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THE JUDGE SHOULD NOT HAVE, SUA SPONTE, TERMINATED THE LEASE BASED ON ALLEGED NONPAYMENT; AND THE JUDGE SHOULD NOT HAVE ISSUED A PRELIMINARY INJUNCTION WHICH GRANTED PLAINTIFF THE ULTIMATE RELIEF SOUGHT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judge should not have, sua sponte, terminated the lease and should not have issued a preliminary injunction. Plaintiff alleged defendant breached the lease and sought to enjoin defendant from using the land pending the outcome of the litigation:

The Supreme Court erred in, sua sponte, declaring that the Lease Agreement terminated due to the defendant’s nonpayment of rent … . There was no motion for summary judgment before the court, and the court did not afford the parties notice of any intention to deem the plaintiff’s motion, inter alia, for leave to amend the complaint, as one, among other things, for summary judgment … .

… [A] preliminary injunction may not issue unless the moving party demonstrates a probability of success on the merits, a danger of irreparable injury in the absence of an injunction, and a balance of equities in that party’s favor … . The purpose of a preliminary injunction is to maintain the status quo pending a final determination in the action or proceeding … and “not to determine the ultimate rights of the parties” … . “[A]bsent extraordinary circumstances, a preliminary injunction will not issue where to do so would grant the movant the ultimate relief to which he or she would be entitled in a final judgment” … .

Here, the plaintiff “failed to demonstrate that the circumstances were of such an extraordinary nature to justify th[e] relief that was granted pending the resolution of the action” … . County of Nassau v NY Youth Sports Network, Inc., 2026 NY Slip Op 03289, Second Dept 5-27-26

Practice Point: The appellate courts do not like “sua sponte” actions by a judge. Here the judge terminated the lease based on nonpayment in the absence of any motion requesting that relief.

Practice Point: A preliminary injunction which grants the ultimate relief sought by the plaintiff should only rarely be issued. Here the circumstances did not justify such extraordinary relief.

 

THE PROCESS SERVER DID NOT EXERCISE DUE DILIGENCE IN ATTEMPTING TO SERVE DEFENDANT BEFORE RESORTING TO NAIL AND MAIL; THE PROCESS SERVER WAS AWARE OF DEFENDANT’S PLACE OF EMPLOYMENT BUT DID NOT ATTEMPT TO SERVE DEFENDANT THERE (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the process server did not exercise due diligence in attempting to serve the defendant before resortinng to nail and mail. Defendant’s motion to vacate the default judgment should have been granted:

“CPLR 308 requires that service be attempted by personal delivery of the summons ‘to the person to be served’ … , or by delivery ‘to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode’ … ” …. “Service pursuant to CPLR 308(4) may be resorted to only where personal service pursuant to CPLR 308(1) and (2) ‘cannot be made with due diligence'” …. “The due diligence requirement of CPLR 308(4) must be strictly observed, given the reduced likelihood that a summons served pursuant to that section will be received. What constitutes due diligence is determined on a case-by-case basis, focusing not on the quantity of the attempts at personal delivery, but on their quality” … . “The due diligence requirement may be met with a few visits on different occasions and at different times to the defendant’s residence or place of business when the defendant could reasonably be expected to be found at such location at those times” … . “Additionally, ‘[f]or the purpose of satisfying the due diligence requirement of CPLR 308(4), it must be shown that the process server made genuine inquiries about the defendant’s whereabouts and place of employment'” … .

Here, the plaintiff failed to demonstrate that the process server acted with due diligence before resorting to affix and mail service pursuant to CPLR 308(4) … . The process server averred that he made two prior attempts to personally serve the defendant at the property before affixing the summons and complaint to the door. However, there was no indication in the record that the process server made any genuine inquiries about the defendant’s whereabouts or place of business … . Moreover, the record reflects that the plaintiff was aware of the defendant’s employment address as of the commencement of the action, but no attempts were made to serve the defendant at his place of employment … . Castro v Castro, 2026 NY Slip Op 03287, Second Dept 5-27-26

Practice Point: Here the process server was aware of where defendant worked but did not attempt to serve defendant there before resorting to nail and mail. The process server failed to exercise due diligence and the default judgment against defendant was vacated.

 

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DEFENDANT CORPORATION IN THIS FORECLOSURE ACTION RAISED A QUESTION OF FACT ABOUT WHETHER THE PERSON WHO SIGNED THE LOAN DOCUMENTS ON BEHALF OF THE CORPORATION HAD THE APPARENT AUTHORITY TO DO SO; PLAINTIFF CANNOT RELY SOLELY ON THE PURPORTED AGENT’S ASSERTIONS OF AUTHORITY, BUT RATHER MUST MAKE A REASONABLE INQUIRY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant corporation in this foreclosure action raised a question of fact whether Wing Fung Chau had apparent authority to sign the loan documents on behalf of the corporation at the time of the closing:

“One who deals with an agent does so at his [or her] peril, and must make the necessary effort to discover the actual scope of authority” … . “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 [or her] own acts imbue himself [or herself] with apparent authority” … . “‘It is axiomatic that apparent authority must be based on the actions or statements of the principal'” … . “[T]he existence of apparent authority depends upon a factual showing that the third party relied upon the misrepresentations of the agent because of some misleading conduct on the part of the principal—not the agent” … . “A third party cannot rely on the alleged agent’s own action and statements, since apparent authority cannot be based upon the agent’s acts” … . Furthermore, the third party “may rely on an appearance of authority only to the extent that such reliance is reasonable” … .

Here, the corporation submitted, among other things, affidavits from its president and secretary/vice president, as well as a shareholder agreement dated December 15, 2017, and the corporation’s bylaws, which demonstrated that Wing Fung Chau held no corporate office and did not have the authority to execute the consolidated note and mortgage on behalf of the corporation, and that the corporation had not communicated to the plaintiff, as a third party, words or conduct that gave rise to the appearance and reasonable belief that Wing Fung Chau possessed authority to execute the consolidated note and mortgage on behalf of the corporation … . While the plaintiff relied on the purported bylaws it received from Wing Fung Chau that identified him as the sole shareholder of the corporation and the loan documents he signed that identified him as the president, the plaintiff produced no evidence that it took any further steps to assure itself that Wing Fung Chau had the authority to enter into the loan transaction … . Thus, the record showed only that any authority of Wing Fung Chau’s arose from his own acts, by which he could not “imbue himself with apparent authority” … . “This is especially true where, as here, the [plaintiff] failed to conduct a reasonable inquiry into the scope of [Wing Fung Chau’s] alleged authority” … . BP3 Capital, LLC v 5120 Realty Corp., 2026 NY Slip Op 03286, Second Dept 5-27-26

Practice Point: Here there is a question of fact whether the person who signed the loan documents on behalf of the corporation had the apparent authority to do so. One who deals with a purported agent must make an effort to learn the scope of the purported agent’s authority and cannot rely solely on the purported agent’s assertions.

 

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THIS TENANT ACTION ALLEGING FRAUDULENT RENT OVERCHARGES AND VIOLATIONS OF THE NYC RENT STABILIZATION LAW AND CODE IS APPROPRIATE FOR A CLASS ACTION; THE MOTION FOR CERTIFICATION OF A CLASS ACTION SHOULD NOT HAVE BEEN DENIED (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the tenants’ motion for class certification in this action alleging fraudulent rent overcharges and violations of the NYC Rent Stabilization Law and Code should not have been dismissed:

CPLR 901(a) sets forth the five requirements for certification of a class action: “1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable; 2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members; 3. the claims or defenses of the representative parties are typical of the claims or defenses of the class; 4. the representative parties will fairly and adequately protect the interests of the class; and 5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” “These factors are commonly referred to as the requirements of numerosity, commonality, typicality, adequacy of representation and superiority” … . “[T]he court’s inquiry ‘vis-à-vis the merits is limited to a determination as to whether on the surface there appears to be a cause of action which is not a sham'” … .

… [T]he issue of whether the defendant overcharged tenants in violation of the rent stabilization laws pursuant to a fraudulent scheme predominates over the questions affecting the individual class members … . …

… [T]he plaintiffs demonstrated that they “will fairly and adequately protect the interests of the class” … . Because the plaintiffs’ attorneys had “assume[d] responsibility for litigation expenses, the [plaintiffs’] personal financial condition [was] irrelevant” … . The plaintiffs also demonstrated that a class action was the superior vehicle for addressing their allegations … . Abdelrazek v 12-15 Broadway Astoria, LLC, 2026 NY Slip Op 03283, Second Dept 5-27-26

Practice Point: Consult this decision for insight into how the criteria for a class action are applied to allegations of fraudulent rent overcharges.

 

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IF A JUDGE DIRECTS THAT A PROPOSED JUDGMENT BE SETTLED OR SUBMITTED ON NOTICE, THE JUDGMENT MUST BE SUBMITTED FOR SIGNATURE WITHIN 60 DAYS OR THE MATTER WILL BE DEEMED ABANDONED PURSUANT TO 22 NYCRR 202.48; HERE, HOWEVER, THE JUDGE DID NOT DIRECT THAT THE PROPOSED JUDGMENT BE SUBMITTED ON NOTICE, SO 22 NYCRR 202.48 AND THE 60-DAY DEADLINE DID NOT APPLY (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiffs did not abandon the action by failing to submit a proposed judgment within 60 days of the inquest awarding damages to plaintiffs after defendants’ default. The 60-day deadline is only triggered when a judge directs the order to be settled or submitted on notice, not the case here:

On January 26, 2022, after an inquest, the court awarded the plaintiffs $188,560 in damages as against both defendants. The plaintiffs did not submit a proposed judgment until November 2022.

Thereafter, the defendants moved, inter alia, pursuant to 22 NYCRR 202.48 to dismiss the complaint as abandoned. In an order dated April 29, 2024, the Supreme Court … granted that branch of the motion. …

“Proposed orders or judgments, with proof of service on all parties where the order is directed to be settled or submitted on notice, 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” (22 NYCRR 202.48[a]; see Funk v Barry, 89 NY2d 364, 367 …). “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[b]). “However, 22 NYCRR 202.48 does not apply where the court merely directs a party to submit an order or judgment without expressly directing that the order or judgment be submitted on notice” … . Here, since the Supreme Court did not direct that a judgment based on its decision after the inquest be settled or submitted on notice, the plaintiffs were not required to comply with 22 NYCRR 202.48 … . Rosenberg v Tool Time Constr. Corp., 2026 NY Slip Op 03192, Second Dept 5-20-26

Practice Point: If the judge does not direct that a proposed judgment be submitted on notice, 22 NYCRR 202.48, which requires that the judgment be submitted for signature within 60 days, does not apply.

 

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DEFENDANT’S AVERMENTS IN HER MOTION TO VACATE HER CONVICTION BY GUILTY PLEA WERE SUFFICIENT TO WARRANT HEARINGS ON WHETHER HER PARTICIPATION IN THE OFFENSE WAS THE RESULT OF HER BEING A VICTIM OF SEX TRAFFICKING AND WHETHER HER COUNSEL WAS INEFFECTIVE FOR FAILING TO INFORM HER OF THE DEPORTATION CONSEQUENCES OF HER PLEA (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant was entitled to a hearing on her motion to vacate the judgment of conviction. The motion to vacate argued defendant participated in the offense as a result of being a victim of sex trafficking within the meaning of CPL 440.10. In addition, defendant argued her counsel was ineffective in failing to inform her of the deportation consequences of her guilty plea:

…. [T]he defendant averred … that the underlying offense occurred within two to five years of her emigration to the United States, that she was initially hired to provide massages that did not require her to perform sex acts, and that after approximately two months, her boss moved her to another location and instructed her to perform sex acts on clients. The defendant further averred that she twice attempted to leave, but that each time her boss threatened to report the defendant’s activities to either her husband or the authorities. Moreover, in addition to her affidavit, the defendant submitted a letter from the Office of Temporary and Disability Assistance dated November 4, 2022, which stated that the defendant “me[t] the criteria for confirmation as a human trafficking victim in New York State.” Under these circumstances, the defendant’s allegations were sufficient to raise an issue of fact as to whether her participation in the offense underlying her conviction was the result of having been a victim of sex trafficking. * * *

The defendant’s averments, including that she feared for her safety if she returned to China, sufficiently alleged that a decision to reject the plea offer would have been rational … . Therefore, the defendant was also entitled to a hearing on that branch of her motion which was pursuant to CPL 440.10 to vacate the judgment on the ground that she was deprived of the effective assistance of counsel by her counsel’s allegedly erroneous advice regarding the immigration consequences of her plea … . People v L.F., 2026 NY Slip Op 03186, Second Dept 5-20-26

Practice Point: There are statutory grounds for vacation of a judgment of conviction because defendant’s participation in the offense was the result having been a victim of sex trafficking. (CPL 440.10).​

 

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THERE WAS NO EVIDENCE DEFENDANT, WHO WAS FOLLOWING THE SHOOTER’S CAR, WAS AWARE THE SHOOTER INTENDED TO KILL A RIVAL GANG MEMBER, OR EVEN AWARE THE SHOOTER WAS ARMED; THEREFORE THE CONSPIRACY TO COMMIT MURDER CHARGE SHOULD HAVE BEEN DISMISSED (SECOND DEPT).

The Second Department determined defendant’s motion for a trial order of dismissal should have been granted. Defendant was following the shooter’s car when the shooter shot and killed a member of a rival gang. There was no evidence defendant knew the shooter intended to kill or even that the shooter was armed. Therefore the evidence did not demonstrate that defendant shared the shooter’s intent to kill:

While the evidence, viewed in the light most favorable to the People, showed that the defendant conspired with others to retaliate against rival gang members, it failed to establish that the defendant entered into a conspiracy with the goal of committing murder in the second degree … . The People failed to present direct or circumstantial evidence establishing that the defendant was aware that Kelson or Oliveras were armed or had the intent to commit murder or that the defendant, in fact, joined a conspiracy with the goal of committing murder … . For the same reasons, the evidence was insufficient to establish that the defendant believed that he was rendering aid to a person who intended to commit murder. People v Hewitt, 2026 NY Slip Op 03184, Second Dept 5-20-26

Practice Point: Consult this decision for insight into the proof necessary for a conspiracy-to-commit-murder conviction. There must be evidence the defendant shared the killer’s intent, not the case here.

 

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THE LABOR LAW LIABILITY EXEMPTION FOR OWNERS OF ONE AND TWO FAMILY HOMES DOES NOT APPLY WHERE THE WORK HAS A COMMERCIAL PURPOSE, I.E., RENOVATION OF THE PROPERTY FOR SALE OR RENTAL; HERE THE DEFENDANTS DID NOT ELIMINATE QUESTIONS OF FACT ABOUT WHETHER THE WORK WAS FOR A COMMERCIAL PURPOSE (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the Labor Law 240(1) and 241(6) causes of action against the owner of a one or two-family dwelling should not have been dismissed on the ground that owners of one and two-family dwellings who do not control the work, are exempt form Labor Law liability. The exemption depends on whether the work serves a residential or commercial purpose. Here, without describing the facts, the Second Department held there was a question of fact about whether the work served a residential or commercial purpose:

Labor Law §§ 240(1) and 241(6) impose nondelegable duties upon property owners to comply with certain safety practices for the protection of workers engaged in certain activities. Both statutes exempt from liability “owners of one and two-family dwellings who contract for but do not direct or control the work” (id. §§ 240[1]; 241[6]). However “‘[r]enovating a residence for resale or rental plainly qualifies as work being performed for a commercial purpose'” … . Where the property serves both residential and commercial purposes, “[a] determination as to whether the exemption applies in a particular case turns on the nature of the site and the purpose of the work being performed, and must be based on the owner’s intentions at the time of the injury” … .

Here … the defendants failed to eliminate triable issues of fact as to whether they were entitled to the homeowner’s exemption to Labor Law §§ 240(1) and 241(6), including whether the premises had a commercial purpose and whether the work the plaintiff performed related to a commercial purpose of the premises … . Moreno v Hossain, 2026 NY Slip Op 03159, Second Dept 5-20-26

Practice Point: The exemption from Labor Law liability for owners of one and two-family homes does not apply when the purpose of the work is commercial, renovation for sale or rental, for example.

 

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THE BANK SENT THE RPAPL 1304 NOTICE OF FORECLOSURE TO THE TWO BORROWERS IN THE SAME ENVELOPE, A VIOLATION OF RPAPL 1304; FORECLOSURE COMPLAINT DISMISSED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined the foreclosure complaint should have been dismissed because the RPAPL 1304 notice of foreclosure was mailed to both borrowers in the same envelope:

RPAPL 1304(1) provides that “at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, . . . including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower.” “Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action” … , and “the plaintiff has the burden of establishing satisfaction of this condition” … . “[T]he mailing of a 90-day notice jointly addressed to two or more borrowers in a single envelope is not sufficient to satisfy the requirements of RPAPL 1304, and . . . the plaintiff must separately mail a 90-day notice to each borrower as a condition precedent to commencing the foreclosure action” …  * * *

… [T]he defendants established that the plaintiff failed to comply with RPAPL 1304 since it is undisputed that a jointly addressed 90-day notice, rather than individually addressed notices in separate envelopes, was sent to the defendants … . HSBC Bank USA, N.A. v Palmore, 2026 NY Slip Op 03152, Second Dept 5-20-26

Practice Point: The bank’s strict compliance with the notice of foreclosure requirements in RPAPL 1304 is a condition precedent to any foreclosure action. Here, sending the RPAPL 1304 notice of foreclosure to the two borrowers in the same envelope violated RPAPL 1304 requiring dismissal of the foreclosure complaint.

 

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WHERE THE STATUTORY PRECONDITIONS FOR DISMISSAL OF A COMPLAINT FOR NEGLECT TO PROSECUTE (CPLR 3216) ARE NOT MET, THE COURT HAS NO AUTHORITY TO, SUA SPONTE, DISMISS THE ACTION; RATHER, THE ACTION MUST BE RESTORED TO THE ACTIVE CALENDAR (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judge did not have the authority to, sua sponte, dismiss the complaint for neglect to prosecute. At the time the purported 90-day notice was issued by the judge, issue had not yet been joined. In addition, the purported 90-day notice did not include all the information required by CPLR 3216(b):

“CPLR 3216 permits a court, on its own initiative, to dismiss an action for want of prosecution where certain conditions precedent have been complied with” … . “[A] court may not dismiss an action based on neglect to prosecute unless the CPLR 3216 statutory preconditions to dismissal are met” … . Here, the Supreme Court was without authority to issue a 90-day notice since issue was not joined in the action … .

In addition, “[p]ursuant to CPLR 3216(b), an action cannot be dismissed pursuant to CPLR 3216(a) unless a written demand is served upon the party against whom such relief is sought in accordance with the statutory requirements, along with a statement that the default by the party upon whom such notice is served in complying with such demand within said ninety day period will serve as a basis for a motion by the party serving said demand for dismissal as against him [or her] for unreasonably neglecting to proceed” … . Here, there is no evidence in the record that the plaintiff was served with a written demand as required by CPLR 3216. Moreover, the conditional order of dismissal, which, in effect, served as a 90-day notice pursuant to CPLR 3216, was defective in that it did not state that the plaintiff’s failure to comply with the demand would serve as a basis for the Supreme Court, on its own motion, to dismiss the action for failure to prosecute … . Further, the record demonstrates that no such motion was ever made, nor was there entry of an order of dismissal. Therefore, the action should have been restored to the active calendar without considering whether the plaintiff had a reasonable excuse for its delay in moving to vacate the conditional order of dismissal … . Deutsche Bank Natl. Trust Co. v Poyer, 2026 NY Slip Op 03145, Second Dept 5-20-26

Practice Point: An action cannot be dismissed by a judge, sua sponte, for failure to prosecute if (1) issue had not yet been joined, or (2) if all the statutory preconditions for dismissal pursuant to CPLR 3216 have not been met. Rather, the action must be restored to the active calendar.

 

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