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LATE NOTIFICATION OF THE INSURER BY THE INSURED ABOUT AN ACTION AGAINST THE INSURED DOES NOT EXCUSE A LATE DISCLAIMER, TIMELINESS OF A DISCLAIMER DEPENDS ON WHEN THE INSURER FIRST LEARNED OF THE ACTION.

The Second Department noted that an insured’s failure to timely notify the insurer of an action does not relieve the insurer of the obligation to timely disclaim. Whether a disclaimer is timely is determined by when the insurer first learned of the action, not when the insured notified it of the action:

… [The] “failure of an insured to timely notify the insurer of a claim does not excuse the insurer’s failure to timely disclaim coverage” … . “The timeliness of an insurer’s disclaimer is measured from the point in time when the insurer first learns of the grounds for disclaimer of liability or denial of coverage” … . In opposition to the cross motion, [the insured] raised triable issues of fact as to whether the plaintiff acquired knowledge of the commencement of the underlying action in April 2012, or, at the latest, October 2012, and thus, whether it timely disclaimed coverage in March 2013, on the basis of, inter alia, late receipt of a copy of the summons and complaint. Evanston Ins. Co. v P.S. Bruckel, Inc., 2017 NY Slip Op 03489, 2nd Dept 5-3-17

INSURANCE LAW (LATE NOTIFICATION OF THE INSURER BY THE INSURED ABOUT AN ACTION AGAINST THE INSURED DOES NOT EXCUSE A LATE DISCLAIMER, TIMELINESS OF A DISCLAIMER DEPENDS ON WHEN THE INSURER FIRST LEARNED OF THE ACTION)/DISCLAIMER (INSURANCE LAW, LATE NOTIFICATION OF THE INSURER BY THE INSURED ABOUT AN ACTION AGAINST THE INSURED DOES NOT EXCUSE A LATE DISCLAIMER, TIMELINESS OF A DISCLAIMER DEPENDS ON WHEN THE INSURER FIRST LEARNED OF THE ACTION)

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BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET.

The Second Department determined plaintiff bank failed to demonstrate standing to bring the foreclosure action because the criteria for the business records exception to the hearsay rule were not met:

Here, the plaintiff attempted to establish its standing by submitting the affidavit of Kelly Thompson, an Assistant V.P., Operations Team Manager, at Bank of America, N.A. (hereinafter BANA), the servicer of the defendant Juliet Willis’s loan on behalf of the plaintiff. Thompson averred, in relevant part, that her affidavit was based upon her review of BANA’s business records, and that upon review of such records, the note was physically transferred to the plaintiff “in or about March 2007.” The plaintiff failed to demonstrate that the records relied upon by Thompson were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]) because Thompson, an employee of BANA, did not attest that she was personally familiar [*2]with the plaintiff’s recordkeeping practices and procedures … . Bank of N.Y. v Willis, 2017 NY Slip Op 03468, 2nd Dept 5-3-17

FORECLOSURE (BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)/EVIDENCE (FORECLOSURE, STANDING, BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)/HEARSAY (FORECLOSURE, STANDING, (BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)/BUSINESS RECORDS EXCEPTION TO HEARSAY RULE (FORECLOSURE, STANDING, (BANK DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, CRITERIA FOR BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE NOT MET)

CAUSE OF ACTION FOR MONEY HAD AND RECEIVED SHOULD NOT HAVE BEEN DISMISSED.

The Second Department, reversing (modifying) Supreme Court, determined the cause of action for money had and received should not have been dismissed. Plaintiff alleged he gave the proceeds of an annuity to his sister (defendant) for safe-keeping (in her bank account) until he decided how to dispose of it. The agreement was oral but the cause of action was in the nature of quasi-contract (unjust enrichment) and was therefore not barred by the statute of frauds:

“The essential elements of a cause of action for money had and received are (1) the defendant received money belonging to the plaintiff, (2) the defendant benefitted from receipt of the money, and (3) under principles of equity and good conscience, the defendant should not be permitted to keep the money. The action depends upon equitable principles in the sense that broad considerations of right, justice and morality apply to it” … .

Here, the plaintiff alleged sufficient facts to assert a cause of action for money had and received. The complaint alleges that the defendant received a benefit when she received the proceeds of the plaintiff’s surrendered annuity, with the understanding that the defendant would keep those proceeds safe while the plaintiff determined how he wanted to dispose of the funds … . Contrary to the defendant’s contention, a plaintiff need not allege malice to state a cause of action for money had and received … . Litvinoff v Wright, 2017 NY Slip Op 03501, 2nd Dept 5-3-17

 

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NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT.

The Second Department, in finding plaintiff bank had established standing to bring the foreclosure action, explained when a court may consider new information in a reply affidavit (re: a motion for summary judgment):

… [I]t was not error for the Supreme Court to consider the reply affidavit, which was submitted in reply to the appellant’s opposition. A party moving for summary judgment generally cannot meet its prima facie burden by submitting evidence for the first time in reply … . However, there are exceptions to this general rule, including when the evidence is submitted in response to allegations raised for the first time in the opposition papers or when the other party is given an opportunity to respond to the reply papers… . Further, “[t]he function of reply papers is to address arguments made in opposition to the position taken by the movant” … .

Here, the Supreme Court properly considered the reply affidavit because the affidavit was offered in response to the appellant’s allegation in opposition to the motion that the plaintiff never had possession of the note, and merely clarified the plaintiff’s initial submissions as to its possession of the note at the time of commencement … . Central Mtge. Co. v Jahnsen, 2017 NY Slip Op 03474, 2nd Dept 5-3-17

CIVIL PROCEDURE (NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)/SUMMARY JUDGMENT (NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)/REPLY PAPERS (SUMMARY JUDGMENT, FORECLOSURE, NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)/FORECLOSURE (SUMMARY JUDGMENT, NEW INFORMATION IN REPLY PAPERS PROPERLY CONSIDERED BY THE COURT)

CRITERIA FOR DISCLOSURE OF ORIGINAL DOCUMENTS FOR FORENSIC TESTING EXPLAINED, NOT MET HERE.

The Second Department determined plaintiff’s motion to compel disclosure original documents in this medical malpractice action for forensic analysis was properly denied (albeit for the wrong reason). The court explained the deficiencies in the plaintiff’s motion:

As to the motion to produce original records for forensic analysis, the plaintiff failed to establish that the proposed testing was not destructive, and failed to adequately indicate the extent to which the testing would alter or destroy the original records … . Moreover, the plaintiff failed to establish adequate justification for the testing … . Freely v Donnenfeld, 2017 NY Slip Op 03490, 2nd Dept 5-3-17

CIVIL PROCEDURE (CRITERIA FOR DISCLOSURE OF ORIGINAL DOCUMENTS FOR FORENSIC TESTING EXPLAINED, NOT MET HERE)/DISCLOSURE (ORIGINAL DOCUMENTS, CRITERIA FOR DISCLOSURE OF ORIGINAL DOCUMENTS FOR FORENSIC TESTING EXPLAINED, NOT MET HERE)/FORENSIC ANALYSIS OF ORIGINAL DOCUMENTS (CIVIL PROCEDURE, CRITERIA FOR DISCLOSURE OF ORIGINAL DOCUMENTS FOR FORENSIC TESTING EXPLAINED, NOT MET HERE)

NEW AUDI DEALERSHIP WAS OUTSIDE PLAINTIFF DEALERSHIP’S MARKET AREA, SUIT UNDER THE DEALER ACT PROPERLY DISMISSED.

The Second Department determined plaintiff Audi dealership’s suit claiming that the award of a new Audi dealership constituted a modification of the franchise in violation of the Dealer Act (Vehicle and Traffic Law 463 (2)) was properly dismissed. Plaintiff acknowledged that the new dealership was outside plaintiff’s market area:

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Here, the plaintiff does not dispute that the location of the proposed new Westbury dealership is outside the plaintiff’s “relevant market area,” and thus, the plaintiff cannot challenge the addition of that dealership under Vehicle and Traffic Law § 463(2)(cc). As a result, the plaintiff seeks to challenge the proposed addition of the new dealership under Vehicle and Traffic Law § 463(2)(ff), which provides that a franchisor must give notice to the dealer of any “modification” to the dealer’s franchise … . However, permitting the plaintiff to challenge the addition of the Westbury dealership under Vehicle and Traffic Law § 463(2)(ff) would essentially render the standing requirement and specific procedures set forth in Vehicle and Traffic Law § 463(2)(cc) superfluous … . As such, the Supreme Court properly determined that Vehicle and Traffic Law § 463(2)(cc) is the sole mechanism under the Dealer Act by which the plaintiff can challenge Audi’s addition of the proposed new Westbury dealership, and properly directed the dismissal of the first cause of action.  JJM Sunrise Automotive, LLC v Volkswagen Group of Am., Inc., 2017 NY Slip Op 03160, 2nd Dept 4-26-17

VEHICLE AND TRAFFIC LAW (DEALER ACT) (NEW AUDI DEALERSHIP WAS OUTSIDE PLAINTIFF DEALERSHIP’S MARKET AREA, SUIT UNDER THE DEALER ACT PROPERLY DISMISSED)/DEALER ACT (VEHICLE AND TRAFFIC LAW, NEW AUDI DEALERSHIP WAS OUTSIDE PLAINTIFF DEALERSHIP’S MARKET AREA, SUIT UNDER THE DEALER ACT PROPERLY DISMISSED)/AUTO DEALERSHIPS (VEHICLE AND TRAFFIC LAW, NEW AUDI DEALERSHIP WAS OUTSIDE PLAINTIFF DEALERSHIP’S MARKET AREA, SUIT UNDER THE DEALER ACT PROPERLY DISMISSED)

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ABUSE OF PROCESS AND ATTORNEY’S FEES COUNTERCLAIMS PROPERLY DISMISSED IN THIS DISPUTE BETWEEN BROKERS OVER A COMMISSION, CRITERIA FOR BOTH COUNTERCLAIMS EXPLAINED.

In a dispute between real estate brokers over plaintiff’s entitlement to a percentage of a commission, the Second Department determined defendants’ counterclaims for abuse of process, prima facie tort, tortious interference with prospective business relations, and attorney’s fees were properly dismissed. The (unsuccessful) claim for attorney’s fees was based upon language in a real estate policy and procedure manual the language of which was deemed too vague to supplant the general rule that parties are responsible for their own attorney’s fees. With regard to the abuse of process and attorney’s fees claims, the court explained:

“The three essential elements of the tort of abuse of process are (1) regularly issued process, either civil or criminal, (2) an intent to do harm without excuse or justification, and (3) use of the process in a perverted manner to obtain a collateral objective'” … . “[T]he gist of the tort is the improper use of process after it is issued’ by an unlawful interference with one’s person or property'”… . Here, the gravamen of the first counterclaim was that the plaintiff initiated this lawsuit with the intent to harm the defendants, knowing that the brokerage community would find out about the lawsuit, which would damage the defendants’ ability to do business in that community. However, “the institution of a civil action by summons and complaint is not legally considered process capable of being abused” … . Moreover, there was no allegation that the plaintiff improperly used process after it was issued. Furthermore, “a malicious motive alone does not give rise to a cause of action to recover damages for abuse of process” … . * * *

In the fourth counterclaim the defendants sought to recover attorneys’ fees incurred in defending this action pursuant to a provision in their “Policy & Procedure Manual,” which states, inter alia, that “[i]f a dispute arises due to a commission and a legal action is commenced as a result thereof, the costs of the legal action will be deducted from the fee collected,” and “[i]f [a] suit is a result of an agent’s action, he/she will be responsible for payment of damages incurred as a result.” Since “a promise by one party to a contract to indemnify the other for attorney’s fees incurred in litigation between them is contrary to the well-understood rule that parties are responsible for their own attorney’s fees, the court should not infer a party’s intention to waive the benefit of the rule unless the intention to do so is unmistakably clear from the language of the promise” … . Here, the provision relied upon by the defendants is vague, and a promise by the plaintiff to indemnify the defendants for attorneys’ fees incurred in litigation between them cannot be clearly implied from the language and purpose of the entire manual. Goldman v Citicore I, LLC, 2017 NY Slip Op 03156, 2nd Dept 4-26-17

 

REAL ESTATE (ABUSE OF PROCESS AND ATTORNEY’S FEES COUNTERCLAIMS PROPERLY DISMISSED IN THIS DISPUTE BETWEEN BROKERS OVER A COMMISSION, CRITERIA FOR BOTH COUNTERCLAIMS EXPLAINED)/INTENTIONAL TORTS (ABUSE OF PROCESS AND ATTORNEY’S FEES COUNTERCLAIMS PROPERLY DISMISSED IN THIS DISPUTE BETWEEN BROKERS OVER A COMMISSION, CRITERIA FOR BOTH COUNTERCLAIMS EXPLAINED)/ABUSE OF PROCESS (ABUSE OF PROCESS AND ATTORNEY’S FEES COUNTERCLAIMS PROPERLY DISMISSED IN THIS DISPUTE BETWEEN BROKERS OVER A COMMISSION, CRITERIA FOR BOTH COUNTERCLAIMS EXPLAINED)/COMMISSIONS (REAL ESTATE, ABUSE OF PROCESS AND ATTORNEY’S FEES COUNTERCLAIMS PROPERLY DISMISSED IN THIS DISPUTE BETWEEN BROKERS OVER A COMMISSION, CRITERIA FOR BOTH COUNTERCLAIMS EXPLAINED)

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HOSPITAL NOT LIABLE FOR ACTS OF SURGEON WHO WAS NOT AN EMPLOYEE, ANALYTICAL CRITERIA OUTLINED.

The Second Department determined defendant hospital (Beth Israel) could not be liable for the acts of a surgeon (Krikhely) who: (1) was not an employee; (2) was not subject to the emergency room exception; (3) did not order the hospital staff to perform an act which was contraindicated; and (4) was not acting under the ostensible or apparent authority of the hospital:

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… [T]he Beth Israel defendants established, prima facie, that Krikhely was a private attending physician who was not an employee of the hospital and who was referred to [plaintiff] by his private physician … . Furthermore, the Beth Israel defendants made a prima facie showing that the emergency room exception was inapplicable by demonstrating that Spiegel was referred to Krikhely’s care by his private physician … .. In opposition, the plaintiffs failed to rebut the prima facie showing that Krikhely was not an employee of the hospital and that the emergency room exception did not apply … . Moreover, the plaintiffs failed to raise a triable issue of fact as to whether the hospital’s staff committed independent acts of malpractice and as to whether any order given by Krikhely was so contraindicated that it should not have been followed by the hospital’s staff … .  Furthermore, the plaintiffs failed to raise a triable issue of fact as to whether the hospital may be held liable under a theory of ostensible or apparent agency … . Spiegel v Beth Israel Med. Center-Kings Highway Div., 2017 NY Slip Op 03211, 2nd Dept 4-26-17

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NEGLIGENCE (HOSPITAL NOT LIABLE OF ACTS OF SURGEON WHO WAS NOT AN EMPLOYEE, ANALYTICAL CRITERIA OUTLINED)/MEDICAL MALPRACTICE (HOSPITAL NOT LIABLE OF ACTS OF SURGEON WHO WAS NOT AN EMPLOYEE, ANALYTICAL CRITERIA OUTLINED)/HOSPITALS (MEDICAL MALPRACTICE, HOSPITAL NOT LIABLE OF ACTS OF SURGEON WHO WAS NOT AN EMPLOYEE, ANALYTICAL CRITERIA OUTLINED)

DEFENDANT CONCERT HALL’S MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED, PLAINTIFF WAS INJURED AFTER BEING PUSHED INTO A MOSH PIT, QUESTIONS OF FACT ABOUT WHETHER PLAINTIFF ASSUMED THE RISK AND WHETHER THE CONCERT HALL WAS NEGLIGENT.

The Second Department determined the defendant concert/dance hall’s (Knitting Factory’s) motion for summary judgment was properly denied. Plaintiff alleged he was pushed into a mosh pit where someone hit him in the eye. The defendant argued plaintiff assumed the risk of the injury and no level of supervision could have prevented the injury:

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A property owner must act in a reasonable manner to prevent harm to those on its premises, which includes a duty to control the conduct of persons on its premises when it has the opportunity to control such conduct, and is reasonably aware of the need to do so … . The doctrine of primary assumption of risk “applies when a consenting participant in a qualified activity is aware of the risks; has an appreciation of the nature of the risks; and voluntarily assumes the risks'” … . A person who chooses to engage in such an activity “consents to those commonly appreciated risks which are inherent in and arise out of the nature of the [activity] generally and flow from such participation”… . The duty owed in these situations is “a duty to exercise care to make the conditions as safe as they appear to be” … . The doctrine has generally been restricted “to particular athletic and recreative activities in recognition that such pursuits have enormous social value’ even while they may involve significantly heightened risks'” … , and are, therefore, “worthy of insulation from a breach of duty claim” … .

Here, even assuming, without deciding, that attending a metal music concert where “moshing” takes place is a qualified activity to which the doctrine may properly be applied … , under the facts presented here, the Knitting Factory failed to eliminate triable issues of fact as to whether it met its duty to exercise care to make the conditions at the subject venue as safe as they appeared to be … , and did not unreasonably increase the usual risks inherent in the activity of concert going… . The Knitting Factory also failed to eliminate triable issues of fact as to whether the plaintiff assumed the risk of injury … , whether the plaintiff’s alleged injuries were foreseeable, and whether it provided adequate security measures and, if not, whether its failure was a proximate cause of the plaintiff’s alleged injuries … . Nevo v Knitting Factory Brooklyn, Inc., 2017 NY Slip Op 03186, 2nd Dept 4-26-17

 

NEGLIGENCE (DEFENDANT CONCERT HALL’S MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED, PLAINTIFF WAS INJURED AFTER BEING PUSHED INTO A MOSH PIT, QUESTIONS OF FACT ABOUT WHETHER PLAINTIFF ASSUMED THE RISK AND WHETHER THE CONCERT HALL WAS NEGLIGENT)/ASSUMPTION OF RISK (DEFENDANT CONCERT HALL’S MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED, PLAINTIFF WAS INJURED AFTER BEING PUSHED INTO A MOSH PIT, QUESTIONS OF FACT ABOUT WHETHER PLAINTIFF ASSUMED THE RISK AND WHETHER THE CONCERT HALL WAS NEGLIGENT)/MOSH PITS (CONCERT HALLS, NEGLIGENCE, DEFENDANT CONCERT HALL’S MOTION FOR SUMMARY JUDGMENT PROPERLY DENIED, PLAINTIFF WAS INJURED AFTER BEING PUSHED INTO A MOSH PIT, QUESTIONS OF FACT ABOUT WHETHER PLAINTIFF ASSUMED THE RISK AND WHETHER THE CONCERT HALL WAS NEGLIGENT)

DEFENDANTS DID NOT DEMONSTRATE (1) THE STAIRS DOWN WHICH PLAINTIFF FELL WERE NOT REQUIRED TO HAVE A HANDRAIL (2) THE STAIRS WERE ADEQUATELY ILLUMINATED (3) OUT OF POSSESSION LANDLORD STATUS, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED.

The Second Department, reversing Supreme Court, determined defendants’ summary judgment motion should not have been granted. Plaintiff fell down stairs on defendants’ property while holding the infant plaintiff. Plaintiffs alleged the stairs should have had a hand rail (an alleged code violation) and were poorly illuminated. The defendants’ papers did not negate those theories and did not demonstrate out-of-possession-landlord status:

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Here, viewing the evidence in the light most favorable to the plaintiffs as the nonmoving parties, the defendants failed to establish, prima facie, that the subject staircase did not have to be equipped with a handrail pursuant to the code provisions alleged in the plaintiffs’ pleadings and that the absence of the handrail and the alleged inadequate lighting condition did not proximately cause the plaintiffs to fall … . The defendants also failed to establish, prima facie, that they were out-of-possession landlords who had no notice of the alleged hazardous conditions of the subject staircase … .

Since the defendants failed to meet their initial burden as the movants, it is not necessary to review the sufficiency of the plaintiffs’ opposition papers … . Lopez-Serrano v Ochoa, 2017 NY Slip Op 03167, 2nd Dept 4-26-17

 

NEGLIGENCE (DEFENDANTS DID NOT DEMONSTRATE (1) THE STAIRS DOWN WHICH PLAINTIFFS FELL WERE NOT REQUIRED TO HAVE A HANDRAIL (2) THE STAIRS WERE ADEQUATELY ILLUMINATED (3) OUT OF POSSESSION LANDLORD STATUS, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED)/SUMMARY JUDGMENT (DEFENDANTS DID NOT NEGATE PLAINTIFFS’ THEORIES, DEFENDANTS DID NOT DEMONSTRATE (1) THE STAIRS DOWN WHICH PLAINTIFFS FELL WERE NOT REQUIRED TO HAVE A HANDRAIL (2) THE STAIRS WERE ADEQUATELY ILLUMINATED (3) OUT OF POSSESSION LANDLORD STATUS, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED)/SLIP AND FALL (DEFENDANTS DID NOT DEMONSTRATE (1) THE STAIRS DOWN WHICH PLAINTIFFS FELL WERE NOT REQUIRED TO HAVE A HANDRAIL (2) THE STAIRS WERE ADEQUATELY ILLUMINATED (3) OUT OF POSSESSION LANDLORD STATUS, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED)/STAIRS (DEFENDANTS DID NOT DEMONSTRATE (1) THE STAIRS DOWN WHICH PLAINTIFFS FELL WERE NOT REQUIRED TO HAVE A HANDRAIL (2) THE STAIRS WERE ADEQUATELY ILLUMINATED (3) OUT OF POSSESSION LANDLORD STATUS, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED) 

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