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Supreme Court Should Not Have Denied Plaintiffs’ Motion to Extend the 90-Day Period for Filing a Note of Issue

In finding Supreme Court abused its discretion in denying plaintiffs’ motion to extend the 90-day period for filing a note of issue, the Second Department explained the analytical criteria:

Once the plaintiffs were in receipt of the 90-day notice, they were required to serve and file a timely note of issue, or move before the default date to either vacate the 90-day notice or extend the 90-day period pursuant to CPLR 2004 … . Here, there is no dispute that the plaintiffs timely moved, inter alia, to extend the 90-day period. However, notwithstanding the plaintiff’s timely motion, the Supreme Court directed the dismissal of the complaint pursuant to CPLR 3216. This was an improvident exercise of discretion.

The determination as to whether to vacate a 90-day notice and grant an extension of time to file a note of issue lies within the court’s discretion, and this determination may be guided by the length of the delay in prosecuting the action, the reason for the delay, the prejudice to the defendants, and whether the moving party was in default before seeking the extension … . The Court of Appeals has observed that CPLR 3216 is “extremely forgiving” …, in that it “never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff’s action based on the plaintiff’s unreasonable neglect to proceed” … . Amos v Southampton Hosp., 2015 NY Slip Op 06700, 2nd Dept 9-2-15

 

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Causes of Action Seeking Monetary Damages Were Not Incidental to the Article 78 Causes of Action and, Therefore, Were Not Subject to the Four-Month Statute of Limitations

The Second Department determined certain causes of action in plaintiffs’ complaint should not have been dismissed because they were not incidental to the Article 78 causes of action which were time-barred.  Plaintiffs brought a hybrid proceeding (1) to annul a town resolution assessing taxes to pay for the town’s demolition of some of plaintiffs’ property which was deemed unsafe, and (2) seeking damages for destruction of property and interruption of plaintiffs’ business. The Second Department explained the criteria for determining whether causes of action seeking monetary damages should be deemed incidental to the Article 78 causes of action (and therefore subject to the four-month statute of limitations):

Pursuant to CPLR 7806, where a CPLR article 78 petitioner seeks damages as well as the annulment of a governmental determination, “[a]ny restitution or damages granted to the petitioner must be incidental to the primary relief sought by the petitioner, and must be such as he [or she] might otherwise recover on the same set of facts in a separate action or proceeding suable in the supreme court against the same body or officer in its or his official capacity” (CPLR 7806). “[W]here the thrust of the lawsuit is the review of an adverse . . . agency determination, with the monetary relief incidental, [the] Supreme Court may entertain the entire case under CPLR article 78” … . “Whether the essential nature of the claim is to recover money, or whether the monetary relief is incidental to the primary claim, is dependent upon the facts and issues presented in a particular case” … . Contrary to the Supreme Court’s determination, the claims asserted in the first, second, and eighth causes of action were not incidental to the plaintiffs’ CPLR article 78 challenges to the Resolution and the special tax assessment … . Therefore, these causes of action were not asserted in connection with the CPLR article 78 portion of this hybrid action/proceeding, and were not barred by the four-month statute of limitations applicable to CPLR article 78 proceedings … . Hertzel v Town of Putnam Val., 2015 NY Slip Op 06708, 2nd Dept 9-2-15

 

Plaintiff Not Entitled to Summary Judgment—Plaintiff Could Not Demonstrate Plaintiff’s Interpretation of the Contract Was the Only Reasonable Interpretation (Rendering the Contract Ambiguous)

Plaintiff sued under a brokerage agreement alleging entitlement to a fee in connection with the sale of defendant’s property. By the terms of the agreement, no fee was owed if the property was sold to “a private party identified as James Walker.” Ultimately the property was sold to “James Walker,” but defendant alleged the buyer was not James Walker but was merely using the name as a pseudonym to protect his privacy. The Second Department determined plaintiff was not entitled to summary judgment because it could not be found as a matter of law that plaintiff’s interpretation of the contract was the only reasonable interpretation. The court explained the relevant analytical criteria:

“The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties’ intent” … . “[A] written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” … . “To determine whether a writing is unambiguous, language should not be read in isolation because the contract must be considered as a whole” … . If the language of the contract is susceptible of more than one reasonable interpretation, the contract will be considered ambiguous … .

The threshold question of whether a contract is unambiguous, and the subsequent construction and interpretation of an unambiguous contract, are issues of law within the province of the court … . “[W]hen interpreting a contract, the court should arrive at a construction which will give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized” … . Extrinsic and parol evidence of the parties’ intent may not be admitted to create ambiguity in a contract that is unambiguous on its face, but such evidence may be considered where a contract is determined to be ambiguous … .

* * * … [Here it] cannot be determined as a matter of law that the plaintiff’s interpretation … was the only reasonable interpretation … . NRT N.Y., LLC v Harding, 2015 NY Slip Op 06719, 2nd Dept 9-2-15

 

Plaintiffs Raised a Question of Fact Whether “SLAPP” Suit Has a Substantial Basis in Fact and Law

The Second Department, over a long and detailed dissent, determined defendant, Petrucci, was entitled to summary judgment on the question whether the action against her constituted a SLAPP suit under the Civil Rights Law, but was not entitled to summary judgment on the merits.  SLAPP stands for “strategic lawsuit against public participation.” The statute, Civil Rights law 76-a(1), seeks to prohibit lawsuits brought against citizens who are critical of public bodies. Although finding that the suit is properly characterized as a SLAPP suit, the majority further determined the plaintiffs had raised questions of fact about whether their action “has a substantial basis in fact and law.” Plaintiffs have leases with the Port Authority. Plaintiffs alleged that Petrucci falsely reported to the Port Authority’s Office of Inspector General that plaintiffs had underreported their revenues and therefore were paying less rent than was owed:

Civil Rights Law § 76-a(1) provides, in relevant part:

“(a) An action involving public petition and participation’ is an action, claim, cross claim or counterclaim for damages that is brought by a public applicant or permittee, and is materially related to any efforts of the defendant to report on, comment on, rule on, challenge or oppose such application or permission.

“(b) Public applicant or permittee’ shall mean any person who has applied for or obtained a permit, zoning change, lease, license, certificate or other entitlement for use or permission to act from any government body, or any person with an interest, connection or affiliation with such person that is materially related to such application or permission.”

Here, the plaintiffs are “public permittees” within the meaning of the statute, since that term encompasses those who have obtained a lease from a government body, and the plaintiffs have obtained concessionary leases from the Port Authority of New York and New Jersey (hereinafter the Port Authority). Moreover, those causes of action specifically asserted against Petrucci in the complaint are “materially related” to her efforts to report on those leases, since they are premised upon her statements to the Port Authority’s Office of the Inspector General (hereinafter the OIG) regarding whether the plaintiffs, inter alia, intentionally underreported their revenues and thus paid less rent than was owed under the leases. Inasmuch as the complaint alleges that Petrucci affirmatively instigated the subject investigations by the OIG in a calculated attempt to undermine the plaintiffs’ leases with the Port Authority, and that she made her statements directly to the governing body responsible for the leases …, Petrucci demonstrated her prima facie entitlement to judgment as a matter of law determining that this action is a SLAPP suit, and the plaintiffs failed to raise a triable issue of fact in opposition. Accordingly, this action is properly characterized as a SLAPP suit … .

However, Petrucci was not entitled to summary judgment dismissing those causes of action specifically asserted against her in the complaint, or on her counterclaim pursuant to Civil Rights Law § 70-a. While we share the dissent’s concern for safeguarding the rights of citizens to comment on matters of public concern, and we acknowledge that “Civil Rights Law § 76-a was enacted to provide special protection for defendants in actions arising from the exercise of their rights of public petition and participation by deterring SLAPP actions” … , we conclude that the plaintiffs sustained their statutory burdens in opposition to the motion by demonstrating that the action “has a substantial basis in fact and law” (CPLR 3212[h]…). International Shoppes, Inc. v At the Airport, LLC, 2015 NY Slip Op 06710, 2nd Dept 9-2-15

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Negligent Supervision Cause of Action Against School Should Have Been Dismissed

Reversing Supreme Court, the Second Department, over a strong dissent, determined the defendants’ motions for summary judgment should have been granted. Plaintiff-student alleged he was injured when he tripped over another student’s (Maher’s) foot during a “speedball” game at school. Plaintiff-student provided conflicting statements about whether Maher had acted deliberately. With respect to the negligent supervision cause of action, the court wrote:

The School District’s submissions, including an affidavit of a physical education expert, established its prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against it … . The evidence submitted by the School District demonstrates that the incident occurred so quickly that it could not have been prevented by even the most intense supervision … . In opposition, the plaintiffs failed to raise a triable issue of fact … . While the plaintiffs emphasize that there is evidence in the record indicating that Maher had shoved another student in a gym class on an earlier date, this evidence was insufficiently specific to place the School District on notice of the conduct that led to the infant plaintiff’s injuries … . Finally, while the compulsory nature of the gym class activities precludes an assumption of risk defense, it is not an impediment to summary judgment, as it does not deprive the School District of its defense that the incident was sudden and unexpected … . Scavelli v Town of Carmel, 2015 NY Slip Op 06666, 2nd Dept 8-26-15

 

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“Lack of Standing” Defense Waived by Not Asserting It In the Answer—“Lack of Standing” Not a Jurisdictional Defect—Sua Sponte Dismissal for “Lack of Standing” Not Warranted

In reversing Supreme Court’s denial of plaintiff-bank’s unopposed motions in a foreclosure action, the Second Department noted that defendant homeowner had waived the “lack of standing” defense by not asserting it in her answer, and, in any event, “lack of standing” is not a jurisdictional defense for which the court’s sua sponte dismissal of the complaint was warranted:

The Supreme Court abused its discretion in, sua sponte, directing the dismissal of the complaint for the plaintiff’s 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 court was not presented with extraordinary circumstances warranting sua sponte dismissal of the complaint. [The homeowner] had waived the defense of lack of standing by failing to assert it in her amended answer, which she withdrew in any event, the State waived the defense by serving and filing a limited notice of appearance, and the remaining defendants waived the defense by failing to appear or answer… . Furthermore, a party’s lack of standing does not constitute a jurisdictional defect and does not warrant a sua sponte dismissal of the complaint by the court … . Mortgage Elec. Registration Sys., Inc. v Holmes, 2015 NY Slip Op 06662, 2nd Dept 8-26-15

 

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False Arrest and False Imprisonment Causes of Action Properly Dismissed—City Demonstrated Police Had Probable Cause to Arrest Based Upon a Complaint by an Identified Citizen

The Second Department determined plaintiff’s complaint alleging false arrest and false imprisonment was properly dismissed, finding the city demonstrated the police had probable cause to arrest the plaintiff based upon allegations made by an identified complainant. Although accused of a shooting by the alleged victim, plaintiff was never indicted. Discrepancies in statements made by the alleged victim of the shooting did not negate the existence of probable cause to arrest:

To prevail on a cause of action alleging false arrest or false imprisonment, a plaintiff must prove (1) intentional confinement by the defendant, (2) of which the plaintiff was aware, (3) to which the plaintiff did not consent, and (4) which was not otherwise privileged … . Where, as here, an arrest is made without a warrant, “[t]he existence of probable cause serves as a legal justification for the arrest and an affirmative defense to the claim” … . “Probable cause does not require proof sufficient to warrant a conviction beyond a reasonable doubt but merely information sufficient to support a reasonable belief that an offense has been or is being committed” … .

The defendants established their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging false arrest and false imprisonment by submitting evidence demonstrating that the police had probable cause to arrest the plaintiff. “[I]nformation provided by an identified citizen accusing another individual of a specific crime is legally sufficient to provide the police with probable cause to arrest” … . The defendants’ submissions established that the complainant, an identified citizen, claimed that he was shot in the back and identified the plaintiff as the person who shot him. The arresting detective testified at his deposition that he observed the complainant’s gunshot wound and recovered a bloody T-shirt with a bullet hole from him. The defendants’ submissions demonstrated that the complainant identified the plaintiff as the shooter by name, provided the police with a physical description of him, and identified the plaintiff as the shooter in a photograph, all prior to the plaintiff’s arrest … . Nolasco v City of New York, 2015 NY Slip Op 06663, 2nd Dept 8-26-15

 

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Licensing Officer Has Broad Discretion Re: Denial of Application for a Pistol Permit

In upholding the denial of an application for a pistol permit, the Second Department explained the broad discretion afforded the licensing officer:

Penal Law § 400.00(1), which sets forth the eligibility requirements for obtaining a pistol license, requires, inter alia, that the applicant be at least 21 years of age, of good moral character with no prior convictions of a felony or serious offense, who has not had a license revoked or who is not under a suspension or ineligibility order, and a person “concerning whom no good cause exists for the denial of the license” (Penal Law § 400.00[1][n]…). “A pistol licensing officer has broad discretion in ruling on permit applications and may deny an application for any good cause” (… see Penal Law § 400.00[1][n]…).

Contrary to the petitioner’s contention, the licensing officer’s determination that good cause existed to deny the application was not arbitrary and capricious. The determination was rationally based, inter alia, on the petitioner’s criminal history … . Moreover, the licensing officer, by her own observation, found that the petitioner had issues with judgment, credibility, the ability to stay in control, and general moral fitness. Matter of Lawtone-Bowles v Klein, 2015 NY Slip Op 06669, 2nd Dept 8-26-15

 

Although the President of a Corporation Was Also a Member of Defendant Limited Liability Company, the Corporation and Limited Liability Were Not Shown to Be “United in Interest” Such that the “Relation-Back” Doctrine Would Apply to Allow Adding the Corporation as a Defendant After the Statute of Limitations Had Run

The Second Department determined plaintiffs were not entitled to amend the complaint to add a party after the statute of limitations had passed pursuant to the “relation-back” doctrine. Although the president of the party to be added, Madjek, Inc., was a member of Madjek, LLC, (a named defendant), that relationship alone was not enough to demonstrate Madjek, LLC, and Madjek, Inc. were “united in interest” such that one would be vicariously liable for the acts of the other. The court explained the “relation-back” and “united in interest” criteria:

To establish the applicability of the relation-back doctrine, a plaintiff is required to prove that: (1) both claims arose out of the same conduct, transaction, or occurrence; (2) the new defendant is united in interest with the original defendant, and by reason of that relationship can be charged with notice of the commencement of the action such that it will not be prejudiced in maintaining its defense on the merits; and (3) the new defendant knew or should have known that, but for a mistake by the plaintiffs as to the identity of the proper parties, the action would have been brought against it as well (see CPLR 203[b] …). Once a defendant has demonstrated that the statute of limitations has expired, the burden is on the plaintiff to establish the applicability of the relation-back doctrine … .

While it is undisputed that the first prong of the test has been satisfied here, the plaintiffs failed to establish that the Madjek defendants are united in interest. Defendants are united in interest only when their interest “in the subject-matter [of the action] is such that [the defendants] stand or fall together and that judgment against one will similarly affect the other” … . Defendants are not united in interest if there is a possibility that the new party could have a different defense than the original party … . Here, the only fact that the plaintiffs established in support of their contention that the Madjek defendants were united in interest was that the president of Madjek, Inc., was a member of Madjek, LLC. This fact, standing alone, is insufficient to establish that the Madjek defendants are vicariously liable for the acts of each other and, thus, is insufficient to establish that the Madjek defendants are united in interest … . Montalvo v Madjek, Inc., 2015 NY Slip Op 06661, 2nd Dept 8-26-15

 

Doctrine of Comity Precluded New York Action Attacking Bermuda Judgment

The Second Department determined Supreme Court, under the doctrine of comity, properly dismissed the complaint attacking a foreign country judgment. Plaintiff had appeared in the Bermuda case and made no showing of fraud or a public policy violation:

Generally, the courts of this State will “accord recognition to the judgments rendered in a foreign country under the doctrine of comity,” which is “the equivalent of full faith and credit given by courts to judgments of our sister States” … . Absent some showing of fraud in the procurement of the foreign country judgment or that recognition of the judgment would do violence to a strong public policy of New York State, a party who properly appeared in the action is precluded from attacking the validity of the foreign country judgment in a collateral proceeding commenced in a New York court … .

Contrary to the plaintiff’s contention, the Supreme Court properly determined that the adjudication of his claims for compensation under employment and consulting agreements with his former employer in a winding-up proceeding that was litigated in the British Overseas Territory of Bermuda precluded the instant action against the employer, among others, to recover damages for breach of contract and fraud. The plaintiff appeared in the Bermuda proceeding by submitting his claims to the Bermuda court, and made no showing of fraud or that a public policy of this State would be violated by recognizing the Bermuda court’s rejection of his claims. Accordingly, the Supreme Court properly granted that branch of the defendants’ motion which was to dismiss the complaint based on principles of comity. Basile v CAI Master Allocation Fund, Ltd., 2015 NY Slip Op 06650, 2nd Dept 8-26-15

 

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