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Whether Arbitrator Erred In Applying the Applicable Law Is Beyond the Courts’ Review Powers

In affirming the arbitrator's award re: no-fault benefits, the Second Department explained the courts' limited review powers (re: arbitration awards):

“Consistent with the public policy in favor of arbitration, the grounds specified in CPLR 7511 for vacating or modifying a no-fault arbitration award are few in number and narrowly applied” … . Here, Allstate failed to demonstrate the existence of any of the statutory grounds for vacating the master arbitrator's award. In addition, the determination of the master arbitrator confirming the original arbitration award had evidentiary support and a rational basis … . “It is not for [the court] to decide whether [the master] arbitrator erred [in applying the applicable law]” … . Matter of Allstate Ins v Westchester Med Group, 2015 NY Slip Op 00876, 2nd Dept 2-4-15


Party Moving for a Change of Venue Must Demonstrate the Change Will Better Serve the Convenience of Material Witnesses

In affirming the denial of a motion for a change of venue, the Second Department explained the criteria:

“The party moving for a change of venue pursuant to CPLR 510(3) has the burden of demonstrating that the convenience of material witnesses would be better served by the change” … . In doing so, the moving party must set forth: (1) the names, addresses, and occupations of material witnesses, (2) the facts to which these witnesses will testify at trial, (3) a showing that those witnesses are willing to testify, and (4) a showing that those witnesses would be inconvenienced if the venue of the action was not changed … . MI v Trinity-Pawling School, 2015 NY Slip Op 00852, 2nd Dept 2-4-15


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Evidence Did Not Support Finding of Neglect Based Upon Mother’s Mental Illness and Failure to Take Medication

The Second Department determined the evidence was not sufficient to demonstrate mother's neglect based upon her mental illness and her failure to take medication:

” A finding of neglect may be predicated upon proof that a child's physical, mental, or emotional condition is in imminent danger of becoming impaired as a result of a parent's mental illness'” (… see Family Ct Act § 1012[f][i]). “However, proof of mental illness alone will not support a finding of neglect'; the evidence must establish a causal connection between the parent's condition, and actual or potential harm to the children'” … .

Here, based on our evaluation of the record, and giving deference to the Family Court's credibility determinations …, we find that the petitioner failed to establish, by a preponderance of the evidence, the existence of a causal connection between the mother's mental illness and actual or potential harm to the subject child … . * * *

“Proof of ongoing mental illness and the failure to follow through with aftercare medication, which results in a parent's inability to care for her child in the foreseeable future, is a sufficient basis for a finding of neglect” … . Here, although there was evidence that the mother stopped taking medication after her discharge from Beth Israel, the evidence was insufficient to establish that the mother was unable to care for the child during that period. Matter of Nialani T, 2015 NY Slip Op 00894, 2nd Dept 2-4-15


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Proper Way to Handle an Inconsistent Verdict Explained

The Second Department explained the proper procedure when a verdict is inconsistent (either have the jury reconsider the verdict or order a new trial):

“When a jury’s verdict is internally inconsistent, the trial court must direct either reconsideration by the jury or a new trial” … . Here, the jury’s verdict was internally inconsistent, as the jury attributed 10% of the fault for the plaintiff’s accident to both the plaintiff and [one of the two defendants], despite having found that their negligence was not a substantial factor in causing the accident … . The Supreme Court should have resolved the substantial juror confusion, as demonstrated by the internally inconsistent verdict, by either resubmitting the case to the jury for reconsideration or directing a new trial on the issue of liability (see CPLR 4111[c]…). Kumar v PI Assoc LLC, 2015 NY Slip Op 00849, 2nd Dept 2-4-15

 

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Requirements for Prima Facie Case Based Upon Circumstantial Evidence Explained (Re: Existence of Hazardous Condition)

The Second Department, reversing Supreme Court, determined the defendants were not entitled to summary judgment in a slip and fall case.  The court explained the plaintiff's standard of proof when the existence of a hazardous condition (here a slippery substance on stairs) is demonstrated by circumstantial evidence.  The court noted that a defendant's self-serving affidavit (claiming that nothing was spilled on the stairs) was not sufficient to warrant summary judgment in defendant's favor:

“To prove a prima facie case of negligence in a case based on a hazardous condition, a plaintiff is required to show that the defendant created the condition which caused the accident or that the defendant had actual or constructive notice of the condition” … . “To establish a prima facie case of negligence based wholly on circumstantial evidence, [i]t is enough that [the plaintiff] shows facts and conditions from which the negligence of the defendant and the causation of the accident by that negligence may be reasonably inferred'” … . “The law does not require that plaintiff's proof positively exclude every other possible cause of the accident but defendant's negligence” … . “Rather, [the plaintiff's] proof must render those other causes sufficiently remote' or technical' to enable the jury to reach its verdict based not upon speculation, but upon the logical inferences to be drawn from the evidence” … . “A plaintiff need only prove that it was more likely or more reasonable that the alleged injury was caused by the defendant's negligence than by some other agency” … . Quiroz v 176 N Main LLC, 2015 NY Slip Op 00863, 2nd Dept 2-4-15


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Criteria for Determining the Clarity or Ambiguity of the Terms of a Contract Explained

In affirming the verdict after a bench trial (finding the relevant terms of a contract unambiguous), the Second Department explained its review powers and outlined the analytical criteria re: the determination of the clarity or ambiguity of the terms of a contract:

“In reviewing a determination rendered after a nonjury trial, the power of this Court is as broad as that of the trial court, and this Court may render the judgment it finds warranted by the facts, taking into account that in a close case the trial court had the advantage of seeing the witnesses and hearing the testimony” … . “The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court, as is the inquiry of whether the writing is ambiguous in the first instance. If the language is free from ambiguity, its meaning may be determined as a matter of law on the basis of the writing alone without resort to extrinsic evidence” … . “When interpreting a contract, the construction arrived at should give fair meaning to all of the language employed by the parties, to reach a practical interpretation of the parties' expressions so that their reasonable expectations will be realized” … . “The terms of a contract are clear and unambiguous when the language used has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion” … . Palumbo Group v Poughkeepsie City Sch Dist, 2015 NY Slip Op 00857, 2nd Dept 2-4-15


Judicial Approval of a Settlement with Third Parties Was Properly Granted After the Expiration of the Statutory Period (Nunc Pro Tunc)—Delay In Seeking Approval Was Not Due to Injured Worker’s Fault or Neglect/Workers’ Compensation Carrier’s Consent to a Settlement Is Required Even Where the Settlement Is Greater than the Amount of the Benefits Received/Absent the Consent of the Carrier, Judicial Approval Is Required

The Second Department determined judicial approval of a settlement with third parties after the statutory period had passed was properly granted nunc pro tunc.  The injured worker received about $189,000 in workers' compensation benefits and eventually settled with third parties for $2,000,000. The workers' compensation carrier sued to collect on its lien.  The court noted that, despite the language of Workers' Compensation Law 29(5), the workers' compensation carrier's consent to a settlement is required even if the amount of the settlement is more than the amount of the benefits. In the absence of such consent (absent here), judicial approval is required (properly granted here):

Workers Compensation Law § 29(5) provides, in pertinent part:

“A compromise of any such cause of action by the employee or his dependents at an amount less than the compensation provided for by this chapter shall be made only with the written approval of . . . the person, association, corporation, or insurance carrier liable to pay the same. However, written approval . . . need not be obtained if the employee or his dependents obtain a compromise order from a justice of the court in which the third-party action was pending. …

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“If the third-party action is on trial at the time the offer of settlement which is acceptable to the plaintiff, is made and either such written approval or order as provided in this subdivision is required, the action may be marked settled subject to the securing of such written approval or such order. If such written approval or such order is not subsequently secured within three months the action shall be restored to the head of the trial day calendar” (emphasis added).

Section 29(5) was enacted to protect an insurance carrier from paying a deficiency between the settlement and the amount paid to the injured party … . As originally enacted, the provision required the consent of the insurance carrier. However, “in many instances, the carrier arbitrarily refused to give its consent to a proposed settlement regardless of how fair or generous the proposal might have been,” prompting the Legislature to amend the provision to provide that consent need not be obtained where there is judicial approval of the settlement … .

Although there is case law which indicates that approval pursuant to Workers' Compensation Law § 29(5) is not required if the amount of Workers' Compensation benefits received is less than the amount of the settlement …, the Court of Appeals has held that even where the settlement constitutes 100% of the policy limits, approval pursuant to Workers' Compensation Law § 29(5) is required in order for the claimant to continue to receive Workers' Compensation benefits in the future …. Any settlement is potentially less than the benefits provided by the Workers' Compensation Law (see 1-7 New York Workers' Compensation Handbook § 7.01[5] [2014]), especially where, as here, the claimant is seeking a permanent partial disability classification from the Workers' Compensation Board, which could mean that he would be entitled to benefits indefinitely.

“[A] judicial order may be obtained nunc pro tunc approving a previously agreed-upon settlement, even where the application for approval is sought more than three months after the date of settlement, provided that the employee can establish that (1) the amount of the settlement is reasonable, (2) the delay in applying for a judicial order of approval was not caused by the employee's fault or neglect, and (3) the insurance carrier was not prejudiced by the delay” … . Fidelity & Guar Ins Co v Digiacomo, 2015 NY Slip OP 00842, 2nd Dept 2-2-15


Shareholder Should Not Have Been Awarded Damages Individually Re: a Derivative Cause of Action

The Second Department determined Supreme Court erred in awarding damages to a shareholder individually because the shareholder had sued on behalf of the closely held corporation:

A shareholder of a corporation, even of a closely held corporation, may not recover in his or her individual capacity for wrongs committed against the corporation, and any recovery obtained pursuant to a derivative cause of action asserted by a shareholder is obtained for the benefit of the injured corporation … . Sakow v Waldman, 2015 NY Slip Op 00742, 2nd Dept 1-28-15

 

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Suppression Should Not Have Been Granted Because the Officer Who Made the Vehicle Stop Had Died/Hearsay Evidence from a Police Officer Who Arrived at the Scene After the Stop and Spoke to the Deceased Officer Was Admissible at the Suppression Hearing

The Second Department determined the hearsay testimony of a police officer (Schmidt) who learned of the reason for the stop of defendant’s vehicle from another officer (Olivieri) was admissible in the suppression hearing.  Supreme Court had suppressed the evidence stemming from the stop because the officer who made the stop (Olivieri) had died and could not therefore be “confronted” at the hearing:

Pursuant to statute, “hearsay evidence is admissible to establish any material fact” at a pretrial suppression hearing (CPL 710.60[4]…). Thus, “[a] police witness at a suppression hearing may establish probable cause by personal knowledge, as well as by information supplied by fellow officers” … . Where the knowledge of the imparting officer is based on his or her first-hand observations, the People are not required to produce that officer at the suppression hearing … .

Here, Schmidt’s testimony established that the stop of the defendant’s vehicle was lawful, based upon the first-hand observations of Olivieri, which were imparted to Schmidt … . Probable cause for the defendant’s arrest also was established through Olivieri’s observations, as imparted to Schmidt, together with Schmidt’s own personal observations … .

Contrary to the Supreme Court’s conclusion, the decision of the United States Supreme Court in Crawford v Washington (541 US 36) does not require a different result. In Crawford, the Supreme Court considered whether particular evidence admitted at trial violated the defendant’s right to confrontation under the Sixth Amendment of the United States Constitution (see id. at 38…), and did not address the admission of hearsay evidence in pretrial suppression hearings … . People v Mitchell, 2015 NY Slip Op 00786, 2nd Dept 1-28-15

 

Right-to-Intervene Criteria Explained (Criteria Not Met Here)

The Second Department described the criteria for intervening in an action (criteria not met here):

Upon a timely motion, a person is permitted to intervene in an action as of right, “1. when a statute of the state confers an absolute right to intervene; or 2. when the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment; or 3. when the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely by the judgment” (CPLR 1012[a]). Additionally, upon a timely motion, the court, in its discretion, may permit a person to intervene, “when a statute of the state confers a right to intervene . . . or when the person’s claim or defense and the main action have a common question of law or fact” (CPLR 1013). In exercising its discretion, the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party (see id.).  Wells Fargo Bank NA v Mazzara, 2015 NY Slip Op 00750, 2nd Dept 1-28-15

 

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