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THE CONTINUING WRONG DOCTRINE APPLIES TO THIS COMPLEX BREACH OF CONTRACT ACTION SUCH THAT EACH BREACH WAS AN ACTIONABLE EVENT; THEREFORE THE STATUTE OF LIMITATIONS DID NOT START RUNNING FOR ALL SUBSEQUENT BREACHES WHEN THE FIRST BREACH OCCURRED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Mazzarelli, over a two-justice dissent, reversing Supreme Court, determined the continuing wrong doctrine applied to this breach of contract action such that each breach was actionable and, therefore, the statute of limitations for all subsequent breaches was not triggered by the first breach. The subjects of the contracts were commercial mortgage-backed securities (CMBS). The complaint alleged defendant CWCI breached a collateral management agreement (CMA):

Generally speaking, a claim accrues for statute of limitations purposes when “all of the factual circumstances necessary to establish a right of action have occurred, so that the plaintiff would be entitled to relief” … . However, the mere fact that a claim has accrued and the time to bring an action on it has commenced to run does not mean that a new claim, with a new limitations period, may not arise out of a new set of facts that forms part of a series with the original wrong. [Plaintiff] maintains that the allegations against CWCI comprise such a series of individual wrongs. Thus, it relies on cases such as Bulova Watch Co. v Celotex Corp. (46 NY2d 606 [1979]). There, a new claim, with a new limitations period, was held to have accrued each time the plaintiff, the obligee under a bond that guaranteed that the defendant roofer would make repairs necessary to ensure the watertightness of the plaintiff’s roof over the 20-year life of the bond, asked the defendant, to no avail, to repair a leak. Accordingly, the plaintiff’s failure to commence suit within the limitations period based on the initial leak did not bar the action. * * *

We find that the continuing wrong doctrine does apply to this case. CWCapital Cobalt VR Ltd. v CWCapital Invs. LLC, 2021 NY Slip Op 02487, First Dept 4-27-21

 

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PLAINTIFF WAS RAPED IN DEFENDANTS’ BAR/RESTAURANT AND RAISED QUESTIONS OF FACT ABOUT THE ADEQUACY OF SECURITY AND THE FORESEEABILITY OF THE THIRD-PARTY ASSAULT; DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff’s third-party-assault-negligence action alleging inadequate security at defendant bar/restaurant should not have been dismissed. The building was owned by Harvard Agency and leased to Turnmill. Plaintiff was raped in a basement restroom. Plaintiff raised questions of fact by evidence a rape had occurred at a nearby bar owned by the same family, the bar was in a high crime area, and there were no security cameras in the basement:

Our courts have long held that “‘New York landowners owe people on their property a duty of reasonable care under the circumstances to maintain their property in a safe condition'” … . “Although landlords . . . have a common-law duty to minimize foreseeable dangers on their property, including the criminal acts of third parties, they are not the insurers of a visitor’s safety … . …

… [P]laintiff raised an issue of fact by pointing to evidence that Harvard was aware of another assault at a bar owned by the same family and located only a few blocks from Turnmill ( … [… ‘[t]here is no requirement . . . that the past experience relied on to establish foreseeability be of criminal activity at the exact location where plaintiff was harmed or that it be of the same type of criminal conduct to which plaintiff was subjected”]).

… [P]laintiff submitted a detailed expert affidavit indicating that the bar/restaurant was in a high crime area, and that the security employed was inadequate and a deviation from reasonable security standards … . Jane Doe v Turnmill LLC, 2021 NY Slip Op 02495, First Dept 4-27-21

 

KESHA, A RECORDING ARTIST, MADE PUBLIC STATEMENTS THAT HER MUSIC PRODUCER, GOTTWALD, HAD DRUGGED AND SEXUALLY ABUSED HER; GOTTWALD WAS PROPERLY AWARDED SUMMARY JUDGMENT IN HIS DEFAMATION ACTION; GOTTWALD DID NOT HAVE TO PROVE MALICE BECAUSE HE WAS NOT A GENERAL-PURPOSE OR LIMITED-PURPOSE PUBLIC FIGURE; TWO DISSENTERS DISAGREED (FIRST DEPT).

The Second Department, over a two-justice dissent, determined plaintiff music producer, Gottwald, was entitled to summary judgment on his defamation action against Kesha, a recording artist with whom Gottwald had entered a contract. Gottwald alleged Kesha falsely claimed Gottwald had drugged and sexually abused her in an effort to force Gattwald to release her from the recording contract. The allegations were published in text messages to Lady Gaga and others. The Second Department found that Gottwald was not a general-purpose or a limited-purpose public figure and provided detailed definitions of both. Therefore Gottwald did not have to prove malice on Kesha’s part. The dissent disagreed with the majority’s conclusion Gottwald was not a public figure:

A person can only be a general-purpose public figure if “he [or she] is a ‘celebrity’; his [or her] name a ‘household word’ whose ideas and actions the public in fact follows with great interest “and ‘invite[s] attention and comment'” … . * * *

To be considered a limited purpose public figure Gottwald must have: (1) successfully invited public attention to his views in an effort to influence others prior to the incident in question, (2) voluntarily injected himself into a public controversy related to the subject of the current litigation, (3) assumed a position of prominence in the public controversy, and (4) maintained a regular and continuing access to the media to influence the outcome of the public controversy.

Gottwald cannot be found to be a limited-purpose public figure because he has not done any of these things. Gottwald v Sebert, 2021 NY Slip Op 02456, First Dept 4-22-21

 

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IT IS NOT CLEAR FROM THE CONTRACT WHETHER DEFENDANT TRUSTEE WAS TO PERFORM A MERELY MINISTERIAL FUNCTION OR A GATEWAY FUNCTION IN ACCEPTING ASSETS FOR THE TRUST FROM A NONPARTY WHICH WAS ACTING FRAUDULENTLY; THERE ARE QUESTIONS OF FACT ABOUT WHETHER THE DAMAGES ASSOCIATED WITH ACCEPTING NON-NEGOTIABLE ASSETS WERE DIRECT OR INDIRECT AND WHETHER A FIDUCIARY DUTY WAS BREACHED (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Mazzarelli, reversing Supreme Court, determined the breach of contract, breach of fiduciary duty action against defendant trustee, Wilmington, should not have been dismissed. Wilmington acted as a trustee for assets transferred to the trust by a nonparty. The contract stated Wilmington would be responsible only for its own negligence but also stated no non-negotiable assets were to be placed into the trust. The nonparty which transferred assets to the trust acted fraudulently and made risky investments rendering the trust assets out-of-compliance with state law. Plaintiff sued Wilmington for breach of contract and breach of fiduciary duty. Wilmington argued that any damages suffered by plaintiff from the assets transferred by the nonparty were indirect, not direct, and therefore barred by the trust agreements:

… [I]t can be argued that, in light of Wilmington’s promise not to accept nonnegotiable assets into the trusts, and to be responsible for its own negligence, maintaining the value of the assets in the trusts was inherent in the service Wilmington agreed to provide. Thus, there is merit to plaintiffs’ argument that when the assets proved not to be negotiable, they lost the benefit of their bargain and were entitled to recover as direct damages the diminution in value, and the concomitant costs of restoring the assets to negotiable status, such as professional fees. * * *

… [A]t this stage of the litigation, it is difficult to discern whether the parties contemplated that Wilmington would have to pay the damages sought by plaintiffs if it failed to perform under the trust agreements. Again, the agreements provided that Wilmington would be liable for “its own negligence,” which a reasonable factfinder could consider as recognition that Wilmington, if it did not perform its duties in accordance with a minimum level of care, would need to pay more than the nominal damages represented by its fee. * * *

Even though the breach of contract and breach of fiduciary duty claims involved the same conduct, the fiduciary duty claim alleges a breach of a noncontractual duty relating to the trustee’s independent duty to perform nondiscretionary ministerial duties with respect to the negotiability of assets. Thus, the fact that Wilmington’s failure to prevent nonnegotiable assets from entering the trusts breached both fiduciary and contractual duties does not bar plaintiffs from seeking damages related to the former … . Bankers Conseco Life Ins. Co. v Wilmington Trust, N.A., 2021 NY Slip Op 02355, First Dept 4-20-21

 

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ALTHOUGH THE MOLINEUX EVIDENCE OF TWO PRIOR BURGLARIES WAS RELEVANT TO THE DEFENDANT’S INTENT TO BURGLARIZE THE BUILDING IN WHICH HE WAS FOUND BY THE POLICE, THE EXTENSIVE, DETAILED EVIDENCE OF THE PRIOR BURGLARIES RENDERED THE EVIDENCE TOO PREJUDICIAL, CONVICTION REVERSED (FIRST DEPT).

The First Department, reversing defendant’s attempted burglary conviction, determined the Molineux evidence of two prior burglaries to demonstrate intent, although admissible in principle, was too extensive and detailed to the extent its probative value was outweighed by its prejudicial effect. Defendant was seen by a tenant in a private area where the apartment fire escapes could be accessed. When the police arrived defendant told them he used that area to smoke marijuana while waiting for his girlfriend to get off work. The evidence of two prior burglary convictions was introduced to prove the defendant’s intent (to commit burglary):

We find however, that the trial court improvidently exercised its discretion in allowing the People to introduce such a significant quantum of evidence regarding the two burglaries. The trial court permitted the People to call three witnesses to testify regarding the prior two burglaries: the tenant of the apartment that had been burglarized, the investigating police officer and the building’s owner. … The court allowed the introduction of still photographs of the burglarized apartment and building. The court also allowed the introduction of a surveillance video from the February 2011 incident and allowed the building owner to testify about the video. That video depicts a male individual standing outside of the locked front door of the building. The male is seen kicking the door several times until the door breaks open. The male is then seen entering the building, ascending the stairway toward the roof, and, after apparently finding the door locked, the male is seen coming back downstairs and leaving the building.

The probative value of this extensive evidence of the two prior burglaries went well beyond the issue of defendant’s intent and did not outweigh the prejudicial effect to defendant. The jury could well have imputed propensity as opposed to defendant’s intent. Further, the court’s limiting instructions were insufficient to minimize its prejudicial effect. People v Rodriguez, 2021 NY Slip Op 02367, First Dept 4-20-21

 

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CONFLICTING EVIDENCE ABOUT WHETHER THERE WAS VIDEO SURVEILLANCE OF THE AREA WERE PLAINTIFF ALLEGEDLY SLIPPED AND FELL PRECLUDED SUMMARY JUDGMENT (FIRST DEPT).

The First Department determined defendants’ motion for summary judgment in this slip and fall case was properly denied. The incident report indicated there was video surveillance of the area where plaintiff allegedly slipped and fell on blueberries on the supermarket (Bogopa’s) floor. An employee of defendant testified he did not know of any surveillance cameras in the supermarket:

The Bogopa defendants moved for summary judgment to dismiss the complaint. In support of their motion, the Bogopa defendants submitted, among other things, a store incident report which checked a “yes” box when asked if the incident was captured on video, which should be preserved. * * *

The record presents contradictory statements from the Bogopa defendants regarding whether surveillance videos recording the time and location of plaintiff’s fall were available and should have been preserved pursuant to an express video-preservation directive in the incident report prepared by the Bogopa defendants following plaintiff’s accident. While the incident report mentions a surveillance recording, the Bogopa defendant’s employee testified that he did not “know of” any surveillance cameras in the supermarket.

The Bogopa defendants argue in their motion for summary judgment that there is no evidence that establishes the existence of surveillance cameras in the supermarket. We disagree. Where, as here, potential video evidence existed of the alleged hazardous location that may have been of assistance to plaintiff in establishing whether defendants created and/or had notice of an alleged slippery, blueberry-strewn floor hazard, the motion by the Bogopa defendants for summary judgment dismissing the complaint against them should be denied. Banks v Bogopa, Inc., 2021 NY Slip Op 02236, Frist Dept 4-13-21

 

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A THEORY ASSERTED FOR THE FIRST TIME IN OPPOSITION TO DEFENDANT’S SUMMARY JUDGMENT MOTION, AFTER DISCOVERY HAD ENDED, SHOULD NOT HAVE BEEN CONSIDERED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the defendants’ motion for summary judgment in this breach of contract action should have been granted. Plaintiff raised a new theory in opposition to the motion, after discovery had ended:

Plaintiff Frank Darabont, represented by his agent, plaintiff Creative Arts Associates, entered into an agreement to develop and run the television series The Walking Dead in exchange for fixed payments for each episode of the series, as well as backend compensation contingent upon the show’s profitability, as calculated based on “Modified Adjusted Gross Receipts” (MAGR), with defendant AMC Network Entertainment LLC producing the series and exhibiting it on its own cable channel.

Plaintiffs’ claim that AMC breached the implied covenant of good faith and fair dealing by crafting the formula for MAGR arbitrarily, irrationally, or in bad faith was improperly asserted for the first time in opposition to defendants’ motion for summary judgment … . … [T]here are no allegations in the complaint that AMC engaged in misconduct by formulating the MAGR definition in such a manner as to deprive plaintiffs of contractual benefits. … [I]t would be prejudicial to require AMC to defend against a theory of liability asserted only after discovery had concluded. Darabont v AMC Network Entertainment LLC, 2021 NY Slip Op 02240, First Dept 4-13-21

 

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REJECTING THE 2ND DEPARTMENT’S CRITICISM OF THE 1ST DEPARTMENT’S THIRD-PARTY-ASSAULT JURISPRUDENCE, THE 1ST DEPARTMENT HELD THE BROKEN DOOR THROUGH WHICH THE ASSAILANTS GAINED ACCESS TO THE BUILDING WHERE PLAINTIFF’S DECEDENT WAS SHOT AND KILLED WAS NOT A PROXIMATE CAUSE OF THE SHOOTING BECAUSE THE ASSAILANTS WOULD HAVE FOUND A WAY TO ENTER THE BUILDING EVEN IF THE DOOR LOCK WERE WORKING (FIRST DEPT).

The First Department determined the landlord, New York City Housing Authority (NYCHA), was not liable for the shooting death of plaintiff’s decedent, Murphy, despite conclusive video evidence the locking mechanism on the door the assailants used to enter plaintiff’s decedent’s building was broken. Disagreeing with the Second Department’s characterization of the First Department’s jurisprudence in similar third-party assault cases, the First Department held that the assailants were intent on shooting plaintiff’s decedent and would have gained entrance to the building even if the locking mechanism worked. Therefore the assailants’ actions constituted the sole proximate cause of plaintiff’s decedent’s death:

We disagree with the [Second Department’s] implication that under this Court’s jurisprudence the fact that a victim was targeted obviates the need for any inquiry into the security measures in place at the subject premises. Indeed, we are aware of no case in the First Department that suggests that a landowner would avoid liability even if minimal precautions would have actually prevented a determined assailant from gaining access. In reality, however, that is hardly ever the case. In Buckeridge v Broadie (5 AD3d 298, 300), … the assailants were “sophisticated” and disguised themselves to gain entry. In Cerda v 2962 Decatur Ave. Owners Corp. (306 AD2d 169, 170 [1st Dept 2003]) … the plaintiff was assaulted by a “team of assassins.” … [C]ases confirm that this Court has not abandoned the notion that more than the simple fact that a victim was targeted is necessary to shield a property owner from liability. … [T]he cases confirm that, given the minimal steps a landowner is required to take to secure premises, it has no duty to outwit or outthink those who are determined to overcome those steps.

The record establishes that Murphy’s killers were intent on gaining access to the building. … [C]onsidering that at least one other person, by all appearances oblivious to the brouhaha … , entered the building at the same time, it does not take a leap of the imagination to surmise that [the assailants] would have gained access to the building by following another person in or forcing such a person to let them in. This negates the unlocked door as a proximate cause of the harm that befell Murphy, and makes her assailants’ murderous intent the only proximate cause. Estate of Murphy v New York City Hous. Auth., 2021 NY Slip Op 02246, First Dept 4-13-21

 

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THE PROPERTY OWNER WAS NOT LIABLE FOR THE ACTIONS OF THE INDEPENDENT CONTRACTOR; PLAINTIFF TRIPPED OVER THE HOSE USED BY THE CONTRACTOR TO DELIVER OIL (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined defendant property owner, Goldner, was not liable for the actions of defendant independent contractor, UMEC, because Goldner did not oversee UMEC’s work and, based upon the protective measures taken by UMEC in the past, the incident was not foreseeable. UMEC delivered oil to Goldner and plaintiff allegedly tripped over the hose which ran across the sidewalk. In the past UMEC had set up safety measures to protect pedestrians from the tripping hazard:

“Generally, a party that hires an independent contractor cannot be held liable for the negligence of that independent contractor” … . “The primary justification for this rule is that one who employs an independent contractor has no right to control the manner in which the work is to be done and thus, the risk of loss is more sensibly placed on the contractor” … . There are various exceptions to this general rule, including “(1) [n]egligence of the employer in selecting, instructing, or supervising the contractor”; (2) “[n]on-delegable duties of the employer, arising out of some relation toward the public or the particular plaintiff”; and (3) “[w]ork which is specially, peculiarly, or inherently dangerous” … .

Under the circumstances presented, we disagree with the motion court’s finding that triable issues of fact exist as to whether Goldner may be liable for the work of an independent contractor where danger is readily foreseeable. The deposition testimony shows that Goldner did not supervise, monitor, or control UMEC when the oil would be delivered. The evidence also shows that UMEC had a prior history of consistently placing safety measures to prevent a pedestrian from tripping over the oil hose. In light of the preexisting precautions established by UMEC and lack of any complaints from prior oil deliveries, Goldner was not placed on notice of the existence of a dangerous condition … . Here, the danger arose “because of the negligence of the independent contractor or [its] employees, which negligence [was] collateral to the work and which [was] not reasonably to be expected” … . Linder v United Metro Energy Servs. Corp., 2021 NY Slip Op 02250, First Dept 4-13-21

 

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IN THIS RESIDENTIAL-MORTGAGE-BACKED-SECURITIES BREACH OF CONTRACT ACTION, THE LAW OF THE CASE DOCTRINE DID NOT PRECLUDE RAISING THE “BORROWING STATUTE” (STATUTE OF LIMITATIONS) DEFENSE IN AN AMENDED ANSWER SERVED AS OF RIGHT (WITHOUT LEAVE OF COURT); LAW OF THE CASE DOCTRINE EXPLAINED IN SOME DEPTH (FIRST DEPT). ​

The First Department, in a full-fledged opinion by Justice Gische, reversing (modifying) Supreme Court, determined that the amended answer with counterclaims, alleging for the first time that the action was untimely under the borrowing statute (CPLR 202), was properly served “as of right” (without leave of court) and the inclusion of the borrowing statute defense was not barred by the law of the case doctrine (LOTC). The opinion includes an in-depth discussion of the LOTC. The opinion rejected the arguments that certain contract provisions were conditions precedent as opposed to independent contractual obligations and certain breach of contract claims were really claims for indemnification. All of the contracts stem from residential-mortgage-backed-securities and obligations to cover losses from the alleged breach of “representations and warranties” concerning the underlying mortgages. With regard to the LOTC, the court wrote:

The doctrine of LOTC is a rule of practice premised upon sound policy that once an issue is judicially determined, further litigation of that issue should be precluded in a particular case … . It ends the matter as far as judges and courts of coordinate jurisdiction are concerned … . While it shares some characteristics of a larger family of kindred concepts, including res judicata and collateral estoppel, it is not identical … . All these concepts contemplate that the party opposing preclusion had a full and fair opportunity to litigate the underlying determination. LOTC, however, differs in that it only addresses the potentially preclusive effect of judicial determinations made during a single litigation and before a final judgment is rendered … . In addition, while res judicata and collateral estoppel are “rigid rules of limitation,” LOTC has been described as “amorphous” and involving “an element of discretion” … . Discretion, however, is circumscribed where the decision providing the basis for LOTC is by an appellate court. Thus, while LOTC cannot bind an appellate court to a trial court ruling … , it does bind a trial court (and subsequent appellate courts of coordinate jurisdiction) to follow the mandate of an appellate court, absent new evidence or a change in the law … . Matter of Part 60 RMBS Put – Back Litig., 2021 NY Slip Op 02252, First Dept 4-13-21

 

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