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THE NOT-FOR-PROFIT CORPORATION LAW CREATES A PRIVATE RIGHT OF ACTION AGAINST AN EMPLOYER FOR RETALIATION FOR WHISTLEBLOWING (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff had stated a cause of action pursuant to Not-For-Profit Corporation Law 715-b alleging her employer retaliated against her for reporting two instances of improper fundraising by her employer. The question on appeal was whether Not-For-Profit Corporation Law 725-b gave rise to a private right of action:

This inquiry involves three factors: “‘(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme'” … . …

Not-For-Profit Corporation Law § 715-b is intended to protect, among others, employees who in good faith report any action or suspected action taken by or within the corporation that is illegal, fraudulent, or in violation of any adopted policy of the corporation from retaliation or adverse employment consequences. Here, the plaintiff is one of the class for whose particular benefit the statute was enacted … . Moreover, the legislative purpose is promoted by holding corporations accountable by allowing whistleblowers to commence civil actions to recover damages for retaliation or adverse employment consequence … . …

… [W]here there is no regulatory agency to otherwise enforce compliance with a statute, “the recognition of a private right of action would do no harm” … .

… [T]here is no regulatory agency to enforce compliance with Not-For-Profit Corporation Law § 715-b on behalf of an employee … . Ferris v Lustgarten Found., 2020 NY Slip Op 07357, Second Dept 12-9-20

 

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THE LOST NOTE AFFIDAVITS SUBMITTED BY THE PLAINTIFF IN THIS FORECLOSURE ACTION WERE INVALID; PLAINTIFF’S MOTION FOR LEAVE TO ENTER A DEFAULT JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff bank’s motion to leave to enter a default judgment in this foreclosure action should not have been granted. The lost note affidavits were invalid:

Pursuant to UCC 3-804, “[t]he owner of an instrument which is lost, whether by destruction, theft or otherwise, may maintain an action in his [or her] own name and recover from any party liable thereon upon due proof of his [or her] ownership, the facts which prevent his [or her] production of the instrument and its terms.”

Here, although the plaintiff submitted sufficient evidence establishing that it was the owner and holder of the note and establishing the note’s terms, the lost note affidavits submitted by the plaintiff failed to establish the facts that prevent the production of the original note … . Neither affidavit identifies who conducted the search for the lost note or explains “when or how the note was lost” … . Capital One, N.A. v Gokhberg, 2020 NY Slip Op 07345, Second Dept 12-9-20

 

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THE WIFE’S COUNTERCLAIM FOR ADULTERY IN THIS DIVORCE ACTION, WHICH, IF PROVEN, WOULD HAVE HAD SUBSTANTIAL FINANCIAL CONSEQUENCES FOR THE HUSBAND, SHOULD HAVE BEEN DISMISSED; THE HUSBAND AND THE WOMAN WHO WAS THE SUBJECT OF THE WIFE’S ALLEGATIONS SUBMITTED AFFIDAVITS DENYING ANY SEXUAL RELATIONSHIP; THE WIFE’S AFFIDAVIT WAS BASED ENTIRELY ON PROXIMITY–THE WOMAN WAS THE FAMILY’S BABYSITTER–AND WAS OTHERWISE UNSUPPORTED (SECOND DEPT).

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Dillon, determined the husband’s motion for summary judgment dismissing the wife’s adultery counterclaim should have been granted in this divorce action. Whether the husband committed adultery was an important issue because of the significant financial consequences agreed to in the post-nuptial agreement, including the award to the wife of 80% of the husband’s future gross income and 80% of all marital assets. The wife alleged the husband committed adultery with the family’s babysitter, R.I. The husband and R.I. submitted affidavits denying any sexual relationship:

… [T]he wife’s focus on the husband’s “opportunity” to commit adultery amounts to the husband’s mere proximity to R.L. at various times and places. Clearly, R.L. was the family babysitter and, in that capacity, could be expected to be in the husband’s presence on many occasions, including occasional overnight stays. The wife offers no facts or evidence — whether objective, inferential, or otherwise — of any adulterous conduct between the husband and R.L. beyond their mere physical proximity to one another. The wife’s affidavit provides no dates, describes no suspicious circumstance with any detail or particularity, identifies no particular relevant social event, and identifies no witness who observed conduct or heard comments between the husband and R.L. that might inferentially support a claim of adultery against the husband. There is no investigator, no photograph, and no suspicious documents, texts, emails, or social media posts. Put another way, the wife’s opposition to summary judgment amounts to mere unilateral speculation, conjecture, guess, and surmise stemming from the husband’s and R.L.’s mere proximity to one another, without anything more. The wife’s conclusory affidavit cannot substitute for admissible evidence even recognizing, as we do, that the adultery counterclaim is premised upon circumstantial evidence and the court’s role in determining summary judgment is that of issue-finding … . Agulnick v Agulnick, 2020 NY Slip Op 07335, Second Dept 12-9-20

 

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THE CRITERIA FOR THE HARSH REMEDY OF ATTACHMENT WERE NOT MET (SECOND DEPT).

The Second Department determined the criteria for an order of attachment were not met. The court noted that suspicion of an intent to defraud and the removal, assignment or disposition of property is not enough to warrant the harsh remedy of attachment:

CPLR 6212(a) provides that, on a motion for an order of attachment, “the plaintiff shall show, by affidavit and such other written evidence as may be submitted, that there is a cause of action, that it is probable that the plaintiff will succeed on the merits, that one or more grounds for attachment provided in section 6201 exist, and that the amount demanded from the defendant exceeds all counterclaims known to the plaintiff.” “Attachment is considered a harsh remedy and CPLR 6201 is strictly construed in favor of those against whom it may be employed” … .

The plaintiffs failed to make an adequate evidentiary showing that each of the defendants is a nondomiciliary residing without the state (see CPLR 6201[1]; see also General Construction Law § 35). Moreover, the plaintiffs’ contention that the defendants were attempting to defraud creditors or frustrate enforcement of a possible judgment against them (see CPLR 6201[3]) “was devoid of evidentiary support” … . “The fact that the affidavits in support of an attachment contain allegations raising a suspicion of an intent to defraud is not enough. It must appear that such fraudulent intent really existed in the defendant’s mind” … , and “the mere removal, assignment or other disposition of property is not grounds for attachment” … . 651 Bay St., LLC v Discenza, 2020 NY Slip Op 07331, Second Dept 12-9-20

 

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THE BANK DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304; THE BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s summary judgment motion should not have been granted because the bank did not demonstrate compliance with the notice requirements of RPAPL 1304:

“In a residential foreclosure action, a plaintiff moving for summary judgment must tender sufficient evidence demonstrating the absence of material issues as to its strict compliance with RPAPL 1304” … . 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.” “The statute further provides the required content for the notice and provides that the notice must be sent by registered or certified mail and also by first-class mail to the last known address of the borrower” … . Strict compliance with RPAPL 1304 is a condition precedent to the commencement of a foreclosure action … . Proof of the requisite mailings “can be established with proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure” … . …

… [W]ith respect to the mailing by first-class mail, “[t]he presence of 20-digit numbers on the copies of the 90-day notices submitted by the plaintiff, standing alone, did not suffice to establish, prima facie, proper mailing under RPAPL 1304” … . As to Babik’s [the loan servicer’s employee’s] affidavit, not only did Babik “not attest to personal knowledge of the mailing [or] set forth any details regarding … [the loan servicer’s] mailing practices or procedures” … , she did not aver that a 90-day notice was sent in accordance with the statute … . Wilmington Sav. Fund Socy., FSB v Hershkowitz, 2020 NY Slip Op 07427, Second Dept 12-9-20

 

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THE SECOND MOTION FOR SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED; SUCCESSIVE SUMMARY JUDGMENT MOTIONS ARE GENERALLY PROHIBITED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the prohibition against successive summary judgment motions applied and the second motion should have been denied:

“Generally, successive motions for summary judgment should not be entertained, absent a showing of newly discovered evidence or other sufficient cause” … . “Evidence is not newly discovered simply because it was not submitted on the previous motion” … . “Rather, the evidence that was not submitted in support of the previous summary judgment motion must be used to establish facts that were not available to the party at the time it made its initial motion for summary judgment and which could not have been established through alternative evidentiary means” … . “Successive motions for summary judgment should not be made based upon facts or arguments which could have been submitted on the original motion for summary judgment” … . Wells Fargo Bank, NA v Carpenter, 2020 NY Slip Op 07426, Second Dept 12-9-20

 

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THE NEGLIGENT SUPERVISION ACTION AGAINST PHYSICAL-THERAPY DEFENDANTS SOUNDED IN MEDICAL MALPRACTICE REQUIRING EXPERT OPINION EVIDENCE; THE DOCTRINE OF OSTENSIBLE OR APPARENT AGENCY RAISED A QUESTION OF FACT WHETHER THE PHYSICAL-THERAPY FACILITY WAS VICARIOUSLY LIABLE FOR THE ALLEGED NEGLIGENCE OF THE THERAPIST, WHO WAS AN INDEPENDENT CONTRACTOR (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined: (1) the negligent supervision cause of action against defendants’ physical therapy services sounded in medical malpractice and therefore required expert opinion evidence; and (2) the defendant physical therapist (Gonikman) was an independent contractor but the doctrine of ostensible or apparent agency raised a question of fact about the facility’s (KCM’s) vicarious liability for Gonikman’s alleged negligence. Plaintiff’s infant daughter, who was receiving physical therapy, fell off a scooter and was injured:

Though a medical facility can be held liable for the negligence or malpractice of its employees, it is not generally held liable when the treatment is provided by an independent contractor, even if the facility affiliates itself with that independent contractor … . However, the facility may be held vicariously liable under a theory of apparent or ostensible agency by estoppel … . “In order to create such apparent agency, there must be words or conduct of the principal, communicated to a third party, which give rise to the appearance and belief that the agent possesses the authority to act on behalf of the principal” … . “The third party must reasonably rely on the appearance of authority, based on some misleading words or conduct by the principal, not the agent” … . “Moreover, the third party must accept the services of the agent in reliance upon the perceived relationship between the agent and the principal, and not in reliance on the agent’s skill” … . …

… [S]ince the conduct at issue in the complaint stems from Gonikman’s generalized treatment plan and alleged negligent supervision of the infant daughter during her physical therapy session, the allegation sounds in medical malpractice, not ordinary negligence, because Gonikman’s duty towards the infant daughter derived from the physical therapist-patient relationship … . In support of his cross motion, Gonikman merely submitted a conclusory statement that his therapy plan of activities was consistent with the accepted standard of care, and he failed to submit an expert’s affidavit to establish that he did not deviate from the accepted standard of care for physical therapy … . Weiszberger v KCM Therapy, 2020 NY Slip Op 07425, Second Dept 12-9-20

 

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IN THE ABSENCE OF AN ORDER SUBSTITUTING THE BANKRUPTCY TRUSTEE FOR THE PLAINTIFF-DEBTOR, THE DEFENDANTS’ MOTION TO DISMISS THE COMPLAINT SHOULD HAVE BEEN GRANTED; SUPREME COURT SHOULD NOT HAVE DENIED DEFENDANTS’ MOTION AND DIRECTED PLAINTIFF TO SEEK RELIEF FROM THE BANKRUPTCY COURT (SECOND DEPT).

The Second Department, reversing Supreme Court, noted that, as a matter of comity, based upon an order in bankruptcy court, a New York court will substitute the bankruptcy trustee as a party in a suit involving the plaintiff/debtor. Here there was no such order and the defendants’ motion to dismiss the complaint should have been granted:

“‘[T]he integrity of the bankruptcy system depends on full and honest disclosure by debtors of all of their assets'” … . “By failing to list causes of action on bankruptcy schedules of assets, the debtor represents that it has no such claims” … .

“[O]nce a bankruptcy proceeding is commenced, all legal or equitable interests of the debtor become part of the bankruptcy estate, including any causes of action (… see 11 USC § 541[a][1]). Accordingly, where a debtor has sought chapter 7 bankruptcy protection, “the causes of action formerly belonging to the debtor . . . [vest] in the trustee for the benefit of the estate . . . [and] [t]he debtor has no standing to pursue such causes of action” … .

In cases where a plaintiff-debtor has successfully petitioned the bankruptcy court to reopen the bankruptcy to include a pending action, this Court has invoked the doctrine of comity to permit substitution of the bankruptcy trustee as a plaintiff … . Here, however, the Supreme Court went further, directing [plaintiff] to seek such relief from the bankruptcy court and denying the defendants’ motion to dismiss the complaint … . …

Under these circumstances, the court should have granted that branch of the defendants’ motion which was to dismiss the complaint … . Nevertheless, the trustee, if he or she should chose to re-commence the case in his or her own name, will enjoy the protection offered by CPLR 205 … . Turner v Owens Funeral Home, Inc., 2020 NY Slip Op 07238, Second Dept 12-2-20

 

ALTHOUGH DECEDENT’S BODY WAS DELIVERED TO THE WRONG FUNERAL HOME, PLAINTIFFS DID NOT DEMONSTRATE DEFENDANT INTERFERED WITH PLAINTIFFS’ RIGHT OF SEPULCHER (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiffs did not demonstrate defendant interfered with plaintiffs’ right of sepulcher by releasing the decedent’s body to the wrong funeral home:

“The common-law right of sepulcher affords the deceased’s next of kin an absolute right to the immediate possession of a decedent’s body for preservation and burial . . . , and damages may be awarded against any person who unlawfully interferes with that right or improperly deals with the decedent’s body” … . “To establish a cause of action for interference with the right of sepulcher, [a] plaintiff must establish that: (1) plaintiff is the decedent’s next of kin; (2) plaintiff had a right to possession of the remains; (3) defendant interfered with plaintiff’s right to immediate possession of the decedent’s body; (4) the interference was unauthorized; (5) plaintiff was aware of the interference; and (6) the interference caused plaintiff mental anguish” … . …

…[T]the evidence establishes that Cleckley, who was then satisfying a residency to become a licensed funeral director, was directed by his superior to collect and transport the decedent’s body to the funeral home. The plaintiffs presented no evidence either that Cleckley was aware that the funeral home was not authorized to take possession of the decedent’s body or that he was negligent in failing to verify that his superior was authorized to direct him to collect and transport the decedent’s body. Thus, the plaintiffs failed to meet their prima facie burden to show that he wrongfully interfered with the plaintiffs’ right to immediate possession of the decedent’s body … . The plaintiffs likewise failed to demonstrate that Cleckley acted wrongfully or negligently such that he may be held liable for their emotional injuries … . Turner v Owens Funeral Home, Inc., 2020 NY Slip Op 07237, Second Dept 12-2-20

 

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THE JURY WAS PROPERLY INSTRUCTED ON THE RES IPSA LOQUITUR DOCTRINE IN THIS MEDICAL MALPRACTICE ACTION (SECOND DEPT).

The Second Department determined the jury was properly instructed on the res ipsa loquitur doctrine in this medical malpractice case. Here plaintiffs presented evidence nerve damage would not have occurred absent negligence. The plaintiff’s verdict was upheld:

We agree with the Supreme Court’s determination to charge the jury with respect to res ipsa loquitur. “Under appropriate circumstances, the evidentiary doctrine of res ipsa loquitur may be invoked to allow the factfinder to infer negligence from the mere happening of an event” … . “‘Where the actual or specific cause of an accident is unknown, under the doctrine of res ipsa loquitur a jury may in certain circumstances infer negligence merely from the happening of an event and the defendant’s relation to it'” … . Res ipsa loquitur “‘derives from the understanding that some events ordinarily do not occur in the absence of negligence'” … . “‘In addition to this first prerequisite, plaintiff must establish, second, that the injury was caused by an agent or instrumentality within the exclusive control of defendant and, third, that no act or negligence on the plaintiff’s part contributed to the happening of the event. Once plaintiff satisfies the burden of proof on these three elements, the res ipsa loquitur doctrine permits the jury to infer negligence from the mere fact of the occurrence'” … . “Moreover, expert testimony may be properly used to help the jury ‘bridge the gap’ between its own common knowledge, which does not encompass the specialized knowledge and experience necessary to reach a conclusion that the occurrence would not normally take place in the absence of negligence, and the common knowledge of physicians, which does” … .

Here, the plaintiffs presented expert testimony that, in a first time fundoplication procedure like the plaintiff’s, injury to the vagus nerves should not occur if the surgeon adheres to the accepted standard of care and follows the proper surgical sequence. While the defendants presented evidence that gastroparesis can be idiopathic, “a plaintiff need not conclusively eliminate the possibility of all other causes of the injury to rely on res ipsa loquitur” … . Smith v Sommer, 2020 NY Slip Op 07235, Second Dept 12-2-20

 

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