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Loan Secured by Shares in a Cooperative Apartment Was Not a “Home Loan” Subject to the Pre-Foreclosure Settlement Conference Required by CPLR 3408

The Second Department determined defendant was not entitled to a pre-foreclosure settlement conference under CPLR 3408. The underlying loan was secured by shares in the cooperative apartment where defendant resided. Such a loan was not a “home loan” within the meaning of Real Property Actions and Proceedings Law (RPAPL) 1304, and therefore was not subject to the mandatory settlement conference under the CPLR:

CPLR 3408 requires, in relevant part, that a court hold a mandatory settlement conference in “any residential foreclosure action involving a home loan as such term is defined in section thirteen hundred four of the real property actions and proceeding law” (CPLR 3408[a]). RPAPL 1304 does not include, in its definition of “home loan,” a loan secured by shares of stock and a proprietary lease from a corporation formed for the purpose of cooperative ownership in real estate (RPAPL 1304[5][a][iii]; cf. Banking Law §§ 6-l[1][e][iv]; 6-m[1][d][iv]). Accordingly, because the subject loan is not a home loan within the meaning of RPAPL 1304, the plaintiff is not entitled to a mandatory settlement conference pursuant to CPLR 3408. DaCosta-Harris v Aurora Bank, FSB, 2015 NY Slip Op 06879, 2nd Dept 9-23-15

 

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The Martin Rule, Which Prohibits Actions Against Unincorporated Associations Unless the Actions Complained of Were Authorized or Ratified, Does Not Prohibit Actions Against Individual Association Members

The Second Department, over a dissent, determined that, although the Martin rule prohibited the “defamation/tortious interference with business relations” actions against the union, the actions against individual union members were not prohibited.  The Martin rule bars suit against unincorporated voluntary membership associations (here the union) unless the actions complained of were authorized or ratified by the union. But the Martin rule does not bar suit against union members in their individual capacities:

… [T]he Martin rule (see Martin v Curran, 303 NY 276…) … bars all actions against an unincorporated voluntary membership association, and bars claims against the officers of such an association in their representative capacities where there is no allegation that the members of the association authorized or ratified the wrongful conduct complained of.

However, neither the Martin rule nor any other authority precludes causes of action from being asserted against individual members of the union defendants in their individual capacities … . In Martin, only the claims asserted against union members in their representative capacities as officers of the union were dismissed. Notably, the Court of Appeals specifically allowed the libel claims in that action to proceed against the same defendant union members, in their individual capacities … . Cablevision Sys. Corp. v Communications Workers of Am. Dist. 1, 2015 NY Slip Op 06873, 2nd Dept 9-23-15

 

Plaintiff Is a Retired Judge—Change of Venue Appropriate to Avoid Appearance of Impropriety

The Second Department determined defendants’ motion to change venue in a wrongful death action should have been granted. Plaintiff is a retired Supreme Court justice in the county where the action was brought. Change of venue was appropriate to avoid the appearance of impropriety:

A court, upon motion, may change the place of trial of an action where there is reason to believe that an impartial trial cannot be had in the proper county (see CPLR 510[2]). Generally, a motion for a change of venue is committed to the sound discretion of the trial court …, and the resolution of such an application will not be disturbed absent an improvident exercise of that discretion … .

To succeed on a motion to change venue pursuant to CPLR 510(2), the movant is required to produce admissible factual evidence demonstrating a strong possibility that an impartial trial cannot be obtained in the county where venue was properly placed … .

Under the circumstances of this case, the Supreme Court improvidently denied the defendants’ motion to change venue. Although he is now retired, the plaintiff’s tenure as a Justice of the Supreme Court, Queens County, supports a change of venue of the action from Queens County to Nassau County to “protect[ ] the court from even a possible appearance of impropriety” … . Lisa v Parikh, 2015 NY Slip Op 06897, 2nd Dept 9-23-15

 

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A Town’s Zoning Powers Include the Creation of a Zoning District for Senior Citizens—Residents of a Retirement Community Had the Power to Enforce the Zoning Ordinance Limiting the Use of the Community Portion of a Building to Community Residents—Agreement to Pay Social Membership Fees Re: a Community Golf Course Constituted a Covenant Which Ran with the Land

The Second Department, in a detailed decision dealing with many issues, resolved a dispute concerning the use of the community portion of a building within a retirement community, which included a golf course. The plaintiffs (residents) alleged the community portion of the building was to be used solely by the community residents and should not be used for special events involving non-residents. The Second Department determined (1) the plaintiffs had the power to enforce the zoning ordinance requiring that the community portion of the building be for the exclusive use of the retirement-community (over 55) residents, (2) the residents were benefitted by easements over the common areas held by the defendants and therefore were obligated to share in the cost of maintenance of those areas, and (3) the requirement that the residents pay social membership fees (re: the golf course) was a covenant which ran with the land, binding subsequent purchasers. The Second Department specifically held that zoning ordinances may properly create a zoning district for senior citizens:

… Town Law § 268(2) permits the individual plaintiffs to enforce the Town Code § 198-21.2(F)(1)(b) to the extent it gives them exclusive use of the community building portion of the combined building. The defendants contend, however, that even if the individual plaintiffs may use Town Law § 268(2) to seek enforcement of this portion of Town Code § 198-21.2(F)(1)(b), it, in fact, may not be enforced because the Town lacked the authority to regulate who owns or occupies land …  . A town does not act in excess of its authority when it creates a zoning district for senior citizens …, or when it limits the occupancy of dwelling units within a planned retirement community to persons aged 55 or over … . Since these are valid exercises of a town’s zoning power, it must follow that a town may also limit the use of a recreational facility within a senior residential community to those seniors living there.  * * *

The defendants were given an easement over the common areas and common elements, including roadways, walkways, and landscaped areas, for ingress, egress, and the retrieval of golf balls. … Generally, absent an express agreement, all persons benefitted by an easement must share ratably in the cost of its maintenance and repair … .  * * *

…[T]the defendants established that the covenant to pay social membership fees runs with the land, as the record demonstrates that the “grantor and grantee intended that the covenant should run with the land,” “the covenant is one touching or concerning the land with which it runs,” and “there is privity of estate between the . . . party claiming the benefit of the covenant and the right to enforce it, and the . . . party who rests under the burden of the covenant” … . Greens at Half Hollow Home Owners Assn., Inc. v Greens Golf Club, LLC, 2015 NY Slip Op 06887, 2nd Dept 9-23-15

 

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Relation Back Doctrine Did Not Apply to Causes of Action in Amended Complaint—Amendment Should Not Have Been Allowed

The Second Department determined Supreme Court should not have allowed the amendment of a medical malpractice complaint to add causes of action for negligent hiring and supervision. The negligent hiring and supervision allegations were time barred and were different from the medical malpractice allegations such that the relation back doctrine did not apply:

Pursuant to CPLR 203(f), claims asserted in an amended complaint are “deemed to have been interposed at the time the claims in the original pleading were interposed, unless the original pleading does not give notice of the transactions, occurrences, or series of transactions or occurrences, to be proved pursuant to the amended pleading” (CPLR 203[f]). Thus, when the nature of a newly asserted cause of action is distinct from the causes of action asserted in the original complaint, and requires different factual allegations as to the underlying conduct than were contained in the original complaint, the new claims will not “relate back” in time to the interposition of the causes of action in the original complaint … . Here, the Supreme Court erred in determining that the allegations in the original complaint in support of the causes of action alleging medical malpractice and lack of informed consent gave [defendant] notice of the “transactions, occurrences, or series of transactions or occurrences, to be proved” with respect to the claims of negligent hiring and supervision … . The causes of action alleging medical malpractice and lack of informed consent are distinct not only as to the conduct alleged, but also as to the dates on which the conduct occurred and who engaged in it … . The mere reference to “negligence” in the original complaint did not give [defendant] notice of the transactions, occurrences, or series of transactions or occurrences, to be proved with respect to the proposed causes of action alleging negligent hiring and negligent supervision. Thus, those proposed causes of action could not be deemed to relate back to the interposition of the causes of action in the original complaint … . Calamari v Panos, 2015 NY Slip Op 06875, 2nd Dept 9-23-15

 

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Forum Selection Clause in a “Release of Liability” Form Is Enforceable

The Second Department determined the forum selection clause in an “Equipment Rental Form and Release of Liability” signed by plaintiff prior to taking snowboarding lessons at defendant ski resort was enforceable. Plaintiff alleged injury caused by improper instruction and argued the form was an invalid contract of adhesion:

Contrary to the plaintiff’s contentions, the “Equipment Rental Form and Release of Liability” was not an unenforceable contract of adhesion, and enforcement of the forum selection clause contained therein does not contravene public policy … . Karlsberg v Hunter Mtn. Ski Bowl, Inc., 2015 NY Slip Op 06890, 2nd Dept 9-23-15

 

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Town Has Duty to Defend Former Town Clerk Accused of Sexual Harassment Within the Scope of Employment

The Second Department determined the Town Law required the town to pay for the defense of the former town clerk accused of sexual harassment within the scope of his employment:

The duty to defend is broader than the duty to indemnify …, and it is triggered if the civil complaint includes allegations that the employee was acting within the scope of his or her employment at the time of the alleged wrongdoing … . Here, the underlying federal complaint specifically alleges, among other things, that the petitioner committed sexual harassment while acting in the scope of his employment as the Town Clerk, the Town facilitated a hostile work environment, and the Town failed to prevent workplace harassment. Contrary to the Town’s contention, the Supreme Court correctly determined that the allegations in the federal complaint were sufficient to trigger the Town’s broad duty to defend the petitioner … . Matter of Bonilla v Town of Hempstead, 2015 NY Slip Op 06916, 2nd Dept 9-23-15

 

Trustees Were Not Required by Town Law to Turn Over to the Town Board Trust Revenues Generated by Water Management in the Town of Southampton

In a detailed decision which traces the history of a trust and statutes governing town finances in the Town of Southampton from pre-colonial times to the present, the Second Department determined that the “Trustees of the Freeholders and Commonality of the Town of Southampton” (Trustees) were not obligated by Town Law to turn over trust revenues from water management to the Town Board:

For nearly 400 years, the Trustees of the Freeholders and Commonalty of the Town of Southampton (hereinafter the Trustees or the Trust) have had the right, derived from royal land grants and patents, to control and manage the waters of the town. In the present day, the Trustees raise revenue from issuing licenses for activities including commercial fishing, charging permit fees for seasonal boat docking, dock and bulkhead construction, and dredging, and selling sand excavated from Mecox Bay. The Trustees deposit their revenues into several bank accounts, which, at the time this action was commenced, had an aggregate balance of close to $1 million. On this appeal, we are called upon to determine whether Town Law § 64(1) requires the Trustees to turn over control of their revenues to the Town Board of the Town of Southampton (hereinafter the Town Board) and whether the expenditure of such revenues must therefore comply with the same statutes which govern town finances and expenditures. We conclude that Town Law § 64(1) does not require the Trustees to turn over control of their revenues to the Town Board, and that the statutes governing town finances and expenditures relied upon by the plaintiffs are inapplicable to the Trust. Gessin v Throne-Holst, 2015 NY Slip Op 06885, 2nd Dept 9-23-15

 

Requirements of Adverse Possession by “Tacking” Explained (Not Met Here)

In affirming the grant of defendant’s motion for summary judgment dismissing the complaint claiming adverse possession of a strip of land, the Second Department explained the requirements for adverse possession by “tacking” the possession of prior owners:

A party claiming adverse possession may establish possession for the statutory period by “tacking” the time that the party possessed the property onto the time that the party’s predecessor adversely possessed the property … . Tacking is permitted where there is an “unbroken chain of privity between the adverse possessors” … . For tacking to apply, a party must show that the party’s predecessor “intended to and actually turned over possession of the undescribed part with the portion of the land included in the deed” … . In order to succeed on a claim of adverse possession, a party must provide clear and convincing evidence that the possession was “hostile and under a claim of right”; (2) actual; (3) open and notorious; (4) exclusive; and (5) “continuous for the statutory period of 10 years” … . The party must also show that the disputed property was “usually cultivated or improved” or “protected by a substantial inclosure” (RPAPL former § 522 …). Munroe v Cheyenne Realty, LLC, 2015 NY Slip Op 06902, 2nd Dept 9-23-15

 

Deed-Escrow Conditions Never Satisfied—Transfer Never Took Place

The Second Department explained that property is not transferred until the escrow conditions (re: a deed held in escrow) are satisfied:

“When a deed is delivered to be held in escrow, the actual transfer of the property does not occur until the condition of the escrow is satisfied and the deed is subsequently delivered to the grantee by the escrow agent” … . Here, in support of their motion for summary judgment dismissing the complaint, the defendants established their prima facie entitlement to judgment as a matter of law … by submitting, inter alia, an escrow agreement … entered into by the plaintiff and the defendant … . Pursuant to the agreement, an escrow agent was required to hold the deed to the subject property until the plaintiff paid certain sums due on a purchase money mortgage. The evidence proffered by the defendants established, prima facie, that the plaintiff failed to satisfy the aforementioned condition of the escrow agreement and, thus, actual transfer of the subject property to the plaintiff never took place. Xui v Iron City Properties, Inc., 2015 NY Slip Op 06898, 2nd Dept 9-23-15

 

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