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Taxi Owners Not Entitled to Damages After Ruling by NYC Taxi and Limousine Commission (Which Was Alleged to Have Damaged the Taxi Owners in the Amount of Over $15 Million) Was Found Arbitrary and Capricious

The First Department determined a ruling by the NYC Taxi and Limousine Commission (TLC), which was found to be arbitrary and capricious by the Court of Appeals, did not entitle the petitioners (taxi owners who lease their taxis to drivers) to damages. The court determined the damages were not “incidental” within the meaning of Article 78 and were not available in an Article 78 proceeding (under the facts). The court futher determined the TLC was immune from suit because the ruling at issue was an exercise of discretion . The ruling by the TLC had effectively reduced the amount a taxi owner could charge a driver by requiring that tax payments for which the owner is responsible be included in the amount charged for the lease (called a “lease cap”). After that ruling was found arbitrary by the Court of Appeals, the taxi owners sought “incidental damages” of over $15 million:

Petitioners seek damages based on the Court of Appeals’ determination that the TLC’s effective reduction of the taxi “lease cap” had no rational basis. The Court of Appeals’ determination, however, does not lead to a conclusion that the damages are “incidental to the primary relief sought” (CPLR 7806). Contrary to petitioners’ argument, monetary injury incurred as a result of agency action does not necessarily constitute incidental damages simply because a court later finds the action to have been arbitrary and capricious. Certainly, whether damages are characterized as incidental “is dependent upon the facts and issues presented in a particular case” … . Even so, incidental damages are generally confined to monies that an agency either collected from or withheld from a petitioner and then was obligated to reimburse after a court annulled a particular agency determination. * * *

CPLR 7806 explicitly limits the availability of damages in an article 78 proceeding … . That article 78 permits the court, in certain circumstances, to award damages in an action that also reviews the validity of a government determination does not create a right to damages that does not otherwise exist. * * *…

[T]he TLC’s determination in this case, however unjustified it may have been, was an exercise of discretion; the TLC did consider the issue of imposing the tax rule and decided to impose it. Putting aside the merits of its decision, there is no escaping that the TLC exercised its discretion. Indeed, a governmental function such as rulemaking is necessarily an “exercise of judgment and discretion performed in the public interest,” and is protected as a discretionary act … . Accordingly, in a plenary action, governmental immunity would preclude petitioners from recovering incidental damages. Metropolitan Taxicab Bd of Trade v New York City Taxi & Limousine Commn, 2014 NY Slip Op 01683, 1st Dept 3-18-14

 

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Failure to Mention the Rate of Compensation Required Dismissal of the Contract Cause of Action Under the Statute of Frauds/However the Allegation Defendant Employed Plaintiff Was Sufficient to Allow the Quantum Meruit Cause of Action to Go Forward

The First Department determined the contract cause of action must be dismissed under General Obligations Law 5-701(a)(10) because there was no mention of the rate of compensation,  but that there were sufficient allegations to allow the quantum meruit cause of action to go forward:

In Davis & Mamber, this Court held that for a writing evidencing a contract “[t]o satisfy the Statute of Frauds . . . a memorandum must contain expressly or by reasonable implication all the material terms of the agreement, including the rate of compensation if there has been agreement on that matter” … . … Davis & Mamber precluded a contract claim for failure to satisfy the applicable provision of the statute of frauds, because the relied-on writings lacked any reference to the agreed-on compensation; however, it permitted a quantum meruit claim, because the rule for a writing establishing quantum meruit claims is less exacting, requiring only that the writing “evidenced the fact of plaintiff’s employment [by defendant] to render the alleged services” …. Here, as in Davis & Mamber, the emails … fail to make any reference to payment terms, and accordingly fail to satisfy the statute of frauds as to the contract claim … . However, they suffice to show that [defendant] employed plaintiff, and are therefore enough to satisfy the statute for purposes of plaintiff’s quantum meruit claim.  Chapman, Spira & Carson LLC v Helix BioPharma Corp, 2014 NY Slip Op 01685, 1st Dept 3-18-14

 

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Hearsay in Medical Records Should Have Been Redacted/Not Relevant to Diagnosis and Not Clearly Attributable to Plaintiff as an Admission

Although the error was deemed harmless, the First Department determined hearsay statements should have been redacted from the plaintiff’s medical records.  The plaintiff alleged the police had pushed him over a fence, causing injury.  The defendants alleged plaintiff jumped.  The medical records included references to the plaintiff’s “jumping.” The jury found for the defendants.  The court explained how hearsay in a medical report should be handled:

Hearsay entries regarding the cause of an injury contained in a medical record come into evidence under the business records exception if they are germane to the treatment or diagnosis of plaintiff’s injuries … . Alternatively, the entry may be admissible as an admission, but only if there is evidence that connects the party to the entry … . The challenged entries were neither germane to treatment or diagnosis, nor were they admissions.

There was simply no evidence supporting defendants’ position that the medical doctors needed to know whether plaintiff jumped or was pushed from the fence in order for doctors to determine what medical testing he needed upon admission to the hospital. No medical expert provided such testimony … . Defendants’ only expert, a biomechanical engineer and accident reconstruction expert, opined that plaintiff’s injuries were consistent with a jump from a height and not a push to a fall. He did not give any opinion on issues relating to treatment or diagnosis. This is not a case where the conclusion is so obvious that no medical testimony is needed to lay the appropriate evidentiary foundation … .

The particular challenged entries cannot be characterized as admissions. Although the Lincoln Medical and Mental Health Center Admission Assessment form has a box checked that “patient” is the source of the information, the particular entry on that record, “he jumped off the fence,” is not clearly a direct statement attributable to or a quote of plaintiff. The Ambulance Call Report form identifies “PO” or the police officer as the source of the information that plaintiff “jumped off a fence.” No other evidence in the record identifies plaintiff as being the source of this information. Nor is there any evidence connecting plaintiff to the 1/21/97 entry in the Progress Record that “s/p fell from a fence after being chased by police officers” or the 1/23/97 entry “fall from 2 storeys [sic]” to make them admissible as admissions by him. These entries should have been redacted from the medical records received in evidence.  Benavides v City of New York 2014 NY Slip Op 01682, 1st Dept 3-18-14

 

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Concise Example of a Weight of the Evidence Review

The First Department reversed defendant’s conviction and dismissed the indictment after a weight of the evidence review. The court found too many inconsistencies in the evidence, especially with respect to the identification of the defendant as the attacker.  The decision is a concise example of the kinds of proof problems which are considered significant under a weight of the evidence analysis:

Here, there were troubling discrepancies in the evidence presented to the jury. Most significantly, the complainant testified that the club was sufficiently well-lit for him to see his assailant’s face while the encounter was ongoing. However, the detective who investigated the incident and interviewed the complainant testified, after having had his recollection refreshed with the DD-5 report he prepared in connection with the investigation, that the complainant told him he “did not have a clear recollection of the suspect because it was somewhat dark” in the Maribella. While the complainant denies he told the detective that, the People do not offer, nor can we perceive of, any reason why the detective would have been untruthful not only on the witness stand, but also in a contemporaneous internal report documenting the investigation.

Further clouding the accuracy of the complainant’s identification of defendant was the photograph he picked out of an array. We acknowledge that the complainant did not represent that the person in the photo he chose was his assailant, but rather that he looked like him. Nevertheless, there is a significant difference in the appearances, especially the complexions, of the people depicted in the two photographs, which calls into question the confidence the complainant had in recalling what his attacker looked like.  People v Diaz, 2014 NY Slip Op 01661, 1st Dept 3-13-14

 

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Conclusory and Unsupported Affidavit from Plaintiff’s Expert Did Not Raise a Question of Fact/Standard of Care for Doctors and Mental Health Professionals In the Context of a Patient’s Post-Treatment Suicide Described

The First Department, in a full-fledged opinion by Justice Sweeny, reversed Supreme Court and granted the defendants’ motion for summary judgment dismissing the action.  The complaint alleged that plaintiff’s husband’s suicide was the result of negligence on the part of the treating doctors, psychiatrists and other health professionals.  The court noted that in most instances the affidavit from an expert asserting a deviation from the appropriate standard of care will be sufficient to defeat summary judgment.  But here the affidavit from plaintiff’s expert was conclusory and unsupported:

It is well settled that “a doctor is not liable in negligence merely because a treatment, which the doctor as a matter of professional judgment elected to pursue, proves ineffective. . .” … . Liability is imposed “only if the doctor’s treatment decisions do not reflect his or her own best judgment, or fall short of the generally accepted standard of care” … . Although a plaintiff’s expert may have chosen a different course of treatment, “this, without more, represents, at most, a difference of opinion among [medical providers], which is not sufficient to sustain a prima facie case of malpractice'” … . In the context of mental health providers, we have held that “[w]hen a psychiatrist chooses a course of treatment, within a range of medically accepted choices for a patient after a proper examination and evaluation, the doctrine of professional medical judgment will insulate such psychiatrist from liability” … . Where a psychiatrist fails to predict that a …patient will harm his or herself if released, liability will likewise not attach for a mere error in professional judgment … . While it is true that “the line between medical judgment and deviation from good medical practice is not easy to draw” … , the “prediction of the future course of a mental illness is a professional judgment of high responsibility and in some instance it involves a measure of calculated risk. If liability were imposed on the physician or the State each time the prediction of future course of mental disease was wrong, few releases would ever be made and the hope of recovery and rehabilitations of a vast number of patients would be impeded and frustrated” … . However, if a decision to release a patient was less than a professional medical determination, liability may attach … . A decision will not be insulated by the medical judgment rule if it is not based upon a careful examination … .

Generally, ” the opinion of a qualified expert that a plaintiff’s injuries were caused by a deviation from relevant industry standards would preclude a grant of summary judgment in favor of the defendants'” … . To suffice, the expert’s opinion “must demonstrate the requisite nexus between the malpractice allegedly committed’ and the harm suffered” … . However, where “the expert’s ultimate assertions are speculative or unsupported by any evidentiary foundation . . . the opinion should be given no probative force and is insufficient to withstand summary judgment” … . Park v Kovachevich, 2014 NY Slip Op 01679, 1st Dept 5-13-14

 

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Stray Remarks Doctrine Applied in Action Under New York City Human Rights Law

The First Department determined that the “stray remarks doctrine” applied to actions brought brought under the New York City Human Rights Law.  The court rejected the argument that a statement in an email written weeks after plaintiff’s termination was actionable, asserting the so-called “stray remarks doctrine:”

Plaintiff relies on one remark made in an email exchange that took place weeks after the decision to terminate him was made and that concerned the resolution of his union’s grievance following the termination. In the email, one of defendant’s employees responsible for making the decision to terminate plaintiff declined to reconsider the penalty because of the nature of plaintiff’s convictions and his concern about the liability that defendant would assume if plaintiff committed a similar crime while on company time. However, “[s]tray remarks such as [this], even if made by a decision maker, do not, without more, constitute evidence of discrimination” … .  Indeed, plaintiff did not demonstrate a nexus between the employee’s remark and the decision to terminate him… .

We decline to hold, as urged by plaintiff and amici, that the stray remarks doctrine may not be relied on in determining claims brought pursuant to the City Human Rights Law, even as we recognize the law’s “uniquely broad and remedial purposes” (Bennett, 92 AD3d at 34 [internal quotation marks omitted]). The doctrine is not inconsistent with the intentions of the law, since statements “constitute evidence of discriminatory motivation when a plaintiff demonstrates that a nexus exists between the allegedly discriminatory statements and a defendant’s decision to discharge the plaintiff” … . Godbolt v Verizon NY Inc, 2014 NY Slip Op 01561, 1st Dept 3-11-14

 

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Inexperience or Lack of Sophistication Does Not Toll the Statute of Limitations Re: the Discovery of Fraud/The Test for When the Fraud Should Have Been Discovered in an Objective One

The First Department determined the action alleging the fraudulent churning of trades by an employee of Morgan Stanley was untimely.  The plaintiff argued that plaintiff’s inexperience and lack of sophistication should toll the statute of limitations re: the discovery of the fraud.  The court explained that when the fraud should have been noticed is determined by an objective test:

“The test as to when fraud should with reasonable diligence have been discovered is an objective one,” and the duty of inquiry arises “where the circumstances are such as to suggest to a person of ordinary intelligence the probability that he [or she] has been defrauded” … . Apt v Morgan Stanley DW Inc, 2014 NY Slip Op 01541, 1st Dept 3-11-14

 

“In Transit” Means Between Destinations, Even If “At Rest”

The First Department, in a full-fledged opinion by Justice Saxe, determined that the “in transit” clause of a bond covered the loss which occurred when the stolen cash was in a vault owned by the armored car company.  Under New York law, the term “in transit” covers a larceny which occurs when the stolen item is between destinations, even if it is not being moved at the time:

An “In Transit” provision was discussed and interpreted in the controlling case of Underwood v Globe Indem. Co. (245 NY 111 [1927]). In Underwood, a bond salesman who was attempting to arrange a bond sale to a potential buyer brought the bonds from Pine Street, in lower Manhattan, to West End Avenue near 88th Street, where the buyer gave him a worthless check that had been forged to appear certified, in exchange for the bonds. When the buyer absconded with the bonds, the seller made a claim under a policy for the theft of the bonds while “in transit.” The Court concluded that the transit of the bonds was never completed, because the completion of transit would have involved a lawful transfer of title, whereas the bonds had been taken “by a trick and false device,” without a valid transfer of title (id. at 115). The Court reasoned that “[t]o hold that transit means actual movement, and not a period of rest, is too narrow a construction to give to this undertaking, and is contrary to its full meaning and scope” (id.).

The Underwood analysis was at the heart of the determination in Franklin v Washington Gen. Ins. Corp. (62 Misc 2d 965 [Sup Ct, NY County 1970], affd 36 AD2d 688 [1st Dept 1971]), a determination affirmed by this Court, holding that the test for whether something is “in transit” is “whether the goods, even though temporarily at rest, were still on their way, with the stoppage being merely incidental to the main purpose of delivery” (at 966-967).  CashZone Check Cashing Corp v Vigilant Ins Co, 2014 NY Slip Op 01565, 1st Dept 3-11-14

 

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Landlord Cannot Recover Lost Rent In Action Based Upon Breach of Covenant to Keep the Premises in Good Repair

Over the dissents of two justices, the First Department determined that lost rent was not recoverable for breach of a lease provision requiring a tenant to keep the premises in good repair:

It is well settled that lost rent is not recoverable as damages for breach of a lease covenant requiring a tenant to keep the premises in good repair. An action alleging breach of such a covenant can be brought either before or after the expiration of the lease term … . In Appleton v Marx (191 NY 81 [1908]), the Court of Appeals identified two different measures of damages, depending on when the action is commenced. If the action is brought before the lease expires, a landlord can recover “the injury done to the reversion” (id. at 83), i.e. “the difference between the value of the premises with the improvement and absent the improvement” … . On the other hand, if the action is brought after the expiration of the lease term, “the measure of the damages is the cost of putting the premises into repair” … . In neither circumstance, however, did the Court of Appeals provide that lost rent is included in the measure of damages.  Building Serv Local 32B-J Pension Fund v 101 Ltd Partnership, 2014 NY Slip Op 01544, 1st Dept 3-11-14

 

Being Thrown from the Forks of a Forklift Is a Gravity Related Event Under Labor Law 240 (1)

The First Department determined that being thrown from the front forks of a forklift (Bobcat) is a gravity related event covered by the Labor Law:

…[W]e find that falling from the Bobcat is the type of gravity related event contemplated by the Court of Appeals in Runner v New York Stock Exch., Inc. (13 NY3d 599 [2009]). In Potter v Jay E. Potter Lumber Co., Inc. (71 AD3d 1565 [4th Dept 2010]), the [4th] Department, relying on Runner, similarly found that a worker, who like plaintiff here, was positioned as a counterweight for a load on a forklift and was catapulted forward when the forklift became unstable, was entitled to the protection of Labor Law § 240(1). Penaranda v 4933 Realty, LLC, 2014 NY Slip Op 01547, 1st Dept 3-11-14

 

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