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THE REFEREE’S REPORT IN THIS FORECLOSURE ACTION DID NOT IDENTIFY THE RECORDS RELIED UPON FOR THE CALCULATIONS AND DID NOT ATTACH THE RELEVANT BUSINESS RECORDS; IN ADDITION THE HEARING ON NOTICE REQUIRED BY CPLR 4313 WAS NOT HELD (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the referee’s report in this foreclosure action was deficient because the business records used for the calculations were not identified or attached. In addition, the referee did not hold the evidentiary hearing required by CPLR 4313:

“The report of a referee should be confirmed whenever the findings are substantially supported by the record, and the referee has clearly defined the issues and resolved matters of credibility” … . Here, with respect to the amount due on the mortgage loan, the referee based his findings on the affidavit of William Randolph, an employee of Seterus, Inc., the purported servicer of the mortgage loan, who asserted the total amount then due on the mortgage loan. Randolph, however, failed to identify the basis for his calculations, stating generally that the information in his affidavit was taken from the “business activities” of Seterus, Inc. Nor did Randolph attach any business records to his affidavit. Accordingly, Randolph’s assertions regarding the date of the defendant’s default in making his mortgage payments and the total sum due and owing under the mortgage loan constituted inadmissible hearsay and lacked probative value … . Thus, the referee’s findings with respect to the total amount due upon the mortgage loan, as well as payments for taxes, insurance, and other advances, were not substantially supported by the record … .

Further, the referee should not have computed the amount due on the mortgage loan without holding a hearing on notice to the defendant. CPLR 4313 provides in relevant part that “[u]nless the order of reference otherwise provides, the referee shall forthwith notify the parties of a time and a place for the first hearing to be held.” Here, there was no language in the order of reference indicating that a hearing was unnecessary. [plaintiff’s] contention that the defendant waived his right to a hearing is without merit … . Thus, the defendant was entitled to notice pursuant to CPLR 4313 … . Onewest Bank, FSB v Feffer, 2022 NY Slip Op 06707, Second Dept 11-23-22

Practice Point: In a foreclosure action, if the referee’s report does not identify the records relied upon for the calculations and does not attach those records, the report should not be confirmed. In addition, absent language in the order indication a hearing is not necessary, the calculations should not be made unless a hearing on notice pursuant to CPLR 4313 has been held.

 

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REDUCTION OF PETITIONER-SCHOOL-DISTRICT EMPLOYEE’S RETIREMENT HEALTH BENEFITS BELOW THE LEVEL AFFORDED ACTIVE EMPLOYEES VIOLATES INSURANCE LAW 4235 (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the school district’s reduction of petitioner-employee’s (Perrotta’s) retirement health benefits below the level afforded active employees violated the Insurance Law:

The moratorium law [Insurance Law 4235] sets “‘a minimum baseline or “floor” for retiree health benefits'” which is “‘measured by the health insurance benefits received by active employees . . . In other words, the moratorium [law] does not permit an employer to whom the statute applies to provide retirees with lesser health insurance benefits than active employees'” … . Thus, a school district may not diminish retirees’ health insurance benefits unless it makes “a corresponding diminution in the health insurance benefits or contributions of active employees” … . The purpose of the moratorium law is to protect the rights of retirees who “‘are not represented in the collective bargaining process, [and] are powerless to stop unilateral depreciation or even elimination of health insurance benefits once the contract under which they retired has expired'” … .

Here, since Perrotta submitted evidence establishing that the district diminished the health insurance contribution rate for certain retirees, and the district failed to proffer evidence that it made a corresponding diminution in the health insurance benefits or contributions for active employees, its determination violated the moratorium law. … Supreme Court should have granted the petition and annulled the district’s determination … . Matter of Perrotta v Syosset Cent. Sch. Dist., 2022 NY Slip Op 06704, Second Dept 11-23-22

Practice Point: Here the petitioner, a retired school district employee, successfully contested the reduction of her retirement health benefits below the level afforded active employees as a violation of Insurance Law 4235.

 

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​ THE DISCHARGED LAW FIRM HANDLED THE PERSONAL INJURY CASE FOR TWO YEARS; ALTHOUGH THE FIRM DID NOT SUBMIT ANY TIME RECORDS, SUPREME COURT ABUSED ITS DISCRETION IN REFUSING TO AWARD THE DISCHARGED FIRM A PORTION OF THE CONTINGENCY FEE AFTER THE CASE SETTLED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the court abused its discretion in refusing to award attorney’s fees to a law firm (Gross) which represented the plaintiff in a personal injury case for two years before being discharged. The case ultimately settled:

After being retained, Gross filed a no-fault benefits application, referred the plaintiff to several doctors, scheduled and rescheduled independent medical examinations, and helped the plaintiff obtain a presettlement loan. The principal of Gross also asserted that the firm investigated the accident scene, obtained and reviewed medical records and other relevant documents, and “spen[t] a great deal . . . of time” on the phone with the plaintiff “answering his many questions about his claim.” The plaintiff ultimately discharged Gross. In May 2018, the plaintiff retained nonparty Gregory Spektor & Associates, P.C. (hereinafter Spektor). In December 2018, Spektor filed a summons and complaint in this action on the plaintiff’s behalf. In July 2020, the plaintiff obtained a $100,000 settlement.* * *

… [I]t cannot be said that the services performed by Gross were of no value … . Although Gross failed to submit time records showing the hours allegedly spent investigating and discussing the claim with the plaintiff, Gross submitted evidence showing that it performed various services in connection with the plaintiff’s case over a period in excess of two years, including, but not limited to, ensuring the plaintiff’s appearances for independent medical examinations to determine the extent of his injuries and the need for additional treatment, and obtaining documentation vital to the plaintiff’s case … . Considering the amount of time spent by Gross working on matters pertaining to the plaintiff’s case, the nature of the work performed, and the relative contributions of counsel, we deem it appropriate to award 10% of the net contingency fee to Gross. Jules v David, 2022 NY Slip Op 06696, Second Dept 11-23-22

Practice Point: Supreme Court abused its discretion in refusing to award a discharged law firm a portion of the contingency fee after the case settled. Although the firm did not submit any time records in this personal injury case, it did schedule independent medical exams, review medical records, investigate the accident scene, obtain documents, etc.

 

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THE CONTINUOUS TREATMENT DOCTRINE TOLLED THE STATUTE OF LIMITATIONS IN THIS MEDICAL MALPRACTICE ACTION; ALTHOUGH THE PLAINTIFFS’ EXPERT’S AFFIDAVIT WAS UNSWORN, IT SHOULD HAVE BEEN CONSIDERED BECAUSE DEFENDANTS DID NOT OBJECT; DESPITE PLAINTFF’S SIGNING A GENERIC CONSENT FORM, THERE WERE QUESTIONS OF FACT WHETHER THERE WAS A LACK OF INFORMED CONSENT (SECOND DEPT).

The Second Department, reversing Supreme Court in this medical malpractice action, determined: (1) the continuous treatment doctrine tolled the statute of limitations for some of the causes of action; (2) the plaintiffs’ expert’s unsworn affidavit raised questions of fact about a departure from the requisite standard of care (although the unsworn affidavit was not in admissible form, defendants did not object); and (3) the lack of informed consent cause of action should not have been dismissed:

… [C]ontinuous treatment may be found when a plaintiff “returns to the doctor because of continued pain in that area for which medical attention was first sought” … . Here, the plaintiffs demonstrated that, continuing until at least October 23, 2014, the injured plaintiff repeatedly sought treatment … for ongoing and sometimes increasing symptoms relating to her original complaints … . * * *

Although the unsworn affidavit of the plaintiffs’ expert does not constitute competent evidence to oppose a motion for summary judgment (see CPLR 2106 … ), the defendants failed to object to the unsworn affidavit on this ground in the Supreme Court and, therefore, any deficiency in the submission has been waived … . * * *

“[T]he fact that the [injured] plaintiff signed a [generic] consent form does not establish [the defendants’] prima facie entitlement to judgment as a matter of law” dismissing this cause of action insofar as asserted against the North Shore defendants … . … [T]he transcripts of the deposition testimony of the injured plaintiff and of the physicians … , submitted by the defendants in support of their motion, did not establish that the injured plaintiff was given sufficient information on the risks and alternatives regarding the materials used and the procedures performed. … [D]efendants failed to establish that a reasonably prudent person in the injured plaintiff’s position would not have declined to undergo the procedures if she or he had been fully informed of the risks and alternatives regarding the materials used and the procedures performed (see Public Health Law § 2805-d[3] …). Hall v Bolognese, 2022 NY Slip Op 06692, Second Dept 11-23-22

Practice Point: Here in this medical malpractice action the appellate court held: (1) the continuous treatment doctrine applied to toll the statute of limitations; (2) the unsworn affidavit from plaintiffs’ expert should have been considered because defendants did not object to it; (3) plaintiff’s signing a consent form did not preclude causes of action alleging a lack of informed consent.

 

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ALTHOUGH THE BREACH OF CONTRACT CAUSES OF ACTION WERE PROPERLY DISMISSED BECAUSE THE CONTRACT WAS NOT AMBIGUOUS AND PAROL EVIDENCE THEREFORE WAS NOT ADMISSIBLE; THE FRAUDULENT INDUCEMENT CAUSE OF ACTION, FOR WHICH PAROL EVIDENCE IS ADMISSIBLE, SHOULD NOT HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the fraudulent inducement cause of action should not have been dismissed as duplicative of the breach of contract causes of action, which were properly dismissed because the contract was not ambiguous and parol evidence was therefore not admissible:

Supreme Court erred in granting that branch of the defendants’ motion which was for summary judgment dismissing the cause of action to recover damages for fraudulent inducement. The fraudulent inducement cause of action is not duplicative of the breach of contract cause of action, as the fraudulent inducement cause of action is not based upon promised performance of an obligation of the defendants under the pledge agreement, and the plaintiffs sought separate and distinct damages for each cause of action … . Furthermore, the use of parol evidence is not precluded to establish the fraudulent inducement cause of action … . Goodale v Central Suffolk Hosp., 2022 NY Slip Op 06691, Second Dept 11-23-22

Practice Point: Here the fraudulent inducement cause of action was not duplicative of the dismissed breach of contract causes of action. Because the contract was not ambiguous, parol evidence was not admissible for the breach of contract causes of action. But parol evidence may be admitted in the fraudulent inducement action. The fraudulent inducement cause of action was not based on the performance of the contract and alleged separate and distinct damages.

 

DEFENDANTS’ CAR WAS STOPPED IN THE SHOULDER LANE FOR A NON-EMERGENCY REASON WHEN THE CAR IN WHICH PLAINTIFF WAS A PASSENGER STRUCK IT FROM BEHIND; THERE WERE QUESTIONS OF FACT WHETHER STOPPING THE CAR IN THE SHOULDER LANE FOR A NON-EMERGENCY REASON WAS A PROXIMATE CAUSE OF THE ACCIDENT (AS OPPOSED TO MERELY FURNISHING THE OCCASION FOR THE ACCIDENT?) (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the Feder defendants were not entitled to summary judgment dismissing the complaint in this rear-end collision traffic-accident case. Plaintiff was a passenger in a car when the driver pulled into the shoulder lane because a speeding car crossed his lane. The Feder defendants’ car was stopped in the shoulder lane and the car in which plaintiff was a passenger struck it. The Feder defendants were not entitled to summary judgment because there were questions of fact whether stopping in the shoulder lane for a non-emergency reason constituted a proximate cause of the accident (as opposed to merely furnishing the occasion for the accident?):

“A rear-end collision with a stopped or stopping vehicle establishes a prima facie case of negligence on the part of the operator of the rear vehicle, thereby requiring that operator to rebut the inference of negligence by providing a nonnegligent explanation for the collision” … . However, “[t]he mere fact that other persons share some responsibility for plaintiff’s harm does not absolve defendant from liability because there may be more than one proximate cause of an injury” … .. “Generally, it is for the trier of fact to determine the issue of proximate cause” … .

Here, the Feder defendants failed to establish their prima facie entitlement to judgment as a matter of law dismissing the complaint and all cross claims insofar as asserted against them. The Feder defendants’ own submissions raised triable issues of fact as to whether Abraham Feder’s conduct in stopping on the shoulder of the highway for a non-emergency purpose imposed upon them a duty of reasonable care to warn other drivers of the hazard posed by their stopped vehicle, and whether their failure to exercise reasonable care was a proximate cause of the accident … . Georgiadis v Feder, 2022 NY Slip Op 06690, Second Dept 11-23-22

Practice Point: Here defendants’ car was stopped in the shoulder lane for a nonemergency reason when the car in which plaintiff was a passenger struck it from behind. The Second Department held there were questions of fact about whether the car stopped in the shoulder lane was a proximate cause of the accident. The case illustrates the fine line between “furnishing the occasion for an accident,” which is not actionable, and a “proximate cause” of an accident, which is.

 

WHERE AN ACTION HAS BEEN MARKED OFF AS “INACTIVE,” THERE IS NO NOTE OF ISSUE, THERE HAS BEEN NO 90-DAY DEMAND AND THERE IS NO ORDER DISMISSING THE COMPLAINT, RESTORATION TO THE CALENDAR AT ANY TIME IS AUTOMATIC (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s motion to retore the action to the calendar after it was marked off because plaintiff failed to appear should have been granted. A note of issue had not been filed, there had been no 90-day notice pursuant to CPLR 3216, and there was no order directing dismissal of the complaint. Therefore restoration to the calendar at any time is automatic:

Where, as here, the case was marked “inactive” before a note of issue had been filed, there was no 90-day notice pursuant to CPLR 3216, and there was no order directing dismissal of the complaint pursuant to 22 NYCRR 202.27 for failure to appear at a compliance conference, “‘restoring a case marked “inactive” is automatic'” … . Under these circumstances, a motion to restore the action to the calendar should be granted “‘without considering whether the plaintiff had a reasonable excuse for the delay or whether [it] engaged in dilatory conduct'” … . Moreover, since this action was pre-note of issue and could not properly be marked off the calendar pursuant to CPLR 3404, the plaintiff was not required to move to restore the action to the calendar within any specified time frame … . Thus, contrary to the Supreme Court’s determination, the plaintiff’s motion was not untimely. Fifth Third Mtge. Co. v Schiro, 2022 NY Slip Op 06689. Second Dept 11-23-22

Practice Point: Where a case has been marked off as “inactive,” there is no note of issue, there has been no 90-day demand and there is not order dismissing the complaint, restoration to the calendar at any time is automatic.

 

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THE CONTRACT BETWEEN DEFENDANT AIRWAY CLEANERS AND DEFENDANT AMERICAN AIRLINES IN THIS AIRPORT SLIP AND FALL CASE DID NOT ENTIRELY DISPLACE AMERICAN AIRLINES’ DUTY TO KEEP THE BATHROOM SAFE; THEREFORE THE CONTRACT COULD NOT SERVE AS THE BASIS FOR AIRWAY CLEANERS’ LIABILTY TO PLAINTIFF UNDER ESPINAL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant Airway Cleaners’ contract with American Airlines did not entirely displace defendant American Airlines’ duty to maintain the bathroom where plaintiff slipped and fell. Therefore the contract between Airway Cleaners and American Airlines could not serve as the basis for Airway Cleaners’ liability to third parties (plaintiff) under Espinal:

“Generally, a contractual obligation, standing alone, will not give rise to tort liability in favor of a third party” … . However, insofar as relevant here, an exception to this general rule applies where “the contracting party has entirely displaced the other party’s duty to maintain the premises safely” (Espinal v Melville Snow Contrs., 98 NY2d at 140).

Here, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against Airway Cleaners, LLC, by demonstrating that a limited janitorial service agreement between Airway Cleaners, LLC, and American Airlines was not a comprehensive and exclusive agreement which entirely displaced American Airlines’ duty to maintain the premises in a reasonably safe condition … . DaCruz v Airway Cleaners, LLC, 2022 NY Slip Op 06687, Second Dept 11-23-22

Practice Point: Here there was a contract between defendant Airway Cleaners and defendant American Airlines with respect to cleaning the premises at Kennedy Airport. The contract was not comprehensive enough to entirely displace American Airlines’ duty to keep the bathroom on the premises, where plaintiff slipped and fell, safe. Therefore, the contractor, Airway Cleaners, under the Espinal criteria, could not be sued by plaintiff.

 

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DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT IN THIS TRAFFIC ACCIDENT CASE SHOULD NOT HAVE BEEN GRANTED; THAT PLAINTIFF PLED GUILTY TO A TRAFFIC OFFENSE DOES NOT PROVE SHE WAS NEGLIGENT; PLAINTIFF ALLEGED SHE PLED GUILTY BECAUSE SHE DID NOT HAVE THE MONEY TO DRIVE FROM HER HOME FOR COURT APPEARANCES (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendants’ motion for summary judgment in this bus-car traffic accident should not have been granted. The defendants submitted conflicting evidence about how the accident happened. The fact that plaintiff pled guilty to a traffic offense does not necessarily prove she was negligent. Plaintiff alleged she pled guilty to avoid traveling from her home in New Jersey for court appearances:

… [T]he defendants failed to establish, prima facie, that they were free from fault in the happening of the accident, because their submissions in support of the motion contained conflicting accounts of how the accident happened, and failed to eliminate triable issues of fact, including which vehicle entered the other vehicle’s lane prior to the collision … .

Contrary to the defendants’ contention, the fact that the plaintiff pleaded guilty to the traffic offense of driving or operating a motor vehicle in an unsafe manner does not conclusively establish that she was negligent … . “It is well settled that a person who pleads guilty to a traffic offense is permitted to explain the reasons for the plea, and it is for the jury to decide what weight, if any, to give to the testimony” … . Here, the plaintiff contended that she pleaded guilty, inter alia, because she did not have the money to keep traveling to New Jersey for court appearances, and thus, it is for a jury to evaluate her explanation and determine what weight, if any, the plea is entitled to in determining if she was negligent … . Charles v American Dream Coaches, 2022 NY Slip Op 06685, Second Dept 11-23-22

Practice Point: In a traffic accident case, the fact that plaintiff pled guilty to a traffic offense is not proof of negligence as a matter of law because the reason for the guilty plea can be explained to the jury. Here plaintiff alleged she pled guilty because she did not have enough money to return to New York for court appearances. That raised a question of fact for the jury.

 

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HERE THE FAILURE TO OPPOSE THE MOTION FOR SUMMARY JUDGMENT WAS DUE TO NEGLECT WHICH DOES NOT WARRANT VACATUR; THE MOTION TO VACATE THE ORDER ENTERED ON PLAINTIFF’S DEFAULT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiff’s motion to vacate the order entered upon plaintiff’s default should not have been granted:

Pursuant to CPLR 5015(a)(1), “[t]he court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person . . . upon the ground of . . . excusable default.” “A party seeking to vacate an order entered upon his or her default in opposing a motion must demonstrate both a reasonable excuse for the default and a potentially meritorious opposition to the motion” . “Law office failure may qualify as a reasonable excuse for a party’s default if the claim of such failure is supported by a credible” and detailed explanation of the default … . The determination as to what constitutes a reasonable excuse is a matter of the court’s discretion, but mere neglect will not suffice … .

… [A] managing attorney at the law firm representing the plaintiff was notified of the February 28, 2018 adjourned deadline to submit opposition papers to the defendants’ motion, and a member of the firm entered a “follow up docket date” for February 7, 2018, “to ensure that the opposition was being handled” … . However, instead of “follow[ing] up with the managing attorney to make sure the opposition was assigned,” the member of the law firm returned the file to the file room. As the member of the law firm affirmed, “[i]t simply was not addressed properly.” … [T]he plaintiff did not move to vacate the order dated August 29, 2018, for approximately eight months, or 253 days, after being served with the order and notice of entry … .

… [T]he plaintiff’s failure to oppose the defendants’ motion was the equivalent of mere neglect and was therefore insufficient to warrant vacatur … . Sauteanu v BJ’s Wholesale Club, Inc., 2022 NY Slip Op 06509, Second Dept 11-16-22

Practice Point: A motion to vacate an order entered upon a party’s default may be granted on law-office-failure grounds but not if the matter was simply neglected. Here the plaintiff did not move to vacate the order for 253 days after service of the order and notice of entry. The court found the plaintiff’s failure to oppose the summary judgment was due to neglect and the motion to vacate the order should not have been granted.

 

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