3404

Padded Wagon, Inc. v Associates Commercial Corp., 2012 NY Slip Op 00731 (1st Dept., 2012)

It is black letter law that "[a] party seeking to have a case restored to the trial calendar must demonstrate a meritorious cause of action, a reasonable excuse for the delay, a lack of intent to abandon the action and the absence of prejudice to the opposing party" (Kamara v Ambert, 89 AD3d 612, 612 [2011]). Furthermore "[a]ll four conditions must be satisfied" (Campbell v Crystal Realty Assoc. Ltd. Partnership, 276 AD2d 328, 328 [2000]).

Here, plaintiff failed to offer any excuse for passively waiting for a trial date and then first seeking relief more than three years after the dismissal for failure to appear (see Spivey v Bouteureira, 259 AD2d 425 [1999]). To the extent that plaintiff's excuse for the delay may be attributed to law office failure, it is unsubstantiated (see Okun v Tanners, 11 NY3d 762 [2008]). [*2]Plaintiff's attempt to demonstrate merit for the first time in its attorney's reply, unaccompanied by an affidavit from a person claiming knowledge of the facts, was insufficient (see Rozina v Casa 74th Dev. LLC, 89 AD3d 508 [2011]).

306-b

CPLR § 306-b. Service of the summons and complaint, summons with notice, third-party summons and complaint, or petition with a notice of petition or order to show cause

Henneberry v Borstein, 2012 NY Slip Op 00235 (1st Dept., 2012)

Plaintiff, proceeding pro se, brought the 2007 Action against defendant attorneys and their firm, asserting claims of legal malpractice and breach of fiduciary duty in their representation of her in an arbitration against a former employer. That arbitration concluded on [*2]December 4, 2004 with a decision adverse to plaintiff. Plaintiff commenced the 2007 Action by filing a summons with notice on November 19, 2007, just under a month before the expiration of the applicable three-year statute of limitations (see CPLR 214[6]).

On March 13, 2008, within 120 days of the filing of the summons with notice, plaintiff arranged for a licensed process server to serve defendants in accordance with CPLR 306-b. She subsequently filed two affidavits of service with the court. On April 1, 2008, 19 days later, defendants submitted a notice of appearance and a demand for a complaint. Plaintiff served a summons and complaint upon defendants on April 28, 2008.

On November 7, 2008, approximately six months later, after having sought and obtained numerous adjournments, defendants moved to dismiss the 2007 Action, on a number of grounds, including lack of personal jurisdiction. Plaintiff, now represented by counsel, cross moved for, inter alia, an extension of time to effect service pursuant to CPLR 306-b.

While the parties' motions were pending, plaintiff filed the 2009 Action, which contained substantially the same substantive claims. She did so to protect her claims in the event that the 2007 Action was terminated on a ground subject to revival under CPLR 205(a). Next, on June 19, 2009, defendants moved to dismiss the 2009 Action, arguing that there was an identical action pending before the court (CPLR 3211[a][4]). On July 23, 2009, the court held a traverse hearing regarding the validity of the March 13, 2008 service.

In the first order appealed from, Justice Tingling dismissed the 2007 Action for lack of personal jurisdiction (based on improper service), without prejudice, and granted plaintiff's cross motion for an extension of time to effect service pursuant to CPLR 306-b, on condition that she purchase a new index number and properly serve a summons and complaint within 30 days after service of the order with notice of entry. In the second order appealed from, issued contemporaneously with the first, Justice Tingling dismissed the 2009 Action based upon the pendency of another identical action (CPLR 3211[a][4]).

Following the court's directive in the first order, on February 11, 2010 plaintiff commenced the 2010 Action. In the third order appealed from, Justice Ramos dismissed that action as untimely. Plaintiff challenges each of these three orders.

The unintended effect of the disposition of the first two orders appealed from was to deprive plaintiff of an opportunity to pursue her timely filed lawsuit, based entirely upon her failure to effectively complete the ministerial act of properly serving defendants within 120 days of the filing of notice. This was error.

CPLR 306-b provides, as relevant:

"Service of the summons and complaint, summons with notice, . . . shall be made within one hundred twenty days after the filing of the summons and complaint, summons with notice, . . . . If service is not made upon a defendant within the time period provided in this section, the court, upon motion, shall dismiss the action without prejudice as to that defendant, or upon good cause shown or in the interest of justice, extend the time for service."

The statute requires that a defendant challenging service move to dismiss on that ground (Daniels v King Chicken & Stuff, Inc., 35 AD3d 345 [2006]). In deciding such a motion, the express language of CPLR 306-b gives the court two options: dismiss the action without prejudice; or extend the time for service in the existing action. Here, defendants made their motions after the statute of limitations had expired. In these circumstances, the court's options were limited to [*3]either dismissing the action outright, or extending the time for plaintiff to properly effect service.

The first order appealed from dismissed the action, without prejudice to the filing of a new action, and granted plaintiff's cross motion for an extension of time to effect service. This directive was internally inconsistent, and it led plaintiff to file the 2010 action, later dismissed as untimely (Matter of Rodamis v Cretan's Assn Omonoia, 22 AD3d 859, 860 [2005] [court cannot grant CPLR 306-b extension where action has been dismissed and statute of limitations has expired]; see Sottile v Islandia Home for Adults, 278 AD2d 482, 484 [2000]). The court should have limited its ruling in the first order on appeal to granting plaintiff's cross motion for an extension of time to effect service pursuant to CPLR 306-b (see Lippett v Education Alliance, 14 AD3d 430, 431 [2005]).

CPLR 306-b authorizes an extension of time for service in two discrete situations: "upon good cause shown" or "in the interest of justice" (Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 104-106 [2001]). The Court of Appeals has confirmed that the "good cause" and "interest of justice" prongs of the section constitute separate grounds for extensions, to be defined by separate criteria (id. at 104). The Court stated,

"Our analysis is buttressed by an examination of the legislative history behind the amendment [to CPLR 306-b]. The New York State Bar Associations Commercial and Federal Litigation Section Committee on Civil Practice Law and Rules characterized the interest of justice standard as more flexible' than the good cause standard, specifically noting that [s]ince the term "good cause" does not include conduct usually characterized as "law office failure," proposed CPLR 306-b provides for an additional and broader standard, i.e., the "interest of justice," to accommodate late service that might be due to mistake, confusion or oversight, so long as there is no prejudice to the defendant'".

(id. at 104-105 [emphasis added]). A "good cause" extension requires a showing of reasonable diligence in attempting to effect service upon a defendant. At least one Appellate Division decision has suggested that good cause is likely to be found where "the plaintiff's failure to timely serve process is a result of circumstances beyond [its] control" (Bumpus v New York City Tr. Auth., 66 AD3d 26, 32 [2009] [noting difficulties of service with person in military or difficulties with service abroad through Hague Convention]).

Even if this case does not qualify for an extension under the "good cause" exception (see Mead v Singleman, 24 AD3d 1142, 1144 [2005]), we find that it qualifies under the "interest of justice" category. Under this prong of CPLR 306-b, the Court of Appeals has instructed that a court "may consider [plaintiff's] diligence, or lack thereof, along with any other relevant factor . . ., including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff's request for the extension of time, and prejudice to defendant" (Leader, 97 NY2d at 105-106).

Here, plaintiff's attempted March 2008 service, although ultimately deemed defective, was a diligent attempt by a pro se plaintiff to hire a process server to serve defendants at their law firm, within 120 days of the timely filing of a summons with notice. By the time the court ruled on the motions in the 2007 Action, the statute of limitations had expired, precluding the filing of a new action. In addition, defendants were aware of the 2007 Action and appeared to demand a complaint as early as April 2008 – they were not prejudiced by the service errors and were afforded full participation in discovery (see Spath v Zack, 36 AD3d 410, 413 [2007]). Finally, construing the pleading in the light most favorable to plaintiff, as is required on consideration of [*4]a CPLR 3211 motion to dismiss, we find that it asserts actions and omissions by defendants that support viable claims for recovery (see Leder v Spiegel, 31 AD3d 266 [2006], affd 9 NY3d 836 [2007], cert denied 552 US 1257 [2008]).

Khedouri v Equinox (73 AD3d 532 [2010]) and Shelkowitz v Rainess (57 AD3d 337 [2008]), cited by the defense in support of dismissing the action, are both distinguishable on their facts. In Khedouri, the court found that dismissal was warranted because plaintiff made no attempt to serve the defendant, a fitness corporation, within 120 days of filing the summons and complaint. In addition, this Court found no merit to the plaintiff's underlying claims, given the voluntary assumption of risks inherent in fitness training (73 AD3d at 532-533). Similarly, dismissal was granted in Shelkowitz, a personal injury action involving the accumulation of snow and ice at the defendant's building, where plaintiff made no attempt to serve the defendant within 120 days of the filing of the action, and the extension request was made 20 months after filing the complaint (57 AD2d at 337). Here, unlike both Khedouri and Shelkowitz, plaintiff attempted service within the 120-day period, defendants were aware of the action soon after the filing of the complaint, and, viewing the amended pleading in the light most favorable to plaintiff, we find it sets forth actionable claims (Spath v Zack, 36 AD3d 410 [2007], supra; Mead v Singleman, 24 AD3d 1142 [2005], supra; Lippett v Education Alliance, 14 AD3d 430 [2005], supra).

Granting plaintiff the opportunity to pursue this action is not only consistent with the "interest of justice" exception set forth in CPLR 306-b, but also with our strong interest in deciding cases on the merits where possible (see e.g. L-3 Communications Corp. v SafeNet, Inc., 45 AD3d 1 [2007]). Accordingly, given our conclusion that the 2007 Action qualified for an extension of time to effect service pursuant to CPLR 306-b, we reverse the third order appealed from and deem the complaint in the 2010 Action to be an amended complaint in the 2007 Action.

 

Renewal and a missing stip

CPLR R. 2221(e) Motion for Leave to Renew

Joseph v Board of Educ. of the City of New York, 2012 NY Slip Op 00306 (1st Dept., 2012)

Where the parties stipulated to a date for making a summary judgment motion and defendant inadvertently failed to append the "so ordered" version of the stipulation, the motion court improvidently exercised its discretion in finding the motion to be untimely. On the motion to renew, defendant provided a so-ordered version of a stipulation, offered a reasonable excuse for its failure to include the new evidence in the original motion (i.e., law office failure), and demonstrated the merit of its defense (see CPLR 2221[e]). In addition, there is no claim of prejudice by plaintiff (see Scannell v Mt. Sinai Med. Ctr., 256 AD2d 214 [1998]). That the additional evidence was available at the time of the original motion is not dispositive (see Cruz v Bronx Lebanon Hosp. Ctr., 73 AD3d 597, 598 [2010]; Scannell, 256 AD2d at 214). Here, the additional evidence addressed an issue raised by the court in the original decision (Scannell, 256 AD2d at 214). In such circumstances, it was error for the court not to consider the new evidence (id.).

 

Sanctions and Contempt (civil and criminal)

Visual Arts Found., Inc. v Egnasko, 2012 NY Slip Op 00646 (1st Dept., 2012)

The motion court improperly denied plaintiff's request for sanctions in its entirety. The court is directed to conduct a hearing to quantify the damages that plaintiff incurred from those [*2]aspects of defendants' litigation conduct that were "frivolous," including, impending discovery, the filing of meritless counterclaims and conduct which was "undertaken primarily to delay or prolong the resolution of the litigation" (22 NYCRR 130-1.1[c][2]). We note that, as Louis Egnasko is presently incarcerated, the hearing may be conducted through written submissions (see 22 NYCRR 130-1.1[d]).

Pentalpha Enters., Ltd. v Cooper & Dunham LLP, 2012 NY Slip Op 00044 (1st Dept., 2012)

Plaintiffs now appeal, having lost in no fewer than four courts of competent jurisdiction, and despite having been warned in the court below that any further prosecution of this matter [*2]would be dangerously close to sanctionable conduct. We are of the opinion that plaintiffs' appeal must, again, be denied on the merits; and that, with this appeal, the conduct of plaintiffs and their attorneys has crossed the line from zealous advocacy to that which is sanctionable under 22 NYCRR 130-1.1.

Commissioners of State Ins. Fund v Kernell, 2012 NY Slip Op 00482 (2nd Dept., 2012)

Contrary to the defendant's contention, the Supreme Court properly denied that branch of his motion which was to hold the plaintiff's counsel in civil contempt. "In order to find that contempt has occurred in a given case, it must be determined that a lawful order of the court, clearly expressing an unequivocal mandate, was in effect," and "[i]t must appear, with reasonable certainty, that the order has been disobeyed" (Matter of McCormick v Axelrod, 59 NY2d 574, 583; see Rubin v Rubin, 78 AD3d 812, 813). In this case, there was no order of the court in effect, expressing an unequivocal mandate, which the plaintiff's counsel disobeyed. Accordingly, the Supreme Court properly denied that branch of the defendant's motion (see Wheels Am. N.Y., Ltd v Montalvo, 50 AD3d 1130, 1130-1131).

The Supreme Court improvidently exercised its discretion, however, in denying that branch of the defendant's motion which was to impose sanctions upon the plaintiff and its counsel pursuant to 22 NYCRR 130-1.1. The defendant demonstrated that the plaintiff and its counsel engaged in frivolous conduct in that they either did not have the necessary documentation upon which to formulate or support a meritorious claim, or, being in possession of the documentation, knew or should have known, based upon prior litigation and correspondence from the defendant, that the plaintiff's claim was completely without merit in law. Under the circumstances, we deem it [*2]appropriate to impose sanctions upon the plaintiff in the sum of $2,500, and upon the plaintiff's counsel in the sum of $1,000 (see 22 NYCRR 130-1.1), payable pursuant to 22 NYCRR 130-1.3.

HSBC Mtge. Corp. v Oberlander, 2012 NY Slip Op 00335 (2nd Dept., 2012)

"A motion to punish a party for civil contempt is addressed to the sound discretion of the motion court" (Chambers v Old Stone Hill Rd. Assoc., 66 AD3d 944, 946; see Educational Reading Aids Corp. v Young, 175 AD2d 152). "In order to prevail on such a motion, the moving party must demonstrate that the party charged with contempt violated a clear and unequivocal mandate of the court, thereby prejudicing the moving party's rights" (Bais Yoel Ohel Feige v Congregation Yetev Lev D'Satmar of Kiryas Joel, Inc., 78 AD3d 626, 626; see McCain v Dinkins, 84 NY2d 216, 226; Chambers v Old Stone Hill Rd. Assoc., 66 AD3d at 946; Matter of Rothschild v Edwards, 63 AD3d 744, 745; Galanos v Galanos, 46 AD3d 507, 508; Rienzi v Rienzi, 23 AD3d 447, 449).

Under the circumstances of this case, the Supreme Court providently exercised its discretion in denying that branch of the motion of the defendant David Oberlander which was to hold the plaintiff and its attorneys in civil contempt for transferring title to the subject real property while a stay pending the hearing and determination of an appeal was in effect. Oberlander failed to meet his burden so as to warrant holding the plaintiff and its attorneys in civil contempt.

Town Bd. of Town of Southampton v R.K.B. Realty, LLC, 2012 NY Slip Op 00200 (2nd Dept., 2012)

"To sustain a finding of either civil or criminal contempt based on an alleged violation of a court order it is necessary to establish that a lawful order of the court clearly expressing an unequivocal mandate was in effect," that "the order has been disobeyed," and that the charged party "had knowledge of the court's order" (Matter of Department of Envtl. Protection of City of N.Y. v Department of Envtl. Conservation of State of N.Y., 70 NY2d 233, 240; see Town of Copake v 13 Lackawanna Props., LLC, 73 AD3d 1308, 1309). The same act may be punishable as both a criminal and civil contempt (see Town of Copake v 13 Lackawanna Props., LLC, 73 AD3d at 1309). Civil contempt must be proven by clear and convincing evidence and requires a showing that the rights of a party have been prejudiced (see McCain v Dinkins, 84 NY2d 216, 226; Incorporated Vil. of Plandome Manor v Ioannou, 54 AD3d 365, 366). Such a showing is not needed to prove criminal contempt "since the right of the private parties to the litigation is not the controlling factor" (Matter of Department of Envtl. Protection of City of N.Y. v Department of Envtl. Conservation of State of N.Y., 70 NY2d at 240). "A key distinguishing element between civil and criminal contempt is the degree of willfulness of the subject conduct. To be found guilty of criminal contempt, the contemnor usually must be shown to have violated the order with a higher degree of willfulness than is required in a civil contempt proceeding" (id.; McCain v Dinkins, 84 NY2d at 226; Dalessio v Kressler, 6 AD3d 57, 66). Moreover, criminal contempt must be proven beyond a reasonable doubt (see Muraca v

An unsigned, but useful Deposition

CPLR R. 3116 Signing deposition; physical preparation; copies
(a) Signing.

Rodriguez v Ryder Truck, Inc., 2012 NY Slip Op 00769 (2nd Dept., 2012)

Contrary to the defendants' contentions, the unsigned but certified deposition of the plaintiff Juan Rodriguez, which was submitted in support of the plaintiffs' motion for summary judgment, was admissible under CPLR 3116(a), since the transcript was submitted by the party deponent himself and, therefore, was adopted as accurate by the deponent (see Ashif v Won Ok Lee, 57 AD3d 700). Additionally, although the plaintiffs initially failed to submit the certification page of the deposition of the defendant Derrick Thomas, they submitted it on reply in response to the defendants' arguments in opposition. Under the circumstances of this case, the late submission did not prejudice the defendants, and the Supreme Court should have considered the certification (see Mazzarelli v 54 Plus Realty Corp., 54 AD3d 1008; cf. Navarrete v A & V Pasta Prods., Inc., 32 AD3d 1003, 1004). Furthermore, although unsigned, as noted above, the transcript of Thomas's deposition was certified, and the defendants did not raise any challenges to its accuracy. Thus, it qualified as admissible evidence for purposes of the plaintiffs' motion for summary judgment (see Zalot v Zieba, 81 AD3d 935, 936; Bennett v Berger, 283 AD2d 374; Zabari v City of New York, 242 AD2d 15, 17). However, the uncertified and unsworn police report submitted by the plaintiffs in support of their motion was inadmissible (see Toussaint v Ferrara Bros. Cement Mixer, 33 AD3d 991, 992; Bates v Yasin, 13 AD3d 474; Lacagnino v Gonzalez, 306 AD2d 250).

Disqualificaiton

Trimarco v Data Treasury Corp., 2012 NY Slip Op 00360 (2nd Dept., 2012)

The advocate-witness rules contained in the Rules of Professional Conduct (see 22 NYCRR 1200.0), provide guidance, but are not binding authority, for the courts in determining whether a party's attorney should be disqualified during litigation (see S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., 69 NY2d 437). Rule 3.7 of the Rules of Professional Conduct provides that, unless certain exceptions apply, "[a] lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact" (Rules of Professional Conduct [22 NYCRR 1200.0] rule 3.7[a]; see Falk v Gallo, 73 AD3d 685). In order to disqualify counsel, a party moving for disqualification must demonstrate that (1) the testimony of the opposing party's counsel is necessary to his or her case, and (2) such testimony would be [*2]prejudicial to the opposing party (see S & S Hotel Ventures Ltd. Partnership v 777 S.H., 69 NY2d at 446; Daniel Gale Assoc., Inc. v George, 8 AD3d 608, 609).

Here, the plaintiff failed to demonstrate that the disqualification of Richard B. Friedman and his law firm, McKenna, Long & Aldridge, LLP, from representing the defendant in this action was warranted. There was no showing that Friedman's testimony was necessary, as there was no evidence that he had first-hand knowledge of material facts relevant to the case (cf. Falk v Gallo, 73 AD3d 685). Further, the plaintiff failed to demonstrate that Friedman's testimony would be prejudicial to the defendant. Accordingly, the Supreme Court improvidently exercised its discretion in granting that branch of the plaintiff's motion which was to disqualify Friedman and McKenna, Long & Aldridge, LLP, from representing the defendant in this action.

Priv

Ambac Assur. Corp. v DLJ Mtge. Capital, Inc., 2012 NY Slip Op 00827 (1st Dept., 2012)

Although the party challenging disclosure bears the burden of establishing that the information sought is immune from disclosure (see Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d 371, 376-377 [1991]), defendants here, as proponents of the motion, did not challenge [*2]the existence of a privilege until their reply. "[T]he function of a reply affidavit is to address arguments made in opposition to the position taken by the movant and not to permit the movant to introduce new arguments in support of the motion" (Ritt v Lenox Hill Hosp., 182 AD2d 560, 562 [1992]). Accordingly, the court erred in granting defendants' motion on burden grounds.

Furthermore, the " [a]t issue' waiver of privilege occurs where a party affirmatively places the subject matter of its own privileged communication at issue in litigation, so that invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, and application of the privilege would deprive the adversary of vital information" (Deutsche Bank Trust Co. of Ams. v Tri-Links Inv. Trust, 43 AD3d 56, 63 [2007]). However, the fact "that a privileged communication contains information relevant to issues the parties are litigating does not, without more, place the contents of the privileged communication itself at issue' in the lawsuit" (id. at 64; see also Long Is. Light. Co. v Allianz Underwriters Ins. Co., 301 AD2d 23, 33 [2002]). Generally, no "at issue" waiver is found where the party asserting the privilege does not need the privileged documents to sustain its cause of action (see Deutsche Bank at 65).

Here, plaintiffs did not waive privilege by placing RMG's review of the loans "at issue." All references to the "third-party consultant" in their complaint could be stricken and it would still stand. Mention of a third-party consultant was not made as an element of the claim, but as a good-faith basis for the allegations made. Since plaintiffs do not "need the privileged documents to sustain [their] cause of action," they have not "waived the attorney-client privilege by injecting privileged materials into the lawsuit" (Manufacturers & Traders Trust Co. v Servotronics, Inc., 132 AD2d 392, 397 [1987]). Nor did plaintiffs waive the privilege by making a selective non-disclosure (see Carone v Venator Group, 289 AD2d 185 [2001]).

Blank Rome, LLP v Parrish, 2012 NY Slip Op 00655 (1st Dept., 2012)

Defendant agreed in the so-ordered stipulation that "any attorney-client privilege applicable to his communications with attorneys representing him is waived for the purposes of this action." By this clear and express provision, defendant waived his attorney-client privilege with respect to the privileged documents produced by Storch Amini to the extent the documents involve matters relevant to the claims and defenses in this action (see DLJ Mtge. Capital Corp., [*2]Inc. v Fairmont Funding, Ltd., 81 AD3d 563, [2011]; Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]; Koren-DiResta Constr. Co. v New York City School Constr. Auth., 293 AD2d 189, 195 [2002]).

Soussis v Lazer, Aptheker, Rosella & Yedid, P.C., 2012 NY Slip Op 00357 (App. Div., 2nd 2012)

A waiver of the attorney-client privilege may be found where the client places the subject matter of the privileged communication in issue or where invasion of the privilege is required to determine the validity of the client's claim or defense and application of the privilege would deprive the adversary of vital information (see Hurrell-Harring v State of New York, 75 AD3d 667, 668; 601 Realty Corp. v Conway, Farrell, Curtin & Kelly, P.C., 74 AD3d 1179, 1179; Raphael v Clune White & Nelson, 146 AD2d 762, 763; Jakobleff v Cerrato, Sweeney & Cohn, 97 AD2d 834, 835). Moreover, a waiver may be found where a party engages in selective disclosure, "as a party may not rely on the protection of the privilege regarding damaging communications while disclosing other self-serving communications" (Village Bd. of Vil. of Pleasantville v Rattner, 130 AD2d 654, 655).

Contrary to the contention of the defendants third-party plaintiffs, under the circumstances presented, the plaintiff did not place the subject matter of the subject e-mail communications in issue and application of the privilege will not deprive them of vital information in defense of her claims. Nor is disclosure of the subject e-mails required under the doctrine of selective disclosure (cf. Orco Bank v Proteinas Del Pacifico, 179 AD2d 390, 390; Village Bd. of Vil. [*2]of Pleasantville v Rattner, 130 AD2d at 655). Accordingly, the Supreme Court properly denied the motion of the defendants third-party plaintiffs to compel the third-party defendant to produce certain e-mail communications withheld from disclosure on the ground that they were protected by the attorney-client privilege.

CPLR 4545 and 4547

CPLR § 4545 Admissibility of collateral source of payment

CPLR § 4547 Compromise and offers to compromise

Casa Redimix Concrete Corp. v Westway Indus. Inc., 2012 NY Slip Op 00407 (1st Dept., 2012)

In addition, plaintiff presented documentary evidence that its specific claim was presented to the surety by Hunts Point in the reformation action. It may be, as Hunts Point's general manager claimed, that this documentation was "merely a tabulation by Hunts Point, as project owner, of the various claims by Westway subs and suppliers that had been made or payments that were outstanding at the time." However, in light of inferences drawn in plaintiff's favor, this fact suggests that plaintiff's claim was at issue in the reformation action. The motion court improperly refused to consider this evidence, since nothing in the record establishes that it is inadmissible under CPLR 4547.

Turuseta v Wyassup-Laurel Glen Corp., 2012 NY Slip Op 00202 (2nd Dept., 2012)

CPLR 4545(a) provides, in relevant part, that "[a]ny collateral source deduction required by this subdivision shall be made by the trial court after the rendering of the jury's verdict." [*2]The statute, by its terms, does not specify the procedures to be employed by the trial court in making the appropriate deductions, and does not specify a time limit within which a defendant may request a hearing to determine the appropriate amount of the deductions. "[A]n application for a collateral source hearing may be timely made at any time before the judgment is entered, unless the court directs otherwise" (Firmes v Chase Manhattan Auto. Fin. Corp., 50 AD3d 18, 32). Here, the defendants established that a collateral source hearing was warranted by tendering "some competent evidence from available sources that the plaintiff's economic losses may in the past have been, or may in the future be, replaced, or the plaintiff indemnified, by collateral sources" (id. at 36; see Nunez v City of New York, 85 AD3d 885, 887-888). In addition, the time limit imposed by the Supreme Court for posttrial motions was clearly meant to encompass motions to set aside the verdict pursuant to CPLR 4404(a), as those types of motions are generally required to be made no later than 15 days after the verdict (see CPLR 4405; cf. Firmes v Chase Manhattan Auto. Fin. Corp., 50 AD3d at 32). Moreover, since "[i]t appears that [the plaintiff's] efforts to enter a judgment may have been undertaken, at least in part, to circumvent potential collateral source setoffs" (Firmes v Chase Manhattan Auto. Fin. Corp., 50 AD3d at 32), in light of the fact that entry of judgment was effected without notice while the defendants' CPLR 4404(a) motion to set aside the verdict was pending, the Supreme Court providently exercised its discretion in granting the defendants' motion for a collateral source hearing despite the fact that judgment had already been entered.

Discovery

Denver Employees Retirement Plan v JPMorgan Chase Bank, N.A., 2012 NY Slip Op 00639 (1st Dept., 2012)

The motion court providently exercised its discretion by refusing to compel plaintiff to respond to an untimely document request for "All Documents Concerning investments by or for the benefit of [plaintiff], direct or indirect, in securities issued by Lehman" (see Kingsgate Assoc. v Advest, Inc., 208 AD2d 356, 357 [1994]). The circumstances presented herein do not warrant exercise of our own independent discretion to reverse this order.

Likewise, we find no reason to disturb the exercise of the court's "broad discretion" in denying defendant's deposition notice (see Brooklyn Union Gas Co. v American Home Assurance Co., 23 AD3d 190, 190 [2007]). This notice called for the production of "a person designated by [plaintiff] regarding any and all investments in securities issued or guaranteed by Lehman . . . that were purchased, held, and/or sold by or for the benefit of [plaintiff] from January 1, 2007 to September 30, 2008, excluding investments made through the JPMorgan Securities Lending Program," i.e., the program at issue in this litigation. Defendant essentially attempted to obtain the same material that the court previously found to be untimely and irrelevant. Plaintiff's litigation concerns investments with defendant in Lehman medium term notes (MTNs). Defendant seeks information about plaintiff's investments in other Lehman securities that plaintiff made at different times and that are unrelated to the MTNs. The court correctly determined that investment decisions concerning other, unrelated investments [*2]purchased for different accounts that have different investment goals, are not relevant to the account in question (cf. Matter of Clark, 257 NY 132, 135 [1931]).

VOOM HD Holdings LLC v EchoStar Satellite L.L.C., 2012 NY Slip Op 00658 (1st Dept., 2012)

This case requires us to determine the scope of a party's duties in the electronic discovery context, and the appropriate sanction for failure to preserve electronically stored information (ESI). We hold that in deciding these questions, the motion court properly invoked the standard for preservation set forth in Zubulake v UBS Warburg LLC (220 FRD 212 [SD NY 2003]; Pension Comm. of the Univ. of Montreal Pension Plan v Banc of Am. Sec., LLC., 685 F Supp 2d 456, 473 [SD NY 2010]), which has been widely adopted by federal and state courts. In Zubulake, the federal district court stated, "Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold' to ensure the preservation of relevant documents" (Zubulake, 220 FRD at 218). The Zubulake standard is harmonious with New York precedent in the traditional discovery context, and provides li tigants with sufficient certainty as to the nature of their obligations in the electronic discovery context and when those obligations are triggered.

W & W Glass Sys., Inc. v Admiral Ins. Co., 2012 NY Slip Op 00307 (1st Dept., 2012)

Defendants' argument that further discovery is warranted and that the motion is therefore premature, is unavailing. Defendants participated in lengthy discovery in the underlying action. Admiral had all of the relevant policies of insurance and had ample opportunity to gather evidence.

No proof was offered demonstrating that wrap-up coverage may have been in effect, and Admiral's bare affirmation raising speculative defenses is insufficient to defeat a prima facie showing of entitlement to summary judgment (see Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d 966 [1988]). Defendants cannot avoid summary judgment based on speculation that further discovery may uncover something.

 

5015 and Defaults

Pichardo-Garcia v Josephine's Spa Corp., 2012 NY Slip Op 00004 (1st Dept., 2012)

In the absence of a determination by the motion court, pursuant to CPLR 5015(a)(1), of the reasonableness of plaintiff's proffered excuse for her failure to appear at a scheduled compliance conference, we reject the claim of law office failure as "conclusory and perfunctory" (see Perez v New York City Hous. Auth., 47 AD3d 505, 505 [2008]). Counsel explained that the failure to appear was due to a conflict between scheduled appearances in this action and in an unrelated action. However, he did not state that he took any steps to resolve or alleviate the conflict or that he was unaware of the conflict. Counsel's "overbooking of cases and inability to keep track of his appearances" does not constitute a reasonable excuse for the failure to appear (id.; see also Youni Gems Corp. v Bassco Creations Inc., 70 AD3d 454, 455 [2010], lv dismissed 15 NY3d 863 [2010]). Moreover, plaintiff made no attempt to vacate the default until almost a year after being served with the notice of its entry (see Youni, 70 AD3d at 455).

Kohn v Tri-State Hardwoods, Ltd., 2012 NY Slip Op 00933 (2nd Dept., 2012)

It is undisputed that the plaintiff defaulted in serving a reply to the appellant's counterclaim and that the appellant failed to move for leave to enter a default judgment on the counterclaim within one year after the default. Since the appellant failed to make a timely motion for leave to enter a default judgment, it was required to demonstrate a reasonable excuse for its delay in seeking a default judgment and a potentially meritorious claim (see Giglio v NTIMP, Inc., 86 AD3d 301, 308; Costello v Reilly, 36 AD3d 581; Iorizzo v Mattikow, 25 AD3d 762, 763; Oparaji v Madison Queens-Guy Brewer, 293 AD2d 591, 592). The appellant failed to demonstrate a reasonable excuse for its delay of over two years after the one-year statutory time period had expired (see Butindaro v Grinberg, 57 AD3d 932, 933; Mattera v Capric, 54 AD3d 827, 828; Lugauer v Forest City Ratner Co., 44 AD3d 829, 830; Opia v Chukwu, 278 AD2d 394). Accordingly, the appellant's motion for leave to enter a default judgment on the counterclaim was properly denied.

2261 Palmer Ave. Corp. v Malick, 2012 NY Slip Op 00506 (2nd Dept., 2012)

In order to vacate her default in appearing or answering the complaint, the defendant was required to demonstrate both a reasonable excuse for the default and the existence of a potentially meritorious defense to the action (see CPLR 5015[a][1]; Bank of Am. v Faracco, 89 AD3d 879; Community Preserv. Corp. v Bridgewater Condominiums, LLC, 89 AD3d 784; see also Swensen v MV Transp., Inc., 89 AD3d 924). Even if the defendant demonstrated a reasonable excuse for her default, our review of the record establishes that she failed to demonstrate a potentially meritorious defense to the action. The papers submitted in support of her cross motion, inter alia, to vacate her default in appearing or answering the compalint were replete with self-serving, vague, and unsubstantiated denials and unsupported legal conclusions as to whether a potentially meritorious defense to the action existed, and were thus an insufficient basis for vacating her default (see Thapt v Lutheran Med. Ctr., 89 AD3d 837; Garal Wholesalers, Ltd. v Raven Brands, Inc., 82 AD3d 1041).

Accordingly, the Supreme Court properly granted that branch of the plaintiff's motion which was pursuant to CPLR 3215 for leave to enter a default judgment, and properly denied that branch of the defendant's cross motion which was to vacate her default in appearing or answering the complaint.

Toll Bros., Inc. v Dorsch, 2012 NY Slip Op 00359 (2nd Dept., 2012)

"A defendant seeking to vacate a default pursuant to CPLR 5015(a)(1) must demonstrate both a reasonable excuse for the default and a potentially meritorious defense to the action" (Clover M. Barrett, P.C. v Gordon,AD3d, 2011 NY Slip Op 09581, *1 [2d Dept 2011]; see Development Strategies Co., LLC, Profit Sharing Plan v Astoria Equities, Inc., 71 AD3d 628). "Other factors which the court should consider include whether the default prejudiced the opposing party, whether it was willful or evinced an intent to abandon the litigation, and whether vacating the default would serve the strong public policy of resolving cases on their merits when possible" (Dimitriadis v Visiting Nurse Serv. of N.Y., 84 AD3d 1150, 1150-1151; see U.S. Bank, N.A. v Dick, 67 AD3d 900, 902; Moore v Day, 55 AD3d 803, 804).

Here, the defendant established both a reasonable excuse for the default, and the [*2]existence of a potentially meritorious defense to the action. Further, there was no showing by the plaintiff that it was prejudiced by the default or that the default was willful, and public policy favors the resolution of cases on their merits (see Dimitriadis v Visiting Nurse Serv. of N.Y., 84 AD3d at 1151; Moore v Day, 55 AD3d at 805; Li Gang Ma v Hong Guang Hu, 54 AD3d 312, 313; Ahmad v Aniolowiski, 28 AD3d 692, 693). Accordingly, under the circumstances of this case, the Supreme Court improvidently exercised its discretion in denying that branch of the defendant's motion which was pursuant to CPLR 5015(a)(1) to vacate his default.