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Plaintiff Allegedly Assaulted by Intoxicated Patron–Proof Requirements Under Dram Shop Act Explained

The Second Department determined the defendant bar was not entitled to summary judgment dismissing the complaint. Plaintiff alleged she was assaulted by an intoxicated patron. The court explained the proof requirements under the Dram Shop Act (General Obligations Law 11-101):

… [W]here a plaintiff alleges that he or she was assaulted by an intoxicated individual, to establish prima facie entitlement to judgment as a matter of law dismissing a complaint alleging a violation of the Dram Shop Act, a defendant is “required to establish either that it did not serve alcohol to [the plaintiff’s assailant] while he [or she] was visibly intoxicated or that its sale of alcohol to him [or her] had no reasonable or practical connection to the assault” … . Here, the defendants failed to establish their prima facie entitlement to judgment as a matter of law. Covert v Wisla Corp., 2015 NY Slip Op 06308, 2nd Dept 7-29-15

 

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Security at Homeless Shelter Is a Governmental Function–City Immune from Suit by Plaintiff Who Was Assaulted at the Shelter/Private Security Company Not Immune/Plaintiff Was a Third-Party Beneficiary of the Contract Between the Department of Homeless Services and the Security Company/Security Company Did Not Demonstrate It Was Free from Negligence and the Assault Was Not Foreseeable

The Second Department determined the city and the Department of Homeless Services (DHS) were immune from suit by plaintiff, who was assaulted in a city homeless shelter. The city’s obligation to provide security is a governmental function for which it cannot be held liable absent a special relationship with the plaintiff (not the case here).  However, the private security company, FJC  was not immune from suit. Plaintiff was a third-party beneficiary of the contract between DHS and FJC. FJC was not entitled to summary judgment because it failed to demonstrate it was not negligent and the attack was not foreseeable:

The plaintiff’s theory of recovery was premised upon the alleged failure of the municipal defendants to provide an adequate and proper security force to prevent attacks by third parties at the homeless shelter where the subject incident occurred. Such a claim, however, implicates a governmental function, liability for the performance of which is barred absent the breach of a special duty owed to the injured party … . Here, the municipal defendants demonstrated, prima facie, that they owed no special duty of care to the plaintiff, and the plaintiff failed to raise a triable issue of fact in opposition. Therefore, that branch of the municipal defendants’ motion which was for summary judgment dismissing the complaint insofar as asserted against them was properly granted … . …

However, the Supreme Court erred in granting that branch of the motion of the defendant FJC Security Services, Inc. (hereinafter FJC), which was for summary judgment dismissing the complaint insofar as asserted against it. Contrary to its contention, FJC, a private, for-profit contractor of security services, is not entitled to governmental immunity … . In addition, the plaintiff is a third-party beneficiary of the contract between FJC and DHS. The provisions of the contract between FJC and DHS unequivocally express an intent to confer a direct benefit on the homeless clients in residence at the City shelter, such as the plaintiff, to protect them from physical injury. Thus, in order to prevail on its motion for summary judgment, FJC was required to demonstrate, prima facie, that there were no triable issues of fact as to whether it was negligent in the performance of its duties, or that the assault on the plaintiff was not a reasonably foreseeable consequence of any breach of its duties … .  FJC failed to demonstrate either. Clark v City of New York, 2015 NY Slip Op 06307, 2nd Dept 7-29-15

 

Pedestrian Struck from Behind Was Not Comparatively Negligent as a Matter of Law

The Second Department, over a dissent, determined plaintiff pedestrian, who was struck from behind by defendant’s car, was free from comparative negligence as a matter of law and entitled to summary judgment. Plaintiff was properly crossing a street and had almost reached the other side when defendant, who was making a left turn into the street plaintiff was crossing, struck plaintiff from behind. Because plaintiff could not have seen defendant’s car before she was struck, there was no possibility she was comparatively negligent:

The deposition testimony of the injured plaintiff and a nonparty witness established that prior to entering the roadway, the injured plaintiff waited for the traffic light controlling the east-west traffic on Montauk Highway to turn red, then looked to her left and right, and, seeing no cars, started to walk southbound across Montauk Highway. The testimony further established that the injured plaintiff traversed the westbound left-turn lane, and while in the eastbound lane of Montauk Highway, having almost completed crossing, was struck by the defendants’ vehicle, which had turned left from Keith Lane to proceed east on Montauk Highway. Significantly, this testimony established that, prior to the impact, Karen Kruse (hereinafter the defendant driver), started her approach to the point of impact from behind and to the right of the injured plaintiff, that is, from behind the injured plaintiff’s right shoulder and out of her view. The defendant driver conceded in her deposition testimony that she did not see the injured plaintiff prior to impact, despite the fact, established by her own testimony, that the injured plaintiff was generally in front of her prior to the impact. Under these circumstances, the plaintiffs established that the defendant driver was negligent and that the injured plaintiff was free from comparative fault. Castiglione v Kruse, 2015 NY Slip Op 06306, 2nd Dept 7-29-15

 

Criteria for an Intended Third-Party Beneficiary of a Contract Explained

The Second Department determined the documents submitted by defendant power companies did not utterly refute plaintiff school-district’s allegation that it was an intended (not “incidental”) third-party beneficiary of a Power Supply Agreement (PSA) in which the defendants agreed not to bring any further tax certiorari proceedings to challenge property tax assessments. The school district brought the breach of contract action when the defendants started a tax certiorari proceeding. Defendants’ motion to dismiss based upon documentary evidence was properly denied. The court explained the criteria for a third-party beneficiary of a contract:

” A non-party [to a contract] may sue for breach of contract only if it is an intended, and not a mere incidental, beneficiary'” … . However, ” the identity of a third-party beneficiary need not be set forth in the contract or, for that matter, even be known as of the time of its execution'” … . “A party asserting rights as a third-party beneficiary must establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for [its] benefit and (3) that the benefit to [it] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [it] if the benefit is lost” … . ” In determining third-party beneficiary status it is permissible for the court to look at the surrounding circumstances as well as the agreement,'” and ” the obligation to perform to the third party beneficiary need not be expressly stated in the contract'” … . Board of Educ. of Northport-E. Northport Union Free Sch. Dist. v Long Is. Power Auth., 2015 NY Slip Op 06304, 2nd Dept 7-29-15

Same issue and result in: Town of Huntington v Long Is. Power Auth., 2015 NY Slip Op 06332, 2nd Dept 7-29-15

 

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Agency’s Failure to Follow Its Own Regulations Renders Determination Arbitrary and Capricious

The Second Department, over a partial dissent, in a rent-overcharge proceeding, affirmed Supreme Court’s review of the propriety of rent regulated by the NYC Rent Stabilization Code. The court explained the extent of the courts’ review powers of the administrative rulings, noting that the Deputy Commissioner’s failure to calculate the appropriate rent in the manner dictated by the controlling regulations rendered that particular aspect of the Commissioner’s ruling arbitrary and capricious:

“[I]n a CPLR article 78 proceeding to review a determination of the DHCR [NYC Department of Housing and Community Renewal], the court is limited to . . . the question of whether its determination was arbitrary and capricious and without a rational basis” … . In reviewing a determination of the DHCR, “[t]he court may not substitute its judgment for that of the DHCR” … . “The DHCR’s interpretation of the statutes and regulations it administers, if reasonable, must be upheld” … . * * *

In determining that the [landlord was] entitled to a rental increase of $204.01 per month pursuant to Rent Stabilization Code (9 NYCRR) § 2522.4(a)(1), the Deputy Commissioner deviated from the statutory calculations set forth in Rent Stabilization Code (9 NYCRR) § 2522.4(a)(4). Accordingly, the determination to recalculate the legal regulated rent to be $1,200 per month, by including a rental increase of $204.01 per month, was arbitrary and capricious and did not have a rational basis in the record … . Matter of Velasquez v New York State Div. of Hous. & Community Renewal, 2015 NY Slip Op 06353, 2nd Dept 7-29-15

 

Naming an Entity Other than the Lender as Mortgagee Did Not Render the Mortgage Null and Void

The Second Department rejected plaintiff’s argument that the naming of an entity other than the lender as the mortgagee rendered the mortgage null and void:

… [T]he plaintiff borrowed the sum of $671,250 from Webster [Bank], as evidenced by an adjustable rate note payable to Webster. Together therewith, the plaintiff executed a mortgage, securing the loan with her home … (hereinafter the subject property). As is relevant to this appeal, the mortgage defined the plaintiff as the “Borrower,” Webster Bank N.A. as the “Lender,” and “MERS” as Mortgage Electronic Registration Systems, Inc., “a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns” and “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD.” The loan is serviced by the defendant Bank of America, N.A. (hereinafter Bank of America).

The plaintiff erroneously contends that the naming of MERS as the mortgagee, even though Webster was the payee designated on the note, constituted a violation of the clear prohibition against separating the collateral from the debt and, as such, the mortgage instrument was rendered null and void … . The plaintiff relies upon the Court of Appeals decision of Merritt v Bartholick (36 NY 44), wherein the Court stated: “As a mortgage is but an incident to the debt which it is intended to secure, the logical conclusion is, that a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it. The security cannot be separated from the debt and exist independently of it” (id. at 45; citations omitted).

The use of the term “nullity” by the Court in Merritt, however, does not mean, as the plaintiff argued, that the mortgage instrument itself was rendered null or void, but rather, that the enforceable interest which was intended to be transferred by the assignment of the mortgage alone was ineffective, as “no interest is acquired by it” … . Ruiz v Mortgage Elec. Registration Sys., Inc., 2015 NY Slip Op 06325, 2nd Dept 7-29-15

 

The Criteria for an Exception to the “Best Evidence Rule” for Admission of an Agreement, the Terms of Which Were In Dispute, Were Not Met—New Trial Ordered

The Second Department determined the the criteria for an exception to the “best evidence rule” for the admission of a copy of a joint development agreement, the terms of which were in dispute, were not met. A new trial was ordered. The court explained the rule:

The best evidence rule requires the production of an original writing where its contents are in dispute and are sought to be proven… . The rule “serves mainly to protect against fraud, perjury and inaccuracies . . . which derive from faulty memory” … . Under an exception to the rule, “secondary evidence of the contents of an unproduced original may be admitted upon threshold factual findings by the trial court that the proponent of the substitute has sufficiently explained the unavailability of the primary evidence, and has not procured its loss or destruction in bad faith” … . The proponent of the secondary evidence “has the heavy burden of establishing, preliminarily to the court’s satisfaction, that it is a reliable and accurate portrayal of the original. Thus, as a threshold matter, the trial court must be satisfied that the proffered evidence is authentic and correctly reflects the contents of the original before ruling on its admissibility” … .

Here, the plaintiff failed to adequately explain the unavailability of the primary evidence, i.e., the original executed joint development agreement … . Stathis v Estate of Karas, 2015 NY Slip Op 06330, 2nd Dept 7-29-15

 

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Village Immune from Suit Alleging Negligence of Ambulance Personnel Who Responded to a 911 Call

The Second Department determined the village was entitled to summary judgment in an action alleging negligence on the part of ambulance personnel responding to a 911 call. The ambulance service is a governmental function for which the city cannot be held liable absent a special relationship with plaintiff (not the case here). The court explained the relevant law:

“When a municipality provides ambulance service by emergency medical technicians in response to a 911 call for assistance, it performs a governmental function and cannot be held liable unless it owed a special duty’ to the injured party” … . Such a special duty can arise, as relevant here, where “the government entity voluntarily assumed a duty to the plaintiff beyond what was owed to the public generally,” or, in other words, where the municipality “voluntarily assumed a special relationship’ with the plaintiffs” … . A municipality will be held to have voluntarily assumed a duty or special relationship with the plaintiffs where there is: “(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) that party’s justifiable reliance on the municipality’s affirmative undertaking” … . Earle v Village of Lindenhurst, 2015 NY Slip Op 06311, 2nd Dept 7-29-15

 

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City Did Not Demonstrate Entitlement to Qualified Immunity for a Planning Decision Re: Design of Playground Equipment

The Second Department determined questions of fact precluded summary judgment in favor of the city in a suit stemming from a playground injury. The complaint alleged the design of the playground equipment was unsafe. The city claimed qualified immunity for liability arising from planning decisions. But the city failed to demonstrate that it undertook a study which addressed the issue at the heart of the case:

Contrary to the City’s contention, it failed to establish its prima facie entitlement to judgment as a matter of law on the basis of qualified governmental immunity. While a municipality will generally be accorded qualified immunity from liability arising out of its planning decisions … , a governmental body may be liable for a planning decision when its study is “plainly inadequate or there is no reasonable basis for its plan” … . Here, the evidence presented by the City failed to establish that it undertook a study which entertained and passed on the very same question of risk that is at issue in this case … . Moskovitz v City of New York, 2015 NY Slip Op 06318, 2nd Dept 7-29-15

 

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Village Did Not Have Authority to Sell Village Land Dedicated to Public Use (Public Roads) to Satisfy Property Tax Liens

The Second Department determined the village did not have the authority under the Real Property Tax Law (RPTL) to sell land dedicated to public use (dedicated public streets) to satisfy property tax liens:

… [W]hile RPTL [Real Property Tax Law] 995 allows a municipality to consent to the sale of property to satisfy a tax lien, not all property owned by a municipality is freely alienable. As relevant here, a municipality holds the fee of dedicated public streets in trust for the public …, and may not convey such a fee unless there is specific legislative authorization permitting it, or the parcel’s use as a dedicated public street has been discontinued… .

RPTL 995 did not provide the Village with that specific authorization. The statute only authorizes petitions to collect “validly levied or charged” taxes (RPTL 995). Since the Legislature limited the application of the statute in that way, it did not contemplate that municipally owned property held for public use, which is exempted from taxation by RPTL 406(1), would be subject to an enforcement proceeding under RPTL 995, or that such property would be sold by a municipality at public auction in reliance on section 995, in satisfaction of a claim for such taxes (see McKinney’s Cons Laws of NY, Book 1, Statutes § 222). Contrary to the Village’s contention, Village Law § 1-102 likewise did not provide the specific authorization necessary for the Village to sell a dedicated public road. Matter of AJM Capital II, LLC v Incorporated Vil. of Muttontown, 2015 NY Slip Op 06335, 2nd Dept 7-29-15

 

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