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NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT).

The Third Department determined several motions to dismiss were properly denied in this action concerning an insolvent workers’ compensation trust. Defendant Regnier provided actuarial services and prepared certain actuarial reports on an annual basis for the trust. In addition to many other causes of action not summarized here, the Third Department held that the negligence and gross negligence causes of action properly survived:

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We reject Regnier’s assertion that the negligence and gross negligence claims should have been dismissed in their entirety because plaintiff failed to allege that it owed the trust a duty of care. “[A]n actuary, possessing special knowledge, can be held liable for the negligent performance of its services” … . The second amended complaint alleged that Regnier held itself out as a skilled and competent actuary, that Regnier prepared actuarial reports to the trust, and that Regnier failed to provide competent actuarial services. More critically, the second amended complaint further alleged that Regnier knew that the trust would be relying on the accuracy of such reports and that Regnier was aware that its services were employed to represent the trust’s finances. Under these circumstances and viewing the allegations in a light most favorable to plaintiff, we conclude that there were sufficient allegations of near privity to survive a motion to dismiss with respect to the negligence and gross negligence claims … . New York State Workers’ Compensation Bd. v Program Risk Mgt., Inc., 2017 NY Slip Op 08426, Third Dept 11-30-17

 

WORKERS’ COMPENSATION LAW (WORKERS’ COMPENSATION TRUST, NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))/WORKERS’ COMPENSATION TRUSTS (NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))/NEGLIGENCE (ACTUARY, WORKERS’ COMPENSATION TRUST, NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))/ACTUARY (NEGLIGENCE, WORKERS’ COMPENSATION TRUST, NEGLIGENCE AND GROSS NEGLIGENCE CAUSES OF ACTION AGAINST AN ACTUARY FOR AN INSOLVENT WORKERS’ COMPENSATION TRUST PROPERLY SURVIVED MOTIONS TO DISMISS (THIRD DEPT))

HOTEL NOT ENTITLED TO CREDIT FOR SALES TAX FOR CONTINENTAL BREAKFASTS PURCHASED FROM A THIRD PARTY, CONTINENTAL BREAKFASTS WERE INCLUDED IN THE ROOM RENTAL AND WERE NOT PURCHASED FOR RESALE (THIRD DEPT).

The Third Department determined the hotel (Washington Square) which included continental breakfast in its room rental was not entitled to a credit for sales tax paid by the hotel for the purchase of the continental breakfasts (from Cafe C-III):

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Generally, sales tax must be paid upon the sale of all tangible personal property … . However, “[c]ertain purchases which are made for resale are not subject to sales tax” … . As such, a reseller may claim a tax credit for sales tax it paid upon purchases of personal property that will be resold … . “Where the question is whether certain purchases are entitled to the resale exemption, the purchaser must show, to avoid imposition of the sales tax on the entire transaction, that each of the items was purchased for one and only one purpose: resale” … . * * *

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We conclude that Washington Square failed to satisfy its burden of establishing its entitlement to the benefit of the resale tax exemption … . According to the hearing testimony of Washington Square’s chief executive officer, Washington Square purchased continental breakfasts from Cafe C-III and such breakfasts were included in the hotel rental fee paid by the guests. Washington Square paid Cafe C-III regardless of whether a guest consumed the continental breakfast. More critically, the chief executive officer also stated that hotel guests would not be separately billed for the continental breakfasts … . …

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Nor do we find any merit in Washington Square’s equitable estoppel argument. “[T]he doctrine of estoppel does not apply in tax cases unless unusual circumstances support a finding of manifest injustice” … . The fact that Washington Square, in a prior audit, was not imposed an additional tax assessment where it sought the same tax credit as in this case does not rise to the level of a manifest injustice especially in light of the auditor’s testimony that each audit stands on its own and does not bind a future audit … .  Washington Square’s reliance on an audit of Cafe C-III is likewise unavailing. Matter of Washington Sq. Hotel LLC v Tax Appeals Trib. of The State of New York, 2017 NY Slip Op 08422, Third Dept 11-30-17

 

TAX LAW (SALES TAX, HOTEL NOT ENTITLED TO CREDIT FOR SALES TAX FOR CONTINENTAL BREAKFASTS PURCHASED FROM A THIRD PARTY, CONTINENTAL BREAKFASTS WERE INCLUDED IN THE ROOM RENTAL AND WERE NOT PURCHASED FOR RESALE (THIRD DEPT))/SALES TAX (SALES TAX, HOTEL NOT ENTITLED TO CREDIT FOR SALES TAX FOR CONTINENTAL BREAKFASTS PURCHASED FROM A THIRD PARTY, CONTINENTAL BREAKFASTS WERE INCLUDED IN THE ROOM RENTAL AND WERE NOT PURCHASED FOR RESALE (THIRD DEPT))

QUESTION OF FACT WHETHER DRIVER WITH RIGHT OF WAY HAD TIME TO TAKE EVASIVE ACTION TO AVOID A CAR CROSSING HIS PATH TO MAKE A LEFT TURN (THIRD DEPT).

The Third Department determined a question of fact precluded summary judgment in favor of defendant in this truck-car intersection collision case. The defendant truck driver, Head, alleged the driver of the car in which plaintiff was a passenger (Sinclair) made a left turn across the truck’s path and Head did not have time to avoid the collision. However an eyewitness, Fuller, testified there was sufficient time for the truck driver to take evasive action:

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In this context, Head “was bound to see what[,] by the proper use of [his] senses[,] [he] might have seen” and, if the circumstances were as described by Fuller, and if Head should have observed Sinclair’s car turning left, “then the accident would be a reasonably foreseeable risk and [Head] would have had a duty to avoid striking [Sinclair], if it were possible to do so”… . Fuller’s materially different version of the accident, if credited, could support the conclusion that Head had adequate time and opportunity to observe Sinclair’s turning car and take evasive action … . That is, Head had “a duty to use reasonable care to avoid a collision” and, unless he had “only seconds to react” to Sinclair’s failure to yield the right-of-way, an issue disputed by plaintiff’s evidence, Head may be partly at fault … . Debra F. v New Hope View Farm, 2017 NY Slip Op 08429, Third Dept 11-30-17

 

NEGLIGENCE (TRAFFIC ACCIDENTS, QUESTION OF FACT WHETHER DRIVER WITH RIGHT OF WAY HAD TIME TO TAKE EVASIVE ACTION TO AVOID A CAR CROSSING HIS PATH TO MAKE A LEFT TURN (THIRD DEPT))/COMPARATIVE NEGLIGENCE (TRAFFIC ACCIDENTS, QUESTION OF FACT WHETHER DRIVER WITH RIGHT OF WAY HAD TIME TO TAKE EVASIVE ACTION TO AVOID A CAR CROSSING HIS PATH TO MAKE A LEFT TURN (THIRD DEPT))/TRAFFIC ACCIDENTS (COMPARATIVE FAULT,  QUESTION OF FACT WHETHER DRIVER WITH RIGHT OF WAY HAD TIME TO TAKE EVASIVE ACTION TO AVOID A CAR CROSSING HIS PATH TO MAKE A LEFT TURN (THIRD DEPT))/RIGHT OF WAY (TRAFFIC ACCIDENTS, COMPARATIVE FAULT, QUESTION OF FACT WHETHER DRIVER WITH RIGHT OF WAY HAD TIME TO TAKE EVASIVE ACTION TO AVOID A CAR CROSSING HIS PATH TO MAKE A LEFT TURN (THIRD DEPT))

MANNER IN WHICH DECORATIONS WERE STACKED IN A STORE DID NOT PRESENT A FORESEEABLE RISK, RES IPSA LOQUITUR DOCTRINE DID NOT APPLY (THIRD DEPT).

The Third Department determined defendant store’s motion for summary judgment in this slip and fall case was properly granted because the manner in which Christmas decorations were stacked did not present a foreseeable risk. Plaintiff was taking down a Christmas decoration when things started to fall from the shelf:

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Plaintiff testified that while taking down garland, she felt a snag on the garland and, when she turned back and saw that the garland was attached to a loop of garland above it, she saw — through her peripheral vision — “stuff” starting to fall and, when she started to move her feet, she fell. Plaintiff further testified that she did not trip over anything and was not struck by anything before she fell, nor did she strike anything on the way down as she fell. In opposition to defendant’s motion, plaintiff submitted defendant’s Holiday Sales Planner and Stocking Procedural Manual. Plaintiff also submitted an affidavit of plaintiff’s expert witness — a retail sales merchandising specialist, consultant and planner — who attested to the proper, correct and safe way to install, stock and display consumer products and merchandise for sale to the public in retail stores. However, such testimony failed to demonstrate how the location and stocking of the garland presented a foreseeable risk. Therefore, plaintiff failed to raise a triable issue of fact that plaintiff’s injury was reasonably foreseeable … . Supreme Court properly found that there was “nothing about the nature of packages of garland falling from above that would lead a reasonable person to foresee said garland knocking a person to the ground and/or breaking a person’s wrist.” Supreme Court also correctly found that the doctrine of res ipsa loquitur did not apply. “The doctrine cannot be used where, as here, the defendant against whom the doctrine is asserted owes no duty in connection with the mechanism that caused the injury” … . Parke v Dollar Tree, Inc.2017 NY Slip Op 08427, Third Dept 11-30-17

 

NEGLIGENCE (FORESEEABILITY, MANNER IN WHICH DECORATIONS WERE STACKED IN A STORE DID NOT PRESENT A FORESEEABLE RISK, RES IPSA LOQUITUR DOCTRINE DID NOT APPLY (THIRD DEPT))/FORESEEABILITY (NEGLIGENCE, MANNER IN WHICH DECORATIONS WERE STACKED IN A STORE DID NOT PRESENT A FORESEEABLE RISK, RES IPSA LOQUITUR DOCTRINE DID NOT APPLY (THIRD DEPT))/SLIP AND FALL (FORESEEABILITY, MANNER IN WHICH DECORATIONS WERE STACKED IN A STORE DID NOT PRESENT A FORESEEABLE RISK, RES IPSA LOQUITUR DOCTRINE DID NOT APPLY (THIRD DEPT))/RES IPSA LOQUITUR (SLIP AND FALL, MANNER IN WHICH DECORATIONS WERE STACKED IN A STORE DID NOT PRESENT A FORESEEABLE RISK, RES IPSA LOQUITUR DOCTRINE DID NOT APPLY (THIRD DEPT))

QUESTION OF FACT ABOUT WHETHER THE FIRE DAMAGED PROPERTY WAS PLAINTIFF’S RESIDENCE REQUIRED DENIAL OF PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS DISCLAIMER ACTION (THIRD DEPT).

The Third Department determined plaintiff’s motion for summary judgment in this action against a homeowner’s insurance company for disclaiming coverage was properly denied. Coverage for fire damage was disclaimed based upon the allegation the property was not plaintiff’s residence. Apparently plaintiff lived elsewhere, at least part of the time, while the house was being extensively renovated:

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Plaintiff testified that she slept at the premises on several occasions, an average of two to four nights per week, and that she intended for the premises to be her permanent residence once renovations were completed. During his deposition, Larrea [the insurer’s claim investigator] testified that he obtained a statement from plaintiff shortly after the fire in which she stated that she was not living at the premises. In opposition to the motion, defendant submitted an affidavit from Larrea, who averred that when he interviewed plaintiff by telephone eight days after the fire, she stated that at the time of the fire that she was in the process of relocating from her father’s home to the apartment and, notably, that she had not been to the premises during the two weeks immediately preceding the fire and had stayed overnight at the premises only once.

On this record, plaintiff’s summary judgment motion was properly denied. The Court of Appeals has held that evidence similar to the record in this case presented issues of fact regarding residency that precluded the grant of summary judgment … . Moreover, as Supreme Court correctly held, the contradictory statements that plaintiff made regarding the extent of her own physical presence at the premises are alone sufficient to create an issue of fact that may not be resolved by summary judgment. Sosenko v Allstate Ins. Co., 2017 NY Slip Op 08425, Third Dept 11-30-17

 

INSURANCE LAW (QUESTION OF FACT ABOUT WHETHER THE FIRE DAMAGED PROPERTY WAS PLAINTIFF’S RESIDENCE REQUIRED DENIAL OF PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS DISCLAIMER ACTION (THIRD DEPT))/RESIDENCE (INSURANCE LAW, QUESTION OF FACT ABOUT WHETHER THE FIRE DAMAGED PROPERTY WAS PLAINTIFF’S RESIDENCE REQUIRED DENIAL OF PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS DISCLAIMER ACTION (THIRD DEPT))/DISCLAIMER (INSURANCE LAW, RESIDENCE, QUESTION OF FACT ABOUT WHETHER THE FIRE DAMAGED PROPERTY WAS PLAINTIFF’S RESIDENCE REQUIRED DENIAL OF PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT IN THIS DISCLAIMER ACTION (THIRD DEPT))

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FAMILY COURT RELINQUISHED ITS FACT-FINDING FUNCTION TO THE BIASED FORENSIC EVALUATOR AND FAILED TO CONSIDER THE CUSTODY-RELOCATION MODIFICATION FACTORS (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Clark, modifying Family Court’s custody/relocation ruling, determined Family Court relinquished its fact-finding role by adopting the findings and recommendations of the forensic evaluator, in the face of the evaluator’s obvious bias in favor of the father. Family Court had granted sole custody to the father in North Carolina, without evaluating the custody/relocation-modification factors, despite the child’s life-long residence in New York and evidence of a supportive home life:

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In its decision and order, Family Court recognized that the testimony given by the forensic evaluator “demonstrated[,] at times[,] a little less than neutral tone” and that it was apparent from her testimony that she was “challenged in her dealings” with the mother and her husband. Nevertheless, Family Court wholly adopted the forensic evaluator’s factual assertions, opinions, conclusions and recommendations, without any perceivable independent consideration given to the best interests of the child. In doing so, the court improperly delegated its fact-finding role and ultimate determination to the forensic evaluator… . We emphasize that “[t]he recommendations of court[-]appointed experts are but one factor to be considered” and, although entitled to some weight, such recommendations are not determinative and should not usurp the trial court’s independent impressions of the evidence and conclusions drawn from that evidence … . …

…[I]n granting the father sole legal and primary physical custody of the child, Family Court did not engage in an assessment of the relocation factors … . Had the court done so, it would have been apparent that the father’s proof was lacking in this regard. Neither the father nor the forensic evaluator offered demonstrable proof, such as photographs or a home study, as to the suitability of the father’s home. In commenting on the quality of the father’s home environment, the forensic evaluator relied solely on her assumptions and the self-serving representations made by the father. Matter of Montoya v Davis, 2017 NY Slip Op 08434, Third Dept 11-30-17

 

FAMILY LAW (FAMILY COURT RELINQUISHED ITS FACT-FINDING FUNCTION TO THE BIASED FORENSIC EVALUATOR AND FAILED TO CONSIDER THE CUSTODY-RELOCATION MODIFICATION FACTS (THIRD DEPT))/EVIDENCE (FAMILY LAW, CUSTODY-RELOCATION MODIFICATION, FAMILY COURT RELINQUISHED ITS FACT-FINDING FUNCTION TO THE BIASED FORENSIC EVALUATOR AND FAILED TO CONSIDER THE CUSTODY-RELOCATION MODIFICATION FACTS (THIRD DEPT))/CUSTODY (FAMILY LAW, CUSTODY-RELOCATION MODIFICATION, FAMILY COURT RELINQUISHED ITS FACT-FINDING FUNCTION TO THE BIASED FORENSIC EVALUATOR AND FAILED TO CONSIDER THE CUSTODY-RELOCATION MODIFICATION FACTS (THIRD DEPT))

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CORRECTIONS OFFICER’S OFFICIAL MISCONDUCT PLEA ALLOCUTION DID NOT ADDRESS ALL THE ALLEGATIONS IN THE INMATE’S CIVIL COMPLAINT AGAINST THE OFFICER, THEREFORE THE STATE WAS OBLIGATED TO DEFEND THE OFFICER IN THE CIVIL PROCEEDING (THIRD DEPT).

The Third Department determined the state was obligated to defendant the petitioner, a corrections officer, in a civil action brought by an inmate against the petitioner. The state argued its obligation to defend the petitioner ended when petitioner pled guilty to official misconduct. The court found that the sparse plea allocution did not indicate the acts alleged in the civil complaint were outside the scope of petitioner’s employment, the allegations in the bill of particulars could not be used to supplement the plea allocution, and the plea did not address at all some of the allegations in the civil complaint:

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As is the case in the private insurance realm, the state’s determination to disclaim financial responsibility for an employee’s defense is rational only if it can be determined, as a matter of law, “that there is no possible factual or legal basis on which the [s]tate may be obligated to indemnify the employee” … . Pursuant to Public Officers Law § 17 (3) (a), the state has an obligation to indemnify its employees for any judgment or settlement obtained against them in state or federal court, so long as “the act or omission from which [the] judgment or settlement arose occurred while the employee was acting within the scope of his [or her] public employment or duties” and “the injury or damage [did not] result[] from intentional wrongdoing on the part of the employee.” Stated differently, the state will not have a duty to indemnify an employee if the act or omission giving rise to the civil judgment or settlement occurred outside the scope of his or her employment or was the product of intentional wrongdoing … .

Generally, “a particular issue expressly or necessarily decided in a criminal proceeding may be given preclusive effect in a subsequent affected civil action” if “the issue is identical in both actions, necessarily decided in the prior criminal action[,] . . . decisive in the civil action [and the defendant in the criminal action] had a full and fair opportunity . . . to litigate the now-foreclosed issue” … . Contrary to respondent’s contentions, neither petitioner’s plea allocution nor the elements of official misconduct preclusively established that the acts alleged in the civil complaint occurred while petitioner was acting outside the scope of his employment or that the injuries or damages allegedly sustained by [the inmate] were the result of petitioner’s intentional wrongdoing … . Matter of Rademacher v Schneiderman, 2017 NY Slip Op 08416, Third Dept 11-30-17

 

EMPLOYMENT LAW (PUBLIC OFFICERS LAW, CORRECTIONS OFFICER’S OFFICIAL MISCONDUCT PLEA ALLOCUTION DID NOT ADDRESS ALL THE ALLEGATIONS IN THE INMATE’S CIVIL COMPLAINT AGAINST THE OFFICER, THEREFORE THE STATE WAS OBLIGATION TO DEFEND THE OFFICER IN THE CIVIL PROCEEDING (THIRD DEPT))/PUBLIC OFFICERS LAW (EMPLOYMENT LAW, CORRECTIONS OFFICER’S OFFICIAL MISCONDUCT PLEA ALLOCUTION DID NOT ADDRESS ALL THE ALLEGATIONS IN THE INMATE’S CIVIL COMPLAINT AGAINST THE OFFICER, THEREFORE THE STATE WAS OBLIGATION TO DEFEND THE OFFICER IN THE CIVIL PROCEEDING (THIRD DEPT))/CRIMINAL LAW (EMPLOYMENT LAW, PUBLIC OFFICERS LAW, CORRECTIONS OFFICER’S OFFICIAL MISCONDUCT PLEA ALLOCUTION DID NOT ADDRESS ALL THE ALLEGATIONS IN THE INMATE’S CIVIL COMPLAINT AGAINST THE OFFICER, THEREFORE THE STATE WAS OBLIGATION TO DEFEND THE OFFICER IN THE CIVIL PROCEEDING (THIRD DEPT))/OFFICIAL MISCONDUCT (CORRECTIONS OFFICERS, EMPLOYMENT LAW, PUBLIC OFFICERS LAW,  CORRECTIONS OFFICER’S OFFICIAL MISCONDUCT PLEA ALLOCUTION DID NOT ADDRESS ALL THE ALLEGATIONS IN THE INMATE’S CIVIL COMPLAINT AGAINST THE OFFICER, THEREFORE THE STATE WAS OBLIGATION TO DEFEND THE OFFICER IN THE CIVIL PROCEEDING (THIRD DEPT))/CORRECTIONS OFFICERS (EMPLOYMENT LAW, PUBLIC OFFICERS LAW, OFFICIAL MISCONDUCT, OFFICER’S OFFICIAL MISCONDUCT PLEA ALLOCUTION DID NOT ADDRESS ALL THE ALLEGATIONS IN THE INMATE’S CIVIL COMPLAINT AGAINST THE OFFICER, THEREFORE THE STATE WAS OBLIGATION TO DEFEND THE OFFICER IN THE CIVIL PROCEEDING (THIRD DEPT))

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TRANSFER OF ASSISTANT SUPERINTENDENT TO A LOWER PAYING JOB WAS NOT DISCIPLINE UNDER THE EDUCATION LAW AND DID NOT CONSTITUTE A DUE PROCESS VIOLATION (THIRD DEPT).

The Third Department determined that the transfer of a school assistant superintendent to another job with lower pay did not violate the Education Law (pay reduction was not discipline) or due process (deprivation of property without due process of law):

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… [W]e conclude that the term “discipline[]” in Education Law § 3020 refers not merely to action that has an adverse impact, but adverse action that is motivated by a punitive intent.

Case law applying and interpreting Education Law § 3020 supports our reading of the statute. “The purpose of [Education Law § 3020] is to protect [tenured educators] from arbitrary imposition of formal discipline. It was not intended to interfere with the day-to-day operation of the educational system” … . * * *

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Petitioner’s reliance on cases involving employees covered under Civil Service Law § 75, which prohibits imposition of a “disciplinary penalty” without a hearing, is misplaced. While it has been held that a lateral transfer of a tenured civil service employee that results in a diminution of salary or benefits constitutes a form of discipline requiring compliance with the procedural safeguards of Civil Service Law § 75 … , this is so because Civil Service Law § 75 specifically provides that a “demotion in grade and title” constitutes a disciplinary penalty … . No comparable statutory language exists within the Education Law. * * *

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Here, petitioner’s right to receive the specific level of compensation earned in his position as Assistant Superintendent derived not from any tenure rights granted under the Education Law, but solely from the terms of his employment contract. Such contract expired on June 30, 2012, prior to the alleged deprivation. Moreover, the contract makes clear that it does not provide for the payment of salary beyond that date and that renewal or extension of its terms could only be effectuated by agreement of the Board. Under these circumstances, petitioner did not have a constitutionally protected property interest in the compensation and benefits derived from his employment contract beyond its June 30, 2012 expiration date … . Matter of Soriano v Elia, 2017 NY Slip Op 08431, Third Dept 11-30-17

 

EDUCATION-SCHOOL LAW (EMPLOYMENT LAW, TRANSFER OF ASSISTANT SUPERINTENDENT TO A LOWER PAYING JOB WAS NOT DISCIPLINE UNDER THE EDUCATION LAW AND DID NOT CONSTITUTE A DUE PROCESS VIOLATION (THIRD DEPT))/EMPLOYMENT LAW (EDUCATION-SCHOOL LAW,  TRANSFER OF ASSISTANT SUPERINTENDENT TO A LOWER PAYING JOB WAS NOT DISCIPLINE UNDER THE EDUCATION LAW AND DID NOT CONSTITUTE A DUE PROCESS VIOLATION (THIRD DEPT))

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ORAL AGREEMENT BETWEEN TWO BOOKMAKERS FOR REPAYMENT OF A $170,000 LOAN ENFORCEABLE, DESPITE THE MONEY-LAUNDERING PURPOSE (THIRD DEPT).

The Third Department, over a two-justice dissent, determined that the trial court’s finding that an oral agreement concerning the repayment of a $170,000 loan was enforceable, because the loan could have been paid off within a year (re: the statute of frauds). Both plaintiff and defendant were bookmakers who had been convicted of promoting gambling. The fact that plaintiff refused to answer questions about whether he paid income tax on the proceeds, based upon the Fifth Amendment, did not affect the result because there was nothing illegal about the loan agreement itself. The two dissenters argued the parties were engaged in money laundering and the loan agreement should not be enforced as a matter of public policy:

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We are mindful that plaintiff testified that the source of the loan proceeds was cash obtained through his illegal bookmaking activities. Indeed, both plaintiff and defendant were convicted of promoting gambling and required to pay fines in the amount of $100,000 and $50,000, respectively. Although plaintiff asserted his Fifth Amendment right against self-incrimination when asked whether he ever reported the cash as income, we are not persuaded by defendant’s contention that Supreme Court erred in failing to draw a negative inference because the source and/or taxable status of the funds was not probative of the issue presented. According due deference to Supreme Court’s credibility assessments, we find ample evidence to support the determination that plaintiff and defendant agreed to the loan that defendant breached by failing to make all of the payments due… . Contrary to defendant’s argument, because there was nothing prohibiting defendant from repaying the loan within one year, the statute of frauds did not bar enforcement of the oral agreement … .

We also find that defendant waived his right to challenge the loan on the basis of illegality because it was not raised as an affirmative defense … . Were we to consider the issue, we would find that, because neither the agreement nor the performance of the agreement was illegal, the judgment was enforceable … . Centi v McGillin, 2017 NY Slip Op 08430, Third Dept 11-30-17

 

DEBTOR-CREDITOR (ORAL AGREEMENT BETWEEN TWO BOOKMAKERS FOR REPAYMENT OF A $170,000 LOAN ENFORCEABLE, DESPITE THE MONEY-LAUNDERING PURPOSE (THIRD DEPT))/CONTRACT LAW (STATUTE OF FRAUDS, DEBTOR-CREDITOR, ORAL AGREEMENT BETWEEN TWO BOOKMAKERS FOR REPAYMENT OF A $170,000 LOAN ENFORCEABLE, DESPITE THE MONEY-LAUNDERING PURPOSE (THIRD DEPT))/CRIMINAL LAW (DEBTOR-CREDITOR, MONEY LAUNDERING, ORAL AGREEMENT BETWEEN TWO BOOKMAKERS FOR REPAYMENT OF A $170,000 LOAN ENFORCEABLE, DESPITE THE MONEY-LAUNDERING PURPOSE (THIRD DEPT))/MONEY LAUNDERING (DEBTOR-CREDITOR, CONTRACT LAW, (ORAL AGREEMENT BETWEEN TWO BOOKMAKERS FOR REPAYMENT OF A $170,000 LOAN ENFORCEABLE, DESPITE THE MONEY-LAUNDERING PURPOSE (THIRD DEPT))

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PROSECUTION CAN NOT USE THE DOCTRINE OF COLLATERAL ESTOPPEL, BASED UPON A PRIOR ATTEMPTED MURDER CONVICTION, TO PROVE INTENT IN A MURDER PROSECUTION STEMMING FROM THE DEATH OF THE SAME VICTIM, EVIDENCE PRESENTED TO THE GRAND JURY INSUFFICIENT, INDICTMENT DISMISSED (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Mulvey, determined the prosecution could not use the doctrine of collateral estoppel to fulfill its proof requirements at the grand jury stage. Defendant had been convicted of attempted murder, which included the intent to kill. After the victim died, the People indicted the defendant for murder. The grand jury was told the intent element had already been proven and the grand jury need only consider causation. The Third Department noted the difference between the application of collateral estoppel in civil and criminal cases. From the defendant’s perspective, using the collateral estoppel doctrine in this context violated defendant’s constitutional rights:

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While the People argue that their offensive use of collateral estoppel is fair play, in that had defendant been acquitted of attempted murder, he would defensively rely on collateral estoppel principles to argue against a subsequent murder trial, this analysis overlooks the obvious and critical difference between an accused’s defensive use of this doctrine and a prosecutor’s strategic use of it against an accused. An accused’s defensive invocation of this doctrine implicates and protects constitutional rights — to a jury trial, to present a defense, to due process and to not be placed twice in jeopardy, among others — whereas the People’s affirmative use is for matters of expediency and economy and lacks a constitutional imperative  … . A California intermediate appellate court that confronted this identical issue over 20 years ago similarly concluded that this strategic use of collateral estoppel was inconsistent with due process, noting that “the pursuit of judicial economy and efficiency may never be used to deny a defendant . . . a fair trial,” and that instructing a jury that a murder trial was limited to causation created an impermissible “gravitational pull towards a guilty verdict” … . People v Morrison, 2017 NY Slip Op 08405, Third Dept 11-30-17

CRIMINAL LAW (PROSECUTION CAN NOT USE THE DOCTRINE OF COLLATERAL ESTOPPEL, BASED UPON A PRIOR ATTEMPTED MURDER CONVICTION, TO PROVE INTENT IN A MURDER PROSECUTION STEMMING FROM THE DEATH OF THE SAME VICTIM, EVIDENCE PRESENTED TO THE GRAND JURY INSUFFICIENT, INDICTMENT DISMISSED (THIRD DEPT))/COLLATERAL ESTOPPEL (CRIMINAL LAW, PROSECUTION CAN NOT USE THE DOCTRINE OF COLLATERAL ESTOPPEL, BASED UPON A PRIOR ATTEMPTED MURDER CONVICTION, TO PROVE INTENT IN A MURDER PROSECUTION STEMMING FROM THE DEATH OF THE SAME VICTIM, EVIDENCE PRESENTED TO THE GRAND JURY INSUFFICIENT, INDICTMENT DISMISSED (THIRD DEPT))/EVIDENCE (CRIMINAL LAW, GRAND JURY, COLLATERAL ESTOPPEL, PROSECUTION CAN NOT USE THE DOCTRINE OF COLLATERAL ESTOPPEL, BASED UPON A PRIOR ATTEMPTED MURDER CONVICTION, TO PROVE INTENT IN A MURDER PROSECUTION STEMMING FROM THE DEATH OF THE SAME VICTIM, EVIDENCE PRESENTED TO THE GRAND JURY INSUFFICIENT, INDICTMENT DISMISSED (THIRD DEPT))/GRAND JURY (COLLATERAL ESTOPPEL, EVIDENCE, PROSECUTION CAN NOT USE THE DOCTRINE OF COLLATERAL ESTOPPEL, BASED UPON A PRIOR ATTEMPTED MURDER CONVICTION, TO PROVE INTENT IN A MURDER PROSECUTION STEMMING FROM THE DEATH OF THE SAME VICTIM, EVIDENCE PRESENTED TO THE GRAND JURY INSUFFICIENT, INDICTMENT DISMISSED (THIRD DEPT))/CONSTITUTIONAL LAW (CRIMINAL LAW, EVIDENCE, COLLATERAL ESTOPPEL, PROSECUTION CAN NOT USE THE DOCTRINE OF COLLATERAL ESTOPPEL, BASED UPON A PRIOR ATTEMPTED MURDER CONVICTION, TO PROVE INTENT IN A MURDER PROSECUTION STEMMING FROM THE DEATH OF THE SAME VICTIM, EVIDENCE PRESENTED TO THE GRAND JURY INSUFFICIENT, INDICTMENT DISMISSED (THIRD DEPT))

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