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THIS LAWSUIT BY AN EMPLOYER AGAINST AN EMPLOYEE WHO ALLEGEDLY USED PLAINTIFF’S PROPRIETARY INFORMATION AFTER RESIGNING PRESENTS FACT-SPECIFIC ISSUES IN THE CONTEXT OF RESTRICTIVE COVENANTS IN THE EMPLOYMENT CONTRACT, COPYRIGHT LAW (PRE-EMPTION OF STATE LAW CLAIMS), TRADE SECRETS, AND THE PROPRIETY OF A PRELIMINARY INJUNCTION; ALL OF THESE COMPLEX ISSUES CANNOT BE FAIRLY SUMMARIZED HERE; THE DECISION IS WORTH CONSULTING (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the Copyright Act pre-empted some but not all of plaintiff’s breach of confidentiality and breach of employment contract claims, defendants’ cross-motions to dismiss sounding in unfair competition should not have granted; the complaint stated a cause of action for unfair competition based on misappropriation of proprietary information; the complaint stated a cause of action for violation of a restrictive covenant prohibiting disclosure of trade secrets; the record was insufficient to support Supreme Court’s ruling that plaintiff engaged in overreaching to obtain the restrictive covenants; and plaintiff’s motion for a preliminary injunction should have been granted. These complex, fact-specific issues cannot be fairly summarized here. With regard to pre-emption and the preliminary injunction, the court wrote:

“Section 301 of the Copyright Act preempts a state law claim if: ‘(i) the work at issue comes within the subject matter of copyright and (ii) the right being asserted is equivalent to any of the exclusive rights within the general scope of copyright'” … . Section 106 of the Copyright Act provides copyright owners the exclusive rights, among other things, to reproduce a copyrighted work, to prepare derivative works, to distribute copies of the work to the public, and to display the work publicly … . “A state law right is equivalent to one of the exclusive rights of copyright if it may be abridged by an act which, in and of itself, would infringe one of the exclusive rights” … . A claim is not equivalent “if an extra element is required instead of or in addition to the acts of reproduction, performance, distribution or display, in order to constitute a state-created cause of action,” and in such circumstances, there is no preemption … . Here, contrary to the defendants’ contentions, the plaintiff sufficiently alleged an extra element—violation of a duty of confidentiality and breach of the employment agreement—in addition to acts of reproduction, adaptation, performance, distribution, or display, that renders the state right qualitatively distinct from the federal right, thereby foreclosing preemption … . * * *

To obtain a preliminary injunction, the moving party must establish, by clear and convincing evidence, (1) a likelihood of success on the merits, (2) irreparable injury absent a preliminary injunction, and (3) that the equities balance in his or her favor” (… see CPLR 6301). Here, the plaintiff showed that trade secrets existed and established a likelihood of success on the merits … . Premium Prods., Inc. v O’Malley, 2026 NY Slip Op 00918, Second Dept 2-18-26

Practice Point: Consult this decision for insight into the wide range of issues raised by the allegation that a former employee has appropriated and used the employer’s proprietary information after resigning.​

 

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THE JUDGE’S QUESTIONING OF WITNESSES, GUIDANCE OF THE PROSECUTION, AND OBVIOUS BIAS IN FAVOR OF THE PROSECUTION DEPRIVED DEFENDANT OF A FAIR TRIAL (SECOND DEPT). ​

The Second Department, reversing defendant’s conviction and ordering a new trial, determined the evidence supported the convictions but the judge’s questioning of witnesses and obvious bias in favor of the prosecution deprived defendant of a fair trial. The issue was not preserved for appeal but the Second Department considered it in the interest of justice:

“‘[A] trial judge is permitted to question witnesses to clarify testimony and to facilitate the progress of trial, and, if necessary, to develop factual information,’ so long as the judge does not take on the function or appearance of an advocate” … . Here, the Supreme Court engaged extensively in its own areas of inquiry, asked numerous leading questions of the People’s witnesses, including the complainant and a police officer, as to their observations of the defendant, elicited identification testimony, and guided the prosecution at length in its questioning.

Viewing the record as a whole, the Supreme Court improperly took on the function and appearance of an advocate. The court’s conduct left the impression that its opinion favored the credibility of the People’s witnesses and the merits of the People’s case … , thus depriving the defendant of a fair trial … . People v Morales, 2026 NY Slip Op 00913, Second Dept 2-18-26

Practice Point: A judge’s involvement in a prosecution which rises to the level of an advocate for the prosecution’s case deprives a defendant of a fair trial.

 

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THE SECOND DEPARTMENT REVERSED SUPREME COURT AND FOUND THERE WAS “GOOD CAUSE” FOR THE 27-YEAR DELAY BETWEEN THE HOMICIDE AND DEFENDANT’S ARREST FOR MURDER (SECOND DEPT).

The Second Department, reversing Supreme Court, in a detailed full-fledged opinion by Justice Wan, determined defendant’s due process rights were not violated by a 27-year delay between the homicide and defendant’s arrest for murder. The opinion is necessarily fact-specific. The facts were analyzed using the “Taranovich factors” for determining whether a defendant’s right to a speedy trial or due process right to prompt prosecution has been violated. The facts are too complex to fairly summarize here:

“The Court of Appeals has articulated the following factors to consider when determining whether a defendant’s right to a speedy trial or due process right to prompt prosecution has been violated: (1) the extent of the delay, (2) the reason for the delay, (3) the nature of the underlying charge, (4) whether there has been an extended period of pretrial incarceration, and (5) whether there is any indication that the defense has been prejudiced by the delay” (hereinafter the Taranovich factors) (… see People v Taranovich, 37 NY2d 442, 445). “The Taranovich framework is a holistic one” … . Thus, “[n]o one factor or combination of the factors is necessarily decisive or determinative of the prompt prosecution claim, but rather the particular case must be considered in light of all the factors as they apply to it” … . “Where, as here, there has been a protracted preindictment delay over a period of years, the burden is on the prosecution to establish good cause” … . People v Grant, 2026 NY Slip Op 00910, Second Dept 2-18-26

Practice Point: Consult this decision for insight into how the “Taranovich factors” are applied to the facts to determine whether there is “good cause” for an extensive delay in prosecution, here 27 years.

 

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THE TOWN ZONING BOARD OF APPEALS MADE NO ATTEMPT TO ACCOMMODATE THE PROPOSED RELIGIOUS USE OF A SINGLE FAMILY HOME; MATTER REMITTED (SECOND DEPT).

The Second Department, reversing Supreme Court and remitting the matter to the town zoning board of appeals, determined the board made no attempt to accommodate the application for religious use of a single-family home. The application sought to change the use of the property from “one family” to “place of worship accessory to one family” (a synagogue):

“[W]hile religious institutions are not exempt from local zoning laws, greater flexibility is required in evaluating an application for a religious use than an application for another use and every effort to accommodate the religious use must be made” … . “[E]ducational and religious institutions are presumed to have a beneficial effect on the community” … . “[T]his presumption can be rebutted ‘with evidence of a significant impact on traffic congestion, property values, municipal services and the like'” … .

Here, the record reflects that the Board denied the petitioner’s application without making any attempt to accommodate the proposed religious use … . Despite the conditions proposed by the petitioner to mitigate the impact on the surrounding community, the Board denied the petitioner’s application in its entirety, even though the proposed religious use could have been substantially accommodated … . Furthermore, the evidence, taken as a whole, was insufficient to rebut the presumed beneficial effect of the proposed religious use … . Matter of Sephardic Synagogue of Plainview v Byrne, 2026 NY Slip Op 00903, Second Dept 2-18-26

Practice Point: Although religious institutions are not exempt from zoning laws, greater flexibility in evaluating a petition for religious use is required. Here no attempt was made to accommodate the change of use from “one family” to “place of worship accessory to one family” and the matter was remitted to the zoning board of appeals for such consideration.

 

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THE RESTAURANT’S INSURANCE POLICY COVERED INJURY INCURRED IN THE OPERATION OF THE “PREMISES” AND THEREFORE DID NOT COVER INJURY CAUSED BY A RESTAURANT EMPLOYEE WHO WAS DELIVERING FOOD BY BICYCLE; IF THE POLICY HAD USED THE WORD “BUSINESS” RATHER THAN “PREMISES,” THE OFF-PREMISES INJURY WOULD HAVE BEEN COVERED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Landicino, determined the restaurant’s insurance policy did not cover an injury cause by a restaurant employee a block away from the restaurant. Plaintiff was struck by a restaurant employee who was on a bicycle returning from a food delivery. The policy limited coverage to injury arising out of use of the restaurant “premises … and operations necessary or incidental to those premises.” The Second Department focused on the word “premises” and concluded an accident a block away from the “premises” was not covered. The court noted that had the coverage limitation used the word “business,” as opposed to “premises,” the injury would have been covered:

There is … a glaring difference between an insurance policy that insures against losses arising from operations necessary or incidental to a business, which would ostensibly include all claims of bodily injury arising from an employee’s negligence while that employee is acting within the scope of his or her employment for the business, and a policy that insures against losses arising from operations necessary or incidental to a premises, which include claims of bodily injury that must have some premises-based connection to the covered premises. Here, the insurance policy at issue covered only those damages that arose from the operations “necessary or incidental” to the premises, which is a narrower category of coverage. Despite the fact that the alleged incident occurred while the restaurant’s employee may have been acting in the scope of his employment, the incident did not occur as a result of any activity that was connected to the operation of the premises. Normile v DB Ins. Co., Ltd., 2026 NY Slip Op 00788, Second Dept 2-11-26

Practice Point: Consult this opinion for insight into how a court will interpret a limitation of coverage in an insurance policy.

 

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IN A SMALL CLAIMS ASSESSMENT REVIEW (SCAR) CHALLENGING A REAL PROPERTY ASSESSMENT FOR TAX PURPOSES, HOMEOWNERS HAVE STANDING TO CHALLENGE THE RESIDENTIAL ASSESSMENT RATIO (RAR) WHICH IS SET BY THE NYS OFFICE OF REAL PROPERTY TAX SERVICES (ORPTS) (SECOND DEPT). ​

The Second Department, in a full-fledged opinion by Justice Genovesi, determined that a residential assessment ratio (RAR) can be challenged by a residential property owner in a small claims assessment review (SCAR). In a SCAR a property owner can challenge the assessed value of the property as an “excessive assessment” and/or as an “unequal assessment:”

A class ratio refers to an assessment ratio that can apply to various types of properties. The residential assessment ratio (hereinafter RAR) is a specific class ratio used to determine the level of assessment for residential properties. It is a measurement of the overall ratio of the total assessed value of residential property in the municipality compared to the full market value … . * * *

It is the opinion of this Court that to conduct the proceedings in a manner that does substantial justice between the parties, RPTL article 7, title 1-A must be interpreted as conferring homeowners with standing to challenge the RAR … or to mount a “collateral attack” on the RAR by providing their own ratio study with an alternative ratio, within the limited context of that SCAR proceeding. To hold otherwise would frustrate the purpose of the statute, which is to provide property owners with an efficient, inexpensive, and simple alternative to the complex and formal tax certiorari proceeding. Matter of Yeung v Assessor of the Vil. of Great Neck Estates, 2026 NY Slip Op 00784, Second Dept 2-11-26

Practice Point: In a small claims assessment review (SCAR) a homeowner can challenge the tax assessment of the property. The question in this case was whether, at a SCAR, the homeowner can challenge the residential assessment ratio (RAR) which is set by New York State. The Second Department held that a homeowner can challenge the RAR in a SCAR.

 

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ONCE THE JUDGE DETERMINED THERE WERE NECESSARY PARTIES WHICH WERE NOT JOINED, THE JUDGE SHOULD NOT HAVE DECIDED THE MOTION FOR A DEFAULT JUDGMENT; THE NECESSARY PARTIES SHOULD HAVE BEEN IDENTIFIED AND SUMMONED IF POSSIBLE; MATTER REMITTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judge should not have ruled on the motion for a default judgment without first identifying the necessary parties to the action (after concluding there in fact were necessary parties who were not joined):

“[N]ecessary parties are persons who might be inequitably affected by a judgment in the action and must be made plaintiffs or defendants” … . “CPLR 1001(b) requires the court to order the necessary party or parties summoned, where they are subject to the court’s jurisdiction, and ‘[i]f jurisdiction over such necessary parties can be obtained only by their consent or appearance, the court is to determine, in accordance with CPLR 1001(b), whether justice requires that the action proceed in their absence'” … . “The nonjoinder of necessary parties may be raised at any stage of the proceedings, by any party or by the court on its own motion, including for the first time on appeal” … .

Here, it was premature for the Supreme Court to make a determination on the plaintiff’s motion, among other things, for leave to enter a default judgment against the defendants without first identifying the necessary parties to the action … . After the court concluded that there existed necessary parties to the action, the court … should have ascertained the identity of those parties, whether they can be joined, and, if not, whether the action should proceed in the absence of any necessary parties pursuant to CPLR 1001(b) … . Under the circumstances of this case, “‘the questions of whether there are any . . . necessary parties who should be joined in this action and, if so, the appropriate procedural disposition for effecting joinder should not be determined by this court in the first instance'” … . Accordingly, we remit the matter to the Supreme Court, Queens County, to hold a hearing to determine whether there are any necessary parties who should be joined in this action and, if so, to compel their joinder, subject to any affirmative defenses, and if joinder cannot be effectuated, to determine, pursuant to CPLR 1001(b), whether the action should proceed in the absence of any necessary parties. Hossain v Rahman, 2026 NY Slip Op 00352, Second Dept 1-28-26

Practice Point: Consult this decision for insight into to proper procedure which should be followed by a judge when there are necessary parties which have not been joined.

 

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ADMINISTRATION FOR CHILDREN’S SERVICES PROPERLY HELD IN CIVIL CONTEMPT FOR FAILING TO COMPLY WITH AN ORDER TO PLACE THE CHILD IN TRADITIONAL FOSTER CARE (SECOND DEPT).

The Second Department, modifying Family Court, determined the petitioner (Administration for Children’s Services) was properly held in civil contempt upon the motion of the attorney for the child for failure to comply with the court order to place the child in a traditional foster home. However, the Second Department deemed the imposition of a fine of $250 per day inappropriate:

“‘A motion to punish a party for civil contempt is addressed to the sound discretion of the motion court'” … . Upon a finding of civil contempt, “‘Judiciary Law § 773 . . . provides for two types of awards: one where actual damage has resulted from the contemptuous act in which case an award sufficient to indemnify the aggrieved party is imposed, and one where the complainant’s rights have been prejudiced but an actual loss or injury is incapable of being established'” … . “In the second situation, the fine is limited to $250, plus the complainant’s costs and expenses” … . By contrast, “where there is actual loss or injury the statute does not provide for a general $250 fine, single or multiple. It calls instead for an assessment that will indemnify aggrieved parties” … .

Here, the Family Court correctly determined that the child had suffered actual injury as a result of the contemptuous act. * * *

* * * [T]he court should have imposed a “reasonably certain compensatory fine” that is “properly related to the scope of the injury” … .

… “‘Accordingly, ‘[a]ny penalty imposed is designed not to punish but, rather, to compensate the injured private party or to coerce compliance with the court’s mandate or both'” … . Under these circumstances, where the Family Court specifically invoked the petitioner’s “inconsisten[cy] and carelessness,” the fine of $250 per day of noncompliance appears to represent an improper attempt to punish the contemnor rather than compensate the injured party … . Matter of Emily M. (Joyce G.), 2026 NY Slip Op 00377, Second Dept 1-28-26

Practice Point: Here the Administration for Children’s Services, upon the motion of the attorney for the child, was held in civil contempt for failing to comply with an order to place the child in traditional foster care.

 

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HERE THE PURPORTED TRANSFER BY DEED OF AN INTEREST IN REAL PROPERTY TO A LIMITED LIABILTY COMPANY WAS NULL AND VOID FROM THE OUTSET BECAUSE THE LLC DID NOT EXIST WHEN THE DEED WAS EXECUTED; THEREFORE THE STATUTE OF LIMITATIONS FOR REFORMATION OF THE DEED NEVER STARTED RUNNING; PLAINTIFF WAS ENTITLED TO A DECLARATORY JUDGMENT THAT THE TRANSFER TO THE LLC WAS NULL AND VOID (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the action seeking a declaratory judgment that a deed is null and void should not have been dismissed as time-barred. The deed was void from the outset because the limited liability company listed as a property owner did not not exist at the time the deed was executed. Because the deed was void (re; the LLC) at the time of execution, the statute of limitations for a reformation of the deed never started running:

“‘A cause of action seeking reformation of an instrument on the ground of mistake is governed by the six-year statute of limitations pursuant to CPLR 213(6), which begins to run on the date the mistake was made'” … . Here, however, the deed, insofar as it purported to convey an interest in the property from Gold to the LLC, was void at its inception, since it is undisputed that the LLC did not exist at the time the deed was executed … . Since “a statute of limitations cannot validate what is void at its inception,” the statute of limitations cannot act as a bar to the cause of action for a judgment declaring the LLC’s purported interest in the property null and void … . J​PMorgan Chase Bank, N.A. v Katz, 2026 NY Slip Op 00359, Second Dept 1-28-26

Practice Point: A statute of limitations cannot be used to validate a purported transfer of property that was void at its inception. Here the statute of limitations for a judgment declaring a purported transfer of property by deed to an LLC which did not exist when the deed was executed should not have been invoked to bar reformation of the deed.​

 

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MEASUREMENT OF THE SIX-MONTH GRACE PERIOD FOR THE FILING OF A NEW ACTION AFTER DISMISSAL (WHICH WOULD OTHERWISE BE TIME-BARRED) PURSUANT TO CPLR 205(A) AND CPLR 205-A CLARIFIED IN AN OPINION (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, clarified how the six-month grace period for filing a new action after dismissal (CPLR 205(a) and 205-a) is measured:

This appeal provides our Court with an occasion to resolve some inconsistencies in decisional authority regarding the timing of the termination event from which the six-month grace period under CPLR 205(a) and 205-a are measured. Under certain circumstances, both statutes permit the plaintiff a six-month window to recommence an action that otherwise would be untimely, measured from the “termination” of a prior action. Is the termination of the prior action the date an order of dismissal is executed by the court, the date the order of dismissal is entered with the clerk, or the date that the order of dismissal is served upon other parties with notice of entry? Is the termination of the prior action delayed 30 days for the potential filing of a notice of appeal pursuant to CPLR 5513(a) or a motion for leave to reargue pursuant to CPLR 2221(d), and further delayed by the appellate process when an actual appeal is undertaken, or is there no termination of the prior action until a final judgment is entered or served with notice of entry? The answer to these questions may make a crucial mathematical difference to the timeliness or untimeliness of actions commenced within or without the six-month grace periods under CPLR 205-a and 205(a). We conclude, for reasons stated below, that when no appeal is taken by a party from an order of dismissal, the six-month period for recommencing an action under CPLR 205-a, and by extension under CPLR 205(a), begins to run once 30 days have elapsed following service of the order of dismissal with notice of entry. HSBC Bank USA, N.A. v Hillaire, 2026 NY Slip Op 00353, Second Dept 1-28-26

Practice Point: Consult this opinion for a definitive discussion of how the six-month grace periods for the filing of a new otherwise time-barred action after dismissal pursuant to CPLR 205(a) and 205-a are measured.​

 

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