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Defendant’s Employee Had “Apparent Authority” to Act on Behalf of Defendant Insurance Agency—Plaintiff Justifiably Relied on the Apparent Authority When It Purchased a Fake Policy from Defendant’s Employee–Plaintiff Entitled to Partial Summary Judgment on the Fraud Cause of Action

The Fourth Department, over a two-justice dissent, determined plaintiff was entitled to summary judgment on its fraud cause of action against defendant insurance agency.  An employee of the insurance agency issued a fake workers’ compensation policy to the plaintiff. The Fourth Department found that the actions of the insurance agency provided the employee with “apparent authority” to issue the policy and the plaintiff justifiably relied on that apparent authority.  The relevant law was succinctly explained:

“In an action to recover damages for fraud, the plaintiff must prove a misrepresentation or a material omission of fact which was false and known to be false by [the maker], made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury” … . It is undisputed that the insurance policy purportedly issued by AIG was false, and thus plaintiff established that a false representation was made that was known to be false by defendant’s employee. Defendant contends, however, that the justifiable reliance element was not met because it cannot be liable for the acts of its employee, and plaintiff’s reliance on the alleged “apparent authority” of defendant’s employee was not reasonable.

It is axiomatic that “[t]he mere creation of an agency for some purpose does not automatically invest the agent with apparent authority’ to bind the principle without limitation . . . An agent’s power to bind his [or her] principal is coextensive with the principal’s grant of authority” … . “Essential to the creation of apparent authority are words or conduct of the principal, communicated to the third party, that give rise to the appearance and belief that the agent possesses authority to enter into a transaction. The agent cannot by his [or her] own acts imbue himself [or herself] with apparent authority. Rather, the existence of “apparent authority” depends upon a factual showing that the third party relied upon the misrepresentation of the agent because of some misleading conduct on the part of the principal — not the agent’ . . . Morever, a third party with whom the agent deals may rely on an appearance of authority only to the extent that such reliance is reasonable” … . Here, plaintiff contacted defendant seeking workers’ compensation coverage, and defendant assigned its employee who specialized in plaintiff’s type of business to assist plaintiff. We therefore conclude that plaintiff established that it reasonably relied upon the authority of defendant’s employee to act for defendant. Regency Oaks Corp. v Norman-Spencer McKernan, Inc., 2015 NY Slip Op 04959, 4th Dept 6-12-15

 

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New Evidence Demonstrated the Declarant, Not the Defendant, Committed the Murders of Which Defendant Was Convicted—Motion to Vacate Defendants’ Convictions Properly Granted

The Fourth Department affirmed County Court’s vacation of defendant’s murder convictions, after a hearing, based upon newly discovered evidence. Although the “declarant” did not testify, witnesses testified declarant admitted killing the two persons defendant had been convicted of murdering. There was considerable evidence supporting the reliability of the declarant’s statements. The court noted that the declarant’s statements were admissible under an exception to the hearsay rule as “statements against penal interest” and it was reasonable to assume the declarant was “unavailable” (a requirement for admissibility) because he would assert his right to remain silent if called as a witness. The court further noted that the testimony of declarant’s ex-wife was not protected by spousal privilege. Declarant’s threat to kill his wife if she reported the murders to the police removed the “communications from the protection of privilege:”

Contrary to the People’s contention, County Court properly determined, following a hearing, that defendant proved by a preponderance of the evidence that “[n]ew evidence has been discovered since the entry of [the] judgment . . . , which could not have been produced by the defendant at the trial even with due diligence on his part and which is of such character as to create a probability that had such evidence been received at the trial the verdict would have been more favorable to the defendant” (CPL 440.10 [1] [g]; see CPL 440.40 [6]). People v Pierre, 2015 NY Slip Op 04985, 4th Dept 6-12-15

 

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The Private Right of Action Afforded to Patients in “Residential Health Care Facilities” Pursuant to Public Health Law 2801-d Does Not Apply to Residents of a Group Home for the Developmentally Disabled

Plaintiff’s brother, Brian, is developmentally disabled and resided in a group home operated by the defendant.  Plaintiff alleged her brother was injured as a result of the negligence of defendant’s employees and brought suit under Public Health Law 2801-d, which allows a private right of action by patients against “residential health care facilities.”  The Fourth Department determined the group home was not a “residential health care facility” within the meaning of the Public Health Law 2801-d and, therefore, the causes of action based on that statute should have been dismissed:

In contrast to a hospital or nursing home, the group home owned and operated by defendant is governed by the Mental Hygiene Law and regulated by the Office for People with Developmental Disabilities (OPWDD), and operates pursuant to a certificate issued by the Commissioner of OPWDD (see Mental Hygiene Law article 16; 14 NYCRR part 686; see also Mental Hygiene Law § 13.07). The group home is classified as an “individualized residential alternative” community residence, defined as “a facility providing room, board, and individualized protective oversight” for “persons who are developmentally disabled and who, in addition to these basic requirements, need supportive interpersonal relationships, supervision, and training assistance in the activities of daily living” (14 NYCRR 686.99 [l] [2] [iii]). Under the plain language of the regulations governing it, the group home does not serve “principally” as a facility “for the rendering of health-related service” governed by Public Health Law article 28 (§ 2800). Burkhart v People, Inc., 2015 NY Slip Op 04974, 4th Dept 6-12-15

 

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Sentence Vacated—Sentencing Judge Relied on Materially Untrue Assumptions and Misinformation About Defendant’s Criminal History

Although the error was not preserved, the Fourth Department, in the interest of justice, determined defendant’s sentence should be vacated.  At sentencing, the judge made statements alleging past criminal acts by the defendant which were unsupported by the record:

… [W]e conclude that the court erred in sentencing defendant on the basis of “materially untrue assumptions or misinformation” … . Here, the court characterized defendant as having been involved in “more than 40 residential burglaries” and “all the tens of burglaries,” but those statements are unsupported by the record and therefore constitute improper speculation… . People v Mcknight, 2015 NY Slip Op 04961, 4th Dept 6-12-15

 

Prima Facie Case of Defamation Made Out in the Complaint

The Fourth Department determined the complaint made out a prima facie case of defamation. The statements were included in a newspaper article and were attributed to defendant. The court succinctly explained the applicable law:

“The elements of a cause of action for defamation are a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and it must either cause special harm or constitute defamation per se”…, and we conclude that the complaint sufficiently alleges those elements and, thus, states a viable cause of action. We further conclude, contrary to defendant’s contention, that the “particular words complained of” were sufficiently set forth in the complaint as required by CPLR 3016 (a) and, in any event, plaintiff attached to the complaint the full Niagara Falls Reporter article containing the alleged defamatory statements … . Defendant contends that, because he did not participate in the drafting of the Niagara Falls Reporter article, he cannot be held liable for defamation and, thus, the court properly granted his cross motion. That contention is without merit. It is well established that “[a]nyone giving a statement to a representative of a newspaper authorizing or intending its publication is responsible for any damage caused by the publication” … . Accadia Site Contr., Inc. v Skurka, 2015 NY Slip Op 04958, 4th Dept 6-12-15

 

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Request for Petitioner’s Income Tax Records Properly Denied—Insufficient Showing the Desired Information Could Not Be Gained from Other Sources

Over a two-justice dissent, the Fourth Department determined petitioner could not be ordered to turn over his income tax records.  Petitioner claimed that he had provided the down payment and monthly mortgage payments for decedent’s home where petitioner resided. Petitioner further claimed that decedent promised the home to him in a verbal agreement (and therefore the home should not pass by the will to petitioner’s sister).  Respondent wanted access to petitioner’s tax records to see if petitioner had sufficient income to make the down payment:

We conclude that Surrogate’s Court properly denied respondent’s motion, inasmuch as respondent has not made a sufficiently strong showing that the information contained in petitioner’s income tax records “were indispensable to this litigation and unavailable from other sources” …, such as “other financial or business records” … . Indeed, respondent “failed to make any factual showing in this regard, since the hearsay affirmation[s] of [respondent’s] attorney [are] wholly conclusory” …, petitioner’s deposition testimony, the only exhibit submitted in support of the motion, accounted for petitioner’s employment history during the times in question, although in a vague manner …, and respondent did not establish that it sought the requested information from any alternate source… .  Matter of Monaco, 2014 NY Slip Op 03423, 4th Dept 5-9-14

 

Resentencing Defendant to Original Sentence (Imposing No Post Release Supervision) Did Not Require Defendant’s Presence

The Fourth Department, over a dissent, determined defendant was properly sentenced even though he was not present at the resentencing.  The original sentence did not include a period of post release supervision [PRS].  The resentence also did not impose PRS.  Therefore, there was no error which adversely affected the defendant:

Defendant … contends that the court erred in conducting the resentence in his absence and without assigning counsel (see Correction Law § 601-d [4] [a]; CPL 380.40 [1]…). That contention is not properly before us because we may only “consider and determine any question of law or issue of fact involving error or defect . . . which may have adversely affected the appellant” (CPL 470.15 [1]). Here, the only issue presented at resentencing was whether the court would impose a period of PRS, and the District Attorney had already informed the court and defendant in writing that the People would consent to the reimposition of the original sentence, i.e., without a period of PRS. Inasmuch as the court reimposed that original sentence, “defendant was not adversely affected by any error, because the result, i.e., freedom from having to serve a term of PRS [with respect to this count of the indictment], was in his favor” … . People v Mills, 2014 NY Slip Op 03388, 4th Dept 5-9-14

 

Sole Heir Did Not Have Standing to Bring Action for Recovery of Estate Property—No Allegations of Misconduct by Personal Representative

The Fourth Department determined plaintiff the sole heir, did not have standing to bring his own action for recovery of the property of the estate because there were no allegations of misconduct on the part of the personal representative:

…[T]he estate representative is charged with the duty of recovering property of the estate, and that plaintiff, as decedent’s sole heir, has no independent cause of action, either in his own right or the right of the estate, to maintain an action for recovery of the property of the estate, absent extraordinary circumstances … . Extraordinary circumstances include collusion of the personal representative with others or an “unreasonable refusal” of the personal representative of the estate to commence an action … . Inasmuch as the extraordinary circumstances must relate directly to the actions of the personal representative of the estate, we conclude that the court erred in determining that the “unique and novel circumstances” of this case, i.e., “homicide, possible forgery, perjury, false statements, and possible conflicts of interest,” constitute the requisite extraordinary circumstances… . Castor v Pulaski, 2014 NY Slip Op 03386, 4th Dept 5-9-14

 

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Rule Requiring Submission of Order or Judgment for Signature within 60 Days Applies Only When Court Directs that the Proposed Order Be Settled or Submitted for Signature

The Fourth Department determined an action had not been abandoned for failure to submit the order for signature within 60 days pursuant to 22 NYCRR 202.48.  That rule applies only when the court directs a party to submit or settle an order or judgment:

…[W]e agree with plaintiff that the court erred in dismissing the complaint sua sponte pursuant to 22 NYCRR 202.48. That rule provides that “[p]roposed orders or judgments . . . must be submitted for signature, unless otherwise directed by the court, within 60 days after the signing and filing of the decision directing that the order be settled or submitted . . . Failure to submit the order or judgment timely shall be deemed an abandonment of the motion or action, unless for good cause shown” (22 NYCRR 202.48 [a], [b]). As the Court of Appeals wrote, “[b]y its plain terms, section 202.48 (a) speaks to the circumstances where the court’s decision expressly directs a party to submit or settle an order or judgment” (Funk v Barry, 89 NY2d 364, 367). Thus, the Court held that “the 60-day period applies only where the court explicitly directs that the proposed judgment or order be settled or submitted for signature” (id. at 365). Here, the order of reference did not explicitly direct plaintiff to settle or submit an order or judgment for signature. Rather, it directed plaintiff to submit a “Motion or [an] Ex Parte Application” seeking a judgment of foreclosure and sale. We therefore conclude that the court erred in dismissing the complaint in reliance on 22 NYCRR 202.48… . Midfirst Bank v Bellinger, 2014 NY Slip Op 03365, 4th Dept 5-9-14

 

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Allegations that Town Was Negligent in Maintaining a Sewer System Involve a Proprietary Function Subject to Ordinary Rules of Negligence

The Fourth Department determined plaintiff’s causes of  action against a town alleging negligent maintenance, as opposed to design, of a sewer system properly survived summary judgment.  Maintenance is a proprietary function of the town and is subject to ordinary negligence principles:

If the municipality acted in a proprietary role, i.e., “when its activities essentially substitute for or supplement traditionally private enterprises” …, ordinary rules of negligence apply. If, however, the municipality acted in a governmental capacity, i.e., “when its acts are undertaken for the protection and safety of the public pursuant to general police powers” (id. at 425 [internal quotation marks omitted]), the court must undertake a separate inquiry to determine whether the municipality owes a special duty to the injured party … . In the event that the plaintiff fails to prove such a duty, the municipality is insulated from liability. Even in the event that the plaintiff proves such a duty, however, the municipality will not be liable if it proves that the alleged negligent act or omission involved the exercise of discretionary authority … .

With respect to municipal sewer malfunctions, it is well settled that a municipality’s design of a sewer system constitutes a governmental function …, while a municipality’s “operation, maintenance and repair of th[at] sewer system is a proprietary function, and thus the Town’s liability in that respect is not contingent upon the existence of a special relationship”… . Gilberti v Town of Spafford, 2014 NY Slip Op 03382, 4th Dept 5-9-14

 

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