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BANK DID NOT SUBMIT SUFFICIENT EVIDENCE OF ITS STANDING, ITS COMPLIANCE WITH CONDITIONS PRECEDENT IN THE MORTGAGE, OR ITS COMPLIANCE WITH THE NOTICE REQUIREMENTS OF THE RPAPL, THE BANK’S MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank was not entitled to summary judgment in this foreclosure action because it presented: (1) insufficient proof of standing; (2) insufficient proof of compliance with the notice provisions of the mortgage; and (3) insufficient proof of compliance with the RPAPL notice requirements:

… [T]he plaintiff failed to establish, prima facie, its standing because it did not show that it was a holder of the note at the time the action was commenced. The affidavits of Melissa Guillote and Myrna Moore, both vice presidents of loan documentation of the plaintiff’s loan servicer, nonparty Wells Fargo Bank, N.A. (hereinafter the loan servicer), that were submitted by the plaintiff in support of its motion, conflict as to whether the plaintiff or the loan servicer possessed the note on the date the action was commenced. Moreover, neither affidavit attaches any admissible document to show that the plaintiff possessed the note endorsed in blank prior to the commencement of this action (see CPLR 4518[a] …). The affidavits also fail to show that either Guillote or Moore possessed personal knowledge of whether the plaintiff possessed the note prior to commencement of the action. …

The plaintiff also failed to establish, prima facie, that it complied with the conditions precedent contained in sections 15 and 22 of the mortgage, which provide that required notice to the defendants is considered given when it is mailed by first class mail or when it is actually delivered to the defendants’ notice address if sent by any other means … . …

The plaintiff also failed to show, prima facie, that it strictly complied with RPAPL 1304. Proper service of the RPAPL 1304 notice containing the statutorily mandated content is a condition precedent to the commencement of a foreclosure action … . The plaintiff did not submit an affidavit of service or proof of mailing by the post office demonstrating that it properly served the defendants as prescribed by the statute … . HSBC Bank USA, Natl. Assn. v Dubose, 2019 NY Slip Op 06481, Second Dept 9-11-19

 

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ALTHOUGH PLAINTIFF’S COUNSEL SENT A LETTER TO THE INSURED SHORTLY AFTER PLAINTIFF WAS INJURED IN THE INSURED’S HOME REQUESTING THAT THE INSURED NOTIFY HER INSURER, THE INSURER WAS NOT NOTIFIED UNTIL IT RECEIVED THE SUMMONS AND COMPLAINT SIX MONTHS AFTER THE INCIDENT; THE INSURER PROPERLY DISCLAIMED COVERAGE ON THE GROUND IT HAD NOT BEEN TIMELY NOTIFIED (SECOND DEPT).

The Second Department determined defendant insurance company (State Farm) properly disclaimed coverage on the ground it was not notified of the underlying incident (plaintiff was injured in an altercation in the insured’s home) until six months after it occurred. Plaintiff was awarded $715,000 after a non-jury trial. Plaintiff then brought a declaratory judgment action against State Farm:

By letter dated October 31, 2007, the plaintiffs’ counsel requested that [defendant] direct her insurance carrier to contact the plaintiffs’ counsel to discuss the subject occurrence. …

In February 2008, the injured plaintiff, and his wife suing derivatively, commenced a personal injury action (hereinafter the underlying action) against, among others, [the insured] to recover damages arising from the September 2007 occurrence. On or about March 13, 2008, State Farm received a copy of the summons and complaint filed in the underlying action. By letter dated April 3, 2008, State Farm disclaimed coverage to [the insured] on the ground, among others, that notice of the occurrence was untimely. …

“[A]n insurer has the right to demand that it be notified of any loss or accident that is covered under the terms of the insurance policy. The purpose of such a requirement is to afford the insurer an opportunity to protect itself by, for example, investigating claims soon after the underlying events” … . Where, as here, an insurance policy requires that notice of an occurrence or loss be given “as soon as practicable,” such notice constitutes a condition precedent to coverage, and notice must be provided within a reasonable time in view of all of the circumstances … . “Where there is no excuse or mitigating factor, the issue [of reasonableness] poses a legal question for the court, rather than an issue for the trier of fact” … . …

… State Farm established its prima facie entitlement to judgment as a matter of law declaring that it is not obligated to pay the judgment in the underlying action by demonstrating that it did not receive notice of the occurrence giving rise to the underlying action until approximately six months after the occurrence … . In opposition, the plaintiffs failed to raise a triable issue of fact, including as to whether they made a reasonably diligent effort to ascertain the identity of [defendant’s] insurer … . Henaghan v State Farm Fire & Cas. Co., 2019 NY Slip Op 06480, Second Dept 9-11-19

 

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PLAINTIFF ALLEGED DEFENDANT WAS LIABLE FOR HER BABY’S BRAIN DAMAGE BECAUSE DEFENDANT’S AMBULANCE BROKE DOWN ON THE WAY TO THE HOSPITAL, CAUSING A DELAY IN DELIVERY; DEFENDANT MUNICIPALITY, WHICH PROVIDED THE AMBULANCE, WAS ENGAGED IN A GOVERNMENTAL FUNCTION AND THERE WAS NO SPECIAL RELATIONSHIP WITH PLAINTIFF; THE MUNICIPALITY CAN NOT BE HELD LIABLE (SECOND DEPT).

The Second Department determined the complaint against the airport emergency medical service alleging liability for a delay in getting plaintiff to the hospital was properly dismissed. Plaintiff suffered complications giving birth which were alleged to have resulted in the baby suffering brain damage. The ambulance provided by defendant broke down and plaintiff was transferred to another ambulance. The defendant was deemed to have been engaged in a governmental function and there was no special relationship between the plaintiff and the municipal defendant. Therefore the defendant could not be held liable:

“Protecting health and safety is one of municipal government’s most important duties” … , and emergency medical services “have widely been considered one of government’s critical duties” … . …

… [D]efendant could not be held liable to the plaintiffs unless it owed them a special duty … . One way to prove the existence of a special duty is by showing that the defendant assumed a “special relationship” with the plaintiff beyond the duty that is owed to the public generally … . “The plaintiff has the heavy burden of establishing the existence of a special relationship by proving all of the following elements: (1) an assumption by the municipality, through promises or actions, of an affirmative duty to act on behalf of the party who was injured; (2) knowledge on the part of the municipality’s agents that inaction could lead to harm; (3) some form of direct contact between the municipality’s agents and the injured party; and (4) the party’s justifiable reliance on the municipality’s affirmative undertaking” … . Of the four factors, the “justifiable reliance” element is particularly “critical” because it “provides the essential causative link between the special duty assumed by the municipality and the alleged injury” … . Halberstam v Port Auth. of N.Y. & N.J., 2019 NY Slip Op 06479, Second Dept 9-11-19

 

DEFENDANT ALLEGED HE WAS NOT SERVED WITH THE SUMMONS AND COMPLAINT WITHIN 120 DAYS OF FILING AND PLAINTIFF DID NOT FILE AN AFFIDAVIT OF SERVICE WITH THE CLERK, DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION PROPERLY GRANTED (SECOND DEPT).

The Second Department determined defendant’s motion to dismiss the complaint for lack of personal jurisdiction was properly granted. Defendant alleged he was not served with the summons and complaint within 120 days of filing and plaintiff had not filed an affidavit of service with the clerk of the court:

While the failure to timely file an affidavit of service with the clerk of the court as required by CPLR 308(4) may, in the absence of prejudice, be corrected by court order pursuant to CPLR 2004 … , in this case, the plaintiff failed to seek such relief, and the Supreme Court declined to extend this time sua sponte … . Accordingly, we agree with the court’s determination to grant that branch of his motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against him on the ground of lack of personal jurisdiction … . Zheleznyak v Gordon & Gordon, P.C., 2019 NY Slip Op 06536, Second Dept 9-11-19

 

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THE CONDITIONAL ORDER OF DISMISSAL WAS NOT AUTHORIZED BECAUSE ISSUE HAD NOT BEEN JOINED AT THE TIME THE ORDER WAS MADE; THE BANK’S MOTION TO VACATE THE CONDITIONAL ORDER IN THIS FORECLOSURE ACTION SHOULD HAVE BEEN GRANTED; AN UNAUTHORIZED SUPPLEMENTAL RECORD ON APPEAL TO WHICH THE PARTIES STIPULATED WAS NOT CONSIDERED (SECOND DEPT).

The Second Department determined the conditional order upon which dismissal of the complaint was based was not authorized because issue had not been joined at the time the order was made. Therefore the bank’s motion to vacate the conditional order in this foreclosure action should have been granted. However, because of the two year delay in moving to vacate the order, the bank is not entitled to interest, late charges, fees, costs and attorney’s fees incurred after the date of the 2014 conditional order. An unauthorized supplemental record on appeal, which was stipulated to by the parties, contained material that was not in the record and was not considered by the Second Department:

A pleading 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 for unreasonably neglecting to proceed'” … . While a conditional order of dismissal may have “the same effect as a valid 90-day notice pursuant to CPLR 3216” … , the conditional order here was defective in that it did not state that the plaintiff’s failure to comply with the notice will serve as a basis for a motion by the court to dismiss the complaint for failure to prosecute … . Additionally, it appears that the complaint was ministerially dismissed, without a motion, and without the entry of any formal order by the court dismissing the complaint … . U.S. Bank Natl. Assn. v Spence, 2019 NY Slip Op 06529, Second Dept 9-11-19

 

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HEARSAY STATEMENTS ATTRIBUTED TO PLAINTIFF’S DECEDENT IN THIS MEDICAL MALPRACTICE ACTION NOT ADMISSIBLE AS ADMISSIONS OR BUSINESS RECORDS; THE DEAD MAN’S STATUTE PROHIBITED TESTIMONY ABOUT THE HEARSAY STATEMENTS; DEFENSE VERDICT REVERSED, NEW TRIAL ORDERED (SECOND DEPT). ​

The Second Department, reversing the defense verdict in this medical malpractice case and ordering a new trial, determined that hearsay statements to the effect that plaintiff’s decedent had signed an “against medical advice [AMA]” form when he allegedly refused treatment at defendant hospital were not admissible under the Dead Man’s Statute or as statements against interest or admissions, or as business records:

“A hearsay entry in a hospital record is admissible under the business records exception to the hearsay rule if the entry is germane to the diagnosis or treatment of the patient” ( … see CPLR 4518[a]). Here, although the entries were germane to the decedent’s diagnosis and treatment, the defendants failed to offer foundational testimony under CPLR 4518(a) or certification under CPLR 4518(c) … . …

If an entry in the medical records “is inconsistent with a position taken by a party at trial, it is admissible as an admission by that party, even if it is not germane to the diagnosis or treatment, as long as there is evidence connecting the party to the entry'”  … . Here … the entry clearly states that the decedent’s primary care physician, not the decedent himself, was the source of the information … . …

Pursuant to CPLR 4519, otherwise known as the Dead Man’s Statute, “[u]pon the trial of an action . . . a party or a person interested in the event . . . shall not be examined as a witness in his [or her] own behalf or interest . . . against the executor, administrator or survivor of a deceased person or the committee of a mentally ill person . . . concerning a personal transaction or communication between the witness and the deceased person or mentally ill person, except where the executor, administrator, survivor, committee or person so deriving title or interest is examined in his [or her] own behalf, of the testimony of the mentally ill person or deceased person is given in evidence, concerning the same transaction or communication.” Here, both [witnesses] were defendants at the time they gave deposition testimony, making them interested parties under the statute … [and] they both testified to transactions or communications with the decedent and sought to offer that testimony against the decedent’s estate. …

The defendants argue that the plaintiff waived the protections of the Dead Man’s Statute by eliciting the communications at issue. However, “[t]he executor does not waive rights under the statute by taking the opponent’s deposition” … . … Contrary to the defendants’ contention, the declaration of the decedent did not fall within the declaration against interest exception to the hearsay rule because the defendants failed to establish that the subject statement was against the decedent’s interest when made … . Moreover, where the Dead Man’s Statute renders a witness’s testimony inadmissible, “the fact that the testimony would fall within an exception to the hearsay rule is simply irrelevant” … . Grechko v Maimonides Med. Ctr., 2019 NY Slip Op 06478, Second Dept 9-11-19

 

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THE 2008 FORECLOSURE ACTION WAS DISMISSED BECAUSE THE BANK DID NOT HAVE STANDING; THEREFORE THE DEBT WAS NOT ACCELERATED IN 2008 AND THE STATUTE OF LIMITATIONS FOR FORECLOSURE DID NOT START RUNNING; PLAINTIFF’S ACTION TO CANCEL AND DISCHARGE THE MORTGAGE PROPERLY DISMISSED (SECOND DEPT).

The Second Department determined plaintiff’s action to cancel and discharge a mortgage on the ground the statute of limitations for a foreclosure action had expired was properly dismissed. Although the bank had attempted to foreclose in 2008, that action was dismissed for lack of standing. Therefore the debt was not accelerated by the 2008 foreclosure proceedings:

Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real property at the time the action to cancel and discharge the mortgage was commenced … . An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]). “[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt” … . However, “an acceleration of a mortgaged debt, by either written notice or the commencement of an action, is only valid if the party making the acceleration had standing at that time to do so”  … .

Here, the evidence submitted in support of the defendants’ motion, including the order dated December 13, 2011, demonstrated that while CitiGroup purported to accelerate the mortgage debt in the complaint served in the action to foreclose the mortgage in January 2008, that acceleration was a nullity, inasmuch as CitiGroup lacked standing to commence that foreclosure action … . Therefore, the plaintiff’s allegation in this action that the statute of limitations to enforce the mortgage had expired was not a fact at all, and it can be said that no significant dispute exists regarding it … . Q & O Estates Corp. v US Bank Trust Nat’l Assoc., 2019 NY Slip Op 06524, Second Dept 9-11-19

 

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PLAINTIFF DID NOT DEMONSTRATE COMPLIANCE WITH THE NOTICE OF DEFAULT PROVISION OF THE MORTGAGE; PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that the plaintiff did not demonstrate compliance with the notice of default provision in the mortgage. Therefore, the plaintiff’s motion for summary judgment in this foreclosure action should not have been granted:

… [T]he plaintiff failed to establish, prima facie, that it complied with the condition precedent contained in section 22 of the mortgage agreement regarding the notice of default. The plaintiff’s submissions did not establish that the notice was sent by first class mail or actually delivered to the notice address if sent by other means, as required by the terms of the mortgage agreement … . PNMAC Mtge. Opportunity Fund Invs., LLC v Torres, 2019 NY Slip Op 06523, Second Dept 9-11-19

 

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DOWNWARD DEPARTURE FROM LEVEL TWO TO LEVEL ONE WAS APPROPRIATE; DEFENDANT PARTICIPATED IN THE SEX TRAFFICKING CONSPIRACY WHILE SHE HERSELF WAS A VICTIM OF SEX TRAFFICKING (SECOND DEPT).

The Second Department, lowering defendant’s risk assessment from a lever two to level one, determined that defendant was herself a victim of sex trafficking and her participation in the conspiracy occurred at the same time that she was being exploited:

… [T]he circumstances identified and proven by the defendant … are not accounted for by the SORA Guidelines and tend to demonstrate a lower likelihood of reoffense and danger to the community. The defendant’s evidence showed that she was exploited by the commercial sex industry when she was a minor, and that, while she later took on some “management” responsibilities by “training” other girls, answering phones, and making appointments, at the same time, she continued to be exploited by that industry as she simultaneously served as a sex worker. There was no evidence or indication that the defendant recruited the identified victim, or any victims, or that she engaged in any acts or conduct to coerce the victim, or any victims, to engage in prostitution … . Indeed, the defendant’s level of responsibility in the sex trafficking conspiracy can be gauged by the federal sentencing court’s decision to sentence the defendant to time served.

Finally, under these circumstances, we find that a departure to a level one risk designation is warranted as a matter of discretion “to avoid an [overassessment] of the defendant’s dangerousness and risk of sexual recidivism” … . People v Snyder, 2019 NY Slip Op 06521, Second Dept 9-11-19

 

QUESTIONS OF FACT PRECLUDED SUMMARY JUDGMENT ON MOST (BUT NOT ALL) OF THE CAUSES OF ACTION IN THIS LABOR LAW 240 (1), 241 (6), 200, COMMON-LAW NEGLIGENCE AND INDEMNIFICATION ACTION STEMMING FROM A FALL INVOLVING A MAKESHIFT PLATFORM PLAINTIFF WAS USING TO INSTALL SPRINKLERS; THE DECISION HAS GOOD SUMMARIES OF THE ELEMENTS OF ALL OF THE CAUSES OF ACTION (SECOND DEPT).

The Second Department, in a substantive decision which explains the elements of Labor Law 240 (1), 241 (6), 200, common-law negligence and indemnification causes of action, determined questions of fact precluded summary judgment on most of the causes of action. Plaintiff was installing sprinklers and fell when he was attempting to position a plank he was using as a platform to stand on. With respect to Labor Law 240 (1), the court wrote:

Here, the [defendants] failed to demonstrate, prima facie, that the plaintiff was the sole proximate cause of his fall and subsequent injuries … . Although they submitted evidence that there were ladders at the site and available to the plaintiff, and that the plaintiff used one such ladder in order to climb to the top of the wall, they also submitted the plaintiff’s deposition testimony, which demonstrated the existence of triable issues of fact as to whether the plaintiff was recalcitrant or whether he was following his supervisor’s instructions and performing the work in the only way possible. In addition, the plaintiff and [defendant] employees testified at their respective depositions that, although [defendant] was aware that the dropped ceiling grids had been installed prior to the sprinklers, no one from [defendant], which had the authority to stop any unsafe work practices, sought to stop the plaintiff from working as he did. Thus, we agree with the Supreme Court’s determination denying those branches of the motions of [defendants] which were for summary judgment dismissing the cause of action alleging a violation of Labor Law § 240(1) … .

However, we agree with the Supreme Court that the plaintiff failed to demonstrate his prima facie entitlement to judgment as a matter of law on the issue of liability on the cause of action alleging a violation of Labor Law § 240(1) … . Triable issues of fact exist as to whether the [defendants] should have provided safety devices or whether the plaintiff’s act in erecting and using a scaffolding board was a recalcitrant act which was the sole proximate cause of his injury. Graziano v Source Bldrs. & Consultants, LLC, 2019 NY Slip Op 06477, Second Dept 9-11-19

 

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