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Insurance Company Could Not Rely On Plaintiff’s Personal Injury Action to Recoup What It Paid Out on a Related Property Damage Claim—Not a Valid Subrogation Vehicle

The Third Department determined an insurance company’s (Erie’s) attempt to rely on plaintiff’s personal injury complaint as the basis of its subrogation claim for property damage was properly dismissed.  The insured’s house exploded due to a gas leak.  Next to the insured’s house was a garage owned by the insured.  Erie paid $50,000 for damage to the garage.  The Erie attempted to rely on the insured’s personal injury action to recoup the money paid out for the property damage:

“Subrogation is an equitable doctrine that allows an insurer to stand in the shoes of its insured to seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse” … . To that end, an insurer seeking to enforce its right of subrogation generally has two options – “the insurer can bring an independent action against the wrongdoer in the name of its insured, the subrogor, or seek to intervene in an existing action between the insured and the wrongdoer” … . Neither path was pursued by Erie here; rather, Erie sought to use plaintiffs’ personal injury complaint “as a vehicle to assert [its] subrogation theory against . . . defendants.”As Supreme Court aptly observed, the principal flaw inErie’s methodology is that although plaintiffs’ complaint indeed recites that plaintiffs’ home exploded as a result of the natural gas leak, that pleading makes absolutely no reference to the property damage sustained to Pete’s Garage, nor does it “plead or otherwise spell out that damages are being sought for [the] property damage/loss” sustained thereto.  Although this Court has limited an insurer’s right to intervene in certain circumstances …, such circumstances are not present here.  Peterson v NYS Electric and Gas Corporation…, 516423, 3rd Dept 3-6-14

 

Failure to Make Timely Motion to Dismiss Based Upon Improper Service Constituted a Waiver of the Jurisdictional Defense

The Third Department determined defendant’s (O’Neill’s) jurisdictional defense based on improper service was waived by the failure to move for judgment on that ground within 60 days:

Plaintiff did not effectuate proper substituted service on O’Neill because she failed to mail a copy of the pleadings to O’Neill after the process server left a copy with the president of Hafner Valuation at O’Neill’s place of business (see CPLR 308 [2]). Despite the error in service and defendants having raised it in their answer,O’Neill waived his objection on this ground by failing to move for judgment on that basis within 60 days of serving the answer (see CPLR 3211 [e]…).  Sutton v Hafner Valuation Group Inc, 516779, 3rd Dept 3-6-14

 

Question of Fact Whether Driver’s Gesture to Turn Was Proximate Cause of Collision

The Third Department determined there was a question of fact about whether defendant driver’s (Slawiendski’s) gesture indicating a second defendant driver (Shaut) could make a left turn in front of him was the proximate cause of plaintiff’s collision with the turning car:

…[T]he duty of a driver to act reasonably in signaling to another driver that he or she will yield the rightof-way or that the other driver may safely proceed is owed not just to the driver being signaled, but also to other motorists and passengers … . Here, there is evidence that Slawienski acted unreasonably based upon his testimony that he failed to check for traffic in his rear or side view mirrors before signaling to Shaut.  However, a signaling driver is liable only when the gesture is a proximate cause of a subsequent collision – an inquiry that “depends on whether the recipient of the gesture relied on it as an indication that the path was safe and clear” … . Proximate cause is generally a factual issue for a jury to resolve … . Here, Shaut testified that he relied on Slawienski’s signal in deciding to make the turn and would not have done so if not for the gesture; further, Slawienski testified that Shaut did not stop as he crossed into plaintiff’s lane, suggesting that Shaut relied on the gesture to indicate that the lane was clear. However, Shaut testified that he knew that he was separately obliged to check the safety of plaintiff’s lane; he stated that he slowed or stopped his vehicle before entering plaintiff’s lane to look for oncoming traffic, but did not see the motorcycle until after the collision. This evidence neither establishes as a matter of law that Shaut fully relied upon Slawienski’s gesture nor that his decision to proceed into plaintiff’s lane was entirely independent … . Thus, there are factual issues for the jury regarding the degree of Shaut’s reliance on Slawienski’s gesture, whether Shaut independently checked the safety of plaintiff’s lane, and if he did, whether the check was a superseding act severing the causal link between the gesture and the collision… . Nasadoski v Shaut, 516374, 3rd Dept 3-6-14

 

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Criteria for Interpreting a Settlement Agreement Which Is Incorporated But Not Merged Into the Judgment of Divorce

In finding that a settlement agreement was not ambiguous and had been complied with by the mother, the Third Department explained the status of a separation agreement which is incorporated but not merged into a judgment of divorce:

A settlement agreement that is incorporated into, but not merged with, a judgment of divorce remains an independent contract, binding on the parties and subject to the rules of contract interpretation … . “Where the language of the agreement is clear, the court must determine the intent of the parties by examining the agreement itself” … .”Whether language is ambiguous is a matter of law to be determined by the court, and in rendering this determination a court may not add or excise terms, nor distort the meaning of those used” … . Matter of Drake v Drake, 516960, 3rd Dept 2-27-14

 

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Statements to Police Officer by Victim at the Scene Were “Nontestimonial” and Were Admissible as Excited Utterances

The Third Department determined a police officer’s testimony about what the assault victim, Stokes, said at the scene and a video of the officer’s encounter with the victim did not violate the defendant’s right to confront witnesses because the admitted statements were “nontestimonial” and “excited utterances.” Stokes had died before the trial:

The officer testified that Stokes said that she had been hit in the head with a bat, described her assailant, and said that he was in a nearby community center. The officer further testified that police then began looking for defendant. The video reveals that the officer encountered Stokes immediately upon arriving at the scene. She was bleeding profusely from her head and complaining of dizziness. The officer asked Stokes about her assailant’s location, description and name, where the attack had occurred, and whether there were other victims, promptly relaying her answers to other police officers and emergency medical personnel who were dispatched to locate and assist Moore and pursue defendant. After the first few minutes, the officer asked no further questions about the incident, concentrating instead on attempting to calm Stokes as she became increasingly agitated and apprehensive about, among other things, the fact that defendant had not been found. County Court correctly determined that the statements by Stokes were admissible as excited utterances … . Further, we find no constitutional violation. The video reveals that the officer’s primary purpose in questioning Stokes was “to enable the police to meet an ongoing emergency and apprehend the perpetrator, not to provide evidence for later prosecution,” and Crawford [541 US 36} does not preclude such nontestimonial statements…. People v Anderson, 105060, 3rd Dept 2-27-14

 

Mother’s Failure to Seek Medical Care for Child Coupled With Mother’s Mental Illness Supported Neglect Finding

The Third Department determined Family Court’s neglect finding was supported by evidence mother did not seek needed dental and medical care for her child and suffered from psychological problems which created an imminent risk of harm to the child:

To establish neglect, a petitioner must demonstrate, by a preponderance of the evidence, that the child’s physical, mental or emotional condition has been impaired or is in imminent danger of becoming impaired due to the failure of the parent or caretaker to exercise a minimum degree of care (see Family Ct Act §§ 1012 [f] [i]…). In determining the minimum degree of care, courts must objectively evaluate parental behavior in terms of whether “a reasonable and prudent parent [would] have so acted, or failed to act, under the circumstances then and there existing” … . On this basis, a failure to provide adequate medical care and/or follow through with necessary medical treatment constitutes neglect… . * * *”While evidence of mental illness, alone, does not support a finding of neglect, such evidence may be part of a neglect determination when the proof further demonstrates that a respondent’s condition creates an imminent risk of physical, mental or emotional harm to a child”… . Matter of Josephine BB …, 516132, 3rd Dept 2-27-14

 

Summary Judgment Finding Derivative Neglect Should Not Have Been Granted

The Third Department determined Family Court should not have granted summary judgment finding derivative neglect. Despite the recent finding of neglect of three other children (by consent), there were questions of fact about whether the conditions leading to the previous neglect determination were being addressed:

Family Court erred in granting summary judgment because triable issues of fact remain. Summary judgment is rarely used in Family Court proceedings, and is only appropriate when no triable issue of fact exists … . While proof that respondent previously neglected three other children was admissible on the issue of whether he neglected Karm’ny (see Family Ct Act § 1046 [a] [i]), such proof alone typically is not sufficient to establish derivative neglect … . “Derivative neglect is established where the evidence demonstrates an impairment of parental judgment to the point that it creates a substantial risk of harm for any child left in that parent’s care, and the prior neglect determination is sufficiently proximate in time to reasonably conclude that the problematic conditions continue to exist” … . The prior neglect determination here occurred less than three months before the instant petition was filed, sufficiently proximate so as to give rise to an inference that the conditions leading to such determination still existed … . Despite that inference, the testimony from the Family Ct Act § 1028 hearing raised questions of fact regarding whether respondent was appropriately dealing with those conditions… . Matter of Karm’ny…, 516250, 3rd Dept 2-27-14

 

Questions of Fact About Defamatory Meaning and Malice Re: Statements Concerning a Public Figure

The Third Department determined plaintiff, a public figure, had raised questions of fact about whether defamatory advertisements were done with malice:

Plaintiff was a public figure … and, as such, he must prove by clear and convincing evidence that defendant made a false statement with actual malice … . Distinguishing actionable fact from a protected expression of opinion is a question of law in which several factors are weighed, including whether the allegedly defamatory words have a precise meaning that is readily understood, whether the statement can be proven as true or false, and whether the context and surrounding circumstances would indicate that the comment is an opinion … . Further, summary judgment dismissing a defamation action may be avoided where the statement is a “‘mixed opinion’ implying a basis in undisclosed fact” or “‘pure opinion’ that accuses the plaintiff of engaging in criminal conduct”… .Since defendant’s statement includes both a strong inference that he knows undisclosed facts that support his assertion that plaintiff engaged in “numerous unscrupulous dealings” when he previously was Town Supervisor and includes an example that indicated possible unlawful abuse of that office, we agree with Supreme Court that the statements are sufficiently susceptible to a defamatory meaning to avoid summary judgment … . Moreover, defendant essentially acknowledged at his deposition that he had no basis for some of his accusations, and when this proof is viewed most favorably to the nonmovant, there is adequate evidence in the record to raise a triable issue of fact regarding whether defendant acted with actual malice… . Baker v Galusha, 517125, 3rd Dept 2-27-14

 

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Application to Vacate Default Judgment in Tax Foreclosure Proceeding Governed by Two-Year Statute of Limitations (Under the Facts, the One-Month Statute Did Not Apply)/Deed Purporting to Transfer Property from Religious Organization Invalid for Failure to Comply with the Religious Corporation Law/Notice of Tax Foreclosure Sufficient Even Though Actual Owner Not Notified

The Third Department determined petitioner’s application to set aside a tax foreclosure judgment was timely, but determined the application was properly denied because the notice of the foreclosure proceeding was adequate, even though petitioner, the actual owner of the property, was not notified. Petitioner, a religious organization, had transferred the property by deed to Forbes, a minister, in 1985. Forbes paid property taxes for several years, but when the payments ceased the county moved to foreclose, naming Forbes as the owner. It turned out that the deed to Forbes was invalid because the transfer did not comply with the Religious Corporation Law. The actual owner, petitioner, was not notified of the foreclosure proceedings. In affirming the judgment of foreclosure, the court discussed the appropriate statute of limitations under the facts, the property-transfer requirements of the Religious Corporation Law, and the tax-foreclosure notice requirements:

Initially, Supreme Court erred in determining that petitioner’s application was untimely. Unlike a motion to vacate a default judgment in a tax foreclosure proceeding, which “may not be brought later than one month after entry of the judgment” (RPTL 1131…), a person or entity challenging the validity of a deed transferred in connection with a tax foreclosure proceeding faces a two-year statute of limitations (see RPTL 1137…). As petitioner was not a party to the foreclosure proceeding and now seeks to set aside the judgment on the basis that respondent failed to provide notice to the rightful owner, the application was timely (see RPTL 1137).The 1985 deed to Forbes was invalid. A religious corporation shall not sell “any of its real property without applying for and obtaining leave of the court” pursuant to N-PCL 511 (Religious Corporations Law § 12 [1]…). Under N-PCL 511 (b), the Attorney General must be notified before any sale may be finalized. Petitioner did not seek court approval in 1985 or thereafter (see Religious Corporations Law § 12 [1], [9]), nor was the Attorney General notified of the transfer of the property. Where court approval is not obtained for the transfer of real property from a religious corporation, the conveyance is invalid … . Accordingly, the 1985 deed was invalid and Forbes should not have had any legal right to the property. * * *When determining the reasonableness of the taxing authority’s attempts to provide notice to interested parties, the court may take into account the conduct of such parties … Here, petitioner indicated that it intended to convey the property to Forbes – its then-minister – in 1985 and was only unsuccessful due to their lack of legal knowledge. Additionally, petitioner did not take any action against Forbes to regain title, despite the deed having been filed for nearly 27 years at the time the foreclosure proceeding was commenced. Under the circumstances, including respondent’s provision of proper statutory notice to the owner of record, respondent complied with due process and satisfied its obligation of searching for interested parties, and petitioner has not demonstrated that any additional steps or more exhaustive search was required here… . Matter of City of Hudson…, 516690, 3rd Dept 2-27-14

 

Court Has Common-Law “Interest of Justice” Authority to Modify Its Own Order and/or a Stipulation Entered Into During Litigation

In affirming Supreme Court’s modifying its own order in the interest of justice, the Third Department explained the common law power to do so.  The order concerned the terms of a stipulation entered into during litigation:

A court has the common-law authority to, in its discretion, grant relief from a judgment or order in the interest of justice, considering “‘the facts of the particular case, the equities affecting each party and others affected by the judgment or order, and the grounds for the requested relief'” … . Even if the stipulation had not merged into an order of the court, the court has the “discretionary power to relieve parties from the consequences of a stipulation effected during litigation” … . Here, Supreme Court correctly noted that it had the authority to modify its own order. Hodge v Development at Helderberg Meadows LLC, 517046, 3rd Dept 2-27-14

 

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