving it. As noted, JCP sought this information almost from the inception of its discussion with MSLO. The information was tantamount to trade secrets, as JCP’s executives acknowledged. * * *

It is well settled that “the primary concern in unfair competition is the protection of a business from another’s misappropriation of the business’ organization [or its] expenditure of labor, skill, and money'” (Ruder & Finn v Seaboard Sur. Co., 52 NY2d 663, 671 [1981]…). Indeed, “the principle of misappropriation of another’s commercial advantage [is] a cornerstone of the tort” (52 NY2d at 671). Allegations of a “bad faith misappropriation of a commercial advantage belonging to another by exploitation of proprietary information” can give rise to a cause of action for unfair competition … .

Here, the agreement between Macy’s and MSLO provided Macy’s with valuable exclusive rights to the Martha Stewart trademark and MSLO’s designs in the Exclusive Product Categories, which, as the court found, gave Macy’s a competitive advantage. It is conceded that the MSLO brand had significant value in the retail world, and the record shows JCP was fully aware of Macy’s commercial advantage as the exclusive distributor of these branded products. JCP’s actions in attempting to misappropriate this commercial advantage by inducing MSLO to breach its agreement falls squarely within Ruder and Finn’s definition of unfair competition … . * * *

…In order to be entitled to punitive damages, a private litigant “must not only demonstrate egregious tortious conduct by which he or she was aggrieved, but also that such conduct was part of a pattern of similar conduct directed at the public generally … . Punitive damages are “a social exemplary remedy, not a private compensatory remedy” Macy’s Inc v Martha Stewart Living Omnimedia Inc, 2015 NY Slip Op 01728, 1st Dept 2-26-15

 

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Insufficient Foundation for Introduction of Grand Jury Testimony as Past Recollection Recorded—No Showing Recollection Was “Fairly Fresh” and Accurate at the Time of the Grand Jury Appearance

The First Department, in a full-fledged opinion by Justice Andrias (disagreeing at length with the rationale of the concurring opinion), reversed defendant’s perjury conviction because a witness’ (Woods’) grand jury testimony was wrongly admitted under the past recollection recorded hearsay exception.  Woods testified and remained available to testify when the hearsay exception was invoked.  Woods claimed that he did not know whether he had actual knowledge of past events or whether his memory stemmed from the many “prep” discussions he had had with the prosecutor over a six-year period. There was a six-year gap between the underlying events and Woods’ grand jury appearance. The First Department determined the prosecutor did not lay a sufficient foundation for admission of the grand jury testimony in that it was not shown that Woods’ recollection was “fairly fresh” at the time of the grand jury testimony:

Although there is no rigid rule as to how soon after the event the statement must have been made …, here the assurance of the accuracy of the recordation and its trustworthiness are diminished by the six- year gap between the underlying events, which concluded in 2000, and Woods’s grand jury testimony in 2006 * * * .

The People argue that Woods’s testimony is admissible despite the six-year gap because the trial court found that he was “feigning a lack of memory.” However, even if Woods’s lack of memory demonstrates that he was unable or unwilling to testify, it does not abrogate the People’s obligation to satisfy the foundational requirement that the recollection was fairly fresh when [*5]recorded or adopted.

Nor was Woods able to “presently testify that the record correctly represented his knowledge and recollection when made” … . Although Woods testified that he believed his grand jury testimony was truthful and accurate, he also testified that “[a]s I sit here right now, I can’t tell you if everything that’s in that Grand Jury that I said was … accurate”; that although he “wanted to be accurate” and “wouldn’t testify untruthfully,” he could not swear that “what’s in the … Grand Jury … was exactly what happened,” and that he could not “remember [if] … what I was talking to was my clear recollection or … was resulting from [my prep sessions] with people.” Thus, Woods’s testimony reflects that although he would not have purposefully lied to the grand jury, he could not presently state that his testimony accurately reflected his own recollection of the events in question at the time that he testified before it … . People V DiTommaso, 2015 NY Slip Op 01592, 1st Dept 2-14-15

 

Re: a Third-Party Settlement, Consent of Special Fund Required Before Carrier Entitled to Reimbursement from Special Fund

The First Department determined an employee must obtain the consent of the Special Fund (or judicial approval) before accepting a third-party settlement:

Workers’ Compensation Law § 29(5) permits an employee to settle a lawsuit arising out of the same accident as gave rise to his workers’ compensation claim for less than the amount of the compensation he has received only if the employee has obtained written consent to the settlement from the carrier or, in the alternative, judicial approval. We find that, just as the employee is required to obtain the carrier’s consent prior to settlement, the carrier is required to obtain the Special Funds Conservation Committee’s consent prior to the settlement where it is entitled to reimbursement by the Committee pursuant to Workers’ Compensation Law § 15(8)(d) … . Ace Fire Underwriters Inc Co v Special Funds Conservation Comm, 2015 NY Slip Op 01574, 1st Dept 2-24-15

 

 

FOIL Request for Police “Intelligence Division” Documents Re: Surveillance of “Middle Eastern, South Asian or Muslim Persons” Properly Denied

The First Department determined the New York City Police Department (NYPD) properly denied a Freedom of Information Law (FOIL) request seeking documents generated by the Intelligence Division of the NYPD which related, in part, to broad categories, such as businesses “frequented” by Middle Eastern, South Asian or Muslim persons.  The court determined the requests were “overbroad,” exempt under the Public Officers Law (law enforcement privilege and danger to  life and safety), and would constitute an invasion of privacy.  With regard to  “danger to life and safety” and “invasion of privacy,” the court wrote:

The court also properly found that the requested disclosure “could endanger the life or safety of any person” (Public Officers Law § 87[2][f]). Granting the broadly worded request for a trove of NYPD Intelligence Division documents replete with sensitive information about the unit’s methods and operations, which could be publicly disseminated and potentially exploited by terrorists, would create “a possibility of endangerment” … . In addition, the court properly recognized that the requested records are exempt from FOIL because disclosure would constitute an unwarranted invasion of personal privacy … . Petitioners emphasize the public interest in scrutinizing whether NYPD engaged in improper surveillance or profiling of certain communities, but this is outweighed by the privacy interests at stake given the specific purpose of this counterterrorism police operation. The revelation that a certain person, business, or organization was the subject of counterterrorism-related surveillance would not only have the potential to be embarrassing or offensive, but could also be detrimental to the reputations or livelihoods of such persons or entities. Matter of Asian Am Legal Defense & Educ Fund v New York City Police Department, 2015 NY Slip OP 01559, 1st Dept 2-24-15

 

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Under the Criteria Recently Announced by the Court of Appeals, the Proof Was Not Sufficient to Justify Placing the Respondent Under Strict and Intensive Supervision in the Community

The First Department, in a full-fledged opinion by Justice Renwick, applied the criteria recently announced by the Court of Appeals and determined the state had not presented sufficient proof to justify placing the respondent, a sex offender who had served 33 years in prison, under strict and intensive supervision (SIST) in the community.  The opinion is very detailed and defies summary.  Some of the main points follow:

The State of New York brought this Mental Hygiene Law (MHL) article 10 proceeding seeking civil commitment of respondent as a dangerous sex offender. This proceeding, however, preceded the recent pronouncement by the Court of Appeals in Matter of State of New York v Donald DD. (24 NY3d 174 [2014]). In Donald DD., the Court of Appeals limited the evidence that can be used to civilly commit a convicted sex offender, and clarified that a sex offender cannot be subject to civil commitment solely because the individual is diagnosed as suffering from an abnormality that predisposes him to commit sexual offenses. In so doing, the Court of Appeals clarifies the line between civil commitment and penal commitment. In this case, we heed this clarification by dismissing this MHL article 10 proceeding on the ground that the State has failed to establish by clear and convincing evidence that respondent has or will have serious difficulty controlling his behavior. * * *

…[T]he jury found that respondent suffers from a mental abnormality qualifying him for civil management under MHL article 10. Following a dispositional hearing where the State experts and respondent testified, Supreme Court found that respondent is not a dangerous sex offender in need of confinement, and ordered instead that he submit to strict and intensive supervision and treatment (SIST) in the community. * * *

…[T]he statute requires that all offenders subject to civil management, including SIST, must be found to have a mental abnormality as a threshold qualification. MHL § 10.03(i) defines a mental abnormality as “a congenital or acquired condition, disease or disorder that affects the emotional, cognitive, or volitional capacity of a person in a manner that predisposes him or her to the commission of conduct constituting a sex offense and that results in that person having serious difficulty in controlling such conduct.”

Article 10 authorizes civil confinement only of those sex offenders whose “mental abnormality” involves such a strong disposition to commit sexual misconduct and an inability to control behavior that the person is dangerous to society (MHL §§ 10.03[e], 10.07[f]). MHL article 10, as written, is also designed to provide courts with a mechanism for deciding whether the mental condition of a sex offender suffering from a mental abnormality is so extreme that the more restrictive alternative of confinement is warranted or whether, on the other hand, the least restrictive option, namely SIST, is permitted (see MHL § 10.07[f]).

…[I]n Donald DD. …, the Court of Appeals clarified that the State must prove, separate from a finding of mental abnormality required for civil commitment, that the defendant has serious difficulty controlling his behavior. Specifically, the State must demonstrate that as a result of the “serious mental illness, abnormality or disorder,” a person also would have serious difficulty controlling his behavior if released (24 NY3d at 187, 189).  Matter of State of New York v Frank P, 2015 NY Slip Op 01551, 1st Dept 2-19-15

 

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Presumption Tenants-In-Common Share Equally Can Be Rebutted

The First Department noted that the presumption that tenants-in-common share equally in the common tenancy, that presumption can be rebutted:

“While there is a presumption that tenants-in-common share equally in their common tenancy, such a presumption may be rebutted if the facts show that they hold the tenancy in unequal shares. A court acting in equity may take into account the amounts invested in the property by the respective tenants in determining the shares to which they are entitled” … . Here, the court properly considered defendant’s undisputed testimony that she alone contributed all of the funds utilized to purchase and maintain the property, and that she resided in the home since its purchase.  Ampratwum v Appiah, 2015 NY Slip Op 01533, 1st Dept 2-19-15

 

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First Responder, a NYC Police Officer, Was Entitled to the World Trade Center Presumption that Her Illness, Fibromyalgia, Was Caused by Environmental Exposure at the Site of the 2001 Collapse of the World Trade Center

The First Department, in a full-fledged opinion by Justice Acosta, determined a NYC police officer was entitled to the World Trade Center (WTC) presumption that her illness, fibromyalgia, was caused by her exposure at the site of the World Trade Center collapse in 2001.  The officer was therefore eligible for accidental disability retirement (ADR):

Administrative Code § 13-252.1 provides that “any condition or impairment of health … caused by a qualifying World Trade Center condition” as defined in the Retirement and Social Security Law “shall be presumptive evidence that it was incurred in the performance and discharge of duty and the natural and proximate result of an accident … unless the contrary be proved by competent evidence” (§ 13-252.1[1][a]…). “Qualifying World Trade Center condition” is defined to include, among other conditions, “[n]ew onset diseases resulting from exposure as such diseases occur in the future including cancer, asbestos-related disease, heavy metal poisoning, and musculoskeletal disease” (§ 2 [36][c][v] [emphasis added]). * * *

Here, the evidence shows that petitioner did not have fibromyalgia before September 11, 2001, and that she developed disabling fibromyalgia and chronic fatigue syndrome in the wake of her WTC exposure.

Because it was “caused by a qualifying [WTC] condition,” petitioner’s fibromyalgia is presumed to have been “incurred in the performance and discharge of duty and the natural and proximate result of an accident not caused by [her] own willful negligence, unless the contrary be proved by competent evidence” (Administrative Code § 13-252.1[1][a]). Respondents bear the burden of showing that petitioner’s qualifying injury was not incurred in the line of duty … . The Board of Trustees’ determination must be supported by credible evidence in the record … .

The significance of the presumption is that, “unlike ordinary ADR claimants, first responders need not submit any evidence — credible or otherwise — of causation to obtain the enhanced benefits” … Thus, the Board “cannot deny ADR benefits by relying solely on the absence of evidence tying the disability to the exposure” … . * * *

…[R]espondents have failed to rebut the presumption that petitioner’s qualifying condition, fibromyalgia, was caused by hazards encountered at the WTC site.  Matter of Sheldon v Kelly, 2015 NY Slip Op 01404, 1st Dept 2-17-15

 

 

Determinative, Purely Legal Arguments Raised for the First Time on Appeal May Be Considered by the Appellate Court

In the context of a mortgage foreclosure action, the First Department noted that arguments raised for the first time on appeal may be considered if the issues are determinative and present purely legal arguments without raising new facts.  Bank of NY v Arthur, 2015 NY Slip Op 01392, 1st Dept 2-17-15

 

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Plaintiff Placed Her Mental Condition In Controversy—Defendant Entitled to Have Her Examined by a Psychiatrist

The First Department, in the context of an action for retaliatory discharge, sexual harassment and intentional infliction of emotional distress, determined plaintiff had placed her mental condition in controversy and defendant was entitled to have plaintiff examined by a psychiatrist.  Plaintiff had alleged “extreme mental and physical anguish,” “severe anxiety,” eczema, hair pulling, depression and suicidal feelings:

Under these circumstances, the court providently exercised its discretion in determining that defendant had demonstrated that plaintiff had placed her mental condition “in controversy” by alleging unusually severe emotional distress, so that a mental examination by a psychiatrist is warranted to enable defendant to rebut her emotional distress claims (CPLR 3121[a]…). Although plaintiff asserts that an examination would be unduly intrusive into private matters, she did not propose conditions or seek a protective order limiting the scope or extent of the examination … . Clark v Allen & Overy LLP, 2015 NY Slip Op 01398, 1st Dept 2-17-15

 

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