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3211(a)(8) Long Arm 302(a)(1)

CPLR R. 3211(a)(8)the court has not jurisdiction of the person of the defendant

CPLR § 302 Personal jurisdiction by acts of non-domiciliaries
(a) Acts which are the basis of jurisdiction
(1) transacts any business within the state or contracts anywhere to supply goods or services in the state

Andrews v Modell, 2011 NY Slip Op 03982 (App. Div., 2nd 2011)

Pursuant to CPLR 302(a)(1), "long-arm jurisdiction over a nondomiciliary exists where (i) a defendant transacted business within the state and (ii) the cause of action arose from that transaction of business" (Johnson v Ward, 4 NY3d 516, 519; see CPLR 302[a][1]). Here, the defendant did not conduct "sufficient purposeful activities in New York, which bore a substantial relationship to the subject matter of this action, so as to avail [himself] of the benefits and protections of New York's laws" (Transportation Ins. Co. v Simplicity, Inc., 61 AD3d 963, 964; see e.g. Spanierman Gallery, PSP v Love, 320 F Supp 2d 108, 111; PaineWebber Inc. v Westgate Group, Inc., 748 F Supp 115, 117, 119; Standard Wine & Liq. Co. v Bombay Spirits Co., 20 NY2d 13, 17; CK's Supermarket Ltd. v Peak Entertainment Holdings, Inc., 37 AD3d 348, 348; American Recreation Group v Woznicki, 87 AD2d 600, 601; J. E. T. Adv. Assoc. v Lawn King, 84 AD2d 744, 745; Pacific Concessions v Savard, 75 Misc 2d 219, 221; cf. Ulster Scientific v Guest Elchrom Scientific AG, 181 F Supp 2d 95, 102; Barclays Am./Bus. Credit v Boulware, 151 AD2d 330, 331). Accordingly, the Supreme Court lacked personal jurisdiction over the defendant and, thus, erred in denying that branch of the defendant's motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint for lack of personal jurisdiction (see Sanchez v Major, 289 AD2d 320, 321; Foley v Roche, 68 AD2d 558, 565).

Magwitch, L.L.C. v Pusser's Inc., 2011 NY Slip Op 03973 (App. Div., 1st 2011)

On May 9, 2002, plaintiff entered into an assignment agreement with Barclays Bank PLC, whereby plaintiff purchased $3,300,000 of the debt owed by Pusser's Ltd. to Barclays in exchange for $1,500,000. Plaintiff was assigned the note and all security held by Barclays in Pusser's Ltd.'s assets. The agreement was governed by BVI law, and was signed by all parties in the BVI except plaintiff, which executed the agreement in New Jersey. The assignment of the security agreements, which provided for the collateral in the United States that secured the note, was executed by defendant Charles S. Tobias in the BVI and was governed by BVI law.

Following Pusser's Ltd.'s default on the note, plaintiff commenced an action in New Jersey federal court to recover on the note against the same defendants sued herein, namely, Pusser's Ltd., two entities affiliated with Pusser's Ltd. (one incorporated in Florida and the other in the BVI), and Tobias, a resident of the BVI who controls the corporate defendants. After the New Jersey action was dismissed for lack of personal jurisdiction, plaintiff commenced this action in Supreme Court, New York County. Defendants timely removed the action to federal court, based on the alleged existence of federal diversity jurisdiction; the removal was effected before the expiration of defendants' time to respond to the complaint by answer or motion. Plaintiff moved to remand the action to New York Supreme Court for lack of diversity, and defendants moved to dismiss for lack of personal jurisdiction. The federal court granted plaintiff's motion and directed that the entire matter, including defendants' pending motion to dismiss, be remanded to state court. Upon remand, Supreme Court granted the motion to dismiss. We affirm. 

Contrary to the argument of plaintiff and the dissent, defendants did not waive any defenses based on lack of personal jurisdiction by removing the action to federal court. We agree with the view of the Third Department, expressed in a decision issued after this appeal was argued, that Farmer v National Life Assn. of Hartford, Conn. (138 NY 265 [1893]), relied on by plaintiff and the dissent, is no longer binding because it was "based on the outdated distinction between special and general appearances . . . and also on the removal procedure applicable at that time, long since superseded by the CPLR, the Federal Rules of Civil Procedure and 28 USC § 1446" (Benifits by Design Corp. v Contractor Mgt. Servs., LLC, 75 AD3d 826, 828 [2010]; see also Siegel, NY Prac § 109 [4th ed] [under prior law "(a) special appearance was used by the defendant for the sole purpose of objecting to the court's jurisdiction of his person," but "(t)he CPLR abolished the special' appearance, and since the general' appearance was used only to differentiate it from the special one, both categories have disappeared under the CPLR"]). "Moreover, though not controlling, we note that removal does not waive the defense of lack of personal jurisdiction in federal court" (Benifits by Design, 75 AD3d at 828 [citations omitted]). While this Court rejected a similar argument against Farmer's continuing viability in Quinn v Booth Mem. Hosp. (239 AD2d 266 [1997]), we find the reasoning of the Third Department in the more recent Benifits by Design case persuasive and, given the desirability of uniform construction of the CPLR throughout the state, follow the latter decision.

The motion court properly dismissed the action for lack of personal jurisdiction. Although CPLR 302(a)(1) permits a court to exercise personal jurisdiction over any non-domiciliary who, in person or through an agent, "transacts any business within the state or contracts anywhere to supply goods or services in the state," defendants' actions here did not amount to purposeful activity by which they availed themselves of the privilege of conducting business in New York. The acts of sending payments to a New York bank account and correspondence to a New York address, and engaging in telephone discussions with plaintiff's principal, who also was defendants' legal advisor while he was in New York, were not a sufficient basis to satisfy the statutory requirements (see Kimco Exch. Place Corp. v Thomas Benz, Inc., 34 AD3d 433, 434 [2006], lv denied 9 NY3d 803 [2007]).

The court also properly found that it could not exercise personal jurisdiction over defendants pursuant to CPLR 302(a)(3). That section provides for jurisdiction over a defendant who (1) commits a tortious act outside New York (2) that causes injury within New York (3) where the defendant either (i) does or solicits business, or engages in any other course of conduct, or derives substantial revenue from activities in New York, or (ii) expects or should expect that its tortious act will have consequences in New York, and derives substantial revenue from interstate or international commerce (see CPLR 302[a][3]; see generally Cooperstein v Pan-Oceanic Mar., 124 AD2d 632, 633 [1986], lv denied 69 NY2d 611 [1987]). The determination of whether a tortious act committed outside New York causes injury inside the state is governed by the "situs-of-injury" test, requiring determination of the location of the original event that caused the injury (see Bank Brussels Lambert v Fiddler Gonzalez & Rodriguez, 171 F3d 779, 791 [2d Cir 1999]; see also Kramer v Hotel Los Monteros S.A., 57 AD2d 756 [1977], lv denied 43 NY2d 649 [1978]).

Here, the original event that caused the injury was not, as plaintiff maintains, the disbursement of funds from New York to purchase the note from Barclays, since there would not have been any injury if payment had been made when due. Rather, the injury was caused by misrepresentations about the transfer of assets and the transfer and diversion of funds, which occurred in the BVI and locations other than New York, and resulted in the unavailability of funds to pay plaintiff the amounts due on the note. The second part of the test also cannot be satisfied, since defendants do not either: regularly do or solicit business, or engage in any other persistent course of conduct, or derive substantial revenue for goods or services used or rendered in New York; or reasonably expect the alleged tortious act to have consequences in the state, and derive substantial revenue from interstate or international commerce (see CPLR 302[a][3]).

All concur except McGuire, J. who dissents

in a memorandum as follows:
McGUIRE, J. (dissenting)

This appeal is controlled by Farmer v National Life Assn. of Hartford Conn. (138 NY 265 [1893]) and our decision in Quinn v Booth Mem. Hosp. (239 AD2d 266 [1997]). In Farmer, the plaintiff commenced an action in state Supreme Court, the defendant removed it to federal court, and the federal court remanded it to Supreme Court. The defendant then moved to dismiss on the grounds that it had not been properly served and that the admission of service was defective. On the defendant's appeal to the Court of Appeals from the denial of its motion, the Court held that the defendant had waived this objection when it removed the action to federal court:

"It is unnecessary to consider what force, if any, the objections to the mode of service of process in this case and to the sufficiency of the admission of service might have had, if they had been seasonably made, for we think it must be held that the defendant necessarily submitted itself to the jurisdiction of the state court and waived any defect there may have been in the procedure to acquire jurisdiction of its person, by the proceeding which it initiated and consummated for the removal of the action into the United States Circuit Court. There could be no transfer of the cause from the state to the federal jurisdiction, unless there was an action pending. The federal statute required it, and the petition must so allege, and must also aver that the petitioner is a party to the action . . . [The rule recognizing the right of a defendant to challenge service after certain special appearances] has no application where the defendant becomes an actor in the suit and institutes a proceeding which has for its basis the existence of an action to which he must be a party. He thereby submits himself to the jurisdiction of the court" (138 NY at 269-70).

As is evident, the Court concluded both that the act of removing the case necessarily entailed a concession by the defendant that jurisdiction of its person had been properly acquired by the state court, and that the concession was conclusive. The Court reiterated this rationale in the course of discussing with approval a federal case in which, following the removal of an action commenced in state court, the court denied the defendant's motion to dismiss on the ground of defective service, reasoning that, "[b]y bringing it here, he voluntarily treats it as properly commenced and actually pending in the state court, and he cannot, after it is entered here, treat it otherwise" (id. at 271 [quoting Sayles v North Western Ins. Co., 2 Curtis C.C. 212 [1856]). The Court stated:

"The principle thus formulated, is, we think, sound, reasonable and just. It cannot be tolerated that a defendant shall question the jurisdiction of a state tribunal over his person, after he has effected a transfer of the cause to another court, by placing upon its records an affirmation under oath of the pendency of the action, and of his relation to it as a party, and obtained the approval of the court of the bond required as a condition of its removal. If the cause is subsequently remanded, he cannot be heard to say that his own proceedings have in effect been coram non judice" (id. at 271-272).

We followed Farmer in Quinn, holding that the defendants' "filing of a removal petition to Federal court effected a general appearance precluding their objections to defective service under CPLR 308(1) or (2) after the case was remanded to State court" (Quinn, 239 AD2d at 266). Moreover, we rejected the "suggest[ion] that Farmer is no longer valid" (id.).

Defendants argue that Farmer and Quinn are not controlling because "both cases involv[e] a challenge to [personal jurisdiction based on] service of process only," not a "challenge to personal jurisdiction under the long-arm statute or the due process clause." They cite no authority in support of this effort to create different classes of challenges to personal jurisdiction. Nor do they explain why an objection to personal jurisdiction based on improper (or even a complete lack of) service of process is of lesser moment than or otherwise stands on a different footing from objections to personal jurisdiction based on either the inapplicability of a long-arm statute or the want of sufficient contacts to satisfy due process ^[FN1]. Aside from these difficulties with defendants' argument, nothing in Farmer suggests that its waiver analysis turned on the specific reason personal jurisdiction allegedly was lacking. The insurmountable difficulty, however, flows from the rationale of Farmer —- removal to federal court entails a concession that personal jurisdiction properly was obtained by the state court —- and our obligation to accept its validity. That rationale applies with the same force to all objections to personal jurisdiction, be they based on the inapplicability of a long-arm statute, the insufficiency of contacts or improper service.

Defendants also argue that: (1) "a combined reading of CPLR 320 . . . and 3211 . . . establishes that removal does not constitute an appearance which . . . waives jurisdictional objections" and (2) "[c]onsistent with [federal precedents], the Federal Rules of Civil Procedure plainly allow objection to personal jurisdiction once a case is removed from state to federal court." The latter argument was raised unsuccessfully in Quinn (Reply Brief at 7, Quinn v Booth Mem. Hosp., 239 AD2d 266 [1997], supra). Moreover, both arguments apply with equal force to the waiver analysis in Farmer. Whatever their force, acceptance of either of these arguments would require us either to refuse to follow Farmer or to limit its holding to its particular facts without identifying a basis for doing so that does not equally undermine that holding.

At least implicitly, the majority rejects defendants' attempt to distinguish Farmer and Quinn. The majority, however, chooses to follow the recent decision of a panel of the Third Department in Benifits by Design Corp. v Contractor Mgt. Servs., LLC (75 AD3d 826 [2010]), because its reasoning is persuasive and a "uniform construction of the CPLR throughout the state" is desirable. The rationale of Farmer certainly is open to question, its inconsistency with federal law is clear, and it arguably unduly burdens the exercise of a federal right. But it has not been overruled by the Court of Appeals, and Quinn and Benifits by Design come to different conclusions on the question of whether Farmer was superseded by the CPLR. Moreover, defendants do not contend that Farmer is no longer good law but seek only to distinguish it, and thus the majority decides this appeal on a ground not raised by defendants (see Misicki v Caradonna, 12 NY3d 511, 519 [2009] ["to decide this appeal on a distinct ground that we winkled out wholly on our own would pose an obvious problem of fair play"]). For these reasons, I would follow Farmer despite my reservations about its rationale.

Accordingly, I would reverse and deny defendant's motion to dismiss for lack of personal jurisdiction.

66666

Evidence

Saccone v Gross, 2011 NY Slip Op 04444 (App. Div., 2nd 2011)

The plaintiffs' contention that the verdict was contrary to the weight of the evidence also is without merit. A jury verdict should not be set aside as contrary to the weight of the evidence unless the jury could not have reached the verdict on any fair interpretation of the evidence (see Mancusi v Setzen, 73 AD3d 992, 993; Nicastro v Park, 113 AD2d 129, 134). " The jury's resolution of conflicting expert testimony is entitled to great weight, as it is the jury that had the opportunity to observe and hear the experts'" (Mancusi v Setzen, 73 AD3d at 993 quoting Speciale v Achari, 29 AD3d 674, 675). " Where, as here, conflicting expert testimony is presented, the jury is entitled to accept one expert's opinion and reject that of another expert'" (Morales v Interfaith Med. Ctr., 71 AD3d 648, 650 quoting Ross v Mandeville, 45 AD3d 755, 757; see Segal v City of New York, 66 AD3d 865, 867). It is within the province of the jury to determine an expert's credibility (see Monroy v Glavas, 57 AD3d 631, 632; Cohen v Kasofsky, 55 AD3d 859, 860). Thus, since the jury was entitled to accept the opinion of the respondents' experts, there is no basis to disturb its determination.  

The plaintiff was properly precluded from offering the Physicians' Desk Reference (hereinafter the PDR) into evidence because the proffered evidence constituted inadmissible hearsay (see Spensieri v Lasky, 94 NY2d 231, 234; Hinlicky v Dreyfuss, 6 NY3d 636; Winant v Carras, 208 AD2d 618, 620).

Azevedo v Platform Taxi Serv., Inc., 2011 NY Slip Op 03985 (App. Div., 2nd 2011)

The defendants failed to meet their prima facie burden of showing that the injured plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their motion, the defendants submitted certain photographs depicting the injured plaintiff's alleged injuries. However, the photographs were not in admissible form (cf. Lewis v General Elec. Co., 145 AD2d 728, 729). Without the photographs, the defendants' other submissions in support of their motion for summary judgment were insufficient to establish, prima facie, the defendants' entitlement to judgment as a matter of law (see Rulison v Zanella, 119 AD2d 957, 957-958; Prieston v Massaro, 107 AD2d 742, 743; Savage v Delacruz, 100 AD2d 707, 707-708; see also Slater v Town of Rochester, 31 AD2d 590; cf. Sidibe v Cordero, 79 AD3d 536, 536; Baker v Thorpe, 43 AD3d 535, 537; Hutchinson v Beth Cab Corp., 207 AD2d 283, 283-284; Edwards v DeHaven, 155 AD2d 757, 758; Koppelmann v Lepler, 135 AD2d 507).

Since the defendants failed to meet their prima facie burden, it is unnecessary to consider whether the plaintiffs' papers in opposition to the defendants' motion were sufficient to raise a triable issue of fact (see Coscia v 938 Trading Corp., 283 AD2d 538).

Guccione v Guccione, 2011 NY Slip Op 03997 (App. Div., 2nd 2011)

Moreover, the nonparty purchaser of the subject property does have an interest in the property as contemplated by RPAPL 1501(4) and, in this regard, is a necessary party to this action, since his or her interest in the property would be affected by any judgment rendered herein (see RPAPL 1511[2]; CPLR 1001[a]; Censi v Cove Landings, Inc., 65 AD3d 1066, 1067-68; Migliore v Manzo, 28 AD3d 620, 621; Weinstein-Korn-Miller, NY Civ Prac ¶ 1001.03 [2d ed]; see also CPLR 1003). This action may be maintained if the purchaser is joined as a party plaintiff, the plaintiff demonstrates that the purchaser assigned his or her cause of action to the plaintiff (see Jean v Joseph, 41 AD3d 657, 658; Cardtronics, LP v St. Nicholas Beverage Discount Ctr., Inc., 8 AD3d 419, 420), or the plaintiff is otherwise authorized to seek cancellation and discharge of the mortgage on the purchaser's behalf pursuant to CPLR 1004 (see Cardo v Board of Mgrs., Jefferson Vil. Condo 3, 67 AD3d 945, 946; Spectra Audio Research, Inc. v Chon, 62 AD3d 561, 564). The plaintiff, however, failed to make such a showing on her motion and, thus, the Supreme Court properly determined that the plaintiff was not entitled at this juncture to summary judgment under RPAPL 1501(4). 

To the extent the plaintiff sought declaratory relief based upon RPAPL 1921, the plaintiff demonstrated that she has an "interest in the mortgage or the debt or obligation secured thereby" such that she may maintain a cause of action (RPAPL 1921[2]). However, the plaintiff failed to establish, prima facie, that the mortgage was satisfied pursuant to RPAPL 1921, since her evidence consisted of statements concerning a transaction or communications with the deceased Mr. Guccione (see CPLR 4519), or was belatedly submitted in her reply brief and not addressed by her adversary (see Batista v Santiago, 25 AD3d 326; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 206; Matter of Harleysville Ins. Co. v Rosario, 17 AD3d 677, 678).

To the extent the plaintiff sought declaratory relief based upon RPAPL 1931, the plaintiff demonstrated that she is the mortgagor of the subject property, enabling her to proceed under that section (see RPAPL 1931[1]). However, the plaintiff failed to show that the mortgage was "ancient" (see RPAPL 1931[5]; Matter of Grasso [Trans-American Mgt. Corp.-Ciembroniewicz], 168 AD2d 713; Matter of Schwartz, 21 Misc 2d 845; Matter of Addesso, 69 NYS2d 702). Thus, the Supreme Court properly determined that the plaintiff was not entitled to summary judgment declaring the mortgage invalid and directing its cancellation under RPAPL 1921 or 1931.

Merriman v Intergrated Bldg. Controls, Inc., 2011 NY Slip Op 04013 (App. Div., 2nd 2011)

The Supreme Court, however, should have also denied the plaintiff's motion for summary judgment on the issue of liability on the cause of action alleging a violation of Labor Law § 240(1). In response to the plaintiff's prima facie showing of his entitlement to judgment as a matter of law, the defendants submitted, inter alia, a report prepared by a neurologist who examined the plaintiff approximately six weeks after the accident. In recounting the circumstances of the accident, the report recited that, while descending the ladder on which he had been working, the plaintiff "missed a step." If credited, this statement, which is inconsistent with the account set forth in the plaintiff's affidavit in support of his motion for summary judgment, would support a finding that the plaintiff's alleged negligence was the sole proximate cause of his injuries (see Blake v Neighborhood Hous. Servs. of N.Y. City, 1 NY3d 280).

The statement in the medical report was not germane to the diagnosis or treatment of the plaintiff and, therefore, at trial, it would not be admissible for its truth under the business records exception to the hearsay rule (see CPLR 4518; Williams v Alexander, 309 NY 283). Nonetheless, the requirement that evidentiary proof be submitted in admissible form is " more flexible'" when applied to a party opposing a motion for summary judgment than it is when applied to the moving party (Zuckerman v City of New York, 49 NY2d 557, 562, quoting Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1068). Accordingly, "proof which might be inadmissible at trial may, nevertheless, be considered in opposition to a motion for summary judgment" (Zuilkowski v Sentry Ins., 114 AD2d 453, 454; see Phillips v Joseph Kantor & Co., 31 NY2d 307), particularly when the inadmissible evidence does not provide the sole basis for the denial of summary judgment (see Phillips v Kantor & Co., 31 NY2d at 310, 315). Such proof is permissible as long as the nonmoving party is able to " demonstrate acceptable excuse for his failure to meet the strict requirement of tender in admissible form'" (Zuckerman v City of New York, 49 NY2d at 562, quoting Friends of Animals v Associated Fur Mfrs., 46 NY2d at 1068; see Moffett v Gerardi, 75 AD3d 496, 498).

Here, the defendants demonstrated an acceptable excuse for failing to elicit admissible evidence from the plaintiff's treating neurologist at this stage of the proceedings. Moreover, even without considering the inadmissible evidence in the neurologist's report, the plaintiff's equivocal responses at his deposition regarding the possibility that he "missed a step" while descending the ladder, as well as the defendants' potential ability to present the evidence contained in the medical report in admissible form at trial (see Williams v Alexander, 309 NY at 285 n), establish the arguable existence of a triable issue of fact (see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404). Accordingly, the defendants' submissions were sufficient to raise a triable issue of fact, requiring the denial of the plaintiff's motion.

Devito v Feliciano, 2011 NY Slip Op 04366 (App. DIv., 1st 2011)

The trial court did not err in excluding certain medical records of plaintiff, as they were not properly certified and never given to defendants for inspection prior to trial (see CPLR 3122-a). Nor did the trial court err in declining to provide a missing witness charge since plaintiff did not satisfy the elements that are a prerequisite for receiving the charge (see Getlin v St. Vincent's Hosp. & Med. Ctr. of N.Y., 117 AD2d 707, 708-709 [1986]; NY PJI 1:75, Comment, Caveat 2).

Jiminian v St. Barnabas Hosp., 2011 NY Slip Op 04371 (App. DIv., 1st 2011)

The motion court correctly determined that following defendants' showing of entitlement to judgment as a matter of law, plaintiff demonstrated the existence of triable issues of fact precluding dismissal of the action as against defendants through plaintiff's own testimony and the report submitted by his expert. Plaintiff's testimony concerning his wife's complaints of dizziness and shortness of breath are res gestae, admissible as simple expressions of suffering by the injured party, who is no longer available by reason of her death, which occurred less than 12 hours following her complaints (see 58 NY Jur 2d, Evidence and Witnesses § 338; Tromblee v North Am. Acc. Ins. Co., 173 App Div 174, 176 [1916], affd 226 NY 615 [1919]). Accordingly, triable issues exist as to whether defendant hospital departed from good and accepted medical practice in failing to properly investigate and address the decedent's complaints.

The report of plaintiff's expert also conflicts with the conclusions of Leong's expert on the issue of whether the decedent was at an increased risk for a pulmonary embolism secondary to deep vein thrombosis, whether Leong failed to properly recognize and treat that risk, and whether said failure was the proximate cause of death (see e.g. Bradley v Soundview Healthcenter, 4 AD3d 194 [2004]).

IRB-Brasil Resseguros S.A. v Portobello Intl. Ltd., 2011 NY Slip Op 04306 (App. DIv., 1st 2011)

IRB met its prima facie burden of establishing entitlement to summary judgment with evidence that defendant Portobello International Limited issued the Global Note, defendant guarantors guaranteed it, IRB purchased it and Portobello defaulted (see IRB-Brazil Resseguros, S.A. v Inepar Investments, S.A., __ AD3d __, 2011 NY Slip Op 03275; IRB-Brasil Resseguros S.A. v Eldorado Trading Corp. Ltd., 68 AD3d 576, 577 [2009]; Eastbank v Phoenix Garden Rest., 216 AD2d 152 [1995], lv denied 86 NY2d 711 [1995]).

In opposition, defendants fail to raise issues of fact regarding the ownership or location of the Global Note. The record shows that defendants accepted the initial loan from IRB, paid interest on the Global Note for a number of years and, at the time of their default, negotiated new terms with IRB, implicitly admitting that IRB was the owner of the note. Moreover, defendants sued IRB — in its capacity as owner of the Global Note — in a separate action. Defendants cannot now be heard to object to the ownership which they embraced when it suited them (see RPI Professional Alternatives, Inc. v Citigroup Global Mkts. Inc., 61 AD3d 618, 619 [2009]).

Equally unavailing are defendants' arguments concerning plaintiff's inability to produce the physical note where, as here, defendants have waived presentment numerous times. These waivers excuse any requirement that the instrument sued upon be presented in connection with subsequent litigation against Portobello as issuers, or against the guarantors (see Banco Nacional de Mexico v Ecoban Fin., 276 AD2d 284 [2000]).

Defendants have failed to show they discharged their debt. Defendants' primary argument is that the JP Morgan document establishes payment. This document, however, which defendants never authenticated through anyone at JP Morgan, and which is offered for the truth of the matter asserted, is impermissible hearsay and does not fall within an exception to the hearsay rule (see e.g. Zuluaga v P.P.C. Constr., LLC, 45 AD3d 479, 480 [2007] [document not "so patently trustworthy as to be self-authenticating"]). Accordingly, it is insufficient to defeat the summary judgment motion (see Rivera v GT Acquisition 1 Corp., 72 AD3d 525, 526 [2010]; Van Dina v City of New York, 292 AD2d 267, 268 [2002]).

Defendants seek to avoid summary judgment by claiming a need for further discovery. Defendants did not demonstrate, however, that there was a likelihood that there is relevant evidence in IRB's exclusive knowledge, that further discovery might reveal the existence of such evidence, or that they made a reasonable attempt, prior to the motion, to pursue other means of discovering the information now claimed to be necessary (see 2386 Creston Ave. Realty, LLC v M-P-M Mgt. Corp., 58 AD3d 158, 162-163 [2008], lv denied 11 NY3d 716 [2009]; Voluto Ventures, LLC v Jenkens & Gilchrist Parker Chapin LLP, 44 AD3d 557 [2007]).

The court properly denied defendants' motion for leave to amend their answers because the proposed counterclaims sounding in fraud plainly lacked merit (see R & R Capital LLC v Merritt, 78 AD3d 533 [2010]).

The court properly applied the statutory interest rate to plaintiff's award of post-judgment interest because, although the terms of the Global Note clearly contemplate payment of interest through satisfaction of the principal, it does not "clearly and unequivocally" specify a post-judgment rate. Accordingly, the motion court correctly "merged" the contract into the judgment and applied the statutory interest rate (Marine Mgt. v Seco Mgt., 176 AD2d 252, 253 [1991], affd 80 NY2d 886 [1992]).

 

Attorney Fees

Insurance Co. of Greater N.Y. v Clermont Armory, LLC, 2011 NY Slip Op 04421 (App. Div., 2nd 2011)

However, the Supreme Court erred in granting that branch of Clermont's motion which was for an award of an attorney's fee. A prevailing party may not recover an attorney's fee from the losing party except where authorized by statute, agreement, or court rule (see U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d 592, 597-598, citing Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21-22). Although an insured who is "cast in a defensive posture by the legal steps an insurer takes in an effort to free itself from its policy obligations," and who prevails on the merits, may recover an attorney's fee incurred in defending against the insurer's action (U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d at 598, quoting Mighty Midgets v Centennial Ins. Co., 47 NY2d at 21), recovery is only possible where the insurer has a duty to defend the insured. Here, the policy covered only property damage and was not a liability policy, but rather a casualty policy. Consequently, ICGNY had no duty to defend Clermont, and its commencement of this action did not put Clermont in a "defensive posture" within the meaning of Mighty Midgets v Centennial Ins. Co. (47 NY2d at 21) (cf. Matter of Aetna Cas. & Sur. Co. v Dawson, 84 AD2d 708, 709, affd for reasons stated below 56 NY2d 1022).

Matakov v Kel-Tech Constr. Inc., 2011 NY Slip Op 04511 (App. Div., 1st 2011)

The subject motion seeks attorneys' fees incurred in connection with the settlement of two related class actions. Plaintiffs brought the actions alleging, inter alia, breach of contract and violation of the New York Labor Law, to obtain prevailing wages for work they had performed at New York City public schools pursuant to public contracts. Following more than five years of litigation, the parties entered into a Stipulation of Class Action Settlement (Stipulation), pursuant to which defendant-appellant was to pay the difference between the wages paid to class members and prevailing wages, provided that the total settlement amount not exceed $600,000. Also pursuant to the Stipulation, defendant agreed to pay class counsel's attorneys' fees, provided such fees were reasonable and did not exceed $200,000. Pursuant to procedures outlined in the Stipulation, plaintiffs' total recovery was determined to be $116,648.66.

The court properly applied the lodestar method to calculate plaintiffs' class counsel's fee rather than the percentage method (see Nager v Teachers' Retirement Sys. of City of N.Y., 57 AD3d 389 [2008], lv denied 13 NY3d 702 [2009]; Flemming v Barnwell Nursing Home & Health Facilities, Inc., 56 AD3d 162, 165-166 [2008], affd 15 NY3d 375 [2010]). However, the record demonstrates that class counsel failed to establish through competent evidence that its fees were consistent with "customary fee[s] charged for similar services by lawyers in the community with like experience and of comparable reputation," or were reasonable (Friedman v Miale, 69 AD3d 789, 791-792 [2010], lv denied 16 NY3d 706 [2011] [internal quotation marks and citation omitted]). Class counsel also failed to submit evidence reflecting the training, background, experience and skill of some individual attorneys who performed work in connection with the class actions (see Matter of Rahmey v Blum, 95 AD2d 294, 302 [1983]). The record reflects that  a great deal of expense on all sides could have been avoided had plaintiffs' claims been appropriately investigated before a lawsuit was filed; concomitantly the number of hours expended was apparently excessive. In our view, the court should have undertaken an analysis as to whether all 1,256 hours expended by class counsel's attorneys, and the 433 hours worked by its paralegals, were useful and reasonable (see Lunday v City of Albany, 42 F3d 131, 134 [2d Cir 1994]).

Notwithstanding the motion court's observations that the litigation was "contentious," "heated" and "hard-fought," in light of the fact that the fee far exceeded plaintiffs' recovery, we remand the matter to Supreme Court for an evidentiary hearing to determine an appropriate amount of reasonable attorneys' fees
to be awarded (see Friar v Vanguard Holding Corp., 125 AD2d 444, 447 [1986]).

All concur except Mazzarelli, J.P. and Manzanet-Daniels, J. who dissent in part in a memorandum by Mazzarelli, J.P. as follows:

MAZZARELLI, J.P. (dissenting in part)

I agree with the majority that the motion court properly applied the lodestar method in ascertaining the appropriate fee due to class counsel. However, the record reflects that the court, which was intimately familiar with the contentious nature of a litigation that was aggressively litigated by both sides, gave appropriate consideration to each of the lodestar factors, including the quality of class counsel's representation. Accordingly, a hearing on the application would be a poor allocation of judicial resources.

It is well established that a trial court's fee award in a class action is entitled to broad deference, "and will not be overturned absent an abuse of discretion, such as a mistake of law or a clearly erroneous factual finding" (Goldberger v Integrated Resources, Inc., 209 F3d 43, 47 [2d Cir 2000])^[FN1]. This is because the trial court "is intimately familiar with the nuances of [a] case, [and] is in a far better position to [rule on a fee application] than is an appellate court, which must work
from a cold record" (In re Bolar Pharm. Co., Inc., Sec. Litig., 966 F2d 731, 732 [2d Cir 1992]).

Disregarding these principles, the majority would remand this matter, and direct the court to engage in "an analysis as to whether all 1,256 hours expended by class counsel's attorneys, and the 433 hours worked by its paralegals, were useful and reasonable." This, the majority maintains, is necessary because the court did not account for expenses which "could have been avoided had plaintiffs' claims been appropriately investigated before a lawsuit was filed." However, the majority ignores several facts. First, the court has already analyzed the six lodestar factors, one of which is the quality of the representation provided. In addition, as the court expressly noted, the fee awarded to class counsel is 49% less than the amount actually billed. This reduction, it is reasonable to assume, more than embraces any work related to plaintiff's unsuccessful attempt to have subclasses certified in connection with certain projects.

Further, it is unfair for the majority to characterize the amount of fees billed as primarily owing to strategic choices made by class counsel. After all, defendants also litigated the matter aggressively, making strategic choices which drove up class counsel's fees. In retrospect, some of these choices could be seen as ill-advised, such as prosecuting two unsuccessful appeals to this Court.

The case which the majority relies on in suggesting that a more detailed analysis of the billings is necessary, Lunday v City of Albany (42 F3d 131, 134 [2d Cir. 1994]), is readily distinguishable. In that case, a district judge presided over the merits of the litigation, and the fee application was decided by a magistrate judge. Here, of course the same court that oversaw the a matter, which it described as "hard-fought," considered the fee request. Thus, it was in a far better position to assess an appropriate fee.

Furthermore, Lunday was decided under a unique set of facts. As in this case, the defendants raised questions about the reasonableness of amount of time expended by counsel, and the Second Circuit properly stated that there was no requirement "that the court set forth item-by-item findings concerning what may be countless objections to individual billing items" (id.). Indeed, the court observed that, while the bills submitted by the plaintiff's counsel were "in certain respects eyebrow-raising . . . we cannot conclude that the review conducted by the Magistrate Judge was erroneous, or lacking in care" (id.). However, the sole reason why the court remanded the fee application in Lunday was because of the District Court's comment that to engage in a detailed review of the submitted billing would be "to demean counsel's stature as officers of the court (id.)." The Second Circuit, while noting that none of the objections raised by the defendants appeared to be meritorious, remanded to ensure that the magistrate judge's comment did not reflect a level of undue deference afforded the fee request.

Here, there is no indication that the motion court may have improperly abdicated its obligation to review the fee application. Accordingly, it is appropriate to defer to the court's determination that the fees awarded were commensurate with the legal work, in light of all of the circumstances.

I further disagree with the majority that class counsel failed to establish that its fees were consistent with "customary fees charged for similar services by lawyers in the community with like experience and of comparable reputation." The supervising partner swore in his affirmation in support of the application that his hourly rate of $375, reduced to $350 for this matter, is consistent "with the hourly rates charged by attorneys of reasonably comparable skill, experience and reputation in New York." In Friedman v Miale (69 AD3d 789 [2010], lv denied 16 NY3d 706 [2011]), the case cited by the majority, the record was "devoid" of such proof (69 AD3d at 791). It is noted that, in opposing the fee application, defendant did not question the reasonableness of class counsel's hourly rates, raising that objection for the first time on this appeal. Nor, did defendant challenge below the billings by the firm's associates on the basis that they failed to establish their "training, background, experience and skill." In any event, the supervising partner's description of the associates' years of experience as attorneys and the fact that they had assisted him in "numerous" wage-and-hour law cases were certainly sufficient bases for the court to weigh the reasonableness of the relevant portions of the fee request. 

Based on the foregoing, it is clear that the motion court acted within its broad discretion. Accordingly, I would leave undisturbed the court's award of fees to plaintiffs.

 

CPLR R. 3212 and such

CPLR R. 3212 Motion for summary judgment

Pleadings required

Fiber Consultants, Inc. v Fiber Optek Interconnect Corp., 2011 NY Slip Op 04412 (App. Div., 2nd 2011)

The Supreme Court properly denied that branch of the cross motion of the defendant Michael S. Pascazi which was pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against him. "A court cannot dismiss an action for neglect to prosecute unless: at least one year has elapsed since joinder of issue; defendant has served on plaintiff a written demand to serve and file a note of issue within 90 days; and plaintiff has failed to serve and file a note of issue within the 90-day period" (Baczkowski v Collins Constr. Co., 89 NY2d 499, 503). Here, Pascazi's 90-day demand was served prior to joinder of issue on the third amended complaint and, thus, was premature.

However, the Supreme Court erred in granting that branch of the plaintiff's motion which was for summary judgment on its eighth cause of action for an award of an attorney's fee insofar as asserted against Pascazi to the extent of finding that the plaintiff was entitled to attorney's fees pursuant to  Debtor and Creditor Law § 276-a and directing a hearing to determine the amount of such fees due the plaintiff. Denial of summary judgment was required since the plaintiff failed to include a copy of the pleadings in support of its motion, as required by CPLR 3212(b) (see Matter of Fraternal Order of Eagles v Board of Assessors, 73 AD3d 770, 771; Zellner v Tarnell, 54 AD3d 329, 329-330; Sendor v Chervin, 51 AD3d 1003; Thompson v Foreign Cars Ctr., Inc., 40 AD3d 965; Matsyuk v Konkalipos, 35 AD3d 675; Sted Tenants Owners Corp. v Chumpitaz, 5 AD3d 663). Under the circumstances of this case, the Supreme Court should have denied the motion without prejudice to renewal upon proper papers (see Wider v Heller, 24 AD3d 433, 434; Greene v Wood, 6 AD3d 976, 977; Welton v Drobnicki, 298 AD2d 757, 757).

Capasso v Capasso, 2011 NY Slip Op 04187 (App. Div., 2nd 2011)

The plaintiff's contention that summary judgment was granted prematurely under the facts of this case is without merit. The belief that additional discovery might reveal something helpful to her case does not provide a basis pursuant to CPLR 3212(f) for postponing a determination of summary judgment in this case (see Morissaint v Raemar Corp., 271 AD2d 586).

Horn v Hires, 2011 NY Slip Op 04205 (App. Div., 2nd 2011)

In opposition, the plaintiff failed to raise a triable issue of fact. The plaintiff raised new theories of liability for the first time in opposition to the motion which should not have been considered in light of the plaintiff's protracted delay in presenting those new theories (see Gallello v MARJ Distribs., Inc., 50 AD3d 734, 736; Medina v Sears, Roebuck & Co., 41 AD3d 798, 799-800; Comsewogue Union Free School Dist. v Allied-Trent Roofing Sys., Inc., 15 AD3d 523, 524). Accordingly, the Supreme Court should have granted the defendant's motion, in effect, for summary judgment dismissing the complaint.

James v Aircraft Serv. Intl. Group, 2011 NY Slip Op 04206 (App. DIv., 2nd 2011)

"A party opposing summary judgment is entitled to obtain further discovery when it appears that facts supporting the opposing party's position may exist but cannot then be stated" (Matter of Fasciglione, 73 AD3d 769, 770; see CPLR 3212[f]; Family-Friendly Media, Inc. v Recorder Tel. Network, 74 AD3d 738, 739; Juseinoski v New York Hosp. Med. Ctr. of Queens, 29 AD3d 636, 637). "This is especially so where the opposing party has not had a reasonable opportunity for disclosure prior to the making of the motion" (Baron v Incorporated Vil. of Freeport, 143 AD2d 792, 793; see Aurora Loan Servs., LLC v LaMattina & Assoc., Inc., 59 AD3d 578). Here, the appellant moved for summary judgment dismissing the complaint insofar as asserted against it prior to the exchange of any discovery. Under the circumstances of this case, the Supreme Court properly denied the appellant's motion for summary judgment dismissing the complaint insofar as asserted against it without prejudice to renewal after the completion of discovery.

Personak Knowledge

Lopez v Stop & Shop Supermarket Co., LLC, 2011 NY Slip Op 04009 (App. DIv., 2nd 2011)

In this case, since the appellants failed to offer proof by a person with personal knowledge, they failed to establish prima facie that they were not aware of the hazardous condition complained of by the plaintiff, which was the wet packaging of the beer the plaintiff was carrying at the time of the alleged accident. Accordingly, the Supreme Court correctly denied their summary judgment motion without regard to the sufficiency of the opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 852).

Teitelbaum v Crown Hgts. Assn. for the Betterment, 2011 NY Slip Op 04038 (App. Div., 2nd 2011)

The Supreme Court, however, should have denied, as untimely, that branch of the City's cross motion which was for summary judgment dismissing the complaint insofar as asserted against it. The City failed to demonstrate good cause for its delay in making the cross motion (see CPLR 3212[a]; Brill v City of New York, 2 NY3d 648, 652; Bickelman v Herrill Bowling Corp., 49 AD3d 578, 580). Contrary to the City's contention, the issues raised on its cross motion were not "nearly identical" to the issues raised on Crown Heights's motion (Ianello v O'Connor, 58 AD3d 684, 686; see Joyner-Pack v Sykes, 54 AD3d 727, 728; Grande v Peteroy, 39 AD3d 590, 592; Bressingham v Jamaica Hosp. Med. Ctr., 17 AD3d 496, 496-497).

Jones v Pinnacle Dunbar Manor, LLC, 2011 NY Slip Op 04091 (App. Div., 1st 2011)

Defendant's motion for summary judgment was properly denied as untimely (see Miceli v State Farm Mut. Auto. Ins. Co., 3 NY3d 725 [2004]; Brill v City of New York, 2 NY3d 648, 652 [2004]). Defendant's excuse that it failed to timely file its motion due to the misplacement of a necessary affidavit does not demonstrate "good cause" within the meaning of CPLR 3212(a) (see Perini Corp. v City of New York [Department of Envtl. Protection], 16 AD3d 37, 40 [2005]). Even if we were to excuse defendant's tardiness, we would still be constrained to deny the motion, due to the presence of numerous issues of fact precluding summary judgment.

 Prove a negative?

Suits v Wyckoff Hgts. Med. Ctr., 2011 NY Slip Op 03894 (App. DIv., 1st 2011)

Wyckoff Heights, however, failed to make a prima facie showing that neither it nor its employees committed independent acts of negligence (see Fiorentino v Wenger, 19 NY2d 407, 414 [1967] ["[w]here a hospital's alleged misconduct involves an omission to act, the hospital will not be held responsible unless it had reason to know that it should have acted within the duty it concededly had"]). Indeed, in its motion for partial summary judgment, Wyckoff Heights merely attached the pleadings and bill of particulars. Significantly, Abakporo's deposition testimony was not included ^[FN1]. Thus, Wyckoff Heights failed to establish its prima facie entitlement to summary judgment, and accordingly the burden never shifted to plaintiff to produce evidentiary proof sufficient to establish the existence of a triable issue of fact (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).

That plaintiffs' bill of particulars stated that plaintiffs believed that the injuries were caused by Dr. Abakporo's negligence is of no moment inasmuch as the underlying pleadings must be liberally construed (CPLR 3026). In any event, plaintiffs' action is not limited to the wording in the bill of particulars cited by the majority, especially when plaintiffs also stated that their claim was against Wyckoff Heights' employees and agents (see Toth v Bloshinsky, 39 AD3d at 849 [holding that all that was required of the plaintiff in serving a bill of particulars was to "provide a general statement of the acts or omissions constituting the alleged negligence"]). In short, the specific wording of the bill of particulars cited by the majority did not relieve Wyckoff Heights of its obligation to establish its prima facie entitlement to summary judgment with proof in admissible form.

CPLR R. 2214 OSC

CPLR R. 2214 Motion papers; service; time

Carter v Johnson, 2011 NY Slip Op 04403 (App. DIv., 2nd 2011)

During the course of this action, inter alia, for the partition of real property, the plaintiffs entered into a stipulation of settlement with the defendant Phyllis B. Johnson wherein Johnson agreed, among other things, to purchase the plaintiffs' share in the subject property. However, Johnson failed to tender performance, and the plaintiffs thereafter entered a judgment  against her in the principal sum of $200,000. Johnson subsequently moved by order to show cause to vacate this judgment. In the resulting order, the Supreme Court denied vacatur, but sua sponte granted relief which was not requested by the movant, namely, it "stayed and enjoined [the plaintiffs] from executing the judgment by sale of [the subject property] for so long as defendant Johnson resides in the premises and until further order of this court."

Pursuant to CPLR 2214(a), an order to show cause must state "the relief demanded and the grounds therefor." "The court may grant relief, pursuant to a general prayer contained in the . . . order to show cause, other than that specifically asked for, to such extent as is warranted by the facts plainly appearing on the papers on both sides" (HCE Assoc. v 3000 Watermill Lane Realty Corp., 173 AD2d 774, 774).

In the case at bar, Johnson never requested the stay relief granted by the Supreme Court. Moreover, the order to show cause contained no general prayer for relief, and even requested that the Supreme Court "appoint[ ] a Judicial Hearing Officer . . . with regard to partitioning the property." Given such a request, the Supreme Court's decision to, in effect, grant to Johnson what was essentially a life estate in the property was not only unwarranted by the facts, but was inconsistent with the relief sought in the order to show cause (see e.g. Hunter Sports Shooting Grounds, Inc. v Foley, 73 AD3d 702, 705; Singh v Hobart Corp., 302 AD2d 444, 445; cf. Shaw v RPA Assoc., LLC, 75 AD3d 634, 635). It is also clear that this unrequested relief operated to the prejudice of the plaintiffs (see HCE Assoc. v 3000 Watermill Lane Realty Corp., 173 AD2d 774). Accordingly, it was error to grant such relief.

In light of our conclusion herein, we need not reach the plaintiffs' remaining contentions, and their appeal from the denial of that branch of their motion which was denominated as leave to renew has been rendered academic.

 

Exclusions and terms

Bentoria Holdings, Inc. v Travelers Indem. Co., 2011 NY Slip Op 04400 (App. Div., 2nd 2011)

The Supreme Court properly denied that branch of Travelers' motion which was for summary judgment dismissing the complaint insofar as asserted against it. "Generally, where an insurer wishes to exclude certain coverage from its policy obligations, it must do so in clear and unmistakable language" (Lee v State Farm Fire & Cas. Co., 32 AD3d 902, 903 [internal quotation marks omitted]; see Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311). "Such exclusions or exceptions from policy coverage must be specific and clear in order to be enforceable, and they are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction" (Lee v State Farm Fire & Cas. Co., 32 AD3d at 903 [internal quotation marks omitted]). "Thus the insurance company bears the burden of establishing that the exclusions apply in a particular case and that they are subject to no other reasonable interpretation" (id. at 903-904 [internal quotation marks omitted]; see Seaboard Sur. Co. v Gillette Co., 64 NY2d at 311). "The burden is a heavy one, and if the language is doubtful or uncertain in its meaning, any ambiguity will be construed in favor of the insured and against the insurer" (Lee v State Farm Fire & Cas. Co., 32 AD3d at 904; see Pepsico, Inc. v Winterthur Intl. Am. Ins. Co., 13 AD3d 599, 600).

Here, Travelers failed to establish its prima facie entitlement to judgment as a matter of law by meeting the heavy burden of demonstrating that the earth movement exclusion clearly and unambiguously applied to the loss at issue in this case (see Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d 302, 306-307; Lee v State Farm Fire & Cas. Co., 32 AD3d at 904). Excavation was not expressly set forth in the exclusion, while other, less common causes of earth movement were (see Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d at 308). Travelers failed to establish, prima facie, that the facts of this case, which allegedly involves the excavation of earth from a lot adjacent to the plaintiff's building, fall squarely within the language of the exclusion, which expressly defines earth movement as "[e]arth sinking, . . . rising or shifting" (see Lee v State Farm Fire & Cas. Co., 32 AD3d at 904). Thus, notwithstanding the fact that the exclusion here refers to earth movement caused by "man made" or "artificial" causes, we conclude that Travelers failed to demonstrate, prima facie, that the express terms of the exclusion clearly and unambiguously establish that the loss at issue here was not covered by the policy. Accordingly, the Supreme Court properly denied that branch of Travelers' motion which was for summary judgment dismissing the complaint insofar as asserted against it.

The Supreme Court providently exercised its discretion in denying the alternate branch of Travelers' motion which was to sever the action insofar as asserted against it. "The determination to grant or deny a request for a severance pursuant to CPLR 603 is a matter of judicial discretion which should not be disturbed on appeal absent a showing of prejudice to a substantial right of the party seeking the severance" (Naylor v Knoll Farms of Suffolk County, Inc., 31 AD3d 726, 727). Here, there are common factual issues involved in the claims against Travelers and the other defendants, and the interests of judicial economy and consistency will be served by having a single trial (see Ingoglia v Leshaj, 1 AD3d 482, 485). Additionally, Travelers failed to demonstrate that a single trial would result in prejudice to a substantial right (see Quiroz v Beitia, 68 AD3d 957, 960-961).

Insurance Co. of Greater N.Y. v Clermont Armory, LLC, 2011 NY Slip Op 04421 (App. Div., 2nd 2011)

Generally, where an insurer wishes to exclude certain coverage from its policy obligations,

"it must do so in clear and unmistakable language. Any such exclusions or exceptions from policy coverage must be specific and clear in order to be enforced. They are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction. Indeed, before an insurance company is permitted to avoid policy coverage, it must satisfy the burden which it bears of establishing that the exclusions or exemptions apply in the particular case, and that they are subject to no other reasonable interpretation" (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [internal quotation marks and citations omitted]; see Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d 302, 307).

The insurer's burden is heavy, and doubtful or uncertain language leading to ambiguity will be interpreted against the insurer (see Lee v State Farm Fire & Cas. Co., 32 AD3d 902, 904; Pepsico, Inc. v Winterthur Intl. Am. Ins. Co., 13 AD3d 599, 600).

Altronix Corp. v Central Machining Specialties, Inc., 2011 NY Slip Op 04181 (App. Div., 2nd 2011)

"[A] written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (Greenfield v Philles Records, 98 NY2d 562, 569; see Bridge Pub. Relations & Consulting, Inc. v Hylan Elec. Contr., Inc., 65 AD3d 603, 603-604). "A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion" (Greenfield v Philles Records, 98 NY2d at 569 [internal quotation marks omitted]; see Bridge Pub. Relations & Consulting, Inc. v Hylan Elec. Contr., Inc., 65 AD3d at 603-604). It is for the court to determine, as matter of law, whether reasonable people may reasonably differ about the meaning of the contract's language (see Breed v Insurance Co. of N. Am., 46 NY2d 351, 356; Bridge Pub. Relations & Consulting, Inc. v Hylan Elec. Contr., Inc., 65 AD3d at 604).

Etzion v Etzion, 2011 NY Slip Op 04198 (App. Div., 2nd 2011)

On this appeal, the plaintiff contends that the Supreme Court erred in denying her motion pursuant to CPLR 3211(a)(1) and (7) to dismiss a counterclaim asserted by the defendant former husband, Rafael Etzion (hereinafter the defendant), for an award of an attorney's fee pursuant to the terms of a stipulation of settlement entered into by the defendant and the plaintiff on June 8, 2005, or, in the alternative, for summary judgment dismissing the counterclaim.

Parties are free to enter into agreements that "not only bind[ ] them, but which the courts are bound to enforce" (Greve v Aetna Live-Stock Ins. Co., 30 NYS 668, 670). Marital contracts are "subject to principles of contract [construction and] interpretation" (Rainbow v Swisher, 72 NY2d 106, 109; see Matter of Meccico v Meccico, 76 NY2d 822, 823-824; Girardin v Girardin, 281 AD2d 457, 457). Moreover, "[w]here a stipulation of settlement provides the basis for an award of an attorney's fee, the terms of the agreement control" (Arato v Arato, 15 AD3d 511, 512; see Sweeney v Sweeney, 71 AD3d 989, 992). 

"The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent" (Greenfield v Philles Records, 98 NY2d 562, 569; see Hooper Assoc. v AGS Computers, 74 NY2d 487, 491). "Where . . . the contract is clear and unambiguous on its face, the intent of the parties must be gleaned from within the four corners of the instrument, and not from extrinsic evidence" (Rainbow v Swisher, 72 NY2d at 109; see Matter of Meccico v Meccico, 76 NY2d 822; Clark v Clark, 33 AD3d 836, 837; see also Kass v Kass, 91 NY2d 554, 556). "Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (Greenfield v Philles Records, 98 NY2d at 569; see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162).

" [C]ourts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing'" (Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475, quoting Reiss v Financial Performance Corp., 97 NY2d 195, 199; see Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 13 NY3d 398, 404; McWade v McWade, 253 AD2d 798, 799). Thus, a court "will not imply a term where the circumstances surrounding the formation of the contract indicate that the parties, when the contract was made, must have foreseen the contingency at issue and the agreement can be enforced according to its terms" (Reiss v Financial Performance Corp., 97 NY2d at 199; see Henrich v Phazar Antenna Corp., 33 AD3d 864, 867). "The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court" (Franklin Apt. Assoc., Inc. v Westbrook Tenants Corp., 43 AD3d 860, 861; see Katina, Inc. v Famiglietti, 306 AD2d 440, 441).

Here, the defendant's counterclaim for an award of an attorney's fee is based on an overbroad reading of an attorney's-fee provision in the parties' stipulation of settlement executed on June 8, 2005 (hereinafter the agreement), which was subsequently incorporated, but not merged, into their judgment of divorce. The parties' separation agreement, at Article XXV, paragraph 3, states, in relevant part:

"In the event either party is forced to seek aid of counsel in enforcing any rights pursuant to this Stipulation, and in the event that party is successful in enforcing such right(s), the other shall reimburse him or her for any reasonable attorneys' fees necessarily incurred in enforcing such rights. The provisions of this paragraph shall be in addition, and without prejudice or limitation, to any other rights or remedies to which the aggrieved party may be entitled. The parties agree that the purpose of this paragraph is to prevent unnecessary litigation between them and to encourage each to fulfill his or her responsibilities under the terms of this Stipulation as fully as possible" (emphasis added).

The defendant, in his counterclaim, asserts that he was entitled to an award of an attorney's fee pursuant to the fees provision because he has been forced, in effect, to defend his rights under the separation agreement. However, the agreement clearly and unambiguously provides that only the party seeking to enforce any rights under the agreement shall be entitled to an attorney's fee, if successful. The defendant is not enforcing any rights under the agreement by simply defending against the plaintiff's motion (see Ferrara v Ferrara, 42 AD3d 426, 427). Had the parties intended the fees provision to be construed as the defendant contends, they were free to expressly so provide (id. at 427).

" [W]here . . . documentary evidence utterly refutes [the proponent's] factual allegations, conclusively establishing a defense as a matter of law,'" a motion to dismiss may be properly granted (Stein v Garfield Regency Condominium, 65 AD3d 1126, 1128, quoting Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; see Leon v Martinez, 84 NY2d 83, 87; Wild Oaks, LLC v Joseph A. Beehan Jr., Gen. Contr., Inc., 77 AD3d 924, 926; Roth v R & P Rest. Corp., 68 AD3d 961, 963; Mazur Bros. Realty, LLC v State of New York, 59 AD3d 401, 402; Troccoli v Zarabi, 57 AD3d 971, 972). Based upon the documentary evidence, consisting of the agreement, the plaintiff conclusively established, as a matter of law, that the defendant is not entitled to an award of an attorney's fee, regardless of the outcome of the current dispute.

31 Victory Corp. v Victory Props., LLC, 2011 NY Slip Op 04039 (App. Div. 2nd 2011)

"The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent" (Greenfield v Philles Records, 98 NY2d 562, 569). "[A] written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (id.). Here, however, the terms of the guaranty, including the effect and date of commencement of the 18-month limitation contained therein, cannot be enforced, as they did not have "a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion" (Breed v Insurance Co. of N. Am., 46 NY2d 351, 355). Moreover, the intentions of the parties cannot be ascertained from any of the extrinsic evidence presented (see Weiss v Weinreb & Weinreb, 17 AD3d 353, 354). As such, the Supreme Court properly construed the ambiguous terms of the guarantee against the party that drafted it, which in this instance was Victory Properties (see Jacobson v Sassower, 66 NY2d 991; 151 W. Assoc. v Printsiples Fabric Corp., 61 NY2d 732, 734).

Dean v Tower Ins. Co. of N.Y., 2011 NY Slip Op 03899 (App. Div., 1st 2011)

Defendant failed to satisfy its prima facie burden on its motion for summary judgment. Because the "residence premises" insurance policy fails to define what qualifies as "resides" for the purposes of attaching coverage, the policy is ambiguous in the circumstances of this case, where the plaintiffs-insureds purchased the policy in advance of closing but were then unable to fulfill their intention of establishing residency at the subject premises due to their discovery and remediation of termite damage that required major renovations. "[B]efore an insurance company is permitted to avoid policy coverage, it must satisfy the burden which it bears of establishing that the exclusions or exemptions apply in the particular case, and that they are subject to no other reasonable interpretation" (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984]). Accordingly, the ambiguity in the policy must be construed against defendant under the facts of this case, and precludes the grant of summary judgment in its favor (see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398 [1983]). Marshall v Tower Ins. Co. of N.Y. (44 AD3d 1014 [2007] is inapposite because it did not address whether the term "residence premises" is ambiguous in light of the policy's failure to define "resides." Moreover, unlike here, the plaintiff in Marshall had no intention of living at the premises (see Marshall v Tower Ins. Co. of N.Y., 12 Misc 3d 117OA [Sup Ct 2006]).

4404

CPLR  R. 4404 Post-trial motion for judgment and new trial

Ortiz v Jaramillo, 2011 NY Slip Op 03822 (App. Div., 2nd 2011)

"[L]itigants are entitled, as a matter of law, to a fair trial free from improper comments by counsel or the trial court" (Rodriguez v City of New York, 67 AD3d 884, 886; see DeCrescenzo v Gonzalez, 46 AD3d 607, 608). CPLR 4404(a) provides that, "[a]fter a trial . . . by a jury, upon the motion of any party or on its own initiative, the court may set aside a verdict . . . and . . . may order a new trial . . . in the interest of justice." A motion pursuant to CPLR 4404(a) should not be granted on this ground unless "substantial justice has not been done, as would occur, for example, where . . . there has been misconduct on the part of attorneys" (Gomez v Park Donuts, 249 AD2d 266, 267 [citations omitted]; see Rodriguez v City of New York, 67 AD3d 884, 885).

Here, the comments of the plaintiffs' counsel, including his repeated denigration of the veracity of defense witnesses and his vouching for the plaintiffs' witnesses, were not isolated, were inflammatory, and were unduly prejudicial. These prejudicial comments so tainted the proceedings as to have deprived the defendant George Tsioulas of a fair trial (see Rodriguez v City of New York, 67 AD3d at 885-886; Brooks v Judlau Contr., Inc., 39 AD3d 447, 449, revd on other grounds 11 NY3d 204; Vassura v Taylor, 117 AD2d 798; see also McArdle v Hurley, 51 AD3d 741, 743; O'Neil v Klass, 36 AD3d 677, 677-678; Pagano v Murray, 309 AD2d 910, 911). Accordingly, the Supreme Court providently exercised its discretion in granting that branch Tsioulas's motion pursuant to CPLR 4404(a) which was to set aside the jury verdict and for a new trial in the interest of justice.

 

5015(a)(3); 317; 2005; Renewal Judgment

CPLR R. 5015 Relief from judgment or order
(a) On motion
(1) excusable default...
(2) newly-discovered evidence...
(3) fraud, misrepresentation, or other misconduct of an adverse party
(4) lack of jurisdiction to render the judgment or order
(5) reversal, modification or vacatur of a prior judgment or order upon which it is based

CPLR § 317

CPLR § 2005

Matter of Travelers Ins. Co. v Rogers, 2011 NY Slip Op 03729 (App. DIv., 1st 2011)

Supreme Court abused its discretion in refusing to vacate its prior order granting a permanent stay of arbitration of respondents Rogers and Westwater's uninsured motorist claim, which was granted upon their failure to appear at the petition hearing or to submit papers in opposition. Vacatur should have been granted on the ground of "fraud, misrepresentation, or other misconduct of an adverse party" (CPLR 5015[a][3]). A review of the record in this case reveals several potential instances of intentional and material misrepresentations of fact by petitioner, which, at least in part, may have formed the basis of Supreme Court's decision and order to permanently stay arbitration. Hence, it was an abuse of discretion to conclude that the failure to proffer a reasonable excuse precluded relief pursuant to CPLR 5015(a)(3), since that section does not require such a showing (cf. CPLR 5015 [a] [1]; see Shouse v Lyons, 4 AD3d 821, 822 [2004]). To the extent that some of respondents' allegations of fraud, misrepresentation or other misconduct are not conclusively established by the evidence in the record, they present issues of fact which should not be determined without holding a hearing (Readick v Readick, 80 AD3d 512, 513 [2011]; see also Tonawonda Sch. Emples. Fed. Credit Union v Zack, 242 AD2d 894, 894-95 [1997]).

Olivaria v Lin & Son Realty, Corp., 2011 NY Slip Op 03655 (App. Div., 1st 2011)

Relief under CPLR 5015(a)(1) was properly denied. The record shows that Lin did not receive process because it failed to maintain a current address on file with the Secretary of State for 18 years (see On Assignment v Medasorb Tech., LLC, 50 AD3d 342 [2008]; Business Corporation Law § 408).

The Supreme Court should not have concluded, however, that Lin's request for relief under CPLR 317 was untimely. The statute permits a defendant who has been "served with a summons other than by personal delivery" and has not appeared to defend the action upon a finding of the court that the defendant "did not personally receive notice of the summons in time to defend and has a meritorious defense" (CPLR 317). A defendant so served may be allowed to defend the action "within one year after [such defendant] obtains knowledge of entry of the judgment, but in no event more than five years after such entry . . ." (id.)^[FN1]. In making a CPLR 317 motion, a defendant does not have to come forward with a reasonable excuse for its default (see Pena v Mittleman, 179 AD2d 607, 609 [1992]).

By regarding the February 4, 2003 order as an entered judgment, the court reached the conclusion that the statutory five-year period had expired. This was error. "A judgment is entered when, after it has been signed by the clerk, it is filed by him" (CPLR 5016[a]). Unlike the 2003 order, the 2009 judgment was duly signed and entered by the County Clerk. Accordingly, the motion was timely because August 20, 2009 is the date of entry from which Lin's time is to be measured.

The lease between Lin and the injured plaintiff's employer provided for heating through perimeter ducts and made no mention of portable heaters. Lin's president states by affidavit that the company had no knowledge of the tenant's use of portable heaters. Thus, Lin has demonstrated, prima facie, that it has a meritorious defense to plaintiffs' claims. Moreover, it does not appear that Lin deliberately attempted to avoid notice of this action (see e.g. Eugene Di Lorenzo, Inc. v Dutton Lbr. Co., 67 NY2d 138, 143 [1986]). In the exercise of discretion, we therefore grant Lin's motion to vacate the default judgment pursuant to CPLR 317.

Casali v Cyran, 2011 NY Slip Op 03791 (App. Div., 2nd 2011)

To vacate his default, the plaintiff was required to demonstrate a reasonable excuse for the default and potentially meritorious opposition to the motion (see CPLR 5015[a]; Legaretta v Ekhstor, 74 AD3d 899; Rivera v Komor, 69 AD3d 833; Nowell v NYU Med. Ctr., 55 AD3d 573). The plaintiff's excuse for failing to oppose the motion of the defendant Daniel J. Cyran for summary judgment dismissing the compaint insofar as asserted against Cyran can only be classified as law office failure. Although the Supreme Court has the discretion to excuse a default resulting from law office failure (see CPLR 2005), here, the plaintiff's attorney, in his affirmation, admitted that there was "no excuse, reasonable or otherwise." Additionally, the plaintiff failed to establish that he had potentially meritorious opposition to the motion (see Bollino v Hitzig, 34 AD3d 711). Accordingly, the Supreme Court properly denied the plaintiff's motion to vacate the prior order granting Cyran's motion for summary judgment dismissing the complaint insofar as asserted against Cyran.

n Tend Masoers Dist. Council Welfare Fund v Diamond Constr. & Maintenance, Inc., 2011 NY Slip Op 03815 (App. Div., 2nd 2011)

In an action for leave to enter a renewal judgment pursuant to CPLR 5014, nonparty Deutsche Bank National Trust Company appeals from an order of the Supreme Court, Richmond County (Minardo, J.), dated July 22, 2010, which denied its motion pursuant to CPLR 5015(a)(4) to vacate a renewal judgment of the same court dated January 11, 2010 on the ground that the Supreme Court lacked jurisdiction to issue the renewal judgment because Deutsche Bank National Trust Company was not joined as a necessary party.
ORDERED that the order is affirmed, with costs.
"Persons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action shall be made plaintiffs or defendants" (CPLR 1001[a]). This statute "limit[s] the scope of indispensable parties to those cases and only those cases where the determination of the court will adversely affect the rights of nonparties" (Matter of Castaways Motel v Schuyler, 24 NY2d 120, 125; see Spector v Toys "R" Us, Inc., 12 AD3d 358, 359).
Here, the Supreme Court properly found that nonparty Deutsche Bank National Trust Company did not need to be joined in the instant action in order to accord complete relief to the parties, and that Deutsche Bank National Trust Company was not inequitably affected by the renewal judgment.
In an action for leave to enter a renewal judgment pursuant to CPLR 5014, nonparty Deutsche Bank National Trust Company appeals from an order of the Supreme Court, Richmond County (Minardo, J.), dated July 22, 2010, which denied its motion pursuant to CPLR 5015(a)(4) to vacate a renewal judgment of the same court dated January 11, 2010 on the ground that the Supreme Court lacked jurisdiction to issue the renewal judgment because Deutsche Bank National Trust Company was not joined as a necessary party.

s

Release and Discharge

Johnson v Lebanese Am. Univ., 2011 NY Slip Op 03658 (App. Div. 1st 2011)

While the fact that plaintiff was not advised to consult with counsel is not dispositive of the enforceability of the Release (Skluth, 163 AD2d at 107), defendants' tying of the payment to plaintiff's return of the Release certainly had a bearing on plaintiff's opportunity to consult counsel. As Supreme Court recognized, the opportunity to consult counsel is at least a factor to be considered when analyzing the volition with which a party entered into a contract (see id.). However, with the payment depending on plaintiff's return of the signed Release it can hardly be said, as the court did, that plaintiff had "ample" opportunity to consult an attorney before signing the document.

For the foregoing reasons, we find that issues of fact exist as to whether plaintiff intended to relinquish employment discrimination claims when he executed the Release. Accordingly, Supreme Court erred in dismissing the complaint.

There is a dissent.

Stipulations and 2221

CPLR R. 2221 Motion affecting prior order
(d) A motion for leave to reargue
(e) Motion for Leave to Renew

Churchill v Malek, 2011 NY Slip Op 03673 (App. Div. 1st 2011)

Given that, in this personal injury action, there is no claim to recover damages for emotional or psychological injury (see Valerio v Staten Is. Hosp., 220 AD2d 580 [1995]), or aggravation of a preexisting emotional or mental condition (see Sternberger v Offen, 138 AD2d 480 [1988]), plaintiff cannot be compelled to disclose confidential psychological or psychiatric records (cf. Carr v 583-587 Broadway Assoc., 238 AD2d 184, 185 [1997]). Defendant's unsubstantiated claim that plaintiff's mental illness might have caused the accident is insufficient to warrant mental health disclosure (see Zimmer v Cathedral School of St. Mary & St. Paul, 204 AD2d 538, 539 [1994]).

Defendant's argument that plaintiff is bound by prior stipulations is unavailing, since both documents were clearly denominated as orders. Equally unavailing is defendant's contention that plaintiff's motion to reargue was untimely. The prior order was never served with notice of entry; therefore, the thirty-day period set forth in CPLR 2221(d)(3) has not been triggered (see Zhi Fang Shi v Sanchez, 36 AD3d 486 [2007]).

Yerushalmi v Yerushalmi, 2011 NY Slip Op 02657 (App. DIv., 2nd 2011)

" A motion for leave to renew must (1) be based upon new facts not offered on a prior motion that would change the prior determination, and (2) set forth a reasonable justification for the failure to present such facts on the prior motion'" (Swedish v Beizer, 51 AD3d 1008, 1010; quoting Ellner v Schwed, 48 AD3d 739, 740; see CPLR 2221[e]; Matter of 171 Sterling, LLC v Stone Arts, Inc., 66 AD3d 688). " Leave to renew is not warranted where the factual material adduced in connection with the subsequent motion is merely cumulative with respect to the factual material submitted in connection with the original motion'" (Matter of Orange & Rockland Util. v Assessor of Town of Haverstraw, 304 AD2d 668, 669, quoting Stone v Bridgehampton Race Circuit, 244 AD2d 403, 403; see City of New York v St. Paul Fire & Mar. Ins. Co., 21 AD3d 982).

Here, the defendant's motion, in effect, for leave to renew was not based upon new facts in existence at the time of the original motion which would have changed the prior determination, but consisted of factual material that was merely cumulative with respect to the factual material submitted in connection with the prior motion. Accordingly, the motion, in effect, for leave to renew was properly denied.

Prinz v New York State Elec. & Gas, 2011 NY Slip Op 02648 (App. Div., 2nd 2011)

The Supreme Court properly denied that branch of the plaintiff's motion which was for leave to renew his opposition to the defendants' motion pursuant to CPLR 3211(a)(7) to dismiss the complaint, which had been granted by the Supreme Court in an earlier order. "A motion for leave to renew must be based upon new facts not offered on the prior motion that would change the prior determination'" (Jackson Hgts. Care Ctr., LLC v Bloch, 39 AD3d 477, 480, quoting CPLR 2221[e][2]; see Renna v Gullo, 19 AD3d 472, 473; Kaufman v Kunis, 14 AD3d 542). Here, the allegedly new facts offered would not have changed the prior determination (see CPLR 2221[e][2]; Countrywide Home Loans Servicing, LP v Albert, 78 AD3d 985).

Under the circumstances of this case, the Supreme Court also properly denied that branch of the plaintiff's motion which was for leave to amend his complaint (see Kazakhstan Inv. Fund v Manolovici, 2 AD3d 249, 250).