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Continuing Representation Doctrine (Tolling the Statute of Limitations) Explained

The Fourth Department reversed Supreme Court finding that the legal malpractice actions should not have been dismissed as time-barred because there were questions of fact whether the continuing representation doctrine tolled the statute of limitations.  The plaintiff Town alleged that defendant lawyers did not advise the Town of the proper procedure for appointing a hearing officer, which resulted in the annulment of a proceeding terminating a Town employee.  The question was whether the attorneys’ subsequent involvement in attempting to rectify the mistake constituted continuing representation such that the three-year statute was tolled:

Here, while there were three separate and distinct retainer agreements, we conclude that there are triable issues of fact whether defendants were retained for separate and distinct legal proceedings or, rather, “ongoing and developing phases of the [same] litigation” … . We cannot say as a matter of law that all of defendants’ acts “were not interrelated so that representation on [the second Section 75 hearing and the subsequent CPLR article 78 proceeding were] not part of a continuing, interconnected representation” to perform the specific task of terminating a Town employee … . Inasmuch as “[a] question of fact exists on this issue, . . . summary judgment is inappropriate” … .

We further conclude that there are triable issues of fact whether the gaps in the legal services that defendants performed for the Town were “merely . . . period[s] absent expectations, rather than . . . period[s] when representation formally ended” … . Here … the Town “immediately return[ed] to [defendants] . . . once an issue arising from [the alleged] malpractice [was] detected” … .

Although defendants correctly contend that the continuous representation doctrine requires that there be ” continuing trust and confidence in the relationship between the parties’ ” … , there are triable issues of fact whether the Town ever lost such trust and confidence in defendants. Town of Amherst v Weiss, 2014 NY Slip Op 06411, 4th Dept 9-26-14

 

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Sheriff’s (Lack of) Liability Under Respondeat Superior, Elements of Malicious Prosection, Abuse of Process, False Imprisonment and Libel Per Se Explained

In a lengthy and detailed decision the Fourth Department explained the negligence actions against the sheriff based on respondeat superior were properly dismissed, the action for malicious prosecution was properly dismissed (because the underlying criminal action was not dismissed on the merits and could be renewed), but the actions for abuse of process, false imprisonment, and libel per se should not have been dismissed.  The decision is too lengthy to summarize here, but it includes detailed explanations of the sheriff’s immunity from suit under respondeat superior and the elements of malicious prosecution, abuse of process, false imprisonment, and libel per se. The action stemmed from the allegation plaintiff was falsely accused of stealing a computer.  D’Amico v Correctional Med Care Inc, 2014 NY Slip Op -5737, 4th Dept 8-8-14

 

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Criteria for “Apparent Authority” to Enter a Binding Contract, Including the “Apparent Authority” of a Member of a Limited Liability Corporation, Explained

In determining the criteria for apparent authority, including apparent authority under the Limited Liability Corporation Law, had been met, the Fourth Department held that member of the defendant limited liability corporation (Sultan) entered into a binding contract on behalf of the defendant corporation:

“Essential to the creation of apparent authority are words or conduct of the principal, communicated to a 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 own acts imbue himself 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” … . Here, we conclude that plaintiffs reasonably relied on, inter alia, their prior course of dealing with Sultan in his capacity as president, principal and manager of defendant … . * * *

…[W]e note that Limited Liability Company Law § 412 (a) provides that, “[u]nless the articles of organization of a limited liability company provide that management shall be vested in a manager or managers, every member is an agent of the limited liability company for the purpose of its business, and the act of every member, including the execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the business of the limited liability company, binds the limited liability company, unless (i) the member so acting has in fact no authority to act for the limited liability company in the particular matter and (ii) the person with whom he or she is dealing has knowledge of the fact that the member has no such authority.” A nearly identical subsection provides that, where management of an LLC is vested in a manager, the acts of the manager are binding upon the LLC unless the manager at issue has in fact no authority to act for the LLC, and the person with whom he or she is dealing knows that the manager lacks such authority (§ 412 [b] [2] [A], [B]). Thus, regardless whether Sultan was acting as a manager of defendant, as reflected by his signature on the contract, or as a member of defendant, as he and defendant’s attorney previously had indicated to plaintiffs, he had apparent authority to act and his acts were binding upon defendant unless, inter alia, plaintiffs had “knowledge of the fact that [Sultan] ha[d] no such authority” … . Pasquarella v 1525 William St LLC, 2014 NY Slip Op 05745, 4th Dept 8-8-14

 

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Decision Offers a Rare, Detailed Discussion of the Probable-Cause Analysis of a Search Warrant Application Which Included Hearsay from Confidential Informants (Analyzed Under the Aguilar-Spinelli Reliability Tests), Controlled Buys and Surveillance

In a rare, detailed analysis of the sufficiency of a search warrant application which relied on confidential informants, surveillance, controlled buys, and hearsay found sufficient under the Aguilar-Spinelli tests, the Fourth Department determined the motion to suppress was properly denied.  The decision is notable for the depth of discussion and the full range of issues involved in the analysis of a search warrant application. People v Myhand, 2014 NY Slip Op 05742, 4th Dept 8-8-14

 

In a Matter of First Impression, the Fourth Dept Determined that Criminal Records Are Eligible for Sealing Pursuant to CPL 160.58 Even If They Relate to Convictions that Predate the Statute

The Fourth Department, in a full-fledged opinion by Justice Whalen, determined that criminal records are eligible for sealing pursuant to Criminal Procedure Law 160.58 even if they related to convictions that predate the statute. People v M.E., 2014 NY Slip Op 05748, 4th Dept 8-8-14

 

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Where the Manufacturer Was Not At Fault in a Products Liability Action, the Retailer Is Not Entitled to Indemnification for the Costs of Defending the Action from the Manufacturer

The Fourth Department determined a downstream retailer (GE) was not entitled to indemnification from and upstream manufacturer (Carrier) when both have been absolved of fault in a products liability action.  The basis of the action was a fire which was alleged to have been caused by an air conditioner manufactured by Carrier and marketed and sold by GE.  It was ultimately determined the fire was not caused by the air conditioner.  GE sought indemnification from Carrier for the costs associated with the lawsuit:

The issue in this case is whether GE, a downstream retailer, is entitled to recoup its costs in defending a products liability action from Carrier, an upstream manufacturer, when they both are ultimately absolved of liability. We conclude that GE is not entitled to recoupment, and we therefore affirm.

Indemnification is grounded in the equitable principle that the party who has committed a wrong should pay for the consequences of that wrong … . Thus, New York courts have consistently held that “common-law indemnification lies only against those who are actually at fault” …, i.e., the “actual wrongdoer” … . In the products liability context, a manufacturer is held accountable as a “wrongdoer” when it releases a defective product into the stream of commerce …, and “innocent” sellers who merely distribute the defective product are entitled to indemnification from the at-fault manufacturer … . That common-law right of indemnification “encompasses the right to recover attorneys’ fees, costs, and disbursements incurred in connection with defending the suit brought by the injured party” … . * * *

Where, as here, it is ultimately determined that the subject product is free from defect, there is no “fault” or “wrongdoing” on the part of the manufacturer… . Bigelow v General Elec Co, 2014 NY Slip Op 05727, 2nd Dept 8-8-14

 

Fall Into a Three-to-Four-Foot-Deep Hole Is Not an Elevation-Related Event Under Labor Law 240(1)

The Fourth Department determined that falling into a hole is not an “elevation-related event” within the meaning of Labor Law 240(1).  The court further determined that regulation requiring that an excavation near a “sidewalk, street or highway or other area lawfully frequented by any person…” be guarded or covered did not apply to employees at a work site. With respect to the elevation requirement for section 240(1), the court wrote:

Where, as here, a plaintiff falls into a hole while walking at ground level, the plaintiff’s injury “[is] not caused by [defendants’] failure to provide or erect necessary safety devices in response to elevation-related hazards,’ and, accordingly, the protections of Labor Law § 240 (1) do not apply” … . The cases relied upon by plaintiff are factually distinguishable because they involve falls into excavated areas, as opposed to mere holes in the ground such as the one here … . Unlike the excavation cases, this is not a case where protective devices enumerated in Labor Law § 240 (1), e.g., “scaffolding, hoists, stays, ladders, slings, hangers, blocks, pulleys, braces, irons, [and] ropes” were designed to apply… . Wrobel v Town of Pendelton, 2014 NY Slip Op 05738, 4th Dept 8-8-14

 

Driver with Right of Way Who Strikes a Vehicle Which Suddenly Enters the Right of Way Is Free from Negligence (No Need to Apply the Emergency Doctrine)/Emergency Doctrine Does Not Automatically Absolve a Driver of Liability

The Fourth Department noted that a driver with the right of way who strikes a vehicle which suddenly enters his or her path is free of negligence absent speeding or some other negligent conduct (no need to apply the emergency doctrine).  The court further noted that the emergency doctrine does not automatically absolve a person of liability.  Here there was a question whether the brakes on the vehicle confronted with the emergency were maintained properly and whether swerving was reasonable:

The existence of an emergency and the reasonableness of a driver’s response thereto generally constitute issues of fact” … . We conclude that there are issues of fact whether the Marriotts’ maintenance of their pickup truck was adequate and thus whether the brake failure was truly unexpected and without any fault on their part. Moreover, it cannot be concluded as a matter of law that swerving to the right in order to avoid rear-ending the garbage truck was a reasonable reaction to the emergency created by the loss of brakes on the pickup truck. Colangelo v Marriott, 2014 NY Slip Op 05746, 4th Dept 8-8-14

 

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Property Should Not Have Been Restored to Petitioner—Time for Redemption Had Passed—Default Judgment in Tax Foreclosure Action Extinguished Petitioner’s Rights in the Property

The Fourth Department determined Supreme Court should not have restored title to property to the petitioner after the a default judgment had been entered in a tax foreclosure action.  The time for redemption had passed and had not been extended:

The Treasurer’s posting of the tax enforcement notification at petitioner’s residence on April 25, 2012 extended the right of redemption until May 25, 2012 (see RPTL 1125 [1] [b] [iii]). Only a local law could extend the cut-off date for redemption (see RPTL 1111 [2]) and, thus, contrary to petitioner’s contention, the published notice of the tax auction could not extend that date of redemption. Where a valid tax lien exists, and the taxing authority followed all proper procedures in foreclosing the lien, the taxpayer’s property interests are “lawfully extinguished as of the expiration of the[ ] right to redemption and the entry of the judgment of foreclosure” … . Thus, all of petitioner’s right, title and interest in the parcels, in her individual and representative capacities, was extinguished when the default judgment was entered in the tax foreclosure action on June 18, 2012 (see RPTL 1123 [8]).  Matter of Johnstone v Treasurer of Wayne County, 2014 NY Slip Op 04590, 4th Dept 6-20-14

 

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Power Company Must Pay Town’s Ad Valorem Sewer Taxes Whether Or Not It Owns the Land On Which Its Transmission Facilities Are Located and Whether or Not It Produces Sewage

The Fourth Department determined that as long as the power company owns the land on which its mass properties (transmission facilities) are located, it must pay the “ad valorem” sewer taxes, even if no sewage is generated. The court further determined that even if the power company did not own the land, it would still be liable for the tax because the town’s storm water sewer system protects the facilities from flooding:

If petitioner owns the land, it must pay the sewer taxes regardless of whether the properties currently produce sewage inasmuch as it is theoretically possible that the properties could be ” developed in a manner that will result in the generation of [sewage]’ ” …, and it is immaterial that the Town taxes the land separately from the improvements thereon and that petitioner challenges only the tax on the improvements.

We further conclude that the court properly granted respondents’ application for summary judgment based on the fact that petitioner may still benefit from the sewer district even if it does not own the land on which its mass properties are located. Respondents established that a significant amount of storm water infiltrates the Town’s sewer system and that “the sewer district encompasses storm sewers that actually or might potentially safeguard [petitioner]’s transmission and distribution facilities from flooding” … . Matter of Niagara Mohawk Power Corp v Assessor, Town of Cheektowaga, 2014 NY Slip Op 04627, 4th Dept 6-20-14

 

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