You are here: / First Department

Tag Archive for: First Department

,

No Liability for Third Party Attack Inside Apartment Building; No Evidence Defendant Aware of Alleged Door-Lock Defect

The First Department determined the defendant Housing Authority could not be held liable for a criminal attack inside plaintiff’s apartment building absent proof the entry door lock was defective (and defendant had actual or constructive knowledge of the defect) or that defendant knew the door could be opened without a key:

While an assault on a young victim is most disturbing, a possessor of land is not an insurer of the safety of those who come onto its premises … . It remains that plaintiff’s injuries were the immediate and proximate result of a criminal attack committed by third parties, for whose actions the landlord is not responsible absent a failure to provide “even the most rudimentary security” of an entry door lock … . In the absence of proof that the Housing Authority contributed to the injuries sustained by plaintiff, a visitor to its premises, by failing to timely repair a “visible and apparent” defect in its front-door lock, no liability can be imposed … .  Batista v City of New York, 2013 NY Slip Op 05502, 1st  Dept 7-30-13

 

,

Major Capital Improvement Rent Increase Should Not Have Been Denied in Its Entirety

In a full-fledged opinion by Justice Renwick, the First Department determined the NYS Division of Housing and Community Renewal’s (DHCR’s) complete denial of a rent increase for a Major Capital Improvement (MCI) to an apartment building was arbitrary and capricious.  In the past, DHCR had denied an MCI rent increase only with respect to a small percentage of all the apartments in the improved building which were experiencing problems (like water damage) after the improvement was complete.  Here the DHCR had denied the increase in its entirety (for all apartments) based upon problems in a small number of apartments.  In noting that the DHCR determination was not supported by any relevant precedent (one aspect of a court’s “arbitrary and capricious” review under Article 78), the First Department wrote:

It is well settled that “[j]udicial review of administrative determinations is limited to whether the determination was affected by an error of law or was arbitrary and capricious or an abuse of discretion… . Further, the Court of Appeals has held that an administrative agency’s determination is arbitrary and capricious when it ” neither adheres to its own prior precedent nor indicates its reason for reaching a different result on essentially the same facts'”… . “[A]n agency that deviates from its established rule must provide an explanation for the modification so that a reviewing court can determine whether the agency has changed its prior interpretation of the law for valid reasons, or has simply overlooked or ignored its prior decision'” … .

When a party mounts an attack upon a decision by DHCR as inconsistent with prior determinations, our task is to examine DHCR’s precedent in similar situations. In those cases where the DHCR has denied an exterior renovation (waterproofing and pointing) MCI rent increase outright in the first instance, this Court has upheld such determinations where the owner failed to prove that the work was necessary and comprehensive… . There is, however, no evidence that the DHCR has ever had a specific policy to deny a rent increase outright in the first instance in the type of situation, as here, where defects (water damage) relating to the improvement are found in a relatively small number of the building’s apartments. Nor does DHCR present any evidence of such policy.  Matter of 20 Fifth Ave, LLC, 2013 NY Slip Op 05434, 1st Dept 7-23-13

 

, ,

Dismissal of Complaint Was Too Severe a Sanction for Spoliation

The New York City Housing Authority (NYCHA) sued a security company and others based upon a fire that apparently was started by a cigarette carelessly thrown into a wastebasket.  During discovery defendants requested the surveillance video.  Plaintiff had reviewed the video and apparently had deleted portions of it considered unnecessary.  Defendants’ motion to dismiss pursuant to CPLR 3126 (spoliation of evidence) was granted and the complaint was dismissed.  The First Department determined dismissal of the complaint was too severe a penalty and ordered that plaintiff be precluded from using the video as evidence.  The court explained:

As a threshold issue, NYCHA unconvincingly argues that no sanction is appropriate because litigation was not pending when the video was edited. For a spoliation sanction to be applicable, there need only be the “reasonable anticipation of litigation” … . The day after the fire, [NYCHA] was already viewing and editing the video, identifying images he thought would be relevant to determine how the fire started. These actions indicate that NYCHA may have been contemplating litigation, or at least wanted to identify the culpable person, and therefore the records were destroyed with a “culpable state of mind” … . For the purposes of a spoliation sanction, “[a] culpable state of mind . . . includes ordinary negligence”… .

Although NYCHA should be sanctioned for the destruction of portions of the surveillance video, the dismissal of the complaint was too harsh a remedy. Dismissing an action is “usually not warranted unless the evidence is crucial and the spoliator’s conduct evinces some higher degree of culpability” … . It is a “drastic sanction” and should only be done when a party has destroyed key evidence… .

The record does not support defendants’ contention that dismissal is required because the unredacted video is key evidence without which they will be “substantially prejudiced”… . New York City Hous Auth v Pro Quest Sec, Inc, 2013 NY Slip Op 05429, 1st Dept 7-23-13

 

Janitorial Schedule Alone Not Enough to Demonstrate Lack of Constructive Notice

In a slip and fall case, over a dissent, the First Department determined the defendant did not demonstrate a lack of constructive notice of a wet substance on the stairway of defendant’s apartment building.  Although the defendant produced evidence of a janitorial schedule, the defendant did not present any evidence the schedule was followed on the day of the accident:

…[D]efendant submitted the deposition testimony of its superintendent about the building’s regular janitorial schedule. However, it offered no evidence that the schedule was followed on the day of the accident … . Moreover, constructive notice remains an issue in this case because defendant made no showing as to when the stairway was last inspected before plaintiff’s accident… . Gautier v 941 Intervale Realty, LLC, 2013 NY Slip Op 05432, 1st Dept 7-23-13

 

,

Trivial Defect in Sidewalk Not Actionable/First Floor Tenant Abutting Sidewalk Not a Proper Defendant

In a sidewalk slip and fall case, over a substantial dissent, the First Department determined “a three-quarter-inch expansion joint, which was not filled to grade level, coupled with a one-fourth-inch height differential between slabs … was “trivial” and therefore not actionable as a matter of law…”.  Although there was evidence the width of the expansion joint exceeded the Department of Transportation construction specifications, the First Department noted there was no evidence the sidewalk was constructed with the defect.  The First Department also dismissed the action against the first-floor commercial tenant of the abutting building on the ground that the tenant was not an owner within the meaning of section 7-210 of the Administrative Code of the City of New York.  Fayolle v East W Manhattan Portfolio LP, 2013 NY Slip Op 05431, 1st Dept 7-23-13

 

Criteria for Denial of Trustee Commissions Based On Misconduct, Including Post-Commission-Period Misconduct, Explained

The First Department discussed when a trustee can be denied commissions for misconduct, including misconduct after the commission period (a post-commission-period penalty is rare and none was imposed here):

We conclude that courts have the discretion to take into consideration all of a trustee’s misconduct in determining the grant of annual commission, even conduct that occurred after the period applicable to the commission. Although there are no appellate cases on point, no New York case holds otherwise. As a basic principle, the Surrogate has broad discretion to deny commission to a trustee if the trustee has engaged in misconduct… .. In determining if a commission should be denied, misconduct that is not directly related to the commission being sought may be taken into consideration … . The Restatement (Second) of Trusts § 243 supports this conclusion with a multi-factor analysis (Comment c). Among the factors to be considered under the Restatement in determining if a commission should be denied are whether the trustee acted in good faith, whether the misconduct related to management of the whole trust and whether the trustee completed services of value to the trust (id.). We conclude, therefore, it is within the court’s discretion to determine whether the trustee’s later misconduct bars her from receiving commission.

Trustees can be denied commission “where their acts involve bad faith, a complete indifference to their fiduciary obligations or some other act that constitutes malfeasance or significant misfeasance” … The denial of a commission, however, should not be “in the nature of an additional penalty” (Restatement (Second) of Trusts § 243, Comment a). Rather, it should be based on the trustee’s failure to properly serve the trust (see id.). Matter of Gregory Stewart Trust, 2013 NY Slip Op 05290, 1st Dept 7-16-13

 

, , , ,

Application for Certification as NYC School Bus Driver Should Have Been Denied Because of Past Drug Convictions

The First Department, over a dissent, reversed Supreme Court’s order that petitioner, who had been convicted of two drug offenses (felonies) in the past, be certified as a NYC Department of Education school bus driver.  The First Department explained the relevant criteria as follows:

Where the applicant seeks employment with the New York City Department of Education, the School Chancellor’s regulations apply and Regulation C-105 establishes procedures to be followed …for background investigations of pedagogical and administrative applicants. Regulation C-105 incorporates by reference article 23-A of the Correction Law. Correction Law § 752 (et seq.) prohibits unfair discrimination against a person previously convicted of a crime “unless: (1) there is a direct relationship between one or more of the previous criminal offenses and the specific license or employment sought or held by the individual; or (2) the issuance or continuation of the license or the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals.” Correction Law § 753(a) – (h), which set forth eight factors a public agency must consider in connection with an application for a license, include the person’s duties and responsibilities, the bearing, if any, the criminal offense(s) will have on the person’s “fitness or ability” to perform his or her duties, the time that has elapsed since the occurrence of the crime(s), the seriousness of the crime, information about the applicant’s reputation, etc., and the legitimate interest of the agency in protecting the safety and welfare of specific individuals or the general public. Regulation C-105 provides further that in reviewing the record of an applicant who has a prior criminal conviction, DOE is particularly concerned with offenses, among others, that involve the possession, distribution or selling of controlled substances.

The Chancellor’s Regulation, like the Corrections Law, provides that where the applicant has a certificate of relief from disabilities, that certificate “shall” also be considered (Correction Law § 753[3]). The certificate, however, only creates a “presumption of rehabilitation” with respect to the crime the individual was convicted of, it does not create a prima facie entitlement to the license the person is applying for… .  Matter of Dempsey v NYC Dept of Educ, 2013 NY Slip Op 05289, 1st Dept 7-16-13

 

,

“Direct Financial Loss” Caused by Employee Defined

The First Department explained what “direct financial loss” means in the context of bonds issued to indemnify a commodities futures broker [MF Global] for loss caused by a wrongful act by an employee:

In the bonds, plaintiffs agreed to indemnify MF Global for losses “sustained at any time for . . . any wrongful act committed by any employee . . . which is committed . . . with the intent to obtain financial gain for [the employee]” (emphasis omitted). “Loss” means “the direct financial loss sustained by [MF Global] as a result of any single act, single omission or single event, or a series of related or continuous acts, omissions or events.” The bonds exclude coverage for “[i]ndirect or consequential loss.” A “[w]rongful act,” with respect to trading in commodities and futures, is defined as “any . . . dishonest . . . act committed with the intent to obtain improper financial gain for . . . an employee” … .. * * *

The motion court properly concluded that MF Global’s loss constituted a “direct financial loss.” Although that term is not defined in the bonds, “[a] direct loss for insurance purposes has been analogized with proximate cause”… …

Here, [a broker’s] conduct in making unauthorized trades beyond his margin was the direct and proximate cause of MF Global’s loss… . New Hampshire Ins Co v MF Global, 2013 NY Slip Op 05291, 1st Dept 7-16-13

 

Complaint Sufficiently Alleged Facts to Support Piercing the Corporate Veil

In a full-fledged opinion by Justice Mazzarelli (which dealt with many corporation law issues not mentioned here), the First Department determined the complaint alleged sufficient facts to meet the criteria for piercing the corporate veil:

To make out a cause of action for liability on the theory of piercing the corporate veil because the corporation at issue is the defendant’s alter ego, the complaining party must, above all, establish that the owners of the entity, through their domination of it, abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against the party asserting the claim such that a court in equity will intervene … . Piercing of the corporate veil is not a cause of action independent of that against the corporation; it is established when the facts and circumstances compel a court to impose the corporate obligation on its owners, who are otherwise shielded from liability… . “Because a decision whether to pierce the corporate veil in a given instance will necessarily depend on the attendant facts and equities, the New York cases may not be reduced to definitive rules governing the varying circumstances when the power may be exercised” … . Indeed, this Court has observed:  “In determining the question of control, courts have considered factors such as the disregard of corporate formalities; inadequate capitalization; intermingling of funds; overlap in ownership, officers, directors and personnel; common office space or telephone numbers; the degree of discretion demonstrated by the alleged dominated corporation; whether the corporations are treated as independent profit centers; and the payment or guarantee of the corporation’s debts by the dominating entity . . . [n]o one factor is dispositive”… .   Tap Holdings LLC v Orix Fin Corp, 2013 NY Slip Op 05293, 1st Dept 7-16-13

 

“John Doe” Party Who Was Not Served Waived Objection to Personal Jurisdiction

The First Department determined that an informal appearance by a “John Doe” party who was not served with the complaint waives any objection to personal jurisdiction.  The action stemmed from plaintiff’s decedent’s drowning at Coney Island:

CPLR 1024 allows for the commencement of an action against an unknown party…. While the use of a John Doe designation does not exempt a plaintiff from the requirement of serving process on the intended defendant by an authorized method under CPLR article 3…, a defendant may appear informally by actively litigating the action before the court…. When a defendant participates in a lawsuit on the merits, he or she indicates an intention to submit to the court’s jurisdiction over the action, and by appearing informally in this manner, the defendant confers in personam jurisdiction on the court…. Thus, absent a formal “appearance” by a defendant, a defendant may nevertheless appear in an action where his or her counsel communicates a clear intent to participate… . Taveras v City of New York, 2013 NY Slip Op 05199, 2nd Dept 7-10-13

 

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