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SEVERAL COUNTS CHARGING CONTEMPT WERE RENDERED DUPLICITOUS BY THE TRIAL EVIDENCE, COUNTS DISMISSED (SECOND DEPT). ​

The Second Department determined several counts charging contempt were rendered duplicitous by the trial evidence and therefore must be dismissed. The contempt charges alleged the violation of two orders of protection in favor of four people. Neither the jury instructions nor the verdict sheet allowed the jury to pinpoint which alleged violation applied to whom:

Here, counts 9, 10, 11, 14, 15, 16, and 17 of Indictment No. 5685/14 all charged the defendant with criminal contempt in the second degree, arising from his alleged violation of two orders of protection during two separate incidents that occurred on June 27, 2014. The first order of protection was in favor of a single individual; the second order was in favor of that same individual, as well as three others.

Neither the verdict sheet nor the jury charge, however, explained how the testimony and evidence adduced at trial applied to the seven counts—i.e., which counts pertained to which of the two orders of protection and which of the four alleged victims. Therefore, as the People effectively concede, the challenged counts were duplicitous because it is impossible to determine the particular acts upon which the jury reached its verdict with respect to each of the counts … . People v Woodley, 2022 NY Slip Op 00201, Second Dept 1-12-22

 

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DEFENDANT WAS ARRESTED AND INDICTED WHILE OUT ON BAIL; THE COURT SHOULD HAVE HELD A HEARING BEFORE REVOKING THE ORDER RELEASING DEFENDANT ON BAIL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the courts was required to hold a hearing before revoking the order releasing defendant on bail. Defendant was out on bail when he was arrested three times and indicted on one set of charges:

… CPL 530.60(2)(a) states that “[w]henever in the course of a criminal action or proceeding a defendant charged with the commission of a felony is at liberty as a result of an order of recognizance, release under non-monetary conditions or bail issued pursuant to this article it shall be grounds for revoking such order that the court finds reasonable cause to believe the defendant committed one or more . . . violent felony offenses.” By its express terms, this statutory section applies to situations where a principal is accused of committing violent felony offenses while he or she was “at liberty as a result of . . . bail” on a pending felony charge (id.). A principal charged with a felony who was out on bail on that charge necessarily includes individuals charged with qualifying offenses since the setting of bail is not initially authorized for nonqualifying offenses (see CPL 510.10[1], [3], [4]). … CPL 530.60(2)(a) clearly applies to the circumstances here. Since the People applied for remand on the sole basis that the principal was accused of committing violent felony offenses while at liberty on the underlying felony charges, the court was required to apply the standard in CPL 530.60(2)(a) and to conduct the hearing mandated in CPL 530.60(2)(c). People ex rel. Rankin v Brann, 2022 NY Slip Op 00153, Second Dept 1-11-22

 

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THE BANK WHICH COMMENCED THE 2006 FORECLOSURE HAD ALREADY ASSIGNED THE NOTE AND MORTGAGE AND DID NOT HAVE STANDING TO FORECLOSE; THEREFORE THE STATUTE OF LIMITATIONS DID NOT START RUNNING IN 2006; THE DISSENT DISAGREED (SECOND DEPT).

The Second Department, over an extensive dissent, determined that the bank (Option One) which commenced foreclosure proceedings in 2006 did not have standing to do so because it had already assigned the note and mortgage (to Residential). Therefore the six-year statute of limitations did not start to run in 2006. The dissent argued Option One, as the original lender, did in fact have standing. Much of the majority’s decision was devoted to demonstrating the dissenting argument was not valid:

We disagree with our dissenting colleague’s assertion that Option One, after its assignment of the note and mortgage to Residential, continued to have standing to commence and prosecute the 2006 action. Our dissenting colleague misreads the holding in Wilmington Sav. Fund Socy., FSB v Matamoro (200 AD3d 79, 90-91), wherein we held that there are three bases to establish standing in residential foreclosure actions. There is no dispute with regard to the second two bases for finding standing; to wit: a plaintiff’s physical possession of the note prior to commencement of the foreclosure action with an allonge or endorsement in blank or to the plaintiff (second basis), or an assignment of the note to the plaintiff prior to the commencement of the foreclosure action (third basis). However, while the Matamoro Court described the first basis for standing as being “where the plaintiff is the original lender in direct privity with the defendant” … , the second part of the description explained that “[t]he direct privity is rarely seen in residential mortgage foreclosure litigations, given the nature of the home lending business where financial instruments are routinely sold, assigned, or ‘bundled’ from one institution to another between the time funds are initially dispersed by a lender and the commencement of a later foreclosure action” … .  The Matamoro Court’s holding and description of the nature of the market falls squarely into the facts of this case. Contrary to our dissenting colleague’s rationale that the original lender retains the right to sue on a note that it has fully assigned, we have held that”‘[a]n absolute assignment of a bond and mortgage transfers to the assignee all rights theretofore conferred upon the assignor-mortgagee to enforce the bond and mortgage'” … . 21st Mtge. Corp. v Rudman, 2022 NY Slip Op 00031, Second Dept 1-5-22

 

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THE MAJORITY CONCLUDED THE INTERVENTION BY THE TRIAL JUDGE DID NOT DEPRIVE DEFENDANT OF A FAIR TRIAL; STRONG TW0-JUSTICE DISSENT (SECOND DEPT).

The Second Department, over an extensive two-justice dissent, affirmed defendant’s murder conviction. The majority noted that some of the trial judge’s remarks would have been better left unsaid, but held the judge did not intervene excessively. The dissent disagreed:

… [W]hile many of the Supreme Court’s interventions were proper attempts to clarify testimony and facilitate the progress of the trial, we agree with our dissenting colleagues that other remarks would better have been left unsaid. Nevertheless, when the record is viewed as a whole, the court’s conduct, to the extent it was improper, did not prevent the jury from arriving at an impartial verdict on the merits … . * * *

From the dissent:

Viewing the record as a whole, the Supreme Court’s conduct, taken together with, inter alia, its disparate treatment of the two experts … , its efforts to point out inconsistencies in the testimony of the defendant’s wife … , and its assistance in eliciting testimony from the People’s witnesses … , “demonstrated apparent bias in favor of the People” … . This improper interference deprived the defendant of a fair trial, and thus, a new trial is warranted before a different Justice … . People v Martinez, 2022 NY Slip Op 00037, Second Dept 1-5-22

 

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DEFENDANT PROPERLY REJECTED THE MACHINES AS NONCONFORMING GOODS, PLAINTIFF DID NOT CURE THE NONCONFORMITY, AND DEFENDANT WAS ENTITLED TO CONSEQUENTIAL DAMAGES AND LOST PROFITS (SECOND DEPT). ​

The Second Department determined Supreme Court properly found that defendant had rejected the machines as nonconforming goods, plaintiff did not cure the nonconformity, and defendant was properly awarded consequential damages and lost profits:

… [T]he Supreme Court found … the defendant[] demonstrated that the plaintiff had breached express and implied warranties by showing that the machines which were delivered to [defendant] Expansion did not conform to the descriptions set forth in the invoice. The court determined that Expansion was entitled to damages in the principal sum of $53,298.75 for breach of express and implied warranties, representing the amount of lease payments it made on the machines, as well as damages in the principal sum of $2,852,430 for lost profits resulting from that breach. …

… [T]he evidence established that Expansion rejected the machines with particularity as required by UCC 2-605. …

… [W]hile Expansion’s rejection triggered the plaintiff’s right pursuant to UCC 2-A-513 to cure the alleged nonconformity, the … determination that the plaintiff failed to do so was warranted by the facts. …

… [T]he determination that, at the time the parties entered into the contract, damages for lost profits were within the contemplation of the parties is warranted by the facts. It was foreseeable that a breach on the part of the plaintiff with respect to delivering functioning machines would result in Expansion being unable to manufacture sufficient ammunition to fill existing orders, or to accept new orders, culminating in lost profits … . Mil-Spec Indus. Corp. v Expansion Indus., LLC, 2022 NY Slip Op 00035, Second Dept 1-5-22

 

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ALTHOUGH THE BANK IN THIS FORECLOSURE ACTION INSPECTED THE VACANT PROPERTY AND MADE PERIODIC REPAIRS, IT WAS NOT A “MORTGAGEE IN POSSESSION” SUCH THAT THE STATUTE OF LIMITATIONS WAS TOLLED; IN ORDER TO BE DEEMED A “MORTGAGEE IN POSSESSION,” THE MORTGAGOR MUST CONSENT TO THE BANK’S POSSESSION OF THE PROPERTY (SECOND DEPT).

The Second Department, reversing Supreme Court, over a dissent, determined the statute of limitations had run on defendant bank’s foreclosure counterclaim. The bank argued that the statute of limitations had been tolled because it was a “mortgagee in possession,” in that it kept tabs on the property and made repairs. The majority held that, in order to be a “mortgagee in possession,” the mortgagor must consent to the possession. Such consent constitutes an acknowledgment of the debt. The mortgagor here did not consent to the mortgagee’s possession of the property:

We disagree with our dissenting colleague that determining whether a mortgagee qualifies as a mortgagee in possession for purposes of tolling the statute of limitations requires “an analysis of the actions taken by the mortgagee to secure the property financially and physically.” Rather, the determination only requires an analysis of whether the mortgagee took full possession of the property pursuant to an agreement with the mortgagor. Mardenborough v U.S. Bank N.A., 2022 NY Slip Op 00034, Second Dept 1-5-22

 

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THE CONDOMINIUM BOARD OF MANAGERS PROPERLY APPLIED THE BUSINESS JUDGMENT RULE WHEN IT AUTHORIZED CONSTRUCTION WHICH NARROWED PLAINTIFF’S BOAT SLIP; THE DISSENT ARGUED THE BOARD FAILED TO SHOW THAT IT ACTED IN ACCORDANCE WITH THE CONDOMINIUM BYLAWS, WHICH IS REQUIRED BY THE BUSINESS JUDGMENT RULE (SECOND DEPT).

The Second Department, over a dissent, determined the defendant condominium board of managers properly applied the business judgment rule when it authorized construction which narrowed the boat slip assigned to plaintiff when she purchased the condominium:

“Under the business judgment rule, the court’s inquiry is limited to whether the board acted within the scope of its authority under the bylaws (a necessary threshold inquiry) and whether the action was taken in good faith to further a legitimate interest of the condominium. Absent a showing of fraud, self-dealing or unconscionability, the court’s inquiry is so limited and it will not inquire as to the wisdom or soundness of the business decision” … .

From the dissent:

Under the business judgment rule, a necessary threshold inquiry is whether the board acted within the scope of its authority under the bylaws and whether the action was taken in good faith to further a legitimate interest of the condominium … . Here, as set forth below, the Board failed to show, prima facie, that it satisfied this first prong—that it acted pursuant to the bylaws. Katz v Board of Mgrs. of Stirling Cove Condominium Assn., 2022 NY Slip Op 00033, Second Dept 1-5-22

 

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ALTHOUGH THE MOTION TO DISMISS THE FORECLOSURE ACTION AS ABANDONED PURSUANT TO CPLR 3215 WAS DENIED ON A GROUND NOT RAISED BY THE PARTIES, THE ORDER WAS SELF-PRESERVED AND APPEALABLE; THE PRESENTATION OF AN ORDER OF REFERENCE WITHIN ONE YEAR OF DEFENDANT’S DEFAULT PRECLUDES A FINDING THAT THE ACTION WAS ABANDONED PURSUANT TO CPLR 3215, DESPITE THE MOTION COURT’S REJECTION OF THE ORDER AS INCOMPLETE (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Dillon, over a concurrence and an extensive two-justice dissent, determined; (1) the dismissal of the foreclosure complaint as abandoned pursuant to CPLR 3215 was appealable, even though it was dismissed, sua sponte, on a ground not raised by the parties; and (2) the fact that the plaintiff submitted an order, albeit an order which was rejected for incompleteness, within one year of defendant’s default rendered  the dismissal pursuant to CPLR 3215 unavailable as a remedy:

The [motion] court employed CPLR 3215(c) reasoning, never argued by the parties, to decide a CPLR 3215(c) motion, just as in Rosenblatt [119 AD3d 45],  the court employed reasoning under CPLR 3212, which was never argued by the parties, to decide a CPLR 3212 summary judgment motion. Under the authority of either Rosenblatt or Tirado [175 AD3d 153], the analysis and reasoning of the court, in the order appealed from, although sua sponte, self-preserved the issues for appellate review because it was pursuant to the same CPLR section within which the plaintiff’s motion was based and was dispositive to the action. * * *

… [T]he plaintiff presented a proposed ex parte order of reference within the one-year statutory period. The fact that the Supreme Court rejected the order of reference as defective is beside the point, as the mere presentment of it established the plaintiff’s intent to proceed toward the entry of judgment and not to abandon the action … . Citibank, N.A. v Kerszko, 2022 NY Slip Op 00032, Second Dept 1-5-22

 

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DEFENDANT EMPLOYEE DID NOT HAVE HIS EMPLOYER’S PERMISSION TO DRIVE THE TRUCK INVOLVED IN THE ACCIDENT; THEREFORE THE EMPLOYER’S INSURER PROPERLY DISCLAIMED COVERAGE (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the driver, Nichols, did have the permission of his employer (Monro) to drive the truck involved in the accident. Therefore Monro’s insurer properly disclaimed coverage:

Under Vehicle and Traffic Law § 388 (1), the negligence of the operator of a motor vehicle may be imputed to the owner of the vehicle who “operat[ed] the same with the permission, express or implied, of such owner”… . The statute “creates a presumption that the vehicle is being operated with the owner’s consent, but the presumption may be rebutted by substantial evidence showing that the operation was without permission”… .

We find that respondents rebutted the presumption of permissive use. Michael Kio, Monro’s store manager and Nichols’ superior, testified that he advised Nichols on more than one occasion of the company’s longstanding policy proscribing an employee’s personal use of company vehicles, including the truck. Nichols acknowledged to Kio that he was aware and understood this policy and that he did not have permission to operate the truck for personal use or use outside of business hours, and that it was to be used for store business only. As Nichols stated in his written submission to Supreme Court, “I knew I was not supposed to be driving the company truck off company time.” The statements of Kio and Nichols regarding company policy and their understanding of that policy proscribing personal use stand uncontradicted. “Uncontradicted statements by both the vehicle’s owner and its driver that the driver was operating the vehicle without the owner’s permission will constitute substantial evidence that rebuts the presumption” … . Matter of Progressive Specialty Ins. Co. (Travelers Prop. Cas. Co. of Am.), 2021 NY Slip Op 07598, Third Dept 12-30-21

 

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FAMILY COURT SHOULD NOT HAVE DETERMINED, WITHOUT A HEARING, THAT NEW YORK DID NOT HAVE JURISDICTION OVER THIS CUSTODY MATTER OR THAT NEW YORK WAS AN INCONVENIENT FORUM; MOTHER HAD RELOCATED TO HAWAII WITH THE CHILDREN (SECOND DEPT).

The Second Department, reversing Family Court, determined the court should not have summarily, without a hearing: (1) New York did not have jurisdiction over the custody proceeding; and (2) New York was in inconvenient forum. Mother had relocated to Hawaii with the children:

The court made the initial custody determination for the children in conformity with the provisions of the Uniform Child Custody Jurisdiction and Enforcement Act (hereinafter UCCJEA) and, therefore, would ordinarily retain exclusive continuing jurisdiction pursuant to Domestic Relations Law § 76-a … . In order to determine the issue of whether it lacked exclusive continuing jurisdiction pursuant to Domestic Relations Law § 76-a(1)(a), the court should have afforded the parties an opportunity to present evidence as to whether the children had maintained a significant connection with New York, and whether substantial evidence was available in New York concerning the children’s “care, protection, training, and personal relationships” … . …

If, upon remittal, the court determines that it does retain exclusive and continuing jurisdiction pursuant to Domestic Relations Law § 76-a, it may exercise that jurisdiction or it may decline to do so if it determines, upon consideration of all of the relevant statutory factors and after allowing the parties to be heard, that New York is an inconvenient forum … . Matter of Sutton v Rivera, 2021 NY Slip Op 07548, Second Dept 12-29-21

 

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