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THE FACT THAT PLAINTIFF WAS SPECIFICALLY TARGETED FOR A HOME INVASION DID NOT PRECLUDE A FINDING THAT INADEQUATE BUILDING SECURITY WAS A PROXIMATE CAUSE (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant property owners should not have been awarded summary judgment in this home invasion case. The fact that plaintiff was specifically targeted did not preclude a finding that building security was inadequate:

Plaintiff was the victim of a home invasion of his apartment in a building owned and operated by defendants. The incident began when someone knocked on plaintiff’s apartment door and asked by name for his niece, who also lived in the apartment. When plaintiff looked through the peephole, he thought he saw a young woman, but the peephole was blurry, as it had been since plaintiff had moved in three or four years earlier. Plaintiff also testified that the chain guard on the door did not function properly. When plaintiff opened the door slightly, the young woman and a man he had not seen through the peephole pushed their way into the apartment and pistol whipped him. After demanding $5,000 that had purportedly been sent to plaintiff’s niece, the two assailants assaulted plaintiff for an extended period and looted the apartment before leaving.

Defendants failed to establish their entitlement to summary judgment dismissing the complaint, as evidence that an attack was targeted toward a particular person does not sever the proximate cause link as a matter of law in cases alleging negligent security … . In light of the record evidence that the building’s locks were malfunctioning, and that plaintiff’s apartment peephole and chain lock were defective, proximate cause is for the factfinder to decide … . Cabrera-Perez v Promesa Hous. Dev. Fund Corp., 2024 NY Slip Op 01338, First Dept 3-14-24

Practice Point: The fact that plaintiff was deliberately and specifically targeted for a home invasion did not preclude a finding that malfunctioning locks and a defective peephole constituted a proximate cause of the invasion and consequent injury.

 

THE STATUTORY CRITERIA FOR A MOTION TO CHANGE VENUE IN CPLR 510(3) WERE NOT MET; THE MOTION SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the defendants’ motion to change the venue in this insurance-coverage dispute should not have been granted because the statutory criteria in CPLR 510(3) were not met. The statute requires detailed information about the witnesses who will testify and how those witnesses would be inconvenienced if venue is not changed:

To warrant a change of venue pursuant to CPLR 510(3), “[t]he affidavit in support of such motion must contain the names, addresses and occupations of the prospective witnesses, must disclose the facts to which the proposed witnesses will testify at the trial, must show that the proposed witnesses are, in fact, willing to testify and must show how the proposed witnesses would be inconvenienced in the event that a change of venue is not granted” … . Defendants have failed to meet any part of this standard. Defendants’ general statements that nonparty witnesses involved in the renovation project will be inconvenienced by venue in New York County is inadequate to satisfy the standard … . Corner of Walnut LLC v Tompkins Ins. Agencies, Inc., 2024 NY Slip Op 01339, First Dept 3-14-24

Practice Point: CPLR 510(3) describes the required contents of a motion to change venue which includes detailed information about the witnesses who will testify and how the witnesses will be inconvenienced if venue is not changed.

 

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PLAINTIFF, A NEW YORK RESIDENT AND A SHAREHOLDER IN DEFENDANT LONDON CORPORATION, ALLEGED DEFENDANT WRONGFULLY FAILED TO PAY DIVIDENDS; THE LONDON DEFENDANT’S MOTION TO DISMISS ON FORUM NON CONVENIENS GROUNDS SHOULD HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant’s motion to dismiss on “forum non conveniens” grounds should have been granted. Plaintiff is a New York resident and the defendant is a London corporation (Anderson). Plaintiff, a shareholder of Anderson, alleged Anderson failed to pay dividends to shareholders:

The doctrine of forum non conveniens permits a court to dismiss an action when it finds that “in the interest of substantial justice the action should be heard in another forum” (CPLR 327[a]). In reviewing the motion court’s exercise of discretion, this Court, however, may exercise such discretion independently … . The factors to be considered on a forum non conveniens motion include: “the burden on the New York courts, the potential hardship to the defendant, and the unavailability of an alternative forum in which plaintiff may bring suit. The court may also consider that both parties to the action are nonresidents and that the transaction out of which the cause of action arose occurred primarily in a foreign jurisdiction. No one factor is controlling” … . New York courts “need not entertain causes of action lacking a substantial nexus with New York” … .

… Although plaintiff is a resident of New York, Anderson, its documents, and the witnesses are all located in the United Kingdom. The dispute involves an accounting of a British private company and will likely involve the application of British law to determine what duty, if any, is owed to plaintiff. Furthermore, the United Kingdom has a stronger interest than New York in the actions, duties, and governance of its companies … . Hayes v Anderson & Sheppard Ltd., 2024 NY Slip Op 01344, First Dept 3-14-24

Practice Point: Here plaintiff, a New York resident and a shareholder in defendant London corporation, alleged defendant wrongfully failed to pay dividends. The London defendant’s motion to dismiss on forum non conveniens grounds should have been granted, criteria explained.

 

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THE AMENDED LIMITED LIABILITY COMPANY AGREEMENT SUPERSEDED THE PRIOR ORAL SIDE AGREEMENT BECAUSE IT INCLUDED AN UNAMBIGUOUS INTEGRATION AND MERGER CLAUSE (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Manzanet-Daniels, over a two-justice dissenting opinion, determined the amended Limited Liability Company (LLC) agreement with an integration and merger clause superseded the prior oral side agreement, called an exit opportunity agreement:

… [T]he amended LLC agreement contains a clear and unambiguous integration and merger clause providing that it “constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter;” the “subject matter” being the “allocation of profits and losses among the Members, distributions among the Members, [and] the rights, obligations and interests of the Members to each other and to the Company” … . * * *

… [T]he merger clause explicitly states that the amended LLC agreement supersedes all prior written and oral agreements concerning the subject matter of the amended LLC agreement … . Behler v Kai-Shing Tao, 2024 NY Slip Op 01337, First Dept 3-14-24

Practice Point: Here the unambiguous integration and merger clause in the amended Limited Liability Company agreement precluded enforcement of a prior oral side agreement. Although the issue here appears simple, it was the subject of a full-fledged majority opinion and a full-fledged two-justice dissenting opinion.

 

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AFTER BEING TOLD THE PREMISES WAS NOT DEFENDANT’S RESIDENCE, THE PROCESS SERVER DID NOT EXERCISE DUE DILIGENCE TO DETERMINE WHERE DEFENDANT RESIDED BEFORE RESORTING TO NAIL-AND-MAIL SERVICE; THE DEFAULT JUDGMENT AGAINST DEFENDANT VACATED (FIRST DEPT).

The First Department determined plaintiff failed to show defendant Lopez was properly served at the traverse hearing. The default judgment against Lopez was vacated. The decisions provides a rare opportunity to look inside a traverse hearing:

During the traverse hearing, plaintiff’s process server testified that he posted the summons and complaint on the door of the subject premises located at 713 Prospect Avenue in the Bronx (the premises), after making four attempts to serve Lopez there. However, the process server also testified that while he was attempting to personally serve Lopez at the premises, which his employer had represented was her residence, someone at the premises told him Lopez did not live there. This testimony established that the nail-and-mail service of process on Lopez was insufficient because plaintiff’s process server did not first comply with the due diligence requirement of CPLR 308(4) … . Upon obtaining information that Lopez did not reside at the premises, due diligence required the process server to investigate her whereabouts on the date of service and whether the service address was actually her dwelling place or usual place of abode before resorting to the alternative method of serving her with the summons and complaint by nail-and-mail service … . There is no evidence that the process server did so, and the affidavit of service simply states that the process server served Lopez at her “dwelling place/usual place of abode.” Casanova v Lopez, 2024 NY Slip Op 01269, Frist Dept 3-12-24

Practice Point: Here the process server was told defendant did not reside at the premises but he did not exercise due diligence (CPLR 308(4)) to find out where defendant did reside before resorting to nail-and-mail service. The default judgment against defendant was vacated.

 

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THE EVIDENCE WAS SUFFICIENT TO WARRANT SUMMARY JUDGMENT IN FAVOR OF PLAINTIFF IN THIS LABOR LAW 240(1) FALLING-OBJECT CASE; BRICK WORK WAS BEING DONE ON THE BUILDING ABOVE WHERE PLAINTIFF WAS STANDING AND PLAINTIFF WAS STRUCK BY A FALLING BRICK; THERE WAS NO SAFETY NETTING TO PROTECT AGAINST FALLING OBJECTS (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, in a full-fledged opinion by Justice Manzanet-Daniels, determined plaintiff was entitled to summary judgment on his Labor Law 240(1) cause of action in this falling object case. Plaintiff was unloading a truck in a designated “delivery zone” near the building where bricks were being drilled out to accommodate the installation of windows. Plaintiff was struck on the head by a brick which damaged his hard hat and injured his head:

In the context of falling objects, the risk to be guarded against is the unchecked or insufficiently checked descent of the object” … . It is settled law that a plaintiff establishes a prima facie entitlement to liability on a Labor Law § 240(1) “falling object” claim where he shows that he was struck by a falling object, that such object required securing for the purposes of the undertaking, and that the lack of adequate overhead protection failed to shield against the falling of such object and therefore proximately caused plaintiff’s injuries … . * * *

… [A] “… plaintiff’s prima facie case in a Labor Law § 240(1) action involving falling objects is not dependent on whether the plaintiff observed the object that hit him. . A plaintiff is not required to show the exact circumstances under which the object fell, where a lack of a protective device proximately caused the injuries. Further, [the general contractor’s project manager] identified a photograph of the brick that struck plaintiff, stating that the brick in the photo was consistent with the lone type of brick that was used on the faÇade of the building at the time of the incident … . Torres-Quito v 1711 LLC, 2024 NY Slip Op 01279, Frist Dept 3-12-24

Practice Point: The absence of safety netting to protect against falling objects was deemed the proximate cause of plaintiff’s injury from a falling brick in this Labor Law 240(1) case.

 

DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT DISMISSING THE ALTER-EGO (PIERCE-THE-CORPORATE VEIL) CLAIMS SHOULD HAVE BEEN GRANTED; CRITERIA EXPLAINED (FIRST DEPT). ​

The First Department, in a full-fledged opinion by Justice Shulman, reversing Supreme Court, determined plaintiff did not raise a question of fact about whether the corporate veil should be pierced. The court explained the relevant criteria:

A party seeking to pierce the corporate veil must show “complete domination of the corporation in respect to the transaction attacked” and that “such domination was used to commit a fraud or wrong against the plaintiff” … . Because “New York law disfavors disregard of the corporate form” ,,,===… , “[m]ere conclusory allegations that the corporate structure is a sham are insufficient to warrant piercing the corporate veil” … . Instead, the party seeking to pierce the corporate veil “must establish that the owners, through their domination, abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against that party” … . * * *

In considering domination, courts consider 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” … . Cortlandt St. Recovery Corp. v Bonderman, 2024 NY Slip Op 01250, First Dept 3-7-24

Practice Point: The evidentiary criteria for piercing the corporate veil were not met by the plaintiff. Defendants’ summary judgment motion should have been granted.

 

THERE IS A QUESTION OF FACT WHETHER DEFENDANTS LAUNCHED AN INSTRUMENT OF HARM BY ERECTING AN OPAQUE FENCE AROUND A CONSTRUCTION SITE WHICH BLOCKED DRIVERS’ AND PEDESTRIANS’ LINES OF SIGHT IN AN INTERSECTION; PLAINTIFF PEDESTRIAN WAS STRUCK BY A CAR WHEN HE STEPPED BEYOND THE FENCE INTO A LANE OF TRAFFIC (FIRST DEPT).

The First Department, reversing Supreme Court, determined there was a question of fact whether defendant general contractor and defendant engineer launched an instrument of harm by erecting an opaque fence around a construction site which extended into a road parallel to the crosswalk. Plaintiff, a pedestrian, assumed the fence had blocked off the road to traffic, but there was one lane open. Plaintiff was struck by a car when he walked past the end of the fence into the lane:

The fabric-covered fencing obstructed the line-of-sight of pedestrians and motorists who were in the vicinity of the crosswalk at 29th Street and 9th Avenue in Manhattan, as the fence enclosure extended halfway into 29th Street, paralleling the crosswalk. Plaintiff, believing 29th Street to be fenced-off to traffic, crossed more than halfway through the crosswalk, against a “Don’t Walk” signal, at which time he was hit by a vehicle that passed through a narrow lane on the other side of the fence enclosure from where plaintiff had approached. There was no construction activity taking place on that Saturday, and crossing guards and traffic agents who were ordinarily deployed during actual construction hours were not provided on the weekend. Triable issues exist whether the fence enclosure created a foreseeable, unreasonable risk to others, or exacerbated risks inherent at the subject intersection … .Hyland v MFM Contr. Corp., 2024 NY Slip Op 01252, First Dept 3-7-24

Practice Point: Here an opaque fence parallel to a crosswalk made it appear the road had been blocked off. Plaintiff pedestrian, who assumed the street was blocked off and was using the crosswalk parallel to the fence, was struck by a car when he stepped beyond the end of the fence into a lane of traffic. There was question of fact whether the erection of the fence by defendants launched an instrument of harm.

 

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BURGLARY SECOND DEGREE AS A SEXUALLY MOTIVATED FELONY IS NOT A REGISTRABLE OFFENSE UNDER SORA; DEFENDANT’S SEX OFFENDER ADJUDICATION VACATED (FIRST DEPT).

The First Department, vacating defendant’s sex offender adjudication, noted that burglary second degree as a sexually motivated felony is not a registrable sex offense on SORA:

As the People concede, burglary in the second degree as a sexually motivated felony is not a registrable sex offense under Sora (see People v Conyers, 212 AD3d 417, 418 [1st Dept 2023], lv denied 39 NY3d 1110 [2023]; People v Simmons, 203 AD3d 106, 111-112 [1st Dept 2022], lv denied 38 NY3d 1035 [2022]). We therefore modify the judgment as indicated. People v Burgos, 2024 NY Slip Op 01255, First Dept 3-7-24

Practice Point: Burglary second as a sexually motivated felony is not a registrable offense under SORA.

 

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ALTHOUGH THE STATUTE OF LIMITATIONS FOR REFORMATION OF A CONTRACT BASED ON A SCRIVENER’S ERROR HAD PASSED; THE CLEAR ERROR PRODUCED AN ABSURD RESULT WHICH CANNOT BE ADOPTED OR CONDONED BY THE COURT (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, in a full-fledged opinion by Justice Oing, determined plaintiff’s motion for summary judgment finding defendant “indemnitor” liable as guarantor of a $44 million debt should have been granted. Plaintiff argued the term “borrower,” instead of “indemnitor,” was mistakenly used to indicate the identity of the guarantor of the loan. Although the statute of limitations on the alleged “scrivener’s error” action had run, to interpret the language of the guaranty in the manner argued by defendant (i.e., “borrower” was the intended term) resulted in an absurdity, which would have rendered the loan unguaranteed:

… [A] court may correct a scrivener’s error outside of a claim for reformation of a contract in “those limited instances where some absurdity has been identified or the contract would otherwise be unenforceable either in whole or in part” … . In other words, a court is not “constrained to adopt an absurd phrasing in the contract merely because the statute of limitations for reformation had passed, when the error is obvious and the drafters’ intention clear” … . * * *

… [A] guaranty must be read in the context of the loan agreement and “in a manner that accords the words their ‘fair and reasonable meaning,’ and achieves ‘a practical interpretation of the expressions of the parties'” … . In other words, a “contract should not be interpreted to produce a result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the parties” … . NCCMI, Inc. v Bersin Props., LLC, 2024 NY Slip Op 01161, First Dept 3-5-24

Practice Point: A clear-cut scrivener’s error in a contract which produces an absurd result the parties could not have intended will not be adopted or condoned by a court, despite the running of the statute of limitations on a contract-reformation cause of action.

 

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