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Plaintiff Not Competent When Release Was Signed/Statute of Limitations Tolled by Plaintiff’s Mental Disability

The Third Department determined Supreme Court properly concluded the release signed by the plaintiff was not enforceable, because the plaintiff was not competent at the time it was signed, and the statute of limitations was tolled by plaintiff’s mental disability. Plaintiff suffered a brain injury when he was struck by a car in 1991. A few months later plaintiff signed a release provided by an insurance adjuster in return for $5000.  The case languished for years and Supreme Court denied defendant’s motion for summary judgment dismissing the case in 2014. The court explained the relevant law:

With respect to the release signed by plaintiff, “the burden of proving incompetence rests upon the party asserting incapacity to enter into an agreement [and], to prevail, plaintiff was required to establish that [his] ‘mind was so affected as to render [him] wholly and absolutely incompetent to comprehend and understand the nature of the transaction'” … . The incapacity must be shown to exist at the time the pertinent document was executed … . Regarding the statute of limitations issue, the toll for “insanity” provided by CPLR 208 is narrowly interpreted, the concept of insanity is “equated with unsoundness of mind” … and encompasses “only those individuals who are unable to protect their legal rights because of an over-all inability to function in society” … . The mental incapacity must exist at or be caused by the accident and continue during the relevant time … . Lynch v Carlozzi, 2015 NY Slip Op 04893, 3rd Dept 6-11-15

 

Resignation in the Face of Immediate Termination Constituted Termination by Final Agency Action (Reviewable by a Court)

The Third Department upheld the determination of the Division of State Police Hearing Board and the termination of the petitioner (a State Trooper). The fact that petitioner had resigned did not deprive the court of its review power, despite the resulting absence of a “final agency determination.”  The petitioner had been shown the superintendent’s termination determination and was told he would be terminated if he did not immediately resign.  Petitioner resigned. The Third Department held that resignation under such a circumstance is effectively a termination by a final agency action and is therefore reveiwable by a court:

… [W]e consider respondents’ argument that, since petitioner resigned, there was no final agency action over which the Court has jurisdiction. Although a resignation “would ordinarily be beyond our review, exceptions exist where . . . the resignation was allegedly ineffective and involuntary” … . It is undisputed that the Superintendent had signed a written decision terminating petitioner’s employment. Significantly, the document was handed to petitioner and he was then told that he had 10 minutes to accept an “option” of resigning. Under the narrow circumstances, petitioner was effectively terminated by a final agency action when he was handed the signed termination document. Matter of Lyons v Superintendent of State Police, Joseph D’Amico, 2015 NY Slip Op 04892, 3rd Dept 6-11-15

 

Dry-Cleaning Chemical, PERC, Is Not “Petroleum” Within the Meaning of the Navigation Law—Plaintiff’s Suit for Clean-Up of PERC Under the Navigation Law Properly Dismissed

The Third Department determined the Navigation Law did not confer upon plaintiff a private right of action to sue for clean-up of PERC, a chemical used in dry cleaning.  Plaintiff is the owner of a shopping plaza and sued the estate of the owner a of dry cleaning business that was located in the plaza after PERC was found in the soil. The Navigation Law provides a private right of action to sue for the clean-up of “petroleum.” Although PERC is derived from petroleum, the court held PERC does not constitute petroleum within the meaning of the Navigation Law:

Essentially, plaintiff argues that this finding that PERC is petroleum derived is sufficient to support imposition of liability under the Navigation Law. This would constitute a novel expansion of the law; plaintiff does not cite to, nor can we find, any case in which PERC has been deemed to constitute petroleum under the Navigation Law. At least two other courts have come to the opposite conclusion, finding that PERC does not constitute petroleum under the Navigation Law … . As defendant argues, the vast and diverse range of products and substances derived from petroleum — many of which pose none of the same dangers as petroleum itself — would make a per se rule imposing liability for the discharge of any petroleum-derived substance unworkable. Accordingly, we find no error in Supreme Court’s determination that PERC is not petroleum as defined under Navigation Law article 12 … . Fairview Plaza, Inc. v Estate of Peter J. Rigos, 2015 NY Slip Op 04901, 3rd Dept 6-11-15

 

Industrial Code Provision Which Prohibits Allowing an Employee to Use an “Elevated Working Surface Which Is In a Slippery Condition” Does Not Apply to Snow Removal/The Injury—a Slip and Fall While Shoveling Snow—Was Caused by “An Integral Part of the Work”

Plaintiff was directed to remove snow from the work site and slipped and fell in the process. The Third Department affirmed the dismissal of plaintiff’s Labor Law 241(6) cause of action because the cited industrial code provision (12 NYCRR 23-1.7 (d)) did not apply to the work plaintiff was assigned. The industrial code prohibited allowing an employee to use an “elevated working surface which is in a slippery condition.” However, where the injury is caused by “an integral part of the work” being performed (here, removal of the slippery condition) that industrial code provision does not apply:

… [P]laintiff cites 12 NYCRR 23-1.7 (d), which prohibits an employer from allowing an employee to use an “elevated working surface which is in a slippery condition.” However, when the injury is caused by “an integral part of the work” being performed, 12 NYCRR 23.1-7 does not apply … . In other words, liability does not attach when the injury is caused by the “‘very condition [a plaintiff] was charged with removing'” … . … Here, plaintiff was injured due to the condition that he was specifically charged with removing … , Barros v Bette & Cring, LLC, 2015 NY Slip Op 04910, 3rd Dept 6-11-15

 

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Townhouse Residents, Members of a Community Homeowners’ Association, Entered an Implied Contract to Pay a Proportionate Share of the Fees for Authorized and Necessary Services in Connection with the Maintenance of the Townhouse Facilities

The Third Department affirmed Supreme Court’s ruling that defendants (townhouse residents) had entered an implied contract to pay a proportionate share of the full cost of maintaining the facilities. The defendants had refused to pay membership fees after a dispute with other residents arose.  The Third Department, applying the “business judgment rule,” determined the fees assessed by the plaintiffs were for authorized and necessary services provided by the plaintiff:

… [T]he Court of Appeals has made clear that an implied contract for a community homeowners’ association “includes the obligation to pay a proportionate share of the full cost of maintaining . . . facilities and services, not merely the reasonable value of those actually used by any particular resident” … . We review plaintiff’s action in undertaking such expenditures under the business judgment rule, which, in the absence of “claims of fraud, self-dealing, unconscionability, or other misconduct,” is limited to an inquiry of “whether the action was authorized and whether it was taken in good faith and in furtherance of the legitimate interests of the corporation” … . Bluff Point Townhouse Owners Assn., Inc. v Kapsokefalos, 2015 NY Slip Op 04905, 3rd Dept 6-11-15

 

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Prior Owner of a Nursing Home Did Not Have Standing to Seek Payments from Medicaid for the Period During His Ownership—Only the Current Owner/Operator of the Nursing Home Had Standing

The Third Department determined petitioner, the former owner of a nursing home, did not have standing to seek payments from Medicaid for the period before petitioner sold the nursing home.  Only the current operator of the nursing home has standing to seek Medicaid payments. The court noted that petitioner had protected his interest in the payments by contract with the new owner of the nursing home:

Standing requires a party to demonstrate both an injury-in-fact and an injury falling “within the zone of interests or concerns sought to be promoted or protected by the statutory provision under which the agency has acted” … . Petitioner has clearly demonstrated an injury-in-fact particularly since it initiated the rate appeal while it was still the owner/operator … . The more difficult question is whether petitioner meets the zone of interests component as a former owner/operator. Our review shows that the governing statute and regulations contemplate the payment of Medicaid reimbursement to the current provider of medical services or the current operator of a nursing home facility. Specifically, Social Services Law § 367-a (1) (a) mandates that all payments “shall be made to the person, institution, state department or agency or municipality supplying such medical assistance” and expressly prohibits the assignment of a reimbursement claim to a third party. This legislation was designed to “relieve DOH from the potential liability and increased administrative burdens involved in such assignments” (Legislative Mem, 1971 McKinney’s Session Laws of NY at 2419-2420…). Correspondingly, nursing home facilities qualify for Medicaid payments provided that they possess a valid operating certificate issued by the Commissioner (see Public Health Law § 2801 [2], [3], [4] [b]; 10 NYCRR 86-2.1 [a]). An operating certificate “shall only be used by the established operator for the designated site or operation” (10 NYCRR 401.2 [b]). When, as here, the owner/operator sells a facility to a party who intends to continue operating the facility, it may transfer the operating certificate to the new operator only upon approval of the Public Health Council (see 10 NYCRR 401.3 [c]). Read together, these provisions establish that it is the current operator of a nursing home facility — i.e., the holder of a valid operating certificate — that is entitled to receive Medicaid payments and, thus, is the protected party within the statutory zone of interest. Matter of Park Manor Rehabilitation & Health Care Ctr., LLC v Shah, 2015 NY Slip Op 04909, 3rd Dept 6-11-15

 

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The County Was Negligent Per Se Due to Its Violation of the Provision of the Vehicle and Traffic Law Requiring Loads in Open Trucks be Covered—Plaintiff Was Struck by Debris Which Came Off an Uncovered Load—The Governmental Immunity Conferred by the Executive Law During a Response to an Emergency (the Truck Was Carrying Debris from the Clean-Up After Hurricane Irene) Did Not Extend to this Situation (Purpose and Scope of the Government’s “Emergency” Immunity Under the Executive Law Explained)

Plaintiff was injured when a piece of lumber fell off an open truck owned by the county.  Plaintiff was driving her vehicle when the debris came off the county truck and struck her in the head. The county truck was being used to transport debris in the aftermath of Hurricane Irene. The Third Department determined that, by transporting unsecured debris in an open truck, the county had violated Vehicle and Traffic Law 380-a (1) and, therefore, the county was negligent per se.  The court interpreted Vehicle and Traffic Law 380-a to mean that a prima facie case of a violation of the statute is made out by proof a load in an open truck was not covered. Once that showing is made, the owner of the truck will not be deemed to have violated the statute, despite the lack of a cover, if the owner can show the load was secure such that no cover was required. No such showing was possible here.  The court rejected the county’s argument that the emergency-related immunity conferred by the Executive Law applied here. The court noted the purpose of the Executive-Law immunity is to allow the government to make decisions during an emergency—which roads to clear first, for instance—without fear of liability, but the “emergency” immunity did not insulate the county from liability for its negligence in every context:

Executive Law § 25 (1) provides that, “[u]pon the threat or occurrence of a disaster, the chief executive of any political subdivision is hereby authorized and empowered to and shall use any and all facilities, equipment, supplies, personnel and other resources of his [or her] political subdivision in such manner as may be necessary or appropriate to cope with the disaster or any emergency resulting therefrom.” To be sure, this statute, which vests a political subdivision’s chief executive “with the power to respond to a local disaster or the immediate threat of a disaster, . . . reflects an awareness by the . . . Legislature that in emergency situations prompt and immediate unilateral action is necessary to preserve and protect life and property” … . Consistent with that awareness, the statute further provides, as noted previously, that “[a] political subdivision shall not be liable for any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of any officer or employee in carrying out the provisions of this section” (Executive Law § 25 [5]).

In our view, the scope of the immunity conferred by Executive Law § 25 is clear. When faced with a disaster, a political subdivision’s chief executive may, for example, decide where to set up a makeshift hospital or aid station, prioritize and determine which streets to clear or allocate supplies and personnel as he or she sees fit, and such discretionary determinations, in turn, will not serve as a basis upon which to expose the political subdivision to liability. In other words, a disgruntled homeowner who is confronted with a flooded basement and is living on an impassable residential street cannot seek to hold a locality liable for damages simply because its chief executive deemed it more important to first clear a path to the local hospital or to pump out the holding cells in the local police station. That said, the immunity conferred by Executive Law § 25 (5) does not, to our analysis, grant a political subdivision carte blanche to perform a discretionary function in any manner that it sees fit — particularly in a manner that poses a danger to the traveling public. Here, a valid — and discretionary — determination may well have been made that the removal of storm debris from, among other locations, the DPW garage was a priority and, further, that transporting such debris in open containers was the most efficient and expeditious way to do so. The discretionary nature of these broad, resource-based decisions, however, did not obviate the need for defendants to comply with the provisions of Vehicle and Traffic Law § 380-a (1) in terms of the actual transport of such debris. As the immunity conferred by Executive Law § 25 (5) does not, in our view, extend to the particular facts of this case, Supreme Court properly denied defendants’ cross motion for summary judgment dismissing plaintiff’s complaint. …

Vehicle and Traffic Law § 380-a (1), which provides that “[i]t shall be unlawful to operate on any public highway any open truck or trailer being utilized for the transportation of any loose substances, unless said truck or trailer has a cover, tarpaulin or other device of a type and specification . . . which completely closes in the opening on. . . said truck or trailer while said truck or trailer shall be so operated, so as to prevent the falling of any such substances therefrom. However, if the load is arranged so that no loose substance can fall from or blow out of such truck, the covering is not necessary.” * * *

In our view, in order to discharge her initial burden on her motion for summary judgment, plaintiff need only have shown that defendants failed to utilize a cover; at that point, the burden shifted to defendants to demonstrate that no statutory violation actually occurred because the load was arranged in such a manner that no cover was necessary. To hold otherwise would place a nearly insurmountable burden upon plaintiff, as the manner in which the container was loaded and the contents were arranged inevitably lies within the exclusive knowledge of defendants… . Pierce v Hickey, 2015 NY Slip Op 04914, 3rd Dept 6-11-15

 

Arbitrator Did Not Have the Authority (CPLR 7511) to Modify an Award by Adding Interest, Even If Interest Should Have Been Awarded as a Matter of Law

The Third Department determined the arbitrator did not have the authority to modify an award by including an additional amount for interest. Even if the interest should have been awarded initially as a matter of law, modification by adding interest exceeded the powers enumerated in CPLR 7511. The court explained the arbitrator’s authority in this context:

“[I]t has been recognized that an arbitrator’s power to modify an award is extremely limited and that, absent compliance with the statutory requirements, an arbitrator is without authority to modify an award” … . The statutory requirements for modification are set forth in CPLR 7509, which allows an arbitrator to modify his or her award upon the grounds set forth in CPLR 7511 (c) if a timely application for modification is made. Because a timely request was made by petitioner, modification was permissible if: “1. there was a miscalculation of figures or a mistake in the description of any person, thing or property referred to in the award; or 2. the arbitrators have awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or 3. the award is imperfect in a matter of form, not affecting the merits of the controversy”(CPLR 7511 [c]). The arbitrator determined that the first two grounds were inapplicable, but that modification was warranted because the failure to assess the requested interest constituted an imperfection in the form of the original award.

Supreme Court correctly determined that CPLR 7511 (c) (3) had no applicability to the modification at issue here, which significantly affected the amount of the award and “was not merely one of form, but one which affect[ed] the substantive rights of the parties” … . Even accepting as true that the arbitrator was obliged to award interest as a matter of law …, “[i]t is clear that an arbitrator’s award cannot be . . . modified due to an error of fact or law unless the correction comes within the corrective or regulatory sections of the CPLR” … . Because the error here does not, the arbitrator lacked authority to correct it … .Matter of David Frueh Contr., LLC (BCI Constr., Inc.), 2015 NY Slip Op 04913, 3rd Dept 6-11-15

 

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Presumption, Pursuant to Banking Law 675, that a Joint Bank Account Created a Joint Tenancy with Right of Survivorship Is Not Triggered Unless the Signature Card for the Account Indicates a Right of Survivorship Was Intended

The Third Department determined petitioner, whose name was on a joint bank account with decedent and another, was not entitled to one-half of the proceeds in the account upon decedent’s death. The court explained that the presumption (Banking Law 675) that a joint bank account creates a joint tenancy with right of survivorship is triggered only when the signature card for the account indicates the parties intended the right of survivorship to apply.  Here the signature card made no mention of the right of survivorship:

Banking Law § 675 (a) provides, in relevant part, that, “[w]hen a deposit of cash . . . has been made . . . in the name of [the] depositor . . . and another person and in form to be paid or delivered to either, or the survivor of them, such deposit . . . and any additions thereto made, by either of such persons, . . . shall become the property of such persons as joint tenants and the same, together with all additions and accruals thereon, . . . may be paid or delivered to either during the lifetime of both or to the survivor after the death of one of them.” Further, Banking Law § 675 (b) provides that “[t]he making of such deposit . . . in such form shall, in the absence of fraud or undue influence, be prima facie evidence, in any action or proceeding to which the . . . surviving depositor. . . is a party, of the intention of both depositors . . . to create a joint tenancy and to vest title to such deposit . . ., and additions and accruals thereon, in such survivor.” Thus, “[w]here an account has been formed in compliance with the statute, it is presumed, absent a showing of fraud or undue influence, that the depositors intended to create a joint tenancy with rights of survivorship” … . That said, the statutory presumption embodied in Banking Law § 675 (b) will not be triggered unless the signature card for the account in question specifically references rights of survivorship … . Assuming the statutory presumption has been invoked, the burden then shifts to the party challenging the survivorship rights “to establish — by clear and convincing evidence — fraud, undue influence, lack of capacity or, as [respondent] asserts here, that the account[] [was] only opened as a matter of convenience and [was] never intended to be [a] joint account[]” … .

Here, the signature card for the Citizens money market account contains no survivorship language. Accordingly, under prevailing case law, petitioner simply is not entitled to the presumption afforded by Banking Law § 675 (b) … . Matter of Farrar, 2015 NY Slip Op 04902, 3rd Dept 6-11-15

 

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The Absence of Proof Defendants Disclosed Slanderous Statements Included in Letters to Plaintiff Precluded a “Name-Clearing” Hearing/The Jury Should Not Have Been Allowed to Consider “Ostracism and Rejection” Damages Absent Proof Defendants Were Responsible for Republication of the Slanderous Remarks by Third Persons

In a lawsuit stemming from allegedly slanderous remarks made by defendants in connection with plaintiff’s termination from employment by the defendant school district, the Third Department determined plaintiff’s petition for a name-clearing hearing should have been dismissed, because there was no evidence defendants disclosed the relevant letters to anyone, and the jury should not have been allowed to consider rumor-related “ostracism and rejection” damages, because there was no evidence defendants were responsible for the alleged repetition of the slander by third persons. A new trial on damages was ordered:

Proof of “ostracism and rejection” to establish damages for defamation is only admissible if the proof is “‘the direct and well-connected result'” of a defamatory statement at issue … . Further, even when a defendant’s slanderous statement is connected by proof to that statement’s republication, “‘one who utters a slander . . . is not responsible for its voluntary and unjustifiable repetition, without his [or her] authority or request, by others over whom he [or she] has no control and who thereby make themselves liable to the person injured'” … . This is because “each person who repeats the defamatory statement is responsible for the resulting damages” … .

Plaintiff’s proof regarding rumors and ostracism fail these tests. Plaintiff and her witnesses offered no proof that directly connected [defendants’] slanderous statements to the ostracism that plaintiff allegedly suffered … . Further, even assuming that the content of the rumors allegedly spread by community members allowed for a reasonable inference that said community members were aware of [defendants’] slanderous statements, proof of republication was nonetheless improper given the absence of evidence that defendants had any knowledge of or played any role in such republication … . Compounding the effect of the error, Supreme Court did not instruct the jury that plaintiff had the burden of proving that the ostracism harms that plaintiff allegedly suffered were actually connected to [defendants’] statements, despite defendants’ request that it do so. Wilcox v Newark Val. Cent. School Dist., 2015 NY Slip Op 04890, 3rd Dept 6-11-15

 

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