theCPLRblog

Fraud SOL

Gorelick v Vorhand, 2011 NY Slip Op 03207 (App. Div., 2nd 2011)

"[A] fraud-based action must be commenced within six years of the fraud or within two years from the time the plaintiff discovered the fraud or could with reasonable diligence have discovered it'" (Sargiss v Magarelli, 12 NY3d 527, 532, quoting CPLR 213[8]; see CPLR 203[g]; Coombs v Jervier, 74 AD3d 724, 724). "The test as to when a plaintiff should have discovered an alleged fraud is an objective one" (Prestandrea v Stein, 262 AD2d 621, 622; see 2 NY PJI2d 3:20, at 192 [2011]). Thus "plaintiffs will be held to have discovered the fraud when it is established that they were possessed of knowledge of facts from which [the fraud] could be reasonably inferred" (Erbe v Lincoln Rochester Trust Co., 3 NY2d 321, 326; see Sargiss v Magarelli, 12 NY3d at 532; Higgins v Crouse, 147 NY 411, 416; Stride Rite Children's Group v Siegel, 269 AD2d 875, 876; Watts v Exxon Corp., 188 AD2d 74, 76; Azoy v Fowler, 57 AD2d 541, 541-542).

"Ordinarily such an inquiry presents a mixed question of law and fact" (Erbe v Lincoln Rochester Trust Co., 3 NY2d at 326; see K & E Trading & Shipping v Radmar Trading Corp., 174 AD2d 346; Azoy v Fowler, 57 AD2d 541, 541-542). As a general matter, "knowledge of the fraudulent act is required and mere suspicion will not constitute a sufficient substitute" (Erbe v Lincoln Rochester Trust Co., 3 NY2d at 326; see Sargiss v Magarelli, 12 NY3d at 532).

Where, as here, "it does not conclusively appear that a plaintiff had knowledge of facts from which the fraud could reasonably be inferred, a complaint should not be dismissed on motion and the question should be left to the trier of the facts" (Trepuk v Frank, 44 NY2d 723, 725; see Sargiss v Magarelli, 12 NY3d at 532; see Pericon v Ruck, 56 AD3d 635, 636-637; Oggioni v Oggioni, 46 AD3d 646, 648-649; Saphir Intl., SA v UBS PaineWebber Inc., 25 AD3d 315, 316). Accordingly, the Supreme Court erred when it, upon reargument, in effect, adhered to so much of the determination in the order entered September 11, 2009, as granted that branch of the motion of the defendant Harry Vorhand which was pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against the defendants Milan Vorhand, Harry Vorhand, and Thomas Vorhand as time-barred.

SOL defense resurrected ("retracted") in opp to SJ

CPLR R. 3211(e)

I don't rembember seeing this before

Lewiarz v Travco Ins. Co., 2011 NY Slip Op 02094 (App. Div. 3rd 2011)

Preliminarily, we conclude that Supreme Court properly entertained defendants' statute of limitations argument set forth for the first time in their motion for summary judgment. Plaintiffs correctly note that defendants had neither raised the statute of limitations defense in their answer nor moved to dismiss the complaint on that ground pursuant to CPLR 3211 (a) prior to their summary judgment motion. However, "'the waiver that would otherwise have resulted from [the failure to plead the defense or move to dismiss the complaint premised on such defense] was retracted by assertion of the defense in connection with the summary judgment motion[]'" (Allen v Matthews, 266 AD2d 782, 784 [1999], quoting Adsit v Quantam Chem. Corp., 199 AD2d 899, 900 [1993] [citation omitted]; see Sullivan v American Airlines, Inc., 80 AD3d 600, 602 [2011]).

I think the cite to Sullivan is a stretch.  I didn't look up the others.

no fault gets curiouser and curiouser

M.N. Dental Diagnostics, P.C. v New York City Tr. Auth., 2011 NY Slip Op 01525 (App. Div. 1st 2011)

It is well settled that "the No-Fault Law does not codify common-law principles; it creates new and independent statutory rights and obligations in order to provide a more efficient means for adjusting financial responsibilities arising out of automobile accidents" (Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 175 [1986]). Since it is undisputed that there existed no contract between plaintiff's assignor and the NYCTA, the common carrier's obligation to provide no-fault benefits arises out of the no-fault statute. Therefore, the three-year statute of limitations as set forth in CPLR 214(2) is applicable here.

What does this mean for self-insureds?

Pomona Med. Diagnostics, P.C. v GEICO Ins. Co., 2011 NY Slip Op 50276(U) (App. Term, 1st 2011)

In opposition to plaintiff's prima facie showing of entitlement to judgment as a matter of law (see Countrywide Ins. Co. v 563 Grand Med., P.C., 50 AD3d 313, 314 [2008]; Central Nassau Diagnostic Imaging, P.C. v GEICO, 28 Misc 3d 34, 36 [2010]; Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8, 9 [2007]), the report of defendant's peer review doctor, which relied on the assignor's medical records (see Cross Cont. Med., P.C. v Allstate Ins. Co., 13 Misc 3d 10, 11 [2006]; see also Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 27 Misc 3d 140[A], 2010 NY Slip Op 50987[U] [2010]), raised a triable issue of fact as to whether the services provided by plaintiff were medically necessary (see Krishna v Liberty Mut. Ins. Co., 24 Misc 3d 128[A], 2009 NY Slip Op 51312[U] [2009]). Contrary to defendant's contention, however, its "submissions did not conclusively establish as a matter of law its defense of lack of medical necessity," and its cross motion was properly denied (A Plus Med., P.C. v Mercury Cas. Co., 23 Misc 3d 136[A], 2009 NY Slip Op 50824[U] [2009]).

Some good old fashioned SOL or Use it or lose it

CPLR R. 3211(e)

Horst v Brown, 2010 NY Slip Op 02836 (App. Div., 1st, 2010)

CPLR 3211(e) explicitly provides that an objection or defense based on the statute of limitations is waived unless raised in a responsive pleading or in a pre-answer motion to dismiss. Defendant failed to do either, and thus waived this defense (see Buckeye Retirement Co., L.L.C., Ltd. v Lee, 41 AD3d 183 [2007] [statute of limitations defense waived unless raised by aggrieved party]).

As defendant waived the affirmative defense of statute of limitations, Supreme Court erred in its sua sponte consideration of that defense (see Paladino v Time Warner Cable of N.Y. City, 16 AD3d 646 [2005] ["court may not take judicial notice, sua sponte, of the applicability of a statute of limitations if that defense has not been raised"]).

While "courts generally allow pro se litigants some leeway on the presentation of their case" (Stoves & Stones v Rubens, 237 AD2d 280, 280 [1997]), in this particular case it was error to treat defendant's opposition to plaintiff's motion for summary judgment on damages as either a motion to amend defendant's answer, or a cross motion for summary judgment based on the statute of limitations. "A motion for summary judgment on one claim or defense does not provide a basis for searching the record and granting summary judgment on an unrelated claim or defense'" (Baseball Off. of Commr. v Marsh & McLennan, 295 AD2d 73, 82 [2002], quoting Sadkin v Raskin & Rappoport, 271 AD2d 272, 273 [2000]). 

All concur except Gonzalez, P.J. and RomÁn, J. who dissent in part in a memorandum by RomÁn, J. as follows:

***

Generally, when a defendant fails to plead the statute of limitations as a defense in his or her answer or fails to move for dismissal on that ground, via a pre-answer motion, the defense is ordinarily waived (see Dougherty v City of Rye, 63 NY2d 989, 991-992 [1984]; Fade v Pugliani, 8 AD3d 612, 614 [2004]). However, when a defendant fails to plead an affirmative defense, as required by CPLR 3211(e) and 3018(b), but nevertheless asserts that defense in connection with a motion for summary judgment, the waiver is said to be retracted and the court can grant, when the defendant is the movant, or deny, when the defendant is the opponent, summary judgment based upon the unpleaded affirmative defense (see Lerwick v Kelsey, 24 AD3d 918, 919-920 [2005]; Allen v Matthews, 266 AD2d 782, 784 [1999]; Adsit v Quantum Chem. Corp., 199 AD2d 899 [1993]). The threshold inquiry is whether in considering the unpleaded defense, the opponent of the defense is prejudiced thereby (see BMX Wordlwide v Coppola N.Y.C., 287 AD2d 383 [2001]; Allen v Matthews, 266 AD2d 782, 784 [1999]; Seaboard Sur. Co. v Nigro, Bros. 222 AD2d 574 [1995]; Rogoff v San Juan Racing Assn. Inc., 77 AD2d 831 [1980], affd 54 NY2d 883 [1981]). Such prejudice, however, is ameliorated when the defense was previously raised on a prior motion or during discovery (id.), or when the opponent of the motion, where defendant seeks summary judgment based upon said defense, is given an opportunity to fully respond to the motion for summary judgment (Sheils v County of Fulton, 14 AD3d 919 [2005], lv denied 4 NY3d 711 [2005]; Kirilescu v American Home Prods. Corp., 278 AD2d 457 [2000], lv denied 96 NY2d 933 [2001]; McSorley v Philip Morris, Inc., 170 AD2d 440 [1991], appeal dismissed 77 NY2d 990 [1991]; International Fid. Ins. Co. v Robb, 159 AD2d 687 [1990]).

***

Cadlerock, L.L.C. v Renner, 2010 NY Slip Op 02849 (App. Div., 1st, 2010)

Defendant sufficiently pleaded his statute of limitations affirmative defense (see Immediate v St. John's Queens Hosp., 48 NY2d 671, 673 [1979]). Contrary to plaintiff's contention, the promissory note, which required defendant to pay principal and interest payments monthly for 20 years, after which the loan would have self-liquidated, was an installment contract (see Phoenix Acquisition Corp. v Campcore, Inc., 81 NY2d 138, 141-142 [1993]), and, since the debt was not accelerated while defendant was making the monthly payments, the applicable six-year statute of limitations (CPLR 213[2]) began to run on the date on which each installment became due and payable (see Phoenix Acquisition Corp. at 141). Thus, the statute of limitations bars plaintiff from seeking to recover the amount of the installment payments, including any interest, that defendant defaulted on before April 18, 2002, when this action was commenced (see id.; Sce v Ach, 56 AD3d 457, 458-459 [2008]).

The defense of laches is unavailable in this action at law commenced within the period of limitations (see Matter of American Druggists' Ins. Co., 15 AD3d 268 [2005], lv dismissed 5 NY3d 746 [2005]; Kahn v New York Times Co., 122 AD2d 655, 663 [1986]). However, we conclude that a triable issue of fact exists whether plaintiff's claims are barred by the doctrine of equitable estoppel, i.e., whether defendant justifiably relied on the nine years of inaction by plaintiff and its predecessors-in-interest to reasonably conclude that his monthly payments were sufficient to satisfy his payment obligations under the note, and therefore was misled into paying a reduced amount for years without realizing that interest was accruing at the 14% interest rate [*2](see Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., 7 NY3d 96, 106—107 [2006]; Triple Cities Constr. Co. v Maryland Cas. Co., 4 NY2d 443, 448 [1958]).

The bold is mine.

CPLR § 203(f)

CPLR § 203(f) Claim in amended pleading

Fisher v Giuca, 2010 NY Slip Op 00218 (App. Div., 2nd, 2010)

Furthermore, the court properly denied the plaintiffs' application for leave to serve an amended complaint. The allegations in the original complaint did not fairly apprise Cleary of "the occurrences . . . to be proved pursuant to the amended pleading" (CPLR 203[f]). Thus, the new theories in the proposed amended complaint do not relate back to the original complaint, and are time-barred (see Panaccione v Acher, 30 AD3d 989, 990; Hyacinthe v Edwards, 10 AD3d 629, 631).

Today in the First Department (22 NYCRR 202.2, CPLR R. 3211, CPLR R. 3212, CPLR § 306-b, CPLR § 3121, SOL)

Several decisions popped out of the Appellate Division, First Department,  today.  In a break from my normal posting style, where I try to split posts between sections and rules, I'm going to post the few decisions that I found interesting.

Ocasio-Gary v Lawrence Hosp., 2010 NY Slip Op 00003 (App. Div., 1st, 2009)

Even had St. Barnabas met its initial burden, plaintiff's expert's submission raises triable issues of fact regarding the hospital's negligence (see DaRonco v White Plains Hosp. Ctr., 215 AD2d 339 [1995]). The trial court should not have rejected the expert's opinion on the ground that the expert failed to expressly state that he or she possessed the requisite background and knowledge in emergency medicine to render an opinion. The expert, who is board certified in internal medicine, is qualified to render an opinion as to diagnosis and treatment with respect to the symptoms presented by the decedent. In contrast, the expert's affirmation in Browder v New York City Health & Hosps. Corp. (37 AD3d 375 [2007]), cited by the trial court, failed to indicate either the expert's specialty or that he or she possessed the requisite knowledge to furnish a reliable opinion. Venue should be retained in Bronx County. The only ground for the motion to change venue was the dismissal of the complaint against St. Barnabas, and the complaint has been reinstated.

The motion to vacate plaintiff's note of issue, served more than 20 days after service of that note, was properly denied as untimely (see 22 NYCRR 202.21[e]), "no showing of special circumstances or adequate reason for the delay having been offered" (Arnold v New York City Hous. Auth., 282 AD2d 378 [2001]). Nor did the court err in finding that defendant Orin failed to demonstrate good cause for an extension of time in which to file his motion for summary judgment (CPLR 3212[a]; Brill v City of New York, 2 NY3d 648, 652 [2004]).

Johnson v Concourse Vil., Inc., 2010 NY Slip Op 00010 (App. Div., 1st, 2009)

Although plaintiff's counsel served her pleadings just one day after the applicable 120-day service period expired (see CPLR 306-b), and counsel offered proof that he attempted to arrange for service with eight days remaining out of the 120-day period, he nonetheless failed to show diligence in his efforts to effect service, particularly as the three-year statute of limitations (CPLR 214[5]) had already expired, and he did not follow up with the process server regarding completion of service until after the 120-day service period had expired. There was no evidence to indicate that the corporate defendants could not be located, or that they could not be readily served through the Secretary of State. Furthermore, counsel waited until after defendants moved to dismiss before he cross-moved for an extension of the time to serve some several months later. Such evidence of lack of diligence undermines plaintiff's "good cause" argument in support of her extension request (see generally Leader v Maroney, Ponzini & Spencer, 97 NY2d 95 [2001]).

Nor is a grant of an extension to serve the pleadings warranted in the interest of justice. The circumstances presented, including that the statute of limitations expired, plaintiff's lack of diligence in prosecuting this action, the lack of probative evidence offered as to the claim's merit, the vague allegations of injury, the lack of notice given of the claim for more than three years and three months, the prejudice to defendants and the several month delay in moving for an extension of the time to serve, demonstrate that the dismissal of this action was appropriate (see Slate v Schiavone Constr. Co., 4 NY3d 816 [2005]; Posada v Pelaez, 37 AD3d 168 [2007]; compare de Vries v Metropolitan Tr. Auth., 11 AD3d 312 [2004]).

One day late.

Suss v New York Media, Inc., 2010 NY Slip Op 00011 (App. Div., 1st, 2009)

We reject plaintiff's argument that such evidence fails to show, prima facie, that the issue first was published on April 29. The affidavits submitted by defendants were made with personal knowledge of the issue's distribution date; the distributor's affidavit was the proper vehicle for the submission of photographs taken by him and his staff (see H.P.S. Capitol v Mobil Oil Corp., 186 AD2d 98, 98 [1992]); and the photographs, as enhanced and highlighted in defendants' reply, clearly depict what they are claimed to depict. In opposition, plaintiff failed to submit any evidence of a later publication.

We also reject plaintiff's argument that unless the court gives CPLR 3211(c) notice of its intention to do so, it may not consider nondocumentary evidentiary materials for fact-finding purposes on a motion to dismiss pursuant to CPLR 3211(a)(5) (see Alverio v New York Eye & [*2]Ear Infirmary, 123 AD2d 568 [1986]; Lim v Choices, Inc., 60 AD3d 739 [2009]).

Welter v Feigenbaum, 2010 NY Slip Op 00012 (App. Div., 1st, 2009)

A plaintiff, in an action for negligent transmittal of genital herpes simplex II, may demand that the defendant submit to a blood test to determine if the latter indeed has the virus (see CPLR 3121). Since the test was ordered in conjunction with the litigation, it is not subject to the physician-patient privilege (see Connors, McKinney's CPLR Practice Commentary C3121:2). Even were the privilege to apply, defendant waived it by asserting the affirmative defense that he was asymptomatic (see e.g. Dillenbeck v Hess, 73 NY2d 278, 287-288 [1989]). Defendant's effort to limit the scope of discovery has simply focused the issue on whether or not he has the virus. This issue is relevant to — and potentially dispositive of — the action. If the test is negative, the case will be subject to dismissal. If, on the other hand, it is positive, defendant will have an opportunity to prove his affirmative defenses that he did not have the virus in 2002, or was unaware that he had it or was asymptomatic at the time of alleged transmittal to plaintiff.

All concur except Andrias and McGuire, JJ., who concur in a separate memorandum by McGuire, J. as follows:

McGUIRE, J. (concurring)

We write separately to emphasize that we express no view on the issue of whether, if the test is positive, it is admissible at trial (see People v Scarola, 71 NY2d 769, 777 [1988] ["(e)ven where technically relevant evidence is admissible, it may still be excluded by the trial court in the [*2]exercise of its discretion if its probative value is substantially outweighed by the danger that it will unfairly prejudice the other side or mislead the jury"]).

The herpes case.

SOL Buden of proof for money owed pursuant to a contract

CPLR R. 3211(a)(5) Motion to dismiss for SOL (or other things, but SOL in this case)

Kuo v Wall St. Mtge. Bankers, Ltd., 2009 NY Slip Op 06511 (App. Div., 2nd, 2009)

The Supreme Court also correctly denied that branch of the defendant's motion which was to dismiss the complaint as barred by the statute of limitations. "To dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the Statute of Limitations, a defendant bears the initial burden of establishing prima facie that the time in which to sue has expired . . . In order to make a prima facie showing, the defendant must establish, inter alia, when the plaintiff's cause of action accrued. Where, as here, the claim is for the payment of a sum of money allegedly owed pursuant to a contract, the cause of action accrues when the plaintiff possesses a legal right to demand payment'" (Swift v New York Med. Coll., 25 AD3d 686, 687, quoting Matter of Prote Contr. Co. v Board of Educ. of City of N.Y., 198 AD2d 418, 420 [citations [*2]omitted]; see Cimino v Dembeck, 61 AD3d 802; Matter of Schwartz, 44 AD3d 779). The defendant offered no evidence that would support a determination that the plaintiff had a legal right to demand payment of her compensation, in connection with the subject loan transaction, prior to the defendant's receipt of the commission fees from the borrower.

The bold is mine.

CPLR § 217: Blown SOL, adjudicated in NY, Moved to Fed, UnBlown

CPLR § 217 Proceeding against body or officer; actions complaining about conduct that would constitute a union's breach of its duty of fair representation; four months

I found this by way of a guest blog on Sui Generis.  Norman Olch, author of Full Court Press, writes about Cloverleaf Realty of New York, Inc. v. Town of Wawayanda, 2nd Circuit Court of Appeals Case, involving the statute of limitations.  Here is the time-line for the case:

• NY DJ action. Case dismissed because four month SOL is blown. (CPLR 217)
• Action then brought into Fed Ct.  Fed Ct. dismisses because of prior dismissal in state court prevented this action proceeding in fed.
• 2nd Cir. reverses.
• MIND BLOWN

Do yourself a favor and check out his post.

Statute of Limitations Cannot be Asserted Sua Sponte

Orix Fin. Servs., Inc. v Haynes, 2008 NY Slip Op 09270 (App. Div., 1st)

Order, Supreme Court, New York County (Jane S. Solomon, J.), entered September 6, 2007, which, in an action on a "conditional sale contract note," denied plaintiff's unopposed motion pursuant to CPLR 3215 for a default judgment and sua sponte dismissed the complaint as barred by the statute of limitations, unanimously reversed, on the law, without costs, the motion granted, and the matter remanded for further proceedings including entry of judgment.

The statute of limitations must be pleaded as an affirmative defense and cannot be asserted sua sponte by the court as a basis for denying an unopposed motion for a default judgment (see

Buckeye Retirement Co., L.L.C., Ltd. v Lee

, 41 AD3d 183, 184 [2007]). We have reviewed plaintiff's submissions on the motion and find them sufficient for purposes of CPLR 3215.

The bold is mine