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Criteria for Appointment of Temporary Receiver to Wind Up Dissolution of Partnership Not Met

The Second Department determined Supreme Court should not have appointed a receiver to wind up the dissolution of a partnership because the criteria for the appointment (irreparable loss or waste of property) had not been met:

The Supreme Court improvidently exercised its discretion in granting that branch of the plaintiffs’ motion which was pursuant to CPLR 6401 for the appointment of a temporary receiver to wind up the affairs of a partnership … and to liquidate and distribute its assets. “A party moving for the appointment of a temporary receiver must submit clear and convincing evidence of irreparable loss or waste to the subject property and that a temporary receiver is needed to protect their interests'” (…see CPLR 6401[a]…). Here, the plaintiffs failed to make a “clear evidentiary showing that property of the [partnership] was in danger of being removed from the state, or lost, materially injured or destroyed'” … . Accordingly, that branch of the plaintiffs’ motion which was for the appointment of a temporary receiver should have been denied. Magee v Magee, 2014 NY Slip Op 05845, 2nd Dept 8-20-14

 

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Highest and Best Use is Measure of Damages—Unconsummated Purchase Contract Is Valid Proof of Value

The Second Department explained the measure of damages for a taking (highest and best use) and determined an unconsummated purchase contract was valid proof of value:

“The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time” … . The determination of highest and best use must be based upon evidence of a use which reasonably could or would be made of the property in the near future … . Here, contrary to the Sewer District’s contentions, Split Rock satisfied its burden of demonstrating that the highest and best use of the subject property was for the commercial development of an office center.

A property’s market value is defined as ” the amount which one desiring but not compelled to purchase will pay under ordinary conditions to a seller who desires but is not compelled to sell'” … . “[T]he purchase price set in the course of an arm’s length transaction of recent vintage, if not explained away as abnormal in any fashion, is evidence of the highest rank’ to determine the true value of the property at that time” … . Matter of Western Ramapo Sewer Extension Project, 2014 NY Slip Op 05889, 2nd Dept 8-20-14

 

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Non-Sex-Offense Committed While On Supervised Released for a Sex Offense Was a “Related Offense” Within the Meaning of Article 10 of the Mental Hygiene Law

The Second Department, in a full-fledged opinion by Justice Hall, determined that a sex offender who had been released and was serving a period of post-release supervision at the time he was arrested and re-incarcerated on a credit-card charge, was incarcerated on a “related offense” within the meaning of the Mental Hygiene Law.  Therefore, the state could properly proceed with civil management proceedings pursuant article 10 of the Mental Hygiene Law.  The respondent argued, and Supreme Court had held, that the credit card offense was not related to his sex offense and therefore the state could not start a civil management proceeding based upon his current incarceration:

The respondent’s 2011 conviction of criminal possession of stolen property in the fourth degree clearly does not fall within the first two categories of a “related offense,” i.e., offenses which are prosecuted as part of the same criminal action or proceeding as the sex offense, and offenses which are part of the same criminal transaction as the sex offense (see Mental Hygiene Law § 10.03[l]). However, the crime of criminal possession of stolen property does fall within the third category, which covers offenses “which are the bases of the orders of commitment received by [DOCCS] in connection with an inmate’s current term of incarceration” (Mental Hygiene Law § 10.03(l)). This category covers “inmates” serving their “current term[s] of incarceration” (…  see Mental Hygiene Law § 10.03[l]). The Court of Appeals has recognized that this third category of “[r]elated offenses” is “broadly worded, reflecting the legislature’s apparent decision to give the State more leeway to pursue civil commitment against soon-to-be-released [DOCCS] inmates than parolees” (Matter of State of New York v Rashid, 16 NY3d at 14 n 12).

When the State initiated this civil management proceeding, the respondent was in the custody of DOCCS, and still subject to the sex offense order of commitment, inasmuch as he had not yet completed the postrelease supervision portion of that sentence. In other words, he was incarcerated on a “related offense,” because he was convicted of that offense while still serving his sentence for the underlying sex offense. Matter of State of New York v Claude McC, 2014 NY Slip Op 05885, 2nd Dept 8-20-14

 

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Even Though the Appeal Had Been Rendered Moot, It Was Appropriate for the Appellate Court to Vacate the Underlying Order

The Second Department explained that, although the appeal had been rendered academic, it was appropriate for the appellate court to vacate the underlying order in order to prevent the order from spawning any further legal proceedings:

While it is the general policy of New York courts to simply dismiss an appeal which has been rendered academic, vacatur of an order or judgment on appeal may be an appropriate exercise of discretion where necessary “in order to prevent a judgment which is unreviewable for mootness from spawning any legal consequences or precedent” … . Here, the plaintiffs sold the premises and satisfied the subject mortgage under threat of foreclosure. They ” ought not in fairness be forced to acquiesce in'” the unreviewable order, which could spawn adverse legal consequences due to its res judicata effect … . Accordingly, we vacate so much of the order … as awarded the defendants summary judgment dismissing the complaint. Mannino v Wells Fargo Home Mtge Inc, 2014 NY Slip Op 05846, 2nd Dept 8-20-14

 

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Disposing of Key Evidence Warranted Striking of Answer

The Second Department determined Supreme Court properly struck the defendant’s answer and awarded summary judgment to plaintiffs on liability because the defendant disposed of crucial evidence after having been asked to preserve it.  Students were directed to stand on a grate to pose for a class picture.  The grate collapsed and the students fell eleven feet.  The defendant disposed of the grate:

Under the common-law doctrine of spoliation, when a party negligently loses or intentionally destroys key evidence, that party may be sanctioned under CPLR 3126 … . Since the Supreme Court has broad discretion in determining what, if any, sanction should be imposed for spoliation of evidence …, it may, under appropriate circumstances, impose a sanction even if the destruction occurred through negligence rather than wilfulness, and even if the evidence was destroyed before the spoliator became a party, provided the spoliator was on notice that the evidence might be needed for future litigation … .

Here, the Supreme Court providently exercised its discretion in striking the defendant’s answers and thereupon awarding the plaintiffs summary judgment on the issue of liability pursuant to CPLR 3126. The record demonstrates that the defendant disposed of the grate involved in the accident after having received a written demand from one of the infant plaintiff’s attorneys that the grate be preserved for inspection by the plaintiffs and their experts. Moreover, the plaintiffs demonstrated that they were unduly prejudiced by the defendant’s conduct in disposing of the grate. Biniachvili v Yeshivat Shaare Torah Inc, 2014 NY Slip Op 05826, 2nd Dept 8-20-14

 

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Law of Contracts, Not Law of Torts, Applied to Conflict of Laws Analysis Concerning Motor Vehicle Insurance Policy

The Second Department determined the law of contracts, as opposed to the law of torts, controlled which state law applied.  The case involved a car accident in Florida and an insurance policy issued in New York:

It is undisputed that this conflict of law question, although arising in the context of a motor vehicle accident, must be resolved by the conflict of law rules relevant to contracts, not torts … . Generally, “the courts apply the more flexible center of gravity’ or grouping of contacts’ inquiry, which permits consideration of the spectrum of significant contacts’ in order to determine which State has the most significant contacts to the particular contract dispute” … . “In general, significant contacts in a case involving contracts, in addition to the place of contracting, are the place of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties” … . As to insurance contracts specifically, significance has been attached to the ” local law of the state which the parties understood was to be the principal location of the insured risk . . . unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 [of the Restatement] to the transaction and the parties'” … . In the case of a noncommercial vehicle, which is by its nature mobile, the principal location of the insured risk is the place where the vehicle is to be principally garaged … .

Here, as the Supreme Court correctly noted, the insurance contract at issue was written to conform to the laws, rules and regulations of New York State, and was obtained in New York by Brand, a New York resident, from an insurance company doing business in New York. Furthermore, Brand served the demand for SUM [supplemental uninsured/underinsured motorist] arbitration upon the American Arbitration Association in New York. Applying the grouping of contacts inquiry to these facts, New York has the most significant contacts with the parties and the contract. Indeed, such a conclusion would be in conformity with the reasonable expectations of the contracting parties. Matter of Unitrin Direct/Warner Ins co v Brand, 2014 NY Slip Op 05887, 2nd Dept 8-20-14

 

Failure to Identify in the Complaint and Bill of Particulars the Specific Code Provision(s) Alleged to Have Been Violated Is Not Fatal to a Labor Law 241(6) Cause of Action

The Second Department noted that the failure to identify, in the complaint and bill of particulars, the specific code provision alleged to have been violated (in support of a Labor Law 241(6) cause of action) is not a fatal defect:

Although a plaintiff asserting a Labor Law § 241(6) cause of action must allege a violation of a specific and concrete provision of the Industrial Code …, the failure to identify the code provision in the complaint or bill of particulars is not fatal to such a claim … . Here, the plaintiff’s belated allegations that Cook violated 12 NYCRR 23-1.21(b)(1), 23-1.21(b)(3)(i), 23-1.21(b)(3)(iv), 23-1.21(b)(4)(ii), and 23-1.21(e)(2) involved no new factual allegations, raised no new theories of liability, and caused no prejudice … . Moreover, these code provisions set forth specific, rather than general, safety standards, and are sufficient to support a Labor Law § 241(6) cause of action … . Przyborowski v A&M Cook LLC, 2014 NY Slip Op 05852, 2nd Dept 8-20-14

 

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Criteria for Granting Leave to Serve a Late Notice of Claim Explained

The Second Department determined Supreme Court had properly granted plaintiff’s motion for leave to serve a late notice of claim. The infant plaintiff was injured at school and there was no doubt the school was aware of the injury, and the background of the injury, at the time it occurred.  The court included a succinct summary of the applicable analytical criteria:

General Municipal Law § 50-e(5) permits a court, in its discretion, to extend the time to serve a notice of claim … . Whether the public corporation acquired timely actual knowledge of the essential facts constituting the claim within 90 days after the claim arose or a reasonable time thereafter is seen as a factor which should be accorded great weight in determining whether or not to grant leave to serve a late notice of claim … . “In order to have actual knowledge of the essential facts constituting the claim, the public corporation must have knowledge of the facts that underlie the legal theory or theories on which liability is predicated in the notice of claim; the public corporation need not have specific notice of the theory or theories themselves” … .

Other factors a court must consider in determining whether to grant leave to serve a late notice of claim are: (1) whether the claimant was an infant or mentally or physically incapacitated; (2) whether the claimant had a reasonable excuse for the failure to serve a timely notice of claim; and (3) whether the delay would substantially prejudice the public corporation in maintaining its defense (see General Municipal Law § 50-e[5]…). The presence or absence of any one of these factors is not necessarily determinative … .  Kellman v Hauppauge Union Free School Dist, 2014 NY Slip Op 05844, 2nd Dept 8-20-14

 

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Child’s Move To Connecticut Did Not Strip New York of Jurisdiction and Did Not Justify Finding that New York Was an Inconvenient Forum

The Second Department determined Family Court erred when it determined the child’s moving to Connecticut removed the child from its jurisdiction.  The court further noted that Family Court erred when it state that, even if it had jurisdiction, it would decline to exercise it.  The Second Department determined the analysis of the statutory factors favored New York’s continued jurisdiction:

Pursuant to the Uniform Child Custody Jurisdiction and Enforcement Act, codified in Article 5-A of the Domestic Relations Law (hereinafter UCCJEA), a court in this State that has made an initial custody determination has exclusive continuing jurisdiction over that determination until it finds, as is relevant here, that the child does not have a “significant connection” with New York, and “substantial evidence is no longer available in this state concerning the child’s care, protection, training, and personal relationships” (Domestic Relations Law § 76-a[1][a]…). Here, while the subject child moved to Connecticut to live with her father approximately eight months before the mother petitioned to modify a prior order of custody so as to award her sole custody of the child, the record reveals that the child retained a significant connection to New York, including attending school and having frequent visitation with her mother in New York, and that substantial evidence was available in this state concerning her present and future welfare … . The child’s significant connection to Connecticut does not diminish her significant connection to New York as well … .

A court of this State that has jurisdiction under the UCCJEA may decline to exercise it if it finds that New York is an inconvenient forum and that a court of another state is a more appropriate forum (see Domestic Relations Law § 76-f[1]…). However, the court is required to consider the factors set forth in Domestic Relations Law § 76-f(2)(a)-(h) before determining that New York is an inconvenient forum … . The Family Court failed to do so here. However, we need not remit the matter to the Family Court, Queens County, for consideration of the statutory factors because the record is sufficient for this Court to consider and evaluate those factors … . Consideration of the relevant statutory factors, including the nature and location of relevant evidence, and the Family Court’s greater familiarity than the courts of Connecticut with the facts and issues underlying the mother’s modification petition, supports a conclusion that New York is not an inconvenient forum … . Matter of Mojica v Denson, 2014 NY Slip Op 05882, 2nd Dept 8-20-14

 

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Husband, Criminally Responsible for the Death of His Mother-in-Law, Could Not Inherit the Mother-in-Law’s Estate Indirectly After the Death of His Wife

The Second Department, in a full-fledged opinion by Justice Hall, determined the husband, Brandon, who was criminally responsible for the death his mother-in-law, could not inherit the mother-in-law’s estate indirectly after the death of his wife, Deanna:

The principle that a wrongdoer may not profit from his or her wrongdoing is deeply rooted in this State’s common law. In 1889, the Court of Appeals decided the seminal case of Riggs v Palmer (115 NY 506) . In Riggs, a grandson, who had intentionally killed his grandfather in order to ensure his inheritance, was prevented from inheriting under the grandfather’s will. In reaching this determination, the Court of Appeals held that, “[n]o one shall be permitted to profit by his own fraud, or to take advantage of his own wrong, or to found any claim upon his own iniquity, or to acquire property by his own crime” (id. at 511). In short, the Riggs rule “prevents wrongdoers from acquiring a property interest, or otherwise profiting from their own wrongdoing” … . * * *

The issue here is whether the Riggs doctrine may be extended to prevent a wrongdoer from indirectly profiting from his or her own wrongdoing. More specifically, we are asked to determine whether Brandon may inherit assets of the decedent’s estate indirectly through Deanna’s estate. While it is clear that Brandon would not be able to inherit from the decedent’s estate directly, the issue of whether he may do so indirectly through Deanna’s estate is less settled. Indeed, this is an issue of first impression, as there is no appellate precedent from New York addressing whether the Riggs doctrine applies where a killer seeks to inherit assets from his or her victim indirectly through the estate of a person not implicated in the unlawful killing. * * *

Here … there is a clear causal link between the wrongdoing and the benefits sought … . But for Brandon’s killing of the decedent, the estate of Deanna would not likely include any assets from the decedent’s estate. Furthermore, since only a relatively short period of time elapsed between the decedent’s death and the death of Deanna, it is clear that Deanna’s estate would include assets traceable to the decedent. Indeed, according to [the] petition for letters of administration, Deanna’s estate consists only of funds Deanna received as beneficiary of the decedent’s retirement plan, and the expected inheritance from the decedent. Significantly, the decedent’s estate has not yet been distributed to Deanna’s estate, and no commingling of any funds between the two estates has occurred.

Under these circumstances, the Surrogate’s Court appropriately exercised its equitable powers (see SCPA 201[2]) in extending the Riggs doctrine to prevent Brandon from inheriting any portion of the decedent’s estate through the estate of Deanna … . Matter of Dianne Edwards, 2014 NY Slip Op 05873, 2nd Dept 8-20-14

 

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