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THE TRUST-ASSET-SUBSTITUTION AGREEMENT, SUBSTITUTING LIFE INSURANCE FOR CERTAIN ASSETS, WAS SUBJECT TO EPTL 11-1.7(a)(1); THEREFORE THE PROVISION OF THE AGREEMENT RELEASING THE TRUSTEE FROM LIABILITY WAS AGAINST PUBLIC POLICY AND THE TRUSTEE IS LIABLE FOR FAILING TO ENSURE THE LIFE INSURANCE PREMIUMS WERE PAID (SECOND DEPT).

The Second Department, reversing Surrogate’s Court, determined the 1992 agreement substituting life insurance for trust assets was covered by Estates, Powers and Trusts Law (EPTL) 11-1.7(a)(1) and the trustee, which owned the policies, was liable in negligence for failing to ensure the premiums were paid (the policies had lapsed). The provision of the trust-asset-substitution agreement exonerating the trustee from liability was invalid as against public policy. The matter was remitted for a determination of damages:

The Surrogate’s Court found that the 1992 agreement created a “new trust agreement” funded in part by the life insurance policies, which was not part of the testamentary trust, and therefore not governed by EPTL 11-1.7(a). The court further found that the agreement released the trustee from any promises relating to “the substitution of property,” which relieved the trustee of any “liability to monitor the investment owed to the trust,” released the trustee and any successor trustee “from any future lawsuit,” and released the trustee of any fiduciary duty to act upon Robert’s default in paying insurance premiums.

Contrary to the conclusion of the Surrogate’s Court, the agreement did not create a new trust. Rather, the agreement provided for the substitution of testamentary trust property with life insurance policies. The petitioner included the life insurance policies in its final account of the testamentary trusts as worthless assets. There is no reference to any separate accounting for the life insurance policies as part of a separate trust. Thus, the duty of the trustee was governed by EPTL 11-1.7(a)(1), which states that the exoneration of a testamentary trustee from liability for failure to exercise reasonable care, diligence, and prudence is contrary to public policy. Matter of Wilkinson, 2020 NY Slip Op 00286, Second Dept 1-15-20

 

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THE BANK DID NOT PROVE STANDING, DEFENDANT’S DEFAULT, OR COMPLIANCE WITH THE NOTICE REQUIREMENTS OF RPAPL 1304; CRITERIA FOR PROVING EACH ISSUE EXPLAINED IN SOME DETAIL (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank’s motion for summary judgment should not have been granted because plaintiff’s standing, defendants’ default, and plaintiff’s compliance with the notice provisions of RPAPL 1304 were not proven. The Second Department explained the proof requirements for each:

… [T]he plaintiff failed to show that the note was properly endorsed and thus validly transferred to it … . * * *

… [T]he plaintiff also failed to submit admissible evidence of the defendants’ default in making the mortgage payments due under the terms of the note and mortgage … . * * *

The plaintiff also failed to proffer evidence establishing its compliance with the notice requirements of RPAPL 1304. U.S. Bank N.A. v Moulton, 2020 NY Slip Op 00171, Second Dept 1-8-20

 

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JURY CONFUSION AND THE INCONSISTENT VERDICT IN THIS LABOR LAW 241(6) ACTION REQUIRED A NEW TRIAL; EVEN A WORKER AUTHORIZED TO BE WITHIN THE RANGE OF AN EXCAVATOR BUCKET CAN CLAIM THE PROTECTION OF THE INDUSTRIAL CODE PROVISION WHICH PROHIBITS WORK IN AN AREA WHERE A WORKER MAY BE STRUCK BY EXCAVATION EQUIPMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the inconsistent verdict in this Labor Law 241(6) action required a new trial. The trial court had dismissed the action. The Second Department noted that even though plaintiff was a member of an excavator crew and therefore was authorized to be within range of a moving excavator bucket he still claim the protections provided by 12 NYCRR 23-9.5(k) which provides “[p]ersons shall not be . . . permitted to work in any area where they may be struck . . . by any excavation equipment.” Plaintiff’s hand was crushed by an excavator bucket:

The jury returned a verdict finding that the City defendants violated Industrial Code (12 NYCRR) 23-4.2(k), but that the violation was not a substantial factor in causing the accident. Although the instructions on the verdict sheet directed the jury to end its deliberations if it found that the violation of Industrial Code (12 NYCRR) 23-4.2(k) was not a substantial factor in causing the accident, the jury further found that the injured plaintiff was negligent and that his negligence was a substantial factor in causing the accident. The jury then proceeded to apportion fault 25% to the City defendants and 75% to the injured plaintiff. After the Supreme Court instructed the jurors to reconsider its verdict, the jury returned a second verdict which was identical to the first verdict, except that the jurors did not answer the questions as to the injured plaintiff’s negligence and apportionment of fault. …

“When a jury’s verdict is internally inconsistent, the trial court must direct either reconsideration by the jury or a new trial” ( …see CPLR 4111[c] …). “On reconsideration, the jury [is] free to substantively alter its original statement so as to conform to its real intention, and [is] not bound by the terms of its original verdict inasmuch as that verdict was not entered by the court” … . “Even after reconsideration by the jury, a trial court has discretion to set aside a verdict which is clearly the product of substantial confusion among the jurors” . “A new trial should be granted where . . . the record demonstrates … substantial confusion among the jurors in reaching a verdict” … . Torres v City of New York, 2020 NY Slip Op 00170, Second Dept 1-8-20

 

WOOD WHICH HAD FALLEN TO THE GROUND FROM A SPLIT RAIL FENCE IS AN OPEN AND OBVIOUS CONDITION WHICH IS NOT ACTIONABLE IN THIS SLIP AND FALL CASE (SECOND DEPT).

The Second Department determined wood from a split rail fence which had fallen to the ground was open and obvious and therefore not actionable in this slip and fall case:

A landowner has a duty to maintain its premises in a reasonably safe condition . There is, however, no duty to protect or warn against conditions that are open…  and obvious and not inherently dangerous … . Here, the defendants established their entitlement to judgment as a matter of law by demonstrating, prima facie, that the wood on the ground was open and obvious and not inherently dangerous … . Swinney v Nassau County, 2020 NY Slip Op 00169, Second Dept 1-8-20

 

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DEFENDANT CLEANING SERVICE CONTRACTOR SUBMITTED EVIDENCE WHICH CREATED A QUESTION OF FACT WHETHER, PURSUANT TO THE ESPINAL CRITERIA, IT LAUNCHED AN INSTRUMENT OF HARM WHICH CAUSED PLAINTIFF’S SLIP AND FALL; DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant cleaning service contractor’s motion for summary judgment in this slip and fall case should not have been granted. Plaintiff alleged defendant was liable under Espinal for launching or creating an instrument of harm by mopping the floor without placing warning signs in the are where she fell:

Generally, a contractual obligation, standing alone, will not give rise to tort liability in favor of a third party (see Espinal v Melville Snow Contrs., 98 NY2d 136, 140). However, there are three exceptions to the general rule … . …

Here, the plaintiff alleged only one of the Espinal exceptions: that the defendant created or launched an instrument of harm. Thus, in support of its motion for summary judgment dismissing the complaint, the defendant was required to establish, prima facie, that it did not create or launch an instrument of harm … . … [T]he defendant’s submissions demonstrated the existence of triable issues of fact regarding the location of “wet floor” signs and whether the wet floor or the signs were readily observable by a reasonable use of the plaintiff’s senses as she entered the area through a closed door … . Thus, the defendant failed to establish, prima facie, that it did not create the condition that caused the plaintiff to fall or that it provided adequate notice of the alleged hazardous condition … . Ramsey v Temco Serv. Indus., Inc., 2020 NY Slip Op 00166, Second Dept 1-8-20

 

DEFENDANT’S DISCARDING A BAG OF MARIJUANA AS HE WAS BEING PURSUED BY POLICE FOR AN OPEN-CONTAINER VIOLATION CONSTITUTED ATTEMPTED TAMPERING WITH PHYSICAL EVIDENCE (SECOND DEPT).

The Second Department determined that defendant’s discarding a bag of marijuana as he was being pursued by a police officer for violating the city’s open-container law constituted attempted tampering with physical evidence, not tampering with physical evidence:

Here, the charge of tampering with physical evidence was based on the defendant’s act of discarding the plastic bag containing marijuana as he was being pursued by Officer Scuadroni for violating the City’s open-container law. Contrary to the People’s contention, the defendant’s act of discarding the bag did not constitute an act of concealment within the meaning of Penal Law § 215.40(2). Nevertheless, since the defendant “engage[d] in conduct that tends to effect, and comes dangerously near to accomplishing, an act of concealment intended to suppress the physical evidence” … , there is legally sufficient evidence to sustain a conviction of attempted tampering with physical evidence (see Penal Law §§ 110.00, 215.40[2 …). Accordingly, we reduce the defendant’s conviction of tampering with physical evidence to attempted tampering with physical evidence … . People v Zachary, 2020 NY Slip Op 00165, Second Dept 1-8-20

 

SENTENCE DEEMED HARSH AND EXCESSIVE; REDUCED IN THE INTEREST OF JUSTICE (SECOND DEPT).

The Second Department reduced the defendant’s sentence, noting it was defendant’s first conviction, her strong family and community ties, her long employment history and her mental health history. “The defendant was convicted of two counts each of rape in the third degree, criminal sexual act in the third degree, and endangering the welfare of a child arising out of two separate incidents wherein the defendant, who was a paraprofessional at a school which the 16½-year-old victim attended, took the victim to a hotel and had sexual intercourse and oral sex with him:”

Appeal by the defendant from a judgment … convicting her of rape in the third degree (two counts), criminal sexual act in the third degree (two counts), and endangering the welfare of a child (two counts), after a nonjury trial, and sentencing her to determinate terms of imprisonment of 3 years on each of the counts of rape in the third degree (counts 1 and 4) and criminal sexual act in the third degree (counts 2 and 5), to be followed by a period of postrelease supervision of 10 years, and a determinate term of imprisonment of 1 year on each of the counts of endangering the welfare of a child (counts 3 and 6), with the sentences imposed on counts 1, 2, and 3 to run concurrently with each other, and the sentences imposed on counts 4, 5, and 6 to run concurrently with each other and consecutively to the sentences imposed on counts 1, 2, and 3. * * *

The sentence imposed, which is at the upper end of the legal sentencing range, is harsh and excessive … . Accordingly, exercising our interest of justice jurisdiction, we modify the sentence to the extent indicated herein … . People v Thompson, 2020 NY Slip Op 00164, Second Dept 1-8-20

 

JUROR SHOULD NOT HAVE BEEN REPLACED WITH AN ALTERNATE; NO SHOWING JUROR WAS ‘UNAVAILABLE’ WITHIN THE MEANING OF CPL 270.35; CONVICTION REVERSED (SECOND DEPT).

The Second Department, reversing defendant’s conviction, determined the trial judge should not have discharged a juror and replaced her with an alternate after the proof had closed and before summations. The juror was not “unavailable” within the meaning of Criminal Procedure Law (CPL) 270.35:

… [A]fter both sides had rested but before summations, the Supreme Court, over the defendant’s objection, excused juror No. 10 and replaced her with an alternate on the basis that juror No. 10 had to travel to Maryland for an evening work obligation the next day, which was a Friday. The day after the alternate was substituted, the jury found the defendant guilty of assault in the first degree and criminal possession of a weapon in the fourth degree. …

… [T]he defendant’s statutory and constitutional rights were violated when, over the defendant’s objection, the court excused Juror No. 10 and substituted an alternate juror. The record does not demonstrate that Juror No. 10 was unavailable as that term is used in CPL 270.35 … . Juror No. 10’s work obligation did not render her unavailable for jury service, as her own convenience or potential financial hardship are insufficient to render her unavailable under CPL 270.35 … . People v Alleyne, 2020 NY Slip Op 00154, Second Dept 1-8-20

 

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DEFENDANT SCHOOL DID NOT DEMONSTRATE IT DID NOT HAVE CONSTRUCTIVE NOTICE OF THE PROTRUDING SCREW WHICH LACERATED PLAINTIFF-STUDENT’S LEG; THE SCHOOL’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department determined defendant school did not demonstrate it lacked constructive notice of the protruding screw which allegedly lacerated plaintiff-student’s leg as she walked by bleachers. Therefore the school’s motion for summary judgment should not have been granted:

A property owner, or a party in possession or control of real property, has a duty to maintain the property in a reasonably safe condition … . In a premises liability case, a defendant property owner, or a party in possession or control of real property, who moves for summary judgment has the initial burden of making a prima facie showing that it neither created the alleged dangerous condition nor had actual or constructive notice of its existence for a sufficient length of time to have discovered and remedied it … . To meet its initial burden on the issue of lack of constructive notice, the moving party is required to offer some evidence as to when the accident site was last inspected or maintained prior to the plaintiff’s accident  … .

Here, in support of their motion, the defendants submitted, inter alia, the affidavit of the School District’s Director of Facilities, Roald Broas, who averred, in relevant part, that the School District did not maintain the subject bleachers, but instead “hire[d] subcontractors to perform inspections and maintenance of the bleachers.” Broas’s conclusory affidavit—which failed to identify the subcontractor who performed the last inspection or maintenance on the bleachers, as well as when and how such inspection or maintenance was performed—was insufficient to establish, prima facie, the School District’s lack of constructive notice of the alleged dangerous condition … . Kelly v Roy C. Ketcham High Sch., 2020 NY Slip Op 00111, Second Dept 1-8-20

 

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PLAINTIFF BANK’S PRIOR FORECLOSURE ACTION WAS DISMISSED FOR FAILURE TO DEMONSTRATE STANDING; RES JUDICATA DOES NOT PRECLUDE THE INSTANT FORECLOSURE ACTION BECAUSE THE PRIOR ACTION WAS NOT DISMISSED ON THE MERITS; COLLATERAL ESTOPPEL DOES NOT PRECLUDE THE INSTANT ACTION BECAUSE THE STANDING ISSUE IS NOT THE SAME (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the prior dismissal of plaintiff bank’s foreclosure action for failure to demonstrate standing did not, under the doctrines of res judicata or collateral estoppel, preclude the present action. The prior dismissal was not on the merits and the standing issue in the current procedure is not the same as in the prior proceeding:

Here, as the prior action was dismissed for lack of standing, without reaching the merits of the foreclosure claim itself, the defendants failed to demonstrate that “a judgment on the merits exists between the same parties involving the same subject matter” … . “To accord res judicata effect to the [judgment in the prior action] would bar a court from ever addressing the merits of plaintiff’s mortgage foreclosure claim, even if plaintiff became able to demonstrate its standing to sue, and there is nothing in the record to suggest . . . [that there are] exceptional circumstances or an unreasonable neglect to prosecute that would warrant such an extreme sanction” … . …

… [T]the defendants failed to demonstrate that the issue of whether the plaintiff has standing under the circumstances of this action was identical to the issue adjudicated in the prior action … . In the prior action, the plaintiff failed to establish that it had possession of the original endorsed note at the time that action was commenced, while in the present action, the issue is whether the plaintiff had possession of the original endorsed note at the time this action was commenced … . HSBC Bank USA, N.A. v Pantel, 2020 NY Slip Op 00109, Second Dept 1-8-20

 

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