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Participation in One’s Own Business, Even If the Business Generates No Income, Can Render One Ineligible for Unemployment Benefits

The Third Department determined claimant’s participation in his own business, even if minimal and the business is not profitable, supports the denial of unemployment benefits:

“A claimant who actively participates in his or her own business will not necessarily be considered totally unemployed even if his or her activities are minimal and the business is not profitable” … . Here, on behalf of the corporation, claimant obtained a credit card and opened a bank account with an initial deposit of $25,000. He wrote checks against the account for office furniture, charged travel expenses and solicited business. Although claimant did not receive any income through the corporation during the time he was collecting benefits, he intended to make money with it, and the record reflects that the corporation was still operating after claimant stopped collecting benefits and it ultimately generated income. Matter of McCann v Commissioner of Labor, 2014 NY Slip Op 03568, 3rd Dept 5-15-14

 

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Codefendant’s Statement Was Admissible—the Fact that the Statement Implicated the Defendant in the Light of Other Trial Evidence Did Not Violate Defendant’s Right of Confrontation

The Third Department determined a co-defendant’s statement, which had been redacted to exclude references to the defendant, was admissible.  The defendant’s argument that the statement implicated him in the light of the trial evidence was rejected:

A defendant’s right to confront witnesses is violated by the admission of “the facially incriminating confession of a nontestifying codefendant” …; however, no such violation occurs where, as here, the codefendant’s statement incriminates the defendant only in light of other evidence produced at trial … . Nor did the use of plural pronouns such as “we” and “they” in the statement necessarily indicate any involvement by defendant … . Accordingly, the statement was admissible, and defendant’s rights under the Confrontation Clause were not violated by the People’s arguments that drew inferences about his participation by linking the statement with other trial evidence … . People v Maschio, 2014 NY Slip Op 03551, 3rd Dept 5-15-14

 

Ambiguous Terms Interpreted to Give Meaning to All Terms—Here Water Damage Caused By Plumbing Backup Originating in Building Was Covered—Water Damage Caused By Plumbing Backup Originating Outside the Building Was Not Covered

The Third Department determined ambiguous terms in an insurance policy concerning whether water backing up through plumbing to cause damage was excluded were properly interpreted by Supreme Court. The ambiguous terms were interpreted to mean that damage from water backing up caused by a problem within the buildings own plumbing is covered, but similar damage caused by a backup originating outside the building (a municipal sewer system, for example) was not covered:

Where an insurer relies on an exclusion to avoid coverage, it has the burden of demonstrating “that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case” … . Moreover, we are “obligat[ed] to interpret the exclusion in a manner that gives full force and effect to the policy language and does not render a portion of the provision meaningless” … . “While [u]nambiguous provisions of a policy are given their plain and ordinary meaning, where policy language is unclear or subject to multiple reasonable interpretations, such ambiguities are resolved against the insurer” … .

In our view, when the exclusion and coverage provisions at issue here are read together, an ambiguity exists in the insurance policy as to losses resulting from a backup and/or overflow from sewers, drains and/or plumbing systems. Although the resolution of this ambiguity appears to be an issue of first impression in this state, Supreme Court’s analysis — that a plumbing system, as referenced in the coverage provision, includes drains that are on the insured’s property — is consistent with decisions in other jurisdictions that have interpreted the interplay of competing provisions similar to those in question here … . Pichel v Dryden Mut Ins Co 2014 NY Slip Op 03575, 3rd Dept 5-15-14

 

Purchaser of a Hazardous Waste Treatment, Storage or Disposal Facility Was Not Required to Provide Financial Assurance for the Ongoing Performance of Corrective Action Imposed Upon the Prior Owner

The Third Department, reversing the Department of Environmental Conservation Commissioners ruling below on an issue of first impression, determined the subsequent owner of property formerly used as a permitted hazardous waste treatment, storage or disposal (TSD) facility was not required to provide financial assurance for the ongoing performance of corrective action imposed upon the prior owner.  The decision includes an exhaustive analysis of all the relevant statutes and regulations:

In essence, respondents seek to impose strict liability to provide financial assurance, in perpetuity, on all subsequent owners of property on which a former TSD facility was operated. Had this been the Legislature’s intent, rather than relegate us to a strained analysis of multiple regulations in order to reach that conclusion, it would have done so expressly. Indeed, the Legislature did exactly that in the context of New York’s “Superfund Law,” which requires the owner of an inactive hazardous waste disposal site, and/or any person responsible for the disposal of hazardous wastes at such site, to take remedial action … . Other examples of New York statutes imposing “strict liability” on property owners are the Oil Spill Act (see Navigation Law § 181 [1]) and the Scaffold Law (see Labor Law § 240 [1]). Thus, there can be no doubt that, if the Legislature had intended to impose liability on landowners for providing financial assurance under New York’s version of RCRA —[Resource Conservation and Recovery Act] without regard to whether they had ever operated a TSD facility on the property in question — clear language to that effect could easily have found its place in the statute and regulations. While such a result would not be inconsistent with the laudatory environmental purposes of this regulatory scheme, absent such language, we discern no legal basis for the Commissioner to create such a requirement. To the extent that the Commissioner interpreted the regulations otherwise, such interpretation was arbitrary and capricious and affected by an error of law and we, therefore, annul his determination, as well as the penalties imposed on petitioners.  Matter of Thompson Corners LLC v New York State Dept of Envtl Conservation, 2014 NY Slip Op 03556, 3rd Dept 5-15-14

 

Derivative Neglect Finding Reversed—Operative Principles Explained

The Third Department reversed Family Court, finding the evidence insufficient to support an allegation of derivative neglect. The theory below was that the alleged abuse of one child, Dominick, was serious enough to warrant a finding of derivative neglect with respect to a child (Brad) who had not been born at the time of the alleged neglect of Dominick.  In the course of the decision, the court explained the operative principles:

Pursuant to Family Ct Act § 1046 (a) (i), “proof of the abuse or neglect of one child shall be admissible evidence on the issue of the abuse or neglect of any other child of . . . the respondent.” However, “[e]vidence of neglect of one child typically may not serve as the sole basis for a finding of neglect [of another child, unless] the nature of the direct [neglect], notably its duration [and] the circumstances surrounding its commission[,] . . . evidence[s] fundamental flaws in the respondent’s understanding of the duties of parenthood” … . — flaws that are “so profound as to place any child in his or her care at substantial risk of harm” … . Contrary to the father’s assertion, petitioner’s failure to commence a direct neglect proceeding against him with respect to Dominick does not bar petitioner from maintaining this derivative neglect proceeding against him with respect to Brad. Similarly, the fact that Brad had yet to even be conceived — much less born — at the time of the home invasion or the search of the father’s residence is not dispositive, as the relevant inquiry is whether the evidence of the direct neglect of one child, i.e., Dominick, “is so proximate in time to the derivative proceeding that it can reasonably be concluded that the condition still exists” … . Matter of Brad I (Tiana K), 2014 NY Slip Op 03555, 3rd Dept 5-15-14

 

Vocational Factors Not Considered Re: “Temporary Marked Partial Disability Rate”

The Third Department determined the Workers’ Compensation Board applied the correct standards when determining a claimant’s temporary marked partial disability rate.  The claimant argued that the Board should have considered “vocational factors” in determining the compensation rate, i.e., claimant’s level of education and her ability to find other work.  The Third Department, in a detailed analysis of the language of the applicable statutes, disagreed:

As pertinent here, the compensation rate for temporary partial disability resulting in reduced earning capacity is based upon the difference between the claimant’s pre-injury average wages “and his [or her] wage earning capacity after the accident in the same or other employment” (Workers’ Compensation Law § 15 [5]…). In almost identical language, the compensation rate for permanent partial disabilities that are not amenable to schedule awards is based upon the difference between the claimant’s previous wages “and his or her wage-earning capacity thereafter in the same employment or otherwise” (Workers’ Compensation Law § 15 [3] [w]…)). For both temporary and permanent partial disabilities, the “wage earning capacity” of a claimant with no actual earnings is to be set by the Board at a reasonable level not greater than 75% of the claimant’s previous full-time earnings, “having due regard to the nature of his [or her] injury and his [or her] physical impairment” (Workers’ Compensation Law § 15 [5-a]…)). These provisions include no reference to vocational factors. However, when determining a claimant’s “loss of wage-earning capacity” in order to set the duration of permanent partial disability benefits following classification (Workers’ Compensation Law § 15 [3] [w] …), the Board considers not just the nature and degree of the injury, but also “work restrictions, [the] claimant’s age, and any other relevant factors, with the [claimant’s] ‘wage earning capacity’ as its inverse” …).

We reject claimant’s contention that this analysis should be applied to the determination of “wage earning capacity” as the term is used in Workers’ Compensation Law § 15 (5-a). Matter of Canales v Pinnacle Foods Group LLC, 2014 NY
Slip Op 03576, 3rd Dept 5-15-14

 

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Antenuptial Agreement Was a Valid Contract Which Controlled Interpretation of Trust Documents

The Third Department applied general principles of contract-interpretation to an antenuptial agreement and trust documents to determine objections to property distribution raised by the surviving wife:

Although the [trust document] makes no explicit mention of the antenuptial agreement, the [trust document] fulfilled decedent’s obligation under that agreement by explicitly creating a trust to benefit [the wife] during her lifetime in an amount in excess of that required by the antenuptial agreement. Further, the [trust document] provides that the trust to benefit [the wife] be funded with assets that “qualify for the marital deduction,” which is consistent with the intentions of the parties as explicitly set forth in the antenuptial agreement. The structure of the [trust document] creates an estate plan that is inconsistent with [the wife’s] claim. The plain language provides for a trust to benefit [the wife] that meets the specific minimum requirements set out in the antenuptial agreement, and the [trust document] conforms to the parties’ intentions regarding tax deductibility expressed in the agreement. Considering this evidence, Surrogate’s Court properly determined that there is no issue of material fact on [the wife’s] claim, because decedent intended to fulfill his obligation under the antenuptial agreement through the [trust] …, and that trust was funded in an amount greater than required by the antenuptial agreement … . Matter of Rich, 2014 NY Slip Op 02982, 3rd Dept 5-1-14

 

Slip and Fall On Sidewalk Near Place of Employment Was Not a Work-Related Accident

The Third Department determined a slip and fall on a sidewalk near claimant’s place of employment did not, under the facts, constitute a work-related accident:

Inasmuch as the accident here occurred near claimant’s place of employment, his claim falls within “a gray area where the risks of street travel merge with the risks attendant with employment and where the mere fact that the accident took place on a public road or sidewalk may not ipso facto negate the right to compensation” … . In order for an incident to be compensable under those circumstances, “there must be (1) a special hazard at the particular off-premises point and (2) a close association of the access route with the premises, so far as going and coming are concerned” … .While the public sidewalk here was near the government center, it was open to the public and there was no showing that it was “otherwise controlled by the employer, that workers were encouraged to use it or that it existed solely to provide access to the” workplace … . The ice on the sidewalk, moreover, constituted “a danger that existed to any passerby traveling along the [sidewalk] in that location” and bore no relation to claimant’s employment… . Matter of Trotman v New York State Cts, 2014 NY Slip Op 03002, 3rd Dept 5-1-14

 

Company Exercised Sufficient Control Over “Agents” to Justify Finding They Were Employees

The Third Department determined that Unemployment Insurance Appeal Board properly found that claimants were employees of Just Energy New York Corporation and were thus entitled to unemployment insurance payments from the employer:

The record establishes that some indicia of control by Just Energy was mandated by law, such as requiring the agent to carry a photo identification badge bearing Just Energy’s name and logo, which, alone, is not sufficient to establish an employer-employee relationship. Nevertheless, “it can still be considered as part of the overall determination of control exercised over” the agents  … . Here, the Board was not convinced that all the indicia of control that Just Energy exercised over the agents was required by applicable state law. Specifically, Just Energy advertised for and interviewed the agents before hiring them. Just Energy provided the agent agreement and set the commission rate, both of which could be changed only by Just Energy. Just Energy provided the agent with the customer contracts. Contracts were required to be submitted on a weekly basis, approval by Just Energy was required before the contracts became effective, and Just Energy reviewed the contracts and returned them to the agent if any corrections needed to be made. Significantly, the agreement precluded the agents from working for any competitor during the term of the contract, as well as for three weeks following the termination of the agreement. Agents were required to attend two half-day orientation sessions, and received a training manual and code of conduct, which, if not adhered to, could result in termination of the contract. Just Energy would field questions from agents. Furthermore, any complaints were handled by Just Energy, which could investigate and maintain a file on an agent. Although there is evidence to support a contrary conclusion, we find substantial evidence to support the Board’s decision that the extent of the control exercised by Just Energy over the agents evinces an employer-employee relationship … . Matter of Cohen (Just Energy Mktg Corp—Commissioner of Labor), 2014 NY Slip Op 02984, 3rd Dept 5-1-14

 

Plaintiff Deemed to Be In the Foreseeable Zone of Danger Re: a Fireworks Display

The Third Department determined questions of fact precluded summary judgment in a case stemming from a malfunction of a fireworks display.  The malfunction caused a projectile to fly horizontally toward plaintiff who injured her arm in attempting to protect her daughter from the projectile. Supreme Court had dismissed the action as unforeseeable because the projectile travelled beyond the usual zone of danger.

To establish a prima facie case of negligence, the plaintiff is required to demonstrate that the defendant owed a duty to him or her, that the defendant breached that duty and that such breach was a proximate cause of the injuries sustained … . “The existence and scope of [the] alleged tortfeasor’s duty is, in the first instance, a legal question for determination by the court” — giving due consideration to “whether the relationship of the parties is such as to give rise to a duty of care, whether the plaintiff was within the zone of foreseeable harm and whether the accident was within the reasonably foreseeable risks” … . Once it is determined that a particular duty exists, whether — and the extent to which — that duty was breached and whether any such breach was a proximate cause of the plaintiff’s injuries generally are factual issues for the trier of fact to resolve … .

Here, defendants possessed, furnished, set up and ignited “a large supply of dangerous fireworks” … and, as such, were bound to exercise “a high degree of care” in order to prevent injury to others … . As to the foreseeability of a malfunction, one of defendants’ representatives testified at his examination before trial that, although he had not experienced a “blow by” prior to the Ticonderoga show, such an event was “an occurrence in the industry,” that “the chance for a malfunction [was] obviously there” and that malfunctions can be dangerous. As to whether plaintiff was in the zone of foreseeable harm, plaintiff estimated that she was sitting approximately 700 feet from where the shells were being launched (well outside the purported safety radius) and, as noted previously, acknowledged that the debris from the first malfunctioning shell did not reach her location. Plaintiff also testified, however, that the second shell exploded “[v]ery close” to where she was sitting, causing sparks to land around her group, and one of defendants’ representatives conceded that “hot flaming debris” from this second shell was propelled into the crowd of spectators. Further, when plaintiff returned to the ball field the following day, she observed scorch marks on the grass — presumably caused by flaming debris from the detonated shell — approximately 20 feet away from where she had been sitting. Moreover, the police report prepared in this matter makes reference to a witness who claimed that the second shell exploded “15-20 feet away from the civilians sitting by Burgoyne [R]oad.” Under these circumstances, we are satisfied that plaintiff was within the zone of foreseeable harm … . Accordingly, Supreme Court erred in finding that defendants owed no duty to plaintiff.  Evarts v Pyro Eng’g Inc, 2014 NY Slip Op 02996, 3rd Dept 5-1-14

 

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