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PLAINTIFF ALLEGED DEFENDANT CORPORATION’S REGISTRATION STATEMENT CONTAINED FALSE AND MISLEADING CLAIMS WHICH INDUCED PLAINTIFF TO BUY STOCK IN DEFENDANT’S CORPORATION; THE CLAIMS IN DEFENDANT’S REGISTRATION STATEMENT WERE MERE PUFFERY AND WERE NOT ACTIONABLE VIOLATIONS OF THE SECURITES ACT OF 1933 (FIRST DEPT).

he First Department, reversing Supreme Court, determined the complaint alleging several violations of the Securities Act of 1933 should have been dismissed. The complaint alleged that it was induced to buy stock by defendant’s registration statement. The First Department concluded the statements not false or misleading and therefore were not actionable:

The … registration statement … includes the following statements: “We believe we have created a financially strong company built upon a foundation of three thriving, independent brands with significant global growth potential.” “New product development is a key driver of the long-term success of our brands. We believe the development of new products can drive traffic by expanding our customer base.” “We face intense competition in our markets, which could negatively impact our business. . . Our ability to compete will depend on the success of our plans to improve existing products, to develop and roll-out new products, [and] to effectively respond to consumer preferences.” * * *

… [T]he statements were nonactionable immaterial puffery and/or nonactionable opinion … .

The statements did not become misleading by omission as a result of a failure to disclose a slight decline in “same-store sales” for a single quarter’s sales … . City of Warwick Mun. Empls. Pension Fund v Restaurant Brands Intl. Inc., 2022 NY Slip Op 06315, First Dept 11-10-22

Practice Point: Statements which are mere puffery are not actionable violations of the Securities Act of 1933. Here plaintiff alleged false and misleading claims in defendant corporation’s registration statement induced plaintiff to buy defendant corporation’s stock. Supreme Court should have granted defendant’s motion to dismiss the complaint.

 

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BG, AN ADOLESCENT OFFENDER (AO) WITHIN THE MEANING OF THE “RAISE THE AGE ACT,” ASSAULTED A MAN AND THREW HIM ON THE SUBWAY TRACKS; A BYSTANDER JUMPED DOWN TO HELP THE ASSAULT VICTIM; THE BYSTANDER WAS KILLED BY A SUBWAY TRAIN WHICH STOPPED BEFORE REACHING THE ASSAULT VICTIM; THE JUDGE RULED THE MATTER SHOULD BE TRANSFERRED TO FAMILY COURT; THE PEOPLE SOUGHT A WRIT OF PROHIBITION WHICH WAS DENIED (FIRST DEPT).

The First Department denied the People’s request for a writ of prohibition to prevent respondent judge from sending a criminal case involving an adolescent offender (AO) to Family Court pursuant to the “Raise the Age Law.” In criminal matters involving AO’s the Raise the Age Law allows judges to decide whether the matter should heard in Family Court. Here BG, the AO, assaulted the victim  in a subway station and threw the victim on the tracks. A bystander jumped down to try to help the victim. The train was able to stop before reaching the assault victim, but the bystander who tried to help the victim was killed by the train:

Justice Semaj rejected the People’s argument that BG engaged in “heinous” conduct by pushing the surviving victim onto the tracks and leaving him there unconscious, observing that this argument was “rebutted by the video footage offered by the People,” which showed that the surviving victim “was conscious at the time he was pushed on to the tracks and even if he became unconscious once on the tracks, [BG] and another young person are seen going into the tracks and seemingly moving [him], possibly inadvertently, but . . . out of harm’s way.” The court further noted that Hueston [the bystander] chose to jump onto the train tracks, and that BG left after he “was told to leave by [Hueston].” … . * * *

“A writ of prohibition against a judge may be issued only when a court acts or threatens to act without jurisdiction in a matter of which it has no power over the subject matter or where it exceeds its authorized powers in a proceeding over which it has jurisdiction” … . “Prohibition cannot be used merely to correct errors of law, however egregious and however unreviewable” … . The Court of Appeals has stressed that, in the context of criminal proceedings, the writ should be issued “only when a court exceeds its jurisdiction or authorized power in such a manner as to implicate the legality of the entire proceeding, as for example, the prosecution of a crime committed beyond the county’s geographic jurisdiction” … . “Although the distinction between legal errors and actions in excess of power is not always easily made, abuses of power may be identified by their impact upon the entire proceeding as distinguished from an error in a proceeding itself” … . Matter of Clark v Boyle, 2022 NY Slip Op 06316, First Dept 11-10-22

Practice Point: Pursuant to the “Raise the Age Law” criminal cases involving adolescent offenders (AO’s) are reviewed by a judge who can chose to have the case heard in Family Court. The AO in this case assaulted a man and threw him onto subway tracks. The man survived but a bystander who tried to help him was killed by the train. The People sought a writ of prohibition to prevent the transfer to Family Court. The First Department laid out the strict criteria for a writ of prohibition and denied it.

 

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PETITIONER NYC FIREFIGHTER WAS DENIED ACCIDENTAL DISABILITY RETIREMENT (ADR) BENEFITS WITHOUT ANY EXPLANATION IN THE MEDICAL BOARD’S FINDINGS; THE MATTER WAS REMITTED FOR A NEW DETERMINATION BASED ON A RECORD ADEQUATE FOR REVIEW (FIRST DEPT).

The First Department, annulling the denial of accidental disability retirement (ADR) benefits in this firefighter-disability case, determined that the Medical Board’s failure to explain the reasons for its conclusion there was no accident and the injuries were not debilitating required remittal to the Medical Board and a new determination by the Board of Trustees with a record adequate for review:

… [T]he Medical Board found petitioner to be disabled on account of the left shoulder injuries he sustained on March 22, 2018. However, citing “inconsistencies” and a “lack of witnessed accounts . . . that would suggest . . . an accident,” the Board denied petitioner an ADR benefit. When the insufficient explanation was raised before the Board of Trustees, they acknowledged that a witness statement was not necessary, and stated that they did not understand what the Medical Board was referring to with regard to inconsistencies in the manner of petitioner’s injuries. Nevertheless, when the Board of Trustees reconsidered the matter, it simply took a vote on petitioner’s application without any deliberation or indication as to why he had been denied an ADR benefit, issuing a conclusory denial without any explanation as to why they had adopted the Medical Board’s unsupported statements about alleged inconsistencies concerning the nature of petitioner’s injuries.

The Medical Board failed to provide any factual basis concerning the alleged inconsistencies and why it did not believe petitioner’s injuries to be accidental. Further, the determination of the Medical Board was devoid of any articulated basis for its conclusion that the limitations of petitioner’s cervical and lumbar spine were not a debilitating or incapacitating condition for performing the duties of a firefighter. The failure to set forth an adequate statement of the factual basis for the determination forecloses the possibility of fair judicial review … . Matter of Reynolds v New York City Fire Pension Fund, 2022 NY Slip Op 06330, First Dept 11-10-22

Practice Point: Here the injured NYC firefighter was denied accidental disability retirement (ADR) but the Medical Board did not give any reasons for its conclusion. The findings were annulled and the matter remitted for a new determination and the creation of an adequate record for review.

 

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ALTHOUGH DEFENDANT PORT AUTHORITY OF NEW YORK AND NEW JERSEY (PANYNJ) WAS THE LESSOR OF THE PROPERTY WHERE PLAINTIFF WAS INJURED IN THIS LABOR LAW 241(6) ACTION, IT WAS AN “OWNER” WITHIN THE MEANING OF THE LABOR LAW AND, THEREFORE, WAS A PROPER DEFENDANT; ALTHOUGH PLAINTIFF WAS NOT AT THE CONSTRUCTION SITE, SHE WAS IN AN AREA USED TO CREATE MATERIALS FOR THE CONSTRUCTION SITE, WHICH IS COVERED BY THE LABOR LAW (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined Port Authority of New York and New Jersey (PANYNJ), although the lessor of the property where plaintiff was injured in this Labor Law 241 (1) action, was an “owner” within the meaning of the Labor Law and therefore was a proper defendant. Although plaintiff was not injured at the construction site, she was injured where materials were being prepared for use in the construction:

PANYNJ failed to establish its entitlement to summary judgment, as the record presents issues of fact as to whether PANYNJ was liable to plaintiff under Labor Law § 241(6). Although PANYNJ leased control of the property to RHCT and transferred responsibility for the maintenance of the terminal to RHCT, PANYNJ was nevertheless the owner of property for purposes of Labor Law § 241(6). The operating agreement between PANYNJ and RHCT permitted RHCT to use the property, and set out conditions on RHCT’s use of the property. The agreement also set forth the scope and manner of the work to be performed and provided that RHCT was required to provide PANYNJ with a monthly profit and loss report. The general manager for PANYNJ testified that RHCT was required to obtain PANYNJ’s consent to sublicense any portion of the property. Additionally, under the purchase order between Tutor Perini and TBTA, the owner of the bridge project, PANYNJ was to be paid a port security charge, among other charges.

As a result, the evidence created a sufficient nexus between PANYNJ and the project, and thus between PANYNJ and plaintiff, to support an imposition of liability under Labor Law § 241(6) … . Plaintiff’s task of grinding bevels on the deck panels to be installed on the bridge also falls under the Labor Law because the protections of the statute extend to areas where materials or equipment are being prepared to be used in construction … .Musse v Triborough Bridge & Tunnel Auth., 2022 NY Slip Op 06171, First Dept 11-3-22

Practice Point: Although defendant was a lessor of the property where plaintiff was injured in this Labor Law 241(6) action, it was an “owner” within the meaning of the Labor Law and therefore was a proper defendant. Even though plaintiff was not injured at the construction site, the Labor Law applies because she was injured in an area used to prepare materials for the construction site.

 

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THE LESSEE OF THE PROPERTY, INFOR, CONTRACTED FOR THE WORK BEING DONE AT THE TIME OF PLAINTIFF’S INJURY IN THIS LABOR LAW 240(1) ACTION; THEREFORE INFOR WAS AN “OWNER” WITHIN THE MEANING OF THE LABOR LAW AND WAS A PROPER DEFENDANT (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the lessee of the property (Infor) was a proper party in this Labor Law 240(1) action because it had contracted for the work done at the time of plaintiff’s injury:

Plaintiff claims he was drilling metal tracks onto a wall when the Baker scaffold on which he was standing overturned, causing him to fall and sustain injuries. 635 owned the building in which plaintiff was working, and defendant SL Green Realty Corp. (SL Green) was 635’s managing agent. Infor leased the premises from 635, and retained JRM as the general contractor to perform construction work. JRM, in turn, retained Montec and nonparty Premier Builders, Inc., plaintiff’s employer, as subcontractors to perform various aspects of the work. * * *

The Labor Law § 240(1) claim should be reinstated against Infor, as the court incorrectly concluded that Infor was not a proper Labor Law defendant. Although Infor leased the premises from 635, it may still be held liable as an “owner” under the statute because it contracted for the construction work being performed at the time of plaintiff’s accident … . For the same reasons that plaintiff is entitled to partial summary judgment against 635 and JMR, plaintiff’s motion for partial summary on the Labor Law § 240(1) claim against Infor should be granted, and Infor’s motion for summary judgment dismissing the claim against it should be denied. Otero v 635 Owner LLC, 2022 NY Slip Op 06172, First Dept 11-3-22

Practice Point: A lessee may be considered a property “owner” in a Labor Law 240(1) action when the lessee contracted for the work being done when the plaintiff was injured.

 

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THE ORDER DENYING A MOTION TO VACATE OR MODIFY A PRIOR ORDER DID NOT MEET THE CRITERIA FOR AN ORDER “APPEALABLE AS OF RIGHT” AND THEREFORE WAS NOT CONSIDERED BY THE APPELLATE DIVISION; THE CRITERIA FOR AN “ORDER APPEALABLE AS OF RIGHT” WERE EXPLAINED (FIRST DEPT)

The First Department noted that the order refusing to vacate or modify a prior order was not appealable:

… [T]his Court lacks jurisdiction to consider the portion of defendants’ appeal from the denial of the motion to vacate. Pursuant to CPLR 5701(a)(3), a party may appeal to this Court as of right from an order refusing to vacate or modify a prior order, but only where the prior order “would have been appealable as of right” pursuant to CPLR 5701(a)(2) if it had been the result of a motion on notice. Here, the Extension Denial Order would not have been appealable as of right if it had been the result of a motion made on notice. The Extension Denial Order was not a substantive ruling, rather it denied defendants’ request for an extension of its time to post a bond. The order did not “involve[] some part of the merits” of the case (CPLR 5701[a][2][iv]) or “affect[] a substantial right” (CPLR 5701[a][2][v]) of the parties, or otherwise fit within CPLR 5701(a)(2) such that it would be appealable as of right. Largo 613 Baltic St. Partners LLC v Stern, 2022 NY Slip Op 06168, First Dept 11-3-22

Practice Point: An order denying a motion to vacate or modify a prior order must meet the criteria for “an order appealable as of right” to be considered on appeal. Here the denial of the motion to vacate the prior order was not a substantive ruling (it asked for an exension of time to post a bond) and therefore did not meet the “appealable as of right” criteria.

 

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BECAUSE THE JUDGE DEVIATED FROM THE STATUTORY CRITERIA FOR THE CALCULATION OF TEMPORARY MAINTENANCE, THE JUDGE SHOULD HAVE EXPLAINED THE REASONS FOR THE DEVIATION; THE TEMPORARY MAINTENANCE AND CHILD SUPPORT AWARDS WERE VACATED (FIRST DEPT).

The First Department, vacating the award of pendente lite maintenance and child support, determined, because the temporary maintenance deviated from the statutory presumptive award,, the judge should have explained the reasons for the deviation:

To determine temporary maintenance, the motion court was required to apply Domestic Relations Law § 236(B)(5-a). While the court appears to have followed the calculations provided in that section to arrive at a presumptive award of temporary maintenance, it then deviated from the presumptive amount by directing the continued payment of the wife’s rent, cell phone bills, utilities, and other household expenses. This statutory formula is intended to cover all the spouse’s basic living expenses, including housing costs … . Where, as here, there is a deviation, the statute requires the court to explain the reasons for any deviation from the result reached by the formula factors … .

Accordingly, we vacate the pendente lite maintenance award and remand the matter for a reconsideration of the award in light of the directives of Domestic Relations Law § 236(B) (5-a), including the articulation of any other factors the court considers in deviating from the presumptive award …  As the amount of maintenance affects calculation of child support, we further vacate the child support award for recalculation based on the directives of Domestic Relations Law § 240(1-b)(b)(5) (iii)(I) and (vii)(C), which require, for child support purposes, income adjustments based on the amount of maintenance ordered. Severny v Severny, 2022 NY Slip Op 06094, First Dept 11-1-22

Practice Point: Any deviation from the statutory criteria for the calculation of temporary maintenance must be explained. The failure to explain the deviation required the vacation of the both the temporary maintenance and the child support awards.

 

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DEFENDANT DEMONSTRATED IT DID NOT HAVE CONSTRUCTIVE NOTICE OF THE WET CONDITION WHICH ALLEGEDLY CAUSED PLAINTIFF’S SLIP AND FALL (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant demonstrated it did not have constructive notice of the wet condition which allegedly caused plaintiff’s slip and fall:

Defendant demonstrated prima facie that it did not have actual or constructive notice of the dangerous condition by producing evidence of its maintenance activities on the day of the accident, specifically, that the wet condition did not exist when the stairs were cleaned by the porter less than three hours before plaintiff fell … , and that there were no complaints about a wet condition on the stairs in the morning prior to her accident … . Defendant was not required to produce a written schedule or log of its cleaning activities; the unrefuted testimony of its porter was sufficient. The porter’s testimony also established that there was a reasonable cleaning schedule in place that addressed the alleged ongoing and recurring condition … .

Plaintiff failed to raise an issue of fact concerning who created the wet condition and when … . Plaintiff presented no evidence that the ongoing and recurring condition was routinely left unaddressed by defendant, nor did she raise a factual issue that defendant’s cleaning routine “was manifestly unreasonable so as to require altering it” … . Hartley v Burnside Hous. Dev. Fund Corp., 2022 NY Slip Op 06065, First Dept 10-27-22

Practice Point: The defendant demonstrated it did not have constructive knowledge of the wet condition alleged to have cause plaintiff’s slip and fall by showing the stairs were cleaned three hours before the fall and no one had complained about the wet condition in the morning prior to the fall.

 

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THE CERTIFICATION OF ACKNOWLEDGMENT IS PRIMA FACIE EVIDENCE THE DECEDENT EXECUTED THE CONTRACT, BUT THAT EVIDENCE CREATES ONLY A REBUTTABLE PRESUMPTION; PLAINTIFF PRESENTED SUFFICIENT EVIDENCE TO RAISE A QUESTION OF FACT WHETHER DECEDENT SIGNED THE AGREEMENT (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the certification of acknowledgment is prima facie proof the contract was executed by decedent but the certification only creates a rebuttable presumption:

… [T]he agreement was notarized by defendant Rosemary Bellini. “Certification of the acknowledgment or proof of a writing . . . in the manner prescribed by law for taking and certifying the acknowledgment or proof of a conveyance of real property within the state is prima facie evidence that it was executed by the person who purported to do so” (CPLR 4538). * * *

“The certification of acknowledgment becomes prima facie evidence that the writing was executed by the person who acknowledged having done so. [This] [p]rima facie evidence” is not conclusive; rather, it “creates a rebuttable presumption” … .  Plaintiff marshalled considerable evidence casting doubt on whether decedent actually signed the purported agreement and, if so, whether he knew or understood what he was signing. Thus, plaintiff should be given a chance to rebut the presumption created by Bellini’s notarization … . Langbert v Aconsky, 2022 NY Slip Op 06067, First Dept 10-27-22

Practice Point: Here the certification of acknowledgment was prima facie proof decedent signed the agreement but that proof only creates a rebuttable presumption. But plaintiff raised a question of fact whether decedent actually executed the agreement.

 

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DEFENDANT’S FAILURE TO COMPLY WITH DISCOVERY ORDERS WAS WILLFUL AND CONTUMACIOUS WARRANTING STRIKING ITS ANSWER (FIRST DEPT).

The First Department, reversing Supreme Court, determined the defendant’s (Motors’s) failure to turn over records despite four court orders and defendant’s attempt to mislead plaintiff about its compliance with the discovery requirements warranted striking defendant’s answer:

We find that Motors’s failure to produce these records was willful and contumacious, in view of the fact that it did not do so despite four courts orders, and in light of its interrogatory response implying that it had complied with its discovery obligations in an apparent attempt to mislead plaintiff (see CPLR 3216 …). Although the other defendants were represented by the same counsel as Motors, there is no indication that they exercised control over Motors or were in possession of Motors’s records … .

Motors’s dilatory behavior warrants striking its answer … . Lopez v Bronx Ford, Inc., 2022 NY Slip Op 06068, First Dept 10-27-22

Practice Point: Here defendant’s failure to comply with four discovery orders and its attempt to mislead plaintiff about its compliance was deemed willful and contumacious warranting striking defendant’s answer.

 

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