Civil Procedure

Don’t Drag Your Feet And Assume That NY Courts Will Grant Extensions Of Time

When requesting an extension of time, clients and attorneys must be cautious in assuming that New York courts will unilaterally grant their requests simply because they think they deserve one. In LaSalle Bank, NA v. Ferrari, the plaintiff filed a mortgage foreclosure action against the defendant in August 2008. In late 2014, plaintiff moved for an order of reference and defendant cross moved to dismiss the complaint. Two years later, the Supreme Court held the motions in abeyance pending the outcome of a hearing to determine the validity of service of process on the defendant. On the date of the scheduled hearing, plaintiff informed the court that it needed an extension because their original process server had died, and plaintiff’s counsel was unable to discover additional information and that was admissible. The request was granted, and the hearing adjourned until the following month. After a series of administrative delays, the Supreme Court ultimately denied plaintiff’s motion for an extension of time to serve the defendant. The Second Department affirmed, recognizing that a court may extend the time for service “upon good cause” or “in the interest of justice.” The court found that plaintiff failed to establish good cause because even though the original process server had passed away, the plaintiff could have produced the server’s logbook or other similar evidence to rebut the defendant’s assertions that process was served on a different person with a similar name as the defendant. The Court also found that plaintiff failed to satisfy the “in the interest of justice” standard. To prevail on this standard, the plaintiff would not need to show reasonably diligent efforts in order to be granted the extension as long as the defendant would not be prejudiced. However, the Court found that plaintiff knew in late 2014 that service might be defective but waited until the hearing date in November 2016 to ask for an extension. The Ferrari decision serves as a reminder that extension requests should be made in a timely manner and that parties should not wait until the minute or risk losing their rights. Thank you to Alexander Rabhan for his contribution to this post. Please contact Andrew Gibbs with any questions.Read More

A Tale Of Two Transit Authorities: Relation Back Doctrine Found Not to Apply Where Defendants Were Not United In Interest

In New York, a claim asserted against a new defendant will “relate back” to the date of the original claim if plaintiff establishes that (1) both claims arose out of the same conduct, transaction, or occurrence; (2) the new defendant is united in interest with the original defendant, and by reason of that relationship can be charged with notice of the institution of the action such that the new defendant will not be prejudiced in maintaining its defense on the merits by the delayed claim; and (3) the new defendant knew or should have known that, but for a mistake by the plaintiff as to the identity of the proper parties, the action would have been brought against the new defendant as well. See CPLR 203(b). The Appellate Division, Second Department recently addressed the “relation back” doctrine in Chandler v. New York City Transit Authority. In that case, plaintiff was allegedly injured after a city bus driver closed the door on plaintiff’s hand and began to drive away. Plaintiff commenced an action only against the New York City Transit Authority, an improper party. After the statute of limitations expired, plaintiff moved for leave to amend the action to include Metropolitan Transit Authority Bus Company, the proper entity. The Supreme Court denied the motion, finding that the claims against the newer defendant did not relate back to the initial pleading. The Second Department affirmed, holding that while both claims arose out of the same conduct, transaction, or occurrence, plaintiff failed to establish that the Transit Authority defendants were united in interest. To do so, it must be shown that the defendants “stand or fall together and that judgment against one will similarly affect the other.” In a negligence action, to be united in interest further means that “the defenses available to two defendants will be identical, and thus their interests will be united, only where one is vicariously liable for the acts of the other.” Since plaintiff could not make such a showing, the court affirmed the denial of plaintiff’s motion to name the Metropolitan Transit Authority Bus Company as a defendant. The takeaway from Chandler is that New York has specific requirements for claims asserted against newer defendants after the expiration of the statute of limitations to “relate back” to claims made in the initial complaint. Claims not meeting these requirements are subject to challenge and dismissal. Thank you to Rebecca Pasternak for her contribution to this post. Please contact Andrew Gibbs with any questions.Read More

Reasonable Excuse And Meritorious Defense Lead To Vacation Of Default Judgment (NY)

When a plaintiff obtains a default judgment against a defendant in New York, the fight does not end there. While the discretion ultimately remains with the court, a default judgment may be vacated when the defendant can establish a reasonable excuse along with a meritorious defense, pursuant to CPLR §5015(a)(1). In Damsky v. Williams, the Appellate Division, Second Department, recently addressed these issues in a case involving an altercation between the plaintiff and defendant, who was a Metropolitan Transit Authority operator. The defendant was operating a train and pulled into the last stop informing all passengers to exit. Plaintiff refused to leave, resulting in an altercation in which defendant struck the plaintiff. Plaintiff filed a lawsuit against the defendant and a preliminary conference was scheduled. Defense counsel failed to appear at the conference, and plaintiff was awarded a default judgment against the defendant. Defense counsel was out of the country on business when he received notice of the default judgment. Counsel subsequently filed a motion to vacate the default pursuant to CPLR §5015(a)(1), explaining that he did not receive proper notice of the preliminary conference because notice was not e-filed per court rules and the notices were sent to his former law office. Defense counsel also demonstrated that the defendant acted in self-defense since the plaintiff verbally and physically attacked him. The lower court granted the motion, vacating the judgment, and plaintiff appealed. The Second Department affirmed, finding that that the trial court properly exercised its discretion in determining that the defendant demonstrated a reasonable excuse for his default in appearing at the conference and that the defendant demonstrated a meritorious defense. Accordingly, the court upheld the vacation of the default judgment. The Damsky case provides both a reminder regarding the grounds needed to vacate a default judgment against a defendant and a warning for parties and counsel to avoid missing court conferences. Thank you to Gabriella Scarmato for her contribution to this post. Please contact Andrew Gibbs with any questions.Read More

New York Appellate Court Emphasizes The Importance Of Timely Settlement Payments

In New York, when an action to recover damages is settled, the settling defendant has twenty-one (21) days after tender of the required documents to pay all sums to the settling plaintiff. CPLR 5003-a. If the settling defendant fails to do so, then the plaintiff is authorized to enter a judgement “for the amount set forth in the release, together with costs and lawful disbursements, and interests,” without further notice to the defendant. CPLR 5003-e. The Appellate Division, Second Department addressed these rules in the recent case of Levine v. American Multi-Cinema, Inc. In that case, plaintiff tripped and fell on property owned by the defendant and the case was settled for $25,000. Two weeks after settling, counsel for defendant informed the Supreme Court that the parties had settled, and a stipulation of discontinuance would soon be filed. Prior to doing so, defense counsel sent plaintiff’s attorney a draft release. The plaintiff’s attorney subsequently returned an executed copy of the release and, citing CPLR 5003-a, requested that defendant send the settlement check within twenty-one (21) days. Twenty-six (26) days later, defense counsel informed plaintiff’s attorney that they would only disburse the settlement proceeds after a Medicare lien had been paid, and a lien payoff letter issued. The insurer then paid the lien in the amount of $1,716.18. Plaintiff moved for leave to enter a judgment with interest, pursuant to CPLR 5003-a. As this motion was pending, a Clerk’s judgment was entered against the defendant for $25,000, plus costs, disbursements, and interest. Defendant subsequently paid the settlement check, minus the lien payment, which was rejected by plaintiff’s counsel. Defendant then cross-moved to vacate the clerk’s judgment and the Supreme Court granted the motion. The Second Department reversed, holding that plaintiff had fulfilled the obligations set forth in CPLR 5003-a when she tendered a duly executed general release and stipulation of discontinuance to defendant’s counsel. Contrary to defendant’s argument, nothing in their general release obligated the plaintiff to provide lien information or a payoff letter as a condition precedent to payment, so the Supreme Court’s decision was incorrect. The Levine case highlights the importance of complying with CPLR 5003 when paying personal injury settlements in New York. The failure to do so can subject defendants and their insurers with additional exposure in the form of costs and interest. The case also highlights the importance of addressing Medicare issues before settlement and the need to include appropriate language in releases if lien or payoff information is required. Thank you to Rebecca Pasternak for her contribution to this post. Please contact Andrew Gibbs with any questions.Read More

Minority Tolling Under N.J.S.A. 2A:14-2(a) Does Not Apply To New Jersey Wrongful Death Claims

In Monk v. Kennedy University Hospital, Inc., the New Jersey Appellate Division recently addressed whether the minority tolling provision in N.J.S.A. 2A:14-2(a), which allows minors to file medical malpractice claims until the age of 13, applies to wrongful death lawsuits filed on behalf of minor decedents or their estates. In that case, the parents of a deceased minor who died six months after his premature birth sued several defendants for medical malpractice and wrongful death.

The lawsuit was filed more than 4 years after the minor’s death and defendants moved for summary judgment, arguing that the plaintiffs’ claims were barred by the two-year statute of limitations for wrongful death and survival claims. Relying on the minority tolling provision in N.J.S.A. 2A:14-2(a), the trial court denied the motion and found that the statute of limitations was tolled until the minor would have reached the age of 13.

The Appellate Division reversed, holding that the minority tolling provision did not apply under the Wrongful Death Act, N.J.S.A. 2A:31-4. The court noted that when the Wrongful Death Act was drafted, the legislature intended for wrongful death cases be filed within two years of a decedent’s death and not to include minority tolling for claims brought on behalf of deceased minors. The court held that the minority tolling provision did not apply because the statute allows only actions “by or on behalf of a minor” and a “minor” refers to a living infant or person under the age of legal competence. The Court reasoned that had the Wrongful Death Act intended to apply minority tolling to claims brought on behalf of deceased minors, it would have stated so, and there was nothing in the plain language of the statute to suggest that. The court further observed that the purpose of the minority tolling was to give a minor the opportunity to assert his or her legal rights at an age of maturity. However, this opportunity does not exist once a minor dies.

Because the minor in the case was deceased when the complaint was filed, the Court found that the two-year statute of limitations applied. However, the court also remanded the case back to the trial court to address the plaintiffs’ argument that they had substantially complied with the statute of limitations, an issue that had not been reached by the trial court.

The Monk decision makes clear that wrongful death claims involving minors must be filed within the two-year statute of limitations and that the minority tolling provision for medical malpractice does not apply to such claims.

Thank you to Arianna Arca for her contribution to this post. Please contact Andrew Gibbs with any questions.

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Federal Court Cracks Down On Discovery Orders (PA)

In a recent ruling from the Eastern District of PA, In re Zostavax, the Court granted the defendant’s motion to dismiss the plaintiff’s complaint for failure to comply with discovery deadlines. The complaint was part of a multidistrict litigation (“MDL”), related to a products liability claim to vaccine from defendant Merck. MDL litigation requires basic initial information necessary to move the case forward. This information is similar to initial disclosures in any federal court case. The plaintiff failed to provide the initial information or provide any required discovery on time.

The plaintiff failed to timely provide a PFS pursuant to Rules 37(b) and 41(b) of the Federal Rules of Civil Procedure. Further the plaintiff failed to comply with a court order to provide the required discovery after missing various deadlines. As a result, the defendant moved to dismiss the case under, Rule 41 (b), that provides “If the plaintiff fails to … comply with … a court order, a defendant may move to dismiss the action.” A court considers the following factors when ruling on a motion to dismiss the action for failure to provide discovery; (1) the extent of the party’s personal responsibility; (2) prejudice to the adversary; (3) a history of dilatoriness; (4) whether the conduct of the party was willful or in bad faith; (5) the effectiveness of sanctions other than dismissal; and (6) the meritoriousness of the claim or defense. Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984).

The court concluded based on plaintiff’s various violations concerning deadlines dismissal was appropriate and dismissed the case. It is the plaintiff’s responsibly to prove their case and failure to provide information to allow the defendant to evaluate the case prejudices the defense.

Thanks to Kevin Riley for his contribution to this post.  Should you have any questions, please contact Tom Bracken.

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New York Court Approves Service Of TRO Via Non-Fungible Token

With approval from the New York Supreme Court, Miami attorneys with Holland & Knight’s asset recovery team recently served a defendant with a temporary restraining order in the form of a non-fungible token (“NFT”).

The underlying lawsuit is based on the unauthorized access to, and theft of, approximately $8 million worth of virtual assets on the Ethereum blockchain. The idea to serve the defendants via NFT emerged when the anonymous defendants allegedly attempted to tamper with their fraudulent transaction history that is visible on the blockchain. By serving the defendants via NFT 24 hours before filing the complaint, plaintiff’s counsel was able to preserve the transaction history reflecting millions of dollars of cryptocurrency.

Plaintiff filed an Order to Show Cause seeking a temporary restraining order against defendants, and the Court permitted plaintiff’s attorneys to serve a copy of the Order to Show Cause and supporting papers upon the person controlling the Address via a special-purpose Ethereum-based token airdropped into the Address. The Service Token contained a hyperlink to a website created by plaintiff’s counsel wherein they would publish the Order to Show Cause. The hyperlink also included a mechanism to track when a person clicks on it. The court found that such service “shall constitute good and sufficient service for the purposes of jurisdiction under NY law on the person or persons controlling the Address….” This decision is significant in that it sanctions a unique and novel approach to service of process in litigation involving the cutting-edge subjects of NFT/Cryptocurrency.

Thank you to Alexandra Deplas for her contribution to this post. Please contact Andrew Gibbs with any questions.

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Forum Shopping Denied: Superior Court Rejects The Availability Of Virtual Technology As A Basis For Denying A Dismissal Based On Forum Non Conveniens

In Green v. CSX Transportation Inc., the Superior Court of Pennsylvania rejected a trial court’s conclusion that the availability of virtual technology ameliorated the difficulties of litigating in an inconvenient forum, and reversed the trial court’s denial of CSXT’s motion to dismiss based on forum non conveniens.  Clyde Green filed a Federal Employers’ Liability Act (“FELA”) claim against CSXT, where he worked for 42 years as a train brakeman and conductor, alleging that he developed colon cancer through his employment-based exposure to toxic substances.  Green is a lifelong resident of Maryland and had worked for CSXT and its predecessor entities almost exclusively in Maryland.  Since his employment with CSXT began in 1987, Green never worked in Pennsylvania.  While working for the predecessor companies, Baltimore and Ohio Railroad and the Chessie System, Green would infrequently travel to one rail yard in Pennsylvania.  In his entire career, Green worked at 13 separate railyards.  His former co-workers and supervisors all live in Maryland, as does his immediate family.  Green was diagnosed and exclusively treated for cancer in Maryland.  All of the medical professionals that were directly involved in Green’s health maintain offices or operated their practices in Baltimore or Annapolis, Maryland.

Notwithstanding the extensive connections to Maryland, Green filed his complaint in the Court of Common Pleas of Philadelphia County.  CSXT filed a motion to dismiss based on forum non convenience.  The court denied the motion, concluding that it was “no more vexatious to conduct. . . remote litigation in Maryland or Pennsylvania.”  The court determined that all discovery and trial depositions could be performed remotely, and the Superior Court observed that the trial court “found that remote accessibility made it immaterial as to where the actual action would be litigated.”  The Superior Court soundly rejected this argument:

Simply put, to the extent the trial court was suggesting the use of video recording technology would ameliorate potential problems with remote witnesses, reliance on these “workaround” methods is misplaced.  Stated differently, overwhelming or exclusive reliance on “modern technology to obviate the need for in-person elements of the trial continuum has been rejected as a justification to deny a motion to dismiss on forum non conveniens grounds.  Citing Wright v. Consol. Rail Corp., 215 A.3d 982, 996 (Pa. Super. 2019).

The Superior Court reversed and remanded to the trial court to with directions to dismiss the underlying complaint without prejudice to refiling it in a more appropriate court.  Ultimately, the Superior Court’s decision was based on its conclusion that the trial court had misapplied the relevant public and private factors under Pennsylvania forum non convenience law and that “given the clear viability of Maryland as an alternate forum, it was an abuse of discretion to the contrary.”  Although Green is a fact-specific non-precedential decision that was ultimately decided on other grounds, it stands as persuasive authority for rejecting future attempts to use the availability of virtual litigation technology as an argument to circumvent existing forum non conveniens jurisprudence.

Thanks to James Scott for his contribution to this article.  Should you have any questions, please contact Tom Bracken.

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Pennsylvania Federal Court Rejects An Insured’s Tactical Delay In Moving To Amend A Declaratory Judgment Complaint

In Giant Eagle, Inc. v. Am. Guarantee & Liab. Ins. Co., the Western District of Pennsylvania addressed whether the plaintiffs in an insurance declaratory judgment action would be permitted to seek leave to amend their complaint where they intentionally delayed seeking such relief for tactical reasons. Plaintiffs Giant Eagle, Inc. (“Giant Eagle”), a supermarket chain, and HBC Service Company Giant Eagle, filed a declaratory judgment action seeking a ruling that its excess insurers owed a duty to defend and indemnify Giant Eagle in four underlying opioid lawsuits. Giant Eagle was initially granted partial summary judgment after arguing that its excess carriers’ duty to defend was triggered by Giant Eagle’s payment of litigation defense costs. Several insurers moved for reconsideration, and the court vacated its partial summary judgment ruling, holding that Giant Eagle failed to show that there was no genuine issue of material fact in dispute.

Giant Eagle moved to certify an interlocutory appeal and for leave to file an amended complaint. The court denied Giant Eagle’s motion for leave to amend, concluding that the company had unduly delayed its effort to amend and that it had known the facts it was trying to add to the complaint at the time of its original filing. The court ruled that Giant Eagle’s efforts were strategic in nature and that it had delayed seeking the amendment until the outcome of its partial summary judgment motion, since the amendment would have delayed such relief.

This case serves as a reminder that parties seeking to amend pleadings should promptly move to do so and that waiting for a tactical advantage could result in the loss of the right to make the amendment.

Thank you to Mason Bailey for his contribution to this post. Please contact Andrew Gibbs with any questions.

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Follow The Rules! Plaintiff’s Claims Dismissed For Failure To Comply With Court Orders (PA)

In Vilgosas, et al. v. Janssen Research & Development LLC, et al., the Pennsylvania Superior Court affirmed the trial court’s dismissal of the plaintiff’s claims after he failed to comply with the court discovery order. The court reasoned that the plaintiff’s failure to comply with the discovery order impeded the defendants’ ability to defend the case.

From 2013 to 2014, plaintiff Alfred Vilgosas (“Vilgosas”) suffered complications from the drug prescribed medication Xarelto including internal bleeding. Vilgosas was not the only Xarelto user with complications and by 2019, nearly 2,000 civil claims had been filed in Philadelphia County against Xarelto manufacturer for similar complications. In March 2019, the plaintiffs in all Xarelto claims negotiated a $750 million settlement to resolve all outstanding Xarelto claims. As part of the settlement, the court issued a case management order with several obligations for the plaintiffs.

Vilgosas failed to comply with the discovery order. Janssen filed a notice of deficiencies with the court. Vilgosas then continued to defy the court order when he failed to produce required documents to Janssen at the show cause hearing. The trial court dismissed Vilgosas’ claims. Vilgosas then appealed to the Pennsylvania Superior Court.

In affirming, Superior Court found Vilgosas’ failure to produce records impeded Janssen’s ability to defend itself. Specifically, Vilgosas failed to produce hospital records that would have had information on his underlying conditions and treatment. This information was necessary for the defense. Further, the court found that Vilgosas’s noncompliance was willful and in bad faith.

Thanks to John Lang for his assistance in this article.  Should you have any questions, please feel free to contact Thomas Bracken.

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