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ATTORNEYS’ FEES NOT AVAILABLE TO INSURED WHO BRINGS AFFIRMATIVE ACTION TO SETTLE RIGHTS UNDER A POLICY; CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT.

The Second Department, reversing Supreme Court, determined the insured's motion for summary judgment dismissing the demand for an attorney's fee should have been granted. When an insured brings an affirmative action to settle rights under an insurance policy, the insured cannot recover attorneys' fees. The court further held the action for breach of the covenant of good faith and fair dealing was not duplicative of the breach of contract cause of action and the insurer's motion for summary judgment on that ground was properly denied:

Implicit in every contract is a covenant of good faith and fair dealing which encompasses any promise that a reasonable promisee would understand to be included … . In the context of an insurance contract, “a reasonable insured would understand that the insurer promises to investigate in good faith and pay covered claims” … . Here, the defendant failed to eliminate all triable issues as to whether it investigated the loss in good faith and timely paid covered claims … . Further, contrary to the defendant's contention, the cause of action alleging breach of the covenant of good faith and fair dealing is not wholly duplicative of the cause of action alleging breach of contract … .

“[A]n insured may not recover the expenses incurred in bringing an affirmative action against an insurer to settle its rights under the policy” … . The defendant established its prima facie entitlement to judgment as a matter of law dismissing so much of the complaint as sought an award of an attorney's fee by demonstrating that the plaintiffs were insureds under the policy and that they commenced this action to settle their rights under the policy … . Doody v Liberty Mut. Group, Inc., 2016 NY Slip Op 01798, 2nd Dept 3-16-16

INSURANCE LAW (ATTORNEYS FEES, INSURED CANNOT RECOVER ATTORNEYS FEES IN AFFIRMATIVE ACTION TO SETTLE RIGHTS UNDER A POLICY)/ATTORNEYS FEES (INSURANCE LAW, INSURED CANNOT RECOVER ATTORNEYS FEES IN AFFIRMATIVE ACTION TO SETTLE RIGHTS UNDER A POLICY)/INSURANCE LAW (CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT)/CONTRACT LAW (INSURANCE LAW, CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT)/COVENANT OF GOOD FAITH AND FAIR DEALING (INSURANCE LAW, CAUSE OF ACTION FOR BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING NOT DUPLICATIVE OF CAUSE OF ACTION FOR BREACH OF CONTRACT)

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ONCE PLAINTIFF RELEASED THE MORTGAGE UPON PAYMENT OF LESS THAN THE VALUE OF THE NOTE, PLAINTIFF COULD PROCEED AGAINST THE NOTE AND GUARANTY BY AMENDING THE FORECLOSURE COMPLAINT.

The Second Department, reversing Supreme Court, determined, once plaintiff agreed to release a mortgage in return for sale proceeds which were less than the value of the note, plaintiff could then commence a proceeding on the note and the guaranty. The court further held that the action on the note and guaranty could be accomplished by amending the original foreclosure complaint:

“RPAPL 1301(3) . . . prohibits a party from commencing an action at law to recover any part of the mortgage debt while the foreclosure proceeding is pending or has not reached final judgment, without leave of the court in which the foreclosure action was brought'” … . Conversely, “where a foreclosure action is no longer pending and did not result in a judgment in the plaintiff's favor, the plaintiff is not precluded from commencing a separate action' without leave of the court” … .

Here, since, pursuant to the parties' stipulation, the plaintiff agreed to accept the net proceeds of the sale in exchange for releasing the property from the mortgage and there was no judgment in the plaintiff's favor, the plaintiff was not precluded from seeking to recover on the note and guaranty by RPAPL 1301(3), “a statute which must be strictly construed” … .

Furthermore, there is no reason the plaintiff could not seek such relief by seeking leave to amend its complaint, rather than by commencing a new action … . TD Bank, N.A. v 250 Jackson Ave., LLC, 2016 NY Slip Op 01828, 2nd Dept 3-16-16

FORECLOSURE (PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/NOTE (FORECLOSURE, PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/MORTGAGES (FORECLOSURE, PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/DEBTOR-CREDITOR  (FORECLOSURE, PLAINTIFF COULD PROCEED AGAINST NOTE AND GUARANTY AFTER RELEASING MORTGAGE)/CIVIL PROCEDURE (AMENDING COMPLAINT, AFTER RELEASING MORTGAGE, PLAINTIFF COULD PROCEED AGAINST THE NOTE AND GUARANTEE BY AMENDING THE ORIGINAL FORECLOSURE COMPLAINT)

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SUA SPONTE DISMISSAL FOR LACK OF STANDING REVERSED, LACK OF STANDING DEFENSE WAS WAIVED AND IS NOT A JURISDICTIONAL DEFECT.

The Second Department reversed Supreme Court's sua sponte dismissal of a foreclosure complaint for lack of standing. Because the defendants did not answer the complaint or make a pre-answer motion to dismiss, the defense of lack of standing was waived. The matter was sent back to be heard by a different judge:

The Supreme Court erred in, sua sponte, directing the dismissal of the plaintiff's complaint and discharge of the notice of pendency against the subject property for lack of standing. “A court's power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal” … . Here, the Supreme Court was not presented with any extraordinary circumstances warranting sua sponte dismissal of the complaint and discharge of the notice of pendency. Since the defendants did not answer the complaint and did not make pre-answer motions to dismiss the complaint, they waived the defense of lack of standing … . Furthermore, a party's lack of standing does not constitute a jurisdictional defect and does not warrant sua sponte dismissal of a complaint by the court … . Consumer Solutions, LLC v Charles, 2016 NY Slip Op 01794, 2nd Dept 3-16-16

FORECLOSURE (SUA SPONTE DISMISSAL OF COMPLAINT FOR LACK OF STANDING REVERSED)/STANDING (FORECLOSURE, SUA SPONTE DISMISSAL OF COMPLAINT FOR LACK OF STANDING REVERSED, DEFENSE WAS WAIVED AND IS NOT A JURISDICTION DEFECT)

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JUVENILE DELINQUENCY ADJUDICATION AGAINST THE WEIGHT OF THE EVIDENCE; ANALYTICAL CRITERIA EXPLAINED.

The Second Department, over a dissent, determined the juvenile delinquency finding was against the weight of the evidence. The juvenile was accused of throwing a kitten under the wheels of a moving vehicle. The single-witness case relied upon weak identification evidence. The court explained the “weight of the evidence” analytical criteria in this context:

We must “weigh conflicting testimony, review any rational inferences that may be drawn from the evidence and evaluate the strength of such conclusions” … . In weighing the conflicting testimony in a single-witness identification case, as here, we must independently consider, among other things, the truthfulness and reliability of the identification testimony … . * * *

… [T]he reliability of the witness’s identification of the appellant was called into doubt by several factors. An examination of her testimony reveals that the witness had only a limited opportunity and ability to observe the perpetrator because the incident occurred over a relatively short period of time, and there was a distance of a minimum of 10 feet between the witness and the perpetrator during their interaction. The witness was also admittedly excited and upset during the incident. In addition, the witness’s description of the perpetrator lacked specificity, and did not include body shape, height, weight, facial features, skin tone, accent, or any distinctive characteristics. We further note that the incident occurred in the late afternoon near the time that students were being released from several neighborhood schools, that the perpetrator was dressed in a school uniform similar in type to the uniforms worn by students at those schools, and that the witness’s description of the school uniform worn by the perpetrator did not match the appellant’s school uniform. Under these circumstances, the witness’s identification of the appellant was not convincing when balanced against the substantial evidence submitted by the appellant in her own defense. Matter of Shannel P., 2016 NY Slip Op 01853, 2nd Dept 3-16-16

FAMILY LAW (JUVENILE DELIQUENCY ADJUDICATION AGAINST WEIGHT OF THE EVIDENCE)/JUVENILE DELINQUENCY (JUVENILE DELIQUENCY ADJUDICATION AGAINST WEIGHT OF THE EVIDENCE)/EVIDENCE (JUVENILE DELIQUENCY ADJUDICATION AGAINST WEIGHT OF THE EVIDENCE)/APPEALS (JUVENILE DELIQUENCY ADJUDICATION AGAINST WEIGHT OF THE EVIDENCE)/WEIGHT OF THE EVIDENCE REVIEW (JUVENILE DELIQUENCY ADJUDICATION AGAINST WEIGHT OF THE EVIDENCE, CRITERIA EXPLAINED)

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DEPORTATION OF DEFENDANT DID NOT RENDER APPEAL OF SORA RISK ASSESSMENT ACADEMIC; UPWARD DEPARTURE BASED UPON THE EXTREME VIOLENCE OF THE CRIME PROPER.

The Second Department, in a full-fledged opinion by Justice Leventhal, determined the fact defendant had been deported did not render his appeal of a Sex Offender Registration Act (SORA) level 2 risk assessment academic ( a matter of first impression in the department). The court further determine the SORA court properly increased defendant's risk level based on the extreme violence of the crime, even though the guidelines took violence into account:

… [T]he People have failed to demonstrate that the defendant's involuntary absence from New York renders review of the order designating him a level two offender academic. As a result of his level two designation, the defendant's name, photograph, the details of his crime, and other information can be accessed online at the Division website, notwithstanding the fact that he has been deported … . The outcome of an appeal such as this, which concerns a defendant's risk level designation, will have certain practical consequences with respect to SORA registration requirements, such as the duration of the posting of this information, which is already on the website (see Correction Law § 168-h). * * *

While the SORA Guidelines do take into account the use of violence under risk factor 1, the People's proof demonstrated, by clear and convincing evidence, that the SORA Guidelines did not adequately take into account the true nature of the defendant's actions, and that the defendant's conduct tended to show a higher likelihood of reoffense or danger to the community. The case summary indicates that the defendant repeatedly punched the victim in the face, placed a knife to her throat, threatened to kill her, put his mouth on her breasts and vagina, attempted to place his penis in her mouth, and put his penis in her vagina against her will. Following the incident, which lasted several hours, the police recovered various items within the subject residence that were covered in blood, and the victim's face was both bruised and bloody.

Thus, the defendant was properly designated a level two sex offender. People v Shim, 2016 NY Slip Op 01818, 2nd Dept 3-16-16

CRIMINAL LAW (SORA RISK LEVEL, DEPORTATION OF DEFENDANT DID NOT RENDER APPEAL ACADEMIC)/APPEALS (SORA RISK LEVEL, DEPORTATION OF DEFENDANT DID NOT RENDER APPEAL ACADEMIC)/SEX OFFENDER REGISTRATION ACT (SORA) (USE OF EXTREME VIOLENCE WARRANTED UPWARD DEPARTURE)

WAIVED DEFENSE CAN BE INTERPOSED IN AN ANSWER AMENDED BY LEAVE OF COURT.

The Second Department determined defendant doctor in this medical malpractice action should have been allowed to amend his answer to add the defense of discharge in bankruptcy. The court noted that even where a defense is waived pursuant to CPLR 3211(e) it can be interposed in an answer amended by leave of court pursuant to 3025(b):

Even when a defense is waived under CPLR 3211(e), “it can nevertheless be interposed in an answer amended by leave of court pursuant to CPLR 3025(b), as long as the amendment does not cause the other party prejudice or surprise resulting directly from the delay, and is not palpably insufficient or patently devoid of merit” … . Under the circumstances of this case, we find that [defendant's] affirmative defense of discharge in bankruptcy is neither patently insufficient nor palpably devoid of merit, and there would be little or no prejudice resulting from any delay in granting leave to amend his answer to add this affirmative defense … . Dixon v Chang, 2016 NY Slip Op 01797, 2nd Dept 3-16-16

CIVIL PROCEDURE (WAIVED DEFENSE CAN BE INTERPOSED IN AN ANSWER AMENDED BY LEAVE OF COURT)/AMENDED ANSWER (WAIVED DEFENSE CAN BE INTERPOSED IN AN ANSWER AMENDED BY LEAVE OF COURT)/AFFIRMATIVE DEFENSES (WAIVED DEFENSE CAN BE INTERPOSED IN AN ANSWER AMENDED BY LEAVE OF COURT)

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STATEMENTS MADE BY ATTORNEY IN AFFIDAVIT SUBMITTED TO THE COURT WERE ABSOLUTELY PRIVILEGED, DEFAMATION ACTION PROPERLY DISMISSED.

The Second Department determined the defendant-attorney's motion to dismiss the defamation complaint was properly dismissed for failure to state a cause of action. The allegedly defamatory statements were made in an affidavit submitted to the court and concerned the will at the center of the proceedings. The statements, therefore, were absolutely privileged:

An otherwise defamatory statement may be “privileged” and thus not actionable … . Insofar as is relevant herein, an absolute privilege is accorded statements made at all stages of a judicial proceeding in communications among the parties, witnesses, counsel, and the court, provided that the statements may be considered in some way “pertinent” to the issue in the proceeding … . “The test of pertinency [to the litigation] is extremely liberal so as to embrace [ ] anything that may possibly or plausibly be relevant or pertinent'” … . This privilege applies to all statements made in or out of court and regardless of the motive for which they were made … .

Here, the complaint alleges that the defendant, who was counsel for the executor in a probate proceeding, made allegedly defamatory statements in an affirmation in support of a motion in that proceeding to compel a continued examination pursuant to Surrogate's Court Procedure Act § 1404. The statements concerned the very subject of the probate proceeding, the contested last Will and Testament of the decedent. Therefore, the subject statements were absolutely privileged as a matter of law and cannot be the basis for a defamation action … . Brady v Gaudelli, 2016 NY Slip Op 01793, 2nd Dept 3-16-16

ATTORNEYS (DEFAMATION, STATEMENTS MADE IN AFFIDAVIT SUBMITTED TO THE COURT WERE ABSOLUTELY PRIVILEGED)/DEFAMATION (STATEMENTS MADE IN AFFIDAVIT SUBMITTED TO THE COURT WERE ABSOLUTELY PRIVILEGED)/PRIVILEGE (ATTORNEYS, STATEMENTS MADE IN AFFIDAVIT SUBMITTED TO THE COURT WERE ABSOLUTELY PRIVILEGED)

USE OF PLAINTIFF’S LAND WAS PERMISSIVE, NOT HOSTILE; EASEMENT BY PRESCRIPTION WAS NOT CREATED.

Affirming the judgment pursuant to Real Property Actions and Proceedings Law (RPAPL) article 15, the Second Department determined plaintiff (Colin Realty) demonstrated the use of its land by neighboring property owners over the years was permissive, not hostile. Therefore no easement by prescription had been created and plaintiff could properly prohibit defendants’ use of the land:

“An easement by prescription is generally demonstrated by proof of the adverse, open and notorious, continuous, and uninterrupted use of the subject property for the prescriptive period” … . In general, “where an easement has been shown by clear and convincing evidence to be open, notorious, continuous, and undisputed, it is presumed that the use was hostile, and the burden shifts to the opponent of the allegedly prescriptive easement to show that the use was permissive” … . This presumption, however, does not arise “when the parties’ relationship was one of neighborly cooperation or accommodation” … . Similarly, the presumption of hostility is inapplicable when the use by the claimant is not “exclusive” … . In this regard, ” exclusivity’ is not established where [a claimant’s] use is in connection with the use of the owner and the general public” … .

Here, while … it appears undisputed that the defendants’ traversing of Colin Realty’s lot was open, notorious, and continuous for the prescriptive period, the court properly determined that the presumption of hostility did not arise. Fred Colin, the manager of Colin Realty, testified that he permitted such use to [defendant] Fradler and the public at large as a matter of willing accord and neighborly accommodation. He further explained how he had, over the years, protected Colin Realty’s ownership interest when others had abused the permission he afforded. Colin Realty Co., LLC v Manhasset Pizza, LLC, 2016 NY Slip Op 01633, 2nd Dept 3-9-16

REAL PROPERTY (EASEMENT BY PRESCRIPTION NOT CREATED, USE WAS PERMISSIVE NOT HOSTILE)/EASEMENTS (EASEMENT BY PRESCRIPTION NOT CREATED, USE WAS PERMISSIVE NOT HOSTILE)

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PHARMACIST’S DUTY OF CARE CLEARLY ARTICULATED AFTER IN-DEPTH ANALYSIS; SUMMARY JUDGMENT DISMISSING THE NEGLIGENCE/WRONGFUL DEATH CAUSES OF ACTION AGAINST THE PHARMACIST AND PHARMACY SHOULD HAVE BEEN GRANTED.

The Second Department, in a full-fledged opinion by Justice Miller, reversing Supreme Court, determined defendant pharmacist and pharmacy (the CVS defendants) were entitled to summary judgment dismissing the negligence/wrongful death causes of action against them. Plaintiff’s decedent was prescribed hydromorphone for pain (up to eight milligrams every three hours). The prescription was filled by defendant pharmacist. Shortly after returning home from the hospital and taking an eight milligram dosage of hydromorphone, plaintiff’s decedent gasped for air and died. The autopsy identified the cause of death as acute hydromorphone intoxication. Noting that the duty of care owed to a patient by a pharmacist had not been clearly articulated, the Second Department issued a comprehensive opinion tracing the historical role of pharmacists and several analogous standards of care. The court concluded the pharmacist has a duty to accurately fill a doctor’s prescription and need not inquire further unless there exists a clear-cut contraindication for use of the medication. No such contraindication was apparent here. The court described the pharmacist’s duty as follows:

… [W]e conclude that, when a pharmacist has demonstrated that he or she did not undertake to exercise any independent professional judgment in filling and dispensing prescription medication, that pharmacist cannot be held liable for negligence in the absence of evidence that he or she failed to fill the prescription precisely as directed by the prescribing physician or that the prescription was so clearly contraindicated that ordinary prudence required the pharmacist to take additional measures before dispensing the medication … . Abrams v Bute, 2016 NY Slip Op 01627, 2nd Dept 3-9-16

NEGLIGENCE (PHARMACIST’S DUTY OF CARE CLEARLY ARTICULATED)/PHARMACISTS (DUTY OF CARE IN DISPENSING MEDICATION CLEARLY ARTICULATED)

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QUESTION OF FACT WHETHER OFFICER DEMONSTRATED RECKLESS DISREGARD FOR THE SAFETY OF OTHERS IN HIGH-SPEED PURSUIT.

The Second Department determined the county’s motion for summary judgment in an action stemming from a high-speed police pursuit was properly denied. Before the pursued car went through a red light and collided with plaintiff’s decedent, there were several similar close calls as the pursuit proceeded through a residential neighborhood:

” The manner in which a police officer operated his or her vehicle in responding to an emergency may form the basis of civil liability to an injured third party if the officer acted in reckless disregard for the safety of others'” … . ” The reckless disregard’ standard requires proof that the officer intentionally committed an act of an unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow'” … .

In this case, the County defendants, in moving for summary judgment, failed to establish, prima facie, that [the officer] did not act in reckless disregard for the safety of others in commencing, conducting, or failing to terminate the high-speed pursuit of [the] vehicle … . Among other things, there are triable issues of fact as to what occurred just moments before the accident and as to whether [the officer] pursued [the vehicle] in a manner that prevented [the pursued driver] from stopping for fear of a collision with [the officer’s] police vehicle. Furthermore, considering the testimony indicating that the pursuit was conducted at high speeds in a residential neighborhood, that [the pursued driver] disobeyed several traffic control devices, and that collisions with other cars at earlier intersections were narrowly avoided, there are triable issues of fact as to whether [the officer] should have terminated the pursuit. … . Foster v Suffolk County Police Dept., 2016 NY Slip Op 01639, 2nd Dept 3-9-16

NEGLIGENCE (POLICE HIGH-SPEED PURSUIT, QUESTION OF FACT RE: RECKLESS DISREGARD FOR SAFETY)/MUNICIPAL LAW (POLICE HIGH-SPEED PURSUIT, QUESTION OF FACT RE: RECKLESS DISREGARD FOR SAFETY)/POLICE (POLICE HIGH-SPEED PURSUIT, QUESTION OF FACT RE: RECKLESS DISREGARD FOR SAFETY)/VEHICLE AND TRAFFIC LAW  (POLICE HIGH-SPEED PURSUIT, QUESTION OF FACT RE: RECKLESS DISREGARD FOR SAFETY)

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