theCPLRblog

Attorney Fees

Blair v O'Donnell, 2011 NY Slip Op 05442 (App. Div., 2nd 2011)

However, the plaintiffs failed to establish their entitlement to an award of disbursements and an attorney's fee. Under the general rule, legal fees and disbursements are incidents of litigation, and the prevailing party may not collect them from the unsuccessful party unless an award is authorized by agreement between the parties, statute, or court rule (see Matter of A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 5; Khanal v Sheldon, 55 AD3d 684, 686). Here, the parties' contract did not provide for recovery of such items in the event of a breach. Accordingly, the Supreme Court should have denied that branch of the plaintiffs' motion which was for summary judgment on so much of the complaint as sought an award of disbursements and an attorney's fee, and should not have set the matter down for an inquest on disbursements and an attorney's fee. Further, under the circumstances of this case, we award summary judgment to the defendants dismissing this claim of the plaintiffs pursuant to our authority to search the record and award summary judgment to the nonmoving party with respect to an issue that was the subject of the motion before the Supreme Court (see Sand v City of New York, 83 AD3d 923, 926).

3216, very forgiving, etc etc

CPLR R. 3216 Want of prosecution

CPLR § 1015 Substitution upon death

CPLR § 1021 Substitution procedure; dismissal for failure to substitute; presentation of appeal

Atterberry v Serlin & Serlin, 2011 NY Slip Op 05439 (App. Div., 2nd 2011)

CPLR 3216 is an "extremely forgiving" statute (Baczkowski v Collins Constr. Co., 89 NY2d 499, 503), which "never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff's action based on the plaintiff's unreasonable neglect to proceed" (Davis v Goodsell, 6 AD3d 382, 383; see Di Simone v Good Samaritan Hosp., 100 NY2d 632, 633; Gibson v Fakheri, 77 AD3d 619; Ferrera v Esposit, 66 AD3d 637, 638). Although the statute prohibits the Supreme Court from dismissing an action based on failure to prosecute whenever the plaintiff has shown a justifiable excuse for the delay and the existence of a potentially meritorious cause of action, "such a dual showing is not strictly necessary in order for the plaintiff to escape such a dismissal" (Davis v Goodsell, 6 AD3d at 384; see Baczkowski v Collins Constr. Co., 89 NY2d at 503-504; Gibson v Fakheri, 77 AD3d 619; Ferrera v Esposit, 66 AD3d at 638).

Here, the plaintiff attempted to file her note of issue 10 days beyond the deadline set by the Supreme Court's certification order, and the defendants did not claim that they have been prejudiced by the minimal delay (see Kadyimov v MacKinnon, 82 AD3d 938). In addition, the delay in filing a note of issue was attributable to law office failure, and the plaintiff proffered both a reasonable excuse for her further two-month delay in making this motion and a potentially meritorious cause of action (see CPLR 2005; Lauri v Freeport Union Free School Dist., 78 AD3d 1130; Goldstein v Meadows Redevelopment Co Owners Corp. I, 46 AD3d 509, 510; Diaz v Yuan, 28 AD3d 603). Furthermore, there is no evidence in the record of a pattern of persistent neglect and delay in prosecuting the action, or of any intent to abandon the action. Under these circumstances, the plaintiff's motion to vacate the dismissal of the action pursuant to CPLR 3216 and to extend her time to file a note of issue should have been granted (see Kadyimov v MacKinnon, 82 AD3d 938; Ferrera v Esposit, 66 AD3d at 638; Anonymous v Duane Reade, Inc., 49 AD3d 479; Diaz v Yuan, 28 AD3d 603).

Sanders v New York City Hous. Auth., 2011 NY Slip Op 05479 (App. Div., 2nd 2011)

In light of the approximate three-year delay between the death of the plaintiff and the appointment of the appellant as the administratrix of the plaintiff's estate, the further three-year delay between the appointment of the appellant as administratrix and the underlying motion, inter alia, seeking her substitution in this action, the failure to proffer any excuse for the delays, and the failure to show that the action was potentially meritorious, that branch of the appellant's motion which was for substitution was properly denied (see CPLR 1021; Reed v Grossi, 59 AD3d 509, 511; McDonnell v Draizin, 24 AD3d 628; Washington v Min Chung Hwan, 20 AD3d 303, 305). 

Furthermore, that branch of the appellant's motion which was to vacate the dismissal of the action pursuant to CPLR 3216 also was properly denied, as she failed to demonstrate a justifiable excuse for the plaintiff's delay in properly responding to the 90-day notice and a potentially meritorious cause of action (see CPLR 3216[e]; Fenner v County of Nassau, 80 AD3d 555, 556; Petersen v Lysaght, Lysaght & Kramer, P.C., 47 AD3d 783, 784; Matter of Bloom v Lubow, 45 AD3d 680; Lugauer v Forest City Ratner Co., 44 AD3d 829, 830; Sortino v Fisher, 20 AD2d 25, 31-32).

3

Mutual Mistake

CPLR R. 2106 Affirmation of truth of statement by attorney, physician, osteopath or dentist

Asset Mgt. & Capital Co., Inc. v Nugent, 2011 NY Slip Op 05438 (App. Div., 2nd 2011)

"Stipulations of settlement are favored by the courts and not lightly cast aside . . . . Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, [mutual] mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation" (Hallock v State of New York, 64 NY2d 224, 230 [citations omitted]). "For a party to be entitled to reformation of a contract on the ground of mutual mistake, the mutual mistake must be material, i.e., it must involve a fundamental assumption of the contract" (True v True, 63 AD3d 1145, 1147). "A party need not establish that the parties entered into the contract because of the mutual mistake, only that the material mistake . . . vitally affects a fact or facts on the basis of which the parties contracted'" (True v True, 63 AD3d at 1147, quoting Janowitz Bros. Venture v 25-30 120th St. Queens Corp., 75 AD2d 203, 214). Moreover, "proof of [mutual] mistake must be of the highest order,' [and] must show clearly and beyond doubt that there has been a [mutual] mistake' and . . . must show with equal clarity and certainty the exact and precise form and import that the instrument ought to be made to assume, in order that it may express and effectuate what was really intended by the parties'" (Janowitz Bros. Venture v 25-30 120th St. Queens Corp., 75 AD2d at 215, quoting 13 Williston, Contracts [3d ed], § 1548, at 125; see Amend v Hurley, 293 NY 587, 595). "Because the thrust of a reformation claim is that a writing does not set forth the actual agreement of the parties, generally neither the parol evidence rule nor the Statute of Frauds applies to bar proof, in the form or parol or extrinsic evidence, of the claimed agreement" (Chimart Assoc. v Paul, 66 NY2d 570, 573).

Here, the plaintiffs established that the stipulation of settlement contains a mutual mistake. Specifically, the Condo Analysis Summary (hereinafter the summary) prepared by Michael T. Nugent, sued herein as Michael I. Nugent (hereinafter the defendant), which the parties agree  formed the basis of the stipulation of settlement, reflects that the defendant's expenditures above his one-half ownership interest in the subject premises totaled $83,925. Moreover, throughout this litigation—until he opposed the plaintiffs' motion to reform the stipulation—the defendant consistently asserted, in pertinent part, that he was entitled to "reimbursement of one half of the amounts he has advanced [$83,925] plus interest thereon." As such, the plaintiffs established that, in the stipulation, the parties intended for the defendant to receive, from the proceeds of sale of the subject premises, and before considering other adjustments, one half of $83,925, or $41,962.50.

However, both the stipulation and the summary are silent with respect to the fact that a $20,000 payment was made by the plaintiffs in February 2004 to pay down the mortgage principal on the subject real property. Since the stipulation properly characterized the $20,000 paid by the plaintiffs as a "reimbursement" to the defendant, and the parties intended first to credit the defendant for one half of the expenditures he incurred before crediting the plaintiffs for the $20,000 reimbursement, the Supreme Court properly determined that the amounts ultimately credited to the parties in the stipulation were the product of a mutual mistake, and properly granted the plaintiffs' motion to reform the stipulation so as to direct the defendant to pay to the plaintiffs the sum of $10,000, representing the plaintiffs' overpayment to the defendant.

 

 

Very Interesting 3215 decision: half sum certain, half not

CPLR 3215

Stephan B. Gleich & Assoc. v Gritsipis, 2011 NY Slip Op 05483 (App. Div., 2nd 2011)

III. The Clerk's Judgment Under CPLR 3215(a)

The defendant's argument that the clerk of the court lacked authority to enter a judgment is raised for the first time on appeal. However, where, as here, an argument presents an issue of law appearing on the face of the record which could not have been avoided if raised at the proper juncture, it may be considered by an appellate court (see Parry v Murphy, 79 AD3d 713; Verde Elec. Corp. v Federal Ins. Co., 50 AD3d at 673; Chrostowski v Chow, 37 AD3d 638, 639; Beepat v James, 303 AD2d 345, 346; Hanna v Ford Motor Co., 252 AD2d 478). The nature of this appeal warrants the exercise of our discretion in reaching on its merits the issue of the propriety of the clerk's judgment.

CPLR 3215(a) allows a party to seek a default judgment by application to the clerk if the claim is "for a sum certain or for a sum which can by computation be made certain" (CPLR 3215[a]). Where the clerk is presented with the requisite proof, he or she "shall enter judgment for the amount demanded in the complaint or stated in the [summons with notice], plus costs and interest" (CPLR 3215[a]). While the statute directs that the amount of the judgment shall be the amount demanded in the complaint or summons with notice, the language has been interpreted by the Court of Appeals as allowing the plaintiff to elect a lesser sum (see McClelland v Climax Hosiery Mills, 252 NY 347, 352 [interpreting a similar predecessor statute, CPA 485]).

The limitation of clerk's judgments to claims for a "sum certain" "contemplates a situation in which, once liability has been established, there can be no dispute as to the amount due" (Reynolds Sec. v Underwriters Bank & Trust Co., 44 NY2d 568, 572; Pikulin v Mikshakov, 258 AD2d 450, 451). The statute is intended to apply to only the most liquidated and undisputable of claims, such as actions on money judgments and negotiable instruments (see Reynolds Sec. v Underwriters Bank & Trust Co., 44 NY2d at 572; Pikulin v Mikshakov, 258 AD2d at 451; Siegel, David D., NY Practice, at 477 [4th ed]).

On the face of the plaintiff's 1993 summons with notice, the plaintiff did not allege the existence of a written retainer agreement, and did not specifically describe the nature of the action as one for breach of contract. Furthermore, no copy of a retainer agreement was annexed to the affidavit of facts submitted to the clerk. The claim "to recover for legal services" may be viewed as stating a cause of action sounding in quantum meruit, for which there must be evidence of (1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services allegedly rendered (see AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d 6, 19; Cruz v McAneney, 31 AD3d 54, 59; Citibank, N.A. v Walker, 12 AD3d 480, 481). The cause of action alleging unjust enrichment, which is clearly stated in the summons with notice, requires proof that (1) the defendant was enriched, (2) at the plaintiff's expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered (see AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d at 19; Cruz v McAneney, 31 AD3d at 59; Citibank, N.A. v Walker, 12 AD3d at 481). Quantum meruit and unjust enrichment theories are equitable in nature, and are appropriate only if there is no valid and enforceable contract between the parties covering the dispute at issue (see AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d at 20; Hochman v LaRea, 14 AD3d 653, 654-655; Zuccarini v Ziff-Davis Media, 306 AD2d 404, 405; Old Salem Dev. Group v Town of Fishkill, 301 AD2d 639). Such causes of action are not for a sum certain and, therefore, are not eligible for the entry of a clerk's judgment under CPLR 3215(a) (see Ayers Mem. Animal Shelter, Inc. v Montgomery County Socy. for Prevention of Cruelty to Animals, 17 AD3d 904, 904-905 [quantum meruit]; Maxwell v First Port Jefferson Corp., 31 AD2d 813 [quantum meruit]). 

By contrast, an account stated is an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and the balance due (see Landau v Weissman, 78 AD3d 661; Jim-Mar Corp. v Aquatic Constr., 195 AD2d 868, 869). By retaining billing statements and failing to object to the account within a reasonable time, the recipient of the bill implies that he or she agrees with the sender regarding the amount owed (see Rodkinson v Haecker, 248 NY 480, 485; American Express Centurion Bank v Cutler, 81 AD3d 761, 762; Landau v Weissman, 78 AD3d at 661; O'Connell & Aronowitz v Gullo, 229 AD2d 637, 638; Ruskin, Moscou, Evans & Faltischek v FGH Realty Credit Corp., 228 AD2d 294, 295-296; Shea & Gould v Burr, 194 AD2d 369, 370; Rosenman Colin Freund Lewis & Cohen v Edelman, 160 AD2d 626; Brown Rudnick Berlack Israels LLP v Zelmanovitch, 11 Misc 3d 1090[A], 2006 NY Slip Op 50800[U], *5). Generally, an account stated may qualify for relief under CPLR 3215 (see Cavalry Portfolio Servs., LLC v Reisman, 55 AD3d 524; Imperial Medical Supply & Surgical Sup. v Country Wide Ins. Co., 2002 NY Slip Op 50352[U] n 6; cf. Commissioners of State Ins. Fund v Khondoker, 55 AD3d 525).

The Appellate Division, First Department, directly addressed the question of whether a clerk may enter a judgment pursuant to CPLR 3215(a) when one or more causes of action in a plaintiff's pleading is for a sum certain and one or more other causes of action is not. It held, in Geer, Du Bois & Co. v Scott & Sons Co. (25 AD2d 423), that a clerk is without authority to enter a judgment under such circumstances (id.; see Gaynor & Bass v Arcadipane, 268 AD2d 296; Bouker Contr. Co. v Neale, 161 App Div 617). Although the First Department did not explain its reasoning, we find its result to be sound. A clerk entering a judgment for a sum certain, in actions where other nonconforming causes of action also are alleged, would, in effect, be severing the nonconforming causes of action from the pleading or, viewed another way, be rendering academic the nonconforming causes of action. Such action is more in the nature of a judicial function than a ministerial function of the type contemplated for a clerk by CPLR 3215(a) (see Reynolds Sec. v Underwriters Bank & Trust Co., 44 NY2d at 572). Accordingly, as the plaintiff's summons with notice asserted equitable causes of action that were not, by definition, for a sum certain, the Nassau County Clerk was without statutory authority to render a clerk's judgment (see Geer Du Bois & Co. v Scott & Sons, Inc., 25 AD2d at 423; Bouker Contr. Co. v Neale, 161 App Div at 617).

Our finding that the clerk's judgment is void raises a secondary issue, namely, whether vacating the clerk's judgment also requires the vacatur of the underlying finding that the defendant was in default or, alternatively, whether upon vacatur, the underlying default finding remains intact and the matter should be remitted to the Supreme Court only to conduct an inquest on damages. In certain cases, the Appellate Divisions have vacated the clerks' judgments only and remitted the matters for inquests (see Fidelity Natl. Tit. Ins. Co. v Valtech Research, Inc., 73 AD3d 686, 687; General Elec. Tech. Servs. Co. v Perez, 156 AD2d 781, 784; Woodward v Eighmie Moving & Stor., 151 AD2d 892, 893; Falso v Norton, 89 AD2d 635, 635-636). In other cases, the Appellate Divisions made clear that the vacatur of the clerks' judgments has the effect of also vacating the underlying finding that the defendants were in default (see Gaynor & Bass v Arcadipane, 268 AD2d at 297; Gibbs v Hoot Owl Sportsman's Club, 257 AD2d 942, 943; Action Lawn & Landscaping v East Glenville Fire Dist., 254 AD2d 585, 587; Jannon v Van Buskirk, 227 AD2d 844, 844-845; Maxwell v First Port Jefferson Corp., 31 AD2d at 813; Geer, Du Bois & Co. v Scott & Sons Co., 25 AD2d at 423).

These seemingly inconsistent cases can be reconciled. In the first set of cases, the issue of whether to vacate the defendants' defaults pursuant to CPLR 5015, on the basis that a reasonable excuse and a potentially meritorious defense were presented, was before the Courts, and the Appellate Divisions concluded in each instance that the defendants failed to establish either reasonable excuses for their respective defaults or potentially meritorious defenses. Since there was no basis to vacate the underlying defaults on the papers submitted in those cases, the only procedures that remained to be undertaken, where the clerks' judgments were found to be unauthorized, were inquests on damages (see Reynolds Sec. v Underwriters Bank & Trust Co., 44 NY2d at 573-574; General Elec. Tech. Servs. Co. v Perez, 156 AD2d 781; Woodward v Eighmie Moving & Stor. 151 AD2d at 893; Falso v Norton, 89 AD2d at 635-636; Fidelity Natl. Tit. Ins. Co. v Valtech Research, Inc., 73 AD3d at 687). By contrast, in the other set of cases, the vacatur of the defendants' underlying defaults was not raised as an issue (see Gibbs v Hoot Owl Sportsman's Club, 257 AD2d at 943; Maxwell v First Port Jefferson Corp., 31 AD2d at 813; Geer, Du Bois & Co. v Scott & Sons Co., 25 AD2d at 423), the defendants' defaults were found on appeal to be excusable so that the actions reverted to their pre-default status (see Gaynor & Bass v Arcadipane, 268 AD2d at 297; Action Lawn & Landscaping v East Glenville Fire Dist., 254 AD2d at 587), or the defendant's default was unresolved upon further application to the Supreme Court to permit service of a late answer (see Jannon v Van Buskirk, 227 AD2d at 844-845). Accordingly, where a defendant's default is found to be excusable, or at least subject to further proceedings at the Supreme Court, the clerk's judgment must be vacated, along with any underlying finding that the defendant was in default.

Here, the Supreme Court found that in the 1993 action, the defendant has demonstrated neither a reasonable excuse for his underlying default nor a potentially meritorious defense to that action. Its finding, which we are affirming on appeal, establishes the law of the case that the defendant is in default and is not entitled to vacatur of the judgment pursuant to CPLR 5015(a). The only remaining action to be undertaken beyond the vacatur of the clerk's judgment is the conduct of a damages inquest on any cause of action asserted in the 1993 summons with notice (see General Elec. Tech. Servs. Co. v Perez, 156 AD2d at 784; Falso v Norton, 89 AD2d at 635-636; Fidelity Natl. Tit. Ins. Co. v Valtech Research Inc., 73 AD3d at 687).

We note that pursuant to CPLR 3012(d), a defendant who has failed to timely appear in an action may move to compel the plaintiff's acceptance of an untimely answer "upon such terms as may be just and upon a showing of reasonable excuse for [the] delay or default" (CPLR 3012[d]; see New York & Presbyt. Hosp. v Auto One Ins. Co., 28 AD3d 441; Beecher v State Farm Mut. Auto. Ins. Co., 186 AD2d 1012). We find that the showing of reasonable excuse that a defendant must establish to be entitled to serve a late answer under CPLR 3012(d) is the same as that which a defendant must make to be entitled to the vacatur of a default under CPLR 5015(a)(1). Since the defendant here has been found to lack a reasonable excuse for his failure to timely appear on the 1993 action, the law of the case forecloses any further remedy under CPLR 3012(d), again leading to the conclusion that an inquest on damages is all that remains for the Supreme Court (see General Elec. Tech. Servs. Co. v Perez, 156 AD2d at 784; Falso v Norton, 89 AD2d at 635-636; cf. Jannon v Van Buskirk, 227 AD2d at 844-845).

We do not suggest that plaintiffs who assert alternative legal and equitable causes of action are always foreclosed from obtaining clerks' judgments under CPLR 3215(a). Plaintiffs' attorneys do not know at the time they draft summonses with notice or complaints that the defendant will fail to appear and answer, and accordingly, all potential causes of action will typically be included. Plaintiffs who later seek a clerk's judgment, instead of applying to the court itself, may be able to avail themselves of CPLR 3217(a)(1), which allows the voluntary discontinuance of any claim, without leave of court, at any time before a responsive pleading is served or within 20 days after service of the pleading asserting the claim, whichever is earlier. If plaintiffs seeking to discontinue non-sum certain causes of action do not meet the time requirements of CPLR 3217(a)(1), they could then move before the court to discontinue pursuant to CPLR 3217(b). It would seem, however, that seeking court intervention to discontinue non-sum certain causes of action would defeat the purpose of seeking a clerk's judgment in the first instance. In any event, assuming the time requirements for a voluntary discontinuance are met, a plaintiff's affidavit of facts, submitted in support of the entry of the clerk's judgment, can include an expressed voluntary discontinuance of all causes of action except for the cause of action seeking a sum certain. Upon the voluntary discontinuance of all claims that do not fall within the scope of CPLR 3215(a), the clerk would then be authorized to enter a judgment upon the submitted proof of the sum certain amount demanded (cf. Time Warner City Cable v TriState Auto, 5 AD3d 153). Here, the plaintiff did not seek to discontinue the non-sum certain causes of action prior to submitting its affidavit of facts to the clerk, rendering the clerk's judgment infirm.

Given the defendant's default in this action and other circumstances in the record, the 1994 clerk's judgment affected by this opinion and order shall stand as security pending the assessment of damages and, during that time, the plaintiff shall be enjoined from enforcing that judgment (see Reynolds Sec. v Underwriters Bank & Trust Co., 44 NY2d at 574; Woodward v Eighmie Moving & Stor., 151 AD2d at 893).

Adopted Judicial Admission

Kraut v City of New York, 2011 NY Slip Op 05460 (App. Div., 2nd 2011

Furthermore, the plaintiff's hearing testimony demonstrated that the sole basis for his arrest was his lack of a valid driver's license, and that no inquiry was made and no problem was discovered with regard to his insurance documentation at the time of his arrest. This testimony, which constituted a judicial party admission (see Ocampo v Pagan, 68 AD3d 1077, 1078-1079; Reno v County of Westchester, 289 AD2d 216, 217), conclusively refuted the allegation in the complaint that the arrest was premised upon a lack of insurance. Although the plaintiff contends that his hearing testimony should not have been considered because there is no evidence that a transcript of the testimony was received and signed by him, the plaintiff adopted the contents of the transcript by appending it to his sworn bill of particulars and serving it upon the defendants during discovery. Moreover, the affidavit submitted by the plaintiff in opposition to the defendant's motion failed to warrant the denial of the motion.

The Civil Court can handle it: CPLR R. 3211(a)(4)

CPLR R. 3211(a)(4) there is another action pending between the same parties for the same cause of action in a court of any state or the United States

DAIJ, Inc. v Roth, 2011 NY Slip Op 05446 (App. Div., 2nd 2011)

Pursuant to CPLR 3211(a)(4), a court has broad discretion in determining whether an action should be dismissed based upon another pending action where there is a substantial identity of the parties, the two actions are sufficiently similar, and the relief sought is substantially the same (see Whitney v Whitney, 57 NY2d 731, 732; Kent Dev. Co. v Liccione, 37 NY2d 899, 901; Cherico, Cherico & Assoc. v Midollo, 67 AD3d 622, 622; Liebert v TIAA-CREF, 34 AD3d 756, 757). "The critical element is that both suits arise out of the same subject matter or series of alleged wrongs" (Cherico, Cherico & Assoc. v Midollo, 67 AD3d at 622 [internal quotation marks omitted]; see Kent Dev. Co. v Liccione, 37 NY2d at 901).

This action and an action pending in the Civil Court of the City of New York both arise from the same subject matter and alleged wrongs, and involve substantial identity of the parties and similarity of claims. The plaintiff's claims may be fully litigated in the Civil Court action. Accordingly, on the record presented, the Supreme Court providently exercised its discretion in granting the defendants' motion to dismiss the complaint pursuant to CPLR 3211(a)(4) (see Cherico, Cherico & Assoc. v Midollo, 67 AD3d at 623; Liebert v TIAA-CREF, 34 AD3d at 757).

Personal Knowledge: probative value

Gogos v Modell's Sporting Goods, Inc., 2011 NY Slip Op 05435 (App. Div., 1st 2011)

The dissent refers extensively to a second affidavit by Michael Feeley, dated August 31, 2009, submitted in opposition to plaintiffs' motion dated July 8, 2009, to strike defendant's answer for failure to preserve evidence. This affidavit, which was submitted 20 months after the court ordered defendant to produce the tapes and approximately 36 months after the accident, states, inter alia, "Each tape would be recycled and taped over on a constant thirty day basis. It appears that this is what happened to the videotapes from the store on the date of the plaintiff's accident." This affidavit completely contradicts the deposition testimony of defendant's store manager, Cesar Abreu, who testified more than a year earlier that a videotape was made on the day of the accident and was kept in a safe in the office of the store. Abreu also testified at his deposition, taken six months after the court order has issued, that the tapes made at that time were in the store. Despite the glaring inconsistencies between Feeley's testimony and that of manager Abreu, the dissent continues to argue, by selective reading of Abreu's testimony, that Feeley's testimony is not inconsistent with that of Abreu, an indefensible position.

The Feeley affidavit is nothing more than a last-minute attempt by defendant to tailor the facts and present a feigned factual issue to avoid the consequences of the admission by manager Abreu, six months after the court order was issued, that the subject tapes were retained on defendant's premises, and is, thus, without probative value (Capraro v Staten Is. Univ. Hosp., 245 AD2d 256, 257 [1997]). Further, a self-serving affidavit by the vice president of a subsidiary of defendant offered to contradict the deposition testimony — here, the testimony of defendant's own general manager — or to retract a previous admission does not raise a bona fide issue of fact and will be disregarded (see Lupinsky v Windham Constr. Corp., 293 AD2d 317, 318 [2002]).

It appears that Feeley was not the vice president of defendant's Modell's II subsidiary at the time of plaintiff's accident, nor did he work at the premises where the accident occurred. On the other hand, Cesar Abreu was defendant's general manager at the subject store, interviewed the injured plaintiff immediately after the accident, called an ambulance for her, investigated the accident, and prepared the accident report. As opposed to Feeley, Abreu is a witness with actual personal knowledge of the facts, and he testified as to how the videotapes on the date of the accident were prepared and retained by defendant.

The affidavit by Michael Feeley is deficient. Throughout its writing, the dissent at times refers to Feeley as "defendant's vice president," a misidentification conveying the false and misleading impression that Feeley was employed in a capacity giving him personal knowledge of the facts of this case. Once again, Michael Feeley is not the vice president or even an employee of defendant corporation. In both of his affidavits, he avers that he is the current "Vice President of Modell's II, Inc., a subsidiary of [defendant corporation]." Nowhere in his affidavits does he state whether there was any operational connection between Modell's II and defendant corporation, two separate and distinct entities, a fact that the dissent does not want to acknowledge. In any event, the dissent misses the point. Feeley, who is not an employee of defendant corporation, makes the conclusory allegation that he is "fully familiar with the operations of this store, including the surveillance cameras located in certain parts of the store," without any explanation of the source of his knowledge (see Peacock v Kalikow, 239 AD2d 188, 190 [1997]). He does not state the nature of his duties, if any, with respect to defendant, a corporation he apparently has no connection with, so as to shed light on the manner in which he allegedly obtained knowledge of the facts of this case. Thus, his affidavit is without probative value (id.). This Court is empowered to decide, sua sponte, that an affiant is without personal knowledge of the facts in a case by simply reviewing the substance of the affidavit (see e.g. Adam v Cutner & Rathkopf, 238 AD2d 234, 238 [1997]). We are not required to accept Feeley's testimony as competent evidence merely because he "swore to the fact . . .," as the dissent urges. It is the burden of the proponent of an affidavit to demonstrate the basis of the affiant's knowledge (see id. at 239-240), and here, defendant failed to meet that burden. It appears that the dissent is placing the burden of proof on the wrong party when it states that "[p]laintiffs' counsel offered no factual basis for his assertion that the vice president had no personal knowledge of the facts . . ." It further appears that the dissent is advancing a legal concept that anyone remotely related to a party to an action can claim to have personal knowledge of the facts of the internal workings of that party by merely reciting, without more, his or her remote connection, to that party. That is not the law. Thus, the dissent's conclusion that Feeley has personal knowledge of the facts based solely on Feeley's statement that he is the current vice president of defendant's subsidiary corporation is without factual or legal basis and must be rejected as untenable.

The dissent is incorrect when it states that "at no time have plaintiffs ever argued that the vice president's position as an officer of the subsidiary was at all relevant, let alone that it provided a ground for disregarding his affidavit." In the reply affirmation dated September 10, 2009, plaintiffs' attorney stated that "the Court should not be misled by the improper self-serving and speculative affidavits from defendant's two off-site executives with no personal knowledge of the facts." Because the dissent's arguments are premised on the self-serving statements by Michael Feeley, its entire position falls along with the affidavits, which lack merit and probative value.

3216

CPLR R. 3216 Want of prosecution

Umeze v Fidelis Care N.Y., 2011 NY Slip Op 04770 (Ct. App. 2011)

Supreme Court abused its discretion by declining to grant defendants' motion to  dismiss without condition. Plaintiff failed to establish a (1) justifiable excuse for his failure to timely file a note of issue and (2) meritorious cause of action (see CPLR 3216 [e]; see also Baczkowski v Collins Constr. Co., 89 NY2d 499 [1997]).

Banik v Evy Realty, LLC, 2011 NY Slip Op 04185 (App. Div., 2nd 2011)

On September 25, 2009, the Supreme Court, sua sponte, dismissed the action. By notice of motion dated February 3, 2010, the plaintiffs moved, in effect, to vacate the dismissal of the action and to restore the action to active status. The appellant opposed the plaintiffs' motion. In an order dated April 14, 2010, the Supreme Court, inter alia, denied those branches of the plaintiffs' motion which were, in effect, to vacate the dismissal and to restore the action as against the defendant Evy Realty, LLC (hereinafter Evy), to active status. In an order dated August 4, 2010, however, the Supreme Court granted the plaintiffs' motion for leave to reargue and, upon reargument, granted those branches of the plaintiffs' motion which had previously been denied. Evy appeals from the order dated August 4, 2010.

Neither the order dated April 14, 2010, nor the order appealed from contain any explanation for the original denial of those branches of the plaintiffs' motion which were, in effect, to vacate the dismissal and to restore the action as against Evy to active status or the subsequent granting, upon reargument, of those branches of the plaintiffs' motion. In addition, the record is not clear as to why the action was dismissed on September 25, 2009, in the first instance. The record]is devoid of any evidence that there was a conference scheduled for September 25, 2009, and there was no order dismissing the complaint pursuant to 22 NYCRR 202.27. Thus, contrary to Evy's contentions, 22 NYCRR 202.27 could not have provided the basis for the order dated April 14, 2010, denying those branches of the plaintiffs' motion which were to vacate the dismissal and restore the action to active status with respect to it (see Mitskevitch v City of New York, 78 AD3d 1137, 1138; Clark v Great Atl. & Pac. Tea Co., Inc., 23 AD3d 510, 511; Murray v Smith Corp., 296 AD2d 445, 446).

Furthermore, while the failure to comply with a court order directing the filing of a note of issue can, in the proper circumstances, provide the basis for the dismissal of a complaint under CPLR 3216, courts are prohibited from dismissing an action based on neglect to prosecute unless the CPLR 3216 statutory preconditions to dismissal are met (see Baczkowski v Collins Constr. Co., 89 NY2d 499, 502-503; Murray v Smith Corp., 296 AD2d at 447; Schwartz v Nathanson, 261 AD2d 527, 528; Schuering v Stella, 243 AD2d 623, 624). Here, a compliance conference order dated December 9, 2008, which set a date for the filing of the note of issue, did not constitute a valid 90-day demand because there was no warning that failure to file the note of issue by June 5, 2009, would serve as a basis for dismissal under CPLR 3216 (see Sanchez v Serje, 78 AD3d 1155, 1156; Ratway v Donnenfeld, 43 AD3d 465; Patel v MBG Dev., Inc., 41 AD3d 682, 683). Moreover, a so-ordered stipulation dated September 24, 2009, which extended the plaintiffs' time to file a note of issue until January 19, 2010, could not be deemed a 90-day demand since it failed to advise the plaintiffs that the failure to comply therewith would serve as the basis for a motion to dismiss the action (see Wasif v Khan, 82 AD3d 1084; Heifetz v Godoy, 38 AD3d 605; Wollman v Berliner, 29 AD3d 786).

Accordingly, upon reargument, the Supreme Court properly granted those branches of the plaintiffs' motion which were, in effect, to vacate the dismissal of the action as against Evy and to restore the action as against Evy to active status.

 

 

Supervising disclosure: CPLR § 3104

CPLR § 3104 Supervision of Disclosure

Etzion v Etzion, 2011 NY Slip Op 04197 (App. Div., 2nd 2011)

Both the underlying order dated January 4, 2010, limiting discovery, as well as the order appealed from, which denied the plaintiff's motion, in effect, to vacate the determination set forth in the order dated January 4, 2010, were made by a referee whom the parties had stipulated would be assigned the task of supervising pretrial discovery in this action (see CPLR 3104[b]). Pursuant to CPLR 3104(d), a party may make a motion seeking review of a referee's order regarding discovery, which "shall be . . . made in the court in which the action is pending within five days after the order is made." The record indicates that the plaintiff did not seek review, by the trial court, of either the order dated January 4, 2010, or the order appealed from, as required by CPLR 3104(d). "The specific language of CPLR 3104(d) mandating review in the court in which the action is pending precludes this court from entertaining a direct appeal from an order of a judicial hearing officer designated as a referee to supervise disclosure" (Crow-Crimmins-Wolff & Munier v County of Westchester, 110 AD2d 871, 873). Accordingly, the appeal must be dismissed (see Krygier v Airweld, Inc., 176 AD2d 701; Crow-Crimmins-Wolff & Munier v County of Westchester, 110 AD2d at 872-873; Matter of Westchester Tit. & Trust Co., 260 App Div 1055).

 

Policy terms and orther language related nuances

Cragg v Allstate Indem. Corp., 2011 NY Slip Op 04767 (Ct. App. 2011)

Insurance contracts must be interpreted according to common speech and consistent with the reasonable expectations of the average insured (see Matter of Mostow v State Farm Ins. Cos., 88 NY2d 321, 326-327 [1996]). To the extent that there is any ambiguity in an exclusionary clause, we construe the provision in favor of the insured. Moreover, "'exclusions or exceptions from policy coverage . . . 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'" (Pioneer Towner Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d 302, 307 [2009], quoting Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984]). Allstate has not met that burden here.

The language of the policy exclusion — excluding coverage "whenever any benefit of this coverage would accrue directly or indirectly to an insured" — is ambiguous. It could be interpreted, as Allstate urges, to mean that bodily injury to an insured is not covered whenever any benefit — including coverage itself in the form of defense and indemnification — would accrue to an insured. However, as plaintiff points out, this interpretation ascribes meaning only to the first clause of the exclusion — "[w]e do not cover bodily injury to an insured person." Since the right to defense and indemnification universally accrues to an insured, under Allstate's interpretation the condition of the second clause of the exclusion would always be met. However, the second part of the exclusion must somehow modify the first part of the clause in order to have any meaning. In this context, a benefit must mean something other than coverage itself and is more naturally read to mean proceeds paid under the policy. In light of our obligation to interpret the exclusion in a manner that gives full force and effect to the policy language and does not render a portion of the provision meaningless (see County of Columbia v Continental Ins. Co., 83 NY2d 618, 628 [1994]), we find plaintiff's interpretation of the clause to be more in keeping with these well-settled principles of contract interpretation.

The current version of the exclusion at issue was brought about in response to the decision in Allstate Ins. Co. v Pestar (168 AD2d 931 [4th Dept 1990]). The prior version of the exclusion had excluded coverage for bodily injury to an insured. In Pestar, a child was injured when she dove into a State-owned lake. Her parents filed a negligence action against the State and the State counterclaimed seeking contribution. Despite the policy exclusion, the Appellate Division determined that Allstate had a duty to defend and indemnify the parents on the State's counterclaim, finding that "the liability at issue . . . is not the parents' liability to [the insured child] but rather the parents' potential liability to the State on a claim of equitable apportionment" (Pestar, 168 AD2d at 931-932). The insurer subsequently added language to the exclusion stating that bodily injury to an insured is not covered "whenever any benefit of this coverage would accrue directly or indirectly to an insured person" (see 9A Couch on Insurance 3d § 128:4).

Assuming the insurer intended this language to exclude coverage under the policy entirely for bodily injury to insureds, it did not accomplish the desired result. Instead of making the exclusion broader, the additional language can be read as limiting the application of the exclusion to situations where an insured would receive a benefit (i.e. payment) under the policy. The amendment, then, can be seen as the insurer's attempt to cut off indirect claims, such as claims for contribution. As relevant to this appeal, however, the exclusion fails to bar unambiguously payment to a noninsured plaintiff, that is to say it does not clearly cut off the nonresident distributee's wrongful death claims arising from the fatal injury to an insured.

Other jurisdictions have observed that there are valid policy reasons for excluding coverage in cases such as this one. They have noted that homeowner's insurance is generally meant to cover bodily injury to noninsureds (see Cincinnati Indem. Co. v Martin, 85 Ohio St 3d 604, 608; 710 NE2d 677, 680 [1999]) and that coverage is excluded in these types of situations in order to avoid imposing liability on the insurer in a case where the insured, due to a close relationship with the injured party, might be unmotivated to assist the insurer in defending against the claim (see Whirlpool Corp. v Ziebert, 197 Wis 2d 144, 149; 539 NW2d 883, 885 [1995])^[FN1]. However, faced with a very similar case addressing the identical exclusion, the Wisconsin Supreme Court recently held that "Allstate has failed to meet its burden to demonstrate that the policy term 'benefit' unambiguously includes the contractual right to receive a defense or the contractual right to indemnification" (Day v Allstate Indem. Co., 2011 WI 24, ¶57 [decided April 29, 2011]). We agree with this analysis.

We therefore find that judgment should have been granted in plaintiff's favor, as the exclusion did not operate to bar coverage for the noninsured plaintiff's wrongful death claim for the death of the insured decedent.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings in accordance with this opinion.

Brennan Beer Gorman/ Architects, LLP v Cappelli Enters., Inc., 2011 NY Slip Op 04825 (App. Div., 1st 2011)

On May 19, 2008, plaintiff submitted a proposal for architectural and engineering services to defendants relating to a proposed casino resort project (the project). Four days later, plaintiff informed defendants that it was still "working on a formal agreement," but nonetheless asked defendants to provide authorization to proceed. Defendants authorized plaintiff to start working, but expressly noted that plaintiff's "proposal and associated pricing" were "still under review and . . . subject to a formal agreement." Although plaintiff proceeded to work on the project, the parties continued to exchange contract drafts and comments for several months, never coming to an express agreement on price and other terms. It is thus evident on this record that the parties' minds never met on the material terms of their agreement, including price (see Yenom Corp. v 155 Wooster St. Inc., 23 AD3d 259, 259-260 [2005], lv denied 6 NY3d 708 [2006]). Accordingly, defendants are entitled to summary judgment dismissing plaintiff's first and third causes of action for breach of an express contract.

Defendants are also entitled to summary judgment dismissing plaintiff's fourth cause of action for breach of an implied contract. As noted, the record establishes that the parties never reached an express agreement on the material term of price. Moreover, defendants' statement that they would be bound only by a formal agreement and their repeated rejection of plaintiff's proposal for lump-sum pricing overrides their act of paying plaintiff's August 2008 invoice, which billed for work performed in June 2008 on a lump-sum basis (see Jordan Panel Sys. Corp. v Turner Constr. Co., 45 AD3d 165, 179 [2007]).

Defendants' consistent objections to plaintiff's invoices requires dismissal of the fifth cause of action for an account stated (cf. Herrick, Feinstein LLP v Stamm, 297 AD2d 477, 478-479 [2002]).

Because plaintiff's express and implied contract claims should be dismissed, plaintiff's second cause of action for attorneys' fees should also be dismissed, as that claim is premised exclusively on the attorneys' fees provision contained in plaintiff's May 2008 proposal.

Supreme Court properly declined to dismiss plaintiff's sixth cause of action for quantum meruit, since triable issues of fact exist as to whether plaintiff could have reasonably expected to be compensated for its services and the reasonable value of those services (see generally Fulbright & Jaworski, LLP v Carucci, 63 AD3d 487, 488-489 [2009]). Although the parties never reached an agreement on price, the record indicates that defendants acknowledged the need to pay plaintiff at least some amount for its services. Indeed, on July 3, 2008, defendants directed plaintiff to bill "for now on a [time and materials] basis until we have reached conclusion on the contract," and, on August 18, 2008, defendants asked plaintiff to prepare a summary of spending and payment status, noting that they wanted "to make sure we are staying current."

We reject defendants' contention that plaintiff cannot establish that defendants benefitted from plaintiff's services. The plaintiff asserting a valid claim in quantum meruit "recovers the reasonable value of his performance whether or not the defendant in any economic sense benefitted from the performance" (Martin H. Bauman Assoc. v H & M Intl. Transp., 171 AD2d 479, 484 [1991] [internal quotation marks and citation omitted]).

We also reject defendants' contention that plaintiff cannot establish the reasonable value of its services because it did not maintain itemized billing records detailing how it spent the asserted 5,800 man-hours of work. There are other means of establishing the reasonable value of services rendered, including the plaintiff's invoices and evidence of the number of hours of service rendered (see Paul F. Vitale, Inc. v Parker's Grille, Inc., 23 AD3d 1147, 1147 [2005], lv denied 6 NY3d 707 [2006]; Clark v Torian, 214 AD2d 938, 938 [1995]), both of which are available in the record. Moreover, plaintiff has submitted the affidavit of a licensed architect who, based on his review of the record, opined that plaintiff's schematic design work had a fair market value of at least $1.3 million.

We note that, on appeal, plaintiff does not seek summary judgment on its quantum meruit claim. In any event, we find that plaintiff is not entitled to such relief due to unresolved issues of material fact. We further note that defendant makes no argument with respect to plaintiff's seventh cause of action for a declaratory judgment.

Goldman Sachs Group, Inc. v Almah LLC, 2011 NY Slip Op 04725 (App. Div. 1st 2011)

Before any discovery was conducted, GS moved to dismiss the counterclaims pursuant to CPLR 3211(a)(1) and (7)(21)^[FN1]. GS argued that it was entitled to dismissal of the first counterclaim (breach of contract) because all the transaction documents submitted established that it "received" no "payment" of any kind as a result of the assignment and sublease. Preliminarily, the motion court acknowledged that, because Art. 12.6(a) of the lease speaks in terms of actual payment, GS's interpretation limiting the profit-sharing obligation to money received was reasonable. Nevertheless, the court denied the motion to dismiss as to the first counterclaim, finding that the term "other consideration" was ambiguous and should be interpreted with the aid of extrinsic evidence, reasoning that, since "sum" means money, if "other consideration" is to have any non-redundant meaning, it must mean more than just money, in accordance with the broad legal concept that consideration may be many forms of value.

Whether a contract is ambiguous is a question of law for the court and is to be determined by looking "within the four corners of the document" (Kass v Kass, 91 NY2d 554, 566 [1998], citing W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162-163 [1990]). A contract is unambiguous if "on its face [it] is reasonably susceptible of only one meaning" (Greenfield v Philles Records, 98 NY2d 562, 570 [2002]; see also Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978]). Conversely, "[a] contract is ambiguous if the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings" (Feldman v National Westminster Bank, 303 AD2d 271, 271 [2003], lv denied 100 NY2d 505 [2003] [internal quotation marks and citations omitted]).

The existence of ambiguity is determined by examining the "entire contract and consider[ing] the relation of the parties and the circumstances under which it was executed," with the wording to be considered "in the light of the obligation as a whole and the intention of the parties as manifested thereby" (Kass at 566 [internal quotations marks and citation omitted]). The " intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and the parties' reasonable expectations'" (Del Vecchio v Cohen, 288 AD2d 426, 427 [2001], quoting Slamow v Del Col, 174 AD2d 725, 726 [1991], affd 79 NY2d 1016 [1992]).

Applying these principles, we find that the language of Article 12.6, when considered as an integrated whole and not in isolation, conveys the parties' intent that only actual "payment" made by the assignee and "receipt" by the assignor as consideration would trigger the profit-sharing clause. Indeed, Article 12.6 lists several types of "consideration" and all of the examples consist of amounts payable, for one reason or another, to the Tenant. The examples of "other consideration" include "sums paid for the sale or rental of Tenant's fixtures, leasehold improvements, equipment, furnishings or other personal property . . . " Additionally, Article 12.6 indicates that any "consideration" would consist of "sums" that a Tenant "receives" and against which the Tenant's expenses can be netted. This language in Article 12.6 conveys the parties' clear intent that only tangible consideration such as cash or notes payable to the tenant could trigger the profit-sharing clause, and that any intangible benefits inuring to the tenant from the assignment and sublease, as the owner posits, in the form of inherent "value" does not suffice. Even though the word "consideration" might seem to suggest a broader meaning in general, the word should be limited to the particular object that the parties intended here. Accordingly, because it is undisputed that no "payment" was "received" as consideration for the assignment of the lease, tenant GS was entitled to a dismissal of the counterclaim in its entirety.

Ellington v Sony/ATV Music Publ. LLC, 2011 NY Slip Op 04733 (App. Div., 1st 2011)

Plaintiff failed to set forth a basis for terminating the parties' copyright royalties agreement. Viacom's sale of defendant Famous Music, a party to the agreement, to defendant Sony/ATV did not repudiate the agreement by assigning plaintiff's rights and rendering Famous incapable of performing its obligations. In any event, an assignment is permissible in the absence of an express prohibition (see Eisner Computer Solutions v Gluckstern, 293 AD2d 289 [2002]; Matter of Stralem, 303 AD2d 120, 122 [2003]). Plaintiff's conclusory characterization of the agreement as an unassignable personal services contract (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 482 [2006], cert dismissed 548 US 940 [2006]) was contradicted by the overall tenor of the agreement, which was cast as a sale of "assets" and did not provide for the management of plaintiff's artistic career or talents. The extraordinary remedy of rescission was unwarranted since, among other reasons, there was an adequate remedy at law (see Rudman v Cowles Communications, 30 NY2d 1, 13 [1972]).

The fiduciary breach claim was duplicative of the contract claims (see William Kaufman Org. v Graham & James, 269 AD2d 171, 173 [2000]), plaintiff's artificial separation of the royalty mis-routing allegation from the "negative adjustment" contract claims notwithstanding. The unjust enrichment claim was not viable in light of the undisputedly valid contract claims (see EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 23 [2005]).

Malekan v Sakai, 2011 NY Slip Op 04751 (App. Div., 1st 2011)

Supreme Court correctly determined that Sakai is the rightful owner of the antique. Plaintiff Malekan's contention that the agreement in Farsi was an agreement to forbear, akin to a covenant not to sue, lacks support in the record. Furthermore, there is no dispute that Malekan also signed a bill of sale written in English concerning the antique, and under the circumstances, Malekan is bound by what he signed (see Shklovskiy v Khan, 273 AD2d 371, 372 [2000]).

Suazo v Maple Ridge Assoc., L.L.C., 2011 NY Slip Op 04762 (App. Div., 1st 2011)

The right of a party to recover indemnification on the basis of a contractual provision depends on the intent of the parties and the manner in which that intent is expressed in the contract (see Kurek v Port Chester Hous. Auth., 18 NY2d 450 [1966]). The promise to indemnify should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding facts and circumstances (see Hooper Assoc., Ltd., v AGS Computers, 74 NY2d 487 [1989]). A contract that provides for indemnification will be enforced so long as the intent to assume such role is sufficiently clear and unambiguous (see Bradley v Earl B. Feiden, Inc., 8 NY3d 265 [2007]).

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