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PARALEGAL IN SMALL LAW OFFICE ENTITLED TO UNEMPLOYMENT INSURANCE BENEFITS.

The Third Department determined claimant, a paralegal in a small law office, was an employee entitled to unemployment insurance benefits:

… [C]laimant's work was assigned by the law office, he could not reassign his work to anyone, he was paid hourly and he was required to submit time sheets reflecting both client billable hours and administrative hours. Furthermore, claimant's work was reviewed by an attorney, any corrections were to be made by claimant, the law office was ultimately responsible for the work product, the law office supplied claimant with all of the equipment and material needed to perform the work and any expenses were reimbursed by the law office. In view of the foregoing, substantial evidence supports the Board's finding that the law office exercised sufficient control over claimant's work to establish an employer-employee relationship … . Matter of Kristensen (Law Offs. of David C. Birdoff–Commissioner of Labor), 2016 NY Slip Op 03035, 3rd Dept 4-21-16


DEFENDANT DEMONSTRATED WATER WAS NOT DIVERTED ONTO PLAINTIFF’S PROPERTY IN BAD FAITH.

The Third Department, reversing Supreme Court, determined defendant land-owner was entitled to summary judgment dismissing the complaint alleging the improper diversion of water onto plaintiff's property:

“Landowners making improvements to their land are not liable for damage caused by any resulting flow of surface water onto abutting property as long as the improvements are made in a good faith effort to enhance the usefulness of the property and no artificial means, such as pipes and drains, are used to divert the water thereon” … . “Thus, a plaintiff seeking to recover must establish that the improvements on the defendant's land caused the surface water to be diverted, that damages resulted and either that artificial means were used to effect the diversion or that the improvements were not made in a good faith effort to enhance the usefulness of the defendant's property”… .

Defendant averred that the complained-of work involved the removal of 17 to 25 cubic yards of soil around the entrance to the culvert and that it did not artificially channel water onto plaintiffs' property. He also stated that he performed the work in a good faith effort to create a detention area that would remediate drainage issues on his property in the event that the flow through the culvert was slow or blocked. Defendant further submitted the affidavit of a neighbor of the parties, a civil engineer with experience in stormwater management, who opined that the work did improve drainage and had no effect on the amount of water flowing onto plaintiffs' property. Defendant accordingly met his prima facie burden of demonstrating his entitlement to summary judgment, shifting the burden to plaintiffs to demonstrate that the changes were undertaken in bad faith or diverted additional water onto their property by artificial means… . Silverman v Doell, 2016 NY Slip Op 03054, 3rd Dept 4-21-16


CO-WORKERS’ EGREGIOUS AND LEWD BEHAVIOR, TOGETHER WITH THE EMPLOYER’S INADEQUATE RESPONSE, CONSTITUTED GOOD CAUSE FOR LEAVING EMPLOYMENT.

The Third Department determined that co-workers' egregious, lewd and harassing behavior, combined with the employer's inadequate response, provided good cause for claimant's leaving employment:

 

“Whether a claimant has left employment for good cause so as to qualify for unemployment insurance benefits is a factual issue to be resolved by the Board and its determination will be upheld if supported by substantial evidence” … . The Board was free to, and did, credit claimant's testimony that she did not feel safe or comfortable with continuing her employment after the egregious behavior of her coworker. The record evidence also reflects that claimant had previously reported harassment by another male coworker, who was reprimanded by the employer. In view of this pattern of sexual harassment and the employer's inadequate offer to transfer claimant to a nearby building — where she would still be forced to interact with the service center — substantial evidence supports the Board's determination that claimant left her employment for good cause … . Matter of Labbate (Robert Green Auto & Truck, Inc.–Commissioner of Labor), 2016 NY Slip Op 02898, 3rd Dept 4-14-16


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ATTORNEY WHO HAD PREVIOUSLY PROSECUTED MOTHER FOR ENDANGERING THE WELFARE OF A CHILD SHOULD NOT HAVE BEEN APPOINTED TO REPRESENT MOTHER’S CHILDREN IN A CUSTODY MATTER; IN THE ABSENCE OF EVIDENCE MOTHER WAS PREJUDICED BY CONFIDENTIAL INFORMATION MOTION TO VACATE CUSTODY STIPULATION ON CONFLICT OF INTEREST GROUNDS PROPERLY DENIED.

The Third Department determined Family Court should not have allowed an attorney who, as an assistant District Attorney, prosecuted mother for endangering the welfare of a child, to serve as the children's attorney in a custody matter. Mother moved to vacate the custody stipulation, in part based upon the attorney's (Bielicki's) conflict of interest. The fact that Bielicki should not have been appointed, in the absence of evidence of actual prejudice to mother from the use of confidential information, did not warrant vacation of the stipulation:

The mother … argues that Bielicki's representation of the children violated Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.11 (c), which provides that “a lawyer having information that the lawyer knows is confidential government information about a person, acquired when the lawyer was a public officer or employee, may not represent a private client whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person.” The rule defines confidential governmental information as “information that has been obtained under governmental authority and that, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose, and that is not otherwise available to the public” … . * * *

Bielicki's assignment as attorney for the children in this matter was contrary to the standards set forth in Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.11 (c) — and, for that reason, Family Court … should not have permitted Bielicki to serve in that capacity — such error, without more, does not warrant vacatur of the stipulation and order. Matter of Tina X. v John X., 2016 NY Slip Op 02874, 3rd Dept 4-14-16


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MOTION TO AMEND PLEADINGS BASED ON TRIAL EVIDENCE OF MUTUAL MISTAKE PROPERLY GRANTED, CRITERIA EXPLAINED.

The Third Department determined Supreme Court properly allowed the pleadings to be amended to conform to the evidence at trial. The trial evidence indicated the contract at issue was based upon mutual mistake rather than deliberate misrepresentation. The motion to amend the pleadings to allege mutual mistake was properly granted and the contract was properly rescinded on that ground:

 

The burden was upon defendant, as the party opposing plaintiff's motion, to establish that it was “hindered in the preparation of [its] case or . . . prevented from taking some measure in support of [its] position” … . That burden cannot be met when the difference between the original pleading and the evidence results from “proof admitted at the instance or with the acquiescence of [the opposing] party” .. . Here, the proof upon which plaintiff's motion was based was the testimony of defendant's president that she acted mistakenly in providing the wrong sales figures … . Given this testimony, defendant cannot have been surprised or unduly prejudiced by plaintiff's assertion of the theory of mutual mistake; thus, leave to conform the pleadings to the proof was properly granted … . Lakshmi Grocery & Gas, Inc. v GRJH, Inc., 2016 NY Slip Op 02891, 3rd Dept 4-14-16


APPELLANT COULD NOT PURSUE COUNTERCLAIMS AND CROSS-CLAIMS WHICH WERE NOT LISTED AS ASSETS IN APPELLANT’S BANKRUPTCY PETITION; THE CAUSES OF ACTION REMAIN VESTED IN THE BANKRUPTCY ESTATE.

The Third Department determined appellant was precluded from raising counterclaims and cross-claims in a matter which was stayed when appellant filed for bankruptcy. The causes of action were not listed as assets and therefore became the property of the bankruptcy estate:

 

It is fundamental that, “[u]pon the filing of a voluntary bankruptcy petition, all property which a debtor owns . . ., including a cause of action, vests in the bankruptcy estate” … . Such a cause of action “can only revert to the debtor to be pursued in his or her individual capacity if the claim is 'dealt with' in the bankruptcy, which necessitates it being listed as an asset [in the schedule of assets] and either abandoned by the bankruptcy trustee or administered by the bankruptcy court for the benefit of the creditors” … . Accordingly, “a debtor's failure to list a legal claim as an asset in his or her bankruptcy proceeding causes the claim to remain the property of the bankruptcy estate and precludes the debtor from pursuing the claim on his or her own behalf” … . Central Natl. Bank, Canajoharie v Scotty's Auto Sales, Inc., 2016 NY Slip Op 02876, 3rd Dept 4-14-16


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CONSTRUCTION CONTRACT PROVISION MAKING LITIGATION THE SOLE METHOD FOR RESOLVING A DISPUTE RENDERED VOID BY GENERAL BUSINESS LAW. 

The Third Department determined the General Business Law rendered void a provision in a construction subcontract mandating litigation as the sole method for resolving a dispute:

… General Business Law § 757 (3) … unambiguously voids and renders unenforceable any contractual provision that makes expedited arbitration unavailable to one or both parties. … [T]he obvious function of section 6.2 of the subcontract is to establish litigation as the sole legal option for the resolution of disputes under the subcontract, which, in turn, denies both parties the opportunity to arbitrate such claims. Inasmuch as General Business Law § 757 (3) clearly operates to void and render unenforceable the subcontract's dispute resolution provision, we find that Supreme Court properly denied petitioner's application to stay arbitration. Matter of Capital Siding & Constr., LLC (Alltek Energy Sys., Inc.), 2016 NY Slip Op 02878, 3rd Dept 4-14-16


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MORTGAGE HAD PRIORITY OVER COUNTY’S CLAIM FOR REIMBURSEMENT OF MEDICAID BENEFITS.

The Third Department determined a mortgage held by Wells Fargo had priority to a claim by the county seeking reimbursement of Medicaid benefits received by the decedent:

 

Petitioner [Saratoga County Department of Social Services] asserts priority pursuant to Social Services Law § 104 (1), which provides, in relevant part, that “[i]n all claims of the public welfare official made under [such] section[,] the public welfare official shall be deemed a preferred creditor” (emphasis added). “Preferred creditor” has been construed to give a social services department priority over a “general creditor, that is, a creditor that, upon giving credit, takes no rights against specific property of a debtor” … . Here, Wells Fargo holds a mortgage lien against the Rotterdam property that was recorded prior to the May 2014 decree of Surrogate's Court validating petitioner's claim. Although Medicaid assistance was provided to decedent before the mortgage was given, petitioner did not have a prior lien against the property (see Social Services Law § 369 [2] [a]). As such, we conclude that Wells Fargo's prior specific lien gives it priority over petitioner's claim with respect to the … property … . Matter of Shambo, 2016 NY Slip Op 02699, 3rd Dept 4-7-16


EXCLUSIONARY LANGUAGE IN HARASSMENT STATUTE NEED NOT BE PLED AND NEGATED IN THE CHARGING DOCUMENT; THE EXCLUSIONS ARE PROVISOS WHICH CAN BE RAISED AS DEFENSES.

The Third Department, in the context of a family offense, determined the portions of the second degree harassment statute which state the subdivision does not apply “to activities regulated by the national labor relations act, as amended, the railway labor act, as amended, or the federal employment labor management act, as amended” (Penal Law § 240.26…)” were “provisos.” The respondent argued that the labor and railroad provisions in the statute were “exceptions” which must be affirmatively pled and negated in the charging document. The Third Department found the provisions were “provisos” which can be asserted as defenses, but which do not have to be pled:

 

“The general rule regarding statutory crimes is that 'exceptions must be negatived by the prosecution and provisos utilized as a matter of defense'” … . In attempting to distinguish between exceptions and provisos, courts will look to whether the defining statute “contains as part of its enacting clause an exception to the effect that under certain circumstances the offense is not to be considered as having been committed” … , in which case a true exception generally will be found, or whether the exception arises either by way of a statutory amendment or reference to a statute outside of the Penal Law, in which case the exception generally will be regarded as a proviso … .

As originally enacted, Penal Law § 240.26 did not contain the exclusionary language at issue; such language was added when the statute was amended in 1994 (see L 1994, ch 109, § 1) to “clarif[y] that activities protected by certain federal labor statutes are not included within the definition of harassment” (Governor's Approval Mem, Bill Jacket, L 1994, ch 109, at 7). Further, as a review of the statute itself makes clear, application of the exclusionary language requires reference to numerous federal statutes outside of the Penal Law. Under these circumstances, the language excluding certain labor activities or disputes from the definition of harassment in the second degree “is more accurately construed as a proviso, which may be raised as a defense [by the charged party], rather than an exception, which must be [affirmatively] pleaded” and negated by the charging party … . Matter of Rogers v Phillips, 2016 NY Slip Op 02687, 3rd Dept 4-7-16


DISQUALIFICATION OF ATTORNEY APPROPRIATE TO AVOID THE APPEARANCE OF IMPROPRIETY.

In a dispute about easements used by property owners to gain access to their properties, the Third Department determined disqualification of an attorney based upon avoiding the appearance of impropriety was appropriate, even though the mandatory conflict-of-interest disqualification criteria may not have been met:

… [E]ven in instances where … disqualification is not mandatory, disqualification nonetheless may be warranted depending upon the particular facts and circumstances of a given case … . In this regard, “[i]t is well settled that an attorney must avoid not only the fact, but even the appearance, of representing conflicting interests” … . To that end, “[a]n attorney may not place himself [or herself] in a position where a conflicting interest may, even inadvertently, affect, or give the appearance of affecting, the obligations of the professional relationship” … . “The disqualification of an attorney is a matter that rests within the sound discretion of the court” … , and the case law makes clear that “[a]ny doubts as to the existence of a conflict of interest must be resolved in favor of disqualification so as to avoid even the appearance of impropriety”… . McCutchen v 3 Princesses & AP Trust Dated Feb. 3, 2004, 2016 NY Slip Op 02703, 3rd Dept 4-7-16


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