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Administrative Review of a Rent Overcharge Petition Should Have Been Granted; Allegations of Fraud Overcame Four-Year Statute of Limitations

The First Department, over a dissent, reversed Supreme Court’s dismissal of an Article 78 petition for administrative review of the denial of petitioner’s rent overcharge complaint by the NYS Division of Housing and Community Renewal (DHCR).  Petitioner’s rent was increased from $572 to $1750 a month.  To justify that adjustment, the landlord was required to have spent $39,000 improving the apartment.  Petitioner submitted evidence that supported her position the landlord spent very little on the improvements.  The landlord, however, produced no evidence of what was actually spent and, therefore, there was no basis in the record for the DHCR’s determination that the $1750 rental amount was justified.  The First Department noted that the four-year statute of limitations did not apply because there was substantial evidence of fraud:

Under the standard set forth in Matter of Grimm v State of N.Y. Div. of Hous. & Community Renewal Off. of Rent Admin. (15 NY3d 358 [2010]), petitioner made a sufficient showing of fraud to require DHCR to investigate the legality of the base date rent … . Although the “look-back” for an apartment’s rental history is ordinarily limited to the four-year period preceding the date that the petitioner files the complaint …, where fraud is alleged and there is “substantial indicia of fraud on the record,” DHCR is obliged to investigate whether the base date rate was legal and “act[s] arbitrarily and capriciously in failing to meet that obligation”… .

Thus, we find that DHCR’s disparate treatment of the parties’ claims was arbitrary. While the agency made no attempt to evaluate the legitimacy of petitioner’s claims despite their consistency and degree of detail, DHCR credited the owner’s implicit claim that it spent $39,000 to renovate the apartment simply because “it would not be difficult for anyone with any experience in this industry to believe it could have taken $39,000 … to update the appearance and equipment in an apartment which had not changed hands for thirty-two years.” This justification for the agency’s determination is irrational. Finding that the owner “could have” spent $39,000 …, where the owner never submitted any evidence controverting petitioner’s claims is not equivalent to finding that the owner actually made improvements costing that much. Accordingly, this matter should be remanded to DHCR to give the parties the opportunity to present evidence in connection with the legality of the base rate rent. Matter of Boyd v NYS Division of Housing and Community Renewal…, 2013 NY Slip Op 06966, 1st Dept 10-29-13

 

 

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Loss of Teeth is “Serious Injury” Re: Assault Second

The First Department determined the loss of teeth (in an assault) was a “serious injury” within the meaning of Penal Law 10.00 (10) because the loss of teeth constituted a “serious and protracted disfigurement” notwithstanding replacement by a prostheses:

The element of serious physical injury (Penal Law § 10.00[10]) was established, because the victim’s permanent loss of four front teeth constituted a protracted impairment of her health or protracted loss or impairment of the function of a bodily organ … . Since the teeth are lost, the victim can never eat with them, notwithstanding that she has been fitted with a prosthetic device; accordingly, her loss is not just protracted, but permanent. While the fact that damage to an organ has been successfully repaired may affect whether the injury qualifies as serious …, this does not apply when the organ is permanently lost, irrespective of whether it is replaced by a prosthesis.

Furthermore, the victim’s loss of four front teeth also constituted a “serious and protracted disfigurement,” since “a reasonable observer would find her altered appearance distressing or objectionable” … . The fact that the victim received a removable prosthetic device did not ameliorate the seriousness of her injuries, since whenever she removes the device, the disfigurement will be readily apparent.  People v Everett, 2013 NY Slip Op 06954, 1st Dept 10-24-13

 

 

Effect of “Notwithstanding” Clause; Criteria for Reformation of Contract

In a full-fledged opinion by Justice Acosta, the First Department affirmed Supreme Court’s denial of defendant’s motion to dismiss a breach of contract complaint.  Plaintiffs contended the floor share price in the “notwithstanding” clause of the contract was an error, and submitted a supporting email referring to a different price in opposition to the motion to dismiss. The court agreed that the email was sufficient to overcome the dismissal motion and explained the powerful legal effect of a “notwithstanding” clause and the criteria for reformation of a contract:

It is well settled that trumping language such as a “notwithstanding” provision “controls over any contrary language” in a contract … . This Court has likewise noted that “inconsistency provisions” — i.e. those that dictate which of two contract provisions should prevail in the event of an inconsistency — “are frequently enforced by courts” … .

In construing statutes and contracts, the U.S. Supreme Court has remarked that “the use of . . . a notwithstanding’ clause clearly signals the drafter’s intention that the provisions of the notwithstanding’ section override conflicting provisions of any other section” … . Thus, the effect of a “notwithstanding” clause will prevail “even if other provisions of the contract[] might seem to require . . . a [conflicting] result” … . * * *

Before a court will grant reformation of a contract, the party demanding this equitable remedy ” must establish his right to such relief by clear, positive and convincing evidence'” … . The purpose of reformation is not to “alleviat[e] a hard or oppressive bargain, but rather to restate the intended terms of an agreement when the writing that memorializes that agreement is at variance with the intent of both parties” … . In order to “overcome the heavy presumption” that the contract embodies the parties’ true intent, the party seeking reformation must “show in no uncertain terms, not only that mistake or fraud exists, but exactly what was really agreed upon between the parties” … . Warberg Opportunistic Trading Fund LP v GeoResources, Inc, 2013 NY Slip Op 06826, 1st Dept 10-22-13

 

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Failure to Call Treating Physician Allowed Negative Inference in Case Alleging Mother Incapable of Caring for Child by Reason of Mental Illness

The First Department determined Family Court properly found mother incapable of caring for her child by reason of mental illness and noted the court properly drew a negative inference from the mother’s failure to call her own treating physician to rebut the allegations in the petition and a suspended judgment is not available:

The evidence, including testimony from a court-appointed psychologist who examined respondent mother, provided clear and convincing evidence that she is presently and for the foreseeable future unable, by reason of mental illness, to provide proper and adequate care for the child (see Social Services Law § 384-b[4][c], [6][a]…). The psychologist testified that respondent mother suffers from, inter alia, bipolar disorder, which interferes with her ability to care for the child, placing the child at risk of becoming neglected if she is returned to her mother’s care. Moreover, respondent mother’s testimony confirms that she lacks insight into the nature and extent of her mental illness … .

Contrary to respondent mother’s contention, the Family Court properly exercised its discretion by drawing a negative inference against her for failing to call her treating physician or other medical providers to rebut the allegations raised in the petition and by the testimony after she expressed an intention to call her providers … .

The Family Court did not err in denying respondent mother’s application for a suspended judgment. This dispositional alternative is not available after a fact-finding determination of mental illness (see SSL § 384-b [3] [g], [4] [c]…). Matter of Love Joy F, 2013 NY Slip Op 06792, 1st Dept 10-17-13

 

Plaintiff Cannot Proceed With Case Taking a Position Different from That Taken in a Prior Action

The First Department determined plaintiff could not proceed with her discrimination action against an organization (ECEC) which had agreed to hire her because there had been a determination in another discrimination action that she was employed by the defendant (East Bronx Day Care) in that action.  The court explained the doctrine of judicial estoppel:

The doctrine of judicial estoppel prevents a party who assumed a certain position in a prior proceeding and secured a ruling in his or her favor from advancing a contrary position in another action, simply because his or her interests have changed … . Also known as the “doctrine of estoppel against inconsistent positions” …, the doctrine “rests upon the principle that a litigant should not be permitted to lead a court to find a fact one way and then contend in another judicial proceeding that the same fact should be found otherwise” … . Applying this doctrine, we find that plaintiff has failed to show that she was “qualified” for the ECEC position, as required to make out a prima facie case of discrimination since plaintiff is judicially estopped from denying that, at the time she was allegedly discriminated against by defendants, she was actually employed with East Bronx Day Care, which would make it impossible for her to carry out her duties for defendants. Becerril v City of New York Dept of Health & Mental Hygiene, 2013 NY Slip Op 06783, 1st Dept 10-17-13

 

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Stay During Appellate Process Expires Five Days After Court of Appeals Denies Leave to Appeal

A police officer was dismissed from the force just before his retirement pension vested. The dismissal was vacated by Supreme Court because of flaws in serving the officer with notice of the charges.  The First Department affirmed and the Court of Appeals denied leave to appeal.  The First Department noted that the stay of the proceedings which was in effect during the appeals process (CPLR 5519(a)) terminated five days after the Court of Appeals denied leave (CPLR 5519(e)(ii)).  The commissioner’s failure to hold a new hearing and issue a new dismissal order within thirty days of the denial of leave resulted in the automatic vesting of the officer’s pension. Matter of Toolasprashad v Kelly, 2013 NY Slip Op 06772, 1st Dept 10-17-13

 

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Erasure of Audio Recording Constituted Negligent Spoliation of Evidence Under New York Common Law—No Need to Turn to Federal Law Re: Preservation of Electronically Stored Information

In a full-fledged opinion by Justice Saxe, the First Department determined the City’s erasure of an audio recording related to a police chase that resulted in injuries to plaintiffs constituted negligent spoliation under New York common law and there was no need to rely on federal authority re: the spoliation of electronically stored information [ESI]:

…[P]laintiffs’ spoliation claim can be fully addressed under New York’s common-law spoliation doctrine. However, because plaintiffs rely exclusively on the [federal] Zubulake IV rule that “[o]nce a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold'” to preserve evidence (220 FRD at 218), we briefly address the question of whether we need to import Zubulake’s rules into the established New York common-law rules as to spoliation of non-ESI evidence.

The cases in which this Court has explicitly adopted the Zubulake rulings have involved ESI discovery … . The usefulness of the Zubulake standard in the e-discovery arena, is … that it “provides litigants with sufficient certainty as to the nature of their obligations in the electronic discovery context and when those obligations are triggered” (93 AD3d at 36). At the same time, … Zubulake “is harmonious with New York precedent in the traditional discovery context” … . This is an area that did not need greater certainty or clarification. * * *

We … conclude that reliance on the federal standard is unnecessary in this context. Zubulake interpreted federal rules and earlier federal case law to adapt those rules to the context of ESI discovery. However, the erasure of, and the obligation to preserve, relevant audiotapes and videotapes, can be, and has been, fully addressed without reference to the federal rules and standards. Strong v City of New York, 2013 NY Slip Op 06655, 1st Dept 10-15-13

 

Affidavit Supporting Motion to Strike Did Not Demonstrate Good Faith Effort to Resolve Issue with Opposing Counsel

In finding the defendant’s cross-claim should not have been struck as a sanction for failure to appear for depositions, the First Department noted that the affidavit in support of the motion to strike did not demonstrate a good faith effort to resolve the matter with opposing counsel:

A party moving to strike a pleading pursuant to CPLR 3126 is required to submit an affirmation that counsel for the moving party has made “a good faith effort to resolve the issues raised by the motion” with opposing party’s counsel (Uniform Rules for Trial Cts [22 NYCRR] 202.7). To be deemed sufficient, the affirmation must state the nature of the efforts made by the moving party to reconcile with opposing counsel (22 NYCRR 202.7[c]…).

Here, [defendant] GSY’s affirmation of its good faith effort to resolve the dispute with [cross-claim defendant] Shavolian did not substantively comply with the requirements of 22 NYCRR 202.7 … . In its affirmation in support of the motion to strike, GSY stated that it made “good faith efforts to proceed with disclosure,” pointing to a letter it faxed to Shavolian’s counsel. There is nothing in the letter, which was written before the continued deposition date, indicating that GSY’s counsel actually conferred with Shavolian’s lawyer in a good faith attempt to resolve the dispute… .  241 Fifth Ave Hotel LLC v GSY Corp, 2013 NY Slip Op 06514, 1st Dept 10-8-13

 

Elements of Several Computer Crimes Described

In a full-fledged opinion by Justice Saxe, the First Department affirmed defendant’s convictions for computer trespass, computer tampering, unlawful duplication of computer related material, and criminal possession of computer related material.  Defendant was on disability leave from his employer Time Warner when he used/installed software to gain access to passwords and log-in information.  The First Department took the opportunity to discuss the proof requirements for the elements of these offenses, some of which have little or no appellate authority.  With respect to the “without authorization” and “computer material” elements of computer trespass, the court wrote:

The term “without authorization” is defined as “access of a computer service by a person without permission . . . or after actual notice to such person, that such access was without permission” (Penal Law § 156.00[8]). While there is apparently no appellate authority on this point, the question of how to prove that use of a computer was not authorized was addressed in People v Klapper (28 Misc 3d 225 [Crim Ct, NY County 2010]), which considered a charge of unauthorized use of a computer (Penal Law § 156.05). The Klapper court held that no allegations supported the claim that the defendant’s access was unauthorized, because for access to be without authorization, the defendant must have had knowledge or notice that access was prohibited or “circumvented some security device or measure installed by the user” (28 Misc 3d at 230). Of course, here, evidence fully supports the finding that defendant gained access to Time Warner’s computers when he was unauthorized to do so. There is proof that Time Warner announced in its employee handbook that employees on disability leave were prohibited from entering the building, and the company deactivated those employees’ access cards; this establishes that defendant had actual notice that he lacked authorization to enter the building and to use the company’s computers. * * *

As to whether the information defendant gained access to constituted “computer material” for purposes of Penal Law § 156.10, the statutory definition of the term includes “any computer data or computer program” that “is not and is not intended to be available to anyone other than the person . . . rightfully in possession thereof . . . and which accords or may accord such rightful possessors an advantage over competitors or other persons who do not have knowledge or the benefit thereof” (Penal Law § 156.00[5]). With the use of user log-in information and passwords obtained through his installation of the keystroke-logging program Winvestigator, defendant was able to access information not intended to be available to anyone but the rightful user, namely, Time Warner and its authorized employees. Specifically, he gained access to … confidential information about customers’ accounts, including address, phone number, subscription, service call records, and billing and payment information, as well as a list of any problems customers reported or services they requested. Customer information … is the sort of information that businesses have an interest in protecting and keeping away from competitors …. Accordingly, it qualifies as computer data that is not intended to be available to anyone other than the rightful possessor and that gives (or may give) the rightful possessor an advantage over competitors. People v Puesan, 2013 NY Slip Op 06530, 1st Dept 10-8-13

 

Denial of For Cause Juror Challenge Required Reversal

The First Department reversed defendant’s conviction because the trial court erroneously denied a “for cause” juror challenge:

The court erred in denying defendant’s challenge for cause to a prospective juror who stated his belief and concern that he recognized defendant from his neighborhood, along with his fear that he would “run into” defendant or his friends. After being apprised of defendant’s address, the panelist expressed an increased concern, resulting from the fact that he lived near that address. The panelist also expressed a “feeling of defendant’s guilt,” because he believed the neighborhood was “infected with drugs and drug dealers,” After further inquiry regarding whether the panelist could follow the law and remain impartial, he ultimately stated, “I’ll try. . . . I can’t promise you anything. . . .” Viewing his statements in context and as a whole, they did not amount to an unequivocal assurance of impartiality… .  People v Tavarez, 2013 NY Slip Op 06515, 1st Dept 10-8-13

 

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