You are here: / First Department

Tag Archive for: First Department

Failure to Allege “Demand Futility” as Required Under Delaware Law Required Dismissal of the Derivative Causes of Action

The First Department determined the derivative claims in the complaint against a Delaware corporation were properly dismissed for failure to allege demand futility, as required under Delaware law:

Under Delaware law, where, as here, no demand has been made on corporate directors to bring a lawsuit, a derivative action may be brought on the corporation’s behalf only where the complaint alleged particularized facts that such a demand would have been futile … . To allege demand futility, the complaint must set forth particularized facts sufficient to raise a reasonable doubt that either (1) the directors are disinterested and independent, or (2) the challenged transaction was the result of a protected business judgment … . Whitecap (US) Fund I, LP v Siemens First Capital Commercial Fin LLC, 2014 NY Slip Op 07297, 1st Dept 10-28-14

 

,

No Privity Between Insured and Reinsurers Which Contracted Solely with the Insurer—Counterclaims by Insured Against Reinsurers Should Have Been Dismissed

The First Department, in a full-fledged opinion by Justice Freedman, reversed Supreme Court and dismissed counterclaims against reinsurers (NICO and Resolute) by the insured (Colgate) because no contract existed between the reinsurers and the insured. The contractual relationship was solely between the insurer (OneBeacon) and the reinsurers.  Colgate alleged that the actions of NICO and Resolute prevented Colgate from exercising control over lawsuits, including whether to settle or litigate. The underlying lawsuits alleged that talc produced by Colgate contained asbestos:

Colgate’s claims raise the issue of whether an insurance policyholder has rights against its carrier’s reinsurer, if the reinsurer administers the insured’s claims under the policy. In a typical reinsurance arrangement, where the carrier administers claims and the reinsurer merely indemnifies it in accordance with the “follow the fortunes” doctrine (see United States Fid. & Guar. Co. v American Re-Ins. Co., 93 AD3d 14, 23 [1st Dept 2012], mod 20 NY3d 407 [2013]), the insured can only state viable claims against the reinsurer in specific circumstances that do not pertain here. In this case, Colgate only holds the Policies with OneBeacon. The carrier’s reinsurer, NICO, and its affiliate, Resolute, both adjust Colgate’s Policy claims and indemnify OneBeacon for claim payouts. NICO’s and Resolute’s dual role does not, however, give rise to any liability to Colgate because Colgate lacks contractual privity with NICO and Resolute. In the absence of privity, Colgate’s breach of contract claims against NICO and Resolute fail. OneBeacon Am Ins Co v Colgate-Palmolive Co, 2014 NY Slip Op 07315, 1st Dept 10-28-14

 

, ,

If a Contractual Representation or Warranty is False When Made, a Claim for Breach of Contract Accrues Upon Execution

The First Department noted that if a contractual representation or warranty is false when made, a claim for breach accrues at the time of the execution of the contract, even if the contract states that the “effective date” is earlier.  US Bank NA v DLJ Mtge Capital Inc, 2014 NY Slip Op 07093, 1st Dept 10-21-14

 

, ,

Landlord May Not Withhold Consent for Continued Operation of a Sidewalk Cafe Where the Lease Contemplated the Operation of the Cafe (Which Had Been in Operation for 50 Years) and Where the Implied Covenant of Good Faith and Fair Dealing Restricted the Landlord’s Ability to Withhold Consent/Erroneous Stipulated Fact Does Not Bind the Appellate Court

The First Department, in a full-fledged opinion by Justice Acosta, determined that a landlord could not terminate the tenant’s operation of a sidewalk cafe because the lease contemplated that use and the implied covenant of good faith and fair dealing restricted the landlord’s ability to deny consent to the continued operation of the cafe.  [The underlying ruling was made on stipulated facts which included the erroneous “fact” that the lease did not include the cafe as part of the leased premises.  The First Department noted that it is not bound on appeal by an incorrect stipulation of fact]:

The question presented on appeal is whether a landlord has an unfettered right to withhold or terminate its consent to a tenant’s operation of a sidewalk café, where the café has existed for at least 50 years and the lease contemplates the use of the sidewalk for that purpose. We hold that defendants may not withhold or terminate their consent, irrespective of whether they have a good-faith basis for doing so, because the lease expressly and unequivocally requires them to consent to plaintiff’s operation of the sidewalk café. In any event, we find that the implied covenant of good faith and fair dealing would otherwise restrict defendants’ ability to deny consent, and that they have failed to make a satisfactory showing of good faith in this case. * * *

Having determined that the lease allows plaintiff to use and occupy the sidewalk for the operation of a sidewalk café, it necessarily follows that defendants cannot withhold or revoke their consent to that use absent a good-faith basis. As the Court of Appeals has explained, “In New York, all contracts imply a covenant of good faith and fair dealing in the course of performance. This covenant embraces a pledge that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. While the duties of good faith and fair dealing do not imply obligations inconsistent with other terms of the contractual relationship, they do encompass any promises which a reasonable person in the position of the promisee would be justified in understanding were included” (511 W. 232nd Owners Corp. v Jennifer Realty Co. , 98 NY2d 144, 153 [2002] [internal citations and quotation marks omitted]).

Because the stipulated facts demonstrate that the sidewalk café existed at the time of the lease’s execution, plaintiff (through its assignor) was justified in understanding that the landlord promised to refrain from unreasonably withholding its consent to operate the sidewalk café. DMF Gramercy Enters Inc v Lillian Troy 1999 Trust, 2014 NY Slip Op 07110, 1st Dept 10-21-14

 

, ,

Videotaped Interview Indicated Defendant Did Not Understand His Right to Counsel—The Videotaped Statement, As Well As the Prior Oral and Written Statements, Should Have Been Suppressed

The First Department determined the People did not meet their burden of demonstrating the defendant understood his Miranda rights at the time he waived them.  After waiving his rights and making an oral and written statement, the defendant spoke with the Assistant District Attorney (ADA).  During that conversation, which was videotaped, the defendant gave responses which indicated he did not understand he had the right to talk to his own attorney before speaking with the ADA.  The court determined that the videotaped statement, as well as the prior oral and written statements, should have been suppressed:

…[I]t is not clear that this 18-year-old defendant with no prior criminal history, who could not read or write, ever understood his right to counsel nor the consequences of waiver. The evidence shows that defendant responded “yes” to questions when asked if he understood his rights. Then, immediately afterwards, defendant expressed confusion in understanding his right to counsel. As such, the People failed to present evidence that established defendant sufficiently understood the immediate import of the Miranda warnings. Moreover, ADA Elliot’s explanations failed to clarify for defendant the concept of his right to counsel. Thus, given defendant’s age, illiteracy, unfamiliarity with the criminal justice system, and statements expressing confusion about his Miranda rights, it is evident that the People failed to establish a knowing and intelligent waiver of Miranda rights … . People v Adames, 2014 NY Slip Op 07063, 1st Dept 10-16-14

 

, ,

Failure to Submit Expert Affidavit In Support of Meterological Data Precluded Summary Judgment Based Upon Defendant City’s Assertion It Did Not Have Sufficient Time to Remove Snow and Ice from a Sidewalk

The First Department, over a dissent, determined summary judgment should not have been granted to the defendant city in a slip and fall case.  The city argued that it did not have sufficient time to address the snow and ice on the sidewalk, and submitted meterological data without an expert affidavit.  The First Department determined the absence of an expert affidavit precluded summary judgment:

“Summary judgment in a snow or ice case is proper where a defendant demonstrates, through climatological data and expert opinion, that the weather conditions would preclude the existence of snow or ice at the time of the accident” … . Accordingly, because it failed to offer an expert opinion, in addition to the meteorological records, the City’s motion should have been denied without regard to the sufficiency of plaintiff’s papers in opposition … . While, as the dissent notes, no expert affidavit was required by this Court in Daley v Janel Tower L.P. (89 AD3d 408 [1st Dept 2011]), it is worth noting that there it was hardly needed.  it is worth noting that there it was hardly needed. That is because in Daley “the climatological reports showed that it last snowed more than one week prior to plaintiff’s fall and that during the three-day period prior to plaintiff’s fall, temperatures remained well above freezing” (89 AD3d at 409). Here, by contrast, the climatological reports showed that, except for a few hours of above-freezing temperatures and non-freezing rain, temperatures generally remained below freezing for the entire period between the December 19 storm and the accident four days later. Plaintiff’s expert opined that these conditions were suitable for the ice that formed as a result of the initial storm to remain, but not for the formation of new ice, which the City would have had insufficient time to clear. Without an expert to interpret the meteorological record in a way that would disprove this theory, the City failed to establish a right to judgment as a matter of law. Rodriguez v Woods, 2014 NY Slip Op 06887, 1st Dept 10-14-14

 

, , , ,

The Language of the NYC Rent Control Law, Unlike the Language of the NYC Rent Stabilization Law, Does Not Allow “Luxury Deregulation” After the Expiration of J-51 Tax Benefits

The First Department, in a full-fledged opinion by Justice Sweeny, determined that the relevant provision of the NYC Rent and Rehabilitation Act (Rent Control Law or RCL) could not be interpreted to allow “luxury deregulation” of a rent-controlled apartment upon the expiration of “J-51” tax benefits.  “Luxury deregulation” refers to the removal of rent controls where the tenant can afford to pay market rates. The opinion focused upon the wording of the Rent Stabilization Law (RSL) versus the wording of the Rent Control Law (RCL) .  The RSL specifically allows the owner of an apartment to apply for luxury deregulation upon the expiration of the J-51 tax benefits, while the RCL (the controlling regulation here) does not.  The opinion includes a discussion of court-review of an administrative agency’s interpretation of a statute where specialized knowledge is not involved, and statutory-interpretation criteria:

At the outset, we note that the question before us turns purely on statutory interpretation. As such, we need not defer to the agency’s interpretation of the statutes in question, as we are not called upon “to interpret a statute where specialized knowledge and understanding of underlying operational practices or . . . an evaluation of factual data and inferences to be drawn therefrom’ is at stake” … . * * *

The owner argues that the rationale of [the RSL] should also apply to apartments subject to rent control, because, inter alia, to hold otherwise would be inconsistent with the purpose of the luxury deregulation law, which attempted to “restore some rationality to a system which provides the bulk of its benefits to high income tenants” … . We are not unmindful that the legislative history indicates a preference not to have people who can easily afford market value rental property inhabit rent-regulated housing. However, this history does not offer sufficient evidence to alter the unambiguous language of Administrative Code § 26-403(e)(2)(j). To do so would require us to import new language into the RCL and “give it a meaning not otherwise found therein” … . Indeed, “where the language of a statute is clear, there is little room to add to or take away from that meaning'” … . If the application of such long-established principles of statutory construction produces “an undesirable result, the problem is one to be addressed by the Legislature” … . Matter of RAM I LLC v NYS Div of Hous & Community Renewal, 2014 NY Slip Op 06784, 1st Dept 10-7-14

 

Falling Block Not Shown to Be Related to the Failure of a Safety Device—Labor Law 240(1) Did Not Apply

The First Department determined injury from a stone block which fell from a pallet was not covered by Labor Law 240(1) because it was not demonstrated the incident resulted from the failure of a safety device:

The motion court properly granted defendants’ cross motion to dismiss plaintiff’s Labor Law § 240(1) claim. Section 240(1) does not apply automatically every time a worker is injured by a falling object … . Rather, the “decisive question is whether plaintiff’s injuries were the direct consequence of a failure to provide adequate protection against a risk arising from a physically significant elevation differential” … . The worker must establish that the object fell because of the inadequacy or absence of a safety device of the kind contemplated by the statute … . In order for something to be deemed a safety device under the statute, it must have been put in place “as to give proper protection” for the worker (§ 240[1]).

Here, we conclude that plaintiff’s injury was not caused by the absence or inadequacy of the kind of safety device enumerated in the statute … . Plaintiff does not contend that the block itself was inadequately secured. Instead, plaintiff argues that § 240(1) is applicable because his injuries were caused by defendants’ failure to provide an adequate safety device to hold the plastic tarp in place. Specifically, plaintiff maintains that the plastic tarp was inadequately secured because, if it had been properly secured, such as with ropes and stakes, plaintiff’s injury would not have occurred.

Plaintiff’s argument is unconvincing. The plastic tarp was not an object that needed to be secured for the purposes of § 240(1)…, nor is there any indication that the tarp caused plaintiff’s injuries. Guallpa v Leon D DeMatteis Constr Corp, 2014 NY Slip Op 06666, 1st Dept 10-2-14

 

Labor Law 241(6) Claim Should Not Have Been Dismissed—Although Claimant Did Not Perform “Labor-Intense Aspects of the Project” His Finance-Related Job Entailed On-Site Inspections

The First Department determined plaintiff’s Labor Law 241(6) claim should not have been dismissed.  Although plaintiff did not perform labor, his finance-related job required that he inspect the work site.  Plaintiff tripped and fell while doing an inspection:

Plaintiff’s Labor Law § 241(6) claim was improperly dismissed on the ground that plaintiff was not covered under the statute. Plaintiff testified that he was an onsite project manager, employed by one of multiple general contractors on the subject construction project, whose job pertained to financial issues such as billing of subcontractors and revenue projections for the project. He testified that he tripped and fell in a vestibule he was walking through, intending to conduct a visual inspection of a condition alleged … to support a back charge for “additional work,” in order to determine whether this claim was substantiated. Thus, plaintiff was not merely working in a building that happened to be under construction … . Rather, his job duties, including the inspection he was conducting at the time of the accident, were contemporaneous with and related to ongoing work on the construction project … . Thus, plaintiff was covered under the statute even though he did not perform the “labor-intense aspects of the project” … .  DeSimone v City of New York, 2014 NY Slip Op 06667, 1st Dept 10-2-14

 

,

Warrantless Cell Phone Search Required Suppression and a New Trial

The First Department ordered a new trial because the police searched defendant’s phone without a warrant and used photos found on the phone as the basis for a search warrant:

The court should have granted defendant’s motion to suppress photographs obtained from his cell phone. After the police arrested defendant and seized his phone, an officer looked through it without a warrant, and found two photos stored on the phone that depicted a pistol resembling the pistol recovered in this case. It was not disputed that the search of defendant’s cell phone was unlawful. Moreover, a recent decision of the United States Supreme Court holds that a cell phone is not a proper subject of a warrantless search incident to arrest … .

After finding the photos on the phone, the same officer averred in an affidavit in support of an application for a search warrant, which specifically sought to search photographs among other things on the phone, that there was reasonable cause to believe that evidence concerning defendant’s possession of a firearm existed on defendant’s phone. This evidence demonstrated that the “decision to seek the warrant was prompted by what [the police] had seen during the initial entry” … . Rather than applying for a warrant on the basis of mere probable cause, the officer “achieve[d] certain cause by conducting an unlawful confirmatory search,” which “undermines the very purpose of the warrant requirement and cannot be tolerated” … . Accordingly, even if there were independent probable cause for the warrant, it would not immunize the initial warrantless search, or permit the subsequently-granted warrant to render the photos admissible … . Nor may the inevitable discovery doctrine be applied to this evidence; the exception does not apply where “the evidence sought to be suppressed is the very evidence obtained in the illegal search” … . People v Marinez, 2014 NY Slip Op 06668, 1st Dept 10-2-14

 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy